Holding

A simple mortgagee bank has no saleable interest in surplus land that vests in the Government, and therefore cannot claim exemption under Section 23 nor sell the land; the Tribunal’s order was without jurisdiction.

Summary

The case concerned 300 acres of land mortgaged to State Bank of India (SBI) which, after the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973 came into force, was declared half of it surplus and surrendered to the Government. SBI sought to recover its mortgage money by selling the surplus land, relying on an order of the Land Reforms Appellate Tribunal that the land was exempt under Section 23 of the Act. The Supreme Court held that SBI, being only a simple mortgagee, had never acquired title to the land in pursuance of debt recovery and therefore could not claim exemption or sell the surplus land, which vested in the Government free of encumbrances under Section 11. The Tribunal's order was deemed without jurisdiction, and the execution court’s sale certificate to the appellants was invalid. The Court also affirmed that its power under Article 136 is to be exercised only to correct gross injustice and declined to interfere with the High Court’s judgment. Consequently, the appeal was dismissed.

Issues considered

Whether land held by a bank as a simple mortgagee is exempt from the ceiling provisions of Section 23 of the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973.
Whether a bank mortgagee can enforce a claim for mortgage money against land that has been declared surplus and vested in the Government under Section 11 of the Act.
Whether the order of the Land Reforms Appellate Tribunal permitting the bank to sell the surplus land was jurisdictionally valid.
Whether the Supreme Court may entertain a petition under Article 136 to set aside the High Court’s judgment in these circumstances.

Legislation cited

Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973s. 11, s. 23
Constitution of Indias. 136

Subjects

Land reformsCeiling ActSurplus landMortgageSection 23 exemptionSection 11 vestingBank mortgageeArticle 136 jurisdictionExecution saleBona fide purchaser

Judgment

P,.-
V. SWARAJYALAXMI AND ORS. A
V.

AUTHORISED OFFICER, LAND REFORMS, MEDAK AND ORS.

APRIL 16, 2003

[K.G. BALAKRISHNAN AND D.M. DHARMADHIKARI, JJ.] B

Andhra Pradesh land Reforms (Ceiling on Agricultural Holdings) Act,
I 97 3-Section 23-Exemption for surplus land-Entitlement of-land
mortgaged in favour of Bank~'lubsequent passing of Ceiling Act-Tribunal
holding surplus land liable to be surrendered to the Government-Appellate
c
Tribunal holding land exempt from the Act-Justification of-Held: Bank is
only a simple mortgagee having no possession over the land-Bank not
acquiring title over the land pursuant to recovery of the mortgaged debt due
to the bank-Thus, Bank has no saleable interest over the /ands-Hence
declarants not entitled to exemption for the surplus land under Section 23(j). D
Section l I-Vesting of land rnrrendered-Mortgagee of land-Right to
proceed against land for realization of mortgage money-Held: Mortgagee
has no such right since land being surplus land has been surrendered-Such
land vests in the Government fi'ee fiwn all encumbrances.
E
Constitution of India, 1950-Article 136--lnteiference-Scope of-Held:
Jurisdiction under the Article can be invoked only to advance cause ofjustice-·
However, when selling aside of the judgment of High Court results in
resurrection of series of other illegal orders passed by subordinate courts, this
Court may not inte1fere.
f
In 1968, owners of 300 acres of land mortgaged the land in favour
of bank and obtained a loan. Subsequently Andhra Pradesh Land Reforms
(Ceiling on Agricultural Holdings) Act, 1973 came into force. Owners of
land filed declarations. Tribunal held that half of-the extent measuring
300 acres was surplus land under the Act which was to be surrendered to
G
the Government. Bank challenged the order. On remand Tribunal again
confirmed its earlier order. Meanwhile, Bank filed a suit for realisa,tion
of the mortgage money. Suit was decreed. Bank filed execution petitions
and also filed appeals before the Appellate Tribunal. It contended that they
be permitted to proceed with the recovery of mortgage money, even
575 H
576 SUPREME COURT REPORTS [2003] 3 S.C.R.

A against the land which was found to be surplus at the hands of the
mortgagors. Appellate Tribunal allowed the appeals. Pursuant to the order
of the Tribunal State took over the surplus land. Thereafter, on the basis
order of the Appellate Tribunal, Bank brought the surplus land under
court auction sale. Appellants purchased the land in a court auction sale.
B However, before the confirmation of sale and issue of sale certificate, State
Government challenged the sale. Executing Cou~tileld that the Bank did
not acquire the land in the course of recovery o( the amount due to them
and thus, the land was not exempted under Section 23(1); and that .the
Bank held only the right to security in respect of that land. Accordingly
it set aside the sale.
c Appellant-purchasers challenged the order. It was found that the
private sale was effected for inadequate consideration by playing a fraud.
Thereafter order granting permission to the judgment debtors/declarants
to sell the surrendered land by private negotiation was set aside. Executing
Court then pursued the matter further and assumed that the sale had been
D set aside as the same was for inadequate consideration. It increased the
value of the land and issued the sale certificate in favour of the appellants.
Tltereafter, Returning Officer took steps to distribute the surplus land and
to prepare assignment proposals. Appellate Tribunal set aside the
proceedings. However, High Court set aside the order of the Appellate
\

E Tribunal and held that the surrendered land would have to be distributed
among landless poor persons as envisaged by the Ceiling Act and the Rules
framed thereunder. Hence the present appeal.

Appellant-purchaser contended that the Bank was a mortgagee of
the land in question and the land held by the ~ank is specifically exempted
p under Section 23(1); that the order passed by the Appellate Tribunal
permitting the Bank to sell the surplus land in the Court auction sale to
realize the mortgage amount due to it was perfectly valid; that this order
had become final and binding as between the parties inter-seas it was not
challenged by the State; that the appellants being bona fide purchasers of
the surplus land in a court auction sale, they are entitled to get the
G protection of their title and the courts have to give utmost sanctity to the
court auction sale; that when the sale certificates are not set aside, the
same cannot be done subsequently in the collateral proceedings; and that
the land was neyer surrendered to the State as surplus land.

Respondent contended tltat the Bank had no saleable interest over
H
,_

-- V.SWARAJYALAXMI1•. AUTHORISEDOIBCER,LANDREFORMS,MEDAK

the lands which were already surrendered by the declarants and the Bank
577

A
being a simple mortgagee had no possession over the lands to claim
protection under Section 23(1); that even if it is assumed that the Bank
had held the land, the same is not liable to be exempted unless the land
was acquired by the Bank in pursuance of the recovery of the mortgage
debt due to the Bank; and that the Execution Court itself had set aside B
the order permitting the land for court auction and therefore, the order
granting permission never revived and so the issuance of sale certificate
in favour of the appellants was illegal and they did not acquire any right
over the land.

State contended that after passing of the first order by the Tribunal, C
surplus land was taken over by State Government the same could not be
distributed to the landless persons in view of subsequent pending judicial
proceedings.

Dismissing the appeal, the Court
D
HELD: I. First and second Provisos to Section 23 (I) of the Andhra
Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973 would
apply only in respect of lands acquired by co-operative societies or banks.
In the instant case, Bank had not acquired title over the lands in question
pursuant to the recovery of the mortgage money due to them. The Bank
was not holding the land on behalf of the declarants/mortgagees. There E
was only a simple mortgage in favour of the Bank and the Bank never
held or possessed the land either as a mortgagee or otherwise. Moreover,
when the Act came into force, the Bank had not even filed the suit for
recovery of the amount due under the mortgage nor obtained a decree
against the mortgagor. The preliminary decree in the suit filed by the Bank F
was passed. The Bank did not acquire any title in respect of the mortgaged
land when the Act came into force. Thus, for the surplus lands the
declarants were not entitled to get exemption under Section 23(1) of the
Act. 1584-E-GI

2.1. By virtue of Section 11 of the Act, any land which is surrendered G
or is deemed to have been surrendered under the Ceiling Act will vest in
the Government free from all encumbrances from the date of the order.
As against this land, certain claims of liabilities could be enforced. If such
claim or liability is in respect of the amount payable under th~ Act, the
same could be enforced. If however, the claim or liability is in respect of
the land which has been surrendered, such claimant could enforce the right H
578 SUPREME COURT REPORTS [2003) 3 S.C.R.

A only against any other property of the owner. Bank had no right to
proceed against this land for realisation of the mortgage money due to
them from the mortgagor. Therefore, the permission granted by the
Appellate Tribunal to the Bank to proceed with the recovery of money
due to them against surplus land was without jurisdiction and the
B Execution Court rightly held that the surplus land cannot be brought to
sale for realization of the mortgage money. 1585-F-H; 586-A)

2.2. It cannot be said that the order passed by the Appellate Tribunal
permitting the banks to proceed with the recovery of money due to them
against surplus land was not challenged and thus it had become final, since
C the order is without jurisdiction. It is for the Execution Court to decide
as to whether the Court has got jurisdiction to proceed against any land
pursuant to the decree passed by the Court. Further, the decree-holder
can bring to sale only the rights, if any, of the judgment debtors over the
land. Once an extent of land was declared to be surplus land and it came
to vest in the Government under Section 11 the Jriginal declarants ceased
D to have any right or title over that land. When an original judgment-
debtors had no saleable interest in the land, nothing could have been sold
by the court in the execution proceedings. 1586-B-DI

2.3. The sale conducted by the court should be give due sanctity and
the purchaser's rights be protected to the extent allowed by law. But when
E the judgment debtors had no saleable interest, no title would pass on to
the purchaser. Even if it is assumed that the sale was validly done, no title
could be said to have passed to the purchasers as the Bank had no saleable
interest in the surplus lands declared by the judgment debtors. 1586-D-E)

2.4. The order of the execution court that the land was not liable to
F be sold as it was surplus land at the hands of the declarants and it vested
with the Government was not set aside in any subsequent proceedings. This
order was further fortified by the High Court. Inspite of these orders, the
Execution Court issued the sale certificate in favour of the appellants,
which is erroneous. It is true that this order was challenged by the State
G unsuccessfully. But in the absence of a valid title having been acquired in
law by the purchasers over the surplus lands, the whole proceedings
pursuant to the court auction sale are vitiated and the Single Judge of High
Court has rightly ~et aside the order passed by the Appellate Tribunal.
1586-E-Gj

H 3. There is no doubt that the jurisdiction under Article 136 could be
V. SWARANALAXMI '" AlJillORISED OFFICER, LAND REFORMS, MEDAK [BALAKRISHNAN, !.) 579

invoked only to advance the cause of justice. Even if it is assumed that A
the Single Judge of High Court exceeded in his jurisdiction by passing the
impugned judgment, this Court may not interfere with the same as the
setting aside of the judgment of the Single Judge would result in
resurrection of a series of other illegal orders passed by the subordinate
courts. Thus there is no reason to interfere with the judgment of the Single B
Judge of High Court. (588-C, DI

Ashok Nagar Welfare Association and Anr. v. R. K. Sharma and Ors.,
(2002) I SCC 749; Narpat Singh and Ors. v. Jaipur Development Authority
and Anr., 120021 4 SCC 666 and Dhakeswari Cotton Mills Ltd. v.
Commissioner of Income Tax, AIR 119551 SC 65, referred to.
c
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1881 of 1999.

From the Judgment and Order dated 2. 7.1998 of the Andhra Pradesh
High Court in CR.P. No. 4627 of 1997.

Shanti Bhushan, L.N. Rao, Sanjay Pathak, Ms. Bina Madhavan, M. D
Kale, J. Mutraj and Ms. Promila for the Appellant.

Smt. K. Amareswari, T.V. Ratnam and G. Venkatesh for the Respondent.

The Judgment of the Court was delivered by
E
K.G. BALAKRISHNAN, J. This appeal is preferred against the
judgment of the learned Single Judge of the High Court of Andhra Pradesh
dated 2.7.1998 in Civil Revision Petition No. 4627 of 1997. The appellants
are purchasers of land in a court auction sale. The land in question originally
belonged to Mis Yadavendra Plantations. Yadavendra Plantations were owners p
of 300 acres of land at Kandi village in Medak District of Andhra Pradesh.
In 1968, Mis. Yadavendra Plantations mortgaged the said 300 acres of land
in favour of State Bank of India and obtained a loan of Rs. 5 lakhs for setting
up a hybrid seed farm. The Andhra Pradesh Land Reforms (Ceiling on
Agricultural Holdings) Act, 1973 (hereinafter referred to as "the Ceiling Act")
came into force on 1.1.1973. The owners of the land, namely Yadavendra G
Plantations filed three declarations under Section 8 (I) of the Ceiling Act
before the Land Reforms Tribunal. The Tribunal held that out of the 300
acres owned by them, 150 acres of land was surplus land liable to be
surrendered to the Government. State Bank of India, which was not made a
party in the proceedings before the Land Reforms Tribunal, filed three appeals H
580 SUPREME COURT REPORTS [2003] 3 S.C.R.

A before the Land Reforms Appellate Tribunal challenging the orders of the
Land Reforms Tribunal. The matter was remanded to the Land Reforms
Tribunal which again confirmed its earlier order holding that half of the
extent admeasuring 300 acres was excess land under the Ceiling Act.

State Bank of India, meanwhile, filed a suit registered as O,S. No. 27
B of 1973 for realisation of the mortgage money. After the said suit was decreed
on 29.8.1975 and a final decree was passed on 5.8.1976, State Bank of India
filed three Execution Petitions bearing No. I of 1977, No. 46 of 1977 and
No. 5 of 1980 before the Subordinate Judge, Sangareddy. A sum of Rs. 10
lakhs was due to the State Bank of India under the mortgage executed by the
C original mortgagor. State Bank of India, in the meantime, also filed three
appeals before the Land Reforms Appellate Tribunal against the revised order
passed by the Land Reforms Tribunal. In those appeals, the Bank contended
that they be permitted to proceed with the recovery of mortgage money, even
against the land which was found to be surplus at the hands of the three
declarants who were the mortgagors. The Land Reforms Appellate Tribunal
D was under the impression that under Section 23 of the Ceiling Act, the land
mortgaged to the Bank was exempted from the provisions of the Ceiling
Laws and permitted the Bank to proceed with the recovery of the money due
to them against the land which was found to be surplus at the hands of the
declarants. It is relevant to note here that pursuant to the order passed by the
E Land Reforms Tribunal, the surplus land was taken over by the State on
25.2.1976 under Section I I of the Ceiling Act. On the strength of the order
passed by the Land Reforms Appellate Tribunal, the State Bank of India
sought to bring the surplus land under court auction sale. As there were no
bidders, steps were taken to sell this land by private negotia~ions and the
surrendered land was thus sold by private negotiations on 22. 7. 1981.
F
Before the sale was confirmed, the appellants herein deposited the sale
proceeds on 22.7.1981. However, before confirmation of the sale and issue
of the sale certificate, the State Govt. filed. E.A. No. 68 of 1981 for setting
aside the private sale which was effected pursuant to the permission granted
earlier in E. A. No. 51 of 1981 dated 21. 7. 1981. In an affidavit filed in those
G proceedings, the Joint Collector stated that the land had already been
surrendered by the declarants and it vested in the State free from all
encumbrances and that the land was not liable to be sold in court auction
sale. It was also contended that in the sale held pursuant to the order in E.
A. No. 51 of 1981, the State was not given notice and as the land was in the
I-I possession of the State, the same was not liable to be sold. The Executing
V. SWARANALAXMI 1•. AlJIHORISED OFFICER, LAND REFORMS, MEDAK [BALAKRISHNAN, J.] 58 J

Court passed an elaborate order on 7. 8. 1981 and set aside the order in E. A
A. No. 51 of 1981 dated 21.7.1981. In that order, the Executing Court held
that the Bank did not acquire the land in the course of recovery of the amount
due to them and, therefore, the land was not exempted under Section 23(f)
of the Ceiling Act and that the Bank had held only the right to security in
respect of that land. It was held that the Section 23 (f) of the Ceiling Act was
not applicable and the court also noticed that under Section I I of the Ceiling B
Act, the Bank could have proceeded only against the compensation amount,
if any, payable to the land owners. The court, in paragraph 11 of the order
dated 7. 8. 1981 made the following directions:

"In the result, I find that the said Order of the Court passed in E. A. C
No. 51/81 in E. P. No. 24/81 dated 21.7.1981 is contrary to express
provisions of law and is liable to be set aside. Therefore, this
application is allowed with costs and the private sale ordered on
21.7.1981 is set aside. "

The order passed by the Executing Court setting aside the sale conducted D
on 21.7.1981 was challenged before the High Court in C.R.P. No. 3364 of
I 981. The learned Single Judge of the High Court held that the matter required
an inquiry whether there was any irregularity in conducting the sale and
whether all the parties, including the State Govt., were given opportunity to
adduce evidence. When the matter was considered by the Executing Court
again, it was found that the private sale was effected for inadequate E
consideration by playing a fraud and a substantial injury was caused to the
State. Again, this order was challenged by the judgment-debtors/declarants in
C.R.P. No. 495 of 1985. The matter was considered in detail by the High
Co.urt and the order dated 21. 7 .198 I in E.A. No. 51 of I 981 granting
permission to the judgment debtors/declarants to sell the surrendered land by F
private negotiation was set aside. This order in C.R.P. No. 495 of 1985 had
become final.

Despite the order passed in C.R.P. No. 495 of 1985 by the High Court,
the Executing Court pursued the matter further and assumed that the sale had
been set aside solely on the ground that the same was for inadequate G
consideration. The Execution Court increased the value of the land from
Rs.3600 per acre to Rs. 7,000 per acre and issued the sale certificate in
favour of the appellants herein. It may be noticed that there was no fresh
proclamation nor any step was taken by the Executing Court to sell the land
as per the procedure prescribed under the Code of Civil Procedure. Against
the sale certificate issued to the appellant, the State preferred an application H
582 SUPREME COURT REPORTS [2003] 3 S.C.R.

A to set aside the confirmation of that sale, but the same was dismissed as time-
barred.

On 9.4.1992, the Revenue Divisional Officer, Sangareddy, wrote a letter
to the Mandal Revenue Officer, Sangareddy, requesting him to take steps to
distribute the surplus land to the extent of 148. 74 acres and to prepare
B appropriate assignment proposals. However, those proceedings were set aside
by the Land Reforms Appellate Tribunal in L.R.A . No. 34 of 1992 filed by
the appellants, who are the alleged purchasers of the land in question. It
appears that while passing the order dated 7.2.1994, the Land Reforms
Appellate Tribunal was again under the erroneous impression that State Bank
C of India had the authority to proceed against the land which was found to be
surplus at the hands of the declarants. This order of the Land Reforms
Appellate Tribunal was challenged in C. R.P. No. 4627 of 1997. The learned
Single Judge of the High Court of Andhra Pradesh set aside the same and
held that the surrendered lands would have to be distributed among landless
poor persons as envisaged by the Ceiling Act and the Rules framed thereunder.
D The learned Judge further held that the order dated 9.4.1992 was passed for
the purpose of distribution of the surplus land among landless poor persons,
for which necessary proposals for assignment of the land were to be made,
and that there was no illegality or irregularity in the said order of the Revenue
Divisional Officer. Aggrieved by this order, the present appeal by special
E leave is filed.

We heard learned Senior Counsel, Shri Shanti Bhushan, for the
appellants, and Smt. K. Amareswari, on behalf of the State. Elaborate
arguments were advanced by the counsel for the appellants. It was contended
that State Bank of!ndia was a mortgagee of the land in question and the land
p held by the Bank is specifically exempted under Section 23 (f) of the Ceiling
Act and that the order passed by the Land Reforms Appellate Tribunal on
9.11.1977 permitting the Bank to sell the surplus land in the court auction
sale to realise the mortgage amount due to it was perfectly valid. It was
further urged that this order was not challenged by the State and thus it had
become final. It was also argued that even if it is assumed that it was an
G erroneous order, it is binding as between the parties inter-se and the principles
of res judicata under Section 11 of the Code of Civil Procedure would apply.
The learned Senior Counsel urged that the appellants had purchased the
surplus land in court auction sale and being bona fide purchasers in a court
auction sale, they are entitled to get the protection of their title and the courts
H have to give utmost sanctity to the court auction sale.
V. SWARAJYALAXMI 1·. AUTHORISED OFFICER, LAND REFORMS, MEDAK [BALAKRISHNAN,J.] 583

Learned Senior Counsel for the respondent, on the other hand, contended A
that State Bank of India had no saleable interest over the lands which were
already surrendered by the declarants and the State Bank of India being a
simple mortgagee had no possession over the lands to claim protection under
Section 23(f) of the Ceiling Act. It was further pointed out that even if it is
assumed that the Bank had held the land, the same is not liable to be exempted
unless the land was acquired by the Bank in pursuance of the recovery of the B
mortgage debt due to the Bank. Learned Counsel also pointed out that the
Execution Court itself had set aside the order permitting the land for court
auction sale by its order dated 7. 8. 1981 and therefore, the order in E. A.
No. 51 of 1981 dated 21. 7. 1981 never revived and the issuance of sale
certificate in favour of the appellants was illegal and they did not acquire any C
right over the land.

It is not disputed that an extent of 148. 74 acres of land was found to
be surplus at the hands of the original declarants. The State would contend
that after the passing of the first order by the Land Reforms Tribunal, the
surplus land was taken over by the State Govt. and the same could not be D
distributed to the landless persons i11 view of the subsequent pending judicial
proceedings.

The appellants would contend that the land was never surrendered to
the State as surplus land, though it is not contended either that this was not
the surplus land. The mortgage in favour of State Bank of India was a simple E
mortgage and the Bank had never been in possession of the land. Furthern10re,
the Bank did not acquire any right of ownership over the land. The Bank had
only a right to recover the mortgage money due under the mortgage and the
Bank could have proceeded against this land had it not been declared surplus
at the hands of the declarants. F
Few provisions of the Andhra Pradesh Land Reforms (Ceiling on
Agricultural Holdings) Act, 1973 are relevant to be considered for the purpose
of this case. Under Section 23 of the Act, certain categories of land are
exempted from the provisions of the Ceiling Act . The relevant portion of
Section 23 is as under : G
"23. Exemption:- Nothing in this Act shall apply to the following
lands, namely:-
(a)

(b) H
584 SUPREME COURT REPORTS [2003) 3 S.C.R.

A (c)

(d)

(e)

(t) lands held by a bank;
B (g) ........

(h) ........ "

The first and second Provisos to Section 23 read thus:

"Provided that where any of the lands specified in clause (a), (b), (c),
c (d), (e), (t), or (g), are held by any person other than the authority,
institution, body corporate or society specified in such clause, whether
as a tenant or usufructuary mortgagee or otherwise, the provisions of
this Act shall apply to such person in respect of such land;

Provided further that the exemptions under item (ii) of clause (e) and
D clause (t) shall be available only in respect of the lands acquired by
such co-operative societies or banks in pursuance of the recovery of
their dues. "

The above Provisos would indicate that Section 23(t) would apply only
E in respect of lands acquired by co-operative societies or banks. In the instant
case, State Bank of India had not acquired title over the lands in question
pursuant to the recovery of the mortgage money due to them. The Bank was
not holding the land on behalf of the declarants/mortgagees. There was only
a simple mortgage in favour of the Bank and the Bank never held or possessed
the land either as a mortgagee or otherwise. Moreover, when the Ceiling Act
F came into force, the Bank had not even tiled the suit for recovery of the
amount due under the mortgage nor obtained a decree against the mortgagor.
The preliminary decree in the suit (No. 27 of 1973) filed by the Bank was
passed on 29. 8. 1975. The Bank did not acquire any title in respect of the
mortgaged land when the Ceiling Act came into force. By no stretch of
G imagination, it could be held that for the surplus lands the declarants were
entitled to get exemption under Section 23(t) of the Ceiling Act.

It is unnecessary for us to refer to the definition of "holding" contained
in Section 3(i) of the Ceiling Act, as the State Bank of India had no case that
it was either a limited owner or usufructuary mortgagee or in possession of
H the land by virtue of a mortgage by conditional sale. The legal status of the
V.SWARANALAXM11•.AlJIHORISEDOFFICER,LANDREFORMS,MEDAK[BAIAKRISHNAN,J.) 585

Bank being a simple mortgagee, the surplus land will not come under an~ of A
the categories mentioned in the definition of "holding" under Section 3(1) of
the Ceiling Act.

The next question that arises for consideration is whether the State
Bank of India, which was a mortgagee of the land, had any right to proceed
against that property for realisation of the mortgage money. Relevant provision B
in that behalf is Section 11 of the Ceiling Act, which is to the following
effect:

"11. Vesting of land surrendered :- Where any land is surrendered or
is deemed to have been surrendered under this Act by an owner the
Revenue Divisional Officer may, subject to such rules as may be C
prescribed by order take possession or authorise any officer to take
possession of such land which shall thereupon vest in the Government
free from all encumbrances from the date of such order :
·-
Provided that any claim or liability enforceable against that land
immediately before the date of vesting in the Government may be D
enforced only
(I) against the amount payable under this Act in respect of such
land; and
(ii) against any other property of the owner; E
to the same extent to which such claim or liability was enforceable
against that land or other property, as the case may be,
immediately before the date of vesting. "

By virtue of Section 11 of the Ceiling Act, any land which is surrendered
or is deemed to have been surrendered under the Ceiling Act will vest in the F
Govt. free from all encumbrances from the date of the order. As against this
land, certain claims or liabilities could be enforced. If such claim or liability
is in respect of the amount payable under the Ceiling Act, the same could be
enforced. If, however, the claim or liability is in respect of the land which has
been surrendered, such claimant could enforce the right only against any G
other property of the owner. State Bank of India had no right to proceed
against this land for realisation of the mortgage money due to them from the
mortgagor. Therefore, the permission granted by the Land Reforms Appellate
Tribunal was without jurisdiction and the Execution Court by its order dated
7.8.1981 had rightly held that the surplus land cannot be brought to sale for
realisation of the mortgage money. H
586 SUPREME COURT REPORTS [2003) 3 S.C.R.

A Learned counsel for the appellants contended that the order passed by
the Land Reforms Appellate Tribunal on 9.11.1977 was not challenged and
therefore, it had become final and binding on the parties inter-se. We find no
force in this contention. Firstly, it is an order without jurisdiction. It is for the
Execution Court to decide as to whether the court has got jurisdiction to
proceed against any land pursuant to the decree passed by the court. Secondly,
B the decree-holder can bring to sale only the rights, if any, of the judgment-
debtors over the land. Once an extent of 148.74 acres of land was declared
to be surplus land and it came to vest in the Govt. under Section 11 of the
Ceiling Act, the original declarants ceased to have any right or title over that
land. When the original judgment-debtors had no saleable interest in the land,
C nothing could have been sold by the court in the execution proceedings.
/

It is true that the sale conducted by the court should be given due
sanctity and the purchaser's rights be protected to the extent allowed by law.
But when the judgment debtors had no saleable interest, no title would pass
on to the purchaser. Even if it is assumed that the sale was valid,ly done, no
D title could be said to have passed to the purchasers as the Ba~k had no
saleable interest in the surplus lands declared by the judgment debtors.

Moreover, in this case, the Execution Court held in its order dated
7.8.1981 that the land was not liable to be sold as it was surplus land at the
hands of the declarants and it vested with the Govt. This order was not set
E aside in any subsequent proceedings. This order was further fortified by the
order passed in C.R.P. No. 495of1985. In spite of these orders, the Execution
Court issued the sale certificate in favour of the appellants, which was clearly
erroneous. It is true that this order was challenged by the State unsuccessfully.
But in the absence ofa valid title having been acquire~ in law by the purchasers
F over the surplus lands, the whole proceedings pursuant to the court auction
sale are vitiated and the learned Single Judge has rightly set aside the order
passed by the Land Refonns Appellate Tribunal.

The counsel for the appellants further pointed out that when the sale
certificates are not set aside, the same cannot be done subsequently in a
G collateral proceeding. The entire proceedings in this case have to be viewed
in the backdrop of the power conferred under Article 136 of the Constitution
on this Court, including the discretionary power to step in and to remedy the
injustice resulting from incorrect interpretation of law. The scope and amplitude
of the powers of this Court under Article 136 has been explained in series of
H decisions of this Court. A Constitution Bench of this Court in Dhakeswari
V. SWARAJYALAXMI 1·. AUIBORISEDOFFICER,lAND REFORMS, MEDAK [BALAKRISHNAN,J.] 587

Cotton Mills Ltd v. Commissioner of Income Tax, AIR (I 955) SC 65 observed A
as follows :

" ....... It is not possible to define with any precision the limitations on
the exercise of the discretionary jurisdiction vested in this court by
the constitutional provision made in Article 136. The limitations,
whatever they be, are implicit in the nature and character of the B
power itself. It being an exceptional and ·overriding power, naturally
it has to be exercised sparingly and with caution and only in special
and extraordinary situations. Beyond that it is not possible to fetter
the exercise of this power by any set formula or rule.

All that can be said is that the Constitution having trusted the wisdom C
and good sense of the Judges of this Court in this matter, that itself
is a sufficient safeguard and guarantee that the power will only be
used to advance the cause of justice, and that its exercise will be
governed by well established principles which govern the exercise of
overriding constitutional powers. It is, however, plain that when the D
court reaches the conclusion that a person has been dealt with
arbitrarily or that a court or tribunal within the territory of India has
not given a fair deal to a litigant, then no technical hurdles of any
kind like the finality of finding of facts or otherwise can stand in the
way of the exercise of this power because the whole intent and purpose
of this article is that it is the duty of this court to see that injustice E
is not perpetuated or perpetrated by decisions of courts and tribunals
because certain laws have made the decisions of these courts or
Tribunals final and conclusive. "

In a recent judgment in As/10k Nagar Welfare Association and A11r, v,
R.K. Sharma and Ors., [2002] 1 SCC 749, this Court stated thus: F
" .. ,, ... It is well settled that Article 136 does not confer a right of
appeal on any party, but it confers a discretionary power on the
Supreme Court to interfere· in suitable cases vide State of Bombay v,
Rusy Mistry. The bar under Article 136 is potential but not compulsive G
and is undoubtedly meant to advance the cause of justice. "

In Narpat Singh and Ors. v. Jaipur Development Authority and Anr.,
[2002] 4 SCC 666, this Court observed :

" ..... The exercise of jurisdictio.n. conferred by Article 136 of the
Constitution on this Court is discretionary. It does not confer a right H
588 SUPREME COURT REPORTS (2003] 3 S.C.R.

A to appeal on a party to litigation; it only confers a discretionary
power of widest amplitude on this Court to be exercised for satisfying
the demands of justice. On one hand, it is an exceptional power to be
exercised sparingly, with caution and care and to remedy extraordinary
situations or situations occasioning gross failure of justice; on the
other hand, it is an overriding power whereunder the Court may
B generously step in to impart justice and remedy injustice. "

Even if it is assumed that the learned Single Judge exceeded in his
jurisdiction by passing the impugned judgment, this Court may not interfere
with the same as the setting aside of the judgment of the learned Single Judge
C would result in re~urrection of a series of other illegal orders passed by the
subordinate courts. There is no doubt whatsoever that the jurisdiction under
Article 136 could be invoked only to advance the cause of justice.

We do not find any reason to interfere with the judgment of the learned
Single Judge. The appeal has no merits and is dismissed accordingly with
D costs.

N.J. Appeal dismissed.