2023 (5) TMI 1276 - SC - Indian Laws

Supreme Court restores appellate decree after High Court wrongly assumed jurisdiction under Maharashtra Prevention of Fragmentation Act

The SC allowed the appeal and restored the First Appellate Court's decree. The HC erroneously considered the validity of a sale deed under the Maharashtra ... Restoration of decree of dismissal of the suit by the trial Court - Regular Civil Suit is one for possession of suit land on the strength of title - Plaintiff proves that he purchased the suit field from Defendants or not - sale deed was nominal and by way of collateral security and the said transaction was hit by the provisions of Section 8 of the Maharashtra Prevention of Fragmentation and Consolidation of Holdings Act or not - HELD THAT:- There is dichotomy between the contention of the first respondent/ the second defendant founded on the Fragmentation Act as mentioned above and also his contention of absolute absence of a transaction partaking the real nature of sale. This is because 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 word ‘transfer’ is not defined under the Fragmentation Act though the expression ‘land’ has been defined thereunder. As per Section 2 (5) of the Fragmentation Act, the term ‘land’ means, ‘agricultural land whether alienated or unalienated’ - A conjoint reading of Section 54 of the TP Act and Section 17 of the Indian Registration Act, 1908, mandates that transfer of ownership of any land worth more than Rs.100/- shall be effected by a registered deed. Therefore, transfer of a land worth more than Rs.100/- by a registered deed implies transmutation of all rights as the vendor possessed in the property concerned. 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 to settle, decide or dealt with, such issues under the said Act. If it does, then after staying the suit the said issue(s) is to be referred to such competent authority for determination. Apparently, no such consideration had been made by the trial Court as also by the High Court. 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 - the decision of the High Court on the validity of the sale transaction covered under the sale deed dated 04.07.1978 executed by the second defendant in favour of the first defendant, in terms of the provisions under the Fragmentation Act (when that question was not legally available to be considered in the subject suit) and the virtual declaration of the said sale as void, are absolutely unsustainable. It is the product of erroneous assumption of jurisdiction and also erroneous and perverse appreciation of evidence. 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. Appeal allowed. Issues Involved:1. Validity of the sale deed dated 21.04.1979 (Exhibit 128).2. Applicability of the Maharashtra Prevention of Fragmentation and Consolidation of Holdings Act, 1947.3. Jurisdiction of the Civil Court under Section 36A of the Fragmentation Act.4. The legal impact and effect of registered sale deeds under the Transfer of Property Act, 1882, and the Registration Act, 1908.Summary:1. Validity of the Sale Deed (Exhibit 128):The trial court initially dismissed the plaintiff's suit for possession of the suit land, finding that the sale deed dated 21.04.1979 (Exhibit 128) was a sham document executed as collateral security for a money lending transaction. The First Appellate Court reversed this decision, holding that the sale deed was valid and the plaintiff had become the owner of the property. The High Court later restored the trial court's decree, but the Supreme Court found that the High Court had failed to consider the legal impact of the registered sale deed (Exhibit 128) and the provisions under the Transfer of Property Act, 1882, and the Registration Act, 1908. The Supreme Court emphasized that the execution and registration of Exhibit 128 carried a presumption of a genuine transaction, and the burden was on the defendant to prove otherwise.2. Applicability of the Fragmentation Act:The second defendant contended that the sale deed was void under Section 8 of the Maharashtra Prevention of Fragmentation and Consolidation of Holdings Act, 1947. The trial court and the High Court accepted this contention without considering the statutory bar of jurisdiction under Section 36A of the Fragmentation Act. The Supreme Court noted that the trial court and the High Court had failed to consider whether the suit involved any issues required to be settled by a competent authority under the Fragmentation Act. The Supreme Court found that the second defendant's mutually destructive pleas and the lack of foundational facts did not make out a case for the applicability of the Fragmentation Act.3. Jurisdiction of the Civil Court:The Supreme Court highlighted that the jurisdiction of the Civil Court has to be determined based on the averments in the plaint, and the trial court and the High Court had failed to consider the statutory bar of jurisdiction under Section 36A of the Fragmentation Act. The Supreme Court stated that the involvement of issues under the Fragmentation Act should be determined with reference to the plaint's averments, and the second defendant had not approached the competent authority under the Fragmentation Act to nullify the action undertaken under the conveyance.4. Legal Impact of Registered Sale Deeds:The Supreme Court reiterated that a registered sale deed, whose execution is admitted, carries a presumption of a genuine transaction. The court emphasized that the burden was on the defendant to prove that the sale deed did not reflect the true nature of the transaction. The Supreme Court found that the High Court had committed a serious error in setting aside the judgment and decree of the First Appellate Court, which had decreed the suit for possession on the strength of the registered sale deed (Exhibit 128).Conclusion:The Supreme Court allowed the appeal, set aside the High Court's judgment, and restored the judgment and decree of the First Appellate Court, thereby decreeing the suit for possession in favor of the plaintiff.