Source: Supreme Court

Why in News?

Recently, the Supreme Court in the matter of Munishamappa v. N. Rama Reddy and others, was hearing the legality of an agreement to sell under Karnataka Prevention of Fragmentation and Consolidation of Holdings Act, 1966.

Background

• As per the order of SC, the appellant and the respondents entered into an agreement to sell, in which the property in question was to be sold.
• The consideration for sale of that property in question was paid and possession of the property in question was also handed over to the appellant.
• However, due to the prohibition on the registration of the sale deed, it was stipulated that the sale deed would be executed once this restriction was lifted.
• The prohibition on the sale was due to a bar contained in Section 5 of the Karnataka Prevention of Fragmentation and Consolidation of Holdings Act, 1966.

Court’s Observation

• The SC held that “The Agreement to sell is not a conveyance; it does not transfer ownership rights or confers any title”.
• The SC further said that the Agreement to Sell cannot be said to be barred under Section 5 of the Fragmentation Act 1966.

Karnataka Prevention of Fragmentation and Consolidation of Holdings Act, 1966

• The preamble of the Act states that this is an Act to provide for the prevention of fragmentation of agricultural holdings and for their consolidation.
• The Act extends to the whole of the State of Karnataka.
• It came into force on 2^nd February 1967.
• It has 48 Sections divided into 6 Chapters and 1 Schedule.

Legal Provision

Section 5 of the Karnataka Prevention of Fragmentation and Consolidation of Holdings Act, 1966: Sale, Lease, etc:

(1)

(a) No person shall sell any fragment in respect of which a notice has been given under sub-section (2) of Section 4, except in accordance with the provisions of clause (b).

(b) Subject to the provisions of Sections 39 and 80 of the Karnataka Land Reforms Act, 1961, whenever a fragment is proposed to be sold, the owner thereof shall sell it to the owner of a contiguous survey number or recognised sub-division of a survey number (hereinafter referred to as the contiguous owner). If the fragment cannot be so sold to the contiguous owner, for any reason, the owner of the fragment shall intimate in the prescribed form, the reasons therefore along with an affidavit in support thereof to the Tahsildar and also send copies of such intimation and affidavit to the Sub-registrar, in the prescribed manner and may thereafter sell such fragment to any other person.

(2) Notwithstanding anything contained in any law for the time being in force or in any instrument or agreement, no such fragment shall be leased to any person other than a person cultivating any land, which is contiguous to the fragment.

(3) No such fragment shall be sub-divided or partitioned.