Rana Sheo Ambar Singh Vs. Allahabad
Bank Ltd., Allahabad [1961] INSC 195 (27 April 1961)
WANCHOO, K.N.
GAJENDRAGADKAR, P.B.
GUPTA, K.C. DAS AIYYAR, T.L. VENKATARAMA
CITATION: 1961 AIR 1790 1962 SCR (2) 441
CITATOR INFO :
RF 1962 SC1464 (19) F 1969 SC 971 (14,16) R
1970 SC1880 (3) D 1971 SC 77 (10) D 1971 SC1678 (6,13,14,20) R 1973 SC1269 (3)
D 1975 SC2295 (8) RF 1977 SC1552 (1)
ACT:
Mortgage Decree-Proprietory rights in
Zamindari-Execution proceedings pending -Zamindari rights abolished-Bhumidari
rights confirmed on intermediaries--Mortgagor, if can sell Bhumidari rights in
execution-Relief available- U. P. Zamindari Abolition and Land Reforms Act,
1950 (U.P. 1 of 1951), ss. 6(a)(i), 6(h), 18.
HEADNOTE:
The appellant's father, a Talukdar of the
Estate of Khajur- gaon, executed a simple mortgage of his proprietary interest
in the estate consisting of sixty-seven villages to the Allahabad Bank Ltd.
While execution proceedings were pending, the U. P. Zamindari Abolition and Land
Reforms Act, 1950, came into force from July 1952. As a result, the Zamindari
rights of the appellant judgment-debtor were abolished and it was no longer
possible to sell these rights in the 67 villages. The respondent Bank made an
application before the executing court that as the Zamindari rights could not
be sold, only such rights of the judgment-debtor as remained in him after
coming into force of the Act might be sold along with certain other rights.
Objections were taken and finally the matter
came up by appeal to the High Court and it, inter alia, upheld the view of the
executing court that the execution could proceed against the Bhumidari rights
created in favour of the appellant under s. 18 of the Act.
The question was whether the Bhumidari rights
created under s. 18 of the Act could also be sold in execution of the decree in
view of the fact that the proprietary rights bad vested in the State.
Held, that the intention of the U. P.
Zamindari Abolition and Land Reforms Act was to vest the proprietary rights in
the Sir and Khudkast land and grove land in the Estate by virtue of s. 6(a)(i)
and resettle it on the intermediary not as compensation but by virtue of his
cultivatory possession of lands comprised therein and on a new tenure and
confer upon the intermediary a new and special right of Bhumidari, which he
Dever had before, by s. 18 of the Act.
The proprietary rights in Sir, Khudkast land
and grove land which were mortgaged were extinguished, and the Bhumidari right
which was altogether a new right could not be con- sidered to be included under
the mortgage.
442 The mortgagee could only enforce his
rights against the mortgagor in the manner as provided by s. 6(h) of the Act
read with s. 73 of the Transfer of Property Act and follow the compensation
money; and so far as the Sir, Khudkast land and grove land were concerned, he
could not enforce his rights under the mortgage by the sale of the Bhumidari
rights created in favour of the mortgagor against them as a substituted
security.
In the instant case the Bhumidari rights
created in favour of the appellant could not be sold in execution of the decree
held against him by the respondent under the mortgage Of 1914.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 301 of 1960.
Appeal from the judgment and decree dated
September 24, 1958, of the Allahabad High Court (Lucknow Bench) at Lucknow in
First Execution of Decree Appeal No. 8 of 1953.
C. B. Agarwala, Shankar Prasad and C. P. Lal,
for the appellant.
Iqbal Ahmed, N. C. Chatterjee, D. N. Mukherjee
and B. N. Ghosh, for the respondent.
1961. April 27. The Judgment of the Court was
delivered by WANCHOO, J.-This is an appeal on a certificate granted by the
Allahabad High Court. The brief facts necessary for present purposes are these.
The appellant's father Rana Umanath Bakshsingh was the Talukdar of Khajurgaon.
On July 13, 1914, Rana Umanath Bakshsingh executed a simple mortgage in favour
of the Allahabad Bank Limited (hereinafter called the respondent). The mortgage
was for a sum of Rs. 6,00,000 and the property mortgaged consisted of
sixty-seven villages. In May 1924, the respondent filed a suit for the recovery
of the balance of the unpaid mortgage money by the sale of the mortgaged
property. In January 1925 a preliminary decree for the recovery of rupees four
lacs and odd was passed, which was made final in July 1926 and directed the
sale of the mortgaged property, namely, the proprietary rights of Rana Umanath
Bakshsingh in the sixty- seven villages. Then followed execution applications
with which we are not concerned. In 1934, the U. P. 443 Agriculturists' Relief
Act was passed and thereupon an application was made by the judgment-debtor for
the amendment of the decree under that Act. On October 19, 1936, the decree was
amended under the provisions of that Act and thereafter the pending execution
proceedings were dropped as installments had been fixed. Eventually, the
respondent applied for execution on-May 25, 1940. Objection was taken to this
application on the ground that it was barred by time; but this matter was
decided against the judgment-debtor and thereafter the execution has been
proceeding uptil now on this application.
On July 1, 1952, the U. P. Zamindari
Abolition and Land Reforms Act, 1950 (1 of 1951), hereinafter called the Act,
came into force. As a consequence of this enactment, the zamindari rights of
the judgment debtor were abolished and it was no longer possible to sell these
rights in the sixty- seven villages. Consequently, on September 29, 1952, the
respondent made an application that as the zamindari rights could not be sold,
only such rights of the judgment debtor as remained in him after the coming
into force of the Act might be sold, namely, the rights in trees and wells in
abadi and buildings situate in various villages under sale.
It was also prayed that the judgment debtor's
proprietary rights in grove land and sir and khudkashat land had been continued
under s. 18 of the Act and these constituted substituted security in place of
the proprietary rights mortgaged with the respondent and they should also be
sold Finally it was prayed that compensation money payable to the
judgment-debtor on the acquisition of the proprietary rights by the State might
be treated as substituted security.
The appellant objected to these applications
on various grounds. The execution court held that the buildings, trees and
wells situated in the abadi were liable to be sold in execution of the decree.
It further held that the respondent was entitled to compensation amount granted
by the State to the appellant in lieu of zamindari rights as substituted
security. Finally, it held that the bhumidari rights acquired by the 444
appellants under s. 18 of the Act could also be sold in execution of the
decree.
The appellant then took the matter in appeal
to the High Court, and the two points urged before the High Court were (i) that
the bhumidari rights created by s. 18 (i) of the Act could not be sold in
execution of the decree, and (ii) that the application dated September 20,
1952, was a fresh application for execution and as it was filed over 12 years
after the date of the amended decree it was barred by time.
The High Court repelled both these
contentions, and held that execution could proceed against the bhumidari rights
created in favour of the appellant under s. 18 of the Act and further that the
application dated September 20, 1952, was within time as it was not a fresh
application and the decree holder was only seeking to execute the decree in
respect of the property for the sale of which he had already applied within
time allowed by law. The High Court therefore dismissed the appeal. The
appellant then obtained a certificate to appeal to this Court; and that is how
the matter has come up before us.
The main point urged on behalf of the appellant
is that the decision of the High Court that bhumidari rights created under s.
18 of the Act can also be sold in execution of the decree, is not correct.
Under the mortgage deed, the property mortgaged consisted of the property
forming part of the Talukdari of Khajurgaon detailed at the foot of the
mortgage, namely, the sixty-seven villages. Thus the mortgage consisted of the
proprietary interests only of the mortgagor in the sixty-seven villages, and as
it was a simple mortgage, possession of no part of the property was given to
the mortgagee. it is therefore contended by Mr. Aggarwala on behalf of the
appellant that as the proprietary right in the sixty-seven villages vested in
the State under the Act, the respondent who was only entitled to get the
proprietary rights sold under the mortgage can now fall back only on
compensation payable to the appellant under the Act, and reliance in particular
is placed on s. 6 (h) of the Act in this connection. On the other hand, the
contention on 445 behalf of the respondent is that bhumidari rights arising
under s. 18 of the Act are liable to be sold as they represented the
proprietary rights which were mortgaged and in any case they can be sold as
substituted security in place of the property mortgaged.
We have therefore to look into the scheme of
the Act in order to decide between the rival contentions. It is not in dispute
that the Taluka of Khajurgaon was an estate within the meaning of the Act. It
may be mentioned that the judgment-debtor had certain sir and khudkashat lands
and zamindar's grove in the sixty-seven villages comprised within the Talukdari
estate. Section 4 of the Act provides for vesting of an estate in the State on
the making of a notification thereunder and the Taluka of Khajurgaon has vested
in the State by virtue of such a notification made under s. 4. Section 6
prescribes the consequences of the vesting arising under s. 4 and we may refer
to s. 6(a) (i) as that will show in what the interests of the judgment- debtor
ceased and became vested- in the State:- "(a)-all rights, title and
interest of all the intermediaries- (i) in every estate in such area including
land (cultivable or barren), grove-land, forests whether within or outside
village boundaries, trees (other than trees in village abadi, holding or
grove), fisheries, tanks, ponds, water-channels, ferries, pathways, abadi sites
hats, bazars or melas (other than hats, bazars, melas held upon land to which
clauses (a) to (c) of sub-section (1) of section 18 apply), and .
............................................
.
shall cease and be vested in the State of
Uttar Pradesh free from all encumbrances." Clause (h) of s. 6 is also
material and is in these terms:
"(h) no claim or liability enforceable
or incurred before the date of vesting by or against such intermediary for any
money, which is charged on or is secured by a mortgage of such estate or part
thereof shall, except as provided in section 73 of the Transfer of Property
Act, 1882, be enforceable against his interest in the estate." 57 446 All
lands therefore whether cultivable or barren or grove lands vested in the State
on the notification under s. 4 having been made save as otherwise provided in
this Act.
Therefore, proprietary rights in Sir and
khudkashat land and grove land would vest in the State on the coming into force
of the notification under s. 4 unless there was some provision otherwise in the
Act. The contention of the respondent therefore that sir and khudkashat land
and grove land continued to be the property of the appellant and would
therefore remain liable to be sold in execution proceedings would fail in view
of the notification under s. 4, unless of course there is a provision otherwise
in the Act. The only provisions otherwise on which the respondent relies are
ss. 9 and 18 of the Act. So far as s. 9 is concerned, it is certainly a
provision otherwise and it provides as follows:- "All wells or trees in
abadi, and all buildings situate within the limits of an estate, belonging to
or held by an intermediary or tenant or other person, whether residing in the
village or not, shall continue to belong to or be held by such intermediary,
tenant or person, as the case may be, and the site of the wells or the
buildings with the area appurtenant thereto shall be deemed to be settled with
him by the State Government on such terms and conditions as may be
prescribed." This provision clearly creates an exception to the property
which vests in the State on the making of a notification under s. 4. The
exception is in favour of all wells and trees in abadi and all buildings and it
is significant to note that these things will continue to belong to the
intermediary, though the further provision shows that the site of the wells,
and buildings with the area appurtenant thereto would vest in the Government
and would be deemed to be settled with the intermediary on such conditions and
terms as may be prescribed. The effect therefore of s. 9 is that wells, trees
in abadi and buildings apart from the land under them continue to belong to the
intermediary (and the appellant is undoubtedly an intermediary within the
meaning of the Act); but even here the 447 land on which the buildings and the
wells stand vest in the State and it is deemed settled with the intermediary on
terms and conditions to be prescribed. So far therefore as wells and trees in
abadi and all buildings are concerned, these continue to belong to the
appellant and if they are covered by the mortgage they would be liable to sale.
As we have already pointed out, there was no dispute before the High Court with
respect to wells, and trees in abadi and buildings and it was conceded there that
these were liable to be sold, the only dispute being with respect to bhumidari
rights created under s. 18.
Let us now turn to s. 18 and see whether it
is also a provision otherwise like s. 9. The relevant part of s. 18 for our
purposes is in these terms:- "(1) Subject to the provisions of sections
10, 15, 16 and 17, all lands- (a) in possession of or held or deemed to be held
by an intermediary as sir, khudkashat or an intermediary's grove, on the date
immediately preceding the date of vesting shall be deemed to be settled by the
State Government with such intermediary, lessee, or tenant, grantee or
grove-holder, as the case may be, who shall subject to the provisions of this
Act be entitled to take or retain possession as a bhumidar thereof." It is
well to contrast the language of this section with the language of s. 9.
Section 9 lays down that trees and wells in abadi and buildings shall continue
to belong to the intermediary and that shows that it was a provision otherwise
excepting these three items from vesting in the State by virtue of the
notification under s. 4 and its consequence under s. 6; but there is no
provision in s. 18 of the Act to the effect that sir and khudkashat land and
intermediary's grove shall continue to belong to the intermediary. Therefore,
sir and khudkashat land and grove land would vest in the State by virtue of s.
6 (a) (i) for there is no provision otherwise in s. 18 in that behalf. In this
connection we may refer for comparison to s. 23 of the 448 Rajasthan Land
Reforms and Resumption of Jagirs Act, No. VI of 1952 (hereinafter called the
Rajasthan Act) which provides that "notwithstanding anything contained in
the last preceding section (i.e. s. 22, which refers to consequences of
resumption), all khudkashat lands of a Jagirdar etc. shall continue to belong
to or be held by such jagirdar or other person". If the intention of the
Act Was not to vest sir and khudkashat land and grove land in the State we
would have found an exception similar to that found in the Rajasthan Act. Section
9 itself shows in what manner the legislature was making an exception when it
did not intend that a particular property should vest in the State.
If the intention were that sir and khudkashat
land and grove land should not vest in the State, s. 18 would have been worded
in the same way as s. 9. Further the way in which s. 18 is worded, (namely that
khudkashat and sir land and an intermediary's grove shall be deemed to be
settled with the intermediary and he would have bhumidari rights therein) shows
that these three kinds of property vested in the State under s. 6(a)(1) and
were then resettled with the intermediary on a new tenure and not in the same
right, which he had in them before the vesting. The legislature was therefore
creating a new right under s. 18 and the old proprietary right in sir and
khudkashat land and any intermediary's grove land had already vested under s. 6
in the State. Therefore, it cannot be said that s. 18 is an exception to the
consequences provided in s. 6 and therefore sir and khudkashat land and grove
land continue to be the property of the judgment debtor in this case in the
same manner as they were his property at the time of the mortgage and would
therefore be available in execution of the decree as the proprietary rights
mortgaged. We are of opinion that the proprietary rights in sir and khudkashat
land and in grove land have vested in the State and what is conferred on the
intermediary by s. 18 is a new right altogether which he never had and which
could not therefore have been mortgaged in 1914.
Our attention in this connection was drawn to
the 449 compensation sections in the Act, and it was urged that what was given
to the intermediary under s. 18 was really his old right because no
compensation was to be paid to him with respect to what was left to him under
s. 18. The first section to be considered in this connection is s. 39 which
deals with gross assets of a mahal. In these gross assets the amount computed
at the rates applicable to the ex- proprietary tenants of similar land for land
in the personal cultivation of or held as intermediary's grove, Khudkashat or
sir by all the intermediaries in the estate was to be included subject to
certain exceptions which are immaterial for our purposes. The very fact that in
the gross assets the rents of these lands in which the bhumidari rights were
created under s. 18 were taken into consideration shows that these lands also
vested in the State; if that were not so there was no necessity for including
these assets in the gross assets for the purposes of compensation. Here again
we may refer to a similar provision in the Rajasthan Act for purposes of
comparison. The second Schedule to that Act provides how gross income is to be
calculated and in calculating the gross income the income from khudkashat land
has not been taken into account because it was excepted from the consequence of
resumption under s. 23 of that Act. It is true that under s. 44 of the Act when
calculating net assets, the income from sir and khudkashat land and grove land
has been excluded on the ground that bhumidari rights have been conferred
therein under s. 18 of the Act. That is however for the purposes of calculating
what should, be paid to the intermediary as compensation and in that connection
it was necessary to take into account the fact that the legislature was
creating a new right in the intermediary with respect to certain lands and
therefore it was not necessary to give money as compensation. That would not
however make any difference in our view as to the legal effect of the
notification under s. 4 and under the notification sir and khudkashat land and
grove land would vest in the State and would not be an exception to the
consequences of vesting in s. 6 and therefore the proprietary right in sir 450
and khudkashat land and grove land which were mortgaged would be extinguished
and the bhumidari right which is created by s. 18 would be a new right
altogether and would not therefore be considered to be included under the
mortgage in this case.
This brings us to a consideration of s. 6(h)
of the Act.
That lays down that "no claim or
liability enforceable or incurred before the date of vesting by or against such
intermediary for any money, which is charged on or is secured by a mortgage of
such estate or part thereof shall, except as provided in s. 73 of the Transfer
of Property Act, 1882, be enforceable against his interest in the estate".
This provision has in our opinion a, two-fold
effect. In the first place, it makes it impossible for the mortgagee to follow
the proprietary right after it vests in the State.
Secondly, it provides that the only way in
which the mortgagee can recover his none advanced on the security of the
property which vested in the State by virtue of the notification under s. 4 and
the consequences thereof under s. 6 is to follow the procedure under s. 73 of
the Transfer of Property Act. Section 73(2) provides that "where the
mortgaged property or any part thereof or any interest therein is acquired under
the Land Acquisition Act, 1894 (1 of 1894), or any other enactment for the time
being in force providing for the compulsory acquisition of immovable property,
the mortgagee shall be entitled to claim payment of the mortgage money, in
whole or in part, out of the amount due to the mortgagor as compensation".
There is no doubt that the property mortgaged has been compulsorily acquired in
this case by the State under the Act.
Therefore, s. 6 (h) read with s. 73 directs
that the mortgagee shall proceed in the manner provided in s. 73, namely,
follow the compensation money, and there is no other way possible for him in
view of s. 6(h) with respect to the property which has been acquired under the
Act. We have held that sir and khudkashat land and grove land have been
acquired under the Act and have vested in the State;
therefore the mortgagee is relegated to
enforce his rights against the mortgagor in the manner provided in s. 73 of the
451 Transfer of Property Act and in no other way. What we say here does not
affect that property which is not acquired by the State, for example, property
excepted under s. 9 of the Act; but where the property has vested in the State
by virtue of a notification under s. 4 and its consequences under s. 6, the
only course open to the mortgagee is to follow the compensation money under s.
6(h). The bhumidari rights created under s. 18 are not compensation; they are
special rights conferred on the intermediary by virtue of his cultivatory
possession of the lands comprised therein.
The respondent therefore cannot enforce his
rights under the mortgage by sale of the bhumidari rights created in favour of
the appellant under s. 18 so far as his sir and khudkashat land and grove land
are concerned; it can only follow the compensation money as provided in s.
6(h). The argument that bhumidari rights can 'be followed as substituted
security must therefore equally fail.
Our attention in this connection was drawn to
s. 8(2) of the U. P. Zamindars Debt Reduction Act, No. XV of 1953. That Act
provides for scaling down of debts of zamindars whose estates have been
acquired under the Act. It also provides that the debts due shall be realisable
from the compensation and rehabilitation grant, and in particular s. 8(2)
provides that "notwithstanding anything in any law the reduced amount
found in the case of a mortgagor or judgment-debtor as the case may be, under
section 3 or 4 as respects mortgaged estates shall not be legally recoverable
otherwise than out of the compensation and rehabilitation grant payable to such
mortgagor or judgment debtor in respect of such estates".
We have not been able to understand how the
provisions of the U. P. Zamindars Debt Reduction Act can affect the con-
struction of s. 6(h) of the Act read with other provisions of the Act. It is
not necessary for us therefore to construe s. 8(2) of the U. P. Zamindars Debt
Reduction Act, for we are clear on the provisions of s. 6 (h) and the other
provisions of the Act that bhumidari rights created in favour of the appellant
cannot be sold in execution of the decree held against him by the respondent
under the mortgage of 1914.
452 This brings us to the question of
limitation. Mr. Aggarwala conceded that if the appellant succeeds on the first
point it would not be necessary for us to consider the question of limitation.
Therefore, as the appellant succeeds on the first point we need not consider
whether the application for execution by sale of bhumidari rights created under
s. 18 is barred by limitation.
We therefore allow the appeal and direct that
the execution of the decree by the respondent will not be levied against the
bhumidari rights created in favour of the appellant under s. 18 of the Act. The
appellant will get his costs of this court and of the High Court. Costs of the
execution court will be at the discretion of that Court.
Appeal allowed.
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