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IN THE HIGH COURT OF BOMBAY
(NAGPUR BENCH)
H.W. Dhabe M.B. Ghodeswar, JJ.
Pravin s/o Jethalal Kamdar.... Appellant.
Versus
State of Maharashtra through Collector Nagpur and Ex-Officio Dy. Secretary Housing and Special
Assistance Department Mantralaya, Bombay and others.... Respondents.
First Appeal No. 366 of 1992, decided on 26-4-1995.
Advocates appeared :
P.G. Palshikar, S.A., with S.P. Palshikar Sanjay Puranik, for the appellant.
L.G. Deshpande, for respondents.
Held, void-No relief can be granted on ground that both parties committed mistake of law in executing sale deed.
Section 17 (1) (C) Articles 58 & 65.
See Urban Land (Ceiling & Regulation) Act, 1976, Sections 10 & 27.
Sections 31 32 and 27 (2)- Urban Land (Ceiling and Regulation ) Act, 1976, Sections 10 and 27-Equitable relief.
Exercise of discretion by Court- It must be upon sound principles and considerations.
It is however, true that there is discretion conferred upon the Court under Section 31 and 32 of the Specific Relief Act, 1963 in cancellation of the instrument as void or voidable or in granting the relief of declaration that the instrument is void or voidable, but in he instant case since the sale deed dated 23-8-1976 is void an initio, the suit is in truth and substance a suit for possession of the suit property since when the sale deed is void an initio, there is no need to set it aside and the same can be ignored. What has however, to seen is that the exercise of discretion by the Court in granting the equitable relief must be upon sound principles and considerations, it cannot be gains aid that when the defendants have obtained the possession of the suit property under a void sale-deed there is reasonable apprehension of he substantial injury to the plaintiff within the meaning of Section 31 of the Contract Act.
It is material to see that the defendants have not brought the case in any of the circumstances referred to in sub-section (2) of Section 27 of the Specific Relief Act. In particular, there is no case made out that the third partys right or interest has come into being upon the suit property and therefore there is hindrance in granting the relief of possession to the plaintiff. In fact, according to the case of the defendants the said property is in possession of the defendants because it was purchased for housing the office of the defendant No.3 No other change of circumstances have also been proved since the date of pre-emptive purchase, because of which the defendants are not in a position to substantially restore the possession of the suit property to the plaintiff. In these circumstances when the sale deed is void because there is by provision to support the pre-emptive purchase by the defendants and more over.
There are no equities in favour of the State, then there is no reason why the discretion should not be exercised in granting the relief of possession of the suit property the plaintiff since the sale-deed executed between the parties is void an initio.
URBAN LAND (CEILING & REGULATION) ACT, 1976
Section 10 and 27.
See Contract Act, 1872-Sections 10, 13,20 and 21.
Section 10 and 27-LimitatioD Act, 1963, Section 17 (1) (c), Articles 58 and 65-Sale-Void an initio-Non est.
Case governed by Article 65-Limitation be 12 years-Action within be valid-As sale without free consent action can be maintained by plaintiff Intended purchaser not necessary party.
Sections 10 and 27.
See Specific Relief Act, 1963, Sections 31, 32 and 27 (2).
Sections 10 (1), (3) and (4), 27 (1) and 27 (5) (a)-Scope of.
It is clear from the language of Section 27 (1) of the ULC Act that it is not restricted to the lands within the ceiling limit only In understanding its scope and ambit, perusal of Section 5 (3) of the ULC Act to which it refers would show that restriction is placed therein upon the person holding laud in excess of the ceiling limit to transfer any such land or part thereof by way of sale, mortgage, gift, lease or otherwise unless and until he has filed a return under Section 6 of the said Act his holdings and a notification regarding the excess land held by him is published under Section 10 (1) of the said Act; any transfer made in contravention of the said provision is deemed to be null and void.
Perusal of Section 10 (4) of the ULC Act referred to in Section 27 (1) of the said Act then shows that there is restriction placed there under upon the transfer by way of sale. mortgage, gift, lease or otherwise of any excess vacant land specified in the notification issued under Section 10 (1) of the said Act during the period commencing On the date of the publication of the said notification under Section 10 (1) and ending with the date specified in the declaration made under Section 10 (3) of the said Act; if any transfer is made in contravention of the said provision it is deemed to be null and void.
Considering the effect of the above provisions of sub-section (3) of Section 5 and sub-section (4) of Section 10 of the ULC Act upon the construction of Section 17 (1) of the said Act.
It is open to the intending seller to make an application for permission to dispose of his property when the proceedings for determination of his excess land are pending, in which event the Slate Government may exercise its right of pre-emption under sub-section (5) (a) of Section 27 or it may return the said application to the intending seller and the purchaser since the proceedings for determination of excess land are not finalized. It is thus clear Section 27 (1) is not restricted to the lands within the ceiling area and, therefore in that sense the declaration of invalidity of the said Section 27 (1) is limited only to the lands which are within the ceiling limit. However, the said question need not detain us any more because as held by us above and also the learned trial Court the plaintiff has in his possession land within the ceiling limit and in fact no proceedings are initiated for determination of his excess land under ULC Act. It is, therefore, clear that since no permission Was required to sell the suit property to its property to its prospective purchaser under the agreement of sale dated 31-3-1976, the impugned order dated 26-5-1976 rejecting the permission for sale of the said property and exercising option to purchase the said property passed under sub-section (5) (a) of Section 27 of the ULC Act was thus invalid.
It may be seen that if there was no obligation upon the intending seller or the purchaser to obtain the permission of the Competent Authority before effecting transfer of the property by way of sale, mortgage, gift, lease, or otherwise as required by Section 27 (1) of the ULC Act, there was no question of the Competent Authority rejecting such permission or exercising its option to purchase such property. It cannot be said that the plaintiff had Voluntarily made an application under Section 27 (1) of the ULC Act. On the other hand, in order to execute the valid sale deed in favour of the prospective buyer, before the said provision was declared invalid, it was a legal requirement which he had to comply with before executing the valid sale deed in favour of the prospective purchaser. The legal compulsion to make such an application is obvious because at the time the said application was made since there was no declaration of its invality the plaintiff had no other alternative but to comply with its requirement.
It cannot thus be said that the sale of the suit property by the plaintiff to the defendants was thus his voluntary legal act As shown hereinbefore, there was legal compulsion Upon the plaintiff under Section 27 (1) of the Act. to seek permission of the competent authority under Section 27 (1) of the ULC Act to sell his immovable property to the prospective purchaser and further there Was legal compulsion upon him to sell it to the State when upon such application seeking its permission being made, the State could exercise and had in fact in the instant case exercised its permission being made, the State could exercise and had in fact in the instant case exercised its right of pre-emptive purchase under sub-section 5 (a) of Section 27 of the ULC Act. When Section 27 (1) of the ULC Act was struck down as invalid in so far as it Was made applicable to the immovable property within the ceiling limit, there was not only no question of seeking any permission to sell from the competent authority but there was no right of preemptive purchase in the State in respect of such property within the ceiling limit.
The sale deed executed in favour of the State by the plaintiff under its right of pre-emptive purchase cannot thus be said to be valid. It may be seen that once the competent authority had decided to exercise its right of pre-emptive purchase under Section 27 (5) (a) of the ULC Act, even if there was no agreement arrived at between the parties about the consideration for the suit property, the said Section 27 (5) (a) of the ULC Act itself provided the price would be calculated in accordance with the provisions of the Land Acquisition Act, 1894 or any other corresponding law for the time being in force. The fact that the State offered the same consideration which was agreed to between the plaintiff and the prospective purchaser and that the plaintiff accepted the same is thus of no consequence. The compulsion upon the plaintiff is thus writ large in the aforesaid provisions of Section 27 (5) (a) of the ULC Act.
2. Briefly the facts are that the plaintiff was the lawful owner of the house property standing on Nazul Plot No. 120 measuring 16,500 sq.ft. bearing M.H. No. 128 situated in Ward No. 73, Ramdaspeth, Nagpur, which is described in the Schedule forming part and parcel of the plaint. The plaintiff was duly recorded as the owner of the suit house in the relevant Nazul and Corporation records. It is the case of the plaintiff that the Nazul Plot No. 120 belonging to him was outside the purview of the Urban Land (Ceiling and Regulation) Act, 1976 (for short the "ULC Act") and that he was not holding any land in excess of the ceiling limit prescribed under the said Act. According to him, he was, therefore, not under obligation to file return under section 6(1) of the ULC Act before the Competent Authority U.L.C. Nagpur.
3. It is then the case of the plaintiff that he wanted to sell the suit property to his relations and business acquaintance M/s. Kothari Brothers, with whom he entered into an agreement of sale on 31-3-1976. The consideration agreed to between the parties for the sale of the suit property was Rs. 2,60,000/-.
4. It may be seen that a ULC Act came into force in the State of Maharashtra with effect from 17-2-1976. Section 27(1) of the said Act required the plaintiff and the prospective purchaser to obtain the permission from the Competent Authority under the ULC Act i.e. the defendant No. 2. An application was, therefore, submitted to him for permission to sell the suit property as per the agreement dated 31-3-1976. The said application was registered as ULC Case No. 74 of 76. The defendant No. 2 by his order dated 26-5-1976 rejected the permission for sale of the suit property to the aforesaid prospective purchaser and further by the same order communicated his option to the plaintiff to buy the said property on behalf of the State of Maharashtra.
5. The defendants offered the same consideration which was offered by the prospective purchaser and accordingly in pursuance of the aforesaid order dated 26-5-1976 passed under section 27(1) of the ULC Act, a sale deed was executed between the parties on 23-8-1976 which was registered at Sr. No. 2363 in the office of the Sub-Registrar, Nagpur. The possession of the suit property was also taken over by the defendant No. 3 i.e. Dy. Commissioner Sales Tax Eastern Division, Nagpur on the date of the sale deed. Since then the suit property is in possession and occupation of the defendant No. 3. The defendants are thus the owner of the suit property from the date of the aforesaid sale-deed dated 23-8-1976.
6. At this stage it is necessary to notice that the validity of the ULC Act was challenged in the Supreme Court in the case of (Bhim Singhji v. Union of India)1, A.I.R. 1981 S.C. 234. The validity of the ULC Act was upheld except section 27(1) thereof in so far as it imposed a restriction on transfer of any Urban or Urbanisable land with a building or of a portion of such building, which was within the ceiling limit. In other words, the provision of sub-section (1) of section 27 of the said Act was held invalid in so far as it sought to affect the citizens right to dispose of his urban property within the ceiling limit.
7. Since the provision of section 27(1) of the ULC Act in so far as it imposed restriction upon the right of the owner to dispose of his property within the ceiling limit has declared invalid in Bhim Singhjis case, cited supra, acc
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