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4. The mortgaged property was attached, notified for auction and sold in auction sale on 08.09.2018. The petitioner submitted sale certificate in favour of the purchaser for registration before the respondent No.2. Respondent No.2 refused to register by stating that the land sold in the auction is a granted land and prior permission of the government is required.

5. Sri. K. Chandranath Ariga, learned advocate for the petitioner submits that the property in question was mortgaged as a security against the loan lent to Sri. Raviraj. The purpose of securing the property is to realize the loan amount by proceeding against the security. It is submitted that when the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978 (for short 'PTCL Act') does not impose any restriction to mortgage the property, it cannot be held that the said PTCL Act imposes a restriction on realization of NC: 2024:KHC:34990 the loan amount by proceeding against the secured property.

6. It is submitted that the petitioner is a Co- operative Society and engaged in the business of banking. The transfer of land by the petitioner is exempt from application of the provisions of PTCL Act.

7. Sri. S. H. Raghavendra, learned Additional Government Advocate by relying on the statement of objections submits that the transfer of granted land is protected under Section 4 of the PTCL Act. The auction sale of the property would amount to transfer. Further submits that exemption is to a Bank, the petitioner is a Co-operative Society.

8. It is the contention of the learned Additional Government Advocate that the grant of land is in favour of a person belonging to Scheduled Caste/Scheduled Tribe Community. Section 4(2) of the PTCL Act prohibits alienation of the granted property.

NC: 2024:KHC:34990

9. Considered the submissions of learned counsel for the parties and perused the writ petition papers.

10. The petitioner is a Co-operative Society engaged in the business of banking. The petitioner has lent money to one Raviraj. Sri Raviraj(borrower) committed default, resulting in a dispute under Section 70 of the Co-operative Societies Act, wherein an award was passed. Execution proceedings were initiated to execute the award, which resulted in attachment and sale of the property in question. In view of the refusal of respondent No.2- sub registrar to register the sale certificate, the present petition under Article 226 of the Constitution of India.

12. Section 7 of the Act extends protection from applicability of transfer of granted lands in favour of a Bank. Section 3(1)(a)(i) of the PTCL Act defines Bank, which covers a co-operative Society including a Co- operative Bank. A bare perusal of the above provisions would make it clear that a co-operative society is a Bank for the purpose of the PTCL Act. Section 7 of the PTCL Act exempts transfer in favour of a Bank.

13. The issue of applicability of PTCL Act regarding transfer of land, protected under Section 4 of the PTCL Act while auction sale of the granted lands for default in repayment of the loans is considered by this Court in W.P. No.57108 of 2014 dated 05.04.2023. This Court in the above judgment has taken the following view, "25. A perusal of the above would indicate that a Bank would also include a Co-operative society, including a Co-operative Bank. Thus, there being NC: 2024:KHC:34990 no restriction on a grantee of agricultural land to avail himself of a loan from any Bank for the purpose of agricultural activities. In the event of there being a default in repayment of the said loan, the borrower cannot subsequently contend that on account of the embargo under Section 4 of the PTCL Act, the property cannot be brought for sale. If such a stand is accepted, then no land which has been mortgaged by a grantee belonging to a Scheduled Caste or Scheduled Tribe Community, can be brought for sale on a default of repayment of the loan. It is for that reason that an exception or an exemption is created under Section 7 of the PTCL Act, and if there is a default in the repayment of the loan, the Bank could be well within its rights to bring the said property for auction, exercising its mortgage rights."