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Giridhari Mohanty Vs. Abdul Khan and ors. - Court Judgment

LegalCrystal Citation
Decided On
Case NumberA.F.A.D. No. 255 of 1945
Reported inAIR1951Ori41
ActsTenancy Law; Orissa Tenancy Act, 1913 - Sections 74 and 212; Orissa Tenancy (Amendment) Act, 1938 - Sections 31; Transfer of Property Act, 1882 - Sections 52 and 100
AppellantGiridhari Mohanty
RespondentAbdul Khan and ors.
Appellant AdvocateB.K. Pal, Adv.
Respondent AdvocateS.P. Mohapatra, Adv.
DispositionAppeal dismissed
Cases ReferredBanku Behari v. Naraindas Dutt
.....that a holder of a charge is not entitled to enforce it even though personal liability may be involved in it, against any property of the charge maker before exhausting his remedies against the charge property, this is the rule which applies to the available remedies of a mortgagee......of his argument is that rent being a first charge on the holding, his purchase in execution of the rent decree should prevail over the private purchase of the plaintiff who must be held bound by the execution proceeding and by the order passed in the said proceeding resulting in the sale of the disputed holding. he supplements his contention by invoking the aid of doctrine of lis pandens as enacted in schedule 2, t. p. act. according to him, notwithstanding the plaintiff's purchase during the pendency of the execution proceedings, the holding passed to him under the provisions of schedule 4 read with schedule 12, orissa tenancy act.3. this contention, with equal strenuousness is repelled by mr. s. p. mohapatra, counsel for the respondent, who contends that the doctrine of lis pendens is.....

Ray, C.J.

1. It is a defendant 1's appeal in a suit for declaration of title and recovery of possession of the disputed property which constitutes an occupancy holding in Touzi No. 3019 in the district of Cuttack. Defendant 5 was the original owner of the occupancy holding. He had usufructorily mortgaged the same to defendent 2 and father of defendant 3 who were recorded mortgagees. Ultimately, defendants 6 to 9 purchased the holding in execution of the mortgage decree before 1938. An ex parte decree in a rent suit was obtained against the recorded tenants on 27-8-1941. The decree was put into execution on 3-1-1941 in which an order to issue attachment against the holding was passed on 4-4-1941. The attachment was effected on 30-4- 1941. Before effectuation of the attachment and after the commencement of the execution, that is, on 25-4-1941, the plaintiff purchased the holding and it can be premised without any controversy that by such purchase he acquired the right of occupancy and all other rights appurtenant thereto under the provisions of Schedule 0A, Orissa Tenancy Act. The section provides that such transfers (of occupancy holding of a ryot, or a portion of share) shall carry with it the occupancy right in the holding and all the rights appurtenant thereto. The transfer, referred to in Schedule 0A, has to be effected notwithstanding the provisions of the T. P. Act in the manner provided in Schedule 1. The latter section provides that the registration of the transfer deed made compulsory in case of sales of occupancy holdings of any valuation must be accompanied with a notice to the landlord. So in the case of auction sales. The object behind this specific provision as to the mode of transfer being to make it binding on the landlord for all purposes and to all the extent for which such binding character is needed under the provisions of the Orissa Tenancy Act. It has been found by the Courts below and has not been controverted at the Bar that the requisite notice had been given to the landlord on 9-5-1911. The auction sale was held In pursuance of the execution case already referred to long after this notice. The auction-purchaser, namely, the appellant took possession through Court and thereby dispossessed the plaintiff. Hence this suit. The suit was decreed by both the Courts below. Hence this appeal by defendant 1 who was the only contesting defendant.

2. Mr. Pal, appearing for the appellant, raised certain very interesting points of law. The pith and substance of his argument is that rent being a first charge on the holding, his purchase in execution of the rent decree should prevail over the private purchase of the plaintiff who must be held bound by the execution proceeding and by the order passed in the said proceeding resulting in the sale of the disputed holding. He supplements his contention by invoking the aid of doctrine of lis pandens as enacted in Schedule 2, T. P. Act. According to him, notwithstanding the plaintiff's purchase during the pendency of the execution proceedings, the holding passed to him under the provisions of Schedule 4 read with Schedule 12, Orissa Tenancy Act.

3. This contention, with equal strenuousness is repelled by Mr. S. P. Mohapatra, counsel for the respondent, who contends that the doctrine of lis pendens is not attracted to the facts of the present case as neither the suit for recovery of rent nor the execution proceedings arising therefrom are such suits or proceedings as are contemplated in Schedule 2, T. P. Act, as no right to immovable property was at any moment in dispute as between the parties thereto. He, however, contends that in order to pass the occupancy holding at the sale, the conditions necessary under the provisions of 3. 212, Orissa Tenancy Act, are that the relationship of landlord and tenant shall continue till the date of sale which did not happen in this case as the holding had been effectively sold with notice to the landlord before the relevant date. At the date of sale, the judgment-debtor in the suit was no longer the ryot and was not representing the holding. The position of law is too well settled to be controverted that at the time of sale in execution of a decree for recovery of' rent, the entire landlord's interest and also the) ryoti interest should be represented respectively by the decree-holder as well as the judgmentdebtor. Anyone of these parties having ceased to have either the landlord's interest or the ryoti interest, as the case may be, the execution and the sale thereunder should lose the character of being an execution of a rent decree as such with the result that the sale will not pass the holding or the tenancy, as the case may be.

4. The only contention that I have to consider in this case is whether the landlord could sell the holding without impleading the transferee. The transferee is one in this particular case who became the ryot of the holding as against the landlord. His purchase was, no doubt, subject to the charge of arrears of rent; till then accruing due, whether decreed for or not sued upon. Under the circumstances, to allow him to sell the holding without bringing him upon the record as a judgment-debtor would amount to encourage the sale of one's property at a court's sale without bringing him unto the proceedings before the Court. As a principle, it is fundamental that nobody's property will be sold except in a proceeding to which he is a party. The case might have been different if this purchase was either not binding upon the landlord or was not within his knowledge or notice. That the object of this notice to the landlord in effecting the transfer is to make it binding against a landlord so that he cannot have the privilege of selling the holding by way of enforcement of a decree without making the transferee a party for arrears of rent is clear from certain provisions of the Act in addition to the one providing for compulsory service of notice. Much assistance is deprived from Expl. (2) of Sub-section (2) of Schedule 1-B, 3I-B is the section which made all transfers of pre-amendment days of the Tenancy Act valid and binding against a landlord. As this measure was given, as it was, a retrospective effect of divesting the landlords of certain vested rights that have already accrued to them, the Legistature thought it fit to compensate them by enabling them to sue for recovery of such registration fees as were lawfully payable by the transferees. Then the Legislature was confronted with the position whether this, by itself, will be sufficient protection to the transferees. They realised, protection from rent execution sales was needed too. In order to effectuate it, Sub-section (2) was enacted which is to the effect that the holding or portion or share of an occupancy ryot shall not be liable to be sold in satisfaction of a decree for arrears to rent without making the said transferee a party to the proceedings in execution of a decree provided that the transferee has given notice of transfer by registered post to the landlord. There is no doubt this sub-section applies to the cases of prior transferees and it is so indicated by the words 'the said transferee which mean 'the transferee referred to in the earlier part of the section, namely, sub-s, (l)'. The object of the sub-section, however, was completely fulfilled by making it incumbent upon the transferee to give notice of the transfer by registered post. The object of the Legislature, however, is clear that after a transfer is made valid and binding against a landlord, ha shall not be permitted to sell away the holding in the absence and behind the back of the said transferees provided ha had notice of the transfers. Though Sub-section (2) does not in terns apply to subsequent transfers, there is no doubt as to the intention behind the explanation attached to it. The explanation reads :

'Notwithstanding anything contained in this Act or in the Code of Civil Procedure, in the ease of a transfer of a holding or a portion or a share thereof, whether before or after the decree, the transferee may be brought on record in the proceedings in execution either in substitution of or in addition to the judgment-debtor, and such transferee shall, when so added or substituted, be treated as a judgment-debtor for all purposes of the said proceedings in execution of the decree.'

5. I say this explanation enures to the benefits of all transferees either prior to or later than Orissa Tenancy Amendment Act, 1938, on account of the occurrence of the following words 'notwithstanding anything contained in this Act.' If the explanation was intended to be confined in its operation to the ease of subsequent transferees only, it could have been said 'notwithstanding anything contained in this section.' At any rate, this explanation enables the landlord to implead the transferees at any stage of the execution case, even at the time of the sale or thereafter before confirmation, and to treat them as judgment-debtors for all purposes of the proceedings. This explanation shall be understood in the context of the previous tenancy laws according to which none but the recorded tenant would be allowed to have the privilege of paying up the decretal amount either in course of execution proceedings or after holding of the sale and before its confirmation. No landlord would be allowed to implead such a transferee unless ha be deemed to consent to the transfer. The present change was necessary to keep pace with the changes with regard to the newly conferred substantive rights of an occupancy ryot to sell his holding in a manner and with the effect of having a binding force against the landlord. Under the circumstances, if a particular landlord after knowledge of the transfer and after knowing that the occupancy right has accrued to the transferee to the exclusion of the till-then-recorded-tenant and the judgment-debtor, it would amount to violence to the language of the law and the principles behind it to hold that he would still be allowed to effectively pass the holding by the sale in execution proceedings conducted in the absence of the transferee to the auction-purchaser at such sale. Mr. Pal also agrees that in case this transfer had taken place either during the pendency of the rent suit or after the decree but before the execution proceedings started, the holding could not have been proceeded against in the absence of the transferee, His contention is that the application of the doctrine of lis pendens makes the sale binding against the transferee even without his being impleaded. In order to attract the provisions of Schedule 2, T. P. Act, the proceedings or suit concerned must be one in which any right to immovable property is directly and specifically in question. It is not contended that such a right is in question in the suit for recovery of rent even though rent is a first charge according to Schedule 4 of the Act. It is well settled in the case of A. H. Forbes v. Maharaj Bahadur Singh, 411. A. 91: (A. I. R. (1) 1914 P. C. 111) and Krishnapada. Chatterji v. Manadasundari, 59 Cal. 1202 : (A. I. R. (19) 1932 Cal. 321 F.B.), that in case the landlord loses the landlord's right in respect of the holding before it is put to sell in execution of a rent decree, the execution of the decree as such loses the character of its enforcement as a rent decree with the consequence that the holding or tenure, as the case may be, does not pass. The Full Bench decision of the Calcutta High Court over rules certain previous decisions of that Court reported in Kshetrapal Singh v. Kritarthamayee Dassi, 33 Cal. 566 : (3 C. L. J. 470 F. B.), Manindranath v. Ashutosh, 21 C. W. N. 1132: (A. I. R. (5) 1918 Cal. 521) and Syedunnessa Khatun v. Amiruddin, 45 Cal. 294, (A. I. R. (4) 1917 Cal. 2). Their Lordships of the Pull Bench fully approved the doctrine laid down in the case of Prafulla Krishna v. Nosibannessa, 24 C. L. J. 331 at p. 331 : (A. I. R. (4) 1917 Cal. 308 S. B.). Similarly, it has been held-in the case of Smt. Binapani Debi v. Banku Behari Mandal, A. I. R. (30) 1943 Cal. 475 : (209 I. C. 237) that if the tenant loses the interest before execution of the rent decree, the execution sale will not be competent so as to convey the holding to the purchaser. Mr. Pal, therefore, contends that the case will be different if the holding is dealt with by way of transfer during the pendency of the execution proceedings, when according to him it becomes a proceeding in which 'any right to immovable properties directly and specifically in question.' This leads us to consider whether the charge declared in Schedule 4 is a charge within the meaning of Schedule 00 so as to attract all the provisions of the Act in respect thereto. If the matter was res integra, I could hold otherwise, but it is covered by abundance of authorties that a suit for enforcement of a charge is a suit relating to immovable property for the purpose of Schedule 2, T. P. Act. The authorities in this respect are Sudhamoyee Singh v. Jessore Loan Co., Ltd. (A. I. R. (32) 1945 Cal. 322 : (49 C.W.N. 68) ), Setharamanuja Charulu v. Venkatasubbama, 54 Mad. 132 : (A.I.R. (17) 1930 Mad. 824), and Aravamudu Ayyangar v. Abhiramvalli Ayah, 66 M. L. J. 566 : (A. I. R. (21) 1934 Mad. 353). But there is a clear distinction between the charge as declared in Schedule 4, Orissa Tenancy Act and the charge within the meaning of Schedule 00. According to the latter sections a charge is one either created by act of parties or by operation of law. The section provides;

'Where immovable property of one person is by act of parties or by operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property and all the provisions hereinbefore contained which apply to simple mortgage shall, so far as may be, apply to such charge.'

6. Truly speaking, a charge created by operation of law would be a charge within the meaning of the section if the law that creates the charge does not provide for any limitations in relation thereto. Charge, to start with, even if it is a charge with all necessary incidents thereof does not create an interest in immovable property. In this connexion I would quote a passage from Mulla's commentary on Schedule 00, T. P. Act:

'In a charge there is no transfer of an interest in the property but the creation of a right of payment out of property specified. The broad distinction between a mortgage and a charge is this: that whereas a charge only gives right to payment out of a particular fund or particular property without transferring that fund or property, a mortgage is in essence a transfer of an. interest in specific immovable property. A mortgage is a jus in tern, a charge a jus ad fern and the practical distinction is that a mortgage is good against subsequent transferees and a charge is only good against subsequent transferees with notice.'

7. In this view of the matter, it has to be seen whether the charge as declared in the Tenancy Act is necessarily and without any choice left to the landlord made payable out of the charge property, namely, occupancy holding. The suit for recovery of rent is commenced as a suit of recovery of money due as arrears of rent in respect of a holding from the tenant holding it. There is not a word in the suit about either declaration or enforcement of the statutory charge. Under the provisions of the Tenancy Act, such a decree is enforceable against any properties of the judgment-debtor other than the holding. In that view, it is difficult to say that execution of a decree for recovery of rent is of necessity and of essence a proceeding relating to any right to immovable property. As in the case of landlord's losing his interest either after the decree or the execution proceeding the decree loses the character of being a decree for enforcement of the charge or a proceeding in which some right to immovable property is to be proceeded against so in the case of the tenant losing his interest as such the decree or the execution proceeding is devested of its character as such. Under the circumstances, it cannot be always said that a proceeding set on foot for execution of a decree is necessarily a proceeding in which any right to immovable property is specifically and directly in question. There Is a very valuable guide which can be obtained from a decision of Stone C. J. in the case of Sitaram Sheolal v. Krishnarao Balaji, (A. I. R. (27) 1940 Nag. 156: (I. L R. (194l) Nag. 607). This decision relates to interpretation of a charge as provided in Schedule (1) C. P. Tenancy Act. The language of the Act which came up for consideration is as follows:

'Notwithstanding anything contained in Schedule 00, T. P. Act, and Order 34, Schedule 1, C. P. C. 1908, such holding shall be liable for the satisfaction of such charge in execution of a decree for rent against the tenant, whether such decree orders such sale or not.'

8. How far it is a charge within the meaning of Schedule 00, T. P. Act, is answered by his Lordship in the following passage:

'The extent to which the ordinary law is set aside is therefore clearly indicated, and, in our opinion, the departure cannot be carried further by implication. The object of Schedule (1) is to give the landlord precedence for his rent. That object is completely attained the moment the holding is sold in the manner specified in the Section, In our opinion, the 'first charge' enures no further than that. Section 9 does not confer rights of subrogation,'

9. To give effect to Mr. Pal's contention would amount to give such incidents of a charge to the charge under consideration under the ordinary law as are either set aside or departed from by the very law which declares it to be a charge. Assuming for a moment that Mr. Pal is right in his contention that as soon as execution starts with a prayer to put the holding to sale, it commences as a proceeding in which some specific right to immovable property is specifically and directly in question as between the decree-holder and the judgment-debtor, the provision for effecting attachment in order to enable the decree-holder (landlord) to proceed against an occupancy holding would be completely nugatory: but it is difficult to explain the position on any other hypothesis than that the decree is considered to be a money decree and enforceable only as such until the occupancy holding is attached in the manner provided in the Civil Procedure Code. Such is not the case under the ordinary law relating to enforcement of charge decrees. It appears from Schedule 00 that a charge under the ordinary law is to be enforced in the manner provided for enforcement of a simple mortgage. The section says

'and all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be apply to such charge (which includes a charge created by acts of parties as well as by operation of law),'

One of these provisions is that a holder of a charge is not entitled to enforce it even though personal liability may be involved in it, against any property of the charge maker before exhausting his remedies against the charge property, This is the rule which applies to the available remedies of a mortgagee. That it is so will appear from the decision of their Lordships of the Privy Council in the case Banku Behari v. Naraindas Dutt, 54 I. A. 129: (A.I.R. (14) 1927 P. C. 73). In this connexion, reference may be made to Order 34, Rule 15, Civil P. C. But unlike charge-holder under ordinary law, the landlord of a tenancy is not confined to first exhausting his remedies against a holding and then only to proceed against the judgment-debtor's other properties. He can exhaust his other remedies on the other hand before he considers it necessary to fall back upon the holding as a security for repayment of the decretal debt in a rent suit. Under the circumstances, all the incidental rights and liabilities are not attracted to a charge under Schedule 4, Orissa Tenancy Act. It is difficult, therefore, to hold that the execution proceeding is a proceeding within the purview of Section 52, T. P. Act, in which any right to immovable properties is in dispute between the parties until a valid attachment is effected. Besides, any transfer by one party during Us which is otherwise binding on the other party of the suit or proceeding, cannot be hit by the mischief of the section. Suppose, both the parties agree in making a transfer, the transfer must stand unaffected by the result of the suit or proceeding. So is a transfer by an occupancy tenant to which his landlord's consent is implicit by virtue of the statute as soon as its conditions for giving notice to him are fulfilled. In my view, therefore, the doctrine of lis pendens does not help the appellant: the only result is that the holding has not passed to the auction-purchaser, namely, the appellant, and in fact, he has purchased the right, title and interest of the judgment-debtor who had lost all rights in the holding by virtue of his transfer in favour of the plaintiff.

10. Then the question arises what other remedy is the appellant entitled to There is no doubt that the appellant is a bona fide purchaser for value. He had paid the money for the arrears of rent decree to the landlord. There is no doubt nor is it controverted at the Bar that the transferee (plaintiff) purchased the holding subject to his liability to pay the arrears of rent then due in respect of the holding. This includes his liability to pay the decretal amount. Mr. Mohapatra, relying upon the Nagpur case, already cited, argues that the idea of subrogation being foreign to the rent charge, the auction-purchaser cannot be said to have subrogated to the right of a charge holder and of calling upon him to pay. This may be the technical aspect of the law, put under the general principles which, so far as they apply to contacts between the parties, have been enacted in Schedule 0, Contract Act, would apply to cases not directly governed by contract but by considerations which amount to those in the nature of contracts. Strictly giving effect to the technical rules, we could direct; the sale to be set aside and relegate the landlord to the position of an execution creditor reviving the execution case and giving him leave to proceed against the transferee: but that would be multiplying unnecessary litigations, the ultimate result of which will be that the auction-purchaser would be refunded the money paid by him as purchase money and the plaintiff would be liable to pay up the decretal dues. In the circumstances, the learned counsel of both sides have agreed that the plaintiff shall be pat on terms in respect of his decrees which he has secured of having his title declared and having restored to him the possession. Accordingly, we put him on terms that he shall re-imburse defendant 1 by paying back the amount for which he had purchased the property at the court sale. I do not fix any time for this payment as it is a condition affixed to his execution of the decree for possession, Under the circumstances of the case, each party should bear his costs throughout. In view of the fact that the plaintiff should recover possession on making payments, the decree for mesne profits, as passed by the Courts below, must stand vacated. In the result the appeal is dismissed without costs.

Panigrahi, J.

11. I agree.

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