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Kantilal Amratlal and ors. Vs. Snehlata Vipinchandra Mehta and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtGujarat High Court
Decided On
Judge
Reported in(1979)1GLR490
AppellantKantilal Amratlal and ors.
RespondentSnehlata Vipinchandra Mehta and ors.
Cases ReferredSemuel Thyagaraja Kumar v. K.S. Hatama Achar and Ors. A.I.
Excerpt:
.....of the said decree in favour of the vendee. all the consequence which would arise in respect of a document executed by a party in fact, also arise and attach to a document executed by a court in pursuance of execution of a decree for execution of a document in case of the failure or refusal of a party under obligation to execute the same. if that is so, and i do not feel doubt in my mind in view of the legal fiction created in sub-rule (5) of rule 34, the conclusion is inescapable that the prohibition contained in section 27 of the ceiling act would also apply to such transactions and the court will have no jurisdiction to execute the document on the failure or refusal of a party under obligation to carry out the decree. the learned judge of the court below observed in the course of the..........has been passed. the division bench answered it in negative on the following ground:the sale deed executed by a court in pursuance of a decree for specific: performance is a transfer by the court on behalf of the judgment-debtor and it is the title of the judgment-debtor to the property which is transferred by the sale deed executed by the court. if the judgment-debtor is precluded from transferring his property by some statutory provision, the court cannot, in violation of that provision, execute a sale deed of the property. clause (3) of section 7 encumbered estates act provides that until the happening of such a contingency the landlord shall not be competent without the sanction of the collector to make any exchange or gift of or to sell, mortgage or lease his proprietary.....
Judgment:

B.K. Mehta, J.

1. A short but interesting question arises, whether Civil Court can execute a sale deed on behalf of a judgment-debtor against whom a decree for specific performance has been passed in respect of a building situate within the urban agglomeration to which the Urban Land (Ceiling and Regulation) Act, 1976 applies in view of the prohibition contained against transfer of such properties under Section 27 of the said Act, The question arises in the following circumstances:

2. One Amratlal Manchharam had executed an agreement to sell a building bearing Nondh No. 1016 situate within Ward No. 2 of Sagrampura main road in the city of Surat in favour of opponent No. 1 herein for a sum of Rs. 15,000/- towards which Rs. 6,000/- were paid to the vendor as earnest money. As the vendor failed to execute a deed of sale in pursuance of the said agreement, opponent No. 1 was required to file the suit in the Court of Civil Judge (S.D.) Surat being Special Civil Suit No. 98 of 1968 for specific performance of the said agreement. Opponent No. 3 herein was also joined as a party-defendant since the heirs of the vendor Amratlal agreed to sell the property to him Amratlal died during the pendency of the suit and, therefore, the present petitioners were brought on record as heirs and representatives of the original defendant said Amratlal. It appears that on October 18, 1969, a compromise was effected between the parties and a decree in terms of the said compromise was passed. The said consent decree provided that opponent No. 1 herein, who was the original plaintiff, would be entitled to recover Rs. 12.500/- from the defendants or would be entitled to a decree for specific performance of the said agreement to sell, and accordingly on her depositing Rs. 9,090/- in the Court, she would be entitled to obtain a deed of conveyance from the defendants or on their default from the Commissioner to be appointed by the Court in that behalf, and to obtain possession in pursuance of the said deed of conveyance. It was further provided that if the defendants pay Rs. 10,503/- before December, 31, 1970, the decree in favour of the plaintiffs was to be marked satisfied. If the defendants failed to pay the said amount, the plaintiffs had an option to execute the money decree or the decree for specific pjrfjrminje as she liked. It is common ground that the defendants failed to pay the amount of Rs. 10,030/- before December 31, 1970, as stipulated in the decree with the result that the occasion for exercising the option by the plaintiffs had arisen. She accordingly applied for the execution of the decree of specific performance by net Special Darkhast No. 15 of 1971 and prayed for direction to the defendants to execute the deed of conveyance or for appointment of Commissioner to execute the said deed if they committed a default in carrying out the directions of the Court. She had deposited Rs. 9,000/- as required by the decree.

3. The defendants raised a number of objections against the execution of the said decree contending, inter alia, that the Court could not have executed the decree by executing the deed of conveyance in view of the prohibition contained on transfer of building situate on the land within the urban or urbauisable agglomeration without the permission of the competent authority as enjoined in Section 27 of the Ceiling Act. The executing Court was not impressed by these objections with the result that they were rejected.

4. The defendants, therefore, carried the matter in appeal before this Court being First Appeal No. 42 of 1973, which was disposed of by A.D. Desai, J. by rejecting all the objections, except one about the prohibition contained in Section 27 of the Ceiling Act. The learned Single Judge, therefore, remanded the matter with the direction to the Executing Court to consider this objection on merits. The said appeal was accordingly disposed of by his order of October 29, 1976.

5. The Executing Court, on remand, heard the Advocates of the parties on the said objection, but was again not impressed with the substance of the contention and the learned Civil Judge, therefore, by his order of February 10, 1977, directed continuance of the Darkhast as prayed for. It is this order, which has been challenged in this civil revision application before the, which was originally filed as first appeal but was allowed to be converted in revision in view of the amended Code of Civil Procedure.

6. At the time of hearing of this revision, Mr. R.N. Shah, learned Advocate, appearing on behalf of the petitioner-defendants urged that the Civil Court has no jurisdiction to execute the decree for specific performance of a property situate within the urban or urbanisable agglomeration in view of the prohibition contained in Section 27 of the Ceiling Act without the prior permission of the competent authority inasmuch as the transfer would amount to a transfer by way of sale by the vendor or the representatives of the vendor to the vendee. This contention, therefore, raises a neat question of law, whether Civil Court has jurisdiction to direct the judgment-debtor, against whom a decree for specific performance of an agreement to sale immovable property situate within an urban area to which the Ceiling Act applies, to execute a deed of conveyance in respect of the said property or on his failure to appoint a Commissioner to execute the deed of conveyance on behalf of the vendor in pursuance of the said decree in favour of the vendee. The answer to this question would ultimately depend on what is the nature of the decree of specific performance, and what is the effect of the execution of the document by the Court in pursuance of the said decree. If the nature of the decree for specific performance to direct a vendor and/or the subsequent purchaser from him to execute a deed of conveyance so as to pass a title, the effect of the execution of the document by the Court is the same as if the document is executed by the vendor himself, and the conclusion is inevitable that the transfer is inter paries. If that is so, the prohibition contained in Section 27 of the Ceiling Act would squarely apply. In the first instance, therefore, I have to consider what is the nature of the decree for specific performance. It should be recalled that the heirs of original vendor-defendant Amratlal, who died during the pendency of the suit, had made some attempts to sell the property in question to opponent No. 3 herein. As held in Ramesh Chandra Chandiok and Anr. v. Chuni Lal Sabharwal and Ors. : [1971]2SCR573 that the proper form of the decree for specific performance in cases where the properties are transferred to subsequent purchasers is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. The nature of the decree of specific performance is always to direct the vendor and/or subsequent purchaser to execute the deed of conveyance to convey the title in the property in question to the vendee vide Durga Prasad v. Lala Deep Chand : [1954]1SCR360 If in pursuance of this decree, a deed of conveyance is executed by the vendor, who may be a judgment-debtor, the transfer of property in pursuance of such a deed of conveyance is undoubtedly a transaction inter partes, because ex-fade the document is effected between the vendor and the vendee, though, of course, in pursuance of the directions contained in the decree. If, however, a judgment-debtor fails to comply with the directions contained in the decree to execute a deed of conveyance, the only course open to a decree holder is to approach the Court and obtain an order of execution of the deed of conveyance under Order 21, Rule 34 of the Civil Procedure Code. Order 21 Rule 34 of the Civil Procedure Code prescribes the mode of execution of a decree for execution of a document or endorsement on a negotiable instrument. The material part of the said rule which is relevant for the purpose of this revision application reads as under:

34(1) Where a decree is for the execution of a document...and the judgment debtor neglects or refuses to obey the decree, the decree-holder may prepare a draft of the document or endorsement in accordance with the terms of the decree and deliver the same to the Court.

(2). ....

(3). ....

(4). ....

(5) The execution of a document or the endorsement of a negotiable instrument under this rule may be in the following form, namely:

CD., Judge of the Court of (or as this case may be), for A B., in a suit by E.F. against A.B.

and shall have the same effect as the execution of the document or the endorsement of the negotiable instrument by the party ordered to execute or endorse the same.

6(a) Where the registration of the document is required under any law for the time being in force, the Court, or such officer of this Court as may be authorised in this behalf by the Court, shall cause the document to be registered in accordance with such law.

7. On the plain reading of Sub-rule (5) of Rule 34 of Order 21, it is clear that though the document is executed by the Court it is for the party and though in fact it is not executed by the party, it is, as if executed by the party. A legal fiction is, therefore, created that even though in fact the document is not executed by the party the same is to be treated as if the same is executed by the party. In my opinion whenever, therefore a Court is called upon to execute the decree for execution of a document on the refusal or neglect of a judgment-debtor to execute the same as directed in the decree, the execution of the same by the Court is virtually tantamount to execution by the party in view of the legal fiction contained in Sub-rule (5) of Rule 34. It is an accepted principle of interpretation of statutes that legal fiction is to be carried to its logical conclusion and the imagination is not to be allowed to boggle it down. All the consequence which would arise in respect of a document executed by a party in fact, also arise and attach to a document executed by a Court in pursuance of execution of a decree for execution of a document in case of the failure or refusal of a party under obligation to execute the same. In other words, it would be, for all intents and purposes, a transfer inter paries. If that is so, and I do not feel doubt in my mind in view of the legal fiction created in Sub-rule (5) of Rule 34, the conclusion is inescapable that the prohibition contained in Section 27 of the Ceiling Act would also apply to such transactions and the Court will have no jurisdiction to execute the document on the failure or refusal of a party under obligation to carry out the decree. What is the effect of a document executed by a Court under Rule 34(5) of Order 21 of the Civil Procedure Code was considered by Kerala High Court in Neelakantan Velu v. Ghee Vargese Koruthu (1960) I.L.R. Kerala 678 where a conveyance was executed by the Court in favour of the plaintiff in pursuance of a decree for specific performance of an agreement to sell the properties. After the conveyance deed was executed, the Kerala Agriculturists Debt Relief Act (XXXI of 1958) came into force and the judgment-debtor, who was the defendant No. 1 in the suit, filed an application to reopen the transaction under Section 9(3) of the said Act and for stay of the delivery of the properties pending the application. A question arose before the Kerala High Court, whether the first defendant could successfully agitate for reopening of the transaction effected by the Court in view of the provision contained in Sub-section (3) of Section 9 of the Kerala Agriculturists Debt Relief Act, which could be opened only by or at the instance of a party to a transaction. In order to find out, whether the first defendant should be considered to be a party to the transaction of sale effected by the Court, the learned Single Judge of the said Court considered the relevant provisions having bearing on the question which, inter alia, included provisions contained in Rules 32 and 34 of Order 21 of the Civil Procedure Code. The learned Single Judge referred to Sub-rule (5) of Rule 34 and observed that the document executed by the Court shall have the same effect as the execution of a document by a party ordered to execute the same, and it will have all the legal incidence and effect of a private document since the transfer was in fact and in law a transfer by the defendants. In that view of the matter, the Court held that the defendant was a party to the document of sale executed by the Court and, therefore, entitled to apply for reopening of the transaction under Section 9(3) of the Agriculturists Debt Relief Act.

8. Similarly in Gopi Nath Das v. Namai Charan Das and Anr. : AIR1951Cal551 a question arose whether a co-sharer has a right to pre-empt a transaction of sale effected by the Court under Order 21 Rule 34(5) of the Civil Procedure Code read with Section 26F of the Bengal Tenancy Act (8 of 1885). In the case before the Calcutta High Court there was a decree for specific performance and the defendant refused to execute the document of transfer with the result that the Court, on behalf of the defendant, executed on September 23, 1946 a deed of conveyance of the property in dispute in favour of the plaintiff and was registered on March 26, 1947. Two co-sharers brought proceeding? to pre-empt this sale. The right of the two co-sharers was upheld in appeal by the Subordinate Judge. The matter cams up before the High Court at the instance of the purchaser. Harries C.J. held that the Court executed the transfer not as owner of the property because, obviously, the Court had no title to it, and it merely executed that transfer as an agent as if it were of the defendant and the transfer was in fact and law a transfer by the defendant, who was a co-sharer in view of this provisions contained in Order 21 Rule 34(5) of the Civil Procedure Code. I am in respectful agreement with the principle enunciated by both Kerala and Calcutta High Courts.

9. A similar problem, as one I have in this revision application, arose in the context of prohibition contained in Section 7(3) of the U.P. Encumbered Estates Act (25 of 1934) which prohibited landlord from transferring his property until the happening of certain contingency with out the sanction of the Collector. A question arose whether the Court can legally execute a deed of conveyance on behalf of such a landlord against whom a decree of specific performance has been passed. The Division Bench answered it in negative on the following ground:

The sale deed executed by a Court in pursuance of a decree for specific: performance is a transfer by the Court on behalf of the judgment-debtor and it is the title of the judgment-debtor to the property which is transferred by the sale deed executed by the Court. If the judgment-debtor is precluded from transferring his property by some statutory provision, the Court cannot, in violation of that provision, execute a sale deed of the property. Clause (3) of Section 7 Encumbered Estates Act provides that until the happening of such a contingency the landlord shall not be competent without the sanction of the Collector to make any exchange or gift of or to sell, mortgage or lease his proprietary rights in the land. It is admitted that the contingency referred to in Clause (3) has not yet happened. It is, therefore, clear that the judgment-debtors were not themselves competent without the sanction of the Collector to transfer the property. As the Court was asked to execute the sale deed on behalf of the judgment-debtors the Court could not ignore the statutory provision which is referred to and could not execute the sale deed without the sanction of the Collector. The learned Judge of the Court below observed in the course of the judgment that hi would even go for the necessary sanction provided he was satisfied on certain points. We construe that it is not for the Court to apply for the sanction of the Collector. If the decrees-holder is so advised, it would be open to him to file an application before the Collector....

10. The same situation, therefore, arises in the present case before me. The judgment-debtor who is the original vendor is not competent without the permission of the competent authority to transfer by way of sale the property in question. If there is a prohibition on transfer by a private party under Section 27 of the Ceiling Act, that prohibition would mutatii mutandii apply in the case where the transfer is sought for by obtaining a deed of conveyance under Order 21 Rule 34(5) of the Civil Procedure Code in pursuance of a decree for specific performance of an agreement to sell the property. If a private party is not entitled to transfer by way of sale etc. any property within the urban or urbanisable land without the prior permission of the competent authority as provided in Section 27 of the Ceiling Act, that provision cannot be circumvented by obtaining a decree for specific performance and praying for the execution of such a decree with the assistance of Court on the real or alleged ground that the judgment-debtor has refused or neglected to carry out the said decree. My attention was drawn to the Circular issued by the Government of India in Ministry of Works and Housing in respect of the various provisions contained in the Ceiling Act bearing reference No. 1/100/76-UCU, dated 7-6-76 which is to be found at page 103 of the Compendium of the Urban Land (Ceiling and Regulation) Act, 1976 and Guidelines issued by the Government of India in which the Government has opined that in view of the provisions contained in Sections 26, 27 and 42 of the Ceiling Act a question has been raised whether the procedure prescribed in Sections 26 and 27 of the Ceiling Act should be followed for sales etc. undertaken for the enforcement of the decree or order of the Court, and it is, therefore, clarified that the provisions contained in Sections 26 and 27 of the said Act will apply in case of only voluntary transfers and not transfers arising out of court decrees or court orders which are not in nature of voluntary transfers.

11. It was urged on behalf of the decree-holder that this is the interpretation of the Government of India and, therefore, should be borne in mind by the Court while interpreting the provisions contained in Section 27 of the Ceiling Act. The opinion of the Government of India, as contained in the said circular in effect provides that the provisions contained in Sections 26 and 27 will apply only to voluntary sales and would not apply to forced sales. It is only on account of the provision contained in Rule 34(5) of Order 21 of the Civil Procedure Code that the sale by a court in execution of a decree for specific performance on refusal or neglect of the judgment-debtor is considered to be of the same effect and intent as that of a private sale and is treated as if it is a sale by a party. In other words, it is treated to be as if it is inter partes. If that is the statutory provision which treats the court sales in execution of a decree of specific performance as if the sale by a party, the opinion contained in the Circular would not be attracted since it is a transfer inter partes. The Karnataka High Court has also in Semuel Thyagaraja Kumar v. K.S. Hatama Achar and Ors. A.I.R 1977 Kar. 158 has also opined that the prohibition contained in Section 27 applies only to inter partes sales and not to forced sales by Courts in execution of money decrees.

12. In that view of the matter, therefore, I am of the opinion that this revision application must be allowed and the objection of the judgment-debtor that the no deed of conveyance should be passed in favour of the decree-holder without the permission of the competent authority as required under Section 27 of the Ceiling Act must be accepted and the execution of the decree should be stayed till the requisite permission is obtained under Section 27 of the Ceiling Act either by the judgment-debtor and/or the decree holder as advised. Rule is made absolute accordingly with no order as to costs.


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