Dispute Between Defendants Regarding Validity Of Sale Deed Can’t Be Considered In Suit For Possession Instituted By Plaintiff: Supreme Court

The Supreme Court bench comprises Justices M.R. Shah and C.T. Ravikumar has ruled that an inter-se dispute on the validity of the sale deed executed between the defendants in respect of the suit land, cannot be considered in the suit for possession instituted by the plaintiff on the basis of a registered sale deed executed in its favour, as it would amount to adjudication of a right or a claim by way of counter-claim by one defendant against his co-defendant, which cannot be permitted by virtue of Order VIII Rule 6A of the Code of Civil Procedure, 1908 (CPC).

The top court set aside the order of the Bombay High Court who had ruled on the validity of the sale deed executed between the co-defendants with respect to the suit property, by holding the same as void in view of Section 9 (1) of the Maharashtra Prevention of Fragmentation and Consolidation of Holdings Act, 1947. Consequently, the sale deed executed by the defendants in favour of the plaintiff was also held as void by the High Court.

The bench observed that, while entertaining the contentions raised in respect of the Fragmentation Act, the Trial Court and the High Court did not take into consideration the statutory bar of jurisdiction contained under Section 36A of the Fragmentation Act, which barred the jurisdiction of the Civil Court under the Act. Further, it reckoned that since the written statement of the defendant only contained a vague averment referring to the Fragmentation Act, the same could not be construed as a counter-claim capable of being treated as a plaint. Consequently, it did not enable the court to pronounce a final judgment in the same suit, on the said issue.

Noting that the sale deeds in question were registered and admitted by the defendant, the bench remarked that the High Court did not consider the legal impact and effect of the registered sale deeds, which was taken into consideration by the First Appellate Court, while reversing the judgment and decree of the latter.

The plaintiff, Damodhar Narayan Sawale, filed a suit seeking possession of the suit land sold to him by the defendants 1 and 2, Ramakrishna Ganpat Mhaske and Tejra Bajirao Mhaske, respectively, under a registered sale deed executed in 1979.

The 1st defendant, Ramakrishna, who had in turn obtained title over certain acres of the suit land from the 2nd defendant, Tejra, under a registered sale deed executed in 1978, with the latter remaining the owner in possession of the balance acres, filed a written statement endorsing the claim and contentions of the plaintiff.

The 2nd defendant, Tejra, however, averred in its written statement that the sale deeds executed in favour of the plaintiff as well as the 1st defendant were sham documents, and that it was executed solely as a collateral security to a money lending transaction. It further pleaded that the transaction was hit by Section 8 of the Fragmentation Act.

The Trial Court dismissed the suit of the plaintiff, holding that the sale deed was a sham document and it was executed only as a security for a money lending transaction.

The said order was set aside by the First Appellate Court, the court of the Additional District Judge, in appeal. The court held that the 2nd defendant, Tejra, had failed to prove that the sale transaction was an outcome of money lending transaction and that the sale deed was nominal in nature. The suit for possession on the strength of title was decreed in favour of the plaintiff.

Against this, Tejra filed an appeal before the Bombay High Court, who allowed the appeal and reversed the judgment of the First Appellate Court. The High Court restored the decree of dismissal of the suit by the Trial Court.

In the Special Leave Petition (SLP) filed against the decision of the High Court, the Apex Court reckoned that even though the powers under Article 136 of the Constitution of India must be exercised sparingly, yet there is absolutely nothing in the said Article which prohibits the Supreme Court from reversing even concurrent findings of fact by the lower courts, if it is of the opinion, on the basis of the evidence on record, that affirming the findings of the courts below would result in a grave miscarriage of justice.

Referring to the facts of the case, the court observed that the sale deed executed in favour of the plaintiff was registered and its execution was admitted by both the defendants- even though it was the case of the 2nd defendant that the same was executed as a collateral security at the time of a money lending transaction. Further, the 2nd defendant had also admitted execution of a registered sale deed in favour of defendant No. 1 in respect of a portion of the suit land, which was executed prior to the sale effected to the plaintiff.

The top court reckoned that the Trial Court had held the sale deed executed in favour of the 1st defendant to be virtually invalid by accepting the contention that the transaction violated Section 8 of the Fragmentation Act. Thus, the sale deed executed in 1978 between defendant 1 and 2 was held as one creating a ‘fragment’ and therefore, violating the prohibition contained in Section 8.

While observing that Section 9 (1) of the Fragmentation Act makes void only the transfer or partition of any land contrary to the provisions of the said Act, the court remarked, “It is not the object or purpose of the Fragmentation Act to totally prohibit or prevent transfer of land within any notified ‘local area’, but it is only aimed at preventing the fragmentation of agricultural holdings and to provide for the consolidation of agricultural holdings for the purpose of the better cultivation thereof.”

The bench further remarked that while entertaining the contentions raised in respect of the Fragmentation Act, the Trial Court and the High Court did not take into consideration the statutory bar of jurisdiction contained under Section 36A of the Fragmentation Act, which bars the jurisdiction of the Civil Court under the Act.

Referring to Section 36A and 36B of Fragmentation Act, the court said, “A conjoint reading of Section 36A and 36B of the Fragmentation Act would reveal that when a suit is instituted in a Civil Court, the Court concerned has to consider if the suit involves any issue(s) which is/are required to be settled, decided or dealt with by any competent authority under the said Act…. Apparently, no such consideration had been made by the trial Court as also by the High Court.”

The bench further held that the jurisdiction of the court has to be determined based on the averments in the plaint and it cannot be determined only on the basis of the uncorroborated averments made in the written statement.

While holding that the written statement of the 2nd defendant only contained a vague averment referring to the Fragmentation Act, the bench ruled that the same could not be construed as a counter-claim capable of being treated as a plaint and be governed by the rules applicable to plaints in terms of Order VIII Rule 6 A, CPC. Consequently, it did not enable the court to pronounce a final judgment in the same suit, on the said issue.

“In regard to ‘the Fragmentation Act’ only a very vague plea was taken in the written statement by the second defendant viz., “In event, according to the provisions of Consolidation of Act and Prevention of Fragmentation Act, the plaintiff is not entitled to any relief.” Thus, when the indisputable position is that no counter-claim, within the meaning of Order VIII Rule 6A, CPC was made by the second defendant and no averment whatsoever was made specifically in the written statement filed by him, how such an issue as to whether ‘he had proved to be a marginal owner’ in the light of the ‘Fragmentation Act’ arise for consideration(?),” said the court. The bench added that as per the settled position of law, one can be permitted to lead evidence only in tune with his pleadings.

The bench held that, nevertheless, the said plea was not available to the defendant since as per the first proviso to Section 9(3) of the Fragmentation Act, the automatic voidness would not be attracted to a transfer of land contrary to the provisions of the Fragmentation Act, if it was made on or after 15th November, 1965 and before the date of commencement of the Maharashtra Prevention of Fragmentation and Consolidation of Holdings (Amendment) Act, 2017.

The court added: “That apart, Section 31, referred therein, which puts bar for sale, makes it clear under clause (iii) Sub-section (3) thereof, that the said bar would not apply to any land which is to be transferred to an agriculturist, in its entirety provided such transfer is not creating a fragment.”

The bench further referred to the pleas raised by the 2nd defendant, terming the same as “mutually destructive”. The court observed that as per the plea of the 2nd defendant, both the sale deeds executed in favour of the plaintiff and the 1st defendant were never intended to be acted upon and were in fact, never acted upon.

“If that is accepted, then, there is absolutely no question of applicability of the provisions of ‘the Fragmentation Act’ as they would apply only in the eventuality of an actual transfer of land or partition of land subject to the satisfaction of other conditions,” the bench held.

The bench thus said, “Thus, going by his mutually destructive pleas as well, no case for attracting the provisions of ‘the Fragmentation Act’ was made out by the second defendant.”

The court further observed that the High Court, by holding the sale deed executed in favour of the plaintiff as void under Section 9(1) of the Fragmentation Act, had virtually considered the validity of the sale deed executed by the 2nd defendant in favour of the 1st defendant, as if a claim by way of counter-claim was made by the 2nd defendant.

“Thus, a careful scanning of the impugned judgment would reveal that virtually, the High Court considered the validity of the sale deed dated 04.07.1978 executed by the second defendant in favour of the first defendant under ‘the Fragmentation Act’, without directly framing an issue precisely on the same and then, decided the validity of the sale deed dated 21.04.1979 executed by the second defendant in favour of the plaintiff. We have already taken note of the decision of this Court in Rohit Singh’s case (supra), wherein it is observed that a defendant could not be permitted to raise counter-claim against co-defendant because by virtue of Order VIII Rule 6A, CPC it could be raised by a defendant against the claim of the plaintiff. Be that as it may, in the instant case, no such counter-claim, which can be treated as a plaint in terms of the said provision and thereby, enabling the court to pronounce a final judgment in the same suit, both on the original claim and on the counterclaim, was filed by the second defendant,” said the court.

The court added that an inter-se dispute on the validity of the sale deed executed by the 2nd defendant against the 1st defendant, could not have been considered in the subject-suit, as it would amount to adjudication of a right or a claim by way of counter-claim by one defendant against his co-defendant.

Referring to the registered sale deeds, which were admitted by the 2nd defendant, the court said “The oral evidence of the second defendant could not override the registered Ext. 128 sale deed, as held by the First Appellate Court in the facts, circumstances and evidence on record in this case.”

“The upshot of our consideration as above, is that the High Court has committed a serious error based on perverse appreciation of evidence, in setting aside the judgment and decree of the First Appellate Court decreeing the subject suit and in restoring the decree of dismissal of the suit of the trial Court,” the bench concluded.

The court thus allowed the appeal and set aside the judgment of the High Court, restoring the order of the First Appellate Court.

Case Title: Damodhar Narayan Sawale (D) through LRs vs Shri Tejrao Bajirao Mhaske & Ors.

Citation : 2023 LiveLaw (SC) 404

Counsel for the Appellant: Mr. Shivaji M. Jadhav, Adv. Ms. Quratulian, Adv. Mr. Brij Kishor Sah, Adv. Mr. Adarsh Kumar Pandey, Adv. Ms. Apurva, Adv. Mr. Rajeev Ranjan, Adv. Mr. Alok Kumar, Adv. For M/s. S.M. Jadhav And Company, AOR

Counsel for the Respondents: Mr. Kishor Ram Lambat, Adv. Suja Joshi, Adv. Kashmira Lambat, Adv. For M/s. Lambat And Associates, AOR

Code of Civil Procedure, 1908: Order VIII Rule 6A- The Supreme Court has ruled that an inter-se dispute on the validity of the sale deed executed between the defendants in respect of the suit land, cannot be considered in the suit for possession instituted by the plaintiff on the basis of a registered sale deed executed in its favour, as it would amount to adjudication of a right or a claim by way of counter-claim by one defendant against his co-defendant, which cannot be permitted by virtue of Order VIII Rule 6A of CPC.

Maharashtra Prevention of Fragmentation and Consolidation of Holdings Act, 1947: Section 9 (1)- The top court set aside the order of the High Court who had ruled on the validity of the sale deed executed between the co-defendants with respect to the suit property, by holding the same as void in view of Section 9 (1) of the Fragmentation Act. Consequently, the sale deed executed by the defendants in favour of the plaintiff was also held as void by the High Court.

The bench observed that, while entertaining the contentions raised in respect of the Fragmentation Act, the Trial Court and the High Court did not take into consideration the statutory bar of jurisdiction contained under Section 36A of the Fragmentation Act, which barred the jurisdiction of the Civil Court under the Act. Further, it reckoned that since the written statement of the defendant only contained a vague averment referring to the Fragmentation Act, the same could not be construed as a counter-claim capable of being treated as a plaint. Consequently, it did not enable the court to pronounce a final judgment in the same suit, on the said issue.

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