IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED...

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IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 10TH

DAY OF JULY 2012

BEFORE

THE HON’BLE MR.JUSTICE S. ABDUL NAZEER

WRIT PETITION NO.12971/2012

C/W W.P.NOS.12976/2012, 12977/2012

& 12978/2012 (GM-CPC)

W.P.NO.12971/2012

Between:

1 Smt. Narasamma,

W/o late Nagappa,

Aged about 71 years.

2 Sri Doddanna,

S/o late Nagappa,


3 Smt. Rathnamma,

W/o Doddanna,


4 Sri Nagaraju,

S/o late Nagappa,


5 Smt. Hanumakka,

W/o Sri Nagaraja,


2

All are r/a Venkatala Village,

Bangalore North Taluk. …. Petitioners.

(By Sri R. Kalyan, Adv.)

And:

1 Sri K.V.Ramprasad,

S/o Sri K.V.Varadaraja Gupta,

Aged about 49 years,

R/a No.58, Anand Nagar,

2nd

Stage, MSH Layout,

5th

Main Road, Bangalore.

2 The State of Karnataka,

Department of Revenue,

Reptd. by its Secretary,

M.S.Bldg., Bangalore. …. Respondents.

(By Sri Jayakumar S.Patil, Sr.Adv. for Sri M.Shivaprakash, Adv.

for R1

Sri H.T.Narendra Prasad, HCGP for R2)

W.P.NO.12976/2012

Between:

Sri Venkatappa,

S/o late Munivenkatappa,


R/a Venkatala Village,

Bangalore North Taluk. …. Petitioner.

(By Sri R.Kalyan, Adv.)

3

And:





2nd

Stage, MSH Layout,

5th


2 Sri Narayana,

S/o late Huchappa,

Aged about 33 yeas,

R/a Venkatala village,

Yelahanka Hobli,

Bangalore North Taluk.






for R1


4

W.P.NO.12977/2012

Between:

Sri Marappa,

S/o Lakkappa,


R/a Venkatala Village,

Bangalore North Taluk. …. Petitioner.


And:





2nd

Stage, MSH Layout,

5th







for R1


5

W.P.NO.12978/2012

Between:

1 Sri Hanumantha,

S/o late Poojappa,


2 Smt. Lakshmamma,

W/o late Anneyappa,


3 Sri Suresh,

S/o late Anneyappa,


All are r/a Venkatala Village,

Bangalore North Taluk. …. Petitioners.


And:





2nd

Stage, MSH Layout,

5th


6






for R1


---

These Writ Petitions are filed under Articles 226 & 227 of

the Constitution of India, praying to quash the impugned order

dated 28.3.2012 in O.S.Nos.2375/2011, 2372/2011, 2370/2011 and

2374/2011 on the file of the 7th

Addl. City Civil Judge, Bangalore,

etc.

These Writ Petitions coming on for Further Hearing this

day, the Court passed the following:

ORDER

The main question for consideration in these writ petitions is

whether the suits filed by the first respondent for enforcement of

the agreements for sale of granted lands without previous

permission of the Government under Section 4(2) of the Karnataka

Scheduled Caste and Scheduled Tribes (Prohibition of Transfer of

Certain Lands) Act, 1978 are liable to be rejected under Order 7

Rule 11(d) of the Code of Civil Procedure?

7

2. Brief facts necessary for disposal of these cases are as

under:

The first respondent is the common plaintiff in

O.S.Nos.2375/2011, 2372/2011, 2370/2011 and 2374/2011 on the

file of the 7th

Additional City Civil Judge, Bangalore. He has filed

the above suits against different defendants (the petitioners herein)

for specific performance of the agreements to sell in respect of the

suit schedule properties. In the suits, defendants have filed

applications for rejection of the plaints under Order 7 Rule 11(d) of

the Code of Civil Procedure (for short ‘CPC’) contending that the

suit schedule properties are granted lands and that there is a bar for

entering into such agreements without taking previous permission

of the Government. The statements made in the plaints disclose that

suits are barred under Section 4(2) of the Act. Therefore, the plaints

are liable to be rejected at the threshold.

8

3. The plaintiff has filed objections contending that the

defendants have received huge amount towards part of the sale

consideration. Applications have already been filed seeking

permission of the Government for sale of the properties. It is

further contended that prior permission of the Government for

entering into agreements to sell is not necessary. The question

raised in the applications has to be decided after the trial in the

suits. Therefore, the plaints cannot be rejected at this stage.

4. The court below has rejected the applications primarily on

the ground that the question raised in the applications has to be

established by the plaintiff by leading evidence. It is only after the

trial, the Court can decide the enforceability of the contract. The

petitioners have called in question the validity of the said orders in

these writ petitions.

5. Sri Kalyan, learned Counsel appearing for the petitioners

submits that perusal of the plaints would disclose that the suit

9

schedule properties are granted lands and attract the provisions of

the Karnataka Scheduled Caste and Scheduled Tribes (Prohibition

of Transfer of Certain Lands) Act, 1978 (for short ‘the Act’). The

defendants have agreed to obtain permission from the Government

under the said Act for the sale of the properties. No such

permission has been obtained before entering into the agreements,

which is evident from the averments made in the plaints. Having

regard to sub-section (2) of Section 4 of the Act, previous

permission of the Government is a condition precedent for transfer

of the lands. The expression ‘transfer’ contained in sub-section (e)

of Section 3 includes an agreement to sell. The agreements entered

into by the parties without previous permission of the Government

are void and are not enforceable in the Court of law. At best, the

plaintiff can seek other remedies available to him in law.

Therefore, the court below ought to have rejected the plaints.

6. On the other hand, Sri Jayakumar S. Patil, learned Senior

Counsel appearing for the first respondent/plaintiff submits that the

10

defendants have already applied for permission for transfer of the

land under Section 4(2) of the Act. There is no bar for entering into

an agreement to sell of the granted lands without delivery of

possession of the properties. He has drawn my attention to the

expression ‘acquire by transfer’ contained in Section 4(2) of the

Act and submits that in order to attract the said Section, there

should be something more than an agreement to sell. Atleast, there

should be delivery of possession under the contract. In this

connection, he has relied on the decisions of the Apex Court in

TILKAYAT SHRI GOVINDLAJI MAHARAJ, etc. VS. STATE

OF RAJASTHAN AND OTHERS - AIR 1963 SC 1638 and in

DEVI DAS GOPAL KRISHNAN & OTHERS VS. STATE OF

PUNJAB & OTHERS - AIR 1967 SC 1895. It is submitted that

after entering into an agreement to sell and before the execution of

the sale deeds, it is open for the parties to obtain permission of the

Government to give effect to the terms of the agreement.

Agreement to sell does not convey any right, title or interest in the

property. In this connection, he has relied on the decisions of the

11

Apex Court in MRS. CHANDNEE WIDYA VATI MADDEN VS.

DR. C.L.KATIAL AND OTHERS - AIR 1964 SC 978,

NATHULAL VS. PHOOLCHAND – AIR 1979 SC 546 and the

decision of the Division Bench of this Court in SYED ZAHEER

AND OTHERS VS. C.V.SIDDAVEERAPPA – 2010 (2) KCCR

954. Alternatively, it is argued that the suits filed by the plaintiff

are for specific performance of the contract. The jurisdiction to

decree the suit for specific performance is discretionary. The Court

in appropriate cases has the power to return the earnest money or

award compensation. Atleast for this purpose, adjudication of the

suits is necessary. Therefore, the plaints cannot be rejected at this

stage.

7. I have carefully considered the arguments of the learned

Counsel made at the Bar and perused the materials placed on

record.

12

8. Order 7 Rule 11 of CPC provides for rejection of the

plaint where the suit appears from the statement in the plaint to be

barred by any law. The Apex Court in T.ARIVANDANDAM VS.

T.V.SATYAPAL AND ANOTHER - AIR 1977 SC 2421 has held

that if on a meaningful and not formal reading of the plaint it is

manifestly vexatious and meritless, in the sense of not disclosing a

clear right to sue, the trial Court should exercise its power under

Order 7 Rule 11 of the CPC taking care to see that the ground

mentioned therein is fulfilled. And, if clear drafting has created the

illusion of a cause of action, nip it in the bud at the first hearing by

examining the party searchingly under Order 10 of the CPC. An

activist Judge is the answer to irresponsible law suits. The trial

Courts would insist imperatively on examining the party at the first

hearing so that bogus litigation can be shot down at the earliest

stage.

9. In SOPAN SUKHDEO SABLE AND OTHERS VS.

ASSISTANT CHARITY COMMISSIONER AND OTHERS –

13

(2004) 3 SCC 137, the Apex Court has declared that Order 7 Rule

11 lays down an independent remedy made available to the

defendant to challenge the maintainability of the suit itself,

irrespective of his right to contest the same on merits. The law

ostensibly does not contemplate at any stage when the objections

can be raised. The trial Court can exercise the power at any stage of

the suit, that is, before registering the plaint or after issuing

summons to the defendant at any time before the conclusion of the

trial and also does not say in express terms about the filing of a

written statement. For the purposes of deciding an application

under clauses (a) and (d) of Order 7 Rule 11 of the CPC, the

averments in the plaint are germane: the pleas taken by the

defendant in the written statement would be wholly irrelevant at

that stage. Instead, the word ‘shall’ is used, clearly implying

thereby that Order 7 Rule 11 casts a duty on the Court to perform

its obligations in rejecting the plaint when the same is hit by any of

the infirmities provided in the four clauses of Order 7 Rule 11,

even without intervention of the defendant. In any event, rejection

14

of the plaint under Order 7 Rule 11 does not preclude the plaintiffs

from presenting a fresh plaint in terms of Order 7 Rule 13. The real

object of Order 7 Rule 11 is to keep out of Courts irresponsible law

suits. The trial Court must remember that if on a meaningful and

not formal reading of the plaint it is manifestly vexatious and

meritless in the sense of not disclosing a clear right to sue, it should

exercise the power under Order 7 Rule 11(a).

10. In POPAT AND KOTECHA PROPERTY VS. STATE

BANK OF INDIA STAFF ASSOCIATION – (2005) 7 SCC 510,

the Apex Court has held that clause (d) of Order 7 Rule 11 speaks

of suit, as appears from the statement in the plaint to be barred by

any law. Disputed questions cannot be decided at the time of

considering an application filed under Order 7 Rule 11 CPC.

Clause (d) of Rule 11 of Order 7 applies in those cases only where

the statement made by the plaintiff in the plaint, without any doubt

or dispute shows that the suit is barred by any law in force. It has

been further held as under:

15

“When the averments in the plaint are considered in

the background of the principles set out in Sopan

Sukhdeo case (2004) 3 SCC 137 the inevitable

conclusion is that the Division Bench of the High

Court was not right in holding that Order 7 Rule 11

CPC was applicable to the facts of the case. Diverse

claims were made and the Division Bench was wrong

in proceeding with the assumption that only the non-

execution of lease deed was the basic issue. Even if it

is accepted that the other claims were relatable to it

they had independent existence. Whether the collection

of amounts by the respondent was for a period beyond

51 years required evidence to be adduced. It was not a

case where the suit from statement in the plaint could

be said to be barred by law. The statement in the plaint

without addition or subtraction must show that it is

barred by any law to attract application of Order 7

Rule 11. That was not so in the present case.”

11. Thus, Order 7 Rule 11 of CPC lays down an independent

remedy made available to the defendant to challenge the

16

maintainability of the suit itself irrespective of his right to contest

the same on merits. A plaint can be rejected where the suit appears

from the averments made in the plaint to be barred by any law. In

order to reject the plaint, the statement in the plaint without any

addition or subtraction must show that it is barred by any law in

force without any doubt or dispute. Where the Court is in doubt or

the Court is not sure and certain that the suit is barred by some law,

the Court would not reject the plaint. Disputed questions cannot be

decided at the time of considering the application under this

provision.

12. Before proceeding to consider the validity of the

impugned orders, it is also necessary to consider as to whether the

Act contains a bar to enter into a contract for sale of granted lands

without previous permission of the Government?

Section 4 of the Act contains a bar for transfer of granted

lands, which is as under:

17

“4. Prohibition of transfer of granted lands.

(1) Notwithstanding anything contained 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 or be deemed ever to have conveyed by such

transfer.

(2) No person shall, after the commencement of this

Act, transfer or acquire by transfer 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 or of any award or

order of any other authority.”

13. For better understanding the above provision, it is also

necessary to notice the statutory definitions provided for the

18

expressions ‘granted land’ and ‘transfer’ in Section 3(b) and 3(e),

which are as under:

“Sec.3(b) “Granted Land” means any land granted

by the Government to a person belonging to any of the

Scheduled Castes or the Scheduled Tribes and includes

land allotted or granted to such person under the

relevant law for the time being in force relating to

agrarian reforms or land ceilings or abolition of inams,

other than that relating to hereditary offices or rights

and the word “Granted” shall be construed

accordingly.

Sec.3(e) “Transfer” means a sale, gift, exchange,

mortgage (with or without possession), lease or any

other transaction not 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.”

19

14. It is well settled that when an expression is defined in a

statute, unless there is anything repugnant in the subject or context,

the expression has to be construed as having the same meaning

assigned to it in the dictionary clause of the statute. The object of

such a definition is to avoid the necessity of frequent repetition in

describing the subject matter to which a word or expression so

defined is intended to apply. In these cases, we are considering the

effect of entering into an agreement to sell in respect of granted

land without the previous permission of the Government. If Section

3(b) is read into Section 4(2), it is clear that no person shall after

commencement of the Act, enter into an agreement to sell any

granted land without the previous permission of the Government.

15. The State, consistent with the Directive Principles of the

Constitution has made it a policy to preserve, protect and promote

the interest of the scheduled castes and scheduled tribes, which by

and large form weaker and poorer sections of the people in our

country. In pursuance of this policy, the lands have been granted to

20

the persons belonging to the scheduled castes and scheduled tribes

which includes the lands allotted or granted to such person under

the relevant law for the time being in force relating to agrarian

reforms or land ceiling or abolition of inams. The condition

regarding prohibition of transfer of granted land had been

introduced in the interest of grantees for the purpose of upkeep of

the grants and for preventing the economically dominant sections

of the community from depriving the grantees, who belong to the

weaker sections of the people of their enjoyment and possession of

these lands and for safeguarding their interests against any

exploitation by the richer sections in regard to the enjoyment and

possession of these lands granted essentially for their benefit. This

prohibition on transfer has not proved to be sufficiently strong

safeguard in the matter of preserving grants in the hands of

grantees belonging to the scheduled castes and scheduled tribes and

in violation of the prohibition on transfer of the granted land,

transfers of such lands on a large scale to serious detriment of the

interests of these poorer sections of the people had taken place.

21

Therefore, the Act was enacted to provide for the prohibition of

transfer and for restoration of lands granted by the Government to

the persons belonging to the scheduled castes and scheduled tribes

in the State.

16. The Hon’ble Supreme Court in MANCHEGOWDA

AND OTHERS VS. STATE OF KARNATAKQA AND OTHERS

- AIR 1984 SC 1151 while upholding the constitutional validity of

the Act has held as under:

“ Non alienation clause contained in the existing Land

Grant Rules and the provisions for cancellation of

grants where the land is alienated in contravention of

the above said provision are found not sufficient to help

the scheduled castes and scheduled tribes grantees

whose ignorance and poverty have been exploited by

persons belonging to the affluent and powerful sections

to obtain sales or mortgages either for a nominal

consideration or for no consideration at all and they

have become the victims of circumstances. To fulfill

the purpose of the grant, the land even if it has been

22

alienated, should be restored to the original grantee or

his heirs. ”

17. In DHARMA NAIKA VS. RAMA NAIKA AND

ANOTHER – (2008) 14 SCC 517, the Apex Court explained the

objects of the Act as under:

“8. A plain reading of the Statement of Objects and

Reasons, for which the legislature has introduced this

Act, would show that the non-alienation clause

contained in the existing Land Grant Rules and the

provisions for cancellation of grants where the land

was alienated in contravention of the abovesaid

provisions were found insufficient to help the

Scheduled Castes and Scheduled Tribes grantees.

From the objects and reasons of the Act, it is evident

that ignorance and poverty of the Scheduled Castes

and Scheduled Tribes were exploited by persons

belonging to the affluent and powerful sections to get

sales or mortgages, either for a nominal consideration

or for no consideration at all and on account of this,

the Scheduled Castes and Scheduled Tribes had

23

become the victims of circumstances. It is for this

reason and to fulfil the purposes of the grant, it was

thought fit by the legislature that the land, even if it

has been alienated, must be resorted to the original

grantee or his heirs and legal representatives who are

admittedly Scheduled Castes and Scheduled Tribes.

9. It is also evident from the objects and reasons of the

Act that the Central Government was also urging the

State Government to enact a legislation to prevent

alienation of lands granted to the Scheduled Castes and

Scheduled Tribes by the State Government on the lines

of the model legislation prepared by it and circulated

to the State Government. It is in that background, the

Act was introduced providing for prohibition of

transfer and restoration of lands granted by the

Government to persons belonging to the Scheduled

Castes and Scheduled Tribes in the State. However, it

is also evident from the relevant provisions of the Act

with which we would be dealing with later that total

prohibition of transfer by Scheduled Castes and

Scheduled Tribes was also not intended by the

legislature. It is provided that in respect of transfers

after the commencement of the Act, it would be open

24

to transfer the land granted to Scheduled Castes and

Scheduled Tribes if prior permission is obtained from

the State Government.”

18. Keeping in mind the back ground of the legislation, we

have to interpret the provisions of the Act. Sub-Section (2) of

Section 4 states that no person shall, after commencement of the

Act, transfer or acquire by transfer any granted land without

previous permission of the Government. An extensive definition

has been used to define the expression ‘transfer’. Thus, ‘transfer’

not only means a sale, gift, exchange or mortgage with or without

possession, lease or any other transaction not being a partition

among members of a family of a testamentary disposition but also

the creation of a charge or agreement to sell, exchange, mortgage

or lease or enter into any other transaction.

19. Section 54 of the Transfer of Property Act, 1882 defines

a contract for sale. It states that a contract for sale of immovable

property is a contract that a sale of such property takes place on

25

terms settled between the parties. It does not, of itself, create any

interest or charge on such property. Thus, contract for sale is only

a document creating right to obtain another document of sale on

fulfillment of terms and conditions specified therein. On the

strength of such an agreement, a buyer does not become the owner

of the property. The ownership remains with the seller. It will be

transferred to the buyer only on the execution of sale deed by the

seller. The buyer obtains only a right to get the sale deed executed

in his favour. There is no bar for the parties to enter into an

agreement to sell with or without delivery under Section 54 of the

Transfer of Property Act. It depends upon the terms and conditions

settled between the parties. However, a contract for sale with or

without delivery of possession of the property makes no difference

for the purpose of Section 4(2) of the Act.

20. Learned Senior Counsel for the first respondent has laid

emphasis on the expression ‘acquire by transfer’ employed in

26

Section 4(2) and submits that mere agreement to sell without

delivery of possession will not come within the ambit of sub-

section (2) of Section 4 of the Act. In my opinion, that is not the

legislative intent. The legislative intent is clear that previous

permission of the Government is a condition precedent for the

agreements for sale of granted lands. This Court in SRI

VENKATANARAYANAPPA VS. SRI SIDDAPPA – ILR 2007

KAR 1323 was considering a similar case where possession was

not delivered in part performance of the agreement to sell. It has

been held as under:

“………….Sub-section (2) of Section 4 provides for

the permission of the Government for such transfer.

But the way the said sub-section is worded makes it

clear that no person shall, after the commencement of

this Act transfer or acquire by transfer any granted

land without the previous permission of the

Government. Sub-section 4(1) deals with transfer of

lands being in violation of the terms of the grant before

the Act came into force. But sub-section (2) deals with

27

transfer of lands after the Act came into force. In other

words, even if the transfer is not in contravention of

the terms of the grant, but if that transfer takes place

after the Act came into force, such transfer requires

previous permission of the Government. Therefore

for all transfers subsequent to the passing of the Act,

previous permission of the Government is a must.

Otherwise it would be null and void.”

It has been further held as under:

“In the Scheme of the Act, it is clear whether to sell

the property by way of a sale or to enter into an

agreement to purchase a granted land previous

permission of the Government is a must. It is a

condition precedent. If previous permission is not

obtained prior to the agreement of sale, then it amounts

to transfer under Section 3(e) of the Act and thus it is

null and void. While interpreting this provision the

Courts have to keep in mind the legislative intent.

When the legislature declares that the transfer in

contravention of Section 4(2) of the Act is null and

void, no contract in the eye of law has come into

existence. The legislature did not stop there. It made

28

its intentions explicitly clear by further declaring that

“no right, title or interest in such land shall be

conveyed or be deemed ever to have conveyed by such

transfer”. An agreement to sell the granted land under

the Act, is opposed to Section 4(2) of the Act, and

therefore is not a contract. It is also opposed to public

policy. Therefore, it is not enforceable in Court of

law.”

21. In DHARMA NAIKA’s case (supra), the Apex Court

has held that Section 4(1) of the Act declares any transfer of

granted land made either before or after the coming into force of

the Act, to be null and void if it is in contravention of any one of

the conditions specified therein i.e. (a) the terms of grant of such

land; or (b) the provisions of the law providing for such grant; or

(c) Section 4(2). It has been further held as under:

“It is true, the word “transfer” as defined in Section

3(1)(e) of the 1978 Act is an inclusive definition. That

is to say, it includes ‘sale’ as well as ‘agreement for

sale’, although an agreement for sale under the

29

Transfer of Property Act, 1882 is not a transfer and the

right, title or interest in the land does not pass until the

sale deed is executed and registered. An agreement to

sell does not pass until the sale deed is executed and

registered. An agreement to sell does not by itself

create any interest of the proposed vendee in the

immovable property but only creates an enforceable

right in the parties. Thus, under the general law, that, is

under the Transfer of Property Act, 1882 an

‘agreement for sale’ is not the same as ‘sale’ and in the

case of an agreement for sale, the title of the property

agreed to be sold still remains with the vendor but in

the case of ‘sale’, title of the property is vested with

the vendee. Therefore, an agreement for sale is an

executory contract whereas sale is an executed

contract.”

22. In BHEMANNA VS. DEPUTY COMMISSIONER,

CHITRADURGA DISTRICT & OTHERS – ILR 2010 KAR 5011,

a Division Bench of this Court has held as under:

30

“A conjoint reading of sub-sections (1) & (2) of

Section 4 of the Act shows that if the transfer of

granted land is made in violation of the terms of the

grant of such land or the law providing for such grant

whether such transfer is before or after the Act came

into force, the same is rendered null and void.

Whereas, in the case of transfer of land after the

commencement of the Act even though the said

transfer is not in contravention of the terms of the

grant or the law providing for such grant, the same is

rendered null and void.

It is thus clear that the intention of the

Legislature is that, after the commencement of the Act,

there shall be prohibition for transfer of granted land

even though the period of non-alienation had expired

and the grantee was otherwise entitled to transfer. It is

therefore clear that the term ‘granted land’ as defined

under Section 3(1)(b) of the Act cannot be given a

restricted meaning to say that the land losses the

characteristic of a granted land after the expiry of non-

alienation period.”

31

23. In TILKAYAT SHRI GOVINDLALJI MAHARAJ’s

case (supra) relied on by the learned Senior Counsel, the Supreme

Court has held that the acquisition of property in the context means

the extinction of the citizen’s rights in the property and conferment

of the said rights in the State or the State owned corporation. In

M/S. DEVI DAS GOPAL KRISHNAN’s case (supra), the Apex

Court has observed that a close scrutiny compels them to give a

restricted meaning to the expressions ‘acquisition’ and ‘price’.

Acquisition is the act by which a person acquires property in a

thing. ‘Acquire’ is to become the owner of the property either by

voluntary or involuntary transfer.

These decisions have no application to the facts of these

cases. In the said cases, the Supreme Court has assigned the

meaning to the expression ‘acquire’ in different contexts.

24. Let us now consider the other decisions relied on by the

learned Senior Counsel. In MRS. CHANDNEE WIDYA VATI

MADDEN’s case (supra), the Hon’ble Supreme Court was

32

considering a case relating to specific performance of an agreement

to sell. One of the terms of the contract was that the vendor shall

obtain necessary permission of the Government for the sale within

two months of the agreement and if the permission was not

forthcoming within that time, it was open to the vendees to extend

the date or to treat the agreement as cancelled. The vendor made an

application for permission. At a later stage, she withdrew the same.

The agreement holder filed a suit for specific performance of the

contract or in the alternative for damages. In this background, the

Apex Court has held that the contract was not a contingent contract

and that the parties are agreed to bind themselves by the terms of

the document executed between them. The Court had got to enforce

the terms of the contract and to enjoin upon the vendor to make the

necessary application for permission. In the event of the permission

being refused, the vendees shall be entitled to the damages.

25. In NATHULAL’s case (supra), the Supreme Court was

considering a case relating to enforcement of an agreement where

33

the land could not be sold without the sanction of the State

Government. The Apex Court has held that where by statute,

property is not transferable without the permission of the authority,

an agreement to transfer the property must be deemed subject to the

implied condition that the transferor will obtain the sanction of the

authority concerned. This is not a case where the statute imposes a

condition that previous permission is necessary for entering into a

contract of sale.

26. In SYED ZAHEER’s case (supra), this Court was

considering the enforceability of a contract in respect of an

agricultural land where there is a bar for transfer of the land to non-

agriculturists under Section 80 of the Karnataka Land Reforms Act,

1961. It has been held that Section 80 does not prohibit any

agreement of sale between the land owner and non-agriculturists.

What it prohibits is a non-agriculturist of the categories specified in

the Section purchasing an agricultural land. He too can purchase

after obtaining necessary permission of the competent authority.

34

27. The common factor in all these decisions is that prior

permission was not required for entering into an agreement of sale

of the properties. In the instant case, an agreement entered into

without previous permission of the Government is void-ab-initio. It

is a condition precedent. Therefore, these decisions have no

application to the facts of the present case.

28. As has been noticed above, there is a clear bar for

entering into an agreement to sell of the granted lands without

previous permission of the Government. If an agreement is entered

into in respect of the granted land in violation of Section 4(2), it is

void-ab-initio. Section 23 of the Indian Contract Act, 1872 bars the

enforcement of a contract if it is forbidden by law. An agreement

offending a statute or public policy or forbidden by law is not

merely void but it is invalid from nativity. The term ‘law’ in this

Section must be understood in the sense of the term explained in

Article 13(3) of the Constitution. Thus, what is done in

35

contravention of the provisions of any law cannot be made the

subject matter of an action. If the contract is expressly prohibited

by law, it is void-ab-initio and cannot be enforced. In the

circumstances, Courts cannot grant a decree for specific

performance subject to the permission, which may be obtained by

one of the parties from the Government. I am of the view that the

suits filed by the plaintiff for enforcement of the void agreements

cannot be entertained by the Civil Court.

29. Let us now consider as to whether from the statements in

the plaint, the suits are barred under Section 4(2) of the Act? It is

not in dispute that the plaint averments in all the suits are similar. It

is sufficient if the plaint averments in one of the suits is taken into

consideration. Therefore, let us take the plaint in

O.S.No.2375/2011. In Paragraph 3 of the plaint, the plaintiff has

stated that the defendants are the wife and children of Nagappa.

The erstwhile Government of Mysore had granted agricultural land

bearing Sy.No.29 measuring an extent of 1 acre 20 guntas in favour

36

of Nagappa. After the death of Nagappa, the sole bread winner of

the family, the defendants have suffered a serious setback. In order

to meet the pressing legal necessities of the family, more

particularly, for their decent living as well as to construct a

dwelling house of their own and to clear off certain debts incurred

for performing the marriage of the second defendant, they have

offered to sell the property in question.

In paragraph 4, it is further stated that on the offer made by

defendant Nos.1 to 5 through their known persons of the same

village, the plaintiff approached the defendants and expressed his

willingness to purchase the said property. The defendants made

available the grant order dated 4.8.1948 passed in favour of

Nagappa along with other supportive documents, which stood in

the name of Nagappa.

In paragraph 5, the plaintiff has stated that defendants have

agreed to obtain necessary permission from the competent

authorities, namely, the Government since the land in question is

the subject matter of grant. The relevant portion is as under:

37

“The defendants have agreed to obtain necessary

permission from the competent authorities, namely, the

Government, since the land bearing Sy.No.29 is a

subject matter of grant in the year 1948 with certain

conditions by virtue of amendment. The provisions

provides and permits the parties to seek necessary

permission from the competent Revenue authorities for

alienation of the property in the event of alienation,

grantee sought such permission from the authorities by

placing satisfactory material to compensate the loss of

property and to acquire certain other properties so as to

render support to the plaintiff’s family.”

In paragraph 7(c), the plaintiff has stated that the agreed sale

consideration of the property was at Rs.45,00,000/- and on the day

of execution of the agreement, plaintiff has paid Rs.25,00,000/-. It

was agreed that balance of the sale consideration will be paid at the

time of registration.

In para 8 of the plaint, the plaintiff has pleaded that at the

time of offer made for sale and negotiations, the defendants have

38

agreed to obtain previous permission of the Government under the

provisions of Karnataka Schedule Caste and Schedule Tribes

(Prohibition of Transfer of Certain Lands) Act, 1978, which is

necessary to conclude the contract.

In paragraph 14, the plaintiff has contended that the

defendants are evading to perform their contractual obligation

under the agreement dated 9.7.2009.

30. A meaningful reading of the entire plaint makes it clear

that the suit schedule properties are granted lands and that the

agreements have been entered into without previous permission of

the Government under Section 4(2) of the Act. Thus, the

agreements are void and unenforceable in law.

31. It is also relevant to consider the submission of the

learned Senior Counsel for the first respondent that the suits filed

by the plaintiff are for specific performance of the contract. The

jurisdiction to decree the specific performance is discretionary. The

39

Court has power to grant alternative reliefs if it refuses to grant the

relief of specific performance. Therefore, the suits cannot be

dismissed at this stage.

32. It is true that the jurisdiction to decree the specific

performance is discretionary and the Court is not bound to grant

such relief merely because it is lawful to do so. It empowers the

Court to refuse specific performance of contracts, even though it

has jurisdiction to render the decree and the contracts are capable

of being specifically enforced. But the discretion of the Court

should not be arbitrary but sound and reasonable, guided by

judicial principles and capable of correction by a Court of appeal.

Section 20 of the Specific Relief Act, 1963 confers discretion for

decreeing specific performance. The Court is not bound to decree

specific performance in the circumstances provided in sub-section

(2) of Section 20, which are as under:

40

“(a) where the terms of the contract or the conduct of

the parties at the time of entering into the contract or

the other circumstances under which the contract was

entered into are such that the contract, though not

voidable, gives the plaintiff an unfair advantage over

the defendant; or

(b) where the performance of the contract would

involve some hardship on the defendant which he did

not foresee, whereas its non-performance would

involve no such hardship on the plaintiff; or

(c) where the defendant entered into the contract under

circumstances which though not rendering the contract

voidable, makes it inequitable to enforce specific

performance.”

33. The Court has also power to grant compensation in

certain cases either in addition to or in substitution of performance

provided such a claim is made by the plaintiff. Sub-section (1) of

Section 21 states that in a suit for specific performance of the

contract, the plaintiff may also claim compensation for its breach

41

either in addition to or in substitution of such performance. Sub-

section (5) of Section 21 states that no compensation shall be

awarded under the said Section unless the plaintiff has claimed

such compensation in his claim. However, the Court can allow him

to amend the plaint at any stage of the proceedings seeking

compensation. Thus, for award of compensation, the plaintiff has to

make a claim in the plaint. Section 22 of the Act lays down the

power to grant relief for possession, partition, refund of earnest

money, etc. It states that any person suing for the specific

performance of a contract for the transfer of immovable property

may, in an appropriate case, ask for possession, or partition and

separate possession of the property in addition to such performance

or any other relief to which he may be entitled including the refund

of any earnest money or deposit paid or made by him in case his

claim for specific performance is refused. Sub-section (2) of

Section 22 states that no relief under this Section shall be granted

by the Court unless it has been specifically claimed. However, the

42

plaintiff can amend his plaint so as to include the claim for such

relief.

34. Thus, the discretion vested in the Court not to decree

specific performance only if the case falls under clauses (a) to (c)

of sub-section (2) of Section 20. No discretion is vested in the Civil

Court for award of compensation or refund the earnest money or

deposit paid or made by the plaintiff without making a claim in the

plaint. A perusal of the plaints would disclose that plaintiff has not

sought any alternative relief. The suits are only for specific

performance of the contract. There is no merit in the contention of

the first respondent that since decree for specific performance is

discretionary, the Court can award compensation or refund the

earnest money or deposit without making a claim in the plaint.

35. Section 24 bars the filing of the suit for compensation

for breach after dismissal of suit for specific performance. It is as

under:

43

“Sec.24. Bar of suit for compensation for breach

after dismissal of suit for specific performance: The

dismissal of a suit for specific performance of a

contract or part thereof shall bar the plaintiff’s right to

sue for compensation for the breach of such contract or

part, as the case may be, but shall not bar his right to

sue for any other relief to which he may be entitled, by

reason of such breach.”

36. Similarly, Order 7 Rule 13 of the CPC provides for

presentation of the fresh plaint in case of rejection of a plaint under

Order 7 Rule 11 of the CPC. It reads as under:

“Rule 13. Where rejection of plaint does not

preclude presentation of fresh plaint: The rejection

of the plaint on any of the grounds hereinbefore

mentioned shall not of its own force preclude the

plaintiff from presenting a fresh plaint in respect of the

same cause of action.”

44

Therefore, even if the suit for specific performance of the

contract or part thereof is rejected, there is no bar for the plaintiff to

sue for any other relief, which he may be entitled to except to sue

for compensation for breach of contract.

37. From the discussions made above, it is clear that the

agreements entered into by the plaintiff and the defendants for sale

of granted lands are null and void having regard to sub-section (2)

of Section 4 of Act and its enforcement is barred under Section 23

of the Contract Act. Therefore, the plaints in question are liable to

be rejected. However, there is no impediment for the plaintiff to

sue for any other relief as provided in Section 24 of the Specific

Relief Act and Order 7 Rule 13 of the CPC.

38. It is also necessary to consider yet another submission of

the learned Counsel for the first respondent that the first respondent

has paid huge advance amount in terms of the contract. He has also

deposited court fee along with the plaints. If the plaints are

45

rejected, the plaintiff will not only be deprived of the properties but

also the earnest money and the court fee. I have already held that

the plaintiff is entitled to sue for other reliefs having regard to

Section 24 of the Specific Relief Act. But, the question is whether

the plaintiff is entitled for refund of court fee? In this connection, I

have also heard Sri H.T.Narendra Prasad, learned HCGP for the

respondent-State.

39. It is well settled that court fee is not a tax. In INDIAN

MICA AND MICANITE INDUSTRIES LTD. VS. THE STATE

OF BIHAR – AIR 1971 SC 1182, the Apex Court has held that

before any levy can be upheld as a fee, it must be shown that the

levy has reasonable correlationship with the services rendered by

the Government. In other words, the levy must be proved to be a

quid pro quo for services rendered.

40. In THE SECRETARY, GOVERNMENT OF

MADRAS, HOME DEPARTMENT AND ANOTHER VS.

46

ZENITH LAMPS AND ELECTRICAL LTD. – AIR 1973 SC 724,

the Hon’ble Supreme Court has held that in a case concerning the

administration of civil justice in a state, the fees must have relation

to the administration of civil justice. While levying fees, the

appropriate legislature is competent to take into account all relevant

factors, the value of the subject matter of the dispute, the various

steps necessary in the prosecution of a suit or matter, the entire cost

of the upkeep of Courts and officers administering civil justice, the

vexatious nature of a certain type of litigation and other relevant

matters. It is free to levy a small fee in some cases, a large fee in

others, subject of course to the provisions of Article 14. But one

thing the legislature is not competent to do, and that is to make

litigants contribute to the increase of general public revenue. In

other words, it cannot tax litigation, and make litigations pay, say

for road building or education or other beneficial schemes that a

state may have. There must be a broad correlationship with the fees

collected and the cost or administration of civil justice. Whenever

the State Legislature generally increases fees, it must establish that

47

it is necessary to increase Court fees in order to meet the cost of

administration of civil justice. As soon as the broad correlationship

between the cost of administration of civil justice and the levy of

Court fees ceases, the imposition becomes a tax and beyond the

competence of the State Legislature.

41. In P.M.ASHWATHANARAYANA SETTY VS. STATE

OF KARNATAKA – AIR 1989 SC 100, the Apex Court has

observed that the power to raise funds through the fiscal tool of a

fee is not to be confused with a compulsion so to do. Fees are

levied in order to defray usually a part, in rate cases the whole of

the cost of services done in public interest and conferring some

degree of advantage on the fee payer. In the said case, though the

Court has abstained from striking down the legislation authorising

levy of ad valorem court fee, it has further stated that immediate

steps are called for and are imperative to rationalise the levies. In

48

doing so, the State should realise the desirability of levying on the

initial slab of the subject matter, say up-to 15,000/-, a nominal

court fees not exceeding 2 to 2½% so that small claims are not

priced out of Courts. Claims in excess of Rs.15,000/- might admit

of an ad valorem levy at rates which, preferably, should not exceed

7½% subject further to an upper limit which having regard to all

circumstances, could be envisaged at Rs.75,000/-. The Court has

further held that after that limit is reached, it is appropriate to

impose on gradually increasing slabs of the value of the subject

matter, progressively decreasing rates, say from 7½% down to ½%

in graduated scales. The Governments concerned should bestow

attention on these matters and bring about a rationalisation of the

levies. The reasons assigned for issuing such directions are as

under:

“12. These are the realities in the background of which

the impact of court fees is to be considered. Indeed all

civilised Governments recognise the need for access to

justice being free. Whether the whole of the expenses

49

of administration of civil justice also – in addition to

those of criminal justice – should be free and met

entirely by public revenue or whether the litigants

should contribute and if so, to what extent, are matters

of policy. These ideals are again to be balanced against

the stark realities of constraints of finance. Before any

judicial criticism of the policy acknowledgment should

be made of the Government’s power to raise the

resources for providing the services from those who

use and benefit from the services. The idea that there

should be uniform fixed fee for all cases, instead of the

ad valorem system, has its own nettling problems and

bristles with anomalies. How far these policy

considerations have an adjudicative disposition and

how far Courts can mould and give direction to the

policy is much debated. The Directive Principles in

Art.39-A are, no doubt, fundamental in the governance

of the country, though not enforceable in Courts of

law.”

42. In view of the above observations, the Karnataka Court

Fees and Suits Valuation Act, 1958 (for short ‘Court Fees Act’)

was amended by Karnataka Act No.2/1993, wherein Article I has

50

been substituted almost incorporating the suggestion made by the

Supreme Court in the above case. Slab system has been introduced

replacing the flat rate at 10%.

43. Chapter VII of the Court Fees Act, 1958 provides for

refund and remission of court fee. Section 63 provides for the

refund of court fee in case of delay in presentation of plaint.

Section 64 provides for refund in cases of remand. Refund of court

fee is also available where the Court reverses or modifies former

decision on ground of mistake. Under Section 66 the plaintiff is

entitled for refund of half of the amount of fee paid in respect of

the claim or claims in a suit or appeal, if the suit is dismissed as

settled out of Court, before any evidence has been recorded on the

merits of the claim; or any suit is compromised ending in a

compromise decree before any evidence has been recorded on the

merits of the claim; or any appeal is disposed of before the

commencement of hearing of such appeal. There is also a provision

in Section 67 for refund of court fee paid by mistake or

51

inadvertence. A Division Bench of this Court in

A.SREERAMAIAH VS. THE SOUTH INDIAN BANK LTD.,

BANGALORE AND ANOTHER - ILR 2006 KAR 4032 has held

that in any settlement arrived in terms of Section 89 of the CPC

including the judicial settlement at the intervention and on terms

suggested by the Court, the appellant is entitled for refund of full

court fee. However, if the plaint is rejected at the threshold, there is

no provision for refund of the court fee. There is no exemption

from payment of court fee if the plaintiff choses to file fresh suits

having regard to Section 24 of the Specific Relief Act or Order 7

Rule 13 of the CPC. I am of the view that the State Government

has to consider amending the Karnataka Court Fees and Suits

Valuation Act, 1958 to enable the plaintiffs to claim refund of the

court fee either in full or atleast in part when their plaints are

rejected under Order 7 Rule 11(d) of the CPC.

44. In the light of the above discussions, I pass the

following:

52

ORDER

(i) The writ petitions are allowed and the orders dated

28.3.2012 on I.A.Nos.8 in O.S.Nos.2375/2011 and 2372/2011,

I.A.No.9 in O.S.No.2370/2011 and I.A.No.7 in O.S.No.2374/2011

are hereby set aside and the applications are allowed. The plaints in

O.S.Nos.2375/2011, 2372/2011, 2370/2011 and 2374/2011 on the

file of the 7th

Additional City Civil Judge, Bangalore are hereby

rejected.

(ii) However, this order will not preclude the first

respondent/plaintiff from availing other remedies available to him

in law.

(iii) The Registry is directed to send a copy of this order to

the Revenue Secretary and Law Secretary, Vidhana Soudha,

Bangalore. The Law Secretary is directed to place a copy of this

order before the Karnataka Law Commission, Bangalore, for

53

consideration of the observations and suggestions made in

paragraphs 38 to 43 of this order. No costs.

Sd/-

JUDGE.

BMM/-

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