B.P. Samiappan (died) and Others vs Arunthavaselvan and Others

Srinivasan, J.—This appeal arises out of a suit for specific performance instituted by the appellant herein. It is the case of the appellant that

under Ex. A-1,dated 12.4.1971 defendants land 2 agreed to sell the suit properties at the rate of Rs. 4,500 per acre. A sum of Rs. 10,000 was

paid as advance on the date of agreement. The total consideration works out to Rs. 66,040. Initially, it was agreed that the sale should be

executed within a period of one year. On 5.4.1972, an endorsement was made extending the period for completion of the transaction till 5.5.1972.

On 3.5.1972 another endorsement was made by which the period was extended to 15.5.1972. On 13.5.1972 an endorsement was made

evidencing payment of Rs. 10,000 by way of further advance and extending the time to 13.8.1972. Thereafter, there was no extention of time as

such. On 3.8.1972 a sum of Rs. 19,000 was paid and a receipt was executed by the second defendant in favour of the plaintiff. Thus, the plaintiff

has paid a sum of Rs. 39,000 in all. One Thirumalaiappa filed a suit O.S. No. 1670 of 1971 for injunction restraining the plaintiff arid defendants 1

and 2 from interfering with his alleged possession. He claimed to be a tenant of the suit properties. The fourth defendant herein, who is the son of

the plaintiff, filed O.S. No. 845 of 1972 for an injunction against Thirumalaiappan and the second defendant as well as the present plaintiff. The

fourth defendant had purchased 14th share in the suit properties earlier. The plaintiff claimed that he was a tenant of the property even before the

suit agreement was entered. The suit filed by Thirumalaiappa was dismissed and the suit filed by the fourth defendant was decreed. The appeals

against the decrees were dismissed and the second appeals in this Court, viz., S.A. No. 2001 of 1978 and S.A. No. 2335 of 1978 were disposed

on 10.8.1979. The second appeal which arose out of Thirumalaiappa''s suit was dismissed, but the second appeal which arose out of the fourth

defendant''s suit was allowed and the decree was set aside with the result that O.S. No. 845 of 1972 was also dismissed.

Soon after the disposal of the appeals in the first appellate court, the plaintiff issued notice to defendants 1 and 2 under Ex. A-15 dated

22.9.1972 calling upon them to execute the sale deed. They were received by the defendants on 26.9.1972 as evident from the postal

acknowledgments. There was no reply thereto. The plaintiff issued another notice on 24.7.1978 under Ex. A-18. To that a reply was sent by

defendants 1 and 2 on 31.7.1978 under Ex. A-20. They denied their liability to execute a sale deed in favour of the plaintiff. It is not necessary to

go into the details of the reply notice. Thereafter, the present suit was filed by the plaintiff on 4.12.1980.

The third defendant claims under a prior agreement dated 19.2.1970 by which the second defendant for herself and as guardian of the first

defendant agreed to sell the suit properties to him. It is the case of the plaintiff that he was not aware of the alleged agreement in favour of the third

defendant and in any event, it was not a valid one. According to the plaintiff, defendants 1 and 2 are bound to execute a sale deed in favour of the

plaintiff after receiving the balance amount. It is the case of the plaintiff that he continues to be in possession as he was a tenant previously and even

after the agreement he continues to be a tenant till the execution of the sale deed.

The defendants contested the suit on several grounds. It is again not necessary to set out the details of the defence. Suffice it to point out that the

defendants contended that the plaintiff was aware of the earlier agreement in favour of the third defendant and his agreement was itself only on the

footing that in case the third defendant fails to complete the transaction, the plaintiff could have a sale deed in his favour. A plea of limitation was

raised by the defendants that the suit was barred. It was also contended that the suit agreement was hit by the provisions of the Tamil Nadu Land

Reforms Act 58 of 1961 and it was not enforceable.

The trial court found on all factual issues in favour of the plaintiff and held that he was not aware of the agreement in favour of the third

defendant. It was also held that the plaintiff had paid the sum of Rs. 39,000 as claimed by him and he was liable to pay only the balance which had

been deposited in court. On the question of limitation the trial court held that time was not the essence of the contract and the suit as such was not

barred by limitation. However, the trial court held that the agreement was affected by the provisions of the Tamil Nadu Land Reforms Act (58 of

1961) and could not be enforced in a court of law as it was void. Consequently, the suit was dismissed.

After hearing counsel on both sides, we are of the view that it is not necessary to consider the various issues of facts, which were considered by

the court below. We are taking up for consideration the two questions of law, one on limitation and the other on the provisions of the Tamil Nadu

Land Reforms Act. In so far as the limitation is concerned, Article 54 of the Limitation Act is very clear in its terms. The period of limitation fixed

for a suit for specific performance of a contract is three years from the date fixed for the performance, or, if no such date is fixed, when the plaintiff

has notice that performance is refused. In the present case, time was originally fixed in the agreement for a period of one year. Subsequently it was

extended by endorsements upto 13th August 1972. Thereafter, there was no extension as such. Ex. A-5 in only a receipt for payment of Rs.

19,000 and it does not extent the period for performance. In fact, that payment was made on 3.8.1972 before the expiry of the period fixed under

the earlier endorsement dated 13.5.1972. It is not the case of the plaintiff in the pleadings that time was extended as between the parties by

implication. In paragraph 8 it is stated as follows:

The plaintiff states, the time of one year for performance stipulated in the agreement to sell is not the essence of contract for one reason that the

agreement is with regard to agricultural immovable properties and for the second that parties themselves never regarded or intended that time

should be of essence of contract. The subsequent conduct of the parties and turn of events also will show that time was not regarded as essence of

contract.

Again in paragraph 23 it is stated,

The plaintiff states that the suit is in time. Performance of suit agreement was refused by defendants 1 and 2 only on 31.7.78 (i.e.) for the first time

through their reply notice, which gives plaintiff cause of action to sue and hence the suit is not barred by limitation.

In the cause of action paragraph (paragraph 25) it is stated that the cause of action for the suit arose on 12.4.1971, the date of suit agreement to

sell, on 15.5.1972 and 13.8.1972 when the time was extended, on 29.6.1978 when the plaintiff requested performance through a notice and on

31.7.1978 when defendants 1 and 2 for the first time disowned their duties under the contract and refused to execute the sale. Thus, there is

absolutely ho whisper in the plaint that the parties either by express agreement or by implied agreement extended the time for performance of the

contract. Hence, by the terms of Article 54 of the Limitation Act, the suit is filed beyond the period prescribed therefor. Admittedly it is beyond the

period of three years from the date fixed for performance in the agreement. Hence, the suit is barred by limitation. The view taken by the court

below that time is not the essence of the contract and, therefore, the suit is in time is unsustainable. It is one thing to say that time is not the essence

of the contract and it is another thing to say that the suit is barred by limitation. In the present case, the suit is governed by Article 54 of the

Limitation Act and it is barred by limitation.

The only ground on which the court below has dismissed the suit is that the agreement is void in as much as it is against the provisions of the

Tamil Nadu Land Reforms Act (58 of 1961). Section 23 of the Act as it stood prior to the amendment in 1974 provided that the Authorised

Officer shall not take into consideration any transfer, whether by sale or by gift, exchange, surrender, settlement or otherwise effected on or after

the notified date and before the date of the publication of the final statement u/s 12 or 14. By Tamil Nadu Act 32 of 1974 the section was

amended and after amendment it reads, in so far as it is relevant in this case, thus:

(1) Subject to the provisions of Section 20 for the purpose of fixing, for the first time after the date of the commencement of this Act, the ceiling

area of any person holding land on the date of the commencement of this Act in excess of 30 standard acres-

(a) any transfer, whether by sale (including sale in execution of a decree or order of a civil court of an award or order of any other lawful authority)

or by gift (other than gift made in contemplation of death), exchange, surrender, settlement or otherwise; or

(b) any sub-division (including sub-division by a decree or order of a civil court or any other lawful authority) whether by partition or otherwise;

effected on or after the notified date and before the publication of a notification under Sub-section (1) of Section 18 shall be, and shall be deemed

always to have been, void and accordingly the authorized Officer shall calculate the ceiling area of such person as if no such transfer of sub-division

had taken place.

Explanation: This Sub-section shall, on and from the 15th day of February, 1970 have effect as if for the figures and words ""30 standard acres

had been substituted.

(2) It shall be the duty of the authorised officer to include the land so transferred or subdivided, within the ceiling area of the transferor or the

person who held the land immediately before such subdivision, as the case may be, as if no such transfer or sub-division had taken place.

Learned Counsel for the appellant contends that the provisions of the Act will invalidate only a transfer and will not affect an agreement of sale.

According to him an agreement is not a transfer and, therefore, the section does not come into play. We are unable to accept this argument. The

plaintiff seeks to have the agreement enforced by a court of law and get a sale deed in pursuance thereof. If the court grants a decree in favour of

the plaintiff and it leads to a sale deed in favour of the plaintiff, either by the party or by the court, that sale is automatically void and it is deemed to

be void always as per the provisions of the Act. The court cannot be a party to a transaction which would be void in law. Hence, there is no

substance in the contention that the agreements are not affected by the provisions of the Act.

It is next argued that the agreement is valid as between the parties and it is only the Authorised Officer who is not bound by the transaction and

who is entitled to ignore the same. In this connection reliance is placed upon the judgment of the Supreme Court in Mrs. Chandnee Widya Vati

Madden Vs. Dr. C.L. Katial and Others, . In that case a contract of sale was entered with reference to a house belonging to the defendant on the

plot granted by the Government. One of the terms of the contract was that the vendor shall obtain necessary permission of the Government for the

same within two months of the agreement and if the permission was not forthcoming, it was open to the vendees to extend the date or to treat the

agreement as cancelled. The vendor made an application for permission but for the reasons of her own, withdrew the same. The vendees filed a

suit for specific performance of the contract or in the alternative for damages. The court found that the vendor had wilfully refused to perform her

part of the contract and the vendees were entitled to get specific performance. The contention that unless the Government granted permission, the

contract was unenforceable was negatived. The court pointed out that the stipulation in the agreement was not a condition precedent and that the

contract was not a contingent one. Hence, the court held that the contract was binding as between the parties and enforceable as such. The ruling

has nothing to do with the present case. Here a provision in a statute declares a transaction to be void. It is a declaration in rem. The transaction is

void for any purpose. It cannot be said that it is void only as against the Authorised Officer and valid as between the parties. The very purpose of

the amendment is to declare the entire transaction as a nullity from the inception. The difference in the language between the section as it stood

before the amendment and the section as it stands after the amendment is very significant. Before the amendment the Authorised Officer shall not

take into consideration certain transactions, but after the amendment, the statute itself declares the transaction to be void from the inception and a

fiction is introduced that it is deemed to be always void.

Reliance is placed upon the judgment of a Full Bench of the Andhra Pradesh High Court in Shankerlal Gupta Vs. V. Jagadishwar Rao, . The

case arose under the Hyderabad House (Rent, Eviction and Lease) Control Act and Andhra Pradesh Buildings (Lease, Rent and Eviction) Control

Act. The question was whether an agreement of tenancy between the landlord and an individual was void because the landlord failed to give notice

of vacancy to the authority under the Act. As per the provisions of the Act, every landlord was bound to give a notice of vacancy to the controller

as soon as the building fell vacant. The Act also enabled the controller to allot the vacant premises to a person and such allottee could dispossess

any unauthorised occupant. The contention before the court was that in as much as no notice of vacancy was given under the Act, the agreement of

tenancy was void and it was against the public policy. That contention was negatived by the court and it was held that as between the parties, the

transaction was valid. It was pointed out that if and when the controller allots the premises to any person under the Act, such person could

dispossess the tenant under the private lease and that does not invalidate the transaction as such between the parties thereto. The ruling has no

application to the present case.

The question has been considered by a Division Bench of this Court in Mariamma Varghese v. K.V. Balasubramanian and Ors. A.S. No. 862

of 1981 dated 11.1.1990. The appeal was against a decree dismissing a suit for specific performance. The dismissal was on the ground that the

agreement of sale was cancelled by the agreement-holders. The appeal was dismissed on the ground that there was a legal impediment to the grant

of specific performance. It was held that by virtue of Section 6of the Tamil Nadu Urban Land (Ceiling and Regulation) Act 24 of 1978, the

agreement could not be enforced. The Bench observed thus:

The impediment is that the transaction, assuming it could fructify through the hands of the court, will come within the mischief of Section 6 of the

Tamil Nadu Urban Land (Ceiling and Regulation) Act 24 of 1978, hereinafter referred to as the Act. That provision inhibits the coming into

existence of any such transaction as the present one and further says that such transaction will be null and void. The court is not supposed to lend

its hands for the purpose of arriving at this result, assuming that the plaintiff has got case on merits otherwise.

One of us sitting singly dealt with the question in detail in Hansraj Bokario v. Government of Tamil Nadu W.P. No. 4807 of 1985 dated

13.1.1993. The relevant passage in the judgment reads thus:

It is contended by learned Counsel for the petitioner that a sale in pursuance of a decree for specific performance is not a voluntary sale and it

would not fall within the scope of Section 6 of the Act. According to learned Counsel, it is a sale executed by the court and it cannot be governed

by Section 6 of the Act. There is no merit in this contention. In Hakim Enayat Ullah Vs. Khalil Ullah Khan and Another, , a Division Bench of the

court held that decree for specific performance only declares the right of the decree-holder to have a transfer of the property covered by the

decree executed in his favour and so long as the sale deed is not executed in his favour by the judgment-debtor in the suit or by the court the title to

the property remained vested in the judgment-debtor and till the execution of the sale deed, the decree-holder has no right to possession of the

properly. It was further held that the sale deed executed by a court in pursuance of a decree for specific performance is a transfer by the court on

behalf of the judgment-debtor and it is the title of the judgment-debtor to the property that is transferred by the sale deed executed by the court

and if the judgment-debtor is precluded by any enactment from transferring the property, the court cannot in violation of that provision execute a

sale deed of that property. In that case, there was a decree for specific performance and an application was filed for execution. But, by that time,

U.P. Encumbered Estates Act (25 of 1934) had come into force. Section 7(3) of the said Act precluded any transfer by the owner of the

property. The contention urged before the bench was that it prevented only the owner of the property and not the court from transferring the

property. That contention was rejected by the court and it was observed that if the judgment-debtor was precluded from transferring the property,

the court cannot in violation of that provision execute a sale deed of that property.

In Mrs. Christine Pais v. K. Ugappa Shetty and Anr. AIR 1966 Mys. 299 : (1965) 2 Mys. L.J. 692, the contention that the sale by a court

under a decree for specific performance is an involuntary sale and not inter vivos was rejected. The court held that the sale deed based on a

contract of sale, which came into existence pursuant to the decree was a transfer by the court on behalf of the judgment-debtor and the sale deed

had all the characteristics of a transfer inter vivos. Reference was also made to the judgment of the Allahabad High court in Hakim Enayat Ullah

Vs. Khalil Ullah Khan and Another, .

In Bai Dosabai Vs. Mathurdas Govinddas and Others, , the Apex Court held the events and changes in law occurring during the pendency of

an appeal against decree in a suit for specific performance have to be taken into consideration and the decree has to be moulded accordingly. They

gave effect in that case to the provisions of Bombay Tenancy and Agricultural Lands Act and Gujarat Vacant Lands in Urban Areas (Prohibition of

Alienations) Act, 1972 besides the Urban Land (Ceiling and Regulation) Act, 1976.

A Division Bench of this Court refused to grant specific performance in Mariamma Varghese v. K.V. Balasubramanian and Anr. A.S. No. 862

of 1981 dated 11.1.1990. The appellant in that case was the plaintiff who prayed for specific performance. The trial court dismissed the suit and

she preferred the appeal. But, the agreement of sale was dated 29.6.1978. The Division Bench held that there was a legal impediment to the grant

of specific performance in the provisions of the Act and consequently dismissed the appeal. On the same day, i.e., 11.1.1990, the Division Bench

also dismissed a writ petition (W.P. No. 1963 of 1984) preferred by the same person, reported in Mariamma Varghese v. The Commissioner of

land Reforms and two Ors. 1990 Writ L.R. 279. Claiming right under the agreement dated 29.6.1978, the petitioner in the Writ petition wanted

exclusion of the lands which were subject matter of the agreement in her favour from the proceedings under the Act and filed the Writ petition

against the authorities under the Act. Taking note of the rigour of the language of Section 6 of the Act, the Bench dismissed the writ petition.

In T.K. Singaram v. The Urban Land Ceiling Tribunal, Chepauk, Madras-5 and Ors. 1992 Writ L.R. 389. Another Division Bench of this

Court had occasion to consider the provisions of Section 43 of the Act. The Bench after extracting the section, observed as follows:

As would be seen from a plain reading of the Section, the Urban Land Ceiling Act Overrides the other lands for the time being in force or any

custom, usage, or agreement or decree or order of a court, tribunal or other authority. In view of Section 43 of the Urban Land Ceiling Act, the

Urban Land Ceiling Act has to be given a full play and any proceedings which are pending on the date when the Urban Land Ceiling Act comes

into force would have to cease in case the Urban Land Ceiling Act applies to those proceedings, to the extent of such application and declaration

of the excess land: A provision similar to S.43 of the Urban ceiling Act is available in Section 4 of the Tamil Nadu Land Reforms (Fixation of

Ceiling on Land) Act, 1961.

In the present case, there is no dispute that defendants 1 and 2 have lands in excess of the ceiling limit. The plaintiff as P.W. 1 has admitted in

his deposition that the defendants had lands in excess of the ceiling limit. It is also brought to our notice that the agreement in favour of the third

defendant which is marked as Ex. B-3 was subject matter of proceedings initiated under the Tamil Nadu Land Reforms Act. The Authorised

Officer had taken the view that it was hit by the Act and was a void transaction. That view was affirmed by this Court in C.R.P. Nos. 1491 and

1502 of 1983 by its judgment dated 2.4.1983. It is stated by learned Counsel for the respondents that the SLP filed against that judgment was

dismissed by the Supreme Court. Thus, there is no dispute that the provisions of the Land Reforms Act would apply to the present case and it

goes without saying that the agreement in favour of the plaintiff is as much hit by the provisions of the Act as the agreement in favour of the third

defendant. In fact, the agreement in favour of the plaintiff is much later than that of the third defendant and, therefore, it is automatically hit by the

Act. We have no hesitation in holding that the agreement is void and the plaintiff cannot get any relief in this suit in view of the provisions of the

Tamil Nadu Land Reforms Act. The view taken by the court below in this regard is correct.

In the result, we confirm the judgment and decree of the trial court and the appeal is dismissed. There will be no order as to costs.

The memorandum of cross-objections filed by defendants 1 and 2 is against the refusal of the trial court to grant costs. We do not find any

merit therein. Having regard to the facts and circumstances of the case, we affirm the conclusion of the trial court in the matter of costs. Hence, the

memorandum of cross-objections is dismissed. No costs.

It is represented by learned Counsel for the appellants that the deceased plaintiff deposited the balance of consideration in court and it has

been invested in fixed deposit in State Bank of India, Bangalapudur as per directions of this Court. Now that the dismissal of the suit is confirmed,

the plaintiff will be entitled to get back the amount deposited. The plaintiff is no more and his legal representatives have already come on record.

The legal representatives of the plaintiff, viz., appellants 2 to 5 are permitted to withdraw the amount deposited in court towards balance of sale

consideration.