VikramajitSen, Ag.C.J. (Oral):

1. On the last date of hearing, we have brought to the notice of Sri.A.G. HOLLA, learned Senior Counsel appearing for the appellants that it is our understanding that the appeal is covered on all fours by the decision of the Hon’ble Supreme Court in ChindeGowda, as well as our judgement (Division Bench) in Chandra Naik Vs State of Karnataka and others in WA No.16380/2011 (2012 (1) KCCR 254 (DB)).

2. Sri. A.G.Holla, learned Senior Counsel contends that factual matrix in the aforementioned cases was that the Court was confronted with a lease granted in favour of the concerned party, containing the covenant restraining the power of alienation for a certain period of time (in that case 15 years). The distinction that is sought to be brought before us is that in the present case, and outright grant has been made. Therefore, the State has divested itself of any control over the land in question. It is however, not disputed that one of the terms of the grant was that there shall be no alienation and was prohibited for a period of 15 years.

3. Sri.B. Veerappa, learned AGA contends that on a perusal of the grant, the moratorium is for a period of 30 years. We need not go into this controversy for the reason that the period before us is not crucial to our decision. This is for the reason that the alienation in favour of the predecessor of the appellants in question took place within a period of 15 years.

4. In Chandra Naik’s case we had noted the decision of their Lordships in SiddegowdaVs Assistant Commissioner, AIR 2003 SC 1290, as well asChinde Gowda Vs Puttamma (2007) 12 SCC 618. In addition to these judgements, Sri.A.G. Holla, also refers to us GuntaiahVs Hambamma 2005(6) SCC 228 which was infact applied in ChindeGowda’s case.

5. Both in Siddegowda as all as in Guntaiahtheir Lordships had gone into question of alienation within the prohibited period. In Siddegowdathe primary question before the Court was the importance of calculation of upset price and whether it would invariably reflect the market price. This is not what we are presently concerned with. However, InGuntaiah, the argument now put forward by Sri.A.G Holla, has been specifically dealt with. At the commencement of the judgment, their Lordships have noticed that initially the land in question was given temporary lease but later by application of Rule 43 J of the Karnataka Land Revenue (Amendment) Rules, 1960, the grantee was prohibited from alienating the land in favour of a third party for a period of 15 years. The distinction between the lease and a grant was therefore within the contemplation of the Apex Court. Even in those circumstances their Lordships have held as follows:

“It is also pertinent to note that the prohibition regarding alienation is a restrictive covenant binding on the grantee. The grantee is not challenging that condition. In all these proceedings, challenge is made by the third party who purchased land from the grantee. The third party is not entitled to say that the conditions imposed by the grantor to the grantee were void. As far as the contract of sale is concerned, it was entered into between the Government and the grantee and at that time the third-party purchaser had not interest in such transaction. Of course, he would be entitled to challenge the violation of any statutory provisions but if the grant by itself specifically says that there shall not be any alienation by the grantee for a period of 15 years, that is binding on the grantee so long as he does not challenge that clause, more so when he purchased the land, inspite of being aware of the condition. The Full Bench seriously erred in holding that the land was granted under Rule 43-J and that the authorities were not empowered to impose any conditions regarding alienation without adverting to Section 4 of Act 2 of 1979. These lands were given to landless persons almost free of cost and it was done as a social welfare measure to improve t