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Magunta Mining Cp. Vs. M. Kondaramireddy and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberA.A.O. No. 464 of 1980
Judge
Reported inAIR1983AP335
ActsCode of Civil Procedure (CPC), 1908 - Order 21, Rule 58
AppellantMagunta Mining Cp.
RespondentM. Kondaramireddy and anr.
Appellant AdvocateP.V. Seshaiah and ;K. Durga Prasad, Advs.
Respondent AdvocateD. Sundarajarao and ;M.V. Ramana Reddy, Advs.
Excerpt:
.....21 rule 58 - mine was below surface of land belonging to judgment-debtor - government granted lease of mica mine in favour of appellant - judgment-debtor has also given consent letter in favour of appellant permitting him to enter upon his land with view to exploit mineral which is subject matter of lease - by virtue of consent letter lessee is entitled to exclusive possession of surface of land to exclusion of owner as long as lease of subsoil rights lasts - such a lessee who prefers petition under order 21 rule 58 entitled not only to subsoil rights but to exclusive possession of surface of land so long as subsoil lease lasts - held, appellant entitled to subsoil rights and exclusive possession of surface in relation to land - sale of lands shall be subject to above rights declared..........suit.3. the first respondent in the appeal is the judgment-debtor while the 2nd respondent is the decree-holder. there was a compromise decree on 12-3-1968 for a sum of rs. 1,00,000/- (one lakh) with interest thereon at 12% p.a. and subject to certain other terms and conditions the judgment -debtor paid some amoutn towards the decree but on the date when the e.p. no. 2/79 was filed still a sum of rs. 68,724.89 was outstanding.4. the 2nd respondent-decree-holder filed e.p. no. 2/79 for realisation of the above sum and obtained an order of attachment of certain lands belonging to the judgment debtor in three villages. the attachment was effected on 15-3-1980 in one village and on 19-3-80 in two others villages of which utukuru is one. in this appeal we are concerned with certains items in.....
Judgment:

Jagannadha Rao, J.

1. The appeal is directed against the order of the learned subordinate judge, Gudar in E.A. No. 107/ 80 in E.P. No. 2/79 in o.s. No. 64/67.

2. The appellant filed an application in the Court below under O. 21 R. 58 C.P.C and the same having been rejected by the lower Court this appeal has been preferred under the amended provisions of the civil P.C. Which provided for an appeal instead of a suit.

3. The first respondent in the appeal is the judgment-debtor while the 2nd respondent is the decree-holder. There was a compromise decree on 12-3-1968 for a sum of Rs. 1,00,000/- (one lakh) with interest thereon at 12% P.A. and subject to certain other terms and conditions the Judgment -debtor paid some amoutn towards the decree but on the date when the E.P. No. 2/79 was filed still a sum of Rs. 68,724.89 was outstanding.

4. The 2nd respondent-decree-holder filed E.P. No. 2/79 for realisation of the above sum and obtained an order of attachment of certain lands belonging to the judgment debtor in three villages. The attachment was effected on 15-3-1980 in one village and on 19-3-80 in two others villages of which utukuru is one. In this appeal we are concerned with certains items in Utukuru village with regard to which the appellant filed an application under O. 21 R. 58 C.P.C. on 25-4-1980 in E.A. No. 107/80 claiming to be interested in getting the attachment released in respect of four survey numbers in Utukuru village. As such we are not concerned with the attachment of the other lands in Uukuru or with regard to the other villages. The lands with regard to which the appellant filed the claim application are-

1. Patta No. 12 - survey No. 183 - Extent ac. 3-78 cents.

2. Patta No. 118 - survey No. 182 - Extent Ac 1-85 cents.

3. Patta No. 44 - survey No. 198/1 - Extent ac. 1-98 cents.

4. Patta No. 42- survey No. 198/2 Extent Ac. 0.55 cents

5. In the said application filed by the appellant under O. 21 R. 58 C.P.C. it was contended as follows; the applicant is a mining company represented by its Managing partner. He is no doubt the son of the Judgment-debtor. The application learnt that the 2nd respondent obtained a decree against the first repsondent and in execution of the said decree brought the schedule mentioned four items to sale as if they belonged to the first respondent in the E.P. it is contended that the schedule properties are the Mica Mine plots covered by survery No. 182, 198/1, 198/2 and 183 of about ac. 8-11 cents They originally belonged to the judgment-debtor (1st respondent) and the land was fit only for mining work. Hence the judgment debtor gave his consent in 1977 for grant of a mining lease in favour of the appellantcompany and in accordance with the consent of the judgmetn-debtor the Assistant Director of Mines and Geology Nellore leased out the said lands to the appellant in his proceedings NO. 4763/ M-1/78 dated 28-2-1979 and since then the appellant alone has been in possession and enjoyment of the same as lessee under Government Memo No. 3160/ Mines II /78-2 dated 17-1-1979. As such and because of the lease. The Judgment debtor has no right or interest in the said properties and it is only the appellant that has been in possession of the same and therefore the attachment of these properties made on 15-3-1980 in the above E.P. is not vallid and hence has to be vacated (obviously 15-3-1980 is a mistake for 19-3-1980.)

6. To this application a counter was filed by the 2nd respondent-decree-holder as follows: the land is the patta land of the Judgment-debtor and they are living Jointly and doing mining business jointly . The judgment-debtor was previously doing mining in the schedule lands. As he failed to pay the dead rent and others dues to the Government the lease granted in favour of the judgment-debtor was cancelled. Subsequently the judgment-debtor instigated the claimant to apply for lease of the schedule land for doing mining work and he might have issued a no objection certificate for granting lease in favour of the claimant thus the claimant obtained only leasehold rights for doing mining work in the schedule property. Even though the claimant wasgranted in favour of the claimant is liable to be cancelled at any moment for not carrying on mining operations. It is contended that the attachment need not be raised. The schedule lands could be brought for sale subject to the leasehold rights of the appellant. Hence the petition should be dismissed.

7. In the lower Court neither party examined any witnesses but Ext. A-1 was marked as being the Government order granting the lease in favour of the claimants. No documents were marked for the respondent decree-holder the Court below on a consideration of the facts of the case rejected the claim application on the facts of the case rejected the claim application on the ground that the claimant is none other than the son of the Judgment-debtor and that the decree-holder is contending that the judgment-debtor is also a partner of the firm and that the claimant did not produce the partnership deed. Therefore it is possible that there might be collusion between the claimant and the Judgment-debtor. It also held that the decree-holder is contending that no mining operations were being conducted and that the mining lease is likely to be cancelled and that in any even if the claimant has got mining rights that is not a hindrance to proceed against the schedule property which admittedly belongs to the judgment-debtor it also in his counter that the decree-holder has no objection to the sale being held subject to the mining rights of the claimant. For those reasons the lower Court rejected the claim application It is against this order that the appellant has filed this appeal.

8. In this appeal it is contended by the learned counsel for the appellant that the lower Court acted on surmises and has not given any categorical findings with reference to the rival contentions of the parties. It is also contended that in view of Ext. A-1 the lease in favour of he appellant granted by the Government cannot be disputed and that the claimant is entitled to the surface rights of the Judgment-debtor in view of the consent letter given by the judgment-debtor in favour of the claimant will not be able to work the Mica mine as the Court auction-purchaser of the surface rights would obstruct the claimant from entering the land and coducting the mining operations the learned counsel also relied upon the amended provisions of O. 21 R. 89 C.P.C.

9. On the other hand the learned counsel for the decree-holder contended that the lease is not a real one and that the claimant is none other than the son of the Judgment debtor and there is nothing wrong even if the sale is held subject to the mining rights of the appellant. The learned counsel for the respondent-decree-holder also raised a contention that subsequent to the filing of this C.,M.A though this Court granted stay on 22-8-80 before the same was brought to the notice of the lower Court the properties in the three villages consisting of various items including these four items were sold on 25-8-1980 for Rs. 25,795/- and that therefore this appeal has become infructuous.

10. Before dealing with the other aspects arising in the appeal we shall first deal with the effect of the Court sale conducted by the lower Court during the pendency of this appeal in this Court.

11. The Judgment-debtor gave a consent letter in 1977 in favour of the claimant and on that basis the Assistant Director of Mines granted a lease on 28-2-1979 in accordance with the Government memo dated 17-1-79. The attachment so far as the lands in Utukuru are concerned was made on 19-3-1980. Thereafter the appellant filed the claim petition on 25-4-1980. It was rejected by the lower Court under the impugned order dated 7-7-1980. The C.M.A was preferred to this Court on 18-8-1980 and interim stay was obtained on 22-8-80 Before the stay order was communicated tothe lower Court the sale was held in respect of all the items in all the three villages on 25-8-80 for a sum of Rs. 25,795/- it is common ground that so far as the four items with which we are concerned they were sold for a sum of Rs. 9,260. The decree-holder was the auction-purchaser in respect of the items. However later this Court granted stay of confirmation of sale.

12. Though the decree-holder contended that the Judgment-debtor is a partner in the claimant firm no evidence has been adduced by the decree-holder in that regard. Hence this contention cannot be accepted. Though the existence of the lease is doubted. Though the existence of the lease is doubted by the decree-holder in view of Ext. A-1 which contains the order of the assistant Director of Mines and the lease deed in Form K Under the Mineral concession Rules 1960 there can be no doubt about the lease.

13. The first question therefore is: whether this appeal can be proceeded with even though during the pendency of the appeal arising out of the claim application the properties have been sold.

14. Admittedly this Court subsequently granted an order staying the confirmation of the sale that order was communicated and even now the confirmation of the sale has not taken place. The provisions of O. 21 R. 59 C.P.C. show that where before a claim is preferred or objection made and the property attached had already been advertised for sale, the Court may, if the property is immovable, make an order, that pending the adjudication of the claim or objection the property shall not be sold, or that pending such adjudication, the property may be sold but the sale shall not be confirmed and any such order may be made subject to such terms and conditions as to security or otherwise as the Court thinks fit. This provision therefore provides that pending adjudiciation of a claim in respect of immovable property the Court may proceed with the sale but stay the confirmation. Obviously this has been made with a view to expedite the sale proceedings so that in the event of the claim being rejected the further proceedings can go on expeditiously. But it is clear that as long as the sale is not confirmed the status quo ante can be restored in case the claim is allowed. It has been held that once the claim petition is allowed the sale will be treated as void because the interest of the judgment-debtor that was sold did not in fact belong to him and the Court auction-purchaser would not get any title to the property as the judgment-debtor had no interest therein and because the claimant continues to retain his interest in those properties vide Bibi umatul Rasul v. Lakho Kuer (AIR 1941 pat 405). To the same effect is the decision in Madholal v. Gajrabi (aIR 1951 Nag 194), Where the learned Judge v. R. Sen quoted the following observations of Niyogi, J in an earlier unreported Judgment of the Nagpur High Court as follows (at p. 197):

'The terms of O. 21 R. 63 are imperative and they declare that any order passed by the executing Court is subject to the result of such a suit. In phul Kumari v. Ghanshyam Misra, 91907) ILR 35 Cal 202 : (35 Ind App 22 (pC) their Lordships of the privy council pointed out that the object of a suit under S. 283, Civil P.c. of 1882 which corresponds to O. 21, R. 63 of the present code is in effect to set aside a summary decision. When the claimant succeeds in getting a decree in his favour declaring his title to the property attached and that the property is not liable for attachment and sale in execution of a particular decree the executing court's power to sell the property in that execution proceeding must cease. The claimant's success in a suit under O. 21 R. 63 ousts the Jurisdiction of the executing Court.

If that is the result, the sale must be pronounced to be a nullity and consequently not capable of being confirmed under O. 21, R. 92, civil P.c.'.

After quoting the said observations of Niyogi, J., Justice sen also referred to the provisions of S. 52 of Transfer of property Act and observed that eve otherwise the Court sale is subject to the general principle of lis pendens and the sale will be subject to the result of the claim suit. The legal position can be summarised as follows:

15. Whenever a claim is preferred under O. 21, R. 58 C.P.c. against attachment of immovable properties the fact that the properties are sold or the sale confirmed will not deprive the Court of its jurisdiction to adjudicate on the claim. The inquiry into the claim can be proceeded with by the trial Court or the appellate Court (under the amended code) and in the event of the claim being allowed, the sale and the confirmation of sale shall to that extent be treated as a nullity and of no effect, as the Judgment debtor had no title which could pay to the Court auction-purchaser.

16. Hence we hold that this C.M.A. has not become infructuous The preliminary objection is therefore overruled.

17. The next and more important question raised by the learned counsel for the respondent-decree-holder is that the consent letter issued by the Judgment-debtor in favour of the claimant does not create any right in the surface which could be the basis of the claim by the lessee of the subsoil rights.

18. It may be noted that Mica Mine is below the surface of the land belonging to the Judgment-debtor the Government has granted a lease of the Mica mine in favour of the claimant anterior to the attachment. The Judgment-debtor has also given a consent letter in 1977 in favour of the claimant anterior to the attachment dated 19-3-1980, permitting him to enter upon his land with a view to exploit the mineral which is the subject matter of the lease. The grant of the consent letter was not specifically denied in the counter of the decree-holder.

19. It is obvious that unless the lessee of the subsoil rights is entitled to enter upon the land and use the surface of the land for the purpose of exploitation of the mine the lease of the subsoil will be rendered wholly nugatory and useless. The purpose of the lessee of the subsoil rights in obtaining the consent letter from the owner of the surface rights is to enable him to have exclusive possession of the surface and reap the benefits of the lease of the subsoil rights profitably. Viewing in that light, the consent letter from owner is absolutely necessary for a profitable enjoyment of the subsoil rights. Subject to these rights, the sale must be taken to have been held.

20. Therefore, on these facts, the legal position can be summarised as follows :

A lessee from the Government of the subsoil rights obtains a consent letter to enable him to enter the land for the purpose of the more profitable exploitation of the subsoil rights. By virtue of the consent letter the lessee is entitled to the exclusive possession of the surface of land to the exclussion of the owner, as long as the lease of the subsoil rights lasts. Therefore such a lessee who prefers a claim petition under O.21, R. 58, C.P.C. is entitled not only to the subsoil rights but to the exclussive possession of the surface of the land so long as the subsoil lease lasts. The landowner possesses only the remaining interest in the land. Therefore a Court auction-purchaser of the rights of the owner in such circumstances owns only the residuary rights in the surface and will not be entitled to obstruct the enjoyment of the surface rights by the grantee of the consent :letter. As the rights of the claimant lessee are declared in the proceedings under O. 21. R. 58, C. P. C. there is no need to set aside the sale but if is sufficient to declare that the auction-purchaser gets only the residuary interest, and even i the right to possession of the surface rights or subsoil rights are sold, it would only be nullity. (Vide Madholal v. Gajrabi (AIR 1951 Nag 194). (supra) ).

21. We, therefore, hold that the attachment made by the decree-holder in respect of the items mentioned in the schedule to the claim petition should be released not only in respect of the right of the claimant to the subsoil rights granted by the Government but also in respect of the right to the exclusive possession of the surface of these items so long as the subsoil lease lasts. The Court auction-purchaser would not be entitled to interfere with the surface rights created in favour of the claimant in such a way as would interfere with or make it impossible to the claimant to exploit the Mine pursuant to the lease of the subsoil rights granted by the Government in favour of the claimant.

22. The appeal is accordingly allowed, to the extent stated above, the order of the is allowed to that extent. There shall be a declaration that the claimant is entitled not only to the subsoil rights created in his favour under the lease executed by the Asstt. Director of Mines. Nellore on 28-2-79 but also to the exclusive. possession of the surface in relation to the lands mentioned in the schedule to the claim petition in such a manner that his possession and enjoyment of the surface rights will not be interfered with or obstructed by the Court auction-purchaser or his successors-in-interest. The sale of the items shall be subject to the above rights declared in favour of the claimant and the Court sale dated 25-8-1980 shall be declared to have passed to the Court auction-purchaser only the remaining interest of the judgment-debtor. The appeal is allowed as indicated above. but in the circumstances, there will be no order as to costs.

23. Order accordingly.


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