Case: State Of Andhra Pradesh Vs. M. Lakshmi Devi

2. Briefly stated, these are the relevant factsThe respondents entered into an agreement to sell the land in appeal, admeasuring 294 acres, to M/s Challapalli Sugar Limited and in pursuance thereof handed over possession of the said land to the said company. The said company filed a declaration under the provisions of the said Act declaring surplus land held by it, which included the said land. The respondents contended that since the title to the said land had not passed to the said company they remained the owners thereof and were entitled to the reversion of its possession to them under Section 12(4) of the said Act. The Primary Land Tribunal held against the respondents but the Appellate Tribunal and the High Court held in their favour3. It is necessary to note the provisions of Section 3(i) of the said Act which defines "holding" toentire land held by a person as an owner; as a limited owner; as a usufructuary mortgagee; as a tenant; who is in possession by virtue of a mortgage by conditional sale or through part performance of a contract for the sale of land or otherwise. ..."Section 12 of the said Act reads thus"12 Reversion and vesting of land surrendered.(1) Where any land is surrendered or is deemed to have been surrendered under this Act by any usufructuary mortgagee or tenant, the possession of such land shall subject to such rules as may be prescribed revert to the owner(2) The owner to whom the possession of the land reverts under(1) from an usufructuary mortgagee shall be liable to pay the mortgage money due to usufructuary mortgagee in respect of that land with interest at the rate of six per cent. per annum from the date of such revision, and the said land shall continue to be the security for such payment(3) The owner to whom the possession of the land reverts under(1) from a tenant shall be entitled to receive from the tenant rent due for the period ending with the last crop harvested by such tenant(4) Where any land is surrendered or is deemed to have been surrendered under this Act by any person in possession by virtue of a mortgage by conditional sale or through a part performance of contract for sale or otherwise, the possession of such land shall subject to such rules as may be prescribed, revert to the owner(5) The owner to whom the possession of the land reverts under(4) shall be liable to discharge the claim enforceable against the land by person in possession : and the land surrendered shall if held as a security, continue to be theWhere any land is surrendered or is deemed to have been surrendered under this Act by any limited owner, the possession of such land shall, subject to such rules as may be prescribed, revert to the person having a vested interest in the remainder and such person shall be liable to discharge the claim enforceable against the land by the limited owner; and the said land shall, if held as a security, continue to be the security.A is added as per Amendment Act No. 10 of 1977)(6) Notwithstanding anything contained in this section, where any land surrendered by an usufructuary mortgagee or a tenant or a person in possession referred to in(4), is also a land surrendered by the owner, the provisions of Section 11 shall apply."

Court's reasoning:
7. It will be remembered that by reason of Section 3(i) the owner is obliged to declare land that he has agreed to sell as his holding, as is the person who is in possession of it through part performance of an agreement of sale. Where that land is surrendered as surplus both by the owner and the party in possession of it, the provisions of Section 11 become applicable and the land vests in the Government; but where the land is surrendered by the party in possession of it through part performance of an agreement of sale but it is not also surrendered by the owner, the provisions of(4) of Section 12 apply and the possession of the land must revert to the owner8. It will be noted that possession shall revert to the owner "subject to such rules as may be prescribed". The relevant rule in this behalf is Rule 9 of the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Rules, 1974.(1) thereof states that where any land is surrendered or is deemed to have been surrendered under the said Act by, inter alia, a person in possession through part performance of a contract for sale, the possession of such land shall, as soon as may be after a seasonal crop on the land is harvested, revert to the owner, except in a case where the owner himself surrenders such land as surplus under the provisions of the Act, whereupon it shall vest in the Government free from all encumbrances.(2) entitles the owner to apply to the Revenue Divisional Officer for being put in possession of the land if the party who is in possession of it, inter alia, by virtue of part performance of a contract for sale fails to deliver its possession to him. The Revenue Divisional Officer is then obliged, after giving to the party in possession an opportunity of making a representation, to authorise an officer to take possession of the land and deliver it to the owner. Having regard to the fact that(4) of Section 12 refers to such rules as may be prescribed and terms of the prescribed rule, we are left in no doubt as to the correctness of the interpretation that we have placed upon Section 12