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Supreme Court Grants Specific Performance in Land Sale Agreement, Overrides High Court’s Reliance on Land Revenue Code.

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CASE TITLE – Babasaheb Dhondiba Kute v. Radhu Vithoba Barde

CASE NUMBER – SLP(C) No.29462 OF 2019

DATED ON – 15.02.2024

QUORUM – Justice B.V. Nagarathna & Justice Augustine George Masih

FACTS OF THE CASE

The appellant-plaintiff and the respondent-defendant entered into an agreement to sell dated 31.07.2001 under which, the defendant agreed to sell his land of 80R situated at Block No.41/1, Mandve (Bk), Tq. Sangamner to the plaintiff for a total consideration of Rs.2,25,000/-. An advance amount of Rs.1, 55,000/ was paid by the plaintiff to the defendant on the said date. Thereafter possession was stated to have been given in the year 2003 by the defendant to the plaintiff. On 10.01.2003, the plaintiff paid an additional consideration of Rs.65, 000/- and thus out of a total consideration of Rs.2, 25,000/-, an amount of Rs.2, 20,000/- was paid. Since the defendant did not perform his part of the contract to execute the sale deed, the plaintiff filed Special Civil Suit no.11 of 2005 before the concerned trial Court seeking the decree for specific performance of the agreement to sell and in the alternative, for refund of the advance sale consideration / earnest money of Rs.2, 20,000/- along with interest @ 6% p.a. In response to the suit summons and notice issued by the trial Court the defendant appeared and denied the case of the plaintiff by filing his written statement. The trial court framed the issues for its consideration and ultimately refused the decree of specific performance and granted the alternative relief of refund of Rs.2, 20,000/- with interest 6% p.a. Being aggrieved by the denial of the decree for specific performance of the agreement to sell, the plaintiff preferred his appeal before the First Appellate Court. The First Appellate Court affirmed the judgment of the trial Court but increased the rate of interest from 6% to 14% from the date of the decree. He also directed the plaintiff to hand over possession to the defendant. Being aggrieved, the plaintiff preferred the second appeal, namely, S.A. No.118/2018 before the High Court. The High Court considered Section 36A of the Maharashtra Land Revenue Code, 1966 and observed that such a decree for specific performance could not be granted and thereby, dismissed the second appeal. Hence, this appeal.

 

ISSUES

Whether the plaintiff is entitled to the relief specific performance of the agreement to sell dated 31.07.2001?

STATUTES

Section 36A of the Land Revenue Code, prescribes how Tribal land occupancy cannot be transferred to non-tribals without government approval.

 

CONTENTION OF APPELLANTS

Learned counsel for the appellant contended that the High Court was not right in interpreting Section 36A of the Land Revenue Code to the effect that there was a total bar for transfer of any land to be made by a tribal to a non-tribal. Such a transfer by way of sale could be made on the basis of the conditions stipulated therein, that is, with the previous sanction of the State Government. That the stage for obtaining a sanction had not arisen in the instant case, inasmuch as the defendant had not come forward to execute the sale deed. In the circumstances, the plaintiff filed a suit seeking specific performance of the agreement to sell. Even after a decree for specific performance is granted by the Court, the plaintiff was required to seek permission under Section 36A of the Land Revenue Code and thereafter execute such a decree. Merely because Section 36A stipulates a pre-condition for sale of land by tribal to a non-tribal, it would not imply that there is a bar to seeking a relief from specific performance of an agreement to sell entered into by a tribal in favour of a non-tribunal. He contended that in a suit for specific performance for agreement to sell what was required to be considered was conditions and stipulations considered under Sections 10, 16 etc. of the Specific Relief Act, 1963 and the plaintiff had complied with those conditions inasmuch as out of a total consideration of Rs.2, 25,000/-, the plaintiff had already tendered Rs.2, 20,000/- and he had performed his part of the contract whereas the defendant had not done so. Therefore the trial Court as well as the first appellate Court were not right in granting only the alternative relief. He further contended that Section 36A of the Land Revenue Code was improperly invoked by the High Court. He submitted that in the absence of the defendant coming forward to execute the sale deed, there was no occasion for the plaintiff to seek such a sanction of the State Government that only if the decree for specific performance is passed in favour of the plaintiff herein he would be in a position to seek such a sanction and ultimately the decree would be executed only if the sanction is given by the State Government in terms of Section 36A of the Land Revenue Code. Therefore, the High Court was not right in holding that in view of the Section 36A of the Land Revenue Code, the defendant had no right to even enter into an agreement to sell and that the plaintiff had no right to seek the relief of specific performance of the agreement to sell. It was contended that the judgments of the High Court and courts below may be set aside and decree of specific performance of agreement to sell may be granted by allowing this appeal.

 

CONTENTIONS OF RESPONDENTS

The Learned Counsel for the respondent supported the impugned judgment and contended that Section 36A not only refers to sale, gift, exchange, mortgage, lease but also uses ‘or otherwise’. That in the instant case, pursuant to the agreement to sell entered into by the defendant in favour of the plaintiff, possession also was handed over. That the sale agreement was in violation of Section 36A of the Land Revenue Code. Therefore, the High Court was right in holding that the transaction itself was void since there was no prior sanction obtained and hence, the decree for specific performance could not have been granted. He therefore contended that there is no merit in this appeal and therefore, the same may be dismissed.

 

COURT ANALYSIS AND JUDGEMENT

The Hon’ble Supreme Court found that the High Court had focused itself only on the aspect regarding Section 36A of the Land Revenue Code to deny relief to the appellant-plaintiff. The trial Court, the First Appellate Court as well as the High Court have concurrently held that there was indeed an agreement to sell between the parties and the plaintiff had paid a sum of Rs.2, 20,000/- out of a total consideration of Rs.2, 25,000/- to the defendant-respondent herein, who had also handed over possession of the subject land to the plaintiff. When all the courts have held that the plaintiff has performed his part of the agreement inasmuch as he had tendered a sum of Rs.2,20,000/- out of a total consideration of Rs.2,25,000/- and he was ready and willing to perform the rest of the obligation under the contract, it was only in the context of  non-performance by the defendant that the plaintiff was constrained to file the suit for specific performance. Therefore, on the basis of Section 36A, the trial Court, the first appellate court as well as the High Court could not have declined to grant the decree for specific performance to the plaintiff inasmuch as the considerations under the provisions of the Specific Relief Act, 1963 only had to be made for the purpose of adjudicating the suit between the parties. The Hon’ble Supreme Court stated that since there was no reason to decline the grant of a decree under the provisions of the said Act, the trial Court, the First Appellate Court as well as the High Court ought to have granted the said decree rather than granting an alternative relief. And after looking through all facts and contention the Supreme Court decided to modify the judgment of the High Court, First Appellate Court as well as the trial Court and decree the suit filed by the plaintiff by holding that the plaintiff is entitled to the relief specific performance of the agreement to sell dated 31.07.2001, and held that the suit is to be decreed in the aforesaid terms. The Court further stated It is needless to observe that now that they have granted the decree of specific performance, the appellant-plaintiff shall proceed under Section 36A of the said Section before seeking conveyance of the subject land in his favour in case the defendant is a tribal.

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Judgement Reviewed by – Gnaneswarran Beemarao

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Compliance of requisites under Section 36A of Maharashtra Land Revenue Code mandatory for conveyance of land from tribal to non-tribal person: Supreme Court

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Case title – Babasaheb Dhondiba Kute VS Radhu Vithoba Barde

Case no. – Civil Appeal No. OF 2024 [@ SLP(C) No.29462 OF 2019]

Decision on – February 15, 2024

Quoram – Justice B.V. Nagarathna and Justice Augustine George Masih

Facts of the case

In this case, Babasaheb, the appellant and Radhu Barde, the respondent entered into an agreement to sell, in the year 2001, under which, the respondent agreed to sell his land of 80R situated at Block No.41/1, Mandve (Bk), Tq. Sangamner to the appellant for a total consideration of Rs.2,25,000/-. An advance amount of Rs.1,55,000/- was paid by the appellant to the respondent on the said date. Upon receiving the possession, in the year 2003 the appellant paid the remaining amount which summed up to Rs. 2,20,000/-

The respondent failed to perform his part of the contract to execute the sale deed. As a result, the appellant filed a Special Civil Suit before the trial Court seeking the decree for specific performance of the agreement to sell. The trial court refused the decree of specific performance and granted the alternative relief of refund of Rs.2,20,000 with interest 6% p.a.

Subsequently, the First Appellate Court affirmed the decision of the Trial Court. Contesting this decision, the appellant preferred a second appeal, before the High Court.

The Court considered Section 36A of the Maharashtra Land Revenue Code, 1966 and observed that such a decree for specific performance could not be granted and thereby, dismissed the second appeal. Hence, the appellant approached the Apex Court.

Issue – Whether a decree for specific performance of land to be transferred from tribal to non-tribal can be granted subject to obtaining permission u/s 36A of Maharashtra Land Revenue Code.

Court’s Analysis and Judgement

The Supreme Court observed that there was neither a conflict on the issue of agreement to sell between the parties nor on the consideration amount paid for the possession of land. The Referring to Section 36A of Maharashtra Land Revenue Code, the Bench opined that the only restriction under the said section is requiring the non-tribal to make an application for a previous sanction before the State Government and obtain its approval for sale before any conveyance could be made between the tribal (respondent) and non-tribal (appellant).

It was also made clear by the Bench that the conveyance by way of sale would take place only at the time of registration of a sale deed in accordance with Section 17 of the Registration Act, 2008. Till then, there is no conveyance.  Hence, the Court noted that there is no bar for a tribal to enter into an agreement to sell and seeking advance sale consideration except for the requisites of Section 36A, which mandates prior approval of the State Government. 

Further, the Court pointed out that such a stage had not yet arisen in the instant case, as the defendant failed to perform his part of the agreement inasmuch as he did not come forward to execute the sale deed. The Bench added that if the defendant had come forward to execute the sale deed in favour of the appellant, then it would have been the duty of the appellant to have proceeded under Section 36A of the Land Revenue Code and seek the requisite permission from the Collector.

The Bench in light of such observations held that on the basis of Section 36A, the trial Court, the first appellate court as well as the High Court ought to have granted the decree for specific performance to the appellant considering the provisions of the Specific Relief Act, 1963 rather than granting an alternative relief.

The Court, further relied on the case of Nathulal v. Fulchand, quoted by the appellant, wherein it was held that when an agreement to sale is executed but it cannot be specifically performed without permission or sanction of any authority, the suit can be decreed and decree for specific performance can be granted subject to obtaining such permission from the competent authority.

The Apex Court, therefore, decreed the suit filed by the plaintiff by holding that the plaintiff would be entitled to the relief specific performance of the agreement to sell. The Court, subject to the relief, also directed the appellant to comply with the requisites under Section 36A before seeking conveyance of the land from the respondent.

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Judgement Reviewed by – Keerthi K

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