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TMI Blog2019 (9) TMI 1724X X X X Extracts X X X X X X X X Extracts X X X X ..... the unambiguous legislative intent is that no such mortgage, transfer, sale etc. would be permitted for a period of 15 years from the date of grant. Undisputedly, even according to the Plaintiff, the grant is of the year 1983, as such, the transfer in question in the year 1990 is beyond any doubt within the prohibited period of 15 years. Sub-section (3) of Section 61 of the Reforms Act makes the legislative intent very clear. It provides, that any transfer in violation of Sub-section (1) shall be invalid and it also provides for the consequence for such invalid transaction. Undisputedly, in the present case, the claim of the Plaintiff is entirely based upon the agreement to sell dated 15.05.1990, which is clearly hit by Section 61 of the Reforms Act. There is no other foundation for the claim of the Plaintiff except the one based on the agreement to sell, which is hit by Section 61 of the Act - It could thus be seen that, the trial Judge upon finding that the agreement of sale was hit by Section 61 of the Reforms Act, had rightly dismissed the suit of the Plaintiff. The judgment and order passed by the High Court of Karnataka dated 08.06.2015 and the Order passed by the Fast Track ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the grant certificate, there was a 15 years bar on alienation of the suit property. The period of the said bar was to expire on 13.10.1988. It was, therefore, held by the trial Judge that since the said agreement was executed during the non-alienation period of 15 years, the agreement was void and non-executable. It was held that since the said agreement was contrary to the statutory bar, it was void in law and as such the suit for specific performance of the contract was not maintainable. 4. Being aggrieved thereby, the Plaintiff filed Regular Appeal No. 86 of 2004 before the Principal District Session Judge, Bangalore. Before the appellate court, though the Defendants had put in their appearance, the Advocate did not appear to argue the matter. The first appellate court held that the father of Original Defendant No. 1, namely, Bale Venkataramanappa, had mortgaged the suit property by a registered mortgage deed on 23.04.1990. It further held that on 15.05.1990 he had also entered into an agreement to sell with the Plaintiff. It was further held that, the entire sum of Rs. 46,000/- agreed to be paid to Bale Venkataramanappa was received by him. It was further found that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded by the trial Judge was correct in law, which ought not to have been interfered with by the first appellate court. It is further submitted that the High Court was also not correct in law in upholding the finding of the first appellate court. 7. The original Plaintiff (Respondent(s) herein), on the contrary, submitted that the provisions of Section 61 of the Reforms Act would prohibit only the sale, gift, exchange, mortgage, lease or assignment and would not prohibit an agreement to sell. It is submitted that once the period of restriction of 15 years is over, the agreement to sell, though executed during the period of 15 years, becomes enforceable in law. It is submitted that, in the present case, Bale Venkataramanappa had received the entire consideration and had also handed over the possession as per the agreement to sell. It is further submitted that, the pleadings in the plaint were not controverted by either filing written statement nor leading any evidence and in this view of the matter, the first appellate court and the High Court were justified in decreeing the suit. 8. The facts in the present case are not in dispute. On 20.10.1976, the suit property, i.e., 1 acre 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red the name of the Plaintiff in the revenue records. The Defendants challenged the same before the Assistant Commissioner, Doddabalapura Division. The said appeal was allowed on 27.06.2008. Accordingly, the revenue records were corrected and the Defendants' names were entered on 24.10.2009. The said Order came to be challenged by the Plaintiff before the High Court by way of Writ Petition Nos. 22243-22244 of 2011. The High Court vide Order dated 26.07.2011, dismissed the said petitions. 11. The short question that arises for consideration in the present appeals is, as to whether the agreement to sell dated 15.05.1990 executed by Bale Venkataramanappa in favour of the Plaintiff would be enforceable in law or not. 12. For appreciating the said issue, it would be necessary to refer to Section 61 of the Reforms Act, which reads thus: 61. Restriction on transfer of land of which tenant has become occupant.-- (1) Notwithstanding anything contained in any law, no land of which the occupancy has been granted to any person under this Chapter shall, within fifteen years from the date of the final order passed by the Tribunal Under Sub-section (4) or Sub-section (5) or Sub-section (5A) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his interest in the land in favour of the State Government, a financial institution, a co-operative land development bank, a co-operative society or a company as defined in Section 3 of the Companies Act, 1956 in which not less than 51% of the paid-up share capital is held by the State Government or a Corporation owned or controlled by the Central Government or the State Government or both. However, such a loan can be taken only for the purpose of development of land or improvement of agricultural practices or for raising educational loan to prosecute higher studies of the children of such person. It further provides that, in the event of such a person making default in payment of such loan in accordance with the terms and conditions on which such loan was granted, it shall be lawful to cause his interest in the land be attached and sold and the proceeds to be utilised in the payment of such loan. Sub-section (3) of the said Section specifically provides that any transfer or partition of land in contravention of Sub-section (1) shall be invalid and such land shall vest in the State Government free, from all encumbrances and shall be disposed in accordance with the provisions of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es; not for the sake of the Defendant, but because they will not lend their aid to such a Plaintiff. So if the Plaintiff and Defendant were to change sides, and the Defendant was to bring his action against the Plaintiff, the latter would then have the advantage of it; for where both are equally in fault, potior est conditio defendentis. There are, however, some exceptions or supposed exceptions to the Rule of turpi causa. In Salmond and William on Contracts, four such exceptions have been mentioned, and the fourth of these exceptions is based on the right of restitutio in integrum, where the relationship of trustee and beneficiary is involved. Salmond stated the law in these words at p. 352 of his Book (2nd Edn.): So if A employs B to commit a robbery, A cannot sue B for the proceeds. And the position would be the same if A were to vest property in B upon trust to carry out some fraudulent scheme: A could not sue B for an account of the profits. But if B, who is A's agent or trustee, receives on A's account money paid by C pursuant to an illegal contract between A and C the position is otherwise and A can recover the property from B, although he could not have claimed it f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is whether the illegality goes so much to the root of the matter that the Plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. If the illegality be trivial or venial, as stated by Williston and the Plaintiff is not required to rest his case upon that illegality, then public policy demands that the Defendant should not be allowed to take advantage of the position. A strict view, of course, must be taken of the Plaintiff's conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis-stating the facts. If, however, the matter is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the Plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the Defendant should not prevail. 16. It could thus be seen, that this Court has held that the correct position of law is that, what one has to see is whether the illegality goes so much to the root of the matter that the Plaintiff cannot bring his action without relying upon the illegal transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Moore, (1937) 2 KB 158 at p. 62. Referring to the maxim ex turpi causa non oritur actio Lord Wright observed that this maxim, though veiled in the dignity of learned language, is a statement of a principle of great importance; but like most maxims it is much too vague and much too general to admit of application without a careful consideration of the circumstances and of the various definite Rules which have been laid down by the authorities . Therefore, in deciding the question raised in the present appeal it would be necessary for us to consider carefully the true scope and effect of the maxims pressed into service by the rival parties, and to enquire which of the maxims would be relevant and applicable in the circumstances of the case. It is common ground that the approach of the Court in determining the present dispute must be conditioned solely by considerations of public policy. Which principle would be more conducive to, and more consistent with, public interest, that is the crux of the matter. To put it differently, having regard to the fact that both the parties before the Court are confederates in the fraud, which approach would be less injurious to public interest. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are confederates in the fraud, the Court will have to find out which approach would be less injurious to public interest. The Court observed that, whichever approach is adopted, one party would succeed and the other would fail and, therefore, it is necessary to enquire as to which party's success would be less injurious to public interest. The Court in the facts of the said case finds that if the decree was to be passed in favour of Respondent No. 1 (who was the Plaintiff), it would be actively assisting Respondent No. 1 to give effect to the fraud to which he was a party and it has been held that in that sense the Court would be allowed to be used as an instrument of fraud and that is clearly and patently inconsistent with public interest. 19. It has further been held, that if both the parties are equally guilty and the fraud intended by them had been carried out, the position would be that, the party raising the defence is not asking the Court's assistance in any active manner. It has been held, that all the defence suggested is that a confederate in fraud shall not be permitted to obtain a decree from the Court because the documents of title, on which the claim is based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured, the grantor was allowed to show that the premises were of less value than the annuity, and consequently, that the deed required enrolment, although he had expressly covenanted in the deed that the premises were of greater value... According to the learned author the better opinion seems to be that where both parties to an indenture either know, or have the means of knowing, that it was executed for an immoral purpose, or in contravention of a statute, or of public policy, neither of them will be estopped from proving those facts which render the instrument void ab initio; for although a party will thus in curtain cases be enabled to take advantage of his own wrong, yet this evil is of a trifling nature in comparison with the flagrant evasion of the law that would result from the adoption of an opposite rule (p. 98). Indeed, according to Taylor, although illegality is not pleaded by the Defendant nor sought to be relied upon by him by way of defence, yet the court itself, upon the illegality appearing upon the evidence, will take notice of it, and will dismiss the action ex turpi causa non oritur actio. No polluted hand shall touch the pure fountain of Justice (p. 93). 21. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Section 76 provides: (1) If the sub-lessee does not hand over possession of the land sub-let to him after the sub-lease ceases to be in force Under Sections 74 and 75 to the lessor or his legal heir ... he shall be deemed to be a trespasser and shall be liable to ejectment in accordance with the provisions of this Act. (2) * * *. Section 78 provides: (1) Any person who in contravention of the provisions of this Act, obtains possession of any land by virtue of a bequest, gift sale, mortgage or sub-lease, or of any agreement purporting to be a bequest, gift, sale, mortgage or sub-lease shall be deemed to be a trespasser and shall be liable to ejectment in accordance with the provisions of Section 58. In the said case, the Plaintiff/Appellant before the Supreme Court was a recorded pattedar tenant and had granted a sublease of land to Respondent Nos. 1 and 2 for five years. The suit was filed on the ground that sub-lease was in contravention of Section 73 of the Revenue Administration and Ryotwari Land Revenue and Tenancy Act, Samvat 2007 (Act No. 66 of 1950) and that the said Respondents had trespassed in the land. The trial court had decreed the suit. The first appellate court ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illegal transaction or as to whether the Plaintiff can rest his claim on something else without relying on the illegal transaction. Undisputedly, in the present case, the claim of the Plaintiff is entirely based upon the agreement to sell dated 15.05.1990, which is clearly hit by Section 61 of the Reforms Act. There is no other foundation for the claim of the Plaintiff except the one based on the agreement to sell, which is hit by Section 61 of the Act. In such a case, as observed by Taylor, in his Law of Evidence which has been approved by Gajendragadkar, J. in Immani Appa Rao (supra), although illegality is not pleaded by the Defendant nor sought to be relied upon him by way of defence, yet the Court itself, upon the illegality appearing upon the evidence, will take notice of it, and will dismiss the action ex turpi causa non oritur actio i.e. No polluted hand shall touch the pure fountain of justice. Equally, as observed in Story's Equity Jurisprudence, which again is approved in Immani Appa Rao (supra), where the parties are concerned with illegal agreements or other transactions, courts of equity following the Rule of law as to participators in a common crime will not inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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