2005 (7) TMI 680 - SC - Indian Laws

Seeking for restoration of lands transferred contrary to Section 4 of Act 2 of 1979 - original allottees who were either scheduled castes or scheduled tribes transferred the property to third parties without obtaining previous permission of the Government - Violations of conditions imposed by the Tahsildar in the Saguvali chit restricting the alienation of such lands by the grantee - HELD THAT - A careful scrutiny of the entire scheme of the rules relating to grant of lease to landless persons would show that the finding of the Full Bench on this issue is legally not sustainable. First of all Rule 43-J is only a general rule which says that the lands which have been given on lease for agricultural purposes could be assigned to the lessees if they complied with the conditions of lease. The title to the land primarily vests with the Government. The Government while granting title to the lessees can impose any conditions which are permissible under law. The land is being given to lessees either free of cost or at a price which is less than the full market price. It is not an outright sale made by the Government for full consideration. In all these cases lands were given almost free of cost. The upset price of the land was either fixed at 200-250 per acre and this 200 itself was waived and the grantee was to remit only 50 per acre. Grantee was to execute Saguvali Chit and it incorporated a condition prohibiting alienation for a period of 15 years. The history of the legislation also would show that the State of Karnataka has all along been giving lands to the landless persons belonging to Scheduled Castes and Scheduled Tribes subject to the restriction on alienation of such land. It is also pertinent to note that the prohibition regarding alienation is a restrictive covenant binding on the grantee. The grantee is not challenging that condition. In all these proceedings challenge is made by the third party who purchased the land from the grantee. The third party is not entitled to say that the conditions imposed by the grantor to the grantee were void. As far as the contract of sale is concerned it was entered into between the Government and the grantee and at that time the third party purchaser had no interest in such transaction. Of course he would be entitled to challenge the violation of any statutory provisions but if the grant by itself specifically says that there shall not be any alienation by the grantee for a period of 15 years that is binding on the grantee so long as he does not challenge that clause more so when he purchased the land inspite of being aware of the condition. The Full Bench seriously erred in holding that the land was granted under Rule 43-J and that the authorities were not empowered to impose any conditions regarding alienation without adverting to Section 4 of the Act 2 of 1979. These lands were given to landless persons almost free of cost and it was done as a social welfare measure to improve the conditions of poor landless persons. When these lands were purchased by third parties taking advantage of illiteracy and poverty of the grantees Act 2 of 1979 was passed with a view to retrieve these lands from the third party purchasers. In any case the High Court failed to take into account the clear language employed in Section 4 according to which any transfer of granted land made either before or after the commencement of this Act in contravention of the terms of the grant of such land shall be null and void(emphasis supplied). The violation of the terms of grant itself gives rise to the action u/s 4 read with Section 5. So long as the terms of the grant prohibiting transfer are not opposed to any specific provision of law they cannot be violated and the transferee gets no rights by virtue of such invalid transfer. That is the sum and substance of Section 4 which has not been duly considered by the High Court. The conditions restricting alienation imposed by the authorities are legally valid and the finding of the Full Bench to the contrary is not correct and the impugned Judgment is thus not sustainable in law. The impugned Judgment is set aside the order passed by the learned Single Judge is upheld and these appeals are allowed. The authorities shall take appropriate steps pursuant to the order passed by the authorities under the Act 2 of 1979 within a period of three months.

Summary

Issues Involved:
1. Validity of conditions restricting alienation of granted lands under Rule 43-J of the Mysore Land Revenue (Amendment Rules), 1960.
2. Interpretation and applicability of Rule 43-G to grants made under Rule 43-J.
3. Legality of transfers made in contravention of the terms of the grant under Section 4 of the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands), Act, 1978.
4. Authority of the government to impose conditions on grants of land and the binding nature of such conditions on grantees and third parties.

Detailed Analysis:

1. Validity of Conditions Restricting Alienation of Granted Lands under Rule 43-J:
The Full Bench of the Karnataka High Court held that lands allotted under Rule 43-J should not have conditions restricting alienation, as Rule 43-J does not specifically provide for such restrictions. The Supreme Court, however, found this view legally unsustainable. It emphasized that Rule 43-J is a general provision allowing authorities to grant land to lessees who have complied with lease conditions. The government, as the paramount title-holder, can impose conditions on such grants, including restrictions on alienation, which are binding on the grantees.

2. Interpretation and Applicability of Rule 43-G to Grants Made under Rule 43-J:
The Full Bench opined that conditions stipulated in Rule 43-G, which includes restrictions on alienation, are not applicable to grants made under Rule 43-J. The Supreme Court disagreed, stating that Rule 43-G's conditions could be imposed on any grant made to a party if the grant is made free of cost or at a price less than the market value. The title to Rule 43-G, which mentions "preceding rules," cannot be used to interpret the rule as excluding Rule 43-J. The marginal notes or side notes are not legitimate aids to construction of the rule.

3. Legality of Transfers Made in Contravention of the Terms of the Grant under Section 4 of Act 2 of 1979:
Section 4 of Act 2 of 1979 states that any transfer of granted land made in contravention of the terms of the grant is null and void. The Supreme Court highlighted that the High Court failed to consider this clear language. The violation of the terms of the grant itself gives rise to action under Section 4, and such conditions are not opposed to any specific provision of law. Therefore, the transfers made in contravention of the terms of the grant are invalid, and the transferees acquire no rights by virtue of such transfers.

4. Authority of the Government to Impose Conditions on Grants of Land and the Binding Nature of Such Conditions on Grantees and Third Parties:
The Supreme Court underscored that the government, while granting land, can impose conditions permissible under law, including restrictions on alienation. These conditions are binding on the grantees, and third parties who purchase the land cannot challenge these conditions. The prohibition on alienation is a restrictive covenant binding on the grantee, and the third party purchaser, aware of the condition, cannot claim that the conditions imposed by the grantor were void. The Court also noted that these lands were granted almost free of cost as a social welfare measure, and Act 2 of 1979 was enacted to retrieve lands from third-party purchasers who exploited the grantees' illiteracy and poverty.

Conclusion:
The Supreme Court set aside the impugned judgment of the Full Bench, upheld the order passed by the learned Single Judge, and allowed the appeals. The authorities were directed to take appropriate steps pursuant to the order passed under Act 2 of 1979 within three months. No order as to costs was made.