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State Of Rajasthan And Others v. Aanjaney Organic Herbal Private Limited .
Factual and Procedural Background
The respondent, a private limited company incorporated on 17-8-2005, purchased 25 bighas of land in Village Jetasan, Rajasthan; 9.73 bighas of that land belonged to members of the Scheduled Castes and were bought on 26-9-2005 for Rs 60,000. When the company applied for mutation, the Revenue Authorities refused on the basis of a Circular dated 19-11-2005 that permits mutation only when the transfer occurs between Scheduled Caste/Scheduled Tribe parties.
The respondent challenged the refusal in SB Civil Writ Petition No. 169 of 2006. A learned Single Judge allowed the writ, and the State’s intra-court appeal (DB Civil Writ Special Appeal (Writ) No. DR(J) 1177 of 2008) was dismissed, both courts relying on the Rajasthan High Court decision in “State of Rajasthan v. Indian Oil Corporation” (2004) 5 WLC 703 (Raj). The State of Rajasthan appealed to the Supreme Court, leading to the present decision.
Legal Issues Presented
- Whether, under Section 42(b) of the Rajasthan Tenancy Act, 1955, a transfer of land by a member of a Scheduled Caste to a juristic person (company, corporation, etc.) that is not itself a Scheduled Caste member is void.
- Whether the term “person” in Section 42(b) should be interpreted to include juristic persons by applying Section 3(42) of the General Clauses Act, 1897, or whether it is confined to natural persons alone.
Arguments of the Parties
Respondent (Purchaser Company)
- The Act does not define “person”; therefore, Section 3(42) of the General Clauses Act must be read in, making “person” include “any company or association or body of individuals.”
- A juristic person has no caste; consequently, a sale by a Scheduled Caste member to such an entity cannot be hit by Section 42(b).
Appellant – State of Rajasthan
- Section 3(42) of the General Clauses Act cannot be imported indiscriminately; the legislative context of Section 42(b) shows “person” refers only to natural persons.
- The purpose of Section 42(b) is to protect Scheduled Caste/Scheduled Tribe land from ultimately passing into non-Scheduled Caste/Tribe hands; allowing companies to purchase would defeat that purpose because land could then be on-sold to non-protected persons.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| State of Rajasthan v. Indian Oil Corporation, (2004) 5 WLC 703 (Raj) | Held that sale by a Scheduled Caste member to a juristic person is not hit by Section 42(b) because a company has no caste. | The Supreme Court expressly disagreed with and overruled this reasoning, holding it to be an erroneous interpretation of Section 42(b). |
Court's Reasoning and Analysis
The Court characterised the Rajasthan Tenancy Act as beneficial legislation designed to prevent exploitation of Scheduled Castes and Scheduled Tribes. It emphasised that:
- Articles 341 and 342 of the Constitution define who is, and who is not, a Scheduled Caste or Scheduled Tribe. Read with Section 42(b), the phrase “a person who is not a member of the Scheduled Caste/Scheduled Tribe” necessarily denotes a natural person outside those constitutional lists.
- If juristic persons were permitted to purchase land, they could act as conduits to transfer property to non-protected persons, thereby defeating the statute. What cannot be done directly (sale to a non-Scheduled Caste individual) cannot be done indirectly through a corporate intermediary.
- The Revenue Circular dated 9-11-2005, particularly Condition 7(2), correctly restricts mutation to the individual Scheduled Caste/Scheduled Tribe purchaser and not to any firm or company of which such individual may be an office-bearer.
- Consequently, the sale deed dated 26-9-2005 is void ab initio; the High Court’s reliance on the Indian Oil Corporation case misconstrued the legislative intent.
Holding and Implications
APPEALS ALLOWED; High Court judgments set aside.
The Supreme Court declared the impugned sale deed void under Section 42(b). The State is authorised to repossess the land and restore it to the original Scheduled Caste owners. No costs were awarded. While noting that Section 42(b) might occasionally operate to the economic detriment of Scheduled Caste/Scheduled Tribe landholders, the Court left any remedial legislative change to the Rajasthan Legislature. No new precedent was set beyond clarifying the correct interpretation of Section 42(b) regarding juristic persons.
K.S.P Radhakrishnan, J.— Leave granted. We are, in this case, called upon to decide the question as to whether the transfer of land from a member of Scheduled Caste to a juristic person, other than Scheduled Caste, is void, in view of the provisions of Section 42(b) of the Rajasthan Tenancy Act, 1955 (for short “the Act”).
2. The High Court of Rajasthan has answered the above question in several cases holding that such a transfer would not be hit by the abovementioned provision, since the expression “person” would not take in a “juristic person” and that a juristic person does not have a caste and, therefore, any transfer made by a Scheduled Caste person would not be hit by Section 42(b) of the Act.
3. In the impugned judgment Civil Writ No. 169 of 2006, reliance has been placed on an earlier judgment of the High Court of Rajasthan in State of Rajasthan v. Indian Oil Corpn. (2004) 5 WLC 703 (Raj), which held as follows:
“6. It goes without saying that though Indian Oil Corporation is a juristic person but it does not have a caste. Thus, the sale in favour of Indian Oil Corporation by a member of Scheduled Caste is not covered by the provisions of Section 42 of the Rajasthan Tenancy Act. Thus, taking the totality of the facts and circumstances, we feel that it is not a fit case where the delay of 480 days should be condoned. The special leave is rejected.”
4. The judgment in Indian Oil Corpn. (2004) 5 WLC 703 (Raj) was challenged before this Court by the State of Rajasthan in CC No. 19386 of 2010 with an application for condonation of delay of 2798 days. This Court dismissed the petition with costs vide order dated 4-1-2011 SLP (C) CC No. 19386 of 2010, since the delay was not properly explained.
5. We are informed that since the special leave petition, arising out of CC No. 19386 of 2010 was dismissed SLP (C) CC No. 19386 of 2010, the judgment in Indian Oil Corpn. (2004) 5 WLC 703 (Raj) is treated as law so far as the State of Rajasthan is concerned and is being followed in various other similar cases. It is, therefore, necessary to examine the various legal issues raised before us so as to render an authoritative pronouncement on the question posed before us.
6. The respondent is a private limited company registered under the Companies Act vide registration certificate of incorporation dated 17-8-2005. The Company purchased 25 bighas of land in Khasra No. 840/651 situated in Village Jetasan, Patwar Area, Jetasan Tehsil, Rajasthan, out of which 9.73 bighas belonged to the members of Scheduled Castes. That property was purchased on 26-9-2005 by a registered sale deed for a consideration of Rs 60,000. An application was preferred by the respondent before the Revenue Authorities for mutation of the property. The same was refused placing reliance on a Circular dated 19-11-2005, which stated that mutation could be effected only if the transfer was between the members of Scheduled Castes/Scheduled Tribes, as the case may be. Since the application for mutation was refused, the respondent herein filed SB Civil Writ Petition No. 169 of 2006, which was allowed Civil Writ No. 169 of 2006 by a learned Single Judge. Aggrieved by the same, the State preferred an appeal before the Division Bench, being DB Civil Writ Special Appeal (Writ) No. DR(J) 1177 of 2008, which was also dismissed following the judgment in Indian Oil Corpn. (2004) 5 WLC 703 (Raj)
7. Heard the learned counsel on either side. The Act is a beneficial legislation which takes special care to protect the interest of the members of Scheduled Castes and Scheduled Tribes.. Section 42 provides some general restrictions on sale, gift and bequest of the interest of Scheduled Castes and Scheduled Tribes, in the whole or part of their holding. The reason for such general restrictions is not only to safeguard the interest of the members of Scheduled Castes and Scheduled Tribes, but also to see that they are not exploited by the members of non-Scheduled Castes and Scheduled Tribes. The relevant provisions of Section 42(b) are extracted below for easy reference:
“42. General restrictions on sale, gift & bequest.—The sale, gift or bequest by a khatedar tenant of his interest in the whole or part of his holding shall be void, if—
(a)***
(b) such sale, gift or bequest is by a member of a Scheduled Caste in favour of a person who is not a member of the Scheduled Caste, or by a member of a Scheduled Tribe in favour of a person who is not a member of the Scheduled Tribe;”
8. Shri P.P Choudhary, learned Senior Counsel appearing for the respondent, submitted that the expression “person”, as such, is not defined in the Act and, therefore, we have to go by the definition of “person” under the General Clauses Act, 1897. The General Clauses Act defines the expression “person” as follows:
“3. (42) ‘person’ shall include any company or association or body of individuals, whether incorporated or not;”
The learned Senior Counsel, therefore, submitted that, if it is so read along with Section 3(42) of the General Clauses Act, the expression “person” used in clause (b) of Section 42 of the Act takes in a juristic person as well and, therefore, if a member of Scheduled Caste sells his property to a juristic person, the sale cannot be declared as void, since a juristic person has no caste.
9. Dr Manish Singhvi, learned Additional Advocate General appearing for the State of Rajasthan, on the other hand, contended that we cannot read Section 3(42) of the General Clauses Act into Section 42(b) of the Act, out of context. The learned counsel submitted that the expression “person” used in Section 42(b) of the Act is a natural person and not a juristic person and if the transfer is by a member of Scheduled Caste or Scheduled Tribe to a person who is not a member of Scheduled Caste or Scheduled Tribe, then such a transfer is void under Section 42 of the Act.
10. Article 341 of the Constitution empowers the President by public notification to specify the castes, races or tribes which shall, for the purpose of the Constitution, be deemed to be Scheduled Castes in relation to that State or Union Territory, etc. Article 341 of the Constitution reads as follows:
“341. Scheduled Castes.—(1) The President may with respect to any State or Union Territory, and where it is a State after consultation with the Governor thereof, by public notification, specify the castes, races or tribes or parts of or groups within castes, races or tribes which shall for the purposes of this Constitution be deemed to be Scheduled Castes in relation to that State or Union Territory, as the case may be.
(2) Parliament may by law include in or exclude from the list of Scheduled Castes specified in a notification issued under clause (1) any caste, race or tribe or part of or group within any caste, race or tribe, but save as aforesaid a notification issued under the said clause shall not be varied by any subsequent notification.”
11. Article 342 of the Constitution deals with “Scheduled Tribes” and reads as follows:
“342. Scheduled Tribes.—(1) The President may with respect to any State or Union Territory, and where it is a State, after consultation with the Governor thereof, by public notification, specify the tribes or tribal communities or parts of or groups within tribes or tribal communities which shall for the purposes of this Constitution be deemed to be Scheduled Tribes in relation to that State or Union Territory, as the case may be.
(2) Parliament may by law include in or exclude from the list of Scheduled Tribes specified in a notification issued under clause (1) any tribe or tribal community or part of or group within any tribe or tribal community, but save as aforesaid a notification issued under the said clause shall not be varied by any subsequent notification.”
12. The expressions “Scheduled Castes” and “Scheduled Tribes”, we find in Section 42(b) of the Act have to be read along with the constitutional provisions and, if so read, the expression “who is not a member of the Scheduled Caste or Scheduled Tribe” would mean a person other than those who have been included in the public notification as per Articles 341 and 342 of the Constitution. The expression “person” used in Section 42(b) of the Act therefore can only be a natural person and not a juristic person, otherwise, the entire purpose of that section will be defeated. If the contention of the Company is accepted, it can purchase land from Scheduled Caste/Scheduled Tribe and then sell it to a non-Scheduled Caste and Scheduled Tribe, a situation the legislature wanted to avoid. A thing which cannot be done directly cannot be done indirectly overreaching the statutory restriction.
13. We are, therefore, of the view that the reasoning of the High Court that the respondent being a juristic person, the sale effected by a member of Scheduled Caste to a juristic person, which does not have a caste, is not hit by Section 42 of the Act, is untenable and gives a wrong interpretation to the abovementioned provision.
14. We are also of the view that the Revenue Authorities rightly refused the mutation as per Circular dated 9-11-2005. Condition 7(2) of the Circular was rightly invoked by the Revenue Authorities in denying the mutation, which condition is extracted below for easy reference:
“7.(2) If the khatedar of a Scheduled Caste/Scheduled Tribe executes sale to such a person of Scheduled Caste/Scheduled Tribe who is the office-bearer of any firm/society/company/legal institution, then the mutation on the basis of registration shall be made only in the name of that particular person/vendee who is a member of Scheduled Caste/Scheduled Tribe and not in the name of that firm/society/company/legal institution wherein he is the office-bearer or member.”
15. The abovementioned condition makes it amply clear that the mutation on the basis of registration shall be made only in the name of that particular person/vendee who is a member of Scheduled Caste/Scheduled Tribe and not in the name of any firm/society/company/legal institution wherein a person is office-bearer or member. When we apply the above principles to the transfer of land in question, we have no hesitation to hold that the sale deed effected on 26-9-2005 was void and therefore rightly denied mutation in the revenue records. Properties, therefore purchased by the respondent from the members of Scheduled Castes vide sale deed dated 26-9-2005 and other sale deeds, therefore, are void since hit by Section 42(b) of the Act and it is so declared. The State can, therefore, repossess the lands and return the lands to the original owners who are members of Scheduled Castes.
16. We may hasten to add, at times, Section 42(b) may go against the interest of the members of Scheduled Castes/Scheduled Tribes as well. There may be several situations where they intend to sell the property for purposes like marriage of son/daughter or to purchase a better property and so on, but in that event sometimes they may not get a better competitive price, if the sale is made only among the members of Scheduled Castes/Scheduled Tribes. We have come across legislations where provisions are made enabling them to sell their lands to the members of non-Scheduled Castes/Scheduled Tribes, on getting permission from the prescribed authority. Such a provision may be sometimes helpful to the members of Scheduled Castes/Scheduled Tribes to get a better price for their land but it is for the legislature to incorporate appropriate provision in the Rajasthan Act.
17. Consequently, the appeals are allowed and the judgments of the learned Single Judge Civil Writ No. 169 of 2006 and the Division Bench of the High Court are set aside. However, there will be no order as to costs.
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