Babasaheb Gaikwad vs Vithal Shelke

P.R. Borkar, J.—These three Civil Revision Applications present almost identical questions of law & facts and therefore they can be conveniently disposed of by a common judgment. Originally three respondents from these three revision applications filed three suits for recovery of consideration amounts paid as per saledeeds, which were executed on 09.06.1982, in their favour by the present revision applicant, who is common in all three revision applications. It is not disputed that the revision applicant Babasaheb was owner to the extent of 1/4th share in Survey No. 256 to 261, situated at village Sukta, Tal. Bhum, Dist. Osmanabad. By the three different saledeeds executed on 09.06.1982, revision applicant - Babasaheb executed saledeeds in respect of different portions of lands in favour of the respondents. Respondent - Vithal in Regular Civil Revision Application No. 99 of 2003 had paid Rs. 9500/as consideration. Respondent - Jalindar in Civil Revision Application No. 100 of 2003 had paid Rs. 7500/as consideration and Respondent - Babasaheb s/o. Shamrao Shelke in Regular Civil Application No. 101 of 2003 had paid Rs. 9500/as consideration for the land purchased. After execution of the saledeeds, the purchasers were put into possession of the properties and they continued to enjoy the property till 18.01.1986 on which day the Circle Inspector, Bhum, dispossessed them. It is admitted position that the above said lands purchased by the respondents/plaintiffs were declared as surplus lands by the Surplus Lands Determination Tribunal (S.L.D.T.) under the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 (for short "the Ceiling Act"). It is further stated that the plaintiffs/respondents were not aware of the civil proceedings and as such there is failure of consideration so far as saledeeds executed by present revision applicant in favour of the respondents are concerned and therefore the respondents filed three suits for recovery of purchase money with 20% interest from the present revision applicant, who was defendant in all the suits.

The Trial Court i.e. Jt. Civil Judge, Junior Division, Bhoom, dismissed the suit. He held that there was no deception practised in execution of saledeeds. The plaintiffs were not entitled to get back purchase money. So the suits deserve to be dismissed. Present respondents filed appeals against dismissal of respective suits, which came to be registered as Regular Civil Appeal Nos. 123 of 1994, 124 of 1994 and 154 of 1994. Said three appeals were heard by II Adhoc Additonal District Judge, Osmanabad and he allowed all these appeals by judgment and decree dated 15.11.2002. He held that there was failure of consideration on the part of present revision applicant which caused loss to the plaintiffs/respondents and as such the plaintiffs and respondents are entitled to get back refund of consideration. He awarded refund of Rs. 9000/to respondent Vithal in Civil Revision Application No. 99 of 2003, Rs. 7000/to respondent Jalindar in Civil Revision Application No. 100 of 2003 and Rs. 9000/to respondent Babasaheb Shelke in Civil Revision Application No. 101 of 2003. He also directed cancellation of saledeed at Exh.67, 58 and 77 in Regular Civil Suit No. 31 of 1987, 32 of 1987 and 33 of 1987 respectively. He directed that a copy of decree be sent to the Sub-Registrar for taking necessary entries in the register. He also directed the parties to bear their own costs.

The learned advocate for the revision applicant Mrs. M.A. Kulkarni argued that when the saledeeds were executed on 09.06.1982, no proceedings under the Ceiling Act was pending. Previously, there were proceedings under the Ceiling Act. However, the defendant/revision applicant was declared as no surplus. But, it is only because the Commissioner, suomoto initiated revision and remanded the matter to the S.L.D.T. in the year 1993, that gave rise to fresh proceeding under the Ceiling Act and ultimately the lands were declared as surplus and were taken into possession by the Govt. In the circumstances, there was no intention to commit any fraud as no proceedings under the Ceiling Act were pending. She also stated that no objection was taken by the present respondents while delivering the possession and they did not contest the delivery of possession by the Government. When the saledeeds were executed, the possession was also delivered and the respondents were in possession of the property from 1982 to 1987. She also referred to various rulings and argued that for 45 years, the respondents enjoyed the land thus have got back the value of price which they had paid and principle of pari delicto should have been considered by the First Appellate Court.

On the other hand Adv. Shri P.S. Shinde for the respondents argued that here is a case where there is a failure of consideration, on the part of revision applicant, for no fault of respondents. He also argued that the revision applicant was quite aware of the ceiling proceedings and declaration of the suit lands as surplus lands. Said fact was deliberately concealed. He also referred to Sections 56 and 65 of the Indian Contract Act and argued that since there is failure of consideration and failure to pass title to respondent/plaintiffs for no fault of them, they are entitled to refund of purchase price.

In para 14 of the judgment the learned II Adhoc Additional District Judge considered the copy of plaint in Special Civil Suit No. 85 of 1970. It was a suit filed by the present revision applicant on 28.04.1970 for declaration and permanent injunction. Therein, present revision applicant pleaded about the mortgage of the suit lands in favour of Limba Khodkar, as well as ceiling proceedings initiated in the year 1964. It is observed by the learned II Adhoc Additional District Judge that the copy of plaint shows that present revision applicant had pleaded about declaration of Limba Khodkar as surplus holder, as well as the declaration of the suit lands as delimited lands and the action for acquiring the suit lands. The copy of the plaint further disclosed that present revision applicant has withdrawn the said suit on 06.09.1972 with permission to file fresh suit. There is nothing on record that after the lands were taken into possession in 1986 from the possession of present respondents, present revision applicant filed any proceedings challenging declaration of the suit lands as surplus lands.

It is argued by Adv. Mrs. Kulkarni and rightly in my opinion, that the ceiling proceedings were reinitiated as a result of order passed in the revision by the Divisional Commissioner in the year 1983 and thereby he remanded the ceiling proceedings for fresh consideration by S.L.D.T. Thereafter, the lands were declared as surplus lands and the order was passed. However, one thing is specifically admitted that after the remand, the suit lands were declared as surplus lands of the present revision applicant. He has in all total 100 acres 25 gunthas land. The learned advocates also stated that on 04.04.1976 the revision applicant was declared as no surplus and under the circumstances she argued that the revision applicant had bona fidely executed the saledeeds. One thing is sure that u/s 16(2) of the Ceiling Act, the owner has right to select which lands be declared as surplus and it does not appear that after remand, present revision applicant has exercised this option in respect of only lands other than the lands sold by him.

If we consider the provisions of the Indian Contract Act, 1872, after giving anxious thought to the arguments by both sides and the judgment of the learned II Adhoc Additional District Judge, in my opinion, the case can be said to be falling u/s 20 of the Indian Contract Act, wherein it is laid down that - Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement the agreement is void. Here in this case after declaration in 1976 that holding of present revision applicant was not surplus, he entered into agreement of sale and executed saledeeds in favour of the respondents on 09.06.1982. The evidence of the respondents also disclosed that they had made necessary enquiries. They checked 7/12 extract, but had no idea that the lands were either declared surplus or were likely to be declared surplus under provisions of the Ceiling Act. The Commissioner exercised revisional powers and remanded the matter to S.L.D.T. in 1983. In the circumstances, in my opinion, appropriate section would be Section 20 of the Indian Contract Act, where both the parties were under mistaken belief that the revision applicant had saleable interest in the property sold, though subsequent events show that the revision applicant had no saleable interest as the lands came to be declared as surplus lands and they were taken over by the Government under the provisions of the Ceiling Act and thus the respondents lost lands which were sold to them.

The case may also come under second part of Section 56 of the Indian Contract Act, which says that a contract to do an act, which after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

After remand the original ceiling proceedings were revived and any sale pending the proceedings under the Ceiling Act become void. We may refer to Sections 8 and 10 of the Ceiling Act. Apart from that the fact remains that the present revision applicant/defendant could not convey the effective title over the suit lands to the respondents and therefore there is failure of consideration on the part of the revision applicant. Therefore, Section 65 of the Indian Contract Act would be applicable. As per Section 65 - When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person from he received it.

At this stage we may also refer to Section 55(2) of the Transfer of Property Act, 1982. As per Section 55(2) the seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same. Here the parties were under mistaken belief that the revision applicant had saleable title.

The learned advocate Mrs. Kulkarni referred to several authorities to explain the principle of pari delicto. They are Amresh Chandra Pandey Vs. Firm Kalyan Mal Dharam Narain Saraf, , Kuju Collieries Ltd. Vs. Jharkhand Mines Ltd. and Others, , D.L.F. United Private Ltd. Vs. Pr. Prem Raj and Others, and State of Rajasthan Vs. Associated Stone Industries (Kotah) Ltd., . It is argued by Mrs. Kulkarni that in this case the respondents have enjoyed the fruits and income of the land from the date of saledeed i.e. 09.06.1982 till the date of their dispossession i.e. 18.01.1986 and though the Trial Court considered, but First Appellate Court failed to consider that when the respondents have enjoyed property for almost 3 1/2 to 4 years, return of entire consideration amount was wrong.

The learned advocate Shri P.S. Shinde for the respondents argued that amount of Rs. 25,000/paid as total consideration by all the three respondents was never said to be inadequate consideration by the revision applicant. The revision applicant never came out with a case that the consideration paid by the respondents was inadequate consideration. Though Adv. Mrs. Kulkarni pointed out that about 52 acres land in seven survey numbers was sold. We will have to consider the price of the same prevailing in 1982. In those days amount of Rs. 25,000/was a big amount.

In my opinion, though the respondents enjoyed the land for 3 1/2 years, the revision applicants enjoyed the amount of Rs. 25,000/for all these years from 1982. In the facts and circumstances, equities will be met if the revision applicant is directed to pay the amounts of consideration without back interest. It may be noted that the original suit was for refund of amount with interest at the rate of 20% p.a. The First Appellate Court while answering the points, particularly point No. 2, has also held that the respondents are not entitled to interest or registration charges, which they have claimed. He has only directed refund of the consideration amount. Considering the facts and circumstances of the case, in my opinion, the order of refund as passed by the learned II Adhoc Additional District Judge, Osmanabad, cannot be said to be inequitable or illegal. In my considered opinion, it requires no interference, except that some interest ought to have been awarded, if amount is not immediately repaid.

In the result, the judgment and decree passed by the II Adhoc Additional District Judge, Osmanabad, on 15.11.2002, is hereby confirmed, with the only modification that said amounts be paid by the revision applicant within three months from this order, incase said amounts are not paid and same shall carry interest at the rate of 9% p.a. from today till actual payment.

The Civil Revision Applications accordingly stand disposed of.