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Babu Lal and anr. Vs. Shive Lal - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 17 of 1970
Judge
Reported inAIR1982Raj111; 1981()WLN578
ActsRajasthan Relief of Agricultural Indebtedness Act, 1957 - Sections 2, 6, 11 and 11(2)
AppellantBabu Lal and anr.
RespondentShive Lal
Appellant Advocate S.K. Keshote, Adv.
Respondent Advocate P.N. Agarwal, Adv.
DispositionAppeal dismissed
Cases ReferredIn Lalchand v. Nenuram
Excerpt:
.....includes adjustment by way of payment of rent also.;once the amount of mortgage determined by a debt relief court, or the debt relief officer, as the case may be, under the provisions of the act, there after though till the amount is paid, the character of the creditor would remain as a secured creditor, but no separate suit for eviction or rent can be entertained, and if decreed earlier can be executed.;appeal dismissed - - 1,500/-and that he executed an usufructuary mortgage in favour of the plaintiffs and claimed that decree for eviction as well as rent should be granted. the case of the defendant is that once the debt is determined, which includes tha mortgage debt, the rent note becomes inoperative and the plaintiffs' claim for eviction as well as rent cannot be maintained. it..........includes the debt of the plaintiffs to the extent of rs. 1,500/- in the application before the debt relief court this mortgage deed was included.4. on 31-8-1965, the debt relief officer determined the debt including the amount of usufructuary mortgage dated 21-1-1957 and ordered that the plaintiff shall get interest on this amount at 6% per annum, and the entire amount would be paid by instalments of rs. 80/-collaterally. the defendant's case is that in view of the judgment of the debt relief court the relationship of landlord and tenant ceased to exist between the parties. the debt relief court further ordered that the plaintiffs are entitled to get rent at rs, 30/- p.m from 25-5-1967, because of the specific order of the debt relief court that the plaintiffs would be entitled to.....
Judgment:

G.M. Lodha, J.

1.Babulal Shiv Charan Lal, plaintiff-appellants have filed this appeal against the judgment of the Additional District Judge, Gangapur City, by which the decree passed by the Munsif, Hindon in a suit for ejectment and arrears of rent was modified.

2. The plaintiff filed a suit for ejectment and arrears of rent on the basis of a rent note executed by the defendant-respondent in favour of the plaintiff-appellants on 21-1-1957, by which the defendant agreed to pay the rent of the premises in question to the appellants at Rs. 30/- p.m. The execution of the rent deed was held to be proved by the trial court, and was not challenged before the first appellate court. Since the defendant did not pay the rent from 20-5-1964 to 25-5-1967, the plaintiff filed a suit. The present suit is for eviction and arrears of rent for Rs. 1,080/-

3. The defendant admitted Rs. 1,500/-and that he executed an usufructuary mortgage in favour of the plaintiffs and claimed that decree for eviction as well as rent should be granted. The defendant in the written statement alleged that he has filed an application under Section 6 of the Rajasthan Relief of Agricultural Indebtedness Act (hereinafter referred to as the Act) and that debt has been determined. This determination includes the debt of the plaintiffs to the extent of Rs. 1,500/- In the application before the Debt Relief Court this mortgage deed was included.

4. On 31-8-1965, the Debt Relief Officer determined the debt including the amount of usufructuary mortgage dated 21-1-1957 and ordered that the plaintiff shall get interest on this amount at 6% per annum, and the entire amount would be paid by instalments of Rs. 80/-collaterally. The defendant's case is that in view of the judgment of the Debt Relief Court the relationship of landlord and tenant ceased to exist between the parties. The Debt Relief Court further ordered that the plaintiffs are entitled to get rent at Rs, 30/- p.m from 25-5-1967, because of the specific order of the Debt Relief Court that the plaintiffs would be entitled to get rent at Rs. 30/- p.m.

5. After framing of the issues, evidence was recorded. The trial court decreed the suit of the plaintiffs, but the same was challenged before the first) appellate court. The Debt Relief Court reopened the accounts and determined the debt and passed a decree in respect of the mortgage for Rs. 1,500/- and also allowed interest at 6% per annum. The case of the defendant is that once the debt is determined, which includes tha mortgage debt, the rent note becomes inoperative and the plaintiffs' claim for eviction as well as rent cannot be maintained. Of course, they can claim interest according to the order of the Debt Relief Court.

6. The sole question raised before me by Mr. Keshote is that a decree for arrears of rent and eviction can still be passed even after determination of the amount of the debt under Section 6 of the Act. According to him, the rent note and mortgage are two different transactions, and the suit based on rent note, whether for eviction or for arrears of rent, can still be decreed irrespective of the determination of the debt by the Debt Relief Court. Reliance was placed on Section 11 and more particularly the proviso to Sub-clause (2), which reads as under :--

'11. Preparation of a Scheme of Repayment and Transfer of Debtor's Property:-- (1) When the amount due has been determined under Section 10, the Debt Relief Court shall, after taking into account the liability of the debtor in respect of claims referred to in Section 4 prepare a scheme of repayment of the debtor's debt.

(2) If the debtor has transferable property which he is willing to transfer to enable him to repay the whole or any part of his debts, the Debt Relief Court may sanction such transfer on such conditions, as it may think necessary to impose in order to safeguard the rights of the creditors including those to whom any liability referred in Section 4 is due and may grant such reasonable time as is necessary for the debtor to transfer such property.'

'Provided that, when there is any mortgage, lien or charge upon the property, such sanction shall be given only upon terms which will ensure that mortgage, lien or charge shall subsist to such extent as is sufficient to safeguard the interest of the secured creditor'

'Provided further that when a transfer has been agreed to before the Debt Relief Court by the parties to the proceedings and either garty fails to complete transaction within a period of sixty days the court may take action as far as may be under Order XXI, Rule 32 of the First Schedule to the Code of Civil Procedure, 1908 (Central Act V of 1908).'

7. The scheme of the Debt Relief Act is to relieve the debtors, who are agriculturists from the ordeal of prolonged litigation and debts by making a settlement on fair terms to ensure that the agriculturists are not exploited by the money lenders by charging interest upon interest and capitalising it to the determination (detriment) of the agriculturists. The law empowers the Debt Relief Court to reopen the accounts, find out the principal and the interest and then to give relief by making instalments and sometimes scaling down the debts as per the various provisions of the Act.

8. The crucial question is, whether in spite of determination of the debt in this particular case by the Debt Relief Court, the creditor can still file a suit for eviction and evict the tenant from the premises on the basis of the rent note which was written to ensure the interest part of the mortgage and to make it usufructuary mortgage. A perusal of the rent deed, which was read over in the court, shows that it makes a mention of mortgage first and then states that the mortgaged property has been taken on rent. The mortgage deed recites the adjustment of the rent into interest. As usual, the object is that to ensure the payment, the creditor is made a secured creditor on the one hand, and the premises, which normally according to usufructuary mortgage covenants contemplate the possession of the mortgagee, but when in fact they remain in possession of the mortgagor, a rent note is executed, so that the mortgagor becomes a tenant and the mortgagee becomes a landlord. In substance, the mortgage deed and the rent deed, though constitute different and separate transactions in fact, but when they are in relation to the usufructuary mortgage for the purpose of rent adjustment, the transaction becomes interwoven.

9. In the face of the above circumstances, the decree or the amount of mortgage, which becomes subject matter of determination by the Debt Relief Court, assumes a different shape and complexion in the form of determined amount realisable as decree, and by virtue of the proviso to Sub-section (2) of Section 11, the security of the immoveable property continues till the entire amount determined under the mortgage is paid. Except the above, the Act contemplates no exception, as would be obvious from the definition of the clause, wherein according to Section 2, Sub-clause (c), debt includes all liabilities owing to a creditor, in cash or kind, secured or unsecured payable under a decree or order of a civil court or otherwise whether due or not due, but shall not include land revenue or anything recoverable as land revenue other than liablites payable under a decree of a village panchayat or any money for the recovery of which a suit is barred by limitation. It is obvious that secured debts are included in the definition of a debt and the legislature in its wisdom has not accepted it like land revenue etc. The effect and impact of this legislation is that once the mortgage amount is determined and when I use the word 'mortgage', it includes all types of mortgage whether usufructuary property or equitable or simple, then, once instance (inference) which follows logically is that determination so far as the amount is concerned is final. This amount includes the principal as well as interest. In the instant case, interest at 6% has been allowed on the principal amount, and once it has been done, I am firmly of the opinion that any interpretation to permit the liability of the rent separately would be circumventing the provisions of this law. To illustrate, suits in a case the rent adjustment permits interest at 8% or 12%, and while determining the amount of mortgage the Debt Relief Court allows principal plus interest at 4% or 6% only. Once that is done, it would be prepostrous to think that the creditor shall be allowed to take interest at 6% which means scaling down of the original interest cum rent and yet he would be allowed to take rent separately in addition to this interest and that also even after adjustment of this rent at a higher rate, may be at 16%, 19% or 24%, This would mean that so far as the usufructuary mortgage the premises rented out are concerned, the Debt Relief Court will have no jurisdiction to determine the interest part of the amount. I am convinced that the legislature never intended to permit the creditor to continue to charge interest at a higher rate in the form of rent. Similarly, by proviso to Sub-section (2) to Section 11, it cannot be inferred that a secured creditor after determination of the amount can still take possession of the premises by filing a suit for eviction and getting a decree executed, and can launch execution for the rent so decreed.

10. I am convinced that the rent deed though separately written and can be termed as a separate transaction is in substance an interwoven part of the mortgage transaction and the rent is similarly interwoven part of the interest aspect of this transaction.

11. Mr. Keshote invited my attention to the judgment this court reported in Lalchand v. Nenuram, 1962 Raj LW 564 : (AIR 1963 Raj 69) to persuade this court to hold that even after determination of the amount by the Debt Relief Court, eviction decree can be entertained because there are two different transactions. In Lalchand v. Nenuram, this Court held as under (at p. 71):--

'Whether the two documents (mortgage deed and lease back to the mortgagor) represent one transaction or two different transactions, a court of law should be anxious to give effect to the terms in both the documents instead of being unduly critical about them. Having secured the possession of the mortgage, the mortgagee is further entitled to lease it out even to the mortgagor. There is nothing objectionable in this, nor is there any statutory prohibition for such transactions. Now, if the parties do this by executing proper documents, it is the duty of the court of law to give effect to them. Cases may arise in which the terms and conditions in the two documents are so interwoven that in order to determine the true nature of the contract entered into by the parties, both must be read together and considered part of the same transaction. Such cases apart, on principle it is difficult to accept that even in cases where the nature of the two transactions can be spelt out separately the terms of the documents should be treated as not binding on the parties.'

12. It would thus be seen that emphasis was that when two documents are executed irrespective of the fact whether they represent one transaction or two different transactions, the court of law should be anxious to give effect to the terms of both the documents. The court then observed that when the two documents are interwoven, then both must be read together and considered part of the same transaction. Mr. Keshote fairly submitted that this case was not in relation to the impact of the Act on the mortgage and that is very obvious by reading of that judgment. I am of the opinion that irrespective of the fact whether one treats the transaction as a separate or interwoven, the basic fact can never be overlooked that their foundation or bedrock, is the mortgage, i.e. the advance of money on security of immoveable property. That being so, when the legislature defined that it means secured debt also, it made it clear that the debtor agriculturist would be given relief of indebtedness also in respect of mortgage transactions. I have got no hesitation in holding that the mortgage transaction when it becomes part of the debt, its interest or rent in Lieu of interest adjustment also becomes part of that debt. Determination of the amount of debt of the mortgage includes determination of the interest part of it, which in its turn includes adjustment by way of payment of rent also. All said and done, it would be closing eyes to the hard reality if it is held that though the document of rent deed starts with the covenant of the execution of the mortgage and the advance of the amount, yet it must be treated separately in a watertight compartment so as to remain unaffected by determination of the mortgage under Section 6 of the Act. This is not permissible having regard to the scheme of the Act, the intention and object of the Act, which is to relieve an agriculturist from indebtedness of all kinds.

13. The net result of the above discussion is, that I find it difficult to uphold the objection of the appellant against the judgment of the first appellate court, and I have got no hesitation in holding that once the amount of mortgage is determined by a Debt Relief Court, or the Debt Relief Officer, as the case may be, under the provisions of the Act, thereafter though till the amount is paid, the character of the creditor would remain as a secured creditor, but no separate suit for eviction or rent can be entertained, and if decreed earlier can not be executed.

14. The appeal is, therefore, dismissed without any order as to costs.


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