S.43 Tenancy Act Bar on Transfer Applies at Conveyance, Not Agreement; Stray Admission on Rubble Insufficient to Disprove Owner's Possession: Bombay HC - 2025-02-18

Bombay High Court Clarifies Scope of S.43 Tenancy Act on Sale Agreements, Upholds Title Holder's Possession

Mumbai, Maharashtra – The Bombay High Court, in a significant judgment, has clarified that the bar on transferring tenanted agricultural land under Section 43 of the Maharashtra Tenancy and Agricultural Lands Act, 1948, applies at the stage of conveyance, not to the agreement for sale itself. Justice GauriGodse , while dismissing a second appeal, also emphasized that isolated admissions, such as storing rubble, do not suffice to prove possession against the rightful owner, especially when substantive evidence supports the owner's claim.

The Court upheld the concurrent findings of two lower courts which had granted a declaration of title and an injunction in favour of the original plaintiffs (respondents), the legal heirs of Dattatray Pawar , concerning the eastern portion of a suit property in Gulsunde , Panvel. The appellants, Ramesh Bagaram Mankame and another, were the original defendants.

Case Background: A Long-Standing Property Dispute

The dispute revolved around agricultural land originally owned by Dattatray Pawar , who was a tenant purchaser under the Tenancy Act. His legal heirs (plaintiffs/respondents) filed a suit for declaration of title and injunction, claiming the defendants (appellants) were obstructing their possession of the eastern side of the property.

The defendants asserted their rights based on two agreements for sale (dated 1983 and 1991), a possession receipt (1993), and a Will (1992) allegedly executed by Dattatray . While the defendants' possession of the western part of the property (divided by a village road) was not in dispute, the possession of the eastern part was contested.

Initially, the second appeal was admitted on a substantial question of law regarding whether Section 43 of the Tenancy Act bars the transfer of tenancy land by Will. However, counsel for the appellants conceded this point, acknowledging the Supreme Court's decision in Vinodchandra Sakarlal Kapadia Vs. State of Gujarat and others which established such a bar. Consequently, a new substantial question of law was framed: whether the lower courts' findings on the plaintiffs' possession of the eastern side were based on an incorrect appreciation of evidence, particularly ignoring an admission by Plaintiff Witness-1 (PW-1).

Arguments Presented

Appellants' (Defendants') Submissions:

* Argued that Dattatray had executed agreements to sell and a possession receipt in their favour, creating rights over the suit property.

* Highlighted PW-1's admission during cross-examination that the defendants had stored heaps of rubble on the eastern side of the road, contending this proved their possession.

* Claimed that the lower courts ignored this crucial admission, leading to a perverse finding on possession.

Respondents' (Plaintiffs') Submissions:

* Maintained that as undisputed owners ( Dattatray being a tenant purchaser with a Section 32M certificate), they were in de-jure possession.

* Argued the agreements and possession receipt did not confer valid possession, especially since the defendants never sought specific performance of the contract and failed to prove payment of consideration.

* Contended that PW-1's statement about rubble was a "stray admission" about a "wrongful act" by the defendants post-suit filing, not proof of their possession.

* Relied on precedents like Nanjegowda & Anr Vs. Gangamma & Ors for conditions under Section 53A of the Transfer of Property Act and Vijay s/o Mahadeo Gaikwad Vs. Parasram s/o Bhanu Meshram regarding stray admissions.

Court's Analysis and Legal Principles

Justice GauriGodse meticulously examined the evidence and legal arguments.

On the Issue of Possession and PW-1's Admission: The Court found that PW-1's admission of defendants storing rubble on the eastern side after the suit was filed did not equate to an admission of the defendants' lawful possession. > "Forcible entry on the eastern side of the suit property or storing heaps of rubble without any permission cannot be construed to mean that the defendants are in possession of the eastern side of the suit property... Thus, the oral evidence of PW 1 indicating the defendants’ act of storing heaps of rubble on the eastern side would mean a wrongful act on the part of the defendants to store heaps of rubble on the plaintiffs’ property."

The Court endorsed the principle from Vijay Gaikwad that a "stray admission cannot be picked up from the oral evidence by ignoring the substantive oral evidence." The lower courts' findings that the defendants failed to prove payment of consideration or actual handing over of possession in furtherance of any valid contract were also upheld.

On Section 43 of the Tenancy Act and Section 53A of the Transfer of Property Act: A key legal discussion involved the interplay between Section 43 of the Tenancy Act (restricting transfer of tenanted land without Collector's sanction) and Section 53A of the Transfer of Property Act (part performance).

The respondents had cited Himatrao Ukha Mali and others Vs. Popat Devram Patil and another , where it was held that a contract to sell property purchased under the Tenancy Act would be invalid under Section 23 of the Indian Contract Act, thus denying protection under Section 53A of the TPA.

However, Justice Godse referred to the Supreme Court's decision in Nathulal Vs Phoolchand and the Bombay High Court's ruling in Balu Baburao Zarole Vs Shaikh Akbar Shaikh Bhikan , which established a different principle: > "The bar under Section 43 would apply at the stage of conveyance and not at the stage of the agreement for sale, in as much as the sale is barred without prior sanction as contemplated under Section 43(1) the Tenancy Act. Hence, in view of the legal principles well-established by the Hon’ble Apex Court in the decision of Nathulal , followed by this Court in the decision of Balu Baburao Zarole , the legal proposition laid down by this Court in the case of Himatrao Ukha Mali , would have no binding effect."

Despite this clarification, the Court found that the defendants in the present case did not meet the conditions for protection under Section 53A of the Transfer of Property Act. Citing Nanjegowda , the Court reiterated the conditions: a written contract, possession obtained in part performance, an act in furtherance of the contract, and performance or willingness to perform the transferee's part of the contract. The defendants failed to prove these, particularly the valid transfer of possession and payment of consideration.

Final Decision and Implications

The High Court concluded that there was no illegality or perversity in the concurrent findings of the trial court and the first appellate court. The evidence, including PW-1's admissions, was found to be correctly appreciated.

> "The findings recorded by both the Courts on possession of the plaintiffs on the eastern side of the suit property amounts to correct appreciation of the entire evidence on record... In the second appeal, re-appreciation of evidence is not permissible for arriving at a different conclusion unless any perversity is found in the reasons recorded by both the Courts."

The second appeal was dismissed, and the judgments and decrees in favour of the plaintiffs (respondents) were confirmed. This decision reinforces that titleholders generally maintain de-jure possession, and claims of dispossession require robust proof beyond isolated incidents or unproven agreements. It also provides important clarification on the application of Section 43 of the Tenancy Act to agreements for sale of tenanted lands.