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R
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 10TH
DAY OF JULY 2012
BEFORE
THE HON’BLE MR.JUSTICE S. ABDUL NAZEER
WRIT PETITION NO.12971/2012
C/W W.P.NOS.12976/2012, 12977/2012
& 12978/2012 (GM-CPC)
W.P.NO.12971/2012
Between:
1 Smt. Narasamma,
W/o late Nagappa,
Aged about 71 years.
2 Sri Doddanna,
S/o late Nagappa,
Aged about 49 years.
3 Smt. Rathnamma,
W/o Doddanna,
Aged about 45 years.
4 Sri Nagaraju,
S/o late Nagappa,
Aged about 43 years.
5 Smt. Hanumakka,
W/o Sri Nagaraja,
Aged about 50 years.
2
All are r/a Venkatala Village,
Bangalore North Taluk. …. Petitioners.
(By Sri R. Kalyan, Adv.)
And:
1 Sri K.V.Ramprasad,
S/o Sri K.V.Varadaraja Gupta,
Aged about 49 years,
R/a No.58, Anand Nagar,
2nd
Stage, MSH Layout,
5th
Main Road, Bangalore.
2 The State of Karnataka,
Department of Revenue,
Reptd. by its Secretary,
M.S.Bldg., Bangalore. …. Respondents.
(By Sri Jayakumar S.Patil, Sr.Adv. for Sri M.Shivaprakash, Adv.
for R1
Sri H.T.Narendra Prasad, HCGP for R2)
W.P.NO.12976/2012
Between:
Sri Venkatappa,
S/o late Munivenkatappa,
Aged about 74 years,
R/a Venkatala Village,
Bangalore North Taluk. …. Petitioner.
(By Sri R.Kalyan, Adv.)
3
And:
1 Sri K.V.Ramprasad,
S/o Sri K.V.Varadaraja Gupta,
Aged about 49 years,
R/a No.58, Anand Nagar,
2nd
Stage, MSH Layout,
5th
Main Road, Bangalore.
2 Sri Narayana,
S/o late Huchappa,
Aged about 33 yeas,
R/a Venkatala village,
Yelahanka Hobli,
Bangalore North Taluk.
3 The State of Karnataka,
Department of Revenue,
Reptd. by its Secretary,
M.S.Bldg., Bangalore. …. Respondents.
(By Sri Jayakumar S.Patil, Sr.Adv. for Sri M.Shivaprakash, Adv.
for R1
Sri H.T.Narendra Prasad, HCGP for R3)
4
W.P.NO.12977/2012
Between:
Sri Marappa,
S/o Lakkappa,
Aged about 43 years,
R/a Venkatala Village,
Bangalore North Taluk. …. Petitioner.
(By Sri R.Kalyan, Adv.)
And:
1 Sri K.V.Ramprasad,
S/o Sri K.V.Varadaraja Gupta,
Aged about 49 years,
R/a No.58, Anand Nagar,
2nd
Stage, MSH Layout,
5th
Main Road, Bangalore.
2 The State of Karnataka,
Department of Revenue,
Reptd. by its Secretary,
M.S.Bldg., Bangalore. …. Respondents.
(By Sri Jayakumar S.Patil, Sr.Adv. for Sri M.Shivaprakash, Adv.
for R1
Sri H.T.Narendra Prasad, HCGP for R2)
5
W.P.NO.12978/2012
Between:
1 Sri Hanumantha,
S/o late Poojappa,
Aged about 41 years.
2 Smt. Lakshmamma,
W/o late Anneyappa,
Aged about 44 years.
3 Sri Suresh,
S/o late Anneyappa,
Aged about 23 years.
All are r/a Venkatala Village,
Bangalore North Taluk. …. Petitioners.
(By Sri R.Kalyan, Adv.)
And:
1 Sri K.V.Ramprasad,
S/o Sri K.V.Varadaraja Gupta,
Aged about 49 years,
R/a No.58, Anand Nagar,
2nd
Stage, MSH Layout,
5th
Main Road, Bangalore.
6
2 The State of Karnataka,
Department of Revenue,
Reptd. by its Secretary,
M.S.Bldg., Bangalore. …. Respondents.
(By Sri Jayakumar S.Patil, Sr.Adv. for Sri M.Shivaprakash, Adv.
for R1
Sri H.T.Narendra Prasad, HCGP for R2)
---
These Writ Petitions are filed under Articles 226 & 227 of
the Constitution of India, praying to quash the impugned order
dated 28.3.2012 in O.S.Nos.2375/2011, 2372/2011, 2370/2011 and
2374/2011 on the file of the 7th
Addl. City Civil Judge, Bangalore,
etc.
These Writ Petitions coming on for Further Hearing this
day, the Court passed the following:
ORDER
The main question for consideration in these writ petitions is
whether the suits filed by the first respondent for enforcement of
the agreements for sale of granted lands without previous
permission of the Government under Section 4(2) of the Karnataka
Scheduled Caste and Scheduled Tribes (Prohibition of Transfer of
Certain Lands) Act, 1978 are liable to be rejected under Order 7
Rule 11(d) of the Code of Civil Procedure?
7
2. Brief facts necessary for disposal of these cases are as
under:
The first respondent is the common plaintiff in
O.S.Nos.2375/2011, 2372/2011, 2370/2011 and 2374/2011 on the
file of the 7th
Additional City Civil Judge, Bangalore. He has filed
the above suits against different defendants (the petitioners herein)
for specific performance of the agreements to sell in respect of the
suit schedule properties. In the suits, defendants have filed
applications for rejection of the plaints under Order 7 Rule 11(d) of
the Code of Civil Procedure (for short ‘CPC’) contending that the
suit schedule properties are granted lands and that there is a bar for
entering into such agreements without taking previous permission
of the Government. The statements made in the plaints disclose that
suits are barred under Section 4(2) of the Act. Therefore, the plaints
are liable to be rejected at the threshold.
8
3. The plaintiff has filed objections contending that the
defendants have received huge amount towards part of the sale
consideration. Applications have already been filed seeking
permission of the Government for sale of the properties. It is
further contended that prior permission of the Government for
entering into agreements to sell is not necessary. The question
raised in the applications has to be decided after the trial in the
suits. Therefore, the plaints cannot be rejected at this stage.
4. The court below has rejected the applications primarily on
the ground that the question raised in the applications has to be
established by the plaintiff by leading evidence. It is only after the
trial, the Court can decide the enforceability of the contract. The
petitioners have called in question the validity of the said orders in
these writ petitions.
5. Sri Kalyan, learned Counsel appearing for the petitioners
submits that perusal of the plaints would disclose that the suit
9
schedule properties are granted lands and attract the provisions of
the Karnataka Scheduled Caste and Scheduled Tribes (Prohibition
of Transfer of Certain Lands) Act, 1978 (for short ‘the Act’). The
defendants have agreed to obtain permission from the Government
under the said Act for the sale of the properties. No such
permission has been obtained before entering into the agreements,
which is evident from the averments made in the plaints. Having
regard to sub-section (2) of Section 4 of the Act, previous
permission of the Government is a condition precedent for transfer
of the lands. The expression ‘transfer’ contained in sub-section (e)
of Section 3 includes an agreement to sell. The agreements entered
into by the parties without previous permission of the Government
are void and are not enforceable in the Court of law. At best, the
plaintiff can seek other remedies available to him in law.
Therefore, the court below ought to have rejected the plaints.
6. On the other hand, Sri Jayakumar S. Patil, learned Senior
Counsel appearing for the first respondent/plaintiff submits that the
10
defendants have already applied for permission for transfer of the
land under Section 4(2) of the Act. There is no bar for entering into
an agreement to sell of the granted lands without delivery of
possession of the properties. He has drawn my attention to the
expression ‘acquire by transfer’ contained in Section 4(2) of the
Act and submits that in order to attract the said Section, there
should be something more than an agreement to sell. Atleast, there
should be delivery of possession under the contract. In this
connection, he has relied on the decisions of the Apex Court in
TILKAYAT SHRI GOVINDLAJI MAHARAJ, etc. VS. STATE
OF RAJASTHAN AND OTHERS - AIR 1963 SC 1638 and in
DEVI DAS GOPAL KRISHNAN & OTHERS VS. STATE OF
PUNJAB & OTHERS - AIR 1967 SC 1895. It is submitted that
after entering into an agreement to sell and before the execution of
the sale deeds, it is open for the parties to obtain permission of the
Government to give effect to the terms of the agreement.
Agreement to sell does not convey any right, title or interest in the
property. In this connection, he has relied on the decisions of the
11
Apex Court in MRS. CHANDNEE WIDYA VATI MADDEN VS.
DR. C.L.KATIAL AND OTHERS - AIR 1964 SC 978,
NATHULAL VS. PHOOLCHAND – AIR 1979 SC 546 and the
decision of the Division Bench of this Court in SYED ZAHEER
AND OTHERS VS. C.V.SIDDAVEERAPPA – 2010 (2) KCCR
954. Alternatively, it is argued that the suits filed by the plaintiff
are for specific performance of the contract. The jurisdiction to
decree the suit for specific performance is discretionary. The Court
in appropriate cases has the power to return the earnest money or
award compensation. Atleast for this purpose, adjudication of the
suits is necessary. Therefore, the plaints cannot be rejected at this
stage.
7. I have carefully considered the arguments of the learned
Counsel made at the Bar and perused the materials placed on
record.
12
8. Order 7 Rule 11 of CPC provides for rejection of the
plaint where the suit appears from the statement in the plaint to be
barred by any law. The Apex Court in T.ARIVANDANDAM VS.
T.V.SATYAPAL AND ANOTHER - AIR 1977 SC 2421 has held
that if on a meaningful and not formal reading of the plaint it is
manifestly vexatious and meritless, in the sense of not disclosing a
clear right to sue, the trial Court should exercise its power under
Order 7 Rule 11 of the CPC taking care to see that the ground
mentioned therein is fulfilled. And, if clear drafting has created the
illusion of a cause of action, nip it in the bud at the first hearing by
examining the party searchingly under Order 10 of the CPC. An
activist Judge is the answer to irresponsible law suits. The trial
Courts would insist imperatively on examining the party at the first
hearing so that bogus litigation can be shot down at the earliest
stage.
9. In SOPAN SUKHDEO SABLE AND OTHERS VS.
ASSISTANT CHARITY COMMISSIONER AND OTHERS –
13
(2004) 3 SCC 137, the Apex Court has declared that Order 7 Rule
11 lays down an independent remedy made available to the
defendant to challenge the maintainability of the suit itself,
irrespective of his right to contest the same on merits. The law
ostensibly does not contemplate at any stage when the objections
can be raised. The trial Court can exercise the power at any stage of
the suit, that is, before registering the plaint or after issuing
summons to the defendant at any time before the conclusion of the
trial and also does not say in express terms about the filing of a
written statement. For the purposes of deciding an application
under clauses (a) and (d) of Order 7 Rule 11 of the CPC, the
averments in the plaint are germane: the pleas taken by the
defendant in the written statement would be wholly irrelevant at
that stage. Instead, the word ‘shall’ is used, clearly implying
thereby that Order 7 Rule 11 casts a duty on the Court to perform
its obligations in rejecting the plaint when the same is hit by any of
the infirmities provided in the four clauses of Order 7 Rule 11,
even without intervention of the defendant. In any event, rejection
14
of the plaint under Order 7 Rule 11 does not preclude the plaintiffs
from presenting a fresh plaint in terms of Order 7 Rule 13. The real
object of Order 7 Rule 11 is to keep out of Courts irresponsible law
suits. The trial Court must remember that if on a meaningful and
not formal reading of the plaint it is manifestly vexatious and
meritless in the sense of not disclosing a clear right to sue, it should
exercise the power under Order 7 Rule 11(a).
10. In POPAT AND KOTECHA PROPERTY VS. STATE
BANK OF INDIA STAFF ASSOCIATION – (2005) 7 SCC 510,
the Apex Court has held that clause (d) of Order 7 Rule 11 speaks
of suit, as appears from the statement in the plaint to be barred by
any law. Disputed questions cannot be decided at the time of
considering an application filed under Order 7 Rule 11 CPC.
Clause (d) of Rule 11 of Order 7 applies in those cases only where
the statement made by the plaintiff in the plaint, without any doubt
or dispute shows that the suit is barred by any law in force. It has
been further held as under:
15
“When the averments in the plaint are considered in
the background of the principles set out in Sopan
Sukhdeo case (2004) 3 SCC 137 the inevitable
conclusion is that the Division Bench of the High
Court was not right in holding that Order 7 Rule 11
CPC was applicable to the facts of the case. Diverse
claims were made and the Division Bench was wrong
in proceeding with the assumption that only the non-
execution of lease deed was the basic issue. Even if it
is accepted that the other claims were relatable to it
they had independent existence. Whether the collection
of amounts by the respondent was for a period beyond
51 years required evidence to be adduced. It was not a
case where the suit from statement in the plaint could
be said to be barred by law. The statement in the plaint
without addition or subtraction must show that it is
barred by any law to attract application of Order 7
Rule 11. That was not so in the present case.”
11. Thus, Order 7 Rule 11 of CPC lays down an independent
remedy made available to the defendant to challenge the
16
maintainability of the suit itself irrespective of his right to contest
the same on merits. A plaint can be rejected where the suit appears
from the averments made in the plaint to be barred by any law. In
order to reject the plaint, the statement in the plaint without any
addition or subtraction must show that it is barred by any law in
force without any doubt or dispute. Where the Court is in doubt or
the Court is not sure and certain that the suit is barred by some law,
the Court would not reject the plaint. Disputed questions cannot be
decided at the time of considering the application under this
provision.
12. Before proceeding to consider the validity of the
impugned orders, it is also necessary to consider as to whether the
Act contains a bar to enter into a contract for sale of granted lands
without previous permission of the Government?
Section 4 of the Act contains a bar for transfer of granted
lands, which is as under:
17
“4. Prohibition of transfer of granted lands.
(1) Notwithstanding anything contained in any law,
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 shall 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 to 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.”
13. For better understanding the above provision, it is also
necessary to notice the statutory definitions provided for the
18
expressions ‘granted land’ and ‘transfer’ in Section 3(b) and 3(e),
which are as under:
“Sec.3(b) “Granted Land” means any land granted
by the Government to a person belonging to any of the
Scheduled Castes or the Scheduled Tribes and includes
land allotted or granted to such person under the
relevant law for the time being in force relating to
agrarian reforms or land ceilings or abolition of inams,
other than that relating to hereditary offices or rights
and the word “Granted” shall be construed
accordingly.
Sec.3(e) “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.”
19
14. It is well settled that when an expression is defined in a
statute, unless there is anything repugnant in the subject or context,
the expression has to be construed as having the same meaning
assigned to it in the dictionary clause of the statute. The object of
such a definition is to avoid the necessity of frequent repetition in
describing the subject matter to which a word or expression so
defined is intended to apply. In these cases, we are considering the
effect of entering into an agreement to sell in respect of granted
land without the previous permission of the Government. If Section
3(b) is read into Section 4(2), it is clear that no person shall after
commencement of the Act, enter into an agreement to sell any
granted land without the previous permission of the Government.
15. The State, consistent with the Directive Principles of the
Constitution has made it a policy to preserve, protect and promote
the interest of the scheduled castes and scheduled tribes, which by
and large form weaker and poorer sections of the people in our
country. In pursuance of this policy, the lands have been granted to
20
the persons belonging to the scheduled castes and scheduled tribes
which includes the lands allotted or granted to such person under
the relevant law for the time being in force relating to agrarian
reforms or land ceiling or abolition of inams. The condition
regarding prohibition of transfer of granted land had been
introduced in the interest of grantees for the purpose of upkeep of
the grants and for preventing the economically dominant sections
of the community from depriving the grantees, who belong to the
weaker sections of the people of their enjoyment and possession of
these lands and for safeguarding their interests against any
exploitation by the richer sections in regard to the enjoyment and
possession of these lands granted essentially for their benefit. This
prohibition on transfer has not proved to be sufficiently strong
safeguard in the matter of preserving grants in the hands of
grantees belonging to the scheduled castes and scheduled tribes and
in violation of the prohibition on transfer of the granted land,
transfers of such lands on a large scale to serious detriment of the
interests of these poorer sections of the people had taken place.
21
Therefore, the Act was enacted to provide for the prohibition of
transfer and for restoration of lands granted by the Government to
the persons belonging to the scheduled castes and scheduled tribes
in the State.
16. The Hon’ble Supreme Court in MANCHEGOWDA
AND OTHERS VS. STATE OF KARNATAKQA AND OTHERS
- AIR 1984 SC 1151 while upholding the constitutional validity of
the Act has held as under:
“ Non alienation clause contained in the existing Land
Grant Rules and the provisions for cancellation of
grants where the land is alienated in contravention of
the above said provision are found not sufficient to help
the scheduled castes and scheduled tribes grantees
whose ignorance and poverty have been exploited by
persons belonging to the affluent and powerful sections
to obtain sales or mortgages either for a nominal
consideration or for no consideration at all and they
have become the victims of circumstances. To fulfill
the purpose of the grant, the land even if it has been
22
alienated, should be restored to the original grantee or
his heirs. ”
17. In DHARMA NAIKA VS. RAMA NAIKA AND
ANOTHER – (2008) 14 SCC 517, the Apex Court explained the
objects of the Act as under:
“8. A plain reading of the Statement of Objects and
Reasons, for which the legislature has introduced this
Act, would show that the non-alienation clause
contained in the existing Land Grant Rules and the
provisions for cancellation of grants where the land
was alienated in contravention of the abovesaid
provisions were found insufficient to help the
Scheduled Castes and Scheduled Tribes grantees.
From the objects and reasons of the Act, it is evident
that ignorance and poverty of the Scheduled Castes
and Scheduled Tribes were exploited by persons
belonging to the affluent and powerful sections to get
sales or mortgages, either for a nominal consideration
or for no consideration at all and on account of this,
the Scheduled Castes and Scheduled Tribes had
23
become the victims of circumstances. It is for this
reason and to fulfil the purposes of the grant, it was
thought fit by the legislature that the land, even if it
has been alienated, must be resorted to the original
grantee or his heirs and legal representatives who are
admittedly Scheduled Castes and Scheduled Tribes.
9. It is also evident from the objects and reasons of the
Act that the Central Government was also urging the
State Government to enact a legislation to prevent
alienation of lands granted to the Scheduled Castes and
Scheduled Tribes by the State Government on the lines
of the model legislation prepared by it and circulated
to the State Government. It is in that background, the
Act was introduced providing for prohibition of
transfer and restoration of lands granted by the
Government to persons belonging to the Scheduled
Castes and Scheduled Tribes in the State. However, it
is also evident from the relevant provisions of the Act
with which we would be dealing with later that total
prohibition of transfer by Scheduled Castes and
Scheduled Tribes was also not intended by the
legislature. It is provided that in respect of transfers
after the commencement of the Act, it would be open
24
to transfer the land granted to Scheduled Castes and
Scheduled Tribes if prior permission is obtained from
the State Government.”
18. Keeping in mind the back ground of the legislation, we
have to interpret the provisions of the Act. Sub-Section (2) of
Section 4 states that no person shall, after commencement of the
Act, transfer or acquire by transfer any granted land without
previous permission of the Government. An extensive definition
has been used to define the expression ‘transfer’. Thus, ‘transfer’
not only means a sale, gift, exchange or mortgage with or without
possession, lease or any other transaction not being a partition
among members of a family of a testamentary disposition but also
the creation of a charge or agreement to sell, exchange, mortgage
or lease or enter into any other transaction.
19. Section 54 of the Transfer of Property Act, 1882 defines
a contract for sale. It states that a contract for sale of immovable
property is a contract that a sale of such property takes place on
25
terms settled between the parties. It does not, of itself, create any
interest or charge on such property. Thus, contract for sale is only
a document creating right to obtain another document of sale on
fulfillment of terms and conditions specified therein. On the
strength of such an agreement, a buyer does not become the owner
of the property. The ownership remains with the seller. It will be
transferred to the buyer only on the execution of sale deed by the
seller. The buyer obtains only a right to get the sale deed executed
in his favour. There is no bar for the parties to enter into an
agreement to sell with or without delivery under Section 54 of the
Transfer of Property Act. It depends upon the terms and conditions
settled between the parties. However, a contract for sale with or
without delivery of possession of the property makes no difference
for the purpose of Section 4(2) of the Act.
20. Learned Senior Counsel for the first respondent has laid
emphasis on the expression ‘acquire by transfer’ employed in
26
Section 4(2) and submits that mere agreement to sell without
delivery of possession will not come within the ambit of sub-
section (2) of Section 4 of the Act. In my opinion, that is not the
legislative intent. The legislative intent is clear that previous
permission of the Government is a condition precedent for the
agreements for sale of granted lands. This Court in SRI
VENKATANARAYANAPPA VS. SRI SIDDAPPA – ILR 2007
KAR 1323 was considering a similar case where possession was
not delivered in part performance of the agreement to sell. It has
been held as under:
“………….Sub-section (2) of Section 4 provides for
the permission of the Government for such transfer.
But the way the said sub-section is worded makes it
clear that no person shall, after the commencement of
this Act transfer or acquire by transfer any granted
land without the previous permission of the
Government. Sub-section 4(1) deals with transfer of
lands being in violation of the terms of the grant before
the Act came into force. But sub-section (2) deals with
27
transfer of lands after the Act came into force. In other
words, even if the transfer is not in contravention of
the terms of the grant, but if that transfer takes place
after the Act came into force, such transfer requires
previous permission of the Government. Therefore
for all transfers subsequent to the passing of the Act,
previous permission of the Government is a must.
Otherwise it would be null and void.”
It has been further held as under:
“In the Scheme of the Act, it is clear whether to sell
the property by way of a sale or to enter into an
agreement to purchase a granted land previous
permission of the Government is a must. It is a
condition precedent. If previous permission is not
obtained prior to the agreement of sale, then it amounts
to transfer under Section 3(e) of the Act and thus it is
null and void. While interpreting this provision the
Courts have to keep in mind the legislative intent.
When the legislature declares that the transfer in
contravention of Section 4(2) of the Act is null and
void, no contract in the eye of law has come into
existence. The legislature did not stop there. It made
28
its intentions explicitly clear by further declaring that
“no right, title or interest in such land shall be
conveyed or be deemed ever to have conveyed by such
transfer”. An agreement to sell the granted land under
the Act, is opposed to Section 4(2) of the Act, and
therefore is not a contract. It is also opposed to public
policy. Therefore, it is not enforceable in Court of
law.”
21. In DHARMA NAIKA’s case (supra), the Apex Court
has held that Section 4(1) of the Act declares any transfer of
granted land made either before or after the coming into force of
the Act, to be null and void if it is in contravention of any one of
the conditions specified therein i.e. (a) the terms of grant of such
land; or (b) the provisions of the law providing for such grant; or
(c) Section 4(2). It has been further held as under:
“It is true, the word “transfer” as defined in Section
3(1)(e) of the 1978 Act is an inclusive definition. That
is to say, it includes ‘sale’ as well as ‘agreement for
sale’, although an agreement for sale under the
29
Transfer of Property Act, 1882 is not a transfer and the
right, title or interest in the land does not pass until the
sale deed is executed and registered. An agreement to
sell does not pass until the sale deed is executed and
registered. An agreement to sell does not by itself
create any interest of the proposed vendee in the
immovable property but only creates an enforceable
right in the parties. Thus, under the general law, that, is
under the Transfer of Property Act, 1882 an
‘agreement for sale’ is not the same as ‘sale’ and in the
case of an agreement for sale, the title of the property
agreed to be sold still remains with the vendor but in
the case of ‘sale’, title of the property is vested with
the vendee. Therefore, an agreement for sale is an
executory contract whereas sale is an executed
contract.”
22. In BHEMANNA VS. DEPUTY COMMISSIONER,
CHITRADURGA DISTRICT & OTHERS – ILR 2010 KAR 5011,
a Division Bench of this Court has held as under:
30
“A conjoint reading of sub-sections (1) & (2) of
Section 4 of the Act shows that if the transfer of
granted land is made in violation of the terms of the
grant of such land or the law providing for such grant
whether such transfer is before or after the Act came
into force, the same is rendered null and void.
Whereas, in the case of transfer of land after the
commencement of the Act even though the said
transfer is not in contravention of the terms of the
grant or the law providing for such grant, the same is
rendered null and void.
It is thus clear that the intention of the
Legislature is that, after the commencement of the Act,
there shall be prohibition for transfer of granted land
even though the period of non-alienation had expired
and the grantee was otherwise entitled to transfer. It is
therefore clear that the term ‘granted land’ as defined
under Section 3(1)(b) of the Act cannot be given a
restricted meaning to say that the land losses the
characteristic of a granted land after the expiry of non-
alienation period.”
31
23. In TILKAYAT SHRI GOVINDLALJI MAHARAJ’s
case (supra) relied on by the learned Senior Counsel, the Supreme
Court has held that the acquisition of property in the context means
the extinction of the citizen’s rights in the property and conferment
of the said rights in the State or the State owned corporation. In
M/S. DEVI DAS GOPAL KRISHNAN’s case (supra), the Apex
Court has observed that a close scrutiny compels them to give a
restricted meaning to the expressions ‘acquisition’ and ‘price’.
Acquisition is the act by which a person acquires property in a
thing. ‘Acquire’ is to become the owner of the property either by
voluntary or involuntary transfer.
These decisions have no application to the facts of these
cases. In the said cases, the Supreme Court has assigned the
meaning to the expression ‘acquire’ in different contexts.
24. Let us now consider the other decisions relied on by the
learned Senior Counsel. In MRS. CHANDNEE WIDYA VATI
MADDEN’s case (supra), the Hon’ble Supreme Court was
32
considering a case relating to specific performance of an agreement
to sell. One of the terms of the contract was that the vendor shall
obtain necessary permission of the Government for the sale within
two months of the agreement and if the permission was not
forthcoming within that time, it was open to the vendees to extend
the date or to treat the agreement as cancelled. The vendor made an
application for permission. At a later stage, she withdrew the same.
The agreement holder filed a suit for specific performance of the
contract or in the alternative for damages. In this background, the
Apex Court has held that the contract was not a contingent contract
and that the parties are agreed to bind themselves by the terms of
the document executed between them. The Court had got to enforce
the terms of the contract and to enjoin upon the vendor to make the
necessary application for permission. In the event of the permission
being refused, the vendees shall be entitled to the damages.
25. In NATHULAL’s case (supra), the Supreme Court was
considering a case relating to enforcement of an agreement where
33
the land could not be sold without the sanction of the State
Government. The Apex Court has held that where by statute,
property is not transferable without the permission of the authority,
an agreement to transfer the property must be deemed subject to the
implied condition that the transferor will obtain the sanction of the
authority concerned. This is not a case where the statute imposes a
condition that previous permission is necessary for entering into a
contract of sale.
26. In SYED ZAHEER’s case (supra), this Court was
considering the enforceability of a contract in respect of an
agricultural land where there is a bar for transfer of the land to non-
agriculturists under Section 80 of the Karnataka Land Reforms Act,
1961. It has been held that Section 80 does not prohibit any
agreement of sale between the land owner and non-agriculturists.
What it prohibits is a non-agriculturist of the categories specified in
the Section purchasing an agricultural land. He too can purchase
after obtaining necessary permission of the competent authority.
34
27. The common factor in all these decisions is that prior
permission was not required for entering into an agreement of sale
of the properties. In the instant case, an agreement entered into
without previous permission of the Government is void-ab-initio. It
is a condition precedent. Therefore, these decisions have no
application to the facts of the present case.
28. As has been noticed above, there is a clear bar for
entering into an agreement to sell of the granted lands without
previous permission of the Government. If an agreement is entered
into in respect of the granted land in violation of Section 4(2), it is
void-ab-initio. Section 23 of the Indian Contract Act, 1872 bars the
enforcement of a contract if it is forbidden by law. An agreement
offending a statute or public policy or forbidden by law is not
merely void but it is invalid from nativity. The term ‘law’ in this
Section must be understood in the sense of the term explained in
Article 13(3) of the Constitution. Thus, what is done in
35
contravention of the provisions of any law cannot be made the
subject matter of an action. If the contract is expressly prohibited
by law, it is void-ab-initio and cannot be enforced. In the
circumstances, Courts cannot grant a decree for specific
performance subject to the permission, which may be obtained by
one of the parties from the Government. I am of the view that the
suits filed by the plaintiff for enforcement of the void agreements
cannot be entertained by the Civil Court.
29. Let us now consider as to whether from the statements in
the plaint, the suits are barred under Section 4(2) of the Act? It is
not in dispute that the plaint averments in all the suits are similar. It
is sufficient if the plaint averments in one of the suits is taken into
consideration. Therefore, let us take the plaint in
O.S.No.2375/2011. In Paragraph 3 of the plaint, the plaintiff has
stated that the defendants are the wife and children of Nagappa.
The erstwhile Government of Mysore had granted agricultural land
bearing Sy.No.29 measuring an extent of 1 acre 20 guntas in favour
36
of Nagappa. After the death of Nagappa, the sole bread winner of
the family, the defendants have suffered a serious setback. In order
to meet the pressing legal necessities of the family, more
particularly, for their decent living as well as to construct a
dwelling house of their own and to clear off certain debts incurred
for performing the marriage of the second defendant, they have
offered to sell the property in question.
In paragraph 4, it is further stated that on the offer made by
defendant Nos.1 to 5 through their known persons of the same
village, the plaintiff approached the defendants and expressed his
willingness to purchase the said property. The defendants made
available the grant order dated 4.8.1948 passed in favour of
Nagappa along with other supportive documents, which stood in
the name of Nagappa.
In paragraph 5, the plaintiff has stated that defendants have
agreed to obtain necessary permission from the competent
authorities, namely, the Government since the land in question is
the subject matter of grant. The relevant portion is as under:
37
“The defendants have agreed to obtain necessary
permission from the competent authorities, namely, the
Government, since the land bearing Sy.No.29 is a
subject matter of grant in the year 1948 with certain
conditions by virtue of amendment. The provisions
provides and permits the parties to seek necessary
permission from the competent Revenue authorities for
alienation of the property in the event of alienation,
grantee sought such permission from the authorities by
placing satisfactory material to compensate the loss of
property and to acquire certain other properties so as to
render support to the plaintiff’s family.”
In paragraph 7(c), the plaintiff has stated that the agreed sale
consideration of the property was at Rs.45,00,000/- and on the day
of execution of the agreement, plaintiff has paid Rs.25,00,000/-. It
was agreed that balance of the sale consideration will be paid at the
time of registration.
In para 8 of the plaint, the plaintiff has pleaded that at the
time of offer made for sale and negotiations, the defendants have
38
agreed to obtain previous permission of the Government under the
provisions of Karnataka Schedule Caste and Schedule Tribes
(Prohibition of Transfer of Certain Lands) Act, 1978, which is
necessary to conclude the contract.
In paragraph 14, the plaintiff has contended that the
defendants are evading to perform their contractual obligation
under the agreement dated 9.7.2009.
30. A meaningful reading of the entire plaint makes it clear
that the suit schedule properties are granted lands and that the
agreements have been entered into without previous permission of
the Government under Section 4(2) of the Act. Thus, the
agreements are void and unenforceable in law.
31. It is also relevant to consider the submission of the
learned Senior Counsel for the first respondent that the suits filed
by the plaintiff are for specific performance of the contract. The
jurisdiction to decree the specific performance is discretionary. The
39
Court has power to grant alternative reliefs if it refuses to grant the
relief of specific performance. Therefore, the suits cannot be
dismissed at this stage.
32. It is true that the jurisdiction to decree the specific
performance is discretionary and the Court is not bound to grant
such relief merely because it is lawful to do so. It empowers the
Court to refuse specific performance of contracts, even though it
has jurisdiction to render the decree and the contracts are capable
of being specifically enforced. But the discretion of the Court
should not be arbitrary but sound and reasonable, guided by
judicial principles and capable of correction by a Court of appeal.
Section 20 of the Specific Relief Act, 1963 confers discretion for
decreeing specific performance. The Court is not bound to decree
specific performance in the circumstances provided in sub-section
(2) of Section 20, which are as under:
40
“(a) where the terms of the contract or the conduct of
the parties at the time of entering into the contract or
the other circumstances under which the contract was
entered into are such that the contract, though not
voidable, gives the plaintiff an unfair advantage over
the defendant; or
(b) where the performance of the contract would
involve some hardship on the defendant which he did
not foresee, whereas its non-performance would
involve no such hardship on the plaintiff; or
(c) where the defendant entered into the contract under
circumstances which though not rendering the contract
voidable, makes it inequitable to enforce specific
performance.”
33. The Court has also power to grant compensation in
certain cases either in addition to or in substitution of performance
provided such a claim is made by the plaintiff. Sub-section (1) of
Section 21 states that in a suit for specific performance of the
contract, the plaintiff may also claim compensation for its breach
41
either in addition to or in substitution of such performance. Sub-
section (5) of Section 21 states that no compensation shall be
awarded under the said Section unless the plaintiff has claimed
such compensation in his claim. However, the Court can allow him
to amend the plaint at any stage of the proceedings seeking
compensation. Thus, for award of compensation, the plaintiff has to
make a claim in the plaint. Section 22 of the Act lays down the
power to grant relief for possession, partition, refund of earnest
money, etc. It states that any person suing for the specific
performance of a contract for the transfer of immovable property
may, in an appropriate case, ask for possession, or partition and
separate possession of the property in addition to such performance
or any other relief to which he may be entitled including the refund
of any earnest money or deposit paid or made by him in case his
claim for specific performance is refused. Sub-section (2) of
Section 22 states that no relief under this Section shall be granted
by the Court unless it has been specifically claimed. However, the
42
plaintiff can amend his plaint so as to include the claim for such
relief.
34. Thus, the discretion vested in the Court not to decree
specific performance only if the case falls under clauses (a) to (c)
of sub-section (2) of Section 20. No discretion is vested in the Civil
Court for award of compensation or refund the earnest money or
deposit paid or made by the plaintiff without making a claim in the
plaint. A perusal of the plaints would disclose that plaintiff has not
sought any alternative relief. The suits are only for specific
performance of the contract. There is no merit in the contention of
the first respondent that since decree for specific performance is
discretionary, the Court can award compensation or refund the
earnest money or deposit without making a claim in the plaint.
35. Section 24 bars the filing of the suit for compensation
for breach after dismissal of suit for specific performance. It is as
under:
43
“Sec.24. Bar of suit for compensation for breach
after dismissal of suit for specific performance: The
dismissal of a suit for specific performance of a
contract or part thereof shall bar the plaintiff’s right to
sue for compensation for the breach of such contract or
part, as the case may be, but shall not bar his right to
sue for any other relief to which he may be entitled, by
reason of such breach.”
36. Similarly, Order 7 Rule 13 of the CPC provides for
presentation of the fresh plaint in case of rejection of a plaint under
Order 7 Rule 11 of the CPC. It reads as under:
“Rule 13. Where rejection of plaint does not
preclude presentation of fresh plaint: The rejection
of the plaint on any of the grounds hereinbefore
mentioned shall not of its own force preclude the
plaintiff from presenting a fresh plaint in respect of the
same cause of action.”
44
Therefore, even if the suit for specific performance of the
contract or part thereof is rejected, there is no bar for the plaintiff to
sue for any other relief, which he may be entitled to except to sue
for compensation for breach of contract.
37. From the discussions made above, it is clear that the
agreements entered into by the plaintiff and the defendants for sale
of granted lands are null and void having regard to sub-section (2)
of Section 4 of Act and its enforcement is barred under Section 23
of the Contract Act. Therefore, the plaints in question are liable to
be rejected. However, there is no impediment for the plaintiff to
sue for any other relief as provided in Section 24 of the Specific
Relief Act and Order 7 Rule 13 of the CPC.
38. It is also necessary to consider yet another submission of
the learned Counsel for the first respondent that the first respondent
has paid huge advance amount in terms of the contract. He has also
deposited court fee along with the plaints. If the plaints are
45
rejected, the plaintiff will not only be deprived of the properties but
also the earnest money and the court fee. I have already held that
the plaintiff is entitled to sue for other reliefs having regard to
Section 24 of the Specific Relief Act. But, the question is whether
the plaintiff is entitled for refund of court fee? In this connection, I
have also heard Sri H.T.Narendra Prasad, learned HCGP for the
respondent-State.
39. It is well settled that court fee is not a tax. In INDIAN
MICA AND MICANITE INDUSTRIES LTD. VS. THE STATE
OF BIHAR – AIR 1971 SC 1182, the Apex Court has held that
before any levy can be upheld as a fee, it must be shown that the
levy has reasonable correlationship with the services rendered by
the Government. In other words, the levy must be proved to be a
quid pro quo for services rendered.
40. In THE SECRETARY, GOVERNMENT OF
MADRAS, HOME DEPARTMENT AND ANOTHER VS.
46
ZENITH LAMPS AND ELECTRICAL LTD. – AIR 1973 SC 724,
the Hon’ble Supreme Court has held that in a case concerning the
administration of civil justice in a state, the fees must have relation
to the administration of civil justice. While levying fees, the
appropriate legislature is competent to take into account all relevant
factors, the value of the subject matter of the dispute, the various
steps necessary in the prosecution of a suit or matter, the entire cost
of the upkeep of Courts and officers administering civil justice, the
vexatious nature of a certain type of litigation and other relevant
matters. It is free to levy a small fee in some cases, a large fee in
others, subject of course to the provisions of Article 14. But one
thing the legislature is not competent to do, and that is to make
litigants contribute to the increase of general public revenue. In
other words, it cannot tax litigation, and make litigations pay, say
for road building or education or other beneficial schemes that a
state may have. There must be a broad correlationship with the fees
collected and the cost or administration of civil justice. Whenever
the State Legislature generally increases fees, it must establish that
47
it is necessary to increase Court fees in order to meet the cost of
administration of civil justice. As soon as the broad correlationship
between the cost of administration of civil justice and the levy of
Court fees ceases, the imposition becomes a tax and beyond the
competence of the State Legislature.
41. In P.M.ASHWATHANARAYANA SETTY VS. STATE
OF KARNATAKA – AIR 1989 SC 100, the Apex Court has
observed that the power to raise funds through the fiscal tool of a
fee is not to be confused with a compulsion so to do. Fees are
levied in order to defray usually a part, in rate cases the whole of
the cost of services done in public interest and conferring some
degree of advantage on the fee payer. In the said case, though the
Court has abstained from striking down the legislation authorising
levy of ad valorem court fee, it has further stated that immediate
steps are called for and are imperative to rationalise the levies. In
48
doing so, the State should realise the desirability of levying on the
initial slab of the subject matter, say up-to 15,000/-, a nominal
court fees not exceeding 2 to 2½% so that small claims are not
priced out of Courts. Claims in excess of Rs.15,000/- might admit
of an ad valorem levy at rates which, preferably, should not exceed
7½% subject further to an upper limit which having regard to all
circumstances, could be envisaged at Rs.75,000/-. The Court has
further held that after that limit is reached, it is appropriate to
impose on gradually increasing slabs of the value of the subject
matter, progressively decreasing rates, say from 7½% down to ½%
in graduated scales. The Governments concerned should bestow
attention on these matters and bring about a rationalisation of the
levies. The reasons assigned for issuing such directions are as
under:
“12. These are the realities in the background of which
the impact of court fees is to be considered. Indeed all
civilised Governments recognise the need for access to
justice being free. Whether the whole of the expenses
49
of administration of civil justice also – in addition to
those of criminal justice – should be free and met
entirely by public revenue or whether the litigants
should contribute and if so, to what extent, are matters
of policy. These ideals are again to be balanced against
the stark realities of constraints of finance. Before any
judicial criticism of the policy acknowledgment should
be made of the Government’s power to raise the
resources for providing the services from those who
use and benefit from the services. The idea that there
should be uniform fixed fee for all cases, instead of the
ad valorem system, has its own nettling problems and
bristles with anomalies. How far these policy
considerations have an adjudicative disposition and
how far Courts can mould and give direction to the
policy is much debated. The Directive Principles in
Art.39-A are, no doubt, fundamental in the governance
of the country, though not enforceable in Courts of
law.”
42. In view of the above observations, the Karnataka Court
Fees and Suits Valuation Act, 1958 (for short ‘Court Fees Act’)
was amended by Karnataka Act No.2/1993, wherein Article I has
50
been substituted almost incorporating the suggestion made by the
Supreme Court in the above case. Slab system has been introduced
replacing the flat rate at 10%.
43. Chapter VII of the Court Fees Act, 1958 provides for
refund and remission of court fee. Section 63 provides for the
refund of court fee in case of delay in presentation of plaint.
Section 64 provides for refund in cases of remand. Refund of court
fee is also available where the Court reverses or modifies former
decision on ground of mistake. Under Section 66 the plaintiff is
entitled for refund of half of the amount of fee paid in respect of
the claim or claims in a suit or appeal, if the suit is dismissed as
settled out of Court, before any evidence has been recorded on the
merits of the claim; or any suit is compromised ending in a
compromise decree before any evidence has been recorded on the
merits of the claim; or any appeal is disposed of before the
commencement of hearing of such appeal. There is also a provision
in Section 67 for refund of court fee paid by mistake or
51
inadvertence. A Division Bench of this Court in
A.SREERAMAIAH VS. THE SOUTH INDIAN BANK LTD.,
BANGALORE AND ANOTHER - ILR 2006 KAR 4032 has held
that in any settlement arrived in terms of Section 89 of the CPC
including the judicial settlement at the intervention and on terms
suggested by the Court, the appellant is entitled for refund of full
court fee. However, if the plaint is rejected at the threshold, there is
no provision for refund of the court fee. There is no exemption
from payment of court fee if the plaintiff choses to file fresh suits
having regard to Section 24 of the Specific Relief Act or Order 7
Rule 13 of the CPC. I am of the view that the State Government
has to consider amending the Karnataka Court Fees and Suits
Valuation Act, 1958 to enable the plaintiffs to claim refund of the
court fee either in full or atleast in part when their plaints are
rejected under Order 7 Rule 11(d) of the CPC.
44. In the light of the above discussions, I pass the
following:
52
ORDER
(i) The writ petitions are allowed and the orders dated
28.3.2012 on I.A.Nos.8 in O.S.Nos.2375/2011 and 2372/2011,
I.A.No.9 in O.S.No.2370/2011 and I.A.No.7 in O.S.No.2374/2011
are hereby set aside and the applications are allowed. The plaints in
O.S.Nos.2375/2011, 2372/2011, 2370/2011 and 2374/2011 on the
file of the 7th
Additional City Civil Judge, Bangalore are hereby
rejected.
(ii) However, this order will not preclude the first
respondent/plaintiff from availing other remedies available to him
in law.
(iii) The Registry is directed to send a copy of this order to
the Revenue Secretary and Law Secretary, Vidhana Soudha,
Bangalore. The Law Secretary is directed to place a copy of this
order before the Karnataka Law Commission, Bangalore, for
53
consideration of the observations and suggestions made in
paragraphs 38 to 43 of this order. No costs.
Sd/-
JUDGE.
BMM/-