The Orissa High Court dismissed orders directing eviction of a petitioner who acquired mortgaged land via auction under the SFC Act, 1951, holding that the Central Act overrides restrictive State regulation provisions regarding land transfer to non-Scheduled Tribes.
The impugned orders at Annexures-4 and 5 were set aside; the writ petition was allowed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
ORISSA HIGH COURT : C U T T A C K
W.P.(C) NO.2348 OF 2014
In the matter of an application under Articles 226 and 227 of the Constitution of India.
AFR
Chandra Sekhar Patra : Petitioner -VersusJitan Manki & others : Opp.Parties For petitioner : M/s.G.Mishra, D.K.Patra & A.Dash For O.P.1 : M/s.R.N.Behera, K.K.Lal & S.R.Panda For O.P.2 : None For O.Ps.3 & 4 : Additional Standing Counsel
PRESENT:-
THE HONOURABLE MR. JUSTICE BISWANATH RATH
Date of hearing : 1.12.2016 & Judgment : 14.12.2016
Biswanath Rath, J. This is a writ petition assailing the order dated 4.12.2013 passed by the Additional District Magistrate, Sundargarh in Revenue Appeal No.3/2010 appearing at Annexure-5 and also the order dated 23.12.2009 passed by the Officer on Special Duty, Panposh, in Revenue Misc. Case No.125/2007, vide Anenxure-4.
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The present petitioner emerged as the
successful bidder and thereby was put in possession of the crusher unit in question. Permission was granted under the provision of Regulation-II of 1956 in respect of the property involving khata no.148 plot no.1432 having an area Ac.1.530 decimals and the auction in favour of the petitioner was finalised for a total sum of Rs.3,25,000/-. It is at this stage, after the sale proceeds were duly credited to the loan account of Dilor Topno, it was found that there was balance outstanding of Rs.13,00,530/-
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as on 30.6.2006. Consequently, notices were also issued to Dilor Topno for payment of balance dues. Neither the loanee nor the mortgager or guarantor could pay the balance amount, as a result of which the other property mortgaged as collateral security situated in Mouza- Balanda, khata no.148, plot no.1432, area Ac.1.03 decimals was taken over by the O.S.F.C. in exercise of power under Section 29 of the S.F.C.Act on 29.12.2006 and put to public auction on 12.1.2007. This property was sold in favour of the present petitioner for a total sum of Rs.3,31,000/on outright purchase basis. The sale was finalised. Property was also handed over to the petitioner.
It is at this stage, it is alleged that O.P.1 filed an application under Regulation-II of 1956 on 11.9.2007, Revenue Misc. Case No.125/2007 for restoration of the property to the custody of O.P.1. In the final outcome, the Officer on Special Duty, vide order dated 23.12.2009 on disposal of the Revenue Misc. Case No.125/2007 directed for eviction of the petitioner from the case land, vide Annexure-4.
Revenue Appeal No.3/2010 preferred by the present petitioner ended with an order of dismissal thereby confirming the order passed by the Officer on Special Duty, vide Annexure-5, giving rise to the present writ petition.
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Secondly, the provision contained in S.F.C. Act, 1951 being involving a Central Act, would prevail over the provision of Regulation-II of 1956 being a State Act and took support of the decisions in the case of Govt. of A.P. & another vrs. J.B.Educational Society & another, (2005) 3 SCC 212, State of West Bengal & others vrs. Committee for Protection of Democratic Rights, West Bengal & others, (2010) 3 SCC 571 and lastly, the recent decision of the Hon’ble apex Court dated 25.11.2016 ( UCO Bank & others vrs. Dipal Debbarma &
Others) rendered in Civil Appeal No.11247/2016.
The third point, as raised by Sri Mishra, learned counsel for the petitioner, is that the application under
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Regulation-II of 1956 is also hit by the principle of waiver and acquisition.
Referring to certain decisions of this Court in the case of Viswasrai Laxminarayana Dora vrs. State of Orissa & another , 2007 (I) OLR-431 and decisions of the Hon’ble apex Court in the case of Harish Chandra Hegde vrs. State of Karnataka & others, 2004(1) CLR (SC) 427 and Sri Natabar Jena vrs. Collector, Jajpur & others, 2014 (II) CLR 1022, Sri Behera, learned counsel for O.P.1, contended that for
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the constraint in the Regulation-II of 1956, both the courts have passed the right judgments leaving no scope for interference in the same.
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the Act, 2002 so as to invalidate the sale notification being contrary to the provision of the local Act, Hon’ble apex Court taking into consideration the enabling provision of Act, 2002, discussed in paragraphs-16, 17 & 18 of the judgment, came to hold that the provision of Act, 2002 enabled the bank to take possession of any property, where a security interest has been created in its favour and more particularly, Section 13 of 2002 Act enables the bank to take possession and sell such property to any person to realize its dues. The purchaser of such property acquires a clear title to the property sold subject to compliance with the requirement prescribed. It is needless to observe here that once the loanee failed to discharge the loan, the bank becomes the owner of the mortgaged property and since the disputed land was sold by the O.S.F.C. to the petitioner, the sale deed or transfer involving therein cannot come under the scrutiny of the Regulation-II of 1956.
In deciding the dominance of the Central legislation over the State legislation in the case of Government of A.P. & another (supra), the Hon’ble apex Court taking into consideration the repugnancy between the Parliamentary legislation and State legislation in paragraph-12 held as follows :
“12. Thus, the question of repugnancy between the parliamentary legislation and the State legislation can arise in two ways. First, where the
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legislations, though enacted with respect to matters in their allotted sphere, overlap and conflict. Second, where the two legislations are with respect to matters in the Concurrent List and there is a conflict. In both the situations, parliamentary legislation will predominate, the first, by virtue of the non-obstante clause in Article 246(I), in the second, by reason of Article 254(I). Clause (2) of Article 254 deals with a situation where the State legislation having been reserved and having obtained President’s assent, prevails in that State ; this again is subject to the proviso that Parliament can again bring a legislation to override even such State legislation.”
Further taking into consideration the restriction in Section 187 of Tripura Act, 1960 like that of the restriction of provision contained in Regulation-II of 1956, in paragraph-18 of Civil Appeal No.11247/2016 held that dominant legislation being the Parliamentary legislation, the provision of the Tripura Act, 1960, pro tanto, Section 187 would be invalid. It is the provision of the Act, 2002, which does not contain any embargo on the category of persons to whom mortgaged property can be sold by the bank for realisation of its dues that will prevail over the provision contained in Section 187 of the Tripura Act, 1960.
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petitioner and under these circumstances, this Court has no hesitation to hold that the impugned orders are bad in law. Thus, while allowing the writ petition, this Court sets aside the impugned orders at Annexures-4 & 5. No cost.
………………………… Biswanath Rath, J.
Orissa High Court, Cuttack. The 14th day of December, 2016/mkr, secy.
3 issues framed by the court
Whether the provisions of Regulation-II of 1956 restricting land transfer apply when property is sold by an SFDC under Section 29 of the SFC Act, 1951.
Whether the Central SFC Act, 1951 overrides the State Regulation-II of 1956 regarding the sale of mortgaged property by a financial institution.
Whether the impugned orders directing eviction are bad in law given the bona fide acquisition by the petitioner under the SFC Act.
Colour shows how this judgement treated each authority
Subhransu Sekhar Padhi vrs. Gunamani Swain & othersReferred¶19
(2014) 12 SCC 368 · Who else cites this
Govt. of A.P. & another vrs. J.B.Educational Society & anotherRelied on¶19
(2005) 3 SCC 212 · Who else cites this
UCO Bank & others vrs. Dipal Debbarma & OthersApplied¶202936
Civil Appeal No.11247/2016
Viswasrai Laxminarayana Dora vrs. State of Orissa & anotherReferred¶26
2007 (I) OLR-431
Harish Chandra Hegde vrs. State of Karnataka & othersReferred¶26
2004(1) CLR (SC) 427
Sri Natabar Jena vrs. Collector, Jajpur & othersReferred¶26
2014 (II) CLR 1022
4 provisions across 3 enactments
Chandra Sekhar Patra
Jitan Manki
Biswanath Rath
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
