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2025 Supreme(Online)(Kar) 33411

KARNATAKA HIGH COURT
UMESH M ADIGA, J
FAKKIRAPPA S/O. KALLAPPA NADATTI, SINCE DEAD, REP. BY HIS LRS. – Appellant
Versus
MAHENDRA S/O. BASTIMAL RATHOD – Respondent
R.F.A. NO. 100525 OF 2022 (SP) | O.S. NO.511/2014



For the Appellants/Petitioners:SRI. BASAVARAJ SABARAD,SENIOR COUNSEL FOR SRI. I. C. PATIL, ADVOCATE
For the Respondents:SRI. R. V. ITAGI, SRI. A. P. MURARI, ADVOCATES FOR R1; SRI. P. G. MUGALI, ADVOCATE FOR R2 TO R4

Agreements executed during non-alienation periods under the Land Reforms Act are void and unenforceable, supporting the principle that contracts must comply with statutory provisions.

Headnote:(A) Karnataka Land Reforms Act, 1961 - Section 61 - Specific performance of contract - Agreement of sale executed during non-alienation period of 15 years found void and unenforceable - Trial Court's decree for specific performance set aside due to defendant's hardships and void agreement under statutory provisions. (Paras 46, 61, 64)

(B) Contract Law - Section 2(h) of Indian Contract Act, 1872 - An agreement not enforceable by law is void - Agreement over property executed in contravention of prohibition is invalid irrespective of subsequent changes in circumstances. (Paras 47, 49)

Facts of the case:
Plaintiff entered into agreement of sale with deceased owner for specific property, received payments, but defendants challenged its validity alleging coercion due to the owner's alcohol addiction and citing a prohibition on alienation until 2014. (Paras 1-5)

Findings of Court:
Delivered judgment that the agreement was void due to the statutory prohibition against alienation and caused undue hardship to the defendants, who depended on the land for income. (Paras 62, 64)

Issues: Whether the agreement executed during non-alienation was enforceable, defendant's readiness to uphold the agreement, and the impact of executing the agreement contrary to Land Reforms Act. (Paras 22, 23)

Ratio Decidendi: The contract was deemed void under Section 61 of the Land Reforms Act; remedy of specific performance denied due to hardship to defendants; suit recognized as misused under the guise of a legitimate contract. (Paras 47, 64)

Result: Appeal allowed; decree of specific performance overturned and earnest money ordered to be refunded with interest.

Table of Content
1. case initiation and appeal against judgment. (Para 1 , 2)
2. details of the agreement and performance obligations. (Para 3 , 4 , 5)
3. defendants' arguments against the agreement. (Para 6 , 7 , 8)
4. claims of fraud and manipulation by the plaintiff. (Para 10 , 11 , 13 , 20)
5. plaintiff's evidence and arguments in defense. (Para 12 , 14 , 15 , 16)
6. court's analysis and final ruling on hardship. (Para 22 , 35)
7. enforceability of agreements under land reforms act. (Para 41 , 43 , 47 , 61)
8. judicial precedents impacting case decision. (Para 55 , 56)
9. conclusion based on analysis of tendered facts. (Para 59 , 62)

CAV JUDGMENT

(PER: THE HON'BLE MR. JUSTICE UMESH M ADIGA)

The defendant Nos.2 (A to D) have filed this appeal challenging the judgment and decree dated 03.08.2022, passed by the learned Principal Senior Civil Judge and CJM, Dharwad, (for short, `trial Court'), in O.S.No.511/2014. Respondent No.1 herein, i.e., plaintiff, filed a suit for specific performance of contract and it was decreed by the trial Curt. The same is challenged in the present appeal.

2. The parties are referred to as per their ranking before the trial Court.

3. Brief facts of the case are that;

It is the case of the plaintiff that, one Kallappa son of Fakirappa @ Fakirappa Nadatti, was the owner and in possession of the suit property bearing Block No.38/3, measuring 3 acres of Gulganjikoppa village of Dharwad Taluk. During his lifetime, along with his wife and son Fakeerappa (deceased defendant Nos.1 and 2) executed a registered agreement of sale dated 20.06.2011 (Ex.P-4) in favour of the plaintiff, agreeing to sell the suit property for Rs.13,80,000/- and received earnest money of Rs.1,00,000/ on the date of agreement. It was agreed that balance amount of Rs.12,80,000/- shall be paid at the time of registration of the Sale Deed. Thereafter, from time to time, Kallappa and his son-defendant No.2 received part of sale considerations i.e., Rs.1,00,000/- on 27.11.2011, Rs.1,00,000/- on 21.10.2013, Rs.1,50,000/- on 21.10.2013 and Rs.30,000/- on 20.06.2014. In this regard, supplementary agreements were executed by Kallappa as well as defendant No.1 and 2.

4. It is the further case of plaintiff that Kallappa died on 11.07.2014 leaving behind the defendants as his legal heirs to succeed to the property. After the death of Kallappa, defendants approached the plaintiff and obtained Rs.1,00,000/- out of balance amount of sale consideration. In all, Kallappa and defendants have received an amount of Rs.5,80,000/- towards sale consideration out of Rs.13,80,000/- and balance was only Rs.8,00,000/-.

5. It is further contended that plaintiff was always ready and willing to perform his part of the contract. But, defendants on one or the other reasons went on postponing execution of the sale deed. On 10.11.2014, plaintiff approached the defendants to execute the sale deed and defendants refused to do so. Hence he filed this suit.

6. Defendant Nos.1 and 2 during their lifetime did not file any written statement. After their death, their legal heirs were brought on record. The legal heirs of defendant No.1 did not file written statement. The legal heir of defendant No.2, i.e., Defendant No.2(A) filed written statement, denying the contentions of the plaintiff. It is her further contention that deceased Kallappa and his son Fakirappa were addicted to bad vices. They were drunkards and squandered the joint family income for their bad habits. The suit property is an ancestral joint family property. Plaintiff created the said agreement of sale taking undue advantage of bad habits of the said Kallappa and Fakeerappa.

7. She further stated that the suit property is situated in the heart of city and its value per acre is more than Rs.1.50 crore and even in the year 2011 to 2014, its value was more than Rs.80 lakhs per acre. Under such circumstances, no prudent man would agree to sell the said property for Rs.13,80,000/-. It shows that the plaintiff and his henchmen have

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