Lawrence Jenkins, K.C.I.E., C.J.
1. The defendant mortgaged a survey number to the plaintiff, and passed a Kabulayat in his favour. The plaintiff now sues the defendant for possession of the land.
2. The defence is that since the mortgage and Kabulayat the land has been forfeited by the Government for non-payment of assessment in arrear ; that all prior rights in it were thereby destroyed; and that it was then leased to the defendant free from all incumbrances.
3. The defence has prevailed in the lower appellate Court, from whose decree the present appeal has been preferred.
4. The point is one of importance, in which the Government is interested, and on their consenting to waive all objections, we have, in accordance with their desire, added the Secretary of State as a party.
5. Section 56 of the Land Revenue Code provides that arrears of land revenue due on account of land by any land-holder shall be a paramount charge on the holding and every part thereof, failure in payment of which shall make the occupancy or alienated holding, together with all rights of the occupant or holder over all trees, crops, buildings and things attached to the land, or permanently fastened to anything attached to the land, liable to forfeiture, whereupon the Collector may levy all sums in arrear by sale of the occupancy or alienated holding, or may otherwise dispose of such occupancy or alienated holding under rules or orders made in this behalf under Section 214, and such occupancy or alienated holding when disposed of, whether by sale as aforesaid, or by restoration to the defaulter, or by transfer to another person or otherwise howsoever, shall, unless the Collector otherwise directs, be deemed to be freed from all tenures, rights, incumbrances and equities theretofore created in favour of any person other than Government in respect of such occupancy or holding.
6. And by Section 57 it is declared that it shall be lawful for the Collector, in the event of the forfeiture of a holding through any default in payment or other failure occasioning such forfeiture under the last section or any law for the time being in force, to take immediate possession of the land embraced within such holding, and to dispose of the same by placing it in the possession of the purchaser or other person entitled to hold it according to the provisions of this Act or any other law for the time being in force.
7. Under Section 153 the Collector may declare the occupancy in respect of which an arrear of land revenue is due to be forfeited to Government, and sell or otherwise dispose of the same under the provisions of Sections 56 and 57 and credit J the proceeds, if any, to the defaulter's account.
8. The lower appellate Court has found that 'the land was forfeited and taken possession of by Government, and it was again let to the defendant, the Khatedar, on his paying the assessment for the previous year and the year that was going, and passing a fresh Kabulayat.'
9. What, then, is the legal consequence of this finding Forfeiture ordinarily implies the loss of a legal right by reason of some breach of obligation, and thus we find it said by Blackstone in Chapter XIV of his Commentaries that 'Forfeiture is a punishment annexed by law to some illegal act or negligence in the owner of lands, tenements or hereditaments, whereby he loses all his interest therein, and they go to the party injured as a recompense for the wrong which either he alone or the public together with him hath sustained.'
10. In support of his contention that the forfeiture had no legal consequences, the appellant principally relies onGanparshibai v. Timmaya Shivappa Halepaik ILR (1899) 24 Bom. 34.
11. But while it is there said of the landlord, the plaintiff in that suit, that ' the forfeiture per se did not destroy the relations existing between him and his tenant ', it is in the preceding sentence conceded that ' it may have done as between him and Government. '
12. Other cases were cited to us, but they seem to us to go no further in the direction for which the plaintiff contends.
13. No doubt in Mulchand Bhagwanji v. Shapurji Dadabhai (1898) P.J. 8, it is said that 'forfeiture in itself has no direct legal consequences under the Code,' but it is conceded in Ganparshibai's case by Candy J., Avho was a party to the decision in Mulchand Bhagwanji v. Shapurji Dadabhai, that the cases on which this statement is based ' may not have been quite apposite.' We agree with this comment, and therefore, refrain from discussing those cases.
14. If, by the phrase we have cited, it is meant that the Code does not define the consequences of a 'forfeiture in itself,' then no exception can be taken to it, but we see in that no reason for withholding from the word forfeiture its ordinary legal significance.
15. When the arrears are levied by sale, then Section 56, in pursuance of an obvious policy, empowers the Collector to sell ' freed from all tenures, incumbrances and rights created by the occupant ... or any of his predecessors-in-title or in anywise subsisting as against such occupant '. Without such protection no one would buy except at a price fixed to meet the risks involved.
16. Should the Collector otherwise dispose of the occupancy, the section affords no such protection ; and the legal relations must be determined by reference to the ordinary law. So judged, the effects of a forfeiture and subsequent acquisition of the forfeited property are subject to the control of equities arising out of the conduct of the parties, and for this proposition there is the sanction of Sir Michael Westropp's decision in Balkrishna Vasudev v. Madhaurau Narayan I.L.R. (1880) 5 Bom. 73 (Cf. Section 90 of the Indian Trusts Act).
17. And, in our opinion, it is by reference to that principle that this case must be decided.
18. This aspect of the case has not been considered by the lower appellate Court, and we must, therefore, remand the case for the determination of the following issues :-
1. Has the defendant, by availing himself of his position as Khatedar, gained an advantage in derogation of the rights of the plaintiff or otherwise by his conduct created an equity in favour of the plaintiff'?
2. If so, is the plaintiff entitled to any, and what, relief? Parties may adduce further evidence. Return in two months.