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TMI Blog1964 (8) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... d that he issued a notice to the Defendant on February 26, 1959 demanding performance but that any such notice was received by the Defendant was denied. However that may be, the suit out of which this appeal arises was brought on March 10, 1959, in which the plaintiff sought a decree for specific performance and possession, and, alternatively, damages of ₹ 10,000. (3) The Defendant resisted the suit on at least two grounds. The first was that there was an abandonment of the agreement by the plaintiff in consequence of the realisation that the execution of the sale deed would transgress the provisions of the Bombay Tenancy and Agricultural Lands Act. The Second was that the agreement was a void agreement for the reason that its performance would result in a transgression of the provisions of that Act. (4) The first plea that there was an abandonment of the agreement was repelled by the Civil Judge. But on the second, the Civil Judge pronounced in favour of the Defendant taking the view that the suit agreement was void. (5) The Plaintiff appeals. (6) While on behalf of the plaintiff, the argument advanced by Mr. Raja Iyer was that the agreement was void, Mr. V.L. Narasimham ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returned to him by Shivaji. The Plaintiff in the course of his evidence denied the truth of that story. (9) It was on these materials that the Civil Judge felt persuaded to record a finding that the story of abandonment was not true. But Mr. Narasimhamurthy has urged that the Civil Judge was not right in placing any dependence at all on the evidence given by Shivaji at a stage when the defendant had not appeared before the Court and therefore had no opportunity to test the evidence given by Shivaji by cross-examination. It is not very clear, however, whether on the second occasion on which Shivaji was examined, the defendant offered to cross-examine Hindu Law or had the opportunity to do so. It may be that for these reasons, Mr. Narasimhamurthy is right in asking us to exclude from consideration anything that Shivaji stated either on the first occasion or on the second. (10) But the question still remain whether there was an abandonment of the agreement by the plaintiff in manner explained by the defendant. What the Defendant stated in his written statement was that the plaintiff who realised the impossibility of getting a sale deed executed in his favour without transgressing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances stated by the defendant. The Defendant himself, as I have mentioned, made contradictory statements about it. The Plaintiff denied that the suit agreement was returned to the defendant by reason of the realisation by him of the impossibility of the realisation by him of the impossibility of implementing the suit agreement except by the transgression of the provisions of the Bombay Tenancy and Agricultural Lands Act. The Civil Judge believed the evidence of the plaintiff and was of the view that the defendant's evidence was not trustworthy. I see no reason to take a different view. In my opinion, we must concur in the finding recorded by the Civil Judge that there was no abandonment of the suit agreement. (13) Mr. Narasimhamurthy, however, contended that even so, the Civil Judge should have recorded a finding on the first issue as to the readiness and willingness on the part of the plaintiff to implement his promise under the suit agreement and that there was good and trustworthy evidence given by D.W. 2 Devappa which demolished the plaintiff's assertion that he was always ready and willing to perform his own promise to purchase the suit lands. (14) I should have me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the plaintiff on the first issue or even on the question whether there was an abandonment of the suit agreement by him on the extremely in sufficient and untrustworthy testimony given by D.W.2. (17) What should next be considered is the correctness of the finding that the agreement of sale was void. The plea of the defendant on this matter was in paragraph 7 of the written statement which reads: "As the suit agreement is against the provisions of the Tenancy Act, neither the plaintiff nor the defendant is liable for completing it. The Plaintiff cannot enforce the same against the defendant". Although the plea was worded in this obscure way, the civil Judge framed the issue so as to present the question more clearly. That issue was the second issue which reads: "Does the defendant prove that the plaintiff cannot ask for specific performance of the agreement because it allowed to purchase the lands, the area in the ownership of the plaintiff would exceed the ceiling area?" It is however true, as Mr. Narasimhamurthy points out in the context of the plea of abandonment, the defendant did state that if the plaintiff had purchased the suit lands, the tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he plaintiff in that purshis would have the effect which I have mentioned. (20) It was on the basis of these materials that the Civil Judge found it possible to say that if in addition to the land already in the possession of the plaintiff, he also acquired possession of the suit lands on his success in his suit, the total area of land in his possession would far exceed the ceiling area permitted by the Bombay Tenancy and Agricultural Lands Act and that, for that reason, the suit agreement was liable to be denounced as void. (21) It is the correctness of this postulate that submits itself to our investigation. (22) I shall now refer to the relevant statutory provisions. They are Sections 5, 7, 34, 35, 36, 63 and 64 of the Bombay Tenancy and Agricultural Lands Act and the 23rd Section of the Contract Act. (23) Section 5 of the Bombay Tenancy and Agricultural Lands Act states that for the purposes of the Act, the ceiling area referred to in the Act shall be either 48 acres of Jirayat land of 24 acres of perennially irrigated land. Sub-section (2) of this Section prescribes a formula for equivalence. (24) Section 7 confers power on the Government to vary the ceiling area. (25) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion by the Civil Judge of the particulars of the information furnished by the Plaintiff and the Defendant in their purshises, the Civil Judge thought that even according to the plaintiff's own purshis, there would be a contravention of Section 35 of the Bombay Tenancy and Agricultural Lands Act if he got possession of the suit lands also. So, it was that he pointed out that the acquisition of the suit lands in that way would transgress the provisions of sections 34 and 35 of the Bombay Tenancy and Agricultural Lands Act and that the Agreement was therefore, void under Section 23 of the Contract Act. (31) The first criticism made by Mr. Raja Iyer of this view was that it was overlooked by the Civil Judge that there was no evidence that on the date of the suit agreement, the plaintiff was in possession of any extent of land at all or that even if he was holding some land on that date, the area of that land if added to the area of the suit lands would exceed 48 acres of jirayat land. That the material date for the determination of the illegality or otherwise of the suit agreement was the date of the agreement and not either the date of the institution of the suit or the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture acquisition in excess of that permitted by the Bombay Tenancy and Agricultural Lands Act made possible by the decree sought by the plaintiff, brings the agreement into the 23rd section of the Contract Act and makes it void. It was also maintained by Mr. Narasimhamurthy that although the Civil Judge did not say so, it was clear that the agreement was void for other reason. We were asked to say that the very purpose of the agreement was the circumvention of the provisions of the Bombay Tenancy and Agricultural Lands Act and the acquisition of property in excess of the ceiling area. It was further urged that the impugned agreement was either expressly or impliedly forbidden by the Act and therefore also fell within the second paragraph of the 23rd section of the Contract Act which invalidates agreements forbidden by law. So, the question is whether as argued for the plaintiff, the agreement was a good agreement when it was made and was therefore not void or whether as urged for the defendant, it was an illegal agreement whose object was the commission of an illegal act prohibited by the Bombay Tenancy and Agricultural Lands Act or the agreement of sale was forbidden expressly or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions if the excess acquisition referred to in Section 35 is in the nature of a "fragment" as defined by Section 2(6B) of the Act, the retention of the fragment may be permitted by the Collector. (38) It was said that the language of Sections 34 and 35 was similar to that of Sections 63 and 64 and that although in terms neither Section 34 nor Section 35 prohibited an agreement of sale in consequence of which the holding of land or acquisition of possession thereof of an area in excess of the ceiling area may become possible, there was an implied prohibition against such agreement of sale. (39) I find nothing either in Section 34 on in Section 35 which expressly or impliedly prohibits any such agreement of sale. While Section 34 prohibits a person from holding land in excess of the ceiling area, what Section 35 in effect forbids is possession in excess of the ceiling area. What it declares is that where the area of land in the possession of a person exceeds the ceiling area in consequence of an acquisition made by any of the modes or processes referred to by it, the excess acquisition is an invalid acquisition. The nullification of only the excess acquisition which is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on before us. It is not disputed that the plaintiff is and was an agriculturist and there is no evidence that on the date of the agreement of sale or at any other relevant point of time he was cultivating not less than the ceiling area. (43) Mr. Narasimhamurthy is therefore not on firm ground when he depends upon any express or implied prohibition against the agreement of sale. (44) So, what remains to be considered is the ground on which the decision of the Civil Judge really depended. The Civil Judge thought that the agreement assists an illegal acquisition and would therefore transgress the provisions of sections 34 and 35 of the Bombay Tenancy and Agricultural Lands Act and the question is whether this view can be supported. (45) If nothing else could be said about this matter, what follows from the plaintiff's purshis Exhibit 147 is that he was, on the date of the suit, in possession of 11 acres and 1 gunta of jirayat land. If to this area, the area of the suit lands which measure 41 acres and 26 guntas of jirayat land is added, the plaintiff would be in possession of 52 acres and 27 guntas of jirayat land which, of course, would exceed the ceiling area. (46) But it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of land, and, in consequence the aggregate area of land in his possession exceeds the ceiling area, the excess acquisition shall be invalid. So, no question can arise under its provisions whether there was an invalid acquisition by the plaintiff until the plaintiff obtained a decree in his favour, executed it and obtained delivery of possession of the suit lands since until all these steps were taken, there would in effect be no disobedience to section 35. The question is whether the Civil Judge was right in thinking that the enforcement of the agreement of sale would defeat the provisions of that section. That, is the only limited investigation to be made since it is not suggested that the provisions of any other law would thereby be defeated. (50) While the criticism for the plaintiff was that the Civil Judge reached a premature conclusion, even when he was asked to make a decree, that there would be such disobedience, Mr. Narasimhamurthy maintained that since it was possible for the plaintiff to obtain delivery of possession of all the 41 acres and 26 guntas which the suit lands measure, and, since that area when added to the area already in his possession on the date of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iedly prohibited by statute. If the contract is of this class it does not matter what the intent of the parties is; if the statute prohibits the contract, it is unforceable whether the parties meant to break the law or not. A significant distinction between the two classes is this. In the former class you have only to look and see what acts the statute prohibits; it does not matter whether or not it prohibits a contract; if a contract is deliberately made to do a prohibited act, that contract will be unenforceable. In the latter class, you have to consider not what acts the statute prohibits, but what contracts it prohibits; but you are not concerned at all with the intent of the parties; if the parties enter into a prohibited contract, that contract is unenforceable." (Page 283). (54) It is the combined effect of these two pronouncements which yields the third principle to which I have referred which is applicable to cases where the performance except by the violation of the law. In St. John Shipping Corporation's case, 1957, 1 QB 267, although Delvin J., referred to the first two principles Blackburn J., referred to the third in (1873) 8 QB 202. (55) The argument resti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssibility of such transgression is sufficient to denounce the agreement as void. What in my opinion makes a agreement which is otherwise legal void is that its performance is impossible except by disobedience to law. (60) A bare possibility of such transgression if there be also a possibility of performance without such transgression does not invalidate the agreement. It is a familiar principle that the presumption of law is in favour of the legality of a contract and that if it reasonably admits of two meanings or two modes of performance one legal and the other not, the interpretation which the Court should prefer is one which supports it and makes it operate, the burden being on the person who impeaches its validity to establish illegality. (61) In Bennett v. Clough, (1818) 1 B. & A 461: 106 ER 169, it was observed: "Illegality is never presumed; on the contrary everything must be presumed to have been legality done till the contrary is proved." In Lewis v. Davison, (1839) 4 M & W 654: 150 ER 1583, Lord Abinger, C.B. said this: "I fully assent to the general proposition which has been urged, that an agreement to do an unlawful act cannot be supported in law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Civil Judge is not as full or adequate as it should have been, the exposition made by Mr. Narasimhamurthy of his finding was that the defendants could not have sold and the plaintiff could not have purchased the suit lands without the contravention of the 35th Section of the Bombay Tenancy and Agricultural Lands Act. It was submitted that since the plaintiff was in possession of 11 acres and 1 gunta of jirayat land on the date of the suit and the sale of a further area of 41 acres and 26 guntas of jirayat land which was the purpose of the bargain would enable the plaintiff to be in possession of more than the ceiling area, and since the acquisition of such possession is what contravenes the Section, and since performance in any other manner was not possible and the only mode of performance was unlawful, the agreement was void. (64) It should not be overlooked that the emphasis of the 35th Section is on prohibition against possession of more than the ceiling area whatever may be the process to which such acquisition is attributable. It does not prohibit the purchase of a larger area of land if such purchase is not reduced to possession. No purchase or acquisition could fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at any stage unless the plaintiff very unwisely made a further acquisition between the date of the decree and the date of delivery of possession or at any other relevant stage. (68) It is equally clear that even if a decree was made in favour of the plaintiff in terms of the plaint without its amendment, it was possible for him before asking for delivery of possession to alienate or part with possession of the excess area of his own lands so as to fall outside the prohibition of the 35th Section. Then again, it was possible for the plaintiff when executing the decree or when asking for possession of the suit properties to ask only for that area of land which when added to the land already in possession would not exceed the ceiling area. (69) Mr. Raja Iyer also suggested the further possibility of an assignment of the decree in favour of a stranger to whom the suit lands could be delivered without the infringement of Section 35 provided the assignee of the decree was an agriculturist and the assignment was not a mere subterfuge for the benefit of the plaintiff. (70) All these possibilities demonstrate that the performance of the agreement does not necessarily involve the transgr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advanced by Mr. Narasimhamurthy that in a case where the plaintiff ask for delivery of possession of a smaller area, in a case like the one in which I have referred, the Court alters the contract between the parties or substitutes a near contract for the old. (76) At one stage, Mr. Narasimhamurthy depended upon two pronouncements of the High Court of Bombay in Pandu Aba Chaugule v. Laxman Dhondi Patil and Rayagonda Anna Patil v. Jankibai, . Those cases have no resemblance to the case before us for the reason that the question which arose in each one of them was whether the provisions of Section 63 and 64 of the Bombay Tenancy and Agricultural Lands Act would be defeated. (77) In , the suit was for specific performance of an agreement of sale executed by defendant 1. Defendant 2 claimed to be a person in possession of the property as a tenant. The suit was resisted on the ground that since the procedure prescribed by Section 64 of the Act had not been complied with before there was an agreement of sale executed in favour of the plaintiffs, and since a sale without compliance with the requirements of that Section was invalid as expressly provided by sub-section (3) of that Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made. (80) The decision of the Supreme Court in Waman Shrinivas v. Ratilal Bhagawandas and Co., which is the next decision on which Mr. Narasimhamurthy depended, was a case in which there was a subletting by a tenant in contravention of the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, and the Supreme Court pointed out that the tenant could not be permitted to assert in a Court of Justice any right founded upon or accruing out of that illegal transaction. (81) In Pujari Narasappa v. Shaik Hazrat, AIR 1960 Mys 59 a suit was brought for specific performance of an agreement of sale of a land, the alienation of which was governed by S. 4 of the Hyderabad Prevention of Agricultural Land Alienation Act. That section prohibited an alienation of agricultural land except with the permission of the Talukdar or the Collector. When a suit was brought on an agreement of sale which was entered into between the owner of the land and the plaintiff for specific performance on the basis of that agreement, that suit was resisted on the ground that the decree sought by the plaintiff could not be made and this Court upheld that contention pointing out that since there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not defeat the provisions of the law. (84) In my opinion, we should therefore say that for none of the reasons upon which Mr. Narasimhamurthy relies can we denounce the suit agreement as void. There was no intention on he part of the plaintiff or the defendant or both to commit an illegal act prohibited by the statute; nor did they enter into a contract expressly or impliedly prohibited by the law; nor was the agreement between them or its consideration or object such as would defeat the provisions of any law. (85) We must, therefore, in my opinion, dissenting from the finding recorded by the Civil Judge that the suit agreement was not void and that it was capable of enforcement. (86) But Mr. Narasimhamurthy at one stage contended that there was no jurisdiction in the Civil Court to pronounce upon the validity or the enforceable character of the agreement of sale and that that jurisdiction was confided to the tenancy authorities by section 70(mb) and 85 of the Bombay Tenancy and Agricultural Lands Act. (87) It does not appear to me that this contention can be accepted as sound Section 70(mb) provides that one of the duties and functions to be performed by the Mamlatdar is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the commencement of the amending Act, 1955, the relevant statutory provision under which the Mamlatdar can make the enquiry authorised by section 70(mb) is section 84C. But, what is authorised by section 84C is an enquiry into the validity of a transfer or acquisition made after the commencement of the amending Act 1955. So, the condition precedent for the exercise of jurisdiction by the Mamlatdar is a transfer or acquisition made in that way and that Judge is unavailable until the transfer or acquisition actually comes into being. (92) In this case, no such transfer or acquisition had yet been made by any one. The acquisition which the plaintiff wanted to make was an acquisition which he could make only after he obtained a decree for specific performance and the invalidity of the acquisition if it was in contravention of section 35 would attack itself to the acquisition only after delivery of possession to the plaintiff of an area of land in excess of what is permitted by the law. (93) In that view of the matter, the jurisdiction exercisable for the determination of the enforceability of the agreement of sale clearly resided in the Civil Court which alone had the jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant receives notice through Court of the deposit made by the Plaintiff of the sum of ₹ 30,000 as directed. On the defendant neglecting to do so, the Court shall execute shall be executed by him within one month from the date on which the defendant receives notice through Court of the deposit made by the Plaintiff of the sum of ₹ 30,000 as directed. On the defendant neglecting to do so, the Court shall execute that sale deed in favour of the plaintiff as prescribed by the law. In the event of the plaintiff depositing the sum of ₹ 30,000 that sum of ₹ 30,000 together with ₹ 2,000 in deposit already in Court will be paid to the defendant towards the consideration for the sale. The decree shall also provide that on compliance by the plaintiff with these directions and after the execution of the sale deed either by the defence or the Court as the case may be and its registration, the defendant shall deliver possession of the suit lands to the plaintiff. (98) A decree will be made as above. (99) The plaintiff has asked for mesne profits. Since he has not yet made the deposit of the entire consideration amount, he cannot get any decree for mesne profits. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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