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2019 DIGILAW 36 (KER)

Southern Plantations Limited v. State of Kerala

2019-01-14

ANNIE JOHN, K HARILAL

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JUDGMENT : K. HARILAL, J. 1. The questions, that arise for consideration in this O.P.(C) are: (1) Has the buyer, who entered into an agreement for sale with the seller, the right to get impleaded in an application filed by the seller, against the Government, under Section 10 of the Kerala Forests (Vesting and Management of Ecologically Fragile Land) Act 2003 (herein after referred to as 'the EFL Act') seeking a decree declaring that the application schedule property is not an ecologically fragile land and to set aside the order passed against the seller. (2) Does an agreement for sale of an immovable property by itself create a charge in favour of the buyer at the inception of the agreement itself, on the seller's interest in the property, to the extent of advance purchase money paid by the buyer under Section 55(6)(b) of the Transfer of Property Act. 2. The petitioner herein is the applicant in O.A No.5/2009, filed before the Court of the Tribunal for EFL Cases, Kozhikode. The aforesaid O.A was filed, seeking a decree declaring that the application schedule property is not an ecologically fragile land and to set aside the order dated 18.06.2009 passed by the 2nd respondent herein, whereby, 242 acres of land belonging to the petitioner was declared as 'Ecological Fragile Land'. While the aforesaid O.A was pending consideration before the Tribunal, the 3rd respondent herein filed a petition, under Order I Rule 10 r/w. Section 151 of the Code of Civil Procedure, seeking to get himself impleaded in the said O.A as supplemental 2nd applicant or supplemental 3rd respondent. 3. The petitioner herein filed objection contending that the 3rd respondent has no right to get himself impleaded in the said O.A as he has no kind of right or interest in the said property. But the petitioner admitted that there was an agreement for sale, dated 14.09.2004 and the term of agreement expired on 30.09.2005. Since the 3rd respondent was not ready and willing to perform his part of the contract, the sale deed was not executed and the 3rd respondent has not resorted to file a civil suit for specific performance, so far. That apart, though the petitioner had executed a power-of-attorney in favour of the 3rd respondent, the said power-of-attorney also has expired on 30.09.2005 and it is no longer in force. That apart, though the petitioner had executed a power-of-attorney in favour of the 3rd respondent, the said power-of-attorney also has expired on 30.09.2005 and it is no longer in force. The 3rd respondent cannot claim any kind of right over the property, either under the agreement for sale or under the power-of-attorney, which stands expired. 4. After considering the rival pleas, the Tribunal allowed the said application and the 3rd respondent was impleaded as the supplemental 3rd respondent in the above O.A. The legality and propriety of the findings, whereby the Tribunal allowed the 3rd respondent to get himself impleaded in the proceedings in the O.A, filed by the petitioner, are assailed in this O.P.C. 5. Heard the learned counsel for the petitioner, the learned Special Government Pleader and the learned counsel for the respondent. 6. Let us consider both questions together, as they are intricately connected together. Going by the impugned order, it could be seen that the 3rd respondent has filed an application to get himself impleaded in the O.A, either as second applicant or as 3rd respondent, on the basis of an agreement for sale, dated 14.09.2004, executed by the petitioner in favour of the 3rd respondent. Therefore, the question in controversy involved in this OP(C) revolves around the scope and extent of right in favour of the 3rd respondent/buyer and emerges from the agreement for sale, dated 14.09.2004. There arises the general question, what is the extent of right conferred to the buyer, under an agreement for sale of an immovable property. According to Section 54 of the Transfer of Property Act, 1882 (herein after referred to as 'the TP Act'), a contract for sale of the immovable property is a contract that a sale of such property shall take place on terms settled between the parties and it does not, of itself, create any interest in or charge on such property. Thus, it is well discernible from Section 54 of the TP Act that an agreement for sale of an immovable property, even if it is true and valid, does not create any right or interest in favour of the buyer on the property. 7. The learned counsel for the respondents drew our attention to Section 55(6)(b) of the TP Act and contended that the buyer has interest in the property also, under the agreement for sale. 7. The learned counsel for the respondents drew our attention to Section 55(6)(b) of the TP Act and contended that the buyer has interest in the property also, under the agreement for sale. On a close reading of Section 55(6)(b) of the TP Act, we find that, unless the buyer has OP(C).No. 2882 of 2011 8 improperly declined to accept delivery of the property, he is entitled to a charge on the property, as against the seller and all persons claiming under him to the extent of the seller's interest in the property, for the amount of any purchase-money properly paid by the buyer, in anticipation of the delivery and for interest on such amount. It means that a charge is created on the seller's interest in the property, to the extent of purchase-money paid, for realising that amount from the property, under the agreement for sale only, unless the buyer has improperly declined to accept delivery of the property. 8. We are of the opinion that the said charge is a conditional one, which comes into operation, unless the buyer has improperly declined to accept delivery of the property only. It follows that an agreement for sale of an immovable property itself, at the very inception of the agreement, would not create such a charge to the extent of advance purchase money, on the sellers interest in the property. Such a charge would stand created and comes into operation, where the buyer has not improperly declined to accept delivery of the property. The above view is fortified by Section 54 of the TP Act, wherein it is specifically stipulated that a contract for sale of an immovable property, of itself, does not create any interest in or charge on such property. To sum up a contract for sale of an immovable property, by itself, does not create a charge in favour of the buyer, for the advance purchase money paid by the buyer, on the sellers' interest in the property and such a charge would be created, when the buyer has not improperly declined to accept delivery of the property. 9. To sum up a contract for sale of an immovable property, by itself, does not create a charge in favour of the buyer, for the advance purchase money paid by the buyer, on the sellers' interest in the property and such a charge would be created, when the buyer has not improperly declined to accept delivery of the property. 9. Coming to the instant case, the O.A has been filed under Section 10 of the EFL Act, seeking a declaration that the application schedule property is not an Ecologically Fragile Land and also to set aside the order dated 18.06.2009 vesting the said property with the Government, under Section 3 of the EFL Act. At this juncture, it is to be borne in mind that the jurisdiction and power of the Forest Tribunal is confined to the provisions, under clause (a) to (c) of Section 10 of EFL Act only. No dispute, other than disputes specifically mentioned under clauses (a) to (c), could be considered in an application filed under Section 10 of the EFL Act. Therefore, a dispute arises from an agreement for sale between a seller and buyer can never be considered in an application filed by the seller, under Section 10 of the EFL Act. 10. The learned counsel for the 3rd respondent invited our attention to different clauses in the agreement for sale and contended that as per the terms of agreement, the 3rd respondent has right and duty to preserve and protect the property under the agreement and by virtue of the terms of agreement, the 3rd respondent has a right to get himself impleaded in the O.A. 11. We are of the opinion that the terms and conditions in an agreement for sale are binding between the parties to the agreement; the buyer and seller only and no right can be asserted on the basis of the terms of agreement against the Government, with whom the property stands vested under Section 3 of the EFL Act. That apart, the terms of agreement cannot confer jurisdiction or power to the Court, where the statute omitted to confer the same. In short, the 3rd respondent had no right to be heard in an application filed, under Section 10 of the EFL Act, by the seller. 12. That apart, the terms of agreement cannot confer jurisdiction or power to the Court, where the statute omitted to confer the same. In short, the 3rd respondent had no right to be heard in an application filed, under Section 10 of the EFL Act, by the seller. 12. In the above view, we find that the court below has failed to analyse the law on the point in its correct perspective and the Tribunal, without considering the rights and liabilities of a seller and buyer under an agreement for sale, allowed the buyer to get himself impleaded in the O.A, on an erroneous finding that no prejudice would be caused to the seller. In view of the rights and liabilities of the buyer and seller determined above, we are inclined to set aside the impugned order under challenge and we do so. The Forest Tribunal is directed to dispose of the O.A at the earliest, within a period of three months from the date of receipt of the copy of this judgment. The O.P.C. is allowed.