Narmada Shankar and anr. Vs. the Collector, Dist. Dhar and ors. - Court Judgment

P.D. Mulye, J.

1. The petitioners have filed this petition under Arts. 226 and 227 of the Constitution, in the matter of M.P. Samaj Ke Kamjor Vargon Ke Krishi Bhumi Dharkon Ke Udhar Dene Walon Ke Bhumi Hadapane Sambhandhi Kuchakron Se Paritran Tatha Mukti Adhiniyam, 1976 and M.P. Samaj Ke Kamjor Vargon Ke Krishi Bhumi Dharkon Ke Udhar Dene Walon Ke Bhumi Hadapane Sambandhi Kuchakron Se Paritran Tatha Mukti Niyam, 1976, to quash the order Annexure-P6 dated 15-7-82 passed by the Sub-Divisional Officer, Kukshi Manawar, in Rev. Case No. 82B-121 year 1978-79 and also to quash the order Annexure-P11 dated 23rd April, 1983 passed by the Collector, Dhar in No. 12/81-82 appeal.

2. The facts giving rise to this petition may be stated, in brief, thus: The respondent No. 3 Shobharam submitted an application under Section 5 of the said 1976 Adhiniyam on 17-12-77 for restoration of possession of the agricultural lands on the ground that he is a bhumiswami on survey No. 24 area 6.563 hectares situated in village Jha-krud. According to him the petitioners are money-lenders and 2.023 area of land of 6.563 of survey No. 24 was transferred to them on 29-4-76 by a registered conditional sale-deed Ex. P-2 for a consideration of Rs. 16,000/- for a period of three years; that after the expiry of the period of 3 years the petitioner would redeliver possession thereof to him on receipt of Rs. 16,000/- He, therefore filed the application to the effect that he was entitled to the benefits of the Act on account of which the possession of the disputed lands be restored to him. The copy of that application is Annexure-P.1.

3. The petitioners contested the said application and contended that they are not money-lenders. They further contended that respondent No. 3 is not a holder of agricultural land as per Clause (c) of Section 2 of the Act. Annexure P. 2A is the copy of the reply.

4. Respondent No. 2, the learned Sub Divisional Officer recorded the statements of Sobharam, Narmada Shankar and Shyam Duttmarked as Annexures P. 3, P. 4 and P. 5. But respondent No. 3 did not file any document to prove that he does not hold and more than the prescribed limit under the said Act. However, the S.D.O. by his order dated 15-7-82 held that the transaction is a prohibited transaction as per Section 2(f) of the Act. He also found that the petitioners are money-lenders and the value of the disputed land on the date of sale was about Rs. 70,000/-. On these findings he quashed the sale-deed Annexure-P2 and ordered restoration of possession in favour of respondent No. 3 (Annexure P. 6).

5. Being aggrieved the petitioners under Section 8 of the Act preferred an appeal before the Collector, respondent No. 1. Copy of the appeal memo is Annexure-P. 7. Along with that they also filed an application under Order 41 Rule 27 CPC (Annexure-P. 8) by which they wanted to produce khasra entries of patwari halka No. 97 for the years 1969-70 to 1973-74 to indicate that respondent No. 3 is in possession of more land and does not come under the category of holder of agricultural land or weaker economic section, kistbandi for the year 1981-82 and certificate of the Gram Panchayat. These documents according to the petitioner were necessary to show that respondent No. 3 owns more than 8 hectares of unirrigated land and is not a holder of agricultural land as per clause (c) of Section 2 of the Act. However, the Collector, Respondent No. 1 by his order dated 23-4-83 dismissed the appeal and confirmed the order of the said S.D.O. Annexure-P. 11. Hence this petition.

6. The learned counsel for the petitioners contended that the application filed by respondent No. 3 Shobharam was not maintainable because he was not a holder of agricultural lands as per Clause (c) of Section 2 of the act as he has failed to prove that he belongs to a weaker section of the community and that he was possessed of that much agricultural land only as mentioned in that section. He, therefore, submitted that from the Khasra entries of the years 1969-70 to 1973-74 & kistbandi for the year 1981-82 it would be clear that respondent No. 3 Shobharam has 1/3rd share in all these lands; he is the exclusive owner of land bearing survey No. 24 that during the pendency of the application respondent No. 3 had transferred on 15-5-78 agricultural land having an area of 1.242 hectares for consideration of Rs. 30,000/-. Thus, the respondent No. 3 owns more than 8 hectaresof unirrigated land. He further submitted that the respondent No. 3 has failed to prove that the petttioners are money-lenders or carrying on the business of money-lending. He also submitted that the learned Sub-Divisional Officer did not comply with the provisions of Section 6 of the said Act as he did not make any preliminary enquiry nor prepared any report on the basis of which he could have issued any notice to the petitioner. He, therefore, submitted that the S.D.O. as also the Collector had no jurisdiction or authority to decide the case in favour of respondent No. 3, who has failed to prove that he is covered by any of the provisions of the said Act. He also submitted that as regards the value of the land in question at the relevant time there is no satisfactory and convincing evidence adduced by respondent No. 3 to prove that in fact the value thereof was Rs. 70,000/-. He therefore, submitted that the impugned orders deserve to be quashed.

7. On the other hand the learned counsel for respondent No. 3 vehemently contested the case of the petitioners mainly on the ground that the petitioners have never challenged before the appellate authority, namely the Collector that the S.D.O. had not acted in accordance with the provisions of Section 6 of the said Act. He further submitted that from the khasra entries it is apparent that lands are jointly recorded in the name of respondent No. 3, his brothers and his uncle; that there was oral partition in which the land sold to the petitioners on conditional sale came to his share; that in fact it was not a conditional sale but a mrotgage which clearly goes to show that this document was got executed after giving a loan of Rs. 16,000/- by way of security and, therefore, on that basis it has been established that the petitioners are money lenders. He, therefore, submitted that the petition deserves to be dismissed.

8. In order to appreciate the rival contentions of the parties, it would be useful to quote the Preamble as also the relevant provisions of the Act. The Preamble of the Act is as follows : --

'An Act to better economic condition of holders of agricultural land in the weaker sections of the people by providing further relief from agricultural indebtedness by nullifying the land grabbing designs resorted to in many a form by lenders of money whileand after extending credit to them and matters connected therewith.

Whereas a holder of agricultural land in the weaker sections of the people is quite often compelled to seek loan from private money lending agencies to meet his various obligations of urgent nature.

And whereas such private agencies seldom if ever advance loan to him without security of land, his only wherewithal;

And whereas due to ignorance of niceties of law of urgency of financial need or both, he falls an easy prey to them scarcely realizing the legal consequences arising out of the documents which he executes or which they get executed from him seemingly by way of security for the loan.

And whereas it is necessary to relieve the holders of agricultural land in the weaker sections of the people from such exploitation by nullifying such past transaction of loan as also to put a stop to such transactions.

Be it enacted by the M. P. Legislature in the Twenty-seventh Year of the Republic of India as follows :

2 of the Act deals with definitions. Section 2(c) defines 'holder of agricultural land', which is as follows:

'(c) 'holder of agricultural land', in the weaker sections of the people means a holder of land used for purposes of Agriculture not exceeding eight hectares of unirrigated land or four hectares of irrigated land within the State whether as a bhumiswami or an occupancy tenant of a Government lessee either in any one or all of the capacities together within the meaning of the Code.

Explanation.-- One hectare of irrigated land shall be equal to two hectares of unirrigated land and vice versa.

Section 2(d) defines 'lender of money' as under : --

'(d) 'lender of money' means a person advancing loan to a holder of agricultural land, whether registered under the Madhya Pradesh Money Lenders Act, 1934 (No. 13 of 1934) or not;'

Section 2(f) defines 'prohibited transaction of loan' as stated below :

'(f) 'prohibited transaction of loan' means a transaction in which a lender of money advances loan to a holder of agricultural land against security of his interest in land, whetherat the time of advancing the loan or at any time thereafter during the currency of the loan in any of the following modes, namely : --

(i) agreement to sell land with or without delivery of possession;

(ii) outright sale of land with or without delivery of possession accompanied by separate agreement to resell it;

(iii) outright sale of land with or without delivery of possession with a distinct oral understanding that the sale shall not be acted upon if the loan is repaid;

(iv) Outright sale of land with or without delivery of possession with a condition incorporated in the sale deed to resell it on repayment of the loan;

(v) transaction in any modes other than those specified in Clause (i) to (iv) affecting interest in land including a fraudulent transaction designed to defeat the provisions of any law regulating money lending or interest, for the time being in force, and includes all those transactions in which a lender of money has, after the appointed day but on or before the date of publication of this Act in the Gazette, obtained possession of land of the holder of agricultural land through court or by force or otherwise or obtained a decree for such possession towards satisfaction of loan,'

Section 6 of the Act, which deals with Enquiry by Sub Divisional Officer is as follows : --

'6. Enquiry by Sub Divisional Officer : --(1) The Sub Divisional Officer may, on his own motion in any transaction of loan and shall on receipt of an application under Section 5 in the transaction of loan referred to therein, make preliminary enquiry as he may in the circumstances of the case deem fit, to ascertain whether the transaction of loan is a prohibited transaction of loan and on being satisfied that Section 4 applies to such transaction, he shall after recording reasons therefor, proceed to conduct an enquiry into such transaction in the manner hereinafter provided.

(2) The Sub Divisional Officer shall by a notice served on the prohibited transaction of loan call upon them to place all relevant facts and documents before him at such place, on such date and at such time as may be specified in the notice.

(3) The Sub Divisional Officer shall at the place and on the dare and time specified inthe notice, afford an opportunity to the parties of being heard in person and may, if necessary, examine all of the parties interested in land to elucidate information relevant to the transaction of loan.

(4) During the enquiry the Sub Divisional Officer shall, for the purpose of ascertaining the true nature of transaction loan, try to collect, as far as may be, information with respect to the following facts, namely : --

(i) The amount of principal money :

(ii) the market value of the land at the time of the transaction :

(iii) adequacy of the amount of principal money as consideration for sale in the context of the market value under Clause (ii)

(iv) whether the consideration shown in the document was paid in whole or in part privately or before the Sub Registrar,

(v) whether possession of the land was actually delivered to the lender of money as per recitals in the said document if not when and in what manner the lender of money obtained possession of the land.

(vi) what were the terms of the actual agreement between the lender of money and the holder of agricultural land including the rate of interest;

(vii) the extent of urgency for the loan and the availability of other sources to the holder of agricultural land to obtain the same : --

(viii) payment, if any, made by the holder of agricultural land to the lender of money towards the loan,

(ix) whether the lender of money is registered money lender or not,

(x) any other surrounding circumstances which the Sub Divisional Officer may deem fit to consider.'

9. Under the said Act Rules have been framed. Rule 2(b) defines 'section' which means : --

'(b) 'Section' means a section of the Madhya Pradesh Samaj Ke Kamjor Vargon Ke Krishi Bhumi Dharkon Ke Udhar Dene Walon Ke Bhumi Hadapane Sambandhi Kuchakron Se Paritran Tatha Mukti Adhiniyam, 1976 (No. 3 of 77)

Rule 4 provides that-

'The price of land per hectare for purpose of Sub-section 7 shall be an average sale price ofland of the same quality of soil and similarly situated in the village sold during three years preceding the date of transfer and if no sale of such land has taken place in the village during the said period of three years the average of sale price of such land in the adjoining villages, during the said period of three years.'

Rule 3 prescribes the form in which an application has to be submitted to the Sub Divisional Officer stating details as mentioned therein.

10. The learned counsel for the petitioners frankly submitted that though the document is styled as a conditional sale still it amounts to a mortgage deed and the respondent No. 3 has every right to get the mortgage redeemed after paying the mortgage amount to the petitioners.

11. The said Act or the Rules have nowhere defined the persons who come under the category of 'weaker sections of the people' It is also apparent that the application form submitted by respondent No. 3 Annexure P. 1 is not according to the prescribed form giving all the details as required therein.

12. A person who wants to take benefit of the provisions of this Act has, first, to prove that he belongs to the category of 'samaj ke kamjor varg' and he has further got to prove that the transaction relating to the agricultural land, which was entered into was with a view to exploit the applicant economically. Therefore it is the economic condition of the applicant which is the main and relevant factor to be considered as to whether that person belongs to the category of 'samaj ke kamjor varg' because as pointed out above the Preamble of the Act clearly stipulates to better economic condition of holders of agricultural lands in the weaker section of the people. Besides the relief under the Act to such persons is to be granted only from agricultural indebtedness from the clutches of those persons who want to grab the land by resorting to other means, in order to save such people from economic exploitation and it is with that view in mind the definition in Section 2(c) 'holder of the land' has used the words 'in the weaker sections of the people'. Therefore this Act does not apply to every holder of agricultural land even though the person may not possess agricultural land even not exceeding 8 hectares of unirrigated land or 4 hectares of irrigated land. Besides such transaction must also be done with a person who is a lender of moneyas defined under Section 2(d) of the said Act. Therefore, a stray transaction would not come under the provisions of the said Act unless and until it is proved that the person who has lent money is a lender of money and even Section 2(f) which defines 'Prohibited transaction of loan' also applies to such transaction in which a lender of money advances loan to a holder of agricultural land.

13. That apart, Section 6 of the said Adhiniyam provides that before issuing any notice to the other side the S.D.O. has to make a preliminary enquiry, first to ascertain whether the transaction of loan is a prohibited transaction of loan and thereafter on being satisfied he has to record reasons therefor and then to proceed to conduct an enquiry. Sub-section (4) of Section 6 casts a duty on the S.D.O. to ascertain the true nature of transaction of loan with respect to the facts mentioned therein. In the present case there is nothing on record to indicate that the Sub Divisional Officer made any such preliminary enquiry or recorded reasons before being satisfied or that he has made the enquiry after taking into consideration the facts mentioned in Section 6 of the said Act or the provisions of Rule 4 made thereunder regarding the valuation of the loan.

14. From the evidence of respondent No. 3 it is clear that he had executed Ann. P. 2 as a deed of mortgage that on the basis of that mortgage deed he filed a civil suit which was dismissed; that according to him against the consideration he had repaid a sum of Rs. 6,500/- to the petitioner No. 1 Narbada Shankar, but he has not said a word that he belongs to the weaker section of the community in the economic sense or that the said transaction was entered into with a view to exploit him or grab his property as he has categorically admitted that he had obtained a loan of Rs. 10,000/- which he needed and it is for the security of this amount that he had mortgaged the land in question. There is nothing on record to indicate that this transaction suffers from any of the conditions mentioned in the Preamble of this Act. Therefore, there is no evidence to substantiate the fact that the said transaction of mortgage was not entered into in the ordinary course of business but was entered into with a view to grab his property.

15. That apart, it is also clear that the respondent No. 3 is holding more than 8 hectares of land as is apparent from the document Annexure-P2 itself coupled with the fact that even after the said transaction he sold a part of the land for a consideration of Rs. 30,000/-. It is also clear from the material on record that he is jointly holding other lands with his brothers and uncle to a substantial extent and even on that ground it cannot be said that he is covered by the definition of Section 2(c) of the Act even though it was tried to be agrued on behalf of respondent No. 3 that as a result of the oral partition-the respondent No. 3 had received only this much land which he had mortgaged with the petitioners.

16. Besides, as regards the value of the land it is not known on what basis the S.D.O. felt that at the time of transaction it was worth Rs. 70,000/-. Therefore, it is quite clear that the Sub Divisional Officer has not at all cared to look into the provisions of law nor did he ask respondent No. 3 to produce documentary evidence of khasra which was expected from him especially when a lawyer is not allowed to appear before him in such a case. The S.D.O. is, therefore, expected to guide the applicant on these matters as many of the applicants are poor and illiterate and unless and until they receive at least the necessary guidance from the S.D.O. as to what documents are required to be filed by the applicant, what sort of evidence he should lead in support of his contentions, the purpose of the Act would be frustrated and bona fide and genuine persons will be deprived of getting any benefit under the provisions of the said Act.

17. The respondent No. 3, who from the evidence and material on record is found to be economically sound cannot get benefit under the provisions of the said Act: otherwise every person who holds land less than 8 hectares of unirrigated or 4 hectares of irrigated land would rush to the Court to set aside that transaction. There may be cases where persons are economically well off but may not have even a single piece of agricultural land, or there might also be cases where people are otherwise affluent but have agricultural land which is less than 8 hectares of unirrigated land or 4 hectares of irrigated land. But, in our opinion, such persons will not come under the definition of Section 2(c) of the Act because they do not belong to the weaker sections of the people in the economic sense of the term.Otherwise the provisions of this Act could be misused by anyone who even does not belong to that category. An illustration. If a family jointly owns 100 bighas of land and if there are 10 shareholders, merely because on partition one member would get 10 bighas land, such a person merely on the ground that his share consists of only 10 bighas would not be included in the category of persons belonging to weaker sections of the people.

18. The Preamble of the Constitution has used the words 'Justice, social economic and political' as also 'liberty, equality and fraternity', These words embody the hopes and aspirations of the people and capture and reproduce the social, economic and political philosophy underlying the Constitution and running through the warp and woof of its entire fabric. Article 14 states that the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. Article 15 provides that the State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them. Sub-section (4) of Article 15 further provides that nothing in this Article or in Clause (2) of Article 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens of for the Scheduled Castes and the Scheduled Tribes.

19. The concept of equality under the Constitution is a dynamic concept. It takes within its sweep every process of equalisation and protective discrimination. Equality must not remain mere idle incantation but it must become a living reality for the large masses of people. Equality of opportunity is not simply a matter of legal equality. Its existence depends not merely on the absence of disabilities but on the presence of abilities. Where, therefore, there is inequality in fact, legal equality always tends to accentuate it. Those who are unequal, in fact, cannot be treated by identical standards; that may be equality in law but it would certainly not be real equality. It is, therefore, necessary to take into account de facto inequalities which exist in the society and to take affirmative action by way of giving preference to the socially and economically disadvantaged persons or inflicting handicaps on those more advantageously placed, in order to bring about real equality. Such affirmative action though apparently discriminatory is calculated to produce equality on a broaderbasis by eliminating and placing the weaker sections of the community on a footing of equality with the stronger and more powerful sections so that each member of the community, whatever is his birth, occupation or social position, may enjoy equal opportunity of using to the full his natural endowments of physique, of character and of intelligence. We cannot, therefore have avid equality which does not take into account the social and economic disabilities and inequalities from which large masses of people suffer in the country. Equality in law must produce real equality. The state must, therefore, resort to compensatory state action for the purposes of making people who are factually unequal in their wealth, education or social environment, equal in specified areas.

20. Scheduled castes and scheduled tribes are backward citizens and weaker sections in the country. There cannot be any manner of doubt that persons belonging to Scheduled Castes and Scheduled Tribes can be considered to be separate and distinct classes particularly in the matter of preservation and protection of their economic and educational interests. In view of the peculiar plight of these two classes the Constitution in Article 15(4) makes specific mention of these two classes and in Article 16(4) speaks of backward class of citizens. One of the directive principles as contained in Article 46 of the Constitution enjoins that the State shall promote with special care the educational and economic interests of the weaker sections of the people and in particular of the Scheduled Castes and Scheduled Tribes and shall protect them from social injustice and all forms of exploitation. However, it has also to be borne in mind that persons belonging to Scheduled Castes and Scheduled Tribes, who are educated, well qualified and are holding important positions in the Government as also in public life and are economically sound with social status cannot gel such economic advantages, merely because initially they belong to Scheduled Castes or Scheduled Tribes. All these facilities and provisions are meant mainly for economically and socially backward people. Therefore, in our opinion, the words used in Section 2(c) of the Act which defines 'holder of agricultural land', is restricted to only those persons in the weaker section of the people' and not every holder of agricultural land who has less than 8 hectares of unirrigated land and 4 hectares of irrigatedland and it is only such people who have been exploited in relation to their agricultural lands, that their transaction could be covered under the definition of Section 2(f) 'prohibited transaction of loan'. Considered in this light, we are of opinion that the findings of the learned Sub Divisional Officer and that of the Collector cannot be sustained in law.

21. In the result this petition succeeds and is allowed. The impugned order Annexure P. 6 dated 15-7-82 passed by the Sub Divisional Officer, Kukshi and Annexure P 11 dated 23-4-83 passed by the Collector, Dhar are quashed and set aside. However, considering the facts and circumstances of the case, parties are directed to bear their respective costs of this petition. The amount of security deposit, on verification, be returned to the petitioners.