1. Ninety Kanals and one Marla of land situated in village Bhustala, Tehsil Tanesar, district Karnal was mortgaged by its Muslim owners with the predecessors-in interest of Kaharaiti Lal and others, who are the plaintiff-respondents in this appeal, in the year 1922-23 vide mutation Nos. 229, 278, 279, 281 & 282. At the time of the partition of the country the equity of redemption thus belonged to the Muslims who migrated to Pakistan and the mortgagee rights were with the plaintiff-non-evacuees. In view of the East Punjab Evacuee Property (Administration) Act passed from time to time by the East Punjab State, all rights and interests of the Muslim evacuees vested in the custodian. Thus the equity of redemption vested in the Custodian and the mortgagee rights vested in the plaintiffs.
2. The Evacuee interest (Separation) Act, 1951, hereinafter referred to as the Separation Act, came into force on 31st October, 1951. This applied to a 'composite property' which was defined by Clause (d) of Section 2 to mean--
'...........any property which, or any property in which an interest has been declared to be evacuee property or has vested in the Custodian under the Administration of Evacuee Property Act, 1950. (XXXI of 1950) and--
(i).......... ............. ............ ............. ..............
(ii) in which the interest of the evacuee is subject to mortgage in any form in favour of a person, not being an evacuee or
(iii).......... ............. ............ ............. ..............
(iv).......... ............. ............ ............. ..............'
Chapter II of the Separation Act provides for the separation of the evacuee interest in composite property. Section 6 provides that the Competent Officer having jurisdiction over the property concerned may give a notice to any person who claimed any interest in such property to submit his claim. Section 7 deals with submission of claims and Section 8 with the decision of the Competent Officer, According to Section 8 the Competent Officer is to finally decide the amount due to the evacuee. S. 10 then lays down the various modes in which the interest of the evacuee is to be separated from that of the non-evacuee claimants and clause (b) provides as follows:--
'(b) in the case of any claim of a mortgagor or a mortgagee--
(i) pay to the Custodian or the claimant the amount payable under the mortgage debt and redeem the mortgaged property; or
(ii) Sell the mortgaged property for satisfaction of the mortgage debt and distribute the sale proceeds thereof; or
(iii) partition the property between the mortgagor and the mortgagee having regard to the share to which the mortgagee would be entitled in lieu of his claim;'
All the three methods given above envisage the existence of a mortgage the amount of which is settled under Section 8. Section 9 of the Separation Act deals with reliefs in respect of mortgaged property of evacuees. Sub-Section (1) provides the maximum interest which is payable to a mortgagee of the evacuee property and sub-section (2) runs as follows:--
'Where a mortgagee has taken possession on any terms whatsoever of any agricultural land and is entitled to receive profits accruing from the land and to appropriate the same very such mortgage shall be deemed to have taken effect as a complete usufructuary mortgage and shall be deemed to have been extinguished on the expiry of the period mentioned in the mortgage deed or twenty years whichever is less, from the date of the execution of the mortgage deed..................................'.
3. In the present case, it is the case of the plaintiffs themselves that they have been in possession of the land since the mortgages were created. This is what they stated in paragraph 1 of the plaint:--
'That the agricultural land.................. was mortgaged to the plaintiffs' predecessors in interest vide mutation Nos. 229, 278, 279, 281 and 282 dated 20-3-1922 and 3-9-1923. They and now the plaintiffs have all along been in possession of this land since the date of mortgage and have acquired proprietary and ancillary rights vested in this property with the lapse of prescribed time fixed under the law of limitation.................'
4. By the time the Separation Act came into force in 1951, nearly 30 years had already expired and by virtue of the provisions of sub-section (2) of Section 9 of the Separation Act. The mortgage automatically by operation of the law stood redeemed and extinguished. Thus the non-evacuees had no interest left in the property and the property was free from all encumbrances, and the equity of redemption which originally vested in the Custodian, had enlarged itself into full proprietorship by the operation of sub-section (2) of Section 9. Therefore no interest of the non-evacuee mortgagee having been left in this property. There was no question of the Competent Officer having any jurisdiction to take any steps under Sections 6, 7, 8 or 10A Competent Officer has jurisdiction only with regard to composite property, that is a property in which a non-evacuee has any subsisting interest. The plaintiffs, however, claiming to be in possession of the land as mortgagees filed a suit against the Custodian challenging the right of the Tahsildar Sales-cum-Managing Officer to sell the property claiming that by lapse at time they have become full owners. This suit was dismissed by the trial Court and the order was confirmed by the first appellate Court but the learned Single Judge came to the conclusion that inasmuch as no action had been taken by the Competent Officer under Section 10 of the Separation Act, the property did not vest in the Custodian and that the plaintiffs were entitled to possession of the suit land as mortgagees till the necessary proceedings under Section 10 have been taken by the competent authority to separate the interest of the evacuee. Aggrieved by this order, the Union of India and the other officials have filed this appeal under Clause 10 of the Letters Patent.
5. As is clear from the above discussion of the various provisions of the law, section 10 or Secs. 6, 7, and 8 have no application to the facts of the present case. This matter is not respondent integra and stands settled by a Bench decision of this Court to which the learned Single Judge was himself a party, in Kundan Shadi Ram v. Union of India, AIR 1969 Punj & Har 193. Apparently this case was not brought to the notice of the learned Single Judge. In that case the original mortgage was executed by a non-evacuee but the equity of redemption was transferred to an evacuee. The Bench came to the conclusion that 'there is nothing in the language of Sections 2(d) and 9(2) of the Act (i.e. Separation Act) to warrant that the mortgage should have been executed by the evacuee himself.' The Second question as to what is the effect of the expiry of 20 years' period as envisaged by sub-section (2) of Section 9 of the Separation Act, the matter was dealt with in Paragraph 7 of the judgment in the following words:--
'The next contention of Mr. Kaushal is that the procedure as envisaged in Sections 6, 7, and 8 of the Act was not followed in the matter of separation of the evacuee interest and in the absence thereof the Custodian of Evacuee Property had no power to put the property to auction and take forcible possession thereof. This argument again loses sight of the provisions of Section 9 of the Act, according to which the mortgage stood extinguished in the expiry of twenty years and the Custodian of the Evacuee Property automatically became the owner of the property. It is open to the Custodian of the Evacuee Property to take possession of such property by evicting the plaintiffs in accordance with law.'
6. The argument of the learned counsel in this case is exactly the same as was pressed by Mr. Kaushal but was rejected. Admittedly the plaintiffs had been in possession for more than 20 years after the creation of the mortgages and, under sub-section (2) of Section 9 of the Separation Act, the mortgages stood extinguished on the enforcement of the Separation Act and, consequently, the Competent Officer has no jurisdiction to deal with this matter under Section 10 or under any other provision of the Separation Act as the property in dispute ceased to be a composite property.'
7. For the reasons given above, we accept this appeal, set aside the judgment and decree of the learned Single Judge and restore that of the Courts below and dismiss the suit of the plaintiffs with costs throughout.
8. Appeal allowed.