Nazul land mortgage without State sanction is void, leaving no enforceable right and defeating freehold conversion claims.

Nazul land governed by the Government Grants Act, 1895 and the Nazul Rules could not be validly mortgaged without prior sanction of the lessor and the State. Because no such sanction was obtained and the bank did not verify title or secure State consent, the mortgage was void ab initio and created no enforceable right. A decree and auction proceedings founded on that invalid mortgage, and obtained without impleading the State as paramount title holder, could not bind the State. Legitimate expectation was inapplicable because there was no recognised legal relationship with the State and the claim rested on an invalid mortgage. The bank therefore had no right to seek conversion of the land into freehold, and the State's resumption notice was upheld.

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Issues: Whether the mortgage created over Nazul land without the State's sanction was valid, whether the resulting decree and auction proceedings could bind the State, and whether the bank could claim conversion of the land into freehold on the basis of legitimate expectation.

Analysis: The property was held to be Nazul land governed by the Government Grants Act, 1895 and the Nazul Rules. Under the governing lease conditions and the statutory regime, transfer or mortgage of the leasehold interest required prior sanction of the lessor and the State. No such sanction was shown, and the bank had not verified title or obtained the State's consent. The mortgage was therefore treated as void from the outset, so it created no enforceable right in favour of the bank. The mortgage decree obtained without impleading the State, which was the paramount title holder, could not bind the State, and the later proceedings before the Debt Recovery Tribunal and auction of the property on that basis were held to be unlawful. The doctrine of legitimate expectation was held inapplicable because the bank had no recognised legal relationship with the State and the claim itself rested on an invalid mortgage.

Conclusion: The bank had no right, title, or interest to seek conversion of the land into freehold, and the State's notice for resumption was upheld.

Final Conclusion: The challenge to the State's action failed, the bank's claim over the property was rejected, and the State's appeal succeeded while the connected appeals were dismissed.

Ratio Decidendi: A mortgage of Nazul land made without the State's prior sanction is void and creates no enforceable right; a decree obtained on that basis without impleading the State cannot bind the State, and legitimate expectation cannot be invoked to compel conversion of the land into freehold.

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