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2001 DIGILAW 307 (KAR)

Rajamma v. Munigiddamma

2001-03-29

H.N.TILHARI, K.R.PRASAD RAO

body2001
JUDGMENT Hari Nath Tilhari, J.—This appeal arises from the judgment and award/decree dated 31.7.1999 delivered by the II Additional City Civil Judge, Bangalore City, in proceedings under Sections 30 and 31(2) of the Land Acquisition Act. 2. The land, in the present case, had been acquired vide notification dated 12.12.1991. This is the date on which the preliminary notification under Section 17 of the Bangalore Development Authority Act had been issued. This notification was published on 10.3.1994. The final notification in that regard is dated 24.1.1996 and was published in Gazette dated 25.1.1996 whereunder the land in dispute namely Sy. No. 6 with total acres of 11.01 guntas inclusive of 0.18 guntas of karab land situated in Konadasapura Village, Bangalore South Taluk, along with some other lands was acquired. According to the case of the appellant, as pleaded, the original owner of the land was one Venkatappa. Venkatappa died during the pendency of the land acquisition proceedings and was succeeded by Smt. Narayanamma, widow of Venktappa. The land was acquired for the purpose of shifting the wholesale Iron and Steel market yard. According to the case of the appellant, Smt. Narayanamma executed an agreement to sell the land in question vide Ex.P-25, copy of which is at page Nos. 52 and 53 of the paper-book. According to the case of the appellant, she agreed to sell the land for sale consideration of Rs. 10,000.00 to the extent of land of 0.30 guntas of the said plot for a sum of Rs. 10,000.00. The terms of the agreement to sell are contained in deed Ex. P-25, copy of which is at page No. 52 of the paper-book. According to the case of the appellant, Smt. Narayanamma also executed a Power-of-Attorney in favour of the appellant namely Smt. Rajamma which is on record as Ex.P-26. Both these deeds admittedly are unregistered documents and according to the appellant's case, they were notarized. The admitted position is that, Exs.P-25 and P-26 are unregistered documents though they had been verified before the Notary. On the basis of these two documents, the appellant (claimant before the Land Acquisition Officer and before the Reference Court) claimed to be entitled to get the proportionate compensation with regard to 0.30 guntas of land. The admitted position is that, Exs.P-25 and P-26 are unregistered documents though they had been verified before the Notary. On the basis of these two documents, the appellant (claimant before the Land Acquisition Officer and before the Reference Court) claimed to be entitled to get the proportionate compensation with regard to 0.30 guntas of land. The reference Court, after perusal of the evidence on record, held that the present appellant failed to prove due execution of the agreement to sell and passing of consideration as well as he failed to establish the execution of alleged Power of Attorney. That on the basis of the findings that the present appellant failed to establish and prove the agreement to sell (Ex.P-25) and Power of Attorney, it held that the present appellant (claimant) was not entitled to make the claim nor to be granted the same which the appellants have made before us. Feeling aggrieved from the order of the Civil Court, Smt. Rajamma who has based her claim on the basis of the agreement to sell as well as on the Power of Attorney dated 23.3.1987, has come up before this Court by way of this appeal. 3. We have heard Sri P. Krishnappa, learned Counsel for the appellant and Sri H.N. Prakash, learned Counsel for the Respondents. 4. The learned Counsel for the appellant contends that the finding recorded by the reference Court regarding appellant's failure to prove Ex.P-25 and Ex.P-26 is vitiated by error of law and is based on misappreciation of the material on record. He contended that the agreement to sell coupled with Power of Attorney confers a right on the appellant to receive the compensation or proportionate compensation with reference to the land acquired. The learned Counsel made reference to certain cases. 5. These contentions of the learned Counsel for the appellant have hotly been contested on behalf of the Respondents. The learned Counsel for the Respondents contended that the finding recorded by the Court below, that the appellant had failed to prove the execution of agreement to sell and the Power of Attorney, does not suffer from any error and the findings are correct and they do not call for any interference. The learned Counsel for the Respondents contended that the finding recorded by the Court below, that the appellant had failed to prove the execution of agreement to sell and the Power of Attorney, does not suffer from any error and the findings are correct and they do not call for any interference. In alternative, the learned Counsel contended even if without conceding it be assumed or taken as a fact for a moment that these documents as well as the execution thereof is proved, cannot and does not help or improve the appellant's case. The learned Counsel for the Respondents contended that on the basis of these documents, the appellant-Rajamma did not get any right to take the compensation. The learned Counsel has contended that under the agreement to sell, no right did pass on and could be said to have been passed on to the appellant as the agreement to sell is not a transfer by itself. The learned Counsel further contended that for the transfer of immovable property, as per law under Transfer of Property Act and Registration Act, the proper procedure is, the execution of registered sale-deed in case of transfer or sale of immovable property worth Rs. One hundred or more, and there being no registered sale-deed and there being only an agreement to sell as alleged, the agreement to sell does not pass on any right of title or ownership in the property in favour of the person who bases his claim on mere agreement to sell as present appellant. The learned Counsel further contended that the Power of Attorney which is alleged to have been executed in favour of the present appellant Rajamma, came to an end and stood automatically determined on the death of Narayanamma who had died on 1.7.1991. The learned Counsel contended that if for a moment it is assumed, without concession of his part being made, that the Power of Attorney creates or confers any interest on the holder of Power of Attorney, the Power of Attorney in the present case not being registered, it could not be deemed to have created or conferred any interest in the property in favour of the appellant. The learned Counsel for the Respondents, in this connection, made reference to certain decisions of the Supreme Court which will be referred to hereinafter. The learned Counsel for the Respondents, in this connection, made reference to certain decisions of the Supreme Court which will be referred to hereinafter. The learned Counsel for the Respondents submitted that the appellant has already filed a suit in the Civil Court in O.S. No. 172 of 1998 in the Court of Principal Civil Judge, Junior Division, Bangalore District, and once he has taken recourse to that remedy, the proper course for him to pursue that remedy and he could not make a claim for compensation before the Land Acquisition Authority or the Reference Court. The learned Counsel for the Respondents contended that the present appeal is misconceived. 6. In rejoinder, Sri Krishnappa appearing for the appellant, contended that a perusal of the Power of Attorney along with the agreement to sell will per se show that an interest has been passed on in favour of the appellant and once the interest has been passed on and when law does not specifically require the Power of Attorney to be registered, the Power of Attorney cannot be said to have come to an end with the death of the donor of the Power-of-Attorney. Sri Krishnappa, in this connection, made reference to a Division Bench decision of this Court in the case of Mohammed @ Podiya Vs. Assistant Commissioner, ILR (1993) KAR 2306 . 7. As regards the first contention as to whether the agreement to sell (Ex.P-25) or the Power of Attorney and the execution thereof whether it is proved or not, it is really a question which should have been agitated before the Civil Court as the suit is already pending. We do not want to express any opinion on that question. The finding of the Reference Court on that question, we may say, should not be taken as binding when the matter is considered by the Civil Court in Original Suit No. 172 of 1998. As the suit is pending, we do not want to express any final opinion on that point. The finding of the Reference Court on that question, we may say, should not be taken as binding when the matter is considered by the Civil Court in Original Suit No. 172 of 1998. As the suit is pending, we do not want to express any final opinion on that point. But, even if for a moment if it be assumed, which assumption, we make clear should not affect the mind of the Civil Court which is trying the Original Suit No. 172 of 1998, that the execution of the agreement to sell and the Power of Attorney has been proved, even then the Petitioner's case does not stand on higher footing so far as the question of appellant's right to claim compensation for the land acquired during the course of Land Acquisition Proceedings. The agreement to sell has been mentioned in Section 54 of the Transfer of Property Act. Section 54 defines "sale". It reads as under: Section 54. 'SALE' defined.- 'Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Sale how made.-Such transfer, in the case of tangible Immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument. In the case of tangible Immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. Delivery of tangible Immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property. Contract for sale.-A contract for the sale of Immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property. 8. A perusal of above provision as to contract for sale, in the section itself makes it clear that the contract for sale or agreement to sell does not by itself create any interest or charge on such property. A prima facie perusal of Section 54 is declarative of the nature and character and effect of agreement to sell or contract to sell. A prima facie perusal of Section 54 is declarative of the nature and character and effect of agreement to sell or contract to sell. It makes it clear that no interest does pass on in favour of the person in whose favour the agreement had been executed to sell the property in future. It does not create any interest in favour of the alleged transferee or in whose favour the transfer is to be made in future. When we so observe, we find support for our view from the decision of Their Lordships of the Supreme Court in the case of Sunil Kumar Jain Vs. Kishan and others, AIR 1995 SC 1891 . The material observations as contained therein, which it will be appropriate to quote, read as under: Learned Counsel appearing for the Petitioner contended that under the agreement of sale dated 5th December, 1981 the Respondents had received consideration and kept the Petitioner in possession of the land and that, therefore, by operation of Section 53-A of the Transfer of Property Act, the Petitioner is entitled to the compensation. We are unable to agree with the learned Counsel. In a reference, the dispute is to the title to receive the compensation. It is settled law that the agreement of sale does not confer title and, therefore, the agreement holder, even assuming that the agreement is valid, does not acquire any title to the property. We further find support for our view from the decision of the Hon'ble Supreme Court in the case of K. Basavarajappa Vs. Tax Recovery Commissioner, Bangalore and others, (1996) 8 AD SC 238 . At page No. 640, Their Lordships observe as under: It must, therefore, be held, as rightly submitted by Mr. Salve, learned Senior Counsel for Respondent No. 3 that the appellant had no locus standi to move application dated 12.4.1998 for getting auction sale set aside. It is also to be noted that he had no legal interest in the said property on the date of application. It is axiomatic that a mere agreement to sale creates any interest to sale or right in the property which is the subject matter of the agreement. 9. It is also to be noted that he had no legal interest in the said property on the date of application. It is axiomatic that a mere agreement to sale creates any interest to sale or right in the property which is the subject matter of the agreement. 9. A perusal of these decisions of Their Lordships of the Supreme Court, in the context of Section 54 which deals with the contract of agreement or agreement to sale as defined, clearly declare the law and legal position that an agreement to sell does not create nor confers any title or interest in favour of the person mentioned therein as a prospective vendee. This being the position, the agreement to sell cannot be held to have conferred any title with respect to the property i.e., Sy. No. 6 in favour of the present appellant even if the plot No. 6 is taken or assumed for a while to be mentioned in the agreement. That even if it is taken to be included in the agreement, no right did pass on in favour of the appellant under the aforesaid agreement. The land had been acquired under Acquisition Act by State no doubt, after the agreement for sale had been entered into. The land had been acquired vide preliminary notification in the year 1991 and published in the year 1994. When the land had been acquired, the right to compensation under law did fall on the heir or heirs of the owner of the land namely Smt. Narayanamma, widow of late Sri Venkatappa. The learned Counsel for the appellant contends that when the Power of Attorney had been executed by Smt. Narayanamma in favour of Smt. Rajamma, thereunder interest had been transferred in favour of the present appellant. Ordinarily, Power of Attorney authorizes a person to act for and on behalf of the donor of the Power of Attorney. Whether an interest had been conferred thereunder in favour of the appellant is a doubtful question and on that point we do not want to express any final opinion at this stage because expressing of an opinion in favour of one or another may damage the interest of either of the parties. Whether an interest had been conferred thereunder in favour of the appellant is a doubtful question and on that point we do not want to express any final opinion at this stage because expressing of an opinion in favour of one or another may damage the interest of either of the parties. But, even if interest is to be transferred or created in the property by a Power of Attorney, then for transferring an interest in the property, the Power of Attorney would require its registration. Ordinarily Power of Attorney may not require registration, but under the Power of Attorney if interest in the property valuing more than Rs. 100.00 is conferred or given, then it will not only amount to be Power of Attorney, but transfer and that transfer had to be made by execution of registered deed of transfer. When we so observe, we find support for our view from the decision of Calcutta High Court in the case of Indra Bibi Vs. Jain Sirdar Ahiri reported in ILR Volume XXXV (1908) Cal 845, wherein Hon'ble Maclean, C.J., observed at page No. 848 as under: I will, however, assume in favour of the appellant that the document did constitute an equitable charge in favour of the person, to whom the power was given, but even then, the want of registration in compliance with the provisions of the Registration Act is fatal to the Plaintiff's case. It is quite clear under Section 17 of that Act, that if the document was one, which purported to affect, or to create any interest in Immovable property, it was bound to be registered. Section 49 says that "No document required by Section 17 to be registered shall affect any Immovable property comprised therein unless it has been registered in accordance with the provisions of this Act. When we look into the circumstances of this case it appears that the document in question has not been registered in compliance with the provisions of the Act. it was admittedly stamped only with the stamp required for a power-of-attorney and not for a document creating an equitable charge, and it was apparently so presented to the Registering Officer. When we look into the circumstances of this case it appears that the document in question has not been registered in compliance with the provisions of the Act. it was admittedly stamped only with the stamp required for a power-of-attorney and not for a document creating an equitable charge, and it was apparently so presented to the Registering Officer. If it was an equitable charge, it is quite clear that it ought to have been entered in Book I, and certain particulars, which are compulsorily required by Section 21 of the Act relating to Immovable property, ought to have been furnished. Section 21 says that: "No non-testamentary document relating to Immovable property shall be accepted for registration, unless it contains a description of such property sufficient to identify the same". That was not the case here-there was no such description-and in point of fact the document was entered, not in Book I, which is a register of non-testamentary documents relating to Immovable property, but was entered in Book IV, which is a "Miscellaneous Register". The case of Najibulla Mulla Vs. Nasir Mistri (1) is akin to the present. But, to my mind, it is sufficient to say that the document was not registered in accordance with the provision of the Act and, therefore, under Section 49, it could not affect any Immovable property comprised therein". Harington, J., and Fletcher, J., expressed their complete agreement with the view expressed by Maclean, C.J., in the case. 10. In view of the above, we are of the view that even if it be assumed that any equitable interest has been created in favour of the appellant, but as the document has not been registered, no equitable interest could and did pass on in favour of the appellant under that deed for want of registration. In this view of the matter, in our opinion, no right did pass on to the or in favour of the appellant with respect to the property, whether it is subject matter of agreement to sell or subject matter of Power of Attorney. No doubt, right to manage might have been there. But it cannot be said that thereunder the appellant became entitled to claim compensation in the land acquisition proceedings from the Government with respect to the land acquired and it is not such that a person who alleges to have paid entire sale consideration has no remedy. No doubt, right to manage might have been there. But it cannot be said that thereunder the appellant became entitled to claim compensation in the land acquisition proceedings from the Government with respect to the land acquired and it is not such that a person who alleges to have paid entire sale consideration has no remedy. The law is very clear on this aspect of the matter and the remedy of the appellant is to file a suit for compensation as the decree for specific performance of contract of sale cannot be granted as the property had already been acquired by the Government. The contract might have become impossible of performance, but it could not be said that it is because of the fault of the appellant, instead it could be said that it became impossible of performance because of the change of position by and on account of acquisition of the plot by the Government in the land acquisition proceedings. In such cases, Section 21 of the Specific Relief Act read with other provision will come to the rescue of the appellant. This question has been considered in greater detail by Their Lordships of the Supreme Court in the case of Jagdish Singh Vs. Natthu Singh reported in AIR 1992 Supreme Court 1604, where Their Lordships of the Supreme Court, after examination of the case law, have been pleased to lay it down as under: When the Plaintiff by his option has made specific performance impossible, Section 21 does not entitle him to seek damages. This position is common to both Section 2 of Lord Cairn's Act, 1858 and Section 21 of the Specific Relief Act, 1963. But in Indian Law that contract, for no fault of the Plaintiff, becomes impossible of performance. Section 21 enables award of compensation in lieu and substitution of specific performance. 11. This decision of Their Lordships has been followed in a Single Judge's decision of this Court and the law to the effect has been laid down by this Court as well in the case of Smt. Pillamma and others Vs. P. Rangaraju, AIR 1996 Kant 330 . 11. This decision of Their Lordships has been followed in a Single Judge's decision of this Court and the law to the effect has been laid down by this Court as well in the case of Smt. Pillamma and others Vs. P. Rangaraju, AIR 1996 Kant 330 . In that case, after having placed reliance on the above Supreme Court's decision, this Court laid it down that the Plaintiff may be entitled to get the plaint amended and seek for compensation to be determined under Section 21 of the Specific Relief Act and therefore, it is permissible to the appellant to seek for amendment of the plaint of Suit No. 172 of 1998. No doubt, Plaintiff may have to pay the Court-fee. But, he is entitled to seek decree for damages or compensation for breach of contract which has become impossible of performance for no act or fault of the present appellant. 12. Thus considered, we are of the opinion that the present appeal deserves to be dismissed, but making it clear that any observation made about the proof of execution of agreement will not be binding on the Civil Court. The appeal having been dismissed, it is open to the Respondents to take the compensation amount. But, they have to furnish an undertaking before the Civil Court that they will abide by the decree passed by the Civil Court. 13. Subject to the above observations and clarifications, the appeal is hereby dismissed.