Karnataka High Court
Smt Narasamma vs Sri K V Ramprasad on 10 July, 2012
Equivalent citations: 2012 AIR CC 2870 (KAR), 2012 (4) AIR KAR R 147, (2013) 2 ICC 554, (2012) 3 KCCR 2448
Author: S.Abdul Nazeer
Bench: S. Abdul Nazeer
R
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 10TH DAY OF JULY 2012
BEFORE
THE HON'BLE MR.JUSTICE S. ABDUL NAZEER
WRIT PETITION NO.12971/2012
C/W W.P.NOS.12976/2012, 12977/2012
& 12978/2012 (GM-CPC)
W.P.NO.12971/2012
Between:
1 Smt. Narasamma,
W/o late Nagappa,
Aged about 71 years.
2 Sri Doddanna,
S/o late Nagappa,
Aged about 49 years.
3 Smt. Rathnamma,
W/o Doddanna,
Aged about 45 years.
4 Sri Nagaraju,
S/o late Nagappa,
Aged about 43 years.
5 Smt. Hanumakka,
W/o Sri Nagaraja,
Aged about 50 years.
2
All are r/a Venkatala Village,
Bangalore North Taluk. .... Petitioners.
(By Sri R. Kalyan, Adv.)
And:
1 Sri K.V.Ramprasad,
S/o Sri K.V.Varadaraja Gupta,
Aged about 49 years,
R/a No.58, Anand Nagar,
2nd Stage, MSH Layout,
5th Main Road, Bangalore.
2 The State of Karnataka,
Department of Revenue,
Reptd. by its Secretary,
M.S.Bldg., Bangalore. .... Respondents.
(By Sri Jayakumar S.Patil, Sr.Adv. for Sri M.Shivaprakash, Adv.
for R1
Sri H.T.Narendra Prasad, HCGP for R2)
W.P.NO.12976/2012
Between:
Sri Venkatappa,
S/o late Munivenkatappa,
Aged about 74 years,
R/a Venkatala Village,
Bangalore North Taluk. .... Petitioner.
(By Sri R.Kalyan, Adv.)
3
And:
1 Sri K.V.Ramprasad,
S/o Sri K.V.Varadaraja Gupta,
Aged about 49 years,
R/a No.58, Anand Nagar,
2nd Stage, MSH Layout,
5th Main Road, Bangalore.
2 Sri Narayana,
S/o late Huchappa,
Aged about 33 yeas,
R/a Venkatala village,
Yelahanka Hobli,
Bangalore North Taluk.
3 The State of Karnataka,
Department of Revenue,
Reptd. by its Secretary,
M.S.Bldg., Bangalore. .... Respondents.
(By Sri Jayakumar S.Patil, Sr.Adv. for Sri M.Shivaprakash, Adv.
for R1
Sri H.T.Narendra Prasad, HCGP for R3)
4
W.P.NO.12977/2012
Between:
Sri Marappa,
S/o Lakkappa,
Aged about 43 years,
R/a Venkatala Village,
Bangalore North Taluk. .... Petitioner.
(By Sri R.Kalyan, Adv.)
And:
1 Sri K.V.Ramprasad,
S/o Sri K.V.Varadaraja Gupta,
Aged about 49 years,
R/a No.58, Anand Nagar,
2nd Stage, MSH Layout,
5th Main Road, Bangalore.
2 The State of Karnataka,
Department of Revenue,
Reptd. by its Secretary,
M.S.Bldg., Bangalore. .... Respondents.
(By Sri Jayakumar S.Patil, Sr.Adv. for Sri M.Shivaprakash, Adv.
for R1
Sri H.T.Narendra Prasad, HCGP for R2)
5
W.P.NO.12978/2012
Between:
1 Sri Hanumantha,
S/o late Poojappa,
Aged about 41 years.
2 Smt. Lakshmamma,
W/o late Anneyappa,
Aged about 44 years.
3 Sri Suresh,
S/o late Anneyappa,
Aged about 23 years.
All are r/a Venkatala Village,
Bangalore North Taluk. .... Petitioners.
(By Sri R.Kalyan, Adv.)
And:
1 Sri K.V.Ramprasad,
S/o Sri K.V.Varadaraja Gupta,
Aged about 49 years,
R/a No.58, Anand Nagar,
2nd Stage, MSH Layout,
5th Main Road, Bangalore.
6
2 The State of Karnataka,
Department of Revenue,
Reptd. by its Secretary,
M.S.Bldg., Bangalore. .... Respondents.
(By Sri Jayakumar S.Patil, Sr.Adv. for Sri M.Shivaprakash, Adv.
for R1
Sri H.T.Narendra Prasad, HCGP for R2)
---
These Writ Petitions are filed under Articles 226 & 227 of
the Constitution of India, praying to quash the impugned order
dated 28.3.2012 in O.S.Nos.2375/2011, 2372/2011, 2370/2011 and
2374/2011 on the file of the 7th Addl. City Civil Judge, Bangalore,
etc.
These Writ Petitions coming on for Further Hearing this
day, the Court passed the following:
ORDER
The main question for consideration in these writ petitions is whether the suits filed by the first respondent for enforcement of the agreements for sale of granted lands without previous permission of the Government under Section 4(2) of the Karnataka Scheduled Caste and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978 are liable to be rejected under Order 7 Rule 11(d) of the Code of Civil Procedure?
7
2. Brief facts necessary for disposal of these cases are as under:
The first respondent is the common plaintiff in O.S.Nos.2375/2011, 2372/2011, 2370/2011 and 2374/2011 on the file of the 7th Additional City Civil Judge, Bangalore. He has filed the above suits against different defendants (the petitioners herein) for specific performance of the agreements to sell in respect of the suit schedule properties. In the suits, defendants have filed applications for rejection of the plaints under Order 7 Rule 11(d) of the Code of Civil Procedure (for short 'CPC') contending that the suit schedule properties are granted lands and that there is a bar for entering into such agreements without taking previous permission of the Government. The statements made in the plaints disclose that suits are barred under Section 4(2) of the Act. Therefore, the plaints are liable to be rejected at the threshold.8
3. The plaintiff has filed objections contending that the defendants have received huge amount towards part of the sale consideration. Applications have already been filed seeking permission of the Government for sale of the properties. It is further contended that prior permission of the Government for entering into agreements to sell is not necessary. The question raised in the applications has to be decided after the trial in the suits. Therefore, the plaints cannot be rejected at this stage.
4. The court below has rejected the applications primarily on the ground that the question raised in the applications has to be established by the plaintiff by leading evidence. It is only after the trial, the Court can decide the enforceability of the contract. The petitioners have called in question the validity of the said orders in these writ petitions.
5. Sri Kalyan, learned Counsel appearing for the petitioners submits that perusal of the plaints would disclose that the suit 9 schedule properties are granted lands and attract the provisions of the Karnataka Scheduled Caste and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978 (for short 'the Act'). The defendants have agreed to obtain permission from the Government under the said Act for the sale of the properties. No such permission has been obtained before entering into the agreements, which is evident from the averments made in the plaints. Having regard to sub-section (2) of Section 4 of the Act, previous permission of the Government is a condition precedent for transfer of the lands. The expression 'transfer' contained in sub-section (e) of Section 3 includes an agreement to sell. The agreements entered into by the parties without previous permission of the Government are void and are not enforceable in the Court of law. At best, the plaintiff can seek other remedies available to him in law. Therefore, the court below ought to have rejected the plaints.
6. On the other hand, Sri Jayakumar S. Patil, learned Senior Counsel appearing for the first respondent/plaintiff submits that the 10 defendants have already applied for permission for transfer of the land under Section 4(2) of the Act. There is no bar for entering into an agreement to sell of the granted lands without delivery of possession of the properties. He has drawn my attention to the expression 'acquire by transfer' contained in Section 4(2) of the Act and submits that in order to attract the said Section, there should be something more than an agreement to sell. Atleast, there should be delivery of possession under the contract. In this connection, he has relied on the decisions of the Apex Court in TILKAYAT SHRI GOVINDLAJI MAHARAJ, etc. VS. STATE OF RAJASTHAN AND OTHERS - AIR 1963 SC 1638 and in DEVI DAS GOPAL KRISHNAN & OTHERS VS. STATE OF PUNJAB & OTHERS - AIR 1967 SC 1895. It is submitted that after entering into an agreement to sell and before the execution of the sale deeds, it is open for the parties to obtain permission of the Government to give effect to the terms of the agreement. Agreement to sell does not convey any right, title or interest in the property. In this connection, he has relied on the decisions of the 11 Apex Court in MRS. CHANDNEE WIDYA VATI MADDEN VS. DR. C.L.KATIAL AND OTHERS - AIR 1964 SC 978, NATHULAL VS. PHOOLCHAND - AIR 1979 SC 546 and the decision of the Division Bench of this Court in SYED ZAHEER AND OTHERS VS. C.V.SIDDAVEERAPPA - 2010 (2) KCCR
954. Alternatively, it is argued that the suits filed by the plaintiff are for specific performance of the contract. The jurisdiction to decree the suit for specific performance is discretionary. The Court in appropriate cases has the power to return the earnest money or award compensation. Atleast for this purpose, adjudication of the suits is necessary. Therefore, the plaints cannot be rejected at this stage.
7. I have carefully considered the arguments of the learned Counsel made at the Bar and perused the materials placed on record.
12
8. Order 7 Rule 11 of CPC provides for rejection of the plaint where the suit appears from the statement in the plaint to be barred by any law. The Apex Court in T.ARIVANDANDAM VS. T.V.SATYAPAL AND ANOTHER - AIR 1977 SC 2421 has held that if on a meaningful and not formal reading of the plaint it is manifestly vexatious and meritless, in the sense of not disclosing a clear right to sue, the trial Court should exercise its power under Order 7 Rule 11 of the CPC taking care to see that the ground mentioned therein is fulfilled. And, if clear drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under Order 10 of the CPC. An activist Judge is the answer to irresponsible law suits. The trial Courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage.
9. In SOPAN SUKHDEO SABLE AND OTHERS VS.
ASSISTANT CHARITY COMMISSIONER AND OTHERS -
13(2004) 3 SCC 137, the Apex Court has declared that Order 7 Rule 11 lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself, irrespective of his right to contest the same on merits. The law ostensibly does not contemplate at any stage when the objections can be raised. The trial Court can exercise the power at any stage of the suit, that is, before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial and also does not say in express terms about the filing of a written statement. For the purposes of deciding an application under clauses (a) and (d) of Order 7 Rule 11 of the CPC, the averments in the plaint are germane: the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage. Instead, the word 'shall' is used, clearly implying thereby that Order 7 Rule 11 casts a duty on the Court to perform its obligations in rejecting the plaint when the same is hit by any of the infirmities provided in the four clauses of Order 7 Rule 11, even without intervention of the defendant. In any event, rejection 14 of the plaint under Order 7 Rule 11 does not preclude the plaintiffs from presenting a fresh plaint in terms of Order 7 Rule 13. The real object of Order 7 Rule 11 is to keep out of Courts irresponsible law suits. The trial Court must remember that if on a meaningful and not formal reading of the plaint it is manifestly vexatious and meritless in the sense of not disclosing a clear right to sue, it should exercise the power under Order 7 Rule 11(a).
10. In POPAT AND KOTECHA PROPERTY VS. STATE BANK OF INDIA STAFF ASSOCIATION - (2005) 7 SCC 510, the Apex Court has held that clause (d) of Order 7 Rule 11 speaks of suit, as appears from the statement in the plaint to be barred by any law. Disputed questions cannot be decided at the time of considering an application filed under Order 7 Rule 11 CPC. Clause (d) of Rule 11 of Order 7 applies in those cases only where the statement made by the plaintiff in the plaint, without any doubt or dispute shows that the suit is barred by any law in force. It has been further held as under:
15
"When the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo case (2004) 3 SCC 137 the inevitable conclusion is that the Division Bench of the High Court was not right in holding that Order 7 Rule 11 CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the non- execution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they had independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years required evidence to be adduced. It was not a case where the suit from statement in the plaint could be said to be barred by law. The statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11. That was not so in the present case."
11. Thus, Order 7 Rule 11 of CPC lays down an independent remedy made available to the defendant to challenge the 16 maintainability of the suit itself irrespective of his right to contest the same on merits. A plaint can be rejected where the suit appears from the averments made in the plaint to be barred by any law. In order to reject the plaint, the statement in the plaint without any addition or subtraction must show that it is barred by any law in force without any doubt or dispute. Where the Court is in doubt or the Court is not sure and certain that the suit is barred by some law, the Court would not reject the plaint. Disputed questions cannot be decided at the time of considering the application under this provision.
12. Before proceeding to consider the validity of the impugned orders, it is also necessary to consider as to whether the Act contains a bar to enter into a contract for sale of granted lands without previous permission of the Government?
Section 4 of the Act contains a bar for transfer of granted lands, which is as under:
17
"4. Prohibition of transfer of granted lands.
(1) Notwithstanding anything contained 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 to 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."
13. For better understanding the above provision, it is also necessary to notice the statutory definitions provided for the 18 expressions 'granted land' and 'transfer' in Section 3(b) and 3(e), which are as under:
"Sec.3(b) "Granted Land" means any land granted by the Government to a person belonging to any of the Scheduled Castes or the Scheduled Tribes and includes land allotted or granted to such person under the relevant law for the time being in force relating to agrarian reforms or land ceilings or abolition of inams, other than that relating to hereditary offices or rights and the word "Granted" shall be construed accordingly.
Sec.3(e) "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."19
14. It is well settled that when an expression is defined in a statute, unless there is anything repugnant in the subject or context, the expression has to be construed as having the same meaning assigned to it in the dictionary clause of the statute. The object of such a definition is to avoid the necessity of frequent repetition in describing the subject matter to which a word or expression so defined is intended to apply. In these cases, we are considering the effect of entering into an agreement to sell in respect of granted land without the previous permission of the Government. If Section 3(b) is read into Section 4(2), it is clear that no person shall after commencement of the Act, enter into an agreement to sell any granted land without the previous permission of the Government.
15. The State, consistent with the Directive Principles of the Constitution has made it a policy to preserve, protect and promote the interest of the scheduled castes and scheduled tribes, which by and large form weaker and poorer sections of the people in our country. In pursuance of this policy, the lands have been granted to 20 the persons belonging to the scheduled castes and scheduled tribes which includes the lands allotted or granted to such person under the relevant law for the time being in force relating to agrarian reforms or land ceiling or abolition of inams. The condition regarding prohibition of transfer of granted land had been introduced in the interest of grantees for the purpose of upkeep of the grants and for preventing the economically dominant sections of the community from depriving the grantees, who belong to the weaker sections of the people of their enjoyment and possession of these lands and for safeguarding their interests against any exploitation by the richer sections in regard to the enjoyment and possession of these lands granted essentially for their benefit. This prohibition on transfer has not proved to be sufficiently strong safeguard in the matter of preserving grants in the hands of grantees belonging to the scheduled castes and scheduled tribes and in violation of the prohibition on transfer of the granted land, transfers of such lands on a large scale to serious detriment of the interests of these poorer sections of the people had taken place. 21 Therefore, the Act was enacted to provide for the prohibition of transfer and for restoration of lands granted by the Government to the persons belonging to the scheduled castes and scheduled tribes in the State.
16. The Hon'ble Supreme Court in MANCHEGOWDA AND OTHERS VS. STATE OF KARNATAKQA AND OTHERS
- AIR 1984 SC 1151 while upholding the constitutional validity of the Act has held as under:
" Non alienation clause contained in the existing Land Grant Rules and the provisions for cancellation of grants where the land is alienated in contravention of the above said provision are found not sufficient to help the scheduled castes and scheduled tribes grantees whose ignorance and poverty have been exploited by persons belonging to the affluent and powerful sections to obtain sales or mortgages either for a nominal consideration or for no consideration at all and they have become the victims of circumstances. To fulfill the purpose of the grant, the land even if it has been 22 alienated, should be restored to the original grantee or his heirs. "
17. In DHARMA NAIKA VS. RAMA NAIKA AND ANOTHER - (2008) 14 SCC 517, the Apex Court explained the objects of the Act as under:
"8. A plain reading of the Statement of Objects and Reasons, for which the legislature has introduced this Act, would show that the non-alienation clause contained in the existing Land Grant Rules and the provisions for cancellation of grants where the land was alienated in contravention of the abovesaid provisions were found insufficient to help the Scheduled Castes and Scheduled Tribes grantees. From the objects and reasons of the Act, it is evident that ignorance and poverty of the Scheduled Castes and Scheduled Tribes were exploited by persons belonging to the affluent and powerful sections to get sales or mortgages, either for a nominal consideration or for no consideration at all and on account of this, the Scheduled Castes and Scheduled Tribes had 23 become the victims of circumstances. It is for this reason and to fulfil the purposes of the grant, it was thought fit by the legislature that the land, even if it has been alienated, must be resorted to the original grantee or his heirs and legal representatives who are admittedly Scheduled Castes and Scheduled Tribes.
9. It is also evident from the objects and reasons of the Act that the Central Government was also urging the State Government to enact a legislation to prevent alienation of lands granted to the Scheduled Castes and Scheduled Tribes by the State Government on the lines of the model legislation prepared by it and circulated to the State Government. It is in that background, the Act was introduced providing for prohibition of transfer and restoration of lands granted by the Government to persons belonging to the Scheduled Castes and Scheduled Tribes in the State. However, it is also evident from the relevant provisions of the Act with which we would be dealing with later that total prohibition of transfer by Scheduled Castes and Scheduled Tribes was also not intended by the legislature. It is provided that in respect of transfers after the commencement of the Act, it would be open 24 to transfer the land granted to Scheduled Castes and Scheduled Tribes if prior permission is obtained from the State Government."
18. Keeping in mind the back ground of the legislation, we have to interpret the provisions of the Act. Sub-Section (2) of Section 4 states that no person shall, after commencement of the Act, transfer or acquire by transfer any granted land without previous permission of the Government. An extensive definition has been used to define the expression 'transfer'. Thus, 'transfer' not only means a sale, gift, exchange or mortgage with or without possession, lease or any other transaction not being a partition among members of a family of a testamentary disposition but also the creation of a charge or agreement to sell, exchange, mortgage or lease or enter into any other transaction.
19. Section 54 of the Transfer of Property Act, 1882 defines a contract for sale. It states that a contract for sale of immovable property is a contract that a sale of such property takes place on 25 terms settled between the parties. It does not, of itself, create any interest or charge on such property. Thus, contract for sale is only a document creating right to obtain another document of sale on fulfillment of terms and conditions specified therein. On the strength of such an agreement, a buyer does not become the owner of the property. The ownership remains with the seller. It will be transferred to the buyer only on the execution of sale deed by the seller. The buyer obtains only a right to get the sale deed executed in his favour. There is no bar for the parties to enter into an agreement to sell with or without delivery under Section 54 of the Transfer of Property Act. It depends upon the terms and conditions settled between the parties. However, a contract for sale with or without delivery of possession of the property makes no difference for the purpose of Section 4(2) of the Act.
20. Learned Senior Counsel for the first respondent has laid emphasis on the expression 'acquire by transfer' employed in 26 Section 4(2) and submits that mere agreement to sell without delivery of possession will not come within the ambit of sub- section (2) of Section 4 of the Act. In my opinion, that is not the legislative intent. The legislative intent is clear that previous permission of the Government is a condition precedent for the agreements for sale of granted lands. This Court in SRI VENKATANARAYANAPPA VS. SRI SIDDAPPA - ILR 2007 KAR 1323 was considering a similar case where possession was not delivered in part performance of the agreement to sell. It has been held as under:
".............Sub-section (2) of Section 4 provides for the permission of the Government for such transfer. But the way the said sub-section is worded makes it clear that no person shall, after the commencement of this Act transfer or acquire by transfer any granted land without the previous permission of the Government. Sub-section 4(1) deals with transfer of lands being in violation of the terms of the grant before the Act came into force. But sub-section (2) deals with 27 transfer of lands after the Act came into force. In other words, even if the transfer is not in contravention of the terms of the grant, but if that transfer takes place after the Act came into force, such transfer requires previous permission of the Government. Therefore for all transfers subsequent to the passing of the Act, previous permission of the Government is a must. Otherwise it would be null and void."
It has been further held as under:
"In the Scheme of the Act, it is clear whether to sell the property by way of a sale or to enter into an agreement to purchase a granted land previous permission of the Government is a must. It is a condition precedent. If previous permission is not obtained prior to the agreement of sale, then it amounts to transfer under Section 3(e) of the Act and thus it is null and void. While interpreting this provision the Courts have to keep in mind the legislative intent. When the legislature declares that the transfer in contravention of Section 4(2) of the Act is null and void, no contract in the eye of law has come into existence. The legislature did not stop there. It made 28 its intentions explicitly clear by further declaring that "no right, title or interest in such land shall be conveyed or be deemed ever to have conveyed by such transfer". An agreement to sell the granted land under the Act, is opposed to Section 4(2) of the Act, and therefore is not a contract. It is also opposed to public policy. Therefore, it is not enforceable in Court of law."
21. In DHARMA NAIKA's case (supra), the Apex Court has held that Section 4(1) of the Act declares any transfer of granted land made either before or after the coming into force of the Act, to be null and void if it is in contravention of any one of the conditions specified therein i.e. (a) the terms of grant of such land; or (b) the provisions of the law providing for such grant; or
(c) Section 4(2). It has been further held as under:
"It is true, the word "transfer" as defined in Section 3(1)(e) of the 1978 Act is an inclusive definition. That is to say, it includes 'sale' as well as 'agreement for sale', although an agreement for sale under the 29 Transfer of Property Act, 1882 is not a transfer and the right, title or interest in the land does not pass until the sale deed is executed and registered. An agreement to sell does not pass until the sale deed is executed and registered. An agreement to sell does not by itself create any interest of the proposed vendee in the immovable property but only creates an enforceable right in the parties. Thus, under the general law, that, is under the Transfer of Property Act, 1882 an 'agreement for sale' is not the same as 'sale' and in the case of an agreement for sale, the title of the property agreed to be sold still remains with the vendor but in the case of 'sale', title of the property is vested with the vendee. Therefore, an agreement for sale is an executory contract whereas sale is an executed contract."
22. In BHEMANNA VS. DEPUTY COMMISSIONER, CHITRADURGA DISTRICT & OTHERS - ILR 2010 KAR 5011, a Division Bench of this Court has held as under:
30
"A conjoint reading of sub-sections (1) & (2) of Section 4 of the Act shows that if the transfer of granted land is made in violation of the terms of the grant of such land or the law providing for such grant whether such transfer is before or after the Act came into force, the same is rendered null and void. Whereas, in the case of transfer of land after the commencement of the Act even though the said transfer is not in contravention of the terms of the grant or the law providing for such grant, the same is rendered null and void.
It is thus clear that the intention of the Legislature is that, after the commencement of the Act, there shall be prohibition for transfer of granted land even though the period of non-alienation had expired and the grantee was otherwise entitled to transfer. It is therefore clear that the term 'granted land' as defined under Section 3(1)(b) of the Act cannot be given a restricted meaning to say that the land losses the characteristic of a granted land after the expiry of non- alienation period."31
23. In TILKAYAT SHRI GOVINDLALJI MAHARAJ's case (supra) relied on by the learned Senior Counsel, the Supreme Court has held that the acquisition of property in the context means the extinction of the citizen's rights in the property and conferment of the said rights in the State or the State owned corporation. In M/S. DEVI DAS GOPAL KRISHNAN's case (supra), the Apex Court has observed that a close scrutiny compels them to give a restricted meaning to the expressions 'acquisition' and 'price'. Acquisition is the act by which a person acquires property in a thing. 'Acquire' is to become the owner of the property either by voluntary or involuntary transfer.
These decisions have no application to the facts of these cases. In the said cases, the Supreme Court has assigned the meaning to the expression 'acquire' in different contexts.
24. Let us now consider the other decisions relied on by the learned Senior Counsel. In MRS. CHANDNEE WIDYA VATI MADDEN's case (supra), the Hon'ble Supreme Court was 32 considering a case relating to specific performance of an agreement to sell. One of the terms of the contract was that the vendor shall obtain necessary permission of the Government for the sale within two months of the agreement and if the permission was not forthcoming within that time, it was open to the vendees to extend the date or to treat the agreement as cancelled. The vendor made an application for permission. At a later stage, she withdrew the same. The agreement holder filed a suit for specific performance of the contract or in the alternative for damages. In this background, the Apex Court has held that the contract was not a contingent contract and that the parties are agreed to bind themselves by the terms of the document executed between them. The Court had got to enforce the terms of the contract and to enjoin upon the vendor to make the necessary application for permission. In the event of the permission being refused, the vendees shall be entitled to the damages.
25. In NATHULAL's case (supra), the Supreme Court was considering a case relating to enforcement of an agreement where 33 the land could not be sold without the sanction of the State Government. The Apex Court has held that where by statute, property is not transferable without the permission of the authority, an agreement to transfer the property must be deemed subject to the implied condition that the transferor will obtain the sanction of the authority concerned. This is not a case where the statute imposes a condition that previous permission is necessary for entering into a contract of sale.
26. In SYED ZAHEER's case (supra), this Court was considering the enforceability of a contract in respect of an agricultural land where there is a bar for transfer of the land to non- agriculturists under Section 80 of the Karnataka Land Reforms Act, 1961. It has been held that Section 80 does not prohibit any agreement of sale between the land owner and non-agriculturists. What it prohibits is a non-agriculturist of the categories specified in the Section purchasing an agricultural land. He too can purchase after obtaining necessary permission of the competent authority. 34
27. The common factor in all these decisions is that prior permission was not required for entering into an agreement of sale of the properties. In the instant case, an agreement entered into without previous permission of the Government is void-ab-initio. It is a condition precedent. Therefore, these decisions have no application to the facts of the present case.
28. As has been noticed above, there is a clear bar for entering into an agreement to sell of the granted lands without previous permission of the Government. If an agreement is entered into in respect of the granted land in violation of Section 4(2), it is void-ab-initio. Section 23 of the Indian Contract Act, 1872 bars the enforcement of a contract if it is forbidden by law. An agreement offending a statute or public policy or forbidden by law is not merely void but it is invalid from nativity. The term 'law' in this Section must be understood in the sense of the term explained in Article 13(3) of the Constitution. Thus, what is done in 35 contravention of the provisions of any law cannot be made the subject matter of an action. If the contract is expressly prohibited by law, it is void-ab-initio and cannot be enforced. In the circumstances, Courts cannot grant a decree for specific performance subject to the permission, which may be obtained by one of the parties from the Government. I am of the view that the suits filed by the plaintiff for enforcement of the void agreements cannot be entertained by the Civil Court.
29. Let us now consider as to whether from the statements in the plaint, the suits are barred under Section 4(2) of the Act? It is not in dispute that the plaint averments in all the suits are similar. It is sufficient if the plaint averments in one of the suits is taken into consideration. Therefore, let us take the plaint in O.S.No.2375/2011. In Paragraph 3 of the plaint, the plaintiff has stated that the defendants are the wife and children of Nagappa. The erstwhile Government of Mysore had granted agricultural land bearing Sy.No.29 measuring an extent of 1 acre 20 guntas in favour 36 of Nagappa. After the death of Nagappa, the sole bread winner of the family, the defendants have suffered a serious setback. In order to meet the pressing legal necessities of the family, more particularly, for their decent living as well as to construct a dwelling house of their own and to clear off certain debts incurred for performing the marriage of the second defendant, they have offered to sell the property in question.
In paragraph 4, it is further stated that on the offer made by defendant Nos.1 to 5 through their known persons of the same village, the plaintiff approached the defendants and expressed his willingness to purchase the said property. The defendants made available the grant order dated 4.8.1948 passed in favour of Nagappa along with other supportive documents, which stood in the name of Nagappa.
In paragraph 5, the plaintiff has stated that defendants have agreed to obtain necessary permission from the competent authorities, namely, the Government since the land in question is the subject matter of grant. The relevant portion is as under: 37
"The defendants have agreed to obtain necessary permission from the competent authorities, namely, the Government, since the land bearing Sy.No.29 is a subject matter of grant in the year 1948 with certain conditions by virtue of amendment. The provisions provides and permits the parties to seek necessary permission from the competent Revenue authorities for alienation of the property in the event of alienation, grantee sought such permission from the authorities by placing satisfactory material to compensate the loss of property and to acquire certain other properties so as to render support to the plaintiff's family."
In paragraph 7(c), the plaintiff has stated that the agreed sale consideration of the property was at Rs.45,00,000/- and on the day of execution of the agreement, plaintiff has paid Rs.25,00,000/-. It was agreed that balance of the sale consideration will be paid at the time of registration.
In para 8 of the plaint, the plaintiff has pleaded that at the time of offer made for sale and negotiations, the defendants have 38 agreed to obtain previous permission of the Government under the provisions of Karnataka Schedule Caste and Schedule Tribes (Prohibition of Transfer of Certain Lands) Act, 1978, which is necessary to conclude the contract.
In paragraph 14, the plaintiff has contended that the defendants are evading to perform their contractual obligation under the agreement dated 9.7.2009.
30. A meaningful reading of the entire plaint makes it clear that the suit schedule properties are granted lands and that the agreements have been entered into without previous permission of the Government under Section 4(2) of the Act. Thus, the agreements are void and unenforceable in law.
31. It is also relevant to consider the submission of the learned Senior Counsel for the first respondent that the suits filed by the plaintiff are for specific performance of the contract. The jurisdiction to decree the specific performance is discretionary. The 39 Court has power to grant alternative reliefs if it refuses to grant the relief of specific performance. Therefore, the suits cannot be dismissed at this stage.
32. It is true that the jurisdiction to decree the specific performance is discretionary and the Court is not bound to grant such relief merely because it is lawful to do so. It empowers the Court to refuse specific performance of contracts, even though it has jurisdiction to render the decree and the contracts are capable of being specifically enforced. But the discretion of the Court should not be arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal. Section 20 of the Specific Relief Act, 1963 confers discretion for decreeing specific performance. The Court is not bound to decree specific performance in the circumstances provided in sub-section (2) of Section 20, which are as under:
40
"(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or
(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff; or
(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance."
33. The Court has also power to grant compensation in certain cases either in addition to or in substitution of performance provided such a claim is made by the plaintiff. Sub-section (1) of Section 21 states that in a suit for specific performance of the contract, the plaintiff may also claim compensation for its breach 41 either in addition to or in substitution of such performance. Sub- section (5) of Section 21 states that no compensation shall be awarded under the said Section unless the plaintiff has claimed such compensation in his claim. However, the Court can allow him to amend the plaint at any stage of the proceedings seeking compensation. Thus, for award of compensation, the plaintiff has to make a claim in the plaint. Section 22 of the Act lays down the power to grant relief for possession, partition, refund of earnest money, etc. It states that any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for possession, or partition and separate possession of the property in addition to such performance or any other relief to which he may be entitled including the refund of any earnest money or deposit paid or made by him in case his claim for specific performance is refused. Sub-section (2) of Section 22 states that no relief under this Section shall be granted by the Court unless it has been specifically claimed. However, the 42 plaintiff can amend his plaint so as to include the claim for such relief.
34. Thus, the discretion vested in the Court not to decree specific performance only if the case falls under clauses (a) to (c) of sub-section (2) of Section 20. No discretion is vested in the Civil Court for award of compensation or refund the earnest money or deposit paid or made by the plaintiff without making a claim in the plaint. A perusal of the plaints would disclose that plaintiff has not sought any alternative relief. The suits are only for specific performance of the contract. There is no merit in the contention of the first respondent that since decree for specific performance is discretionary, the Court can award compensation or refund the earnest money or deposit without making a claim in the plaint.
35. Section 24 bars the filing of the suit for compensation for breach after dismissal of suit for specific performance. It is as under:
43
"Sec.24. Bar of suit for compensation for breach after dismissal of suit for specific performance: The dismissal of a suit for specific performance of a contract or part thereof shall bar the plaintiff's right to sue for compensation for the breach of such contract or part, as the case may be, but shall not bar his right to sue for any other relief to which he may be entitled, by reason of such breach."
36. Similarly, Order 7 Rule 13 of the CPC provides for presentation of the fresh plaint in case of rejection of a plaint under Order 7 Rule 11 of the CPC. It reads as under:
"Rule 13. Where rejection of plaint does not preclude presentation of fresh plaint: The rejection of the plaint on any of the grounds hereinbefore mentioned shall not of its own force preclude the plaintiff from presenting a fresh plaint in respect of the same cause of action."44
Therefore, even if the suit for specific performance of the contract or part thereof is rejected, there is no bar for the plaintiff to sue for any other relief, which he may be entitled to except to sue for compensation for breach of contract.
37. From the discussions made above, it is clear that the agreements entered into by the plaintiff and the defendants for sale of granted lands are null and void having regard to sub-section (2) of Section 4 of Act and its enforcement is barred under Section 23 of the Contract Act. Therefore, the plaints in question are liable to be rejected. However, there is no impediment for the plaintiff to sue for any other relief as provided in Section 24 of the Specific Relief Act and Order 7 Rule 13 of the CPC.
38. It is also necessary to consider yet another submission of the learned Counsel for the first respondent that the first respondent has paid huge advance amount in terms of the contract. He has also deposited court fee along with the plaints. If the plaints are 45 rejected, the plaintiff will not only be deprived of the properties but also the earnest money and the court fee. I have already held that the plaintiff is entitled to sue for other reliefs having regard to Section 24 of the Specific Relief Act. But, the question is whether the plaintiff is entitled for refund of court fee? In this connection, I have also heard Sri H.T.Narendra Prasad, learned HCGP for the respondent-State.
39. It is well settled that court fee is not a tax. In INDIAN MICA AND MICANITE INDUSTRIES LTD. VS. THE STATE OF BIHAR - AIR 1971 SC 1182, the Apex Court has held that before any levy can be upheld as a fee, it must be shown that the levy has reasonable correlationship with the services rendered by the Government. In other words, the levy must be proved to be a quid pro quo for services rendered.
40. In THE SECRETARY, GOVERNMENT OF MADRAS, HOME DEPARTMENT AND ANOTHER VS.
46ZENITH LAMPS AND ELECTRICAL LTD. - AIR 1973 SC 724, the Hon'ble Supreme Court has held that in a case concerning the administration of civil justice in a state, the fees must have relation to the administration of civil justice. While levying fees, the appropriate legislature is competent to take into account all relevant factors, the value of the subject matter of the dispute, the various steps necessary in the prosecution of a suit or matter, the entire cost of the upkeep of Courts and officers administering civil justice, the vexatious nature of a certain type of litigation and other relevant matters. It is free to levy a small fee in some cases, a large fee in others, subject of course to the provisions of Article 14. But one thing the legislature is not competent to do, and that is to make litigants contribute to the increase of general public revenue. In other words, it cannot tax litigation, and make litigations pay, say for road building or education or other beneficial schemes that a state may have. There must be a broad correlationship with the fees collected and the cost or administration of civil justice. Whenever the State Legislature generally increases fees, it must establish that 47 it is necessary to increase Court fees in order to meet the cost of administration of civil justice. As soon as the broad correlationship between the cost of administration of civil justice and the levy of Court fees ceases, the imposition becomes a tax and beyond the competence of the State Legislature.
41. In P.M.ASHWATHANARAYANA SETTY VS. STATE OF KARNATAKA - AIR 1989 SC 100, the Apex Court has observed that the power to raise funds through the fiscal tool of a fee is not to be confused with a compulsion so to do. Fees are levied in order to defray usually a part, in rate cases the whole of the cost of services done in public interest and conferring some degree of advantage on the fee payer. In the said case, though the Court has abstained from striking down the legislation authorising levy of ad valorem court fee, it has further stated that immediate steps are called for and are imperative to rationalise the levies. In 48 doing so, the State should realise the desirability of levying on the initial slab of the subject matter, say up-to 15,000/-, a nominal court fees not exceeding 2 to 2½% so that small claims are not priced out of Courts. Claims in excess of Rs.15,000/- might admit of an ad valorem levy at rates which, preferably, should not exceed 7½% subject further to an upper limit which having regard to all circumstances, could be envisaged at Rs.75,000/-. The Court has further held that after that limit is reached, it is appropriate to impose on gradually increasing slabs of the value of the subject matter, progressively decreasing rates, say from 7½% down to ½% in graduated scales. The Governments concerned should bestow attention on these matters and bring about a rationalisation of the levies. The reasons assigned for issuing such directions are as under:
"12. These are the realities in the background of which the impact of court fees is to be considered. Indeed all civilised Governments recognise the need for access to justice being free. Whether the whole of the expenses 49 of administration of civil justice also - in addition to those of criminal justice - should be free and met entirely by public revenue or whether the litigants should contribute and if so, to what extent, are matters of policy. These ideals are again to be balanced against the stark realities of constraints of finance. Before any judicial criticism of the policy acknowledgment should be made of the Government's power to raise the resources for providing the services from those who use and benefit from the services. The idea that there should be uniform fixed fee for all cases, instead of the ad valorem system, has its own nettling problems and bristles with anomalies. How far these policy considerations have an adjudicative disposition and how far Courts can mould and give direction to the policy is much debated. The Directive Principles in Art.39-A are, no doubt, fundamental in the governance of the country, though not enforceable in Courts of law."
42. In view of the above observations, the Karnataka Court Fees and Suits Valuation Act, 1958 (for short 'Court Fees Act') was amended by Karnataka Act No.2/1993, wherein Article I has 50 been substituted almost incorporating the suggestion made by the Supreme Court in the above case. Slab system has been introduced replacing the flat rate at 10%.
43. Chapter VII of the Court Fees Act, 1958 provides for refund and remission of court fee. Section 63 provides for the refund of court fee in case of delay in presentation of plaint. Section 64 provides for refund in cases of remand. Refund of court fee is also available where the Court reverses or modifies former decision on ground of mistake. Under Section 66 the plaintiff is entitled for refund of half of the amount of fee paid in respect of the claim or claims in a suit or appeal, if the suit is dismissed as settled out of Court, before any evidence has been recorded on the merits of the claim; or any suit is compromised ending in a compromise decree before any evidence has been recorded on the merits of the claim; or any appeal is disposed of before the commencement of hearing of such appeal. There is also a provision in Section 67 for refund of court fee paid by mistake or 51 inadvertence. A Division Bench of this Court in A.SREERAMAIAH VS. THE SOUTH INDIAN BANK LTD., BANGALORE AND ANOTHER - ILR 2006 KAR 4032 has held that in any settlement arrived in terms of Section 89 of the CPC including the judicial settlement at the intervention and on terms suggested by the Court, the appellant is entitled for refund of full court fee. However, if the plaint is rejected at the threshold, there is no provision for refund of the court fee. There is no exemption from payment of court fee if the plaintiff choses to file fresh suits having regard to Section 24 of the Specific Relief Act or Order 7 Rule 13 of the CPC. I am of the view that the State Government has to consider amending the Karnataka Court Fees and Suits Valuation Act, 1958 to enable the plaintiffs to claim refund of the court fee either in full or atleast in part when their plaints are rejected under Order 7 Rule 11(d) of the CPC.
44. In the light of the above discussions, I pass the following:
52
ORDER
(i) The writ petitions are allowed and the orders dated 28.3.2012 on I.A.Nos.8 in O.S.Nos.2375/2011 and 2372/2011, I.A.No.9 in O.S.No.2370/2011 and I.A.No.7 in O.S.No.2374/2011 are hereby set aside and the applications are allowed. The plaints in O.S.Nos.2375/2011, 2372/2011, 2370/2011 and 2374/2011 on the file of the 7th Additional City Civil Judge, Bangalore are hereby rejected.
(ii) However, this order will not preclude the first respondent/plaintiff from availing other remedies available to him in law.
(iii) The Registry is directed to send a copy of this order to the Revenue Secretary and Law Secretary, Vidhana Soudha, Bangalore. The Law Secretary is directed to place a copy of this order before the Karnataka Law Commission, Bangalore, for 53 consideration of the observations and suggestions made in paragraphs 38 to 43 of this order. No costs.
Sd/-
JUDGE.
BMM/-