All India Bar Examination (AIBE) 2-II Previous Year Question Papers with Answers

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49.

Parties A and B enter into an Agreement for Sale of immovable property. In the recitals portion of the agreement, it is mentioned that A, being the seller, agrees to pay all the relevant taxes to the authorities, including registration charges. However, the operative part to the said agreement contains a clause whereby B, being the purchaser, agrees to pay the registration charges. Who has to pay the registration charges ?

Principle :

If the recitals are clear, and the operative part is ambiguous, the recitals recitals govern the construction. If the are ambiguous and the operative part is clear, the operative part must prevail. If both the recitals and operative part are clear, but they are inconsistent with each other, the operative part is to be preferred.
A: A has to pay registration charges as the recitals clearly mention that the relevant taxes to the authorities shall include registration charges.
B: Regardless of what the agreement states, B has to pay the registration charges, as it is the norm that the purchaser shall pay those charges.
C: Regardless of what the agreement states, A has to pay the registration charges as it is the norm that the seller pays the registration charges.
D: B has to pay the registration charges as the clause in the operative part of the agreement prevail over the recitals.
E: Neither A or B have to pay the registration charges as the conflicting clauses in the agreement cancel each other out.

The answer is: D

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Explanation

The correct answer is :

D: B has to pay the registration charges as the clause in the operative part of the agreement prevails over the recitals.

Explanation:

In cases where there is a conflict or inconsistency between the recitals and the operative part of an agreement, the operative part typically takes precedence. In this scenario, while the recitals may mention that A agrees to pay all relevant taxes, including registration charges, the operative part of the agreement contains a specific clause where B agrees to pay the registration charges. Since the operative part of the agreement is clear and unambiguous in this regard, B, as the purchaser, is responsible for paying the registration charges as per the terms of the agreement.