Supreme Court Upholds Land Rights Transfer Despite Exchange Deed Flaw: Sita Ram vs. Bharat Singh (2019)

Date of the Judgment: 17 September 2019

Citation: Civil Appeal No(s). 8179 of 2016

Judges: A.M. Khanwilkar, J., Ajay Rastogi, J.

Can a land sale be invalidated if a later exchange of the same land is found to be flawed? The Supreme Court of India addressed this question in a recent case, focusing on the validity of land transfers under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950. The core issue revolved around whether a prior, valid sale of land could be overturned due to a subsequent exchange deed that did not comply with legal requirements.

The Supreme Court bench, comprising Justices A.M. Khanwilkar and Ajay Rastogi, delivered a unanimous judgment. Justice Rastogi authored the opinion.

Case Background

The case involves a land dispute in Village Mathura Bangar, Uttar Pradesh. Smt. Chando and Sita Ram owned Plot No. 2902, which they sold to N.D. Chaudhary on January 24, 1973, through a registered sale deed. Later, on March 2, 1974, Kesho Ram, who owned Plot Nos. 2863 and 2888, exchanged these plots with N.D. Chaudhary for Plot No. 2902 via a registered exchange deed.

During a field survey for revenue record correction, Kesho Ram applied to have his name recorded on Plot No. 2902 based on the exchange deed. N.D. Chaudhary supported Kesho Ram’s application. However, Smt. Chando and Sita Ram objected, challenging the validity of the original sale deed to N.D. Chaudhary.

Timeline:

Course of Proceedings

The Consolidation Officer initially ruled the sale deed of 1973 as valid, but deemed the exchange of plots invalid because the parties did not obtain prior permission from the Assistant Collector as required under Section 161 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950. On appeal, the appellate authority held the sale deed unproven and the exchange deed void.

The matter then went to the State Government in its revisional jurisdiction. The Deputy Director of Consolidation dismissed the revision petitions, but the order revealed that the authority proceeded on the premise that the registered sale deed dated 24th January, 1973 was genuine and valid.

The High Court, in its judgment dated July 5, 2007, observed that the exchange deed was in contravention of Section 166 read with Section 167 of the Act, 1950. However, it also noted that only the State Government could seek cancellation of the exchange deed, not the original tenure holders.

Legal Framework

The case primarily revolves around Sections 161, 166, and 167 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950.

Section 161 of the Act, 1950, addresses the exchange of land by a bhumidhar or sirdar, stating that such exchange requires the permission of an Assistant Collector. The section states:

“Section 161 Exchange. [(1) A bhumidhar or sirdar may exchange with: (a) any other bhumidhar or sirdar land held by him, or (b) any Gaon Sabha or local authority, lands for the time being vested in it under Sec. 117 [ * * *] : Provided that no exchange shall be made except with the permission of an Assistant Collector who shall refuse permission if the difference between the rental value of land given in exchange and of land received in exchange calculated at hereditary rates is more than 10 per cent of the lower rental value.”

Section 166 of the Act, 1950, states that any transfer made in contravention of the provisions of this Act shall be void. The section states:

“S. 166. Transfer made in contravention of this chapter to be void. Any transfer, made by or on behalf of a sirdar or asami in contravention of the provisions of this chapter shall be void.”

Section 167 of the Act, 1950, outlines the consequences of void transfers, stating that the transferee is liable to ejectment on the suit of the Gaon Sabha or the landholder. The section states:

“S. 167. Consequences of void transfers. [(1) Where a sirdar or asami has made any transfer in contravention of the provisions of this Act, the transferee and every person who may have thus obtained possession of the whole or part of the holding shall be liable to ejectment on the suit of the [Gaon Sabha or the land holder, as the case may be,]”

Rule 338 of the U.P. Zamindari Abolition & Land Reforms Rules, 1952, specifies that suits for ejectment of a bhumidhar or sirdar must be instituted within six years from the date of illegal transfer.

Arguments

The appellants (legal heirs of Smt. Chando and Sita Ram) argued that the High Court exceeded its jurisdiction by interfering with the concurrent findings of the consolidation authorities. They contended that N.D. Chaudhary did not get his name mutated in the revenue records based on the 1973 sale deed and that the exchange deed of 1974 was void due to lack of permission under Section 161 of the Act, 1950. Therefore, they claimed a right over Plot No. 2902.

The respondents (legal heirs of Kesho Ram and N.D. Chaudhary) argued that once Plot No. 2902 was sold to N.D. Chaudhary in 1973, the appellants lost their rights over it. They further argued that the lack of permission for the exchange deed would not negate the rights conferred by the transfer of property and that transfers made before June 3, 1981, were voidable, not void, and subject to a suit filed within the limitation period, which was not done in this case.

The appellants argued that the exchange deed was void under Section 166 read with Section 167 of the Act, 1950, and that they were entitled to hold their right and possession over Plot No. 2902.

The respondents contended that the permission of the Assistant Collector, even if not obtained, would not take away the rights of the parties conferred by the registered exchange deed. They also stated that as per the scheme of the Act, 1950, transfers made prior to June 3, 1981, were not void but voidable at the option of the Gaon Sabha or landholder within the period of limitation.

The innovativeness of the argument by the respondents lies in highlighting the distinction between void and voidable transfers under the pre-amended Act and the fact that no action was taken within the limitation period.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. What are the legal consequences if a registered exchange deed is executed without following the procedure prescribed under Section 161 of the Act, 1950?

Treatment of the Issue by the Court

Authorities

The Court considered the following legal provisions:

• Section 161 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, regarding exchange of land.
• Section 166 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, regarding void transfers.
• Section 167 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, regarding consequences of void transfers.
• Rule 338 of the U.P. Zamindari Abolition & Land Reforms Rules, 1952, regarding the limitation period for suits.

Judgment

How each authority was viewed by the Court?

✓ The Court considered Section 161 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950* to highlight the mandatory requirement of obtaining permission from the Assistant Collector for land exchange.

✓ The Court used Section 166 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950* to clarify that transfers made in contravention of the Act are void.

✓ The Court referred to Section 167 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950* to explain the consequences of void transfers and the process for ejectment, noting that under the pre-amended Act, such transfers were voidable, not void.

✓ The Court relied on Rule 338 of the U.P. Zamindari Abolition & Land Reforms Rules, 1952* to emphasize the six-year limitation period for filing suits for ejectment, which had expired in this case.

What weighed in the mind of the Court?

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

✓ The validity of the original sale deed of January 24, 1973, which transferred ownership of Plot No. 2902 from Smt. Chando and Sita Ram to N.D. Chaudhary.

✓ The fact that the exchange deed of March 2, 1974, was executed without the mandatory permission from the Assistant Collector as required under Section 161 of the Act, 1950.

✓ The legal distinction between void and voidable transfers under the pre-amended Act, 1950, and the limitation period for filing suits for ejectment.

✓ The Court also emphasized that the original tenure holders, Smt. Chando and Sita Ram, did not have the locus standi to claim the benefit of the defect in the exchange deed between other parties.

The court’s reasoning was based on the following logical steps:

The Court considered the argument that the exchange deed was void but rejected it because under the pre-amended Act, the transfer was voidable and not void, and that the limitation period for filing a suit had already expired. The Court also considered the argument that the original tenure holders could claim rights over the land due to the flawed exchange deed but rejected it because they had already transferred their rights through a valid sale deed.

The Court concluded that the original sale deed was valid and that the subsequent flawed exchange deed did not nullify the rights transferred by the sale deed. The Court also held that the original tenure holders had no locus standi to claim the benefit of the defect in the exchange deed.

The Court’s decision was based on the following reasons:

• The registered sale deed of January 24, 1973, was valid and transferred ownership to N.D. Chaudhary.
• The exchange deed of March 2, 1974, was in contravention of Section 161 of the Act, 1950, as it was executed without the permission of the Assistant Collector.
• Under the pre-amended Act, 1950, such transfers were voidable, not void, and required a suit for ejectment within six years, which was not filed.
• The original tenure holders, Smt. Chando and Sita Ram, had no locus standi to claim the benefit of the defect in the exchange deed.

The Court did not have a minority opinion.

The Court’s reasoning was based on a strict interpretation of the law and the facts of the case. It emphasized the importance of following the legal procedures for land transfers and the consequences of not doing so. The Court also highlighted the distinction between void and voidable transfers under the pre-amended Act and the importance of the limitation period for filing suits.

The decision has implications for future cases involving similar issues of land transfers and exchange deeds. It clarifies that a prior valid sale deed cannot be nullified by a subsequent flawed exchange deed and that the rights of the parties are governed by the valid sale deed.

No new doctrines or legal principles were introduced in this case. The Court applied existing legal principles to the facts of the case.

Key Takeaways

• A valid sale deed transfers ownership rights, and a subsequent flawed exchange deed does not nullify those rights.
• Land exchanges require permission from the Assistant Collector as per Section 161 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950.
• Under the pre-amended Act, transfers made in contravention of the Act were voidable, not void, and required a suit for ejectment within six years.
• Original tenure holders cannot claim the benefit of a defect in an exchange deed between other parties if they have already transferred their rights through a valid sale deed.

This judgment reinforces the importance of following legal procedures for land transactions. It also highlights the legal distinction between void and voidable transfers and the significance of limitation periods for filing suits. The decision may lead to more careful adherence to legal procedures in land transactions and may reduce future disputes of similar nature.

Directions

The Supreme Court did not issue any specific directions in this case.

Specific Amendments Analysis

The judgment discusses the amendments made to the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, by U.P. Act No. 20 of 1982, which came into effect on June 3, 1981. The pre-amendment scheme of the Act, 1950, treated transfers made in contravention of the Act as voidable, requiring a suit for ejectment within a limitation period. However, the post-amendment Act made such transfers void, with the subject land deemed to have vested in the State Government.

Development of Law

The ratio decidendi of this case is that a prior valid sale of land cannot be nullified by a subsequent flawed exchange deed involving the same land, especially when the limitation period for challenging the exchange deed has expired. The judgment clarifies the distinction between void and voidable transfers under the pre-amended Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950. There is no change in the previous position of the law.

Conclusion

The Supreme Court dismissed the appeals, upholding the High Court’s decision. The Court held that the original sale deed of Plot No. 2902 was valid and that the subsequent flawed exchange deed did not nullify the rights transferred by the sale deed. The Court also emphasized that the original tenure holders had no locus standi to claim the benefit of the defect in the exchange deed. This judgment reinforces the importance of following legal procedures for land transactions and clarifies the legal consequences of not doing so.