Case Law Details
Ramavtar Agarwal Vs State of Odisha (Orissa High Court)
Orissa High Court held that in event petitioners obtain conversion, there will be better chance of recovery by revenue on proceeding with the attachment of land that would then be owned by the estate. However, upon the permission granted under clause (ii) of the proviso in section 281, State will be bound to cause the conversion
Facts- Petitioner wants conversion of leasehold right to ownership so as to enable dealing with the land for liquidating demands outstanding against the estate of Nanu Ram Agrawalla, since deceased.
Whereas, the State submits certificate of dues that are outstanding from the estate. It is stated that there has to be a first recovery before petitioners, as legal heirs, can claim to have conversion.
On the other hand revenue submits that no transfer can be permitted as barred by section 281 in Income Tax Act, 1961. He submits, conversion means that the government land will be transferred by the government, to petitioners. The estate has income tax dues, to enforce recovery of which there has been the attachment of the property.
Conclusion- We are convinced that in event petitioners obtain conversion, there will be better chance of recovery by revenue on proceeding with the attachment of land that would then be owned by the estate. On the grounds asserted in impugned order, State cannot sustain its opposition to the claim for conversion. In the facts and circumstances, in event revenue gives permission for the conversion, impugned order will stand set aside and quashed. Upon the permission granted under clause (ii) of the proviso in section 281, State will be bound to cause the conversion within four weeks thereof.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. Mr. Mishra, learned senior advocate appears on behalf of petitioners. He draws attention to our order dated 2nd December, 2022 and reiterates, his clients want conversion of leasehold right to ownership so as to enable, inter alia, dealing with the land for liquidating demands outstanding against the estate of Nanu Ram Agrawalla, since deceased. His clients are the heirs and legal representatives.
2. Mr,Nanda, learned advocate, Additional Government Advocate appears on behalf of State and opposes the prayer. He submits, certificate dues are outstanding from the estate. There has to be first recovery before petitioners, as legal heirs, can claim to have conversion.
3. Mr. Satapathy, learned advocate appears for revenue and submits, no transfer can be permitted as barred by section 281 in Income Tax Act, 1961. He submits, conversion means that the government land will be transferred by the government, to petitioners. The estate has income tax dues, to enforce recovery of which there has been attachment of the property.
4. We have seen that there is indenture dated 23rd November, 1998 between Sri Sachindra Kumar Mohanty, who, Mr. Nanda submits, is subsequent lessor from the government. Second party in the lease is Nanu Ram Agrawalla, since deceased, heirs and legal representatives of whom are petitioners. Third party in the lease is Governor of Orissa. We have ascertained from the parties that the second assignment of leasehold rights by this deed was between the assignee and Nanu Ram Agrawalla. This second assignment of leasehold rights was confirmed by the Governor, by having been a party to the deed.
5. The original lease is not part of the record, as disclosed by any party before us. Hence, we are unable to ascertain whether there is restraint thereby on assignment. Indication is that there is such restraint because otherwise aforesaid deed would have been between the assignee and Nanu Ram Agrawalla, without necessity of the Governor to be a party thereto.
6. Section 281 has two provisos. The second proviso permits transfer with previous permission of the Assessing Officer. Revenue is opposing the conversion sought.
7. By impugned order, two grounds for refusing the conversion have been put forward by State. First is that the plot has been attached by Income Tax Department, Government of India, for recovery of outstanding demand in name of late Daulatram Nanu Ram Agrawalla. Second ground is that the leasehold plot is subjudice in this Court under WP(C) no.654 of 2008.
8. Mishra points out that there is order dated 2nd November, 2021, made by coordinate Bench, specifically saying that WP(C) no.15349 of 2021 is not related to WP(C) no.654 of 2008. We reproduce below said order dated 2nd November, 2021.
“1. This matter is taken up through Hybrid Mode.
2. Heard learned counsel for the parties.
3. This writ petition is not related to WP(C) no.15349 of 2021.
4. The writ petition be delisted from WP(C) no.15349 of 2021 and place the same before the assigned Bench after obtaining permission from the Hon’ble the Chief Justice.”
This writ petition is WP(C) no.15349 of 2021. Second reason given in impugned order is that leasehold plot is also subjudice under WP(C) no.654 of 2008. Above reproduced order says otherwise. Only ground of State, for opposing the conversion therefore is that revenue has outstanding demand against the estate.
9. The leasehold is likely to have restriction on assignment and transfer of the interest. Petitioners have only leasehold interest and therefore some interest in the land. They seek conversion of their interest to ownership. Petitioners have averred and there has been reliance by revenue, on the averments that on conversion petitioners will deal with the land to pay the demand of revenue.
10. We have before us State claiming recovery of certificate dues from the estate and the revenue claiming recovery of their demand, already put in enforcement by attachment of the property. How far the attachment may be built upon for the revenue to deal with the land is doubtful. Real opposition to recovery by revenue is from State, who wants to recover their certificate dues.
11. We reproduce below paragraph 5 from the counter of State.
“5. That in reply to the averments made in the paragraph 6 of the writ petition, it is to submit that Nanuram Agarwal applied for the conversion of the suit plot on dtd. 12.01.2000 and also deposited the conversion fee on the same day that is on 12.01.2000 without any approval order against the conversion application which should not be accepted. A copy of conversion application dtd. 12.01.2000 along with challan deposit receipt is annexed herewith as Annexure-D/1 series. Such conduct of Nanuram Agarwal in depositing the conversion in a hurried manner without any order for conversion is completely illegal and unacceptable in law.”
(emphasis supplied)
The resistance to conversion on contention that late Daulatram Nanuram Agrawalla had applied for conversion by putting in the fees and without waiting for an order of conversion is not a contention that can bear scrutiny, neither for its substance nor because it is in trying to supplement reasons given in impugned order, impermissible as declared by the Supreme Court in Mohinder Singh Gill v. Chief Election Commissioner, reported in AIR 1978 SC 851.
12. That leaves us with the other ground of opposition from the Sate being that the lease hold stands attached by revenue.
13. We are convinced that in event petitioners obtain conversion, there will be better chance of recovery by revenue on proceeding with the attachment of land that would then be owned by the estate. On the grounds asserted in impugned order, State cannot sustain its opposition to the claim for conversion. In the facts and circumstances, in event revenue gives permission for the conversion, impugned order will stand set aside and quashed. Upon the permission granted under clause (ii) of the proviso in section 281, State will be bound to cause the conversion within four weeks thereof.
14. The writ petition is disposed of.
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