Karnataka High Court
D B Thagaraj vs Sri Jayappa on 28 February, 2020
Equivalent citations: AIR 2020 KARNATAKA 175, AIRONLINE 2020 KAR 398
Author: N S Sanjay Gowda
Bench: N.S.Sanjay Gowda
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
®
DATED THIS THE 28TH DAY OF FEBRUARY 2020
BEFORE
THE HON'BLE MR.JUSTICE N.S.SANJAY GOWDA
R.S.A.No.1727/2016
BETWEEN:
D.B.THAGARAJ, S/O T.VASU,
AGED ABOUT 49 YEARS,
R/AT DOMMASANDRA VILLAGE,
SARJAPURA HOBLI, ANEKAL TALUK,
BANGALORE DISTRICT-562 106. ... APPELLANT
(BY SRI. RASHEED KHAN, ADVOCATE)
AND:
1. SRI. JAYAPPA, S/O LATE NARAYANAPPA,
AGED ABOUT 57 YEARS,
R/AT PATANDUR AGRAHARA VILLAGE,
K.R.PURAM HOBLI,
BANGALORE DISTRICT-562 114.
2. NARAYANAPPA, S/O VENKATARAMANAPPA,
AGED ABOUT 51 YEARS,
R/AT PATANDUR AGRAHARA VILLAGE,
K.R.PURAM HOBLI,
BANGALORE DISTRICT-562 114.
... RESPONDENTS
(BY SRI. VARADARAJAN M.S, ADVOCATE FOR C/R-1)
THIS APPEAL IS FILED UNDER SECTION 100 OF CPC,
AGAINST THE JUDGMENT AND DECREE DATED 14.07.2016
PASSED IN R.A.NO.177/2013 ON THE FILE OF II ADDL.
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DISTRICT AND SESSIONS JUDGE, KOLAR, ALLOWING THE
APPEAL AND SETTING ASIDE THE JUDGMENT AND DECREE
DATED 22.08.2013 PASSED IN O.S.NO.762011 (OLD
NO.275/2005) ON THE FILE OF SENIOR CIVIL JUDGE AND
JMFC, MALUR.
THIS APPEAL HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS
DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
1. The 2nd defendant - purchaser is in second appeal.
2. Facts relevant for the disposal of the appeal are as follows:
The plaintiff/1st respondent herein filed a suit seeking to enforce the Agreement of Sale dated 26.06.1996 which was stated to have been executed by the 1st defendant -
Narayanappa in his favour. Under the said Agreement of Sale, the sale consideration had been fixed at Rs.1,00,000/-
and sum of Rs.95,000/- had been paid as advance and plaintiff was stated to have been put in possession. The balance consideration thus payable was Rs.5,000/-.
It was the case of the plaintiff that the suit property had been granted in favour of the 1st defendant by the 3 Tahsildar and a grant certificate had been issued to him on 23.01.1995 and the Agreement stipulated that seller was required to obtain permission from the Government and after obtaining permission, he was required to inform the purchaser and within a week thereof, the sale was to be concluded. It was stated therein that a sum of Rs.53,000/-
out of the advance amount of Rs.95,000/- was paid to Narayanappa, who was the holder of an earlier Agreement of Sale and further, sum of Rs.26,000/- was to be paid to Venkatappa, the second agreement holder and out of balance amount of Rs.21,000/-, Rs.16,000/- was paid by cheque and a further sum of Rs.5,000/- was paid in cash.
3. It was the case of the plaintiff that the seller was evasive and was avoiding concluding of transaction. He stated that without notice to him, the seller had obtained permission from the Tahsildar for selling the property on 19.08.2005 and within a day thereafter had proceeded to sell the suit property to the 2nd defendant. He stated that since he had an indefeasible right to secure the Sale Deed by virtue of being the earlier agreement holder, he was entitled to seek 4 for specific performance of the contract and for consequential execution of the Sale Deed.
4. The claim of the plaintiff was denied both by the seller - defendant No.1 and also the purchaser. The seller denied the very execution of Agreement. It was stated by the purchaser that he was a bonafide purchaser and the suit could not therefore be decreed.
5. On behalf of the plaintiff, apart from the plaintiff the attestors of the agreement i.e., Venkataramanareddy and Chowdappa were examined and the son of another witness was also examined and 11 documents were marked.
6. On behalf of defendants, the 2nd defendant examined himself as D.W.1 and got exhibited 6 documents. The two other witnesses were also examined on their behalf and thereafter, the 1st defendant was examined as D.W.4 and through him one document was marked.
7. The Trial Court, on consideration of evidence adduced before it, recorded a finding that the plaintiff had failed to prove the execution of Agreement of Sale and for arriving at 5 the said conclusion, it based its conclusion on discrepancies in the signatures by its own visual comparison. The Trial Court accordingly dismissed the suit.
8. In the appeal by the plaintiff, the Appellate Court, on reappreciation of evidence on record, came to the conclusion that the plaintiff had proved the execution of the Agreement and the execution of the Agreement was not only proved by the evidence of the plaintiff, but also the attesting witnesses to the documents and one of whom was incidentally the earlier agreement holder. The Appellate Court also came to the conclusion that the seller had admitted his signature during the course of cross-examination on the Agreement of Sale and it came to the conclusion that the sale was not void contract which could not be enforceable. The Appellate Court accordingly proceeded to decree the suit and directed execution of a Sale Deed in favour of the plaintiff within six months on receipt of the remaining balance consideration.
9. This decree has been accepted by the seller and it is only the purchaser who is in second appeal. 6
10. Learned counsel for the purchaser - appellant basically contended that the Agreement of Sale was null and void and therefore, unenforceable. It is submitted that the provisions of the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act (for short, 'the PTCL Act') require prior permission even for entering into an Agreement of Sale and since, no such permission was obtained for entering into an Agreement of Sale, the suit for specific performance would not lie. He contended that the suit to enforce an Agreement of Sale in respect of a granted land would be opposed to public policy and therefore, the suit was to be dismissed.
11. He also contended that the execution of the agreement was not proved inasmuch as no expert opinion had been obtained.
12. In support of his arguments, he relied upon the following decisions:
i) CIVIL APPEAL NO.7630/2019 DATED 26.09.2019 -
LAWS (SC) 2019 9 101;
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ii) DHARMA NAIKA Vs. RAMA NAIKA AND ANOTHER -
(2008) 14 SCC 517;
iii) SATISH KUMAR Vs. KARAN SINGH AND ANOTHER -
2016 (2) KCCR SN 88 (SC);
iv) SMT.NARASAMMA & OTHERS Vs. K.V.RAMPRASAD & ANOTHER - ILR 2012 KAR 4261;
v) SRI VENKATANARAYANAPPA Vs. SRI SIDDAPPA -
ILR 2007 KAR 1323.
13. Learned counsel for the respondents on the other hand contended that the Agreement of Sale cannot be enforced as it was a void document. He contended that there wasn't an absolute bar under PTCL Act for sale of a granted land and the provisions of PTCL Act only barred the transfer of granted land only if it was contrary to the terms of the grant or if it was sought to be made after the commencement of the PTCL Act without first obtaining permission of the Government. He contended that when the Agreement of Sale itself contained a specific clause that the transfer was to be made only after obtaining permission of the Government, it was essentially a proposed transfer of granted land in terms of the grant itself. 8 According to him, if the Government had refused permission, the Agreement of Sale would stand nullified and a transfer would not simply take place.
14. On merits, he contended that the signature of the 1st defendant on the Agreement of Sale having been admitted by the 1st defendant himself, specific performance of the agreement of sale could not be denied. He submitted that in the background of the fact that the 1st defendant had agreed to sell the property to two people earlier to the one executed in favour of the plaintiff and the further fact that plaintiff had repaid the sums that had been advanced by those two agreement holders, while getting the Agreement of Sale in his favour was by itself was sufficient proof of the fact that the 1st defendant wanted to sell the property and the plaintiff was also keen to purchase the same. He submitted that since 95% of the sale consideration had already been paid to the 1st defendant, the question of readiness and willingness would also never arise since the only remaining part of the sale transaction was the execution of the sale deed on the 1st defendant obtaining permission of the Government. He 9 ultimately submitted that the Appellate Court while exercising its equity jurisdiction, had passed a just and well reasoned judgment, which do not call for any interference. He therefore submitted that no question of law as such arose for consideration in this appeal.
15. I have considered the contentions of learned counsel for both the parties and also perused the material on record.
16. The essential facts of the case are that on 05.01.1995, the suit property was granted to the 1st defendant and within 1½ year of the said grant, on 26.06.1996, the plaintiff entered into an Agreement of Sale, whereby he agreed to sell the property for a sum of Rs.1,00,000/- and received a sum of Rs.95,000/- under the Agreement of Sale.
17. It is also undisputed that the 1st defendant had sought for permission from the Government and by an order dated 19.08.2005, the Government accorded permission to the 1st defendant to sell the land and he immediately thereafter, on 20.08.2005, i.e., the very next day executed a Sale Deed in favour of the 2nd defendant.
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18. The principal argument of the learned counsel for the appellant - purchaser is that 'Transfer' had been defined under PTCL Act and in terms of the said definition, a transfer included 'an agreement of sale' and since the provisions of PTCL Act stipulated that permission of the Government was necessary even to enter into an agreement of sale, as admittedly no such permission had been obtained before entering into an Agreement of Sale, the contract would be null and void and therefore, unenforceable.
19. Section 3(e) of the PTCL Act reads as follows:
"Transfer" means a sale, gift, exchange, mortgage with or without possession), lease or any other transaction not being a partition among members of a family or a testamentary disposition and includes the creation of a charge or an agreement to sell, exchange, mortgage or lease or enter into any other transaction."
20. As could be seen from the said definition, a transfer does include an Agreement of Sale.
21. Section 4 of the PTCL Act reads as follows:
"Prohibition of transfer of granted lands.-(1) Notwithstanding anything in any law, 11 agreement, contract or instrument, any transfer of granted land made either before or after the commencement of this Act, in contravention of the terms of the grant of such land or the law providing for such grant, or sub-section (2) shall be null and void and no right, title or interest in such land shll be conveyed or be deemed ever to have conveyed by such transfer.
(2) No person shall, after the commencement of this Act, transfer or acquire by transfer any granted land without the previous permission of the Government.
(3) The provisions of sub-sections(1) and (2) shall apply also the sale of any land in execution of a decree or order of a Civil Court or of any award or order of any other authority."
(Underlining by me)
22. As could be seen from Section 4 of the PTCL Act, the law bars only those transfers of granted land which were being made in contravention of the terms of the grant of such land. It, therefore, follows that if the transfer is not in contravention of terms of grant of such land, such a transfer is not barred. In other words, there is no absolute bar for transfer of granted land and it is open for a grantee to transfer the granted land as provided under the terms of the grant itself or under the law providing for the grant and in 12 case of a transfer being made after the Act had come into force, it could be done only after securing permission from the Government.
23. In the instant case, since the Agreement of Sale, though a transfer by itself, indicated that transfer would happen only on the Government granting permission, it becomes clear that the transfer was essentially a transfer in adherence to the terms of the grantand the law relating to the grant. In other words, since the parties to the transaction agreed to abide by the terms of the grant and the law relating to the grant, by agreeing to seek permission of the Government to transfer the granted land, it cannot be said that such an Agreement of Sale was null and void and required the permission of the Government.
24. A contrary interpretation to the effect that an agreement to sell a granted land after securing the requisite permission from the Government would render the transfer of granted land impossible, which is not the intent of Section 4 of the PTCL Act.
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25. It to be borne in mind that is only those transfers which, if entered into in breach of the terms of the grant or the law relating to the grant, which thereby defeat the provisions of PTCL Act, are void. In other words, if an Agreement of Sale was entered into by which the purchaser would simply occupy the land in part performance of the contract without having to seek for permission from the Government for conclusion of the sale transactionand thereby try to take shelter under the ground that there was no actual transfer of interest in the granted land, such an agreement of sale would be contrary to the terms of the grant and the law relating to the grant and thereby be void.
26. If, on the other hand, an intending purchaser enters into an agreement with a clear stipulation in the agreement that the Agreement of sale would be proceeded to its logical conclusion only if Government grants permission for transfer, such an Agreement of Sale cannot be said to be either void or in violation of the PTCL Act.
27. The clause in the Agreement of Sale in this case reads as follows:
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'¸Àzj À µÉqÀÆå®Ä ¸ÀévÀÛ£ÀÄß ªÀiÁgÁl ªÀiÁqÀĪÀ §UÉÎ ªÀiÁgÁlUÁgÀgÀÄ ¸ÀPÁðgÀ¢AzÀ C£ÀĪÀÄw ¥Àvª Àæ £ À ÀÄß ¥Àqz É ÀÄPÉÆAqÀÄ, ¸Àzj À ¸ÀÆZÀ£A É iÀÄ£ÀÄß RjâzÁgÀjUÉ w½¹zÀ ¢£ÁAPÀ¢AzÀ MAzÀÄ ªÁgÀzÀ M¼ÀUÁV RjâzÁgÀgÀ ºÉ¸j À UÁUÀ°Ã, CªÀjAzÀ ¸ÀÆa¹gÀĪÀ £Á«Ä¤UÀ¼À ºÉ¸j À UÁUÀ°Ã PÀA æ iÀÄ ¥ÀvÀæ §gɹ £ÉÆÃAzÁ¬Ä¹PÉÆqÀĪÀÅzÁV ªÀiÁgÁlUÁgÀgÀÄ M¦àPÉÆArgÀÄvÁÛgÉ ªÀÄvÀÄÛ D jÃw ªÀiÁgÁlUÁgÀgÀÄ ªÀiÁgÁlzÀ §UÉV£À C£ÀĪÀÄwAiÀÄ£ÀÄß ¥Àqz É À £ÀAvÀgÀ ªÉÄîÌAqÀªj À AzÀ AiÀiÁªÀÅzÉà vÀgº À z À À ºÉaU Ñ É ºÀtªÀ£ÀÄß ¥ÀqA É iÀÄzÉ FUÀ £ÀªÀÄÆzÀÄ ªÀiÁrgÀvPÀ ÀÌ ºÀtPÉÌ £ÉÆÃAzÀt ªÀiÁrPÉÆqÀ®Ä M¦àgÀÄvÉÛêÉ.'
28. A reading of the said clause would make it clear that it was the intention of both the parties that they were acting in terms of the grant and the law relating to the grant and such an agreement of sale cannot be void and unenforceable.
29. The fact that the PTCL Act provides for transferring granted land on securing permission itself is a clear indicator that there is no absolute bar for transfer of a granted land. In fact, transfers of a granted land made without contravening the terms of the grant and before the Act came 15 into force are not void transactions and after the commencement of the PTCL Act, the transfers made after securing permission from the Government are also not void transactions.
30. Keeping in mind the fact that there is no absolute bar for transfer of a granted land under the PTCL Act, I am of the view that in the instant case, since the Agreement of Sale categorically provided for securing permission from the Government and thereafter proceeding with the sale, the Agreement of Sale cannot be said to be a void document and thereby unenforceable in law.
31. If an Agreement of Sale which contains a stipulation that the consequential sale would be subject to the permission of the Government, the entire transaction being designed to be in compliance of the law, the same cannot be said to be a device to defeat the law relating to the grant. In other words, if two parties to an agreement have clearly agreed to abide by the rigor of law, they cannot be penalized and they cannot be denied the benefit of following the process established by law. In that view of the matter, it has 16 to be held that the Agreement of Sale entered into in the instant case is not a void transaction and the same was therefore enforceable.
32. The Appellate Court, on appreciation of evidence, has recorded a clear finding of fact that the Agreement of Sale had been executed by the 1stdefendant and he himself had admitted his signature during his cross-examination. The Appellate Court has also taken note of the fact that though the 1st defendant claimed to have sold the property to the 2nd defendant, nevertheless, the Sale Deed executed by him in favor of the 2nd defendant was actually produced by the 1st defendant and it was, therefore, clear that the defendants had not come to the Court with clean hands.
33. The Appellate Court has also taken note of the fact that the 1st defendant in fact stated that he did not know why he signed on the Agreement of Sale and his conduct in trying to deny all his signatures establishes that his only intention before the Court was to wriggle out of the contract that he entered into.
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34. The Appellate Court has noticed that all the documents in relation to the suit property including the original grant certificate had been handed over to the plaintiff and therefore, the execution of the Agreement of Sale could not be denied.
35. In the instant case, the earlier agreement holder has been examined and he has also stated before the Court that he had entered into an agreement and the plaintiff had paid him that part of the consideration which he was entitled to receive from the 1st defendant on his agreement being dissolved. In view of the fact that the Agreement of Sale has been held to be proved, the consequential direction by the Appellate Court to conclude sale transaction by granting a decree cannot be found fault with.
36. The judgment relied upon by the counsel for the appellant are also clearly distinguishable.
37. In Civil Appeal No.7630/2019 disposed of on 26.09.2019, the Apex Court was considering the case of a transfer under the provisions of the Karnataka Land Reforms 18 Act, which contained an absolute bar for transfer of land by a tenant in whose favour occupancy right has been granted. But the instant case is a case of a granted land under PTCL Act in which there is no absolute bar for transfer as found in the Karnataka Land Reforms Act. As stated earlier, the PTCL Act and the Grant, itself provide for a transfer of the land, subject however to securing a permission from the Government. Thus, the said judgment of the Apex Court would have no application to the present case.
38. In the case of DHARMA NAIKA Vs. RAMA NAIKA AND ANOTHER - (2008) 14 SCC 517, the Apex Court was dealing with a case of an Agreement of Sale which had been executed before the commencement of PTCL Act and in that regard, the Apex Court took the view that the sale would not render Section 4(1) inapplicable. In the instant case, as the Agreement of Sale itself stipulated that the proposed transfer would happen on the Government granting permission for transfer, the question of parties being in violation of law would not arise.
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39. Similarly, the decision of the Apex Court in the case of SATISH KUMAR Vs. KARAN SINGH & ANOTHER - 2016(2) KCCR SN 88 (SC) wherein it was held that relief cannot be granted if a contract was invalid or unenforceable would also be inapplicable to the present case since the Agreement of Sale in the instant case was valid and also enforceable.
40. Reliance placed by the learned counsel for the appellant on the decision by this Court in the case of SMT.NARASAMMA & OTHERS Vs. K.V.RAMPRASAD & ANOTHER - ILR 2012 KAR 4261 to support his argument that even for entering into an Agreement of Sale, previous permission of the Government is condition precedent can have no application because in that case this Court was not dealing with a situation in which Agreement of Sale itself contained a clause stating that the proposed Transfer was subject to the Government granting permission for the transfer.
41. Reliance placed on the decision of this Court in the case of SRI VENKATANARAYANAPPA Vs. SRI SIDDAPPA - ILR 2007 KAR 1323 is also of no avail, since that was a case 20 in which the Agreement of Sale did not contain any clause for securing permission from the Government.
42. In the result, there is no merit in this appeal and the same is accordingly dismissed.
Sd/-
JUDGE PKS