SUPREME COURT OF INDIA
ARUN MISHRA, M. R. SHAH, B.R. GAVAI, JJ.
SMT. NARAYANAMMA & ANR. Etc. Etc. – APPELLANT(S)
VERSUS
SRI GOVINDAPPA & ORS. Etc. Etc. – RESPONDENT(S)
CIVIL APPEAL Nos. 76307631 OF 2019 (Arising out of S.L.P.(C) Nos. 2920529206 of 2015)
Decided On : 26-09-2019
(a) Karnataka Land Reforms Act, 1961 - Section 61 - Grant of year 1976 - Prohibition on mortgage, transfer, sale etc. for a period of 15 years - Property mortgaged in 1990 to plaintiff - Agreement to sell executed one month after registration of mortgage deed in 1990 in favour of plaintiff - Total consideration amount paid - Possession delivered - Nothing short of transfer of property - After expiry of 15 years, plaintiff filing suit for specific performance of agreement to sell - Plaintiff and defendants confederates in the illegality - Both equally liable in law - Transfer by agreement to sell invalid. (Para 23, 24)
(b) Karnataka Land Reforms Act, 1961 - Section 61 - Plaintiff basing his claim of specific performance on the agreement to sell which is hit by section 61 - Trial court rightly dismissing the suit. (Para 25, 26)
(c) Karnataka Land Reforms Act, 1961 - Section 61 - Plaintiff and defendants both party to illegal agreement to sell - Allowing the suit will amount to rendering active assistance to enforcing an illegal agreement hit by section 61 - Clearly and patently inconsistent with the public interest - On the other hand, deciding in favour of defendants would be rendering a passive assistance - Less injurious to public interest. (Para 27)
Facts of the case:
A suit 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 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. The trial court dismissed the suit.
The first appellate court allowed the first appeal.
The plaintiff and the defendants both filed second appeal. Bothe the appeals were dismissed by High Court.
Finding of the Court:
Although both parties are confederates in illegal agreement, decision titling towards cdefenadants is less injurious to public interest.
Result: Appeal allowed.
Key Points: - Agreement to sell land within 15 years of grant under Karnataka Land Reforms Act is void and unenforceable (!) (!) (!) . - Both parties were confederates in the illegal transaction, making them equally liable (!) (!) . - Courts will not actively assist enforcement of illegal agreements; passive assistance may be less injurious to public interest (!) (!) (!) . - The doctrine of in pari delicto potior est conditio defendentis applies when both parties share fault (!) (!) . - The court must assess which outcome is less injurious to public interest when illegal transactions are involved (!) (!) .
JUDGMENT
B.R. GAVAI, J.
Leave granted.
2. The present appeals arise out of the common judgment and order passed by the Single Judge of the Karnataka High Court in Regular Second Appeal No. 1925 of 2008 and Regular Second Appeal No. 1834 of 2008 thereby dismissing both the appeals.
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 maintainable.
4. 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 allowed.
5. 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.
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