In a second appeal regarding a suit for specific performance of a sale agreement on leased land, the High Court of Orissa answered a substantial question of law against the plaintiff. The court held that the agreement became unenforceable upon the government's refusal of transfer permission.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
HIGH COURT OF ORISSA : CUTTACK RSA NO.380 of 2022
In the matter of an Appeal under Section-100 of the Code of Civil Procedure, 1908 assailing the judgment and decree dated 10th October, 2022 & 21st October, 2022 respectively passed by the learned 2nd Additional District Judge, Bhubaneswar in RFA No.10/49 of 2014/12 confirming the judgment dated 29th September, 2012 & decree dated 16th October, 2012 respectively passed by the learned 1st Additional Senior Civil Judge, Bhubaneswar in Title Suit No.07/190 of 2012/1984.
Chatrubhuja Behera (Since … Appellants
Dead) by his LRs, namely,
Pramila Behera &Others
-:: VERSUS ::-
Sabitri Sahu & Others … Respondents
Advocate(s) who appeared in this case by hybrid arrangement
(virtual/physical) mode.
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For Appellants … Mr. B.Bhuyan, Advocate
For Respondents … Mr. R.K. Mohanty, Sr. Advocate
with Mr. J. Panda, Advocate for
R-7
Mr. P.P. Parida, (Advocate for
R.1,2,3,4,4(a), 5 and 6)
Mr. G. N. Rout, ASC for R.8
------
CORAM :
MR. JUSTICE D.DASH
--------------------------------------------------------------------------------------- Date of Hearing: 19.12.2023 :: Date of Judgment: 15.02.2024
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D.Dash,J . The Appellants, by filing this Appeal, under Section-100 of the
Code of Civil Procedure, 1908 (for short, ‘the Code’) have assailed the judgment and decree passed by the learned 2nd Additional District Judge, Bhubaneswar in R.F.A. No.10/49 of 2014-12.
One Brundaban Behera, the Predecessor-In-Interest of these
Appellants as the Plaintiffs had filed Title Suit No.07/190 of 2012-1984 for specific performance of contract dated 06.01.1973 seeking further direction to the original Defendant, namely, Jhula Sahu, the Predecessor-In-Interest of Respondent Nos.1 to 4(a). The same stood dismissed with a direction to the Defendants to refund a sum of Rs.2900/- to the Appellants (Plaintiffs) with pendente lite and future interest @ 6% per annum. These Appellants being the unsuccessful Plaintiffs carried the Appeal under section 96 of the Code, which has also been dismissed confirming the judgment and decree passed by the Trial Court. Hence, the present Second Appeal is at the instance of the Appellants who have aggrieved by the judgments and decrees passed by the Courts below in not granting the principal relief of specific performance of contract.
2 . For the sake of convenience, in order to avoid confusion and bring in clarity, the parties hereinafter have been referred to, as they have been arraigned in the Trial Court.
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3. Plaintiffs Case
Chatrubjuja Behera, the original Plaintiff came to know that Jhula
Behera, the original Defendant No.1 was interested to sale his plot of land bearing Plot No.22 situated at Saheed Nagar in Capital City of Bhubaneswar. Accordingly, after final negotiation, the Defendant No.1
agreed to sale the suit plot for a sum of Rs.4800/- Accordingly, the parties entered into an agreement for sale which was registered and a sum of Rs.2900/- was paid by the Plaintiff to the Defendant No.1 with the stipulation that even one year of the agreement the Defendant No.1 would obtain required permission from the concerned Department of Government of Odisha, since the land in question was a lease hold land and on receipt of the balance consideration, the Defendant No.1 shall transfer his land failing which the agreement shall be specifically enforced. It is stated that obtaining permission from the Government for transfer of the leasehold land was merely a formality and it depends on persuasion and fulfilment of certain precondition like construction up-to the lintel level in accordance with the approved plan. By the time of agreement, there was no construction over the suit land for which no transfer was made. After the agreement, the Defendant No.1 handed over all the documents to the Plaintiff and the possession of the suit land was also given to the Plaintiff on 06.01.1973. Since then the Plaintiff has been in possession of the suit land. During the current settlement,
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the draft Record of Right was issued in favour of the Plaintiff. The Defendant No.1’s building plan was approved on 21.03.1978 and he accordingly handed over the approved building plan to the original Plaintiff for putting up construction in accordance with the said approved plan. The Defendant No.1 thereafter submitted the application for permission for transfer of his suit land. The Plaintiff putting up construction over the suit land took water connection to the same on
behalf of Defendant No.1. On 02.01.1981 the concern Department of the Government called for certain clarifications from the Defendant No.1 and on 03.03.1983 the clarifications were given. Thereafter the Plaintiff pursued the Defendant No.1 to expedite the process of obtaining the permission for quicker execution of the Deed of Transfer in his favour. The Defendant No.1, however, delayed at his level in getting the permission from the concern Department of the Government and avoided the matter on some plea or other.
On 23.08.1984, the Defendant No.2 came in a body and asked the Plaintiff to vacate the suit premises. He then disclosed to have purchased the property from the Defendant No.1 and on the strength of the same, he threatened the Plaintiff to dispossess by force if he would not vacate within fifteen days. Then the Plaintiff came to know that Defendant No.1 had sold the suit land to Defendant No.2 and triparty lease deed
has also been executed between Defendant Nos.1, 2 and the State
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(Defendant No.3) which according to the Plaintiff is a fake document and does not convey any right, title and interest in favour of the Defendant No.2 because of the subsistence of the agreement for sale dated 01.06.1973 on the date when the permission was granted and subsequent transaction based upon that permission took place. It is stated that the Plaintiff was always ready and willing to perform his part of the contract and they are still willing to do so.
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5 . The Defendant No.2 in his written statement stated to have no knowledge about the agreement for sale. It is his case that after proper inquiry obtaining the No Encumbrance Certificate in respect of the suit property and in view of the permission obtained by the Defendant No.1 for sale of the suit land, he has purchased the suit property from the Defendant No.1 for valuable consideration. So, he says to be a bona fide purchaser for the value. It is his specific case that after purchase when he was in possession over the suit land, the Plaintiff on 30.09.1984 by using force dispossess him from the suit land and since then the original Plaintiff has unauthorizedly possessing the suit land. His further case is that as the permission for sale of the suit land to the Plaintiff has been rejected by the concern Department of the Government, the Plaintiff has no right to seek for specific performance of contract.
6 . The Defendant No.3 in his written statement submitted that the suit land is a leasehold property and it was so leased out with the terms
and conditions contained in the lease of deed. It is stated that the Plaintiff has no locus standi to bring the suit. The Defendant No.1 has no authority to enter into a contract with the Plaintiff in violation of the terms and conditions of the lease deed. It is stated that even if there was an agreement the same was contrary to the conditions imposed under the lease upon the lessor and thus he is not specifically enforceable. It is further stated that the application submitted by the Defendant No.1 for
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sale of the suit land to the Plaintiff has been rejected and as such the
Plaintiff has no right to file suit for specific performance of contract.
7 . The Defendant No.2 having advanced a counter claim for recovery of possession from the Plaintiff, the Plaintiff filed the written statement to the said counter claim. The Plaintiff practically reiterated the version already made in the plaint in further stating that the Defendant No.2 has no cause of action to advance any counter claim.
8 . The Trial Court on the above rival pleading having framed in total nine issues, took up Issue Nos.3 and 5 first for consideration. Those two issues concerned with the registered agreement dated 06.01.1973 and he readiness and willingness of the Plaintiff in performing his part of the contract under the said agreement. Finally, the answers upon examination of evidence and their evaluation have been given against the Plaintiff while however saying that the Plaintiff is entitled to refund of sum of Rs.2900/- with interest pendente lite and future.
Then coming to Issue Nos.4 and 6 regarding the agreement between the Defendant Nos.1 and 2 and also the claim of the Defendant as the bona fide purchaser for value, the Trial Court, keeping in view the evidence on record and their assessment has rendered the finding in favour of the Defendant Nos.1 and 2. The other issues have also been decided in favour of the Defendant No.2. The suit thus stood dismissed. The First Appellate Court being moved by the aggrieved Plaintiffs in
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view of refusal of grant of a decree of specific performance of contract has affirmed the findings returned by the Trial Court.
9 . The present Second Appeal at the instance of the aggrieved of the
aggrieved Plaintiff has been admitted to answer the following substantial question of law:-
“Whether the right of the Appellants (Plaintiffs) as per the contract under Ext.3 subsist against the Defendant No.2, the subsequent leasee in terms of section 19(d) of the Specific Relief Act read with section 53 of the Transfer of Property Act in the context of possession of the suit property by virtue of Ext.3, or the right created under Ext.3 has ended upon refusal of permission by the Government of Odisha, the original owner.”
10 . Learned counsel for the Appellants submitted that in the present
case the Agreement for Sale (Ext.3) executed by the Defendant No.1 in favour of the Plaintiff was coupled with the delivery of possession of the suit land and said finding has been concurrently rendered by the Courts below. He, therefore, submitted that the possession of the suit land by
the Plaintiff, therefore, stands to be protected under section 53A of the Transfer of Property Act, 1882 (for short, ‘the T.P. Act’) when the First Appellate Court has arrived at a conclusion reversing the finding of the Trial Court that the Plaintiff was all along is ready and willing to perform his part as per the agreement. He further submitted that when the agreement for sale (Ext.3) is a registered one and the Defendant No.1 has said to have executed the same, the Defendant thus cannot be
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termed to be a bona fide purchaser for value without the knowledge of such agreement and thus cannot be allowed to derive the benefit of the provision contained under section 19(b) of the Specific Relief Act, 1963. In that view of the matter, according to him, the agreement (Ext.3) is enforceable against the Defendants (original lessee, the subsequent purchaser and the lessor-State respectively). In support of his submission, he has cited the decision in case of Mrs. Chandnee Wadya Vati Madden vrs. Dr. C.L. Katial & others, AIR (1964) SC 978 and Ram Niwas (Dead) through LRs. Vrs. Bani (Smt.) & Others, (2000) 6 SCC
685 .
Courts below have rightly held that the Plaintiffs are not entitled to the relief of specific performance of contract and the agreement, in question, (Ext.3) is not enforceable without there being the permission of the lessor (State) which the parties to the agreement were very well aware of
from the beginning and this had the same placed as the condition precedent for such enforcement of the agreement; obligating the Plaintiff to sale the suit land upon obtaining the permission from the lessor-State. He further submitted that the agreement for sale (Ext.3) in the present case was contingent upon the grant of permission by the lessor, the owner of the property and thus when the permission having
been applied for by the lessee-Defendant No.1 has been refused in view
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of the policy of the State prevailing at that point of time, the said agreement is deemed to have come to an end in so far as further performance of the act/deed by the parties are concerned. He next submitted that in view of the refusal of the lessor-State to accord permission for sale of the land which had been applied for by the lessee, Defendant No.1; the Defendant No.2 having purchased the property after the Plaintiff obtained the permission form the lessor-State for sale of the suit land afresh after few year, he has rightly been held to be the
bona fide purchaser for value and, according to him, when the agreement for sale freezed for further performance of the act/deed by the parties thereto in view of the refusal of permission by the lessor-State for ever, the notice about the said agreement for sale by the Defendant No.2 has absolutely no significance at all in the eye of law. He next
submitted that the suit for specific performance of contract filed in the year 1984 is grossly barred by limitation. Referring to the provision
contained in section 54 of the Indian Limitation Act, 1963 (for short, the L.A. Act’), he submitted that that the same mandates that the suit be
filed within three years from the date of fixed for performance or if no such date is fixed when the Plaintiff has noticed that the performance is refused, in the instant case, the agreement for sale having come into being on 06.01.1973 as per the stipulation therein, the sale deed was to
be executed in that very year, the suit is hopelessly barred by limitation.
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According to him, in the peculiar facts and circumstances, which have emerged in the pleadings and evidence especially that the agreement for sale was a contingent one and that in view of the refusal of the permission for sale by the lessor-State has become unenforceable, all such readiness and willingness from the side of the Plaintiff to perform his part of the contract, have absolutely no significance, the Plaintiff is not entitled to protection as provided under section 53A of the T.P. Act.
12 . Keeping in view the submission made, I have carefully read the judgment passed by the Courts below. I have also perused the plaint and written statement and have travelled through the evidence both oral and documentary.
13 . Indisputably, the suit property had been leased out by the State-
Defendant No.3, the original owner to the Defendant No.1 way back on 23rd April, 1970. As per the conditions stipulated in the said lease, the lessee (Plaintiff) was under total restriction from exercising his right of transfer of his interest without the permission in writing from the lessorState. This was known to the parties, i.e., the Plaintiffs and Defendant No.1 and, therefore, in the very agreement for sale (Ext.3) it had been stipulated as under :-
“The vendor hereby agrees that by obtaining permission from the Government during this year, the sale deed would be executed upon receipt of Rs.1900/which is the balance of the agreed consideration.”
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14 . The Defendant No.3 (lessor-State) in his written statement at paragraph-7 has pleaded that the Defendant No.1 had filed an application for transfer of plot of land in favour of the Plaintiff. But that application was rejected as it was considered to be running against the principle of the State Government in prevalence during that time. The
Plaintiff has not countered the same by leading any such evidence although it is stated that the Defendant No.1 had applied for permission after the agreement for sale (Ext.3) between the Plaintiff and Defendant No.1, as regards its fate, nothing has been further proved. On the other hand, subsequently permission having been taken, the Defendant No.1 had transferred the property in favour of Defendant No.2.
The agreement for sale having come into being on 06.01.1973; the tripartite deed after obtaining the permission from the lessor-State wherein the Defendant No.1, 2 and 3 are parties has come into being on 20.08.1984. Thus when it has been concurrently found by the Courts
below that the Defendant No.1 having applied for permission from the Defendant No.3, as per the agreement for sale (Ext.3), the same has been rejected; the fact remains that the Plaintiff within three years from that time has not come up a suit for specific performance of contract impleading the Defendant No.1 and 3 as parties seeking a direction to both of them in that regard. Therefore, the agreement for sale in view of the rejection of permission became unenforceable and the Plaintiff’s
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readiness and willingness to perform his part of the contract carries no meaning and value in the eye of law. So also it cannot be said that the Defendant No.1 failed to perform his part of the contract in order to see that the same stands frustrated in seeing that the benefit thereunder does not flow to the hands of the Plaintiff.
15 . In that view of the matter even on the accepted position that the Plaintiff had been delivered with the possession of the suit land pursuant to the agreement for sale (Ext.3) that in my considered opinion would not be taken to be the possession in the direction of the part of the performance of the contract and it is only to be taken in the eye of law as being so permitted without any such right, whatsoever and thus precarious in nature which does not warrant protection by virtue of the provision contained in section 53A of the T.P. Act.
16 . The Defendant No.2 in the present case, therefore, thus having acquired the right over the leasehold property with effect from 20.08.1984, the substantial question of law is accordingly answered against the Plaintiff, which entails dismissal of the Appeal.
17 . In the result, the Appeal stands dismissed. No order as to cost.
Signature Not Verified
(D. Dash), Judge.
Digitally Signed Signed by: HIMANSU SEKHAR DASH Reason: Authentication Location: OHC Himansu Date: 27-Feb-2024 15:26:00
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3 issues framed by the court
Whether the right created under the agreement for sale subsists against the subsequent purchaser when the government permission for transfer was refused.
Whether the plaintiff's dispossession is protected under section 53A of the Transfer of Property Act given the nature of possession.
Whether the plaint for specific performance is barred by limitation due to the contingency on government permission.
Pramila Behera & Others
Sabitri Sahu & Others
D. Dash
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
