Hulagaiah vs State of Karnataka and Others

The petitioner, in this writ petition under Articles 226 and 227 of the Constitution, has sought for quashing the order (Annexure-B) made by the Special Deputy Commissioner, respondent-2 herein, on 2-9-1985 in case No. PTCL 346/1984-85.

A few facts that are necessary for the disposal of this writ petition are as follows:

It is not in dispute that, by an order dated 19-8-1963 made by the competent authority, certain land in Sy. No. 391 situated in Bachihalli Village, Gundlupet Taluk, Mysore District, was granted in favour of the petitioner Hulagaiah under the Karnataka Land Grant Rules then prevailing. It is also not in dispute that one of the conditions imposed was that the grantee should not alienate the granted land for a period of 15 years. The grantee was cultivating the land in terms of the grant.

Subsequently, the petitioner-grantee entered into an agreement with one Siddaiah, husband of respondent-4 "Smt. Chinnamma, on 13-4-1969 by which the petitioner agreed to sell the land in favour of the said "Siddaiah" on certain conditions. Accordingly, he received a sum of Rs. 6,000 as part of the sale amount under the said agreement. He did not repay the amount in question nor did he convey the property in favour of Siddaiah."

On the death of Siddaiah, his wife, respondent-4 filed a suit in O.S. No. 248 of 1972 on the file of the Court of the Addl. Munsiff, Nanjangud, with the following prayer:

(i)for specific performance of the contract directing the defendant to execute a sale deed in her favour in terms of the agreement;

(ii)to give actual possession of the suit land free from mortgage in terms of the agreement; or (iii)in the alternative, to pay a sum of Rs. 7,620/- with current interest on Rs. 6,000/-from the date of suit till realisation of the said amount.

That suit came to be decreed on contest by an order made on 24-11-1972. It is stated that the decree came to be passed pursuant to the mutual understanding that the sum of money received under the agreement shall be paid in four equal annual instalments with one single default clause.

Later on the coming into force of the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978 (hereinafter called the Act) (Karnataka Act No. 2 of 1979 which came into force on 1-1-1979), the petitioner grantee approached the Assistant Commissioner, respondent-3, seeking benefit under Sections 4 and 5 of the Act. Section 4 of the Act reads:

"4. Prohibition of transfer of granted lands.-(1) Notwithstanding anything in any law, agreement, contract or instrument, any transfer of granted land made either before or after the commencement of this Act, in contravention of the terms of the grant of such land or the law providing for such grant, or sub-section (2) shall be null and void and no right, title or interest in such land shall be conveyed nor be deemed ever to have conveyed by such transfer.

(2) No person shall, after the commencement of this Act, transfer or acquire by tranfer any granted land without the previous permission of the Government.

(3) The provisions of sub-sections (1) and (2) shall apply also to the sale of any land in execution of a decree or order of a Civil Court of any award or order of any other authority.-

The petitioner had sought for an order in terms of Section 4 declaring that the transaction of the agreement was null and void and that he was entitled for the benefit under the Act.

The Assistant Commissioner, by an order dated 17-1-1981, allowed the application of the petitioner and directed restoration of the land in his favour.

Aggrieved by the said order, the matter was taken up before the Deputy Commissioner, Mysore, by respondent-4, in appeal.

The learned Deputy Commissioner, by the order made as per Annexure-B, reversed the order of the Assistant Commissioner and allowed the appeal of respondent-4. Although he passed a detailed common order clubbing a number of cases, he has not given cogent reasons except saying that the Court decree came to be passed by the Civil Court after the expiry of 15 years period of non-alienation. Therefore, he held that the petitioner was not entitled for the benefit under the Act. Hence this petition.

Sri N.S. Srinivas Anand, learned counsel for the petitioner, argued that the view taken by respondent-2 Deputy Commissioner reversing the order of the Assistant Commissioner-respondent-3 and holding that the petitioner was not entitled for the relief under the Act, was erroneous and that therefore the impugned order was liable to be quashed. He has taken a number of grounds to sustained this stand.

Sri Kumar, learned counsel for respondent-4, however, argued that the money decree that was passed by the Court in O.S. No. 248 of 1972 was executed and the landed property was sold in public auction through Court on 1-6-19/8 though the sale came to be confirmed by the Civil Court on 28-7-1979. Therefore, according to him, as on the date of confirmation of sale, prohibitory period of 15 years having expired, question of application of Sections 4 and 5 of the Acs did not arise. Therefore, the view taken by the Deputy Commissioner being justified, this Court should not interfere with it.

Sri M. Jagannath, learned Government Advocate, adopted the arguments advanced by Sri Anand, learned counsel for the petitioner.

In view of the arguments advanced on both sides, two questions arise for my consideration. They are:

(1) Whether the sale taken place in public auction through Court on 1-6-1978 is hit by clause (e) of sub-section (1) of Section 3 of the Act.

(2) Whether the Deputy Commissioner was justified in holding that the sale in the present case having taken place after the expiry of 15 years period of non-alienation, Section 4 was not attracted.

Considering the first point, which is a legal point, it is necessary for me to extract clause (e) of sub-section (1) of Section 3 of the Act. It reads:

"(e) ''transfer'' means a sale, gift, exchange, mortgage (with or without possession), lease or any other transaction on being a partition among members of a family or a testamentary disposition and includes the creation of a charge or an agreement to sell, exchange, mortgage or lease or enter into any other transaction."

xx xx xx xx xx xx

It is true that by perusal of the above clause, the word ''sale'' is included therein and according to the said clause, any transaction including a sale, not being a partition among members of a family or a testamentary disposition, is brought within the meaning of the Act. In other words, if admittedly the sale of property in question has taken place in public auction through Court on 1-6-1978, could it be said to be a sale, unless the said sale is duly confirmed by the Court order, as has been done in the instant case on 28-7-1979.

The argument is that, having regard to the scope of Order 21, Rule 92, C.P.C. the sale held in public auction through Court will not complete until it is confirmed, and till then it cannot be said to be a sale. Learned counsel placed reliance on the following three decisions.

(1) 1977(1) Kar. L.J. 300, Kanvihalli Chinnappa v Tigari Shivappa & Others.

(2) 1964(1) Kar. L.J. 166, Chayappa Santammappa v Mahamad Hasan & Others.

(3) AIR 1974 Gujarat 218, Chimanlal Narsibhai Patel v Amratlal Chhotalal Shah and Another.

In the first of the three decisions referred to above, it is true that Jagannatha Shetty, J., as he then was, disposing of a civil revision petition arising out of execution sale of immovable property through Court and interpreting Sections 79-A and 80 of the Karnataka Land Reforms Act, 1964 (the Act of 1961 for short), held as follows:

"The executing Court, before confirming a sale is not competent to examine its validity with reference to the provisions of Sections 79-A and 80 of the Karnataka Land Reforms Act. The executing Court cannot examine the question whether the sale is in contravention of Sections 79-A and 80 of the Land Reforms Act, since the sale is not completed before it is confirmed. It is only a completed sale which could be challenged as being in contravention of the provisions of the Land Reforms Act and not the sale which has not yet been confirmed."

By a careful consideration of the facts and circumstances and the question of law arose in that case and the consideration made by the Court, it is clear that the main question was whether the execution sale through Court would affect Sections 79-A and 80 of the Act of 1961. The Court was not called upon to decide the question whether the Court sale that had taken place on a particular date would affect the right of the judgment-debtor particularly applying the provisions of Sections 4 and 5 of the Act. That was not the question that was put to decide in that case. In the instant case, we are not concerned with the application of Sections 79-A and 80 muchless we are interested to know when the Court sale came to be confirmed. Therefore, that decision is of no assistance to us to decide the relevant question.

In the second decision referred to above, the Division Bench was considering the question whether Sections 63 and 85 of Bombay Tenancy and Agricultural Lands Act could be applied to a property sold in execution through Court. Therefore, in that case, Their Lordships were considering the application of Bombay Prevention of Fragmentation and Consolidation of Holdings Act applying Sections 7, 8 & 9. Having regard to the peculiar facts and circumstances of that case, Their Lordships held that the question whether a sale is or is not invalid under Section 63 can arise if there is a completed sale and that question could not therefore arise in an application under Rule 90 of Order 21, C.P.C. The observations made therein would help us know whether the provisions of Rules 90 and 92 of Order 21, C.P.C. could be applied to the facts of this case. I am of the opinion that the view expressed in that case would not enure to the benefit of the petitioner herein. Therefore, that decision does not directly apply to the facts of this case.

Lastly in Gujarat''s case, His Lordship Mehta, J., was considering the question whether the auction purchaser would have the right to the property sold in execution after confirmation and not before that date. Now again, we are not concerned with such a question in this case. Therefore, that decision is also of no assistance to the petitioner.

It is true that Order 21, Rule 82, C.P.C. confers necessary powers upon the Civil Court to sell immovable property, subject matter of decree in execution case. It is again true that Rule 92 of Order 21 deals with the question as to when sale would become absolute or when such sale could be set aside and under the circumstances. It would say that for the purpose of deciding the question arising in the instant case, it is not necessary for me to understand the scope of Rule 82 or 92 of Order 21, C.P.C. inasmuch as in the present case we are concerned with the question whether the sale admittedly taken place on 1-6-1978 through Court could be said to be a sale or could it not be said to be a sale unless it is confirmed by the Court under Rule 92 of Order 21 as has been done here on 28-7-1979 because if the sale of property that has taken place on 1-6-1978 is said to be a sale within the meaning of the word "transfer" defined under clause (e) of sub-section (1) of Section 3 of the Act, then the Court will have to answer in favour of the petitioner. On the other hand, if such a sale cannot be said to be a sale unless it is confirmed by the Court by another order as has been done in the present case on 28-7-1979, then the petitioner shall not be entitled for the benefit under the Act because the sale of the granted land, if date of confirmation of sale is taken into consideration, is clearly after the expiry of the period of 15 years prohibitory period.

Section 54 of the Transfer of Property Act defines the word "sale". It reads:

"54. "Sale" defined-"Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised."

"Contract for Sale" is again defined in the said section that a contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.

There are two aspects to be considered to answer the first point in the instant case. One, admittedly, there is a contract viz., the agreement entered into between the two parties which has given rise to the suit seeking for specific performance of the contract, though later, by consent, decree came to be passed for recovery of money. If that agreement which has been made basis for the suit gives rise to the cause of action, can we not consider the said agreement as contract for the sale of immovable property viz., the land in question?

Indeed, we may fall back upon the language employed in Section 4 of the Act wherein the agreement is also included in the non-abstante clause. If such an agreement has given rise to the transfer of granted land and is made basis for the suit, then I must say that the agreement itself is void because Section 4 clearly mentions that such an agreement shall be null and void and no right, title or interest in such land shall be conveyed nor be deemed ever to have conveyed by such transfer. Secondly, sub-section (3) of Section 4 provides that the provisions of sub-sections (1) and (2) shall apply also to the sale of any land in execution of a decree or order of a Civil Court or of any award or order of any other authority. (emphasis supplied)

In the instant case, admittedly, the sale of the land in question came to be made by an order of the Court-whether by an order or decree-which terms are completely covered by sub-section (3) of Section 4 of the Act. Therefore, the agreement entered into between the parties intending to transfer the land in question by way of sale having given rise to a suit resulting in a decree in execution of which the sale of the granted land came to be made through Court, itself is hit by Section 4 of the Act thereby entitling the applicant/grantee to seek relief under the Act. Unfortunately, the Deputy Commissioner failed to understand the correct interpretation of the above provisions of law.

In order to understand whether the sale of immovable property made by the Court of law in terms of Order 21, Rule 82 could be said to be a sale without passing an order confirming the said sale under Order 21, Rule 92, C.P.C. I may straight away refer to one of the decisions of this Court in Siddaveerappa & Another v Jalal Khan and Another, AIR 1953 Mysore 87. In that case, the question was whether the depositing of the amount of sale by the auction purchaser on the date of sale would enure to the benefit of the depositor without awaiting 30 days as required under Rule 92 of Order 21. Indirectly, this will answer our question because mere depositing the amount in pursuance of the sale of land by the Court without giving 30 days time to the person who may file an application for setting aside the said sale, does not make the sale absolute. Answering the question, the Court said:

"Sale cannot be confirmed within 30 days from the date of acceptance of the bid which date must be deemed to be the date of the sale and not the actual date on which the sale was held."

Therefore even before passing an order of confirmation as required under Rule 92 of Order 21, the sale of immovable property through Court is held to be a proper sale.

There is one more judgment of Oudh Court directly on this point. In Iqbal Narain & Others v Raj Kumar Bakshi, AIR 1934 Oudh 25, a Division Bench of Oudh Court directly dealing with this question held as follows:

"Directly a bid is made the sale cannot be said to be concluded. It is only on the date when the bid is accepted and a declaration made about a person being purchaser, which declaration is to be followed immediately with the deposit of the one-fourth of the purchase money (when the decree-holder is the purchaser the Court may dispense with this requirement) that the sale can be said to have been completed. And the sale can be confirmed only 30 days after such declaration when the sale becomes complete or concluded in order to enable the judgment-debtor to take advantage of the provisions of Rules 89 and 90."

In view of the ruling of the Oudh Court, I am clearly of the opinion that even before the confirmation of the sale made through Court as required under Rule 92, the sale is complete on the date of the sale of the property through Court with the deposit of the sale amount. In the instant case, it is not in dispute that the sale has taken place on 1-6-1978 though the order of confirmation came to be passed on 28-7-1979.

Again in the instant case, we need not go so deep to understand the crux of the matter involved in the case bacause with a view to understand the object sought to be achieved under the Act, we have to refer to clause (e) of sub-section (1) of Section 3 where in the word ''sale'' is mentioned. Therefore, I have no alternative but to hold that since the property in question came to be sold by the executing Court on 1-6-1978 and since on that day itself the bid amount was deposited by the bidder, the sale is complete. There is no need for us to answer the question whether 30 days time as required under Rule 92 of Order 21 should be given for passing an order of confirmation. In other words, it was only for the purpose of procedure, it has been followed. Indeed, the object of Rule 92 is entirely different from the one which we would like to consider applying the provisions of the Act.

Lastly the great author Benjamin on Sale Eighth Edition quoted at page 441 of the Law Lexicon By T.P. Mukherjee & K.K. Singh, Vol-II, 1971 Edition, defined a valid sale as follows:

"What elements constitutes a valid sale.

To constitute a valid sale there must be a concurrence of the following elements, namely:

(1) parties competent to contract;

(2) mutual assent;

(3) a thing, the absolute or general property in which is transferred from the seller to the buyer; and (4) a price in money paid or promised."

Taking into consideration the generic terms defined above by the great author, I am of the opinion that when the Court has sold the property in public auction on 1-6-1978 and has received the sale price, the sale of the property in question is complete, though for the purpose of procedural regularity, a further order of confirmation is necessary as required under Rule 92. But that is only for the purpose of confirming the sale of the property of the judgment-debtor or any person claiming under him. We are not concerned in this case with the right of any third person. Therefore, viewed from these circumstances, I am clearly of the opinion that the sale of the granted land that has taken place on 1-6-1978 is made in contravention of the condition of the grant thereby bringing home the benefit that is accrued to the petitioner under Section 4 of the Act. Unfortunately, the Deputy Commissioner failed to apply his mind to the real perspective looking into the language employed in that section and he thereby took a different view from the view expressed by the Assistant Commissioner.

Sri Kumar, learned counsel for respondents, has not been able to persuade me to accept his contention to the contrary.

In the result, this writ petition is allowed. The impugned order, Annexure-B is quashed.