*HON’BLE SRI JUSTICE A.GOPAL REDDY AND HON’BLE SRI JUSTICE B.CHANDRA KUMAR +A.S.No.4183 of 2004 % Date: 19-11-2009 Between: # Government of Andhra Pradesh through District Collector, Medak District at Sangareddy and others. … Appellants and $ 1. V.Swarajyalakshmi and others. … Respondents ! Counsel for appellants: Special Government Pleader ^ Counsel for respondents 1 to 5: Sri J.V. Suryanarayana,Senior Counsel for Sri T.Sudhakar Reddy Counsel for respondent No.9: Sri M. Narender Reddy Counsel for R-10 to R-15: Sri N. Praveen Kumar < GIST: >HEAD NOTE: ? Cases referred: 1. 1978(2) ALT 413 (DB) 2. (2000) 7 SCC 12 3. (2000) 3 SCC 689 4. (2004) 1 SCC 597 5. (2002) 1 SCC 633 6. AIR 1974 SC 1471 7. 1983 ALT (1) 199 8. (2005) 7 SCC 605 9. (2001) 4 SCC 9 THE HON’BLE SRI JUSTICE A.GOPAL REDDY AND THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR A.S.NO.4183/2004 JUDGMENT (Per the Hon’ble Sri Justice A. Gopal Reddy) Defendants 11 to 13, namely, Government of Andhra Pradesh represented by its District Collector, Medak District at Sangareddy, Revenue Divisional Officer-cum-Land Reforms Tribunal, Sangareddy, and Mandal Revenue Officer, Sangareddy respectively, in OS No.14/2003 filed this appeal challenging the judgment and decree of the District Judge, Medak at Sangareddy dt.15-4-2004, whereunder the suit filed by the plaintiffs, who are respondents 1 to 5 herein, to declare that they are in lawful possession over the suit schedule land; to grant perpetual injunction restraining defendants 11 to 13 from dispossessing them from the suit schedule land and to declare that the plaintiffs 1 to 5 are entitled to get their names recorded in Record of Rights for having purchased the suit schedule land from their vendors, namely, defendants 5 to 10, was decreed. This case has had a chequered history and is a classic example how unscrupulous litigatns hoodwink the laws and exploit the loopholes in the legal system. The relevant facts as per the pleadings and evidence are summarized as under: Originally the land bearing S.Nos.450 to 452, 454, 455, 460, 461, 464 and 468 measuring about 300 acres situated at Kandi village, Sangareddy Mandal belonged to Syed Saduddin and they were in possession of Syed Khaja Azeemuddin and Syed Anwarulla. Maharaja Yadavender Singh, who died on 11-6-1974, purchased the said land popularly known as M/s. Yadavendra Plantations and raised a loan from State Bank of India, Shamsheergunj Branch, Hyderabad (4th defendant) by mortgaging the said land for the purpose of development. For non-payment of loan amount, the fourth defendant-bank filed mortgage suit, OS No.27/1973 on the file of Subordinate Judge, Sangareddy, which was decreed on 29-8-1975 and a preliminary decree was passed. Later, on 5-8-1976 a final decree was also passed in IA No.145/76. In spite of final decree, the defendants 1 to 3 neither redeemed the property nor discharged the decretal amount. On enforcing Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973 (hereinafter called as “the Ceiling Act”), which came into force with effect from 1-1- 1975, the owners of land, namely, M/s. Yadavendra Plantations, owned by defendants 1 to 3 (2 major sons and widow of Maharaja Yada Vender Singh), filed three declarations under Sec. 8 (1) of the Ceiling Act before the Land Reforms Tribunal, Sangareddy. On enquiry, the Land Reforms Tribunal held that out of 300 acres owned by M/s. Yadavendra Plantations, 148.74 acres of land was surplus land, excess than the ceiling limit, and is liable to be surrendered to the Government vide CC Nos.2325 to 2327/S/75 dt. 22-7-77. State Bank of India is not a party to the proceedings before the Land Reforms Tribunal. The Bank, against the orders of the Land Reforms Tribunal accepting the surrender of the excess land to an extent of Ac.148.74 cents, filed three appeals, LRA Nos.328 to 330 of 1976, before the Land Reforms Appellate Tribunal, Hyderabad, contending that Bank was not given an opportunity to put forth its case before the Primary Tribunal ie., Land Reforms Tribunal. The Land Reforms Appellate Tribunal accepting the contention of the Bank remanded the matter for fresh enquiry with a direction to give an opportunity to the Bank and finalize the proceedings. After such remand, the Primary Tribunal after haring the objections of the Bank and after considering the material on record, recorded the same finding by its order dt. 22-7- 1977 and accepted the surrender of aforesaid 148-74 acres of land. Thereupon, the declarants filed LRA No.746/77 and the Bank filed LRA Nos.773 to 775 of 1977 before the Land Reforms Appellate Tribunal, Medak at Sangareddy against upholding its earlier order passed by the Primary Tribunal. The Land Reforms Appellate Tribunal by its order dt. 9-11-1977 disposed of all the appeals directing the decree holder-Bank to proceed, in the first instance, against the properties which are not surrendered and which are still in the possession of the judgment-debtors (declarants) and if the sale proceeds do not satisfy the claim of the Bank, then they may proceed against the lands that are surrendered by the declarants to the Government for realizing the balance of the amount due to the Bank from the declarants. Thereafter, the decree holder (Bank) filed an execution petition and brought the un-surrendered lands to sale. As the decree holder (Bank) has not realized the decretal amount, the judgment-debtors (declarants) filed EA No.27/1980 before the executing court (Subordinate Judge, Sanga Reddy) under Order XXi Rule 83 CPC seeking permission to sell the un-surrendered land by private negotiations, which was allowed on 30-6-1980. Accordingly, the un-surrendered lands were sold by private negotiations, but the sale proceeds did not satisfy the decree. The Judgment-debtors (declarants) filed another petition, EA No.51/81, seeking permission to sell the surrendered land by private negotiations, which was allowed on 21-7-1981. The surrendered lands were sold and sale proceeds were deposited in the executing court on 22-7-1981. Aggrieved by orders passed in EA No.51/81 dt. 21-7-81, and before sale was confirmed and certificates of sales were issued by the executing court, the Government filed EA No.68/81 in EP No.24/81 under Order XXI Rule 90 read with Section 151 CPC to set-aside the private sale entered into between the Judgment Debtors (declarants) and the purchasers. The Executing Court by an elaborate order dt. 7-8-1981 allowed EA No.68/1981 and set-aside the private sale ordered on 21- 7-1981. Questioning the same, the Judgment Debtors (declarants) filed CRP No.3364/1981 before this court (Ex.A-36). In the affidavit filed by the Joint Collector, Medak District in support of EA No.68/1981, it was contended that the surrendered lands have already vested in the State without any encumbrance and hence they are not liable to be sold. It was further contended that the order passed in EA No.51/81 dt. 21-7- 1981 is an ex parte order, inasmuch as the State was not given notice before granting permission and it is liable to be set-aside. This court by order dt. 21-4-1982 allowed the revision and remanded the matter to the lower court (executing court) to dispose of the matter afresh by giving opportunity to adduce evidence holding that the matter requires enquiry whether there were any irregularities in conducting the sale. On remanding the matter to the executing court (Subordinate Judge, Medak at Sangareddy) for fresh enquiry, the District Court, Medak at Sangareddy transferred EA No.68/81 and EP No.24/81 from the file of Subordinate Judge, Medak at Sangareddy to the Subordinate Judge, Medak, where they were renumbered as EA No.6/1984 and EP No.9/1984 respectively. Before the Subordinate Judge, Medak, Exs.A-1 to A-36 and Exs.B-1 to B-11 were marked. The executing court after considering the evidence adduced by the parties, by its order dt. 19-12-1984 (Ex.B-37) came to the conclusion that the surrendered lands were sold under private sale for an inadequate consideration by playing fraud and thereby caused substantial injury to the State and hence they are not sustainable, and allowed EA No.6/1984 setting aside the private sale made by the Judgment- Debtors. By the aforesaid order, the earlier order dt. 7-8-1981 setting aside the order passed in EA No.51/81 dt. 21-7-1981 stood vindicated. Once again the purchasers carried the matter in revision before this court in CRP No.495/1985 (Ex.A-38). A learned single Judge of this court, Justice K. Ramaswamy (as he then was) after considering the matter exhaustively dismissed the revision by order dt. 18-7-1986. The result is order dt. 21-8-1981 permitting the declarants to sell the surrendered land by private negotiations has been set-aside. The said order passed by this court in CRP No.495/1985 dt. 18-7-1986 has become final. Thereafter, the executing court instead of treating the proposal of the judgment- debtors (declarants) to sell the surrendered land by private negotiations as closed entertained EA Nos.225/87, 11/89, 12/89, 13/89, 14/89 and 15/89 filed by certain purchasers (vendors of the plaintiffs) for issue of sale certificates by confirming the sale, which was already held to be irregular and set-aside. The executing court instead of dismissing EAs vide its order dt. 21-2-1989 ordered for issuance of sale certificates. Later the declarants filed EA No.34/89 in EP No.9/84 under Order 21 Rule 83 and Secs. 47 and 151 CPC to indicate the range of price practicable and confirm the same and issue sales certificates in favour of the purchasers which was allowed on 1- 4-1989 by the executing Court fixing Rs.7000/- per acre as reasonable price instead of Rs.3600/- and ordered to issue sale certificates by confirming the sale. The sale certificates were issued in favour of the purchasers on 20-4-1989 and the possession was delivered through court. After getting possession on 10-1-1990, the auction purchasers sold the property to the plaintiffs. While so, the District Collector, Medak District filed an application to set-aside the order dt. 21-2-1989 passed in EA Nos.225/87, 11/89, 12/89 to 15/89 in EP No.9/84 with an application, EA No.551/92, to condone delay of 605 days in filing the application to set-aside the above order. The said delay condonation petition, EA No.551/92, was dismissed on 3-12-1993. Against which, no appeal has been preferred. Meanwhile, Land Reforms Tribunal passed an order directing the Mandal Revenue Officer, Sanga Reddy to prepare appropriate proposals and to get the proposals approved and to give physical possession to the beneficiaries and report compliance to the Collector, Medak District, vide orders dt. 9-4-1992 in CC No.2325 to 2327/S/75. Questioning the correctness of the said order, plaintiffs herein and others filed LRA No.34/1992 before the Land Reforms Appellate Tribunal, Medak at Sangareddy. The Appellate Tribunal by its order dt. 7-2-1994 (Ex.A-31) allowed the appeal setting aside the order passed by the Land Reforms Tribunal (Revenue Divisional Officer) Sanga Reddy dt. 9-4-1992 in CC Nos.2325 to 2327/S/75. Questioning the orders passed by the Land Reforms Appellate Tribunal dt. 7-2-1994, the appellants/defendants 11 to 13 filed CRP No.4627/1997 before this court. This court by its order dt. 2-7-1998 allowed the revision holding that the lands under mortgage to Bank are not exempted from the operation of the Ceiling Act and the effect of vesting is that they vest in the Government free from all encumbrances including the liability under the mortgage subject to a right to the mortgagee enforcing liability against the amount payable under the Ceiling Act or of any other property of the owner. This court further held that by legal fiction surrendered land vested in the State without any encumbrances by way of mortgage stood transformed into the amount payable under the Ceiling Act. The order passed by the Subordinate Judge, Medak dt. 21-2-1989 in EA Nos.225/1987 and batch confirming the sale by private negotiations and issuing sale certificates is in utter disregard to the orders of this court in CRP No.495/1985 dt. 18-7-1986 and it is without jurisdiction and non-est and the claim of the purchasers, if any, on confirming the sale is only to proceed against the amount payable under the Ceiling Act. Aggrieved by the same, the plaintiffs carried the matter in Civil Appeal No.1881/1999 before the Honourable Supreme Court. The Supreme Court by an elaborate order dt. 16-4-2003 dismissed the appeal holding that even if it is assumed that the learned single Judge exceeded in his jurisdiction by passing the impugned judgment and this court may not interfere with the same as the setting aside of the judgment of the learned single Judge in CRP No.4627/1997 dt. 2-7-1998 would result in resurrection of a series of other illegal orders passed by the Subordinate Courts. On dismissal of the appeal by the Supreme Court, the plaintiffs instituted the above suit for the reliefs claimed as aforementioned contending that the executing court in EA No.9/1984 has not held that the Bank cannot proceed against the lands covered by EP No.9/1984 to realize the decretal amount since the order passed in LRA Nos.773 to 775 of 1977 dt. 9-11-1977 has become final in so far as the right of the Bank to proceed with recovery of its loan amount by selling the so called surrendered lands. The executing court permitted the bank to sell suit schedule property under attachment and purchasers-defendants 5 to 10 deposited the amount fixed by the court at Rs. 7000/- per acre against its earlier value at Rs.3600/- and on confirmation of sale and on issuance of sale certificates possession was also delivered, and the plaintiffs who are bona fide purchasers purchased the said property from defendants 5 to 10. On dismissal of EA No.551/92 filed for condoning delay to set aside the orders passed issuing sale certificates, the State has not carried the matter in appeal and thus the said order has become final. On filing LRA No.34/92 they requested the authorities to allow them to peruse the file relating to surrender proceedings including receipt of the orders of the Primary Tribunal, declarations or surrender statements and panchanama of taking possession of the land by the Primary Tribunal in pursuance of the so called surrender statement, but the authorities did not permit the plaintiffs to peruse the same on the ground that they are not the parties to the declaration proceedings, which goes to show that there are no such documents. There is no record evidencing taking possession of the land. When the suit schedule properties are in possession of the Government they would definitely raise an objection in EP No.9/84. Taking possession of the land as surplus land is barred by limitation since the orders have been passed in 1977. On allowing LRA No.34/92, the defendants 11 to 13 carried the matter in CRP No.4627/1997, in which the High Court has not observed anything contrary to the rights and possession of the plaintiffs over the suit schedule lands nor any direction was issued in favour of the defendants 11 to 13 to dispossess the plaintiffs. The same was confirmed by the Honoruable Supreme Court in Civil Appeal No.1881/1999, but there is no direction to the defendants 11 to 13 or any body to dispossess the plaintiffs from the suit scheduled land without due process of law. They are the bona fide purchasers, without notice of earlier dispute, as such they are entitled to protect their possession, which they secured from their vendors defendants 5 to 10 who got possession from the court. Defendants 1 to 3, 6 to 8 and 10 remained ex parte. Defendants 5 and 9 though represented by a counsel did not choose to file their written statement. Defendant No.4 filed a separate written statement. Defendant No.12 filed a written statement on behalf of himself and defendants 11 and 13. The fourth defendant-Bank though admitted the ownership of defendants 1 to 3 and mortgage of the suit schedule properties with the Bank for the loan obtained pleaded that they are not aware of defendants 1 to 3 filing declarations and were declaring them as surplus landholders under the Ceiling Act. For recovery of the mortgage amount, the fourth defendant filed OS No. 27/1973 and obtained a preliminary decree and later final decree. In the appeal filed before the Land Reforms Appellate Tribunal against the orders of the Land Reforms Tribunal accepting the surrender, the Bank contended that it has first charge on the mortgage and they may be proceeded against the surrendered lands, at first, of defendants 1 to 3 for due realization of the mortgage debt. The Land Reforms Appellate Tribunal permitted the Bank to proceed against the un-surrendered lands which are still in the possession of the declarants in the first instance and if the sale proceeds do not satisfy the claim they may proceed against the lands that are surrendered by the declarants. The fourth defendant filed EP No.24/81 to recovery balance of decretal amount by selling the remaining lands ad-measuring Ac.149-22 cents since declarants have excess surplus land and the executing court permitted the fourth defendant to sell the same for recovery of the decretal amount by way of private negotiations and the sale was confirmed in EA No.51/81 and at that stage defendant No.11 filed EA No.68/81 in EP No.24/81 for setting aside the private sale ordered on 21-7-1981. Aggrieved by the same, the auction purchasers filed CRP No.3364/1981 and same was allowed and remanded to the executing court. Defendants 5 to 10 who are auction purchasers deposited the amount fixed at Rs.7000/- per acre. Against confirmation of sale and delivery of possession, no appeal or revision has been preferred. The fourth defendant is not aware of the plaintiffs preferring CRP and subsequent proceedings thereof. Defendant No.12 filed a written statement on behalf of himself and defendants 11 and 13 while narrating the events which took place from the date of declaration till orders were set-aside by the High Court in CRP No.4627/97 and dismissal of SLP by the Supreme Court contended that on the declarations filed by defendants 1 to 3 they were declared as surplus land holders to an extent of Ac.148-74 cents. Harichand Singh, the agent of the defendants 1 to 3/declarants filed statement of surrender of lands required under the law on 8-10-1975 and the possession of the said land was taken on 25-2-1976 in Form-X prescribed under the Ceiling Act, which has been confirmed by the Supreme Court. On dismissal of Civil Appeal No.1881/99 dt. 16- 4-2003 the plaintiffs cannot re-agitate the same. The Civil Court’s jurisdiction is barred to question any order or proceedings taken by any of the authority under the Ceiling Act in view of Sec. 26 of the Ceiling Act. Grant of sale certificates was set-aside by the High Court in CRP No.4627/97, which has been confirmed by the Supreme Court. On filing written statement by D-12, the plaintiffs filed a rejoinder stating that the stand of D-12 as to the dates of order of surrender and acceptance are self-contradictory and manifest the fraud played by the Government. The Government has played a fraud in passing an order by the Land Reforms Tribunal and the Land Reforms Tribunal did not follow the procedure prescribed under the Statute and it cannot claim that the land is vested in it without surrender by the declarants. In the absence of any mandatory notice under Form No.6 served on the declarants or any other notice required under the Statute to save the skin the defendant No.12 has introduced one Harichand Singh as the agent of defendants 1 to 3 and it is for them to prove the competency of Harichand Singh to surrender the land on behalf of defendants 1 to 3. The Tribunal has not followed the procedure prescribe under the Ceiling Act. In the absence of any change effected in the revenue records, the Government is not in possession of the property. Fraudulent acts have been suppressed before High Court as well as the Supreme Court and there was no occasion for the High Court or the Supreme Court to consider the fraudulent acts of the State in taking the surplus land. The very surrender and acceptance of the land and vesting in the Government and even passing the order declaring D-1 to D-3 as surplus landholders is a fraud and they are null and void, as such there is no land of D-1 to D-3 vested in the Government and as long as the land is not vested in the Government, it cannot be held to be in possession of the Government. Fraud was not brought to the notice of High Court in CRP No.4627/97 and before Supreme Court in CA No.1881/99 and it was noticed after filing the written statement by D-12. The orders passed by High Court and Supreme Court are not binding on defendants 1 to 3 since they are not parties to the said proceedings, therefore suit has to be decreed as prayed for. On the above pleadings, the trial court framed the following issues for trial: 1. Whether the plaintiffs are in lawful possession of the suit schedule lands on the date of suit? 2. Whether the defendants 1 to 3 have surrendered the lands before the Tribunal and the Tribunal selected and accepted the same? 3. Whether the matter is barred by res judicata in view of orders LRS No.773 to 746 of 1977 and EA No.53/92 on the file of Sub- Court, Medak? 4. Whether the plaintiffs are the bona fide purchasers in peaceful possession? 5. Whether the court is having jurisdiction to entertain the suit? 6. Whether the plaintiffs are entitled to declare them as owners of the suit schedule lands and they are entitled for the consequential relief of injunction? 7. Whether there was any mis-representation, suppression of facts and fraud on the part of defendants, if so, what is its effect? 8. To what relief? In order to substantiate the case of the plaintiffs, the third plaintiff himself examined as P.W.1 and their GPA as P.W.2 and marked Exs.A-1 to A-8. On behalf of the defendants 1 to 3, D.W.1 was examined and Exs.B-1 to B-16 were marked. The trial court after considering the oral and documentary evidence and after hearing the arguments on both sides, on issue No.5, held that civil court has jurisdiction to try the suit since the evidence adduced by the parties shows that the Primary Tribunal under the Ceiling Act has not followed the prescribed mandatory provisions of law and has not acted in conformity with the fundamental judicial principles and procedure laid down under the Ceiling Act. The trial court on issue No.7 held that there is no record to show regarding service of mandatory notice before taking possession and there is no panchanama showing that the possession of the land was taken by the Government. When the Government represented before the Appellate Tribunal that the defendants 1 to 3 have surrendered their lands and surrender was accepted and possession was taken and as such the lands are vested in the Government suppressing the fact that the surrender statement was not signed by declarants and the same was signed by a stranger, Harichand Singh who has no authority. When the plaintiffs have distinctly pleaded in their pleadings and proved that defendants 11 and 12 played fraud, and the judgments obtained from the Honourable High Court in CRP and the Apex Court in Civil Appeal No.1881/99 by suppressing material facts amount to fraud. In view of answering issue No.7 in favour of the plaintiffs, issue No.2 was answered in favour of the plaintiffs holding that the defendants 1 to 3 have not surrendered the land and it was not vested in the Government. On issue No.3, it was held that once the judgment of the High Court in CRP No.4627/1997 and Supreme Court in CA No.1881/99 were obtained by fraud and misrepresentation, judgment in LRA Nos.773 to 775 of 1977 automatically revived, and it is not open that the said orders have been set-aside. When the plaintiffs have been in possession of the suit schedule property from the date of purchase and prior to that their purchasers, they are entitled to declaration and holding so decreed the suit. Learned Special Government Pleader for the appellants submitted that when the defendants 1 to 3/declarants have been declared as surplus landholders under the Ceiling Act,