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2024 Supreme(Guj) 1319

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BIREN VAISHNAV, NISHA M. THAKORE, JJ.
Ashokbhai Madhubhai Patel - Appellant
Versus
Madhubhai Jagubhai Patel & Ors. - Respondents
R/First Appeal No.2346 of 2024 With Civil Application (For Stay) No.1 of 2024 In R/First Appeal No.2346 of 2024
Decided On : 10-07-2024

Advocates Appeared:
For the Appellant : Mr. Dhaval Vyas, Senior Counsel for M/s. Vyas Associates, Mr. D.A. Sankhesara.
For the Defendants : Mr. S.P. Majmudar, Mr. V.Z. Bharda.

Agreements for the sale of new tenure land without prior permission from the Collector are unenforceable under Section 43 of the Tenancy Act, and parties cannot claim relief for illegal agreements.

Headnote:(A) Code of Civil Procedure, 1908 - Section 96 and Order VII Rule 11 - Gujarat Tenancy & Agricultural Lands Act, 1948 - Section 43 - Appeal against dismissal of suit for specific performance of sale agreement - Suit dismissed as the agreement was based on an illegal transaction involving new tenure land without prior permission from the Collector - Court held that the agreement was unenforceable and the plaintiff could not claim damages or compensation due to being in pari delicto. (Paras 6.1, 6.12, 6.13)

(B) Specific Relief Act, 1963 - Nature of specific relief - Court cannot enforce an agreement that is illegal or void ab initio - The plaintiff's claim for compensation was also dismissed as it arose from the same illegal agreement. (Paras 6.12, 6.13)

Facts of the case:
The plaintiff sought to declare a sale deed null and void and enforce agreements to sell land, claiming he had made substantial payments. The defendants argued the agreements were invalid under Section 43 of the Tenancy Act, which prohibits such transactions without Collector's permission.

Findings of Court:
The trial court found the agreements invalid and dismissed the suit, ruling that the plaintiff could not seek specific performance or damages due to the illegal nature of the agreements.

Issues: Whether the suit for specific performance was maintainable given the agreements were illegal under the Tenancy Act, and whether the plaintiff could claim damages.

Ratio Decidendi: The court ruled that agreements made in violation of statutory provisions are unenforceable, and the plaintiff, being aware of the illegality, could not claim any relief.

Result: Appeal dismissed.

ORDER :

Biren Vaishnav, J.

1. This appeal under Sec. 96 of the Code of Civil Procedure, 1908, has been filed by the appellant, who was the original plaintiff. He challenges the order dated 08.02.2024, passed by the 15th Additional Senior Civil Judge, Surat, below Exh.12 and 13 in Special Civil Suit No. 231 of 2022. By the aforesaid order, the learned Judge dismissed the suit under the provisions of Order VII Rule 11 of the Code of Civil Procedure, 1908.

2. The plaintiff had filed the suit seeking a declaration that the registered Sale Deed dated 16.03.2022, executed by the defendant Nos. 1 to 4 in favour of defendant nos. 5 to 11 be declared as null and void and not binding to the appellant – plaintiff. It was further prayed that a declaration be issued that the defendants No. 5 to 11 acquired no right in the subject land.

2.1 A further relief was prayed for a specific performance of the Agreements to Sell dated 01.02.2007 and 16.07.2007 executed by the defendant Nos. 1 and 2 and their predecessors in favour of the plaintiff. Alternatively, it was prayed that the defendants be directed to pay an amount equivalent to the market price of the subject land with interest @18%. The reliefs prayed for in the suit read as under :

    “1. to declare that the registered sale deed dated 16.3.2002 executed by defendant nos. 1 to 4 in favour of defendant nos. 5 to 11 was null and void and was not binding on the plaintiff, further to declare that defendant nos. 5 to 11 acquired no right in the subject land on account of such sale transaction and to further direct the Mamlatdar, Adajan, Surat to set aside entry no. 4111 dated 25.3.2022 pursuant to the said sale deed.

    2. For specific performance of the Agreement to Sell dated 1.2.2007 and 16.7.2007 executed by defendant nos. 1 and 2 and their predecessor in favour of the plaintiff and to further appoint a Court Commissioner for execution of a sale deed in favour of the plaintiff.

    Alternatively

    If the Hon’ble Court is not inclined to pass a decree for specific performance, then defendant nos. 1 and 2 and defendant nos. 5 to 11 be directed to pay the plaintiff an amount equivalent to the market price of the subject land along with 18% interest towards loss, from the date of filing of suit.

    3. To declare that the defendants their agents and servants have no rights to create any rights, in any way, including by transferring, alienating, leasing the subject land to any third party/ies, from executing any written/oral agreements, seeking development permissions etc., or otherwise with a view to frustrate the right of the plaintiff in the subject land.

    4. To injunct the defendants their agents and servants from creating any rights, in any way, including by transferring, alienating, leasing or otherwise to any third party/ies with a view to frustrate the right of the plaintiff in the subject land.”

3. It was the case of the appellant plaintiff as set out in the plaint that the land bearing Survey No. 107, Block No.133 admeasuring 17402 sq.mtrs situated at Palanpore, Taluka: Adajan, District: Surat, belonged to the defendants. The land originally was of the ancestor- Keshavbhai Jagubhai Patel who died on 14.12.2019. The land, therefore, vested in the defendants who were the lineage descendants of Keshubhai Patel. On the death of Shri Keshubhai Patel on 14.12.2019, a revenue entry was made on 19.01.2021 in favour of the defendant Nos. 3 and 4 and other sisters. Subsequently, some of the descendants on 26.07.2021, prepared a release deed in favour of defendant Nos. 3 and 4.

3.1 According to the plaintiffs, they had entered into an Agreement to Sell on 01.02.2007 for purchase of the said land for consideration of Rs.33,30,000/-. An amount of Rs.1,00,001/- was paid and as per Condition No.7 of the Agreement to Sell, it was the responsibility of the plaintiffs, intended purchasers to get approval under Sec.43 of the Tenancy Act. The case of the plaintiffs was that they had over a period of time on 24.02.2007 and 16.07.200

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