P.S. Narayana, J.
1. The second appeal is coming under the caption of 'Dismissal' and that at 10.40 a.m., the matter was dismissed for default, but immediately Sri Rajasekhar representing Sri Chandrasekhar, learned Counsel for appellants made a request that he is prepared to argue the matter and also made a request that the order dismissing the second appeal for default may be recalled. Sri Y.V. Srinivasan, learned Counsel representing Sri Chidambaram, learned Counsel for respondent, who is present in the Court, reported no objection and hence the said order is hereby recalled since the same was not signed by that time.
2. Sri Rajasekhar learned Counsel representing the appellants-defendants had pointed out that in the light of the substantial questions of law, which had been raised, the crucial question which may have to be decided is that when the agreement of sale as such is a void transaction, can the refund of amount be ordered in the facts and circumstances of the case. While elaborating his submissions, the learned Counsel had taken this Court through the evidence available on record and had pointed to the relevant portions and would maintain that certain of the admissions made would clearly go to show that the parties had knowledge about the nature of the land even on the date of the transaction and in view of the same, ordering refund is definitely bad in law. The learned Counsel pointed out to the substantial questions of law raised on the strength of which the second appeal was admitted and also further placed reliance on certain decisions.
3. Per contra, Sri Srinivasan, learned Counsel representing Sri Chidambaram, learned Counsel representing the respondent-plaintiff would maintain that on appreciation of evidence of PWs. 1 to 4, DWs. 1 to 3, Exs. A1 to A7 and Exs. B1 to B7 and Exs. Cl and C2, both the Courts came to the conclusion that both in law and equity, refund to be ordered and there is no legal infirmity or any illegality in such a decree which had been made by the Court of first instance and also the appellate Court. The Counsel also would submit that in the light of Section 65 of the Indian Contract Act, 1872, even if the transaction to be treated as void, the opposite party is bound to compensate the same and hence absolutely there is no illegality in the order of refund made in the facts and circumstances of the case. The learned Counsel also relied upon certain decisions to substantiate his submissions.
4. Heard both the learned Counsel perused the oral and documentary evidence and also the findings recorded by the learned Subordinate Judge, Narsapur in OS No. 57 of 1984 and also the findings recorded by the learned District Judge, West Godavari at Eluru in AS No. 188 of 1991.
5. This Court on 3-12-1997 made the following order:
Admit in view of the substantial question of law raised in ground No. 14 of Memorandum of Grounds of Appeal. Notice.
In CMP No. 19378 of 1997, interim stay as prayed for had been granted.
6. The substantial questions of law raised in ground No. 14(a), (b) and (c) read as hereunder:
(a) Whether Courts below having rightly held that Ex. A1 agreement of sale dated 1-7-1981 was in violation of and in contravention of provisions of A.P. Assigned Lands (Prohibition of Transfer) Act 9/1977 and therefore void under Section 3 of the said Act, are still justified in decreeing the suit for alternative relief of refund and alleged consideration without following the decisions reported in 1990 (1) ALT page 290 and 1984 (1) An.WR 50 ?
(b) Whether the Courts below were justified in ignoring the categorical admissions made by PW. 1 in his cross-examination (vide page 14 C.C. of deposition) that he knew that the lands were assigned lands by Government to landless poor persons and are not alienable, and still decreed the suit in favour of such persons who purchased the property with eyes wide open ?
(c) Whether the Courts below were justified in decreeing the suit for relief of alleged refund of amount, when both the parties to the contract are equally guilty and the doctrine of Impais-delicto and relevant principles, Section 23 of Indian Contract Act ?
7. For the purpose of convenience, the parties hereinafter would be referred to as plaintiff and defendants as shown in OS No. 57 of 1984 on the file of Subordinate Judge, Narsapur.
8. The plaintiff filed the said suit praying for the relief of specific performance of possessory sale agreement dated 1-7-1981 executed by defendants in favour of the plaintiff in respect of plaint schedule land, or in the alternative for a decree directing the defendants to repay the sale consideration of Rs. 20,000/- paid by the plaintiff to them together with subsequent interest at 12% from the date of suit till date of payment and creation of charge over the plaint schedule property and for a permanent injunction and certain other ancillary reliefs.
9. It was pleaded in the plaint, which is as hereunder:
The defendants are the owners of the plaint schedule Ac. 1-36 cents of wet land covered by RS No. 455/5B situated in LB. Cherla Village. The defendants agreed to sell the land for Rs. 20,000/- to the plaintiff, took the said amount, delivered possession of the land and executed an agreement of sale on 1-7-1981 agreeing to execute a sale deed in favour of plaintiff or her nominee at her expense and register the same. The plaintiff demanded the defendants several times to execute a sale deed and register the same at her expense, but the defendants on one pretext or the other postponed the same. Finally the plaintiff got issued a registered notice to the defendants on 28-6-1984 demanding them to execute a sale deed at her expense, but they did not do so. The plaintiff was always ready at all material points of time to take registered sale deed from the defendants. She performed her part of the contract. The defendants were never ready to perform their part of the contract. Hence the plaintiff is entitled to seek for specific performance of the contract. Since 1-7-1981 the plaintiff has been in possession of the plaint schedule land on payment of taxes to the Government. The defendants have been declaring that they would trespass into the land and dispossess the plaintiff. Hence the plaintiff is also entitled to sue for a permanent injunction. If, for any reason, the Court comes to the conclusion that specific performance of the contract cannot be granted, the plaintiff is entitled to recover the amount of Rs. 20,000/-from the defendants with interest at 12% from the date of agreement till date of realization and a charge over the plaint schedule land for the said purpose. Interest was, however, claimed only from the date of suit.
10. The 1st defendant filed written statement denying the allegations substantially and no doubt admitting certain of the allegations and the averments are as hereunder:
The allegation in the plaint that the defendants are the owners of the property described in the plaint schedule is not correct. This defendant is the owner of the plaint schedule property as the Government granted patta to this defendant and put her in possession. The 2nd defendant has nothing to do with the plaint schedule property. The plaint allegation that this defendant and the 2nd defendant agreed to sell the plaint schedule property for Rs. 20,000/- to the plaintiff, took the amount of Rs. 20,000/-, delivered possession of the property to the plaintiff and executed an agreement of sale on 1-7-1981 agreeing to execute a registered sale deed in favour of the plaintiff or her nominee at her expense in not at all true and correct. It is true that the plaintiff got issued a registered notice dated 28-6-1984 demanding the defendants to execute a sale deed in her favour. The plaintiff's husband forged the agreement of sale with the help of experienced persons and got issued the said registered notice only two days prior to the filing of the suit without giving an opportunity to the defendants for sending reply notice. This defendant and her son the 2nd defendant never executed an agreement of sale in favour of the plaintiff and never took an amount of Rs. 20,000/- or any other amount from the plaintiff. The plaintiff's husband must have given the registered notice after concocting the suit agreement with the help of an eminent document writer and interested persons as witnesses, with a view to give a colour of reality. This defendant and the 2nd defendant immediately sent reply dated 2-7-1984 stating all the facts and also the fact that the first defendant executed an agreement of sale in favour of one Ponnamanda Venkatanarayana of Pedamunavenilanka on 5-8-1980 for her necessity, for discharge of sundry debts and for meeting medical expenses of her daughter and her protection. This defendant handed over possession of the plaint schedule property on 5-8-1980 to her vendee Ponnamanda Venkatanarayana and received the entire consideration of Rs. 15,000/-. The plaintiff is no other than the wife of this defendant's younger brother. This fact was suppressed not only in the registered notice issued by the plaintiff but also in the plaint. In or about June, 1981, this defendant and the 2nd defendant demanded the plaintiff's husband for an amount of Rs. 1,000/-. On that occasion, by way of security, the plaintiff's husband demanded this defendant and the 2nd defendant to subscribe thumb impression and signature respectively on blank non-judicial stamp stating that promissory notes were not valid in view of A.P. Act No. 7/77. Sometime thereafter both the defendants paid off and on to the plaintiff's husband. Thereafter the defendants demanded for return of the blank stamp paper but it was not so far returned. The plaintiff's husband who is an influential Doctor must have managed to get an agreement of sale written on the blank stamp paper with a view to grab away the plaint schedule property. The plaintiff is not entitled to any of the reliefs claimed in the suit. Therefore the suit may be dismissed with costs.
11. After the issues were settled initially, again paragraph 4(a) had been inserted in the written statement of the 1st defendant with the leave of the Court granted in IA No. 760 of 1986, wherein it was averred that the land covered by the alleged agreement of sale dated 1-7-1981 was given under a patta to the first defendant as she was a landless poor person; that as per the terms and conditions of the patta, the land was inalienable and any sale agreement with regard to the land was void ab initio, that the alleged suit agreement of sale was also against public policy and in contravention of the provisions of A.P. Assigned Lands (Prohibition of Transfer) Act, 1977 and more particularly, Section 3 of the said Act. It was further averred that the claim of the plaintiff for specific performance was against statute and opposed to public policy and as such it could not be entertained and that the alternative relief for refund of the alleged sale consideration which animated from a transaction opposed to public policy and specifically prohibited by the Act 9/77 could not be granted.
12. The plaintiff in the Rejoinder filed averred that the agreement of sale executed by defendants on 1-7-1981 did not disclose that the property was a patta land given to a landless poor person; that the defendants did not give the patta to her; that the defendants, suppressing the true facts, took Rs. 20,000/- and executed the agreement and that the defendants represented that they had full rights to alienate the property. The plaintiff further averred that the defendants are liable for prosecution for cheating her and they have no right to retain Rs. 20,000/- which was paid by her in the event of the Court holding that the transaction was hit by the provisions of A.P. Act 9/77, that a decree has to be passed for refund of the said amount with interest and costs against the defendants creating charge over the plaint schedule land and that even if the provisions of A.P. Act 9/77 applied, the plaintiff is entitled to a decree for permanent injunction against the defendants as they have no right to approbate or reprobate. The plaintiff disputed the averment of the defendants that the suit agreement of sale was opposed to public policy.
13. On the strength of the above pleadings, before the Court of first instance, the following issues were settled:
1. Whether the agreement of sale dated 1-7-1981 alleged to have been executed by the defendants 1 and 2 was true and possession of the plaint schedule land was given to the plaintiff?
2. Whether the second defendant had any rights in the plaint schedule land ?
3. If the agreement of sale dated 1.7.1981 was true, whether the agreement relates to a land for which patta was given to the first defendant as a landless poor person and as such the land was inalienable and as such the agreement was void ab initio or was not valid in law as opposed to public policy in view of Section 3 of A.P. Assigned Lands (Prohibition of Transfer) Act (No.9 of 1977) ?
4. If the agreement was true and valid, whether the plaintiff was always ready and willing to perform her part of the contract and the defendants were at fault in performing their part of the contract ?
5. If the agreement of sale was true and valid, whether the plaintiff is entitled to specific performance of the agreement of sale ?
6. If not, whether the plaintiff is entitled to refund of sale consideration amount of Rs. 20,000/- together with subsequent interest, if any, from the date of suit ?
7. Whether the plaintiff is entitled to the permanent injunction prayed for ?
8. To what relief ?
14. The evidence of PWs. 1 to 4, DWs. 1 to 3 had been recorded, Exs. A1 to A7, Ex. B1 to B7 and Exs.Cl and C2 were marked. The Court of first instance, on appreciation of evidence available on record, came to the conclusion that the agreement of sale is not enforceable and negatived the main relief of specific performance and also the relief of permanent injunction, but, however, granted the alternative relief of refund of the sale consideration of Rs. 20,000/- received under the agreement of sale with subsequent interest at 6% per annum from the date of suit till the date of payment. However, the Court of first instance rejected the prayer of the plaintiff to create a charge over the plaint schedule property for recovery of the said sum and directed the parties to bear their own costs. Aggrieved by the same, the defendants carried the matter by way of appeal AS No. 188 of 1991 on the file of District Judge, West Godavari at Eluru, and the appellate Court at paragraph 13, having framed point for consideration, proceeded to discuss with the oral and documentary evidence commencing from paragraphs 14 to 22 and ultimately dismissed the appeal. Aggrieved by the same, the present second appeal is preferred.
15. The respective pleadings of the parties and the evidence available on record had already been referred to supra.
16. As can be seen from the evidence available on record, several facts are not in serious controversy. Ex. A1 is the possessory agreement of sale dated 1-7-1981; Ex.A2 is the office copy of registered notice dated 28-6-1984; Exs. A3 and A4 are the postal acknowledgements; Ex. A5 is Cist receipt; Ex. A6 is the reply notice dated 2-7-1984 and Ex. A7 is the postal acknowledgment. Apart from this documentary evidence, oral evidence of PW. 1 well supported by the evidence of PWs. 2 to 4 also is available on record. As against this evidence, Ex. B1, the patta issued by the Tahsildar, Narsapur, dated 23-12-1962; Ex. B2 the land revenue receipt, Ex. B4 yet another land revenue receipt, Ex. B3 the patta issued by the Mandal Revenue Officer, Narsapur, Ex. B5 office copy of reply notice, Ex. B6 postal acknowledgement and Ex. B7 the. sale agreement executed by 1st defendant in favour of Venkata Narayana dated 5-8-1980 had been marked.
17. The 1st defendant was examined as DW. 1 further supported by the evidence of DWs.2 and 3 as well. Ex. C1, the white paper containing specimen thumb impression of DW. l taken in open Court on 23-3-1991 and Ex. C2 Vakalat given by the defendants in favour of Sri N.V. Subramanyam, Advocate had been marked. Since the concurrent findings recorded relating to the existence of the agreement of sale Ex. A1 and such findings being factual findings, the same not to be disturbed normally in a second appeal. Hence, the said findings are hereby confirmed.
18. Elaborate submissions were made in relation to the nature of the transaction Ex. A1. The Court of first instance and also the appellate Court arrived at a conclusion that inasmuch as these lands are assigned lands and non-alienable lands by virtue of the prohibition imposed by the Act No. 9 of 1977 of A.P. Assigned Lands (Prohibition of Transfers) Act, 1977, the same cannot be enforced.
19. The husband of the plaintiff was examined as PW. l. He had deposed in detail about the agreement of sale in question and payment of Rs. 20,000/- to defendants 1 and 2 and the witnesses who were present at the that time. This witness also deposed that he had taken possession and he had been ready and willing to take a sale deed, but the defendants had been delaying. This witness also deposed about the issuance of registered notice and the other details in Exs. A1 to A4. In cross-examination this witness deposed that the 1st defendant is his own elder sister and the 2nd defendant is the son of the 1st defendant and he knows the affairs of the family of defendants 1 and 2 and there were no differences between these families prior to the filing of the suit. He had also given several details relating to the bargain and the settlement of price. This witness deposed that he had paid the entire sale consideration of Rs. 20,000/- at the time of agreement of sale and requested the defendants to give sometime for the purpose of obtaining the registered document. This witness also deposed in cross-examination that he was cultivating the land as tenant as such there is no necessity for delivery of physical possession of the land and some of his father's property are adjacent to plaint schedule land and they are in same survey number. This witness deposed that he does not know whether the lands in RS. 455/53 are the lands assigned by the Government to landless poor and he knows that the lands assigned by the Government to landless poor persons are not alienable. Before 1.7.1981 he was aware of the people saying that the lands assigned by the Government to the landless poor persons were alienable and he had seen the concerned Act and he knows the details thereof. This witness also deposed that the 1st defendant was telling them that the plaint schedule land was Jiraithi land and it is mentioned in Ex. A1 that the land was Jiraithi and it was not mentioned in Ex. A1 that Act 9 of 1977 was not applicable. This witness also deposed that he does not know whether the 1st defendant had no right to sell the plaint schedule land because the land was one assigned to a landless poor person. Several other details also had been elicited in the cross-examination of PW. 1.
20. As can be seen from the substantial questions of law specified above and also the contentions advanced by the respective Counsel on record, the only question now to be decided is whether the refund ordered by both the Courts below to be interfered with on the ground that Ex.Al is a void transaction.
21. Section 65 of the Indian Contract Act, 1872 deals with obligation of person who has received advantage under void agreement or contract that becomes void, which reads as hereunder:
When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.
22. In Kuju Collieries v. Jharkand Mines : [1975]1SCR703 , the Apex Court observed as hereunder:
Section 65 makes a distinction between an agreement and a contract. According to Section 2 of the Contract Act, an agreement which is enforceable by law is a contract and an agreement which is not enforceable by law is said to be void. Therefore, when the earlier part of Section 65 speaks of an agreement being discovered to be void, it means that the agreement is not enforceable and is, therefore, not a contract. It means that it was void. It may be that the parties or one of the parties to the agreement may not have, when they entered into the agreement, known that the agreement was in law not enforceable. They might have come to know later that the agreement was not enforceable. The second part of the section refers to a contract becoming void. That refers to a case where an agreement which was originally enforceable and was, therefore, a contract, becomes void due to subsequent happenings. In both these cases, any person who has received any advantage under such agreement or contract is bound to restore such advantage, or to make compensation for it to the person from whom he received it. But where even at the time when the agreement is entered into both the parties knew that it was lawful and, therefore, void, there was no contract but only an agreement and it is not a case where it is discovered to be void subsequently. Nor is it a case of the contract becoming void due to subsequent happenings. Therefore, Section 65 of the Contract Act did not apply.
Strong reliance was placed on the decision of Division Bench of this Court in B. Ramaiah v. Mandal Revenue Officer, Puttaparthi, Ananthapur District and Ors. 1990 (1) ALT 290 and the decision of the learned Judge of this Court in Kammari Balaram v. A. Bhooma Lingam 1984 (1) An. WR 50.
23. There cannot be any doubt or controversy relating to the aspect that in the light of the statutory prohibition imposed by Act 9 of 1977, the agreement of sale cannot be enforced. In fact, these are the concurrent findings which had been recorded both by the Court of first instance and also by the appellate Court. The contention advanced by the learned Counsel for the appellants that the respondent-plaintiff having knowledge about the nature of the land and the statutory prohibition, had entered into Ex. A1. It is true that the parties are close relatives. The husband of the plaintiff as PW. 1 clearly deposed that as far as the nature of the land is concerned, they were not aware, but no doubt the admission was limited to the extent that he was aware that such lands are inalienable. The fact whether this land also was inalienable or not was not within the knowledge of both these parties, the husband and wife, on the date of the transaction Ex. A1. When that is the evidence of PW. 1, this Court is of the considered opinion that the elaborate submissions made in relation thereto by the Counsel for appellants are liable to be rejected and accordingly the same are hereby rejected.
24. Hence, in the light of the view expressed by the Apex Court referred to supra and also Section 65 of the Indian Contract Act, 1872, and further in the light of the concurrent findings which had been recorded by both the Courts below, this Court is thoroughly satisfied that both in law and equity, a just order had been made while ordering the refund with reasonable interest and hence this Court does not see any reason to disturb such concurrent findings which had been recorded by both the Courts below and accordingly the said findings are hereby confirmed.
25. In the result, the second appeal is bound to fail and the same shall stand dismissed. In view of the close relationship between the parties, the parties to the litigation to bear their own costs.