Conditional sale deed disputes: party cannot repudiate the deed as void and still sue for recovery on the same transaction.

A party cannot both repudiate a conditional sale deed as void for alleged non-encashment of cheques and still sue on the same deed for recovery of the sale consideration. The High Court treated the transaction as contingent on payment, read with the contractual arrangement and Section 55(4)(b) of the Transfer of Property Act, 1882, and held the recovery claim untenable. The plaintiff's suit was dismissed. On the counterclaim, the defendants were entitled to refund of the part consideration paid, but past interest was refused because they remained in possession and were themselves in breach. The counterclaim succeeded for principal with future interest only.

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Issues: (i) Whether the plaintiff could maintain a suit for recovery of the sale consideration while also treating the sale deed as void on the alleged non-encashment of the cheques, and (ii) whether the defendants were entitled to a decree on the counterclaim for refund of the amount paid, with interest.

Issue (i): Whether the plaintiff could maintain a suit for recovery of the sale consideration while also treating the sale deed as void on the alleged non-encashment of the cheques.

Analysis: The sale deed itself recorded that possession had been delivered and that the sale would stand cancelled if the post-dated cheques were dishonoured. On that footing, the transaction was not an unconditional transfer merely by registration, but one governed by the parties' contract and the contingency attached to payment. Once the plaintiff had already instituted proceedings treating the sale deed as null and void, the plaintiff could not simultaneously maintain a suit asserting rights under the same deed as though it had validly conveyed title. The contractual arrangement, read with the principle embodied in Section 55(4)(b) of the Transfer of Property Act, 1882 and the concept of contingent contracts, made the plaintiff's recovery claim untenable.

Conclusion: The suit for recovery of Rs. 8 crores was misconceived and was dismissed.

Issue (ii): Whether the defendants were entitled to a decree on the counterclaim for refund of the amount paid, with interest.

Analysis: The defendants sought return of the amount paid as part sale consideration, and the plaintiff did not seek damages for breach. The defendants also undertook not to create or have created any third-party rights in the property and expressed willingness to have the sale deed treated as void in the appropriate forum. However, interest was not justified for the past period because the defendants remained in possession of the property and were themselves the party in breach of the transaction. Interest was therefore confined to the future period after a short grace period.

Conclusion: The counterclaim succeeded for refund of Rs. 2 crores, with future interest at 10% per annum after 60 days from the order, and the claim for prior interest was rejected.

Final Conclusion: The plaintiff's recovery suit failed, while the defendants obtained a money decree on the counterclaim limited to principal with future interest only, leaving each party to bear its own costs.

Ratio Decidendi: A party cannot simultaneously repudiate a conditional conveyance as void and also sue on the basis that the same conveyance remains effective for recovery; where title was made contingent on fulfilment of a contractual condition, the remedy must conform to the election already made under that transaction.

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