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CASE NO.: Appeal (civil)  4308-4310 of 1998

PETITIONER: Guntaiah & Ors.                                           

RESPONDENT: Hambamma & Ors.                                          

DATE OF JUDGMENT: 22/07/2005

BENCH: K.G. BALAKRISHNAN & P. VENKATARAMA REDDI

JUDGMENT: J U D G M E N T WITH

CIVIL APPEAL NOS. 6044-6047/1998

K.G. BALAKRISHNAN, J.

       All these appeals have been filed against the common Judgment  passed by the Full Bench of the  Karnataka High Court in five Writ Appeals.

       Under the Mysore Land Revenue (Amendment Rules), 1960  [hereinafter being referred to as "Rules of 1960"], certain lands were  granted to members of Scheduled Castes and Scheduled Tribes.  Initially,  these lands were given to them on temporary lease and later by virtue of  Rule 43-J of Rules of 1960, these lands were given to them permanently  with a restriction that the grantees shall not alienate these lands to third  parties for a period of 15 years.  These lands were granted to them during  the period 1959-65.  The Karnataka Scheduled Castes and Scheduled Tribes  (Prohibition of Transfer of Certain Lands), Act, 1978 [hereinafter being  referred to as "Act 2 of 1979"] came into force on 1.1.1979.  Section 4 of  this Act is to the effect that any transfer of granted land made either before  or after the commencement of the Act, in contravention of the terms of the  grant of such land or the law providing for such grant, shall be null and void  and no right, title or interest on such land shall be conveyed nor be deemed  ever to have conveyed by such transfer.  The persons who obtained grant of  Government land, contrary to the condition regarding alienation, transferred  the properties to third parties.  In some cases, even the transferees had   effected  further transfer of such lands to others.  Section 5 of Act 2 of 1979  empowers the Assistant Commissioner to pass appropriate orders for  restoration of the land to the original allottee in case any transfer was  effected  contrary to Section 4 of the Act.  Section 5 of  Act 2 of 1979  provides that an Assistant Commissioner, on application by any interested  persons or on information given in writing by any person, or suo-motu, after  such inquiry, if he is satisfied that the transfer of any granted land is null  and void as provided under sub-Section (1) of Section 4,  may by order,  take possession of such land after  giving a reasonable opportunity of being  heard to the person evicted,  and restore the land to the original allottee.   An appeal also is provided against the order passed by the Assistant  Commissioner.  Section 11 of  Act 2 of 1979 further states that  Act 2 of  1979 shall have overriding effect over the other laws.

       In all these cases, the original allottees who were either scheduled  castes or scheduled tribes transferred the property to third parties without  obtaining previous permission of the Government.  Later, the original  allottees or their successors-in-interest filed applications before the  Assistant Commissioner praying for restoration of lands which were   transferred contrary to Section 4 of  Act 2 of 1979.  The Assistant  Commissioner after conducting inquiry in these cases held that all the

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transfers were null and void and directed restoration of possession to the  original grantees.  The affected parties filed appeals and those appeals were  dismissed by the appellate authority.  Those orders  were challenged before  the High Court and the learned Single Judge  confirmed the orders passed  by the appellate authority.  Aggrieved by the Judgment of the learned Single  Judge, Writ Appeals were filed which came  up before the Division Bench.   An argument was canvassed on behalf of the transferees of such lands that  the lands in all these cases were granted under Rule 43-J of Rules of 1960  and as it is not specifically provided under Rule 43-J that  there shall  be any  restriction on alienation, the restriction imposed was not valid or  enforceable.  The Division Bench of the High Court thought it fit to refer the  matter to the Full Bench as certain conflicting opinions were expressed by  different Benches of the same High Court.  The relevant portion of the  reference order was to the following effect:-

"One of the important questions that arises for consideration in  these Writ Appeals is as to whether an Authority granting land  under Rule 43-J of Mysore Land Revenue (Amendment) Rules,  1960 can impose any condition at the time of making grant  that the grantee, shall not alienate the land for a period of 15  years when Rule 43-J do not provide for any such condition.  A  further question also arisesp on the effect of a condition  imposed in the Saguvali chit by the Tahsildar that the grantee  shall not alienate the land for a period of 15 years when such  condition was not imposed by the order of the Authority making  the grant."

The Full Bench held that in all these cases the lands were allotted  under Rule 43-J and, therefore, there should not have been any condition  restricting the alienation by the grantees.  The Full Bench also held that the  conditions stipulated in Rule 43-G were not applicable to the grants made  under Rule 43-J and,  therefore, the conditions imposed by the Tahsildar in  the ’Saguvali chit’  restricting the alienation of such lands by the grantee  was not sustainable in law.  Aggrieved by the said decision, the State as well  as the affected parties  have filed these appeals.  

We heard the appellant’s Counsel and learned Counsel for the  respondents.

In order to appreciate the contentions urged before us by the  parties  on either side, it is necessary to go into some of the relevant provisions  contained in the Rules of 1960.  These Rules of 1960 were intended to  regulate the allotment of the Government lands to certain category of  persons.  As regards grant of lands, the Revenue Officers are given certain  powers.  The Tahsildar to whom the power of Deputy Commissioner has  been delegated may grant not exceeding two acres of rain-fed wet land or  four acres of dry land, provided the market value of such land including the  value of the trees thereon does not exceed three hundred rupees.  The  Assistant Commissioner in-charge of the taluk is also given power to grant  land not exceeding two acres of land fit for garden cultivation or wet land  with assured irrigation facilities.  Rule 43 provides the format of the  application form for grant of land for cultivation.  Rule 43-B states that no  land with more than twenty-five reserved trees in an acre shall be disposed  of for cultivation except under the special orders of Government.  Rule 43-C  and Rule 43-D give certain preference to individual who is poor or bona fide  agriculturist, political sufferer, etc.   It also provides that lands which are in  control of the Revenue Department may be leased out to the schools,  colleges and the training institutions and also to farming societies registered  under the Karnataka Co-operative Societies Act.  Rule 43-E says that the  lands available for disposal in a village shall be reserved, for grant to  different categories of persons eligible for such grant, and where a land  available for disposal in any village is less than ten acres, the entire lands  available shall be reserved for grant to applicants belonging to the  Scheduled Castes and Scheduled Tribes who are ordinarily resident in the  village.  Where the  extent of land available for disposal in a village is more

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than ten acres, a minimum of ten acres shall be reserved for grant to  applicants belonging  to Scheduled Castes and Scheduled Tribes.   Rule 43-F  prescribes the order of priority and the  extent of land to be granted.    Marginal note to  Rule 43-G says that the grant of land under the preceding  rules shall be subject to  certain conditions.  Section 43-G reads as follows:-

43-G    Grant of lands under the preceding rules shall be  subject to the following conditions. (1) In the case of grant  of lands to applicants belonging to the Scheduled Castes and  Scheduled Tribes, and to other applicants, who are unable to  pay the occupancy price on account of poverty, the occupancy  price may be waived up to rupees two hundred and the balance  recovered in three annual  instalments.

(2)     In the case of grant of land to applicants who are ex- servicemen the occupancy price shall be waived up to the extent  awarded by Government under the Military Concession Rules.

(3)     In the case of grant of land free of occupancy price, the  grant shall be subject to the condition that the grantee shall pay  contribution or betterment levy in respect of the land and the  value of trees standing of the land.

(4)     Where the grant is made free of cost, or is made at a  price which is less than the full market value, the grant shall be  subject to the condition that the land shall not be alienated for a  period of fifteen years from the date of the grantee taking  possession of the land, after the grant:

Provided that such land may be alienated with the  previous sanction of the Government and subject to such  conditions as the Government may specify, if the Government is  of the opinion that in the circumstances of any case, it is just  and reasonable to permit such alienation either for purposes of  acquiring some other land or for any other purpose:

Provided further that nothing in this clause shall apply to:

(a) the alienation of any land in favour of the State  Government or Co-operative Society as security for loans  obtained for improvement of the land or for buying cattle  or agricultural implements for the cultivation of the land,  or alienation of any land in favour of the Indian Coffee  Board as security for loans advanced by the Indian Coffee  Board under the Coffee Development Plan;

(b) the leasing of any land by a person who is a widow, a  minor or who is subject to physical or mental disability or  who is a serving member of the armed forces.

(5)     The grantee shall cultivate the land personally.

(6)     The land shall be brought under cultivation within two  years from the date of the grantee taking possession of the  land.

(7)     The grant is liable to be terminated [by the Divisional  Commissioner or the State Government] and the land resumed  if any of the aforesaid conditions is not fulfilled, and on such  resumption the land shall vest in Government free from all  encumbrances:

Provided that no land shall be resumed under this clause  except after giving an opportunity to the grantee or his

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successor in interest to show cause why the grant should not be  terminated and the land resumed."

Rule 43-J is a general clause empowering the authorities to grant land  to the lessees to whom lease had been granted previously.  It reads as  follows:-

43-J    Grant of land to persons to whom lands have been  leased temporarily- Notwithstanding anything contained in the  preceding rules of this Chapter, in the case of agricultural land  leased by competent authority to any person for purposes of  cultivation at any time before the commencement of the Mysore  Land Revenue (Amendment) Rules, 1960, if such land is  available for disposal and if the conditions of the lease have  been complied with, the land may be granted to the lessee.

The finding of the Full Bench of the Karnataka High Court is that if the  grant is made under Rule 43-J, there could not have been any condition  restricting the alienation and if at all there were any such conditions they are  null and void.  This view has been taken for the reason that conditions  restricting alienations are given under clause (4) of Rule 43-G and these  provisions would apply to grant of lands made under the preceding rules and  not  apply to Rule 43-J which comes after Rule 43-G of the Rules of 1960.   This view has been taken based on the  title/marginal note  of  Rule 43-G.   The Full Bench was also of the view that under Rule 43-J, it is not stated that  there shall be any conditions prohibiting alienation.  Therefore, the court held  that authorities were not empowered to impose any such conditions.

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 Rs. 200-250  per acre and this  Rs. 200 itself was waived and the grantee was to remit only Rs. 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.   

Rule 43-J  is  a general provision which empowers the authorities to  invest the lessees with title of the land provided the lessees fulfilled the  conditions of lease.  The High Court assumed that conditions of alienation are  not stated in Rule 43-J and   therefore, the authorities were  not  empowered  to impose such conditions.  Rule 43-J is only an enabling provision which  permits the competent government authorities to grant title to lessees.  The  Government being the paramount title-holder is empowered to impose any  condition which is not against the law and it is binding on the grantees.   All  these grants of land are made under the general provisions of rules and Rule  43-J by itself is not a provision by which grants are made.  All the general  provisions of the Rules of 1960 could be made applicable to such grant if the  grant is made at a price lesser than the market price, or is made free of cost.

In the title to Rule 43-G, it is stated that the grants of lands under the  preceding rules shall be subject to the following conditions.  This title to the  rules as such cannot be taken as the key words to interpret Rule 43-G.  They

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have got the effect  of only  marginal notes.  The marginal notes are not  considered as legitimate aid to construction of  any section or rule.  The side  notes are not considered as part of the Act.    Lord Macnaghten in a case  decided by the Privy Council held that the marginal notes cannot be referred  to for the purpose of construction.  Lord Reid in Chandler Vs. D.P.P.  [1964] A.C. 763 said:  " In my view,  side notes cannot be used as an aid to  construction.  They are mere catchwords and I have never heard\005that an  amendment to alter a side note could be proposed in either House\005.So side  notes cannot be said to be enacted in the same sense as the long title or any  part of the body of the Act."   

When the rule itself says that where the grant is made free of cost or  at a price which is less than the full market value,  such grant shall be  subject to the condition that the land shall not be alienated for a period of 15  years from the date of the grantee taking possession of the land after the  grant, such conditions could be imposed on any grant made to the party.

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 under Section 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.

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.      When Act 2 of 1979 was challenged, this Court observed in Manchegowda  & Ors. Vs. State of Karnataka & Ors.  1984(3) SCC 301:

"17. Granted lands were intended for the benefit  and  enjoyment of the original grantees who happen to belong to the  Scheduled Castes and Scheduled Tribes.   At the time of the  grant, a condition had been imposed for protecting the interests  of the original grantees in the granted lands by restricting the  transfer of the same.   The condition regarding the prohibition  on transfer of such granted lands for a specified period, was  imposed by virtue of the specific term in the grant itself or by  reason of any law, rule or regulation governing such grant.    It  was undoubtedly open to the grantor at the time of granting  lands to the original grantees to  stipulate  such a condition the  condition being a term of the grant itself, and the condition was  imposed in the interests of the grantee.   Except on the basis of  such a condition the grantor might not have made any such

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grant at all.  The condition imposed against the transfer for a  particular period of such granted lands which were granted  essentially for the benefit of the grantees cannot be said to  constitute any unreasonable restriction.  The granted lands were  not in the nature of properties acquired and held by the  grantees in the sense of acquisition, or holding of property  within the meaning of Article 19(1) (f) of the Constitution.   It  was a case of a grant by the owner of the land to the grantee  for the possession and enjoyment of the granted lands by the  grantees and the prohibition on transfer of such granted lands  for the specified period was an essential term or condition on  the basis of which the grant was made.   It has to be pointed  out that the prohibition on transfer was not for an indefinite  period or perpetual.  It was only for a particular period, the  object being that the grantees should enjoy the granted lands  themselves at least for the period during which the prohibition  was to remain operative.   Experience had shown that persons  belonging to Scheduled  Castes and Scheduled Tribes to whom  the lands were granted were, because of their poverty, lack of  education and general backwardness, exploited by various  persons who could and would take advantage of the sad plight  of these poor persons for depriving them of their lands.   The  imposition of the condition of prohibition on transfer for a  particular period could not, therefore, be considered to  constitute any unreasonable restriction on the right of the  grantees to dispose of the granted lands.   The imposition of  such a condition on prohibition in the very nature of the grant  was perfectly valid and legal."

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.  There will be no order as to costs.