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PETITIONER: SHIVASHANKAR PRASAD SHAH & ORS.

       Vs.

RESPONDENT: BAIKUNTH NATH SINGH & ORS.

DATE OF JUDGMENT: 07/03/1969

BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. SIKRI, S.M. BACHAWAT, R.S.

CITATION:  1969 AIR  971            1969 SCR  (3) 908  1969 SCC  (1) 718  CITATOR INFO :  D          1971 SC1678  (17)  RF         1971 SC2251  (7)  RF         1975 SC2295  (10)  RF         1978 SC1642  (20)  RF         1988 SC1531  (64)

ACT: Code   of  Civil  Procedure-Res-Judicata-Objection   against execution proceeding, when barred. Bihar Land Reforms Act, ss. 3, 4 & 6-Mortgaged  Estate-Final Decree obtained-Effect of.

HEADNOTE: After  a preliminary decree was obtained by  the  appellants (mortgagees  of an Estate including both Bakasht  lands  and other  lands),  the Bihar Land Reforms Act, 1950  came  into force.   The  appellant  filed petition  for  passing  final decree.   The  Estate  mortgaged vested in the  State  as  a result  of a notification issued under s. 3(1) of  the  Act, and  later a final decree was passed in the  mortgage  suit. Thereafter the appellants applied under s. 14 of the Act and got determined the compensation to which they were  entitled under the Act.  But yet they filed an execution petition  to execute  the mortgage decree against the Bakasht land.   The respondents resisted that execution by filing an application under  s.  47,  Civil Procedure  Code  contending  that  the execution  was  barred  under  s. 4(d)  of  the  Act.   That application was dismissed for default of the respondents.  A second application raising, the same ground was filed by the respondents but this, too, was dismissed for their  default. A third application raising the same ground was filed by the respondents  and in this, the execution court overruled  the objection raised by the respondents on the grounds (i)  that the  objection was barred by the principles of res  judicata and  (ii) that the bar of s. 4(d) pleaded was  not  tenable. This decision was affirmed in appeal, but reversed in second appeal by the High Court.  Dismissing the appeal this Court;     HELD  :  (i)  The  objection  was  not  barred  by   the principles of res judicata.  Before a plea can be held to be barred  by res judicata that plea must have been  heard  and

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determined  by the court.  Only a decision by a court  could be res judicata, whether it be statutory under s. 11, Civil Procedure Code or constructive as a matter of public  policy on  which the entire doctrine rests.  An execution  petition having  been dismissed for the default of the  decree-holder through  by  the  time petition came to  be  dismissed,  the judgment  debtor had resisted the execution on one  or  more grounds, does not bar the further execution of the decree in pursuance  of fresh execution petitions filed in  accordance with  law.   Even the dismissal for  default  of  objections raised under s. 47, Civil Procedure Code does not operate as res  judicata when the same objections are raised  again  in the course of the execution. [911 B-H] Maharaja  Radha Parshad Singh v. Lal Sahab Rai & Ors.   L.R. 17  I.A.  150,  Pulvarthi  Venkata  Subba  Rao  v.   Velluri Jagannadha Rao & Ors. [1964] 2 S.C.R. 310, Lakshmibai  Anant Kondkar v. Ravi  Bhikaji Kondkar, XXXI B.L.R. 400, Bahir Das Pal  &  Anr. v, Girish Chandra Pal, A.I.R.  1923  Cal.  287, Bhagwati Prasad Sah v. Radha Kishun Sah & Ors.  A.I.R.  1950 Pat.  354, Jethmal & Ors. v. Mst.  Sakina, A.I.R. 1961  Rai. 1959  Bishwanath  Kundu v. Smt.  Subala Dassi,  A.I.R.  1962 Cal. 272, referred to. 909 Ramnarain v. Basudeo, I.L.R. XXV Pat. 595, disapproved. (ii)Proceedings  under  s. 4(d). of the Bihar  Land  Reforms Act,  1950 included execution proceedings and the  execution could  not be proceeded with.  The only remedy open  to  the appellants  was to get compensation under Chapter IV of  the Act. [913 G, H] Reading  ss.  3,  4 and 6 together,  it  followed  that  all Estates notified under s. 3 vested in the State free of  all encumbrances.  The quondum proprietors and tenure holders of those  Estates  lost  all interests in  those  Estates.   As proprietors  they  retained no interest in respect  of  them whatsoever.  But in respect of the lands enumerated in s.  6 the State settled on them the rights of raiyats.  Though  in fact  the vesting of the Estates and the deemed  settlements of  raiyat  rights in respect of certain  classes  of  lands included  in the Estates took place simultaneously,  in  law the  two  must be treated as different  transactions;  first there was a vesting of the Estates in the State  absolutely, free   of  all  encumbrances.   ’Men  followed  the   deemed settlement  by the State of raiyat’s rights on  the  quondum proprietors.   Therefore in law it would not be  correct  to say that what vested in the State were only those  interests not coming within s. 6. [913 C-E]    Section  4(d)  provided that "no suit shall  lie  in  any civil  court  for the recovery of any money  due  from  such proprietor (proprietor whose estate has vested in the State) or  tenure  holder  the payment of which  is  secured  by  a mortgage  of, or is a charge on, such estate or  tenure  and all suits and proceedings for the recovery of any such money which  may  be  pending  on the date  of  vesting  shall  be dropped".  Proceedings in this section undoubtedly  included execution proceedings. [1913 F] Ramnarain v. Basudeo I.L.R. XXV Pat. 595, Raj Kishore v. Ram Pratap, A.I.R. 1967 S.C. 801; [1967] 2 S.C.R. 56, Rana  Sheo Ambar  Singh  v. Allahabad Bank Ltd.,  Allahabad,  [1962]  2 S.C.R.  441 and Krishna Prasad & Ors. v. Gauri Kumari  Devi, (1962] Supp. 3 S.C.R. 564, referred to. Sidheshwar  Prasad Singh v. Ram Saroop Singh, 1963  B.L.J.R. 802, majority view disapproved.

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JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 368 of 1966. Appeal  by special leave from the judgment and  order  dated February  3,  1964 of the Patna High Court in,  Appeal  from Appellate Order No. 99 of 1963. Sarjoo Prasad and R. C. Prasad, for the appellants. K. K. Sinha and S. K. Bisaria, for the respondents. The Judgment of the Court was delivered by Hegde, J. This appeal against the judgment of the Patna High Court  dated the 3rd February, 1964 in its  Appellate  Order No. 99 of 1963 was filed obtaining special leave from  this Court.   It  arises  from a proceeding under  s.  47,  Civil Procedure  Code.   In execution of a  mortgage  decree,  the decree-holders sought to proceed against 910 Bakasht lands of the judgment debtors.  The judgment debtors objected  to the same on the ground that  the  execution-was barred under s. 4(d) of the Bihar Land Reforms Act, 1950 (to be  herein,after  referred  to as  the  Act).   But   that objection  was  overruled  by the  executing  court  on  two different grounds namely (1) that the objection in  question is barred by the principles of res judicata and (2) the bar of  s.  4(d) pleaded is not tenable.  The  decision  of  the execution  court was affirmed appeal but reversed in  second appeal by the High Court. The two questions that arise for decision in this appeal are (1)  whether the objection as regards the  executability  of the decree pleaded by the judgment debtors is barred by  the principles  of  res judicata and (2)  whether  the  mortgage decree has become unexecutable in view of the provisions  of the Act. We shall now briefly set out the material facts of the case. The  mortgages,  the appellants in this  appeal  obtained  a preliminary  decree  on  June 26, 1947 on  the  basis  of  a mortgage.   The property mortgaged was an Estate within  the meaning  of  the Act.  That property included  both  Bakasht lands as well as other lands.  The Act came into force after the  passing of the aforementioned preliminary decree.   The decree-holders filed petition for passing a final decree  on September  19,  1955.  The Estate mortgaged  vested  in  the State  of  Bihar  on  January  1, 1956  as  a  result  of  a notification  issued  under s. 3 (1) of the  Act.   A  final decree  was passed in the mortgage suit on October 1,  1956. Thereafter the mortgagees applied under s. 14 of the Act and got determined the compensation to which they were  entitled under  the Act.  It is said that they did not  proceed,  any further  in that proceeding but on the other hand  filed  on June 18, 1958 an execution petition to execute the  mortgage decree  against  the, Bakasht lands.  The  judgment  debtors resisted  that execution by filing an application  under  S. 47, Civil Procedure Code (Misc.  Case No. 94 of 1959) on the ground  that  the decree cannot be executed in view  of  the provisions  of the Act.  That application was dismissed  for the  default of the judgment debtors on September 12,  1959. A  second application raising the same ground  (Misc.   Case No. 110 of 1959) was filed by the judgment debtors is barred on  the principles of res judicata and further on  July  23, 1960   for  default  of  the  judgment  debtors.   A   third application  raising  the same ground  of  objection  (Misc. Case  No. 91 of 1960) was filed by the judgment  debtors  on September  12,  1960.   That application  was  dismissed  on January  4,’1962  after  examining the  contentions  of  the parties.  Therein the execution court came to the conclusion that the objection raised by the judgment debtors is  barred on  the  principles of res judicata and further that  the

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same has no merits.  This decision as mentioned earlier was affirmed  by  the appellate court but reversed by  the  High Court. We  shall  first take up the contention that  the  objection taken 911 by  the  judgment debtors’ is barried by principles  of  res judicata.   Though  at one stage, learned  Counsel  for  the appellants-decree holders attempted to bring the case within Explanation  5,  s.  11, Civil Procedure Code,  he  did  not pursue  that  line  of argument but  tried  to  support  his contention  on the broader principles of res judicata.   The real  question  for  decision in this case  is  whether  the dismissal of Misc. cases Nos. 94 and 110 of 1959 for default of  the judgment debtors can be said to be a final  decision of  the court after hearing the parties.  Before a plea  can be  held to be barred by the principles of res judicata,  it must  be shown that the plea in question had not  only  been pleaded  but  it had been heard and finally decided  by  the court.  A dismissal of a suit for default of the  plaintiff, we  think,  would  not operate as  res  judicata  against  a plaintiff in a subsequent suit on the same cause of  action. If it was otherwise there was no need for the legislature to enact  rule  9,  Order  9, Civil  Procedure  Code  which  in specific  term  say that where a suit is  wholly  or  partly dismissed  under  rule 8, the plaintiff shall  be  precluded from  bringing a fresh suit in respect of the same cause  of action.   The  contention that the dismissal of  a  previous suit for default of the plaintiffs operates as res  judicata in  a  subsequent  suit in respect of  the  same  claim  was repelled by the Judicial Committee, of the Privy Council  in Maharaja  Radha Parshad Singh v. Lal Sahab Rai and  Ors.(1). Therein the Judicial Committee observed thus :               "None of the questions, either of fact or law,               raised  by  the pleadings of the  parties  was               heard  or  determined  by  the  Judge  of  the               Shahabad   Court  in  1881;  and  his   decree               dismissing  the suit does not  constitute  res               judicata  within  the  meaning  of  the  Civil               Procedure  Code.  It must fall within  one  or               other  of the sections of chapter VII  of  the               Code; in the present case it is immaterial  to               consider which, the severest penalty, attached               to  such dismissal in any case being that  the               plaintiff  cannot bring another suit  for  the               same relief." From  this decision it is clear that the Judicial  Committee opined  that before a plea can be held to be barred by  res judicata  that plea must have been heard and  determined  by the  court.   Only  a  decision by  a  court  could  be  res judicata,  whether  it  be  statutory  under  s.  11,  Civil Procedure Code or constructive as a matter of public  policy on  which  the  entire doctrine rests.   Before  an  earlier decision  can  be considered as res judicata the  same  must have  been heard and finally decided-see  Pulvarthi  Venkata Subba.  Rao v. Velluri Jagannadha Rao, and Ors. (2). The  courts in India have generally taken the view  that  an execution petition which has been dismissed for the  default of the (1) L.R. 17 I.A. 150. (2) [1964] 2 S.C.R. 310 912 decree-holder  though by the time that petition came  to  be dismissed, the judgment debtor had resisted the execution on one  or more grounds, does not bar the further execution  of

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the decree in pursuance of fresh execution petition filed in accordance  with law--see Lakshmibai Anant Kondkar v.  Ravji Bhikaji  Kondkar(1).   Even  the dismissal  for  default  of objections raised under s. 47, Civil Procedure Code does not operate as res judicata when the same objections are  raised again  in the course of the executionsee Bahir Das  Pal  and Anr. v. Girish Chandra Pal (1) Bhagawati Prasad Sah v. Radha Kishun  Sah and OrS. (3); Jethmal and Ors. v.  Mst.   Sakina (4)  ; Bishwanath Kundu v. Sm.  Subala Dassi (5). We do  not think that the decision in Ramnarain v. Basudeo(6) on  which the  learned Counsel for the appellant placed great deal  of reliance is correctly decided.  Hence we agree with the High Court  that  the  plea  of  res  judicata  advanced  by  the appellant is unsustainable. The  next question is whether the execution is barred  under the provisions, of the Act.  The contention of the  judgment debtors  is that it is ’so barred whereas according  to  the appellants  as  the  Bakasht lands which form  part  of  the mortgaged  property  had,  not  vested  in  the  State,  the execution  can  proceed against those lands.   Therefore  we have to see whether the entire mortgaged property had vested in the State in pursuance of the notification under s. 3  or only the mortgaged property minus the Bakasht lands.          There is no dispute that the property mortgaged was an Estate within the meaning of s. 2(1) and the notification issued  under s. 3 covered the entirety of the Estate.   But what was urged on behalf of the appellants is that what  had vested in the State was the non-bakasht lands as well as the proprietory  interest  in the Bakasht lands  and  hence  the Bakasht  lands  do  not  have the  protection  of  s.  4(d); Consequently  it  is not necessary for them  to  exclusively proceed under s. 14. The  consequences of the vesting of an Estate is set out  in s. 4. Section 4(a) provides that once an Estate vests in the State   the  various  rights  in  respect  of  that   Estate enumerated therein shall also vest in the State,  absolutely free  from  all encumbrances.  Among the  rights  enumerated therein  undoubtedly includes the right of  possession.   In view  of  s.  4(a)  there  is  hardly  any  doubt  that  the proprietor  loses all his rights in the estate in  question. After  setting  out  the  various  interests  lost  by   the proprietor the section  proceeds to say  "such  proprietoror tenure holder shall      (1) XXXI, B.L.R. 400.    (2) A.I.R. 1923 CaI. 287.      (3) A I.R. 1950 Pat. 354.     (4) A. I. 1961 Raj. 59.      (5) A.I.R. 1962 Cal. 272.     (6) I.L.R. XXV pat. 595. 913 cease to have any interests in such estate or tenure,  other than   the  interests  expressly  saved  by  or  under   the provisions  of  this  Act".   In  order  to  find  out   the implication  of the clause extracted above we have to go  to s. 6 which provides that on and from the date of vesting all lands  used for agriculture or horticultural purposes  which were  in  khas possession of an intermediary on  the-date  a vesting (including certain classes of land specified in that section) shall subject to the provisions of ss. 7A and B  be deemed to be settled by the State with such intermediary and he  shall be entitled to retain possession thereof and  hold them as a raiyat under the State having occupancy rights  in respect  of such lands, subject to the payment of such  fair and equitable rent as may be determined by the Collector  in the prescribed manner. Reading ss. 3, 4 and 6 together, it follows that all Estates notified  under  s.  3  vest  in  the  State  free  of   all encumbrances.  The quondum proprietors and tenure-holders of

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those  Estates  lose  all interests in  those  Estates.   As proprietors  they  retain  no interest in  respect  of  them whatsoever.  But in respect of the lands enumerated in s.  6 the State settled on them the rights of raiyats.  Though  in act the vesting of the Estates and the deemed settlement of raiyats  rights in respect of certain classes of  lands  in- cluded in the Estates took place simultaneously, in law  the two  must be treated as different transactions; first  there was  a vesting of the Estates in the State  absolutely,  and free   of  all  encumbrances.   Then  followed  the   deemed settlement  by the State of raiyat’s rights on  the  quondum proprietors.   Therefore in law it would not be  correct  to say  that what vested in the State are only those  interests not coming within s. 6. Section  4(d) provides that "no suit shall lie in any  Civil Court  ’for  the  recovery  of  any  money  due  from   such proprietor (proprietor whose estate has vested in the State) or  tenure  holder  the payment of which  is  secured  by  a mortgage  of, or is a charge on, such estate or  tenure  and all suits and proceedings for the recovery of any such money which  may  be  pending  on the date  of  vesting  shall  be dropped".  Proceedings in this. section undoubtedly  include execution proceedings.  This is not a case where only a part of  the mortgaged property has vested in the such  the  rule laid  down  by this Court in Raj Kishore  Pratap(1)  is  not attracted.   As mentioned earlier the State and as   v.  Ram entire  Estate mortgaged had vested though some interest  in respect  of  a portion of the mortgaged  property  had  been settled by the State on the mortgagors.   Under  the  circumstances  the only  remedy  open  to  the decreeholders is that provided in Chap.  IV of the Act  i.e. a claim under (1)  [1967] 2 S.C.R. 56; A.I.R. 1967 S.C. 801. 914 s. 14 before the Claims Officer for "determining the  amount of  debt  legally  and justly payable to  each  creditor  in respect of his claim’.  The procedure to be followed in such a  proceeding  is prescribed in ss. 15 to  18.   ’Provisions relating  to  the  assessment and  payment  of  compensation payable  to the quondum proprietors and  tenure-holders  are found  in Chap.  V of the Act (ss. 19 to 31.) Section  24(5) provides  that  "in  the  case  where  the  interest  of   a proprietor  or  tenure-holder is subject to  a  mortgage  or charge,  the  compensation  shall be first  payable  to  the creditor holding such mortgage or charge and the balance, if any,  shall  be payable to the proprietor  or  tenure-holder concerned:"  That subsection further prescribes the  maximum amount that can be paid to such a creditor.     In  view of what has been stated above it  follows  that under  the circumstances of this case it is not open to  the appellants to proceed with the execution.  Their only remedy is to get compensation under the Act.   Our  conclusion receives strong support from some  of  the decisions  of  this  Court.  In Rana  Sheo  Ambar  Singh  v. Allhabad  Bank Ltd., Allahabad(1), a question  identical  to the  one  before us, but arising under  the  U.P.  Zamindari Abolition and Land Reforms Act, came up for consideration by this Court.  One of the questions that arose for decision in that  case  was whether the Bhumidari right settled  by  the State  on a previous proprietor whose estate had- vested  in the State was liable to be proceeded against in execution of a mortgage decree against the Estate that had vested in  the State.   This  Court  held  that it was  not  liable  to  be proceeded against.  Therein it was ruled that the  intention of  the U.P. Zamindari.  Abolition and Land Reforms Act  was

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to vest the proprietory rights in the Sir and Khudkasht land and grove land in the State and resettle on 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  never  had  before by s.  18  of  the  Act.   The provisions in that Act relating to vesting and settlement of Bhumidari rights are in all essential particulars similar to those  in  the  Act relating to vesting  and  settlement  of Bakasht  lands.  This Court further ruled in that case  that the  mortgagee  could only enforce his  rights  against  the mortgagor in the manner as provided in s. 6 (h) of the U.P., Act  read  with s. 73 of the Transfer of  Property  Act  and follow the compensation money under the Act. In  Krishna  Prasad and Ors. v. Gauri Kumari  Devi(  2)  the question that arose for decision by the Court was whether, a mortgage decree-holder could proceed against the  properties of the mortga- (1) [1962] 2, S.C.R. 441. (2) [1962] Supp. 3 S.C.R. 564. 915 gor  other  than  those  mortgaged  in  enforcement  of  the personal covenant when the property mortgaged had vested  in the  State under the provisions of the Act.   That  question was answered in the negative.  In the course of the judgment Gajendragadkar, J. (as he then was) who spoke for the  Court observed that there is no doubt "that the scheme of the  Act postulates  that  where  the provisions of  the  Act  apply, claims,  of  the creditors have to be submitted  before  the Claim  Officer, the claimants have to follow  the  procedure prescribed by the Act and cannot avail of any remedy outside the  Act by instituting suit or any other proceeding in  the court of ordinary civil jurisdiction." Proceeding further he observed               "It is in the light of this scheme of the  Act               that  we  must  revert  to  section  4(b)  and               determine what its true scope and effect  are.               Mr. Jha contends that in construing the  words               of Section 4 (d) it would be necessary to bear               in mind the object of the Act which was merely               to  provide for the transference to the  State               of  the  interests  of  the  proprietors   and               tenure-holders  in land and of the  mortgagees               and lessees of such interests.  It was not the               object   of   the  Act,  says  Mr.   Jha,   to               extinguish,  debts due by the  proprietors  or               tenure-holders and so, it would be  reasonable               to  confine the operation of s. 4 (d) only  to               the claims made against the estates which have               vested  in  the State and no others.   In  our               opinion,   this   argument  proceeds   on   an               imperfect  view of the aim and object  of  the               Act.   It is true that one of the  objects  of               the Act was to provide for the transference to               the State of the estates as specified.  But as               we have already seen, the provisions contained               in section 16 in regard to the scaling down of               the  debts due by the proprietors and  tenure-               holders  clearly indicate that another  object               which  the Act wanted to achieve was  to  give               some redress to the debtors whose estates have               been taken away from them by the notifications               issued   under   section  3.   Therefore,   in               construing  s. 4(d), it would not be right  to               assume  that  the  interests  of  the  debtors

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             affected  by the provisions of the Act do  not               fall  within  the protection of the  Act"  and               again at page 578               "Having  regard  to  the said  scheme,  it  is               difficult  to  confine the application  of  s.               4(d)  only to execution proceedings  in  which               the decree-holder seeks to proceed against the               estate  of the debtor.  In fact, an  execution               proceeding to recover the decretal amount from               the  estate  which has already vested  in  the               State,  would be incompetent because the  said               estate  no  longer  belong  to  the  judgment-               debtor." Sup CI-69-9 916 Summarising the effect of the aforementioned decisions  this is what this Court observed in Raj Kishore’s case(1)-a  case arising under the Act:                  From the principles laid down by this Court               in the above two decisions, follows that where               the  whole  of the property  mortgaged  is  an               estate,  there  can  be  no  doubt  that   the               procedure  prescribed by Chapter IV has to  be               followed, in order that the amount due to  the               creditor  should be determined by  the  claims               officer and the decision of the claims officer               or the Board has been made final by the Act." For the reasons mentioned earlier we are of the opinion that the  decision  of the majority of the judges  in  the  Full Bench  decision  in Sidheshwar Prasad Singh  v.  Ram  Saroop Singh(2)  is not correct.  The true effect of the  decisions of this Court in Rana Sheo Ambar Singh’s case(3) and Krishna Prasad’s case(4) is as explained by Kamla Sahai, J. in  that case. In  the  result this appeal fails and it is  dismissed  with costs. Y.P.                              Appeal dismissed. (1)  [1967]2 S.C.R. 56 A.I.R. 1967 S.C. 801. (2)  [1963] B.L.J.R. 802. (3)  [1962] 2 S.C.R. 441. (4)   [1962] Supp, 3 S.C.R. 564 917