Luka Mathai Vs. Neelakanta Iyer
Subramonia Iyer  INSC 276 (6 October 1971)
SIKRI, S.M. (CJ) SIKRI, S.M. (CJ) RAY, A.N.
CITATION: 1972 AIR 383 1972 SCR (1) 977
Travancore Land Improvement and Agricultural
Loans Regulation IX ,of 1094.(M.E.)-Recovery of loan.
The loans granted under the Travancore Land
Improvement and Agricultural Loans Regulation IX of 1094 together with interest
and charges etc. can be recovered from the borrowers under cl. (a) of s. 7(1)
of the Regulation, as arrears of land revenue due by him or in any of the other
modes prescribed by cls. (b), (c) and (d) of the section.
The fact that the properties which had been
sold were not mentioned in the bond as collateral security or were not
expressly hypothecated does not make any difference, because, Travancore
Revenue Recovery Act 1 of 1068 (M.E.) provides under s. 5 "when public
revenue due on loan may be in arrear, such arrear, together with interest if
any and cost and process may be recovered by the sale of the defaulter's
movable or immovable property or both in the manner hereinafter provided."
Further, it is not necessary for the borrower to specifically so covenant in
his bond that he would be personally liable, because, s. 7(1) (a) of the Regulation
makes the borrower personally liable. This is also made clear by sub-s. (2)
under which if a surety pays the loan he can request that the money be
recovered from the borrower on his behalf. [979 F] Ulahannan Quseph v. Koohitti
Kochukumari, 23 Tr. L. J.
1051, 54 and Birendra Nath Raha v. Mir
Mahabubar Rahaman, A.I.R. 1947 Cal. 332, held inapplicable, Gonjalada
Bhojarajappa v. Korlahalli Halappa, A.I.R. 1946 Mad. 226, Lakshman Venkatesh
Naik v. Secretary of State A.I.R. 1939 Bom. 183 Hand Birendra Nath Raha v. Mir
Mahabubar Rahman, A.I.R. 1947 Cal. 332, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 542 of 1967.
Appeal from the judgment and decree dated
January 24, 1964, of the Kerala High Court in Appeal Suit No. 368 of 1959.
Manual T. Paikeday, S.K. Sabharwal and Ganpat
Rai, for the appellant.
A. R. Somanatha Iyer and M. R. K. Pillai, for
The Judgment of the Court was delivered by
Sikri, C.J. By judgment dated May 26, 1970, this Court (Sikri J., as he then
was, and Ray J.) allowed Civil Appeal No. 542 of 1967, set aside the judgment
of the High Court and passed a decree in favour of the appellant after
modifying the decree passed by the Trial Court. The respondent subsequently
filed Review Petition No. 35 of 1970 for review on the ground that they had
failed to 978 bring to the notice of the Court the provisions of Travancore
Regulation IX of 1094 and the fact that the loans were. granted under the above
Regulation. We allowed review on February 1, 1971. This judgment is, however, in
continuation of our earlier judgment dated May 26, 1970, The only new point
which needs discussion is the effect of the provisions of Travancore Regulation
IX of 1094 on our conclusion on the fourth point in that judgment.
We had inter alia held that the "fourth
point raised by the learned counsel for the plaintiff is fatal for the
respondent." We observed that "the bonds do not give power to the
Government to sell the properties other than mentioned in the bond. The
properties mentioned in plaint A schedule items 2 to 5, B Schedule items 1 and
3 to 8, and C schedule items were not given as security under the bond and the
Government had no authority to sell them. It is conceded on behalf of the
respondent that all the properties were sold in one lot. This, in our opinion'
vitiates that the sale of all the properties was void." The fourth point
raised before us was that "the Government had no authority to attach and
sell plaint A schedule items 2 to 5 and B schedule items 1 and 3 to 8 and C
schedule items, which were not given as security under the bonds; and if the
Government had no authority then the sale of all the properties is void."
We had while dealing with the third ground also observed that "no other
regulation has been brought to our notice which makes dues under this bond to
be recoverable as arrears of public or land revenue." It now transpires
that Regulation IX of 1094-Travancore Land Improvement & Agricultural Loans
Regulation-provides for recovery of land improvement loans from the borrower as
if they were arrears of land revenue due by him. Section 7 of the above
Regulation provides "7. (1) Subject to such Rules as may be made under
Section 10, all loans granted under this Regulation, all interests (if any)
chargeable thereon and costs (if any) incurred in making the same shall, when
they become due, be recoverable in any of the following modes :
(a) from the borrower as if they were arrears
of land revenue due by him;
(b) from his surety (if any as if they were
arrears of land revenue due by him;
(c) except as regards the loans referred to
in Section 4, out of the land for the benefit of which 979 the loan has been
granted as if they were arrears of land revenue due in respect of that land;
(d) out of the property comprised in the
collateral security according to the procedure for the realisation of land
revenue by sale of immovable property other than the land on which the revenue
is due :
Provided that no proceeding in respect of any
land under Clause (c) shall affect any interest in that land which existed
before the date of the order granting the loan, other than the interest of the
borrower, and of mortgagees of, or persons having charges on, that interest,
and, where the loan is granted under Section 3 with the consent of another
person, the interest of that person, and of mortgagees of, or persons having
charges on, that interest.
(2) When any sum due on account of any such
interests or costs is paid by a surety or an owner of property comprised in any
collateral security, or recovered from a surety or out of any such property,
such sum shall on the application of the surety or the owner of such property,
be recovered on his behalf from the borrower or out of the land for the benefit
of which the loan has been granted, in manner provided in this Section."
From these provisions it is quite clear that the loans granted under the
Regulation, interest and charges, etc. can be recovered in any or all of the
four modes described in the section. They can be recovered from the borrower
under clause (a); they can be recovered from recovered from a surety under
clause (b); the, land for the benefit of which the loan had been granted can be
proceeded.. against under clause (c) ; and under clause (d) property comprised
in the collateral security can be proceeded against. The fact that the
properties which had been sold were not mentioned in the bond as collateral
security or were not expressly hypothecated does not make any difference
because the Travancore Revenue Recovery Act 1 of 1068 provides under s.
5 that "when Public Revenue due on land
may be in arrear, such arrear, together with interest, if any, and costs of
process. may be recovered by the sale of the defaulter's movable or immovable
property or both, in the manner hereinafter provided." The learned counsel
for the appellant contends that neither the Travancore Revenue Recovery Act 1
of 1068 nor the Land improvement and Agricultural Loans Regulation IX of 1094,
and 980 the rules made thereunder, confer any power or jurisdiction on the
State Government or its officers to sell through the machinery of the Revenue
Recovery Act any other property of the borrower than what he has specifically
given by his bond as security for the loan. It is further contended that the
borrower does not incur any personal liability. unless he has specifically so
covenanted in the bond and hence the sale of all the 12 out of the 13 items of
land sold--one item alone having been a security-property under the loan
agreement-was unauthorised, illegal and void.
We are unable to agree with this contention.
It is not necessary for the borrower to specifically so convenant in his bond
that he would be personally liable because s. 7 (1 ) (a) of Regulation IX of
1094 makes the borrower personally liable. This is also made clear by sub-s.
(2). Under subs. (2), if a surety pays the loan he can request that the money
be recovered from the borrower on his behalf.
The learned counsel relied on the decision in
Ulahannan Quseph v. Koohitti Kochukiimari(1) where reference was made to an earlier
judgment in the Dewan of Travancore v. Eravi Narayanan(2) in which it was held
that "though under section 59 of the Revenue Recovery Regulation, moneys
due to Government under written agreements and all sums declared by other
Regulations to be realisable as arrears of public revenue may be recovered
under this Regulation, that section only makes the machinery or procedure
prescribed in the Regulation applicable to such cases, and it would not follow
that the incidents of a Revenue sale held under section 39 would also attach to
sales held under the authority conferred by the provisions of section 59."
The Court held that the property in the case remained subject to the
plaintiff's prior charge.
We are unable to appreciate how this case
assists us on the question whether there is any personal liability of the
appellant or not.
The learned counsel also due our attention to
Birendra Nath Raha v. Mir Mahabubar Rahaman (3). In this case it was held that
according to the provisions of the Bengal Land Revenue Sales Act, 1868, the
properties in question could not be sold because they were neither an estate
nor a tenure within s. 5 of the Act. No such question arises in this case but
it may be mentioned that at page 336 the Court interprated cl. (a) of s. 7 of the
Land Improvement Loans Act to mean that it imposed a personal liability on the
(1) 23 Travancore Law Journal 1051, 54.
(2) 29 Travancore Law Reports 37.
(3) A.I.R. 1947 Cal. 332.
981 There is, however, authority against the
contentions of the appellant. The Madras High Court observed in Gonjalada
Bhojarajappa v. Korlahalli Halappa(1) as follows :"It is clear from s. 5,
Revenue Recovery Act, that for the recovery of a loan advanced under the
Agriculturists Loans Act it is open to the Collector to sell any part of the
immovable property belonging to the defaulter, and the remedy is not confined
to that particular property in respect of which or for whose improvement the
loan had been taken." It may be noted that Section 5 of the Agriculturists'
Loans Act,, 1884, provides :
"Every loan made in accordance with such
rules, all interest (if any) chargeable thereon, and costs (if any) incurred in
making or recovering the same, shall, when they become due, be recoverable from
the person to whom the loan was made, or from any person who has become surety
for the repayment there of, as if they were arrears of land-revenue or costs
incurred in recovering the same due by the persons to whom the loan was made or
by his surety." In interpreting this section, the Madras High Court, in
the above mentioned case clearly held that it was open to the Collector to sell
any part of the immovable property belonging to the defaulter, and the remedy
was not confined to that particular property in respect of which or for whose
improvement the loan had been taken.
We may also mention that in Lakshman
Venkatesh Naik v.Secretary of State(2), while dealing with s. 7 of the Land Improvement
Loans Act, 1883, which is in terms similar to sec. 7 of Travancore Regulation
IX of 1094, it was observed that "it was therefore open to the Collector
to adopt all or any of the four different methods which the Section provides
for the recovery of the taqavi arrears." In the result the appeal is
dismissed. The parties will bear their own costs throughout. Our order dated February 1, 1971 awarding Rs. 1,500 to the appellant as thrown away costs shall however,
(1) A.I.R. 1946 Mad. 226.
(2) A.I.R. (1939) Bom. 183.