1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD. SECOND APPEAL NO.304 OF 2008 Mehboobkha Alanurkha Pathan, R/o-Shivaji Nagar, Pachora, Tq-Pachora, Dist-Jalgaon. .... APPELLANT. VERSUS 1) Joint Family Manager, Tajkha Sulemankha, R/o-Nagardeola, Tq-Pachora, Dist-Jalgaon, 2) Jahirkha Sulemankha Since deceased, L.R.s: 2/1) Alimunnisa Jabirkhan, 2/2) Raziyabee Jabirkhan, 2/3) Yusufkhan Jabirkhan, 2/4) Shahurkha Jabirkhan, 2/5) Farukhkhan Jabirkhan, 2/6) Salmankhan Jabirkhan, 2/7) Makasudkhan Jabirkhan, 2/8) Rubinabee Jabirkhan, 2 2/9) Shabinabee Jabirkhan, All R/o-Nagardeola, Tq-Pachora, Dist-Jalgaon. 3) Sabirkha Sulemankha, 4) Amrutabi Sulemankha, All R/o- Nagardeola, Tq-Pachora, Dist-Jalgaon. .... RESPONDENTS ... Mr.B.R. Warma Advocate for the Appellant. Mr.M.M. Bhokarikar Advocate for Respondent Nos. 1, 2/1 to 2/9 , 3 and 4. ... CORAM: K.K. TATED, J. ORDER RESERVED ON : 8TH MAY, 2009. ORDER PRONOUNCED ON: 9TH JUNE, 2009 ORDER: 1. Heard Mr. Warma, learned counsel for the Appellant and Mr.Bhokarikar, learned counsel for Respondents. 3 2. Present Second Appeal preferred by the original plaintiff against the Judgment and decree dated 16th August, 2007 passed by Ad-hoc District Judge-2, Jalgaon in Regular Civil Appeal No.254 of 2003 arising out of the Judgment and decree dated 20th September, 2003 passed by Civil Judge, Junior Division, Pachora in Regular Civil Suit No. 108 of 1999. The Trial Court passed decree in favour of Appellant/ original plaintiff directing him to deosit a sum of Rs.20,000/- in the Court on or before 20th October, 2003 and directed the Respondents herein / original defendants to obtain permission from Collector and execute a sale deed of suit property in favour of Appellant on or before 20th November, 2003. The said decree came to be modified by the Appellate Court directing the Respondents/ original defendants to repay the amount of Rs.60,000/- to the Appellant/ original plaintiff. 3. To avoid the confusion in the nomenclature while deciding this Appeal, the parties will be referred to their original status. The Plaintiff filed Regular Civil Suit No.108 of 1999 for specific performance of 4 agreement dated 30 th November, 1991 in respect of agricultural land Gut No.69/13 admeasuring 1 Hector with half share in well and electric motor situated at Mauje Hole, Taluka - Pachora, Dist-Jalgaon. The defendants handed over possession of the suit property to the plaintiff and executed the possession receipt on the same day. At the time of agreement to sale, it was decided between the plaintiff and defendant to pay Rs.80,000/- as a price of suit property. Out of said price, plaintiff paid Rs.50,000/- to the defendant in presence of witnesses. It was decided to pay remaining Rs.30,000/- to the defendant on 15th December, 1991. It was further decided that out of remaining amount of Rs.30,000/-, the plaintiff will repay the defendant's loan of Rs.10,000/- of the society. Accordingly, plaintiff paid loan amount of society and obtained receipt to that effect. It was further decided that at the time of sale deed the plaintiff shall pay Rs. 20,000/- to the defendant on 31st May, 1992 i.e. date of execution of sale deed. It was also decided between plaintiff and defendant that till 31st May, 1992 the defendant will procure permission for execution of sale from competent authority and in case if it is not procured, in that case after receiving required permission, the 5 defendant shall inform about the permission and thereafter within one month, they will complete the said transaction. As the defendant failed to procure the permission from competent authority and failed to execute the sale deed in respect of suit property, the plaintiff filed Regular Civil Suit No.108 of 1999 in the Court of Civil Judge, Pachora and same came to be decreed. Against that the defendant preferred Appeal being Regular Civil Appeal No.254 of 2003 in the Court of District Judge, Jalgaon. In the said Appeal, the Appellate Court set aside the Judgment and decree passed by the trial Court and held that plaintiff is entitled to refund of sum of Rs. 60,000/-. The Appellate Court mainly relied on Section 43 of the Bombay Tenancy and Agricultural Lands Act, 1948, which reads as under: "43. (1) No land purchased by a tenant under section 32, 32F, [32O, [33C or 43-ID] or sold to any person under Section 32P or 64 shall be transferred by sale, gift, exchange, mortgage, lease or assignment without the previous sanction of the Collector. [Such sanction shall be 6 given by the Collector in such circumstances, and subject to such conditions, as may be prescribed by the Stage Government: Provided that, no such sanction shall be necessary where the land is to be mortgaged in favour of Government or a society registered or deemed to be registered under the Bombay Co-operative Societies Act, 1925, for raising a loan for effecting any improvement of such land.] (2) Any transfer of land in contravention of sub-section (1) shall be invalid.] “ 4. The Appellate Court held that considering Section 43 of the Act, transaction made between the plaintiff and defendant is invalid as no permission has been sought by the defendant or plaintiff before sale or purchase of the suit property. Appellant Court further held that prior permission to sale the property by the competent authority is appears to be essential before transferring or selling such property. In support of this conclusion, the Appellate Court relied on the Judgment in the matter of Shri Parshuram Kathod Gaikar vs. Pandu Mahadu Hard and another, reported in 1993 Mh.L.J. Page 1570, in which the Bombay High Court held that under Section 43 of the Bombay 7 Tenancy and Agricultural Lands Act, 1948, legislature prescribed total and complete bar on alienation of agricultural land in order to protect tenant agriculturist's interest without prior permission from competent authority. 5. Being aggrieved by the said Judgment and decree dated 16th August, 2007, the plaintiff preferred present Second Appeal. At the time of issuing notice before admission on 14th July, 2008, this Hon'ble Court observed that substantial question of law involved in the present Second Appeal is as under: "For grant of decree of specific performance no previous sanction is necessary U/s. 43 of the Bombay Tenancy and Agricultural Lands Act. Agreement of sale is first document of contract i.e. acceptance of offer for valuable consideration. On the basis of agreement of sale decree of specific performance ought to have been granted. Previous permission is necessary for execution of sale, which can be obtained at the time of execution of sale deed. The parties to the contract can apply for permission for execution of sale deed after securing decree of specific performance. The Apex Court has laid down law in case of Manzoor vs. Gulam reported in A.I.R. 2000 (S.C.) 8 Page No.191 and AIR 1964 SC 978. There is consistent view of our High Court in that respect, which are reported in 2001 - 3 - All M.R. 95 & 2001 - 4 ALL M.R. 116." . Simultaneously this Hon'ble Court directed to call Record and Proceedings from the trial Court. 6. Both the counsel appearing on behalf of the Appellant as well as Respondents, restricted their arguments only in respect of substantial question of law as reproduced herein above about the permission under Section 43 of the Bombay Tenancy and Agricultural Lands Act, 1948. 7. With the assistance of learned counsel for the parties, I have gone through the Record and Proceedings of the present case. As the point involved in the present Second Appeal is about execution of document subject to the terms and conditions under Section 43 of the Bombay Tenancy and Agricultural Lands Act, 1948, it is not necessary to give entire facts of the case. 9 8. Learned counsel appearing on behalf of the plaintiff submitted that the Appellate Court erred in coming to the conclusion that for want of permission under Section 43 of the Bombay Tenancy and Agricultural Lands Act, 1948 the plaintiff is not entitled decree for specific performance of agreement dated 30th November, 1991 in respect of suit land. He submitted that the Appellate Court erred in coming to the conclusion that considering Section 43 of the said Act, the transaction made between the plaintiff and defendant is invalid as no permission has been obtained either by the plaintiff and/or defendants before sale or purchase of the suit land before the agreement entered into. He further submitted that Appellate Court erred in coming to the conclusion that prior permission to sale suit property by the competent authority is appear to be essential before transferring or selling the same. Learned counsel for the Plaintiff further submitted that the Appellate Court came to this conclusion on the basis of Judgment in the matter of Shri Parshuram Kathod Gaikar vs. Pandu Mahadu Hard and another (supra). He submitted that in the subsequent Judgment in the matter of Balu Baburao Zarole and others vs. Shaikh Akbar Shaikh Bhikam, reported in 2001 (3) B. C. 10 R. Page 255, it is held that Section 43 of the Act would be attracted at the stage of execution of conveyance and therefore the Court cannot refuse specific performance of agreement on the ground that if there is no permission under Section 43 of the said Act, Court cannot pass decree for specific performance. Learned counsel for plaintiff further submitted that similar view was taken by Bombay High Court in the matter of Hanusingh s/o Harsingh Chavan vs. Amnaji s/o Bhaurao Wadje, reported in 2007 (5) B.C.R. Page 425. Learned counsel for the plaintiff further relied on the Judgment in the matter of Mrs. Chandanee Widya Vati Madden vs. Dr. C.L. Katial and others, reported in AIR 1964 S.C. Page 978, the Judgment in the matter of Manzoor Ahmed Margray vs. Gulam Hassan Aram and another, reported in A.I.R. 2000 S.C. Page No.191. 9. On the other hand, learned counsel for Respondent restricted his submission only to the point that in view of two different views taken by two learned Single Judges of this Court on the same point, the matter to be referred to the Larger Bench as per High Court Appellate Side Rules. Learned counsel for Respondent submitted 11 that Bombay High Court in the matter of Shri Parshuram Kathod Gaikar vs. Pandu Mahadu Hard (supra) held that under Section 43 of the Act the legislature restricted total ban and complete bar on alienation of agricultural land in order to protect tenant agriculturists interest. If any transaction took place contrary to the provisions of Section 43 of the Act then the same is held as invalid. Learned counsel for Respondent mainly relied on Para 7 of the said Judgment which reads as under: "7. Section 43 of the Act reads as follows: (1) No land purchased by a tenant under Section 32, 32-F, (321, 32-O, (33-O or 43-ID) or sold to any person under section 32- P or 64 shall be transferred by sale, gift, exchange, mortgage, lease or assignment without the previous sanction of the Collector, (such sanction shall be given by the Collector in such circumstances and subject to such conditions, as maybe prescribed by the State Government) 12 Provided that, no such sanction shall be necessary where the land is to be mortgaged in favour of Government or a society registered or deemed to be registered under the Bombay Co-operative Societies Act, 1925, for raising a loan for effecting any improvement of such land.' It is abundantly clear from a plain reading of this section, and to my mind for very good reason, that the legislature has prescribed a total and complete bar on alienation of the agricultural lands in question without the previous sanction of the Collector. There is no dispute about the fact that the intention behind the promulgation of this provision of law was in order to completely protect the tenant-agriculturists who were not only poor but invariably illiterate and therefore extremely valuable to all sorts of methods whereby they would be divested of the lands that had been conferred on them by operation of law. The reform in question would have been totally frustrated if what the legislature was to give with one hand was permitted to be taken away by the other and it was for very good reason therefore that the previous sanction of the Collector was made a condition precedent. By this it would mean that there was a total prohibition or a legal bar on alienation of the lands 13 in question and if one were to read the wording of the section, more carefully, it would include any attempt of doing so or for that matter the execution of any document in pursuance thereof. It is in these circumstances that I am unable to draw a distinction between the agreement to sell and the conclusion of the sale. Though under normal circumstances, the argument canvassed by Mr. Mundergi is a perfectly justifiable one, in the present case however, we do have a specific statutory bar that prohibits any transaction in relation to alienation. In these circumstances, it would be extremely difficult to impart even the slightest garb of legal validity to the transaction entered into in the year 1981. A detailed analysis of this aspect of the matter however will be undertaken by the trial Court when the suit is heard but for the purposes of deciding the present petition, which is no more than an interim relief, it will have to be held prima facie that the plaintiff, de-hors the transaction of 1981 has made out a prima facie case for grant of relief." 10. Learned counsel appearing on behalf of the Respondent relied on the Judgment in the matter of Lotan Ramchandra Shimpi and others vs. 14 Shankar Ganpat Kayasth and others, reported in 1994 (4) B.C.R. Page 575. In this Judgment the Hon'ble High Court held that if an agreement to sell agricultural land taken place without obtaining permission under Section 43 of the Act, in that case the said agreement to be held as invalid. Head Note A of the said Judgment reads as under: "A. Transfer of Property Act, 1882 - Section 53A and Bombay Tenancy and Agricultural Lands Act, 1948 - Section 43 - Agreement to sale agricultural land - Sanction required Under Section 43 of Tenancy Act not obtained - Impugned agreement is invalid - Possession given to purchaser is not valid - Same not protected Under Section 53-A of Transfer of Property Act - Plaintiff is entitled to recover possession. Held: There is an agreement to sell executed by deceased Ramchandra in favour of the defendants and possession of the suit lands was also delivered simultaneously. However, the agreement to sell (Exh.55) itself is without authority, is an invalid document and is incapable of its execution by any Competent Court and on the strength of the invalid and illegal document, the possession parted with would be illegal and the defendants are held to be 15 in unauthorised and illegal possession of the suit lands right from the execution of the agreement to sell and delivery of possession." 11. Learned counsel for Respondent further submitted that later on Bombay High Court in the matter of Balu Baburao Zarole vs. Shaikh Akbar Shaikh Bhikan (supra) have taken contrary view and therefore it is necessary to refer the matter to the Larger Bench as per High Court Appellate Side Rules. Except this submission, learned counsel for Respondents has not pointed out any other authority in support of the case of Respondents / defendants. 12. On the basis of above mentioned submissions of learned counsel for the parties, I am proceeding to decide the substantial question of law as framed by this Court as per Order dated 14th July, 2008. 13. Learned counsel for the plaintiff submitted that permission under Section 43 of the Act is required at the time of executing conveyance and/or executing a decree passed by the Court in respect 16 of specific performance of agreement. He submitted that our High Court in the matter of Balu Baburao Zarole vs. Shaikh Akbar Shaikh Bhikan supra) held that at the time of deciding suit for specific performance of agreement, there cannot be a bar of Section 43 of the Act. Para 3 and 4 of the said Judgment reads as under: "3. Section 43 of the Act provides, in so far as is material that no land purchased by a tenant inter alia under section 32 'shall be transferred by sale, gift, exchange, mortgage, lease or assignment without the previous sanction of the Collector'. The requirement of taking the previous sanction of the Collector would apply to a transfer by sale or by any of the other modes specified therein. In so far as the requirement of taking the sanction of the Collector under the provisions of section 43 of the Bombay Tenancy and Agricultural Lands Act, 1948 is concerned, the trial Court and the Appellate Court correctly held that the decree for specific performance would be subject to the condition of the sanction being obtained to the sale from the Collector under section 43. In the event of the Collector not granting sanction, the plaintiff would be entitled to a refund of the purchase price together with interest only as, in the absence of sanction under section 43 the sale cannot be concluded. In taking this view, no error has 17 been committed by the trial Court and by the Appellate court. In (Nathulal v. Phoolchand), reported in A.I.R. 1970 S.C. 546, a Bench of the Supreme Court, consisting of Mr. Justice J.C. Shah (as the Learned Chief Justice then was ) and Mr. Justice K.S. Hegde held that where by a statute property is not transferable without the permission of an authority, an agreement to transfer the property must be deeded to be subject to the implied condition that the transferor will obtain the sanction of the authority concerned. While laying down the aforesaid proposition in paragraph 5 of its judgment, the Supreme Court referred to the judgment of the Privy Council in (A.I.R. 1930 P.C. 187) and the judgment of the Supreme Court in (Chandnee Widya Vati Madden vs. Dr. C.L. Katial), A.I.R. 1964 S.C. 978. 4. Section 43 of the Act would be attracted at the stage of execution of the conveyance since upon the execution of the sale deed, the property is transferred by sale. An agreement to sell does not create any interest in property. In this regard, a reference may be made to a judgment of a Learned Single Judge of this Court, D.K. Deshmukh, J., delivered on 1st October, 1997, in Appeal from Order No. 713 of 1977. The earlier judgment delivered by M.F. Saldanha, J., reported in (Parshuram Kathod Gaikar v. Pandu Mahadu Hard), 1994 (1) Bom.C.R. 715 which was subsequently referred to in the judgment of V.H. 18 Bhairavia, J., reported in (Lotan Ramchandra Shimpi v. Shankar Ganpat Kayasth), 1994 (4) Bom.C.R. 575 will have to be construed with reference to the observation of the Learned Judge in para 9 of the judgment where the Learned Judge clarified that the observations which were made in the order were for the limited purpose of the petition before the Court, which arose against an interim order. Since the suit was pending before the trial Court, the learned Judge held that it would be open to the parties in the said case to urge all contentions before the trial Court 'without being prejudiced even in the least by any of the observations made' in that judgment. in view of the subsequent judgment of a learned Single Judge, D.K. Deshmukh, J., it would be clear that the provisions of section 43 of the Act would be attracted at the stage of the execution of the conveyance. Before the conveyance is executed in pursuance of a decree for specific performance the previous sanction of the Collector under section 43 would have to be sought and the execution of the conveyance can only take place after and subject to grant of sanction by the Collector. If the Collector grants sanction, the terms and conditions laid down therein have to be observed. If sanction is refused, no conveyance can be executed. section 43 would unquestionably be attracted to the execution of the conveyance in respect of the land and it is, therefore, that both the courts in the present case came to the conclusion that the decree 19 will have to be subject to the condition that permission of the Collector would have to be sought under the provisions of section 43. The judgment of both the Courts below do not suffer from any infirmity. There is, therefore, no merit in the Second Appeal." 14. Learned counsel for the plaintiff further submitted that in similar way our High Court in the matter of Hanusingh s/o Harsingh Chavan vs. Amnaji s/o Bhaurao Wadje, (supra) permission under Section 43 of the Act requires at the time of executing final conveyance. Para 32 of the said Judgment reads as under: "31. In case of "Nasrullakhan Bismill Khan since deceased through L.R.s vs. Shahbuddin s/o Syed Hussain and others" (1994 (3) Bom.C.R. 488) it is held that Section 50-B does not create a legal bar to suit for specific performance. It is held that though the Section declares that the land shall not be transferred without the previous sanction of the Collector, it is no bar to the institution of a suit for specific performance. In "Asudamal s/o Laxmandas Sindhi vs. Kisanrao s/o Wamanrao Dharmale and others" (2003 (4) Mh.L.J. 134) a single Bench of this Court held that lack of permission under Section 89 20 of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, is not an impediment in passing decree for specific performance. So also in "Balu Baburao Zarole and others vs. Shaikh Akbar Shiakh Bhikan and others" (AIR 2001 Bombay 364) it is held that decree for specific performance, granted subject to sanction of transfer permission by Collector, was not improper. It is observed that an agreement to sale does not create any interest in the property and hence the enforcement of such agreement can be sought. For, execution of the conveyance would be only after grant of sanction by the Collector. Thus, "decree nici" can be passed without difficulty. In this view of the matter there is no error committed by the trial court while granting the decree for specific performance subject to condition that the defendant Nos. 1 and 2 shall obtain the necessary sale permission." 15. Learned counsel for the plaintiff also relied on the Judgment in the matter of Mrs. Chandnee Widya Vati Madden vs. C.L. Katial (supra). In this case the Apex Court held that decree for specific performance can be passed subject to the permission. Para 3 and 4 of the said Judgment reads as under: 21 "3. The High Court on appeal came to the conclusion that the agreement was completed contract for sale of the house in question, subject to the sanction of the Chief Commissioner before the sale transaction could be concluded, but that the Trial Court was in error in holding that the agreement was inchoate, and that therefore, no decree for specific performance of the contract could be granted. The High Court relied mainly on the decision of their Lordships of the Judicial Committee of the Privy Council in Motilal v. Nanhelal, 57 Ind App 333 : for coming to the conclusion that there was a completed contract between the parties and that the condition in the agreement that the vendor would obtain the sanction of the Chief Commissioner to the transaction of sale did not render the contract incomplete. In pursuance of that term in the agreement, the vendor had to obtain the sanction of the Chief Commissioner and as she had withdrawn her application for the necessary sanction, she was to blame for not having carried out her part of the contract. She had to make an application for the necessary permission. The High Court also pointed out that if the Chief Commissioner ultimately refused to grant the sanction to