RSA No.2228 of 1995 -1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.2228 of 1995 Date of decision:- 8.8.2008 Ajit Singh ...Appellant. Versus Gurcharan Singh and others ...Respondents. CORAM: HON'BLE MR. JUSTICE RAKESH KUMAR JAIN Present:- Mr.O.P.Goyal, Sr.Advocate with Mr.Ashok K.Kumar, Advocate for the appellant. Mr.Sunil Chadha, Advocate for respondent No.1. Mr.G.S.Gandhi, Advocate for respondent No.3. RAKESH KUMAR JAIN, J. This appeal has been preferred by the plaintiff against the judgment and decree dated 21.12.1993 passed by Senior Sub Judge, Kapurthala whereby his suit for specific performance was dismissed and the plaintiff was held entitled only to the alternative relief of recovery of Rs.12,000/- against defendant No.1 only along with interest @ 12% p.a. from the date of agreement to sell and future interest @ 6% p.a. on the principal amount from the date of the suit till realisation. However, the suit against defendants No.2 and 3 was dismissed. The facts of the case are that land measuring 71 Kanals 13 Marlas was allotted to defendant No.1 by the Government of Punjab in village Jhal Thikriwala, Tehsil and District Kapurthala. Defendant No.1 entered into an agreement of sale of the said land with the plaintiff for a RSA No.2228 of 1995 -2 - consideration of Rs.12,000/- on 18.1.1979 and had received total amount of Rs.12,000/- at the time of execution of agreement to sell. It was provided in the agreement that the sale deed shall be executed by defendant No.1 within a period of one month from the date he would get issued/granted Sanad of the land. It was mentioned in the plaint that possession of the land was with the plaintiff and when he was tried to be dispossessed by the defendants forcibly, a suit for permanent injunction was filed by him. After filing of the suit for permanent injunction, the defendants got initiated proceedings under Section 145 Cr.P.C. in which Sub Divisional Magistrate, Kapurthala vide his order dated 24.4.1989 attached the suit land and appointed Naib Tehsildar, Kapurthala as Receiver. However, the proceedings under Section 145 Cr.P.C. were ordered to be consigned to record by Sub Divisional Magistrate, Kapurthala vide his order dated 25.7.1989 subject to the decision of the Civil Court and the factum of possession was left undecided. It was pleaded that by virtue of order dated 24.4.1989 passed by Sub Divisional Magistrate, Kapurthala, the receiver took the possession of the land in dispute from the plaintiff, therefore, the possession of the receiver tantamounts the possession of the plaintiff. It was also claimed that at the time of filing of suit for permanent injunction against the defendants, the Sanad of the land was not issued/granted to defendant No.1, therefore, the plaintiff could file suit for permanent injunction but the plaintiff has come to know that Sanad/Sale certificate of the land in question has been issued to defendant No.1 on 17.7.1989. It was further added that plaintiff has come to know that by virtue of Civil Suit No.538 of 17.7.1990, Durga Dass defendant No.3 has obtained a decree for possession of the land in question by way of specific performance of alleged agreement dated 6.6.1978 from RSA No.2228 of 1995 -3 - the Court of Sub Judge Ist Class, Kapurthala on 30.8.1990. The plaintiff has challenged the agreement dated 6.6.1978 as fabricated and judgment and decree in the Suit No.538 of 1990 as collusive. The plaintiff, thus, prayed for a decree for specific performance of agreement to sell dated 18.1.1979 in respect of land measuring 71 Kanals 13 Marlas in lieu of Rs.12,000/- already paid at the time of agreement and in the alternative, prayed for recovery of Rs.12,000/- for breach of the agreement. The suit was contested by defendants No.1, 2 and 3 by filing their written statements separately. In the preliminary objections, defendants No.1 and 2 had pleaded that the suit is barred under Section 11 CPC as the plaintiff had earlier filed a Suit No.417 of 14.11.1987 which was dismissed as withdrawn on 20.2.1990 although that suit was also filed on the basis of agreement to sell dated 18.1.1979. It was also mentioned that defendant No.1 had no right to sell the disputed land for a period of 10 years from the date of sale certificate issued in his favour by Government on 17.7.1989. On merits, it was pleaded that land in dispute was allotted to defendant No.1 on reserved price being Scheduled Caste, therefore, he had no right to part with the possession of the same in favour of third person and was not having ownership rights at the time of allotment of the land in question. Defendant No.1 also denied agreement to sell and termed it as an act of fraud and misrepresentation. So far as the possession is concerned that too was denied in favour of the plaintiff. Defendant No.3 had taken up the stand that the plaintiff can not be granted decree for specific performance as the sale deed has already been executed in his favour and the possession has been taken through the Court in execution in due course of law. The plaintiff denied the averments made in the written statement by way of replication. On the pleadings of the RSA No.2228 of 1995 -4 - parties, following issues were framed by the trial Court : (i) Whether Gurcharan Singh defendant No.1 entered into an agreement to sell the suit land in favour of the plaintiff on 18.1.1979 for a consideration of Rs.12,000/- paid as advance ? OPP. (ii) If issue No.1 is proved, whether the plaintiff has been ready and willing to act upon his part of the contract ? OPP. (iii) Whether the suit is within time ? OPP. (iv) Whether the suit is bad for misjoinder of parties? OPD. (v) Whether the suit is barred by principle of res judicata? OPD. (vi) Whether defendant No.1 could not alienate the disputed property for a period of 10 years? If so its effects? OPD. (vii) Relief. In support of his case, plaintiff examined himself as PW1, Satpal deed writer as PW2. On the other hand, defendants examined Gurcharan Singh as DW1 and Durga Dass - defendant No.3 as DW2. On appreciation of evidence, the trial Court found issue No.1 in favour of the plaintiff and held that defendant No.1 had executed an agreement Ex.P1 dated 18.1.1979 in favour of the plaintiff and had received Rs.12,000/- as earnest money. Issue No.2 was also decided in favour of the plaintiff holding that he was and is still ready & willing to perform his part of contract. Issue No.3 was further decided in favour of plaintiff holding that the suit is within time. However, issue No.4 was decided against the plaintiff and in favour of the defendants holding that defendant No.2 has been an unnecessary party, therefore, the suit is bad for misjoinder of parties. Issue No.5 was decided against the defendants and in favour of the plaintiff holding that the suit is not barred by the principles of res judicata. RSA No.2228 of 1995 -5 - So far as issue No.6 is concerned, that was decided against the plaintiff and in favour of the defendants wherein it was held that the suit land can not be alienated in favour of the plaintiff and he is only entitled to the alternative relief. On the basis of the findings on all the issues, the trial Court vide its judgment and decree dated 21.12.1993, decreed the suit of the plaintiff with costs for the recovery of Rs.12,000/- along with interest @ 12% p.a. from the date of agreement to sell and with future interest on the principal amount till realization. However, suit against defendants No.2 and 3 was dismissed. Aggrieved against the judgment and decree of the trial court, two appeals were filed, namely C.A.No.6 of 1994 titled Ajit Singh Vs. Gurcharan Singh and others and C.A.No.18 of 1994 titled Gurcharan Singh Vs. Ajit Singh and others in which Ajit Singh plaintiff had prayed for a decree for specific performance of the agreement whereas Gurcharan Singh defendant No.1 prayed that the suit has been illegally decreed even for the recovery of Rs.12,000/-. The first Appellate court dismissed both the appeals holding that findings recorded by the trial Court on all the issues are in accordance with law, therefore, the alternative prayer has been legally granted. Plaintiff is in second appeal before this Court but no appeal has been filed by defendant No.1 against the judgment and decree of the first Appellate Court. Only issue No.6 has been assailed by the counsel for the plaintiff-appellant before this Court. During the course of hearing, by virtue of Miscellaneous Application No.2220-C of 2008, counsel for the appellant has placed on record list of substantial questions of law which was allowed on 19.3.2008. Although, counsel for the appellant has framed as many as 8 RSA No.2228 of 1995 -6 - questions in his list of substantial questions of law but what has been pressed before this Court is :- (i)Whether the condition in Sale Certificate imposing restriction for a period of ten years to a Non-Harizan is against the Provisions of Sections 10 & 11 of the Transfer of Property Act and is thus, void and unenforceable? (ii)Whether respondents No.1 and 3 are estopped and precluded to take the plea that respondent No.1 could not alienate the land in suit for a period of ten years from the issuance of sale certificate? Before I refer to the questions of law that have been argued before this Court by the counsel for the appellant, it is desirable to mention that dehors the sale in favour of defendant No.3 by defendant No.1, if the law does not permit defendant No.1 to sell the land in question within a period of 10 years from the issue of the sale certificate and further to the member of non scheduled caste, then whether plaintiff has a legally enforceable right in this suit. Therefore, the only question that has to be answered in this case is as to whether the bar is created by the Statute for sale within 10 years and that too in favour of non scheduled caste and if so then whether decree for specific performance can be granted to the plaintiff in spite of the fact that no action has been taken by the State in this regard. It would be appropriate to reproduce the certificate of transfer which is appended as Ex.DX with the record which reads as under : “Certificate of transfer of Nazool land to the individual member of Scheduled Caste under Rule 11 of the Nazool Lands (Transfer Rules), 1956. Whereas Nazool land measuring 71 Ks-13 Marlas and RSA No.2228 of 1995 -7 - comprising field Nos.6//13/2-12, 25/7-12, 11/6-16, 12/8-0, 19/1/6-0, 22/2/6-0, 23/8-0, 7//15/0-9, 9//5/7-12, 6//18/2/2-12, 24/8-0 and 9//4/8-0, situated in village Jhal Thikriwala, Tehsil and District Kapurthala was agreed to be transferred by Governor of Punjab in favour of Shri Gurcharan Singh S/o Sangat Singh (hereinafter referred to as the said Sh.Gurcharan Singh) on the terms and conditions contained in agreement dated 1.7.1989 executed between the Government and the said Sh.Gurcharan Singh. And whereas the said Shri Gurcharan Singh has paid to the Government all the instalments of price in respect of the said Nazool land, that is to say, the whole of the price amounting to Rs.1279.80P. Now, therefore, in pursuance of Rule 11 of the Nazool Lands (Transfer) Rules, 1956, it is hereby certified that the Govt. has transferred absolutely to the said Shri Gurcharan Singh all rights, title and interest in the said Nazool land in lieu of payment of Rs.1279.80 which sum has been paid by the said Sh.Gurcharan Singh vide Treasury Receipt No.62 dated 15.1.1979 subject to the conditions that the said Shri Gurcharan Singh shall not alienate the land permanently or temporarily except with the express permission in writing of the State Govt. for a period of ten years from the issue of this sale certificate. The alienation thereafter shall be restricted only to the members of the scheduled castes. This certificate is given under my hand and seal RSA No.2228 of 1995 -8 - this day. 17.7.1989. Sd/- Collector, Distt.Kapurthala for and on behalf of the Governor of Punjab” Sh.O.P.Goyal, Sr.Advocate, counsel for the appellant has vehemently argued that agreement of sale between the parties has been proved on record, as also the payment of sale consideration. The only reason on the basis of which decree for specific performance has been denied is due to the condition contained in the certificate of transfer Ex.DX which was issued on 17.7.1989. Counsel for the appellant had initially argued that Rule 7 of Nazool Land (Transfer) Rules, 1956 (for short the `Rules') which are applicable to the present controversy applies only to member of Cooperative Society and not to the individual member of the Scheduled Caste. Therefore, there is no bar as envisaged in the document Ex.DX. He further pointed out that the amendment with regard to the member of the scheduled caste has been brought by way of notification dated 18.3.1991 which is subsequent to the transfer having been made in favour of defendant No.1 on 17.7.1989, therefore, the subsequent amendment would not apply. In this regard, counsel for the appellant has relied upon Scheduled Castes Cooperative Society Vs. State of Punjab and another 2005(1) RCR (Civil) 92. He has further argued that in view of Sections 10 and 11 of the Transfer of property Act, the condition imposed in the document Ex.DX shall be ignored as it takes away the enjoyment of property by the vendor and vendee and even for the sake of arguments, though not admitted, it is assumed that there is a ban legally imposed as contained in Ex.DX, only the RSA No.2228 of 1995 -9 - state could have raised the objections who had allotted the land and not the vendor who is estopped by his own act and conduct, therefore, the Court below should have decreed the suit for specific performance instead of granting alternative relief. Counsel for the appellant has referred to Puran Chand Vs. Jagat Ram and others 1986(2) PLR 485, Smt.Lilawati and others Vs. Firm Ram Dhari Suraj Bhan and another AIR 1971 P & H 87, B.Anjaneyulu Vs. V.G.Raghunathan 1995(1) CCC 291, Manohar Shivram Swami Vs. Mahadeo Guruling Swami (deceased) by LRs and others AIR 1988 Bombay 116, Gayasi Ram and others Vs. Shahabuddin and others AIR 1935 Allahabad 493. On the other hand, Sh.Sunil Chadha, Advocate, counsel for respondent No.1 has argued that the amendment has been brought in under Rule 7(1) of the Rules on 28.10.1970, which is reproduced as under: “No Cooperative Society or the individual member of Scheduled Castes, as the case may be, shall, except with the express permission in writing of the State Government alienate, whether permanently or temporarily, the Nazool land transferred to it/him for a period of ten years from the date the said Cooperative Society or the individual member of Scheduled castes gets all rights title and interest in the said Nazool land. Thereafter its alienation shall be strictly restricted to the members of the Scheduled Castes only: Provided that in granting permission the State Government shall have regard to the general interests of the Cooperative Society or individual member, as the case may :” Counsel for respondent No.1 had highlighted that on the basis RSA No.2228 of 1995 -10 - of this amendment there is a double ban for transfer whether permanently or temporarily for a period of 10 years and thereafter, there is a further prohibition on alienation of the land to any person other than the scheduled caste whereas admittedly, the plaintiff is a Jat Sikh and the agreement to sell is dated 18.1.1979 whereas the sale certificate is 17.7.1989. Therefore, it was submitted that amendment of 1991 has nothing to do with the present case as the amendment has already been brought in on 28.10.1970 much prior to the date of agreement of sale dated 18.1.1979. It has been further submitted that there cannot be any estoppel against the Statute and that if the contract defeats the provisions of law then it is opposed to public policy as provided under Section 23 of the Contract Act, 1872 and every such agreement of which object of consideration is unlawful and against public policy is void. Therefore, in view of bar to alienation title can not be conveyed and the Court has rightly not ordered for specific performance as vendor was not competent to sell the property and the Court below has rightly awarded recovery of the amount received as earnest money. In this regard, counsel for respondent No.1 has cited Ramachandraiah Vs. Nagappa Naidu 1995(2) RRR 599 and Manchegowda and others Vs. State of Karnatka and others 1984(3) SCC 301. I have heard counsel for the parties and have perused the record. The first argument of the counsel for the appellant that amendment by way of subsequent notification dated 18.3.1991 would not apply in view of Division Bench judgment in the case of Scheduled Caste Cooperative Society (supra) is without any force because the conditions imposed in the document Ex.DX dated 17.7.1989 is not by virtue of the RSA No.2228 of 1995 -11 - amendment by way of notification dated 18.3.1991 but by way of amendment in Rule 7(1) of the Rules dated 28.10.1970, therefore, the amendment is not subsequent but prior in time. The second argument raised by the counsel for the appellant is that condition imposed in document Ex.DX has to be ignored as it takes away the enjoyment of the property by the vendor in view of judgments cited by him referred to in the earlier part of this judgment. So far as decision in Puran Chand's case (supra) is concerned, the dispute was that sale deed contained a stipulation to the effect that if construction is not raised by the vendee by Dussehra 1947, the land would be resumed by the vendor. In this regard, it was held that such a stipulation is void and enforceable in view of Section 11 of Transfer of Property Act which provides that where an interest is created absolutely in favour of any person by way of transfer of property and if there is a term which directs that such interest shall be applied or enjoyed in a particular manner then the vendee is entitled to receive and dispose of such interest as if there was no such direction. In the case of Lilawati and others (supra), the sale was absolute but some conditions were introduced, one of those being that a sum of two annas in every hundred rupees would be paid as haqe malkana to the vendor. Out of this sum of two annas, one anna was to be given to the village panchayat and the remainder one anna was to be retained by the vendor Lilawati. In this case also, it was held that no restriction on the enjoyment of property transferred absolutely is justifiable. In the case of B.Anjaneyulu (supra), it was held that a plot was agreed to be sold situated in the Defence Housing Cooperative Society but the defendant refused to sell on the ground that as per Bye laws No.5 and 11, the suit property can not be transferred as the plaintiff was not Defence RSA No.2228 of 1995 -12 - personnel. In this case, the Court has held that as per Section 10 of the Transfer of Property Act where condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void. Therefore, such a condition contemplated by Bye-laws on its members that a member after purchasing the property from the Society cannot alienate the same without the permission of the managing committee of the Society would be prima-facie, illegal. However, it was held that if there should be any restriction on such a right, the same could be only by appropriate legislature i.e. either by the Parliament or the State Legislature. It was further held in that case that by-law is not a law and the same cannot restrict the rights of the citizens. In the case of Manohar Shivram Swami (supra), the condition of sale deed was that it should not be sold to anybody outside the family of the vendor. The vendee sold the property to cousins of the vendor whereas the first cousin very much belongs to the vendor's stock (family), thus there was no breach of covenant and even assuming that there was breach of the covenant even then it is of no use because the condition incorporated in the sale deed is void under Section 10 of Transfer of Property Act. In the case of Gayasi Ram and others (supra) there was a clause in the sale deed that the vendee should not transfer the property by way of mortgage, gift or sale to any one excepting vendor or his heirs was found to be contrary to Section 10. In my considered view, none of the Authorities which have been cited by the counsel for the appellant, is applicable to the facts and circumstances of the present case in which restriction/ban has been imposed under the Statutory Rules namely Nazool Land (Rules) 1956 and it is RSA No.2228 of 1995 -13 - admitted fact as per the statement of PW1, who had admitted in the cross- examination that vendor is a Scheduled Caste and he is a Jat. It is also admitted that he had seen the allotment letter, which was read over to him by his Advocate. Therefore, it is within the knowledge of the plaintiff that land could not have been sold by Scheduled Caste to non-Scheduled Caste before the expiry of 10 years of the issuance of the Sanad. On the other hand, in the case of Ramachandraiah (supra), it has been held that if there is a bar to alienate the property, title can not be conveyed. Therefore, no court can order specific performance of an agreement where the vendor is not competent to sell the property. The only alternative is to grant damages as per the conditions made in the agreement. Para 7 of the aforesaid judgment is being reproduced as under : “In this regard, Mr.Bhat had drawn my attention to two decisions in support of his submission that it is a well settled proposition of law that where a party to a sale agrees to transfer a property in respect of which he does not have a valid or a marketable title, that no decree for specific performance is competent in such a situation. In the first instance, Mr.Bhat has relied on the decision reported in the case of Rajendra Kumar vs. Poosamma and others, AIR 1975 Mad 309 wherein the Court has very clearly laid down that where the vendor had no marketable title, than it was not permissible for a Court to direct specific performance. Learned counsel has also placed reliance on a decision of the Bombay High Court reported in the case of Bhiku Keru Gade v. Dasarath and others, AIR 1967 Bom 267. In this case, the Court was concerned with a RSA No.2228 of 1995 -14 - situation wherein the vendor had an imperfect title even though he claimed that he has acquired interest in the property and the question arose as to whether he could be compelled to transfer that limited interest to the vendee. The Court after considering the scope of S. 18-A of the Specific Relief Act held that in the absence of the vendor having a perfect title, that it was not permissible to enforce an order for specific performance in respect of such a title. It is obvious, that the interest that can be conveyed is necessarily a 100% interest which the vendor possesses and where the title is imperfect or where as in the present case there is bar to the alienation