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PETITIONER: RAJA SAILENDRA NARAYAN BHANJ DEO

       Vs.

RESPONDENT: KUMAR JAGAT KISHORE PRASAD NARAYAN SINGH

DATE OF JUDGMENT: 13/12/1961

BENCH: SARKAR, A.K. BENCH: SARKAR, A.K. GAJENDRAGADKAR, P.B. 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)

ACT:      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, 14, 35.

HEADNOTE:      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

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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   tenureholders.  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 mortgaged property.      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 ?

JUDGMENT:      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 No. 1.      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

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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. Sastri.      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

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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 dispossessed.      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 17, 1949.      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 some  time 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 interest.      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

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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 infructuous.      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 refer.

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    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 the claim. 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.

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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

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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 question. 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 any more; 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.                                     Appeal allowed 130