Karnataka High Court
Sri. Siddappa vs The State Of Karnataka on 10 December, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
Reserved on : 24.09.2025
Pronounced on : 10.12.2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF DECEMBER, 2025
BEFORE
R
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
WRIT PETITION No.22857 OF 2024 (GM - CPC)
BETWEEN:
1. SRI SIDDAPPA
S/O LATE ERAPPA
AGED ABOUT 72 YEARS.
2. SMT. NAGARATHNAMMA
W/O SIDDAPPA
AGED ABOUT 54 YEARS.
3. SMT.NETHRAVATHI S.,
D/O SIDDAPPA
AGED ABOUT 42 YEARS.
4. SMT. NIRMALAMMA
D/O SIDDAPPA
AGED ABOUT 34 YEARS.
5. SMT.RENUKA
D/O SIDDAPPA
AGED ABOUT 32 YEARS.
ALL PETITIONERS ARE
2
RESIDING AT
BAGGANADODDI VILLAGE
KASABA HOBLI, ANEKAL TALUK
BENGALURU RURAL DISTRICT - 562 106.
... PETITIONERS
(BY SRI R.K.MASUR, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
REPRESENTED BY ITS
CHIEF SECRETARY
VIDHANA SOUDHA
BENGALURU - 560 001.
2. THE ASSISTANT COMMISSIONER
BENGALURU SOUTH TALUK
KANDAYA BHAVANA
BENGALURU - 560 009.
3. THE TAHSILDAR
ANEKAL TALUK
BENGALURU RURAL DISTRICT
BENGALURU - 562 106.
4. THE DEPUTY COMMISSIONER
BENGALURU URBAN
KANDAYA BHAVANA
BENGALURU - 560 009.
5. THE COMMISSIONER
KARNATAKA HOUSING BOARD
CAUVERY BHAVAN
BENGALURU - 560 009.
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6. THE SPECIAL LAND ACQUISITION OFFICER
KARNATAKA HOUSING BOARD
CAUVERY BHAVAN
BENGALURU - 560 009.
7. SRI DASAPPA
LATE SANJEEVAIAH
AGED ABOUT 71 YEARS
RESIDING AT NO.40/25
1ST 'A' CROSS
2ND MAIN ROAD, 5TH BLOCK
KRISHNAIAH LAYOUT
BANASHANKARI 3RD STAGE
BENGALURU - 560 085.
... RESPONDENTS
(BY SMT.RASHMI RAO, HCGP FOR R-1 TO R-4;
R-5 SERVED;
SRI H.L.PRADEEP KUMAR, ADVOCATE FOR R-6;
SRI M.V.VEDACHALA, ADVOCATE FOR R-7)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO A) SET-ASIDE
THE COMPROMISE DECREE DTD 27.08.2011 PASSED IN OS NO.
591/2011 ON THE FILE OF THE HON'BLE COURT OF THE SENIOR
CIVIL JUDGE AND JMFC AT ANEKAL, AS PER ANNEXURE-G; B)
QUASH THE ENTIRE PROCEEDINGS IN EXECUTION PETITION NO.
38/2012, PENDING ON THE FILE OF THE HON'BLE COURT OF THE
SENIOR CIVIL JUDGE AND JMFC AT ANEKAL AS PER ANNEXURE-H
AND ETC.,
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 24.09.2025, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT MADE THE FOLLOWING:-
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CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CAV ORDER
The petitioners/defendants 1 to 5 who are the judgments
debtors are at the doors of this Court calling in question entire
proceedings pertaining to compromise decree dated 27-08-2011
passed in O.S.No.591 of 2011 and as a consequence thereof call in
question entire execution proceedings in E.P.No.38 of 2012 and also
seek a direction to reopen O.S.No.591 of 2011.
2. Heard Sri R.K. Masur, learned counsel appearing for the
petitioners, Smt. Rashmi Rao, learned High Court Government
Pleader appearing for respondents 1 to 4, Sri H.L.Pradeep Kumar,
learned counsel appearing for respondent No.6 and
Sri M.V. Vedachala, learned counsel appearing for respondent No.7.
3. Facts, in brief, germane are as follows: -
3.1. Before embarking upon consideration of the issue
involved, I deem it appropriate to notice the protagonists to the lis.
The 1st petitioner is one Siddappa, judgment debtor No.1,
5
repository of the family; petitioner No.2 one Smt. Nagarathnamma,
judgment debtor No.2 is the wife of the 1st petitioner; petitioner
No.3, Smt. Nethravathi S, judgment debtor No.3; petitioner No.4,
Smt. Nirmalamma, judgment No.4 and petitioner No.5,
Smt. Renuka, judgment No.5 are all children of petitioners 1 and 2.
Respondent No.7, key protagonist is the father of sister-in-law of
petitioner No.2. He is the decree holder. Petitioners 1 and 2 were
granted suit schedule lands. Pursuant to issuance of land grant
certificates they were to cultivate the lands through saguvali chits.
The 1st petitioner was granted 30 guntas of land in Sy.No.53/34 and
the 2nd petitioner was granted 1 acre and 20 guntas of land in
Sy.No.53/40. The revenue entries after such grant were mutated in
the names of petitioners 1 and 2. They were put in physical
possession of the property on the strength of aforesaid saguvali
chits. 13 years pass by. The 7th respondent/decree-holder is said
to have accepted the request of petitioners 1 and 2 to grant some
loan owing to their financial difficulties.
3.2. It is the averment in the petition that the petitioners who
were not educated, signed on the document, thinking that it was a
6
loan document to be executed by them. So, they were taken to the
office of the Sub-Registrar and the document is registered in the
name of the 7th respondent. On two different dates, petitioners 1
and 2 received certain amounts of money from the hands of the 7th
respondent to be the consideration of the document so executed. A
suit then comes to be filed by the 7th respondent seeking specific
performance of the contract and a consequent direction to the
petitioners to execute the sale deed in favour of the 7th respondent
in terms of the agreement that stood registered on 07-06-2010.
Both the parties, four days thereafter, were referred to Lok Adalat
and before the Lok Adalat on 27-08-2011 a compromise was
arrived at on a compromise petition being preferred. The Lok Adalat
accepts the compromise petition and decrees the suit in terms of
the compromise entered into between the parties with a direction to
draw up a decree on the said score. All these things happen during
the period of non-alienation clause.
3.3. When the lands were granted in favour of petitioners 1
and 2, it was indicated that they should not alienate the property
prior to the expiry of 15 years. The said period was to expire on
7
20-05-2012. Sale deed was not executed pursuant to the decree.
On 11-10-2012, the 7th respondent files execution petition in
Execution Petition No.38 of 2012. It is at that juncture the
petitioners claim that they came to know about the compromise
decree which was not known to them. After issuance of notice in
the execution proceedings, on 19-10-2013, the Karnataka Housing
Board notifies the subject lands for the purpose of acquisition by
issuance of a preliminary notification. Objections were called and
final notification was also issued on 12-03-2015.
3.4. The averment in the petition is that the 7th respondent,
now the legal representative of Sanjeevaiah who was the decree-
holder, registers his claim seeking compensation to be paid in
respect of the subject property. The 7th respondent then files an
application before the Tahsildar as well, for change of mutation
entries with respect to the lands on the basis of compromise
decree. Therefore, mutation proceedings come to be initiated
between 19-12-2019 and 04-11-2020. The Tahsildar then passes
an order mutating katha in favour of the 7th respondent in terms of
agreement of sale, compromise decree and a Will of late
8
Sanjeevaiah. The petitioners then challenge the said order by filing
an appeal under Section 136(2) of the Karnataka Land Revenue Act
which comes to be dismissed. 5th respondent/Karnataka Housing
Board issues a revised award notice in terms of the new Act in the
names of petitioners 1 and 2 and the 7th respondent. The claim in
the petition is that the lands should have been only in the names of
petitioners 1 and 2 qua the award notice and not the 7th
respondent's name. Now aggrieved by the aforesaid action of the
Karnataka Housing Board in indicating the name of the 7th
respondent in the revised award notice, the petitioners raise a
challenge to the compromise decree drawn up on 27-08-2011,
entire execution proceedings in Execution Petition No.38 of 2012
and also seek quashment of orders mutating the name of the 7th
respondent, indicating the 7th respondent to be entitled for
compensation.
4. The learned counsel appearing for the petitioners would
contend that petitioners 1 and 2 were not educated. They did not
know what they were signing, whether an agreement of sale or
compromise petition. They always thought that it was a loan
9
document. Though the amount was received before and after
entering into compromise decree, all that has transpired behind the
back of petitioners 3, 4 and 5. The 7th respondent, it is the
allegation, took advantage of the financial condition, played fraud
and coerced them to appear and sign the document before the Sub-
Registrar. The compromise decree was entered into within 4 days of
filing of the suit which would clearly indicate that 7th respondent
had played fraud. The compromise decree does not refer to the
contents of the compromise which was not read out to the
petitioners/judgment debtors. The contract is void ab initio, as 15
years had not yet passed by as per the condition in the saguvali
chit when the grant was made. Therefore, the agreement of sale so
entered into before 15 years is void ab initio.
5. Per contra, the learned counsel appearing for the 7th
respondent would vehemently refute the submissions in contending
that the petitioners have challenged the compromise decree of
27-08-2011 after 13 years. The petitioners have no right, title or
interest in the property, as agreement of sale is entered into and
entire consideration is paid. The petitioners were granted land
10
subject to Karnataka Land Grant Rules and registered agreement of
sale is executed for a consideration of ₹9/- lakhs, as they needed
money for their daughters marriage and on the date of agreement
they received ₹5/- lakhs and at the time of execution of agreement
₹1.25 lakhs. Petitioners 1 and 2, up to the date of filing of subject
petition, had not challenged any proceeding that took place earlier.
For the first time it is contended that compromise arrived at was a
fraud. He would contend that the petitioners were very much aware
of non-alienation clause and notwithstanding the same had entered
into an agreement of sale, but no sale deed even as on today is
executed. Therefore, the rigour of the Rules would not become
applicable at all.
6. The 7th respondent being the only contesting respondent,
the remaining respondents to whom the learned High Court
Government Pleader appears would only toe the lines of the 7th
respondent.
7. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
11
material on record. In furtherance thereof, the following issues
would arise for consideration:
(i) Whether the compromise decree entered into
between the parties could be set aside in a
petition filed under Article 227 of the Constitution
of India?
(ii) Whether the compromise decree/award is to be
declared as void due to the embargo of non-
alienation period of 15 years in terms of Section
61 of the Karnataka Land Reforms Act, 1961 ('the
Act' for short)?
Issue No.1:
(i) Whether the compromise decree entered into
between the parties could be set aside in a
petition filed under Article 227 of the Constitution
of India?
8. To consider the subject issue a few dates and events are
necessary to be retraced. Two parcels of lands were granted
separately to both the petitioners, one measuring 30 guntas and
the other 1 acre and 20 guntas. The conditions in the grant order
are as follows:
".... .... ....
12
(1). ಪರಂತು, ಈ ಕಂ ಾಯವನು ಭೂಕಂ ಾಯದ ಆ ಯಮದ ಉಪಬಂಧದ ೕ ೆ ೆ ಈ
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13
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(7) ಮತು ಪರಂತು,
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( ವಷ-ಗಳ)
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.ಾ_ದ ಭೂ$ಯ ಅಡ.ಾನ ಮತು
(ಖ) ಕSಾ-ಟಕ ಭೂ ಸುsಾರJೆಗಳ ಆ3 ಯಮ, 1961ರ
ಉಪಬಂಧಗDಗನು;ಾರAಾG ಭೂ$ಯನು ೇm ೆ !ೊಡವ:ದು,
14
(8) ಮತು ಪರಂತು, ಮಂಜೂ ಾ)ಯು ;ಾ.ಾನ<AಾG ಭೂ ಕಂ ಾಯ ಅ3 ಯಮದ ಮತು
ಅದರ ೕ ೆ ೆ ರ4%ಡ ಯಮಗಳ ಉಪಬಂಧಗD ೆ ಅಥAಾ ತ7ಾ#ಲದ tಾ5ಯ ರುವ ಇತರ
Kಾವ: ೇ !ಾನೂ ೆ ಸಹ ಒಳಪ[]ರತಕು#ದು.
(9) ಭೂ;ಾರ ಸಂರuJಾ ಅ3!ಾ5ಯು ೇ-vಸುವಂ7ೆ ಮಂಜೂ ಾ) ಪRೆದವನು ಭೂ;ಾರ
ಸಂರuJಾ !ಾಯ-ಕ(ಮಗಳನು !ೈ ೊಳebವ:ದ!ೆ# ಬದZSಾGರತಕು#ದು."
(Emphasis added)
Clause 7 thereof places an embargo of non-alienation by the
petitioners for a period of 15 years with effect from 19-05-1997 and
conditions would be subject to the Act. Consequent upon grant of
land, the revenue entries were changed in the names of petitioners
1 and 2. These facts are not in dispute. When things stood thus,
owing to the need of funds, as is averred in the petition, an
agreement of sale is entered into between the 7th respondent and
petitioners 1 and 2, a registered document. The schedule in the
agreement of sale is as follows:
": yೆಡೂ<z ಸV)ನ Hವರ :
Lೆಂಗಳ{ರು ನಗರ |6ೆ, ಆSೇಕz 7ಾಲೂಕು, |ಗm IೋಬD, !ಾಡುಜಕ#ನಹDb ಾ(ಮದ
ಸAೆ- ನಂ. 53/34 ರ 0-30(ಮೂವತು ಗುಂ}ೆ) %ದEಪ2 ~• ಈರಪ2 ರವರ Lಾ§ÄÛ ಜ$ೕನು ಮತು ಇ ೇ
!ಾಡುಜಕ#ನಹDb ಾ(ಮದ ಸAೆ- ನಂ53/40 ರ H%ಣ--1-ಎಕ ೆ 20 ಗುಂ}ೆ (ಒಂದು ಎಕ ೆ ಇಪ2ತು
ಗುಂ}ೆ) ಜ$ೕನು v(ೕಮ) Sಾಗರತ ಮj ರವರ Lಾ§ÄÛ, ಒಟು] .H%ಣ-2-10 (ಎ ೆಡು. ಎಕ ೆ ಹತು ಗುಂ}ೆ)
ಗುಂ}ೆ ಜ$ೕನುಗD ೆ €ೆಕು#ಬಂ8,
ಚಕು#ಬಂ8:-
15
ಪ•ವ-!ೆ# : ಸAೆ- ನಂ 96 ರ ಮು Aೆಂಕಟಮj ರವರ ಸVತು
ಪvXಮ!ೆ#: ಸ!ಾ-5 ಹಳb
ಉತರ!ೆ#: ಮು ಯಪ2 ರವರ ಜ$ೕನು
ದ‚ಣ!ೆ# : .ಾದಪ2 ಮತು ಮು ಯಮj ರವರ ಜ$ೕನು
ಈ ಮsೆ< ಇರುವ ಸVತು .ಾತ( ಈ ಕ(ಯದ ಕ ಾರು ಪತ(!ೆ# ಒಳಪ[]ರುತ ೆ. ಸದ5ೕ ಸV)ನ ;ಾV3ೕನವನು
ಕ(ಯ ಪತ(ದ Sೋಂದm Aೇgೆಯ ವ ೆಗೂ SಾAೇ ಉD%!ೊಂ_ರು7ೇAೆ, ಈ ಕ ಾರು ಪತ(ವನು ಓ8,
ಓ8%, !ೇD ಸ5KಾG ೆdಂದು ಒ12 !ೆಳಕಂಡ ;ಾ‚ ಾರರ ಸಮuಮದ ಸf .ಾ_ರು7ೇAೆ, ಮತು
ಈ ಅ% ೆ ಸಂಬಂಗ ಪಟ] ಾಖ6ೆಗಳನು ಅವ8 ಮುGದ ನಂತರ ¸ÀA§AzsÀ¥ÀlÖ PÀbÉÃjUÀ½AzÀ MzÀV¹
vÀªÀÄUÉ £ÉÆÃAzÀt ªÀiÁrPÉÆqÀ®Ä §zÀÞgÁVgÀÄvÉÛêÉ.
;ಾ‚ ಾರರು
1. M ªÀiÁzÀ¥Àà s/o ªÀÄ®è¥Àà 1. LTM of ¹zÀÝ¥Àà
§UÀΣÀzÉÆrØ UÁæªÀÄ PÀ¸À¨Á 2. LTM of £ÁUÀgÀvÀߪÀÄä
3.. ¸À»/-Nithira
2 A. nagaraja 4. ¸À»/-¤ªÀÄð®
s/o CªÀ®¥Àà 5..
D£ÉÃPÀ¯ï vÁ||
D£ÉÃPÀ¯ï
.ಾ ಾಟ ಾರರು
¸À»/-
¸ÀAfêÀAiÀÄå
ಖ5ೕ8 ಾರರು
Sd/-
K.S.YathiRaj"
Petitioners 1 and 2 affix their thumb impressions before the
Sub-Registrar. The agreement did not fructify into execution of sale
deed. The father of the 7th respondent, late Sanjeevaiah then
16
institutes O.S.No.591 of 2011 seeking specific performance of
contract directing execution of sale deed. The prayer in the suit is
as follows:
".... .... ....
Wherefore, the Plaintiff above named humbly prayed that
this Hon'ble Court be pleased to pass a judgment and decree
against the defendants for:
a) For the relief of specific performance of the contract
directing the defendants to execute the valid sale deed in
favour of the plaintiff under the terms and conditions of
the agreement dated 7-06-2010.
b) If the defendants failed to execute the valid sale deed in
favour of the plaintiff, this Hon'ble Court be pleased to
execute the valid sale deed in favour of the plaintiff on
behalf of the defendants, under the terms and conditions
of the agreement.
c) For consequential relief of permanent injunction,
restraining the defendants or their power of attorney
holders, agents, supporters or any persons claiming right
through or under him from alienating the suit schedule
property in favour of any persons in any manner.
d) To award the costs of the suit, and for such other relief or
reliefs as this Hon'ble Court deems fit to be grant under
the circumstances of the case in the interest of justice
and equity.
SCHEDULE
All the part and parcel of the property bearing
Sy.No.53/34 (New Sy.No.53/P34) measuring 30 guntas and
Sy.No.53/40 (New Sy.No.53/P40) measuring 1 acre 20 guntas
in all 2 acres 10 guntas, abutting each other having common
boundary and situated at Kadajakkanahalli village, Jigani Hobli,
Anekal Taluk, Bangalore District, bounded on
17
East by: Munivenkatamma's property in Sy.No.96
West by: Government Halla.
North by: Muniyappa's property and
South by: Madappa and Muniyamma's property."
The suit was filed for two pieces of land, one concerning 30 guntas
and the other 1 acre 20 guntas. In the said suit, an application
under Order 23 Rule 3 of the CPC for compromise was filed. The
contents of the said compromise petition are as follows:
"The plaintiff and defendants above named beg to file the
following compromise petition as hereunder:
1. The plaintiff instituted the said suit against the
defendants for the relief of specific performance and other
consequential reliefs and the said suit is pending on the file of
this Hon'ble Court. At the intervention of the villagers, elderly
persons of the locality, the dispute involved in between the
plaintiff and defendants have been settled out of the court, and
the parties hereto intend to enter into this compromise petition
as hereunder.
2. The defendants admits they entered into the registered
agreement of sale in favour of the plaintiff on 7.06.2010
agreeing to sell the suit schedule property for a total
consideration of ₹9,00,000/-. The defendants also admitted that
on the very day of the agreement they received a sum of
₹5,00,000/- from the plaintiff by way of cash. The defendants
are also agreed to receive balance sale consideration of
₹4,00,000/- at the time of registration. The defendants agreed
to execute the sale deed in favour of the plaintiff after getting
the necessary documents for registration. As such the time if
not essence of the contract. The defendants are also received
the additional advance amount a sum of ₹1,25,000/- on
19.08.2011 and also executed the shara on the stamp paper.
18
3. The defendants admit that the very property is the
granted lands granted in favour of the defendant No.1
and 2 and they required necessary sale permission for
executing the registered sale deed. As such the
defendants filed necessary application for getting the
necessary permission from the Government for
transferring and conveying the property and proceedings
are pending consideration. In between the plaintiff filed
the said suit against the defendants for the relief of
specific performance of the contract. For that this
defendants have no objection to decree the suit in favour
of the plaintiff as prayed for in the plaint. The defendants
are also agreed to execute the sale deed in favour of the
plaintiff after getting the necessary permission or after
relaxing the imposed period for alienation the property.
This day the defendants received the balance sale
consideration of ₹2,75000/- from the plaintiff in full and
final settlement and this day itself the defendants handed
over the vacant possession of the suit schedule property
in favour of the plaintiff. From this day onwards the
plaintiff is entitled to use and enjoy the schedule property
as he likes. The plaintiff is entitled to approach the
concerned authorities to seek the document in respect of
the schedule property in his favour, from the concerned
authorities. The defendants have no objection to decree
the suit as prayed for by him in the plaint, further this
compromise petition is in the interest of both the parties.
And as such, it is prayed that this Hon'ble Court be
pleased to record the compromise petition and decree the
suit in terms of the compromise petition.
Wherefore, the plaintiff and defendants above named
humbly prayed that this Hon'ble Court be pleased to record the
compromise petition and decree the suit in terms of the
compromise petition, in the interest of justice and equity.
SCHEDULE
All the part and parcel of the property bearing old
Sy.No.53/34, New Sy.No.53/P34, measuring 30 guntas and old
Sy.No.53/40, New Sy.No.53/P40, measuring 1 acre 20 guntas,
in all 2 acres 10 guntas, abutting each other having common
boundary and situated at Kadajakkanahalli village, Jigani Hobli,
19
Anekal Taluk, Bangalore District, bounded on East by:
Munivenkatamma's property in Sy.No.96, West by: Government
Halla, North by: Muniyappa's property and South by:Madappa
and Muniyamma's property.
Sd/-Advocate for Plaintiff Sd/- Plaintiff.
Sd/-Advocate for Defendants Sd/- Defendants.
VERIFICATION
We the Plaintiff and defendants do hereby declare that
what is stated above is true and correct to the best of our
knowledge, information and belief.
Anekal
Dated: 27-08-2011 Sd/- Plaintiff
Sd/- Defendants."
(Emphasis added)
The concerned Court, on the basis of compromise petition, draws
up a decree. The compromise decree is as follows:
"Compromise Decree
IN THE COURT OF THE SENIOR CIVIL JUDGE & J.M.F.C. AT
ANEKAL
O.S.NO.591 of 2011
Plaintiff/s: Sri Sanjeevaiah,
S/o Late Muthaiaha,
Aged about 76 years,
R/at Uyyalappanahalli Village,
Maralavadi Hobli, Kanakapura Taluk,
Ramanagara District.
Vs.
20
Defendants: 1. Sri Siddappa,
S/o late Eerappa
Aged about 53 years.
2. Smt. Nagarathnamma,
W/o Sri Siddappa,
Aged about 46 years,
3. Smt. Nethravathi,
D/o Siddappa,
Aged about 23 years.
4. Smt. Nirmalamma,
D/o Sri Siddappa,
Aged about 21 years.
5. Renuka,
D/o Sri Siddappa,
Aged about 19 years.
All are R/at Bagganadoddi Village,
Kasaba Hobli, Anekal Taluk,
Bangalore District.
----
Suit filed on: 23-08-2011 Nature of suit: Specific Performance. Suit claim: a) For the relief of Specific Performance of the contract
directing the defendants to execute the valid sale deed in favour of the plaintiff under the terms and conditions of the agreement dated 07-06-2010.
b) If the defendants failed to execute the valid sale deed in favour of the plaintiff, this Hon'ble Court be pleased to execute the valid sale deed in favour of the plaintiff on behalf of the defendants, under the terms and conditions of the agreement.
c) For consequential relief of permanent injunction, restraining the defendants or their power of attorney 21 holders, agents, supporters or any persons claiming right through or under him from alienating the suit schedule property in favour of any persons in any manner.
d) To award the cost of the suit and grant such other relief/s.
This suit is coming on this day before the Lok-Adalath for disposal before Sri Mahanthappa., A.D., B.A.LL.B., Senior Civil Judge & JMFC, Anekal and Judge Conciliator, Sri Mohan M, Advocate Conciliator, in the presence of Sri Vijayakumar, Advocate for plaintiff, Sri J.Mohan Kumar, Advocate for defendants.
It is ordered and decreed that the suit of the plaintiff is hereby decreed in terms and conditions of compromise petition Under Order 23 Rule 3 of CPC., filed by the plaintiff and defendants before Lok-Adalath on 27-08-2011 as follows:
The plaintiff instituted the said suit against the defendants for the relief of specific performance, and other consequential reliefs, and the said suit is pending on the file of this Hon'ble Court. At the intervention of the villagers, elderly persons of the locality, the dispute involved in between the plaintiff and defendants have been settled out of the court, and the parties hereto intends to enter into this compromise petition as hereunder.
The defendants admit they entered into the registered agreement of sale in favour of the plaintiff on 07.06.2010 agreeing to sell the suit schedule property for a total consideration of Rs. 9,00,000=00. The defendants also admitted that on the very day of the agreement they received a sum of Rs. 5,00,000=00 from the plaintiff by way of cash. The defendants are also agreed to receive balance sale consideration of Rs.4,00,000=00 at the time of registration. The defendants agreed to execute the sale deed in favour of the plaintiff after getting the necessary documents for registration. As such the time if not essence of the contract. The defendants are also received the additional advance amount a sum of Rs.1,25,000=00 on 19.08.2011 and also executed the shara on the stamp paper.22
The defendants admit that the very property is the granted lands granted in favour of the defendant No.1 and 2 and they required necessary sale permission for executing the registered sale deed. As such the defendants filed necessary application for getting the necessary permission from the Government for transferring and conveying the property and proceedings are pending consideration. In between the plaintiff filed the said suit against the defendants for the relief of specific performance of the contract. For that this defendants have no objection to decree the suit in favour of the plaintiff as prayed for in the plaint. The defendants are also agreed to execute the sale deed in favour of the plaintiff after getting the necessary permission or after relaxing the imposed period for alienation the property. This day the defendants received the balance sale consideration of Rs.2,75,000=00 from the plaintiff in full and final settlement, and this day itself the defendants handed over the vacant possession of the suit schedule property in favour of the plaintiff. From this day onwards the plaintiff is entitled to use and enjoy the schedule property as he likes. The plaintiff is entitled to approach the concerned authorities to seek the document in respect of the schedule property in his favour, from the concerned authorities. The defendants have no objection to decree the suit as prayed for by him in the plaint, further this compromise petition is in the interest of both the parties.
Given under my hand and the seal of the Court, this 27th day of August, 2011.
Sd/-
12.09.2011 Senior Civil Judge & JMFC Anekal.
SCHEDULE All the part and parcel of the property bearing old Sy.No.53/34, New Sy.No.53/P34, measuring 30 guntas and old Sy.No.53/40, New Sy.No.53/P40, measuring 1 acre 20 guntas, in all 2 acres 10 guntas, abutting each other having common 23 boundary and situated at Kadajakkanahalli village, Jigani Hobli, Anekal Taluk, Bangalore District, bounded on:
East by: Munivenkatamma's property in Sy.No.96, West by: Government Halla, North by: Muniyappa's property and, South by: Madappa and Muniyamma's property.
Sd/-
12.09.2011 Senior Civil Judge & JMFC Anekal."
(Emphasis added) Seeking execution of compromise decree, the 7th respondent prefers execution petition, as no sale deed was executed on the strength of the compromise decree. All this happened during the subsistence of 15 years non-alienation clause. Nothing happened thereafter between the parties.
9. The suit schedule property was notified for acquisition by the 5th respondent/Karnataka Housing Board. Here begins the problem; not immediately, but when the award or revised award notice comes to be notified notifying the 7th respondent along with petitioners 1 and 2 to be entitled for compensation. It is then petitioners 1 and 2 or their children, petitioners 3 to 5 wake up and 24 file the subject petition calling in question the compromise entered into before the Lok Adalat 13 years ago and today, the matter is heard 14 years thereafter. It is germane to notice that the compromise was entered into between the parties in the year 2011 and execution proceedings were filed in the year 2012. For 12 years no person raised any objection with regard to the compromise as being fraud or otherwise. In such circumstance, whether the compromise decree could be annulled is what is required to be considered. The consideration of which need not detain this Court for long or delve deep into the matter. The Apex Court in the case of K. SRINIVASAPPA v. M. MALLAMMA1, has held as follows:
".... .... ....
33. Section 21 of the Legal Services Authorities Act, 1987 equates an award of the Lok Adalat, to a decree of a civil court and imputes an element of finality to an award of compromise passed by the Lok Adalat. When the Lok Adalat disposes cases in terms of a compromise arrived at between the parties to a suit, after following principles of equity and natural justice, every such award of the Lok Adalat shall be deemed to be a decree of a civil court and such decree shall be final and binding upon the parties. Given the element of finality attached to an award of the Lok Adalat, it also follows that no appeal would lie, under Section 96CPC against such award, vide P.T. Thomas v. Thomas Job [P.T. Thomas v. Thomas Job, (2005) 6 SCC 478].1
(2022) 17 SCC 460 25
34. While we recognise that a writ petition would be maintainable against an award of the Lok Adalat, especially when such writ petition has been filed alleging fraud in the manner of obtaining the award of compromise, a writ court cannot, in a casual manner, dehors any reasoning, set aside the order of the Lok Adalat. The award of a Lok Adalat cannot be reversed or set aside without setting aside the facts recorded in such award as being fraudulently arrived at.
35. The Latin maxim "cessante ratione legis cessat ipsa lex" meaning "reason is the soul of the law, and when the reason of any particular law ceases, so does the law itself"
vide Swamiji of Shri Amar Mutt v. HRCEC, Mysore [Swamiji of Shri Amar Mutt v. HRCEC, Mysore, (1979) 4 SCC 642], is also apposite.
36. On the aspect of the duty to accord reasons for a decision arrived at by a court, or for that matter, even a quasi- judicial authority, it would be useful to refer to a judgment of this Court in Kranti Associates (P) Ltd. v. Masood Ahmed Khan [Kranti Associates (P) Ltd. v. Masood Ahmed Khan, (2010) 9 SCC 496 : (2010) 3 SCC (Civ) 852] , wherein after referring to a number of judgments, this Court summarised at para 47 of the judgment the law on the point. The relevant principles for the purpose of this case are extracted as under:
(a) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.
(b) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.
(c) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations.
(d) Reasons have virtually become as indispensable a component of a decision-making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.26
(e) Reasons facilitate the process of judicial review by superior courts.
(f) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts.
This is virtually the lifeblood of judicial decision-making justifying the principle that reason is the soul of justice.
(g) Judicial or even quasi-judicial opinions these days can be as different as the Judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.
(h) Insistence on reason is a requirement for both judicial accountability and transparency.
(i) If a Judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.
(j) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or "rubber- stamp reasons" is not to be equated with a valid decision- making process.
(k) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the Judges and decision-makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro, "In Defence of Judicial Candor" [Defence of Judicial Candor, (1987) 100 Harvard Law Review 731- 37].)
(l) In all common law jurisdictions judgments play a vital role in setting up precedents for the future.
27Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "due process".
(m) The requirement to record reasons emanates from the broad doctrine of fairness in decision-making i.e. adequate and intelligible reasons must be given for judicial decisions.
Though the aforesaid judgment was rendered in the context of a dismissal [Kranti Associates (P) Ltd. v. Masood Ahmed Khan Revision Petition No. 2889 of 2007, order dated 31-8-2007 (NCDRC)] of a revision petition by a cryptic order by the National Consumer Disputes Redressal Commission, reliance could be placed on the said judgment on the need to give reasons while deciding a matter particularly as it arises in the instant case.
37. In view of the aforesaid discussion, we shall now consider the facts of the present case. The details as to the terms of the compromise as well as the contentions raised at the Bar have been narrated above. On a consideration of the same, the following aspects would emerge:
37.1. The Lok Adalat, in its award dated 7-7-2012 recorded that the parties had admitted that the contents of the compromise petition were true and correct, after the terms thereof had been read over and explained to them in Kannada language. Further, it was also noted that the compromise was entered into by Plaintiff 1, on behalf of, and for the benefit of his two minor children, in order to protect their shares. The same was allowed by the Lok Adalat on recognising the terms of the compromise, would protect the interests of Plaintiff 1's minor children. There is no objection raised on behalf of Plaintiff 1 in the instant case.
37.2. The Lok Adalat, in its order dated 27-4-2013, rejected the allegations of fraud raised by Plaintiffs 4 to 6, against the defendants and recorded that Plaintiffs 4 to 6 had offered no explanation as to why no objection was raised by any of them on 7-7-2012 before the Lok Adalat.
It was further observed that Plaintiffs 4 to 6, could not, after having accepted huge sums of money in terms of the compromise, rescind from the terms thereof.
2837.3. It is not the case of Plaintiffs 4 to 6 that they had not received an amount of Rs 30,00,000 (Rupees thirty lakhs) each, in terms of the compromise. Further, it is not their case that such sum has been returned, in whole or in part, to the defendants.
37.4. That although Plaintiff 4, stated that on learning that the proceedings conducted on 7-7-2012 before the Lok Adalat were in relation to a compromise, she had not signed the order sheet, she failed to provide any explanation as to why she did not inform the Lok Adalat on the said date that her signature on the compromise petition was obtained by fraud.
37.5. That Plaintiffs 4 to 6 had admitted before the Lok Adalat on 7-7-2012 that the contents of the compromise petition were true and correct, when the same had been read over and explained to them in Kannada.
37.6. That Plaintiffs 4 to 6 specifically admitted that they had received a sum of Rs 30,00,000 (Rupees thirty lakhs) each, as mentioned in the compromise petition in lieu of relinquishing their rights, title and interest in the other suit schedule properties.
37.7. That if, in fact, the signatures of Plaintiffs 4 to 6 had been obtained by fraud, they ought to have returned the amount of Rs 30,00,000 (Rupees thirty lakhs) each, paid to them in accordance with the terms of the compromise. Having not done so, Plaintiffs 4 to 6 had failed to establish that any fraud was practiced upon them, by the defendants, with a view to obtain their signatures on the compromise petition.
.... .... .....
38. The learned Single Judge of the High Court in the impugned judgment [K. Sugunamma v. K. Devaraj, 2015 SCC OnLine Kar 9700] has not considered the aforesaid facts of the case in the context of setting aside the award of the Lok Adalat dated 7-7-2012. The learned Single Judge has also not considered the reasoning given in the order dated 27-4-2013 by which the objections 29 raised by Plaintiffs 4 to 6 to the decree of the Lok Adalat had been rejected.
39. This Court in Ruby Sales and Services (P) Ltd. v. State of Maharashtra [Ruby Sales and Services (P) Ltd. v. State of Maharashtra, (1994) 1 SCC 531] observed that a consent decree is a creature of an agreement and is liable to be set aside on any of the grounds which will invalidate an agreement. Therefore, it would follow that the level of circumspection, which a court of law ought to exercise while setting aside a consent decree or a decree based on a memo of compromise, would be at least of the same degree, which is to be observed while declaring an agreement as invalid.
40. In Pushpa Devi Bhagat v. Rajinder Singh [Pushpa Devi Bhagat v. Rajinder Singh, (2006) 5 SCC 566] , this Court held that since no appeal would lie against a compromise decree, the only option available to a party seeking to avoid such a decree would be to challenge the consent decree before the court that passed the same and to prove that the agreement forming the basis for the decree was invalid. It is therefore imperative that a party seeking to avoid the terms of a consent decree has to establish, before the Court that passed the same, that the agreement on which the consent decree is based, is invalid or illegal.
41. It is a settled position of law that where an allegation of fraud is made against a party to an agreement, the said allegation would have to be proved strictly, in order to avoid the agreement on the ground that fraud was practiced on a party in order to induce such party to enter into the agreement. Similarly, the terms of a compromise decree, cannot be avoided, unless the allegation of fraud has been proved. In the absence of any conclusive proof as to fraud on the part of the objectors, the High Court could not have set aside the compromise decree in the instant case.
42. Having considered the aforesaid facts of the present case, we are of the view that no ground was made out warranting the decision of the High Court to set aside the order 30 of the Lok Adalat dated 7-7-2012, wherein compromise was recorded between the parties. The High Court's decision to set aside the order of the Lok Adalat, without entering into a discussion as to the findings in such order, cannot be sustained. Such decision of the High Court runs contrary to established principles of law which seek to protect the sanctity and finality of orders based on a compromise or consent between parties."
(Emphasis supplied) The Apex Court holds that the Court exercising jurisdiction to annul compromise decree should approach with certain circumspection.
The Apex Court holds that question of fraud would not arise when the terms of the compromise are read over to the parties and explained; where the parties had not filed any objections soon after recording the compromise; where the parties were in receipt of amounts in terms of the compromise and the said receipt is not disputed; where the parties have signed on the order sheet; where the parties had admitted to the contents of the compromise and when after allegation of fraud has been alleged any attempt is made to return the money. The Apex Court holds that the High Court exercising jurisdiction to set aside a compromise decree should bear in mind the above conditions. If the contents of the compromise or the link in the chain of events between the parties is 31 considered, on the bedrock of the principles so laid down by the Apex Court what would unmistakably emerge is, that there is no challenge to the compromise immediately after entering into it and amounts are received in terms of the compromise decree without any demur. There is no attempt to return the money that was received as a part of the compromise. Therefore, most of the conditions stipulated by the Apex Court to desist from annulling a compromise decree do exist in the case at hand. Therefore, this Court by a stroke of pen, without any content, cannot annul the compromise decree.
10. It becomes apposite to notice the judgments of the Apex Court, wherein the Apex Court holds that the award of the Lok Adalat does not mean any independent verdict or opinion arrived at by any decision-making person. The making of an award is merely an administrative act of incorporating the terms of settlement or compromise agreed between the parties in the presence of the Lok Adalat. Therefore, to challenge the same would be only on extremely limited grounds. The Apex Court laid down these grounds 32 in the case of STATE OF PUNJAB v. JALOUR SINGH2, wherein it is held as follows:
".... .... ....
7. A reference to relevant provisions will be of some assistance, before examination of the issues involved. Section 19 of the Legal Services Authorities Act, 1987 ("the LSA Act", for short) provides for organisation of the Lok Adalats. Section 19(5)(i) of the LSA Act provides that a Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or settlement between the parties to a dispute in respect of any case pending before any court for which the Lok Adalat is organised. Section 20 relates to cognizance of cases by the Lok Adalats. Sub-section (1) refers to the Lok Adalats taking cognizance of cases referred to by courts and sub-section (2) refers to the Lok Adalats taking cognizance of matters at pre-litigation stage. The relevant portions of other sub-sections of Section 20, relating to cases referred by courts, are extracted below:
"20. (3) Where any case is referred to a Lok Adalat under sub-section (1) ... the Lok Adalat shall proceed to dispose of the case ... and arrive at a compromise or settlement between the parties.
(4) Every Lok Adalat shall, while determining any reference before it under this Act, act with utmost expedition to arrive at a compromise or settlement between the parties and shall be guided by the principles of justice, equity, fair play and other legal principles.
(5) Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, the record of the case shall be returned by it to the court, from which the reference has been received under sub-section (1) for disposal in accordance with law.
*** 2 (2008) 2 SCC 660 33 (7) Where the record of the case is returned under sub-section (5) to the court, such court shall proceed to deal with such case from the stage which was reached before such reference under sub-section (1)."
(emphasis supplied)
8. It is evident from the said provisions that the Lok Adalats have no adjudicatory or judicial functions. Their functions relate purely to conciliation. A Lok Adalat determines a reference on the basis of a compromise or settlement between the parties at its instance, and puts its seal of confirmation by making an award in terms of the compromise or settlement. When the Lok Adalat is not able to arrive at a settlement or compromise, no award is made and the case record is returned to the court from which the reference was received, for disposal in accordance with law. No Lok Adalat has the power to "hear" parties to adjudicate cases as a court does. It discusses the subject-matter with the parties and persuades them to arrive at a just settlement. In their conciliatory role, the Lok Adalats are guided by the principles of justice, equity and fair play. When the LSA Act refers to "determination" by the Lok Adalat and "award" by the Lok Adalat, the said Act does not contemplate nor require an adjudicatory judicial determination, but a non-adjudicatory determination based on a compromise or settlement, arrived at by the parties, with guidance and assistance from the Lok Adalat. The "award" of the Lok Adalat does not mean any independent verdict or opinion arrived at by any decision- making process. The making of the award is merely an administrative act of incorporating the terms of settlement or compromise agreed by parties in the presence of the Lok Adalat, in the form of an executable order under the signature and seal of the Lok Adalat.
... ... ...
12. It is true that where an award is made by the Lok Adalat in terms of a settlement arrived at between the parties (which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final and binding on the parties to the settlement and becomes executable as if it is a decree of a civil court, and no 34 appeal lies against it to any court. If any party wants to challenge such an award based on settlement, it can be done only by filing a petition under Article 226 and/or Article 227 of the Constitution, that too on very limited grounds. But where no compromise or settlement is signed by the parties and the order of the Lok Adalat does not refer to any settlement, but directs the respondent to either make payment if it agrees to the order, or approach the High Court for disposal of appeal on merits, if it does not agree, is not an award of the Lok Adalat. The question of challenging such an order in a petition under Article 227 does not arise. As already noticed, in such a situation, the High Court ought to have heard and disposed of the appeal on merits."
(Emphasis supplied) The said judgment is followed in the case of BHARGAVI CONSTRUCTIONS v. KOTHAKAPU MUTHYAM REDDY3, wherein it is held as follows:
".... .... ....
22. The question arose before this Court (three-
Judge Bench) in State of Punjab [State of Punjab v. Jalour Singh, (2008) 2 SCC 660: (2008) 1 SCC (Civ) 669: (2008) 1 SCC (Cri) 524: (2008) 1 SCC (L&S) 535] as to what is the remedy available to the person aggrieved of the award passed by the Lok Adalat under Section 20 of the Act. In that case, the award was passed by the Lok Adalat which had resulted in disposal of the appeal pending before the High Court relating to a claim case arising out of the Motor Vehicles Act. One party to the appeal felt aggrieved of the award and, therefore, questioned its legality and correctness by filing a writ petition under Articles 226/227 of the Constitution of India. The High Court dismissed the writ petition holding it to be not maintainable. The aggrieved party, 3 (2018) 13 SCC 480 35 therefore, filed an appeal by way of special leave before this Court. This Court, after examining the scheme of the Act allowed the appeal and set aside the order of the High Court. This Court held that the High Court was not right in dismissing the writ petition as not maintainable. It was held that the only remedy available with the aggrieved person was to challenge the award of the Lok Adalat by filing a writ petition under Article 226 or/and Article 227 of the Constitution of India in the High Court and that too on very limited grounds. The case was accordingly remanded to the High Court for deciding the writ petition filed by the aggrieved person on its merits in accordance with law."
(Emphasis supplied) In the light of the afore-noticed judgements of the Apex Court, the challenge to the award of the Lok Adalat is only on extremely limited grounds of fraud or coercion. Fraud is not found in the case at hand for the reasons indicated hereinabove. All that the petitioners contend is lack of awareness, in the entire petition, to challenge the award of the Lok Adalat. This again suffers from want of tenability in the light of the judgment rendered by the High Court of Kerala in the case of SAJITHA v. BALDBOSE4, wherein it is held as follows:
".... .... ....
4. Having heard the learned counsel on either side, I hold that there is no infirmity in Ext.P2 award passed for the reasons 4 2023 SCC OnLine Ker.5257 36 to follow. There is no allegation of fraud committed or alleged in the petition. The ground that she was not aware of the contents of the compromise and that she was not communicated about the same by her counsel cannot be accepted. At any rate, the same cannot be a ground to challenge the award of the Lok Adalat. It is also pointed out by the parties though there is a stipulation that no maintenance would be claimed, subsequently, the petitioner approached the family court for maintenance. This shows that Lok Adalat has not prevented the right of the first petitioner to claim maintenance, and all that could be understood from the relevant term is that, at that point in time, no maintenance was being claimed. It is also to be seen that the petitioner had received the benefit of the first condition regarding the return of gold ornaments, and therefore, she is not aggrieved by all the terms but only against the selective ones. The petitioner cannot be allowed to approbate and reprobate at the same time. It is trite that the award of the Lak Adalath can be challenged only on very limited grounds, as held by the Courts, including the Apex Court reported in K. Srinivasappa v. M. Mallamma [AIR 2022 SC 238], which held as follows:
"29. While we recognise that a Writ Petition would be maintainable against an award of the Lok Adalat, especially when such writ petition has been filed alleging fraud in the manner of obtaining the award of compromise, a writ court cannot, in a casual manner, de hors any reasoning, set aside the order of the Lok Adalat. The award of a Lok Adalat cannot be reversed or set aside without setting aside the facts recorded in such award as being fraudulent arrived at.
"34. In Pushpa Devi Bhagat (dead) through LR. Sadhna Rai v. Rajinder Singh - [(2006) 5 SCC 566], this Court held that since no appeal would lie against a compromise decree, the only option available to a party seeking to avoid such a decree would be to challenge the consent decree before the Court that passed the same and to prove that the agreement forming the basis 22 for the decree was invalid. It is therefore imperative that a party seeking to avoid the terms of a consent decree has to 37 establish, before the Court that passed the same, that the agreement on which the consent decree is based, is invalid or illegal.
xxxxx
35. It is a settled position of law that where an allegation of fraud is made against a party to an agreement, the said allegation would have to be proved strictly, in order to avoid the agreement on the ground that fraud was practiced on a party in order to induce such party to enter into the agreement. Similarly, the terms of a compromise decree, cannot be avoided, unless the allegation of fraud has been proved. In the absence of any conclusive proof as to fraud on the part of the objectors, the High Court could not have set aside the compromise decree in the instant case."
(Emphasis supplied) The High Court of Kerala holds that once having signed the document and later to come up in a challenge contending that signatories lack awareness of law and were not aware of consequences of signing of the document cannot be entertained, unless fraud is palpable or demonstrable. I am in respectful agreement with the judgment rendered by the High Court of Kerala.
Therefore, issue No.1 with regard to challenge to the Lok Adalat award tumbles down and is held against the petitioners.
38Issue No.2:
(ii) Whether the compromise decree/award is to be declared as void due to the embargo of non-
alienation period of 15 years in terms of Section 61 of the Karnataka Land Reforms Act, 1961 ('the Act' for short)?
11. Heavy reliance is placed upon the condition imposed in the saguvali chit quoted supra, which was not to alienate the subject lands prior to the expiry of 15 years, as obtaining under Section 61 of the Act. Section 61 of the Act reads as follows:
"61. Restriction on transfer of land of which tenant has become occupant.--(1) Notwithstanding anything contained in any law, no land of which the occupancy has been granted to any person under this Chapter shall, within fifteen years from the date of the final order passed by the Tribunal under sub-section (4) or sub- section (5) or sub-section (5A) of Section 48-A] be transferred by sale, gift, exchange, mortgage, lease or assignment; but the land may be partitioned among members of the holder's joint family.
(2) Notwithstanding anything contained in sub-section (1), it shall be lawful for the occupant registered as such or his successor-in-title to take a loan and mortgage or create a charge on his interest in the land in favour of the State Government, a financial institution, a co-operative land development bank, a co-operative society or a company as defined in section 3 of the Companies Act, 1956 in which not less than fifty one per cent of the paid-up share capital is held by the State Government or a Corporation owned or controlled by the Central Government or the State Government or both for development of land or improvement of agricultural practices or for raising educational loan to prosecute the higher studies of 39 the children of such person; and without prejudice to any other remedy provided by any law, in the event of his making default in payment of such loan in accordance with the terms and conditions on which such loan was granted, it shall be lawful to cause his interest in the land to be attached and sold and the proceeds to be utilised in the payment of such loan.
Explanation.--For the purpose of this sub-section, "Higher studies" means the further studies after Pre-university Examination or 12th Standard Examination conducted by CBSE or ICSE or any Diploma courses.
(3) Any transfer or partition of land in contravention of sub-section (1) shall be invalid and such land shall vest in the State Government free from all encumbrances and shall be disposed in accordance with the provisions of Section 77."
(Emphasis supplied) Section 61 has conditions that one should not alienate but can mortgage the property for loan or otherwise. The issue is whether petitioners 1 and 2 have alienated the properties prior to the expiry of 15 years.
12. The dates and link in the chain are all narrated hereinabove, which would not require any reiteration. The land is granted on 19-05-1997. The compromise decree is passed on 27-08-2011; 14 years and 3 months after the grant. No sale deed is executed. The expiry of 15 years comes about on 20-5-2012.
40Even on that date, there is no alienation, as there is no sale deed executed. After the expiry of 15 years, execution proceedings are initiated, seeking execution of sale deed in terms of the compromise decree. Therefore, even if the sale deed is executed in furtherance of execution proceedings, it would be after expiry of 15 years. A coordinate Bench of this Court in the case of B.S. LAKSHMAN v. PUTTASHETTY5, on identical circumstance, considering this very issue, holds that until sale, the non-alienation clause would not kick in. The coordinate Bench has held as follows:
".... .... ....
23. Having heard the learned counsel appearing for the respective parties and also keeping the substantive questions of law framed by this Court, this Court has to analyse the material on record. This Court has framed the substantive questions of law in keeping the PTCL Act that whether the plaintiff is not entitled for discretionary relief of specific performance is perverse. Having taken note of Ex.P2 and also the submission of respective counsel, it is clear that there is a grant under the Land Revenue Act and question of invoking PTCL Act does not arise. Though this Court considered the judgment reported in ILR 2020 Kar 4723 invoking of PTCL Act while framing substantive question of law that whether the Trial Court was justified in holding that the subject matter of suit is hit by the provisions of PTCL Act, the evidence on record indicates that it was granted under the provisions of Inams Abolition Act. I have already pointed out that the document at Ex.P2 is very clear that it is a grant under the Land Revenue Act and not under the PTCL Act and the same is not disputed by the counsel appearing for the respective parties. Thus, the question of invoking Section 5 2025 SCC OnLine Kar.4491 41 4 of PTCL Act does not arise and hence, the finding of both the Courts is contrary to the material on record and this Court has to answer that both the Courts have committed an error holding that the subject matter of suit is hit by the provisions of PTCL Act and the same is against the very document at Ex.P2. Hence, I answer the substantive questions of law accordingly holding that both the Courts have committed an error.
24. Now, this Court has to examine that whether the appellant is entitled for the relief of specific performance. The main focus is with regard to Section 61 of the Karnataka Land Reforms Act. Hence, this Court would like to extract Section 61 of the Karnataka Land Reforms Act, 1961, which reads as under:
"61. Restriction on transfer of land of which tenant has become occupant.--(1) Notwithstanding anything contained in any law, no land of which the occupancy has been granted to any person under this Chapter shall, within fifteen years from the date of the final order passed by the Tribunal under sub-section (4) or sub- section (5) or sub-section (5A) of section 48A be transferred by sale, gift, exchange, mortgage, lease or assignment; but the land may be partitioned among members of the holder's joint family.
(2) Notwithstanding anything contained in subsection (1), it shall be lawful for the occupant registered as such or his successor-in-title to take a loan and mortgage or create a charge on his interest in the land in favour of the State Government, a financial institution, a co-operative land development bank, a co-operative society or a company as defined in section 3 of the Companies Act, 1956 in which not less than fifty one per cent of the paid-up share capital is held by the State Government or a Corporation owned or controlled by the Central Government or the State Government or both for development of land or improvement of agricultural practices or for raising educational loan to prosecute the higher studies of the children of such person and without prejudice to any other remedy provided by any law, in the event of his making default in payment of such loan in accordance with the terms and conditions on which such loan was granted, it shall be lawful to cause his interest in the land to be 42 attached and sold and the proceeds to be utilised in the payment of such loan.
Explanation.- For the purpose of this subsection, "Higher studies" means the further studies after Pre- university Examination or 12th Standard Examination conducted by CBSE or ICSE or any Diploma courses.
(3) Any transfer or partition of land in contravention of sub-section (1) shall be invalid and such land shall vest in the State Government free from all encumbrances and shall be disposed in accordance with the provisions of section
77."
25. It is also important to note that having read Section 61 of the Act and also the judgment of the First Appellate Court, it discloses that the First Appellate Court while answering fourth point for consideration comes to the conclusion that Ex.P1 agreement of sale was executed within 15 years from the date of grant and the same is hit by Section 61 of the Karnataka Land Reforms Act. No doubt, the judgment of the Apex Court in the case of NARAYANAMMA referred supra referred by the counsel for the respondents is very clear with regard to hit by Section 61 of the Karnataka Land Reforms Act. In that judgment, it has to be noted that predecessor-in-title executed the registered mortgage deed in favour of the plaintiff but in the case on hand, there is no any such mortgage deed and there was no any transfer and only an agreement is executed and in the said judgment, having executed the registered mortgage deed in favour of the plaintiff, again executed the sale agreement when already there was a mortgage deed. But in the case on hand, only sale agreement is executed.
26. The counsel for the respondents mainly relies upon Section 5 of the Transfer of Property Act. Hence, this Court would like to extract Section 5 of the Transfer of Property Act, 1882, which reads thus:
"5. "Transfer of property" defined.-- In the following sections "transfer of property" means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, [or to 43 himself] and one or more other living persons; and "to transfer property" is to perform such act.
In this section "living person" includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals."
27. The counsel for the respondents also relies upon Section 9 of the Specific Relief Act. Hence, this Court also would like to extract Section 9 of the Specific Relief Act, 1963, which reads thus:
"9. Defences respecting suits for relief based on contract.-- Except as otherwise provided herein where any relief is claimed under this Chapter in respect of a contract, the person against whom the relief is claimed may plead by way of defence any ground which is available to him under any law relating to contracts."
28. It is important to note that in the case on hand, only sale agreement is executed and parties have also having conscious about the fact that there was a non-alienation clause in the grant. It is also not in dispute that the land was granted in the year 1997 and the sale agreement was executed in the year 2000. It is important to note that not only the grantee, even his wife and children have joined in the execution of the sale agreement. Having perused the sale agreement at Ex.P1, it is very clear with regard to the receipt of the entire sale consideration of Rs. 1,06,000/-. It is important to note that Ex.P1 discloses the reason for selling the property as to meet the legal necessities as well as to clear the loan and in the document itself it is referred that in the year 1999, availed the loan of Rs. 25,000/- from PLD Bank, Aaluru and Rs. 50,000/- from PCRDB Society. It is also important to note that the agreement was entered in the month of April 2000 and having received the sale consideration, the very same loan was cleared and given the clearance certificate in favour of the plaintiff. Though clearance certificate is in the name of the defendants but both the Courts failed to take note of the fact that having cleared the loan, clearance certificates are handed over to the plaintiff. Apart from that all the original documents were handed over to the plaintiff and hence, it is clear that having conscious 44 about the non-alienation clause in the grant, specific time is not mentioned in the agreement and agreed to execute the sale deed immediately after completion of the non-alienation clause of 15 years.
29. In the case on hand, it has to be noted that after the completion of 15 years, issued notice and reply was given wherein denial was made totally that no such sale agreement was executed and hence, the Court has to take note of the conduct of the defendants when each member of the family have signed the document but denied the very execution of the document. It is important to note that having conscious about the non- alienation clause only received the entire sale consideration and agreed to execute the sale deed. It is also important to note that the suit is filed only after the completion of period of 15 years.
30. This Court would like to refer the judgment of the Apex Court in the case of BALWANT VITHAL KADAM referred supra wherein it is held that when a suit is field for the relief of specific performance and prohibition is only for the sale that is agreement between the parties to sell the land, itself not creating any interest of buyer in land, nor amounting to sale, it is held that agreement to sale simply enabling buyer to claim specific performance of agreement on proving terms, 'sale', creating interest in land once accomplished, distinct from agreement to sale, sale agreement between parties cannot be treated as actual alienation or transfer of land, State agreement not executed in contravention of Section 48(d) of 1961 Act, specific performance of agreement can be granted to buyer. When such finding is given by the Apex Court, the First Appellate Court committed an error in relying upon Section 61 of the Karnataka Land Reforms Act and Section 61 of the said Act is only in respect of sale but in the case on hand, no such sale is taken place.
31. The counsel for the respondents also relied upon the judgment of this Court passed in R.S.A. No. 1597/2013 referred supra. No doubt, wherein also this Court relied upon the judgment of NARAYANAMMA referred supra in 45 paragraph 16 and the same will not help to the respondents as there is no such sale and there is only an agreement of sale.
32. It is important to note that the Division Bench of this Court in a similar set of facts and circumstances in the case of SYED ZAHEER referred supra, in a case for specific performance, only discussed both Section 20 as well as 23 of the Contract Act. The counsel for the respondents also pressed into service of Section 23 while arguing the case and in the judgment it is held that appellants seeking non-enforceability of the agreement, grievance of the appellant was that the specific performance has been sought prior to the expiry of the non-alienation clause and held that at the time of grant, non-alienation clause for a period of 15 years was imposed and it is only after the lapse of said period, the suit for specific performance was filed by the respondent. Therefore, it cannot be said that there has been a breach of the non-alienation clause or that the specific performance has been sought prior to the expiry of the non-alienation clause. This Court even further held that in the instant case and the agreement of sale specifically mentions that the sale deed would be executed after the period of non-alienation is completed. Therefore, the agreement in question cannot be held to be null and void or hit by Section 23 of the contract. Having considered the principles laid down in the judgment of the Division Bench, the very facts and circumstances is fit into the case on hand and though there was a grant and non- alienation clause of 15 years, it has to be noted that the specific term was made in the sale agreement that sale deed would be executed after the completion of 15 years. When such condition is not violated, the said sale agreement is not null and void and not hit by Section 23 of the Contract Act as held by the Division Bench of this Court.
33. At this juncture, this Court would like to extract Section 23 of the Indian Contract Act, 1872, which reads thus:
"23. What considerations and objects are lawful, and what not. - The consideration or object of an agreement is lawful, unless--46
it is forbidden by law;
or is of such a nature that, if permitted, it would defeat the provisions of any law;
or is fraudulent; or involves or implies, injury to the person or property of another;
or the Court regards it as immoral, or opposed to public policy.
In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void."
34. The counsel for the appellant also relied upon the judgment in the case of ABDUL HAMMED referred supra wherein also this Court discussed regarding having purchased the property and investment made by the subsequent purchaser and comes to the conclusion that having regard to the circumstances of the case, the State can be estopped in law from acting at this late point of time having regard to the over all complexion of the case. It is also held that this Court do not propose to lay down that this proposition is to be construed as a licence to trade in such lands, but this Court elaborately set out the facts and circumstances that are before the Court in the present writ petitions and the essence of doing justice would require that complete justice is done to the party who is entitled to it. This Court taken note of the equity also while considering the same.
35. In the case on hand also having conscious that there is a bar of non-alienation clause entered into an agreement of sale and received the entire sale consideration and even put the condition in the agreement at Ex.P1 that going to execute the sale deed either by themselves or by their legal representatives after completion of 15 years of non-alienation clause and even delivered the original records as well as possession. When such being the case, the Court has to take note of the said fact into consideration. It is important to note that the Court has to take note of the conduct of the 47 parties wherein they though denied in the reply notice as well as in the written statement, but material emerges regarding execution of the sale agreement and the Trial Court comes to the conclusion that sale agreement was executed and also in the cross-examination, even denied the very signature in the vakalath as well as in the written statement, the same is nothing but an attempt to make wrongful gain totally denying the very sale transaction.
36. This Court would like to refer the judgment of the Apex Court reported in (1999) 6 SCC 104 in the case of K S SATYANARAYANA v. V R NARAYANA RAO wherein also the Apex Court referred Sections 70 and 72 of the Contract Act, 1872 with regard to the undue enrichment and lack of privity of contract and circumstances and comes to the conclusion that an attempt is made by the defendant to make wrongful gain denying the vakalath and also the signature found in the written statement and the said facts and circumstances is also applicable to the case on hand. The Apex Court also invoked Section 73 and 45 of the Evidence Act and held that where defendant denied signature on various exhibited docs and also on vakalatnama and written statement, the Trial Court could have compared the signatures under Section 73 of the Evidence Act.
37. No doubt, the counsel for the respondents relied upon the judgment in the case of G T GIRISH referred supra and brought to notice of this Court paragraph 91 wherein held that whatever may be intention of the parties, a contract which is expressly or impliedly prohibited by a statute, may not be enforced by the Court. No doubt, no dispute with regard to the principles laid down in the judgment and here is a case that there is no any sale but only an agreement of sale. Though contract is entered between the parties and consciously entered into an agreement stating that they are going to execute the sale deed after the completion of 15 years of non-alienation clause and the same would not amounts to any violation and hence, question of obtaining any permission also does not arise after the completion of the period non-alienation clause of 15 years and hence, the facts and circumstances of the case on hand and also the 48 principles laid down in the judgments, same will not comes to the aid of the respondents.
38. No doubt, the counsel for the respondents also relied upon the case of SATISH KUMAR referred supra wherein in paragraph 8, it is held that the jurisdiction to order specific performance of contract is based on the existence of a valid and enforceable contract. Where a valid and enforceable contract has not been made, the Court will not make a contract for them. Specific performance will not be ordered if the contract itself suffers from some defect which makes the contract invalid or unenforceable. But in the case on hand also though there was a non-alienation clause and sale agreement was entered during that period but made it clear that going to execute the sale deed after completion of non-alienation clause and no document of sale as defined is executed. When such being the case, the very contention of the counsel for the respondents cannot be accepted.
39. This Court would like to refer the recent judgment of the Apex Court dated 07.01.2025 in a case of INDIAN OVERSEAS BANK v. M.A.S SUBRAMANIAN wherein also in paragraph 6 it is held that it is well settled that an agreement for sale in respect of an immovable property does not transfer title in favour of the purchaser under the agreement. In view of Section 54 of the Transfer of Property Act, 1882 an agreement for sale does not create any interest in the property. The only mode by which an immovable property worth more than Rs. 100/- can be sold is by a sale deed duly registered in accordance with the Indian Registration Act, 1908. In the case on hand also no such sale was taken place and only an agreement of sale is entered.
40. In the judgment of the Apex Court in the case of M S ANANTHAMURTHY v. J MANJULA in CIVIL APPEAL Nos. 3266-3267/2025 [arising out of SLP Nos. 13618- 13619/2020) dated 27.02.2025 in paragraph 47 held that it is a settled law that a transfer of immovable property by way of sale can only be by a deed of conveyance. An 49 agreement to sell is not a conveyance. It is not a document of title or a deed of transfer of deed of transfer of property and does not confer ownership right or title.
41. Having considered the principles laid down in the judgments referred supra and also the discussions made by this Court with regard to the document at Ex.P1 that there was a sale agreement and entire sale consideration has been received and also all the family members including the grantee and his wife and children have joined in the execution of the sale agreement and hence, all of them having the conscious and knowledge that there is a non-alienation clause in the grant and also agreed to execute the sale deed after the completion of 15 years of non-alienation clause and notice was issued by the plaintiff after the complete to 15 years and reply was given denying the sale agreement but both the Courts have comes to the conclusion that there was an agreement of sale but erroneously held that it attracts PTCL Act since no such grant under the PTCL Act and First Appellate Court comes to the conclusion that it attracts Section 61 of the Karnataka Land Reforms Act. Having considered both oral and documentary evidence and the principles laid down in the judgments referred supra, it disclose that there was an agreement of sale and there was no any conveyance or sale as contained in Section 61 of the Land Reforms Act, hence, the contention of the respondents' counsel cannot be accepted. The very agreement in terms of Ex.P1 is very clear that received the entire sale consideration and executed the document consciously knowing about the non-alienation clause, this Court comes to the conclusion that Section 61 of Land Reforms Act will not attract as there was no sale, mortgage or any debt or conveyance as indicated in Section 61 of the Act. Thus, both the Courts have committed an error in declining to grant the relief of specific performance. Therefore, I answer the substantive questions of law accordingly holding that both the Courts have committed an error in dismissing the suit and confirming the same in the appeal regarding specific performance though the First Appellate Court reversed the finding of the Trial Court regarding sale agreement as 50 well as readiness and willingness, committed an error in invoking Section 61 of the Act... "
(Emphasis supplied) If the law as held by the coordinate Bench is considered qua the facts obtaining in the case at hand, it would clearly indicate that no sale deed was executed prior to expiry of 15 years and non-
alienation clause would operate only after execution of the sale deed. Therefore, the invocation of Section 61 of the Act by the petitioners is thoroughly misplaced.
13. In yet another judgment, another coordinate Bench in the case of MR.MOHAMMED MURTUZA v. MR.V.C.GOVARDHAN6, refuses to set aside the compromise decree on the score that it was entered into prior to the expiry of non-alienation clause as obtaining under Section 61 of the Act. The coordinate Bench has held as follows:
".... .... ....
2. The suit in OS.No.89/2013 was filed for specific performance of an agreement of sale deed dated 12.02.2013. The suit was contested. Later, the parties agreed to settle the 6 W.P.No.53622 of 2016 decided on 08-08-2022 51 dispute amicably and thus the case was referred to Lok-Aadalat. A compromise petition was filed under Order XXIII Rule 3 of Code of Civil Procedure before the Lok-Aadalat by which the dispute was settled between the parties and the suit was disposed of on 23.10.2013. Long thereafter i.e., on 07.12.2015 an application was filed by the defendant under order XXIII Rule 3-A R/w Section 151 and 152 of Code of Civil Procedure contending that the suit property was granted to him by the Tahsildar, Mudigere on 17.02.2004, which was followed by a Saguvali chit dated 05.06.2004. He contended that, the grant was subject to non-alienation for a period of 15 years and therefore he submitted that the compromise could not have been accepted. He claimed that the compromise was forcibly imposed on him by the plaintiff. The trial Court in terms of its order impugned in this writ petition, rejected the application. Being aggrieved by the said order, the present petition is filed.
3. The learned counsel for the petitioner submits that the compromise could not have been recorded by the Lok-Aadalat as on that day, the defendant was not in a position to enter into an compromise in respect of the suit property as there was a clear bar against alienation. He however did not dispute his signature and also the fact that he had appeared before the Lok-Aadalat and admitted the compromise.
4. Learned counsel for the respondent on the other hand submitted that the ground urged by the defendant to set aside the compromise is not maintainable as there are provisions in the land grant rules which provide for condonation of any violation of the conditions attached to the grant. He therefore submitted that the order passed by the Lok-Aadalat, be not disturbed.
5. The defendant did not dispute the fact that he appeared before the Lok-Aadalat and admitted of the compromise before the Lok-Aadalat. He also did not dispute the terms of the compromise, the defendant has now attempted to resile from the compromise contending 52 that the compromise had the effect of violating a term of the grant, should not have been accepted."
(Emphasis supplied)
14. In the light of the judgments rendered by the coordinate Benches quoted supra, the contention that the agreement of sale is in violation of Section 61 of the Act or the compromise decree is vitiated on account of conditions in Section 61 is unacceptable. In that light, finding no merit in the petition, the petition deserves to be rejected. It is accordingly rejected.
Sd/-
(M.NAGAPRASANNA) JUDGE bkp CT:MJ