Supreme Court Upholds Restrictions on Land Transfers by Scheduled Tribes: Additional Commissioner Revenue vs. Akhalaq Hussain (2020)

Date of the Judgment: March 03, 2020

Citation: (2020) INSC 199

Judges: R. Banumathi, J., S. Abdul Nazeer, J., A.S. Bopanna, J.

Can a land transfer between a Scheduled Tribe member and a non-Scheduled Tribe member be deemed valid if it occurs through an exchange deed? The Supreme Court of India recently addressed this question, focusing on the interpretation of the U.P. Zamindari Abolition and Land Reforms Act, 1950. The core issue revolves around whether such an exchange, without prior permission from the Assistant Collector, violates the Act’s provisions designed to protect tribal land rights. The Supreme Court, in this case, examined the legality of an exchange deed and its implications under the said Act. The judgment was delivered by a three-judge bench comprising Justices R. Banumathi, S. Abdul Nazeer, and A.S. Bopanna, with Justice R. Banumathi authoring the opinion for the bench.

Case Background

In 1994, Akhalaq Hussain and Saqir Hussain (the respondents), exchanged a small piece of land (4 ½ Muthi, equivalent to 56.25 sq. mtrs.) with Mangal Singh, a member of the Scheduled Tribe, for a larger plot of agricultural land (12 Nali, equivalent to 2400 sq. mtrs.) in Pithoragarh district, Uttarakhand. This exchange was formalized through a registered deed on March 16, 1994. The respondents later constructed a hotel named “Zara Resort” on the land they received in the exchange.

However, on July 19, 2000, the Pargana Magistrate/Assistant Collector declared the exchange void, stating that the respondents had violated the U.P. Zamindari Abolition and Land Reforms Act, 1950, specifically Section 161, which requires prior permission from the Assistant Collector for such exchanges. The order also stated that, under Section 167 of the U.P. ZA & LR Act, the land was to vest in the Government of Uttar Pradesh. The authorities also noted that Mangal Singh, being a member of the Scheduled Tribe, was prohibited from transferring land to a non-Scheduled Tribe member under Section 157-B of the same Act.

Timeline:

Course of Proceedings

The respondents appealed the Pargana Magistrate’s order, arguing that the exchange was lawful and that the Transfer of Property Act should apply, not the U.P. Zamindari Abolition and Land Reforms Act, 1950. The Additional Commissioner (J) dismissed the appeal, noting that the land was “transferable land” under the Act and that prior permission was not obtained. Furthermore, the transfer violated Section 157-B of the Act, which prohibits the transfer of land from a Scheduled Tribe member to a non-Scheduled Tribe member.

A revision petition was then filed before the Additional Revenue Commissioner, who also dismissed it. The Commissioner stated that the exchange was essentially a sale due to the disproportionate land values and therefore void under Section 166 of the Act.

The respondents then filed a writ petition before the High Court of Uttarakhand, which set aside the orders of the lower authorities. The High Court held that Sections 161 and 157-B of the U.P. ZA & LR Act do not apply to land exchanges made through a registered deed with paid stamp duty. The High Court also stated that Section 157-B does not bar exchanges by Scheduled Tribe members since they also receive land in return.

Legal Framework

The case primarily revolves around the interpretation of the U.P. Zamindari Abolition and Land Reforms Act, 1950. Key provisions include:

• Section 3(14): Defines “land” as that which is held or occupied for purposes connected with agriculture, horticulture, or animal husbandry.
  
  “3. Definitions.
  (14) “Land” except in Sections 109, 143 and 144 and Chapter VIII means land held or occupied for purposes connected with agriculture, horticulture or animal husbandry which includes pisciculture and poultry farming.”
• Section 143: Allows a bhumidhar (landholder) to use their land for non-agricultural purposes after obtaining a declaration from the Assistant Collector.
  
  “143. Use of holding for industrial or residential purposes. – (1) Where a bhumidhar with transferable rights uses his holding or part thereof for a purpose not connected with agriculture, horticulture or animal husbandry which includes pisciculture and poultry farming, the Assistant Collector-in-charge of the sub-division may, suo motu or on an application, after making such enquiry as may be prescribed, make a declaration to that effect.”
• Section 157-B: Restricts the transfer of land by members of Scheduled Tribes to non-Scheduled Tribe members, including sale, gift, mortgage, lease, or otherwise.
  
  “157-B. Restrictions on transfer of land by members of Scheduled Tribes. – (1) Without prejudice to the restrictions contained in Sections 153 to 157, no bhumidhar or asami belonging to a Scheduled Tribe shall have the right to transfer by way of sale, gift, mortgage or lease or otherwise any land to a person not belonging to a Scheduled Tribe.”
• Section 161: Governs the exchange of land between bhumidhars, requiring prior permission from the Assistant Collector.
  
  “161. Exchange. – (1) A bhumidhar may exchange with –
  (a) any other bhumidhar land held by him; or
  (b) any Gaon Sabha or local authority, lands for the time being vested in it under Section 117:
  Provided that no exchange shall be made except with the permission of an Assistant Collector who shall refuse permission if the difference between the rental value of land given in exchange and of land received in exchange calculated at hereditary rates is more than 10 per cent of the lower rental value.”
• Section 166: States that any transfer made in contravention of the Act’s provisions shall be void.
  
  “166. Every transfer made in contravention of the provisions of this Act shall be void.”
• Section 167: Specifies the consequences of a void transfer, including vesting of the land in the State Government.
  
  “167. Consequences of transfer in contravention of this Act. – (1) Where any transfer of land is made in contravention of the provisions of this Act, it shall be void and the land shall, with effect from the date of such transfer, vest in the State Government free from all encumbrances.”

Arguments

Appellants’ (Government) Arguments:

• The appellants argued that the High Court erred in holding that Sections 161 and 157-B of the U.P. ZA & LR Act do not apply to exchanges of land made through registered documents with paid stamp duty.
• They contended that Section 157-B imposes a complete bar on the transfer of land by a bhumidhar or asami belonging to a Scheduled Tribe to a non-Scheduled Tribe member, which includes exchanges.
• The appellants asserted that the High Court’s reasoning was contrary to the statutory provisions of Sections 157-B and 166 of the Act, as well as the legislative intent of the U.P. ZA & LR Act.
• They submitted that the High Court exceeded its jurisdiction under Article 227 of the Constitution by setting aside the concurrent findings of the lower authorities.
• The appellants emphasized that the mere payment of stamp duty does not override the mandatory bar under Sections 157-B and 161 of the Act.

Respondents’ (Landholders) Arguments:

• The respondents argued that the land in question is not “agricultural land” and therefore does not fall under the purview of the U.P. ZA & LR Act.
• They claimed that the exchange deed specifically mentions that the land is not agricultural land, which should be considered as proof.
• They contended that failure to seek permission under Section 161 cannot result in vesting of the land under Section 167 of the Act.
• The respondents argued that the Pargana Adhikari did not have the jurisdiction to pass the vesting order, and only the Assistant Collector is empowered to do so.
• They argued that the ex-parte vesting order under Section 167, without giving them a hearing, was unsustainable.
• The respondents contended that the proceedings under Section 161 were barred by limitation, citing Appendix-III of the U.P. ZA & LR Act, which specifies a six-year limitation period from the date of transfer.
• They highlighted that they have been running a hotel/resort since 1998 and taking over possession would cause great hardship, as they have various loans from financial institutions.

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. Whether the exchange deed dated 16.03.1994 is in contravention of the provisions of U.P. ZA & LR Act in view of complete bar for the transfer of land by a member of Scheduled Tribe under Section 157-B of the U.P. ZA & LR Act?
2. Whether the High Court was right in saying that permission required under Section 161 of the U.P. ZA & LR Act is not a requisite condition for the exchange of land?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

The Court rejected the respondents’ argument that the land was not agricultural, stating that no declaration under Section 143 had been made, and the land was thus deemed agricultural. The Court also rejected the argument that post-facto approval was sufficient, emphasizing the mandatory nature of prior permission. The Court also stated that the limitation period in Appendix-III applies to suits for ejectment of a sirdar or asami, not to void transfers.

The Court emphasized the importance of protecting the land rights of Scheduled Tribes and the need to interpret the U.P. ZA & LR Act in a manner that achieves its beneficial purpose. The Court also noted that when a transfer is void under the Act, the consequences under Section 167 must follow, and equity cannot be considered.

The Supreme Court held that the High Court’s interpretation was incorrect and that the exchange deed was void due to the contravention of Sections 157-B and 161 of the U.P. ZA & LR Act. The Court stated that the High Court had erred in holding that Section 157-B does not bar exchanges by Scheduled Tribe members because they also receive land in return. The Court emphasized that the phrase “or otherwise” in Section 157-B indicates that the land cannot be transferred in any manner.

The Supreme Court stated that the High Court’s view was against the benevolent object of the U.P. ZA & LR Act and the constitutional scheme for social and economic empowerment of Scheduled Tribes. The Court set aside the High Court’s judgment and allowed the appeal, granting the appellants the liberty to proceed in accordance with the law.

The key reasons for the decision were:

• The exchange deed was in contravention of Section 157-B of the U.P. ZA & LR Act.
• Prior permission from the Assistant Collector was mandatory under Section 161 of the Act, and it was not obtained.
• The land was deemed to be agricultural land as no declaration under Section 143 was made.
• The limitation period in Appendix-III applies to suits for ejectment of a sirdar or asami, not to void transfers.
• When a transfer is void under the Act, the consequences under Section 167 must follow, and equity cannot be considered.

“As per Section 166 of the Act, any transfer made in contravention of the provisions of the U.P. ZA & LR Act shall be void.”

“Under Section 157-B of the Act, no bhumidhar or asami belonging to a Scheduled Tribe, shall have the right to transfer by way of “sale, gift, mortgage or lease or otherwise any land to a person not belonging to a Scheduled Tribe.”

“The U.P. ZA & LR Act being a beneficial legislation, the provisions need to be interpreted in a manner so as to achieve the rationale behind the legislation.”

Key Takeaways

• Land transfers by members of Scheduled Tribes to non-Scheduled Tribe members are strictly prohibited under Section 157-B of the U.P. ZA & LR Act, including exchanges.
• Prior permission from the Assistant Collector is mandatory for any land exchange under Section 161 of the U.P. ZA & LR Act.
• Land will be considered agricultural unless a declaration under Section 143 of the U.P. ZA & LR Act has been obtained and registered.
• The U.P. ZA & LR Act is a beneficial legislation aimed at protecting the interests of rural masses, especially Scheduled Tribes.
• The consequences of a void transfer under the Act must be followed, and equity cannot be a consideration.

Directions

The Supreme Court set aside the High Court’s judgment and allowed the appeal. The appellants were granted the liberty to proceed in accordance with the law.

Development of Law

The ratio decidendi of this case is that any transfer of land by a member of a Scheduled Tribe to a non-Scheduled Tribe member, including an exchange, is void under Section 157-B of the U.P. ZA & LR Act. This judgment reinforces the protective measures for Scheduled Tribes’ land rights and clarifies that prior permission from the Assistant Collector is mandatory for any land exchange under Section 161. This case also clarifies that the limitation period in Appendix-III applies to suits for ejectment of a sirdar or asami, not to void transfers.

Conclusion

In the case of Additional Commissioner Revenue vs. Akhalaq Hussain, the Supreme Court upheld the restrictions on land transfers involving Scheduled Tribes, emphasizing the mandatory nature of prior permission for land exchanges and the protective intent of the U.P. Zamindari Abolition and Land Reforms Act, 1950. The Court’s decision underscores the importance of adhering to statutory provisions designed to safeguard the land rights of Scheduled Tribes and reinforces that any contravention of these provisions will result in a void transfer, with the land vesting in the State Government.