Ban on India Inc acquiring SC, ST land

Ban on India Inc acquiring SC, ST land

In a significant ruling, the Supreme Court today said that the land belonging to scheduled castes (SCs) or tribes (STs) cannot be bought by non-dalits, including companies as such transactions are unconstitutional.

A bench of justices K S Radhakrishnan and Dipak Misra gave the verdict on an appeal by the Rajasthan government against the state high court’s order holding such a sale to be valid in law.

The high court had passed its order on an appeal by a firm, Aanjaney Organic Herbal Pvt Ltd, against the refusal by the state authorities to recognise or grant mutation to the purchase of a plot by the company from a person belonging to scheduled caste.

“The Act is a beneficial legislation which takes special care to protect the interest of the members of Schedule Caste and Schedule Tribe.

“Section 42 (SC, ST Act) provides some general restrictions on sale, gift and bequest of the interest of Scheduled Caste and Scheduled Tribe, in the whole or part of their holding.

“The reason for such general restrictions is not only to safeguard the interest of the members of Scheduled Caste and Scheduled Tribe, but also to see that they are not being exploited by the members of non-Scheduled Caste and Scheduled Tribe.

“We find Section 42(b) of the Act has to be read along with the constitutional provisions and, if so read, the expression `who is not a member of the Scheduled Caste or Scheduled Tribe would mean a person other than those who has been included in the public notification as per Articles 341 and 342 of the Constitution,” said Justice Radhakrishnan, writing the judgement for the bench.

That property was purchased on September 26, 2005 through a registered sale deed for a consideration of Rs 60,000.

The high court had held that such a transfer was valid as the company being a `juristic person’ does not have a caste and, therefore, any transfer made by a Scheduled Caste person would not be hit by Section 42(b) of the Act.

“If the contention of the company is accepted, it can purchase land from Scheduled Caste / Scheduled Tribe and then sell it to a non-Scheduled Caste and Schedule Tribe, a situation the legislature wanted to avoid.

“A thing which cannot be done directly can not be done indirectly by over-reaching the statutory restriction.

“We are, therefore, of the view that the reasoning of the high court that the respondent being a juristic person, the sale effected by a member of Scheduled Caste to a juristic person, which does not have a caste, is not hit by Section 42 of the Act, is untenable and gives a wrong interpretation to the above mentioned provision,” the apex court said.