Case Note & Summary
The Supreme Court allowed the appeals filed by the defendants (appellants) against the judgment of the Karnataka High Court which had upheld the decree for specific performance of an agreement to sell. The suit property was granted to Bale Venkataramanappa under the Karnataka Land Reforms Act, 1961, with a 15-year non-alienation clause expiring on 13.10.1988. On 15.05.1990, during the non-alienation period, Venkataramanappa executed an agreement to sell the property to the plaintiff Govindappa, receiving full consideration and handing over possession. The plaintiff filed a suit for specific performance in 1999. The trial court dismissed the suit holding the agreement void due to the statutory bar. The first appellate court reversed, and the High Court upheld the reversal. The Supreme Court examined Section 61 of the Act, which prohibits transfer by sale, gift, exchange, mortgage, lease or assignment within 15 years. The Court held that an agreement to sell is a transfer and falls within the prohibition. The agreement was void ab initio and cannot be enforced even after the restriction period ends. The Court also noted that the plaintiff's suit was barred by limitation as it was filed beyond three years from the date of the agreement. The appeals were allowed, setting aside the judgments of the first appellate court and the High Court, and restoring the trial court's dismissal.
Headnote
A) Land Reforms - Restriction on Transfer - Section 61 Karnataka Land Reforms Act, 1961 - Agreement to Sell - The court considered whether an agreement to sell executed during the 15-year non-alienation period is enforceable. Held that the agreement to sell is a transfer and void ab initio, not enforceable even after the restriction period ends (Paras 11-16). B) Specific Performance - Void Agreement - Agreement to Sell - The court held that an agreement to sell which is void under Section 61 cannot be enforced by a suit for specific performance. The plaintiff cannot rely on the agreement after the restriction period as the agreement itself is void from inception (Paras 15-16).
Issue of Consideration
Whether an agreement to sell executed during the non-alienation period under Section 61 of the Karnataka Land Reforms Act, 1961 is enforceable in law
Final Decision
Appeals allowed. Judgment and order of the High Court and first appellate court set aside. Suit for specific performance dismissed. No order as to costs.
Law Points
- Section 61 of Karnataka Land Reforms Act
- 1961 prohibits transfer of granted land within 15 years
- agreement to sell is a transfer
- void ab initio
- not enforceable even after restriction period ends
