Case Note & Summary
The petitioner, South Canara District Central Co-operative Bank Ltd., filed a writ petition under Articles 226 and 227 of the Constitution of India challenging an endorsement dated 18.07.2023 issued by the Tahsildar, Brahmawara (Respondent No.4). The endorsement rejected the bank's request to enter its name in the revenue records as a mortgagee in respect of a site granted to Respondent No.5 under the Ashraya scheme pursuant to the Karnataka Land Grant Rules, 1969. The grant order contained a condition that the grantee shall not alienate the site for a period of 25 years. The bank had advanced a housing loan to Respondent No.5 against the security of the said site, and the grantee had executed a mortgage deed in favour of the bank. When the bank applied for mutation of its name as mortgagee, the Tahsildar refused, citing the condition against alienation. The bank contended that a mortgage is not an alienation but only a creation of a security interest and does not transfer ownership. The State respondents argued that the condition prohibits any encumbrance including mortgage. The Court examined the grant condition and held that the word 'alienate' in the condition does not include mortgage, as mortgage is a transfer of interest by way of security and not a transfer of ownership. The Court observed that the purpose of the condition is to prevent the grantee from selling or transferring the site, but it does not bar the grantee from raising a loan by mortgaging the property. The Court quashed the impugned endorsement and directed the Tahsildar to enter the name of the bank as mortgagee in the revenue records. The petition was allowed.
Headnote
A) Land Grant - Condition against alienation - Mortgage - The condition in a grant order under the Karnataka Land Grant Rules, 1969 that the grantee shall not alienate the site for 25 years does not prohibit the grantee from creating a mortgage in favour of a co-operative bank to secure a housing loan, as mortgage is not a transfer of ownership but a security interest. The Tahsildar's endorsement rejecting mutation on the ground that the grant condition prohibits mortgage was quashed. (Paras 1-5) B) Writ Jurisdiction - Articles 226 and 227 of Constitution of India - Quashing of endorsement - The High Court exercised its writ jurisdiction to quash an endorsement by the Tahsildar that refused to enter the name of the mortgagee bank in the revenue records, holding that the bank's right as a mortgagee is not barred by the grant condition. (Paras 1-5)
Issue of Consideration
Whether the condition in a grant order under the Karnataka Land Grant Rules, 1969 that the grantee shall not alienate the site for 25 years prohibits the grantee from creating a mortgage in favour of a co-operative bank to secure a housing loan.
Final Decision
The writ petition is allowed. The impugned endorsement dated 18.07.2023 passed by the Tahsildar, Brahmawara (Annexure-A) is quashed. The Tahsildar is directed to enter the name of the petitioner bank as mortgagee in the revenue records in respect of the site granted to respondent No.5.
Law Points
- Interpretation of grant conditions
- Mortgage not amounting to alienation
- Karnataka Land Grant Rules
- 1969
- Articles 226 and 227 of Constitution of India
