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PETITIONER: LUKA MATHAI

       Vs.

RESPONDENT: NEELAKANTA IYER SUBRAMONIA IYER

DATE OF JUDGMENT06/10/1971

BENCH: SIKRI, S.M. (CJ) BENCH: SIKRI, S.M. (CJ) RAY, A.N. PALEKAR, D.G.

CITATION:  1972 AIR  383            1972 SCR  (1) 977

ACT: Travancore   Land   Improvement   and   Agricultural   Loans Regulation IX ,of 1094.(M.E.)-Recovery of loan.

HEADNOTE: 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.

JUDGMENT: 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.

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A.  R.  Somanatha  Iyer  and  M.  R.  K.  Pillai,  for   the respondent. 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

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             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  cha rges  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  sub- s.  (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

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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 borrower. (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  rul-               es, 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 thereo f, 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

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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, stand. K.B.N.                             Appeal dismissed. (1)  A.I.R. 1946 Mad. 226. (2)  A.I.R. (1939) Bom. 183. 982