http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5

PETITIONER:

GULZARA SINGH

Vs.

RESPONDENT:

THE COLLECTOR, LUDHIANA & OTHERS

DATE OF JUDGMENT07/03/1995

BENCH:

RAMASWAMY, K.

BENCH:

RAMASWAMY, K.

VENKATACHALA N. (J)

CITATION:

1995 SCC Supl. (2) 253 JT 1995 (3) 26

1995 SCALE (2)141

ACT:

HEADNOTE:

JUDGMENT:

K. RAMASWAMY, J.:

1. The lands bearing Khasra Nos. 75/ 10/2, 11, 12, 19/1,

admeasuring 25 kanals 4 marlas along with other Nazool lands

in a total extent of 47 kanals 3 marlas situated in Bassi

Gujjran, Tehsil Samrala, District Ludhiana, were granted to

the appellant by the Collector, Ludhiana, in File No.217 on

June 27, 1968, subject to the appellant paying a sum of

Rs.1,520/- for redemption of the mortgage in respect of the

aforesaid 25 kanals 4 marlas of land. Pursuant thereto, the

appellant had deposited the aforesaid money with the Collec-

tor on June 30, 1968. The appellant was put in possession

of the said land on September 11, 1968. By proceedings

dated September 13, 1968, the Collector cancelled the said

grant, without notice to the appellant, on the ground that

the respondents-mortgagees, namely, Fakir Chand, Prem

Prakash and Gurdas Ram, were in possession and enjoyment for

over 50 years and they cannot be dispossessed and the

property cannot be redeemed by operation of the provisions

of Redemption of Mortgage (Punjab) Act, 1913 (for short,

'the Act') and redelivered possession to the respondents on

September 21, 1968.

2. The appellant filed Civil Suit No.204 of 1970

challenging the order cancelling grant and redelivering

possession of the lands to the respondents. After adduction

of evidence, the trial court considered the evidence adduced

by the parties and by judgment and decree dated March 17,

1972, decreed the suit and, on appeal, it was confirmed.

The High Court of Punjab & Haryana in Regular Second Appeal

No. 1506/75, though recorded

29

practically all the findings in favour of the appellant,

holding that grant was valid and cancellation was void,

inoperative and does not bind appellant, allowed the appeal

and reversed the decree for possession on the ground that

mortgage was not redeemed in accordance with the provisions

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5

of the Act. Thus this appeal by special leave.

3.The question is whether the High Court is right in

refusing the relief of possession to the appellant. Under

Rule 2(d) of Government of Patiala and East Punjab States

Union Notification dated May 28, 1956, The Nazool lands

(Transfer) Rules, 1956 (forshort, 'the Rules') for grant of

Nazool lands have been made. Rule 2(d) defines Nazool land

to mean (i) "the land which has escheated to the State

Government and has not already been appropriated by the

State Government for any purpose; (ii) such other lands as

the State Government may make available for being trans-

ferred under these rules". Rule 3 provides the procedure

for transfer of Nazool land. Clause (b) is relevant which

reads thus:-

"(b) In the village where Nazool land

available is 10 acres or more, the scheduled

castes land-owing co-operative societies may

be formed by the heads of scheduled caste

families in accordance with the serials and

the Nazool land may be allotted to them. If a

co-operative society cannot be formed, then

the Nazool land may be allotted to present

lessees, i.e. members of a scheduled castes

individually up to the Unit of Nazool land as

defined in the rules provided they do not own

any land of their own. Those who own some

land, they may be allowed such area as would

make up the Unit of Nazool land when added -to

their own area and the rest may be allotted to

other members of the scheduled castes."

4. Under these rules, the land granted by the Collector

being admittedly below 10 acres of land, the grant of the

land to the appellant was valid. In this behalf, all the

courts below concurrently recorded the finding in favour of

the appellant. This was done in implementation of the

constitutional mandate to render socioeconomic justice to

the Scheduled Castes. As enjoined in the Preamble and in

Article 46 of the Constitution, the Nazool lands vested in

the State were granted and transferred' to the appellant.

Rule 3-A envisages the procedure regarding mortgaged Nazool

land. It says thus :-

"3-A. Mortgaged Nazool land - In the case of

Nazool lands mortgaged with possession the

mortgagors rights be transferred to the co-

operative society of scheduled castes, where

the land is 10 acres or more and to be the

individual members of scheduled castes where

it is less than 10 acres, in the manner

prescribed in rule 3(a) and (b) and the

mortgagors should pay the, entire mortgage

amount which would be deemed as equal to the

sale price of the land, in cases where

mortgage money exceeds the price to be charged

by Government under rules. Where the mortgage

amount is less than the price to be charged

according to the rules, the difference between

the two amounts should be paid to the

Government and the mortgage money to the

mortgagees. "

A reading thereof clearly indicates that in the case of a

Nazool land burdened with possessory mortgage, the land

would be transferred to Scheduled Castes Cooperative Society

or a member of Scheduled Castes as indicated in Rule 3 and

the grantee was treated as mortgagor. Thereby the right of

redemption has been conferred on the grantee. The grantee

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5

should pay the entire mortgage amount which would

30

be deemed as equal to the sale price of the land. In cases

where the mortgage money exceeds the price to be charged by

the Government under the Rules the same should be paid.

Where the mortgage amount is less than the price to be

charged, the difference between the mortgage money and the

price charged should be paid to the Government and the

mortgage money to the mortgagee. Thereby it would be clear

that the grant is subject to the payment of the price. The

mortgage money or the difference of the price was treated to

be the price payable to the State and the mortgage money is

payable to the mortgagee. In the light of the definition of

the Nazool land, since the land admittedly is escheat, the

lands stood vested in the State subject to the redemption of

the mortgage. Where Nazool land is burdened with possessory

mortgage, the State has the power either itself to redeem

the mortgage by paying the amount to the mortgagee or the

grantee would be entitled to redeem the mortgage by paying

the amount to the mortgagee.

5. The question emerges whether the Act, 1913, would be

applicable to the redemption of possessory mortgage of the

Nazool land'? The High Court and the courts below clearly

found that in respect of the Nazool land "it is clear from

the language of the Rule that the allottee is required to

pay the mortgage money himself to the prior mortgagee". But

the High Court found that he is required to redeem the

mortgage by following the procedure prescribed under the

Act. It also found that the Collector was not authorised to

take the price and redeem the mortgage. Section 2 of 'The

(Government) Grants Act, 1895, provides that "nothing in the

Transfer of Property Act, 1882, contained shall apply or be

deemed ever to have applied to any grant or other transfer o

land or of any interest therein heretofore made or hereafter

to be made by or on behalf of the Government to, or in

favour of any person whomsoever, but every such grant and

transfer shall be construed and take effect as if the said

Act had not been passed". Thereby it is clear that for any

grant and transfer of the land or of any interest therein

and, in favour of, by and on behalf of the Government to or

in favour of any person whomsoever for such grant or

transfer the provisions of the Transfer of Property Act

shall not apply or be deemed ever to have applied to such

grant or transfer and that Act takes effect as if the

Transfer of Property Act has not been passed. Section 3

further adumbrates that all provisions, restrictions,

conditions and limitations over, contained in any such grant

or transfer as aforesaid shall be valid and take effect

according to their tenor, any rule of law, statute or

enactment of the Legislature to the contrary notwith-

standing. In other words, notwithstanding any rule of law,

statute or enactment of the Legislature contrary to the

provisions, restrictions, conditions and limitations con-

tained in any such grant or transfer, shall be valid and

take effect according to the tenor. It would thereby be

clear that not only that the provisions of the Transfer of

Property Act should not apply to such grant or transfer of

land, the operation of any rule of law or statute or

enactment of the State Legislature including the Act stand

excluded to the grant or transfer of the Nazool land.

Section 3 clearly manifests that the operation of the Act

stands excluded, Therefore, the need for the appellant to

follow the procedure prescribed under the Act was obviated.

The question then is whether the appellant is entitled to

pay the amount as directed by the tenor or conditions

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5

mentioned in the letter of grant

31

or transfer of the Nazool land? It is seen that the

appellant had paid the said amount on June 30, 1968. The

order of cancellation indicates that the cancellation was

effected solely on the premise that the respondents were in

possession and enjoyment as a possessory mortgagees for over

50 years and that, therefore, it would be improper to

dispossess them from the Nazool lands. The question emerges

whether the payment of the amount as ordered by the

Collector and thereby the lands stood redeemed under the

Rules is within the limitation prescribed in that behalf? it

is true that though the escheat land stood vested in the

State, the escheat land burdened with possessory mortgage

was differently treated by Rule 3-A. In other words, the

Rule indicates that despite vesting of the land as escheat

for the lands burdened with possessory mortgage, the State

is burdened with the right to redeem the land by paying the

redemption money by itself or by the grantee or transferee.

The grant or transfer for such land was for price. The

mortgage money was treated to be the price. In case of

excess, the difference between the: price fixed and the

mortgage money was to be paid to the State. In this case,

admittedly, the price fixed was the money payable under the

mortgage which amount was deposited by the appellant. The

Limitation Act, 1918, prescribed 60 years for the State to

redeem the mortgage but The Limitation Act, 1963, prescribed

30 years which had come into force with effect from January

1, 1964. Section 30 of the Limitation Act provides that

where limitation given in the old Act has been reduced by

the new Act, the suit would be filed within five years from

January 1, 1964. By further amendment, by Act 10, 1969, the

period of five years was extended to seven years. The

period o limitation for redemption of the mortgage was

extended up to 1971. Since the grant of the Nazool land was

made in 1968 and amount was deposited on June 30, 1968, the

appellant had lawfully redeemed the mortgage by paying the

amount as contained in the order of grant. The counsel for

the respondent candidly conceded in the appellate court that

the redemption was within limitation but contended that the

procedure prescribed under the Act had not been followed and

by the date of suit it was barred and that, therefore, the

payment by the appellant was not in accordance with law and

the mortgage was not redeemed as per the law as on the date

of the suit. That finding, though was negatived by the

appellate court, it was found favour with the High Court.

In view of the fact that the State itself has right to

redeem the Nazool land burdened with the possessory

mortgage, the grant of the same land subject to the

redemption, the grantee gets the right of redemption within

limitation available to the State. That could be in terms

of the order, namely, making the payment to the mortgagee or

deposit with the Government. Since the order specifically

postulates payment with the government and the same had been

paid, the need to follow the procedure prescribed under the

Act has been obviated not only by operation of Section 3 of

the (Government) Grants Act but also by the terms of the

grant or transfer of the Nazool land.

6. The High Court, therefore, was not right in refusing

the relief of possession to the appellant. Accordingly, the

judgment and decree of the High Court is set aside and that

of the trial court is confirmed as prayed for. The appeal

is accordingly allowed with costs throughout.

33

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5