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2003 DIGILAW 52 (ORI)

Laxmi Magar v. Kishorimoni Patel

2003-01-21

B.PANIGRAHI

body2003
JUDGMENT B. PANIGRAHI, J. — The defendants in M.S. No. 68 of 1978 of the Court of Subordinate Judge, Sambalpur after having suffered from a decree for payment of money of Rs. 6500/- together with interest at the rate of 6% per annum have preferred this appeal 2. The case of the plaintiff-respondent in the trial Court is as follows : The appellants approached the plaintiff for purchase of “A” Schedule properties of the plaint for a consideration of Rs. 10.000/- and executed a contract for sale in her favour on 17.10.73 and got it registered. The plaintiff intend¬ed to offer sale of the properties in order to meet the house hold expenses and there was pressing necessity for such sale. Appellant No. 1 also undertook to obtain permission from the concerned S.D.O. at the time of sale of the suit land and also further agreed to sell the land within a month from the date of obtaining permission from the S.D.O. Pursuant to such agreement defendant No.1 applied for permission, but failed to produce necessary document in the proceeding. Consequently the concerned S.D.O. refused to accord permission for sale of the land. The respondent asked the appellants for refund of the consideration money of Rs. 6500/- but on some pretext or other they avoided to pay the same. 3. The defendant-appellants' case in their written statement is that execution of the suit agreement was neither voluntary nor supported by consideration. They have admitted that they are members of Scheduled Caste, but they had denied to have applied for permission and that the S.D.O. refused permission. They had taken the plea that there was a misrepresentation by the plain¬tiff that instead of an agreement for sale of Ac. 34 decimals at Demul chak they surreptitiously took the suit document in collu¬sion with the scribe and the attesting witness. The contents of the suit document was never read over and explained to defendant No. 1. 4. The trial Court on careful appraisal of the evidence placed before it has, however, come to the conclusion that defendant No. 1 and her son received Rs 6500/- towards the earnest money for the agreement vide Ext. 1. The Court below have held that defend¬ant No.1 executed an agreement for sale in favour of the plain¬tiff-respondent and she was present at the time of execution of Ext.1. The contents of Ext. 1. The Court below have held that defend¬ant No.1 executed an agreement for sale in favour of the plain¬tiff-respondent and she was present at the time of execution of Ext.1. The contents of Ext. 1 were read over to defendant No. 1 and accordingly defendant No. 1 after having understood the contents put her L.T.I. and presented it for registration. It was agreed between the parties that the appellant would sale A0.34 decimals in ‘Demul chak’ for a consid¬eration of Rs. 1000/- which would have been payable to them after getting permission and registration of the sale deed. P.W.2 was an attesting witness to the sale deed. He also supported the plaint case. Thus there was an agreement by and between the appellants and the respondent for sale of A0.34 decimals for Rs. 10,000/-. Pursuant to the said agreement defendant No.1 applied for permission from the S.D.O., Sambalpur vide Ext.2. But unfortu¬nately permission for sale of the land by appellant No. 1 was not accorded. Thereafter no deed of conveyance could be executed by the appellants. Thus the plaintiff was obliged to file the suit for the earnest money paid to defendant No. 1. 5. Mr. Patra, learned Advocate appearing for the appellants has strongly contended that since the agreement is unenforceable in law as the same is contrary to the provisions of Sections 22 and 23 of the O.L.R. Act. Thus the learned Court below could not have passed the decree directing the appellants to pay the amount. From the contention it has further appeared that such transaction is opposed to public policy. Therefore, even the agreement is executed, it is unenforceable in law. In order to examine the said contention reliance has been placed by the respondent on a judgment reported in Vol.41 (1975) CLT 143 in the case of Ganga Rout v. Durjodhan Jhankar in which his Lordship has referred to a decision reported in AIR 1974 S.C. 1892 in the case of Kuju Collieries v. Jharkhand Mines wherein the Supreme Court held : “The section makes a distinction between an agreement and a contract. According to Section 2 of the Contract Act an agreement which is enforceable by law is a contract and an agreement which is not enforceable by law is said to be void. According to Section 2 of the Contract Act an agreement which is enforceable by law is a contract and an agreement which is not enforceable by law is said to be void. Therefore, when the earlier part of the section speaks of an agreement being discov¬ered to be void it means that the agreement is not enforceable and is, therefore, not a contract. It means that it was void. It may be that the parties or one of the parties to the agreement may not have, when they entered into the agreement, known that the agreement was in law not enforceable. They might have come to know later that the agreement was not enforceable. The second part of the section refers to a contract becoming void. That refers to a case where an agreement which was originally enforceable and was, therefore, a contract, becomes void due to subsequent happenings. In both these cases any person who has received any advantage under such agreement or contract is bound to restore such advan¬tage, or to make compensation for it to the person from whom he received it. But where even at the time when the agreement en¬tered into both the parties knew that it was not lawful and, therefore, void, there was no contract but only an agreement and it is not a case where it is discovered to be void subsequently. Nor is it a case of the contract becoming void due to subsequent happenings. Therefore, Section 65 of the Contract Act did not apply.” 6. Therefore, referring the aforesaid judgment of the Supreme Court, his Lordship has held that where a contract has been entered in ignorance of its void nature and later on a party discovers that it is void, benefit of Section 65 of the Contract Act is available. 7. Section 65 of the Contract Act deals with 'agreement' and 'contract'. The distinction between both the expressions is quite apparent. In case of agreement promise or every set of promises forming the consideration of each other is an ‘agreement’. The agreement which is unenforceable in law is said to be void. It is, therefore, to be decided whether such an agreement from the inception was void or not. The agreement entered into between appellant No. 1 and the respondent was on the understanding that the appellants shall obtain permission for alienation of the land. The agreement which is unenforceable in law is said to be void. It is, therefore, to be decided whether such an agreement from the inception was void or not. The agreement entered into between appellant No. 1 and the respondent was on the understanding that the appellants shall obtain permission for alienation of the land. The alienation is subject to the permission to be granted by the competent authority under Section 22 of the O.L.R. Act. Therefore, it was only a contingent contract on the happening or not happening of the events, such contract shall be enforceable. On the promise to obtain permission from the authorities, the appellants received Rs. 6,500/-. In the event, the appellants failed to obtain permission or it was refused by the authority to accord such permission, then the promisee is entitled to claim refund of the money. Because from the inception, the agreement was not void. It was like a contingent contract which shall be enforceable only after obtaining permission. 8. Learned counsel appearing for the appellants next placed reliance on judgment reported in Volume 54 (1982) C.L.T. 191 in the case of Bhuban Mahanandia and another v. Parameswar Sa. In the aforesaid case, this Court had considered a question regarding operation of the amending provision whether it was prospective or retrospective. It is true that in the aforesaid judgment this Court held that the provision engrafted into the statute book prohibiting to the persons purchasing the properties was prospective in operation. But in this case, in strict sense there was no transfer of properties by the appellants. Therefore, it would not be a contract coming under Section 65 of the Con¬tract Act to be meant as void from the inception. 9. On perusal of the judgment reported in Volume 67 (1993) C.L.T. 367 in the case of Ramnaresh Singh v. Padmalochan Jaypu¬ria (dead) and after him Gulapi Devi and others cited by the learned counsel for the appellants, it appears that the facts of that case are almost similar and this Court took a view that since a proposed vendor was deprived of his right of enjoyment as the possession was delivered to the intending purchaser, there¬fore, before execution of such agreement the possession having been transferred the proposed vendee could not recover the ear¬nest money. But in this case, on perusal of the document, it is found that no right had accrued to the intending vendee save and except that the vendor undertook to obtain permission for sale from the authority and contract could have been then enforceable in the event permission being obtained. 10. On perusal of the judgment reported in 1995 AIR SCW 2224 in the case of Muralidhar Dayandeo Kesekar v. Vishwanath Pandu Bardu and another cited by the learned counsel for the appellants, it is found that prior permission for alienation of the land was a condition precedent. The Apex Court held : “In that behalf, the competent authority is enjoined to look to the nature of the property, subject matter of the proposed conveyance and pre-existing rights flowing thereunder and whether such alienations or encumbrances violate provisions of the Con¬stitution or the law. If the answer is in the positive, then without any further enquiry the permission straightway would be rejected. Even in case the permission is granted, it would be decided on the anvil of the relevant provisions of the Constitu¬tion and the law.” 11. Therefore, nowhere it is stated that mere contract for purchasing the property without delivery of possession would amount to sale to be brought within the mischief of Sections 22 and 23 of the O.L.R. Act. 12. Another contention has been raised that the plaintiff’s claim is barred by limitation inasmuch as the suit having not been brought within 3 years from the date of agreement. While examining the contention, it is necessary to go into the contents of Ext. 1, the deed of agreement. The appellant No.1 undertook to obtain permission from the competent authority and within a month thereafter execution of the deed of conveyance would take place. The suit has been filed within three years from the date of refusal of permission by the authorities. Therefore, the cause of action was accrued only when such refusal was made by the S.D.O. 13. Considering the claim of the appellants from any angle, it is found that the appeal has no merit. It is accordingly dis¬missed, but in the circumstances without costs. Appeal dismissed.