srk 1 wp-221-11.sxw THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.221 OF 2011 Nashik District Industrial and Mercantile Co-operative Bank Ltd. ... Petitioner Versus State of Maharashtra and others. ... Respondents Mr. A.V. Anturkar, Senior Advocate i/by Mr. S.B. Deshmukh for the petitioner. Mr. S.R. Nargolkar, Additional Government Pleader for State. CORAM : MOHIT S. SHAH, C.J. & S.J. VAZIFDAR, J. Tuesday, January 18, 2011 P.C. Rule. Rule is made returnable forthwith and the writ petition is heard finally. 2. The petitioner is a co-operative bank which had advanced a loan to a tribal for which mortgage was executed. On account of the defaults in repayment of loan, the petitioner-bank intended to foreclose the mortgage and auction the property in question. In order to ensure that the auction purchaser who is a non-tribal, gets a clear title and the best price is realized at the auction, the petitioner-bank approached the Collector, Nashik seeking a no objection certificate under section 36(4) of the Maharashtra Land Revenue Code. In response to the said request, the Additional Collector, Nashik has given reply dated 20th August, 2010 at Exhibit `G' to the petition. Aggrieved by the said reply, the petitioner-bank has filed this petition under Article 226 of the Constitution of India. srk 2 wp-221-11.sxw 3. Sub-section (1) of section 36 provides that an occupancy shall, subject to the provisions contained in section 72 and subject to the conditions lawfully annexed to the tenure, be deemed an heritable and transferable property. Unless otherwise provided by law, sub-section (2) specifically provides that occupancies of persons belonging to the Scheduled Tribes, shall not be transferred except with the previous sanction of the Collector. Sub- section (4) commencing with a non-obstante clause provides that it shall be lawful for tribal land/ occupant Class-II to mortgage his property in favour of the Co-operative society in consideration of a loan advanced to him by the Co- operative society and without prejudice to any other remedy open to the Co- operative society, in the event of such occupant making default in payment of such loan in accordance with the terms of loan, it shall be lawful for the Co- operative society to attach and sell the same and the proceeds to be applied towards the payment of such loan. Sub-section (4) of section 36 reads as follows: "The Collector may, on the application of the co-operative society and payment of the premium prescribed by the State Government in this behalf, by order in writing reclassify the occupant as occupant- Class I. This reclassification, the occupant shall hold the occupancy of the land without any restriction on transfer under this Code." 4. It is, thus, clear that interests of the co-operative bank have been preserved. However, the co-operative bank is clearly required to make an application to the Collector and pay the premium prescribed by the State Government and thereupon, the Collector is required to pass an order of reclassifying the tribal occupant as occupant Class I and on such reclassification, the property in question can be sold by the Co-operative bank without any restrictions on transfer under the Maharashtra Land Revenue Code. srk 3 wp-221-11.sxw 5. In view of the above statutory provisions, the learned counsel for the petitioner-bank states that the petitioner-bank will make the application to the Collector, Nashik and pay the prescribed premium as required by sub- section (4) of section 36 of the Maharashtra Land Revenue Code. The learned counsel for the petitioner-bank, however, submits that only the petitioner-bank is required to make such application and that the auction purchaser cannot be required to make such application. 6. Mr. S.R. Nargolkar, learned Additional Government Pleader submits that the auction purchaser should be required to make such application under sub-section (2) of section 36 of the Code. 7. The scheme of section 36 is very clear. Even where occupancy of the persons belonging to Scheduled Tribe cannot be transferred except with the previous sanction of the Collector, if the occupancy was subject matter of a mortgage in favour of a co-operative bank which had advanced a loan to the tribal occupant and the latter makes a default in repayment of the loan, it is lawful for the co-operative bank to cause the occupancy to be attached and sold and to apply the sale proceeds towards the payment of such loan. The auction purchaser would become the occupant of the property but it would still remain tribal land/ occupant Class II, subject to the restriction under sub-section (2) of section 36. The last part of sub-section (4) of section 36, however, provides that in such a case, if a co-operative society makes an application to the Collector and pays premium prescribed by the State Government in this behalf, the Collector may by an order in writing reclassify the occupant as occupant- Class I and on such reclassification, the occupant shall hold the occupancy of the land without any restriction on transfer under the Maharashtra Land Revenue Code. srk 4 wp-221-11.sxw 8. Accordingly, after the auction is held and the bank sells the property in favour of the auction purchaser, it is for the co-operative bank to make the application and not for the auction purchaser. If the conditions prescribed by sub-section (4) of section 36 are satisfied, the Collector will pass the order in writing, reclassifying the auction purchaser as occupant Class I and upon such reclassification, the auction purchaser will hold the occupancy of the land without any restriction on transfer under the Land Revenue Code. It is, thus, clear that the bank is required to make application and not the auction purchaser. 9. The reply dated 20th August, 2010 at Exhibit `G' shall accordingly, be read in the light of the aforesaid interpretation of the provisions of the Maharashtra Land Revenue Code. Writ petition stands disposed of accordingly. CHIEF JUSTICE S.J. VAZIFDAR, J.