THE HON'BLE SRI JUSTICE A.V. SESHA SAI
WRIT PETITION No.6698 of 2008
Between:
K. Venkateswar Reddy PETITIONER AND
1. The State of Andhra Pradesh, rep. by its Secretary, Revenue (Land Acquisition), Secretariat Buildings, Hyderabad, and others.
RESPONDENTS ORDER:
This writ petition, filed under Article 226 of the Constitution of India, challenges the notice vide proceedings Rc.C.A1/128/2007, dated 18.03.2008 issued by the Tahsildar/Mandal Revenue Officer, Gangavaram Mandal, Chittoor District, the 4th respondent herein, ordering resumption of agricultural lands, as illegal, arbitray and violative of Articles 14 and 300-A of the Constitution of India.
2. Heard Sri V. Vinod K. Reddy, learned counsel for the petitioner and learned Government Pleader for Land Acquisition, apart from perusing the material available on record.
3. Filtering the unnecessary details, the facts, which are essential for the purpose of resolving the controversy in the writ petition, are as under:-
In the auction held on 15.10.2003 by the 5th respondent-Bank, the petitioner had also participated and emerged as the highest bidder in respect of the lands admeasuring Ac.2.74 cents in Sy.No.294/3, Ac.4.34 cents in Sy.No.295/1, Ac.4.57 cents in Sy.No.294/7A of Gandrajupalle Village, Gangavaram Mandal, Chittoor District. Subsequently, sale certificates were also issued on 9.01.2004 followed by execution of sale deeds in favour of the petitioners. While the matters stood thus, the 4th respondent-Tahsildar, Gangavaram issued notice to the petitioner under Rule 3 of A.P. Assigned Lands (Prohibition of Transfers) Rules, 2007 (for brevity ‘the Rules), directing the petitioners to show cause as to why the petitioner should not be evicted from the assigned lands. In response to the said show cause notice, the petitioner submitted reply/objections on 11.06.2007. Subsequently, 4th respondent-Tahsildar, Gangavaram, by way of the impugned proceedings Rc.No.A1/128/07, dated 18.03.2008 ordered resumption of the abovementioned lands from the petitioner.
4. Calling in question the validity and legal acceptability of the said proceedings dated 18.03.2008 ordering resumption of the lands from the petitioner, the present writ petition has been instituted.
5. This Court on 28.03.2008 directed the respondents not to dispossess the petitioner from the subject lands. Subsequent to the same, the said interim order was extended on 31.03.2008. This Court issued Rule Nisi on 6.03.2009.
6. It is contended by the learned counsel for the petitioner that the petitioner is a lawful purchaser for a valuable consideration and as such the impugned order, ordering resumption of the subject lands, which the petitioner purchased in the public auction conducted at the instance of the 5th respondent-District Cooperative Central Bank, is illegal and arbitrary and violative of Articles 14 and 300-A of the Constitution of India. It is further contended by the learned counsel that the impugned orders passed by the 4th respondent-Tahsildar are totally one without jurisdiction and the very initiation of proceedings under the Rules is neither sustainable nor tenable in the eye of law.
7. To bolster his submissions and contentions, the learned counsel for the petitioner places reliance on the judgments of this Court in Sub-Registrar, Srikalahasti, Chittoor District v. K. Guravaiah[1] and the unreported judgment in W.P.Nos.14743 and 14753 of 2007 dated 26.07.2007 rendered by this Court.
8. Per contra, it is vehemently argued by the learned Government Pleader for Land Acquisition that the impugned action is strictly in conformity with the provisions of the A.P. Assigned Lands (Prohibition of Transfers) Act, 1977 and the Rules made thereunder. It is further contended that there is neither illegality nor irregularity in the orders and in the absence of any irregularity or illegality the present writ petition filed under Article 226 of the Constitution India, is not maintainable.
9. The material available on record clearly and manifestly discloses that the petitioner purchased the subject property in a public auction conducted by the 5th respondent on 15.10.2003 for sale of mortgage properties. There is also no dispute that the petitioner emerged as highest bidder and in his favour sale deeds were also executed.
10. In the present writ petition, the only question, which boils down for consideration of this Court, is whether the Tahsildar, Gangavaram Mandal, Chittoor District, 4th respondent herein, is justified in initiating the proceedings under the provisions of A.P. Assigned Lands (Prohibition of Transfer) Act, 1997 and the rules framed thereunder.
11. This question is no longer res integra. This Court in the case of Sub-Registrar, Srikalahasti, Chittoor District v. K. Guravaiah case (supra) at paragraphs 14 to 22 held as under:-
“14. One has also to see whether the mortgage created in favour of the bank by the original assignee of the land wasjust, proper and legal. The assignee of the land can raise money by mortgaging the land so as to develop the land or to do some other better financial activity. At the same time, to see that unscrupulous elements do not lend money to the poor assignees so as to have the assigned land transferred in their favour, the mortgage executed in favour of the authorities enumerated in the explanation was not to be treated as ‘alienation’. When mortgage in favour of a cooperative society registered or deemed to have been registered under the provisions of the Co- operative Societies Act is not treated as alienation, in our opinion, mortgage executed in favour of the bank by the original assignee would be absolutely just and legal.
15. Thus, there cannot be any dispute to the fact that the original assignee of the lands in question had mortgaged the land in favour of the bank in an absolutely lawful manner. The afore-stated fact has not been disputed anywhere in the entire proceedings. Thus, we come to the conclusion that the original assignees were authorised to mortgage the assigned lands in favour of the bank because the bank is a cooperative society under the provisions of the Co- operative Societies Act.
16. Once it is held that the mortgage was legal and valid, then one has to look at the natural consequences which would follow when the mortgage money is not repaid by the mortgagor to the mortgage. The term ‘mortgage’ has been defined under Section 58(a) of the Transfer of Property Act, which reads as under:
58. “Mortgage”, “mortgagor”, “mortgagee”, “mortgage-mone” and “mortgaged” defined.
a) A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed.
…… …..
17. Thus, when the property is mortgaged, interest in the property is transferred by the mortgagor to the mortgagee. If the mortgage money is not repaid, the consequences provided in the Transfer of Property Act would naturally follow. We need not go in detail about the same because it is not in dispute that the mortgage money was not paid by the original assignee of the assigned lands to the bank and, therefore, the bank had initiated proceedings under the provisions of the Cooperative Societies Act. The bank ultimately obtained recovery certificate under the provisions of Section 71 of the afore-stated Act and after following legal procedure, the lands in question were put to auction and it is not in dispute that the petitioner was the highest bidder and ultimately, the assigned lands were sold to him. The sale executed in favour of the petitioner was confirmed and a sale-deed had been executed. If the property in the assigned land had been transferred to the petitioner, the revenue record must be completed accordingly by showing the fact that the petitioner is the owner of the land in question.
18. Section 5 of the Act has been enacted with an intention to see that one who wants to transfer the assigned land in contravention of the provisions of the Assigned Lands Act cannot transfer the land further.
Normally, a purchaser of the immovable property would look into the revenue record and after having necessary search, if he finds that the seller is the lawful owner, he would purchase the property, but if he comes to know that the property to be purchased is not in the name of the seller or if there is any charge or burden on the land in question, he would be careful before purchasing the property. The facts with regard to any encumbrance created on the land can be known from the revenue record. So as to see that an assignee of the assigned land, in contravention of the provisions of the Assigned Lands Act, cannot enter into any transaction in relation to the assigned land, so as to dupe someone, Section 5 has been enacted by the Legislature. Thus, Section 5 has been incorporated with an intention to see that the illegality committed by the assignee or the seller of the assigned land is not further perpetuated and to warn the probable purchaser to the effect that the property he is planning to purchase cannot be lawfully purchased by him.
19. Let us consider the provisions of Section 5 of the Assigned Lands Act in the light of the facts of the present case. In the present case, as stated hereinabove, it was open to the original assignees of the land to mortgage the land to the bank by virtue of the definition of Section 2 (1). If the mortgage in favour of the bank was not alienation, there was no restriction with regard to mortgaging the assigned land in favour of the bank. Thus, the mortgage was valid. As the mortgage money was not repaid to the bank, the bank sold the land after following due process of law and thereby the petitioner became a lawful owner of the land in question. In view of the above fact, in our opinion, provisions of Section 5 would not operate because the prohibition is on registration of any document relating to transfer or creation of any interest in assigned land. In the instant case, the transaction in pursuance of which the land had been purchased by the petitioner was valid and not contrary to the provisions of the Assigned Lands Act. In such a case, in our opinion, if the concerned party had approached the District Collector for obtaining prior permission, the District Collector was bound to accord necessary permission in favour of the person seeking such permission. At the most, the authorities could have approached the District Collector for seeking permission under Section 5 and in that event, the District Collector was bound to give permission in view of the fact that the bank, admittedly a co- operative society registered under the provisions of the Co-operative Societies Act, could have become a mortgagee in respect of the assigned land.
20. The submissions made by the learned Government Pleader with regard to sharing of sale proceeds between the creditor bank and the government under G.O.Ms. No. 471, dated 18.6.1977 are not relevant now for the reason that even according to him, the aforestated G.O., which has been referred to in para (6) hereinabove, is no more in force today. On the contrary, the above referred G.O. clearly permits sale of mortgaged land. As the subject G.O. is not in force now, the learned Government Pleader cannot even submit that the sale proceeds of the land in question should be shared by the creditor bank and by the government. Be that as it may, we are not concerned with the sale proceeds, but we are concerned only with registration of the document whereby land has been sold to the petitioner in pursuance of the auction conducted by the bank.
21. Reference to G.O.Ms. No. 1033, dated 21.5.1970 by the learned Government Pleader would also not assist him for the reason that the said G.O. also deals with certain instructions with regard to sale of assigned lands when they are mortgaged by members of persons belonging to Scheduled Castes. In the instant case, at no point of time anyone has referred to caste or creed of the original assignee and in the absence of such material, we do not think it necessary to deal with the said submission also.
22. In view of the above facts, in our opinion, the learned Single Judge was justified in allowing the petition by directing respondent No. 1 to register the sale-deed in accordance with law as Section 5 of the Act would not come in way of the parties in the matter of registration of the document.
12. In the order in W.P.Nos.14743 and 14753 of 2007, dated 26.07.2007 this Court at paragraphs 12, 13 & 14 held as follows:
“The facts of the present case are different.
The petitioners are transferees from the Society, in whose favour the lands were mortgaged. Once the mortgage in favour of the cooperative society is exempted, the other consequential steps taken for, foreclosure of the same, would also stand exempted. The net result is that, if an assigned land comes to be sold, in pursuance of a mortgage, which is exempted under Section 6, it looses the characteristics of assigned land, and the exemption continues to be available to the purchasers from the society or financial institutions, as the case may be.
The ration in Harjana Bazrappa’s case (2 supra) has no application to the facts of this case. The prohibition contained in Section 3 of the Act, was reiterated and the exemption under Section 6 of the Act was, neither claimed, nor was dealt with.
For the foregoing reasons, the writ petitions are allowed, and it is directed that the properties purchased by the petitioners, in the sales conducted by the District Co-operative Central Bank Ltd., Chittoor, shall not be treated as assigned lands, and the documents presented for transfer, shall be entertained by the 1st respondent, and processed, in accordance with law.”
13. In view of the law laid down by this Court in the above referred judgments, this Court has absolutely no scintilla of hesitation to hold that the impugned orders passed vide proceedings Rc.No.A1/128/07, dated 18.03.2008 cannot be sustained in the eye of law.
14. For the aforesaid reasons, this writ petition is allowed and the proceedings Rc.No.C.A1/128/2007, dated 18.03.2008 are hereby set aside. It is made clear that if the respondent-authorities require the lands for any public purpose, this order will not preclude them from acquiring the lands by initiating proceedings under the relevant legislation, in accordance with law. No order as to costs. As a sequel, the miscellaneous petitions, if any, shall stand closed.
JUSTICE A.V. SESHA SAI.
1st September, 2014 Js.
[1] 2009 (2) ALD 250 (DB)