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irani Basettappa Vs. Municipal Council Davangere City Municipality - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKarnataka High Court
Decided On
Case NumberSecond Appeal Nos. 419 and 420 of 1950-51
Judge
Reported inAIR1955Kant76; AIR1955Mys76; (1956)34MysLJ61
ActsIndian Contract Act, 1872 - Sections 2; Mysore City Municipalities Act, 1933 - Sections 41(7); Transfer of Property Act - Sections 53A and 55(1)
Appellantirani Basettappa
RespondentMunicipal Council Davangere City Municipality
Appellant AdvocateV. Krishnamurthy, Adv.
Respondent AdvocateM.K. Srinivasa Iyengar, Adv.
Excerpt:
.....existence. the learned munsiff has referred to some cases none of which deals directly with the sale or contract to sell immoveable property by a municipal corporation, or where a provision like section 41(7), city municipalities act, has been considered in connection with such sale or a completed contract to sell. even in this court i have not been referred by the respondent to any case which lays down that in circumstances like the present a person in the position of the defendant cannot rely upon section 53-a or wherein it has been held that a municipal council which has in pursuance of a contract to sell received the full purchase money and has either put or has permitted the purchaser to take or remain in possession can plead the bar of section 41(7), city municipalities act...........be by an oral agreement and such an agreement can be enforced by a suit for specific performance. sale is transfer of ownership in exchange for k price paid or promised and can be made only by a registered instrument, in the case of immoveable property of the value of over rs. 100/-. 5. it is contended by mr. v. krishnamurthy, learned counsel for the appellant, that there was no longer any contract for sale to be enforced as such between the parties. the contract had been executed as the price had been deposited and the only thing left was the execution of a sale deed which the plaintiff was bound to give under section 55(1)(d), transfer of property act this was a statutory right independent of any contract. mr. krislinamurthy has also urged that the case reported in -- 'hormasji.....
Judgment:

1. O. S. No. 388/48-49 and O. S.No. 499/48-49 on the file of the Munsif of Davangere were brought by the Municipal CouncilDavangere City Municipality, and one EraniBasettappa respectively. In O. S. No. 388 of 48-49the Municipal Council prayed for a declarationof its title to a vacant piece of land measuring10 feet North to South and 100 feet East to westand for a permanent injunction restraining thedefendant from putting up any construction onit or otherwise interfering with the rights and possession of the plaintiff.

In O. S. No. 499 of 48-49 the plaintiff Erani Easetappa prayed for a similar declaration that he was the owner of the same piece of land or in the alternative directing the Municipal Council to execute a sale deed conveying the same to him for the consideration of Rs. 500/- which had already been paid by him or for a proper title deed and for a similar injunction.

Defendant 2 was impleaded in that suit as he was claiming some Interest in the site under a later grant from the Municipal Council. The Davangere Municipal Council, who will hereafter be referred to as the plaintiff, admitted in its plaint that by a resolution of the Council at a meeting held on 22-11-47, it had granted the site in question to Erani Basettappa, who will hereafter be referred to as defendant. But the resolution had been passed under some mistake and by a later resolution at a meeting held on 20-10-48 the earlier resolution was cancelled.

The first resolution was communicated to the defendant on 1-12-47 and the defendant had deposited the value of the site later on. Subsequently, the later resolution was also communicated to the defendant on 17-11-48 and he could not therefore claim any rights in the site. Possession had not been given to him by the plain-tiff and he could not apply for permission, to build on it. His application for license had therefore been rejected, though somewhat late, but the same did not confer any right on the defendant to build, on the schedule site which was vested in the plaintiff and which continued to belong to the plaintiff and to which the defendant did not acquire any right in law.

Moreover it was pleaded that the contract of sale of that space had to be completed by the same being reduced to writing and signed by the President, or Vice-President and two Councillors and sealed by the common seal of the Council if it was to have any validity, and as these formalities specified by Section 41(7), City Municipalities Act (Act 7 of 1933) had not been observed the defendant could not enforce any rights under the resolution.

2. The defendant pleaded that he had all along been in possession and was using the suit land for over 20 years, that he had applied to the Municipality for the grant of it, that a resolution Had been passed granting him the same, that the same was communicated to him and that in pursuance of it he had paid the entire purchase, money of Rs. 500/- and obtained a proper receipt therefor. He was permitted to take possession of the site and continued as owner thereof.

He had applied for a licence to the Municipality for erecting a compound wall. As the Municipality had not replied within 30 days he had secured a statutory right to effect the construction and the subsequent resolution of the Municipality could not therefore affect him.

With regard to the objection of the plaintiff based on Section 41(7), City Municipalities Act, he pleaded that the resolution recorded the required sanction of the Council and conferred title and the objection taken by the Municipal Council was not sustainable in law and even if that section applied, under Section 53-A, Transfer of Property Act, the plaintiff was debarred from claiming to dispossess the defendant.

3. The learned Munsiff who tried the suit did -not record any evidence. He heard arguments after marking as exhibits the two resolutions aforesaid. He upheld the objection of the plaintiff based on Section 41(7), Municipalities Act, and decreed the suit of the Municipal Council and dismissed the suit of Erani Basettappa. On appeal the Subordinate Judge of Chitaldrug upheld his decision. Erani Basettappa has filed these two second appeals which can be disposed of by a common judgment.

4. The learned Munsiff was of the view that there was no concluded contract between the parties and that the resolution of the Municipal Council could in no event be treated as a concluded contract.

Here I think he is clearly wrong. A contract requires an offer and an acceptance. The acceptance may be either express or implied. Whether the defendant's application for the site is treated as an offer and the resolution of the Municipal Council is treated as an acceptance or whether the resolution is treated as an other and the defendant's depositing the required purchase money is treated as an acceptance, clearly a contract has come into existence. If the first resolution was communicated to the defendant, as it admittedly was done, and he deposited the full purchase money, it is difficult to see what more was required to constitute a concluded contract.

A contract between two private individuals to sell, or purchase immoveable property 'docs not require any writing and can even be by an oral agreement and such an agreement can be enforced by a suit for specific performance.

Sale is transfer of ownership in exchange for K price paid or promised and can be made only by a registered instrument, in the case of immoveable property of the value of over Rs. 100/-.

5. It is contended by Mr. V. Krishnamurthy, learned counsel for the appellant, that there was no longer any contract for sale to be enforced as such between the parties. The contract had been executed as the price had been deposited and the only thing left was the execution of a sale deed which the plaintiff was bound to give under Section 55(1)(d), Transfer of Property Act This was a statutory right independent of any contract.

Mr. Krislinamurthy has also urged that the case reported in -- 'Hormasji Jamshedji Ginwala & Sons v. Maneklal Mansukhbhai', AIR 1944 Bom 105 (A), on which the learned Munsiff has relied and which held that under Section 53-A, Transfer of Property Act, if a contract was required to be reduced to writing and signed, it must itself be proved by primary and secondary evidence and its terms must be determined from the contract itself and not from what purports to be its quotation in another document, had been set aside on appeal by the Supreme Court in -- 'Maneklal Mansukhabhai v. Hormusji Jamshcdji Ginwala & Sons', : [1950]1SCR75 (B), where it has been held that a formal lease is not necessary to attract the application of Section 53-A, all that was required being that an agreement in writing signed by the transferor can be gathered from the evidence.

The word 'transferor' will naturally include any person who is authorised to sign for him. In 'Ewaz AH v. Firdous Jehan. AIR 1944 Oudh 213 (C), it has been held that all that Section 53-A requires is that there should be a writing signed by the transferor and from it the terms necessary to constitute a transfer should be as certainable with reasonable certainty.

In that case a receipt which had been given by the vendor for the earnest money in respect of the sale of a house was held to be such a contract in writing within the intendment of Section 53-A, Transfer of Property Act.

In this view it may be open to the defendant to rely not merely on his application and the resolution but also on the terms of its communication to him and other correspondence between himself and the Municipal Council in that matter and the terms of the receipt which he obtained for the payment of the purchase money. This part of the case could, therefore, not have been disposed of without recording evidence.

6. The learned Munsiff was of the view that assuming there was a contract it was still executory and not executed and that the defendant was barred by Section 41(7), City Municipalities Act, from relying on any such writing or from invoking the aid of Section 53-A, Transfer of Property Act, as the necessary formalities required under Section 41(7) had not been observed.

It is urged by Mr. Krishnamurthy that Section 53-A is in general terms and that

'where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute a transfer can be ascertained with reasonable certainty and the transferee has, in part performance of the contract, taken possession of the property, or the transferee being already in possession continues to be in possession in part performance of the contract and has done some act in furtherance of the contract and the transferee has performed or is willing to perform his part of the contract, then notwithstanding that the contract though required has not been registered or where there Is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any rights in respect of the property.'

Mr. Krishnamurthi urges that in the present case, the transferee has already in performance of the contract paid the whole of the purchase money and is in possession; and has applied for a licence to construct a compound wall & must be deemed to have been granted that permission as the Municipal Council has not objected in time; that there is nothing more -for the transferee to do and that he is entitled to claim a formal sale deed and even without such a sale deed the plaintiff is debarred from claiming any rights over the property under Section 53-A.

The learned Munsiff has referred to some cases none of which deals directly with the sale or contract to sell immoveable property by a Municipal Corporation, or where a provision like Section 41(7), City Municipalities Act, has been considered in connection with such sale or a completed contract to sell. They are cases of contracts relating to moveable property; Vide -- 'Muni-venkaLappa v. Bangalore City Municipal Council', 28 Mys CCB 119 (D); -- 'Radha Krishna Das v. Municipal Board, Benares', 27 All 592 (E), right of collection of tolls, vide -- 'Abaji v. Trimbak Municipality, 28 Bom 66 (F); '42 Mys HCR 507 (G)'; '46 Mys HCR 258 (H)', (which is more in favour of the defendant) enforcement of road, contracts with District Boards, and even in those cases it has been held that if the contract has been executed (vide '46 Mys HCR 258 (H)), the section which prescribes the formalities for such contract to be valid may no longer have any significance and that it is only if the contract is to be enforced that the question of 'the bar comes in. Even in this Court I have not been referred by the respondent to any case which lays down that in circumstances like the present a person in the position of the defendant cannot rely upon Section 53-A or wherein it has been held that a Municipal Council which has in pursuance of a contract to sell received the full purchase money and has either put or has permitted the purchaser to take or remain in possession can plead the bar of Section 41(7), City Municipalities Act.

7. It is urged by Mr. Krishnamurthy with considerable force that the Municipalities in the State, almost as a rule, never issue registered sale deeds nor enter into formal contracts to sell sites in accordance with Section 41(7), City Municipalities Act, that they usually auction sites, or merely receive the purchase money and issue receipts or certificates to evidence sale of the sites and that it would be putting a premium on bad faith if Municipalities are allowed, long after such sales, to claim the benefit of Section 41(7) and that no title would be safe as the Municipalities have 30 years within which they can bring suits for possession of the sites ignoring their own resolutions and actions including receipt of consideration.

I do not wish to say anything further in this matter as when the question of applying Section 53-A arises after the parties have adduced evidence the trial Court may be called upon to consider the effect of Section 41(1) also in that context. -

8. In the result these two appeals are allowed, the judgments and decrees of the Courts below are set aside and the suits are remanded to the trial Court which will permit both parties to adduce all their evidence and dispose of the suits afresh in accordance with law.

As regards costs Erani Basettappa will have his costs in both the appeals both here and in the lower appellate Court. The costs of the trial Court will be costs in the cause and will abide the final decision in the suit. The Court-fee paid in these second appeals will be refunded to the appellant.

9. Appeals allowed.


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