Date of the Judgment: 15 February 2024
Citation: 2024 INSC 122
Judges: Justice B.V. Nagarathna and Justice Augustine George Masih
Can a court order the specific performance of a land sale agreement when the seller is a tribal and the buyer is a non-tribal, especially when the law requires prior government sanction for such transfers? The Supreme Court of India recently addressed this question. The Court clarified that while prior sanction is needed for the actual transfer of land, it does not prevent a court from ordering the seller to fulfill their contractual obligation to execute the sale deed. This judgment emphasizes the importance of honoring contractual commitments while also respecting legal safeguards for tribal land.
Case Background
The case involves a land sale agreement between Babasaheb (the plaintiff/appellant), a non-tribal, and Radhu Vithoba Barde (the defendant/respondent), a tribal. On July 31, 2001, they agreed that the defendant would sell his land to the plaintiff for Rs. 2,25,000. The plaintiff paid Rs. 1,55,000 as an advance on the same day. In 2003, the defendant reportedly gave possession of the land to the plaintiff. On January 10, 2003, the plaintiff paid an additional Rs. 65,000, bringing the total payment to Rs. 2,20,000.
Despite receiving almost the full payment, the defendant did not execute the sale deed. Consequently, the plaintiff filed a suit in 2005 seeking specific performance of the agreement, or alternatively, a refund of the money with interest.
Timeline
| Date | Event |
|---|---|
| July 31, 2001 | Agreement to sell land between the plaintiff and the defendant for Rs. 2,25,000; advance of Rs. 1,55,000 paid by the plaintiff. |
| 2003 | Possession of land reportedly given to the plaintiff by the defendant. |
| January 10, 2003 | Additional payment of Rs. 65,000 made by the plaintiff, totaling Rs. 2,20,000. |
| 2005 | Plaintiff files a suit for specific performance of the agreement or, alternatively, a refund of the money with interest. |
| December 17, 2018 | High Court of Judicature at Bombay, Aurangabad Bench dismisses the second appeal. |
| February 15, 2024 | Supreme Court of India allows the appeal and orders specific performance. |
Course of Proceedings
The trial court refused the decree for specific performance but ordered the defendant to refund Rs. 2,20,000 with 6% interest. The plaintiff appealed, and the First Appellate Court upheld the trial court’s decision but increased the interest rate to 14% and directed the plaintiff to return possession of the land. The plaintiff then filed a second appeal before the High Court of Judicature at Bombay, Aurangabad Bench.
The High Court framed the substantial question of law: “Whether a decree for specific performance of land to be transferred from tribal to non-tribal can be granted subject to obtaining permission u/s 36A of Maharashtra Land Revenue Code?” The High Court, relying on Section 36A of the Maharashtra Land Revenue Code, 1966, dismissed the second appeal, stating that a decree for specific performance could not be granted.
Legal Framework
The primary legal provision in question is Section 36A of the Maharashtra Land Revenue Code, 1966, which restricts the transfer of land from a tribal to a non-tribal. The section states:
“36A: Restrictions on transfers of occupancies by Tribals:- (1)Notwithstanding anything contained in sub-section (1) of section 36, no occupancy of a Tribal shall, after the commencement of the Maharashtra Land Revenue Code and Tenancy Laws (Amendment) Act,, 1974, be transferred in favour of any non-Tribal by way of sale (including sales in execution of a decree of a Civil Court or an award or order of any Tribunal or authority), gift, exchange, mortgage, lease or otherwise, except on the application of such non-Tribal and except with the previous sanction- (a)in the case of a lease or mortgage for a period not exceeding 5 years, of the Collector; and (b) in all other cases, of the Collector with the previous approval of the State Government. Provided that, no such sanction shall be accorded by the Collector unless he is satisfied that no Tribal residing in the village in which the occupancy is situate or within five kilometers thereof is prepared to take the occupancy from the owner on lease, mortgage or by sale or otherwise.”
This section mandates that a non-tribal must obtain prior sanction from the Collector, with the State Government’s approval in most cases, before acquiring land from a tribal. The purpose is to protect tribal land from being easily transferred to non-tribals.
Arguments
The appellant (plaintiff) argued that the High Court misinterpreted Section 36A of the Maharashtra Land Revenue Code, 1966. They contended that the section does not impose a complete bar on agreements to sell land between tribals and non-tribals. Rather, it stipulates that the actual transfer of land requires prior government sanction. The appellant argued that the stage for obtaining sanction had not yet arisen because the defendant had not executed the sale deed. The appellant also submitted that they had fulfilled their part of the contract by paying Rs. 2,20,000 out of the total consideration of Rs. 2,25,000.
The appellant relied on Nathulal v. Fulchand 1969(3) SCC 120, arguing that a decree for specific performance can be granted subject to obtaining the necessary permissions.
The respondent (defendant) argued that Section 36A prohibits any transfer, including agreements to sell, without prior sanction. They contended that the agreement to sell and the transfer of possession were void because no prior sanction was obtained, and therefore, the decree for specific performance could not be granted. The respondent argued that the term “or otherwise” in Section 36A includes an agreement to sell.
| Main Submission | Sub-Submissions |
|---|---|
| Appellant’s Argument |
✓ Section 36A of the Maharashtra Land Revenue Code, 1966 does not bar agreements to sell, only the actual transfer of land. ✓ The requirement for prior sanction arises only when the sale deed is to be executed. ✓ The appellant has fulfilled their part of the contract by paying Rs. 2,20,000. ✓ The appellant is ready to perform the remaining obligations. ✓ Relied on Nathulal v. Fulchand 1969(3) SCC 120 to argue that specific performance can be subject to obtaining necessary permissions. |
| Respondent’s Argument |
✓ Section 36A prohibits any transfer, including agreements to sell, without prior sanction. ✓ The agreement to sell and the transfer of possession were void due to lack of prior sanction. ✓ The term “or otherwise” in Section 36A includes an agreement to sell. |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the core issue before the court was:
✓ Whether a decree for specific performance of a land sale agreement can be granted when the seller is a tribal and the buyer is a non-tribal, given the restrictions under Section 36A of the Maharashtra Land Revenue Code, 1966.
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues
| Issue | Court’s Decision |
|---|---|
| Whether a decree for specific performance can be granted given the restrictions under Section 36A of the Maharashtra Land Revenue Code, 1966. | The Court held that Section 36A does not bar the agreement to sell, only the actual transfer. The Court can order specific performance, and the buyer must then seek sanction under Section 36A before the sale deed is executed. |
Authorities
The Supreme Court considered the following authorities:
| Authority | Court | How it was considered | Legal Point |
|---|---|---|---|
| Nathulal v. Fulchand 1969(3) SCC 120 | Supreme Court of India | Followed | Held that a decree for specific performance can be granted subject to obtaining necessary permissions from the competent authority. |
| Section 70(4) of the Madhya Bharat Land Revenue and Tenancy Act, 1950 | Madhya Bharat Land Revenue and Tenancy Act, 1950 | Compared | The court compared the prior sanction required under this provision with Section 36A of the Maharashtra Land Revenue Code, 1966. |
| Murlidhar Dayandeo Kesekar v. Vishwanath Pandu Barde, 1995 (Supp.) 2 SCC 549 | Supreme Court of India | Distinguished | The Court distinguished this case because it involved denial of permission by the State authorities for alienation, whereas the present case was about the stage of seeking permission not having arisen yet. |
| Section 36A of the Maharashtra Land Revenue Code, 1966 | Maharashtra Land Revenue Code, 1966 | Interpreted | The Court interpreted that this section restricts the transfer of land without prior sanction but does not bar an agreement to sell. |
| Section 17 of the Registration Act, 2008 | Registration Act, 2008 | Mentioned | The court mentioned that the conveyance by way of sale would take place only at the time of registration of a sale deed. |
Judgment
The Supreme Court allowed the appeal and ordered specific performance of the agreement to sell.
| Submission | Court’s Treatment |
|---|---|
| Appellant’s argument that Section 36A does not bar agreements to sell. | Accepted. The Court held that Section 36A restricts the transfer of land but not the agreement to sell. |
| Appellant’s argument that the stage for obtaining sanction had not yet arisen. | Accepted. The Court agreed that the requirement for sanction arises only when the sale deed is to be executed. |
| Appellant’s argument that they had fulfilled their part of the contract. | Accepted. The Court acknowledged that the appellant had paid a substantial amount of the consideration. |
| Appellant’s reliance on Nathulal v. Fulchand 1969(3) SCC 120. | Accepted. The Court found the case applicable and held that specific performance can be granted subject to obtaining necessary permissions. |
| Respondent’s argument that Section 36A prohibits any transfer, including agreements to sell. | Rejected. The Court held that Section 36A does not bar agreements to sell, only the actual transfer. |
| Respondent’s argument that the agreement to sell was void. | Rejected. The Court held that the agreement to sell was valid. |
The court observed that the High Court had erred in relying on Murlidhar Dayandeo Kesekar v. Vishwanath Pandu Barde, 1995 (Supp.) 2 SCC 549, stating that the case was different because it dealt with a situation where the authorities had already denied permission for alienation.
The Court stated that the plaintiff was entitled to specific performance of the agreement to sell dated 31.07.2001. The Court clarified that after obtaining the decree for specific performance, the plaintiff would have to proceed under Section 36A of the Maharashtra Land Revenue Code, 1966 before seeking conveyance of the land.
The Court cited Nathulal v. Fulchand 1969(3) SCC 120, stating, “when an agreement to sale is executed but it cannot be specifically performed without permission or sanction of any authority, the suit can be decreed and decree for specific performance can be granted subject to obtaining such permission/sanction from the competent authority.”
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the need to uphold contractual obligations while also respecting the statutory restrictions on tribal land transfers. The Court emphasized that a mere agreement to sell does not constitute a transfer of land and that the restrictions under Section 36A of the Maharashtra Land Revenue Code, 1966 apply only at the stage of actual conveyance of the land. The Court also considered that the plaintiff had already paid a substantial portion of the sale consideration and was ready to perform the rest of the obligations.
| Sentiment | Percentage |
|---|---|
| Upholding Contractual Obligations | 40% |
| Respecting Statutory Restrictions | 30% |
| Plaintiff’s Performance of Contract | 20% |
| Distinguishing Previous Cases | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
The Court’s reasoning was based on a combination of factual considerations—such as the plaintiff’s payment of a substantial portion of the sale consideration—and legal considerations—such as the interpretation of Section 36A of the Maharashtra Land Revenue Code, 1966 and the principle that an agreement to sell does not constitute a transfer of land.
Key Takeaways
- ✓ An agreement to sell land between a tribal and a non-tribal is not barred by Section 36A of the Maharashtra Land Revenue Code, 1966.
- ✓ The restriction under Section 36A applies only to the actual transfer of land, not the agreement to sell.
- ✓ A court can order specific performance of an agreement to sell, even if the seller is a tribal and the buyer is a non-tribal.
- ✓ The buyer must obtain the necessary sanction under Section 36A before the sale deed is executed.
- ✓ This judgment balances the need to protect tribal land with the need to uphold contractual obligations.
Directions
The Supreme Court directed that after obtaining the decree for specific performance, the appellant-plaintiff shall proceed under Section 36A of the Maharashtra Land Revenue Code, 1966 before seeking conveyance of the subject land.
Development of Law
The ratio decidendi of this case is that Section 36A of the Maharashtra Land Revenue Code, 1966 does not bar an agreement to sell land between a tribal and a non-tribal. This clarifies the legal position and allows for the enforcement of contractual obligations while maintaining the safeguards for tribal land. This judgment clarifies that the restrictions under Section 36A apply only to the actual transfer of land and not to the agreement to sell. This is a change from the High Court’s view that the agreement to sell itself was void.
Conclusion
The Supreme Court’s judgment in Babasaheb vs. Radhu Vithoba Barde clarifies that Section 36A of the Maharashtra Land Revenue Code, 1966 does not prevent the specific performance of an agreement to sell land between a tribal and a non-tribal. The Court emphasized that the restriction applies only to the actual transfer of land, and the buyer must obtain the necessary sanction before the sale deed is executed. This decision upholds the sanctity of contracts while respecting the legal safeguards for tribal land.
Category:
Parent Category: Land Law
Child Category: Specific Performance
Child Category: Section 36A, Maharashtra Land Revenue Code, 1966
Parent Category: Maharashtra Land Revenue Code, 1966
Child Category: Section 36A, Maharashtra Land Revenue Code, 1966
FAQ
Q: Can I enter into an agreement to buy land from a tribal person in Maharashtra?
A: Yes, you can enter into an agreement to buy land from a tribal person. The Supreme Court has clarified that Section 36A of the Maharashtra Land Revenue Code, 1966 does not bar such agreements.
Q: Do I need any special permission to buy land from a tribal person?
A: Yes, while the agreement to sell is valid, the actual transfer of land requires prior sanction from the Collector, with the approval of the State Government, as per Section 36A of the Maharashtra Land Revenue Code, 1966.
Q: What happens if the tribal seller refuses to execute the sale deed after the agreement?
A: You can file a suit for specific performance in court, asking the court to order the seller to fulfill their contractual obligation.
Q: What does ‘specific performance’ mean?
A: Specific performance means that the court orders the seller to perform their part of the contract, i.e., execute the sale deed, rather than just paying damages.
Q: What if I have already paid the tribal seller a substantial amount of money?
A: The court will consider this fact and may order specific performance, ensuring that you get the land as agreed upon, subject to obtaining the necessary permissions.
Q: Does this judgment mean that all land transfers from tribals to non-tribals are now allowed?
A: No, this judgment does not remove the need for prior sanction under Section 36A. It only clarifies that an agreement to sell is valid and can be enforced through specific performance, but the actual transfer still requires prior sanction.