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suit for specific performance of compromise order = compromise was arrived at, whereby, the respondent No.2 agreed to re-convey the land to the extent of 1.16 acres to the appellant. This was on the condition that the respondent No.2 would use the remaining 1 acre land for building the administrative block. The appellant was also required to use the re-conveyed parcel of land for industrial purposes. = Thus, there was no breach of the compromise on the part of the Government which would necessitate her to file a suit for specific performance. Once it is held that the Government retracted its steps well in time, there could not be any decree of specific performance based on the alleged breach of the compromise. ; non-issue of the notice under Section 80 could not be permitted to be raised for the first time in the second appeal, when this contention was not raised seriously at any stage earlier.

 publisehd in http://judis.nic.in/supremecourt/imgst.aspx?filename=40721

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1361 OF 2006

 

Tarabai (Dead) Through L.Rs. … Appellant (s)

Versus

Govt. of Karnataka & Ors. … Respondent (s)

WITH

CIVIL APPEAL NO.3789-3791 OF 2007
J U D G E M E N T
H.L. Gokhale J.
These appeals are filed to challenge a common judgment and
order dated 30.9.2005 passed by a learned Single Judge of Karnataka High
Court in Regular Second Appeal No.137/2001 and RSA No.215/2001. Both the
appeals, which were decided by the learned Single Judge, were concerning
the land which was owned by the appellant Tarabai (now deceased) along with
her family members. The land consisted of 2 acres 16 guntas in Survey
No.16/1A and 1B in Jangamarakoppa Village in District Hubli. The Assistant
Commissioner, Dharwad had initiated acquisition proceedings for acquiring
the said land by publishing a notification under the Land Acquisition Act,
1894, for the purposes of constructing an administrative building for the
benefit of the Small Scale Industries Development Corporation. The Chief
Manager, Industrial State Zone-2, Hubli, of this corporation is respondent
no.2 in these appeals.
2. Initially the acquisition proceedings were challenged by the
above referred appellant by filing a Writ Petition bearing No. 366/1969
before the Karnataka High Court, but during the pendency of the petition a
compromise was arrived at, whereby, the respondent No.2 agreed to re-convey
the land to the extent of 1.16 acres to the appellant. This was on the
condition that the respondent No.2 would use the remaining 1 acre land for
building the administrative block. The appellant was also required to use
the re-conveyed parcel of land for industrial purposes. The compromise was
taken on record and the said Writ Petition was disposed of by the High
Court by its order dated 11.12.1970.
3. The appellant received the compensation for the 1 acre of land,
and a deed of reconveyance was executed on 25.8.1971 with respect to the
remaining parcel of land. It, however, so transpired that the
administrative block was not constructed immediately. On the other hand,
the said parcel of land was allotted to one M/s Basanth Tiles (appellant in
RSA No.137/2001). On coming to know about this development, the appellant
filed Original Suit No.519/1984 on 8.10.1984 in the Court of First
Additional Munsiff at Hubli. The appellant contended that the respondent
No.2 had acted in contravention of the compromise, and the allotment of
land in favour of M/s Basanth Tiles was illegal. The appellant, therefore,
sought specific performance of the compromise, and return of the said land
of 1 acre. It was, however, pointed out by Deputy Commissioner, Dharwad,
respondent No.3 herein (defendant No.3 in the suit) that the allotment in
favour of M/s Basanth Tiles was in fact a mistake, and they had taken steps
to withdraw the same on 16.8.1984 i.e. well before the filing of the suit.
M/s Basanth Tiles who were defendant No.4 in the said suit contested the
same by contending that they were bona-fide purchasers of the said parcel
of land, and had carried out certain developments on the land. It was
claimed that they had constructed a bore well and a compound wall around
the property.
4. The Trial Court framed various issues, recorded the evidence
thereon, and examined the relevant documents, particularly the compromise
memo arrived at between the parties, and dismissed the suit by its judgment
and order dated 22.2.1992.
(i) The Trial Court held that the Government had become absolute owner
in view of the compulsory acquisition of the property, and since the
respondent No.2 had not obtained the sanction of the State Government to
enter into the compromise, the memo of compromise had no legal force. It
was further held that the respondent No.2 could not have withdrawn the land
from acquisition. The Trial Court, therefore, held that the appellant had
failed to establish the necessary ingredients to get a decree of specific
performance.
(ii) It was also held by the Trial Court that since the notice under
Section 80 of C.P.C. was sent on 31.10.1978, and since it was replied to on
12.3.1979, the suit which was filed on 8.10.1984 was clearly beyond the
period of limitation. Thus on both these counts the Trial Court dismissed
the suit.
5. The appellant filed a Regular Appeal bearing no.56/1992 against
this judgment in the Court of Additional Civil Judge (Sr. Division), Hubli.

(i) The Appellate Court reversed the findings of the Trial Court. The
First Appellate Court held that the respondent No.2 had admitted in the
written statement that the compromise was legal, and had been acted upon,
and therefore it could not be contended that the compromise was not
enforceable. In para 20 of the judgment it was also observed that though
the Government of Karnataka was not a signatory to the compromise, it had
not opposed it, and its consent could always be deemed and inferred from
its conduct. The Appellate Court also did not accept the plea of the
respondent No.2 that the plot was kept for constructing an administrative
building. If that was so, it would not have been allotted to M/s Basanth
Tiles. The Court, therefore, held that the respondents had acted in
contravention of the compromise and, therefore, the appellant was entitled
to enforce the same.
(ii) As far as limitation is concerned, the First Appellate Court held
that the limitation will have to be calculated from the date of allotment
of said land to M/s Basanth Tiles which was 30.5.1984, and therefore the
filing of the suit on 8.10.1984 was within limitation. (iii) The
First Appellate Court, however, accepted the contention of M/s Basanth
Tiles that it had effected improvement on the land and, therefore, directed
the appellant to pay an amount of Rs.1,50,000/- to them to get possession
of the suit land. The Court also directed the appellant to refund the
amount of compensation to respondents No.1 to 3 which the appellants had
received. On these terms, the First Appellate Court directed the land to
be re-conveyed to the appellants.
(iv) The Court held that the appellants were always ready and willing to
perform their part of the contract but there was a breach on the part of
respondent No.2 and, therefore, the decree had to be passed. The appeal
was therefore allowed by its judgment and order dated 30.10.2000, and
thereby the suit filed by the appellant was decreed.
6. The Government of Karnataka carried the matter to the High
Court in Regular Second Appeal No. 215/2001, and M/s Basanth Tiles also
filed RSA No.137/2001. Both these appeals were heard and decided by a
Single Judge of the Karnataka High Court together. The questions of law,
though not very precisely spelt out, but considered by the High Court in
its judgment were as follows:-
“(i) Whether the First Appellate Court is justified in law in
granting a decree for reconveyance in the absence of any de-
notification made by the State Govt. under Section 48 of the Land
Acquisition Act ?

(ii) Whether in the facts and circumstances of the case, the
respondent No.6 being a bonafide purchaser and when the petitioners
were entitled only for damages, was the First Appellate Court
justified in decreeing the suit for reconveyance ?

(iii) Whether the suit was barred by limitation?

(iv) Whether there is any mandatory compliance of Section 80
C.P.C, prior to the institution of suit?

(v) Whether the compromise memo, alleged to have been filed
before the Court in Writ Petition No.366/1969 is not binding on the
respondent – Govt. since it had not signed the compromise memo?”

7. The High Court answered the above questions as follows:-
“(i) That the lower Appellate Court had committed an error in
granting a decree for reconveyance although there was no cause of
action for the plaintiff to move to the Civil Court to seek an order
of reconveyance. This was because the respondent authorities took
steps to revoke the allotment made in favour of Basanth Tiles, and
proceeded to act in terms of the compromise well before the suit was
filed. Besides there was no notification withdrawing the concerned
land from the acquisition under Section 48 of the Land Acquisition
Act. The first question of law was therefore held in favour of the
Government.
(ii) Neither was the plaintiff entitled to reconveyance, nor was
M/s Basanth Tiles entitled to retain possession of the suit property,
having regard to the stand of the Government and also the
circumstances in which the allotment was made in their favour. As far
as the claim of M/s Basanth Tiles for the improvements was concerned,
the High Court found that the suit had been filed immediately after
coming to know about the allegedly illegal allotment made in favour of
M/s Basant Tiles. Therefore, the improvements if any, would be
minimal, and if any improvement had been so made after filing of the
suit, those would be at the risk of M/s Basanth Tiles. The High
Court, therefore, rejected the contention of M/s Basanth Tiles for any
damages.
(iii) On the issue of limitation, the High Court held in favour
of the appellant that the real starting point of the limitation was
the date of the alleged breach by respondent Nos. 1 to 3 when they
allotted the suit land to M/s Basanth Tiles on 30.5.1984. The suit
was therefore held to be within limitation.
(iv) The High Court held that the issue of a mandatory notice
under Section 80 C.P.C. was not seriously contested by the respondents
at the appropriate stage, and in fact there was a notice issued as
early as in 1978, calling upon the respondents to re-convey the
property in terms of the compromise. The conduct of the respondents
throughout showed that the suit had not been seriously objected to or
contested on this point. Under such circumstances the contention could
not be permitted to be raised for the first time in the Second appeal.
The issue was therefore decided in favour of the appellants.

(v) It could not be said that the compromise entered into
between the parties was not binding on the Government. However, the
requirement of the third defendant/respondent was shown to be still
surviving, and the allotment of land to M/s Basanth Tiles was made
erroneously, and steps were taken for canceling this allotment even
before filing of the suit. Besides there was no time limit provided
for constructing the administrative building. Such being the case, the
petitioner-plaintiff had no cause of action.”

8. For the aforesaid reasons the High Court allowed the appeal in
RSA No. 215 of 2001 filed by the Government, and dismissed RSA No. 137 of
2001 filed by M/s Basanth Tiles. No order was made with respect to cost.
The High Court held that the Government was entitled to take back
possession of the said land from M/s Basanth Tiles. Being aggrieved by
this judgment and order the Civil Appeal No. 1361 of 2006 has been filed by
Tarabai (Dead) through her L.Rs., and Civil Appeal No. 3789-3791 of 2007 is
filed by M/s Basanth Tiles.
9. As far as the Civil Appeal No.1361 of 2006 preferred on behalf
of Tarabai by her L.Rs. is concerned, these appellants can not have any
grievance with respect to the finding of the High Court that the suit filed
by her was within limitation. The High Court has rendered a finding that
the contention with respect to the alleged non-issue of the notice under
Section 80 could not be permitted to be raised for the first time in the
second appeal, when this contention was not raised seriously at any stage
earlier. These appellants can certainly not have any objection with respect
thereto. In fact a finding was rendered in their favour by the High Court
that there was a notice issued as early as in 1978 for seeking reconveyance
of the property in terms of the compromise concerned.
10. The main grievance which Tarabai through her L.Rs have with
respect to the High Court judgment is concerning the finding that there was
no cause of action for Tarabai to move the Civil Court to seek an order of
reconveyance. This observation of the High Court was based on a finding of
fact that the Government had moved to revoke the allotment made to M/s
Basanth Tiles even before the filing of the suit by Tarabai. In fact the
Trial Court had held that the Government and its officers had not acted in
contravention of the compromise. Therefore, there was no reason for the
First Appellate Court to reverse this finding of fact which is based on the
material on record. Thus, there was no breach of the compromise on the part
of the Government which would necessitate her to file a suit for specific
performance. Once it is held that the Government retracted its steps
well in time, there could not be any decree of specific performance based
on the alleged breach of the compromise. The finding of the High Court in
this behalf, therefore, cannot be disturbed at the instance of the
appellant-Tarabai.
11. Similarly, it cannot be disputed that there was no notification
issued for withdrawing the land from acquisition as required under Section
48 of the Land Acquisition Act. The concerned parcel of land, therefore,
continued to remain with the Government. There was undoubtedly delay on
the part of the Government in taking steps which it was expected to take,
namely, to construct the administrative building, but that by itself cannot
be a ground for decree of specific performance. In the circumstances,
there is no substance in the appeal filed by Tarabai through her L.Rs.
12. (i) As far as the appeal filed by M/s Basanth Tiles is concerned,
they cannot be unhappy with respect to the dismissal of the suit filed by
Tarabai. Their only grievance can be with respect to the observations of
the High Court that Government can recover the land from M/s Basant Tiles.
It is submitted on their behalf that these observations could not be made
in a suit filed by Tarabai against the Government. Here we must note that
the sole reason for Tarabai to file her suit was this very allotment. Once
the Government specifically contended and established that steps for
cancellation of the allotment were initiated before filing of the suit, the
suit had to fail. It was accepted by the Government that there was an error
in allotting the land to M/s Basanth Tiles. The claim of M/s Basanth Tiles
could only be through the Government. If there was an error on the part of
Government in making the allotment, the Government could certainly retract
its steps, cancel the allotment and proceed to recover the land, by due
process. M/s Basanth Tiles has not raised any plea such as that of
promissory estoppel against the Government to claim any right. The
observations made by the High Court are to be seen in this context.
(ii) M/s Basanth Tiles were essentially aggrieved by these observations
and not so much with respect to the observations that they were not
entitled to any damages. The High Court has explained as to why no such
claim for damages could be made against the Government in the present suit.

13. Although various authorities were cited on behalf of both the
appellants on certain peripheral issues, inasmuch as the principal issues
involved in the matter were as discussed earlier hereinabove, and since
there was no effective challenge on those aspects, it is not necessary for
us to go into those submissions. We may, however, add that though the
impugned decision arrived at by the learned Judge is a correct one, we wish
that he would have been more careful in the manner in which the judgment is
written.
14. Both the appeals are, therefore, dismissed, though without any
order as to costs.

…………..………………………..J.
[ H.L. Gokhale ]

 

………………………………….…..J.
[ Ranjana Prakash Desai ]

New Delhi
Dated : September 3, 2013
———————–
12

 

 

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