(1) Ram Lal in this writ petition under Articles 226 and 227 of the Constitution if India has prayed that the orders passed by respondents Nos. 1 to 4 in regard to the payment of Rupees 3, 744, 77 out of the amount of compensation due to him under the provisions of the Displaced Persons (Compensation and Rehabilitation ) Act. to Dial Dass respondent No. 6 may be quashed.
(2) The petitioner is a displaced person from West Pakistan where he is said to have abandoned considerable urban immovable property for which his claims (annexure 'A'. A-1 and A-2 ) to the tune of Rs. 35,472.00 had been verified. Three properties out of those stood already mortgaged with Dial Dass respondent No. 6. The amount of claim verified for these was Rs. 19,570.00. Respondent No. 6 filed an application under S. 10 of the Displaced Persons (Debts Adjustment ) Act before the Tribunal. Karnal. The parties compromised their dispute as a result of which his claim for Rs. 14,500.00 was accepted and he elected under S. 16(2) of the said Act to retain his security in the form of mortgage (copies of the Judgment and decree of the Tribunal. Annexures B and B-1).
The petitioner before the claim of mortgagee-respondent No. 6 could be paid applied for a loan of Rs. 8,000.00 under the House Building loan scheme from the Government which was sanctioned. This was payable in three equal instalments out of which first two instalments totalling Rupees 5,332, 00 had been received by him. He then approached the Settlement Officer for Payment of the compensation on the basis of his verified claims (annexures A. A-1 and A-2). The Settlement Officer assessed the compensation at Rs. 9,161,00 out of which Rs. 125.00 arrears of rent and Rs. 8,000.00 house building loan were deducted. The balance Rs. 1,036.00 was directed to be paid to the mortgagee-respondent No. 6 (annexure C). The petitioner under an impression that Rs. 1,036.00 were not payable to the mortgagee felt aggrieved from this order and filed an appeal before the Assistant Settlement Commissioner (Appeals) respondent No. 3 which stood dismissed on 9th March. 1959 (Annexure D.).
In the meantime. the Settlement Officer reviewed his previous order and directed that Rs. 3,744.77 should be paid to respondent No. 6. He deducted Rs. 5,332.00 only as house building loan and Rs. 125.00 as arrears of rent out of the total amount due to the petitioner by way out of compensation while ascertaining the amount payable to the mortgagee. The petitioner felt aggrieved from this order as well and preferred an appeal to the authorities concerned but to no effect. He pleaded that the orders of respondents Nos. 1 to 4 directing the payment of Rs. 3,744.77 to the mortgagee-respondent No. 6 were bad in law because according to S. 16(3)(a) of the Displaced persons (Debts Adjustment) Act a creditor to have a first charge on the compensation amount paid in cash provided that the amount of debt in respect of which he should be that amount as bears to the total debt the same proportion as the compensation paid in respect of the property bears to the value of the verified claim in respect thereof.
In his view the mortgage amount was to be treated as first charge only on that amount of compensation which was to be paid in hard cash to him. He further urged that after deducting Rupees 125.00 arrears of rent and Rs. 8,000.00 granted to him as house building loan. a sum of Rs. 1,036.00 remained to be paid in cash and so the mortgagee should have been determined in terms of S. 16(3)(a) of the above Act treating this amount as the compensation paid in respect of the mortgaged property. He emphatically contended that although the third instalment of the house building loan. i.e.. Rs. 2,708.77 had not been received by him but still the same could be deemed to have been sanctioned and so was liable to be deducted form the total amount of compensation before determining the amount due to respondent No. 6.
(3) Respondents Nos. 1 to 5 in their written statement explained that the petitioner's compensation application was processed and adjustment of Rs. 5,291.23 towards house building lone was communicated to the Deputy Commissioner. Karnal. and after adjustment of rent and deduction of Rupees 3,744.77 as mortgage charge pertaining to the decree from the Tribunal. there was nothing left to be paid to him. They further maintained that deduction of two instalments which had actually been received by him was made from the compensation and to this alone he was entitled under the rules. Dial Dass respondent No. 6 stated that the cash compensation payable to the petitioner was Rs. 9,161.00 and not Rs. 1,036.00 as contended by him and that public due for which the petitioner was actually liable on the date his compensation application was processed could be deduction from the compensation due to him and no more.
(4) Dial Dass respondent died during the tendency of these proceedings and the names of his window Shrimati Chando Bai and Sons Jai Chand. Jawahar Lal and Bhim Sain were brought on the record as his legal representatives.
(5) There is no doubt that the petitioner's property claims were verified for an aggregate sum of Rs. 35,470.00 and out of his properties there units for which a claim of Rs. 19,570.00 had been verified were under mortgage with Dial Dass respondent No. 6 for a sum of Rs. 14,500.00 It is also common ground that on the application of the mortgagee and the statement of ten petitioner the Tribunal under the Displaced Persons (Debts Adjustment) Act passed an order on 16th October. 1957. to the effect that the amount due to the mortgagee was Rs. 14,500/- which he would be entitled to recover as fist charge from the amount which the petitioner would received as compensation in respect of his claim for the mortgaged property in the same proportion which such compensation will bear to the amount in claim. The learned counsel for the petitioner contended that the amount due to the mortgagee-respondent was to be first charge on the amount of compensation paid in cash which in this case was Rs. 1,036.00 and not Rs. 9,161.00. I am unable to agree with him. The amount of compensation payable in cash to the petitioner was Rs. 9,161.00 and not as was left after adjusting the amount due from him to the Government on various accounts. The meaning of the term 'paid in cash' in section 16(3)(a) of the Displaced Persons (Debts Adjustment) Act can best be understood when read in conjunction with section 16(3)(b) of the Act. These run as:
'16. (1) * * * *
(2) * * * *
(3) Where in any case the creditor elects to retain his security. fifth displaced debtor receives any compensation in respect of any such property as is referred to in sub-section (1). the creditor shall be entitled-
(a) where the compensation is paid in cash. to first charge thereon: provided that the amount of the debt in respect of which he shall be entitled to the first charge shall be that amount as hears to the total debt the same proportion as the compensation paid in respect of the property bears to the value of the verified claim in respect thereof and to the extent the debt shall be deemed to have been reduced:
(b) where the compensation is by way of exchange of property to a first change on the property to a first charge on the property situated in India so received by way of exchange: provided that the amount of the debt in charge shall be that amount as bears to the that debt the same proportion as the value of the property received by way of exchange bears to the value of the verified claim in respect thereof and to that extent the debt shall be deemed to have been reduced.
* * * * * *'.
The compensation was payable to the petitioner not by way of exchange of property but in cash which comes to Rs. 9,161.00 as is also clear from the calculations made by the Settlement Officer while processing his compensation application.
(6) The learned counsel for the petition the further maintained that although the third instalment of the house building loan amounting to Rs. 2668.00 had not been received by the petitioner by the date his compensation application was processed but it should have been deducted from the aggregated compensation due to his before paying the mortgage as the loan and been sanctioned long ago. This argument also is devoid of all force. Sub-section (2) of section 7 of the Displaced Persons (Compensation and Rehabilitation ) Act provides:
'7 (1) * * * * * * *
(2) On ascertaining the amount of compensation to which an applicant is entitled under sub-section (1). the Settlement Commissioner shall deduct therefrom the following dues recoverable from the applicant. in the order the priority mentioned below-
(a) the amount if any of the public dues recoverable from the applicant under S. 5;
* * * * *.'
The third instalment of the house building loan had not been received by the petitioner on the date respondents Nos. 1 to 4 directed the payment of Rs. 3,744.77 to mortgagee-respondent in terms of the order of the Tribunal passed under sub-section (3) of section 16 of the Displaced Persons (Debts Adjustment) Act. Therefore. it could not be deducted from the compensation before determining the amount payable to the mortgagee.
(7) Respondents Nos. 1 to 4 while passing the impugned order acted strictly in accordance with the provisions of law an as such these could not be successfully challenged in the present proceedings. The writ petition thus fails and is dismissed with costs.
(8) Petition dismissed.