Facts of the Case
- A piece of assigned land was granted by the government to a beneficiary (assignee) for cultivation or livelihood.
- The assignee mortgaged the land to raise a loan for personal purposes, not connected to agricultural development or land use.
- The mortgagee (lender) is likely a non-government institution or private individual.
- The transaction is being questioned for its legal validity.
Issues in the Case
- Whether an assignee of government land can legally mortgage the land to raise funds.
- Whether such a mortgage, particularly for personal purposes, is considered a transfer under law.
- Does this violate the prohibition under the Andhra Pradesh Assigned Lands Act?
- Whether the mortgage is void and unenforceable in the eyes of law.
Principles Associated with It
- Under Section 3(1) of the Andhra Pradesh Assigned Lands (Prohibition of Transfers) Act, 1977, any transfer of assigned land—whether by sale, gift, mortgage, lease, or otherwise—is prohibited.
- Such land is assigned for agricultural or livelihood purposes only, and cannot be alienated without prior government permission.
- Any such transaction (mortgage included) is deemed null and void, and the land is liable to be resumed by the government.
- Even if the mortgage is not for sale, if it is for personal use, it is still considered a violation of the purpose of assignment.
- Courts have repeatedly held that assigned land cannot be burdened with third-party interests, especially for non-agricultural uses.
Judgment
- The mortgage of assigned land for personal purposes is not valid under the Andhra Pradesh Assigned Lands Act.
- It constitutes a prohibited transfer, regardless of whether possession is transferred or not.
- The mortgage agreement is void ab initio (void from the beginning) and unenforceable in law.
- The government has the right to resume the land from the assignee and cancel the assignment.
- Therefore, the mortgage is illegal, and the land may revert back to the government as per the provisions of the Act.
