1. This is a plaintiff's appeal arising out of a suit on a mortgage, the plaintiff mortgagee asking for his money or for foreclosure. The mortgage has, however, under circumstances which will have to be set forth, been held to be a simple mortgage and this fact wilt have an important bearing on the applicability of the Full Bench decision to which reference will have to be made later. The history of the proceedings, which is important for the purposes of the present appeal, is as follows:
2. In 1903-(Local) Act 2 of 1903, the Bundelkhand Land Alienation Act, was passed. By Section 1(3) it was declared that the Act should come into force on a date to be declared by notification.
3. 1st July 1903-By notification the Act came into force on this date.
4. 27th July 1912-Date of the mortgage in suit. On this date Ajudhya Prasad, defendant-respondent, executed a mortgage in favour of Kalika Prasad, the plaintiff-appellant, for Rs. 160. It provided for interest at Rs. 1-4-0 per mensem payable yearly, and the principal sum was to be repaid with any accumulated interest on 15th June 1916, with a condition as to foreclosure if the money was not paid by that date.
5. 11th October 1913-By Section 4 of the Act it was provided that by notification the Government might determine what bodies of persons are to be deemed agricultural tribes for the purposes of the Act; and on this date both the mortgagor and the mortgagee were declared to be agriculturists within the meaning of the Act. Prior to that date they had not been 'agriculturists.'
6. 16th January 1923-On this date the mortgagee filed a suit asking for the money then due, Rs. 699-7-0 or for foreclosure. The defendant relied upon Section 10, Bundelkhand Land Alienation Act. Section 10 provides that:
in any mortgage of land made after the commencement of this Act, any condition which is intended to operate by way of conditional sale shall be null and void.
7. 12th February 1923-The trial Court held that the condition as to foreclosure must be struck out, and that if that was struck out there remained no legal relation of mortgagor and mortgagee between the parties, and dismissed the suit, since, if the bond was treated as a simple money bond, the remedy was barred by limitation.
8. 28th July 1923-The mortgagee having appealed, the District Judge held that the effect of striking out the condition was not to destroy wholly the relationship of mortgagor and mortgagee, but that there remained a mortgage. He held further that the Munsif had misunderstood the effect of Section 9(the Munsif had thought it only applicable before any suit was instituted), and finally remanded the case to the learned Munsif:
for rehearing and deciding the questions not yet decided. If ha finds that anything is due he will determine what is due... and then send the case to the Collector.
9. 12th September 1923-The trial Court found Rs. 160, principal and Rs. 539-7-0 interest due and:
referred the matter to the Collector under Section 9(3), Bundelkhand Land Alienation Act for the exercise of the powers under Section 9(1) of the said Act.
10. 14th November 1923-The Collector held Section 9 not applicable and refused to act under it on the ground that the mortgagor was not an agriculturist, and further held that even if both parties be regarded as agriculturists he need not, in view of an order of the Board, take any action.
11. The Commissioner held that the question whether the parties were agriculturists was res judicata by the civil Court and cancelled the Collector's refusal to take action.
12. 16th April 1925-On appeal the Board reversed the decision of the Commissioner and upheld that of the Collector that Section 9(1) was not applicable the mortgagor not having been an agriculturist at the time when he made the mortgage and that there was no provision in the Act for the case where, though the mortgage was made after the commencement of the Act, the Act had not been applied to the mortgagor at the date of the mortgage, i.e. the mortgage was made between the commencement of the Act and the date of the notification applying the Act to the mortgagor. The Board further directed that a copy of its order should be sent to the trial Court, the Munsif.
13. On 12th September 1925-The learned Munsif proceeded to pass a preliminary decree for sale of the property under Order 34, Rule 4 the decree to be framed on the basis of the order of the Munsif's proceeding dated 12th September 1923, in which it had been found that Rs. 699-7-0 was due on the mortgage.
14. On 4th December 1925, the lower appellate Court held that:
the matter is decided by Section 16, Bundelkhand Land Alienation Act, under which no land belonging to a member of an agricultural tribe can be sold in execution of any decree or order of a civil Court.
15. The appeal was thereupon allowed and the suit dismissed with all costs against the plaintiff.
16. The plaintiff appeals to this Court and raises two pleas. It is contended that even upon the view taken by the lower appellate Court the mortgagee was entitled at least to a decree for sale even though he might not be able to execute that decree. He meets the principle that the Court will not give what must inevitably be an infructuous decree by the suggestion that if he is given a decree it is possible that the judgment-debtor may be induced to pay up, even though the decree cannot be executed by sale. This is not I think a contention which we should allow; but the real contest between the parties has been concerned with the two related questions:
(a) whether a mortgage executed in the circumstances of the present case comes within Section 9 of the Act, and (b) if it does not come within Section 9, then is the mortgagee entitled to stand outside the Act altogether or does Section 16 stand in his way? While these two questions are intimately related they must be dealt with separately.
17. I have set out at the commencement of this judgment with what might seem at first sight unnecessary detail, the chequered history of this case, but I have deemed it advisable to do so because this case does not stand alone, and is only illustrative of the trouble and expense that is caused to individuals and to the public by the present state of the statutory law and of judicial decisions, whether of the civil or revenue Courts, and of the orders of the Board of Revenue taken together.
18. I will consider first the question whether the present mortgage can be held to fall within the purview of Section 9. If it was open to me to hold that it does come within the purview of Section 9, I might feel compelled to so hold, notwithstanding the fact that the Board of Revenue has refused to allow action to be taken under Section 9.
19. There are two considerations which must be weighed in the circumstances of this case in determining the applicability of Section 9. The first of these, as we proceed through the section, is whether the present mortgage can be said to come within the phrase in Section 9:
a member of an agricultural tribe makes a mortgage of his land.
20. For the mortgagor it may be contended with some force that in this case no member of an agricultural tribe made the mortgage, that he, the mortgagor, was not a member of an agricultural tribe at the time he made the mortgage, and this view was taken by the Collector and the Board of Revenue. On the other hand it may be contended on behalf of the mortgagee that we should give effect to the intention of the Act and that we should consider the words 'a member of an agricultural tribe makes a mortgage' as including the case where a non-member of an agricultural tribe makes a mortgage and subsequently before the mortgage comes into Court, is declared to be a member of an agricultural tribe within the Act. It is not, however, necessary in view of the next consideration to answer this question as it appears to me that the second consideration is conclusive.
21. I proceed to state that second consideration. In Ram Sahai v. Debi Din : AIR1926All617 a Full Bench of this Court had to consider the applicability of Section 9 to a simple mortgage executed after the Act between members of the same tribe. Two learned Judges, Walsh, J., and Daniels, J., placed an interpretation on the next following words: 'in any manner or form not permitted by or under this Act' in accordance with which they held that a simple mortgage executed between members of the same tribe did not come within Section 9(1) of the Act. I myself was the third Judge in that Full Bench and I dissented from the view expressed by my brothers and would have held that such a mortgage was not excluded from Section 9 by the phrase 'in any manner or form not permitted by or under this Act,' but there can of course be no question but that I am bound to accept absolutely the decision of the majority. The mortgage with which we were there concerned was clearly not excluded from Section 9(1) by the words a member of an agriculturist tribe makes a mortgage' upon either the narrow or the wide interpretation. But as to the present case, even if the wider interpretation be put on those words and the mortgage passes that test, there remains the fact that the mortgage has been held to be a simple mortgage and being, ex hypothesi, made between members of an agricultural tribe, it is in these essentials exactly on the same footing as the mortgage with which we had to deal in the Full Bench and must be held to be not within Section 9. It therefore is immaterial to consider whether or not it is also excluded by the words 'a member of an agricultural tribe makes a mortgage.'
22. Before leaving this point I may note that counsel for the mortgagor respondent contended that by the order of remand of the District Judge to the trial Court, after he had held that striking out the condition from the mortgage did not destroy the mortgage altogether but reduced it to a simple mortgage, the question of the applicability of Section 9 to this particular mortgage at any rate was concluded there having been no appeal from that order of remand. The contention is apparently that the District Judge's direction, that the Munsif after determining the amount due should send the case to the Collector under Section 9, was a conclusive finding that Section 9 was applicable. The result of this would be that we could not discuss whether Section 9 was applicable, but would be bound to hold it applicable in the present case; and as the Board of Revenue has refused to hold it applicable the mortgagor would be successful in depriving the mortgagee of all remedy. I am not prepared to hold, however, that there was any issue raised at all before the learned District Judge as to whether Section 9 was applicable or not. The Munsif had applied the Act in so far that he had applied Section 10. The only question dealt with by the Judge was whether the result arrived at by the Munsif after applying Section 10 was correct or not, and the learned District Judge held that it was not. Incidentally he directed the learned Munsif to proceed under Section 9, but it was not a necessary part of his order, and though the mortgagee in his grounds of appeal to the District Judge had referred to the applicability of Section 10, there is nothing whatever to show that anybody at all, either the parties or the Judge, considered or discussed the issue whether the Act was applicable at all. I thought it desirable to mention this as the point was argued. I do not think that we are debarred for this reason from considering the applicability of Section 9 but I have already held that whatever may be my own opinion I am debarred by the decision of the majority of the Full Bench from applying Section 9.
23. I turn then to the second question whether, assuming the mortgage to be outside Section 9 altogether Section 16 can properly be applied to deprive the mortgagee of his right to sell. The scope of Section 16 was discussed in the Full Bench case, Ram Sahai v. Debi Din : AIR1926All617 to which I have just referred. Walsh, J, referred to Section 16 in a few lines which will be found at the bottom of p. 11 and the top of p. 12 of the report and Daniels, J., p. 13. I myself dealt with Section 16 on the hypothesis that the opinion of the majority of the Full Bench must result in holding that the mortgage in question did not come within Section 9, though it might be a view with which I was not personally in agreement and I gave my reasons for holding that, on the hypothesis that the mortgage did not come within Section 9, Section 16 should not be interpreted to deprive the mortgagee of his right to sell. The order of the Court, which will be found at p. 25, only concerned the scope of Section 9. The scope of Section 16 is still, therefore, a question open to us, I have heard no reason for holding the view which I expressed in the Full Bench case to be mistaken.
24. As to the classes of mortgage to which it is applicable Section 16 is clearly of retrospective effect, and if the present mortgage comes within the other provisions of the Act there can be no question but that Section 16 will apply at whatever date the mortgage was made before or after the commencement of the Act. But Section 16 must be interpreted, like any section in any Act, in the light of the rest of the Act. The question is, therefore, whether we ought to apply it to all mortgages or whether, upon a consideration of the scheme and intention of the Act as deduced from the Act itself, we are justified in limiting its application, whether retrospective or otherwise, to those mortgages only which are found to be within the general scope of that Act.
25. It is unnecessary for me to repeat the reasons which I have already recorded in my judgment in that Full Bench. As I appreciate the scheme of the Act and its intention as evidenced by the Act itself, we find first in the opening words of Section 6 what I may call the personal considerations with which the Act is concerned, and in the remainder of Section 6 and Section 9 we find the types of mortgage with which the Act is concerned, and then we have the provision in Section 16. It appears to me that the true interpretation of these sections is that the legislature set itself to consider:
Who are the types of persons and what are the types of mortgages which we desire to control, and what are the limitations that we will put on the rights of the mortgagee in those cases.
26. Having laid down the forms which those mortgages must take or the forms into which they must be transformed and having thus secured to the mortgagee the rights which he was to have, they proceeded to deprive the mortgagee by Section 16 of the right to bring to sale. I would state this in other words by a simple illustration. The legislature considered the transactions which it desired to control, let us say four types of mortgage, A, B, C and D and having determined what rights the mortgagee was to have in the cases of those mortgages, it proceeded to say:
Having given the mortgagee the remedies we think he should have, we will now (by Section 16) deprive him of his right to sell.
27. Whether the legislature, in omitting some mortgages from the provisions which it enacted giving in the case of certain mortgages other remedies in place of the right to sell, omitted them by design or accident, one thing at least absolutely certain is that it did not intend by Section 16 to deprive any mortgagee of his normal legal rights without giving him what it considered to be an equitable equivalent. It is impossible to conceive that Section 16 was intended to apply to cases where the legislature was not giving the mortgagee any other remedies. If, therefore, by intention or by accident a type of mortgage, E or F was omitted from the clauses giving the mortgagee other exceptional remedies I think we are wholly justified by the recognized canons of interpretation which I have discussed in my judgment in the Full Bench case in refusing to apply Section 16 and that we should be wrong in applying it. In his judgment in the Full Bench case Walsh, J., said:
it is a mortgage which is not within the mischief prohibited by Section 6. The policy of the Act is to keep out what may be called outsiders,
if, as by the decision of the Full Bench I am compelled to hold, the mortgage does not come within the mischief with which the Act deals I feel not merely inclined but compelled by the relevant canons of interpretation to hold that Section 16 is not applicable.
28. In conclusion I may be permitted to emphasise that there is no conflict between the two views which I hold. The guiding principle underlying both is the same that Section 16 can only be applied where there is a mischief which comes within the Act. If the mortgage comes within Sections 6 and 9 and is thereby declared to be within the mischief contemplated by the Act and Section 16 is not applicable. If the mortgage does not come within Sections 6 and 9, it has not been declared to be within the Act and the mischief contemplated by the Act and Section 16 is not applicable. The first condition is untenable according to the majority decision of the Full Bench; the second alone remains. Having arrived then at the conclusions that, in obedience to the decision of the majority of the Full Bench, I must hold that this mortgage, deprived as it at present stands of its foreclosure clause by the remand order of the District Judge purporting to be passed under Section 10 of the Act which order was allowed by the parties to become final, does not come within the Act and that Section 16 does not constitute any obstacle, it would remain to consider to what, if any, relief the decree-holder was entitled.
29. The remand order of the District Judge while it struck out the foreclosure clause, held that there was a subsisting mortgage and that could only mean a simple mortgage. On such a simple mortgage the Act not being applicable, the mortgagee would be entitled to a decree for sale, and, if the matter ended there, I would give him such a decree. I appreciate that as a result of such a sale the property might pass into the hands of an outsider, but the mortgage cannot be held to be outside the mischief of the Act so as to deprive the mortgagee of his remedy under Section 9 and to be inside the Act so as to deprive him of his normal remedy and if the mortgage must be held to be outside the Act in obedience to the majority in the Full Bench case it must be held outside the Act altogether.
30. But the matter does not end here. Exactly the same reasoning which applies to exclude Section 16 from operation to a mortgage not within the scope of the mischief aimed at by the Act applies to exclude the operation of Section 10.
31. The basis of the Full Bench majority decision was that 'the policy of the Act is to keep out, what may be called outsiders.' The giving effect to this mortgage by granting the mortgagee the foreclosure to which he was entitled under its terms would not have had the effect of admitting an outsider, the mortgage as it stood was outside the Act, and that being so, Section 10 was no more operative than Section 16 in the case of a simple mortgage.
32. It is true that it may be said that both parties rested under the remand order exercising the foreclosure clause, but that does not preclude us from exercising the powers reserved to us by Section 151 to do justice. I am aware that those powers should not be lightly exercised where a litigant had a remedy and did not avail himself of it, but the circumstances of this case and the manner in which the subject has been dealt with by the legislature and the Courts are such that it would be grossly unjust to penalise a litigant for his ignorance of what view the Courts might take and for not pursuing what might well have seemed to him and his advisers a fruitless course involving further and useless costs.
33. The result is that I would be prepared to give the mortgagee a decree for sale on the basis that his mortgage as it at present stands is a simple mortgage, or to restore the foreclosure clause and give him a decree for foreclosure.
34. In view of the fact that as I understand my learned brother is not prepared to take the view that the result of the District Judge's order of remand was as between the parties to establish a simple mortgage, and in view of the facts that the same reasoning applies to exclude the operation of both Sections 16 and 10 and that a decree for foreclosure will exclude the possibility of admitting an outsider, I am prepared to restore the foreclosure clause and give the appellant a decree for foreclosure if the amount due upon the mortgage is not paid before a date to be fixed.
35. This second appeal arises out of a suit brought by the plaintiff-appellant for foreclosure on a mortgage dated 27th June 1912. The mort gage was a mortgage by conditional sale, The plaintiff sued for foreclosure. Fourteen months after the mortgage was executed Government issued a notification under Section 4, Bundelkhand Land Alienation Act, U.P. 2 of 1903 making the tribe to which both parties to the mortgage belonged an agricultural tribe for the purposes of the Bundelkhand Land Alienation Act.
36. Section 10 of that Act is as follows:
In any mortgage of land made after the commencement of this Act any condition which is intended to operate by way of conditional sale shall be null and void.
37. The Munsif dismissed the suit on the ground that under this section the condition of conditional sale being eliminated there remained no mortgage. On appeal to the District Judge it was held by him that although the plaintiff could not sue on the mortgage as it stood by reason of Section 10, nevertheless he might get the terms of the mortgage revised by the Collector under Section 9(1), Alienation Act and remanded the case to the Munsif in order that the latter might proceed under Section 9(3), that is to say, might refer the case for action by the Collector under Section 9(1). The provisions of Section 9 of the Act are as follows:
(1) If after the commencement of this Act a member of an agricultural tribe makes a mortgage of his land in any manner or form not permitted by or under this Act, the Collector shall have authority to revise and alter the terms of the mortgage so as to bring it into accordance with such form of mortgage permitted by or under this Act as the mortgagee appears to him to be equitably entitled to claim.
(2) If a member of an agricultural tribe has before the commencement of this Act made a mortgage of his land in which there is a condition intended to operate by way of conditional sale the Collector shall have authority to put the mortgagee to his election whether he will agree to the said condition being struck out, or to accept, in lieu of the said mortgage, a mortgage in form (a) as provided by Section 6 which shall be made for such period not exceeding the period permitted by the said section, and for such sum of money as the Collector considers to be equitable.
(3) If a suit is instituted in any civil Court on a mortgage to which Sub-section (1) applies, or if a suit for the enforcement of a condition intended to operate by way of conditional sale in a mortgage made before the commencement of this Act, is instituted or is pending at the commencement of the Act, in any civil Court, against a member of an agricultural tribe or if any appeal in any such suit is instituted, or is pending at the commencement of this Act in any civil Court other than the High Court, the Court shall if it finds that the mortgage is enforceable or that the mortgagee is entitled to a decree absolute for foreclosure, refer the case to the Collector with a view to the exercise of the power conferred by sub-Ss. (1) and (2) respectively.
38. Accordingly the Munsif referred the case to the Collector, but the Collector refused to take any action under Section 9 on the ground that it did not apply, the mortgagor not being a member of an agricultural tribe at the date when the mortgage was made. This view was upheld by the Board of Revenue. The appellant then came back to the Munsif who proceeded to grant a decree for sale, I cannot discover what justification the Munsif held to exist for the passing of such an order.
(a) On appeal to the District Judge it was objected that the passing of such a decree for sale on a mortgage by conditional sale was contrary to Section 67(a), T.P. Act.
(b) that Section 16(1), Alienation Act, forbade the sale of any land belonging to a member of an agricultural tribe.
39. That section is as follows:
No land belonging to a member of an agricultural tribe shall be sold in execution of any decree or order of any civil or revenue Court, made after the commencement of the Act.
40. The District Judge did not consider the first plea, but according to the second plea held that Section 16(1) prevented a decree for sale being operative and therefore no such decree should have been granted.
41. In this appeal the position taken up is that the District Judge by his order of remand which was not appealed against, conclusively established that the plaintiff must get a decree on the basis of his mortgage. As Section (16)(1) prevented him getting a foreclosure decree and as the refusal of the Collector to proceed under Section 9 prevented him getting his mortgage altered and revised he must be deemed to have a remedy by sale of the mortgaged property.
42. In reply it is urged:
(a) that the Collector was right in holding that Section 9 would not apply on the ground that section would not apply to a mortgagor who was made a member of an agricultural tribe at a date subsequent to the mortgage, and that in any case the Collector's order, upheld as it was by the Board is final and cannot be interfered with by this Court;
(b) that a decree for sale cannot be passed, because in the first place no such decree can be passed on a mortgage by conditional sale under Section 67(a), T.P. Act, and secondly if it was passed, it would be inoperative by reason of Section 16(1). Consequently the plaintiff has no remedy. His claim for foreclosure is barred by Section 10, his claim for revision of the mortgage by the Collector is barred by the Collector's order and his claim for decree for sale is barred by Section 16(1) of the Act, and Section 67(a), T.P. Act.
43. I hold that the Collector's order was wrong even though upheld by the Board. The Act clearly was designed to have retrospective effect. Reference may be made in particular to Section 9(2) which allows the Collector to interfere with mortgages executed before the Act came into force. This being so we must deem that an order under Section 4 of the Act allowing the Local Government to determine what persons are to be deemed to be agriculturists must also be deemed to have retrospective effect. Under Section 21, U.P. General Clauses Act 1 of 1904, the Local Government could notify additional tribes as agricultural tribes from time to time.
44. At the same time it is pleaded in this case that even if the Collector's refusal to apply Section 9 was incorrect if based on the ground that the Government notification did not have retrospective effect it was correct on another ground, namely that both the parties to this mortgage were members of the same agricultural tribe, and it has been ruled by a Full Bench in this Court, namely Ram Sahai v. Debi Din : AIR1926All617 , that Section 9 would not apply to a case of a mortgage by one member of an agricultural tribe in favour of another. I may remark that in any case this Court cannot disturb the Collector's finding as Section 22, Alienation Act, deprives this Court of jurisdiction in any matter which a Revenue Officer is empowered by this Act to dispose of. This must mean that if a Collector decides that he has no jurisdiction to act under Section 9(1) and revise a mortgage, this Court cannot question his decision.
45. I also hold it beyond doubt that the plaintiff cannot get a decree for sale. Section 67(a) clearly bars such a decree on a mortgage like this. Nor is there anything in the District Judge's remand order (assuming that we cannot go behind it as it was not appealed against) that can be interpreted to mean that the District Judge held the mortgage to be enforceable only as a simple mortgage decree. What the District Judge in effect said was that although the condition for foreclosure could not operate there was still left a mortgage that could be referred to the Collector. It is not, therefore, necessary to consider whether Section 16(1) would prevent the plaintiff getting a decree for sale.
46. The only question then is whether the plaintiff can get a decree for foreclosure. Apart from the Full Bench decision in Ram Sahai v. Debi Din : AIR1926All617 , I should hold that he could not, and that his only remedy was revision of the mortgage by the Collector. But that decision by which I am bound (though I agree with the dissentient judgment in that case of Boys, J., and hold it was wrongly decided) takes away that remedy. It held that Section 9 did not refer to a mortgage executed by one agriculturist in favour of another. As it is clear that the legislature could not have intended to deprive a mortgage between two agriculturists of all effect, the logical consequence is that not only Section 9 but no section of the Act applies to such a mortgage. Therefore we must hold Section 10 does not apply.
47. It is true that the District Judge's remand order held it to apply. That order was not appealed from and under Section 105(2) the appellant cannot now question its correctness. But I hold that this Court can under its inherent powers, to prevent an obvious injustice, refuse to be bound by a finding in a remand order of a subordinate Court, even though neither party can question it. It would lead to an impossible situation if by Section 105(2), Civil P.C., a High Court were in an appeal from a decree to be debarred from taking on a law point a different view from that taken by the District Judge in an interlocutory order. Section 151 is wide enough to prevent such an impasse. I would decree the suit with costs throughout and give the plaintiff a decree for foreclosure in the ordinary form, six months being allowed for paying the mortgage money.