Raja Sailendra Narayan Bhanj Deo Vs.
Kumar Jagat Kishore Prasad Narayan Singh  INSC 355 (13 December 1961)
GUPTA, K.C. DAS AYYANGAR, N. RAJAGOPALA
CITATION: 1962 AIR 914 1962 SCR Supl. (2) 119
CITATOR INFO :
RF 1967 SC 801 (39) D 1971 SC 77 (10)
Suit for redemption decreed and accounts
ordered-Appeal pending-Mortgage tenure vested in the State by virtue of
notification free for all encumbrances-Effect-Jurisdiction of Civil Courts, if
barred-Decree of redemption, if becomes infructuous-Bihar Tenancy Act, 1885
(Bihar 8 of 1885), s. 171-Bihar Land, Reforms Act, 1950 (Bihar 30 of 1950), ss,
K the mortgagee of certain Mokarrari tenures
obtained a decree on his mortgage and put it into execution. Pending execution,
C the mortgagor having failed to pay the rent of the mortgaged and some other
tenures they became liable to be sold for the realisation of the arrears of
rent under a certificate issued for the purpose. K whose security was thereby
jeopardised paid the arrears and became under s. 171 of the Bihar Tenancy Act a
mortgagee of the tenures for the amount paid and entitled to possession of them
till repayment. K thereafter took possession of the tenures. After C had died
in 1941, the respondent claiming to represent his estate as receiver and
executor under his will sued the appellant who had succeeded to K's interest,
for redemption of the mortgages on the allegation that K and the appellant had
realised from the rents of the tenures in their possession more than what was
due. The suit was decreed by the trial court. The appellant appealed to the
High Court at Patna.
While the appeal was pending there the Bihar
Land Reforms Act, 1950, came into force and as a result of a notification
issued under it all the tenures became vested in the State of Bihar free from
all encumbrances and the proprietors, tenure-holders and all other persons
ceased to have any interest in them but became entitled to compensation for the
divestment. As required by s. 14 of the Land Reforms Act, the appellant filed a
claim before the officer appointed under the Act in respect of his mortgages on
the tenures and such claim was adjudge at a certain sum on notice to C's
representatives which adjudication later became final under s. 18. Under the
provisions of the Land Reforms Act, the amount so found due became payable out
of the compensation awarded to the proprietors and tenure holders. Thereafter
the appeal before the High Court came up for hearing.
The appellant contended that in view of the
provisions of s. 35 of the Land Reforms Act a civil court must 120 be deemed to
have no jurisdiction to decide any question concerning claims under mortgages
of tenures vested in the Government under the Act.
The High Court rejected this contention
observing that the Act barred a suit by a mortgagee only and not a suit by a
mortgagor and confirmed the decree.
^ Held, that though the Act did not expressly
bar a suit by a mortgagor for redemption, that was the practical and inevitable
effect of it. The mortgage accounts could not be taken over again by the civil
court when they had been taken under the Act and the decision in the
proceedings under the Act had become final.
Held, further, in the proceedings under the
Act to ascertain the claim of a creditor, the debtor was entitled to show what
had been paid to the creditor or what the creditor had realised from the
Held, also, that after a mortgagor had been
divested of the mortgaged property under the Act a redemption decree would be
infructuous as the mortgagor would not then be entitled to have it reconveyed
to him. Neither would it then be in the power of the mortgagee to convey that
property. In fact the mortgagor having been divested of the property and lost
his right of redemption.
Query-Whether if the mortgagee had realised
from the profits of the mortgage property more than what was due him on his
mortgage, a suit by the mortgagor refund would lie ?
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 246 of 1959.
Appeal from the judgment and decree dated
December 4. 1956, of the Patna High Court in First Appeal No. 429 of 1951.
A. V. Viswanatha Sastri and Mohan Behari Lal,
for the appellant.
B. K. P. Sinha and A.G. Ratnaparkhi, for respondent
M. K. Ramamurthy R. K. Garg, D. P. Singh and
S. C. Agarwal, for respondent No. 6.
1961, December 13. The Judgment of the Court
was delivered by SARKAR. J.-This appeal arises out of a suit brought by the
respondent Kumar Jagat Kishore 121 Prasad Narayan Singh, hereafter called the
respondent, against the appellant, the Raja of Kanika, for redemption of
certain mortgages. The suit was decreed by a learned Subordinate Judge of Gaya
and the High Court at Patna confirmed that decree on appeal. The appellant has
now appealed to this Court against the judgment of the High Court.
In the High Court many points were argued but
in this Court Mr. Sastri for the appellant pressed only one point. We have
therefore to state only such of the facts as concern the point raised by Mr.
The respondent claimed to be entitled to
redeem the mortgages as the executor of the estate of Chandreshwar Prasad, the
mortgagor, and as the receiver appointed in certain execution proceedings
hereafter mentioned. It has since been finally held, as will appear later, that
the will appointing the respondent executor was not genuine. It may also be
stated that the respondent is no longer holding the office of receiver. It
would, therefore, appear that the respondent has now no locus standi to contest
the appeal. He was however, the only person opposing the appeal in this Court.
As learned counsel for the appellant did not object to the respondent appearing
in this appeal, it is unnecessary to discuss the respondent's position further.
It appears that on February 17, 1924,
Chandreshwar Prasad executed a mortgage in favour of the then Raja of Kanika to
secure a sum of Rs. 4,00,000/-. The mortgaged properties consisted of certain
Mokarrari tenures. The mortgage debt not having been paid, the Raja of Kanika
filed a suit on the mortgage and obtained preliminary and final decrees
thereon. Thereafter he put the decree into execution sometime in 1938 and we
are informed that the execution case was never finally disposed of. It was in
these execution proceedings 122 that the respondent had been appointed the
receiver of the mortgaged properties.
The Mokarrari tenures were held under the
Tikari Raj. The Tikari Raj had mortgaged its proprietary interests in these and
other tenures to the Darbhanga Raj by way of a usufructuary mortgage.
Chandreshwar Prasad appears to have failed to pay the rent of the mortgaged and
other tenures which he held under the Tikari Raj.
Thereupon, the Darbhanga Raj as the
usufructuary mortgagee of the proprietary interests in these tenures started
certificate proceedings for the realisation of the rent and in or about 1940
obtained a certificate for Rs. 83,267/- in respect of arrears of rent. The
certificate put the mortgage security of the Raja of Kanika in jeopardy and the
latter thereupon on September 28, 1940, paid the amount of the certificate. In
view of this payment, under s. 171 of the Bihar Tenancy Act the Raja of Kanika
became the mortgagee of the tenures in respect of the rent of which the certificate
had been issued and also entitled to possession of the tenure villages till the
amount paid by him in respect of the certificate was repaid with interest at
the rate prescribed. On November 23, 1940, the Raja of Kanika took possession
of all the tenures in respect the arrears of rent of which the certificate had
been issued. As a result, the receiver appointed in the execution case was
The mortgagor Chandreshwar Prasad died on
September 28, 1941. The respondent as the executor under a will alleged to have
been left by Chandreshwar Prasad obtained probate of it from the High Court on
December 10, 1945. He was appointed receiver in the execution case on February
On September 20, 1949, the respondent as the
receiver and executor as aforesaid filed the suit for the redemption of the
aforesaid mortgages. By 123 this date, the Raja of Kanika in whose favour the
mortgage had been executed in 1924 had died and the suit was brought against
the appellant as his successor and as the person then entitled to the
mortgage's interest. The respondent contended that the Raja of Kanika had
realised sufficient amounts from the tenures of which he came into possession
under s. 171 of the Bihar Tenancy Act, to pay off both the mortgages and had in
fact realised more which he was liable to repay. On March, 19, 1951, the
respondent was removed from his office as receiver and thereafter on August 22,
1951, the High Court in a Letters Patent Appeal set aside the grant of the
probate, holding the will to be a forgery. On the last mentioned date, a decree
for redemption was passed in the suit by the Subordinate Judge, directing the
accounts to be taken and giving other usual directions.
The appellant appealed from the judgment of
the learned Subordinate Judge to the High Court at Patna sometime in September
1951. While this appeal was pending in the High Court, four daughters of
Chandreshwar Prasad were brought on the record as representing the mortgagor's
In the meantime, on September 25, 1950, the
Bihar Land Reforms Act, 1950 had come into force.
This Act provided that the State Government
might by notification declare that the estates or tenures mentioned in it had
passed to and become vested in the State. Sometime in 1952, a notification was issued
by the Bihar Government under this Act vesting in the State of Bihar the
tenures which had come into the possession of the Raja of Kanika under s. 171
of the Bihar Tenancy Act. As a result of this notification the right, title and
interest of the mortgagor Chandreshwar Prasad and of the superior owner in
tenures vested absolutely in the state free from all encumbrances and 124 the
proprietor and tenure-holder ceased to have any interest in them. In August
1952, the State of Bihar took possession of these tenures from the appellant
who had till then been in possession.
Thereafter, the State of Bihar was made a
party to the appeal pending in the High Court.
As required by s. 14 of the Bihar Land
Reforms Act, the appellant filed claims in respect of his dues under his
aforesaid mortgage decree and the mortgage under s. 171 of the Bihar Tenancy
Act before the officer appointed under the first mentioned Act. The daughters
of Chandreshwar Prasad were made parties to the claim proceedings but they did
not appear to contest the claim. On January 15, 1955, the Claims Officer
decided that a sum of Rs. 5,33,077/- was due to the appellant in respect of the
mortgage of 1924 a sum of Rs. 25,034/4/- in respect of the mortgage created by
the operation of s. 171 of the Bihar Tenancy Act.
No appeals had been taken against these
decisions of the Claims officer as provided in the Land Reforms Act and they
therefore became final under s. 18(3) of that Act. The appellant's appeal to
the High Court which had been pending all this time, thereafter came up for
hearing and it was dismissed on December 4, 1956. It had been contended on
behalf of the appellant that in view of s. 35 of the Land Reforms Act a civil
court must be deemed to have no jurisdiction to decide any question of mortgage
claims over tenures vested in the Government under the Act. The High Court was
unable to accept this contention as in its view what was barred by the Act was
a suit by the mortgagee only and observed that the Act did not contain any
provision barring a suit by the mortgagor. In that view of the matter the High
Court confirmed the decree of the learned Subordinate Judge. This appeal
against this decisions of the High Court.
We think that this appeal must be allow. It
is clear that a redemption decree can no more be 125 given effect to after the
notification issued under the Land Reforms Act, since thereafter the mortgaged
tenures became vested in the State of Bihar free from all encumbrances. The
tenures having vested in the State of Bihar, the mortgagee had no longer any
interest in the tenures nor was he in possession of them. He could not carry
out the decree by reconveying the tenures to the mortgagor or put him into
possession. The mortgage as a security had ceased to exist, for the mortgaged
properties vested in the State of Bihar under the Act free from all
encumbrances. The mortgagor in his turn also ceased to be entitled to the
mortgaged properties. He had hence no right to redeem them. Therefore, in our
view, the decree for redemption which had been previously passed, became
But it was said that if the mortgagee had
realised more out of the income of the mortgaged properties than was due to
him, the mortgagor was entitled to repayment of the excess realisation and
that, therefore, the redemption decree in so far as it directed the taking of
accounts had not become infructuous. We are unable to accept this contention in
view of the provisions of the Land Reforms Act to some of which we shall now
Under s. 4, upon the notification, all the
interests of proprietors and tenure-holders in estates and tenures mentioned in
it came to an end and vested in the State free from all encumbrances. Clause
(d) of this section provides that no suit will lie in a civil court for the recovery
of moneys due from the proprietor or tenure-holder on a mortgage of the estate
or tenure and all such suits and proceedings pending on the date of vesting
will be dropped. Section 14 provides that every creditor whose debt is secured
by a mortgage of an estate or tenure vested in the State may within the time
there prescribed notify his claim in writing to a Claims 126 Officer for the
purpose of determining the amount of the debt payable to him. It would be clear
from this section and s. 4(d) earlier referred to, that a mortgagee could not
recover the amount due to him from the mortgaged tenures which had vested in
the Government except by following the procedure laid down in s. 14. Section 14
also provides that the Claim's Officer shall be a Subordinate Judge or a Munsif
depending on the amount of the claim.
Section 16 states the principles how the
claim of the creditors is to be ascertained. It is not necessary to refer in
detail to the provisions of this section but it may be stated that it gives power
to scale down the interest. Section 17 provides for appeals against the
decisions of the Claims Officer to a Board one of whose members shall be a
Judge of the High court or a District Judge, again depending on the amount of
Sub-section (3) of s. 18 provides that
"The decision of the Board and where no appeal has been filed to the
Board, the decision of the Claims Officer shall be final." Sections 14 to
18 are contained in Chapter 4 of the Act. Chapter 5 of the Act deals with the
assessment of compensation payable to the divested proprietors or tenure-
holders. Section 24, which is contained in this chapter, deals with the
determination of the amount of compensation payable in respect of the
transference of the properties to the State. Sub- section (5) of this section
provides that in a case where the interest of a proprietor or tenure- holder is
subject to a mortgage, the compensation shall first be payable to the creditor
and then to the proprietor or tenure-holder, the amount of compensation payable
to the creditor being the amount determined under Ch. 4. All compensation
payable to the proprietor, tenure-holder or encumbrancer is required to be set
out in the compensation Assessment-roll. Section 35 of the Act states, "No
suit shall be brought in any Civil Court in respect of any entry in or omission
from a Compensation Assessment-roll 127 or in respect of any order passed under
Chapters II to VI or concerning any matter which is or has already been the
subject of any application made or proceedings taken under the said
Chapters." This section would make it impossible for the decision of the
Claims Officer or the Board to be challenged in an ordinary civil proceeding.
Section 32, which is contained in Chapter 6
of the Act, provides that when the Compensation Assessment-roll was become
final as prescribed in the Act, the Compensation Officer appointed under the
Act shall proceed to make payment in the manner specified in it. We may also
refer to s. 38 of the Act which states that the Claims Officer and the
Compensation Officer shall have the powers of a Civil Court.
What is the effect of these provisions on the
redemption decree in so far as it directed the mortgage accounts to be taken ?
It seems to us that they rendered that part of the decree also infructuous. In
our view, the mortgage accounts cannot be taken under the decree for they have
already been taken under the Act and the decision of the Claims Officer on the
State of the accounts is final under s. 18(3). In view of s. 35, no suit can be
brought concerning the decision of the Claims Officer. It is true that the suit
in the present case had been brought before the Act and would not itself be
affected by s. 35. But we should suppose that the Act will now prevent the
account being taken under the decree so as to challenge the decision of the
Claims Officer. If this were not so, the Officer taking the accounts under the
decree has to accept the Claims Officer's decision for that is final and the
parties cannot challenge it. That being so, the result would be that the
officer taking the accounts would have to make a report finding that the same
amount which the Claims Officer found to be due, was due to the mortgagee. On
this report a decree would follow and the appellant would become entitled to
the amount found due 128 to him under the decree. Now, he was already entitled
to that amount under s. 32(1) of the Act.
He would then have a right to be paid the
same sum twice over in respect of the same mortgage right.
We cannot conceive that such an anomalous
position could have been intended by the Act. We, therefore think that since
the Act, the redemption decree cannot be given effect to.
The High Court seems to have thought that the
Officer taking the accounts under the redemption decree would not be bound by
the decision of the Claims Officer. This view was based on the reason that only
such of the Claims Officer's decisions would be binding as had been given in
matters over which he had jurisdiction and that he had no jurisdiction to investigate
into a claim by the mortgagor in respect of realisation by the mortgagee from
the mortgaged properties in excess of his dues. We think that in this the High
Court was in error. In taking the accounts the Claim's Officer has to decide
under s. 16 (2)(b) how much had been paid to the mortgagee or realised by him.
It is therefore, wrong to say that the Act
did not give the Claims Officer jurisdiction to go into the question of the
realisation by the mortgagee.
It is true, as the High Court pointed out,
that the Act does not expressly bar a suit by a mortgagor for redemption but
that seems to be the practical and inevitable effect of it. This does not
affect the rights of a mortgagor. He can establish before the Claims Officer
that the mortgagee had realised out of the income of the mortgaged properties
of which he was in possession more than what was legitimately due to him. If he
succeeds in doing that the Claims Officer will hold that nothing in payable to
the mortgagee out of the compensation. He may even indicate that the mortgagee
has been overpaid to a certain extent.
Whether in such a case the mortgagor can file
a suit to recover from the mortgagee the amount paid in excess is not a
question that arises in this appeal.
129 Even if he could, that would not lead to
the conclusion that in the present case the mortgage accounts can be taken
under the redemption decree.
We therefore, express no opinion on that
We think it right to point out that the Act
has taken sufficient care to see that neither the mortgagor nor the mortgagee
is in any way prejudiced in the proceedings concerning the investigation of the
mortgagee's claim. It has provided that the investigation would be by
experienced judicial officers of high status and that the proceedings would be
taken as if they were taken in a Civil Court.
In the result, in our view, on the mortgage
security having vested in the State of Bihar free from encumbrances under the
Land reforms Act the redemption decree passed by the learned Subordinate Judge
became infructuous. The decree could not stand anymore; the accounts directed
to be taken by it could no more be taken, nor the other directions contained in
it carried out. In our view, the High Court was in error in confirming the
decree. The decree could no longer be acted upon. The claim proceedings under
the Act finally determined the state of the mortgage accounts.
We, therefore, allow this appeal, set aside
the decree of the High Court and direct that the respondent's suit for
redemption be dismissed.
There will be no order for costs.