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The Land Acquisition Act, 1894
The Transfer of Property Act, 1882
Section 4(1) in The Land Acquisition Act, 1894
Section 30 in The Land Acquisition Act, 1894
T.H. Musthaffa vs M.P. Varghese & Ors on 23 September, 1999

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Andhra High Court
Executive Director, Mr. G. ... vs Land Acquisition Officer And ... on 30 July, 2001
Equivalent citations: 2001 (5) ALD 658, 2001 (6) ALT 322
Author: M B Naik
Bench: M B Naik, G Rohini



JUDGMENT
 

 Motilal B. Naik, J.

1. This appeal is directed against the award made by the Court of the Subordinate Judge at Markapur in LAOP No. 47 of 1988 dated 22nd April, 1996 on various grounds. The said LAOP No. 47 of 1996 was instituted on the basis of a reference made under Section 30 of the Land Acquisition Act to resolve the controversy as to the disbursement of compensation payable to the lands to an extent of Ac 15-9 cents situate in Survey No. 10 of Bestavaripeta which was acquired for the purpose of providing house sites to the members of Samithi Teachers Co-operative House Building Society, Bestavaripeta.

2. Initially, there was an agreement to sell the schedule lands which belonged to the appellant, between the President of the appellant-association with the third respondent and others. As per the agreement dated 5-9-1980, the value of the land was determined at Rs. 6,000/- per acre, pursuant to which an amount of Rs. 20,000/- was also paid by the first respondent to the appellant. While so, on the basis of a request made by the members of the Samithi Teachers Co-operative House Building Society, Bestavaripeta, the Land Acquisition Officer initiated land acquisition proceedings by issuing notification under Section 4(1) of the Land Acquisition Act on 28-5-1981 seeking to acquire the entire extent of land covered under the agreement of sale which was entered into between the President of the Appellant-Association with the third respondent and others. As the land acquisition proceedings were initiated by issuing notification under Section 4(1) of the Act on 28-5-1981 for the same lands which are subject-matter of agreement of sale, the registration of the lands in favour of the third respondent could not be materialized and thus, the contract between the appellant and the third respondent and others became unenforceable, as a result of which the third respondent could not be put in possession of the lands though he parted with Rs. 20,000/- as advance pursuant to the original agreement dated 5-9-1980.

3. The Land Acquisition by Award No. 14 of 1986 dated 23-6-1996 fixed the compensation at Rs. 6,000/- per acre. During the course of enquiry, not only the appellant claimed compensation but also the third respondent and others claimed compensation. A dispute is raised by the third respondent seeking the entire compensation which was awarded by the Land Acquisition Officer on the ground that the lands were purchased by him through an agreement of sale dated 5-9-1980 and parted with a sum of Rs. 20,000/-. The Land Acquisition Officer therefore, referred the matter to the Civil Court under Section 30 of the Land Acquisition Act for deciding the issue as to who shall be entitled for the compensation and thus the matter was enquired by the civil Court and OP No. 47 of 1988.

4. The civil Court issued notices to all the parties and permitted them to participate in the enquiry and to adduce evidence. Though there were three claimants, only appellant and third respondent contested the matter. On behalf of the appellant-respondent, RWs 1 to RWs3 were examined and documents Exs. B1 and B36 were marked. RW1 was the respondent-appellant herein RW2 is one C. Achi Reddy, President of Kandla Obulareddy Co-operative House Building Society, Bestavaripeta, RW3 is one G. Sambasiva Rao, one of the attestors to Ex.B26 agreement of sale deed.

5. Considering the oral and documentary evidence, the civil Court held that since the third respondent had entered into an agreement with the appellant-respondent and has parted with an amount of Rs. 20,000/- which was paid towards advance, he shall be entitled to receive the entire compensation and further held that the appellant herein is entitled for the balance amount of sale consideration i.e., Rs. 71,040/- with proportionate interest, by judgment dated 22-4-1996.

6. This is the judgment of the civil Court which is assailed in this appeal on various grounds.

7. Sri Sridhar Reddy, learned Counsel for the appellant contended before us that though the appellant had entered into an agreement with the third respondent for the sale of the entire extent of Ac. 15-9 cents of land at Rs. 6,000/- per acre and had also accepted the advance amount of Rs. 20,000/-, as a result of initiation of the land acquisition proceedings by the Land Acquisition Officer, the contract became unenforceable and as such, the third respondent is not entitled for the compensation amount awarded by the Land Acquisition Officer. It is further contended that the view taken by the civil Court that the appellant is entitled for the balance of sale consideration cannot be sustained as pursuant to the agreement of sale dated 5-9-1980, the possession of the land was not given to the third respondent and the property was in the possession of the appellant only and thus, the third respondent is not entitled to claim any compensation. Counsel further contended that the civil Court has erroneously applied the ratio laid down by this Court in H.A. Dawson v. M.L. Prasad, 1971 APHC Notes 100 and in B. Appalanaidu v. B. Appayyamma, , and held that the third respondent is entitled to receive the entire compensation, though the above two cases arise out of different set of circumstances. Counsel nextly submitted that in view of the initiation of the land acquisition proceedings, the contract between the appellant and the third respondent became unenforceable and that the land being still under the possession of the appellant, the civil Court was not justified in ordering payment of the compensation to the third respondent.

8. On the contrary, it is submitted by the learned Counsel for the respondent that as a result of the agreement between the parties for purchase of entire extent of land at Rs. 6,000/- per acre totalling to Rs. 91,040/-, having parted with Rs. 20,000/-in advance, the third respondent is entitled for the entire compensation. It is further stated that for executing the registered sale deed, time was fixed upto 30-6-1981, and had the land acquisition proceedings not been initiated, the appellant could have registered the sale deed in favour of the third respondent and thus the third respondent could have become the owner of the property. It is, therefore, contended that the third respondent is entitled to receive the entire compensation awarded by the Land Acquisition Officer. It is also contended that even otherwise, merely because Land Acquisition proceedings were initiated, the contract cannot be held to be frustrated. It is submitted that the civil Court is justified in directing the Land Acquisition Officer to pay the entire compensation to the third respondent, minus Rs. 71,040/- being the balance sale consideration, as he is the owner of the property.

9. The point that arises for consideration is whether the civil Court is justified in directing payment of entire amount of compensation to the third respondent in respect of the acquired lands as if the third respondent is the owner of the said lands.

10. The facts in the two decisions cited above, relied upon by the civil Court emanate from a different set of circumstances and altogether stand on a different footing. In the said decisions, pursuant to the agreement between the parties, the property was transferred in the hands of the purchaser as the possession of the property was given and under those circumstances, the Court held that since the property has been transferred to the purchase who had also taken subsequent steps pursuant to the agreement, even though the said property is not registered in the name of the purchaser, the transfer became complete and therefore, the transferee becomes the owner of the property and shall be entitled for all benefits. The facts in this case are different. Though advance amount of Rs. 20,000/- is paid to the vendor pursuant to the sale agreement, the vendee was not put in possession of the property,

11. Before we proceed to examine this view, it is necessary for us at this stage to look into the provisions of Section 53-A of the Transfer of Property Act, which stipulates "where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession, of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then notwithstanding the contract, though required to be registered has not been registered, or where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract."

12. A reading of the provisions under Section 53(A) of the Transfer of Property Act, would amply demonstrate that irrespective of whether the contract is registered or not, if the transferee has been put in possession of the property or any part thereof pursuant to such contract, and the transferee does some act in furtherance of the contract, the transferee shall be deemed to be the owner of such property. Thus, the crucial factor to claim ownership in a contingency arising out of this nature of contract is the transferee shall take possession of the property or any part thereof and shall do some act in furtherance of the contract. In the case on hand, though there was an agreement of sale between the appellant and the third respondent and others in respect of the acquired land and though the third respondent paid an advance amount of Rs. 20,000/- to the appellant, but the vendee-third respondent was not put in possession of the property or any part and the possession continued to remain with the appellant. On account of the initiation of the land acquisition proceedings registration of the property could not be effected. Under these circumstances, it is difficult for us to appreciate the view taken by the civil Court that the third respondent is entitled for the entire compensation and the appellant is entitled only for the balance of sale consideration. As discussed, the facts obtaining in the two decisions (supra), relied upon by the Civil Court, are different and the principle laid down in those decisions could not have been applied to the facts of the case on hand. A reading of the provision under Section 53-A of the Transfer of Property Act leaves no doubt in our mind that the civil Court has lost sight of the true implication emanating therefrom and has misapplied the said provision and erroneously held that the third respondent is entitled to receive the entire amount of compensation.

13. In the light of our above discussion, we set aside the impugned order made by the civil Court in LAOP No. 47 of 1996 dated 22-4-1996.

14. During the course of hearing the appeal, an alternative submission is also made on behalf of the third respondent that in the event this Court sets aside the impugned order passed by the civil Court and allows this appeal filed by the original owner of the acquired lands, the third respondent shall be entitled to receive not only the amount of Rs. 20,000/- which was paid by him towards advance in the year 1980 for the acquired lands but also interest at 18% per annum of the said amount. According to the Counsel for the third respondent, the appellant has retained the said sum of Rs. 20,000/- for over a period of more than 20 years and therefore, he is entitled to seek interest at 18% per annum.

15. We have examined this alternative submission advanced on behalf of the third respondent. The main issue which is raised in this appeal is the correctness of the order made by the Civil Court in LAOP No. 47 of 1988. Having examined it in the light of the provisions contemplated under Section 53-A of the Transfer of Property Act, we held that the impugned order made by the Civil Court is unsustainable and set aside the same. However, in the circumstances of this case, the third respondent is entitled to get back his amount of Rs. 20,000/- which was paid by him towards advance to the appellant. The claim of interest rate of 18% per annum by the third respondent looks to be exorbitant. Having regard to the circumstances of the case, we hold that the third respondent shall be entitled to interest at 12% per annum on the advance amount of Rs. 20,000/-from the date of payment till the date of realisation.

16. For all the above reasons, we allow this appeal declaring that the appellant alone is entitled to receive the entire compensation amount awarded by the Land Acquisition Officer and also other statutory benefits under the Act, being the owner of the acquired lands. No costs.