Judgment Rajendra Menon,J. ( 1. ) This is defendants first appeal against the judgment and decree dated 25.2.99 passed by the Additional Sessions Judge,Burhanpur decreeing a suit for specific performance filed by the respondents/plaintiffs. ( 2. ) Facts, which are not in dispute, necessary for deciding the present appeal are, that the land in dispute is situated in Amagird,Tehsil Burhanpur. Appellant here in Rameshwarlal is,holding Bhumiswami Rights for the entire la nd. In revenue Case No.19/A-2/77-78, he sought diversion of the land for the purpose of using it to establish a colony. The competent authority-exercising jurisdiction under section 172 of the Madhya Pradesh Land Revenue Code, vide order-dated 22.6.1979 granted permission. It may be noted that the application for permission under section 172 of the Code, was accompanied by the relevant documents as per the statutory rule applicable for seeking diversion i.e... Rule 4 and the documents included a tentative map and layout plan of the area. After obtaining diversion, records indicate that the appellant herein applied for a license to undertake colonization. The license was sought in accordance to the requirement of section 24(a) of The Madhya Pradesh Vinirdishta Bhrastha Acharan Nivaran Adhiniyam,1982 (hereinafter referred to as Adhiniyam of 1982).Under the provisions of section 24 of the Adhiniyam of 1982, license for establishing a colony was necessary. At this point, it may be noted that under section 31 of the Adhiniyam of 1982, transfer of plots in an area of illegal diversion or illegal colonization is void. ( 3. ) However, after obtaining the requisite Colonizers License, which was granted vide Ex.D/6 dated 31.1.1989, appellant herein applied for permission to develop the area on 3.9.91. Records indicate that on 20.1.1992, permission was received vide Ex.D/8. When the aforesaid process was in progress, it is seen that plaintiffs herein and the appellant entered into an agreement for sale of certain plots measuring 34 x 100 at the rate of Rs.12/- per sq ft. The total consideration for the sale was to be Rs.40,800/-. Each of the plaintiffs paid an earnest money of Rs.25,000/- and it was agreed that the balance amount of sale consideration i.e.. Rs.15,800/- shall be paid at the time of registration of the sale-deed, which was to be executed on or before 31.10.1987. These agreements for sale are executed vide Ex.P/1 to P/6 on 7.10.1987. Plaintiffs 1, 3, 4, 5 and 6 i.e...
Rs.15,800/- shall be paid at the time of registration of the sale-deed, which was to be executed on or before 31.10.1987. These agreements for sale are executed vide Ex.P/1 to P/6 on 7.10.1987. Plaintiffs 1, 3, 4, 5 and 6 i.e... respondents 3, 4, 5 and 6, in this appeal, were parties to the agreement and one of the executant to the agreement Rambhau Mahajan having died, he is represented by his Legal Representatives i.e... son and wife, plaintiff No. 2(a) and (b)respondents No.2(a) and 2(b) in this appeal. ( 4. ) The agreements - Ex.P/1 to P/6 executed for sale of the plots and the colony being developed by the appellant was named as Mohan Nagar Colony. One of the conditions in these agreements for sale was that the appellant herein was to obtain the requisite permission from the Sub-Divisional Officer, as contemplated under the Adhiniyam of 1982, for sale of the plots. It seems that even though the appellant obtained the license - Ex.D/6 and permission for development on 20.1.1992 vide Ex.D/8, for a long period of time, nothing was done even after 31.10.1987 to execute the sale-deeds. According to the plaintiffs, they Papaiah Vs. State of Karnataka and others, AIR 1997 SC 2676 were approaching the defendant, who used to orally inform them that immediately after permission is obtained, the sale-deed would be executed. When nothing was done, records indicate that the plaintiffs on 3.9.93, vide Ex.P/7 to P/12,served notice through their counsel for execution of the sale-deed. It seems that after some negotiations on 1.4.1994, endorsements were made on the back of Ex.P/1 to P/6, to the effect that as no permission to sell the land/plots is obtained, sale would be executed within one month from the date permission is granted by the competent authority. ( 5. ) It is the case of the plaintiffs that even though vide Ex.D/12 dated 2.4.1994 and Ex.D/13 dated 16.2.1996, certain permissions were received by the appellant/defendant for transfer of 10 Plots measuring 25350 sqft. The appellant did not take any action for execution of the sale-deed, therefore, again notice - Ex.P/13 was sent on 23.12.94; another notice - Ex.P/14 was sent on 9.8.1995, and when the defendant failed to reply and take action, the suit in question was filed on 29.1.1996.
The appellant did not take any action for execution of the sale-deed, therefore, again notice - Ex.P/13 was sent on 23.12.94; another notice - Ex.P/14 was sent on 9.8.1995, and when the defendant failed to reply and take action, the suit in question was filed on 29.1.1996. It is the case of the plaintiffs that vide Ex.D/13, permission under the statutory rule was granted for selling 13550 sqft and clubbing together the permission granted on various occasions, the total area for which permission was obtained is 38090 sqft. It was further the case of the plaintiffs that vide sale-deed Ex.P/23 dated 29.3.1996, appellant sold a plot measuring 5520 sq ft to one Smt. Shashibala Agrawal in a block known as Block-B,Plot No.2. Appellant also issued a Pamphlet - Ex.P/24, indicating the purpose of establishing a colony and his intention to sell the plots. By bringing on record the documents as indicated hereinabove and by contending that defendant appellant herein is not executing the sale deed, inspite of the fact that he has got permission in various other cases and by bringing on record the requisite map, lay out plan and other documents indicating development of the colony by the appellant, suit was filed for specific performance of the agreements - Ex.P/1 to P/6. It was further pointed out in the plaint that on 16.8.95, appellant/defendant had moved an application for permission to sell 75% plots only, after development, but when nothing was done and even though permission was granted to sell more than 38000 sqft of land and when plots were being sold,plaintiffs filed the suit for specific performance. ( 6. ) In the written statement filed, appellant herein raised the following objections: (a) His first contention was that the agreements in question - Ex.P/1 to P/6 are not agreements for sale, but are agreements for securing loan and is executed as a security for loan advanced by the plaintiffs to the defendant appellant. It was further his case that as he was unable to repay the loan, hence succumbing to the threat issued by the plaintiffs for filing a suit, he made the endorsements on 1.4.94, at the back of the agreements - Ex.P/1 to P/6. Accordingly, it was the contention of the appellant hereinabove that the agreements in question are not agreements for sale at all.
Accordingly, it was the contention of the appellant hereinabove that the agreements in question are not agreements for sale at all. (b)Objections were also raised with regard to delay in filing the suit and it was contended that the suit is barred by limitation. (c) Finally, the third objection raised was that as the agreement is to sell the property for which permission from the competent authority of the State Government is required,no decree for specific performance can be issued, as it would amount to decreeing a suit for performance of an agreement, which is void in view of section 24 and 31 of the Adhiniyam of 1982.Accordingly, contending that the suit could not be decreed, resistance was made by the appellant. ( 7. ) The learned court below on the basis of the pleadings of the parties framed eleven issues: (i) The first issue was to the effect as to whether the defendant has entered into an agreement with the plaintiffs for sale of plots bearing Numbers 7 to 12, for a consideration of Rs.40,800/- each, and each of the plaintiffs had paid Rs.25,000/- on the date of execution of the agreements i.e.. 7.10.1987. On the basis of the material that came on record, this issue is answered in favour of the plaintiffs by holding that the agreement was executed. (ii) The second issue framed was as to whether the defendant has agreed to execute the sale deed after obtaining permission from the Sub Divisional Officer,Burhanpur on or before 31.10.1987. This issue is also answered in the affirmative by holding it to be established. (iii) The third issue framed was as to whether even after 31.10.1987, defendant was assuring the plaintiffs that he shall execute the sale deed. This issue is also answered by holding that the defendant was so assuring. (iv) The fourth issue was with regard to endorsement made on the backside of the agreements - Ex.P/1 to P/6, on 1.4.94, for execution of the sale deed within one month of receipt of permission. This issue is also answered in the affirmative by holding that such an endorsement was made. (v) The fifth issue was to the effect as to whether the defendant was selling the plots to various other persons. It was found that the defendant was so doing.
This issue is also answered in the affirmative by holding that such an endorsement was made. (v) The fifth issue was to the effect as to whether the defendant was selling the plots to various other persons. It was found that the defendant was so doing. (vi) Issue number six was to the effect as to whether the plaintiffs were willing to perform their part of the agreement, by paying the remaining amount of consideration and getting the sale deed executed. The issue is answered by holding that the plaintiffs were willing to do so. (vii) The seventh issue was to the effect as to whether the so-called agreements for sale, which are referred to as sauda chhitiyon par was only a security for the loan received. The issue is answered against the defendant by holding that it was not an agreement by way of security for the loan advanced. (viii)Issue number eight was as to whether the suit is barred by time. It is held that the suit is within time. (ix) Issue number nine was with regard to breach of certain provisions of money lenders act. It is held that no such breach is established. (x) Issue number ten was to the effect as to whether the agreement for sale executed on 7.10.1987 is void and cannot be specifically enforced in view of not obtaining permission from the Collector in accordance to the provisions of the Adhiniyam of 1982. The issue is answered by holding that the agreements are not void and it can be enforced. (xi) Issue number eleven was with regard to relief and costs. Evidence was led by the parties and on the basis of the documents, by answering each and every issue as indicated hereinabove, the suit was decreed directing the defendant, appellant herein, to execute the sale-deed within a period of one month and to transfer the land on the basis of the permission already granted by the Collector and if less land than the permission is found to be available for transfer, then the plaintiffs were entitled to damages at the rate of Rs.240/- per sqft of land for the non-executed part. ( 8. ) Assailing the aforesaid judgment and decree for specific performance granted, this appeal is filed by the appellant.
( 8. ) Assailing the aforesaid judgment and decree for specific performance granted, this appeal is filed by the appellant. In this appeal,at the time of hearing, the findings recorded by the trial court were assailed with particular emphasis to the findings recorded by the trial court with regard to the agreement being an agreement for sale and the reasons given for negating the contentions of the appellant to the effect that the agreement was only a document executed by way of security for the loan advanced. It was also stated that the suit was barred by time and, therefore, liable to be dismissed and finally much emphasis was placed to the fact that the agreements in question are void in view of section 31 of the Adhiniyam of 1982. This Adhiniyam provides for penalty for breach of its provisions, particularly section 24 and a decree for performance of such an agreement which is prohibited under law, cannot be specifically enforced. ( 9. ) These were the three main grounds urged in this appeal and Shri Ravish Agrawal,learned Senior Advocate appearing for the appellant, taking me through the provisions of the Adhiniyam of 1982,particularly sections 24(a), 27 and 31, emphasized that the agreements to sale is void as no sale or agreements for sale can be executed without permission of the competent authority. Thereafter, referring to section 9 of the Specific Relief Act; section 23 of the Indian Contract Act; and, the meaning of the word void appearing in the Blacks Law Dictionary, it was argued by learned Senior Advocate that specific performance of an agreement, which is void and illegal cannot be granted, as the agreement itself is impermissible under law and an illegal or void contract cannot be enforced by a decree for specific performance. Emphasizing that the appellant had executed the sale deed for the purpose of obtaining loan for treatment of his sick father and the finding recorded by the trial court holding the agreement to be an agreement for sale is a perverse finding,Shri Agrawal,learned Senior Advocate, sought interference into the matter and in support of his contention placed reliance on the following judgments: (i)Waman Shriniwas Kini Vs. Ratilal Bhagwandas and Company, AIR 1959 SC 589 -to canvass his contention that an agreement contrary to provisions of law is unsustainable, being in contravention to the statutory provisions, which prohibit such an agreement. (ii)Sita Ram Vs.
Ratilal Bhagwandas and Company, AIR 1959 SC 589 -to canvass his contention that an agreement contrary to provisions of law is unsustainable, being in contravention to the statutory provisions, which prohibit such an agreement. (ii)Sita Ram Vs. Radha Bai and others, AIR 1968 SC 534 again to canvass his contention that an illegal contract entered into in breach of law cannot be enforced. (iii)Murlidhar Dayandeo Kesekar Vs. Vishwanath Pandu Barde and another, 1995(2) SCC 549-to substantiate his contention that if an agreement for sale is void, then in view of section 23 of the Contract Act, it cannot be enforced. (iv)K.S. Vidyanadam and others Vs. Vairavan, 1997(3) SCC 1 - which pertains to the principle with regard to time being essence of a contract. (v)Papaiah Vs. State of Karnataka and others, AIR 1997SC 2676-to contend that a contract, which is opposed to public policy under section 23 of the Contract Act, cannot be enforced. (vi) Finally, he placed reliance on a judgment of the Supreme Court in the case Tarsem Singh Vs. Sukhminder Singh,1998(3)SCC 471, to contend that a void contract cannot be enforced in view of the provisions of section 20 read with 23 of the Contract Act. Accordingly, on the aforesaid submissions Shri Ravish Agrawal,learned Senior Advocate, sought for interference into the matter and setting aside the judgment and decree. ( 10.
Sukhminder Singh,1998(3)SCC 471, to contend that a void contract cannot be enforced in view of the provisions of section 20 read with 23 of the Contract Act. Accordingly, on the aforesaid submissions Shri Ravish Agrawal,learned Senior Advocate, sought for interference into the matter and setting aside the judgment and decree. ( 10. ) Shri R.D.Hundikar,learned counsel appearing for the plaintiffs, respondents herein, refuted the aforesaid contentions and by referring to the agreements in question - Ex.P/1 to P/6, conduct of the appellant herein in obtaining permissions for colonization, getting the land developed, thereafter obtaining permission from the competent authority and selling more than five plots to various persons, argued that in this case the agreement is not void, but is voidable at the instance of the plaintiff and as permission is granted in most of the cases it is a case where specific performance of the agreement can be granted and he refuted each and every contention advanced by Shri Ravish Agrawal,Shri R.D. Hundikar argued that the agreement is an agreement for sale; defendant has failed to prove that it was only a security for the loan advanced; it was further stated that as the endorsement made in the agreement in the year 1994 amounts to acknowledgement by the defendant, the suit filed within three years thereof is within limitation and further contending that the agreement is not void, but is voidable and specific performance of the same can be granted. Learned counsel emphasized that as decree for specific performance is a discretionary relief granted by the court after considering the principles of equity, it is a fit case where after evaluating the conduct of the appellant in getting permission for some of the plots and selling them, his intention to get enhanced value for the plots in question is apparent and, therefore, decree should be granted. ( 11. ) In support of his contention Shri R.D. Hundikar invited attention of this Court to a Full Bench of the Allahabad High Court, in the case of Dip Narain Singh Vs. Nageshwar Prasad and others, AIR 1930 Allahabad 1, to draw a distinction between an agreement forbidden by law and an agreement which is only declared to be void;Munshi Tajammul Husain Vs. Cantonment Board,Lucknow and another, AIR (30) 1943Oudh 99, to canvass his contention that the agreement is voidable and can be enforced;Ramesh Chandra Chandiok and another Vs.
Nageshwar Prasad and others, AIR 1930 Allahabad 1, to draw a distinction between an agreement forbidden by law and an agreement which is only declared to be void;Munshi Tajammul Husain Vs. Cantonment Board,Lucknow and another, AIR (30) 1943Oudh 99, to canvass his contention that the agreement is voidable and can be enforced;Ramesh Chandra Chandiok and another Vs. Chuni Lal Sabharwal (dead) by his Legal representatives and others, AIR 1971 SC 1238 , in which facts similar to the present case were considered and a decree for specific performance granted; Mrs. Chandnee WidyaVati Madden Vs. Dr. CL. Katial and others, AIR 1964 SC 678, to contend that when law requires permission of some authority to transfer property, then a decree for performance subject to obtaining the permission can be granted;ShriKrishanSwarup Bhatnagar Vs. Shri Chander Mohan Rewal and another, AIR 2000 HP 53 ; Motilal Jain Vs. Smt. Ramdasi Devi and others, AIR 2000 SC 2408 ; Tarsem Singh Vs. Sukhminder Singh, 1998(3) SCC 471 ;and,Sukhbir Singh and others Vs. Brij Pal Singh and others 1997(2)SCC 200. By placing reliance on the aforesaid judgments, it was argued by Shri Hundikar that in the facts and circumstances of the case and in the light of the principle laid down in the aforesaid judgments, in decreeing the suit the court below has not committed any error warranting interference. ( 12. ) Having heard learned counsel for the parties at length and on consideration of the facts and circumstances of the case and on evaluating the legal principles canvassed, the following three questions require consideration now in this appeal: (i) Whether the agreements - Ex.P/1 to P/6 are only documents executed for securing the loan granted by the plaintiffs to the defendant and are not agreements for sale? (ii) Whether the suit is barred by limitation? (iii) In view of the requirement of the Adhiniyam of 1982 and in the absence of sanction from the competent authority i.e.. the Collector/Sub-Divisional Officer, Burhanpur,decree for specific performance of the agreements in question can be granted or not? ( 13. ) As far as the first contention is concerned, it is the case of the plaintiffs that for the purpose of purchasing the plots in question, the agreements in question were executed, they had advanced an amount of Rs.25,000/- on 7.10.1987, and the remaining amount of sale consideration i.e..
( 13. ) As far as the first contention is concerned, it is the case of the plaintiffs that for the purpose of purchasing the plots in question, the agreements in question were executed, they had advanced an amount of Rs.25,000/- on 7.10.1987, and the remaining amount of sale consideration i.e.. Rs.15,800/- was to be paid at the time of execution of the sale deed. By bringing on record certain documents showing obtaining loan from the Life Insurance Corporation of India and by pleading ailment of his father it was the case of the appellant herein that the agreements in question are not agreements for sale, but are only documents evidencing security for the loan advanced. In his statement, defendant Rameshwarlal,who is examined as DW-1, has stated that plaintiffs Dattatraya and Rambhau Mahajan were his friends and he had asked for a loan of Rs.1 Lacs from them. On this they had asked him to give as security certain plots in Mohan Nagar and it was under these circumstances that the agreements, six in number, were executed. However, after evaluating the evidence and material that came on record and after taking note of the aforesaid defence of the defendant, appellant herein, the learned court below has analysed the material and Issue No.(i) and (ii) framed in this regard are answered by taking note of the fact that after obtaining the loan as contended by the appellant in the year 1987, there is nothing to indicate that at any point of time after 1987 upto filing of the suit, the defendant appellant had made any effort to repay the loan or had paid any interest on the amount loaned. By taking note of the circumstances that have come on record with regard to development of the plots, obtaining permission from various authorities for development of the plots, even obtaining permission from the Collector for sale of more than 38,000 sqft of land, sale-deeds executed in more than four cases and after taking note about the fact of development of a colony i.e... Mohan Nagar Colony, on the basis of colonizers license obtained by the defendant vide Ex.D/6 on 31.1.1989, the contention of the appellant seems to be incorrect.
Mohan Nagar Colony, on the basis of colonizers license obtained by the defendant vide Ex.D/6 on 31.1.1989, the contention of the appellant seems to be incorrect. Except for making his oral statement to the effect that the agreements were executed for advancing loan and by way of security, the conduct of the parties particularly the appellant herein, as indicated hereinabove, read alongwith the endorsements made on 1.4.1994 with regard to extension of time to seek permission for sale of the plots, it is very difficult to believe the defence of the appellant. The totality of the circumstances and the manner in which the parties have acted during the period after execution of the agreements on 7.10.1987 till filing of the suit indicates that there is nothing to show that plaintiffs had advanced loan to the defendant appellant and the entire transaction was infact a loan agreement. ( 14. ) On the contrary, the conduct of the parties and the material available clearly indicates that it was a transaction for sale of the plots in Mohan Nagar Colony and the finding recorded by the trial court with regard to Issue No.(i) and (ii) in this regard is a proper finding, which is based on material available on record and in this appeal this Court does not find any ground to interfere in the matter. Accordingly, the first question is answered by holding that the agreements in question - Ex.P/1 to P/6, are infact an agreement for sale of certain plots in Mohan Nagar Colony and the contention of the appellant that it was only a document evidencing loan transaction and executed for securing the loan by way of security cannot be accepted. ( 15. ) As far as the question of limitation is concerned, the agreements in question were executed on 7.10.1987 and as per the agreements the sale deed was to be executed on or before 31.10.1987. However, the evidence that has come on record indicates that even after 31.10.1987 parties continued to act in pursuance to the agreement and the appellant herein got the license vide Ex.D/6 on 31.1.1989, on 3.9.1991 the defendant sought for permission for development which was granted vide Ex.D/8, on 20.1.1992, and when all these activities were continuing and when the sale deeds were not being executed, notice - Ex.P/7 to P/12 were sent on 3.9.93.
Evidence available indicates that negotiations took place and on 1.4.1994 an endorsement was made in the agreements in question - Ex.P/1 to P/6, which was signed by appellant Rameshwarlal. The appellant has signed at portions marked B-B and by terming the endorsements to be sauda chittiyonpar,he has agreed to sell the property within one month of receipt of permission. It is, therefore, clear that even though the agreements initially were to execute the sale-deeds by 31.10.1987, but on 1.4.1994 defendant Rameshwarlal agreed to get the sale-deeds executed within a period of one month of his getting the permission from the competent authority. This endorsement, which is proved in each of the agreements, extends the time fixed for execution of the sale- deeds from 31.10.1987 upto a period of one month from the date of receipt of permission and the suit filed on 29.1.1996 i.e.. within three years of extension of the agreement on 1.4.1994, is clearly within limitation and, therefore, on the ground of delay in filing the suit cannot be dismissed. On the contrary, the suit filed within two years of extension made in the agreement on 1.4.94 is within time and, therefore, the second question framed has to be answered by holding that the suit in question was in time and there is no question of it being dismissed on the ground of delay. ( 16. ) The third question framed for consideration in this appeal is the most important question, on which much emphasis was made by learned counsel for the parties during the course of hearing. ( 17. ) For considering the said question, it is necessary to take note of the provisions of The Madhya Pradesh Vinirdishta Bhrastha Acharan Nivaran Adhiniyam,1982. The Adhiniyam of 1982 is an Act, which makes provision for prosecuting persons who illegally develop colonies or illegally undertake diversion or use land without permission from the competent authorities. Section 24 of this Act contemplates a provision with regard to obtaining colonizers license, seeking permission for diversion and thereafter conversion of the land. Section 27 contemplates a provision for punishment for illegal diversion and illegal colonization and section 31 prohibits transfer of land or plots in an area without permission of the competent authority. A transaction or transfer under this section and an agreement to transfer is held to be void.
Section 27 contemplates a provision for punishment for illegal diversion and illegal colonization and section 31 prohibits transfer of land or plots in an area without permission of the competent authority. A transaction or transfer under this section and an agreement to transfer is held to be void. In the present case, it is the case of the appellant that the agreements for sale being without permission is in violation of the statutory provisions and, therefore, it is void and cannot be enforced. Before considering the legal question as canvassed,the conduct of the parties particularly that of the appellant may be taken note of, for it would have some bearing on the question of granting decree for specific performance, as principle of equity will have to be given some consideration in this regard. ( 18. ) After execution of the agreement on 7.10.1987, records indicate that appellant had received the license for colonization, he had moved a application for development of the land and permission was also granted to him for sale of certain plots. In this regard the aforesaid facts are established if document Ex.D/6 i.e.. the license obtained by the defendant on 31.1.1989; Ex.D/8 dated 20.1.1992 permission for development of the land received by the defendant; and, Ex.D/12 dated 6.4.1994 permission to sell 10 Plots in B Wing,are taken note of. Thereafter, again vide Ex.D/13 on 31.1.1996, further permission to sell plots is received. Records indicate that appellant had received permission to sell more than 38,000sqft of land and he had executed about 5 sale-deeds. Even after 1.4.94, on 6.4.94 defendant had received permission to sell 10 plots vide Ex.D/12. Vide Ex.P/23, 5520sqft of land was sold to Smt. Shashibala Agrawal. These facts clearly indicate that it is not a case where no permission was being granted for sale of plots in the area in question. On the contrary, it is a case where the defendant had received colonizers license, for developing the colony known as Mohan Nagar Colony, and he had been receiving permission for selling various plots and infact he had sold various plots out of the permission received by him to sell 38090sqft. It is not a case where there was total prohibition under law, which prevented the defendant from selling any plot.
It is not a case where there was total prohibition under law, which prevented the defendant from selling any plot. There is no evidence or material available on record on the basis of which it can be said that permission to sell any particular plot, which formed part of the agreements, is refused. On the contrary, it is a case where the colony is being developed in accordance to the requirement of law and for the purpose of sale of plots, certain permissions were granted and sale affected. It is, therefore, not a case where total sale of plots in the area or development of the colony is prohibited. On the contrary, it is a case where the colony is being developed and there are instances where sale of plots have been made and permission for sale granted. It is only with regard to specific plots indicated in Ex.P/1 to P/6 that permission is not being granted and the reason for the same is not forthcoming. Before the trial court the main case of the defendant was that it is not an agreement for sale at all and when this contention of his had failed, he has come out with a case that he cannot transfer the plots because permission is not being granted by the competent authority. However, the reason specific in nature, for not obtaining permission, for the plots in question covered by agreements - Ex.P/1 to P/6 is not forthcoming and there is no evidence on record to indicate that there is any reason on the basis of which it can be said that there is some legal impediment or prohibition in getting permissions for transfer of the plots in question. On the contrary it seems to be a case where after execution of the agreements, the defendant/appellant for the reasons best known to him was not interested in getting the sale or transfer executed and kept the matter pending even though he was in possession of a license for colonization and records indicate that the process of development of the colony and sale of the plots were in progress.
It is this conduct of the defendant which had compelled the trial court to come to a conclusion that the defendant was not interested in getting the agreement performed and was only interested in getting the agreements cancelled so that he can get more amount or enhanced value for the plots. ( 19. ) Keeping in view the aforesaid factual aspects of the matter and the conduct of the defendant, if the legal principles governing grant of decree for specific performance of such an agreement is evaluated, it would be seen that a decree of the nature prayed for by the plaintiffs can be granted. ( 20. ) Shri Ravish Agrawal,learned Senior Advocate, had placed much emphasis on the ground that an agreement prohibited under law and which is void cannot be specifically enforced and, therefore, a decree for specific performance of such an agreement is prohibited. ( 21. ) The contention of Shri Ravish Agrawal and the judgments relied upon by him, if scrutinized, would indicate that all the judgments are those which relate to bar created in the matter of enforcing an agreement, which is prohibited under law. In the case of Waman Shriniwas Kini(supra), the question before the Supreme Court pertained to certain transfer of property contrary to the provisions of section 15 of the Bombay Hotel and Lodging House Rent Control Act, 1947. Section 15 of the said Act prohibited subletting and it was unlawful for a tenant to assign or transfer his interest in any premises, which was let out to him. Finding an agreement entered into by a tenant assigning his interest in the premises to be contrary to section 15 of the Act, it was held by the Supreme Court that the agreement is unsustainable. ( 22. ) Likewise in the case of Sita Ram(supra),the question pertain to transfer of certain moveable properties i.e... diamond, gold and pearl jewellery. In the said case, enforcement of a fraudulent agreement and the principle governing the maxim In pari delicto potior est conditio defendentis was taken into consideration and it was held that a court will refuse to enforce an illegal agreement at the instance of a person, who is himself party to the illegality or fraud, but certain exceptions to application of the aforesaid maxim was also laid down in the said judgment. ( 23.
( 23. ) The third case relied upon by Shri Ravish Agrawal,learned Senior Advocate, is the judgment of the Supreme Court in the case of Murlidhar Dayandeo Kesekar(supra). This judgment pertains to protecting the rights of the tribal and sale of land allotted to the tribals by the State Government and the principle considered is the right of a tribal, which has to be protected in view of the mandate of Article 14, 21, 38, 39 and 46 of the Constitution of India and it is held that an agreement to sell the land of a tribal is opposed to public policy. The Supreme Court has dealt with such an agreement in the said case. ( 24. ) In the case of K.S. Vidyanadam(supra), again relied upon by Shri Ravish Agrawal,the question of limitation and delay and latches in execution of the agreement and seeking specific performance is taken note of. The said judgment speaks about consideration of relevant circumstances and the time limit specified in the agreement and discretion to be exercised in getting the decree executed on the principle of time being the essence of contract. This judgment is also not of any assistance in the facts and circumstances of the present case. ( 25. ) The next case relied upon by Shri Agrawal,learned Senior Advocate, is that of Papaiah(supra), where again the question of agreement or transfer for affected alienation of land assigned to a member of the depressed class is taken note of and it is found that such an agreement is opposed to public policy and has the effect of frustrating the mandate under Article 29(b) of the constitution. Alienation of assigned land to the member of the oppressed class is considered and discussed in the aforesaid case. ( 26. ) Similarly,the case of Tarsem Singh(supra), relied upon by Shri Agrawal pertains to execution and enforceability of an agreement in which certain mistakes have crept in. ( 27. ) The aforesaid judgments relied upon by Shri Ravish Agrawal,learned Senior Advocate, and its applicability in the facts and circumstances of the present case has to be evaluated keeping in view the law laid down in the matter of granting a decree for specific performance, even when the agreement contemplates a provision for sale of the land subject to specific permission or no objection from certain Government authorities or agencies.
As there are judgments directly on these questions, the general principles laid down in the cases referred to by Shri Ravish Agrawal,learned Senior Advocate, as indicated hereinabove, are required to be analysed in the backdrop of the judgments specific in nature. ( 28. ) In the case of Dip Narain Singh(supra) rendered by the Full Bench of the Allahabad High Court, conveyance of property and distinction between agreement forbidden by law and agreement declared to be void are taken note and the Full Bench in the aforesaid case has laid down the principle that if a void agreement has been carried out and consideration is passed, then the promisor may not be in equity allowed to go back upon it without restoring the benefit which he has received and in such cases if the promissee comes to the court, it is held that enforcement of such an agreement can be made with the help of a court of law. ( 29. ) Similarly, in the case of Ramesh Chandra Chandiok(supra), relied upon by Shri Hundikar,the Supreme Court considered the question of granting a decree for specific performance with regard to transfer of plot, which required obtaining prior permission of the Rehabilitation Ministry of the Government of India, and after evaluating somewhat similar circumstances that was existing in the said case and after taking note of certain principles laid down in the English Law, it is held that the relief of specific performance is a discretionary relief and a decree was granted subject to performance of the condition of obtaining sanction. ( 30. ) Similarly, the judgment in the case of Mrs. Chandnee Widya(supra) relied upon by Shri Hundikar,lays down the same principle: "After taking note of a judgment of the Privy Council, in the case of Motilal Vs. Nanhelal Ghasiram,AIR 1930 PC 287". In the case of Mrs. Chandnee Widya(supra), the contract was for sale of a house on a plot granted by the Government, one of the terms in the contract was that the vendor shall obtain necessary permission from the Government before the sale.
Nanhelal Ghasiram,AIR 1930 PC 287". In the case of Mrs. Chandnee Widya(supra), the contract was for sale of a house on a plot granted by the Government, one of the terms in the contract was that the vendor shall obtain necessary permission from the Government before the sale. The vendor made the application, but withdrew the same, when specific performance of the contract was sought for, an objection was raised that the contract is not enforceable as permission from the Government was not received, after taking note of the judgment in the case of Motilal(supra),rendered by the Privy Council, it has been held by the Supreme Court that there is no substance in the contentions raised by the objecting defendant and finding the plaintiff to be always ready and willing to perform their part of the contract and defendant willfully refusing to perform his part, decree for specific performance was granted subject to sanction by the Chief Commissioner. This judgment in the case of Mrs. Chandnee Widya(supra) is followed in many other cases. ( 31. ) In the case of Rojasara Ramjibhai Dahyabhai Vs. Jani Narottamdas Lallubhai(dead by LRs)and another, AIR 1986 SC 1912 , the judgment of the Privy Council in the case of Motilal(supra) is considered and after taking note of the principle laid down therein, the question of granting decree for specific performance with regard to transfer of land, which warranted obtaining permission from government authorities was taken note of and in paragraphs 13 and 14, the matter is so dealt with: "13. In this context, reference may be made to the decision of the Privy Council in Motilal v. Nanhelal Ghasiram,(1930) 57 Ind App 333: (AIR 1930 PC 287). There, the facts were these. In that case, the plaintiff Mst. Jankibai entered into an agreement to purchase from Raibahadur Seth Jiwandas of Jabalpur four annas proprietary share of Mauja Raisalpur together with the sir and khudkast lands appurtenant thereto, with cultivating rights in the sir lands. The property was subject to the provisions of the Central Provinces Tenancy Act, 1920.She filed a suit for specific performance of the said contract.
Jankibai entered into an agreement to purchase from Raibahadur Seth Jiwandas of Jabalpur four annas proprietary share of Mauja Raisalpur together with the sir and khudkast lands appurtenant thereto, with cultivating rights in the sir lands. The property was subject to the provisions of the Central Provinces Tenancy Act, 1920.She filed a suit for specific performance of the said contract. The Privy Council held that the contract was for a transfer of the sir lands without reservation of the right of occupancy, and that the sanction of the Revenue Officer to the transfer was necessary under S. 50(1) of the Act, which was in these terms: "S. 50(1): If a proprietor desires to transfer the proprietary rights in any portion of his sir land without reservation of the right of occupancy specified in S. 49, he may apply, to a revenue-officer and, if such revenue-officer is satisfied that the transferor is not wholly or mainly an agriculturist, or that the property is self-acquired or has been acquired within the twenty years last preceding, he shall sanction the transfer." 14. It was contended before the Privy Council that a decree for specific performance of the agreement of sale could not be made, because such performance would necessitate an application by or on behalf of the vendor to the Revenue Officer for sanction to transfer the cultivating rights in the sir land, and that the Court had no jurisdiction to require the vendor to make such an application. In repelling the contention, the Privy Council observed that in view of their construction of the agreement, namely, that the vendor agreed to transfer the cultivating rights in the sir land: "(T)here was in their Lordships opinion,an implied covenant on the part of the vendor to do all things necessary to effect such transfer,which would include an application to the Revenue Officer to sanction the transfer." It was further observed that it was not necessary for their Lordships to decide whether in that case the application for sanction to transfer must succeed, but that it was material to mention that no facts were brought to their Lordships notice which would go to show that there was any reason why such sanction should not be granted.
After making the said observations, the Privy Council held that in those circumstances the Court had jurisdiction to enforce the contract under the Specific Relief Act,1877 and Order 21,R.35 of the Code of Civil Procedure,1908 by a decree ordering the vendor to apply for sanction and to execute a conveyance on receipt of such sanction. The decision of the Privy Council in Motilal v. Nanhelal Ghasiram. supra, therefore is an authority for the proposition that if the vendor agrees to sell the property which can be transferred only with the sanction of some Government authority,the Court has jurisdiction to order the vendor to apply to the authority within a specified period,and if the sanction is forthcoming to convey to the purchaser within a certain time. See also: Mrs. Chandee Widya Vati Madden v. Dr. C. L. Katial, (1964) 2 SCR 495 : ( AIR 1964 SC 978 ) and Ramesh Chandra Chandiok v. Chuni Lal Sabharwal, (1971) 2 SCR 573 : ( AIR 1971 SC 1238 ) where this Court following the Privy Council decision in Motilal v. Nanhelal Ghasirams case, supra, reiterated the same principle." (Emphasis supplied) It is, therefore, clear from a complete reading of the aforesaid judgments of the Supreme Court that even if the law warrants obtaining of permission from certain authorities with regard to transfer, specific performance of the contract can be granted and the prayer cannot be rejected only on the ground that the sanction is not available. ( 32. ) A Full Bench of the Gujarat High Court, in the case of Shah Jitendra Nanalal Vs Patel Lallubhai Ishverbhai,Ahmedabad and others, AIR 1984 GUJ145,considered the question of granting a decree for specific performance, where it was urged that the transfer is prohibited by certain statutory provisions like the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act, 1972; The Urban Land (Ceiling and Regulation) Act, 1976 etc. In the said case also, it was found that under section 53 of the Gujarat Vacant Land in Urban Areas (Prohibition of Alienation) Act, a contract or agreement or transfer was declared as void. However, there was a provision for seeking exemption from permission for such transfer. When the matter was pending, the law was amended. However, the principle of granting a decree subject to permission was approved by the Gujarat High Court in the said case.
However, there was a provision for seeking exemption from permission for such transfer. When the matter was pending, the law was amended. However, the principle of granting a decree subject to permission was approved by the Gujarat High Court in the said case. In paragraphs 11 and 13,after considering the judgment in the case of Bai Dosabai(supra), the matter is so dealt with: "11. So long as the provision declaring the transfer under Section 5(3) as void is subject to the right to move for exemption,obtain exemption and transfer the property, the power of an owner of vacant land in excess of the ceiling limit to alienate such land is dormant in him and such power could be exercised by him in case he seeks exemption satisfies the Government that the grounds for exemption exist and obtains such exemption. That being the case, a decree cannot be defeated on the ground that transfer inter parties would not be possible. The possibility of obtaining exemption survived till the notification under Section 10(3)of the Act is issued. That being the situation, until then, a plaintiff seeking specific performance cannot be told that the terms of the contract cannot be fulfilled. Once it is said so, the plaintiff loses his right to get a decree for specific performance, though, invoking the provisions of the very Act, based on which the plaintiff was told that he could not get conveyance of the property agreed to be sold to him, the owner of excess land obtained exemption and continues in possession of property and perhaps even alienates it later. We see no reason either in law or in logic to countenance such a situation. There is nothing prohibiting a decree being passed for specific performance, with, of course, such alternative remedies as may be called for in a situation where that decree may become inoperative. The decree for specific performance may be made conditional on the exemption under Section 20 (l)(a) or (b)operating. Of course, it is not for us in this reference to envisage how safeguards should be built in, in such a decree. Resourcefulness, of course, must necessarily find answer to possible situations. 13.
The decree for specific performance may be made conditional on the exemption under Section 20 (l)(a) or (b)operating. Of course, it is not for us in this reference to envisage how safeguards should be built in, in such a decree. Resourcefulness, of course, must necessarily find answer to possible situations. 13. In this view, in answer to the second question referred to us we hold that a conditional decree for specific performance subject to exemption being obtained under Section 20 of the Urban land (Ceiling and Regulation) Act 1976 (Act No.33 of 1976) is permissible. As we have said earlier, we do not propose to answer the first question as it may not be necessary. The case will be sent back to the Division Bench for disposal in accordance with the decision herein and in accordance with law." ( 33. ) Again, the Delhi High Court in the case of Raghunath Rai and another Vs. Jageshwar Prashad Sharma and another, AIR 1999 Del 383 , considered the case of agreement to sell certain property, which required obtaining No Objection Certificate" and income tax clearance. After taking note of the principles laid down by the Privy Council in the case of Motilal(supra); by the Supreme Court in the case of Mrs. Chandnee Widya(supra);and, various other cases, in paragraph 17 the principle was so crystallized: "17- In the agreement to sell defendant had agreed to do certain acts and things. There is mostly always an implied covenant on the part of the vendor to do all things necessary to give effect to the agreement including the obtaining of the permission or clearance for the transfer of the property. The law is well settled that if the vendor agrees to sell the property which can be transferred only with the sanction of some Government authority, the Court has jurisdiction to order the vendor to apply to such authority within a specified period,and if the sanction is forthcoming to convey the property to the purchaser within a certain time.(See- Motilal Vs. Nanhelal,AIR 1930 PC 287; Mrs. Chandnee Widyavati Madden V. Dr. C.L. Katial, AIR 1964 SC 978 ; and Rojasara Ramjibhai Dahyabhai Vs. Jani Narottamdas Lallubhai(dead by LRs), AIR 1986 SC 1912 ." (Emphasis supplied) ( 34. ) A Division Bench of this Court in the case of Nimar Industrial Corporation Private Limited,Khandwa Vs.
Nanhelal,AIR 1930 PC 287; Mrs. Chandnee Widyavati Madden V. Dr. C.L. Katial, AIR 1964 SC 978 ; and Rojasara Ramjibhai Dahyabhai Vs. Jani Narottamdas Lallubhai(dead by LRs), AIR 1986 SC 1912 ." (Emphasis supplied) ( 34. ) A Division Bench of this Court in the case of Nimar Industrial Corporation Private Limited,Khandwa Vs. M.P. Electricity Board,Jabalpur, 1973 MPLJ 846 , has considered the question of a contract to sell the land without the consent of the Government and the question of granting a decree for specific performance after considering the provisions of sections 10 and 23 of the Contract Act and section 21 of the Specific Relief Act, it has been held that if a lease of land is transferred without consent of the government, the only effect of the requirement of consent being passed would be that a decree for specific performance if passed, has to be subject to approval of the State Government. ( 35. ) It is, therefore, clear on an analysis of the principles laid down by the Supreme Court and various High Court in the matter of granting decree for specific performance in cases where consent, sanction or permission of any officer, authority or government is required. The principle laid down is that if a condition is laid down that the transferor is bound to do everything to give effect to the contract, specific performance can be obtained with a direction to the transferor to obtain the required consent or permission. The general principle is that until and unless the transaction itself is unlawful, it may be enforced directing the defendant to take such steps as are necessary for affecting the contract. Reference may be made to a judgment of the Andhra Pradesh High Court, in the case of Somisetti Ramanaiah Vs. The District Supply Officer,Chittoor, AIR 1979 AP 19 . The principle laid down by the Privy Council in the case of Motilal(Supra) and by the Supreme Court in the cases of Mrs.
Reference may be made to a judgment of the Andhra Pradesh High Court, in the case of Somisetti Ramanaiah Vs. The District Supply Officer,Chittoor, AIR 1979 AP 19 . The principle laid down by the Privy Council in the case of Motilal(Supra) and by the Supreme Court in the cases of Mrs. Chandnee Widya(supra) and Rojasara Ramjibhai Dahyabhai(supra), all together if considered would indicate that the principle laid down is that if the vender has agreed to sell property, which can be transferred only with the sanction of some government authority, the Court has jurisdiction to order the vendor to apply to the authority and if sanction is not forthcoming, to convey to the purchaser the same and on the ground that the sanction is not available, decree for specific performance can not be refused. It is held in most of the cases that when permission from some authority is required to be obtained, obtaining of the same is not a condition precedent for grant of decree for specific performance, if after grant of decree permission can be obtained. The conditional decree for specific performance can be granted making it subject to obtaining permission or exemption as contemplated in the statute. It is held that a relief can be moulded to such an effect that defendant is directed to obtain permission or consent. It has been the consistent view that on the ground of non- availability of consent or permission a defendant cannot avoid such an agreement. There are series of judgments in this regard by various High Courts, which have followed the principles laid down in the case of Mrs. Chandnee Widya(supra); Motilal(supra), and some of the judgments in this regard are Khan Bahadur C.B. Taraporwala and another Vs. Kazim Ali Pasha and others, AIR 1966 AP361;Indra Prasad Saxena Vs. Chaman Lal Malik, AIR 1994 ALLAHABAD 105; and,Shri Rajesh Agrawal Vs. Shri Balbir Singh and another, AIR 1994 DELHI 345. ( 36. ) If the case in hand is analysed in the backdrop of the aforesaid principles, it would be seen that a decree for specific performance can be granted subject to a rider being placed directing the appellant herein to get the permission and, therefore, the contention of Shri Ravish Agrawal,learned Senior Advocate, to the effect that no decree for specific performance can be granted, cannot be accepted.
As already indicated hereinabove the judgments relied upon by Shri Ravish Agrawal,deal with prohibition under the law in the matter of execution of the agreement, however, when the question of specific performance of a contract of the nature involved in the present case is evaluated, this Court is of the considered view that the judgments relied upon by Shri Agrawal may not be applicable in the facts and circumstances of the present case. ( 37. ) At this juncture, this Court has to take judicial notice of certain additional facts. According to the appellant herein the transaction is hit by the prohibition contained in section 31 of the Adhiniyam of 1982. It is seen that the provisions of Sections 24 to 32 of the Adhiniyam of 1982 is incorporated in Chapter 8 of the Adhiniyam of 1982 and by M.P. Act No.6 of 1988 w.e.f.31.8.1998, the entire Chapter i.e... from Sections 24 to Section 32 is omitted. If that be so, the changed circumstances brought about will have to be taken note of and if the judgment rendered by the Supreme Court in the case of Bai Dosabai Vs. Mathurdas Govinddas and others, AIR 1980 SC 1334 , is taken note of, it would be seen that the following principle is laid down with regard to law governing the consideration of changed circumstances in the event of a pending appeal. In paragraph 14,the following principle is laid down by the Supreme Court: "14..... The question for our consideration is what is the effect of the Urban Land (Ceiling and Regulation) Act, 1976 on the decree passed by the High Court. While it is true that events and changes in the law occurring during the pendency of an appeal are required to be taken into consideration in order to do complete justice between parties and so that a futile decree may not be passed. It should be so moulded as to accord with the changed statutory situation......" ( 38. ) This judgment of the Supreme Court is considered by the Full Bench of the Gujarat High Court, in the case of Shah Jitendra Nanalal(supra) also. ( 39.
It should be so moulded as to accord with the changed statutory situation......" ( 38. ) This judgment of the Supreme Court is considered by the Full Bench of the Gujarat High Court, in the case of Shah Jitendra Nanalal(supra) also. ( 39. ) If the case in hand is analysed in the backdrop of the aforesaid principles, it would be seen that the contentions advanced by Shri Ravish Agrawal to the effect that no decree can be granted for enforcement of a void agreement cannot be accepted as a universal principle, in certain cases a decree for specific performance can be granted, particularly when illegality or breach of law pointed out in the agreement is such that it can be made good or cured by certain subsequent action, like obtaining permission or sanction or approval from the competent authority as envisaged under the statutory provisions and a decree for specific performance, conditional in nature, can be granted to the plaintiffs with a rider for obtaining permission from the competent authority. In the present case, under the changed circumstances, there is nothing before this Court on the basis of which, as on date it can be held that permission or sanction of some authority is required after changes brought about in the light of the Amending Act, M.P. Act No.6 of 1988 w.e.f.31.8.1998. ( 40. ) As already indicated hereinabove, by amending Act No.6 of 1988 w.e.f.31.8.1998, provisions of sections 24 to 32 appearing in Chapter VIII of the Adhiniyam of 1982, is deleted and the statement of object and reason indicates that after coming into force of the M.P. Housing Policy 1995 and due to involvement of the local bodies, provisions have been made in the M.P. Municipal Corporation Act, 1956, The M.P. Municipalities Act, 1961 and the M.P. Panchayat Raj Adhiniyam 1993, regarding regulation for establishment of colonies in urban and rural areas on the lines contained in Chapter VIII of the Adhiniyam of 1982. Because of the aforesaid reason, the entire Chapter VIII, containing sections 24 to 32, have become redundant and, therefore, the amendment.
Because of the aforesaid reason, the entire Chapter VIII, containing sections 24 to 32, have become redundant and, therefore, the amendment. It is, therefore, clear that during the pendency of these proceedings,infact even before the judgment and decree impugned was passed on 25.2.99, the provisions of the Adhiniyam were not required to be complied with and the specific provisions under the M.P. Municipalities Act and M.P. Municipal Corporation Act, which warrants obtaining of permission and its consequences, have not been brought to the notice of this Court and, therefore, it is not known as to which statutory provision is to be complied with now in the matter. This change has to be taken note of and after considering this change, the judgment and decree has to be passed in a manner so as to do substantial justice to the parties. If the judgment and decree passed by the court below in the present case is analysed, it would be seen that the learned court below has found that permission is already available with the appellant and, therefore, decree is granted to execute sale-deeds to the extent permission is available and thereafter pay to the plaintiffs compensation @ Rs.240/-per sqft for the less land transferred. This decree was passed in the year 1999,more than 10 years have passed and in all probability as the colony was being developed, more permission would have been granted. Considering these factors and taking note of the totality of the circumstances and the legal principles, as indicated her in-above, including the change in the circumstances, this Court does not find any reason to interfere with the decree granted by the trial court. The decree granted is just and reasonable and does not warrant any interference. ( 41. ) Accordingly, the decree granted is confirmed and it is directed that on the basis of the permission already granted, not only till the date of the judgment and decree passed by the trial court, but also on the basis of further permission granted till date, sale-deeds be executed in terms of the agreements - Ex.P/1 to P/6, and in case the permission falls short of the area to be transferred, then compensation as directed by the learned court below alongwith interest @ 8% per annum from the date of agreements - Ex.P/1 to P/6, till payment is made, be paid to the plaintiffs/respondents. ( 42.
( 42. ) Appeal stands dismissed with the aforesaid modification to the decree passed. Cost on parties. Appeal dismissed.