Allowed¶31

Sarfaraj Ahmad v. State of Odisha

Orissa HC22 Jul 2026WP(C)/8379/2025

Case brief

AI extract

What is this about?

Mutation appeal remand; auction purchase of OSFC-auctioned land; lease deed proviso to Clause 4 exempting Collector's permission for mortgage to secure loans; certiorari/mandamus; Sub-Collector, Sadar Sundargarh; Odisha Jesuit Society 2023 (II) OLR-400; W.P.(C) No. 8379 of 2025; Sashikanta Mishra, J.; High Court of Orissa.

What did the court decide?

Impugned order dated 04.01.2024 set aside; matter remitted to the Sub-Collector, Sadar, Sundargarh for fresh disposal of Mutation Appeal Case No. 40 of 2023 within six weeks after hearing all parties, considering the lease deed recitals (particularly the proviso to Clause 4) and the ratio in Odisha Jesuit Society (Supra); parties directed to appear before the appellate authority on 29th July, 2026 at 10.30 a.m. with certified copy of the order. ¶31

Sarfaraj Ahmad Vs State of Odisha — Orissa HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the appellate authority erred in setting aside the mutation authority's order without considering the proviso to Clause 4 of the lease deed, which dispenses with the requirement of obtaining the Collector's written permission where the demised land is mortgaged for securing a loan.

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Court's answer

The proviso to Clause 4 of the lease deed dispenses with the requirement of obtaining written permission of the Collector where the property is put to mortgage for securing a loan; the appellate authority did not consider this aspect, and the Court therefore finds considerable force in the petitioner's submission and is persuaded to interfere with the impugned order.

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Ratio / Principle

The writ application is allowed and the impugned order dated 04.01.2024 is set aside; the matter is remitted to the Sub-Collector, Sadar, Sundargarh to hear Mutation Appeal Case No. 40 of 2023 afresh after granting opportunity of hearing to all concerned, specifically taking note of the recitals of the lease deed, particularly the proviso to Clause 4, and the ratio in Odisha Jesuit Society (Supra), and to dispose of the appeal within six weeks.

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Detailed headnote1 paragraphs

Writ petition allowed. The Sub-Collector, Sadar Sundargarh had allowed the appeal of Opposite Party No. 3 and set aside the mutation authority's order recording land in favour of the petitioner, an auction purchaser of OSFC-auctioned property, principally because the petitioner had not obtained the Collector, Sundargarh's consent. The Court held that on a plain reading, the proviso to Clause 4 of the lease deed dispenses with the requirement of the Collector's written permission where the demised land is transferred by way of mortgage for securing loans, an aspect the appellate authority failed to consider. The impugned order was set aside and Mutation Appeal Case No. 40 of 2023 remitted to the Sub-Collector for fresh decision within six weeks, taking note of the lease deed recitals and the ratio in Odisha Jesuit Society, Bhubaneswar v. State of Odisha and Ors., 2023 (II) OLR-400; parties ordered to appear on 29th July, 2026.

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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W.P.(C). No. 8379 of 2025

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[In the matter of an appeal under Section 100 of the Code of Civil Procedure, 1908.

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---------------

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Sarfaraj Ahmad ...… Petitioner -VersusState of Odisha & Ors ….. Opposite Parties

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Advocate(s) appeared in this case :-

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________________________________________________________ For Petitioner : Mr. P.K. Satapathy, Advocate For Opp.Parties : Mr. A.R.Dash, Advocate

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_______________________________________________________ CORAM JUSTICE SASHIKANTA MISHRA

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ORDER

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22nd July, 2026

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SASHIKANTA MISHRA, J.

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The petitioner has approached this Court with

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the following prayer:

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“The petitioner therefore prays that your Lordships would be graciously pleased to admit this Writ Petition, call for the records, after hearing the parties issue writ/writs in the nature of certiorari/mandamus or any other writ/directions, quash the order dated 04.01.2024 passed in Mutation appeal No. 40 of 2023 by the Sub-Collector, Sadar Sundargarh under Annexure-1,

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And for this act of kindness the petitioner as in duty bound shall ever pray.”

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Page 1 of 5

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Heard Mr. P.K. Satpahty, learned counsel for the Petitioner and Mr. G. Mohanty, learned Standing Counsel for the State and Mr. P.R. Barik, learned counsel appearing for the OSFC (Opp.Party No.6).

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Be it noted that despite service of notice on Opposite Party No.7, there was no appearance.

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Perusal of the impugned order reveals that the appeal of Opposite Party no. 3 against the order passed by the mutation authority was allowed and the order of the mutation authority directing recording of the land in favour of the petitioner was set aside. The petitioner is an auction purchaser of the land in question put to auction by the OSFC because of default in repayment of the loan by the original borrower (Opp. Party No.7).

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Mr. Satapathy, learned counsel for the petitioner draws attention of this Court to the impugned order to submit that the appeal was rejected mainly on the ground that the petitioner has not obtained any consent from the Collector, Sundargarh before purchasing the property through auction. In this regard, attention of this Court is drawn to the recitals of lease deed, whereby it is provided

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Page 2 of 5

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that the requirement of obtaining permission of the Collector is not required if the property in question is put to mortgage for securing any loan.

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Mr. Satapathy submits that the appellate authority has not considered the lease deed in its entirety. He also cites a judgment of a division Bench of this Court rendered in the case of Odisha Jesuit Society, Bhubaneswar v. State of Odisha and Ors., 2023 (II) OLR-400 in this context.

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Mr. G.Mohanty, learned State counsel submits that there being no permission of the Collector, the OSFC could not have put the property to auction and thereafter sold it to the petitioner. He, however, fairly agrees that the lease deed does grant an exemption in case the property is put to mortgage for securing loan.

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Mr. Barik, learned counsel appearing for OSFC, also fairly submits that the lease deed, in fact, contains such a clause.

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This Court has taken note of the recitals of the lease deed, copy of which was produced by Mr. Barik. Clause 4 of the lease deed reads as follows:

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Page 3 of 5

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“PROVIDED FURTHER that this Convenant shall not apply to any transfer or assignment of the said demised land or any part thereof by way of mortgage for securing loans for the under taking and/or for completing the construction work of the factory or other works of the Lessee and/or in favour of the Trustees of Debenture Trust in respect of any issue of debentures or debenture stock which may be hereafter issued by the Lessee.”

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(emphasis supplied)

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A plain reading of the proviso makes it clear that the requirement of obtaining written permission of the Collector is dispensed with in case the property is put to mortgage for securing a loan. This aspect does not appear to have been considered by the appellate authority as evident from the impugned order. To such extent therefore, this Court finds considerable force in the submission of learned counsel for the petitioner and is, therefore, persuaded to interfere with the impugned order.

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For the foregoing reasons therefore, this writ application is allowed. The impugned order is set aside. The matter is remitted to the Sub-Collector, Sadar, Sundargarh to hear the Mutation Appeal Case No. 40 of 2023 afresh after granting opportunity of hearing to all concerned and specifically, by taking note of the recitals of the lease deed, particularly, the proviso to Clause-4 thereof referred to in

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Page 4 of 5

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this order. The Sub-Collector shall also take into consideration the ratio decided in the case of Odisha Jesuit Society, Bhubaneswar (Supra) . The appeal shall be disposed of within six weeks from the date of appearance of the parties.

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To cut short the delay, the parties are directed to appear before the appellate authority on 29^th July,2026 at 10.30 a.m. with certified copy of this order.

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…………….……………. Sashikanta Mishra,

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Judge

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Deepak

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Signature Not Verified

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Digitally Signed Signed by: DEEPAK PARIDA Reason: Authentication Location: OHC,Cuttack Date: 27-Jul-2026 10:03:25

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Page 5 of 5

Sarfaraj Ahmad v. State of Odisha

Case brief

What is this about?

What did the court decide?

Sarfaraj Ahmad v. State of Odisha

Case brief

What is this about?

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