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PETITIONER: STATE OF MAHARASHTRA

       Vs.

RESPONDENT: PRAVIN JETHALAL KAMDAR (DEAD) BY LRS.

DATE OF JUDGMENT:       07/03/2000

BENCH: S.S.Ahmad, Y.K.Sabharwal

JUDGMENT:

     Y.K.SABHARWAL J.

     The  respondent,  now  represented through  his  legal heirs,  is the original plaintiff in a suit for  declaration and  possession  filed  against  the appellant  -  State  of Maharashtra  and others.  The suit was filed on 22nd August, 1976,  seeking a declaration that the order dated 26th  May, 1976  by  which  the right of pre-emption was  exercised  by defendants  1  and  2  (State   of  Maharashtra  and  Deputy Collector and Competent Authority Urban Land Ceiling, Nagpur respectively)  to purchase the property in question and  the sale  deed  dated  23rd  August,  1976,  obtained  from  the plaintiff  in pursuance of the said order was null and  void and  do  not  confer  any right title  or  interest  in  the property  in favour of defendants.  A decree for  possession was  also sought against refund of Rs.2,60,000/- received by the  plaintiff under the sale deed dated 23rd August,  1976. The  facts in brief and in respect whereof, there is  hardly any dispute are.

     The Urban Land (Ceiling and Regulation) Act, 1976 (for short,  ’the  Act’)  came  into   force  for  the  State  of Maharashtra  w.e.f.   17th  February, 1976.   The  plaintiff claims  that  he was not holding any land in excess  of  the ceiling  limit prescribed under the Act and, therefore,  was under  no obligation to file a return under Section 6(1)  of the  Act  before  the competent  authority.   The  plaintiff wanted  to  sell  the  suit property to  his  relations  and business   acquaintances  with  whom  he  entered  into   an agreement  of  sale dated 31st March, 1976 for sale  of  the suit property for consideration of Rs.  2,60,000/-.  Section 27(1)  of the Act required the plaintiff and the prospective purchaser  to obtain permission from the competent authority under  the Act to sell the suit property.  According to  the plaintiff,  the application for grant of the said permission to  sell the property to prospective purchaser was  rejected by the competent authority by order dated 26th May, 1976 and further by the same order, the competent authority exercised option  to  buy  the  property on behalf  of  the  State  of Maharashtra.    The   plaintiff  was    offered   the   same consideration  which was to be paid to the plaintiff by  the prospective  purchaser, i.e., Rs.2,60,000/-.  Thus, pursuant

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to  the order dated 26th May, 1976, passed under Section  27 of the Act, a sale deed dated 23rd August, 1976 was executed between  the  plaintiff  and the State  of  Maharashtra  and possession  was also taken over by defendant no.  3, namely, Deputy  Commissioner of Sales Tax, Eastern Division, Nagpur. Since  then, the suit property is in possession of defendant no.  3.

     In  Maharao Sahib Shri Bhim Singhji v.  Union of India and Ors.  [(1981) 1 SCC 166], this Court upheld the validity of  the  Act  except  Section  27(1)  insofar  as  the  said provision  imposed a restriction on transfer of any urban or urbanisable  land  with  a  building or a part  of  on  such building, which was within the ceiling limit.  Section 27(1) to  the extent it sought to affect the right of a person  to dispose  of his urban property within the ceiling limit  was held  invalid.   In  view of this  decision,  the  plaintiff claimed  in the suit that the order dated 26th May, 1976 and sale  deed  executed pursuant thereto on 23rd  August,  1976 were  null and void since what was sought to be sold to  the prospective  purchaser  was the property within the  ceiling limit  and  the  plaintiff  was  entitled  to  a  decree  of declaration  that  the impugned order and the sale deed  are illegal  and invalid and do not confer right of ownership on defendants.   The  possession  taken pursuant to  above  was claimed  to be illegal and thus the plaintiff is entitled to recovery  of possession besides damages for wrongful use and occupation  at  the  average  market  rental  value  of  the property.   It has also been pleaded that the plaintiff  was ready and willing to return the amount of Rs.2,60,000/- paid to him under the sale deed dated 23rd August, 1976.

     The  suit  was dismissed by the trial court.   In  the appeal  reversing the decision of the trial court, the  High Court  has  passed a decree for possession in favour of  the plaintiff  on his deposit of sum of Rs.2,60,000/- which  has been  directed  to  be paid  to  the  defendants/appellants. Under  these  circumstances,  the State of  Maharashtra  has filed the present appeal.

     Article  58  of the Limitation Act,  1963,  prescribes limitation  of  three years from the date when the right  to sue  first  accrues to obtain a declaration.  Under  Article 65,  the  period of limitation prescribed for filing a  suit for possession of immovable property or any interest therein based  on title is 12 years from the date when possession of the  defendants  becomes  adverse  to  the  plaintiff.   The contention  urged on behalf of the State Government was that Article  58  of  the Limitation Act was  applicable  as  the plaintiff had sought declaration about the invalidity of the order  dated 26th May, 1976 and sale deed dated 23rd August, 1976 and that the period of limitation of three years had to be  computed  from 26th May, 1976 and, therefore,  the  suit filed  on  22nd August, 1988 was hopelessly barred by  time. This  contention  was rejected by the High Court as also  by the  trial  court.   The contention urged on behalf  of  the plaintiff  and  which has been accepted is that the suit  is basically  for  possession of the property based upon  title and  the  sale  deed dated 23rd August, 1976 and  the  order dated  26th  May,  1976  being void ab  initio  and  without jurisdiction,  a plea about its invalidity can be raised  in any  proceedings  and  it  is not  necessary  to  claim  any declaration  and  thus Article 65 which deals with suit  for possession based on title would be applicable from the date, the  possession  of  the defendant becomes  adverse  to  the

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plaintiff.   The  High Court held that in view of the  order and   the  sale  deed  being   null  and  void  and  without jurisdiction,  the same have no existence in the eyes of law and  the  plea  about invalidity of these documents  can  be raised  in  any proceedings and no separate  declaration  is necessary  to  be  sought.   It   held  that  the  suit  for possession would be governed by Article 65 of the Limitation Act,  1963.  It was further held that a suit is within  time even  from the date when the possession of the suit property was  taken on the execution of the sale deed on 23rd August, 1976.

     As  already  noticed, in Bhim Singhji’s case  (supra), Section  27(1)  insofar  as  it  imposes  a  restriction  on transfer of any urban or urbanisable land with a building or a  portion  of  such building, which is within  the  ceiling area,  has  been held to be invalid.  Thus, it has not  been and  cannot be disputed that the order dated 26th May, 1976, was  without  jurisdiction and nullity.  Consequently,  sale deed  executed  pursuant to the said order would also  be  a nullity.   It was not necessary to seek a declaration  about the  invalidity  of the said order and the sale  deed.   The fact  of plaintiff having sought such a declaration is of no consequence.    When  possession  has   been  taken  by  the appellants  pursuant  to void documents, Article 65  of  the Limitation  Act  will apply and the limitation to  file  the suit  would be 12 years.  When these documents are null  and void,  ignoring them a suit for possession simpliciter could be filed and in the course of the suit it could be contended that these documents are nullity.  In Ajudh Raj and Ors.  v. Moti  S/o Mussadi [(1991) 3 SCC 136] this Court said that if the order has been passed without jurisdiction, the same can be  ignored as nullity, that is, non-existent in the eyes of law  and is not necessary to set it aside;  and such a  suit will  be governed by Article 65 of the Limitation Act.   The contention  that the suit was time barred has no merit.  The suit  has  been rightly held to have been filed  within  the period prescribed by the Limitation Act.

     Next,  it  was  contended that simply  on  account  of Section  27(1)  to  the  extent  stated  above  having  been declared  unconstitutional,  it  does not  follow  that  the petitioner is entitled to equitable relief particularly when he  accepted  the sale consideration and executed  the  sale deed.   Reliance has been placed on the decision of Mafatlal Industries  Ltd.   and  Ors.   v.  Union  of  India  &  Ors. [(1997)  5  SCC 536] holding that  equitable  considerations cannot  be held to be irrelevant in case of claim for refund under  Section 72 of the Contract Act or in a writ  petition filed under Article 226 or 32 of the Constitution.  That was a  case where refund was not directed despite invalidity  of the provisions under which duties had been paid or collected as  person  claiming the refund had passed on the burden  of duty  to  others and had not suffered any prejudice or  loss and,  therefore,  no directions were issued for refund.   It was held that under these circumstances there is no question of reimbursement to such a person.  The principles laid down in  Mafatlal  Industries’ case have no applicability to  the facts  of  the  present case.  It cannot be  said  that  the plaintiff has not suffered any prejudice or loss.  It is not a  case  of a voluntary sale.  The plaintiff had to  execute the  sale  deed  on  account  of  an  illegal  and   without jurisdiction  order  made under Section 27(1) of the Act  in respect  of  property  within  the ceiling  limit.   If  the plaintiff  has  retained the sum of Rs.2,60,000/- all  these

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years,  at the same time, defendants have also retained  the possession  of  the property.  The plaintiff on his own  did not  want to sell the property to the defendants/appellants. The  fact that the same amount of consideration as mentioned in  the  agreement of sale was paid to the plaintiff by  the defendants,  is of no relevance.  On the facts of the  case, it   cannot   be  held  that   there   are   any   equitable considerations  against the plaintiff to warrant the  denial of relief of possession granted to him by the High Court.

     For  the  foregoing reasons, the appeal  is  dismissed leaving the parties to bear their own costs.