Karnataka High Court
Sri.B.S.Lakshman vs Sri.Puttashetty on 27 June, 2025
Author: H.P.Sandesh
Bench: H.P.Sandesh
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
R
DATED THIS THE 27 DAY OF JUNE, 2025
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
REGULAR SECOND APPEAL NO.1358/2022 (SP)
BETWEEN:
SRI. B.S.LAKSHMAN
S/O B.R. SAGANASHETTY
AGED ABOUT 50 YEARS
R/AT BELAME VILLAGE
PALYA HOBLI, ALUR TALUK
HASSAN-573 218. ... APPELLANT
(BY SRI VASANTH KUMAR H.T., ADVOCATE)
AND:
1. SRI. PUTTASHETTY
S/O MUDDASHETTY
AGED ABOUT 70 YEARS
SINCE DEAD, HIS LRS ALREADY ON
RECORD AS RESPONDENTS NO.2 TO 6.
2. SMT. RAJAMMA
W/O PUTTASHETTY
AGED ABOUT 66 YEARS
3. SRI. CHANDRASHEKAR
S/O PUTTASHETTY
AGED ABOUT 46 YEARS
4. SRI. MANJASHETTY
S/O PUTTASHETTY
2
AGED ABOUT 44 YEARS
SINCE DEAD BY HIS LRS
4(a) SMT. BHAGYA
W/O LATE MANJASHETTY
AGED ABOUT 44 YEARS
4(b) SRI. SHASHI
S/O LATE SRI. MANJASHETTY
AGED ABOUT 24 YEARS
4(c) SMT. NANDINI
D/O LATE SRI. MANJASHETTY
AGED ABOUT 21 YEARS
5. SRI. TUNGASHETTY
S/O PUTTASHETTY
AGED ABOUT 40 YEARS
6. SRI. KANTHA
S/O PUTTASHETTY
AGED ABOUT 38 YEARS
ALL ARE R/AT BASAVANAPURA
MADABALU VILLAGE
PALYA HOBLI, ALUR TALUK
HASSAN-573 218. ... RESPONDENTS
(BY SRI. K.VIJAYA KUMAR, ADVOCATE FOR R2, R3, R5,
R6 AND R4(a - c); VIDE ORDER DATED 21.03.2023,
R2 TO R6 ARE TREATED LRS OF DECEASED R1)
THIS R.S.A. IS FILED UNDER SECTION 100 OF CPC,
AGAINST THE JUDGMENT AND DECREE DATED 11.08.2022
PASSED IN R.A.NO.119/2016 ON THE FILE OF THE II
ADDITIONAL SENIOR CIVIL JUDGE AND JMFC, HASSAN, PARTLY
ALLOWING THE APPEAL AND THIS R.S.A. IS FILED AGAINST THE
JUDGMENT AND DECREE DATED 17.12.2016 PASSED IN
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O.S.NO.194/2012 ON THE FILE OF THE CIVIL JUDGE AND
J.M.F.C., ALUR AND ETC.
THIS R.S.A. HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 17.06.2025 THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE H.P.SANDESH
CAV JUDGMENT
This second appeal is filed against the concurrent finding passed in R.A.No.119/2016 dated 11.08.2022 partly allowing the appeal and confirming the judgment and decree passed in O.S.No.194/2012 dated 17.12.2016 with regard to the relief of specific performance is concerned.
2. The factual matrix of the case of the plaintiff before the Trial Court seeking the relief of specific performance of contract that defendant No.1 is the owner of the suit schedule property and he has offered to sell the suit schedule property for his family necessity and for discharging the loans. The defendant has entered into an agreement with the plaintiff. The plaintiff has agreed to purchase the suit schedule property for Rs.1,06,000/- and defendants have received the entire sale 4 consideration and executed the sale agreement dated 29.04.2000. It is also the case of the plaintiff that defendants have agreed to hand over the possession and the original documents to the plaintiff. Since, there is a non-alienation clause, had agreed to execute the sale deed after the expiry of said non-alienation clause. It is contended that immediately after the expiry of 15 years of non-alienation period, the plaintiff caused the legal notice and reply was given by the defendants denying the very execution of the sale agreement. Hence, the plaintiff filed the suit for the relief of specific performance on contract.
3. The defendant in the written statement denied the very execution of the sale agreement and also contend that when the grant was made in the year 1997, Government has imposed a condition that defendants have no right to alienate the property for a period of 15 years and as on the date of alleged agreement, the defendants have no right to execute the sale agreement. It is contended that the defendants are illiterate and innocent persons and plaintiff being an advocate, taken a 5 signatures of defendants on the blank paper for the purpose of loan and defendants believe the words of the plaintiff, handed over the documents to the plaintiff. The defendants contended that the defendants never executed any agreement in favour of the plaintiff and not received any amount from him and hence, the alleged agreement is void and it cannot be enforceable under law.
4. The Trial Court having considered the grounds urged in the plaint as well as in the written statement, framed the following Issues:
1. Whether plaintiff proves that the defendants have agreed to sell the suit schedule property in favour of plaintiff for Rs.1,06,000/- and on 29.04.2000 executed sale agreement in favour of plaintiff by receiving the entire sale consideration from the plaintiff?
2. Whether plaintiff proves that he is always ready and willing to perform his part of contract?
3. Whether defendant proves that the plaintiff by playing mischief has obtained the signature of the 6 defendants on blank papers and now by manipulating the same come up with this suit?
4. Whether plaintiff is entitled for relief as prayed?
5. What order?
5. The plaintiff in order to prove his case, examined himself as PW1 and also got examined two witness as PW2 and PW3 and got marked the documents at Ex.P1 to P23. On the other hand, defendant No.1 examined as DW1 and his wife i.e., defendant No.2 examined as DW2 and got marked the documents at Ex.D1 to D15. The Trial Court having considered both oral and documentary evidence placed on record comes to the conclusion that denial of execution of sale agreement is not correct and there was a sale agreement but answered other Issues as negative regarding payment of sale consideration as well as readiness and willingness and the contention of the defendant that the plaintiff by playing mischief has obtained the signature of the defendants on the blank papers and now by manipulating the same, came up with this suit is also answered 7 as negative and dismissed the suit of the plaintiff for the relief of specific performance.
6. Being aggrieved by the said judgment and decree of dismissal of suit by the Trial Court, an appeal was filed in R.A.No.119/2016. The First Appellate Court having considered the grounds urged in the appeal memo and also the contention of the respective parties framed the following points for consideration:
1. Whether the Trial Court was justified in holding that payment of sale consideration of Rs.1,06,000/- has not been proved by the plaintiff/appellant?
2. Whether the Trial Court was justified in recording the findings that plaintiff has not proved that he has always been ready and willing to perform his part of contract?
3. Whether the Trial Court was justified in applying the provisions of Section 3 and 4 of PTCL Act to the facts of the present case and in holding that agreement is void document?8
4. Whether Ex.P1 agreement of sale executed within 15 years from the date of grant is hit by Section 61 of the Karnataka Land Reforms Act?
5. Whether the judgment and decree of the Trial Court calls for interference by this Court?
6. Whether plaintiff/appellant is entitled for alternative relief of refund of earnest money?
7. What order or decree?
7. The First Appellate Court having reassessed both oral and documentary evidence placed on record comes to the conclusion that the Trial Court not committed any error regarding payment of sale consideration and readiness and willingness and answered as negative and Point No.3 also answered as negative holding that the Trial Court is not justified in applying the provision of Sections 3 and 4 of PTCL Act to the facts of the present case in holding that agreement is void document however, answered Point Nos.4 to 6 as affirmative holding that Ex.P1 agreement of sale is hit by Section 61 of the Karnataka Land Reforms Act and judgment and decree of the 9 Trial Court calls for interference and the appellant is entitled for alternative relief of refund of earnest money and finding of the Trial Court recorded on Issue No.1 is answered partly affirmative and Issue No.2 as negative was set aside in coming to the conclusion that payment was made and the plaintiff always ready to perform his part of contract and only these two points held as negative but decline to grant the relief of specific performance in coming to the conclusion that the sale agreement is hit by Section 61 of the Karnataka Land Reforms Act and also held that the suit of the plaintiff is liable to be dismissed and confirmed the dismissal of the suit for the relief of specific performance by the Trial Court.
8. Being aggrieved by the judgment and decree of the Trial Court as well as the First Appellate Court wherein the First Appellate Court declined to grant the relief of specific performance though the appeal was partly allowed, the present second appeal is filed before this Court. This Court having considered the grounds urged in the second appeal admitted the matter and framed the following substantive questions of law: 10
1. Whether the finding of the Courts below that suit agreement is hit by the provisions of PTCL Act and therefore, the plaintiff is not entitled for discretionary relief of specific performance is perverse, palpably erroneous and contrary to proposition laid down in the case of THAGARAJ vs JAYAPPA AND OTHER [ILR 2020 KAR 4723] as the parties to the suit agreement have clearly incorporated a condition in the suit agreement that the transaction will be completed only after securing permission from the competent authority?
2. Whether having regard to the facts and circumstances of the case, the Trial Court was justified in holding that the subject matter of suit is hit by the provisions of PTCL Act, when the evidence on record indicates that it was granted under the provisions of Inams Abolition Act?
9. The learned counsel for the appellant in his arguments would vehemently contend that there is no dispute that land was granted on 14.07.1997. The counsel also not disputes that while granting the land, condition was imposed 11 that not to alienate the property for a period of 15 years. The counsel would vehemently contend that agreement was executed on 29.04.2000 and also received the sale consideration of Rs.1,06,000/- and the document of sale agreement is very clear that sale deed will be executed after the completion of 15 years as per the non-alienation clause. The counsel would vehemently contend that after the expiry of 15 years, notice was issued and untenable reply was given by the defendants denying the very execution of the sale agreement. The counsel also would vehemently contend that having in anticipation of filing of suit, caveat also filed. The counsel would vehemently contend that the Trial Court committed an error in invoking Section 4 of the PTCL Act. The counsel would vehemently contend that the First Appellate Court reversed the finding of the Trial Court with regard to the execution of the sale agreement and payment of sale consideration but dismissed the appeal only on the ground that the execution of the sale agreement is hit by Section 61 of the Karnataka Land Reforms Act. The counsel also would vehemently contend that under Section 61 of the Act, there is no bar for execution of sale agreement.
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10. The counsel for the appellant in support of his argument relied upon the judgment of Division Bench of this Court reported in ILR 2010 KAR 765 in the case of SYED ZAHEER AND OTHERS vs C V SIDDVEERAPPA wherein this Court 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. 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. It is held that the Trial Court was correct in holding that the respondent who had filed the suit for specific 13 performance was ready and willing and had in fact performed his part of the contract and there was no reason as to whey specific performance relief could not be granted to him.
11. The counsel also relied upon the judgment reported in ILR 1998 KAR 4156 in the case of ABDUL HAMMED AND OTHERS vs THE STATE OF KARNATAKA AND OTHERS wherein it is held that occupancy rights granted to the tenants in 1981. The tenants put possession of the lands granted to them to the petitioners under the terms of agreement to sell within the prohibited period of fifteen years. Petitioners-purchasers constructed house and started living in them. As late as in the 1996, eviction proceedings were initiated and eviction orders were also passed. Petitioners challenged them before Karnataka Appellate Authority unsuccessfully. Then they approached this Court and this Court held that State by virtue of its non-action is totally precluded from initiating eviction proceedings at such belated time, long after rights have accrued to the parties and held that the only point raised by the petitioners is that the petitioners belonged to the weaker section of the society and 14 what they are pointing out to this Court is that even assuming that the law is given effect to, what it would mean is that the land has to be taken away by the State and distributed to other landless persons whereas the petitioners themselves are landless persons and the learned advocate contend that even assuming that the petitioners have committed some breach, having regard to the consequences of permitting the confiscation in so far as the petitioners would lose what they have invested and apart from being landless they would also be homeless. Having considered this argument also this Court taken note of the fact that if they have intervened at the initial stage the transaction could have been reversed and the poor landless people who have spent their hard earned money in buying these lands would not have been punished. Secondly, had the intervention come at the right point of time the remaining persons would not have entered into transactions and thirdly, none of the persons would have invested their money in constructing houses on those lands. The direct result of the non-action on the part of the Government Authorities has had the result of considerable amount of investment going into the lands and the unusual 15 question arises as to whether the Court should permit the wronged party to be punished, in a situation such as this. It is held that respondents 3 and 4 are the people who have sold the lands and the law does not provide for any action against them, by virtue of recovery of sale proceeds, whereas, on the other hand, what is sought to be done is that the parties who have already incurred heavy investment are sought to be evicted for the breaches committed by respondents 3 and 4. It is observed that the equities are also required to be examined, in so far as the short question before this Court is as to whether the belated action on the part of the Government should be upheld or should be struck down. Having considered all these aspects taken note that even though there may be no bar of limitation, 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. The counsel referring this judgment also claim the equity.
12. The counsel also relies upon the judgment reported in AIR 2018 SC 49 in the case of BALWANT VITHAL KADAM 16 vs SUNIL BABURAOI KADAM and in this case, in a similar facts and Court when a suit is field for the relief of specific performance 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.
13. The counsel also relied upon the judgment reported in 2015 (2) KCCR 1210 in the case of SMT. H LALITHAMMA AND ANOTHER vs V VENKATESHULU wherein also in a case of specific performance discussed regarding house allotted by Housing Board to respondent on lease-cum-sale basis for 10 years and non-alienation period of 15 years, agreement to sell in favour of appellant during subsistence of lease-cum-sale 17 agreement, appellant was put in possession and future installments were paid by appellant and held that limitation for specific performance starts after non-alienation period. Concurrent finding of Courts below dismissing the suit on ground of limitation was set aside. Appellant was directed to pay Rs.2,00,000/- to respondent within six months and respondent to execute the sale deed.
14. The counsel referring these judgments would vehemently contend that both the Courts have committed an error in considering the factual aspects of the case and the First Appellate Court committed an error in coming to the conclusion that the execution of the sale agreement is hit by Section 61 of the Karnataka Land Reforms Act. The counsel would vehemently contend that there is no any sale but only it was a sale agreement and the same will not create any interest. The counsel also would vehemently contend that the suit is filed only after expiry of non-alienation period and hence, this Court has to answer the substantive questions of law accordingly. The counsel would vehemently contend that the question of invoking PTCL 18 Act does not arise since the land granted is not under the PTCL Act and both the Courts have mis-directed and hence, prayed to grant the relief of specific performance.
15. Per contra, the learned counsel appearing for the respondents would vehemently contend that the plaintiff is an advocate and knowingfully well the fact, entered into an agreement. The counsel in his arguments would vehemently contend that the relief is sought for specific performance and the same is a discretionary relief. The contract entered by the plaintiff itself is a void under Section 23 of the Contract Act as well as the same is hit by Section 61 of the Karnataka Land Reforms Act and there is a non-obstante clause in the Act itself. The First Appellate Court rightly comes to the conclusion that the agreement cannot be enforced. The counsel would vehemently contend that the Trial Court committed an error in invoking PTCL Act and the same is a land granted under the Karnataka Land Revenue Act. The counsel would vehemently contend that the document at Ex.P2 is very clear that there is a non-alienation 19 clause for a period of 15 years and not to sell or use the same for other purpose in terms of clause Nos.8 and 13.
16. The counsel in support of his arguments, relied upon the judgment of the Apex Court reported in AIR 2019 SC 4654 in the case of SMT. NARAYANAMMA AND ANOTHER ETC. ETC vs GOVINDAPPA AND OTHERS ETC. ETC and contend that in a case for specific performance, taken note of the fact that the land was granted in the year 1983 and transfer in question is of year 1990 which is within prohibited period of 15 years, agreement executed during non-alienation period of 15 years is illegal as hit by Section 61 of Act and it is held that predecessor- in-title and plaintiff are equally responsible for illegal agreement and suit for specific performance, not maintainable.
17. The counsel also relied upon the judgment reported in (2022) 12 SCC 321 in the case of G T GIRISH vs Y SUBBA RAJU (DEAD) BY LEGAL REPRESENTATIVES AND ANOTHER and brought to notice of this Court the Apex Court held regarding illegality of contract or its subject matter, applicability of Section 23 of the Contract Act. The counsel referring this 20 judgment would vehemently contend that when the very transaction itself is void, there may not be any enforcement 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.
18. The counsel also relied upon the judgment reported in (2016) 4 SCC 352 in the case of SATISH KUMAR vs KARAN SINGH AND ANOTHER and brought to notice of this Court paragraph 8 wherein also 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. The discretion of the Court will not be there even though the contract is otherwise valid and enforceable.
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19. The counsel also relied upon the judgment of this Court passed in R.S.A.No.1597/2013 dated 02.04.2024 wherein this Court referring the very same judgment of NARAYAMMA referred supra comes to the conclusion that sub- section (3) of Section 61 of the Reforms Act makes the legislative intent very clear and it provides that any transfer in violation of sub-section (1) shall be invalid and it also provides for the consequence for such invalid transaction and the same is hit by Section 61 of the Karnataka Land Reforms Act hence, question of granting the relief of specific performance does not arise. The counsel also would vehemently contend that the First Appellate Court taken note of this judgment and comes to the right conclusion that same is hit by Section 61 of the Karnataka Land Reforms Act.
20. The counsel also brought to notice of this Court Section 5 of Transfer of Property Act regarding transfer inter se between the parties and transfer of property is also defined and the counsel referring this section would vehemently contend that transfer of property means an act by which a living person 22 conveys property, in present or in future, to one or more other living persons, or to himself and one or more other living persons and hence, it is very clear that the transfer of property is also defined under the Transfer of Property Act.
21. The counsel also would vehemently contend that having considered the document at Ex.P2 it is mentioned that the sale consideration is Rs.1,06,000/- and the same is also subject to the clearance of loan and the document is also mentioned regarding clearance. The counsel would vehemently contend that the loan was cleared by defendant No.1 only and Ex.P16 and P17 are clear that the loan was cleared by the owner and the plaintiff has not cleared the loan as per the terms of the contract. Hence, not entitled for the relief.
22. In reply to this arguments, the learned counsel for the appellant would vehemently contend that the Trial Court committed an error holding that readiness and willingness is not proved and the same is erroneous since already paid the entire sale consideration but the Trial Court held that consideration is not paid but the First Appellate Court reversed the same. The 23 counsel also would vehemently contend that contra defence was taken by the plaintiff and the counsel would vehemently contend that the agreement is not a transfer and entire sale consideration was paid and the counsel contend that Section 61 of the Act attracts only if there is any transfer but in the case on hand, there is no any transfer, only there is an agreement of sale.
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 24 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 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: 25
"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 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 the children of such person and 26 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."
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 27 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 28 present or in future, to one or more other living persons, or to himself, [or to 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."29
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, 30 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 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.
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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.
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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 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 AND OTHERS 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 33 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: 34
"23. What considerations and objects are lawful, and what not. - The consideration or object of an agreement is lawful, unless--
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 AND OTHERS 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 35 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 parties wherein they though denied in the reply notice as well as in the written statement, but material 36 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 vs 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 37 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 principles laid down in the judgments, same will not comes to the aid of the respondents.
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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 vs M.A.S SUBRAMANIAN AND OTHERS wherein also in paragraph 6 it is held that it is well settled that 39 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 AND ANOTHER vs J MANJULA ETC 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 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.
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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 41 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 well as readiness and willingness, committed an error in invoking Section 61 of the Act. Hence, this second appeal is liable to be allowed and the relief of specific performance has to be granted.
42. In view of the discussions made above, I pass the following:
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ORDER The second appeal is allowed.
The judgment and decree passed in R.A.No.119/2016 dated 11.08.2022 and the judgment and decree passed in O.S.No.194/2012 dated 17.12.2016 are set aside.
The suit filed by the plaintiff/appellant is decreed with cost. The respondents/defendants are directed to execute the sale deed within a period of two months. If the respondents fail to execute the sale deed, the appellant herein is given liberty to obtain the sale deed through the Court in accordance with law.
Sd/-
(H.P. SANDESH) JUDGE SN