Partly allowed

Smt Nagamma v. Syed Shafiulla S/O Syed Karim Sab

Karnataka HC5 Nov 2020RSA/3278/2006

Case brief

AI extract

What is this about?

An agreement to sell fragmented agricultural land during a statutory ban was held unenforceable despite postponing registration until the ban was lifted. The court partly allowed the appeal, set aside specific performance, and confirmed refund of the sale consideration with enhanced interest.

What did the court decide?

Specific performance set aside; refund of sale consideration confirmed with enhanced interest from the agreement until payment.

Smt Nagamma Vs Syed Shafiulla S/O Syed Karim Sab — Specific Performance | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 5^TH DAY OF NOVEMBER, 2020

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BEFORE

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THE HON’BLE MR. JUSTICE N.K.SUDHINDRARAO

R.S.A.No.3278/2006

BETWEEN:

1. SMT. NAGAMMA

SINCE DEAD BY HER LRs.

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V/O DATED 17.11.2014 A-2 TO A-6 ARE TREATED AS LRs. OF DECEASED A-1

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M N DHANANJAIAH S/O LATE M C NARAYANAPPA AGED ABOUT 46 YEARS

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M N NAGARAJA S/O LATE M C NARAYANAPPA AGED ABOUT 43 YEARS

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M N CHANKRASHEKHAR @ CHANDRAPPA S/O LATE M.C.NARAYANAPPA AGED ABOUT 40 YEARS.

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M N MANJUNATHA S/O LATE M C NARAYANAPPA AGED ABOUT 32 YEARS.

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ANNAPURNAMMA D/O LATE M C NARAYANAPPA AGED ABOUT 34 YEARS.

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SHARADAMMA @

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ANUSUYAMMA D/O LATE M C NARAYANAPPA AGED ABOUT 30 YEARS

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ALL ARE RESIDENTS OF Y.N.HOSAKOTE- 572 141. PAVAGADA TALUK TUMKUR DISTRICT. …APPELLANTS

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(BY SRI K P THRIMURTHY, ADVOCATE)

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AND:

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SYED SHAFIULLA S/O SYED KARIM SAB AGED ABOUT 53 YEARS RESIDING AT Y.N.HOSAKOTE PAVAGADA TALUK TUMKUR DISTRICT. …RESPONDENT

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(BY SRI HARISH H V, ADVOCATE)

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THIS RSA IS FILED U/S 100 OF CPC AGAINST THE JUDGMENT AND DECREE DATED:4.9.2006 PASSED IN R.A.No.85/2003 ON THE FILE OF THE CIVIL JUDGE(SR.DN.), MADHUGIRI, ALLOWING THE APPEAL AND SETTING ASIDE THE JUDGMENT AND DECREE DATED:6.3.2003 PASSED IN OS. No.206/1997 ON THE FILE OF THE CIVIL JUDGE (JR.DN.) & JMFC, PAVAGADA.

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THIS APPEAL COMING ON FOR FURTHER DICTATION THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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The appeal is directed against the judgment and decree dated 04.09.2006 passed in R.A.No.85/2003 by the learned Civil Judge (Sr.Dn.) Madhugiri, wherein the appeal filed by the plaintiff came to be allowed and the findings given by the trial court on issue No.7 is set aside and judgment and decree passed in O.S.No.206/1997 by the learned Civil Judge (Jr.Dn.) Pavagada, on 06.03.2003 came to be set aside and suit of the plaintiffs has been decreed in entirety with costs and the defendants are directed to execute the registered sale deed in favour of plaintiff within a period of three months from the date of decree and in case defendants fail to execute the registered sale deed, plaintiff is at liberty to get the sale deed executed through Court process and dismissed the cross appeal filed by the defendants. This appeal is preferred by the defendants.

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In order to avoid confusion and

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overlapping, the parties herein are referred to in accordance with their rankings as held by them before the trial court.

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The suit schedule property is the dry land bearing Sy.No.63, measuring 2 Acres 27 Guntas assessed at Rs.0.80 paise, situated at Hosadurga Village, Y.N.Hosakote Hobli, Pavagada Taluk, out of this 1/3^rd share of M.C.Narayanappa i.e., 0-35 Guntas only which is bounded by:

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East by:

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Remaining portion in the same survey Number which is in possession and enjoyment of N.P.V.Setty and thereafter land of Sannapalaiah.

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West by:

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Remaining 1/3^rd portion in the same Survey Number and the same has been sold by Sri Anjanappa s/o Mududi Dodda Rudrappa in favour of plaintiff and it is in possession of plaintiff.

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North by:

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Land of Peddayapa now in possession of plaintiff.

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South by:

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Y.N.Hoskote-Doddhalli PWD Road.

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Plaintiff has filed a suit for specific performance of the contract/agreement of sale dated 25-11-1990 executed by M.C.Narayanappa in favour of the plaintiff by directing the defendants to execute a registered sale deed in respect of the suit property and consequential relief of permanent injunction restraining defendants, their agents, servants, workmen and all others from interfering with the plaintiff’s peaceful possession and enjoyment of the suit schedule property.

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The substance of the plaint are: one

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M.C.Narayanappa S/o M. Chowdappa is the husband of 1^st defendant Nagamma and father of defendant Nos. 2 to 7, was the owner of the schedule property. He entered into an agreement of sale with the plaintiff agreeing to sell the schedule property for Rs.15,000/on 25.11.1990. On the same day, M.C.Narayanappa received the entire sale consideration of Rs.15,000/from the plaintiff before the witnesses and executed an agreement of sale in his favour on 25-11-1990 and as part performance of contract, M.C.Narayanappa had delivered physical possession of the schedule property to the plaintiff on the date of the said sale agreement. The defendant Nos.1 to 3 also attested their signature to the agreement of sale as consenting witnesses for the sale. Since the date of agreement, plaintiff has been in possession and enjoyment of the schedule property.

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It is further stated that, during the life time of M.C.Narayanappa, plaintiff requested him to

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execute the registered sale deed of the schedule property in his favour. However, M.C.Narayanappa had postponed and also went on postponing the execution of the registered sale deed under one pretext or the other.

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7. The said M.C.Narayanappa died during the

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year 1994 leaving behind him defendants 1 to 7 as his legal representatives. Regard being had to the fact that as on the date of his death, he had not executed the registered sale deed of the schedule property. The

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defendant Nos.1 to 7 are the legal heirs of M.C.Narayanappa. After the death of said M.C.Narayanappa, plaintiff approached his legal heirs

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for execution of registered sale deed of the schedule property in terms with the sale agreement dated

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25.11.1990. The defendants informed the plaintiff that

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they will execute the sale deed of the suit land after getting the khatha of the same changed in their names. But it did not happen. Panchayath convened in this connection were of no avail. Thereafter, plaintiff got issued legal notice on 19.07.1996. It is also claimed that the sale agreement was executed by the said M.C.Narayanappa to counter legal necessities and for the benefit of the family.

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1^st defendant filed written statement and it

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was adopted by defendant Nos.2 to 7. In the written statement defendants denied the case of the plaintiff. They contended that even otherwise the suit is barred by limitation. Deceased M.C.Narayanappa has not executed any sale agreement. It is also contended that, as the plaintiff was disturbing the possession of the defendants, defendant No.1 as kartha of the family filed a suit against plaintiff in O.S.No.236/1996

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and to over come the said suit plaintiff has filed this suit on the created suit document with an intention to have wrongful gain. It is further stated that petitioner

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is a rich person and trying to exploit the defendants and contended that they are not liable to execute the registered sale deed in favour of the plaintiff.

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On the basis of the pleadings and contentions of the parties, the learned trial Judge framed as many as nine issues and he was accommodated with the following oral and

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documentary evidence on behalf of both the parties:

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Plaintiffs:

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PW.1. Syed Shafiulla. PW.2. Gouse peer. PW.3. Hanumantharyappa.

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Ex.P.1 Agreement of sale. Ex.P.1(a) and (b) Signature of the deceased M.C.Narayanappa. Ex.P.1(c) Signature of M.C.Ramakrishna. Ex.P.1(d) Signature of B.Gouse peer. Ex.P.1(e) Signature of M.N.Nagaraja. Ex.P.1(f) Signature of M.N.Dhananjaya.

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Ex.P.1(g) Signature of M.C.Ramachandrappa. Ex.P.1(h) Signature of D.N.Hanumantharayappa. Ex.P.1(i) Signature of scribe Sheshagiri Sharma. Ex.P.1(j) Thumb impression of wife of M.C.Narayanappa. Ex.P.2 RTC extract. Ex.P.3 Legal notice. Ex.P.4 Reply notice. Ex.P.5 Copy of the Judgment in R.A.No.201/69. Ex.P.6 Certified copy of the LRMCR 237/76-77.

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Defendants:

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DW.1 Dhananjaya. DW.2 M.N.Chandrashekra. DW.3 Nagaraja. DW.4 Nagamma.”

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Ex.D.1 Xerox copy of the sale deed.

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On the basis of the oral and documentary

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evidence available in file, learned trial Judge partly decreed the suit of the plaintiff with costs. The relief of specific performance of contract came to be refused. However, the suit is decreed for the amount of Rs.15,000/- together with interest at 6% p.a. and defendants were restrained from interfering with the peaceful possession and enjoyment of the suit

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schedule property by the plaintiff till the same is recovered through due process of law.

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Being aggrieved by the said judgment and decree, the plaintiff approached the appellate court in R.A.No.85/2003 and defendants also filed counter appeal seeking to set aside the entire judgment passed in the suit and to dismiss the suit with costs.

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The appellate court reversed the judgment and decree of the trial judge by setting aside the finding on issue No.7 holding that the matter covered therein become insignificance and decreed the suit of the plaintiff in its entirety with costs as mentioned above. Against which, defendants are before this court.

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This court while admitting the appeal on 20-06-2009, framed the following substantial questions of law:

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“(1) Whether the lower appellate court was justified in decreeing the suit in its entirety and in this regard whether the judgment is contrary to the provision contained in the contravention of the prevention of Fragmentation and consolidation of Holding Act and the decision rendered by this court in ILR 2003 KAR 4535?

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(2) Whether the lower appellate court has committed an error in computing the cause of action for the purpose of holding that the suit is within time?”

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Before delving on the other aspects, it is necessary to mention issue No.7 framed by the trial court which is as under:

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Issue No.7.

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“Whether the defendants prove that in order to escape from the orders in OS No.236/1996 the plaintiff has suppressing the facts filed this suit?”

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The sale agreement dated 25.11.1990 is between Syed Shafiulla son of Syed Karim Sab and M.C.Narayanappa son of M.Chowdappa wherein the

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later entered into the agreement with plaintiff to sell

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suit schedule property for a cash consideration of

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Rs.15,000/- and full amount of sale consideration was paid and possession was delivered. It is stated therein that as there was restriction for getting the sale deed registered seller undertakes to execute the registered sale deed whenever restriction is lifted.

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Learned counsel for appellants/defendants submits that the agreement of sale stated to have been executed by M.C.Narayanappa dated 25.11.1990 is to sell the schedule property for Rs.15,000/-. Further the trial court and first appellate court seriously erred in not considering the fact that the suit filed by plaintiff was barred by time. The first appellate court erred in directing appellants/defendants to execute the registered sale deed of the schedule property. It is further submitted that in the light of ignoring the restriction applicable to fragmented land, both the courts have not at all considered the scope and object of the Prevention of

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Fragmentation and Consolidation of Holdings Act with reference to relevant provisions of Karnataka Land Reforms Act. On facts or on law both courts could not have held unless identified as independent plot of land irrespective of its extent. In support of his submission,

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he relied on the following decisions:

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“1.Smt.Parvathamma & Ors.v.Smt.Uma and Ors. – AIR 2011 Kar 58.

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2.Smt.Khamarunnisa vs Mudalappa – ILR 2003 Kar 4535.

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V.S.Munirathanam, since deceased by LRs. vs P Sundaram, since deceased by LRs and Others. – ILR 2004 KAR 2328.

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Sri Venkatanaraynappa vs Sri Siddappa – ILR 2007 KAR 1323.

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Smt. Saraswathi Ammal vs Sri V C Lingam and Another. – 1993 (1) KarLJ 196(DB).”

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Learned counsel for respondent-plaintiff

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would submit that the land agreed to be sold is 35 guntas in Sy.No.63 and that the plaintiff has also entered into agreement with neighbouring owners

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apart from his own land of 35 guntas and thus, considering the total extent of land there is no violation of Prevention of Fragmentation and Consolidation of Holdings Act. It was also submitted that there is no pleading to the effect of violation of said Act.

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In plain presentation, following facts are amply clear:

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This is a defendants’ appeal directed against the Judgment and decree passed in R.A.No.85/2003 on the file of the learned Civil Judge (Sr.Dn), Madhugiri. By the said Judgment the learned Civil Judge (Sr.Dn) allowed the appeal filed by the plaintiff and finding given on issue No.7 was set aside and suit was decreed as prayed for. Insofar as issue No.7 as framed by the learned trial Judge is as under:

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“Whether the defendants prove that in order to escape from the orders in O.S.No.236/1996 the plaintiff has suppressing the facts filed this suit?”

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Incidentally on verification it could be seen

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that the issues framed by the trial court and findings

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on them are as under:

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“1. Whether the plaintiff proves that the husband of the 1^st defendant and father of the defendants No.2 to 7 one M.C.Narayanappa had executed an agreement of sale dated 25.11.1990 agreeing to sell the suit schedule property and received Rs.15,000-00 towards full consideration of the agreement of sale?

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Whether the plaintiff proves that he is always ready and willing to take the sale deed in his favour?

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Whether the plaintiff proves that he is in possession of the suit schedule property in pursuance of the sale agreement and he is also in possession as on the date of the suit?

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Whether the plaintiff proves that the defendants were interfering with his peaceful possession and enjoyment of the suit schedule property?

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Whether the defendants prove that the suit agreement has been concocted by the plaintiff?

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Whether the suit is barred by Limitation?

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Whether the defendants prove that in order to escape from the orders in O.S.No.236/1996 the plaintiff has suppressing the facts filed this suit?

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Whether the plaintiff is entitled for the relief claimed in this suit under the specific Relief Act?

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What order or Decree?”

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Answers:

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“Issue No.1: In the affirmative. Issue No.2: In the affirmative. Issue No.3: In the affirmative. Issue No.4: In the affirmative. Issue No.5: In the negative. Issue No.6: In the negative. Issue No.7: In the affirmative. Issue No.8 and 9: As per final order.

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In the total context and circumstances of

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the case, the agreement does not appear to be seriously disputed. The defendants contend that

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defendant No.1 filed a suit for injunction in O.S.No.236/1996 before the trial court. The plaintiff

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has filed the present suit without even pleading regarding the said suit. At the end of the day regarding execution of the sale agreement it is held in the affirmative.

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On facts and evidence both the courts have upheld the execution of sale agreement as contended by the plaintiff. As it is the case of the plaintiff that M.C.Narayanappa, husband of defendant No.1 and father of defendant Nos.2 to 7 executed sale agreement and received sale consideration of Rs.15,000/- on 25.11.1990, the possession also is claimed to be with the plaintiff. He states that he is in possession of the schedule property in part performance of the contract. The operative portion of the Judgment of the trial court is as under:

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“The suit of the plaintiff is partly decreed with costs. The relief for Specific Performance of contract is refused and the suit is decreed for Rs.15,000/- with interest @ Rs.6% p.a. Further the defendants are restrained from interfering with the peaceful possession and enjoyment of the suit schedule property by the plaintiff till the same is recovered through due process of law.”

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Thus, the suit came to be decreed for specific performance in part wherein plaintiff was held entitled for refund of the advance money of Rs.15,000/- together with interest at the rate of 6% p.a. Further defendants were restrained from interfering with the peaceful possession and enjoyment of the schedule property by the plaintiff.

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In this connection it is necessary to

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mention that issue No.3 framed by the learned trial Judge is as under:

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“Whether the plaintiff proves that he is in possession of the suit schedule property in pursuance of the sale agreement and he is also in possession as on the date of the suit?”

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And finding to the said issue is in the affirmative. Being aggrieved by the said Judgment and decree of the trial court plaintiff preferred appeal sought for decree of specific performance in tandum. Even appellate court in R.A.No.85/2003 at pages 21 and 22 of the Judgment has clearly held that the plaintiff established delivery of possession of the schedule property. The RTC extract of the year 1995-96 of Sy.No.63 of Hosadurga Village, Y.N.Hosakote Hobli, Pavagada Taluk shows that one Nagamma is in

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possession of the schedule property to the extent of 2 acres 27 guntas.

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To sum up the result of the entire proceedings before the trial court and first appellate court is that former held that the plaintiff is entitled for refund of advance amount together with interest at 6% p.a. Per contra, latter has held that plaintiff is entitled for decree for specific performance and directed the defendants to execute the registered sale deed in favour of the plaintiff within a period of three months from the date of the decree.

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The substantial questions of law framed for

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consideration in this appeal are as under:

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(2) Whether the lower appellate court has committed an error in computing the cause of action for the purpose of holding that the suit in within time?”

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I find in the nature and circumstances of the case whether schedule property forms a fragment or independent piece of land; whether claim of the plaintiff that in the light of he being abutting owner there is no problem of violation of the agreement and whether the agreement entered into between the plaintiff and defendants is barred under the Indian Contract Act, 1872.

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Points that are amply clear are:

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Sale agreement is dated 25.11.1990, property

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agreed to be sold by late M.C.Narayanappa is 35 guntas of land in Sy.No.63 of Hosadurga Village, Y.N.Hosakote Hobli, Pavagada Taluk, for a cash consideration of Rs.15,000/- and it was agreed between the parties that in the light of prohibition of

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transfer of agricultural land with reference to the Prevention of Fragmentation and Consolidation of Holdings Act he would execute the registered sale deed after lifting of ban. The Prevention of Fragmentation and Consolidation of Holdings Act was originally passed in the year 1966 and it notified the lands that cannot be transferred in any of its form.

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The word `fragment’ is defined in Section 2(g) of

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the Karnataka Prevention of Fragmentation and Consolidation of Holdings Act, 1966 and it is as under:

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“Fragment” means a holding of land of less extent than the appropriate standard area determined under Section 3:

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Provided that no holding shall be deemed to be fragment by reason of any diminution in its area by diluvian;

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The definition of “Fragment” has to be read as per Section 5. Section 5 of the Prevention of

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Fragmentation and Consolidation of Holdings Act is as

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under:

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“5.Sale Lease, etc.-(1) (a) No person shall sell any fragment in respect of which a notice has been given under sub-section (2) of Section 4, except in accordance with the provisions of clause (b).

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[(b)] Subject to the provisions of Sections 39 and 80 of the Karnataka Land Reforms Act, 1961 (Karnataka Act 10 of 1962), whenever a fragment is proposed to be sold, the owner thereof shall sell it to the owner of a contiguous survey number or recognized sub-division of a survey number (hereinafter referred to as the contiguous owner). Is the fragment cannot be so sold to the contiguous owner, for any reason, the owner of the fragment shall intimate in the prescribed form, the reasons therefore along with an affidavit in support thereof to the Tahsildar and also send copies of such intimation and affidavit to the Subregistrar, in the prescribed manner and may thereafter sell such fragment to any other person.]

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(2) Notwithstanding anything contained in any law for the time being in force or in any instrument or agreement, no such fragment shall be leased to any person other than a person cultivating any land, which is contiguous to the fragment.

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(3) No such fragment shall be sub-divided or partitioned.”

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Insofar as fragment of agricultural land is

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concerned, when a person wants to sell the land he may have to chose the contiguous owner recognized as sub-division survey number. It is in this connection I have perused ILR 1992(1) Kar 716. Under Section 6 of the Act fragmentation is prohibited even against partition or sub-division so as to create a fragment. On connected reading of Section 5 and 6 indicates that neither fragmented land could be sold nor transfer of such land can be made in order to create fragment to circumvent the provisions of Section 5. I have also perused ILR 1987 Kar 867. For the purpose of identifying and understanding fragment, one has to resort to the combined study of both the Prevention of Fragmentation and Consolidation of Holdings Act and the Karnataka Land Reforms Act, 1961.

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The rigorosity of fragmented land is such

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that even it cannot be sold in court sale or created by

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such sale which is clearly focused under Section 7 of the Act. Now as I have stated above, the extent

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agreed to be sold is 35 guntas of land out of 2 acres 27 guntas in Survey No.63.

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As per the latest amendment, the nature

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and extent of fragmented land is notified as under:

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Sl. No.	Class of Lands	Area
(1)	(2)	(3)
1.	A Class	One-half acre.
2.	B Class	Three- fourth acre.
3.	C Class	One and one- fourth acre.
4.	D Class	Two and seven- tenth acres.

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Explanation.- In this Schedule ‘A’ Class, ‘B’ Class, ‘C’ Class or ‘D’ Class shall have the meaning assigned to them in the Karnataka Land Reforms Act, 1961.”

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The above schedule has to be read with

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reference to the Karnataka Land Reforms Act. The notification of land is made under Schedule I with reference to Section 2(a) and 35(a) of the said Act. The meaning of classes of land under A class, B class,

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C class and D class are notified and they are as under:

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“A Class

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Lands having facilities for assured irrigation from such Government Canals and Government Tanks as are 2[*****] capable of supplying water for growing two crops of paddy 3[or one crop of sugarcane] in a year.

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B Class

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(i) Lands having facilities for assured irrigation from such Government Canals and Government Tanks as are 4[*****] capable of supplying water for growing only one crop of paddy in a year.

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(ii) Lands irrigated by such life irrigation projects constructed and maintained by the State Government as are 5[*****] capable of supplying water for growing two crops of paddy 6[or one crop of sugarcane] in a year.

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C Class

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(i) Lands irrigated from any Government sources of irrigation, including life irrigation projects constructed and maintained by Government other than those coming under A Class and B Class.

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(ii) Lands on which paddy crop can be raised or areca crop is grown with the help of rain water.

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(iii) Lands irrigated by lifting water from a river or Government canal or Government tank where the pumping installation or other devise from lifting water is provided and maintained by the land owner.

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Note.-(1) Lands having facilities for irrigation from a Government source where the system of water supply is suitable for growing only light irrigated crop namely, crops other than paddy and sugarcane shall come under this class.

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(2) Lands growing irrigated garden crop will come under Classes ‘A’, ‘B’ or ‘C’ as the case may be depending upon the source of irrigation and the system of water supply.

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D Class

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Lands classified as dry but not having any irrigation facilities from a Government source.

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Note.- Lands growing paddy or garden crops not coming under A Class, B Class or C Class shall belong to this class.”

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There is no dispute as to the classification of

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land. The schedule property is concerned, it falls under ‘D’ class which means “ lands classified as dry but not having any irrigation facility from a government source.” Invariably, the extent of land comes up to 2 and 7/10^th acres, calculating in guntas, at 40 guntas per acre, 7/10^th would be 28 guntas. So totally the ceiling limit of land for sale shall not be less than 2 acres 28 guntas. In this connection, no doubt, total extent itself is 2 acres 27 guntas in survey No.63 and in case it was sold in its entirety it would not have attracted Prevention of Fragmentation and Consolidation of Holdings Act. But here the land in question is 35 guntas of land.

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Learned counsel Sri.Harish Kumar for plaintiff/respondent strenuously submitted that agreement cannot be rejected on the basis of fragment for two reasons:(1) It was not pleaded by

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the defendants before the courts and (2) It was not the case of the defendants that they are the owners of the adjacent land. Thus, he purchases the land abutting that is another 35 guntas of land. It is necessary to mention that in this connection Sections 5 and 6 are to be read with conjunction. A person may be the owner of the land which is a portion of a decreed land. But the question is, whether such land was fragmented and separated from the original survey number and new survey number is allotted to it in the records maintained by the competent authority. On the other hand, on the basis of several owners enjoying different bits of land out of total land, it cannot apply to each portion of the land as separate fragmented land when they are less than the fixed extent. The question of contiguous land cannot be applied in the absence of documents.

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The suit schedule mentioned in the plaint

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does not indicate that suit schedule property is sold well out of the limitation of the Act. Now the applicability of the ban is concerned, as stated above, the act was passed in the year 1966. The restriction of transfer of fragmented land came into force and however such restriction commenced from 28.6.1983. Thus, by virtue of the enforcement of the restriction may be by the court through amendment of the year 1983 fragmented land could not have been sold. It is necessary to mention, the restriction against transfer is not only in respect of the sale deed transferring or any of its form was prohibited within the meaning of Section 5 of the Transfer of Property Act, such as sale, mortgage, lease, gift or exchange or any other mode having the effect of transfer of ownership. However, the restriction was lifted on 05.02.1991. The present sale agreement is entered

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into between the parties on 25.11.1990. Now the question is, parties have specifically agreed that there was restriction for transfer of land when it was entered into and hence, they agreed for getting the registered sale deed to be executed after lifting of ban. What is guaranteed by the above phenomena is, parties were aware that there was prohibition to sell fragmented land and they agreed to get it done when

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once ban is lifted. It is to be understood that, whenever there is a law by means of statute or notification it cannot be taken for granted that it is not

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going to ever last unless contrary is understandable and that it cannot go on the premise that when you cannot break the law bend it.

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In this connection, it is necessary to

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mention Section 23 of the Indian Contract Act, 1872 which deals with the agreements opposed to the public policy, which reads as under:

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“23. What consideration and objects are lawful, and what not.- consideration or object of an agreement is lawful, unless-

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It is forbidden by law; or

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Is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or

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Involves or implies, injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.”

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Second category of agreement mentioned

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under Section 23 of the Indian Contract Act is, agreement which is of such a nature that if permitted would defeat the provisions of law. When once particular act is forbidden there cannot be an alternative access to keep such prohibited contracts and transactions alive so that it could be ratified. It is necessary to be aware that what is prohibited by law cannot be ratified by the parties. Under such

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circumstances, the agreement cannot be allowed to be enforced in its strict sense in violation of the said Act.

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The next aspect is, as per the agreement

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the plaintiff has paid the full consideration of Rs.15,000/- to the defendants and both courts held that plaintiff is in possession of the land. In the matters of performance or non performance equitable principle is Doctrine of quantum meruit which means as much as meruited and no one can be allowed to enrich unjustly at the cost of another.

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It is in this connection, it appears the trial court has granted the relief of refund of sale consideration amount of Rs.15,000/- together with interest at 6% p.a. Here, I find it is right on the part of the trial court to order for refund of sale consideration of Rs.15,000/- but the rate of interest awarded appears to be very much on the lower side.

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Considering the cost of living of the year 1990, a minimum rate of interest at 12% should have been ordered. I find the equitable principle would be if the plaintiff is ordered to be entitled for refund of sale consideration of Rs.15,000/- with interest at 12% p.a.

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right from the date of sale agreement i.e. on 25.11.1990 till payment. The substantial questions of law are answered accordingly.

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For the aforesaid reasons, the appeal is

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allowed in part.

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The prayer of defendants for dismissal of suit in its entirety is hereby rejected. The judgment and decree dated 04-09-2006 passed in R.A.No.85/2003 passed by the learned Civil Judge (Sr.Dn) Madhugiri is set aside and the judgment and decree passed by the trial court in O.S.No.206/1997 on 6.3.2003 is hereby confirmed insofar as decreeing suit for Rs.15,000/-.

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However, the rate of interest is awarded at 12% p.a.

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instead of 6% p.a. from the date of agreement till its

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payment.

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Sd/JUDGE

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tsn*/ SBN