High Court of KeralaSingle Judge2022-09-16Writ petition allowed; Clause 12 (mortgage proh...

K.I.UMMER KHAN v. The State of Kerala

Case / Petition Number:WP(C) No.33821 of 2018

Neutral Citation:/

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: V.G. ARUN
Judgment Date: 2022-09-16
Court Decision / Holding: Writ petition allowed. Clause 12 of Ext.P7, to the extent it interdicts mortgaging the land assigned to the petitioner, is quashed.
Final Disposition: Writ petition allowed; Clause 12 (mortgage prohibition) quashed to the extent of prohibiting mortgaging the land assigned to the petitioner.

Parties to the Case

Appellants / Petitioners

K.I.UMMER KHAN

Respondents

The State of Kerala
The District Collector, Ernakulam
District Industry Centre, Ernakulam
The Tahsildar, Taluk Office, Parur

Legal Representation & Advocates

Counsels for Petitioners

• T.C.SURESH MENON
• P.S.APPU
• A.R.NIMOD

Counsels for Respondents

• Government Pleader

Case Synopsis & Summary

The petitioner, K.I. Ummer Khan, was allotted 60.450 cents of land in Sy. Nos. 100/1 and 131/4A of Kadungallur Village in the Edayar industrial area to establish an industrial unit. The allotment, made by proceedings dated 1.9.1976, was followed by remittance of land value and commencement of the unit. Subsequently, the petitioner sought assignment of patta for the land and obtained sanction to operate a petroleum retail outlet within the same premises. In 2013 the Government issued G.O.(Rt).No.567/2013/ID sanctioning Patta but limited to the portion of land housing the industrial unit and excluding the petrol pump area. This order was challenged in W.P.(C) No.15452 of 2013, Ext.P2 being the judgment that set aside the order to the limited extent and directed reconsideration. Pursuant to Ext.P2, Ext.P3 ordered Patta for the entire 60.450 cents on the condition that the land not be transferred without prior Government permission. The petitioner, aggrieved by inaction, moved W.P.(C).No.28141 of 2017; Ext.P5 allowed the petition, directing assignment within two months subject to the same non-transfer restriction. Nevertheless, Patta was not issued, leading to contempt and Ext.P6/Ext.P7, the latter containing Clause 12 interdicting mortgaging. The petitioner contended Clause 12 was a punitive, harassing condition and not contemplated by the Rules, violating Article 19(1)(g). The respondents argued that Rule 2(a) defines alienation to include mortgage and that Clause 12, though harsh, aligns with Rule 11 and Appendix II. The judge held that the absolute prohibition against mortgaging under Clause 12 contravenes these provisions and quashed Clause 12 to the extent it prohibits mortgaging. The writ petition was allowed.

Provisions of Law Cited

Article 19(1)(g) of the Constitution of IndiaRule 2(a) of the Rules for Assignment of Land for Industrial purposesRule 11 of the Rules for Assignment of Land for Industrial purposesAppendix II to the Rules for Assignment of Land for Industrial purposesRule 18 of the Rules for Assignment of Land for Industrial purposes

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that the absolute mortgage prohibition imposed by Clause 12 of Ext.P7 is arbitrary, harassing, and unsupported by statutory provisions governing land assignment for industrial purposes. The absence of such a condition in Ext.P3 and Ext.P9/P10 Pattas, the earlier Pattas issued to others, and a certificate (Ext.P4) indicating no objection to mortgaging undermines the asserted restriction. He relies on G.O.(MS) No.55/2013/ID (27.05.2013) which indicates the Industries Department had overruled a Revenue Department view that mortgage permission could not be granted for industrial lands, and he invokes Article 19(1)(g) to argue his right to carry on business is impeded by an absolute mortgage prohibition.

Contentions of Respondents

The Government Pleader argued that the definition of alienation in Rule 2(a) includes mortgage and other transfers. Rule 11 and Appendix II restrict the land from being alienated or encumbered without prior written Government permission, and Rule 18 prescribes the form of assignment; accordingly, clause 12 is a valid restriction rather than an impermissible encumbrance. The reliance on TR Gopi v. District Collector (1992) 2 KLT 605 was to show that restrictions are not unsustainable, but the court should be guided by the statutory framework which embodies the Government’s prerogative to permit encumbrances with conditions."},

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
T.R. Gopi v. District Collector	1992 (2) KLT 605	Distinguished	The court cited this decision to argue that the challenge based on alleged conflict with the Transfer of Property Act is not sustainable, and then distinguished its applicability to the present facts.
W.P.(C) No.15452/2013	W.P.(C) No.15452/2013	Mentioned Only	Ext.P2 judgment is cited as background showing that order had been set aside to limited extent, not as a controlling precedent.
W.P.(C) No.28141/2017	W.P.(C) No.28141/2017	Mentioned Only	Judgment in W.P.(C) No.28141/2017 referenced to describe prior directives; used for background.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE V.G.ARUN** **FRIDAY, THE 16[TH] DAY OF SEPTEMBER 2022 / 25TH BHADRA, 1944** **WP(C) NO. 33821 OF 2018** ## **PETITIONER/S:** K.I.UMMER KHAN, AGED 68 YEARS S/O. IDROSE, PROPRIETOR, M/S. TRIOZ FABRICATORS ENGINEERS AND CONSTRUCTIONS, P.O MUPPATHADAM, INDUSTRIAL DEVELOPMENT AREA, EDAYAR, RESIDING AT AMBAKUDY HOUSE, WEST KADUNGALLUR P.O, ALUVA, ERNAKULAM DISTRICT. BY ADVS. T.C.SURESH MENON P.S.APPU A.R.NIMOD ## **RESPONDENT/S:** 1 THE STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, INDUSTRIES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM 695001. 2 THE DISTRICT COLLECTOR, ERNAKULAM, COLLECTORATE, CIVIL STATION, KAKKANAD, KOCHI- 682030. 3 DISTRICT INDUSTRY CENTER, ERNAKULAM, REPRESENTED BY ITS GENERAL MANAGER, KOCHI- 682016. 4 THE TAHSILDAR, TALUK OFFICE, PARUR, ERNAKULAM, PIN- 683513. BY ADV GOVERNMENT PLEADER ## **OTHER PRESENT:** GP sri.Rajeev Jyothish George THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY ARED ON 13.07.2022, THE COURT ON 16.09.2022 DELIVERED THE FOLLOWING: W.P.(C) No.33821 of 2018 -2- ## **JUDGMENT** Dated this the 16[th] day of September, 2022 The petitioner was allotted an extent of 60.450 cents of land in Sy.Nos.100/1 and 131/4A of Kadungallur Village in the Edayar industrial area for starting an industrial unit. The allotment was made as per proceedings No.B5/80618/76 dated 1.9.1976. Petitioner remitted the entire land value and started the industrial unit. Thereafter, the petitioner applied for assignment of patta for the land. In the meanwhile, the petitioner obtained sanction for starting a petroleum retail outlet in the allotted land, vide G.O.No.17/06/ID dated 5.1.2006. Sometime later, the Government issued G.O(Rt).No.567/2013/ID dated 19.4.2013, sanctioning Patta, but limited to the extent of land in which the petitioner was conducting the industrial unit and excluding the portion where W.P.(C) No.33821 of 2018 -3- the petrol retail outlet was functioning. This Government order was challenged in W.P(C).No.15452 of 2013 and Ext.P2 judgment rendered, setting aside the order, to the limited extent of excluding assignment of Patta in respect of the land in which the petrol pump is situated and directing reconsideration of the matter. Pursuant to Ext.P2 judgment, the first respondent issued Ext.P3 order sanctioning Patta for the entire extent of 60.450 cents, on condition that the land shall not be transferred without the Government's prior permission. 2. Aggrieved by the inaction in assigning the land as ordered in Ext.P3, the petitioner filed W.P(C).No.28141 of 2017. That writ petition was allowed by Ext.P5 judgment and the competent authority directed to assign the land referred to in Ext.P3 within two months, subject to the condition that the land shall not be transferred without the prior permission of the Government. ## W.P.(C) No.33821 of 2018 -4- In spite of the judgment, Patta was not issued and the petitioner was compelled to initiate contempt proceedings. This ultimately prompted the respondents to issue Ext.P6 proceedings authorising the issue of Patta to the petitioner. Accordingly, Ext.P7 order of Assignment of Government land on Registry for Industrial Purposes was issued. This writ petition is filed aggrieved by condition No.12 in Ext.P7, which interdicts the petitioner from mortgaging the land. 2. Learned Counsel for the petitioner contended that Clause 12 was incorporated in Ext. P7 with the deliberate intention of harassing the petitioner due to the animosity of the officers against him for having initiated contempt proceedings. Attention is drawn to Exts.P9 and P10 Pattas, issued to certain other persons, to point out that the objectionable clause (Clause 12) is not incorporated in those Pattas. ## W.P.(C) No.33821 of 2018 -5- Reference is also made to Ext.P4 certificate of the General Manager, District Industries Centre, certifying that there is no objection in mortgaging the land and the proposed building to the Kadangalloor Service Co-operative Bank Ltd in order to raise finance for running the allotted industrial unit. Learned Counsel also made available a copy of G.O(MS) No.55/2013/ID dated 27.05.2013, whereby the Industries Department had overruled the view of the Revenue Department that, mortgage permission cannot be granted for industrial lands. It is contended that the prohibition against mortgaging the property amounts to interference with the petitioner’s right to enjoy the land and militates against the right to conduct business guaranteed under Article 19(1)(g) of the Constitution of India. Moreover, in the absence of a condition against mortgage in Ext.P3 Government order and Ext.P6 proceedings of the District Collector, the W.P.(C) No.33821 of 2018 -6- Tahsildar, who is a subordinate authority, cannot impose such a condition 3. Learned Government Pleader submitted that the definition of ‘alienation’ in Rule 2(a) of the Rules for Assignment of Land for Industrial purposes (the Rules), takes in sale, gift, will, mortgage, hypothecation, lease or transfer of possession. As per Rule 18, the order of assignment of registry shall be in the Form in Appendix-II to the Rules. Rule 11 stipulates that the assigned land shall be heritable, but shall not be alienated or encumbered in any manner without the prior permission in writing of the Government. In Clause 1 of Appendix II also, it is reiterated that the land shall be heritable, but cannot be alienated or encumbered without the prior permission in writing of the Government. The provisions being specific, the challenge against Clause 12 of Ext.P7 is liable to be repelled. Reliance is placed on the W.P.(C) No.33821 of 2018 -7- decision in _**T.R.Gopi v. District Collector [1992**_ _**(2) KLT 605]**_ to contend that the challenge on the premise that the restriction militates against the provisions of the Transfer of Property Act is not sustainable. It is true that Rule 11 and Clause 1 of Appendix II interdicts the assignee from alienating or encumbering the assigned land without prior permission in writing of the Government. On the contrary, Clause 12 of Ext.P7 imposes an absolute restriction against mortgaging the assigned land to any financial institution. In my considered opinion, the absolute prohibition in clause 12 goes against the stipulations in Rule 11 and Appendix II. The provisions provide for encumbering the land with prior permission of the Government. Being so, it is harsh and illogical to interdict the assignee from even mortgaging his property for the purpose ## W.P.(C) No.33821 of 2018 -8- of raising the requisite funds for establishing and conducting the industry, for the functioning of which the land is assigned to him. Such an interpretation will go against the very objective behind the assignment. In the above view of the matter, there is merit in challenge against Clause 12 of Ext.P7. I make it clear that the above findings are rendered based on the peculiar facts involved in the instant case. In the result, the writ petition is allowed. Clause 12 of Ext.P7, to the extent it interdicts the petitioner from mortgaging the land assigned to him, is quashed. Sd/- **V.G.ARUN JUDGE** Scl/ W.P.(C) No.33821 of 2018 -9- ## **APPENDIX OF WP(C) 33821/2018** ## PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE COMMUNICATION ISSUED BY THE 3RD RESPONDENT DIRECTING THE PETITIONER TO TAKE POSSESSION OF THE LAND, DATED 10.12.1976. EXHIBIT P2 TRUE COPY OF THE JUDGMENT IN W.P. (C)NO.15452/2013 ON THE FILE OF THIS HONOURABLE COURT DATED 20.12.2014. EXHIBIT P3 TRUE COPY OF THE ORDER PASSED BY THE 1ST RESPONDENT DATED 17.10.2015. EXHIBIT P4 TRUE COPY OF THE CERTIFICATE ISSUED BY THE 3RD RESPONDENT DATED 16.03.2005. EXHIBIT P5 TRUE COPY OF THE JUDGMENT IN W.P. (C)NO.28141/2017 ON THE FILE OF THIS HONOURABLE COURT DATED 10.10.2017. EXHIBIT P6 TRUE COPY OF THE ORDER NO.L2-54006/10 ISSUED BY THE 2ND RESPONDENT DATED 20.02.2018. EXHIBIT P7 TRUE COPY OF THE 'PATTA' ISSUED BY THE 4TH RESPONDENT DATED 29.05.2018. EXHIBIT P8 TRUE COPY OF THE LATEST LAND TAX RECEIPT ISSUED BY THE VILLAGE OFFICER, KADUNGALLUR DATED 11.06.2018. EXHIBIT P9 TRUE COPY OF THE PATTA ISSUED TO M/S.SWATHY CABLES AND CONDUCTORS PRIVATE LIMITED DATED 29.09.2004. EXHIBIT P10 TRUE COPY OF THE PATTA ISSUED TO M/S NATIONAL BATTERY INDUSTRIES DATED 29.03.2008.