Karnataka High Court
Shri Rathnakar Hegde vs Shri Seenappa on 25 March, 2022
Bench: G.Narendar, Shivashankar Amarannavar
1
`IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF MARCH, 2022
PRESENT
THE HON'BLE Mr. JUSTICE G. NARENDAR
AND
THE HON'BLE Mr. JUSTICE SHIVASHANKAR AMARANNAVAR
R.F.A. No.191/2010
BETWEEN :
--------------
Shri Rathnakar Hegde
S/o Late Debu Hegde
Aged about 61 years
Residing at No.1016 E-A
III 'A" Main, Vijayanagar II Stage
R.P.C.Layout
Bangalore - 560 040. ... APPELLANT
(By Sri Venugopal M.S, Advocate)
AND :
-------
1. Shri Seenappa
S/o Late T.Muniyappa
Aged about 52 years
2. Shri M Nanjundappa
S/o Late T.Muniyappa
Aged about 55 years.
2
3. Shri M Marappa
S/o Late T.Muniyappa
Aged about 49 years.
All are residing at
Yerthaganahalli Village
Kasaba Hobli
Devanahalli Taluk
Bangalore Rural District. ... RESPONDENTS
(By Sri R Hemanth Raj, Advocate for R1 to R3
Sri B Krishna Gowda, Advocate for Impleading R-4)
---
THIS RFA IS FILED UNDER SECTION 96 CPC AGAINST
THE JUDGMENT AND DECREE DATED 30.11.2009 PASSED
IN OS.No.898/2006 ON THE FILE OF THE CIVIL JUDGE
(SENIOR DIVISION) AND JMFC, DEVANAHALLI, DISMISSING
THE SUIT FOR SPECIFIC PERFORMANCE.
THIS RFA HAVING BEEN HEARD AND RESERVED FOR
ORDERS, THIS DAY, SHIVASHANKAR AMARANNAVAR J,
DELIVERED THE FOLLOWING;
JUDGMENT
This appeal is filed by the appellant - plaintiff
challenging the judgment and decree passed in O.S. No.
898/2006 dated 30.11.2009 by the Civil Judge (Senior
Division and JMFC), Devanahalli whereby the suit of the
plaintiff for the relief of specific performance came to be
dismissed.
2. The parties will be referred to as per their rankings
before the trial Court for the sake of brevity. The appellant -
plaintiff and respondent Nos. 1 to 3 were defendant Nos. 1
to 3.
3. The case of the appellant - plaintiff before the trial
Court was that the defendant Nos. 1 to 3 have entered into an
agreement of sale dated 22.12.2003 with him and agreed to
sell the suit schedule properties for valuable sale
consideration of Rs.24,75,000/- and received a sum of
Rs.7,00,000/- as advance. They have agreed to execute
registered sale deed immediately after getting permission from
the competent authority and after receiving the balance sale
consideration of Rs.17,75,000/-. The suit schedule property
was granted to the defendants through darakastu vide
Tahsildar order bearing No. LND.SR.1/115/78-79 dated
04.11.1982 in favour of defendant No. 1. Later, under
Panchayat palu patti the defendants have divided the said
land and accordingly land measuring 1 acre 30 guntas was
given to defendant No.1 and 30 guntas of land was given to
defendant No.3. The family arrangement/palu patti deed
was acted upon and khatha and pahani were mutated into
their respective names. It was the further case of the plaintiff
that the defendants had approached the competent authority
by filing an application on 16.01.2004 and obtained an order
of permission for alienation of the suit schedule property on
30.03.2005. Inspite of obtaining such permission the
defendant did not approach the plaintiff for sale of property,
but acting malfidely they have issued notice on 28.04.2005
with a false and untenable allegation leveled against the
plaintiff. Thereafter the plaintiff has got issued a legal notice
calling upon the defendants to execute the sale deed in
respect of suit schedule property in his favour, by receiving
the balance sale consideration. Inspite of receiving the said
notice the defendants have not come forward to execute the
registered sale deed.
4. The defendants filed their written statement
contending that the suit is not maintainable either in law or
on facts and it is liable to be dismissed. They have denied the
execution of the sale agreement dated 22.12.2003 and receipt
of the advance amount of Rs.7,00,000/- and agreeing to
execute registered sale deed for total consideration of
Rs.24,75,000/-. They have also denied the terms and
conditions that they have to obtain permission from the
authority to sell the schedule property to the plaintiff. They
have also denied the alleged Panchayat palu patti and on the
basis of the said document the khatha and pahani were
mutated in favour of defendant No. 1 in respect of 1 acre 30
guntas of land and 30 guntas in the name of defendant No. 3.
They have also denied that they have obtained permission of
authority on 30.03.2005 to sell the suit schedule property in
favour of the plaintiff. The defendants contended that the
plaintiff has relinquished his right of enforcement of the
contract against the defendants on the date of receipt of the
legal notice sent by them. It is further averred that the
defendants being fed up with the attitude of the plaintiff,
finally got issued the said notice. The plaintiff, after going
through the said notice has got issued legal notice raising
untenable grounds.
5. On the basis of the above pleadings, the trial
Judge has framed the following issues:
i. Whether the plaintiff proves that, the defendants being
the owners of the suit schedule properties have agreed
to sell the same to the plaintiff for a sum of
Rs.24,75,000/- and that they have received a sum of
Rs.7,00,000/- as advance by executing the sale
agreement dated 22.12.2003?
ii. Whether the plaintiff proves that, he is always ready
and willing to perform his part of contract?
iii. Whether the plaintiff proves that, he is entitled for the
relief of specific performance against the defendants as
prayed for?
iv. Whether the defendants prove that, the suit is not
maintainable either in law as the same is barred by
limitation?
v. Whether the defendants prove that, the suit is not
properly valued and C.F. paid is insufficient?
vi. What order or decree?
6. To prove the above issues the plaintiff got himself
examined as P.W.1 and got marked Ex.P.1 to Ex.P.13 and
also examined one Sri. N.R. Jaishankar as P.W.2. The
defendant No. 1 who has been examined as D.W.1 did not
tender himself for cross-examination and therefore his
evidence came to be discarded. Thereafter the GPA holder of
the defendants has been examined as D.W.2 and got marked
Ex.D.1 to Ex.D.16. The trail Court has considered I.A. No. 10
filed under Order VII Rule 11 of CPC seeking rejection of the
plaint on the ground of its maintainability under issue No. 4
which is framed in respect of maintainability of the suit. The
trail Court has answered issue No. 1 in the affirmative and
issue Nos. 3 to 5 in the negative and held that issue No. 2
does not survive for consideration and dismissed the suit of
the plaintiff and gave liberty to the plaintiff to recover the
advance amount of Rs.7,00,000/- together with interest at
the rate of 6% p.a. by way of damages and in accordance with
law. The plaintiff, aggrieved by the said judgment and decree,
has preferred the present appeal.
7.The trail Court has held that the plaintiff has proved
that the defendants being the owners of the suit schedule
properties have agreed to sell the same to the plaintiff for
consideration of Rs.24,75,000/- and they have received a
sum of Rs.7,00,000/- as advance and executed the sale
agreement dated 22.12.2003 by answering issue No.1 in the
affirmative. The defendants have not challenged the said
finding of the trail Court on issue No.1. The learned counsel
for the respondents - defendants did not urge any ground
challenging the finding on issue No.1. The only ground urged
by the learned counsel for the respondents - defendants is
with regard to the validity of the sale agreement in view of the
provisions of the Karnataka Schedule Caste and Schedule
Tribe (Prevention of Transfer of Certain Lands) Act, 1978
(hereinafter referred to as `the PTCL Act').
8. Learned counsel for appellant contended that there
wasn't an absolute bar under PTCL Act for sale of a granted
land and the provisions of PTCL Act only barred the transfer
of granted land only if it is contrary to the terms of grant or it
was sought to be made after the commencement of PTCL Act
without first obtaining the permission of the Government. He
contended that when the agreement of sale itself contained a
specific clause, the transfer was to be made only after
obtaining permission of the Government, it was essentially a
proposed transfer of granted land in terms of the grant itself.
According to him, if the Government has refused permission,
the agreement of sale would stand nullified and a transfer
would not simply takes place.
9. Learned counsel for the appellant plaintiff, in
support of his contentions has relied upon the following
decisions:
i. Zarina Siddiqui Vs. A. Ramalingam alias R.
Amarnathan, (2015) 1 SCC 705
ii. Ferrodous Estates (Pvt) Ltd., Vs. P. Gopirathnam
(dead) and others, Civil Appeal No. 13516/2011
iii. B. Santoshamma and another Vs. D. Sarala and
another, Civil Appeal No. 3574/2009.
10. The principal argument of the learned counsel for
the defendants - respondents is that transfer had been
defined under the PTCL Act and in terms of the said definition
the transfer include an agreement of sale and since the
provisions of the PTCL Act stipulate that permission of
Government was necessary even to enter into an agreement of
sale, as admittedly no such permission had been obtained
before entering into an agreement of sale, the contract would
be null and void and therefore unsustainable.
11. Learned counsel for the respondent has relied
upon the following decisions.
i. Dharma Naika Vs. Rama Naika and another, AIR
2008 SC 1276
ii. Sri. Venkatanarayanappa Vs. Sri. Siddappa, ILR
2007 Kar. 1323
iii. Smt. Narayanamma and another Vs. Govindappa
and others, AIR 2019 SC 4654
12. In view of the arguments urged and on perusal of
the records, the following points arise for our consideration.
i. Whether the sale agreement - Ex.P.1 is void and
therefore it is not enforceable in the Court of law?
ii. Whether the plaintiff is entitled for specific
performance of the sale agreement dated
22.12.2003?
Re. Point No.(i)
13. The essential facts are that the suit property was
granted to defendant No. 1. The defendants entered into an
agreement to sell the suit schedule property in favour of
plaintiff for consideration of Rs.24,75,000/- and received a
sum of Rs.7,00,000/- under the agreement of sale.
14. Defendant No. 1 had sought for permission from
the Government and by order dated 30.03.2005 the
Government accorded permission to defendant No.1 to sell
the land.
Section 3(e) of the PTCL Act reads as follows:
"Transfer" means a sale, gift, exchange,
mortgage with or without possession), lease or
any other transaction not being a partition
among members of a family or a testamentary
disposition and includes the creation of a charge
or an agreement to sell, exchange, mortgage or
lease or enter into any other transaction."
As could be seen from the said definition, a transfer
does include an Agreement of Sale.
Section 4 of the PTCL Act reads as follows:
"Prohibition of transfer of granted
lands.-(1) Notwithstanding anything in any law,
agreement, contract or instrument, any transfer
of granted land made either before or after the
commencement of this Act, in contravention of
the terms of the grant of such land or the law
providing for such grant, or sub-section (2)
shall be null and void and no right, title or
interest in such land shall be conveyed or be
deemed ever to have conveyed by such transfer.
(2) No person shall, after the
commencement of this Act, transfer or acquire
by transfer any granted land without the
previous permission of the Government.
(3) The provisions of sub-sections(1) and
(2) shall apply also the sale of any land in
execution of a decree or order of a Civil Court or
of any award or order of any other authority."
15. As could be seen from Section 4 of the PTCL
Act, the law bars only those transfers of granted land
which were being made in contravention of the terms of
the grant of such land. It, therefore, follows that if the
transfer is not in contravention of terms of grant of such
land, such a transfer is not barred. In other words, there
is no absolute bar for transfer of granted land and it is
open for a grantee to transfer the granted land as
provided under the terms of the grant itself or under the
law providing for the grant and in case of a transfer
being made after the Act had come into force, it could be
done only after securing permission from the
Government.
16. In the instant case, since the Agreement of
Sale, though deemed a transfer by itself, indicated that
transfer would happen only on the Government granting
permission, it becomes clear that the transfer was
essentially a transfer in adherence to the terms of the
grant and the law relating to the grant. In other words,
since the parties to the transaction agreed to abide by
the terms of the grant and the law relating to the grant,
by agreeing to seek permission of the Government to
transfer the granted land, it cannot be said that such an
Agreement of Sale was null and void and required the
permission of the Government.
17. In the case of M.Suresh Kumar vs. the
Deputy Commissioner and Others Writ Appeal
No.16/2020 (SC/ST) decided on 15.04.2021, Division
Bench of this Court held that the transaction would not
amount to transfer within the meaning of PTCL Act,
since the possession of the land in question has not been
handed over under the agreement of sale.
18. It is to be borne in mind that it is only those
transfers which, if entered into in breach of the terms of
the grant or the law relating to the grant, which thereby
defeat the provisions of PTCL Act, are void. In other
words, if an Agreement of Sale was entered into by which
the purchaser would simply occupy the land in part
performance of the contract without having to seek for
permission from the Government for conclusion of the
sale transaction and thereby try to take shelter under the
ground that there was no actual transfer of interest in the
granted land, such an agreement of sale would be
contrary to the terms of the grant and the law relating to
the grant and thereby be void.
19. If, on the other hand, an intending purchaser
enters into an agreement with a clear stipulation in the
agreement that the Agreement of sale would be proceeded
to its logical conclusion only if Government grants
permission for transfer, such an Agreement of Sale cannot
be said to be either void or in violation of the PTCL Act.
20. The relevant clauses in the agreement of sale
reads as follows:
6. The vendors hereby further covenants
that he will do all lawful acts, deeds and
things for more perfectly assuring the absolute
title of the schedule mentioned sites in favour
of the purchaser.
12. The expenses and responsibility for
getting the permission to the sale the land, from
the D.C. or competent authority will be borne
by the vendors.
13. The time limit to get the permission and
agreement in three months.
21. A reading of the said clauses would make it
clear that it was the intention of both the parties that they
were acting in terms of the grant and the law relating to
the grant and such an agreement of sale cannot be void
and unenforceable.
22. The fact that the PTCL Act provides for
transferring granted land on securing permission itself is a
clear indicator that there is no absolute bar for transfer of
a granted land. In fact, transfers of a granted land made
without contravening the terms of the grant and before the
Act came into force are not void transactions and after the
commencement of the PTCL Act, the transfers made after
securing permission from the Government are also not
void transactions.
23. Keeping in mind the fact that there is no
absolute bar for transfer of a granted land under the PTCL
Act, we are of the view that in the instant case, since the
Agreement of Sale categorically provided for securing
permission from the Government and thereafter
proceeding with the sale, the Agreement of Sale cannot be
said to be a void document and thereby unenforceable in
law.
24. If an agreement of sale which contains a
stipulation that the consequential sale would be subject to
the permission of the Government, the entire transaction
being designed to be in compliance of the law, the same
cannot be said to be a device to defeat the law relating to
the grant. In other words, if two parties to an agreement
have clearly agreed to abide by the rigor of law, they
cannot be penalized and they cannot be denied the benefit
of following the process established by law. In that view of
the matter, it has to be held that the agreement of sale
entered into in the instant case is not a void transaction
and the same was therefore enforceable.
25. The judgments relied upon by the counsel for
the respondents are also clearly distinguishable.
26. In Smt. Narayanamma & Another Vs.
Govindappa & Others, reported in AIR 2019, SC 4654,
the Apex Court was considering the case of a transfer
under the provisions of the Karnataka Land Reforms Act,
which contained an absolute bar for transfer of land by a
tenant in whose favour occupancy right has been granted.
But the instant case is a case of a granted land under
Land Grant Rules in which there is no absolute bar for
transfer as found in the Karnataka Land Reforms Act. As
stated earlier, the PTCL Act and the Grant, itself provide
for a transfer of the land, subject however to securing a
permission from the Government. Thus, the said
judgment of the Apex Court would have no application to
the present case.
27. In the case of Dharma Naika Vs. Rama
Naika And another reported in (2008) 14 SCC 517, the
Apex Court was dealing with a case of an agreement of
sale which had been executed before the commencement
of PTCL Act and in that regard, the Apex Court took the
view that the sale would not render Section 4(1)
inapplicable. In the instant case, as the Agreement of Sale
itself stipulated that the proposed transfer would happen
on the Government granting permission for transfer, the
question of parties being in violation of law would not
arise.
28. Reliance placed on the decision of this Court in
the case of Sri Venkatanarayanappa Vs. Sri Siddappa
reported in ILR 2007 KAR 1323 is also of no avail, since
that was a case in which the Agreement of Sale did not
contain any clause for securing permission from the
Government.
29. In the instant case since the agreement for
transfer by itself indicate that the transfer would happen only
on the Government granting permission, it becomes clear that
transfer was essentially a transfer in adherence to the terms
of the grant and law relating to the grant. In other words
since the parties to the transfer abide by the terms of the
grant and the law relating to the grant, for agreeing to seek
permission of the Government to transfer the land, it cannot
be said that such an agreement of sale would be null and void
and required the permission of the Government. In the result
point No. (i) is answered in the negative.
Re. point No.(ii)
30. The plaintiff has established that Ex.P1 -sale
agreement which is executed by the defendants is valid and
enforceable. In a suit for specific performance, the plaintiff
has to aver and prove that he is ready and willing to perform
his part of contract. In the present case, the plaintiff has
averred that he is ready to perform his part of contract. The
defendants have denied that the plaintiff is ready to perform
his part of contract. In that regard, the Trial Court has
framed issue No.(ii). The Trial Court while passing the
impugned judgment has not given finding on the said issue
No. (ii).
31. The plaintiff was aware that he has to prove issue
No. (ii). Inspite of that, in chief-examination P.W.1 stated only
that he is ready and willing to perform his part of the
contract. The burden to prove that plaintiff had requisite
funds to pay balance sale consideration was on him. The
plaintiff has not placed any document that he had requisite
funds to perform his part of contract as on the date of suit.
After one and half decade it is not proper to remand the suit
for recording evidence on issue No. (ii).
32. The suit is of the year 2005. The defendants are
belonging to Schedule Tribe. The subject matter of the suit is
a darkasth land granted to defendant No.1 belonging to
Scheduled Tribe. An application filed by the defendants
seeking restoration of the land under PTCL Act against the
plaintiff is pending before the Assistant Commissioner. Third
party interest is also created.
33. In view of the above, we deem it proper to direct the
defendants to pay damages and refund the advance sale
consideration of Rs.7,00,000/- (Rupees Seven lakhs only)
with interest @ 9% p.a. In our view, a sum of Rs.10,00,000/-
(Rupees Ten Lakhs only) is proper to award as compensation
to the plaintiff, to compensate the loss that is suffered on
account of non-refund of the advance in a timely manner.
As a result, we pass the following:
ORDER
i. The appeal is allowed in part with cost through out.
ii. The judgment and decree passed by Trial Court is
modified as under:
iii. The defendants are directed to refund advance sale
consideration of Rs.7,00,000/- (Rupees Seven lakhs
only) along with interest at 9% p.a. from the date of
agreement i.e. 22.12.2003 till the date of realization and
also to pay damages in a sum of Rs.10,00,000/-
(Rupees Ten Lakhs only) to the plaintiff.
iv. In the event of the defendants failing to pay the
amounts awarded/decreed within two months from
today, the plaintiff is entitled to a decree for execution of
sale deed through Court.
v. Draw decree accordingly.
Sd/-
JUDGE
Sd/-
JUDGE
LRS.
