NAMDEO versus COLLECTOR, EAST NEEMAR, KHANDWA AND ORS.

Citation: [1995] SUPP. 2 S.C.R. 869 · Decided: 22-08-1995 · Supreme Court of India · Bench: K. RAMASWAMY · Disposal: Dismissed

Judgment (excerpt)

-'. 
NAMDEO 
v. 
COLLECTOR, EAST NEEMAR, KHANDWA AND ORS. 
AUGUST 22, 1995 
(K. RAMASWAMY AND B.L. HANSARIA, JJ.} 
M.P. Samaj Ke Kamjor Wa1gon ke Krishi Bhumidharankon Ka Udhar 
Dene Walon Ke Bhumi Hadapane Sambandhi Kuchakron Se Paritran Tatha 
Mukti Adhiniyam, 1977: Sections 2(a), (c), 4, 6(4) and 7. 
"Holder of Agricultural Land'!._..Weaker .Section-Obtaining of 
loan-Sale of land for-Prohibited transaction-On facts held transaction was 
prohibited and thus void-Extent of land covered by prohibition-Power of 
authorities to declare prohibited transaction as void-Compliance with 
statutory requirement. 
Retrospective operation of Ac~Agreement to sell before coming into 
force of the Act-Documents purporting to be sale deed not intended to be a 
conveyance-Act held applicable to such a transaction. 
A 
B 
c 
D 
R, owner of certain lands obtained loan from L, a money lender, by 
oral mortgage of his land in 1964. L got the sale-deed executed in favour E 
of his son D who later sold the land in question to the appellant. On the 
application of the original owner the Sub-Divisional Officer found tha~ it 
was not a transaction of real sale but of prohibited loan because even after 
several years of the transaction the original owner was in possession of the 
disputed land. Consequently, an order was passed declaring that the initial F 
sale as well as subsequent sale-deed by D in favour of the appellant was 
void under the provisions of the 1977 Adhiniyam and accordingly directed 
the appellant to deliver possession of the land to the original owner. This 
order was confirmed in appeal by the Tribunal and upheld by the High 
Court. In appeal to this Court it was contended for the appellant that (i) G 
the Act has no application because (a) the land covered by the 1964 sale 
deed is not covered within the specified extent of land declared in the Act; 
(b) the transaction took place in 1964 while the Act came into force in 1971; 
(c) the transaction dates back to the date of agreement to sell which was 
effected in 1969; (ii) failure to record a finding by Sub-Division Officer as 
required under section 6 relating to conditions enumerated in sub-section H 
869 
870 
SUPREME COURT REPORTS [1995] SUPP. 2S.C.R. 
A 
(4) resulted in failure of justice; (iii) the order passed by the authorities 
1 
B 
was in violation of section 7(2) of the Act; and (iv) the appellant is ready 
to pay the market value of land, therefore, an order to that effect be passed. 
Dismissing the appeal, this Court 
HELD :1. A reading of section 2(c) indicates that a holder of an 
agricultural land not exceeding 8 hectares of unirrigated land or 4 hectares 
of irrigated land within the State as a Bhoomiswami or occupancy tenant 
or a Government lessee either in any one or all of the capacities together 
C is a holder of agricultural land. The Sub-Division Officer had recorded a 
finding that what remained in possession of L, money lender and his son 
D was 8 acres 20 gunthas and, therefore, it is within the specification of 4 
hectares of irrigated land. The Act thereby clearly becomes applicable to 
be lands in this case. [873-A-B] 
D 
2. The Sub-Divisional officer found that though sales were effected 
E 
·F 
only in 1974 but the document which purported to have been a sale deed of 
1964 was not really intended to be a conveyance. The Tribunal found that R 
never intended to sell the land; and L, being a money lender, made the 
document as if a sale deed, which was intended to be a mortgage deed. This. 
fact gets corroboration from the finding and revenue entries that the owner 
remained in possession of the lands. Therefore, even if the sales were 
effected in 1974, the Act becomes applicable to such transactions. [873-D-E] 
3. An agreement of sale does not convey any right, title or interest. 
It would create only an enforceable right in a court of law and parties could 
act thereon. The right, title and interest in the land of D stood extinguished 
only on execution and registration of the sale deed in 1974. Therefore, the 
sale deeds are within the prohibited period. [873-F] 
4. The High Court had agreed with the finding by the statutory 
G authorities that the Sub-Divisional Officer had substantially complied with 
the provisions in sub-section (4) of section 6 of the Act. So, the non-con-
sideration of the enumerated circumstances did not cause any failure of 
, justice. [874-E] 
5. Sub-section (2) of Section 7 comes into operation only when no 

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