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Taherbhoy Feeda Ally and ors. Vs. State of West Bengal and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata High Court
Decided On
Case NumberMatter No. 365 of 1977
Judge
Reported inAIR1977Cal361
ActsUrban Land (Ceiling and Regulation) Act, 1976 - Section 27; ;Transfer of Property Act, 1882 - Section 54
AppellantTaherbhoy Feeda Ally and ors.
RespondentState of West Bengal and ors.
Cases ReferredGobinda Chandra Pal v. Dwarka Nath Pal
Excerpt:
- .....feeda ally seek to impugn an order no. 27/s/223 of 1977 dated the 6th april 1977 passed by the competent authority under the urban land (ceiling and regulation) act, 1976 (hereinafter referred to as 'the said act'). the undisputed facts relevant to these proceedings are, inter alia, that the petitioners are owners in possession of premises nos. 83a and 83b, park street (hereinafter referred to as 'the said premises'). under an agreement in writing dated the 2nd september 1976 the petitioner agreed to sell to favourite small investment limited, the respondent no. 4 in these proceedings, the said premises for a price of rs. 8 lakhs on, inter alia, the following terms and conditions:(a) the sale would be subject to the petitioners obtaining the necessary certificate and/or permission.....
Judgment:
ORDER

Dipak Kumar Sen, J.

1. The six petitioners in these proceedings viz., Taherbhoy Feeda Ally, Yayahbhoy Feeda Ally, Abdullabhoy Feeda Ally, Salehbhoy Feeda Ally, Dawoodbhoy Feeda Ally and Tayebhoy Feeda Ally seek to impugn an order No. 27/S/223 of 1977 dated the 6th April 1977 passed by the competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976 (hereinafter referred to as 'the said Act'). The undisputed facts relevant to these proceedings are, inter alia, that the petitioners are owners in possession of premises Nos. 83A and 83B, Park Street (hereinafter referred to as 'the said premises'). Under an agreement in writing dated the 2nd September 1976 the petitioner agreed to sell to Favourite Small Investment Limited, the respondent No. 4 in these proceedings, the said premises for a price of Rs. 8 lakhs on, inter alia, the following terms and conditions:

(a) The sale would be subject to the petitioners obtaining the necessary certificate and/or permission under the said Act;

(b) The petitioners would simultaneously with the execution of the agreement give vacant possession of the entire ground floor of premises No. 83A, Park Street to the respondent No. 4 who would be authorised to make repairs, alterations and additions therein on the understanding that if the transaction fell through then the said respondent would give back vacant possession of the said portion to the petitioners. In default, the respondent No. 4 would have to pay mesne profits at the rate of Rs. 125 per day.

2. Pursuant to and in terms of the said agreement, a sum of Rs. 1 lakh was paid by the respondent No. 4 to the petitioners as earnest. The ground floor of the said premises No. 83A, Park Street was made over to the respondent No. 4. On the 8th February 1977 an application was made by the petitioners to the First Land Acquisition Collector. Calcutta, the Competent Authority and the respondent No. 3 herein in the prescribed form, for his approval and/or permission as required under Section 27 of the said Act.

3. On the 9th April 1977 the petitioners received the said notice dated the 6th April 1977 from the Competent Authority informing the petitioners, inter alia, as follows: --

'On enquiry it reveals that the applicants already transferred premises Nos. 83A and 83B. Park Street, Calcutta to Favourite Small Investment Ltd. (transferee) by making over possession of the said premises to the transferee on receipt of a sum of Rs. 1,00,000 (Rupees one lac) only on the basis of an agreement executed between them and the transferee, without obtaining prior permission of the Competent Authority, under Section 27(3) of the Urban Land (Ceiling and Regulation) Act. 1976. The applicants are, therefore, no longer owners of the property and they are not entitled to make the application under Section 27(2) of the said Act as owners of the property. 'Permission sought in the application is, therefore, refused. Inform the applicants furnishing a copy of this order to them.'

4. The petitioners contend that the said order dated the 6th April 1977 is erroneous, without jurisdiction, null and void and not binding on the petitioners on grounds, inter alia, as follows:

(i) The respondent No. 3 exceeded his jurisdiction in passing the said order as there had been no transfer at all of the said premises or any portion thereof to the respondent No. 4 or to anybody else as contemplated under Section 27(1) of the said Act.

(ii) The said order having been passed by the respondent No. 3 on the basis of consideration which he is not entitled to take into account under the provisions of the said Act, and without considering the application on its merit under Section 27(2) of the said Act was mala fide.

(iii) The respondent No. 3 having granted the petitioners no opportunity whatsoever to represent their case before passing the said impugned order acted in violation of the principles of natural justice.

5. A Rule nisi was issued in this application on the 4th May, 1977 calling upon the respondents, namely, the State of West Bengal; the Secretary, Ministry of Land and Land Revenue; the First Land Acquisition Collector, Calcutta and the Competent Authority under the said Act and the said Favourite Small Investment Ltd., to show cause why a writ in the nature of mandamus should not be issued directing the said respondents, their servants, agents and officers to set aside and cancel the said order dated the 6th April 1977 and also to refrain from acting on the basis thereof and/or giving effect to and/or taking any proceedings under and from making any demand on the basis thereof in any manner whatsoever. The said respondents were further directed to show cause why a writ in the nature of certiorari should not be issued setting aside, cancelling or quashing the said impugned order and they were directed to produce or cause to be forwarded to the Registrar of this Court all documents, orders and proceedings relating thereto for the aforesaid purpose. The said respondents were further directed to show cause why a writ in the nature of prohibition should not be issued commanding them not to enforce or give effect to or act in terms of or on the basis of the impugned order or to exercise jurisdiction in any manner in respect thereof.

6. An affidavit affirmed by one Nirmal Chandra Roy on the 9th June 1977 has been filed in these proceedings. The contentions in the petition have been denied in this affidavit.

7. Mr. Jayanta Mitra, learned counsel for the petitioners contended at the hearing that the order was wholly misconceived inasmuch as there had been no transfer of the said premises as has been wrongly held in the said impugned order, All that happened was that earnest had been paid and a part of the said premises was made over to the respondent No. 4 for the specific purpose of repairs. This was utmost a case of leave and license and not transfer. It was specified that the agreement would be subject to the permission of the Competent Authority under the Act and no title could pass at this stage.

8. Mr. S. Sen, learned counsel for the respondents, contended on the other hand that all the ingredients of a valid transfer were present in the transaction. There was payment of earnest and also a transfer of possession of a part of the property. On these facts read with the agreement it would be deemed that ownership of the property had passed. In support of his contentions Mr. Sen relied upon a decision of this Court in the case of Rabindra Nath Banerjee v. Harendra Kumar Chakravarty, reported in : AIR1956Cal462 , in this case it was observed in connection with certain proceedings under Order 81, Rule 89 of the Code of Civil Procedure by a Single Bench of this Court as follows:

'The language of Section 54 emphasises that of itself a contract for sale does not create any interest of charge on the property. But very often a contract for sale does not stand by itself where there is a part payment of the purchase price or payment of what is called the earnest money. In that event Section 55(b), Transfer of Property Act would be attracted and it will be treated as though the ownership of the property had passed and there is a charge for part of the purchase money paid.'

9. In my opinion, this decision does not advance the case of the respondents to any appreciable extent. All that was held in this case was that after part payment of the purchase price or payment of earnest money the purchaser would acquire a charge on the property which was in the nature of an interest in the property.

10. Section 54 of the Transfer of Property Act makes it quite clear that a con-tract for sale of itself does not create any interest or charge. In the case of Gobinda Chandra Pal v. Dwarka Nath Pal, reported in (1908) ILR 35 Cal 837 a Division Bench of this Court held that unlike a mortgage, a charge only secured payment of money out of a property and did not operate as a transfer. This case was cited by Mr. Mitra in reply on behalf of the petitioners.

11. Apart from that, it is clear from the language of Section 27 of the Act itself that without permission of the competent authority no property can be transferred. Section 27 of the Act reads as follows

'27. Prohibition on Transfer of Urban Property.-- (1) Notwithstanding anything contained in any other law for the time being in force, but subject to the provisions of Sub-section (3) of Section 5 and Sub-section (4) of Section 10, no person shall transfer by way of sale, mortgage, gift, lease for a period exceeding ten years, or otherwise, any urban or urbanisable land with a building (whether constructed before or after the commencement of this Act) or a portion only of such building for a period of ten years of such commencement or from the date on which the building is constructed, whichever is later, except with the previous permission in writing of the competent authority.'

12. It is nobody's case that such permission has been granted and therefore there can be no question of any transfer. There is also the specific clause in the agreement which makes the agreement itself subject to such permission.

13. It appears to me that the impugned order so far as it purports to hold that there has been a transfer of property is misconceived and ex facie erroneous.

14. For the reasons stated above the order is set aside and the Rule is made absolute to that extent. In the facts and circumstances of this case there will be no order as to costs.


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