Case: Narayanamma and Ors Vs. Govindappa and Ors

3. For the sake of convenience, the parties shall be referred hereinafter as per their status shown in the plaint before the trial court. The suit O.S. No. 93/1999 was filed by the Plaintiff Govindappa, who is the son of Bale Krishnappa. Originally the suit property belonged to one Bale Venkataramanappa, who was the brother of Bale Krishnappa. Said Bale Venkataramanappa has entered into an agreement to sell with the Plaintiff, specific performance of which is sought in the present suit. The son of the Bale Venkataramanappa, M.V. Nagaraj was Defendant No. 1, who has been represented through Legal representatives in the appellate courts since deceased. The wife and daughter of Anjanappa, who was another son of Venkataramanappa are the Defendant Nos. 2 & 3 to the suit respectively. The daughter and wife of Bale Venkataramanappa are Defendant Nos. 4 & 5 to the suit respectively. The R.S.A. No. 1925/2008 is filed by the original Defendant Nos. 4 & 5, who are daughter and wife of Bale Venkataramanappa. The R.S.A. No. 1834/2008 has been filed by the legal representatives of the original Defendant No. 1, M.V. Nagaraj and the original Defendant Nos. 2 & 3, who are wife and daughter of Anjanappa. The suit was filed inter alia contending that the Defendants did not come forward to execute the sale deed in respect of the agreement to sell. After the notice was issued by the Civil Judge (Junior Division) & JMFC, Hoskote, the Defendants appeared before the Court. However, they did not file the written statement. The power of attorney holder of the Plaintiff is examined as PW-1. The Plaintiff also examined two witnesses in support of his case, i.e., PW-2 and PW-3. He produced documentary evidence Exhibits P-1 to P-34 in support of his case. The Defendants did not cross-examine the Plaintiff. The trial court, upon appraisal of Exhibit P-1, i.e., the agreement to sell dated 15.05.1990, held that the suit property was granted in favour of the Defendant and as per the grant certificate, there was a 15 years bar on alienation of the suit property. The period of the said bar was to expire on 13.10.1988. It was, therefore, held by the trial Judge that since the said agreement was executed during the non-alienation period of 15 years, the agreement was void and non-executable. It was held that since the said agreement was contrary to the statutory bar, it was void in law and as such the suit for specific performance of the contract was not maintainable4. Being aggrieved thereby, the Plaintiff filed Regular Appeal No. 86 of 2004 before the Principal District & Session Judge, Bangalore. Before the appellate court, though the Defendants had put in their appearance, the Advocate did not appear to argue the matter. The first appellate court held that the father of Original Defendant No. 1, namely, Bale Venkataramanappa, had mortgaged the suit property by a registered mortgage deed on 23.04.1990. It further held that on 15.05.1990 he had also entered into an agreement to sell with the Plaintiff. It was further held that, the entire sum of Rs. 46,000/- agreed to be paid to Bale Venkataramanappa was received by him. It was further found that the Plaintiff had already been put in possession of the suit property. The first appellate court held that, the reasoning of the trial court that the non-alienation Clause prohibits alienation was not apt. On this reasoning, the appeal was allowed5. Being aggrieved by the judgment and order passed by the first appellate court, the original Defendant Nos. 4 and 5 had filed Regular Second Appeal No. 1925 of 2008 whereas, legal representatives of Defendant No. 1 and original Defendant Nos. 2 and 3 have filed Regular Second Appeal No. 1834 of 2008. Two points were raised before the High Court on behalf of the Defendants. Firstly, that the suit which was filed in the year 1999 for specific performance of agreement to sell entered into on 15.05.1990 was beyond limitation. Secondly, that in view of provisions of Section 61 of the Karnataka Land Reforms Act, 1961 (hereinafter referred to as the Reforms Act), the agreement was not enforceable. The High Court observed that, as a matter of fact, the trial court ought not to have framed such an issue. It further observed that, though in the suit for specific performance of contract it was necessary to frame the issue with regard to readiness and willingness of the Plaintiff to perform his part of the contract along with other issues, neither the trial court nor the first appellate court had framed such an issue. According to the High Court, in the absence of the Defendants neither filing the written statement nor contesting the suit, the finding as recorded by the first appellate court was correct in law. The High Court concurred with the finding of the first appellate court that since the entire amount was received by Bale Venkataramanappa, father of Defendant No. 1, and also from the recital of the agreement to sell, it was clear that the possession was also handed over. As such, the High Court held that the finding of the first appellate court was correct. Being aggrieved thereby, Defendants have approached this Court.

Court's reasoning:
13. A perusal of the said provision would clearly show that, notwithstanding anything contained in any law, no land of which the occupancy has been granted to any person under the said Chapter shall, within 15 years from the date of the final order passed by the Tribunal Under Sub-section (4) or Sub-section (5) or Sub-section (5-A) of Section 48-A of the Reforms Act be transferred by sale, gift, exchange, mortgage, lease or assignment. However, the land may be partitioned among members of the holders of the joint family. No doubt, that Sub-section (2) of Section 61 of the Reforms Act permits the registered occupant or his successor-in-title, to take a loan and mortgage or create a charge on his interest in the land in favour of the State Government, a financial institution, a co-operative land development bank, a co-operative society or a company as defined in Section 3 of the Companies Act, 1956 in which not less than 51% of the paid-up share capital is held by the State Government or a Corporation owned or controlled by the Central Government or the State Government or both. However, such a loan can be taken only for the purpose of development of land or improvement of agricultural practices or for raising educational loan to prosecute higher studies of the children of such person. It further provides that, in the event of such a person making default in payment of such loan in accordance with the terms and conditions on which such loan was granted, it shall be lawful to cause his interest in the land be attached and sold and the proceeds to be utilised in the payment of such loan. Sub-section (3) of the said Section specifically provides that any transfer or partition of land in contravention of Sub-section (1) shall be invalid and such land shall vest in the State Government free, from all encumbrances and shall be disposed in accordance with the provisions of Section 77 of the Reforms Act22. We have to apply the principles of law as deduced by this Court in the case of Kedar Nath and Immani Appa Rao (supra), to the facts of the present case23. The transaction between the late Bale Venkataramanappa and the Plaintiff is not disputed. Initially the said Bale Venkataramanappa had executed a registered mortgage deed in favour of the Plaintiff. Within a month, he entered into an agreement to sell wherein, the entire consideration for the transfer as well as handing over of the possession was acknowledged. It could thus be seen, that the transaction was nothing short of a transfer of property. Under Section 61 of the Reforms Act, there is a complete prohibition on such mortgage or transfer for a period of 15 years from the date of grant. Sub-section (1) of Section 61 of the Reforms Act begins with a non-obstante clause. It is thus clear that, the unambiguous legislative intent is that no such mortgage, transfer, sale etc. would be permitted for a period of 15 years from the date of grant. Undisputedly, even according to the Plaintiff, the grant is of the year 1983, as such, the transfer in question in the year 1990 is beyond any doubt within the prohibited period of 15 years. Sub-section (3) of Section 61 of the Reforms Act makes the legislative intent very clear. It provides, that any transfer in violation of Sub-section (1) shall be invalid and it also provides for the consequence for such invalid transaction24. Undisputedly, both, the predecessor-in-title of the Defendant(s) as well as the Plaintiff, are confederates in this illegality. Both, the Plaintiff and the predecessor-in-title of the Defendant(s) can be said to be equally responsible for violation of law26. It could thus be seen that, the trial Judge upon finding that the agreement of sale was hit by Section 61 of the Reforms Act, had rightly dismissed the suit of the Plaintiff27. Now, let us apply the another test laid down in the case of Immani Appa Rao (supra). At the cost of repetition, both the parties are common participator in the illegality. In such a situation, the balance of justice would tilt in whose favour is the question. As held in Immani Appa Rao (supra), if the decree is granted in favour of the Plaintiff on the basis of an illegal agreement which is hit by a statute, it will be rendering an active assistance of the court in enforcing an agreement which is contrary to law. As against this, if the balance is tilted towards the Defendants, no doubt that they would stand benefited even in spite of their predecessor-in-title committing an illegality. However, what the court would be doing is only rendering an assistance which is purely of a passive character. As held by Gajendragadkar, J. in Immani Appa Rao (supra), the first course would be clearly and patently inconsistent with the public interest whereas, the latter course is lesser injurious to public interest than the former.