An agreement for sale of granted land executed without prior government permission during the non-alienation period is void and unenforceable under the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978.

CAV ORDER

The petitioners are before this Court calling in question the order dated 16-04-2025 passed by the concerned Court rejecting the application filed under order VII Rule 11(a) and (d) of the CPC.

2. Facts in brief, germane, are as follows:

2.1. Before embarking upon the consideration of the issue, I deem it appropriate to notice the protagonists in the lis. Petitioners 1 to 6 are defendants 1 to 6 who are grantees of land. The 1^st respondent is the plaintiff and the 2^nd respondent is M/s. One Wolf Ventures, the defendant No.7. On 06-09-2000 land measuring 2 acres and 21 guntas in Sy.No.168 of Kuduvathi Village, Nandi Hobli, Chikkaballapura Taluk and District is granted in favour of the 1^st petitioner/defendant No.1 imposing condition in the grant certificate dated 06-09-2000 that the property should not be alienated for a period of 15 years from the date of grant. On 16-06-2014, the petitioners purportedly execute a sale agreement and a registered power of attorney in favour of the 1^st respondent/plaintiff and a sale consideration of Rs.27,50,000/- is also determined in the agreement of sale. The petitioners allegedly received Rs.20,00,000/- which was projected as a security deposit for the development of the subject property.

2.2. On 06-10-2023, the petitioners executed a deed of cancellation to cancel the registered General Power of Attorney dated 16-06-2014. The cancellation deed was executed on the score that the 1^st respondent/plaintiff did not develop the schedule property as was promised. The 1^st respondent/plaintiff was not a party to the cancellation deed; it was executed by the petitioners only. The 1^st respondent/plaintiff institutes a suit for specific performance on 21-10-2023 in O.S.No.578 of 2023 seeking a direction for execution of a sale deed in furtherance of the sale agreement dated 16-6-2014. The petitioners were made defendants 1 to 6 before the concerned Court. The defendants file written statement and an application in I.A.No.12 under Order VII Rule 11(a) and (d) of the CPC seeking rejection of the plaint. The concerned Court rejects the application seeking rejection of the plaint by the impugned order dated 16-4-2025. The petitioners are before the Court calling in question the said order.

3. Heard Sri Bipin Hegde, learned counsel appearing for petitioners and Sri Bhaskar Babu H.J., learned counsel appearing for respondent No.1.

4. The learned counsel appearing for petitioners Sri Bipin Hegde would contend that the land was granted to the petitioners on 06-09-2000 with a condition of non-alienation for a period of 15 years until 05-09-2015. The sale agreement and the general power of Attorney are executed on 16-06-2014, which would be one year prior to the expiry of the period of non-alienation. He would submit that Section 4 (1) of the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978 (hereinafter referred to as ‘the Act’ for short) stipulates that transfer of granted land made in contravention of the terms of the grant is null and void, which renders the sale agreement or the General Power of Attorney as null and void. He would further contend that (2) of the Act stipulates permission to be taken for transfer of the land even after the non-alienation period. The sale agreement and the General Power of Attorney are executed without prior permission of the Government. All these facts would render the transaction void. He would further refer to Section 3 (1)(e) of the Act, to contend that (1)(e) includes a sale agreement within the definition of transfer under the Act. Therefore, the entire transaction is void ab initio and the suit to that effect could not have been filed seeking specific performance of the agreement of sale which by itself was void.

5. Learned counsel appearing for the 1^st respondent would contend that the non-alienation clause would not become applicable to a transaction that happens after the period of non-alienation. According to t