Conditional government land allotment upheld as statutory grant, with restrictions not void under the Transfer of Property Act.

Government land allotted to a charitable trust under the Telangana Alienation of State Lands and Land Revenue Rules, 1975, read with the relevant government order and standing order, was treated as an allotment under a statutory scheme rather than a private sale. The allotment letter imposed conditions requiring use for the allotted purpose, completion of construction within two years, plantation in open areas, and resumption on breach, so the grant was conditional. Those restrictions were not invalid under section 10 of the Transfer of Property Act, 1882, because the transaction was a statutory government grant governed by public-purpose terms, not an absolute private restraint on alienation.

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Issues: (i) Whether the alienation of land by the District Collector, Medak on 8 February 2001 was a sale or an allotment under a statutory scheme; (ii) whether conditions were imposed on the allotment of land; (iii) whether the conditions or restrictions attached to the allotment were hit by section 10 of the Transfer of Property Act, 1882.

Issue (i): Whether the alienation of land by the District Collector, Medak on 8 February 2001 was a sale or an allotment under a statutory scheme.

Analysis: The land was Government land, the respondent had applied for allotment as a charitable trust, and the order of 8 February 2001 was issued under the statutory framework of the Telangana Alienation of State Lands and Land Revenue Rules 1975, framed under the Telangana Land Revenue Act, together with G.O.Ms. No. 635 and Board Standing Order 24. The order itself recorded that sanction was accorded for alienation subject to payment of market value and stipulated conditions, with resumption in case of breach. The transaction was therefore not a private sale deed but an allotment under a statutory scheme.

Conclusion: It was an allotment under a statutory scheme and not a sale.

Issue (ii): Whether conditions were imposed on the allotment of land.

Analysis: The allotment letter expressly required the land to be used only for the allotted purpose, required completion of construction within two years, and required plantation of trees in open areas. It further provided that any deviation would result in resumption of the land by the Revenue authorities. The respondent's own correspondence and pleadings acknowledged that the allotment was conditional and that the land was being used for the allotted purpose.

Conclusion: Conditions were imposed on the allotment.

Issue (iii): Whether the conditions or restrictions attached to the allotment were hit by section 10 of the Transfer of Property Act, 1882.

Analysis: Section 10 governs absolute restraints on alienation in inter vivos transfers. The allotment in question was a grant of government land under a statutory public-purpose scheme, not a classical private transfer. The statutory rules and standing orders operated in a distinct field and the State was entitled to impose conditions consistent with the purpose of allotment. The use of the land for a colony and sale of plots in breach of the grant conditions showed violation of the allotment terms rather than invalidity under section 10.

Conclusion: The conditions were not void under section 10 of the Transfer of Property Act, 1882.

Final Conclusion: The appeal was allowed, the High Court judgments were set aside, and the State's challenge succeeded on the footing that the land was allotted conditionally under a statutory regime and the allottee acted in breach of the grant conditions.

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