Conveyance Takes Place Only At Time Of Registration Of Sale Deed; Need For Sanction For Conveyance Doesn't Bar Agreement To Sell : Supreme Court

The Supreme Court observed that conveyance by way of sale would take place only at the time of registration of a sale deed in accordance with Section 17 of the Registration Act, 1908. Therefore, the Court held that there is no bar for a tribal in Maharashtra to enter into an agreement to sell and seeking advance sale consideration.On this basis, the Court held that a suit for specific performance of an agreement to sell can be decreed subject to obtaining sanction as per the Maharashtra Land Revenue Code for the conveyance of land by a tribal to a non-tribal.The Court further observed that when there is no reason to decline a decree for specific performance of the agreement, the Courts ought to grant the same rather than give an alternative relief. In this judgment, the Division Bench of Justices BV Nagarathna and Augustine George Masih also interpreted Section 36A of the Maharashtra Land Revenue Code. It was noted that the Section does not bar the transfer of land from a Tribal to a Non-Tribal. However, a previous sanction is required before the conveyance of land. The Court observed that the conveyance was only at the time of registration of a sale deed and not before that. Thus, a decree for the specific performance of the sale agreement was granted in favor of the appellant.The Court also relied on Nathulal v. Fulchand, 1969(3) SCC 120. In that case, it was held that the suit can be decreed when an agreement to sell is executed but cannot be specifically performed without sanction. Further, the decree for specific performance can be granted subject to obtaining such sanction from the competent authority. Briefly, in the present case, an agreement to the sale of land was entered between the parties. The land belonged to the defendant. Pursuant to the agreement, the plaintiff/ appellant also paid an advance amount. However, the defendant did not perform his part of the contract to execute the sale deed. Thus, the plaintiff filed the suit seeking the decree for specific performance, and in the alternative, a refund of the advance sale amount along with interest was sought. The trial court refused the decree of specific performance and granted the alternative refund relief. When the matter reached the High Court, the issue was “Whether a decree for specific performance of land to be transferred from tribal to non-tribal can be granted subject to obtaining permission u/s 36A of Maharashtra Land Revenue Code?” The High Court dismissed the appeal, stating that such a decree cannot be granted. However, the decision was overturned when the matter reached the Top Court. The Division Bench noted that Section 36A restricts the transfer to be made by a tribal(defendant) in favor of the non-tribal (plaintiff) through sale, gift, exchange, mortgage, lease or otherwise. However, the Court pointed out that such restriction was to the extent that it required the non-tribal to make an application for a previous sanction before conveyance of a land. Given that the conveyance was only at the time of registration of a sale deed and not before that, the Court held that there is no bar in the present case to enter into a sale agreement. “The conveyance by way of sale would take place only at the time of registration of a sale deed in accordance with Section 17 of the Registration Act, 2008. Till then, there is no conveyance. Therefore, there is no bar for a tribal to enter into an agreement to sell and seeking advance sale consideration.” The Court added that if the defendant had executed the sale deed, the plaintiff would have been duty-bound to comply with Section 36A of the Land Revenue Code and seek the required sanction. “Therefore, on the basis of Section 36A, the trial Court, the first appellate court as well as the High Court could not have declined to grant the decree for specific performance to the plaintiff inasmuch as the considerations under the provisions of the Specific Relief Act, 1963 only had to be made for the purpose of adjudicating the suit between the parties.” “Since there was no reason to decline the grant of a decree under the provisions of the said Act, the trial Court, the First Appellate Court as well as the High Court ought to have granted the said decree rather than granting an alternative relief.” Given this above projection, the Supreme Court modified the impugned judgment while granting a decree of specific performance. Case Title: BABASAHEB vs. RADHU VITHOBA BARDE., Diary No.- 18239 – 2019Citation : 2024 LiveLaw (SC) 225 Click here to read/ download the judgment

Conveyance Takes Place Only At Time Of Registration Of Sale Deed; Need For Sanction For Conveyance Doesn't Bar Agreement To Sell : Supreme Court

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Conveyance Takes Place Only At Time Of Registration Of Sale Deed; Need For Sanction For Conveyance Doesn't Bar Agreement To Sell : Supreme Court

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