1. This second appeal arises out of a proceeding under the Encumbered Estates Act. An application under Section 4 of that Act was made by the respondents in this Court and it was in due course sent to the Special Judge, Orai. The respondents stated in their application the various debts to which they were liable and one of those debts was a usufructuary mortgage deed, dated 22nd February 1910, for Rs. 3500 which had been executed by Girdhari Lal, the maternal grandfather of the first two respondents, Badri Prasad and Phuljari Lal. In their written statement under Section 8 the applicants gave details of certain zamindari properties belonging to them and one of these properties was zamindari property comprising 124.16 acres, bearing a jama of Rs. 273-12-0 with Rs. 27-6-0, thok Shiva Ram, mauza Hardoi. It is with this property alone that we are concerned in the present appeal. With regard to this property a claim was lodged by the appellants, Seth Deokinandan and Mt. Phul Kunwar. They alleged that this property had been purchased by their 'predecessor-in-interest Seth Bhoj Raj, and belonged entirely to them. They denied that the applicants had any right, title or interest left in this property. The Courts below have decided that Seth Bhoj Raj did not acquire any title to this property and hence the objection or the claim made by the appellants has been dismissed. They have now come up in second appeal to this Court.
2. In order to understand the case of the parties it is necessary to set out a few facts regarding which there is no contest. The property in question originally belonged to one Ghanshiam Gir Goshain who executed a mortgage in favour of Seth Bhoj Raj, the predecessor-in-interest of the appellants, in the year 1896. In the year 1897, one Ganga Bai obtained a simple money decree against Ghanshiam Gir Goshain and in execution of that decree the property in question was put up for sale and was purchased by Ganga Bai herself subject to the previous mortgage of 1896. In the year 1903, Act 2 of 1903 called the Bundelkhand Land Alienation Act was passed. That Act prevented the permanent alienation of any land by an agriculturist except in favour of an agriculturist of the same tribe or of an agriculturist living in the same district in which the property was situated. The Act provided that no transfer by an agriculturist in favour of a non-agriculturist could be effected without the sanction of the Collector. It is admitted that Ganga Bai was an agriculturist as contemplated by Act 2 of 1903. In the year 1908 She transferred the property in suit under a sale deed to one Bhawani Prasad, who is also admitted to have been an agriculturist under Act 2 of 1903. On behalf of the appellants it was alleged in the Courts below, and there is also a finding to that effect in their favour arrived at by both the Courts, that this sale was only ostensibly in favour of Bhawani Prasad but the real purchaser was Seth Bhoj Raj. It is admitted that Seth Bhoj Raj was a non-agriculturist and under Act 2 of 1903 he could not have taken a sale from an agriculturist without the sanction of the Collector. Indeed, the Courts below have found that the sale in favour of Bhawani Prasad was merely a device on the part of Seth Bhoj Raj to circumvent the law. After Bhawani Prasad's death, his widow again transferred the property in question along with certain other properties to Girdhari Lal, the maternal grandfather of the first two respondents, Badri Prasad and Phuljari Lal. This transfer was made in the year 1910. It is again admitted that Girdhari Lal was an agriculturist within the meaning of Act 2 of 1903, so that the sale by Bhawani Prasad's widow in his favour was a valid sale under that Act. It is, however, again alleged on behalf of the appellants that this sale was a benami transaction, the real purchaser of the property being again Seth Bhoj Raj. On this point also the finding of both the Courts below is that this was another attempt by Seth Bhoj Raj to get round the law and to evade the provisions of Act 2 of 1903. Girdhari Lal executed a usufructuary mortgage deed in respect of the property in question in favour of Seth Bhoj Raj on 22nd February 1910. This mortgage, as already stated, was shown by the applicants in their application under Section 1, Encumbered Estates Act, as one of the debts, though it was stated at the same time that the mortgage had been paid off and yet the appellants, who are the representatives of Bhoj Raj, were still in possession and occupation of the property covered by the mortgage. Upon a claim being lodged by the appellants with regard to this property that they were the real owners thereof, an issue arose for decision between them and the applicants as to who was entitled to the proprietary rights in this property. This issue has been decided in favour of the applicants by both the Courts below and the only question for consideration in this second appeal is whether there is any reason to interfere with the decree of the Courts below on that point.
3. The substance of the argument on behalf of the appellants is that the original transaction of mortgage in the year 1896 was a perfectly valid transaction between two non-agriculturists and hence Seth Bhoj Raj was entitled to foreclose the property in question even in the hands of an agriculturist' after the passing of Act 2 of 1903, inasmuch as the mortgage was one by conditional sale. It is contended that if Bhoj Raj was entitled to foreclose the mortgage, there was no reason why he should not have acquired a title to the property covered by the mortgage by means of a private sale. It is thus argued that upon the admitted facts and upon the findings of the Courts below Seth Bhoj Raj was the real purchaser and he acquired a good title to the property in suit. We are unable to accept this argument in view of the clear provisions of Section 3 of Act 2 of 1903. Both the sales, namely, one by Ganga Bai in favour of Bhawani Prasad and the other by the widow of Bhawani in favour of Girdhari Lal, were ostensibly good sales and in each case it is claimed on behalf of the appellants that the real title to the property in question passed to Seth Bhoj Raj. Upon the finding of the Courts below that on both these occasions Seth Bhoj Raj made an attempt to get round the provisions of Act 2 of 1903, it cannot but be held that he could not acquire a legal or valid title to the property in suit. This point is supported by a Bench decision of this Court in Bhagwati Prasad Singh v. Hari Har Prasad Singh : AIR1928All511 . It was clearly held in that case that 'if the ostensible alienee is a non-agriculturist, no title passes to him without the sanction of the Collector' and further that:
If the ostensible alienee is an agriculturist but he holds the property for a third party who is a non-agriculturist no resultant trust can accrue in favour of the beneficial owner in defiance of the provisions of Section 3, Clause (2) of the Act.
We find ourselves in agreement with that, view which appears to be based upon the principle that no party can be allowed to circumvent or defeat the provisions of the law. The result, therefore, was that on each occasion Seth Bhoj Raj failed to acquire any legal title to the property in question and it must be deemed that the title to the property remained on the first occasion with Bhawani Prasad and on the second occasion with Girdhari Lal, the predecessor-in-interest of the first two respondents, Badri Prasad and Phuljari Lal. Section 3 of Act 2 of 1903 makes no exception of any kind in favour of a mortgagee who had obtained his mortgage entitling him to foreclose the property prior to the passing of the Act. It cannot, therefore, be argued that a mortgagee entitled to foreclose the property covered by his mortgage was not hit by the provisions of Section 3 of Act 2 of 1903. The argument advanced on behalf of the appellants appears to be based upon the supposition that the right which a mortgagee prior to the passing of Act 2 of 1903 had to foreclose the property covered by his mortgage subsisted even after the passing of Act 2 of 1903. This argument is, in our judgment, fallacious if the provisions of Section 9, Sub-section (3) of Act 2 of 1903 are kept in mind. Sub-section (3) of Section 9 provides that:
If 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....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-sections (1) and (2) respectively.
The terms of this sub-section are wide enough to include the case of a mortgagee prior to the passing of the Act who was entitled to foreclose the property covered by his mortgage. If after the passing of the Act he had to bring a suit against an agriculturist, he could not obtain the relief of foreclosure even though he was found to be entitled to it. In the case before us if Seth Bhoj Raj had brought a suit on the basis of his mortgage sometime after the passing of Act 2 of 1903, he would have had to bring it against the transferee of the property from his mortgagor, that is, either Ganga Bai or Bhawani Prasad or Girdhari Lal and in either case it would have been a suit against a member of an agricultural tribe and, therefore, having regard to the provisions of Sub-section (3) of Section 9, it is clear that he would not have been able to obtain a decree for foreclosure, even though the Court found that his mortgage was enforceable and that he was entitled to a decree absolute for foreclosure. It is, therefore, wrong to suppose that the rights of a mortgagee prior to Act 2 of 1903, who was entitled to foreclosure under his mortgage, were not affected by the passing of the Act and his remedy under the general law remained intact. It necessarily follows, therefore, that there is no force in the argument that the mortgagee being a person entitled to foreclose the property there is no harm if he acquires title to the same property by means of a private treaty or sale. We are further of the opinion that even if the position of a mortgagee prior to Act 2 of 1903 had been left undisturbed by the Act, still it would not have been a good argument to contend that because the mortgagee would have obtained a decree for foreclosure from a competent Court he was also entitled to obtain the property by means of a private sale, even though that sale offended against the provisions of Section 3 of Act 2 of 1903. The result, therefore, is that we see no reason to interfere and dismiss this appeal with costs.