R.S.A. No. 435 of 1991 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A. No. 435 of 1991 (O&M) Date of decision: 16.04.2009 Chanan Singh and others ....appellants versus Khairan and others ....respondents CORAM: HON'BLE MR. JUSTICE VINOD K. SHARMA Present: - Mr. J.S. Toor, Advocate, for the appellants. Mr. S.C. Chhabra, Advocate, for the respondents. *** VINOD K. SHARMA, J. This judgment shall dispose of R.S.A. No. 435 of 1991 titled Chanan Singh and others Vs. Khairan and others and R.S.A. No. 2113 of 1991 titled Saraj Vs. Chanan Singh and others, as they arise out of same judgment and decree. For brevity sake facts are being taken from R.S.A. No. 435 of 1991 titled Chanan Singh and others and others Vs. Khairan and others. The plaintiff/appellants have knocked the door of this Court to challenge the judgment and decree dated 3.8.1990 passed by the learned Courts below, vide which the suit filed by the plaintiff/appellants for R.S.A. No. 435 of 1991 (O&M) -2- specific performance of agreement to sell dated 23.6.1979 regarding land measuring 32 kanals 16 marlas situated at village Waraswala Jattan, Tehsil Zira, has been ordered to be dismissed, by granting an alternative relief of recovery of Rs.21,000/-, and also permanent injunction restraining the defendants from dispossessing the plaintiffs forcibly from the suit land except in due course of law. The plaintiff/appellants were also held entitled to interest @ 12% per month from the date of filing of the suit till the passing of decree and with future interest @ 6% per month. The facts leading to the filing of the present appeal are that Sh. Mussa deceased was an allottee of land measuring 32 kanals 16 marlas, fully described in the heading of the plaint, situated in the area of village Waraswala Jattan, Teh. Zira. Sh. Mussa died leaving behind respondent/defendants No. 1 to 7 as his legal heirs. Plaintiff No. 2 also died and his legal representatives were brought on record as plaintiffs No. 2(i) to (v). Late Mussa entered into an agreement of sale regarding the suit land in favour of the plaintiffs for consideration of Rs.21,000/- on 23.6.1979. A sum of Rs. 20,000/- was paid as earnest money at the time of execution of agreement, and possession of the land was handed over to the plaintif/appellants by deceased Mussa. As per terms of the agreement, remaining amount of Rs.1,000/- was to be paid before the Sub Registrar at the time of execution of sale deed. It was one of the stipulations that late Mussa would clear all instalments due to the Government and get the sale certificate and will also get the land mutated in his name. It was also stipulated in the agreement that, in R.S.A. No. 435 of 1991 (O&M) -3- case, late Musa failed to secure full rights, then after getting the sale deed executed in his favour, he would give two months' notice to the plaintiff/appellants to get the sale deed registered. The plaintiff/appellants claimed that they have always remained willing to perform their part of contract, and were still ready and willing to do so, but the defendants were not ready and willing to execute the sale deed. It was asserted by the plaintiffs that major portion of the sale price stood already paid to the defendants. The land was of inferior quality and that the plaintiff/appellants spent huge sum to make the same cultivable, by levelling the same and had also dug a bore in it. It was also the case of the plaintiff/appellants that on 19.3.1985, the plaintiffs served a registered notice to the defendants to execute the sale deed in their favour. On 1.4.1985, they waited for the whole day in the office of the Sub Registrar, but the defendants did not appear. It was further pleaded that the defendants threatened to take forcible possession of the suit land with the help of police and the bad characters, thus, the suit. The suit was contested by the defendants by filing separate written statements. In the written statement filed by the defendants No. 1 to 6, it was admitted that late Mussa was allotted the suit land, and that defendant/respondents were the legal heirs. The averments made in the plaint were denied. The execution of agreement in dispute by late Mussa was denied for want of knowledge. It was alleged that the possession of land in dispute was not delivered to the plaintiff/appellants and that defendants were in possession of the suit land since the date of allotment. Respondents also claimed that improvements have been made R.S.A. No. 435 of 1991 (O&M) -4- on the land by the defendant/respondents by spending huge amount and hard work. Defendant No. 7 filed separate written statement by taking preliminary objections that he was owner of the land in dispute under decrees dated 30.10.1984 and 18.12.1984, passed by the learned Sub Judge, First Class, Zira, therefore, the relief of specific performance could not be granted to the plaintiff/appellant. Stand was also taken that according to the terms of the sale deed executed by the Government in favour of late Mussa, there was condition that late Mussa could not sell the suit land to non-scheduled caste for a period of 20 years since the date of its purchase. It was, thus, claimed that, in case, relief of specific performance is granted, it would defeat the provisions of law and, therefore, would be against the public policy. It was also alleged that Mussa deceased was not the owner of the suit land at the time of alleged agreement dated 23.5.1979, therefore, he had no right to enter into any contract. The suit was said to be time barred. On merits, defendant No. 7 admitted that late Mussa was allottee of the suit land and respondents were legal heirs. The averments on merits were denied. It was claimed that the plaintiffs should have filed a suit under Section 45 of the Punjab Land Revenue Act for correction of entry made in jamabandi, before filing the suit. It was claimed that jamabandi showed that no agreement was executed by late Mussa in favour of the plaintiff/appellants. It was claimed that agreement, if proved, is bogus and is the result of fraud and mis- representation. Replication was filed, wherein the averments made in the R.S.A. No. 435 of 1991 (O&M) -5- plaint were reiterated and that of written statement were denied. On the pleadings of the parties, the learned trial Court was pleased to frame the following issues: - "1. Whether Mussa deceased entered into an agreement of sale of the land in dispute on 23.6.1979 with the plaintiff for a consideration of Rs.21000/- and received Rs.20000/- as earnest money from the plaintiffs? OPP. 2. Whether the plaintiffs remained always ready and willing to perform their part of the contract? OPP. 3. Whether the plaintiffs are in possession of the suit land? OPP. 4. Whether the plaintiffs have dug bore in the suit land and have made improvements? If so, to what extent? OPP. 5. If the relief of specific performance is denied, whether the plaintiffs are entitled to claim damages as alternative relief and injunction as prayed? OPP. 6. Whether Mussa deceased was prohibited from selling the suit land to any non-schedule caste for a period of 20 years from the date of its purchase? OPD 7. Whether the suit is not within limitation? OPD. 8. Whether the decrees dated 18.12.84 and 30.10.84 obtained by Saraj are nullity being collusive? OPP. 9. Relief." In support of the case, the plaintiff/appellants examined Bagga Singh PW-1, the attesting witness of the agreement Ex. P-1, Parma Nand Kapoor PW-3, the scribe of the agreement, besides Chanan Singh R.S.A. No. 435 of 1991 (O&M) -6- plaintiff, also appeared in the witness box as PW-1. The scribe, attesting witness and the plaintiff proved the due execution of the agreement, and also payment of earnest money of Rs.20,000/-. The agreement was also entered in the register of the scribe at serial No. 405. The handing over of possession was also proved. The learned trial Court, taking into consideration certain discrepancies in the statement, which though of very minor nature, held the agreement was doubtful and also that the consideration amount was not passed on by the plaintiffs. Issue No. 1 was decided against the plaintiff/appellants. Issues No. 2 and 6 were taken up together, and keeping in view the fact that the land in dispute was allotted to late Mussa being Majbi Sikh, in restricted auction the sale was said to be governed by the Punjab Package Deal Properties (Disposal) Rules, 1976. The learned trial Court was pleased to hold that Rules as well as sale certificate DW2/A put a restriction of 20 years on sale, to a person who was not a member of Scheduled Caste. The learned Courts held that no sale could be effected for a period of 20 years from the date of sale. The learned trial Court also held that the suit was filed without issuance of two months' notice, as stipulated. It was held that the agreement was not specifically enforceable. The suit was held to be pre-mature. Issues No. 2 and 6 were decided against the plaintiffs and in favour of the defendants. In view of the findings recorded, the suit filed by the plaintiff/appellants was ordered to be dismissed. The plaintiff/appellants preferred an appeal. In view of the R.S.A. No. 435 of 1991 (O&M) -7- restriction placed qua sale for 20 years, the learned lower appellate Court was pleased to hold, that the agreement to sell could not be enforced by way of specific performance of the contract. The findings on issue No. 6 were upheld. However, the learned lower appellate Court held, that agreement to sell was executed by late Mussa in favour of the plaintiff/appellants. The learned lower appellate Court was further pleased to hold, that the decree suffered in favour of the defendant/respondents was not binding on the rights of the plaintiff/appellants. Consequently, the appeal was decreed for alternative relief of recovery of Rs.21,000/- as also for permanent injunction restraining the defendant/respondents from dispossessing the plaintiff/appellants forcibly from the suit land except with due process of law. The plaintiff/appellants were also held entitled to interest @ 12% per annum from the date of filing of suit till decree with future interest @ 6% per annum. Mr. J.S. Toor, learned counsel appearing on behalf of the appellants contended that this appeal raises the following substantial questions of law: - “1. Whether the judgment and decree passed by the learned Courts below is outcome of mis-reading of the Punjab Package Deal Properties (Disposal) Rules, 1976, thus, perverse? 2. Whether the plaintiff/appellants, in view of the facts and circumstances of the case, were entitled to specific performance of agreement?” In support of the substantial questions of law, the learned counsel for the appellants contended that in view of the findings R.S.A. No. 435 of 1991 (O&M) -8- recorded by the learned lower appellate court, it cannot be disputed that late Mussa purchased the land in restricted auction on 29.9.1966, whereas agreement to sell was executed on 23.6.1979 i.e. after 13 years of auction and, therefore, it cannot be said that the sale was barred under the Punjab Package Deal Properties (Disposal) Rules, 1976. It was also the contention of the learned counsel for the appellants that in view of the fact that the land in dispute stood auctioned on 29.9.1966, the sale was governed by 1962 Rules and not by the Rules framed in 1976. In support of the contention, the learned counsel for the appellants placed reliance on the judgment of Division Bench of this Court in Scheduled Castes Co-op. Society Vs. State of Punjab and another, AIR 2005 Punjab and Haryana 100, wherein the Division Bench has been pleased to hold as under: - “3. In the context of the facts and circumstances of the case, as shall hereinafter be given, what has primarily been debated before us is applicability of the amended provisions of Nazool Lands (Transfer) Rules, 1956 to the allotments, that were made prior to such amendments. To be specific, the question that requires adjudication in the matter is as to whether even if there was no provision of cancellation of allotment if transferee society had sold a part of the land, subject matter of the allotment, under the rules when allotment was made the Government could yet cancel such allotment on the dint of the provisions authorising cancellation in the event as mentioned above when power to cancel the allotment was conferred by virtue of amendment of the rules. The backdrop of events culminating into filing of present writ petition requiring the answer to the question, as posed above, R.S.A. No. 435 of 1991 (O&M) -9- need necessary mention. 30. The petitioner society, having become absolute owner having right, title and interest in the property, subject matter of transfer, and, thus, not being fettered in its right of alienation, which automatically vests with every owner apart, we are further of the view that the amendments brought about in the Rules could not apply with regard to the transfer made before such amendments, were brought about. The observation made above has support of a Division Bench judgment of this Court in State of Punjab v. Chinder Pal, 1973 Pun LJ 478. This judgment, it is significant to mention, came under the very rules, which are subject matter of discussion in the present case. Facts of the case aforesaid reveal that one Attu Ram, a Harijan, was allotted 71 kanals, and 2 marlas of land in the year 1962 by the Collector, Ferozepur, against price of Rs.1,777.50 paise, which was to be paid on 20 equated half yearly instalments. He continued to pay regularly the instalments when they fell due. He had deposited instalments upto Rabi 1968 and six instalments were still due when the allotment was cancelled. For cancellation of the allotment, notice was issued to Attu Ram by the Collector, Ferozepur, on 24.12.1968, stating that allotment of Nazool Land made to him was not in accordance with law and the rules and he was required to show cause why the allotment of Nazool Land made in his favour on 4.5.1962 should not be cancelled. His reply was not found to be satisfactory and the allotment was cancelled vide order dated 1.7.1969. Attu Ram died and the order of cancellation was challenged by his son Chinder Pal by way of Civil Writ Petition. That writ petition was allowed and the impugned order was R.S.A. No. 435 of 1991 (O&M) -10- quashed. Against the order of learned single Judge, the State filed Letters Patent Appeal. Learned counsel, who appeared in support of this appeal, urged that the land, subject-matter of allotment to Attu Ram, was not Nazool Land and that the same was against Rule 3 of the Rules. We are not concerned with the first contention of learned counsel, as noted above, but the second contention has a pertinent bearing upon the controversy in hand. 31. Learned counsel for the appellant had urged that transfer of the land in favour of Attu Ram was against Rule 3 of the Rules. According to this rule, the Nazool Land could be transferred in favour of Co- operative Societies formed by the heads of Scheduled Castes families in accordance with the Rules. That Rule was amended by the Governor of Punjab by notification dated 10.2.1960, by substituting Rule 3 whereby, in a village where Nazool Land available was less than 10 acres and was being leased to members of Scheduled Castes, it may be allotted to the present lessees individually upto the limit of a unit of Nazool Land, provided they do not own any of their own land. There is no need to make a mention of entire rule, suffice it, however, to say that this very rule was once again amended vide notification dated 16.6.1967, Previous Rules 3(b) was substituted by the following: - “In the villages where Nazool Land available is 10 acres or more, the Scheduled Castes Land owing Co-operative Societies may be formed by the heads of Scheduled Castes families in accordance with these rules, and the Nazool Land may be allotted to them. In a village where no Co-operative Societies of the members of the Scheduled Castes had been formed by the R.S.A. No. 435 of 1991 (O&M) -11- 16th May, 1964, the land should be allotted to individual Harijans instead of Harijan Co- operative Societies, according to these Rules. For this purpose, members of Scheduled Castes who are already cultivating such lands are to be preferred. In case there more than one claimant for the same piece of land, the allotment will be made by the drawing lots.” 32. Contention of the learned counsel for the appellant in short was that by virtue of the rules, that were in existence by virtue of amendments, Attu Ram could not be transferred the Nazool Land. This contention of learned counsel was repelled by observing that in view of the amendments in Rule 3 from time to time, the transfers already made in favour of members of the Scheduled Castes could not be cancelled.” By placing reliance on the judgment of the Division Bench of this Court in Scheduled Castes Co-op. Society Vs. State of Punjab and another (supra), the contention of the learned counsel for the appellants was, that as per the rules in force at the time of auction sale, there was no restriction placed, and subsequent amendment could not be enforced to deny the claim of specific performance. The contention of the learned counsel for the appellants was, that the judgment and decree passed by the learned lower appellate Court deserves to be modified and the suit filed for specific performance deserves to be decreed, as alternative relief cannot be said to be adequate relief qua the enforcement of contract of immovable property, specially when out of sale consideration of Rs.21,000/-, a sum of Rs.20,000/- already stands paid, and only a meagre amount of Rs.1000/- is to be paid R.S.A. No. 435 of 1991 (O&M) -12- at the time of registration of sale deed. The learned counsel for the appellants made reference to the rules in force in the year 1962 regarding sale of surplus rural property. The learned counsel for the appellants pointed out that the Division Bench of this Court in Joga Singh Vs. The Deputy Secretary, 1987 Punjab Legal Reports and Statutes 460 has been pleased to hold, that when in the conveyance deed stipulation is contained that the land is not to be sold for 10 years, and in case the said terms are violated, the original sale would become bad and liable to be cancelled. Similarly, this Court in Jagir Singh Vs. State of Punjab, 1987 Punjab Legal Reports and Statutes 489 was pleased to hold, that in case of violation of conveyance deed the land can be resumed under Section 10 of the Punjab Package Deal Properties Disposal Rules. This view was again formed by this Court in Daljit Singh and others Vs. Chief Sales Commissioner Punjab and another, 1987 Punjab Legal Reports and Statutes 52. Thus, it would be seen that the only right given in case of violation of the terms of the conveyance deed is, that the sale in favour of the auction purchaser can be cancelled. However, in the present case, the sale was made after 13 years of the auction purchase. Merely because conveyance deed was executed subsequently, cannot be a ground to hold that the restriction was to apply for 20 years. In any case, it was not open to the defendant/respondents to oppose the enforcement of agreement, as in case of violation, the sale in favour of late Mussa was required to be cancelled and, therefore, defendant/respondents were estopped from raising such plea. R.S.A. No. 435 of 1991 (O&M) -13- Thus, in view of the submissions referred to above, specially in view of the law laid down by the Division Bench of this Court in Scheduled Castes Co-op. Society Vs. State of Punjab and another (supra), the learned counsel for the appellants contended that the substantial questions of law be answered in favour of the appellants and the suit be decreed. Mr. S.C. Chhabra, learned counsel appearing on behalf of the respondents, supported the judgment and decree passed by the learned Courts below by placing reliance on the judgment of this Court in Jit Singh Vs. Piara Singh, 2003 P.L.J. 292, wherein it has been laid down that transfer in violation of the terms of the sale would render the transfer to be null and void being against the statute, which could not confer any title on the vendees. Similar view was taken in Hardial and others Vs. The Commissioner, Jalandhar Division, Jalandhar and others, 2004(2) P.L.R. 825, wherein it was held that transfer by allottee would be void ab initio and no right can be said to have been acquired by subsequent purchaser. Reference was also made by the learned counsel for the respondents to the judgment of the Division Bench of this Court in Joga Singh Vs. The Deputy Secretary (supra) to contend that the conditions in the conveyance deed are part and parcel of the rules and, therefore, enforceable in law. Reliance was also placed on the judgment of this Court in Jagir Singh and another Vs. Chanchal Singh, died and represented by his legal heirs namely Jasjit Singh and others, 1984 S.L.J. (P&H) 471 wherein it is held that a person who is not entitled to enter into an agreement to sell the said agreement would be against the public policy and, therefore, not enforceable. The learned counsel for R.S.A. No. 435 of 1991 (O&M) -14- the respondents also placed reliance on the judgment of the Hon'ble Supreme Court in Sneh Gupta Vs. Devi Sarup and others, 2009(2) RCR (Civil) 129 to contend that the consent decree is as good as contested decree and, therefore, the learned lower appellate Court committed an error in holding that the decree was not binding on the plaintiff/appellants. This plea cannot be accepted, as the judgment and decree in favour of the defendant/respondents has been held to be bad not for the reason that it was a consent decree, but the learned lower appellate Court has merely held it to be not binding on the rights of the plaintiff/appellants being not party to the said decree, and further that it was suffered with an object to defeat the rights of the plaintiff/appellants. On consideration, I find force in the contentions raised by the learned counsel for the appellants. In view of the law laid down by the Division Bench of this Court in Scheduled Castes Co-op. Society Vs. State of Punjab and another (supra), the subsequent change in policy enhancing the restrain of sale to 20 years was not to operate retrospectively, as admittedly in the year 1966 when the auction sale was conducted the restriction imposed was only for a period of 10 years. The plaintiff/appellants entered into an agreement after 13 years of auction sale and, therefore, it cannot be said that the agreement to sell was against public policy or against the rules, as held by the learned Courts below. Even otherwise, the defendant/respondents cannot claim any right. At best it was open to the State to have cancelled the allotment in R.S.A. No. 435 of 1991 (O&M) -15- favour of late Mussa, which would have given no right to the defendant/respondents to claim any interest in the property. Thus, the defendant/respondents being legal representatives of late Mussa are estopped by their conduct to challenge the agreement to sell, which was otherwise in accordance with rules having been executed after expiry of 10 years of auction sale. The subsequent amendment could not have been applied retrospectively to non-suit the plaintiff/appellants For the reasons stated, the substantial questions of law raised are answered