2025 (5) TMI 1120 - SCH - Indian Laws

Absolute owner of the land - restriction on enjoyment of land - Section 10 of the Transfer of Property Act 1882 - Alienation of land by the District Collector Medak Government of Andhra Pradesh - Imposition of condition pursuant to the alienation of land by the Government of Andhra Pradesh - Condition/restriction imposed by the State Government would be violative of Section 10 of the TPA. Alienation of land by the District Collector Medak Government of Andhra Pradesh - sale or alienation/allotment? - HELD THAT - The request of the Respondent-Trust was processed as per the instructions laid down in G.O.Ms. No.635 dated 02nd July 1990 and the land in question was conditionally allotted by the District Collector Medak Government of Andhra Pradesh vide order dated 8th February 2001 by virtue of the power conferred under the Telangana Alienation of State Lands and Land Revenue Rules 1975 framed under Sections 25 and 172 of the Act and G.O.Ms.No.635 dated 2nd July 1990 read with Board Standing Order 24. The said fact is apparent from the alienation letter dated 8th February 2001 issued by the District Collector Medak which specifically records that sanction is accorded to alienation of Government land subject to payment of market value and subject to the following three conditions. It was made clear that in case of deviation of the said three conditions the land shall be resumed back by the Revenue authorities. The alienation of land by the District Collector Medak Government of Andhra Pradesh vide order dated 8th February 2001 was not a sale but an allotment under a statutory Scheme. Imposition of condition pursuant to the alienation of land by the Government of Andhra Pradesh - HELD THAT - Though no specific purpose of allotment was mentioned yet this Court is of the view that as the allotment was in favour of the Respondent-Trust the allotment could be used for a charitable purpose only. Even in the Respondent- Trust s understanding the allotment of land was conditional. This would be apparent from the fact that not only in the contemporaneous correspondence but even in the writ petition filed there was an admission by the Respondent-Trust that the allotment was made for a charitable purpose and the land was being used for the said purpose - It was also specifically averred in the writ petition filed by the Respondent- Trust that as the Appellant-State had offered the land as per G.O.Ms. No.635 dated 2nd July 1990 subject to three conditions vide proceedings No.E3/7542/98 dated 08th February 2001 the Respondent-Trust had followed the same scrupulously . Consequently the Respondent-Trust s argument that no specific purpose of allotment was specified is false to the Respondent-Trust s knowledge. Condition/restriction imposed by the State Government would be violative of Section 10 of the TPA - HELD THAT - This Court is of the view that the Appellant-State had allotted land to public trust for public purpose. In such a situation the State cannot be put in the normal classical inter vivos party s position as public interest is supreme and must prevail. This Court is also of the opinion that Rules 1975 and the Board of Revenue Standing Orders operate in a completely distinct space and are not eclipsed by Section 10 of the TPA. Conclusion - i) The alienation was an allotment under a statutory scheme not a sale. ii) Conditions were imposed and known; the Respondent-Trust violated these conditions by unauthorized subdivision and sale. iii) Conditions imposed under the statutory scheme are valid and not rendered void by Section 10 of the TPA. Appeal allowed.

1. ISSUES PRESENTED and CONSIDERED

The Court identified the following core legal questions for consideration:

i. Whether the alienation of the subject land by the District Collector, Medak, Government of Andhra Pradesh vide order dated 8th February 2001 constituted a sale or an allotment/alienation under a statutory scheme;

ii. Whether any conditions were imposed by the Government pursuant to the alienation/allotment of the land;

iii. Whether any such conditions or restrictions imposed by the State Government on the land use would be violative of Section 10 of the Transfer of Property Act, 1882 (TPA), which prohibits conditions absolutely restraining alienation.

2. ISSUE-WISE DETAILED ANALYSIS

Issue i: Nature of Alienation - Sale or Allotment?

Relevant legal framework and precedents: The Telangana Alienation of State Lands and Land Revenue Rules, 1975 (Rules 1975) framed under Sections 25 and 172 of the Telangana Land Revenue Act empower the State to alienate land for public purposes subject to conditions. The Government Order (G.O.Ms.) No.635 dated 2nd July 1990 further empowers the Commissioner and District Collectors to alienate Government land on payment of market value, subject to conditions. Board Standing Order 24 outlines conditions for grants of State land, including the right of the Government to resume land upon breach of conditions.

Precedents emphasize that the Government cannot arbitrarily sell State land without a policy or welfare purpose and must obtain maximum value unless special circumstances exist. (Ramana Dayaram Shetty v. International Airport Authority of India; Natural Resources Allocation, In Re; Manohar Lal Sharma v. Principal Secretary)

Court's interpretation and reasoning: The Court examined the alienation letter dated 8th February 2001, which explicitly stated that the land was alienated subject to payment of market value and three specific conditions, including usage for the allotted purpose and completion of construction within two years. The Court found that the transaction was not a sale in the conventional sense but an allotment under a statutory scheme designed to regulate State land alienation for public purposes.

Key evidence and findings: The land was originally Government (Poramboke) land; the Respondent-Trust applied for allotment as a charitable trust; the allotment letter imposed conditions and reserved the right of resumption by the Government; the Respondent-Trust's own correspondence admitted the conditional nature of the allotment.

Application of law to facts: The Court held that the alienation was an allotment under the statutory scheme governed by the Rules 1975, G.O.Ms. No.635, and Board Standing Order 24, rather than a sale. The State's power to alienate land with conditions was exercised lawfully, and the Respondent-Trust accepted the allotment subject to these conditions.

Treatment of competing arguments: The Respondent-Trust argued the transaction was a sale at market value without conditions restricting use. The Court rejected this, noting the absence of any social or welfare policy backing a sale and emphasizing the statutory framework for allotment. The High Court's earlier characterization of the transaction as a sale was held to be erroneous.

Conclusion: The alienation was an allotment under a statutory scheme, not a sale.

Issue ii: Existence and Nature of Conditions Imposed

Relevant legal framework: Rules 5 and 6 of Rules 1975, G.O.Ms. No.635, and Board Standing Order 24 require that alienation of State land be subject to conditions, including usage restrictions and Government's right to resume land upon breach.

Court's interpretation and reasoning: The alienation letter dated 8th February 2001 explicitly imposed three conditions: (1) land use only for the purpose allotted; (2) completion of construction within two years; and (3) planting of trees in open spaces. The letter also stated that deviation would lead to resumption without compensation.

Key evidence and findings: The Respondent-Trust's own replies and pleadings admitted the conditional nature of the allotment and asserted compliance with the conditions. However, evidence showed that the Respondent-Trust subdivided the land into plots, created a colony named 'Eden Orchard', and sold plots to third parties, violating the purpose of a charitable trust.

Application of law to facts: The Court found the conditions were clearly imposed and known to the Respondent-Trust. The subdivision and sale of plots constituted a breach of the conditions, amounting to misuse of the land alienated for charitable purposes.

Treatment of competing arguments: The Respondent-Trust contended that no specific purpose was mentioned and that no restrictions applied. The Court rejected this, noting the Respondent's own admissions and the statutory scheme's clear provisions.

Conclusion: Conditions were imposed and known; the Respondent-Trust violated these conditions by unauthorized subdivision and sale.

Issue iii: Validity of Conditions under Section 10 of the Transfer of Property Act

Relevant legal framework: Section 10 of the TPA declares void any condition absolutely restraining the transferee from alienating property, except in certain lease cases or transfers to women under specific circumstances.

Court's interpretation and reasoning: The Court distinguished the statutory allotment by the State from private inter vivos transfers contemplated under Section 10. It held that Section 10 does not eclipse the statutory scheme governing State land alienation, which inherently includes conditions for public benefit and Government's right of resumption.

The Court emphasized that the State's allotment for public purposes operates in a distinct legal sphere where public interest prevails over the private rights of transferees.

Key evidence and findings: The allotment was under a statutory scheme with explicit conditions and resumption rights. The Respondent-Trust's reliance on Section 10 was misplaced as the restriction was not an absolute restraint on alienation in a private transfer context but a lawful condition imposed by the State in public interest.

Application of law to facts: The Court applied the statutory framework and public interest considerations to uphold the validity of conditions imposed by the State, rejecting the contention that Section 10 invalidated such conditions.

Treatment of competing arguments: The Respondent-Trust argued that any condition restricting alienation was void under Section 10. The Court rejected this, clarifying the distinction between private transfers and statutory allotments by the State.

Conclusion: Conditions imposed under the statutory scheme are valid and not rendered void by Section 10 of the TPA.

3. SIGNIFICANT HOLDINGS

The Court set aside the impugned judgments of the High Court and allowed the appeal, holding:

"The alienation of land by the District Collector, Medak, Government of Andhra Pradesh vide order dated 8th February, 2001 was not a sale, but an allotment under a statutory Scheme."

"The allotment was made subject to specific conditions, including utilization only for the purpose for which it was allotted, completion of construction within two years, and planting trees, with the express provision that deviation would lead to resumption without compensation."

"Section 10 of the Transfer of Property Act operates in the sphere of inter vivos transfers and does not eclipse the statutory scheme of allotment by the State, which is governed by Rules 1975 and Board Standing Orders."

"The Respondent-Trust knowingly accepted the allotment subject to conditions, and its subsequent subdivision of the land into plots and sale to third parties violated the conditions and amounted to a fraud on the statute."

"The General Power of Attorney executed by the Respondent-Trust without disclosing the conditions of allotment reflects malafides."

"Accordingly, the impugned judgments are set aside and the appeal is allowed."

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