Maqbool Hussain vs State on 6 December, 2016

FACTS

The writ petitioners who, in fact, replaced the original writ petitioner Badri Lal Raigar (since
deceased) have filed writ petition before the ld.Single Judge assailing order dt.27.01.1996 passed
by the Additional Registrar-II, Co-operative Societies, Rajasthan, Jaipur questioning the auction
notice dt.05.04.1985 issued by the Inspector of Co-operative Societies, Malpura and it was prayed
that the auction of agricultural land of the original khatedar (writ petitioner) be declared illegal &
quash and set aside such transfer to non-SC being void in view of Sec.42 of the Act, 1955.

The original writ petitioner Badri Lal was by caste Raigar and a member of Scheduled Caste and
the real son of Ramcharan but his uncle Ramsukh took him in adoption and both the brothers
Ramcharan & Ramsukh (member of SC) were the (4 of 23) [SAW-714/2007 & 1011/2007]
original khatedars of khasra Nos.2821, 5408, 5409, 5411, 5413 & 5414 measuring 10 bighas & 10
biswas.

The present appellant - Tonk District Co-operative Land Development Bank advanced a loan of
Rs.4,500/- to the respondents in the instant appeal who are legal representatives of the original writ
petitioners on 07.08.1971 on the subject land being mortgaged with the Bank as security against
the credit facility extended to them. Ramsukh & Ramcharan failed to re-pay the installments and
became defaulters and both of them expired.

The original writ petitioner Badri Lal claimed that he came to know about the aforesaid loan only
when he received a notice from the appellant-Bank on 19.05.1976 informing that a sum of
Rs.2,000/- has been deposited against the loan and on enquiry from office of the appellant-Bank,
it revealed that apart from Rs.2,000/- a sum of Rs.400/- was deposited by his father on 15.06.1976
and thereafter certain more amount has also been paid. The original writ petitioner Badri Lal
thereafter obtained certified copy of the statement of accounts from the appellant- Bank in the year
1981, according to which a sum of Rs.4,441/- was due to be paid and the original loanee, being
defaulter, failed to re-pay the loan.
In the year 1980, the Bank attached the electric pump set installed over the subject land and gave
the same in custody of Motilal on 16.05.1980 and initiated the auction proceedings of the subject
land in question belonging to Badri Lal and finally the (5 of 23) [SAW-714/2007 & 1011/2007]
land of the petitioner was auctioned on 05.04.1985 for a sum of Rs.37,401/- and the outstanding
loan, as alleged by the Bank, against the petitioner at that time was Rs.8,600/-. In open auction the
subject land was purchased by Maqbool Hussain S/o Ghasi, by caste Muslim, resident of Malpura,
District Tonk, who was impleaded as respondent No.3 in the petition, and possession of the land
was also handed over to him & indisputably he is not a member of Scheduled Caste.

Aggrieved by the auction proceedings adopted by the Bank, the petitioner initially filed a petition
before the Sub-Divisional Officer, Tonk but it was held not maintainable. Thereafter, the petitioner
filed revision petition u/Sec.128 of the Rajasthan Co- operative Societies Act, 1965 (for short 'the
Act, 1965') before the Additional Registrar-II, Co-operative Societies, Rajasthan, Jaipur but when
he failed to decide the petition, a representation was filed before the Minister-in-Charge of the Co-
operative Department who in turn sent the same to the Additional Registrar-II, Co-operative
Societies for decision. The revision petition was dismissed vide order dt.27.01.1996 and it is
against the backdrop of these facts that the writ petition was filed assailing the aforesaid orders.

ISSUE

"Whether the Land Development Bank is competent to auction/sell the land mortgaged to it by its
loanee, who is a member of Scheduled Caste/Scheduled Tribe, in open auction to a person who is
not a member of Scheduled Caste/Scheduled Tribe in contravention of Sec.42 of the Rajasthan
Tenancy Act, 1955

RULE

Section 42 of Rajasthan Tenancy Act creates a bar on transfer of property to other person not a
member of Schedule Tribe or Schedule Caste.

APPLICABILITY
At the outset, it may be noticed that the Division Bench of this court in Asuram Vs. Tehsildar,
Sanchore reported in AIR 2000 Raj. 345 examined the matter regarding the scheme of Sec.13 &
14 of the Rajasthan Agricultural Credit Operations (Removal of Difficulties) Act, 1974 (in short
'the Act, 1974') and so also the restriction of transfer/alienation of land belonging to the members
of Scheduled Caste & Scheduled Tribe to a non- Scheduled Caste & Scheduled Tribe person,
prohibited u/Sec.42 of the Act, 1955. Para-4 of the judgment being relevant, is reproduced ad
infra:-

The scrutiny of two provisions makes it clear that in a sale conducted under S.13 of the Act, no
Proprietary interest is acquired by the creditor-Bank in the land in question and the sale conducted
under S.13 of the Act is like a sale conducted by the Court in execution of a decree in which interest
of the judgment-debtor involved is transferred through the agency of the Court but such transfers
are governed by the rights and obligations attached to the land of (7 of 23) [SAW-714/2007 &
1011/2007] the judgment-debtor which are attached under the general law. Therefore, if the
interest of the judgment- debtor is transferred under S.13 of the Act by the agency of the Bank
upon obtaining an order from the Tehsildar, which is executed like a decree of Civil Court, what
is really transferred through auction is the interest of the judgment-debtor though there is
involvement of the Bank or the auctionee (auctioneer) and in that event, the provisions of the
Rajasthan Tenancy Act, 1955 effecting restrictions of the persons on whom interest of judgment-
debtors can be transferred are automatically attracted. In contrast, a sale under S.14 of the Act
takes place where the Bank being of the opinion that proper market price is not being
achieved/obtained in the sale executed under S.13 of the Act, it can acquire the land itself and,
thereafter, it can dispose of the land of the debtor- mortgagee. Such sale by the Bank as a matter
of law is transfer of Bank's own property which has been acquired by it under S.14 of the Act.
However, keeping in view the basic scheme and the constitutional mandate which protracts the
interests of weaker sections of the society particularly members of SC/ST and the provisions of
the Rajasthan Tenancy Act, 1955 which puts restrictions on the alienation of the interest of the
members of the SC/ST, to the members of the SC/ST alone so that the sources of such weaker
sections remains within such community and it does not go out of them, therefore, by dint of sub-
section(4) of S.14 of the Act, the legislative policy is maintained that interest of members of SC/ST
should continue to remain with that community and it does not go out of them. In this view of the
matter, we do not find any-thing which goes contrary to the constitutional mandate in making the
provision like S.14(4) of the Act."

It appears that later on there was a difference in view and the very judgment of the Division Bench
in Asuram (supra) came up for re-consideration before the Larger Bench in State of Rajasthan Vs.
Uka & Others reported in 2010 (4) WLC (Raj.) 1 it examined the scope of Sec.42 of the Act, 1955
which envisages general restriction on sale, gift & bequest by the member of Scheduled Caste &
Scheduled Tribe in favour of a (8 of 23) [SAW-714/2007 & 1011/2007] person who is not a
member of Scheduled Caste/Scheduled Tribe to be void in sequence of Sec.46-A & 49-A of the
Rajasthan Tenancy Act, 1955 and so also the provisions of Sec.13 & 14 of the Act, 1974 and the
majority view was that the transfer of land by sale/transfer/bequest to non-SC/ST being in violation
of Sec.42 of the Act, 1955 is void and that being so, no right could be conferred to the auction
purchaser based on such void transactions which are not being permissible by law. Para Nos.27,
28 & 31 of the judgment being relevant are reproduced ad infra:-

Under the Act of 1955 Scheduled Castes/Scheduled Tribes are treated as a class separate than the
other tenants and this classification is founded on socio-economic and political circumstances of
the Indian society. The classification, therefore, is having a nexus with the object sought to be
achieved. The check as per sub-section (4) of Section 14 was necessary in view of the fact that
while adopting the mode of recovery under this provision, the rights of an agriculturist stands
transferred in favour of the financing agency.

The transfer of rights so made is essential to obtain financial assistance, and looking to this
statutory transfer of rights the legislature in its absolute domain considered it appropriate to have
a check on further transfer of tenancy rights by the creditor bank. Sub-sec.(4) of Section 14 of the
Act of 1974 provides a shelter to the members of Scheduled Caste/Scheduled Tribe or in general
the above mentioned privileged categories from loosing their tenancy rights in favour of some
other category. This check is absolutely in consonance to the constitutional mandate i.e. to
safeguard the Scheduled Castes /Scheduled Tribes economic and social status, not only as an
individual but as an independent class of tenants. Sub-sec.(4) of section 14 of the Act of 1974 also
serves the protection available to the privileged categories under Section 42 of the Act of 1955. As
already stated earlier, the Act of 1955 is enlisted under Schedule IXth, thus, is having protection
as per (9 of 23) [SAW-714/2007 & 1011/2007]Article 31-B of the Constitution. The availability
of same protection to sub-sec.(4) of Section 14 of the Act of 1974, thus, is implicit. The resultant
is that the classification of the tenants and their tenancy rights adopted under the Act of 1974 are
rational and the provision in question in no manner suffers from any arbitrariness, irrational or
germination of discrimination or any inconsistency, otherwise too with the rights enshrined under
part third of the Constitution.

It is next contended by learned counsel for the respondent bank that as per Section 3 of the Act of
1974, an agriculturist can alienate land or his interest therein in favour of a bank for the purpose
of obtaining financial assistance, thus, the bank is having every right to transfer the property/land
alienated to it by the agriculturist, through public auction in the case of default in satisfying the
loan advanced. This argument too deserves to be negatived simply on the count that as per Section
3 of the Act of 1974, an agriculturist may alienate his rights and interest in the land holding by
creation of charge or mortgage for the purpose of obtaining financial assistance from the bank and
not for their permanent transfer. The purpose for marking charge or mortgaging land or interest in
favour of a bank as per Section 3 is only for obtaining financial assistance. So far as permanent
transfer of such rights is concerned, that is governed by Section 13 and14 of the Act of 1974."

CONCLUSION

By looking at the substance in the submission made and proposal cannot be countered inasmuch
as if the sale in favour of the appellant cannot be sustained, any sum received under the invalid
transaction is bound to be returned to the appellant from whom consideration was received but at
the same time, the recorded khatedar of the subject land in question at whose instance the auction
proceedings were questioned/assailed is under an obligation to settle the outstanding loan account
with the Tonk District Cooperative Land Development Bank before taking possession of the
subject property in question.

In these circumstances, we direct the appellant-Bank to refund the amount recovered from the
appellant-Maqbool Hussain (auction purchaser) as consideration of the subject land in question to
the appellant-auction purchaser within a period of two months and the Bank is at liberty to get the
loan account settled before handing over possession of the subject land in question and transferred
to the tenant/recorded khatedar. Therefore, for securing loan if a property has been mortgage it
cannot be stated as illegal transfer under section 42 of the Rajasthan Tenancy Act.