Gujarat High Court
New Jalaram Park Co-Op. Housing Society ... vs Ramchandra M. Chauhan And Ors. on 23 September, 1987
Equivalent citations: (1988)1GLR82
JUDGMENT A.P. Ravani, J.
1. Would an agreement to sell vacant land in favour of a party confer any right to be heard by the competent authority? The question arises in the context of Rule 5 of the Urban Land (Ceiling and Regulation) Rules, 1976.
2. The petitioners feel aggrieved by an order dated October 14, 1982 passed by the Competent Authority under the provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (hereinafter referred to as 'the Act'). A copy of the order is produced at annexure-A to the petition. Petitioner No. 1 is a Co-operative Housing Society and petitioner No. 2 is a member of the said society. The petitioners contend that an agreement to sell was entered into with the holder of the land by one Jalaram Land Development Corporation on October 16, 1974. The said agreement was with respect to 10000 sq. yds. of land of Survey No. 458 of village Vejalpur, situated within the urban agglomeration area of Ahmedabad. The entire survey number admeasures about 15730 sq. yds. of land.
2-A. The aforesaid Jalaram Land Development Corporation entered into an agreement to sell the land with petitioner No. 1 - Society on April 28, 1975. The society got itself registered under the provisions of the Gujarat Co-operative Societies Act, 1962 on May 26, 1976. In respect of the land in question, an application dated May 26, 1976 was submitted by the land-holder to the Government under Section 20 of the Act praying that exemption from the operation of certain provisions of the Act be granted, in respect of the land. The Government granted exemption in respect of 4000 sq. yds. of land. A copy of the order is produced at annexure-D to the petition. In the proceedings pursuant to the form filled in by the land-holder under Section 6 of the Act, the Competent Authority, after affording an opportunity of being heard to the land-holder, passed an order under Section 9 of the Act on October 14, 1982. As per this order, the Competent Authority came to the conclusion that land admeasuring 5068 sq. yds. was in excess of the ceiling limit. This order is challenged by the petitioners who are not the land-holders. Petition is essentially under Article 227 of the Constitution of India.
3. It is contended by the petitioners that in view of the provisions of Rule 5 of the Urban Land (Ceiling and Regulation) Rules, 1976 the petitioner-Society was entitled to be served with a draft statement prepared under Section 8 of the Act. It is further contended that the petitioner-Society ought to have been afforded an opportunity to submit its objections against the draft statement, and the Society ought to have been heard before the final statement is prepared by the Competent Authority. Admittedly so draft statement under Section 8 of the Act is served upon the petitioner-Society and no such opportunity of being heard has teen afforded to the petitioner before preparing the final statement. Hence it is contended, that the order annexure-A to the petition dated October 14, 1982 be quashed and set aside.
4. The sole contention raised by the learned Counsel for the petitioners requires correct interpretation and examination of Rule 5 of the Urban Land (Ceiling and Regulation) Rules, 1976. The relevant part of Rule 5 reads as follows:
Rule 5....
(1) ... ... ...
(2)(a) The draft statement shall be served, together with the notice referred to in Sub-section (3) of Section 8, on
(i) ... ... ...
(ii) ail other persons, so far as may be known, who have, or are likely to have, any claim to or interest in, the ownership, or possession, or both, of the vacant lands, by sending the same by registered post addressed to the person concerned;
(i) ... ... ...
(ii) ... ... ...
On the basis of the aforesaid provisions of the Rules it is contended that it was within the knowledge of the Competent Authority that there was subsisting agreement to sell the land in favour of the petitioner-society. In view of this subsisting agreement to sell, it should be held that the petitioner-Society had a claim or interest in the ownership or possession of the vacant land in question. The learned Counsel for the petitioners submitted that the words "who have; or are likely to have, any claim to, or interest in, the ownership, or possession, or both", occurring in Rule 5 of the Rules are of very wide import. The aforesaid words also include persons in whose favour the agreement to sell is executed by the land-holder. In the instant case it is an undisputed position that there was an agreement to sell dated April 28, 1975 in favour of the petitioner Society. The Act came into force on February 17, 1976. Therefore it is submitted that on the date of commencement of the Act the petitioner-Society had claim to, or interest in, the ownership or possession of the land.
5. In above view of the matter, the question is - whether the agreement to sell in favour of a party would confer on it any right of being heard? In this respect the position of Indian Law is quite different than English Law on the subject. Under the English Law as soon as there is a concluded contract by A to sell land to B at a certain price, B becomes, in equity, the owner of the land subject to his obligation to pay the purchase money. On the other hand, A in spite of his having the legal estate, holds the same in trust for the purchases, and whatever rights he still retains in the land are referable to his right to recover and receive the purchase money. On the other hand the Indian Law is embodied in Section 54 of the Transfer of Property Act. A contract for sale of land does not of itself create any interest in the property which is the subject matter of the contract. The obligations of the parties to a contract for sale of land are, therefore, same as in other ordinary contracts (See : Satyabrata v. Mugnseram , para 18).
6. In a Full Beach decision of this High Court in the case of Chief Controlling Revenue Authority v. Mahesh Fakirchand Mehta 18 GLR 83, it is inter alia, held that a contract for sale of immovable property does not by itself create any interest or charge on such property. Such a contract is in no way a conveyance and it does not confer any right or interest on such property. It is also held therein that 'banakhat' rights do not create any benefits to arise out of land which can be said to be in the nature of rights in the immovable property. Similarly, law on the point is reiterated by the Supreme Court in the case of Radhakishan Laxminarayan Tesinwal v. Shridhar Ramchandra Alshi . Therein it is held that under Section 54 of the Transfer of Property Act a contract for sale does not of itself create any interest in or charge on immovable property. Consequently the contract for sale does not create any right or interest in favour of the vendee and the proprietary tills does not validly pass from the vendors to the vendee. In above view of the matter, position of law is abundantly clear.
7. The learned Counsel for the petitioners submitted that the petitioners will have a right to get a decree for specific performance of the contract in their favour, on the basis of the agreement to sell. Therefore it is argued that the petitioners have interest in the ownership or possession or both in the vacant land in question. In fact petitioners will have a right to sue; the decree for specific performance of contract may or may not be passed by the Court. Even assuming that the petitioners may have a right to obtain decree for specific performance of the contract and even if it is further assumed that such a decree may be passed in favour of the petitioner-society, such a decree would not create any right or interest in the property. And a decree for specific performance of the contract, at the most again creates and or my crystallises right in favour of the plaintiff to get another document of conveyance executed. Unless the document of sale is executed, the plaintiff in whose favour decree for specific performance is granted, does not get any right or interest in the property. Having regard to the provisions of Urban Land (Ceiling and Regulation) Act, 1976 the right of plaintiff to get a decree for specific performance is conditional, in view of the settled legal position it is abundantly clear that even after passing of the decree for specific performance of the contract, the right which the plaintiff gets is conditional upon the exemption that may be granted by the Government under the provisions of Section 20 of the Act. On this point the law is laid down by the Full Bench of this High Court in the case of Shah Jitendra Nanalal v. Patel Lallubhai Ishverbhai , no further discussion is necessary. In view of the settled legal position it cannot be said that merely because the petitioner-Society had a subsisting contract of sale of land in its favour it had any right or interest in the ownership or possession of the property in question.
8. The learned Counsel for the petitioners submitted that the words 'any claim to' is of very wide import and a claim arising out of contractual rights and obligations of the parties should also be construed as a claim falling within the ambit of Rule 5. The word 'claim' occurring in Rule 5 has to be understood in the proper context and particularly having regard to the preceding phrases "who have, or likely to have" and the succeeding phrases "the ownership, or possession, or both of the vacant lands". If these phrases are taken into consideration it would appear clear that the word 'claim' does not mean the same thing as the cause of action by which the claim is supported or the ground on which a particular demand or prayer may be made. In the context, it should mean an existing right in ownership or possession of the property. Thus in the context, the word 'claim' does not mean mere right to sue. Be it noted that as provided under Section 6(B) of the Transfer of Property Act a mere right to sue cannot be transferred. A right to sue is personal to the party. It cannot be assigned or transferred as property. It is not property as such. Therefore in cases wherever there is agreement to sell, a party to the contract may have a personal right to sue but there does not arise any claim on the property, either in its ownership or possession or both. If the word 'claim' is not giving this meaning, then it would lead to absurdity. Anyone can assert that he has a claim in the ownership or possession of the property. Such a claim may be based on oral agreement. It is not necessary that an agreement to sell should be in writing and should always be on a stamp paper or registered. Moreover, since an argument to sell does not create any right or interest in the property, it may be transferred also, notwithstanding the provisions of Section 5 of the Urban Land (Ceiling and Regulation) Act, 1976. If such an interpretation is given it will be contrary to the provisions of Section 5 of the Act. Moreover it would make the operation and implementation of the Act impossible. Hence such an interpretation of the word 'claim' would be contrary to the provisions of the Act. It is cardinal principle of interpretation of statute that provision of rule has to be interpreted so as to make it harmonious with the provisions of the Act. It cannot be read so as to run counter to the provisions of the Act. Therefore, in the context, the word 'claim' has to be understood as 'right' in ownership or possession of the land. As stated hereinabove, in cases where an agreement to sell is executed in favour of a party, his right in the property would be created only after the document of sale is executed and not before that. As pointed out hereinabove, agreement to sell does not create any right or interest in the property. In view of this position of law, word 'claim' can never be given wide meaning as sought to be canvassed by the learned Counsel for the petitioners.
9. As far as the question of possession of the land in question is concerned, the position is very simple. It is stated by the land-holder himself in his application dated July 17, 1986 that possession of the land was given to the petitioner-Society in the year 1980 (this application is produced in a cognate matter, i.e. Special Civil Application No. 5605 of 1986, at Annexure-H to the petition. This was pointed out to the learned Counsel for the petitioner and he has not controverted this fact. Thus it is abundantly clear that on the appointed date the possession of the land in question was not parted with by the land-holder. The possession of the land remained with the land-holder. The petitioner-society was not put in possession of the land on the appointed date. Rule 5 has to be read together with the provisions of the Act and other provisions of the rules. It cannot be read so as to frustrate the provisions of the Act. Reading the rule in that manner, it has got to be interpreted that claim or interest in the ownership of possession of the property should exist on the appointed date. If such a claim or interest either in the ownership or possession of the property comes into existence after the appointed date, the same cannot be taken into consideration as far as Rule 5 is concerned. In the instant case it is abundantly clear that on the appointed date the petitioner-Society was not in possession of the land. In this view of the matter, since the petitioner-Society has not been put in possession of the land on the date of coming into force of the Act, Rule 5 does not help the petitioners.
10. The learned Counsel for the petitioners submitted that when the Competent Authority decided the case, the application under Section 20 of the Act preferred by the land-holder was pending. Therefore, in view of the decision of this High Court in the case of Nirmalaben v. State of Gujarat 25(1) GLR 322, the Competent Authority ought not to have passed the impugned order. The contention is based on facts non existing. The correct position is that the application submitted by the landholder under Section 20 of the Act was decided on January 10, 1979. By this order the application was partly granted. Land admeasuring 4000 sq. yds. was exempted from operation of certain provisions of the Act. When the impugned order was passed on October 14, 1982 no application under Section 20 of the Act was pending. As far as the application submitted by the land-holder on July 13, 1986 is concerned it was in fact an application for review. It is rejected the landholder has preferred a cognate petition being Special Civil Application No. 5605 of 1986. Therein the land-holder has challenged the legality and validity of the order rejecting the application. It may be noted that in the case of Nirmalaben (supra) this Court has not laid down that the proceedings under Section 6 onwards should not be decided till the review application or the subsequent on record application under Section 20 of the Act is decided. It is not held that even when subsequent applications are pending the proceedings under Section 6 onwards should be kept stayed. The first application under Section 20 of the Act preferred by the land-holder was decided on January 19, 1979. Thereafter even if there were to be any other application pending before the Government, preferred by the land-holder, or by the Society, the same would be either a review application or a subsequent application. During the pendency of such subsequent application it is not necessary that proceedings under Section 6 of the Act be kept pending. Therefore, even assuming that any such subsequent application under Section 20 of the Act was pending before the Government it was not at all necessary for the Competent Authority to stay the proceedings and not to decide the form filled in by the land-holder.
11. The learned Counsel for the petitioners submitted that two Special Civil Applications have been admitted by this Court in which identical question as regards interpretation of Rule 5 is involved. These petitions are Special Civil Application No. 3302 of 1987 (admitted on August 31, 1987) and Special Civil Application No. 3303 of 1987 (admitted on August 13, 1987). Both the petitions have been admitted by me. In those petitions the question with regard to interpretation of Rule 5 is raised, but in altogether different context. Therein it is almost an uncontroverted position or at any rate it appeared from the record of the case that on the date of commencement of the Act the Co-operative Housing Society in question was in possession of the land. Admittedly the Co-operative Housing Society was not served with a notice together with draft statement under Section 8(3) of the Act. Therefore, in the facts and circumstances of those cases it was obvious that provisions of Rule 5 were attracted. As such it cannot be said that identical question of law is involved in those petitions. On the contrary there the question was whether the provisions of Rule 5 were attracted on almost admitted or uncontroverted facts? prime facie I found that the facts as disclosed by the petitioners were sufficient to attract the provisions of Rule 5. Hence the matters have been admitted, and not because therein the question of interpretation of Rule 5 is involved. It is clarified that these observations are not to be given any importance or weightage while deciding this petitions finally. These observations are made for deciding the point raised herein only.
No other contention is raised. In view of the aforesaid position there is no substance in the petition. Hence the petition is rejected. Notice discharged.