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1998 DIGILAW 162 (KAR)

VENKATARAM AND CO. , SHIMOGA CITY v. STATE OF KARNATAKA

1998-03-11

CHIDANANDA ULLAL, G.C.BHARUKA

body1998
G. C. BHARUKA, J. ( 1 ) THE short question involved in this appeal is as to whether the resolution dated 26-2-1993 passed by the respondent-Agricultural Produce Market Committee purporting to cancel the allotment/sale of site No. 9 in Block-H, measuring 60' x 120' of Sy. No. 1 in Srigandha Kavalu, Kasaba Hobli, Shimoga City, being the notified market yard, can be held to be legally permissible on the part of the said Market Committee. Since the learned single Judge by his impugned order has answered the said question in the affirmative, therefore, the present appeal by the writ petitioner. ( 2 ) THE respondent-Market Committee has been established under S. 9 of the Karnataka Agricultural Produce Market Committee (Regulation) Act, 1966 (in short "the APMC Act") having the jurisdiction over the entire market area of Shimoga. It is now an accomplished fact that as provided under the provisions of the APMC Act the said Market Committee has been established for ensuring better regulation of buying and selling of notified agricultural produces. For achieving the said objective sub-section (2) of S. 8 of the APMC Act mandates that no place except the market yard, market sub-yard or sub-market yard shall be used for purchase or sale of notified agricultural produces. ( 3 ) SECTION 6 of the APMC Act, inter alia, provides that for every market ara there shall be a market and for every market there shall be a market yard and there may be one or more market sub-yards. Section 69 of the APMC Act empowers the State Government to acquire the lands for carrying out the purposes of the APMC Act by invoking the provisions of the Land Acquisition Act, 1894, and the lands which were acquired on payment of the awarded compensation by the Market Committee shall vest in the Market Committee. Sub-section (2) of S. 9 of the APMC Act declares that every Market Committee established under the APMC Act shall be a body corporate which may sue or be sued in its corporate name. It also provides that the Market Committee shall be competent to make contract and to acquire, hold, lease, sell or otherwise transfer any property and to do all other things necessary for the purpose for which it is established. ( 4 ) SECTION 63 of the APMC Act enumerates the powers and duties of the Market Committee. It also provides that the Market Committee shall be competent to make contract and to acquire, hold, lease, sell or otherwise transfer any property and to do all other things necessary for the purpose for which it is established. ( 4 ) SECTION 63 of the APMC Act enumerates the powers and duties of the Market Committee. Clause (b) (iii) of sub-section (1) of the said Section empowers the Market Committee to acquire, hold and dispose of any moveable or immovable property for the purpose of efficiently carrying out its duties. A conspectus of the statutory provisions of the Act, as noticed above, clearly establishes the authority of the Market Committee, established under the APMC Act, to acquire and transfer the immovable properties by way of lease, sale or otherwise, provided that the said transactions can be said to have a reasonable nexus with the object and purpose for which the Market Committee is established, namely, for the better and effective regulation of buying and selling. In other words, if the Market Committee enters into any contract of transfer of any property which is found to be opposed to the object of the APMC Act or which may on appropriate analysis is found to be defeative of the purposes for which the Market Committee is established, then the same will be void in view of S. 23 of the Indian Contract Act, 1872, which reads thus :"23. What considerations and objects are lawful and what not. The consideration or object of an agreement is lawful, unless -it is forbidden by law;or is of such a nature that, if permitted, it would defeat the provisions of any law, or is fraudulent; or 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 of object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. "illustrationsxxx xxx xxx xxx ( 5 ) NOW, coming to the facts of the present case which lie in a narrow compass, respondent-Market Committee under its resolution dated 26-2-1993, took a decision to allot the site in question in favour of a partnership firm, namely M/s. Murugar Arecanut Traders, being the vendor of the appellant, for a total consideration of Rs. 1,666. 67 ps. 1,666. 67 ps. Consequent to the said resolution a registered instrument termed as Sale Deed came to be executed on 24-5-1974, which has been placed at Annexure-A to the writ petition. The preamble of the said instrument reads thus :"this sale deed is made the Twenty fourth day of May 1974 between the Agricultural Produce Market Committee, Shimoga, Shimoga District, Karnataka State, represented by (1) its Chairman Sri N. D. Thimmappa (2) its I/c Secretary Sri C. Jayappa (hereinafter called the seller) of the one part and M/s. Murugar Arecanut Trader, represented by its Partner Sri V. Subramanyachetty s/o. Sri Vadivelu Chetty, aged about 43 years, resident of Shimoga City, Shimoga District (hereinafter called the purchaser) of the other part. WHEREAS the seller is the owner and in possession of the market yard known as Sandalwoodkaval situated in Sl. No. 1 of Gopala village, Kasaba Hobli, Shimoga Taluk, Shimoga District, Shimoga, and now included in the limits of Shimoga City Municipality, Shimoga. WHEREAS the seller has divided a portion of that yard into sites or plots for allotment to licenced traders and commission agents connected with trade carried on in the yard under the supervision, direction and control of the seller in accordance with the provisions of the Karnataka Agricultural Produce Marketing (Regulation) Act, 1966, and the rules thereunder and the bye-laws and regulations framed by the seller for construction of shop-cum-godown and for providing storage etc. , of commodities dealt within the yard; andwhereas the purchaser being a licencee holding a licence from the seller to carry on dealings and trade so supervised, regulated and controlled by the seller has applied for allotment of a site in the Market Yard for construction of shop-cum-godown for the above said purposes and the seller at its meeting held on 26-4-1971 resolved to grant to the purchaser a site No. 9 (nine) block 'h' more particularly described in the Schedule below for a consideration of Rs. 1,666. 67 (Rupees one thousand six hundred sixty six and paise sixty seven only) subject to the conditions, reservations and stipulations enumerated hereafter in this Deed which conditions, reservations and stipulations the purchaser has agreed to and has accepted. 1,666. 67 (Rupees one thousand six hundred sixty six and paise sixty seven only) subject to the conditions, reservations and stipulations enumerated hereafter in this Deed which conditions, reservations and stipulations the purchaser has agreed to and has accepted. " ( 6 ) THE material conditions incorporated in the said instrument which are relevant for the present purposes reads thus :" (A) That the purchaser should construct shop-cum-godown on the said site according to the design previously approved by the seller committee on or before the date prescribed and if the purchaser fails to do so without sufficient reasons the said site may be forfeited and resumed by the seller's Committee without refunding the price or any part of it paid as above or without payment of any compensation or without any extension of time; (b) That the purchaser can sell the site and the buildings that will be constructed thereon only to permanent licence-holders from the seller' committee and to none else; (c) That the purchaser should not sell the site and the buildings that will be constructed thereon, within a period of five years from the date of completion of the first building thereon and should the seller be obliged to sell it within this period as a result of his ceasing to carry on business in the Market Yard, he can dispose of or transfer the site or buildings or any other interest thereon to only merchants holding a licence to trade granted by the seller and only with the previous sanction in writing of the seller;" ( 7 ) THE instrument of transfer in question further makes it abundantly clear that the site in question had been transferred in favour of the petitioner only for the purpose of construction of shop-cum-godown for carrying the wholesale trade in notified agricultural produces as specified from time to time by the Market Committee and it would be impermissible for the buyer to use the said site for residential or any other purpose whatsoever. It was also agreed between the parties that the purchaser cannot store articles, goods or commodities other than those specified by the Market Committee without the permission of the latter. It was also agreed between the parties that the purchaser cannot store articles, goods or commodities other than those specified by the Market Committee without the permission of the latter. Therefore, as agreed to between the parties, the enjoyment of the site in question was absolutely restricted to bring it in consonance with the object and purpose of the APMC Act since any attempt to violate the said legislative mandate would have rendered the contract of transfer entered into between the parties as void. ( 8 ) ADMITTEDLY, the original allottee namely M/s. Murugar Arecanut Traders did not make any construction on the site in question as stipulated under the deed of transfer for the purpose of carrying on any business till and up to 1989. Instead, they filed an application before the Market Committee on 30-5-1989 seeking their permission to transfer the said site in favour of the present appellant which was acceded to by the Market Committee through its administrator subject to the condition that the appellant should construct shop cum godown within the period of two years failing which action was to be taken in accordance with law. The permission so accorded was communicated by the Secretary of the Market Committee under his letter 14-6-1989 with a copy to the present appellant. Consequent upon the said permission, the original allottee transferred his right, title and interest over the site in question to the appellant herein by a registered deed of transfer 28-6-1989 (Annexure 'b' to the writ petition) which specifically mentions that transfer was being effected subject to the condition laid down by the Market Committee. Subsequently, when it was found that the appellant had failed to make construction on the site in question within the stipulated period of two years, the Market Committee served several notices upon him to show cause as to why the allotment should not be forfeited. In response to one of the said notices 22-9-1992 the appellant filed reply 2-9-1992 stating therein that the business in arecanut had come down and he was facing financial difficulties and as such he could not put up the construction. Since the committee did not find the reply acceptable, therefore, the Market Committee under its meeting held on 26-2-1993 resolved to forfeit the allotment. Since the committee did not find the reply acceptable, therefore, the Market Committee under its meeting held on 26-2-1993 resolved to forfeit the allotment. ( 9 ) THE aforesaid resolution 26-2-1993 came to be challenged by the appellant after a lapse of almost three years by filing writ Petition No. 3586/96 by raising various legal issues. But the learned single Judge having found no substance in the pleas so raised dismissed the writ petition by the impugned order 24-9-1996 taking the view that the instrument like the present one at Annexure 'a' was only a licence granted by the Market Committee to a trader for specific purpose of constructing a shop cum godown for carrying on wholesale business in notified agricultural produce within a period of two years and since it was found that there was violation of the said condition, therefore revocation thereof was held to be valid. ( 10 ) MR. K. I. Bhatta, learned counsel for the appellant, has submitted that the instrument 24-5-1974 (Annexure 'a' to the writ petition) executed by the Market Committee in favour of the vendor of the appellant evidences absolute sale and therefore keeping in view S. 11 of the Transfer of Property Act ('tp' Act for short), the directions contained therein, for user and enjoyment of site in a particular manner and purpose are of no legal consequence and in that view of the matter it was not competent on the part of the Market Committee to forfeit the allotment for violation of the said direction pertaining to enjoyment and user. ( 11 ) ON the other hand, Mr. B. G. Sridharan, learned Counsel appearing for the Market Committee, by relying on S. 31 of the TP Act raised the plea that the instrument of transfer at Annexure 'a' merely evidences creation of interest with a condition, namely, construction of shop cum godown should be made within a specified period and on failure to carry out the same, interest ceased to exist. ( 12 ) FOR weighing the rival contentions, it would be better to quote Sections 11 and 31 of the T. P. Act which read thus :-Section 11. ( 12 ) FOR weighing the rival contentions, it would be better to quote Sections 11 and 31 of the T. P. Act which read thus :-Section 11. Restriction repugnant to interest created.- Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction. Where any such direction has been made in respect of one piece of immoveable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof. Section 31. Condition that transfer shall cease to have effect in case specified uncertain event happens or does not happen.- Subject to the provisions of Section 12, or on a transfer of property an interest therein may be created with the condition superadded that it shall cease to exist in case a specified uncertain event shall happen, or in case a specified uncertain event shall not happen. Illustrations (a) A transfers a farm to B for his life, with a proviso that, in case B cuts down a certain wood, the transfer shall cease to have any effect. B cuts down the wood. He loses his life-interest in the farm. (b) A transfers a farm to B, provided that, if B shall not go to England within three years after the date of transfer, his interest in the farm shall cease. B does not go to England within the term prescribed. His interest in the farm ceases. 12a. In the case of Devendra Prasad Sukul v. Surendra Prasad Sukul, AIR 1936 PC 24 : 63 Ind App 26, the Privy Council, by referring illustration (b) as set out in Section 31 of the T. P. Act quoted above, has held thus.-"this is an example of a completed transfer subsequently resolves. The interest has already been created, but it is thereafter defeated. The interest has already been created, but it is thereafter defeated. " ( 13 ) IN the case of Govindamma v. Secretary, Municipal First Grade College, Chintamani, ILR (1986) Kant 1175 : (AIR 1987 Kant 227) (para 12), this Court, on comparision and analysis of Sections 11 and 31 of the T. P. Act, held that :-"transfer of property is always made to convey property to some one or in other words to create an interest in the property in favour of such a person if the interest so created is absolute but in the terms of the transfer there is a direction that such interest shall be applied or enjoyed by the transferee in a particular manner (though the interest created is absolute), provisions of Section 11 of the Transfer of Property Act squarely apply. It is to be noted here that the direction in the terms of the transfer has to be in regard to application of the interest created or enjoyment of the interest created in a particular manner (though the interest has been created absolutely ). In such cases, the law makes the term or direction disappear allowing the interest created absolutely to survive. On the other hand, when an interest in the property transferred is created but with a condition that it shall cease to exist on the happening of a specified uncertained event or on the non-happening of specified uncertain event, the provisions of Section 31 of the Transfer of Property Act squarely apply. The absence of the word 'absolutely' in extension of the words 'an interest' in Section 31 is very significant. Illustration (a) to Section 31 takes into consideration a case of limited interest. Illustration (b) to Section 31 appears to take into consideration a case where a limited interest has not been created, but a condition which is unconnected with application of the interest or enjoyment of the interest so created is superadded. These two illustrations, clearly highlight the basic distinction between the provisions in Section 11 and Section 31 of the Transfer of Property Act. In a case falling under Section 31 of the Transfer of Property Act, the superadded condition survives and the interest created disappears. These two illustrations, clearly highlight the basic distinction between the provisions in Section 11 and Section 31 of the Transfer of Property Act. In a case falling under Section 31 of the Transfer of Property Act, the superadded condition survives and the interest created disappears. ( 14 ) AS noticed above, in our opinion, it cannot seriously be disputed that keeping in view the provisions of APMC Act, the Market Committee had no competence to convey or transfer a property absolutely in the sence that a transferee can use and enjoy the same in any manner he likes. If the instrument at Annexure 'a' is considered to have conveyed absolute interest in the site in question permitting unrestricted enjoyment thereof, then, clearly it would be violative of the purpose, intendment and mandate of the APMC Act and thus ultra vires the powers of the Market Committee as envisaged under Section 9 (2) of the APMC Act, rendering the whole transaction as void. Therefore, keeping in view the well established rules of construction, even in the instruments, such construction cannot be adopted. Therefore, to save it from being void ab initio as per Section 23 of the Contract Act the only alternative that remains is to hold the instrument as one creating a interest in the site superadded with the condition of putting up construction within the specified time and in case of failure to do so, the interest so created was to be ceased to exist. Therefore, in our considered opinion, no fault can be found with the Market Committee in taking formal decision of cancellation of allotment and that too after compliance of principles of natural justice. ( 15 ) MR. Bhatta has further submitted that even if it be held that the petitioner/appellant has forfeited his right, interest and title over the site in question but still it will be unlawful on the part of the Market Committee to enter upon the site and take possession thereof without taking recourse to the due process of law i. e. of obtaining decree of possession from the competent Civil Court. In support of the said ground, he has relied upon the judgment of the Supreme Court in the case of Express Newspapers Pvt. Ltd. v. Union of India, AIR 1986 SC 872 (Para 87), wherein it has been held that-"the Express Buildings constructed by Express Newspapers Private Limited with the sanction of the lessor i. e. the Union of India, Ministry of Works and Housing on plots Nos. 9 and 10, Bhadurshah Zafar Marg, demised on perpetual lease by registered lease deed dt. March 17, 1958, can, by no process of reasoning, be regarded as public premises belonging to Central Government under Section 2 (e ). That being so, there is no question of the lessor applying for eviction of the Express Newspaper Private Limited, under Section 5 (1) of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 nor has the Estate Officer any authority or jurisdiction to direct their eviction under sub-section (2) thereof by summary process. Due process of law in a case like the present necessarily implies the filing of the suit by the lessor i. e. the Union of India, Ministry of Works and Housing, for the enforcement of alleged right re-entry, if any, upon forfeiture of lease due to breach of the terms of the lease. " ( 16 ) IN our opinion, the plea so raised is wholly misconceived and misplaced. In a case like the present one, where a person, who had been given the site for specific purpose by a statutory body, in furtherance of the object of the APMC Act, fails to carry out the said purpose, then the statutory body need not approach the Court for exercise of its power. Even otherwise, we have failed to understand as to how any direction of the nature sought for can in any way advance the cause of justice because once the act of forfeiture is held to be valid then recovery of possession will be merely and inevitable consequence which defaulters like the appellant can under no situation avoid. Therefore, apparently, the said plea has been raised only with a mala fide intention as a measure to prolong the dispute to which the writ Court cannot be a party. Therefore, apparently, the said plea has been raised only with a mala fide intention as a measure to prolong the dispute to which the writ Court cannot be a party. ( 17 ) IT is also of much importance that the writ petition of the appellant could not have been at all entertained because of gross laches committed by him inasmuch as in the present case, the resolution of the Market Committee has been questioned under the writ jurisdiction after a lapse of almost three years. In the case of State of M. P. v. Nandlal Jaiswal, AIR 1987 SC 251 (Para 23) it has been held that :-"now, it is well settled that the power of the High Court to issue an appropriate writ under Article 226 of the Constitution is discretionary and the High Court in the exercise of its discretion does not ordinarily assist the tardy and the indolent or the acquiescent and the lethargic. If there is any inordinate delay on the part of the petitioner in filing a writ petition and such delay is not satisfactorily explained, the High Court may declined to intervene and grant reliefs in the exercise of its writ jurisdiction. The evolution of this rule of laches or delay is premised upon a number of factors. The High Court does not ordinarily permit of belated resort to the extraordinary remedy under the writ jurisdiction because it is likely to cause confusion and public inconvenience and bring in its train new injustices. The rights of third parties may intervene and if the writ jurisdiction is exercised on a writ petition filed after unreasonable delay, it may have the effect of inflicting not only hardship and inconvenience but also injustice on third parties. When the writ jurisdiction of the High Court is invoked, unexplained delay coupled with the creation of third party rights in the meanwhile is an important factor which always weighs with the High Court in deciding whether or not to exercise such jurisdiction. We do not think it necessary to burden this judgment with reference to various decisions of this Court where it has been emphasised time and again that where there is inordinate and unexplained delay and third party rights are created in the intervening period, the High Court would decline to interfere, even if the State action complained of is unconstitutional or illegal. " ( 18 ) FOR the reasons discussed above, we are of the considered opinion that the appellant is not entitled to any relief as claimed. The appeal is accordingly dismissed with costs assessed at Rs. 1,100/ -. Appeal dismissed. --- *** --- .