Rajasthan High Court - Jaipur
Maqbool Hussain vs State on 6 December, 2016
Author: Ajay Rastogi
Bench: Ajay Rastogi
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
D.B.SPECIAL APPEAL WRIT NO. 714 / 2007
Maqbool Hussain S/o Ghasi, by Caste Muslim, Aged About 48
Years, Address: Malpura, District Tonk.
----Appellant.
Versus
1. The State of Rajasthan Through Secretary, Cooperative
Department, Government of Rajasthan, Secretariat, Jaipur.
2. The Tonk District Cooperative Land Development Bank,
Tonk, through its Secretary.
3. Badri Lal Raigar (since Deceased) through his LRs.:
3/1. Smt. Govindi Devi widow of Bardi Lal,
3/2. Babulal Verma S/o Badri Lal,
3/3. Sita Ram Verma S/o Badri Lal,
3/4. Mahendra S/o Badri Lal,
All by caste Raigar, residents of Mohalla Raigaran,
Chhipon Ki Dhal, Malpura, District Tonk, Rajasthan.
3/5. Smt.Basanti W/o Narendra Pal D/o. Bardi Lal, r/o.
Magan Bhawan, Shanti Nagar, Malusar Road, Ajmer.
3/6. Smt. Prem Devi W/o. Dayal Chand D/o. Badri Lal, r/o.
Chmraghar, Kishangarh, District Ajmer, Rajasthan.
----Respondents.
Connected With
D.B.SPECIAL APPEAL WRIT NO. 1011 / 2007
Tonk Zila Sahkari Bhoomi Vikas Bank Limited, Tonk through its
Secretary.
----Appellant.
Versus
1. Badri Lal Raigar (Since deceased) through his legal
representatives:
1/1 Smt. Govindi widow of Late Shri Badri Lal;
(2 of 23)
[SAW-714/2007 & 1011/2007]
1/2 Babu Lal Verma son of Late Shri Badri Lal Raigar;
1/3 Sita Ram Verma son of Late Shri Badri Lal Raigar;
1/4 Mahendra son of Late Shri Badri Lal Raigar
All by caste Raigar residents of Mohalla Raigaran,
Chhipon ki Dhal, Malpura, District Tonk.
1/5 Smt. Basanti wife of Shri Narendra Pal daughter of
Late Shri Badri Lal Raigar, resident of Magan Bhawan,
Shanti Nagar, Malusar Gate, Ajmer.
1/6 Smt. Prem Devi wife of Shri Dayal Chand daughter of
Late Shri Badri Lal Raigar, resident of Chamraghar,
Kishangarh, District Ajmer.
2. Maqbool Hussain son of Shri Ghasi, by caste Muslim,
resident of Malpura, District Tonk.
3. The State of Rajasthan through Secretary, Co-operative
Department, Government of Rajasthan, Secretariat, Jaipur
----Respondent.
____________________________________________________
For Appellants : Sh.A.K.Bhandari, Sr.Adv. assisted by
Sh.A.K.Pareek, Adv. & Sh.R.K.Sharma, Adv.
For Respondents : Sh.Saket Pareek, Adv., Sh.Aditya Pareek,
Adv. & Sh.A.N.Sharma, Adv.
____________________________________________________
HON'BLE MR. JUSTICE AJAY RASTOGI
HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA
Judgment
BY THE COURT: (Per Hon'ble Mr.Justice Ajay Rastogi)
Judgment reserved on : 24th November, 2016.
Date of Judgment : 6th December, 2016.
Instant special appeals have been filed against the self same judgment of the ld.Single Judge dt.10.04.2007. The moot question arose for consideration before the ld.Single Judge was -
(3 of 23) [SAW-714/2007 & 1011/2007] "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 (in short 'the Act, 1955'), which prohibits the sale, gift or bequest of a land belonging to Scheduled Caste/Scheduled Tribe to a person who is not a member of Scheduled Caste/Scheduled Tribe and transfer of such sale, gift or bequest of agricultural land of recorded khatedar tenant to non-SC can be held to be void?"
The brief facts of the case which have culled out from the record are that 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.
The ld.Single Judge after hearing the parties & taking note of the mandate of Sec.42 of the Act, 1955 allowed the writ petition and while setting aside the auction sale in favour of the appellant in D.B.Special Appeal (Writ) No.714/2017 (respondent No.3) the ld.Single Judge held the auction sale to non-Scheduled (6 of 23) [SAW-714/2007 & 1011/2007] Caste to be illegal & in contravention of Sec.42 of the Act, 1955 and further observed that the original writ petitioners are entitled to restore back the possession of the subject land in question and the Tehsildar was directed to ensure compliance of the order.
On intra-court appeal being preferred by the appellant-Tonk District Cooperative Land Development Bank and so also by the auction purchaser, this court vide its order dt.25.05.2007 while admitting the appeal granted interim protection to the auction purchaser to remain in possession but restrained from transferring or creating any third party rights or interest on the subject land in question in any manner whatsoever.
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:-
"4. 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:-
"27. 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.
28. 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.
31. 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."
In the light of the view expressed by the Larger Bench of this Court, of which reference has been made supra, the question remains no more res integra to be examined by us.
Ld.senior counsel Mr.A.K.Bhandari appearing on behalf of the appellant-Maqbool Hussain (auction purchaser) and Mr.R.K.Sharma, Counsel appearing on behalf of the appellant- Tonk District Co-operative Land Development Bank have tried to persuade this court that although the Larger Bench has observed in reference to Sec.42 of the Act, 1955 holding such transfer of land by sale/bequest/gift from the member of Scheduled Caste & (10 of 23) [SAW-714/2007 & 1011/2007] Scheduled Tribe to a non-Scheduled Caste & Scheduled Tribe person to be void and not permissible by law but the appellant is a Land Development Bank which is registered under the Rajasthan Co-operative Societies Act, 1965 and notice for recovery of outstanding dues was served to the loanee agriculturist who is Scheduled Caste u/Sec.106(1)(b) of the Act, 1965 and since action has been taken by the Bank under the provisions of the Act, 1965, as such the restriction which has been imposed u/Sec.42 of the Act, 1955 may not come in the way of the Bank in holding auction proceedings and transfer of the subject land in question, mortgaged with the Bank, to a non- Scheduled Caste or Scheduled Tribe person is a valid transaction and submits that Sec.93 read with Sec.103, 104 & 106 of the Act, 1965 deals with the mechanism for disposal of the mortgaged property creating security interest over the subject property and in absence of there being any restriction/prohibition under the Act, 1965 in which the auction proceedings were initiated, the restriction u/Sec.42 of the Act, 1955 has no application and this is the basic error which the ld.Single Judge has committed in passing the judgment impugned interfering & cancelling the auction proceedings and holding the auction sale to be in violation of Sec.42 of the Act, 1965. Sections 93, 103, 104 & 106 of the Rajasthan Co-operative Societies Act, 1965 being relevant are reproduced ad infra:-
"Sec.93. Priority of mortgage. - (1) A mortgage executed in favour of a Land Development Bank shall have priority over any claim of the Government arising (11 of 23) [SAW-714/2007 & 1011/2007] from a loan granted after the execution of the mortgage under the Rajasthan Agricultural Loans Act, 1957.
(2) Notwithstanding anything contained in the Rajasthan Tenancy Act, 1955, or any other corresponding law for the time being in force, where a mortgage in favour of a Land Development Bank is in respect of land in which a tenant has an interest, the mortgage may be against the security of such interest, and the rights of the mortgagee shall not be affected by the failure of the tenant to comply with the requirements of such law, and the sale of the land and his interest therein under such law shall be subject to the prior charge of the Land Development Bank.
Sec.103. Right of Land Development Bank to buy mortgaged property.- (1) Property purchased under sub-section (3) of section 106 by and the property transferred under section 122 to, the Land Development Banks, may be disposed of by such banks by sale within such period as may be fixed by the Trustee, subject to the condition that such sales shall be in favour only of agriculturists eligible to hold land under the Rajasthan Tenancy Act, 1955 or any corresponding law for the time being in force, or may be leased out by them on such terms and conditions as may be laid down by the Government from time to time.
(2) Nothing contained in any law for the time being in force fixing the maximum limit of agricultural holdings shall apply to the acquisition or holding of land by the Land Development Banks under this section.
Sec.104. Recovery of Loans by Land Development Banks.- All loans granted by the Land Development Banks, all interests (if any) chargeable thereon, and costs (if any), incurred in making the same, shall when they become due, be recoverable by the Land Development Bank concerned.
Sec.106. Sale of mortgaged Property. - (1) Notwithstanding anything contained in the Transfer of Property Act, 1882, the Land Development Bank or any person authorised by it in this behalf shall, in case of default of payment of the mortgage money, or any part thereof, have power, in addition to any other remedy available to the Bank, to bring the mortgaged property to sale by public auction in the village in (12 of 23) [SAW-714/2007 & 1011/2007] which the mortgaged property is situated or at the nearest place of public resort without the intervention of the Court:
Provided that no action shall be taken under this sub-section and no such power shall be exercised, unless and until-
(a) the Land Development Bank has been previously authorised by the Collector or the Registrar, to exercise the power conferred under this sub-section, after hearing the objections, if any, of the mortgager or mortgagers;
(b) notice in writing requiring payment of such mortgage money or part thereof has been served upon-
(i) the mortgager or each of the mortgagers;
(ii) any person who has any interest in or charge upon the property mortgaged, or in upon the right to redeem the same so far as is known to the bank;
(iii) any surety for the payment of the mortgaged debt or any part thereof, and
(iv) any creditor of the mortgager who has, in a suit for administration of his estate obtained a decree for sale of mortgaged property; and
(c) default has been made in payment of such mortgage money or part thereof for three months after service of the notice.
(2) If the Land Development Bank fails to take action against a defaulter under section 102 or section 105 or under this section, the State Land Development Bank may direct the Land Development Bank to take appropriate action, and where no action is taken either by the State Land Development Bank, or the Land Development Bank, the Trustee may take such action. If such action is taken by the Trustee, the provisions of this Chapter and of any rules shall apply in respect thereto, as if all reference to the Land Development Bank in the said provision were references to the Trustee.
(3) Notwithstanding anything contained in any law for the time being in force, it shall be lawful for a Land (13 of 23) [SAW-714/2007 & 1011/2007] Development Bank or the State Land Development Bank to purchase any mortgaged property sold under this Chapter."
As regards Sec.13 & 14 of the Rajasthan Agricultural Credit Operations (Removal of Difficulties) Act, 1974 vis-à-vis provisions of Sec.42, 46-A & 49-A of the Rajasthan Tenancy Act, 1955 which are special provisions embodied only to protect the interest of weaker sections of the society put manifold restrictions in regard to transfer of land which is under the tenancy of Scheduled Caste & Scheduled Tribe.
Before meeting with the question raised for our consideration, we consider it appropriate to take note of the special features of the Act, 1955 enacted by a later amendment to safeguard the interest of weaker sections of the society. Sec.42, 46-A & 49-A of the Rajasthan Tenancy Act, 1955 which restrict transfer of land that is under tenancy of Scheduled Caste & Scheduled Tribe, being relevant is reproduced ad infra:-
"42. General restrictions on sale, gift & bequest- The sale, gift or bequest by a khatedar tenants of his interest in the whole or part of his holding shall be void, if
(a)..... deleted -w.e.f. 11.11.1992.
(b) Such sale, gift or bequest is by a number of Scheduled Caste in favour of a person who is not a member of the Scheduled Caste, or by a member of a Scheduled Tribe in favour of a person who in not a member of the Scheduled Tribe.
(bb) such sale, gift or bequest, notwithstanding anything contained in clause(b), is by a member of Saharia Scheduled Tribe in favour of a person who is not a member of the said Saharia tribe.
(14 of 23) [SAW-714/2007 & 1011/2007] 46-A. Special provision for letting or sub-letting by members of scheduled castes and scheduled tribes - Notwithstanding anything contained in sections 44, 45 and 46, no person who is a member of a scheduled caste or a scheduled tribe shall let or sub- let the whole or any part of his holding under the said sections to any person who is not a member of a scheduled caste or a scheduled tribe.
49-A. Special provision for exchange by members of scheduled castes or scheduled tribes - Notwithstanding anything contained in section 48 and 49, no tenant who is a member of a scheduled caste or scheduled tribe shall have the right to exchange his holding under any of those sections for land which is included in the holding of a person who is not a member of a scheduled caste or scheduled tribe and an application under section 49 shall be rejected if it contravenes the provisions of this section."
A bare look to the provisions quoted clearly envisages that the legislature in its wisdom was of the view that the interest of the tenants belonging to Scheduled Caste & Scheduled Tribe are to be safeguarded and protected from all social evils and from all forms of exploitation and at the same time, fulfill the directive principles enshrined u/Art.46 of the Constitution. Apart from the general restrictions on sale, gift and bequest provided u/Sec.42. Sec.46-A envisages special provision for letting or subletting by the members of Scheduled Caste & Scheduled Tribe with a non- obstante clause contained in Sec.44, 56 & 46, at the same time, a further restriction has been imposed u/Sec.49-A even for exchange by members of Scheduled Caste & Scheduled Tribe of their holdings to non-Scheduled Caste & Scheduled Tribe members with no room or discretion being left to any of the statutory authority including the Bank in disposal of the subject (15 of 23) [SAW-714/2007 & 1011/2007] land of the holder in contravention of the rights of the members of Scheduled Caste & Scheduled Tribe being protected u/Sec.42, 46-A & 49-A of the Act, 1955.
To safeguard the interest of the agriculturist for availing agricultural credit facilities from Banks and other financial institutions and to ensure that adequate proportion of commercial Bank credit goes to the agricultural section and other priority sectors and for the purpose of enabling the commercial banks to undertake financing of agriculture on a large scale and to facilitate smooth and efficient operation of commercial Banks in the sphere of agriculture credit and this approach not only facilitates expeditious action but also provides for laying down a clear and unambiguous statutory frame work for the agricultural credit business of commercial Banks and the facilities to the co- operatives and Land Development Banks could be provided to other institutional credit agencies by a separate legislation and keeping that object into consideration and in order to facilitate adequate flow of credit by commercial Banks to the agriculturists, the Rajasthan Agricultural Credit Operations (Removal of Difficulties) Act, 1974 was enacted by the State Legislature on the basis of the recommendations of the Talwar Committee constituted by the Central Government.
The Banks who are lending credit facilities to the 'Agriculturists', who are engaged in agriculture, are being extensively covered u/Sec.2(b) of the Act, 1974 and 'co- operative societies' are covered u/Sec.2(e) of the Act, 1974 and (16 of 23) [SAW-714/2007 & 1011/2007] the rights of banks to the extent of their financial assistance by way of loans, advances, guarantee or otherwise for agricultural purpose are protected under the Act, 1974. Sec.13 & 14 of the Act, 1974 lay down the procedure for recovery of dues of a bank through the prescribed authority and regulating the rights of the bank to acquire and dispose of immovable properties. It would be relevant to quote Sec.13 & 14 of the Act, 1974 for the present purpose, which read ad infra:-
"13. Recovery of dues of a bank through a prescribed authority - (1) Notwithstanding anything contained in any law for the time being in force, an official of the State Government notified by the State Government as the prescribed authority for the purpose of this section may, on the application of a bank, make an order on or any agriculturist or his heir or legal representative [or his guarantor], directing the payment of any sum due to the bank on account of financial assistance availed of by the agriculturist, by the sale of any land or interest therein or any other immovable property, upon which the payment of such money is charged or mortgaged [or any other property in his possession]:
Provided that no order shall be made by the prescribed authority under this sub-section for the sale of any land or any interest therein or any other immovable property upon which the payment of money is charged or mortgaged [or any other property in his possession], as the case may be, unless the agriculturist or the heir or legal representative [or his guarantor] of the agriculturist, as the case may be, has been given an opportunity of being heard and has been served with a notice by the prescribed authority calling upon him to pay the amount due and default has been made in payment thereof for three months after the determination of liabilities by such authority.
(2) Every order passed by the prescribed authority in term of sub-section (1) shall be deemed to be a decree of a civil court and shall be executed by him in the same manner as a decree of such court.
(17 of 23) [SAW-714/2007 & 1011/2007] Explanation:- For the purpose of exercising powers conferred by this sub-section, the prescribed authority shall be deemed to be a civil court.
(3) Nothing in this section shall debar a bank from seeking to enforce its rights in any other manner under any other law for the time being in force.
14. Right of a bank to acquire and dispose of immovable property.-(1) Notwithstanding anything contained in any law for the time being in force, a bank shall have power to itself acquire agricultural land or interest therein or any other immovable property which has been charged or mortgaged to it by an agriculturist in respect of any financial assistance availed of by him, provided the said land or interest therein or any other immovable property has been sought to be sold by public auction and no person has offered to purchase it for a price which is sufficient to pay to the bank the money due to it. (2) A bank which acquires land or interest therein or any other immovable property in exercise of the power vested in it under sub-section (1) shall dispose it of by sale, within a period to be specified by the State Government in this behalf.
(3) If the bank has to lease out any land acquired by it under sub-section (1) pending sale thereof as indicated in sub-section (2), the period of lease shall not exceed one year at a time and the lessee shall not acquire any interest in that property notwithstanding any provisions to the contrary in any other law for the time being in force.
(4) A sale by a bank of land or interest therein in terms of sub-section (2) shall be in favour of persons as may be prescribed by the State Government under Section 30 of this Act and shall be subject to any provisions of any law in force which may place restrictions on purchase of land by non-agriculturists or ceiling for acquisition of land or by a person not belonging to a scheduled caste or scheduled tribe or fragmentation of land."
Sec.14(4) of the Act, 1974 clearly restricts that disposal of any immovable property of an agriculturist shall always be subject to the provisions of law in force which may place (18 of 23) [SAW-714/2007 & 1011/2007] restrictions on purchase of land by a non-agriculturist or by a person not belonging to a Scheduled Caste or Scheduled Tribe, obviously as has been envisaged u/Sec.42 of the Act, 1955.
The Larger Bench of this court has considered the scope of Sec.13 & 14 of the Act, 1974 and also of Sec.42, 46-A & 49-A of the Rajasthan Tenancy Act, 1955 in extenso and finally observed that the financial institutions cannot get out of a rigour of Sec.42(b) of the Act, 1955 and any transaction contrary to Sec.42 of the Act, 1955 being void certainly cannot be acted upon and will not confer any right to the party entered into the shoes of recorded tenant/khatedar under the scheme of the Act, 1955.
In our considered view, there is no room left to further examine the question which has been raised in the instant special appeals and we are fully fortified with the view expressed by the Larger Bench and the question is no more res integra to be examined by us.
The emphasis of counsel on the provisions of the Rajasthan Co-operative Societies Act, 1965, reference of which has been made supra, in our view is of no substance for the reason that Sec.93 envisages regarding priority of mortgage and the prior charge of the Land Development Bank over the mortgage on which security interest has been created and Sec.103 & 104 of the Act, 1965 relates to the right of Land Development Bank while the mortgaged property being purchased by the financial institution and as regards Sec.106 of the Act, 1965 is concerned, (19 of 23) [SAW-714/2007 & 1011/2007] it gives a procedure which has to be followed as & when the mortgaged property is put to auction sale but at the same time, a special enactment put ample restrictions over the mortgaged property of the land holder who is member of Scheduled Caste/Scheduled Tribe for its transfer by sale, gift or bequest to a member of non-Scheduled Caste/Scheduled Tribe and that has been further specially protected by the special enactment of the Act, 1974 legislated by the State Government protecting rights of the agriculturist in general and the members of Scheduled Caste/Scheduled Tribe in particular and the provisions of the Act, 1965 will not in any manner eliminate the mandate of Sec.42 of the Act, 1955 and the special provisions which have been enacted by the Act, 1974 protecting the rights of the agriculturists availing credit facilities on mortgaging the agricultural land from Banks and other financial institutions, of which detailed reference has been made by us supra.
After the matter was reserved by us on 24.11.2016, counsel for petitioner has made available to us a judgment of the Apex Court in support of his submission in the case of UCO Bank & Anr. Vs. Dipak Debbarma & Ors. [Civil Appeal No.11247 of 2016] decided on 25.11.2016.
Although, it is a case where the property was mortgaged, on which security interest was created, was put to auction under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the question was whether transfer of land to non-ST person (20 of 23) [SAW-714/2007 & 1011/2007] is in infraction of Sec.187 of the Tripura Land Revenue and Land Reforms Act, 1960 where there is legislative embargo on the sale of mortgaged properties by the Bank to any person who is not a member of Scheduled Tribe but the issue under consideration before the Apex Court was that in a case where the Central and State Act on any field of entry mentioned in List-III of the 7 th Schedule (Concurrent List), to such a situation of repugnancy or inconsistency, the provisions of Art.254 of the Constitution may apply provided there is such an inconsistency in the two enactments but at the same time, if the Central Act has been enacted under List-I of the 7th Schedule and which is a later Act and the earlier Act is relatable to List-II of the 7th Schedule, the primacy could be of the Central Act which is to be prevailed and taking note thereof it is observed by the Apex Court that the Act of 2002 being relatable to the entry of banking which is included in List-I of the 7th Schedule & the object of the State Act may not override the provisions of Central Legislation and the field of encroachment made by the State legislature is in the area of banking, so long there did not exist any parallel Central Act dealing with the sale of secured assets and referable to Entry 45 of List-I, the State Act, 1960 including Sec.187 thereof may not be operated validly and the provisions of the Act, 2002 would prevail over the provisions contained in Sec.187 of the Act, 1960 but that is not the fact situation in the instant case. The Rajasthan Co-operative Societies Act, 1965, the Rajasthan Tenancy Act, 1965 and the Rajasthan Agricultural Credit (21 of 23) [SAW-714/2007 & 1011/2007] Operations (Removal of Difficulties) Act, 1974 are the State Legislations protecting rights of the agriculturist by a special mandate incorporated by the Act in its legislative wisdom and the question of repugnancy or inconsistency under the Rajasthan Tenancy Act, 1955 or Act, 1965 or Act, 1974 may not arise in the instant case.
At the relevant point of time when the ld.Single Judge examined the question raised for consideration, different views were expressed by the court regarding applicability of Sec.42 of the Rajasthan Tenancy Act, 1955 but after the view has been expressed by the Larger Bench of this court in the year 2010, of which a detailed reference has been made supra, in our considered view the submission made by counsel for the appellants is for the sake of submission but there is no substance in the same which could emerge for our consideration.
Counsel for the appellant Mr.Bhandari (for auction purchaser) in the alternate submits that he was a bonafide purchaser and in the open auction, he gave a fair proposal but because of impediment/restriction being envisaged u/Sec.42 of the Rajasthan Tenancy Act, 1955 if transfer of the subject land by sale, gift or bequest of Scheduled Caste is not permissible to a non-Scheduled Caste at least in such event justice demands that the auction sale in favour of the appellant if not sustained, he be entitled to at least for refund of the consideration received from him for the subject land in question before extinguishing his title.
(22 of 23) [SAW-714/2007 & 1011/2007] It has not come on record that the outstanding dues, as alleged, at the time when the subject property was put to auction was Rs.8,600/- and the auction sale consideration of Rs.37,401/- was received on 05.04.1985. It has not come on record as to whether the excess amount received in auction of the subject land in question was refunded to the land holder/recorded khatedar or still lying in the Bank.
However, this court finds 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.
We further direct that if the aforesaid payment is not refunded to the auction purchaser within two months, the auction (23 of 23) [SAW-714/2007 & 1011/2007] purchaser shall be entitled to interest @ 12% p.a. from the date of recovery of amount from him until the date of refund.
Consequently, both the special appeals are devoid of merit accordingly stands dismissed with the observations made supra. No order as to costs.
(SANJEEV PRAKASH SHARMA),J. (AJAY RASTOGI),J. Solanki DS, P.S.