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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION  

CIVIL APPEAL Nos. 7630­7631  OF 2019 (Arising out of S.L.P.(C) Nos. 29205­29206 of 2015)

SMT. NARAYANAMMA & ANR. Etc. Etc.      .... APPELLANT(S)                             

VERSUS

SRI GOVINDAPPA & ORS. Etc. Etc.         .... RESPONDENT(S)

J U D G M E N T   

B.R. GAVAI, J.

    Leave granted.

2. The present appeals arise out of the common judgment

and order passed by the Single Judge of the Karnataka High

Court in Regular Second Appeal No. 1925 of 2008 and Regular

Second Appeal No. 1834 of 2008 thereby dismissing both the

appeals.

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3. For the sake of convenience, the parties shall be

referred hereinafter as per their status shown in the plaint

before the trial court. The suit O.S. No. 93/1999 was filed by

the plaintiff  Govindappa,  who is  the son of Bale Krishnappa.

Originally the suit property belonged to one Bale

Venkataramanappa, who was the brother of Bale Krishnappa.

Said Bale Venkataramanappa has entered into an agreement to

sell with the plaintiff, specific performance of which is sought in

the present suit. The son of the Bale Venkataramanappa, M.V.

Nagaraj was defendant No. 1, who has been represented

through Legal representatives in the appellate courts since

deceased. The wife and daughter of Anjanappa, who was

another son of Venkataramanappa are the defendant Nos. 2 & 3

to the suit respectively. The daughter and wife of Bale

Venkataramanappa are defendant Nos. 4 & 5 to the suit

respectively. The R.S.A. No. 1925/2008 is filed by the original

defendant Nos. 4 & 5, who are daughter and wife of Bale

Venkataramanappa. The R.S.A. No. 1834/2008 has been filed

by the legal representatives of the original defendant  No. 1,

M.V. Nagaraj and the original defendant Nos. 2 & 3, who are

wife and daughter of Anjanappa. The suit  was filed  inter alia

contending that the defendants did not come forward to execute

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the  sale  deed  in respect  of the  agreement to sell.  After the

notice was issued by the Civil Judge (Junior Division) & JMFC,

Hoskote,  the defendants appeared before the Court.  However,

they did not file the written statement. The power of attorney

holder of the plaintiff  is examined as PW­1. The plaintiff  also

examined two witnesses in support of his case, i.e., PW­2 and

PW­3. He produced documentary evidence Exhibits P­1 to P­34

in support of his case. The defendants did not cross­examine

the plaintiff. The trial court, upon appraisal of Exhibit P­1, i.e.,

the agreement to sell dated 15.05.1990, held that the suit

property was granted in favour of the defendant and as per the

grant certificate, there was a 15 years bar on alienation of the

suit property. The period of the said bar was to expire on

13.10.1988. It was, therefore, held by the trial Judge that since

the said agreement was executed during the non­alienation

period of 15 years, the agreement was void and non­executable.

It was held that since the said agreement was contrary to the

statutory bar, it was void in law and as such the suit for specific

performance of the contract was not maintainable.

4.      Being aggrieved thereby, the plaintiff filed Regular Appeal

No. 86 of 2004 before the Principal District & Session Judge,

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Bangalore.  Before the appellate  court, though the defendants

had put  in their  appearance, the Advocate did not appear to

argue the matter.  The first appellate court held that the father

of Original defendant No. 1, namely, Bale Venkataramanappa,

had mortgaged the suit property by a registered mortgage deed

on 23.04.1990. It further held that on 15.05.1990 he had also

entered into  an  agreement to sell  with the  plaintiff.   It  was

further held that, the entire sum of Rs. 46,000/­ agreed to be

paid to  Bale Venkataramanappa was received by him.  It  was

further found that the plaintiff had already been put in

possession of the suit property. The first appellate court held

that, the reasoning of the trial court that the  non­alienation

clause prohibits alienation was not apt. On this reasoning, the

appeal was allowed.

5.      Being aggrieved by the judgment and order passed by the

first appellate court, the original defendant Nos. 4 and 5 had

filed Regular Second Appeal No. 1925 of 2008 whereas,  legal

representatives of defendant No. 1 and original defendant Nos. 2

and 3 have filed Regular Second Appeal No. 1834 of 2008.  Two

points were raised before the High Court on behalf of the

defendants.  Firstly, that  the suit  which was  filed  in the year

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1999 for specific performance of agreement to sell entered into

on 15.05.1990 was beyond limitation. Secondly, that in view of

provisions of  Section 61 of the Karnataka Land Reforms Act,

1961 (hereinafter referred to as “the Reforms Act”), the

agreement was not enforceable. The High Court observed that,

as a matter of fact, the trial  court ought not to have  framed

such an issue. It further observed that, though in the suit for

specific performance of contract it was necessary to frame the

issue with regard to readiness and willingness of the plaintiff to

perform his part of the contract along with other issues, neither

the trial court nor the first appellate court had framed such an

issue. According to the High Court, in the absence of the

defendants neither filing the written statement nor contesting

the suit, the finding as recorded by the first appellate court was

correct in law. The High Court concurred with the finding of the

first appellate court that since the entire amount was received

by Bale Venkataramanappa, father of defendant No.1, and also

from the recital of the agreement to sell, it was clear that the

possession was also handed over. As such, the High Court held

that the finding of the first appellate court was correct. Being

aggrieved thereby,  defendants have approached this Court.

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6. Mr.  Shailesh  Madiyal, learned counsel appearing  on

behalf of the defendants (appellants herein), submitted that in

view of the  provisions  of  Section  61 of the  Reforms Act, the

predecessor­in­interest of the defendants, i.e., Bale

Venkataramanappa could not have transferred the said land, as

such, the agreement to sell was void in law and, therefore, not

enforceable. He submitted that the finding as recorded by the

trial Judge was correct in law, which ought not to have been

interfered with by the first appellate court. It is further

submitted that the High Court was also not correct in law in

upholding the finding of the first appellate court.

7. The original plaintiff (respondent(s) herein), on the

contrary, submitted that the  provisions  of  Section  61  of the

Reforms Act would prohibit only the sale, gift, exchange,

mortgage, lease or assignment and would not prohibit an

agreement to sell. It is submitted that once the period of

restriction of  15 years is  over, the agreement  to  sell, though

executed during the period of 15 years, becomes enforceable in

law. It is submitted that, in the present case, Bale

Venkataramanappa had received the entire consideration and

had also handed over the possession as per the agreement to

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sell. It is further submitted that, the pleadings in the plaint were

not controverted by either filing written statement nor leading

any evidence and in this view of the matter, the first appellate

court and the High Court were justified in decreeing the suit.

8. The facts in the present case are not in dispute. On

20.10.1976, the suit property, i.e., 1 acre 6 guntas  bearing

Survey No. 57 situated at Mutkur Village, Angondanahalli Hobli,

Hoskote Taluk, Bangalore District, was given as a grant in

favour of  Bale Venkataramanappa. The said grant was under

the provisions of the Reforms Act. On 13.09.1983, the premium

was paid by Bale Venkataramanappa and the grant was

confirmed in his favour with a non­alienation clause of 15 years.

On  15.09.1983, there was a mutation entry in the revenue

records entering the name of said Bale Venkataramanappa with

an endorsement that the land shall not be alienated for a period

of  15  years.  On 23.04.1990,  Bale  Venkataramanappa,  by  a

registered mortgage deed, mortgaged the suit land in favour of

the  plaintiff for  a  sum of  Rs.  20,000/­.  The  mortgage  deed

recites about the receipt of the entire mortgaged amount by Bale

Venkataramanappa. Under the mortgage deed, Bale

Venkataramanappa had agreed to repay the loan within a

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period of one year. However, within a period of one month,  Bale

Venkataramanappa executed an agreement to sell dated

15.05.1990 in favour of the plaintiff. The agreement to sell

recites that he was in need of money for his legal necessities

and to repay his hand loans and for his domestic needs and,

therefore, he had agreed to sell the suit property for a sum of

Rs. 46,000/­. He acknowledges the receipt of entire amount of

consideration, i.e., Rs. 46,000/­.   The recital in the agreement

to sell reads that at the time of execution of the agreement, the

possession of the suit property is handed over to the plaintiff.

Further, the recital reads that the plaintiff shall take the

consent of the officers of the Tribunal or the concerned officers

at his own cost for transferring the property in the name of the

plaintiff.

9. It could thus be seen that, initially the property was

mortgaged on 23.04.1990, and within a period of one month the

agreement to sell is executed.  At the time  of the  agreement

itself, the entire consideration amount is said to  have been

received by Bale Venkataramanappa and also the possession is

handed over to the plaintiff.

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10. It  appears, that there  were  also  parallel  proceedings

before the revenue authorities. After the death of Bale

Venkataramanappa, the plaintiff filed an application on

12.05.1997 before the Tehsildar, Hoskote, for mutating his

name in place of Bale Venkataramanappa. The Tehsildar,

without any notice, carried out the mutation and entered the

name of the plaintiff in the revenue records.  The  defendants

challenged the same before the Assistant Commissioner,

Doddabalapura Division. The said appeal was allowed on

27.06.2008.   Accordingly, the revenue records were corrected

and the defendants’  names were  entered on 24.10.2009.  The

said Order came to be challenged by the plaintiff before the High

Court by way of Writ Petition Nos. 22243­22244 of 2011. The

High Court  vide  Order dated 26.07.2011,  dismissed  the said

petitions.

11. The short question that arises for consideration in the

present appeals is, as to whether the agreement to sell dated

15.05.1990 executed by Bale Venkataramanappa in favour of

the plaintiff would be enforceable in law or not.

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12. For appreciating the said issue, it would be necessary

to refer to Section 61 of the Reforms Act, which reads thus:

“61. Restriction on transfer of land of which tenant has become occupant.—

(1) Notwithstanding anything contained in any law, no land of which the occupancy has been granted to any person under this Chapter shall, within fifteen years from the date of the final order passed by the Tribunal under sub­section (4) or sub­section (5) or sub­section (5A) of section 48A be transferred by sale, gift, exchange, mortgage, lease or assignment; but the land may  be  partitioned among members of the  holder’s joint family,

(2) Notwithstanding anything contained in sub­section (1), it shall be lawful for the occupant registered as such or his successor­in­title to take a loan and mortgage or create a charge on his interest in the land in favour of the  State  Government, a financial institution, a co­ operative land development bank, a co­operative society or a company as defined  in Section 3 of the Companies Act, 1956 in which not less than fifty one per cent of the paid­up share capital is  held by  the State Government or a Corporation owned or controlled by the Central Government or the State Government or both for development of land or improvement  of agricultural  practices; or for raising educational loan to prosecute the higher studies of the children of such person and without prejudice to any other remedy provided by any law, in the event of his making default in payment of such loan in accordance with the terms and conditions on which such loan was granted, it shall be lawful to cause his interest in the land to be attached and sold and the proceeds to be utilised in the payment of such loan.

Explanation. –  For the  purpose  of this sub­section, “Higher Studies” means the further studies after Pre­ university Examination or 12th  Standard Examination conducted by CBSE or ICSE or any Diploma courses.

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(3) Any transfer  or  partition of land  in contravention of Sub­section  (1)  shall  be  invalid and such  land shall vest in the State Government free from all encumbrances and shall be disposed in accordance with the provisions of Section 77.”

13. A perusal of the said provision would clearly show that,

notwithstanding anything contained in any law, no land of

which the occupancy has been granted to any person under the

said Chapter shall, within 15 years from the date of the final

order passed  by the  Tribunal  under sub­section (4) or sub­

section (5) or sub­section (5­A) of Section 48­A of the Reforms

Act be  transferred by sale,  gift,  exchange,  mortgage, lease or

assignment.   However, the land may be partitioned among

members of the holders of the joint family. No doubt, that sub­

section (2) of Section 61 of the Reforms Act permits the

registered occupant or his successor­in­title, to take a loan and

mortgage or create a charge on his interest in the land in favour

of the State Government, a financial institution, a  co­operative

land development bank, a co­operative society or a company as

defined in Section 3 of the Companies Act, 1956 in which not

less than 51% of the paid­up share capital is held by the State

Government or a Corporation owned or controlled by the

Central Government or the State Government or both. However,

such a loan can be taken only for the purpose of development of

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land or improvement of agricultural practices or for raising

educational loan to prosecute higher studies of the children of

such person. It further provides that, in the event of  such a

person making default in payment of such loan in accordance

with the terms and conditions on which such loan was granted,

it shall be lawful to cause his interest in the land be attached

and sold and the proceeds to be utilised in the payment of such

loan.   Sub­section (3) of the said Section specifically provides

that any transfer or partition of land in contravention of sub­

section (1) shall be invalid and such land shall vest in the State

Government free, from all encumbrances and shall be disposed

in accordance with the provisions of Section 77 of the Reforms

Act.

14. This Court in the case of  Kedar Nath Motani and Ors.

vs.   Prahlad  Rai  and  Ors.1  had  an  occasion to consider the

question of application of the maxims ex turpi causa non oritur

actio and ex dolo malo non oritur actio. This Court has referred to

various English judgments in paragraphs 11, 12 and 14, which

read thus:

“11.  Coming now to the question whether the appellants' suit was rightly dismissed by the High Court on the

1 (1960) 1 SCR 861

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application of the maxim, ex turpi causa etc., we have first to see what are the specific facts on which this contention is based. The case of the appellants was that the property was taken benami in the names of Prahlad Rai and others to avoid the implication of clause 16. In making the application to the Bettiah Raj the signatures of Prahlad Rai and others were made by Radhumal or someone under his instructions, because the relationship between Radhumal, Prahlad Rai and others was so intimate that it was considered unnecessary to trouble them. Inasmuch, as the matter was brought to the notice of the Assistant Manager of the Court of Wards, all these facts were capable of being investigated, including the making of the signatures by Radhumal. No doubt, the making of the signatures of another person without his consent, express or implied, is an offence under the ordinary law, but the intention was not so  much to forge the signatures  but to  present the application in the names of those persons. However it be, we proceed on the assumption that there was some illegality committed  by  Radhumal in approaching the  Bettiah  Raj and also in the execution of the B.H. forms, which were also signed with the names of these persons. The question  is whether this illegality is sufficient to non­suit the plaintiffs on the application of the maxim.

12.  The law was stated as far back as 1775 by Lord Mansfield in Holman v. Johnson,  (1775) 1 Cowp 341, 343 : 98 ER 1120, 1121,  in the following words:

“The principle of public policy is this; ex dolo malo non oritur actio. No Court will lend its aid to a man who founds  his cause  of action  upon an immoral or an illegal act. If, from the plaintiff's own stating or otherwise, the cause of action appears to arise ex turpi causa,  or the  transgression of  a  positive law of this country, there the Court  says he has no right to be assisted. It is upon that ground the Court goes; not for the sake of the defendant, but because they will  not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally in fault, potior est conditio defendentis.”

There are, however, some exceptions or “supposed exceptions” to the rule of turpi causa. In Salmond and

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William on Contracts, four such exceptions have been mentioned, and the fourth of these exceptions is based on the right of restitutio in integrum, where the relationship of trustee and beneficiary is involved. Salmond stated the law in these words at p. 352 of his Book (2nd Edn.):

“So if A employs B to commit a robbery, A cannot sue B for the proceeds. And the position would be the same if A were to vest property in B upon trust to carry out some fraudulent scheme: A could not sue B for an account of the profits.  But  if  B, who is A's agent or trustee, receives on A's account money paid by C pursuant to an illegal contract between A and C the position is otherwise and A can recover the property from B, although he could not have claimed it from C. In such cases public policy requires that the rule of turpis causa shall be excluded by the more important and imperative rule that agents and trustees must faithfully perform the duties of their office.”

Williston in his Book on Contracts (Revised Edn.), Vol. VI, has discussed this  matter  at  p.  5069,  para 1785 and  in paras 1771 to 1774, he has noted certain exceptional cases, and has observed as follows:

“If recovery is to be  allowed  by either partner or principal in any case, it must be where the illegality is of so light or venial a character that it is deemed more opposed to public policy to allow the defendant to violate his fiduciary relation with the plaintiff than to allow the plaintiff to gain the benefit of an illegal transaction.”

Even in India, certain exceptions to the rule of turpi causa have been accepted. Examples of those cases are found in Palaniyappa  Chettiar   v.   Chockalingam Chettiar  (1920) ILR 44 Mad 334] and Bhola Nath v. Mul Chand, (1903) ILR 25 All 639.

14. Recently, the Court of Appeal in Bowmakers Ltd. v. Barnet Instruments, Ld.  (1945) 1 KB 65] reviewed the law on the subject, and laid down that every illegality did not entitle the Court to refuse a judgment to a plaintiff. Du Parcq, L.J., observed as follows:

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“In our opinion, a man's right  to possess his own chattels will as a general rule be enforced against one who, without any claim of right, is detaining them, or has converted them to his own use, even though it may appear either from the pleadings, or in the course of the trial, that the chattels in question came into the defendant's possession by reason of an illegal contract between  himself and the  plaintiff, provided that the plaintiff does  not seek, and is  not forced, either to found his claim on the illegal contract or to plead its illegality in order to support his claim.”

We are aware that Prof. Hamson has criticised this case in (1949) 10 Cambridge Law Journal, 249, and has forborne its application, except in the clearest possible circumstances. The law has been also considered by Pritchard, J., in Bigos v. Bousted (1951) 1 All ER 92, where all the authorities are referred to.”

15. The three­Judge Bench of this Court, after referring to

the aforesaid judgments, speaking through M. Hidayatullah, J.

(as His Lordship then was), observes thus:

“15.  The correct position  in law, in our opinion,  is that what one has to see is whether the illegality goes so much  to the  root  of the  matter that the  plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. If the illegality be trivial or venial, as stated by Williston and the plaintiff is not required to rest his case upon that illegality,  then public policy demands that the defendant should not be allowed to take advantage of the position.  A strict view, of course, must be taken of the plaintiff's conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis­stating the facts. If, however, the matter is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff  recanted before the  illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail.”

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16. It could thus be seen, that this Court has held that the

correct position of law is that, what one has to see is whether

the illegality goes so much to the root of the matter that the

plaintiff cannot bring his action without relying upon the illegal

transaction into which he had entered. This Court further held,

that if  the illegality is trivial  or venial and the plaintiff is not

required to rest his case upon that illegality, then public policy

demands that the defendant should not be allowed to take

advantage of the position. It has further been held, that a strict

view must be taken of the plaintiff’s conduct and he should not

be allowed to circumvent the illegality by resorting to some

subterfuge or by misstating the facts. However, if the matter is

clear and the illegality is not required to be pleaded or proved as

part of the cause of action and the plaintiff recanted before the

illegal purpose is achieved, then, unless it be of such a gross

nature as to outrage the conscience of the Court, the plea of the

defendant should not prevail.

17. Subsequently, another three­Judge Bench of this

Court in  Immani Appa Rao and Ors.   vs.   Gollapalli

Ramalingamurthi and Ors.2  again had an occasion to consider

2 (1962) 3 SCR 739

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the issue with regard to applicability of the aforesaid two

maxims. This Court speaking through P.B. Gajendragadkar, J.

(as His Lordship then was) observed thus:

“12.    Reported decisions bearing  on this  question show that consideration of this problem often gives rise to what may be described as a battle of legal maxims. The appellants emphasised that the doctrine which is pre­ eminently applicable to the present case is ex dolo malo non oritur actio or ex turpi causa non oritur actio. In other words, they contended that the right of action cannot arise out of fraud or out of transgression of law; and according to them it is necessary in such a case that possession should rest where  it lies in  pari  delicto  potior  est  conditio  possidentis; where each party is equally in fraud the law favours him who  is  actually in  possession,  or  where  both parties  are equally guilty the estate will lie where it falls. On the other hand, Respondent 1 argues that the proper maxim to apply is nemo allegans suam turpitudinum audiendum est, whoever has first to plead turpitudinum should fail; that party fails who first has to allege fraud in which he participated. In other words, the principle invoked by Respondent 1 is that a man cannot plead his own fraud. In deciding the question as to which maxim should govern the present case it is necessary to recall what Lord Wright, M.R. observed about these maxims in Berg  v. Sadler and Moore, (1937) 2 KB 158 at p. 62. Referring to the maxim ex turpi causa non oritur actio Lord Wright observed that “this maxim, though veiled in the dignity of learned language, is a statement of a principle of great importance; but like most maxims it is much too vague and much too general to admit of application without a careful consideration of the circumstances and of the various definite rules which have been laid down by the authorities”. Therefore, in deciding the question raised in the present appeal it would be necessary for us to consider carefully the true scope and effect of the maxims pressed into service by the rival parties, and to enquire which of the maxims would be relevant and applicable in the circumstances of the case. It is common ground that the approach of the Court in determining the present dispute must be conditioned solely by considerations of public policy. Which principle would be more conducive to, and more consistent with, public interest, that is the crux of the matter. To put it differently,

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having regard to the fact that both the parties before the Court are confederates in the fraud, which approach would be less injurious to public interest. Whichever approach is adopted one party would succeed and the other would fail, and so it is necessary to enquire as to which party's success would be less injurious to public interest.

13.     Out of the two confederates in fraud Respondent 1 wants a decree to be passed in his favour and that means he wants the active assistance of the Court in reaching the properties possession of which has been withheld from him by Respondent 2 and the appellants.  Now,  if the defence raised by the appellants is shut out Respondent 1 would be entitled to a decree because there is an ostensible deed of conveyance which purports to convey title to him in respect of the  properties in  question;  but, in the  circumstances, passing a decree in favour of Respondent 1 would be actively assisting Respondent 1 to give effect to the fraud to which he was a party and in that sense the Court would be allowed to be used as an instrument of fraud, and that is clearly and patently inconsistent with public interest.

14.    On the other hand, if the Court decides to allow the plea of fraud to be raised the Court would be in a position to hold an enquiry on the point and determine whether it is a case of mutual fraud and whether the fraud intended by both the  parties  has  been  effectively carried  out. If it is found that both the parties are equally guilty and that the fraud intended by them has been carried out the position would be that the party raising the defence is not asking the Court's assistance in any active manner; all that the defence suggests is that a confederate in fraud should not be permitted to obtain a decree from the Court because the document of title on which the claim is based really conveys no title at all. It is true that as a result of permitting Respondent 2 and the appellants to prove their plea they would incidentally be assisted in retaining their possession; but this assistance is of a purely passive character and all that the Court is doing in effect is that on the facts proved it proposes to allow possession to rest where it lies. It appears to us that this latter course is less injurious to public interest than the former.”

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18. This Court held that, which principle is to be applied in

the facts of  the case would depend upon the question,  as to

which principle is  more consistent with  public interest. The

Court  finds that,  when both the parties before the Court are

confederates in the fraud, the Court will have to find out which

approach would be less injurious to public interest. The Court

observed that, whichever approach is adopted, one party would

succeed and the other would fail and, therefore, it is necessary

to enquire as to which party’s success would be less injurious to

public interest. The Court in the facts of the said case finds that

if  the decree was to be passed in favour of respondent No. 1

(who was the plaintiff), it would be actively assisting respondent

No. 1 to give effect to the fraud to which he was a party and it

has been held that in that sense the Court would be allowed to

be used as an instrument of fraud  and that is clearly and

patently inconsistent with public interest.

19. It has further been held, that if  both the parties are

equally guilty and the fraud intended by them had been carried

out, the position would be that, the party raising the defence is

not asking the Court’s assistance in any active manner. It has

been held, that all the defence suggested is that a confederate in

fraud shall not be permitted to obtain a decree from the Court

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because the documents of title,  on which the claim is  based

really conveys no title at all.  In the facts of the said case, it was

held, that though the result thereof would be assisting the

defence therein to retain their possession, for such an

assistance would be purely of passive character and all that the

Court would do in effect is that on the facts proved,  it proposes

to allow possession to rest where it lies. It has been held that,

latter course appears to be less injurious to public interest than

the former one. This Court in the said judgment has digested

the English law on the issue in the following paragraphs, which

read thus:

“19.    In support of the contrary view reliance is usually placed on an early English decision in Doe, Dem. Roberts against Roberts, Widow, 106 ER 401 . In that case it was held that “no man can be allowed to allege his own fraud to avoid his own deed; and, therefore, where a deed of conveyance of an estate from one brother to another was executed, to give the latter a colourable qualification to kill game. The document was as against the parties to it valid and so sufficient to support an ejectment for the premises”. In dealing with the question raised Bayley, J. observed “by the production of the deed, the plaintiff established a prima facie title; and we cannot allow the defendant to be heard in a court of justice to say that his own deed is to be avoided by his own fraud;” and Holroyd, J. added that “a deed may be avoided on the ground of fraud, but then the objection must come from a person neither party nor privy to it, for no man can allege his own fraud in order to invalidate his own deed”.

 20.    This decision has, however, been commented on by Taylor in his Law of Evidence. According to Taylor “it seems now clearly settled that a party is not estopped by his deed from avoiding it by proving that it was executed for a

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fraudulent, illegal  or immoral  purpose   [Taylor's “Law of Evidence”,  Vol.  11th,  Edn.  p.  97,  para 93]”.  The  learned author then refers to the case of Roberts, 106 ER 401 and adds “in the subsequent case of Prole v. Wiggins, (1837) 3 Bing. NC 235 : 6 LJCP 2 : 43 R.R. 621, Sir Nicholas Tindal observed that this decision rested on the fact that the defence set up was inconsistent with the deed”. Taylor then adds that “the case, however, can scarcely be supported by this circumstance, for in an action of ejectment by the grantee of an annuity to recover premises on which it was secured, the grantor was allowed to show that the premises were of less value than the annuity, and consequently, that the  deed required enrolment, although  he  had  expressly covenanted in the deed that the premises were of greater value…” According to the learned author “the better opinion seems to be that where both parties to an indenture either know, or have the means of knowing, that it was executed for an immoral purpose, or in contravention of a statute, or of public policy, neither of them will be estopped from proving those  facts  which render the  instrument void  ab initio; for  although a  party  will thus  in curtain  cases  be enabled to take advantage of his own wrong, yet this evil is of a trifling nature in comparison with the flagrant evasion of the law that would result from the adoption of an opposite rule” (p. 98). Indeed, according to Taylor, “although illegality is not pleaded by the defendant nor sought to be relied upon by him by way of defence, yet the court itself, upon the illegality appearing upon the evidence, will  take notice of it, and will dismiss the action ex turpi causa non oritur actio. No polluted hand shall touch the pure fountain of Justice” (p. 93).

21.   To  the same effect is  the opinion of  Story  [Story's Equity Jurisprudence, Vol. I, s. 421; English edition by Randall, 1920, s. 298.] : “In general, where parties are concerned in illegal agreements or other transactions, whether  they are mala prohibita or mala  in se,  courts  of equity following the rule of law  as to participators in a common crime will not interpose to grant any relief, acting upon the known maxim in pari delicto potior est conditio defendentis et possidentis. The old cases often gave relief, both at law and in equity, where the party would otherwise derive an advantage from his inequity. But the modern doctrine  has adopted a  more severely just and  probably politic and moral rule, which is, to leave the parties where it finds them giving no relief and no countenance to claims of this sort.”

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20. It  could thus be seen that,  although  illegality  is  not

pleaded by the defendant nor is relied upon by him by way of

defence, yet the court itself,  upon the illegality appearing upon

the evidence, will take notice of it, and will dismiss the action ex

turpi causa non oritur actio. It has been held, that no polluted

hand shall touch the pure  fountain of justice. It  has  further

been held, that where parties are concerned in illegal

agreements or other transactions, courts of equity following the

rule of law as to participators in common crime will not

interpose  to  grant any relief,  acting  upon the maxim  in  pari

delicto potior est conditio defendetis et possidentis.

21. In the case of Nathu Prasad  vs.  Ranchhod Prasad and

Ors.3  the three­Judge Bench of this Court had an occasion to

consider somewhat similar provisions which read thus:  

“2.  Section 73 of the Revenue Administration and Ryotwari Land Revenue and Tenancy Act, Samvat 2007 (Act No. 66 of 1950) provides:

“No Pakka tenant shall sub­let for any period whatsoever any land comprised in his holdings except in the cases provided for in Section 74.

Explanation.— * * *.”

3 (1969) 3 SCC 11

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Section 74 deals with sub­letting by disabled persons. Since the plaintiff is not a disabled person, the section need not be read. Section 75 provides:

“A sub­lease of the whole or any part of the holding of a Pakka tenant effected properly and legally prior to the commencement of this Act shall terminate after the expiry of the period of sub­lease or 4 years after the commencement of this Act, whichever period is less.”

Section 76 provides:

“(1) If the sub­lessee does not hand over possession of the land sub­let to him after the sub­lease ceases to be in force under Sections 74 and 75 to the lessor or his legal heir … he shall be deemed to be a trespasser and shall be liable to ejectment in accordance with the provisions of this Act. (2) * * *.”

Section 78 provides:

“(1) Any person who in contravention of the provisions of this Act, obtains possession of any land by virtue of a bequest, gift sale, mortgage or sub­lease, or of any agreement purporting to be a bequest, gift, sale, mortgage or sub­lease shall be deemed to be a trespasser and shall be liable to ejectment in accordance with the provisions of Section 58.”

In the said case, the plaintiff/appellant before the  Supreme

Court was a recorded  pattedar  tenant and had granted a sub­

lease of land to respondent Nos. 1 and 2 for five years. The suit

was filed on the ground that sub­lease was in contravention of

Section 73 of the  Revenue Administration and Ryotwari Land

Revenue and Tenancy Act, Samvat 2007 (Act No. 66 of 1950)  and

that the said respondents had trespassed in the land.  The trial

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court had decreed the suit. The first appellate court had also

confirmed the same.   However, the same was reversed by the

High Court in the second appeal. Allowing the appeal and

reversing the judgment of the High Court, this Court held that a

person inducted as a sub­lessee contrary to the provisions of

Section 78 of the Tenancy Act did not acquire any right under a

contract of sub­letting and his possession was not protected.

22. We have to apply the principles of law as deduced by

this  Court in the case  of  Kedar  Nath  and  Immani  Appa Rao

(supra), to the facts of the present case.

23. The transaction between the late Bale

Venkataramanappa and  the  plaintiff is  not  disputed. Initially

the said Bale Venkataramanappa had executed a registered

mortgage deed in favour of the plaintiff.  Within a month, he

entered into an agreement to sell wherein, the entire

consideration  for  the  transfer  as  well  as handing over  of the

possession was acknowledged. It could thus be seen, that the

transaction was nothing short of a transfer of property. Under

Section 61 of the Reforms Act, there is a complete prohibition

on such mortgage or transfer for a period of 15 years from the

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date of grant.  Sub­section (1) of Section 61 of the Reforms Act

begins  with  a  non­obstante  clause. It is thus  clear that, the

unambiguous legislative intent is that no such mortgage,

transfer, sale etc. would be permitted for a period of 15 years

from  the  date of grant.  Undisputedly, even  according to the

plaintiff, the grant is of the year 1983,  as such,  the transfer in

question in the year 1990 is beyond any doubt within the

prohibited period of 15 years. Sub­section (3) of Section 61 of

the Reforms Act makes the legislative intent very clear. It

provides, that any transfer in violation of sub­section (1) shall

be invalid  and  it  also  provides  for the  consequence  for  such

invalid transaction.

24.     Undisputedly, both, the predecessor­in­title of the

defendant(s)  as  well as the  plaintiff, are confederates in this

illegality. Both, the plaintiff and the predecessor­in­title of the

defendant(s) can be said to be equally responsible for violation

of law.  

25. However, the  ticklish question that  arises in such a

situation is: “the decision of this Court would weigh in side of

which party”?  As held by Hidayatullah, J. in Kedar Nath Motani

(supra),  the question that would arise for consideration is as to

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whether the plaintiff can rest his claim without relying upon the

illegal transaction or  as to  whether  the  plaintiff  can rest  his

claim on something else without relying on the illegal

transaction. Undisputedly, in the present case, the claim of the

plaintiff is entirely based upon the agreement to sell dated

15.05.1990, which is clearly hit by Section 61 of the Reforms

Act. There is no other foundation for the claim of the plaintiff

except the one based on the agreement to sell, which is hit by

Section 61 of the Act. In such a case, as observed by Taylor, in

his “Law of Evidence” which has been approved by

Gajendragadkar, J. in Immani Appa Rao (supra), although

illegality is not pleaded by the defendant nor sought to be relied

upon him by  way  of defence, yet the  Court itself,  upon the

illegality appearing upon the evidence, will take notice of it, and

will  dismiss  the action  ex  turpi  causa non oritur  actio i.e.  No

polluted hand shall touch the pure fountain of justice. Equally,

as  observed in  Story’s  Equity  Jurisprudence,  which  again is

approved  in  Immani Appa Rao (supra),  where the parties are

concerned with illegal agreements or other transactions,  courts

of equity following the rule of law as to participators in a

common crime will not interpose to grant any relief, acting upon

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the maxim  in pari delicto potior est conditio defendentis et

possidentis.

26. It could thus be seen that, the trial Judge upon finding

that the agreement of sale was hit by Section 61 of the Reforms

Act, had rightly dismissed the suit of the plaintiff.

27. Now, let  us apply the another test laid  down in the

case of Immani Appa Rao (supra).  At the cost of repetition, both

the parties are common participator in the illegality. In such a

situation, the balance of justice would tilt in whose favour is the

question. As held in  Immani Appa Rao  (supra), if the decree is

granted in favour of the plaintiff on the basis of an illegal

agreement  which is  hit  by  a  statute, it  will  be rendering  an

active assistance of the court in enforcing an agreement which

is contrary to law.   As against this, if the balance is tilted

towards the defendants, no doubt that they would stand

benefited even in spite of their predecessor­in­title committing

an illegality.  However,  what the court would be doing  is only

rendering an assistance which is purely of a passive character.

As held by Gajendragadkar, J. in Immani Appa Rao (supra),  the

first course would be clearly and patently inconsistent with the

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public interest whereas, the latter course is  lesser injurious to

public interest than the former.

28. In the result, the appeals deserve to be allowed and are

accordingly  allowed.  The  judgment and order passed by the

High Court of Karnataka dated 08.06.2015 and the Order

passed by  the Fast  Track Court­III,  Bangalore  Rural  District,

Bangalore,  dated 17.06.2008 are quashed and set aside.  The

order dated 23.01.2004 dismissing the suit passed by the trial

court is upheld.

29. The parties shall bear their own costs.  

…....................J.                              [ARUN MISHRA]

......................J.                              [M. R. SHAH]

         ......................J.                                                    [B.R. GAVAI]

NEW DELHI; SEPTEMBER  26, 2019.