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Shrirang Maruti Falake Vs. Tanubai - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai High Court
Decided On
Case NumberCivil Revision Application No. 988 of 1953
Judge
Reported in(1955)57BOMLR418
AppellantShrirang Maruti Falake
RespondentTanubai
DispositionApplication allowed
Excerpt:
.....to opponent no. 2. the petitioner thereafter filed an application under the bombay agricultural debtors relief act, 1947, for the adjustment of his debts, challenging the aforesaid transactions of sale contending that they were mortgages and praying for possession of the property from opponent no. 2 after liquidating the mortgage debt. notice was served upon opponent no. 2, but he failed to appear and the trial court held that both the transactions were mortgages and made an award on that basis. opponent no. 1 applied to the court under section 36(2) of the act to set aside the award on the ground that it was an ex-parte award :-;that opponent no. 1 was not entitled to challenge the award as she was not a creditor within the meaning of the bombay agricultural debtors relief act.;the..........no. 2, he failed to appear, and the preliminary issues under section 17 of the bombay agricultural debtors relief act were decided in favour of the petitioner. the trial court held that both the transactions were mortgages and made an award on that basis. opponent no. 1, tanubai, then applied to the trial court under section 36(2) to set aside the award on the ground that it was an ex-parte award. the trial court dismissed that application and in appeal the district court has reversed that decision, set aside the award, and remanded the matter to the trial court to be proceeded with according to law. it is against this decision that this revision application is preferred.2. the point urged is that opponent no. 1, could not either apply to set aside the award under section 36(3) or.....
Judgment:

M.C. Chagla, C.J.

1. The petitioner, who is the debtor, filed an application for the adjustment of his debts in 1917 and in this application he challenged, among others, two transactions of sale contending that they were mortgages. One was a transaction of 1930. According to the petitioner he had sold his property to one Balwant. Balwant sold that property to opponent No. 1 Tanubai and Tanubai on November 29, 1945, executed a gift deed in respect of this property in favour of her brother Bala, opponent No. 2. The second transaction challenged was a transaction of 1921. That transaction was a transaction of ostensible sale by the petitioner in favour of Gangaram the husband of opponent No. 1. On the death of Gangaram, Tanubai succeeded to his property as his heir and she also transferred this property to her brother by the same deed of gift dated November 29, 1945. Notice was served upon opponent No. 2, he failed to appear, and the preliminary issues under Section 17 of the Bombay Agricultural Debtors Relief Act were decided in favour of the petitioner. The trial Court held that both the transactions were mortgages and made an award on that basis. Opponent No. 1, Tanubai, then applied to the trial Court under Section 36(2) to set aside the award on the ground that it was an ex-parte award. The trial Court dismissed that application and in appeal the District Court has reversed that decision, set aside the award, and remanded the matter to the trial Court to be proceeded with according to law. It is against this decision that this revision application is preferred.

2. The point urged is that opponent No. 1, could not either apply to set aside the award under Section 36(3) or maintain this appeal to the District Court, and what is urged is that, she is not a creditor, she has not been served under Section 14 and she has no right to challenge the award. Under Section 14(a) creditors mentioned in The application made by the debtor have to be served and in the application although the debtor mentions in the case of the first transaction the name of Balwant, opponent No, 1 and opponent No. 2 he makes it clear that the only defendant is opponent No. 2 in whose favour the gift deed is passed, and with regard to the second transaction also it is made clear that the application is against the done under the gift deed, viz. opponent No. 2. It is important to note that with regard to both these transactions the relief that the debtor seeks is that the land should be restored to him after liquidating the mortgage, debt. Therefore, strictly, according to Section 14 no notice was required to be served upon opponent No. 1 and in fact no notice was served. But Mr. Chandrachud is right that even apart from service of notice if in fact opponent No. 1 is a creditor, she would have a right to challenge the award as much as opponent No. 2, and the rather important question that I have to consider is whether for the purposes of the Bombay Agricultural Debtors Relief Act Tanubai is a creditor who is entitled to challenge the award passed in the Bombay Agricultural Debtors Relief Act proceedings.

3. Now, what is urged by Mr. Chandrachud is that Tanubai is the transferee and the issue arises between the debtor and the transferee as to whether the ostensible sale is a mortgage or not and according to Mr. Chandrachud whenever such a transaction is challenged under Section 24, the necessary party to the debtor's application is the original transferee in whose, favour the transfer was made or his heirs. In my opinion that is not the scheme of the Bombay Agricultural Debtors Relief Act at all. The challenge that is made under Section 24 to a particular transaction is in order to enable the debtor to get possession of the property after paying the mortgage debt, if any is ascertained to be due by him. If in the award it is found 'that no debt is due in respect of the mortgage, he is entitled to the possession of the property without payment of any amount at all. Therefore, the person with whom the debtor is concerned is the person in possession of the property. It is that person who can be called upon by the Court to hand over possession to the debtor and it is that person to whom the debtor would be liable to pay any debt ascertained to be due at the foot of the mortgage. In this case, by reason of the gift deed, the title is vested in opponent No. 2. Not only is he in possession of the property, but the title is also vested in him, and the application of the debtor is that possession should be given to him from opponent No. 2. Therefore, if the transaction is declared to be a mortgage, opponent No. 2 would be, by reason of the gift deed, only entitled to the rights of a mortgagee, Therefore he is entitled to have the mortgage redeemed, and if there is any debt found, he is entitled to that debt. Therefore, within the meaning of the Bombay Agricultural Debtors Relief Act the creditor of the debtor would be opponent No. 2 and not opponent No. 1. The petitioner has nothing to do with opponent No. 1. In this case the transaction was not with opponent No. 1 but with her husband. But even assuming the original transaction was with her and if she has transferred the property, then he must challenge the possession of the transferee and obtain possession from the transferee.

4. Now, even the scheme with regard to transferees is rather significant under the Bombay Agricultural Debtors Relief Act. Under Section 25(ii) only, bona fide transferees for value, where the transfer has been effected before February 15, 1939, are protected provided they had no notice of the real nature of the transfer. Here the transferee is opponent No. 2, transfer is subsequent to 1939, and under Section 25 he would not be protected. In this case he has not given value for the property. Even if he had, given the value and even if he had no notice of the real nature of the transaction, he would not be protected against the claim, of the debtor. Therefore, except for the transferees who fall under Section 25(ii), every transferee is liable, to give possession of the property to the debtor if it is found that the original transaction was a mortgage and not a sale and the transferee obtains his title from the original vendee. In this view of the matter it is clear that the creditor for the purposes of Section 24 and for the purpose of adjusting the mortgage debt is the ultimate transferee who is in possession of the property. If the transferee is protected under Section 25(ii), no further question arises. The debtor then cannot go back to the earlier transaction. If the transferee is not protected, then he takes the property Subject to the infirmity which attached to it, when the original transaction was entered into. Mr. Chandrachud says that there may be questions arising between the ultimate transferee and his transferor, but with those questions the Bombay Agricultural Debtors Relief Act has nothing whatever to do. It may be that a transferee for value who has taken the property under a sale deed may have some right against his transferor for failure of consideration if he is directed to hand over possession of the property to the debtor. But that would be a matter for the civil Court. In this very ease it seems that Tanubai adopted a certain boy in 1949 and it appears from, the judgment of the learned District Judge, though no copy of the judgment is referred to, that he filed a suit challenging the gift deed and according to the learned District Judge the Court has held that the gift deed is bad and the adopted son is the owner of the property. Now, if that be the true position and if Mr. Chandrachud's argument were to be accepted, then Tanubai has no right whatever to go to the Bombay Agricultural Debtors Relief Act Court or to go to the appellate Court, because when the application was made in 1951, she had already adopted a boy to her husband and the property would vest in the boy and the only person who would, be entitled to challenge the award or to prefer the appeal would be the adopted son and not Tanubai. All this shows that the Bombay Agricultural Debtors Relief Act Court is not concerned with ramifications about title to the property. The debtor is concerned with the ultimate transferee in whose possession the property is any question of title that may arise between the transferee and his transferor are matters for civil Courts and not for the Bombay Agricultural Debtors Relief Act Court. Therefore, when the award was made in favour of the debtor, the Court held that the original transaction was a mortgage, that the ultimate transfer was only of the interest of the mortgagee, that the ultimate transferee held possession of the property as a mortgagee, and the ultimate transferee was liable to be redeemed by the debtor on payment of the mortgage debt, if any. Therefore, I am of the opinion that Tanubai was not entitled to challenge the award as she was not a creditor within the meaning of the Bombay Agricultural Debtors Relief Act.

5. The result is that the revision application succeeds. Rule made absolute with costs. The order of the learned District Judge set aside and the order of the trial Court restored.


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