Gujarat High Court
Patel Shankarbhai Narottambhai vs State Of Gujarat & 4 on 1 October, 2015
Author: C.L. Soni
Bench: C.L. Soni
C/SCA/15751/2015 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 15751 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE C.L. SONI
=============================================
1 Whether Reporters of Local Papers may be allowed to see No
the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any
order made thereunder ?
=============================================
PATEL SHANKARBHAI NAROTTAMBHAI....Petitioner(s)
Versus
STATE OF GUJARAT & 4....Respondent(s)
=============================================
Appearance:
MR DIPAK H SINDHI, ADVOCATE for the Petitioner(s) No. 1
MR RONAL RAVAL, AGP for the Respondent(s) No. 1, 2 & 3.
MR DILIP B RANA, CAVEATOR for the Respondent(s) No. 4
=============================================
CORAM: HONOURABLE MR.JUSTICE C.L. SONI
Date : 01/10/2015
ORAL JUDGMENT
[1] Affidavit in reply on behalf of respondent no.4 is taken on record. Considering the issue involved in the matter, the matter is taken up for final hearing and disposal. Hence, Rule. Learned AGP Mr. Ronak Raval waives service of rule on behalf of respondent nos.1,2 and 3. Learned advocate Mr. Rana appearing on caveat for respondent no.4 Page 1 of 9 HC-NIC Page 1 of 9 Created On Tue Oct 06 01:03:33 IST 2015 C/SCA/15751/2015 JUDGMENT waives service of rule on behalf of respondent no.4.
[2] By the present petition filed under Article 226 of the Constitution of India, the petitioner - opponent no.3 in Revision Application No.4 of 2015 filed by respondent no.4 and pending before the Secretary, Revenue Department (Appeals) has challenged the impugned order dated 28.08.2015 passed therein, whereby the Secretary has ordered to maintain status in connection with implementation of the order dated 22.10.2014 passed by the Collector granting N.A. permission to the petitioner under Section 65 of the Gujarat Land Revenue Code ('the Code' for short) for land bearing survey no.413 paiki admeasuring 1758 sq.mtrs.
[3] Learned advocate Mr. Sindhi for the petitioner submitted that the petitioner is owner of the land and respondent no.4 is holding only agreement to sell (Banakhat) in respect of land in question and thus has got no right or interest in the land in question and cannot object to grant of N.A. permission in favour of the petitioner for the land in question. Mr. Sindhi submitted that order of granting N.A. permission is in the nature of exercising administrative powers and right, title and interest of the parties in the land are not decided by the Collector and till respondent no.4 gets his right established in the suit filed by him, he has no locus to challenge the order granting N.A. permission.
[4] On the other hand, learned advocate Mr. Rana for respondent no.4 submitted that based on agreement to sell, respondent no.4 has acquired interest in the land in question and therefore, he is very much entitled to challenge the order of N.A. Permission, as such order of N.A. permission will directly affect the right of respondent no.4. Mr. Rana submitted that agreement to sell in favour of respondent no.4 Page 2 of 9 HC-NIC Page 2 of 9 Created On Tue Oct 06 01:03:33 IST 2015 C/SCA/15751/2015 JUDGMENT is prior in time then execution of sale deed in favour of the petitioner and based on such agreement to sell, respondent no.4 has filed suit and prayed for injunction by filing Exh.5 application in the civil suit and therefore, if status quo is not maintained in respect of the order made by the Collector, third party rights will be created which will seriously prejudice the rights of respondent no.4 and in absence of interim protection even if respondent no.4 succeeds in the suit, he will be deprived of his right to enjoy the property on account of creation of third party rights.
[5] Learned AGP Mr. Raval appearing for the State authorities submitted that based on the agreement to sell, respondent no.4 is claiming interest in the property and it is for this Court to consider such aspect of the matter.
[6] Having heard learned advocates for the parties, it appears that by virtue of registered sale deed dated 27.05.2013, copy whereof is placed with the present petition at page no.53, the petitioner has applied for N.A. permission as owner of the land in question. The Collector in exercise of powers under Section 65 of the Code has granted N.A. permission to the petitioner on different conditions after considering different reports from different authorities. However, the petitioner is aggrieved by such order of Collector granting N.A. permission in connection with the land in question and has preferred Revision Application before the Secretary on the basis of agreement to sell alleged to have been executed in his favour by original owner. In such Revision Application by impugned order, the Secretary has directed to maintain status quo in connection with the order made by the Collector by observing that such interim order is being passed to avoid multiplicity of proceedings.
Page 3 of 9
HC-NIC Page 3 of 9 Created On Tue Oct 06 01:03:33 IST 2015
C/SCA/15751/2015 JUDGMENT
[7] The Court, however, finds that no such interim order of
status quo could have been passed on the ground that it will avoid multiplicity of proceedings and based on agreement to sell. The respondent no.4 could not be said to have acquired any interest in the land in question and therefore, respondent no.4 did not deserve grant of any interim order. It is well settled position of law that party holding agreement to sell (Banakhat) does not get any interest or right in the property and that agreement to sell cannot be utilized for the purpose of claiming interest in the land against the third party.
[8] In the case of State of U.P. v/s. District Judge and Others reported in (1997) 1 SCC 496, while examining the right of agreement to sell holder in context of Section 53A of Transfer of Property Act, the Hon'ble Supreme Court observed in paragraph no.7 as under : "7. Having given our anxious consideration to the rival contentions we find that the High Court with respect had patently erred in taking the view that because of Section 53A of the Transfer of Property Act the proposed transferees of the land had acquired an interest in the lands which would result in exclusion of these lands from the computation of the holding of the tenure holder transferor on the appointed day. It is obvious that an Agreement to Sell creates no interest in land. As per Section 54 of the Transfer of Property Act, the property in the land gets conveyed only by registered Sale Deed. It is not in dispute that the lands sought to be covered were having value of more than Rs.100/. Therefore, unless there was a registered document of sale in favour of the proposed transferee agreement holders, the title of the lands would not get divested from the vendor and would remain in his ownership. There is no dispute on this aspect. However, strong reliance was placed by learned counsel for respondent No 3 on Section 53A of the Transfer of Property Act. We fail to appreciate how that Section can at all be relevant against the third party like the appellantState.That Section provides for a shield of protection to the proposed transferee to remain in possession against the original owner who has agreed to sell these lands to the transferee if the proposed transferee satisfies other conditions of Section 53A. Page 4 of 9 HC-NIC Page 4 of 9 Created On Tue Oct 06 01:03:33 IST 2015 C/SCA/15751/2015 JUDGMENT That protection is available as a shield only against the transferor, the proposed vendor, and would disentitle him from disturbing the possession of the proposed transferees who are put in possession pursuant to such an agreement. But that has nothing to do with the ownership of the proposed transferor who remains full owner of the said lands till they are legally conveyed by Sale Deed to the proposed transferees. Such a right to protect possession against the proposed vendor cannot be pressed into service against a third party like the appellantState when it seeks to enforce the provisions of the Act against the tenureholder, proposed transferor of these lands. Section 5, subsection (1) of the Act provides that on and from the commencement of the Uttar Pradesh Imposition of Ceiling on Land Holdings (Amendment) Act, 1972, no tenure holder shall be entitled to hold in the aggregate throughout Uttar Pradesh, any land in excess of the ceiling area applicable to him.The definition of the term 'tenureholder' as found in Section 3 subsection (17) lays down that a 'tenureholder' means a person who is the holder of a holding. 'Holding' is defined by Section 3, subsection (9) to mean the land or lands held by a person as a bhumidhar, sirdar, asami of Gaon Sabha or an asami mentioned in Section 11 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950.A conjoint reading of Sections 5 (1), 3 (17) and 3 (9) clearly indicates that if a person holds the land as bhumidar, sirdar or asami, amongst others, as laid down by the said provision then such land will be liable to be included for computing ceiling of his holding under Section 5 (1). It is difficult to appreciate how the term 'holding held by a tenureholder' should be confined only to such lands which are possessed by him as owner and would exclude such lands which are owned by him but which are not in his physical possession. Section 5 (1) nowhere contemplates that the lands must also be physically possessed by him before he could be said to have held such lands even though he was the full owner thereof. If the construction canvassed by learned counsel for Respondent No.3 is accepted then even though a tenure holder may be the full owner of the land if he had parted with the possession of the land in favour of a licensee or a tenant he could not be said to have held such land as tenureholder. On the scheme of the Act, such a construction cannot be said to have been under countenanced. A person can be said to be holding the lands as full owner even if the actual possession of such land might have been parted by him in favour of someone else who might enter into such possession by his permission and under his licence or by a lease created by him. In all such cases he can be said to be in constructive possession or legal possession. Similarly in case of Page 5 of 9 HC-NIC Page 5 of 9 Created On Tue Oct 06 01:03:33 IST 2015 C/SCA/15751/2015 JUDGMENT agreements of sale by which no title passes from the transferor of possession to the transferee thereof, it cannot be said that merely because actual physical possession of such land can be protected by the transferee of possession against its transferor, the transferor ceases to legally hold such a land.This question is no longer res integra as it is concluded by a decision of a three member Bench of this Court in the case of State of Andhra Pradesh v. Mohd. Ashrafuddin (AIR 1982 SC 913) (supra). It is true that in that case the court was concerned with Section 3 of the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act. It defined the word 'holding' to mean the entire land held by a person as an owner, amongst others, and there was an explanation that where the same land is held by one person in one capacity and by another person in any other capacity, such land shall be included in the holding of both such persons. Still, however, the first part of the definition in Andhra Pradesh Act, namely, 'holding' to mean the entire land held by a person as an owner is analogous to the definition of the word 'holding' as found in the present Act as per Section 3(9) which also defines the word 'holding' as land or lands held by a person. It is true that in the Andhra Pradesh Act there is an explanation which makes the land covered by agreement to sell liable to be included also in the holding of the transferee. In absence of such an explanation in Uttar Pradesh Act, such land may not be included in the holding of the transferee. However, the liability of the transferor to get such land included in his holding remains untouched in both the Acts. To that extent, schemes of both the Acts run on parallel lines. So far the term 'land held by a person' is concerned, in the aforesaid decision, the following pertinent observations are found in paragraph (9) of the Report :
"It is now well settled that a person in possession pursuant to a contract for sale does not get title to the land unless there is a valid document of title in his favour. In the instant case it has already been pointed out that the transferee came into possession in pursuance of an agreement for sale but no valid deed of title was executed in his favour. Therefore, the ownership remained with the respondenttransferor. But even in the absence of a valid deed of title the possession pursuant to an agreement of transfer cannot be said to be illegal and the transferee is entitled to remain in possession. If per chance he is dispossessed by the transferor, he can recover possession. The transferor cannot file any suit for getting back possession but all the same he will continue to be the owner of the land agreed to be transferred. The respondent, in our considered opinion, satisfies the conditions contemplated by the Page 6 of 9 HC-NIC Page 6 of 9 Created On Tue Oct 06 01:03:33 IST 2015 C/SCA/15751/2015 JUDGMENT definition of the term 'holding' and the land transferred by him under a defective title deed will form part of his holding. The High Court, therefore, erred in holding that the land in possession of the transferee cannot be taken to be a part of the holding of the transferorrespondent."
In the aforesaid decision it is, therefore, clearly held that even when the land is under an Agreement to Sell in favour of the transferee, the transferor can be said to be holding the said land and the land transferred by him under a defective title deed will form part of his holdings. It has also been in terms observed that High Court erred in holding that the land in possession of the transferee cannot be taken to be a part of the holding of the transferorrespondent. A similar situation arises in the present case.As the Agreement to Sell does not create any interest in favour of the transferee and such land can be treated to be a part and parcel of the holding of the transferor, the result is inevitable that the appellantState is entitled to succeed. It must be held that despite the Agreements to Sell in favour of the transferees concerned, that had taken place in 1970, the said lands which continued to remain in the ownership of Respondent No.3 could be legally included as a part of his holding."
[9] In the case of Suraj Lamp and Industries Private Limited (2) through Director v/s. State of Haryana and Another reported in (2012) 1 SCC 656, the Hon'ble Supreme Court has again reiterated its view on the aspect of right of parties holding agreement to sell, power of attorney, etc. and held and observed in paragraph nos.23 to 27 as under : "23. Therefore, a SA/GPA/WILL transaction does not convey any title nor create any interest in an immovable property. The observations by the Delhi High Court, in Asha M. Jain v. Canara Bank, 94 (2001) DLT 841, that the "concept of power of attorney sales have been recognized as a mode of transaction"
when dealing with transactions by way of SA/GPA/WILL are unwarranted and not justified, unintendedly misleading the general public into thinking that SA/GPA/WILL transactions are some kind of a recognized or accepted mode of transfer and Page 7 of 9 HC-NIC Page 7 of 9 Created On Tue Oct 06 01:03:33 IST 2015 C/SCA/15751/2015 JUDGMENT that it can be a valid substitute for a sale deed. Such decisions to the extent they recognize or accept SA/GPA/WILL transactions as concluded transfers, as contrasted from an agreement to transfer, are not good law.
24. We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transactions of the nature of 'GPA sales' or 'SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immoveable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of section 53A of the TP Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales.
25. It has been submitted that making declaration that GPA sales and SA/GPA/WILL transfers are not legally valid modes of transfer is likely to create hardship to a large number of persons who have entered into such transactions and they should be given sufficient time to regularize the transactions by obtaining deeds of conveyance. It is also submitted that this decision should be made applicable prospectively to avoid hardship.
26. We have merely drawn attention to and reiterated the well settled legal position that SA/GPA/WILL transactions are not 'transfers' or 'sales' and that such transactions cannot be treated as completed transfers or conveyances. They can continue to be treated as existing agreement of sale. Nothing prevents affected parties from getting registered Deeds of Conveyance to complete their title. The said 'SA/GPA/WILL transactions' may also be used to obtain specific performance or to defend possession under section 53A of TP Act. If they are entered before this day, they may be relied upon to apply for regularization of allotments/leases by Development Authorities. We make it clear that if the documents relating to 'SA/GPA/WILL transactions' Page 8 of 9 HC-NIC Page 8 of 9 Created On Tue Oct 06 01:03:33 IST 2015 C/SCA/15751/2015 JUDGMENT has been accepted acted upon by DDA or other developmental authorities or by the Municipal or revenue authorities to effect mutation, they need not be disturbed, merely on account of this decision.
27. We make it clear that our observations are not intended to in any way affect the validity of sale agreements and powers of attorney executed in genuine transactions. For example, a person may give a power of attorney to his spouse, son, daughter, brother, sister or a relative to manage his affairs or to execute a deed of conveyance. A person may enter into a development agreement with a land developer or builder for developing the land either by forming plots or by constructing apartment buildings and in that behalf execute an agreement of sale and grant a Power of Attorney empowering the developer to execute agreements of sale or conveyances in regard to individual plots of land or undivided shares in the land relating to apartments in favour of prospective purchasers. In several States, the execution of such development agreements and powers of attorney are already regulated by law and subjected to specific stamp duty. Our observations regarding 'SA/GPA/WILL transactions' are not intended to apply to such bona fide/genuine transactions."
[10] In light of above and for the reasons stated above, the petition is allowed. Impugned order dated 28.08.2015 passed by the Secretary, Revenue Department (Appeals) in Revision Application No.4 of 2015 is hereby quashed. Rule is made absolute. Direct service is permitted.
(C.L.SONI, J.) satish Page 9 of 9 HC-NIC Page 9 of 9 Created On Tue Oct 06 01:03:33 IST 2015