Supreme Court Upholds Sale of Endowment Land: Division Bench’s Decision Overturned

The Supreme Court of India recently ruled in the case of K. Arjun Das v. Commissioner of Endowments, Orissa & Others, dealing with the legality of selling religious endowment property. The Court upheld the sale of land belonging to the deity Sri Rama Laxman Sita Swamy and reversed the Orissa High Court’s Division Bench decision that had nullified the transaction.

Background of the Case

The case concerned a parcel of land measuring 4.255 acres owned by the deity Sri Rama Laxman Sita Swamy, situated in Luchapada, Ganjam District, Orissa. The temple’s managing body sought permission under Section 19 of the Orissa Hindu Religious Endowments Act, 1951, to sell the land, claiming it was barren and yielded no income for the deity.

The Commissioner of Endowments, after due diligence, approved the sale at an upset price of Rs. 10 lakh per acre, granting the first right to purchase to the appellant, K. Arjun Das, who was already in possession as a tenant. The sale was finalized in 2005, and Arjun Das acquired 2.019 acres through registered sale deeds.

Arguments of the Appellants

The appellants, represented by senior advocate Vijay Hansaria, put forth the following arguments:

• The sale was approved following due process under the Endowments Act, with a valuation conducted by the Inspector of Endowments.
• Arjun Das was a tenant of the land for over 40 years and had been paying ‘bhag’ (share of produce) to the deity, as evidenced by official receipts.
• The valuation of Rs. 10 lakh per acre was justified based on the market rate at the time of approval.
• The Division Bench of the High Court had exceeded its jurisdiction by nullifying the registered sale deeds under Article 227 of the Constitution.
• The intervenors, Lokesh Patro and Debendranath Patro, never challenged the sale within the appeal period but later claimed they were willing to pay Rs. 25 lakh per acre.

Arguments of the Respondents

The respondents, represented by Lokesh Patro and Debendranath Patro, countered with the following points:

• The land belonged to the deity, and its sale should have fetched the highest price possible to serve the best interest of the religious institution.
• The appellants’ claim of tenancy was unverified, and they should not have been given preferential treatment.
• The Division Bench’s order ensuring that the land be auctioned at a higher price was in the best interest of the temple.
• Since no auction had been conducted, the High Court’s order directing a fresh auction was valid.

Supreme Court’s Analysis

1. Compliance with Endowment Act Provisions

The Supreme Court emphasized that the sale had been conducted in accordance with Section 19 of the Orissa Hindu Religious Endowments Act, 1951, which allows the Commissioner of Endowments to approve sales if beneficial for the religious institution.

“The entire process, including valuation, publication, and execution of sale deeds, was completed in accordance with statutory provisions. The sale was not arbitrary.”

2. Market Valuation of the Land

The Court dismissed the respondents’ argument that the land should have been sold at Rs. 25 lakh per acre, noting that valuation was done at Rs. 10 lakh per acre based on prevailing market rates.

“If the intervenors were genuinely interested, they should have participated in the process at the appropriate time rather than raising objections post-sale.”

3. High Court’s Overreach

The Court found that the Division Bench of the High Court had exceeded its jurisdiction under Article 227 by nullifying the registered sale deeds.

“The High Court’s power under Article 227 is limited to correcting jurisdictional errors, not reviewing factual determinations made by statutory authorities.”

4. Role of the Deity as a Legal Entity

The respondents had argued that since the deity is a perpetual minor, the State Government must ensure maximum benefit from the sale of its properties. While the Court agreed with this principle, it clarified:

“The best interest of the deity was duly considered by the Endowments Commissioner, and the sale was conducted with proper valuation and public notice.”

Final Judgment

The Supreme Court ruled in favor of the appellants, setting aside the Division Bench’s order. The judgment stated:

“The sale of the land in question is upheld, and the High Court’s order directing fresh auction is quashed. The registered sale deeds executed in favor of K. Arjun Das remain valid.”

The Court also allowed the State Government to proceed with the auction of the remaining 2.206 acres of land while considering any fresh offers for the unsold portion.

Implications of the Judgment

This ruling has several key implications for religious endowment properties and statutory sales:

• The Commissioner of Endowments has the authority to approve sales if deemed beneficial for the religious institution.
• Judicial interference in statutory sales must be limited to jurisdictional errors.
• A sale conducted per statutory provisions cannot be undone merely because a higher offer is made later.
• The protection of religious endowment properties must be balanced with legal adherence to the Endowments Act.

The Supreme Court’s decision affirms the validity of statutory sales and prevents undue interference in transactions that follow legal procedures.

Petitioner Name: K. Arjun Das.
Respondent Name: Commissioner of Endowments, Orissa & Others.
Judgment By: Justice N.V. Ramana, Justice Mohan M. Shantanagoudar, Justice Ajay Rastogi.
Place Of Incident: Ganjam, Orissa.
Judgment Date: 17-09-2019.

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