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  • s. 55(6)(b) of the Transfer of Property Act
  • s. 55(6)(5) of the Transfer of Property Act.
  • TRANSFER OF PROPERTY ACT
  • provisions of s. 64 of the Tenancy Act
  • s. 52 of the Transfer of Property Act
  • s. 64 of the Tenancy Act.
  • s. 32 of the Tenancy Act.
  • s. 55(6)(b) of that Act
  • Section 55(6)(b)
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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • s. 55(6)(b) of the Transfer of Property Act
  • s. 55(6)(5) of the Transfer of Property Act.
  • TRANSFER OF PROPERTY ACT
  • provisions of s. 64 of the Tenancy Act
  • s. 52 of the Transfer of Property Act
  • s. 64 of the Tenancy Act.
  • s. 32 of the Tenancy Act.
  • s. 55(6)(b) of that Act
  • Section 55(6)(b)
Smart Summary

Legal Opinion Summary — S.M. Shah, J.

Factual and Procedural Background

The dispute concerns survey No. 302/10 (1 acre 2 gunthas) originally owned by Kashinath Ganpat. The petitioner, Dnyanu Balaram, occupied the land as a protected tenant. On 12 July 1952 Kashinath agreed to sell the land to Gulab Eknath for Rs. 2,300 and received Rs. 1,000 as earnest; performance of that contract depended on evicting the tenant and obtaining possession. On 15 April 1953 Kashinath sold the land to Ganpatsing Gulabsing for Rs. 1,250. Gulab filed Civil Suit No. 218 of 1953 (19 August 1953) for return of the earnest.

During the pendency of Gulab’s suit, Kashinath and the petitioner applied to the Mamlatdar under s. 32 of the Tenancy Act for fixation of the reasonable price; the Mamlatdar fixed Rs. 1,200. Thereafter Kashinath executed a registered sale-deed (18 October 1954) conveying the land to the petitioner for Rs. 1,200.

On 21 February 1955 a decree in Gulab’s suit ordered return of the earnest and declared a charge on the land for the decretal amount. Gulab initiated execution (Darkhast No. 193 of 1955) and impleaded the petitioner as judgment-debtor No. 3, seeking sale of the charged property. The trial Court held the property liable for sale; on appeal to the District Court the Assistant Judge upheld that decision, applying s. 55(6)(b) of the Transfer of Property Act and treating the transfer to Dnyanu as hit by lis pendens. Dnyanu filed this revision application in the High Court challenging the dismissal of his appeal.

Legal Issues Presented

  1. Whether a person who, as a protected tenant, becomes purchaser of agricultural land by virtue of s. 32 of the Tenancy Act can be said to be "claiming through or under" the owner-transferor so that a charge declared by decree (for earnest paid under an agreement of sale) can be enforced against that land in the hands of the tenant-purchaser.
  2. Whether a transfer of such land to the tenant under the Tenancy Act during the pendency of a suit (filed by the purchaser under the earlier agreement) is affected by the doctrine of lis pendens (s. 52, Transfer of Property Act), so that the transfer would be subject to the result of that suit.

Arguments of the Parties

Appellant / Petitioner (Dnyanu) — as advanced by Mr. Bhasme

  • The petitioner became entitled to purchase the land by operation of s. 32 of the Tenancy Act after the Mamlatdar fixed the reasonable price at Rs. 1,200; the transfer to him was by virtue of that statutory procedure.
  • Because the transfer arose from the statutory right conferred on protected tenants, the petitioner is not "claiming under" Kashinath in the sense used by the Transfer of Property Act; that expression applies to voluntary transfers (or inheritance), not compulsory statutory transfers.
  • The transfer was not a voluntary act of the owner and hence should not be treated as a transfer that creates liability to enforcement of a purchaser's lien declared by a decree in earlier suit.

Respondent / Decree-holder (Gulab) — as advanced by Mr. Sawant

  • The decree declaring a statutory charge under s. 55(6)(b) of the Transfer of Property Act can be executed against the land now held by the petitioner because the petitioner claims through or under Kashinath, the original owner.
  • Even if s. 32 exists, it is a fortuitous circumstance; Kashinath could have voluntarily transferred the land to Dnyanu and accordingly the purchaser's statutory charge/lien should bind the transferee.
  • The transfer to Dnyanu occurred during the pendency of the suit and therefore is hit by lis pendens (s. 52), making the transfer subject to the decision in the suit and to any charge declared therein.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court accepted the petitioner's contention and analyzed the questions in light of the statutory scheme of the Transfer of Property Act (1882) and the Tenancy Act (Bombay Tenancy Act provisions cited). The reasoning proceeded in the following steps:

  1. The Transfer of Property Act was enacted with the expectation of dealing with voluntary transfers; when that Act uses the language of a person "claiming under" an owner it contemplates either inheritance or a voluntary transfer by the owner.
  2. Section 55(6)(b) of the Transfer of Property Act (statutory charge in favour of a purchaser for sums paid as part of the price or earnest) and s. 52 (lis pendens) presuppose a voluntary transfer by the seller. The Court held that those provisions apply where the transferor parts with property of his own volition.
  3. Under s. 64 of the Tenancy Act (procedure for selling land in possession of a protected tenant), an owner could not lawfully sell such land without following mandated procedure; failure to consult the tenant/comply with the statutory process could render a sale void. The agreement between Kashinath and Gulab contemplated delivery of possession by the vendor (Kashinath) and so s. 55(6)(b)'s statutory charge would operate only if the vendor was in a position to deliver possession but failed to do so.
  4. Where a contract depends on the vendor re-covering possession from a protected tenant, the purchaser is taken to be aware of the contingency that the vendor might not be able to secure possession; therefore the statutory lien under s. 55(6)(b) does not arise until the vendor can actually deliver possession.
  5. The agreement of sale between Kashinath and Gulab was, on one view, void under s. 64 of the Tenancy Act; in any event, because Kashinath never secured possession from the protected tenant, the purchaser (Gulab) was not entitled to the statutory lien on the land for the earnest paid under s. 55(6)(b).
  6. The sale to the petitioner under s. 32 of the Tenancy Act was not a voluntary transfer by Kashinath. The Tenancy Act is social legislation designed to protect tenants and to empower tenants to acquire title; transfers effected by operation of s. 32 are compelled by law and are not voluntary acts of the owner.
  7. Because the transfer to Dnyanu was not voluntary and flowed from statutory compulsion, the petitioner cannot be treated as "claiming under" Kashinath for the purposes of s. 55(6)(b), nor is the transfer hit by the doctrine of lis pendens under s. 52, which presupposes a voluntary act by a party to the suit.
  8. Although the Court acknowledged that the decree in favour of Gulab declaring a charge had in fact been passed and had not been set aside, the Court proceeded on the practical footing of that existing decree while holding that the charge could not be enforced against the land now owned by the petitioner by virtue of the Tenancy Act transfer.
  9. The Court recognized that these points were not raised before the lower Courts and indicated reluctance to permit them to be raised first in revision. Nevertheless, because the Tenancy Act is social legislation, the Court considered it appropriate to give effect to its provisions and to decide the questions accordingly.

Holding and Implications

Holding: The application is allowed. The orders of the two lower Courts are set aside and the rule is made absolute. The Court held that:

  • The tenant-purchaser who acquired the land under s. 32 of the Tenancy Act cannot be said to be "claiming through or under" the original owner in the sense required by s. 55(6)(b) of the Transfer of Property Act; accordingly the charge declared by the decree in favour of Gulab cannot be enforced against the land in the hands of the tenant-purchaser.
  • The transfer to the tenant under the Tenancy Act during the pendency of Gulab’s suit is not hit by the doctrine of lis pendens (s. 52 of the Transfer of Property Act) because the transfer was not a voluntary act of the owner but was effected by operation of statutory provisions.
  • The decree-holder (Gulab) is therefore confined to executing the decree against Kashinath personally and against any other property of Kashinath, if any; the charge cannot be enforced against the land now in the possession/ownership of the petitioner by virtue of s. 32 of the Tenancy Act.

Costs: Because these contentions were raised for the first time in this Court, the Court ordered that each party shall bear its own costs throughout.

Implications: The direct consequences stated above are the only consequences addressed in the opinion: the execution of the decretal charge cannot be enforced against the tenant-purchaser’s land bought under s. 32, and the decree-holder must seek satisfaction from the former owner’s personal assets. The opinion rests on interpretation of existing statutory provisions; the text does not state that novel precedent beyond the case's outcome was established.

    Dnyanu Baba Chobe v. Gulab Eknath Bhais

    S.M Shah, J.:— Two very interesting questions of law have arisen on. this application, firstly, as to whether a person who having been a tenant of an agricultural land under the bombay tenancy act, becomes the purchaser thereof by virtue of s. 32 of that Act, can be said to be claiming through or under the owner-transferor of that land so that a charge on that land declared by a decree of a Court to the extent of the amount of earnest paid by a person to the owner of that land under an agreement of sale can be enforced against that land in the hands of the tenant-purchaser, and secondly, as to whether the transfer of such land to the tenant under the provisions of the tenancy act during the pendency of a suit filed by a person to whom that land was agreed to be sold for a declaration of a charge on that land to the extent of the earnest money paid by him to the owner of that land and recovery of that amount is hit by the doctrine of lis pendens so that the transfer to the tenant would be subject to the decision in the suit. These questions do not appear to have been raised in any of the two lower Courts and they have been raised for the first time in this Court in this revision application.

    2. It appears that survey No. 302/10 measuring 1 acre and 2 gunthas originally belonged to one Kashinath Ganpat. The petitioner in this application was in possession of this land as a protected tenant. On July 12, 1952, Kashinath agreed to sell this land to Gulab Eknath for Rs. 2,300 under an agreement of sale and received Rs. 1,000 by way of earnest. It was agreed that the sale-deed was to be passed in favour of Gulab after evicting the tenant and obtaining possession of the land. On April 15, 1953, Kashinath sold this land to another person altogether, namely, Ganpatsing Gulabsing by a registered sale-deed for Rs. 1,250. Thereafter, Gulab Eknath filed regular civil suit No. 218 of 1953 against Kashinath Ganpat and Ganpatsing Gulabsing for the return of the earnest money in Sangola Court on August 19, 1953. During the pendency of the suit, it appears, Kashinath Ganpat and the petitioner Dnyanu Balaram made an application to the Mamlatdar of Malsiras for determining the reasonable price of the suit land. This application apparently was made under s. 32 of the Tenancy Act. The Mamlatdar determined the reasonable price of the land at Rs. 1,200. Thereafter it appears, Kashinath Ganpat sold the land in question to the petitioner Dnvanu Balaram for Rs. 1,200 by a registered sale-deed dated October 18, 1954.

    3. On February 21, 1955, a decree was passed in Gulab's regular civil suit No. 218 of 1953 for the return of the earnest money against Kashinath Ganpat and Ganpatsing Gulabsing, By that, decree a charge for the decretal amount was also created on the land in question. The decree-holder thereafter filed regular Darkhast No. 193 of 1955 against the judgment-debtors Kashinath and Ganpatsing. He also impleaded the petitioner Dnyanu as a party to the execution proceeding as judgment-debtor No. 3 and claimed the decretal amount by the sale of the charged property. Out of these three opponents in the execution proceedings only the petitioner Dnyanu filed his written statement. He contended that the regular civil suit No. 218 of 1953 was only for recovering the earnest amount and survey No. 302/10 was not the subject-matter of that suit at all. He further contended that the sale-deed in his favour dated October 18, 1954, was not affected by the doctrine of lis pendens. He submitted that on February 21, 1955, the day on which the decree was passed in Gulab's suit. Kashinath had no interest left in the land and that; therefore, no charge could be validly created on that land by a decree passed in that suit. He stated that he had purchased that land free from all incumbrances and that for that reason also no charge could be created on that land. According to him, it was Kashinath alone who was responsible to pay the decretal amount to Gulab. He was not a party to the decree and that survey No. 302/10 should not be sold in execution of that decree. The trial Court held that the property in dispute was liable for sale in execution of the decree in civil suit No. 218 of 1953 and, accordingly, sale warrant and proclamation were ordered to be issued by the Court. Against that order of the trial Court Dnyanu, the petitioner, took an appeal to the District Court at Sholapur. In that appeal the question that was argued was as to whether the charge in respect of the decretal amount created by the decree passed in regular suit No. 218 of 1953 could he enforced against survey No. 302/10 in the hands of Dnyanu. The learned Assistant Judge agreed with the conclusion of the trial Court holding that the charge under s. 55(6)(b) of the Transfer of Property Act was a statutory charge and that the petitioner Dnyanu who claimed the property through Kashihath was bound by that charge. The learned Assistant Judge was also of the view that the transfer in favour of. Dnyanu was effected during the pendency of the suit filed by Gulab against Kashinath and that, therefore, it was affected by the doctrine of lis pendens. Accordingly, in the view of the learned Assistant Judge, the transfer in favour of Dnyanu was subject to the result of the suit between Gulab and Kashinath and inasmuch as that suit had resulted in a decree declaring a charge upon the property in question, the transfer in favour of Dnyanu was subject to the charge on that property as declared by the decree passed in that suit. In the result, the appeal filed by Dnyanu was dismissed. It is against the order dismissing his appeal that Dnyanu has filed this revision application in this Court.

    4. On behalf of the petitioner Dnyanu it was contended by Mr. Bhasme, his learned advocate, that it was incorrect to say in the circumstances of the case that his client claimed the suit land through Kashinath who was the original owner of the land. He urged that before the decree was passed in Gulab's suit, Dnyanu had moved in the matter with a view to purchase the land in his possession as a protected tenant under s. 32 of the Tenancy Act which had given a right to protected tenants to purchase the land in their possession if they so desired and made an application to the Mamlatdar for fixing the reasonable price of the land and that it was by virtue of the certificate issned by the Mamlatdar who had fixed the price at Rs. 1,200 that he became entitled to purchase the property at that price from Kashinath and accordingly, Kashinath irrespective of his wish in the matter executed the sale-deed in his favour under which he became the full owner of the land. Accordingly, Mr. Bhasme submitted that Dnyanu could not be said to be claiming ‘under’ Kashinath, because that expression would apply only in cases where inter alia a transferor voluntarily transferred the property to the transferee. In this case, however, according to him, Kashinath was compelled to transfer the land to Dnyanu by virtue of the special privilege given by the Legislature to agricultural tenants. On the other hand, it was contended by Mr. Sawant, the learned advocate for the opponent, that the decree which was passed in Gulab's suit could be executed against the land in enforcement of the charge declared by the decree, because, Dnyanu in view of the sale-deed in his favour could not be said to claim otherwise than through or under Kashinath. According to him, it was a fortuitous circumstance that s. 32 came to be enacted in the Tenancy Act giving right to the tenants to purchase lands in their possession as tenants. But even in the absence of this provision, Mr. Sawant arerued Kashinath could well have sold the land to Dnyanu for the price for which it was actually sold of his own volition. It was accordingly submitted by Mr. Sawant that Dnyanu could not resist the execution of the decree against the land in his possession.

    5. In my opinion, the contention raised by Mr. Bhasme should be accepted. In the first place, Kashinath, who was the owner of the land, agreed to sell to Gulab an agricultural land which was in the possession of a protected tenant. Now in view of the provisions of s. 64 of the Tenancy Act Kashinath could not possibly have sold this land to any one except after following the procedure laid down in that section, In this case, Dnyanu, the petitioner, was undoubtedly in possession of the land as a protected tenant and, therefore, the first person whom Kashinath should have consulted about his proposal to sell the land was Dnyanu himself. Having failed to consult him in the first instance Kashinath could not in law sell the land to anybody else, and if he sold it, the sale would be void. Besides, under the agreement which Kashinath entered into with Gulab, Kashinath had agreed to execute a conveyance in favour of Gulab only if and after he got possession of the land from his protected tenant. It appears, however, that Kashinath was not able to secure the possession from the protected tenant Dnyanu. Accordingly, Kashinath could not and was not in a position to execute the sale-deed in favour of Gulab as stipulated in the agreement of sale. In these circumstances, I wonder if Gulab could have any lien upon the land for the amount of earnest that he had paid to Kashinath. Section 55(6)(b) would come into operation, in my opinion, only when it is possible for the vendor to give possession of the property to the purchaser and yet he fails to deliver it. In that case, undoubtedly the purchaser would have a statutory charge over the property for the money he had paid either as part of the price or as earnest. But where the contract depends for its performance upon the vendor recovering possession of the property from the protected tenant, the purchaser can very well be said to be aware of the contingency of the vendor being unable to secure the possession. In my opinion, therefore, unless and until the vendor secured the possession of the land and was in a position to deliver it to the purchaser, the statutory lien under s. 55(6)(b) of the Transfer of Property Act would not be created in favour of the purchaser in respect of the money that he might have paid under the contract of sale. In the suit that was filed by Gulab against Kashinath this aspect of the matter seems to have been completely overlooked. Firstly, the agreement of sale itself would be void under s. 64 of the Tenancy Act. Assuming, however, that it could have any effect in law, in the circumstances of the case, the purchaser was not entitled to any lien for the money that he had paid under s. 55(6)(5) of the Transfer of Property Act. On either of these considerations, the decree declaring a charge for the money that was advanced by Gulab to Kashinath upon the land in question should not really have been passed. Inasmuch as, however, the decree has in fact been passed and it has not been set aside in appeal or in any other proceeding, we must proceed upon the footing that a valid executable decree was passed in favour of Gulab.

    6. The next question then would be as to whether in execution of such a decree Gulab could recover the amount of his decree by enforcing the charge against the land in possession of Dnyanu. The question here would be as to whether Dnyanu could be said to be claiming under Kashinath who was the owner of the land. The second question that would require consideration is whether the sale in favour of Dnyanu by Kashinath pending the suit filed by Gulab against. Kashinath was hit by lis pendens, so that the sale would be subject to the result of that litigation.

    7. Now in regard to both these questions, it is pertinent to note that the Transfer of Property Act was passed as far back as in 1882 and one can say without any fear of contradiction that in that year of grace the Legislature never thought that a day would arrive in this country when landlords would by law be compelled to part with their properties in favour of their tenants. The whole of the Transfer of Property Act, to my mind, deals with voluntary transfers and consequently, when any section of that Act speaks of a person claiming under an owner of a particular property, it can only mean either a person who has inherited that property on the death of the owner or a person in whose favour a transfer of that property, has been validly and voluntarily effected by the owner. Accordingly, turning to s. 52 of the Transfer of Property Act which deals with the doctrine of lis pendens, the transfer of any immovable property which is the subject-matter of a suit by any of the parties to the suit as contemplated by that section is a transfer which is voluntarily effected by such party during the pendency of the suit. Likewise, s. 55(6)(b) of that Act which deals with the statutory charge in favour of a purchaser of at immovable property in respect of the money paid by him in anticipation of delivery thereof as against the seller and all persons claiming under him contemplates inter alia such person to whom the seller has transferred the property of his own volition and not under the compulsion of any statute or authority, so that such person can be said to be claiming under the seller. If I am right in the view that I am taking of these two sections of the Transfer of Property Act, and if I am right in my opinion as regards the general scheme of the Transfer of Property Act, evidently the sale-deed executed in favour of Dnyanu by Kashinath can by no stretch of imagination be said to be a voluntary act on the part of Kashinath. The bombay tenancy act to all intents and purposes is a social legislation. Its primary aim and object is to protect the rights of tenants to the utmost possible length and eventually even to matte them owners of the lands in their possession as tenants. With this end in view provisions have been made in that Act which in certain respects have reduced the position of a landlord or the owner of an agricultural land to one of a man having no voice in the matter of his own property. By virtue of s. 32 of that Act, a tenant has been given a right to call upon the landlord to transfer the land in his possession to him not at the price the owner might demand but at the price either the tenant might offer or the Mamlatdar might fix. In view of such a provision, it is impossible to say that the owner of the land parts with his ownership in favour of his tenant of his own free will. There may be exceptions where the owner of a land in possession of a tenant might be inspired by the instinct of a social service even to his own tenant and accordingly might not grudge transferring the ownership of the land to the tenant at a price that might be offered by the tenant himself, but such cases ??? naturally be very rare. In such a case, therefore, it is impossible to say that the tenant-purchaser in the eye of the law would claim the land through the owner. As observed already, s. 55(6)(b) of the Transfer of Property Act refers to a person claiming under a seller either as a result of the death of the seller or as a result of a voluntary transfer on the part of the seller in favour of such person, but it does not contemplate a case of a person who becomes the owner of the property by sheer force of law. In my opinion, therefore, the charge created by the decree passed in favour of Gulab cannot be enforced against the land in possession of Dnyanu as its owner and the decree-holder, I am afraid, shall have to be content by executing the decree only against Kashinath personally and his other property, if any.

    8. Likewise, the transfer in favour of Dnyanu, the petitioner, by Kashinath during the pendency of the suit filed by Gulab against Kashinath cannot be said to have been hit by s. 52 of the Transfer of Property Act. Kashinath was undoubtedly a party to that suit, but it was not of his own volition and free will that he transferred the land to Dnyanu pending the litigation. In such a case, therefore, the doctrine of lis pendens, in my opinion, becomes entirely helpless and can render no assistance to any of the parties to the suit during the pendency of which the property which is the subject-matter of the suit is dealt with by either of the parties.

    9. As observed at the outset, the points discussed above were not urged before either of the two lower Courts, and I should myself have been reluctant to allow them being raised for the first time in this Court.

    10. But, as stated above, the Tenancy Act is a piece of social legislation,. and I feel that it is the duty of this Court to give effect to it as best as it can. The application will, therefore, be allowed, the orders passed by both the lower Courts shall be set aside and the rule shall be made absolute. In view of the fact that the contentions I have dealt with in course of this judgment were raised for the first time in this Court, the fairest order for costs that I should make is that each party should bear its own costs throughout. Application allowed.

    11. Application allowed.

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    Comments

    Dnyanu Baba Chobe v. Gulab Eknath Bhais
    (Jul 26, 1960)