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Judgment
L. Narasimha Reddy, J.—The question that arises for consideration in these two writ petitions is: whether the prohibition contained u/s 5 of the A.P. Assigned Lands (Prohibition of Transfer) Act, 1977 (for short ''the Act''), applies to the lands, which were brought to sale by a Co-operative Society, mentioned in Section 6 of the Act, for the redemption of mortgage, made in its favour.
Some of the villagers of Pagali, of Earpedu Mandal, and Udamalapadu, of Srikalahasthi Mandal, were assigned Government lands in various survey numbers. Few of them have raised loans from Primary Agricultural Co-operative Societies of the area, affiliated to District Co-operative Central Bank Limited, Chittoor. As a security for repayment, they mortgaged the lands, assigned to them. Since the loans remained unpaid, Recovery Certificates were obtained from the competent authority u/s 71 of the A.P. Co-operative Societies Act (for short ''the APCS Act'') by the creditor society. Thereafter, the properties were put to sale. The petitioners have purchased the lands, that were brought to sale. The particulars are as under:
WP No. Name Sy.No. and Extent Date of Date of of the Village Sale confirmation Assignee Certificate of sale
14743/2007 N. Polaiah 166/1, Ac.4.89 5-6-2000 24-2-2006 1st petitioner Pagali Vill., cents Earpedu Mandal
14743/2007 S. Venkataiah 164/2 and Ac.4.43 5-6-2000 24-2-2006 1st petitioner 167/3 Pagali cents Vill., Earpedu Mandal
14743/2007 S. Ramalakshmamma 165/2 Ac.4.99 10-2-2006 14-7-2006 2nd petitioner Pagali Vill., cents Earpedu Mandal
14743/2007 N. Mathaiah 166/2 and Ac.4.68 5-6-2000 24-2-2006 3rd petitioner 167/1 Pagali cents Vill., Earpedu Mandal
14743/2007 N. Bathaiah 167/2 Pagali Vill., Ac.4.58 10-2-2002 24-2-2006 3rd petitioner Earpedu Mandal cents
14750/2007 K. Bheemaiah 137/2-3/IP Ac.6.63 10-2-2006 14-7-2006 3rd petitioner Udamalapadu cents
After the sales in favour of the petitioners became final, their names were mutated in the revenue records, and they were issued pattadar passbooks.
Petitioners intended to sell their properties in favour of third parties. For this purpose, they approached the 1st respondent, Sub-Registrar, Srikalahasthi. They claim to have presented the sale deeds before the 1st respondent, for registration. ft is stated that, on the information furnished by the respective Tahsildars of the Mandals, the 1st respondent is not entertaining the documents by treating the property, as assigned land.
Sri O. Manohar Reddy, learned Counsel for the petitioners submits that, though the lands purchased by the petitioners were, at one point of time; assigned to various beneficiaries, they came to be sold by the Co-operative Central Bank, on behalf of the Primary Agricultural Cooperative Societies, affiliated to it, for recovery of loans, raised by the assignees, on the basis of mortgages. He contends that the prohibition contained under Sections 3 and 5 of the Act, does not apply to transactions to an assignee, and financial institutions, owned by the State, such as a Primary Agricultural Co-operative Society, as mentioned in Section 6 of the Act.
Learned Government Pleader for Revenue, took instructions at the stage of admission, and made extensive submissions. He contends that an assigned land always retains its character, and the prohibition brought about by the Act continues to operate. It is urged that an otherwise invalid sale cannot change the character of the lands, nor can bring about new legal regime. He places reliance upon the judgments of this Court in B. Ramaiah v. Mandal Revenue Officer, Puttaparthi 1990 (1) ALT 290 and Majeti Gopala Krishna Vs. Commissioner, Rajahmundry Municipal Corporation, .
The Act prohibits alienation of assigned lands. While Section 3 renders all categories of transfers of assigned land, as void ab initio, Section 5 prohibits the registration of any document, evidencing such transfers. Any sale or transfer, in contravention of the provisions of the Act, cannot change the character of land, and the objection can be raised at any point of time. Successive transactions, which are otherwise prohibited, do not bring about any change as to the legal implications.
The Legislature, however, carved out an exception as regards the prohibition imposed under Sections 3 and 5 of the Act. Section 6 reads as under:
Section 6: Nothing in this Act shall apply to the assigned lands held on mortgage by the State or Central Government, any local authority, a Co-operative Society, a Scheduled Bank or such other financial institution owned, controlled or managed by a State Government or the Central Government, as may be notified by the Government in this behalf.
From a reading of this provision, it is evident that if the transfer by way of mortgage is in favour of a State or Central Government, any Local Authority, a Cooperative Society, or a Scheduled Bank, or any financial institution, controlled or managed by State or Central Governments, the provisions of the Act do not apply.
The record discloses that the lands assigned in favour of various beneficiaries, referred to in the table, were mortgaged in favour of Primary Agricultural Co-operative Societies, as security for repayment of loans. In view of the default committed by the borrowers, steps were taken to foreclose the mortgages. Sale Certificates u/s 71 of the A.P.C.S. Act were obtained and further steps were taken. In the ultimate analysis, the petitioners emerged as the successful bidders and the competent authority affirmed the sales, in favour of the petitioners. Revenue records are also mutated, correspondingly.
In B. Ramaiah''s case (supra), the land assigned to a beneficiary was mortgaged in favour of an Agricultural Development Bank. Even while the mortgage was subsisting, the assignee sold the land to third parties. When steps were initiated under the Act, transferee claimed exemption u/s 6 of the Act. Extensive discussion was undertaken, and the provisions of the Act were analyzed. The Division Bench of this Court held that, mere existence of mortgage does not enable the assignee, to sell the land to third parties. It was pointed out that the benefit u/s 6 of the Act enures to the Co-operative Society, in whose favour, the land was mortgaged.
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 Co-operative 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 u/s 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 ratio in Harijana Bazarappa''s case (supra), has no application to the facts of this case. The prohibition contained in Section 3 of the Act, was reiterated and the exemption u/s 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.
There shall be no order as to costs.