Supreme Court Upholds Dismissal of Specific Performance Suit Due to Delay and Violation of Himachal Pradesh Land Laws: Ajay Dabra vs. Pyare Ram & Ors. (2023)

Date of the Judgment: January 31, 2023
Citation: 2023 INSC 78
Judges: Pamidighantam Sri Narasimha, J., Sudhanshu Dhulia, J. (authored the judgment)

Can a delay in filing an appeal be excused simply because the appellant lacked funds? The Supreme Court of India recently addressed this question, alongside issues of land transfer restrictions in Himachal Pradesh, in the case of Ajay Dabra vs. Pyare Ram & Ors. The Court examined whether a suit for specific performance could be granted when the initial agreement to sell violated the state’s land laws, specifically Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972.

The Supreme Court bench, comprising Justices Pamidighantam Sri Narasimha and Sudhanshu Dhulia, with Justice Dhulia authoring the judgment, dismissed the appeals, upholding the High Court’s decision. The court emphasized that delays in filing appeals must be reasonably explained and that agreements violating land laws cannot be enforced through specific performance.

Case Background

The case involves a dispute over an agreement to sell agricultural land in Himachal Pradesh. M/s Himalayan Ski Village Pvt. Ltd. (a non-agriculturist entity) entered into an agreement with an agriculturist landowner for the purchase of land. However, under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972, a non-agriculturist cannot purchase agricultural land without prior permission from the State Government.

M/s Himalayan Ski Village Pvt. Ltd. failed to obtain the necessary permission. Subsequently, they assigned their rights under the agreement to Ajay Dabra (the appellant), who then filed a suit for specific performance, seeking to compel the landowner to sell the land. The Trial Court dismissed the suit, and the High Court upheld the dismissal, citing a 254-day delay in filing the appeal and the lack of sufficient reason for the delay.

Timeline:

Course of Proceedings

The Trial Court dismissed the suits for specific performance on the grounds that the agreement was contingent upon obtaining permission from the State Government under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972, which was not obtained. The Trial Court also held that the assignment of rights to the plaintiff was not valid.

Ajay Dabra then filed a First Appeal before the High Court, along with an application for condonation of delay of 254 days. The High Court dismissed the delay condonation applications, finding the reasons for the delay insufficient. The primary reason given for the delay was lack of funds, which the High Court found unconvincing given the appellant’s status as an affluent businessman.

Legal Framework

The case primarily revolves around the interpretation and application of the following legal provisions:

• Section 5 of the Limitation Act, 1963: This section allows for the condonation of delay in filing appeals if sufficient cause is shown. The court noted that the appellant must explain each day’s delay, and the reason must be adequate.
• Section 149 of the Civil Procedure Code, 1908: This section empowers the court to allow a party to pay deficient court fees at any stage, and upon such payment, the document is deemed to have the same effect as if the fee had been paid initially.

  The court quoted the provision verbatim:
  
  “Section 149: Power to make up deficiency of Court Fees.- Where the whole or any part of any fee prescribed for any document by the law for the time being in force relating to court fees has not been paid, the Court may, in its discretion, at any stage, allow the person, by whom such fee is payable, to pay the whole or part, as the case may be, of such court-fee; and upon such payment the document, in respect of which such fee is payable, shall have the same force and effect as if such fee had been paid in the first instance.”

• Section 4 of the Court Fees Act, 1870: This section states that no document requiring a court fee can be filed without the prescribed fee. However, the court clarified that this provision must be read along with Section 149 of the Civil Procedure Code, 1908.
• Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972: This section restricts the transfer of land to non-agriculturists, except with the permission of the State Government.

  The court quoted the provision verbatim:
  
  “1[118. Transfer of Land to non-agriculturist barred: – (1) Notwithstanding anything to the contrary contained in any law, contract, agreement, custom or usage for the time being inforce but save as otherwise provided in this Chapter, no transfer of land (including transfer by a decree of a civil court or for recovery of arrears of land revenue) by way of sale deed, gift, will, exchange, lease, mortgage with possession, creation of a tenancy or in any other manner shall be valid in favour of a person, who is not an agriculturist.]
  2[Explanation. For the purpose of this sub-section the expression “Transfer of land” shall not include.
  i. Transfer by way of inheritance;
  ii. Transfer by way of gift made or will executed, in favour of any or all legal heirs of the donor or the testator, as the case may be;
  iii. Transfer by way of lease of land or building in a municipal area;
  but shall include
  a) a benami transaction in which land is transferred to an agriculturist for a consideration paid or provided by a non-agriculturist; and
  b) an authorization made by the owner by way of special or general power of attorney or by an agreement with the intention to put a non-agriculturist in possession of the land and allow him to deal with the land in the like manner as if he is a real owner of that land.]
  (2) Nothing in sub-section (1) shall be deemed to prohibit the transfer of land by any person in favour or,
  (a)….
  (b)….
  (c)….
  (d)….
  (e)….
  (f)….
  (g)….
  (h) a non agriculturist with the permission of the State Government for the purposes that may be prescribed.”

The court emphasized that Section 149 of the Civil Procedure Code, 1908 mitigates the strictness of Section 4 of the Court Fees Act, 1870. It allows a party to rectify a deficiency in court fees, and once rectified, the document is considered valid from the date of its original presentation.

Arguments

The appellant’s main arguments were:

• The delay in filing the appeal should have been condoned because the appellant lacked sufficient funds to pay the court fee.
• The High Court should have heard the appeal on its merits.
• The assignment of rights to the appellant was valid, and therefore, the suit for specific performance should have been granted.

The respondents’ main arguments were:

• The delay in filing the appeal was not justified, as the appellant could have filed a defective appeal and paid the court fees later.
• The appellant failed to provide sufficient reasons for the delay.
• The agreement to sell was contingent on obtaining permission under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972, which was not obtained.
• The assignment of rights to the appellant was invalid because there was no prior consent or approval from the seller.

The court noted that the appellant’s argument regarding lack of funds was not a sufficient reason for condonation of delay. The court also noted that the appellant could have filed a defective appeal under Section 149 of Civil Procedure Code, 1908.

Regarding the validity of the assignment, the court emphasized that the agreement to sell did not contain a clause allowing for the assignment of rights without the seller’s consent.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the main issues that the court dealt with were:

1. Whether the High Court was correct in dismissing the delay condonation application.
2. Whether the suit for specific performance could be granted when the initial agreement violated Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972.
3. Whether the assignment of rights to the appellant was valid.

Treatment of the Issue by the Court:

Authorities

The Court considered the following authorities:

Judgment

How each authority was viewed by the Court:

• Mannan Lal v. Mst. Chhotaka Bibi & Ors. [ (1970) 1 SCC 769 ]* The Court followed this authority to explain the interplay between Section 149 of the Civil Procedure Code, 1908 and Section 4 of the Court Fees Act, 1870, emphasizing that Section 149 mitigates the strictness of Section 4.
• S. Wajid Ali v. Mt. Isar Bano Urf Isar Fatima & Ors. [AIR 1951 All 64]* The Court relied on this case to support the view that a document is deemed to have been presented on the date it was originally filed, not when the defects were cured.
• P.K. Palanisamy v. N. Arumugham & Anr. [(2009) 9 SCC 173]*, Ganapathy Hegde v. Krishnakudva & Anr. [(2005) 13 SCC 539]*, and K.C. Skaria v. Govt. of State of Kerala & Anr. [(2006) 2 SCC 285]* The Court followed these authorities to reiterate that Section 149 of the Civil Procedure Code, 1908 has retrospective effect.
• Mahant Bikram Dass Chela versus Financial Commissioner, Revenue, Punjab, Chandigarh And Others [(1977) 4 SCC 69]* The Court cited this case to emphasize that Section 5 of the Limitation Act, 1963 is a hard task-master and requires a litigant to explain every day’s delay.
• Basawaraj and Another versus Special Land Acquisition Officer [(2013) 14 SCC 81]* The Court relied on this authority to state that a party must show sufficient cause to condone a delay, and negligence or lack of bona fide cannot be condoned.
• Ashok Madan and Another versus State of H.P. and Other [2011 SCC OnLine HP 3885]* The Court cited this case to explain the purpose of Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972, which is to protect small agriculturists and prevent the conversion of agricultural land for non-agricultural purposes.
• Smt. Sudarshana Devi v. Union of India [ILR 1978 HP 355]* The Court cited this case to highlight that the constitutional validity of Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972 has been upheld.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

1. The appellant’s failure to provide a sufficient explanation for the 254-day delay in filing the appeal. The court emphasized that a lack of funds is not a valid reason, especially when the appellant could have filed a defective appeal.
2. The violation of Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972. The court noted that the agreement was contingent on obtaining permission, which was not secured, and that the assignment of rights was invalid without the seller’s consent.
3. The need to protect small agriculturists and prevent the conversion of agricultural land for non-agricultural purposes, as highlighted in the Ashok Madan case.

The court’s reasoning was heavily based on the legal framework and the specific facts of the case. The court emphasized the importance of adhering to procedural rules and the need to protect the intent of land laws.

The court considered alternative interpretations, such as the possibility of condoning the delay due to the appellant’s financial difficulties. However, it rejected this interpretation, emphasizing that the appellant could have availed of the provisions of Section 149 of the Civil Procedure Code, 1908.

The court’s decision is clear and accessible, emphasizing the need to adhere to procedural rules and the importance of protecting the intent of land laws. The court’s reasoning is supported by legal precedents and a thorough analysis of the facts.

The court quoted the following from the judgment:

“The appellant who seeks condonation of delay therefore must explain the delay of each day.”

“In the present case, this delay has not been explained to the satisfaction of the court.”

“In the present case the assignment is not valid as there was no prior consent or approval of the seller before the assignment.”

Key Takeaways

• Lack of funds is generally not a sufficient reason for condonation of delay in filing appeals.
• Parties must utilize provisions such as Section 149 of the Civil Procedure Code, 1908 to file defective appeals and rectify them later.
• Agreements to sell agricultural land in Himachal Pradesh that violate Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972 are not enforceable.
• Assignment of rights under an agreement to sell requires the prior consent or approval of the seller, especially when the initial agreement is contingent on obtaining specific permissions.
• Courts will strictly interpret and apply land laws to protect the interests of small agriculturists and prevent the conversion of agricultural land for non-agricultural purposes.

This judgment reinforces the importance of adhering to procedural rules and the strict application of land laws. It serves as a reminder that courts will not easily condone delays, and parties must be diligent in pursuing their legal rights. The judgment also highlights the need for caution in entering into agreements that may violate land laws and the importance of obtaining necessary permissions before transferring rights.

Directions

No specific directions were given by the Supreme Court in this case. The appeals were dismissed.

Specific Amendments Analysis

There is no discussion about specific amendments in the judgment.

Development of Law

The ratio decidendi of this case is that delays in filing appeals must be reasonably explained, and lack of funds is not a sufficient reason for condonation of delay. The judgment also reinforces the strict interpretation of Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972, emphasizing that agreements violating land laws cannot be enforced through specific performance. Additionally, the judgment clarifies that assignment of rights requires the prior consent or approval of the seller when the initial agreement is contingent upon specific permissions.

The judgment does not introduce any new legal principles but reinforces existing principles regarding condonation of delay, specific performance, and land transfer restrictions.

Conclusion

In Ajay Dabra vs. Pyare Ram & Ors., the Supreme Court dismissed the appeals, upholding the High Court’s decision to reject the delay condonation application and the suit for specific performance. The court emphasized that lack of funds is not a sufficient reason for delay, and agreements violating land laws cannot be enforced. The judgment reinforces the importance of procedural compliance and the need to protect the intent of land laws.