2024 (2) TMI 1516 - SC - Indian Laws

Seeking the decree for specific performance of the agreement to sell and in the alternative for refund of the advance sale consideration / earnest money - Whether a decree for specific performance of land to be transferred from tribal to non-tribal can be granted subject to obtaining permission u/s 36A of Maharashtra Land Revenue Code? - HELD THAT - The High Court has focused itself only on the aspect regarding Section 36A of the Land Revenue Code to deny relief to the appellant-plaintiff. The trial Court the First Appellate Court as well as the High Court have concurrently held that there was indeed an agreement to sell between the parties and the plaintiff had paid a sum of Rs.2, 20, 000/- out of a total consideration of Rs.2, 25, 000/- to the defendant-respondent herein who had also handed over possession of the subject land to the plaintiff. On a reading of the Section 36A what is evident is that there is only a restriction on the transfer to be made by a tribal in favour of the non-tribal by way of sale gift exchange mortgage lease or otherwise. Such a restriction is in the context of requiring the non-tribal to make an application for a previous sanction before such a conveyance could be made by a tribal (defendant/ respondent herein) in favour of non-tribal (plaintiff/appellant herein) before the State Government so as to seek previous approval of the State Government only after a previous approval of the State Government could such a sale take place. The conveyance by way of sale would take place only at the time of registration of a sale deed in accordance with Section 17 of the Registration Act 2008. Till then there is no conveyance. Therefore there is no bar for a tribal to enter into an agreement to sell and seeking advance sale consideration. In view of the defendant not performing his part of the agreement to sell the plaintiff was constrained to file suit for specific performance. When all the courts have held that the plaintiff has performed his part of the agreement inasmuch as he had tendered a sum of Rs.2, 20, 000/- out of a total consideration of Rs.2, 25, 000/- and he was ready and willing to perform the rest of the obligation under the contract it was only in the context of non-performance by the defendant that the plaintiff was constrained to file the suit for specific performance. Therefore on the basis of Section 36A the trial Court the first appellate court as well as the High Court could not have declined to grant the decree for specific performance to the plaintiff inasmuch as the considerations under the provisions of the Specific Relief Act 1963 only had to be made for the purpose of adjudicating the suit between the parties. Conclusion - The suit filed by the plaintiff decreed granting specific performance of the agreement to sell subject to the plaintiff obtaining the necessary sanction under Section 36A of the Maharashtra Land Revenue Code. Appeal allowed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment were:

- Whether a decree for specific performance of a land transfer from a tribal to a non-tribal can be granted subject to obtaining permission under Section 36A of the Maharashtra Land Revenue Code.

- Whether the High Court was correct in interpreting Section 36A as a total bar to the transfer of land from a tribal to a non-tribal without prior sanction.

2. ISSUE-WISE DETAILED ANALYSIS

Relevant legal framework and precedents:

Section 36A of the Maharashtra Land Revenue Code, 1966, restricts the transfer of land from tribals to non-tribals without prior sanction from the State Government. The section requires that any such transfer, including sale, gift, exchange, mortgage, or lease, must be sanctioned by the Collector with the previous approval of the State Government.

The Specific Relief Act, 1963, particularly Sections 10 and 16, governs the conditions under which specific performance of a contract can be granted.

Precedents considered include Nathulal v. Fulchand, which established that a decree for specific performance can be granted subject to obtaining necessary permissions, and Murlidhar Dayandeo Kesekar v. Vishwanath Pandu Barde, which dealt with the denial of permission for land transfer by state authorities.

Court's interpretation and reasoning:

The Court interpreted Section 36A as imposing a restriction rather than an absolute bar on the transfer of land from tribals to non-tribals. The Court reasoned that the requirement for prior sanction is a procedural step that must be completed before the actual conveyance of the land, i.e., before the registration of the sale deed.

The Court found that the High Court had erred in interpreting Section 36A as preventing the granting of a decree for specific performance. The Court held that the stage for obtaining the necessary sanction had not yet arisen because the defendant had not executed the sale deed.

Key evidence and findings:

The Court observed that there was a valid agreement to sell between the parties, and the plaintiff had paid a substantial portion of the consideration amount. The defendant had also handed over possession of the land to the plaintiff.

Application of law to facts:

The Court applied the principles from the Specific Relief Act and the precedent set in Nathulal v. Fulchand to conclude that a decree for specific performance could be granted subject to the plaintiff obtaining the necessary sanction under Section 36A of the Maharashtra Land Revenue Code.

Treatment of competing arguments:

The appellant argued that the High Court misinterpreted Section 36A as an absolute bar, while the respondent contended that the agreement was void due to the lack of prior sanction. The Court sided with the appellant, emphasizing that the requirement for sanction is a procedural step that follows the granting of a decree for specific performance.

Conclusions:

The Court concluded that the plaintiff was entitled to a decree for specific performance of the agreement to sell, subject to obtaining the necessary sanction under Section 36A.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning:

"There is no bar for a tribal to enter into an agreement to sell and seeking advance sale consideration. However, before conveying the land by the tribal in favour of a non-tribal, the requisites of Section 36A must be complied with by the non-tribal before the State Government."

Core principles established:

The Court established that Section 36A imposes a procedural requirement rather than an absolute bar on land transfers from tribals to non-tribals. A decree for specific performance can be granted subject to obtaining the necessary sanction.

Final determinations on each issue:

The Court decreed the suit filed by the plaintiff, granting specific performance of the agreement to sell, subject to the plaintiff obtaining the necessary sanction under Section 36A of the Maharashtra Land Revenue Code.