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IN THE HIGH COURT OF ORISSA
P.K. Mohanty, J.
SHRI RAMACHANDRA BHAKTA - APPELLANT
Versus
SHRI KRUSHNA CHANDRA BHAKTA AND ANOTHER - RESPONDENT
Second Appeal No. 268 of 1986
Decided On : 28-06-1999
TRANSFER OF PROPERTY ACT, 1882 - SECTION 10 - RESTRICTION ON ALIENATION - PARTIAL RESTRICTION - VALIDITY - A restriction on alienation of property is valid if it is a partial restriction and not an absolute restriction.
Fact of the Case:
The plaintiff and defendant No. 1 entered into a family arrangement, Ext. 1, which contained a pre-emptory clause that if any of the parties wanted to sell the land allotted to their share, the other party had the first right to purchase it. Defendant No. 1, however, sold the suit property to defendant No. 2 without offering it to the plaintiff. The plaintiff filed a suit for declaration that the sale deed, Ext. A, is illegal and void and for a direction to the defendant No. 1 to execute the sale deed in respect of the suit property in his favor.
Finding of the Court:
The court held that the restriction on alienation in Ext. 1 was a partial restriction and not an absolute restriction. Therefore, it was not void under Section 10 of the Transfer of Property Act. The court also held that the sale deed, Ext. A, was invalid as it was executed in violation of the pre-emptory clause in Ext. 1.
Issues: Whether the restriction on alienation in Ext. 1 was an absolute restriction or a partial restriction.
Ratio Decidendi: The court held that the restriction on alienation in Ext. 1 was a partial restriction and not an absolute restriction. Therefore, it was not void under Section 10 of the Transfer of Property Act. The court also held that the sale deed, Ext. A, was invalid as it was executed in violation of the pre-emptory clause in Ext. 1.
Final Decision: The court allowed the appeal, set aside the judgment and decree passed by the learned Additional District Judge, Cuttack, and restored and confirmed the judgment and decree passed by the learned Subordinate Judge, Athagarh.
JUDGMENT :
P.K. Mohanty, J. - This Second Appeal is directed against the reversing judgment of the learned Second Addtional District Judge, Cuttack allowing the defendants' appeal against the order of the learned Subordinate Judge, Athagarh.
2. The plaintiff's case, in short, was that the suit property-Bari land of A. 0.01 decs, in plot No. 1690/2639 under Khata No. 273 by a deed of family arrangement, Ext. 1 dated 10.3.1956 was executed by the plaintiff and his father on one side and defendant No. 1 on the other incorporating a pre-emptory clause that if any of the aforesaid parties wants to sell the land allotted to his share, then the other party, if prepared to purchase the said property, the demised land cannot be sold to any third party. However, if the party is unable or not interested in purchasing the land on the market value, then it can be sold to any third party. It was alleged that defendant No. 1 violating the aforesaid stipulation in the deed, alienated the suit property to defendant No. 2 Krushna Chandra Bhokta by registered sale deed, Ext. A dated 11.1.1980 for a consideration of Rs. 500/-. The plaintiff, therefore, brought a suit for declaration that the sale deed, Ext. A is illegal and void and for a direction to the defendant No. 1 Nidhi Bhokta to execute the sale deed in respect of the suit property in favour of the plaintiff, failing which the Court may execute the suit sale deed and for permanent injunction. The defendant No. 1 however, took the plea that he has offered to sell the suit property to the plaintiff, but since the plaintiff declined to purchase, he had sold the same to defendant No. 2 under Ext. A and as such, there has been no breach of contract in terms of Ext. 1 by defendant No. 1.
3. Learned Subordinate Judge, Athagarh found that Ext. 1 is a valid document enforciable in law and that defendant No. 1 has violated the terms of the agreement, Ext. 1 dated 18.3.1956. He found Ext. A as illegal and a fraudulent transaction and, therefore, not binding on the plaintiff. The plaintiff was found to be entitled to the relief sought for, for declaring the sale deed, Ext. A as null and void and not binding on the plaintiff. Defendants 1 and 2 were permitted to execute a sale deed in respect of the suit property for Rs. 500/- in favour of the plaintiff within three months, failing which the plaintiff was at liberty to get the sale deed executed through Court and deposit the aforesaid amount and get delivery of the possession. The defendants were permanently restrained from interfering with the possession and enjoyment of the plaintiff in respect of the suit property.
4. On appeal, being filed by the defendants, the Second Additional District Judge, Cuttack by his order dated 11.9.1985 in Title Appeal No. 64 of 1983 remanded the case to the trial Court after framing an additional issue for determination.
The following issue was framed :
"Had the defendant No. 2 any notice of the contract entered into between the plaintiff and defendant No. 1 prior to his purchase ?"
The learned Subordinate Judge in his judgment dated 24.12.1985 on the aforesaid issue found that defendant No. 2 had notice of the contract entered into between the plaintiff and defendant No. 1 prior to his purchase. Defendant No. 2 filed Civil Revision No. 262 of 1983 in this Court challenging the admissibility of the agreement. Ext. 1, but however, this Court by order dated 8.4.1983 dismised the Civil Revision with an observation that "if the Stamp Duty and penalty are not paid by the plaintiff, it shall be open to the defendants to move the Court for exclusion of Ext. 1. The Stamp Duty and penalty levied on Ext.-l were paid by the plaintiff. The appeal was finally heard and by judgment dated 20.10.1986, the judgment decree of the trial Court was reversed mainly on the ground that in view of Section 10 of the Transfer of Property Act, the agreement Ext-1 to the extent it contemplates absolute restriction imposed on alienation of the property,
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