Landless Poor Person Who Bought Assigned Land Before 1977 Act Can Sell It Further: AP High Court Full Bench

Clarifying the scope of Section 3(5) of the Andhra Pradesh Assigned Lands (Prohibition of Transfers) Act, 1977, the High Court has held that a landless poor person who purchased assigned land in good faith and for valuable consideration before the Act came into force acquires full title to the land, including the right to further alienate it.

Emphasising the effect of Section 3(5), the majority held that once its statutory conditions are fulfilled, the land is taken outside the purview of the Act. Consequently, it ceases to be "assigned land" and no longer attracts the prohibition on transfer under Section 3.

A Full Bench comprising Justice R. Raghunandan Rao, Justice T.C.D. Sekhar and Justice Ravi Cheemalapati answered a reference arising from a writ appeal concerning the interpretation of Section 3(5) of the Andhra Pradesh Assigned Lands (Prohibition of Transfers) Act, 1977.

Explaining the scope of Section 3(5), the Court observed:

"The language of Section 3(5) makes it clear that the object of exemption is not the alienation or the assignee or the transferee, but the assigned land itself. The inclusion of the word “transferee” in Section 3(5) has a certain significance. The legislature was not only condoning the transfer of 14 assigned land to a person who is not a landless poor person, but was also providing for exemption to even such transfers. The language in Section 3(5) is quite clear and can only be interpreted to mean that any assigned land, purchased prior to the Act, by a landless poor person, irrespective of whether the transfer is from the original assignee or a transferee, who is not a landless poor person, falls outside the purview of Section 3 of the Act.

There is also no future limitation, in the provision, in terms of time or the number of transactions, of further transfer after the Act came into effect. This would lead to the conclusion that the said assigned land falls outside the prohibitions and consequences contained in Sections 3 and 4 of the Act and becomes and remains freely transferrable land."

The State of Andhra Pradesh has long followed a policy of assigning government land, free of cost, to landless poor persons, with a condition of non-alienation incorporated in the pattas granted to such assignees.

As large-scale violations of this condition were noticed, the Legislature enacted the Andhra Pradesh Assigned Lands (Prohibition of Transfers) Act, 1977 to prohibit such transfers and restore assigned lands to eligible beneficiaries.

Section 3 of the Act declares transfers of assigned land to be null and void, both prospectively and retrospectively. Section 4 empowers authorities to evict persons in unlawful possession and restore the land to the original assignee.

However, Section 3(5) creates an exception by protecting purchases made before the Act came into force where the purchaser is a landless poor person who purchased the land in good faith and for valuable consideration and continued to remain in possession when the Act commenced.

The writ appeal arose from a dispute between the State and the purchaser of assigned land over the interpretation of Section 3(5). The matter was referred to a Full Bench after an earlier Division Bench held that while Section 3(5) validated the purchase, the land continued to remain "assigned land" and could not be freely transferred thereafter.

The principal question before the Full Bench was whether such a purchaser acquires complete title, including the right to further alienate the land, or whether the land continues to retain its character as assigned land.

The State argued that the Act's object was to ensure that assigned land always remained with the landless poor, and any interpretation removing such land from the Act's purview would defeat its object.

The respondents, on the other hand, contended that Section 3(5) completely exempts such land from the operation of the Act and confers full title on the purchaser.

Accepting the respondents' contention, the majority opinion delivered by Justice R. Raghunandan Rao and Justice T.C.D. Sekhar held that once the statutory conditions under Section 3(5) are fulfilled, the land falls completely outside the operation of Sections 3 and 4 of the Act. The majority held that the exemption is not confined to validating only the first transaction but attaches to the land itself, making it freely transferable.

Answering the reference, the majority held:

"The purchase of land by a landless poor person in good faith and for valuable consideration, prior to the commencement of 1977 Act and on fulfillment of the conditions stipulated in Section 3(5), confer title on the purchaser including the right of alienation, and such land would not continue to remain assigned land attracting the prohibition of Section 3 of the Act."

Justice Ravi Cheemalapati agreed that a purchase satisfying the conditions under Section 3(5) is protected from the consequences under the Act. However, he disagreed with the majority's reasoning that such land ceases to be "assigned land" and becomes freely transferable.

According to him, Section 3(5) protects the transaction from invalidation but does not alter the legal character of the land. He cautioned that treating such land as freely transferable could enable assignees to circumvent the Act by routing transfers through landless poor persons before ultimately selling the land to affluent purchasers, thereby defeating the object of the legislation.

The Full Bench accordingly answered the reference and directed that the writ appeal be placed before the Division Bench for disposal in the light of its opinion.

Case Title: State of Andhra Pradesh & Others v. D. Venugopal & Another

Case No.: Writ Appeal No. 239 of 2017

Counsel for the Appellants: Additional Advocate General (AP)

Counsel for the Respondents: Sri N. Ashwani Kumar

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