Hardayal Hardy, J.
(1) This order will dispose of two petitions under Article 226 of the Constitution which were filed together by the same petitioner and in which rule nisi was also issued on the same day. Civil Writ No. 254-D of 1960 is directed against an order dated 28th November, 1959 made by the Deputy Custodian General of Evacuee Property India who is the only respondent imp leaded therein, while Civil Writ No. 255-D of 1960 challenges the validity of the order dated 15-3-1956 made by the Appellate officer under the Evacuee Interest (Separation, Act, 64 of 195/ The second respondent imp leaded in that petition is the Assistant Custodian of Evacuee Property, Porbunder.
(2) In order to appreciate the controversy arising in both these petitions which have a common object in view, it is necessary to set out the salient facts about which there is no dispute. One Haji Ayub Khadbhai of Porbunder had three sons namely, Omar, Ahmed and Aboobakar. The last name two sons had business dealings with the petitioner as a result of which the petitioner claimed a sum of Rs. 76,416/6 to be due to him. The petitioner and his debtors agreed to have their alleged dispute settled by arbitration. On 27-6-1949 the arbitrator made an award in favor of the petitioner for the amount claimed by him with interest at the rate of 6/o per annum and a further direction that four immovable properties belonging to the debtors would stand mortgaged with the petitioner for the payment of the amount due to him. The award was filed in the court of Assistant Judge, Porbunder and was made a rule of the court by a decree being passed in accordance therewith on the following day i.e. 28-6-1949.
(3) The debtors paid Rs. 55,404/15/9 towards satisfaction of the mortgage debt leaving a sum of Rs. 21011/6/9 to be still outstanding against them.
(4) On 5-7-1950 the two debtors aforesaid were declared evacuees and thus their interest in the mortgaged properties became vested in the Custodian of Evacuee Property. The petitioner filed an application for execution of the decree on 14-8-1952 but the same was dismissed in view of section of the Administration of Evacuee Property Act, 1950. The Petitioner thereupon preferred his claim before the competent Officer, Rajkto appointed under the Evacuee Interest (Separation) Act, 1951 for separation of the evacuees interest from that of the petitioner as a mortgagee. The Competent Officer acting on the mortgage-decree held by his order dated 12-8-1954 that the petitioner having received Rs. 55,404/15/9 towards the mortgage-debt was entitled to the outstanding principal sum of Rs. 21011/6/6 with simple interest thereon at the statutory rate of 5/o per annum from the date of the decree till realisation.
(5) The order of the Competent Officer was challenged in appeal preferred by the Assistant Custodian, Porbunder before the Appellate Officer appointed under the.aforementioned Act. The latter accepted the appeal by his order dated 15-3-1956 and set aside the order of the Competent Officer holding that the decree obtained by the petitioner was nto a mortgage-debt as defined in the Act and thereforee the Competent Officer was nto entitled to entertain the claim. The Appellate Officer however went on to add that 'the claimant (petitioner) may however, get the transaction in his favor confirmed by the Custodian' and for that purpose remanded the case to the Competent Officer with a direction that he shall allow three months' time to the petitioner to get the transaction in his favor confirmed by the Custodian, in default of which the claim would stand dismissed.
(6) The petitioner's contention in Civil Writ No. 255-D of 1960 is that the Appellate Officer having held that the award created a mortgage in favor of the petitioner could nto go back on the decree passed in accordance there with by a civil court of competent jurisdiction and that the said decree was binding on the Appellate Officer and all the officers below by virtue of the proviso to S. 8(3) of the Evacuee Interest (Separation) Act, 1951 and that the direction given by him was improper, illegal and without jurisdiction and had the effect of mis leading the petitioner into embarking on further proceedings by making an application under section 40 of the Administration of Evacuee Property Act, for confirmation of the decree.
(7) After the remand order made by the Appellate Officer the petitioner filed an application for confirmation of the mortgage decree before the Assistant Custodian, Evacuee Property, Porbunder under section 40 of the Administration of Evacuee Property Act, 1950. The application was accepted and the decree was confirmed by an order dated 14-6-1956.
(8) Against that order an appeal was filed before the Custodian of Evacuee Property who by an order dated 5-1-57 upheld the order of the Assistant Custodian with the modification that the petitioner should pay a sum of Rs. 4000.00 to the Department as penalty within two months of the date of the order.
(9) A revision application was thereupon filed against the order of the Custodian by the third brother Omar before the Custodian General of Evacuee property. New Delhi which was heard along with another suo motu revision under section 27 of the Administration of Evacuee Property Act, 1950.
(10) The main question debated before the Deputy Custodian General who heard the revision petition, was as to whether it was the award or the resulting decree that called for confirmation as a mortgage transaction within the meaning of section 40 of the Administration of Evacuee Property Act, 1950 and if so whether an unregistered award or decree affecting immovable property could be confirmed under that section. The petitioner's contention was that the words 'mortgage transaction' included all proceedings culminating in the decree and that the decree did nto require registration. The contention on behalf of the Department on the other hand was that the decree which had followed the award, did nto create the mortgage which had already been created by the award and as such it was the award which could be confirmed and nto the decree.
(11) The Deputy Custodian General (Shri M. L. Vijh) who eventually dealt with the case after a remand report had been received from the Deputy Custodian, pursuant to an earlier order made by his predecessor Shri Tara Chand Aggarwal, held by his order dated 28-11-1959 that the mortgage transaction had been created by the award and that since the same involved transfer of immovable properties of more than Rs. 100.00 in value the award was compulsorily registerable under section 17 of the Indian Registration Act, 1908. Inasmuch as the award was nto register ed it did nto confer any rights on the petitioner as a mortgagee in the properties. He thereforee rejected the confirmation application on that ground.
(12) In Civil Writ No. 254-D of 1960 the petitioner's challenge is to the above-mentioned order of the Deputy Custodian General.
(13) Both the petitions are opposed on behalf of the Custodian of Evacuee Property although a counter affidavit has been filed by Shri P. N. Bhanot, Deputy Custodian General Evacuee Property New Delhi in Civil Writ No. 254-D of 1960 only and has by mistake been placed in the file of Civil Writ No. 255-D of 1960. In the counter affidavit filed by Shri P. N. Bhanot, it is stated that the agreement of arbitration and the subsequent award and decree obtained by the petitioner were collusive and were a mere contrivance and device to defeat the provisions of Evacuee Legislation which had already come into force in other parts of the country and was around the corner in Saurashtra.
(14) The affidavit also states that the petitioner's claim was rejected by the Appellate Officer as far back as 15-3-1956 while the present petition was filed by him in July 1960 only; the petition was thereforee liable to be dismissed on the ground of laches and delay.
(15) Finally it is contended that the liability of the evacuees arose from the award given by the arbitrator and since the award created a charge on immovable properties of the value of more than Rs. 100.00 it could nto affect the immovable properties in this case unless it was registered under section 17 of the Indian Registration Act. The petitioners' allegation that the debtors were non-evacuees on the date on which a reference was made to the arbitrator is also denied by the deponent and it is asserted that the debtors being evacuees their property vested in the Custodian right from 14-8-1947 as per section 2(d)(ii) of the Administration of Evacuee Property Act.
(16) The above narration of facts makes it plain that the real question in this case is whether the liability incurred by the evacuee debtors under the award dated 22-7-1949 which culminated in the decree passed by the Assistant Judge Porbunder on 28-6-1949, is a mortgage-debt within the meaning of that expression as defined in clause (f) of section 2 of the Evacuee Interest (Separation) Act, 1951 and if so, what is its effect.
(17) Before I come to deal with that question it is necessary to discuss the objection raised by Mr. Chadha that civil writ petition No. 255-D of 1960 which is directed against the order of the Appellate Officer made on 15-3-1956 is liable to be dismissed on the ground of laches and delay. It is no doubt true that a petition filed on 14-7-1960 against an order dated 15-3-1956 is highly belated. The Explanationn of the petitioner's counsel for this inordinate delay however is that the Appellate Officers' order was one of remand for the purpose of enabling the petitioner to get the transaction confirmed by the Custodian of Evacuee Property and thereforee so long as proceedings for confirmation were pending and no final order was passed the petitioner could nto move the High Court for redress under Article 226 of the Constitution. Learned counsel submits that the final order was passed by the Deputy Custodian General on 28-11-1959 and was communicated to the petitioner on 25-3-1960. A petition for writ filed on 14-7-1960 could nto under the circumstances be treated as belated.
(18) There is substance in the argument of the petitioner's counsel. The view taken by the Appellate Officer in his order dated 15-3-1956 was that the petitioners claim did nto fall within the definition of a mortgage debt as given in the Evacuee Interest (Separation) Act and inasmuch as the liability had been created after 14th August 1947 the transaction required confirmation under section 40 of the Administration of Evacuee Property Act, 1950. He thereforee remanded the case to the Competent Officer with a direction that he should allow three month's time to the petitioner to get the transaction in his favor confirmed. It was argued that the Appellate Officer was wrong in giving that direction; but the petitioner bona-fide believed that the direction was binding on him and thereforee took immediate steps in conformity with it. The Custodian of Evacuee Property also appeared to take the same view. In fact the Assistant Custodian when moved in that behalf actually confirmed the transaction and his decision was up-held by the Custodian. In such circumstances there is hardly any merit in the plea of laches and delay.
(19) Coming now to what has been described by me as the real question in the case, the position is that the petitioner's claim for relief is based on a mortgage-decree passed by a civil court of competent jurisdiction on 28-6-1949 when there was no evacuee legislation in the territory in which the property forming the subject-matter of mortgage is situated or over which the court passing the decree could exercise jurisdiction. Both the award and the decree were made before the debtors who were fastened with liability and whose property was later declared as evacuee property, were declared evacuees. There was also no other legal impediment in the way of creation of the mortgage.
(20) The argument on behalf of the Custodian however is that the effect of the order dated 5-7-1950 by which the two debtors, Ahmed and Aboobakar were declared evacuees was to impress their property with the character of 'evacuee property' as defined in clause (f) of section 2 of the Administration of Evacuee Property Act, 1950 which reads ad under :-
'EVACUEE property' means any property of an evacuee (whether held by him as owner or as a trustee or as a beneficiary or as tenant or in any other capacity), and includes any property which has been obtained by any person from an evacuee after the 14th day of August, 1947, by any mode of transfer which is nto effective by reason of the provisions contained in section 40,
BUT does nto include,
(I)any ornament and any wearing apparel, cooking vessels, or other house-hold effect in the immediate possession of an evacuee;
(II)any property belonging to joint stock company the registered office of which was situated before the 15th day of August, 1947 in any place now forming part of Pakistan and continues to be so situated after the said date.'
(21) Any liability incurred by the evacuee-debtors after 14th August 1947 in respect of that property would thereforee confer no rights on the person in whose favor such liability was created unless the transaction was confirmed by the Custodian under S. 40 of the said Act. the material portion of the section reads :-
'NO transfer made after the 14th day of August, 1947, (but before the 7th day of May, 1954) by or on behalf of any person in any manner whatsoever of any property belonging to him shall be effective so as to confer, any rights or remedies in respect of the transfer on the parties thereto or any person claiming under them or either of them, if, at any time after the transfer, the transferor, becomes an evacuee within the meaning of section 2 of the property of the transferor is declared or notified to be evacuee property within the meaning of this Act, unless the transfer is confirmed by the Custodian in accordance with the provision of this Act.'
(22) So far, the argument presents no difficulty. It is only when the next step in the argument is considered that one comes up against the question who created the mortgage If the mortgage in favor of the petitioner was created by the evacuee debtors it would certainly amount to 'property which has been obtained by any person from an evacuee after the 14th day of August, 1947, by any mode of transfer' within the meaning of clause (f) of section 2 of the Administration of Evacuee Property Act, 1950. On the other hand if the mortgage was the result of operation of law the position might be different. In the former case the transaction would require confirmation while in the later case, it would not.
(23) In dealing with the point the Appellate Officer observed:-
'THE decree of the court was based on an 'award.' It was by the award by which the mortgage in favor of the claimant was created. The Arbitrators derived their authority to create the mortgage from the evacuee and the claimants. It must, thereforee, be held that the mortgage was created by the Arbitrators on behalf of the evacuee. It is nto disputed that there was no mortgage debt due from the evacuee to the claimant before the award was made. The money was made payable to the non-evacuees by the award by the mortgage or the property of the evacuees. It is, thereforee a transfer as defined in the Transfer of Property Act and as such would require confirmation.'
(24) Mr. Ahuja. learned counsel for the petitioner contended that if the word 'transfer' as used in section (2) and section 40 of the Evacuee Property Act is given the same meaning as in section 5 of the Transfer of Property Act, 1882 it would include only those transfers which are the result of voluntary acts of the parties and as such a transfer which is the result of the decision of an arbitrator or a court would nto require confirmation. Considering the wide phraseology employed in section 2(f) and section 40 of the Evacuee Property Act, I do nto think Mr. Ahuja is right in his contention as in my opinion the creation of mortgage in the present case by means of an award, was one of the modes of transfer adopted by the non-evacuee petitioner for obtaining the property of the evacuees.
(25) The relevance of section 5 of the Transfer of Property Act for the purpose of this argument lies only in this that it deals with transfers inter vivos and nto with those which are the result of operation of law. The definition thus excludes testamentary or intestate succession and other modes of transfer, such as sale in execution, forfeiture or bankruptcy, but it cannto exclude a transfer of the type with which we are concerned in this case.
(26) In the present case, as held by the Appellate Officer, there was no pre-existing mortgage in favor of the petitioner. The debt owed by the evacuees was a simple money debt. Instead executing a regular deed of mortgage which would have been the normal mode of transferring their right in the property to the petitioner the debtors took recourse to another mode of transfer by appointing an arbitrator and clothing him with the authority to create the mortgage and then submitting to the award made by him. So far as the petitioner is concerned, there can be hardly any doubt that his action amounts to 'obtaining of property by him from an evacuee by any mode of transfer' within section 2(f). A fortiori the action of the debtors amounts to transfer by or on behalf of any person in any manner whatsoever . . . .who after the transfer becomes on evacuee or his property is declared or notified to be evacuee property within section 40.
(27) The problem presented by the case however does nto end here because what has happened is that the transaction did nto stop short with the award only and that soon after the award was made, it was followed by a decree and it is now the effect of the decree and nto the award that has to be considered. The Appellate officer appears to have gto rid of the problem by simply saying that the 'liability arose because of the award and that the decree did nto create any new rights; it only imparted the seal of of the court to the award.' But he also went on to add and observed:-
'I would thereforee hold that this is a mortgage-decree.'
(28) The Deputy Custodian General Realizing the implications of that finding went behind the decree and observed that 'the invalidity of the award may be covered by the decree so far as its executability is concerned but the decree does nto create any new rights, so far as the mortgage transaction goes.' After saying that, he ended up by holding that the mortgage transaction leaving been created by an unregistered award, did nto confer any rights on the petitioner as a mortgagee in the properties and consequently rejected the petitioner's application for confirmation of the transaction.
(29) The petitioner's counsel in his attack against the orders made by the Appellate Officer as well as the Deputy Custodian General made the finding of the Appellate Officer as the starting point of his argument and argued that once it was accepted that the petitioner had a mortgage-decree in his favor which was passed after the 14th day of August, 1947 the same was binding on the Competent Officer and his only function under section 8 of the Evacuee Interest (Separation) Act was to determine the amount due under the claim in accordance with the provisions of section 9. A fortiori the decree was also binding on the Deputy Custodian General and the authorities subordinate to him.
(30) The argument is based on sub-section (2) of section 8 and its proviso which runs as under:
'IF there is any dispute as to whether a liability is a mortgage debt or nto or whether any claim is submitted under section 7 exists, the Competent Officer shall decide such dispute: PROVIDED that a decree of a Civil Court (other than a a exparte decree passed after the 14th day of August, 1947) shall, subject to the provisions of sections 9 and 10 be binding on the Competent Officer in respect of any matter which has been finally decided by such decree; and where any matter was decided by an exparte decree based by a Civil Court after the 14th day of August, 1947, the Competent Officer may decide such matter afresh and on such decision being made, the exparte decree shall be deemed to have no effect.'
(31) Mr. Ahuja contended that a bare reading of the above provision makes it plain that it makes no distinction between a decree following an award or a decree resulting from a suit. It also does nto make any distinction between a decree based on the consent of the parties and a decree passed after contest. The only exception recognised by it is an ex-parte decree passed after the 14th day of August, 1947. There is no provision in the Evacuee Interest (Separation) Act which entitles a Competent Officer to go behind the decree. It was thereforee nto open to the Appellate Officer, after he had come to the conclusion that the petitioner had a mortgage decree in his favor, to enter upon the discussion as to whether the mortgage was created by the award or by the decree. He had before him what he had himself described as a mortgage-decree and that was the end of the matter so far as he was concerned.
(32) Mr. Ahuja further contended that if the Custodian had any doubt about the bona-fides of the transaction, and was of the view that it was collusive or tainted with fraud or was without consideration, his remedy, if at all, was to file a suit for setting aside the decree. But so far as the Appellate Officer was concerned he had no jurisdiction to ignore the decree and hold that the mortgage transaction having been created by an award the same required confirmation.
(33) Mr. Ahuja next contended on the basis of a Full Bench decision of the Patna High Court in Seonarain La! v. Prabhu Chand(1) which was followed by a Full Bench of the Punjab High Court in Sardool Singh v. Hari Singh and others(2) that even if the mortgage transaction was treated as having been created by the award the Deputy Custodian General was wrong in holding that the award required registration.
(34) I shall first take up the last contention of Mr. Ahuja. In my judgment in suit No. 588 of 1966 (Tehmi P. Sidhwa and others v. Messrs Shib Banerjee & Sons Pvt. Limited)(3) delivered on 17-1-1968 I had expressed my dissent from the above decisions and had held that an award affecting immovable property over the value of Rs. 100.00 requires registration. The view then taken by me has since been up-held by the Supreme Court in Civil Appeal No. 822 of 1966 (Satish Kumar and others v. Surinder Kumar and others)(4) decided on 27-9-1968 where the Full Bench decisions of Patna and Punjab High Courts have been expressly over-ruled.
(35) No fault can thereforee be found with the decision of the Deputy Custodian General on the point that the award being unregistered was nto receivable in evidence and as such did nto affect the immovable property to which it related. The Deputy Custodian General however appears to have lost sight of the fact that the objection as to in-admissibility of the award was sought to be produced in the court of the Assistant Judge Porbunder for a decree being passed in accordance with it. If no such objection was taken at that stage and the award was admitted in evidence and a decree was passed in accordance therewith, no such objection could be raised thereafter. Whatever rights and obligations accrued to the parties thereafter accrued under the decree and nto under the award which merged in the decree.
(36) I am nto unaware of cases in which it has been held that even after the decree is passed, if the award is set aside on appeal the decree will go with the award. But that is nto the case here. The award in this case was nto being challenged in an appeal under the Arbitration Act; the challenge was by way of collateral attack on the award by the Custodian who was claiming that his interests had been prejudicially affected by it.
(37) Instead of examining the bona fides of the transaction and other allied matters like want of consideration and collusion etc. the Deputy Custodian General took recourse to the extraordinary procedure of tearing off the award from the decree and holding that the award being inadmissible in evidence for want of registration conferred no rights on the petitioner and as such the decree itself could be ignored.
(38) I do nto find any warrant for such biopsy in law nor do I find any warrant in law for avoiding a decree on the ground that the award which is the basis of the decree is unregistered. The proposition appears to me to be too plain to need any authority in its support; but if one were needed, I would refer to a Bench decision of the High Court of Allahabad in Sagar Mal and Another v. Parsotam Das and Another(5).
(39) This takes me to the other two contentions urged by Mr. Ahuja. In my opinion there is a great deal of force in the argument of the learned counsel when he says that except in the case of an ex-parte decree passed after the 14th day of August 1947 the Competent Officer could nto go behind any other decree whether passed before or after that day. I however cannto accede to the other argument of Mr. Ahuja that even the Deputy Custodian General had no such power. I have already said that a mortgage created under an award or decree passed against an evacuee debtor, is as much a mode of transfer which is hit by section 2(f) and section 40 of the Evacuee Property Act as any other mode of transfer inter vivos adopted by him and thereforee the transaction needs confirmation. My only objection to the order made by the Deputy Custodian General in this case relates to the ground on which the transfer was rejected by him.
(40) Mr. Chadha, learned counsel for the Custodian, did nto address any argument in support of the ground on which the Deputy Custodian General had based his order. He however concentrated his attention on the definition of 'mortgage-debt' in section 2(f) of the Evacuee Interest (Separation Act). The section reads:-
'MORTGAGE debt' means any liability in respect of a property due under any form of mortgage (including any usufructuary mortgage or mortgage by conditional sale) whether such liability is payable presently or in future or under any decree or order of a court or otherwise or whether ascertained or not, which-
(I)in any case where it is incurred by an evacuee, is secured by the mortgage of the interest of the evacuee in the property in favor of a person, nto being an evacuee.
(II)in any case where it is incurred by a person nto 'being an evacuee, is secured by the mortgage of the interest of such person in the property in favor of an evacuee; but does nto include any such liability of an evacuee arising out of any transaction entered into after the 14th day of August, 1947, unless such transaction has been confirmed by the Custodian under the Administration of Evacuee Property Act, 1950 (XXXI of 1950);'
(41) Mr. Chadha argued that the above definition makes no distinction between a mortgage created by an act of the parties or by an order or decree passed by a Court. So long as the liability is incurred by an evacuee after the 14th day of August, the transaction whether incorporated in a deed or a decree will have effect only after it is confirmed by the Custodian. There is a great deal of force in the submission made by Mr. Chadha.
(42) Reading sub-section (3) of section 8 and its proviso in the light of the above definition, it is apparent that under sub-section (3) a duty is cast on the Competent Officer to decide whether a liability is a mortgage-debt or not. In performing that duty the Competent Officer has to keep in view the above definition of 'mortgage- debt'. If the liability of the evacuee is under a decree or order of the Court the Competent Officer has to see if it arises out of any transaction entered into after the 14th day of August 1947. If it does, then he has to see further if the transaction has been confirmed by the Custodian. In case he finds that it has nto been so confirmed then he has to hold that it is nto a 'mortgage-debt' and has thereforee to reject the claim. On the other hand if he finds that the transaction has been confirmed by the Custodian then he has to accept the decree as such. The decree in that case is binding on him in respect of any matter which has been finally decided by it. If is, for instance, nto open to the Competent officer to question the basis or the contents of the decree. The only exception is in respect of an ex-parte decree passed after the 14th day of August, 1947 which he is empowered to ignore and to decide the matter afresh.
(43) But the question is: in what way does that advance Mr. Chadha's case? The liability in the present case was admittedly incurred by the evacuee debtors under a decree passed by a Court after the 14th day of August, 1947. It could nto thereforee be treated as a mortgage-debt unless it was confirmed by the Custodian. When the petitioner first put his claim before the Competent Officer, the decree in his favor had nto been confirmed by the Custodian. The Competent officer should have thereforee rejected the claim. But instead, he allowed the claim. The Appellate Officer up-set the decision of the Competent Officer. But he gave an opportunity to the petitioner to get his decree confirmed by the Custodian. The petitioner followed that course and succeeded in getting the decree confirmed. The order of confirmation was however set aside by the Deputy Custodian General on a view of law which I have held, was wholly erroneous. The result is that the order of confirmation as passed by the Custodian of Evacuee Property on 5-1-1957 stands. According to that order the amount due to the petitioner is a mortgage debt and he is thereforee entitled to necessary reliefs under sections 8, 9 and 10 of the Evacuee Interest (Separation) Act.
(44) In the circumstances, the rule issued in Civil Writ No. 254-D of 1960 is made absolute and the order of the Deputy Custodian General of Evacuee Property dated 28-11-1959 is hereby quashed and set aside and in its place the order of the Custodian of Evacuee Property dated 5-1-1957 is restored.
(45) As regards Civil Writ No. 255-D of 1960 it is declared that the decision of the Appellate Officer that the claim made by the petitioner is nto a mortgage-debt can no longer be sustained in view of the fact that the transaction has been confirmed by the Custodian of Evacuee Property. In the result the order made by the Appellate Officer is quashed and in its place a direction is issued to the Competent officer Saurashtra, Rajkto to decide the petitioner's claim on the basis of its being a mortgage-debt and to afford all necessary reliefs to the petitioner in accordance with the provisions of the Evacuee Interest (Separation) Act on that basis.
(46) The petitioner will also have his costs of these proceedings. Counsel's fee Rs. 300.00.