1. The question submitted to us, which I arises upon the present rule is, `whether a mortgagee of a tenure or holding, sold in execution of a decree for arrears of rent due in respect of it, is entitled to make an application under Section 310A of the Code of Civil Procedure, as 'being a person' whose immoveable property has been sold' within the meaning of that Section.' The reference has been made owing to a conflict between the cases of Hamidal Huq v. Matangini Dassi (1898) 2 C. W. N. ccl viii, and Nityananda Patra v. Hira Lal Karmakar (1900) 6 C. W. N. 63. It is clear that, in a sale under these circumstances, the mortgagee, unless he can come in under Section 310A, runs a very serious risk of losing the' benefit of his security, as the auction-purchaser is entitled to annul it. Here the mortgage was a simple mortgage, and, under Section 58 of the Transfer of Property Act, 'a mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money,' That the mortgagee has or at least may have a very substantial interest in the tenure sold is obvious, for if the tenure were mortgaged up to its full value, the whole interest would virtually be his. A mortgagor, whose tenure has been mortgaged up to the hilt, would have no interest in defending the suit, or resisting the sale, and, if the mortgagee cannot intervene, his security would probably be lost. Nor, on the other hand, is the auction-purchaser or the decree-holder in any wise prejudiced by the deposit being made by the mortgagee, for it can make no difference to J either of them whether it is made by the mortgagor, or by the mortgagee. These considerations lead me to think that the language of the Section ought to be liberally construed.
2. The opposite party is reduced to the position that the words in question refer to the judgment-debtor alone. This can hardly be so, for, if this had been intended, it is difficult to suppose that the Legislature would not have used the expression the judgment-debtor instead of the wider and more general expression which we find in the Section. And, if persons other than the judgment-debtor are included in the language ' any person whose immoveable property has been sold,' it is not very reasonable to say that the mortgagee of the tenure sold in execution of a decree for arrears of rent does not come within the category. If it apply to persons other than the judgment-debtor, but not to a mortgagee of the tenure, we have not been told to whom the words can apply. A simple mortgagee, as in the case here, has undoubtedly an interest in the tenure sold: to the extent of that interest it may fairly be said within the meaning of the Section that it is his immoveable property which has been sold. Do the words of the Section compel us to say that it is only the owner of the whole interest in the property sold, who can apply under it? I think not. Apart from authority, I should have been prepared to hold that such a mortgagee, as we find in the present case, is entitled, in a sale such as the present, to apply under Section 310A.
3. I. will refer briefly to the authorities. In Rakhal Chunder Bose v. Dwarka Nath Misser (1886) I. L. R. 13 Calc 346, the mortgagee was held entitled to amply under Section 311 of the Code, the language of which is identical, on this point, with Section 310A. There, no doubt, the mortgagee had obtained a decree for foreclosure, but, as it had not been made absolute, at the time of that application, under Section 311 I do not think that circumstance can, in principle, differentiate the case from the present. In the case of Hamidal Hug v. Matanging Dusi (1898) 2 C. W. N. cclv iii, it was expressly decided that the mortgagee could apply and the same view was held in Rule No. 770 of 1900, decided or the 27th July 1900, but unreported. In the case of Srinivasa Ayyangar v. Ayyathorai Pillai (1897) I. L. R. 21 Mad. 416, a similar view was held. On the other hand reliance is placed upon the case referred to in the reference, and reported in 5 C. W. N. 63. This is a clear decision the other way and opposed to the mortgagee being allowed to apply. That is the only decision precisely in point in support of the opposite parties view. The case of Asmutunnissa Begum v. Ashruff Ali 1888 I. L. R. 15 Calc. 488, was not a case under Section 310A, nor did it deal with the precise point now under discussien. There the applicant ought perhaps to have applied, and could have got the relief she sought, under the claim Section s of the Code (Section 278 et seq). Here the mortgagee has no remedy save under Section 310A. Cases have been cited to show that a simple mortgagee is not the owner of the mortgaged property, and that the words in Section 310A mean and apply to the owner only. Reliance has been placed upon certain observations in the Privy Council case of Sri Raja Papamma Rao v. Sri Vira Pratapa H. V. Bama Chandra Razu (1896) I. L. R. 19 Mad. 24(sic), especially upon that where their Lordships say 'that in such a mortgage (i.e., a simple mortgage) there is no transfer of ownership' (p. 252), an observation which must be read, I think, in connection with the particular point then under discussion, and in a, case to which the provisions of the Transfer of Property Act had no application. In is again unreasonable to suppose that, if the Legislature intended to confine the right of application to the owner and to the owner alone, should not have said so in so many words. On the best consideration I can give to the question it ought, in my opinion, to be answered in the affirmative. As the whole rule is before us it be made absolute with costs here, and before the Division Ben for, if the mortgage were benami, the benamidar could apply up the Section; See Basi Poddar v. Ram Krishna Poddar (1896) 1 C.N.W. 135; if it was not benami then the mortgagee could apply. I desire to make it clear that my observations apply only to the case of such a sale as we have here, viz., the sale of a mortgaged tenure under the Rent Law. If it had been merely the sale of the equity of redemption, different considerations would obviously apply.
4. This case arises out of an application by the petitioners under Section 310A, of the Code of Civil Procedure, for setting aside the sale of a tenure or holding under the Bengal Tenancy Act. The petitioners claimed to be simple mortgagees of the property sold. The Court below, finding that the mortgage was a benami transaction, rejected the application. The petitioners then moved this Court and obtained a rule calling upon the opposite party to show cause why the order of the lower Court should not be set aside or such other order made as to this Court might seem fit. At the hearing of the rule the learned vakil for the petitioners contended that, even if they were benamidars for the judgment-debtor, their application ought to have been granted, and the Court below in rejecting it had really failed to exercise a jurisdiction vested in it by law, so as to bring the case under Section 622 of the Code of Civil Procedure; and in support of this contention Basi Poddar v. Ram Kristo Poddar (1896) 1 C. W. N. 135, was cited. On the other hand it was argued for the opposite party that the order of the Court below rejecting the application was right, not only for the reasons stated in the order, but also for the further reason that the petitioners, who were on the face of their application only simple mortgagees of the property sold, were, according to the decision in Nityananda Patra v. Hira Lal Karmahar (1900) 5 C. W. N. 63, insompetent to apply under Section 310A of the Code. In answer to the latter branch of this argument the petitioners relied upon the case of Hamidal Huq v. Matangini Dasi (1898) 2 C. W. N. cclviii. There being a conflict between the two cases just referred to, on the question whether a mortgagee of immoveable property can apply under Section 310A of the Code of Civil Process dure for setting aside a sale of the same, the case has been refer] red to a Full Bench.
5. It is, as it must be, conceded that according to the authorities,-Janardhan Ganguli v. Kali Kristo Thakur (1895) I. L. R. 23 Calc. 393, and Buhgshidhar Haldar v. Kedar Nath Mondal (1896) 1 C. W. N. 114,--Section 310A applies to sales under the Bengal Tenancy Act. I am further of opinion, that, accepting the finding of the Court below that the mortgagees a benami transaction, the petitioners, according to the principle of J the decision in Basi Poddar v. Ram Krishna Poddar (1896) 1 C. W. N. 135, the correctness of which I see no reason to doubt, were competent] to apply under Section 310A of the Code. That being so, and there] being no dispute as to the sufficiency of the deposit or as to its having been made within the time allowed by law, the case turns upon the determination of the question, whether the Court below was bound to reject the application without enquiry, on the ground that the petitioners on the face of their application were only simple mortgagees of the property sold, and as such incompetent to apply under Section 310A.
6. The answer to that question must depend upon the construction of Section 310A. That Section provides that 'any person whose immoveable property has been sold' under Chapter XIX of the Code, may, within a limited time, apply to the Court for setting aside the sale. Is a simple mortgagee of a tenure or holding then a person of whom it can be said that his immoveable property has been sold at a sale of the tenure or holding for arrears of rent? I am of opinion that the question should be answered in the affirmative. For immoveable property as defined in Section 2, Clause (5) of Act I of 1868, the General Clauses Act in force when Section 3101 of the Code was enacted, includes benefits to arise out of land; and a mortgage of any kind including a simple mortgage, is, according to Section 58 of the Transfer of Property Act, the transfer of an interest in specific immoveable property. So that the interest of a simple mortgagee in a tenure or holding mortgaged is immoveable property. And as the purchaser of a tenure or holding at a sale for arrears-of rent due in respect thereof, by Section 159 pf the Bengal Tenancy Act, takes it with power to annul incumbrances (except those that are called 'protected interests,--' and with them we have nothing to do now) a mortgagee's interest in such tenure or holding must be deemed in effect as sold at such a sale.
7. Against the above view it is argued in the first place, that an interest in immoveable property which is all that a simple mortgagee can have in the mortgaged property, is not immoveable property. And in the second place it is argued that, as the purchaser of a tenure or holding at a sale for arrears of rent only takes it with power to annul incumbrances, and the law (see Section s 159 and 167 of the Tenancy Act) requires that the power must be exercised, if at all, within a limited time and in a particular manner, the mortgagee's interest cannot be said to have passed to the purchaser by the sale.
8. As to the first argument, it is enough to say that an interest in land like that of a mortgagee comes within the definition of immoveable property referred to above, which includes 'benefits to arise out of land.' For, if it be not within that definition, it must be moveable property under Section 2, Clause 6 of the General Clauses Act, a conclusion which cannot be accepted as correct.
9. And as to the second argument, I would observe that it is the sale for arrears of rent that passes the mortgagee's interest to the auction-purchaser, though the latter may lose the benefit of that interest, if he omits to proceed in a certain way within a certain time, just s he may lose the entire benefit of his purchase, if he omits to take possession within a certain time.
10. The view I take is in accordance with the spirit as well as the letter of the law. A tenure or a holding may be so heavily en-, cumbered, that the mortgagor's interest is almost nothing, while that of the mortgagee absorbs the whole value of it; and in such a case, it is but right and proper that the mortgagee should be allowed to avail himself of a remedial provision like Section 310A. Indeed, if the Legislature had not intended to allow a mortgagee to come in under that Section, it is difficult to say why they should have used the general expression any person whose immoveable property has been sold' instead of the term judgment-debtor. It is said that the mortgagee has ample provision made for the protection of his interest by Section 171 of the Tenancy Act, which provides that he may deposit the amount of the decree to prevent a sale of the mortgaged property. I do not think that is so. Section 171 enables a mortgagee to prevent a sale by a deposit, made before sale; but, if a mortgagee, who did not make any such deposit, expecting that the sale would fetch an adequate' price and he would be paid out of the surplus sale-proceeds, finds that by reason of material irregularity in the conduct of the sale or for any other reason the property has sold for an inadequate price and he has sustained material injury, there is no reason why he should be deprived of the remedy provided by Section 310A.
11. It remains now to consider the cases chiefly relied upon in the argument before us.
12. The case of Rakhal Chunder Bose v. Diearka Nath Misser (1886) I. L. R. 13 Calc. 346, cited by both sides, can hardly be said to determine the question now before us one way or the other. It relates to the construction of a provision of the Code, namely Section 311, in which the same words any person whose immoveable property has been sold' occur; and it is relied upon on behalf of the petitioners as shewing that a mortgagee comes within the meaning of those words, and that the reason for the decision which is stated towards the conclusion of the judgment, will apply as well to a simple mortgagee as to a mortgagee by conditional sale, whose case was then before the Court. But it must be conceded that the importance attached to the fact of the mortgage there having been foreclosed would show that the decision leans in favour, of the view maintained by the opposite party.
13. The decision in Asmutunnissa Begum v. Ashruff Ali (1888) I. L. R. 15 Calc. 488 cited for the petitioner, though bearing only indirectly upon the present question, contains an important observation which favours the view I take. Sir Comer Petheram in delivering the judgment of the Full Benah says, after referring to Section 311 of the Code: 'We think that this means that the substantial injury must be the direct result of the irregularity and that this could only be the case when the property of the person applying had not only been put up for sale or knocked down, hut had been sold in the-sense that the applicant's interest had been legally affected by such sale.'
14. The case of Sri Raja Papamma Rao v. Sri Viva. Pratapa (1896) I. L. R. 19 Mad. 249, is cited by the opposite party as showing that in a simple mortgage there is no transfer of ownership. Bat the words of their Lordships which are relied upon, must be taken in connection with the question before them, which was whether a decree erroneously giving possession to the plaintiff in a suit to enforce a: simple mortgage, could have the effect of a foreclosure decree; and the case is no authority for the proposition that the interest of a simple mortgagee in the mortgaged property is not immoveable property.
15. Turning now to the cases, which are more directly in point, I find that Hamidal Bug v. Matangini Dassi (1898) 2 C. W. N. cclviii, the judgment in which is not given in 2 C. W. N. cclviii, is clearly in favour of the view I take; and so is the unreported judgment in Rule No. 770 of 1900. The case of Srinivasa Ayyangar v. Ayyathorai Pillai (1897) I. L. R 21 Mad. 416, is also in favour of the same view. As against these oases there is the case of Nityananda Patra v. Patra Lal Karmakar (1900) 5 C : W. N. 63, which is no doubt directly in point. But for the reasons given above, I would respectfully dissent from the view there taken, that a simple mortgagee cannot apply under Section 310A.
16. The answer to the question whether a mortgagee can apply under Section 310A depends, in my opinion, not upon the nature of the mortgage, but upon the nature of the execution sale. If the sale is not subject to, but is free of the mortgage, the interest of the mortgagee, which is immoveable property as defined in the General Clauses Act, is sold in the sense that it is affected by the sale and passes to the auction-purchaser upon his taking certain steps; and the mortgagee, whether the mortgage is a simple mortgage or one by conditional sale, is, as?' he ought to be, entitled to come under Section 310A.
17. It might be said that, if a sale under the Bengal Tenancy Act is set aside in the manner we are asked to do, it may give rise to future complications, I do not see that. An order under Section 310A' setting aside a sale, does not determine any question of the relative rights of parties to the property sold. Those rights remain as they were before the sale.
18. I would accordingly answer the question referred to us in the affirmative, and hold that a simple mortgagee of a tenure or holding sold for arrears of rent under the Bengal Tenancy Act, can apply under Section 310A of the Code of Civil Procedure for having the sale set aside; and I would make the rule absolute, set aside the order of the lower Court confirming the sale, and set aside the sale complained of under Section 310A. The petitioners are in my opinion entitled to their costs.
Ameer Ali, J.
19. The question referred for the consideration of the. Full Bench is whether a mortgagee of a tenure or holding sold in execution of a decree for arrears of rent due in respect thereof, is entitled to make an application under Section 310A of the Code of Civil Procedure as being a 'person whose immoveable property has been sold' within the meaning of that Section.
20. The identical question came before my learned brother, Pratt J., and myself in the case of Hamidal Hug v. Matangini Dassi (1898) 2 C. W. N. cclviii, and in coming to the conclusion that a' mortgagee was so entitled, we gave our reasons at some length The report of the case in 2 Calcutta Weekly Notes, cclviii, is not quite accurate, for there the mortgage is represented to have been by way of a conditional sale, whereas we dealt with the case upon the finding of the Munsif that the transaction, upon the basis of which the application was made under Section 310A, was a simple mortgage.
21. As a different view has since been taken in Nityananda Patra v. Hlira Lal Karmakar (1900) 5 C. W. N. 63, by another Division Bench of this Court, it becomes necessary to examine the grounds upon which we came to our conclusion in Hamidal Huq's case (1).
22. It appears that on the 14th of Jane 1899, a holding or jama belonging to one Prosunno Kumar Singh was sold in execution of a decree for arrears of rent, and was purchased by the party showing cause against the rule now before us. On the 10th of July and within the time fixed by law, the applicants alleging themselves to be the mortgagees of the land deposited the amount due under the decree with costs and a sum equal to five per cent a of the purchase-money under Section 174 of the Bengal Tenancy Act, read with Section 310A of the Civil Procedure Code and applied to have the sale set aside. But the Munsif rejected their application on the ground that the mortgage was a benami transaction. The applicants thereupon moved this Court and obtained a rule calling upon the auction-purchasers to show cause why the order of the Munsif should not be set aside or such other order made as to this Court may seem proper.
23. The present reference is due to the conflict between the two cases mentioned above. The learned pleader showing cause contends that even assuming the applicants' allegation to be true, as simple mortgagees, they are not entitled to any relief under Section 310A. Secondly he urges that as benamidars they have no locus standi.
24. As regards the right of the applicants to claim the benefit of the Section under discussion, it seems to me that (there is a fallacy underlying the learned pleader's arguments. Although he has not formulated it in precise terms he evidently seems to be under the impression that the right to apply under Section 310A is confined to persons actually in possession of the property sold.
25. Now, in judging of the question raised in this somewhat vague form, we must bear in mind that the word 'property' is not limited to things existing in substance; incorporeal rights are as much the subject of property as things tangible and corporeal. The Indian Legislature in defining the words 'moveable and immoveable property' followed the distinction recognised in the civil law; and has in terms declared that all rights issuing from or connected with or attached to immoveable property falls within the same category.
26. Again, absolute ownership consists of an aggregate of rights, each capable of being owned and dealt with separately; and the owner is entitled to parcel out his rights in a particular property among different individuals. As owner he has also the power of borrowing- upon its security money from another, and giving to him the right of treating the property as his security for the debt.
27. Section 58 of the Transfer of Property Act (IV of 1882) defines a mortgage to mean the transfer of an interest in specific immoveable property for the purpose of securing the payment, of money advanced or to be advanced byway of loan, an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability.
28. According to Domat mortgage is 'a right which a creditor acquires in immoveables appropriated to him by his debtor, although he be not put into possession of them.'
29. Whether it is a right or whether it is an interest which a creditor acquires in the property hypothecated, the legal consequence is the same.
30. Under Section 58, mortgagees are classified under three heads. Their remedies for the satisfaction of their debts are different, and a different procedure is provided in each case for the enforcement of the remedy; but so far as the interest or right is concerned they are grouped in one category. And a simple mortgagee is entitled to pursue the property in the hands of all subsequent takers for the satisfaction of his debt. As a logical consequence of the right vested in him by the act of the owner, and the transfer to him of the particular interest, the property in the somewhat loose language of the Section is as much his as that of the owner. It is not suggested that it is only the absolute owner in possession of all the rights in a particular immoveable property, who can claim the benefit of Section 810A. It has been conceded that a mortgagee in possession under a conditional sale is so entitled; if the idea be that the right to apply is based upon the fact of actual possession, it would follow that a termor, however short his term might be, would be able to come in under the Section, but not the owner if the reversion, although his interest may be far more valuable and although in fact it is his property that has been sold in execution of the decree. If the argument be well-founded an ijaradar or a mokuraridar may get the property sold, and the owner cannot invoke the benefit of Section 310A. A mere statement of the logical consequence following from such a contention, if given effect to, shows its untenability. It seems to me clear, therefore, that the right to apply under that Section was never intended to he limited to persons actually in possession of any particular immoveable property that has been sold.
31. Nor is that right restricted to the person having an absolute t interest, in other words the judgment-debtor. If that were the intention, the Legislature would have declared so in express terms, as it has done in Section 174 of the Bengal Tenancy Act. To construe the Section as applicable only to the judgment-debtor or absolute owner would exclude from its benefit a mortgagee by conditional sale, a lessee, tin executor in possession of the property, &c.;, but that is obviously absurd. The question then arises, does a simple mortgagee who is unquestionably the transferee of an interest in the immoveable property on question, come within the category of persons entitled to apply to have the sale set aside? To this, in my opinion, there can be but one answer. A particular property may be mortgaged up to the hilt, as the expression goes; it may be the interest of the mortgagor to have it sold; it may be of the utmost importance to the mortgagee to save the property, and yet, if the contention of the pleader for the opposite party be correct, he cannot save the property by invoking the special relief provided for under Section 310 A.
32. In my opinion the words 'any person whose property is sold' include every person, who has an interest in the property in question whether qualified, partial or absolute.
33. An executor has only a qualified interest; a member of a joint Mitakshara family, a lessee, a mortgagee, a mokuraridar, an owner of a reversion, &c.;, have partial interests. In my opinion they all come within the intent and meaning of the Section.
34. I have not referred to the cases cited at the Bar as they have been fully discussed by the learned Chief Justice with whose observations I desire to express my entire concurrence.
35. But it is said that in the particular case before us, the property sold is a holding or jama, and is therefore subject to the provisions of Chapter XIV of the Bengal Tenancy Act; and as the sale does not ipso facto avoid the incumbrance held by the applicants, they are not affected by it and consequently have no right to apply under the Section. It has also been said that a mortgagee may guard himself against the annulment of his mortgage by means of a, registered and notified document under the provisions of Section 159 of the Bengal Tenancy Act. This latter argument is purely hypothetical, and does not arise upon the facts of the case, forit is not suggested that the present mortgage is a protected interest within the meaning of Section 159, and, as it cannot be touched by the purchaser, the incumbrancer is not affected by the sale. As regards the first argument based on Section 167 of the Bengal Tenancy Act, it is to be observed that the purchaser acquires the holding or tenure with the power to cancel incumbrances, and it depends upon his option to do so or not, wholly independent of the will of the incumbrancer. He has that power for a year, whereas the right to have the sale set aside under Section 810A comes to an end on the expiration of a month from the date of sale. It is obvious from these considerations that the right of the mortgagee to look to the satisfaction of his debt from the property hypothecated is materially affected by the sale. To say that his right to apply under Section 310A can only arise when the purchaser seeks to annul the incumbrance would be to declare that he has no right at all. However Section 310A gives the right to apply to have the sale set aside, to every person whose property is sold. If the application is granted, the sale is set aside in its entirety. The Section does not say that a person, who has a partial interest in the property, may apply to have the sale cancelled so far as his interest is concerned. The fact that a person has under the provisions of Section 159 of the Tenancy Act protected his interests from annulment by the purchaser has, in my opinion, nothing to do with his right to apply to have the sale set aside. As the holder of a 'protected interest' he may not think it worth his while to seek the relief under Section 310A. But the property which is sold is his quoad the interest ho holds and there is no reason that I can see in principle or in law to debar him from invoking the benefit of the Section in question. His right comes into existence upon the sale of the property to which his right is attached. For all these reasons, I and of opinion that the question referred to the Full Bench should be answered in the affirmative.
36. As regards the second question I am of opinion, that if the transaction upon which the applicant bases his right is not real, the property is still in the judgment-debtor and ho is in fact the latter's benamidar, and that under the ruling in Bad Poddar v. Ram Kristo Poddar (1896) 1 C. W.N. 135, he is entitled to maintain this application. I, therefore, agree in making the rule absolute.
37. This is a reference made to a Full Bench in a rule issued to the opposite party to show cause why an order of the Munsif of Serampore, dated 22nd August 1900, refusing to set aside a sale of a jama or holding held in execution of a rent decree on the 13th June 1899 should not be set aside. The application to set aside the sale was made under Section 171 of the Bengal Tenancy Act and Section 310A of the Civil Procedure Code, at the instance of two persons, who alleged that they had a simple mortgage over the holding sold. The Munsif refused the application on the ground that there was no evidence of the consideration of the alleged mortgage having passed, which led him to the conclusion that the alleged mortgage was a mere benami transaction.
38. The Bench, before whom the rule came for hearing, has referred to the Full Bench the question whether a mortgagee of a tenure or holding sold in execution of a decree for arrears of rent due in respect of it is entitled to make an application under Section 310A of the Civil Procedure Code, as being a 'person whose immoveable property has been sold' within the meaning of that Section. The referring Bench were also of opinion that there was a conflict between the cases of Hamidol Huq v. Matangini Dassi (1898) 2 C. W. N. cclviii and Nityananda Patra v. Hira Lal Karmokar (1990) 5 C. W. N. 63. In their opinion it made no difference whether the mortgage is a simple mortgage or one by conditional sale, the real point for consideration being whether the mortgagee is a person, whose immoveable property has been sold within the meaning of the Section.
39. I am of opinion that the question propounded to us by the referring Bench does not properly arise in this rule'-in consequence of the Munsif's finding that there was no evidence of the payment of the consideration for the alleged mortgage, on which ground he says it is a benami transaction, but which, I think, means that in his opinion there was no mortgage at all. The petitioners are therefore not simple mortgagees. They have no real mortgage over the holding. They can have no right to apply under either Section 174, Bengal Tenancy Act, or Section 810A of the Civil Procedure Code. The finding of the Munsif to this effect has, it is to be noted, not been set aside by the referring Bench. The learned pleader, who appears in support of the rule, relies in answer to this objection on the case of Basi Poddar v. Ram Kristo Poddar, in which it has been ruled that a benamidar of a person whose immoveable property has been sold has a right to apply to have the sale set aside under Section 310A of the Code of Civil Procedure. I feel grave doubts as to the correctness of this ruling. I do not see how a benamidar of a person whose immoveable property has been sold care fairly be held to represent him except in circumstances in which the beneficial owner will be bound by his benamidar's proceedings. But it is unnecessary (sic) me to consider this point, for the ruling in Basi Poddar v. Ras(sic) Krishna Poddar (1896) 1 C. W. N. 135, would seem to have no application to the present case, in which it has not been found that the applicant ire the benamidars of the judgment-debtor or represent them my way, but in which it has been found as a matter of fact, in consequence of the absence of proof of the passing of the alleged consideration, that the alleged mortgage is not a real mortgage, at a sham and fictitious one. I would, the discharge the Rule for this reason.
40. But however this may be, I would observe in dealing with (sic) merits of the question referred for our decision that it would sera at first sight that there is no direct conflict between the cases Hamidal Huq v. Matangini Dassi (1898) 2 C. W. N. cclviii and Nityananda Patra v. Hira Lal Karmakar (1900) 5 C. W. N. 63, as the former case according to the sport in the Calcutta Weekly Notes, is a case of a mortgage by (sic)conditional sale while the latter is a case in which the applicant was wimple mortgagee. But on referring to the judgment in the case of Hamidal Huq v. Matangini Dassi (1898) 2 C. W. N. cclviii, it appears that the Munsif under whose order the sale took place decided that the mortgage in question was nothing but a simple mortgage and his decision of this point, was not set aside or its correctness impugned. Hence there no doubt is a conflict of decisions between the two cases. It follows that what we have to consider now is the question of the nature of the rights of a mortgagee by simple mortgage, when there is a sale in execution of a rent decree of the tenure or holding over which he has a lien. Our decision on any other question would be an obiter dictum. But the matter is not of much importance, as I now am of the same opinion as the referring Bench that there is no difference between the case of a mortgagee by conditional sale and that of a simple mortgagee in respect of their rights under the provisions of Section 310A. The question for our consideration in this rule accordingly is--Is a mortgagee a person whose immoveable property has been sold within the meaning of Section 310A of the Civil Procedure Code
41. It would seem to me that the answer to this question should be in the negative for the following reasons: (1) That the interest of a simple mortgagee is not 'immoveable property;' (2) that a simple mortgagee is not the 'person whose immoveable property is sold' at a sale in execution of a (sic) for arrears of rent, and (3)that at such a sale, the interest of mortgagee is not sold and does not pass to the purchaser.
42. On the first point, I would observe that a simple mortgagee is not the owner of immoveable property. He has, according to the definition of a mortgage contained in Section 58 of the Transfer of Property Act, but 'an interest in specific immoveable property.' It has been said that under the definition of 'immoveable property' contained in the General Clauses Act (1 of 1868) a mortgage, or an interest in immoveable property, is immoveable property. I am unable to see that this is so. In Act I of 1868, immoveable perty is defined as including 'land, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth.' It is said that a mortgage is ' a benefit to arise out of land. 'In my opinion it cannot be properly so described. By the expression 'benefits to arise out of land' in Section 3(5) of the General Clauses Act are meant profits a prendre, rights of fishery and the like. It is only in my opinion by an undue straining of the meaning properly to be attached to these words, that they can be held to apply to a mortgage, and in Debendra Kumar Mandel v. Rup Lall Dass (1886) I. L. R. 12 Calc 546, it has been expressly decided by this Court that a debt secured by a mortgage by a lien upon immoveable property, more especially when the mortgagee is not in possession, is not immoveable property within the meaning of Section 174 of the Code of Civil Procedure. Hence, according to my view, a mortgagee is only the owner of an interest in immoveable property which is a different thing from immoveable property. The difference between an interest in immoveable property and immoveable property would seem to mo to have been recognized not only in Section 58 of the Transfer of Property Act, but by the Courts, as is apparent from O'Kinealy (sic) judgment in the case of Fadu Jhala v. Gour Mohun Jhala (1892) I. L. R. 19 Calc. 544. (Secondly, it would appear to me that whether or not the interest of a mortgagee is immoveable property, a mortgagee is not a person whose immoveable property is sold at a sale held in execution of a rent decree. What is sold at such a sale is the tenure or holding on which the arrears accrued. This is too certain a proposition to require any demonstration or argument. The words 'the person whoso immoveable property has been sold' in Section 310A, when applied to a sale held in execution of a rent decree, must, therefore, mean the tenure-holder or raiyat whose tenure or holding has been sold. It cannot, in my opinion, mean anything else. That is what is specified in the proclamation of sale issued under Section 167 of the Bengal Tenancy Act and in the sale certificate issued after the sale. The mortgage lien is not mentioned in either document as about to be sold or as having been sold. The words 'whose immoveable property has been sold' cannot, therefore, in my opinion, apply to a mortgagee, who has merely a lien over the property sold. And the same conclusion follows from a consideration of a mortgagee's position and rights as regards the tenure or holding. He is not the owner of it. He has no right of ownership in it. [(See Macpherson on Mortgages, p. 270, Mata Din Kasodhan v. Kazim Husain (1891) I. L. R. 13 Ali. 432, 474, and Papamma Rao v. Rama Chandra Razu (1896) I. L. R. 19 Mad. 219, 252. He cannot deal with it in any way. All that a simple mortgagee can do is to realize his debt by a sale of it. And, unless the tenure or holding is a transferable one, he cannot even do this.
43. Thirdly, the rights of a mortgagee are not sold and do not pass lo the purchaser at a sale of a tenure or holding held in execution of a rent decree. A mortgage of a tenure or holding is an 'incumbrance,' as defined in Section 161 of the Bengal Tenancy Act. If the mortgagee takes the precaution of registering and notifying his incumbrance to the landlord under Section 176, his mortgage lien not only is not sold at a sale of the tenure or holding held in execution of a rent decree, but may never even be affected by such a sale. His mortgage lien may remain intact for ever. If the mortgagee has not taken this precaution, still it would seem to me his lights are not sold and do not pass to the purchaser. They remain unaffected by the sale. But the purchaser can within a year of the date of sale take steps to annul the incumbrance. He may do so or not, as he pleases. If he does not do so, the rights of the mortgagee subsist in him as before. If the purchaser annuls the incumbrance, the mortgagee's rights are avoided, or extinguished. It may be said that in these circumstances the mortgagee's rights may be affected by a sale in execution of a rent decree. This is, however, not the case. They may be affected, not by the sale, but by some act which may or may not be done, subsequently to the sale. Now it has been decided in Asmutunnissa Begum v. Ashruff Ali (1888) I. L. R. 15 Calc. 488 that a person whose rights are not affected by a sale is not a person entitled to apply under Section 311, Civil Procedure Code, to have the sale set aside. But even supposing that the mortgagee's rights may be affected by the sale, which in my opinion it is not correct to say that they are, it cannot be predicated of them that they are sold or pass to the purchaser. What may happen to them is that they may be 'annulled.'
44. It may here be pointed out that a mortgagee who has not registered and notified his mortgage lien (sic) Section 176 can always prevent the possibility of his rights be (sic) affected by the sale of the tenure or holding by paying in (sic)er Section 171 the decretal amount before the sale actually takes place, and he has then an additional mortgage over the tenure or holding for the amount paid by him which bears interest at 12 per cent. per annum which takes priority over every other mortgage and which entitles him to be put in possession of the tenure or holding. A mortgagee has thus provided for him by the law two means of protecting his interest.
45. It may be said that we are here concerned only with the provisions of Section 310A as applicable to a sale of a tenure or holding. But the provisions of the Tenancy Act I have adverted to apply to all sales held in execution of decrees for arrears of rent. Such sales are held in accordance with the procedure prescribed by Chapter XIX of the Civil Procedure Code, of which Section 310A is one of the Section But Section 310A is applicable only after the sale has taken place and in no way prevents the operation of the provisions of Chapter XIV of the Tenancy Act.
46. Then, it has been asked, if the words 'a person whose immoveable property has been sold' in Section 310A do not include a mortgagee, whom, other than the judgment-debtor, do they include? They must include, it is urged, some person other than the judgment-debtor, otherwise the provisions of Section 310A of the Civil Procedure Code would have no wider operation than those of Section 174 of the Bengal Tenancy Act. Even if this were so, this would not, in my opinion, lead to the conclusion that the words referred to must include a mortgagee; for Section 174 was framed in 1885 and Section 310A in 1894. When the latter Section was added to the Code, it was never contemplated that it would be hold applicable to sales under the Bengal Tenancy Act. It was not till the decision - of the case of Janardhan Ganguli v. Kali Kristo Thahu (1895) I. L. R. 23 Calc. 393, that they were considered to apply to such sales. But the case of Janardhan Ganguli v. Kali Kristo Thahur (1895) I. L. R. 23 Calc. 393 and the cases in which it has been followed, show the character of the persons other than the judgment-debtor to whom the provisions of Section 310A may apply. In Janardhan Ganguli v. Kali Kristo Thahur (1895) I. L. R. 23 Calc. 393, the person, who applied to set aside the sale, was an unregistered co-sharer to the extent of 8 annas. In Bungshidhar Haldar v. Kedar Nath Mondal (1896) 1 C. W. N. 114, the applicant under Section 310A was a purchaser from the tenant who is described as being a co-sharer in the tenure sold, but whose interest did not amount to an incumbrance or to a protected interest which would not be affected by the sale. In Rule No. 1643 of 1895, referred to at I. L. R. 23 Calc. 396, the applicant was an unregistered transferee of the whole holding, and in Rule No. 2269 of 1895, cited on the same page, the applicant was a person who professed to pay in the decretal amount on behalf of the judgment-debtor, but who appeared to be really a purchaser from him.
47. Then, it has been urged that to hold that a mortgagee may be included within the words 'person whose immoveable property has been sold 'in Section 310A, even if straining the strict meaning of these words, is merely to extend a privilege, which extension can do no harm to anyone. But I conceive it is my duty to interpret the law and not to extend it, and, further, I apprehend that an extension of the provisions of Section 310 A to mortgagees may do harm. The purchaser in this case considers it will do harm to him, otherwise he would not have opposed the rule. It is said, however, that he will be compensated by the allowance of 5 per cent, on the price paid by him prescribed by the provisions of Section 310A. In the present case the compensation offered to the opposite party is the small sum of Rs. 5, and as the sale took place on the 13th June 1899 and Rs. 100 were paid for the holding, the purchaser will have lost the use of his money for more than 2 years, for which and for the expenses incurred in making the purchase, the sum of Rs. 5 may well be an inadequate compensation. But the object of a purchaser of a tenure or holding would seem to be either to establish himself as an agriculturist in a village or to acquire some land contiguous to his own, if he has already established himself there. It will be seldom, I think, that 5 per cent, on the purchase-money will console him for the loss of his purchase. Then, the extension of the provisions of Sections 174 and 310A must increase the uncertainty attending sales and must diminish the chance of the full value of tenures or holdings being bid for them at sales. This cannot fail to be harmful to judgment-debtors. Finally, it must increase, the risk of litigation which to a greater or less extent attaches to all Court sales. This is greatly to be deprecated in the case of sales of agricultural holdings, for it tends to throw land out of cultivation. The holding in this case was one of 19 bighas. The dispute as to whether the sale of this land is a be set aside or to stand has continued for two years. We do not know what has become of the land in the meantime. But the uncertainty as to its ultimate ownership that must have prevailed during these two years may well have left it fallow and destroyed the chances of the landlord ever recovering any rent for it. Tens of thousands of holdings are annually sold in this way in the province.
48. In conclusion, I would say there seems to me to be no authority for the view contended for by the learned pleader, who appears in support of the rule. The case of Rakhal Chunder Bose v. Dwarka Nath Misser (1886) I. L. R. 13 Calc. 346, on which he relies is, no doubt, a case in which, though under Section 311 of the Civil Procedure Code, the meaning of the words 'a person whose immoveable property has been sold' were considered, and in which it was held that a mortgagee by conditional sale, who had obtained a decree for foreclosure, had such an interest in the property, sold as entitled him to make an application for the setting aside of the sale. The ratio decidendi however, was that after a foreclosure decree, it would be difficult to hold that the property belonged solely either to the mortgagee or to the mortgagor and that therefore either would be entitled is apply under Section 311 to have the sale set aside. This would scorn to mo to be putting an unduly liberal and a not strictly legal interpretation on the terms of Section 311, For the foreclosure decree would not affect the rights of the mortgagor and the legal estate would remain in him until the period for redemption had passed without his redeeming the mortgage. Further, the sale in that case was one under the old rent law and the tenure on which the arrears had accrued is said to have passed free of incumbrances. The rights of the mortgagee therefore were affected by the sale.
49. Reference has also been made in the course of the argument before us to Civil Rule No. 770 of 1900, decided on the 27th July 1900, in which a mortgagee was regarded as a person whose immoveable property has been Sold within the meaning of Section 310A. I have satisfied myself by a reference to the petition of the appellant to the Munsif, dated 6th December 1899, that he was a mortgagee by conditional sale. This, however, does not make any difference, and therefore I can only say that I am constrained to dissent from the decision of this rule. Finally, there-is the case of' Srinivasa Ayyangar v. Ayyathorai Pillai (1897) I. L. R. 21 Mad. 416, in which it was decided that a mortgagee, who was a party to the suit, could apply under Section 310A to have a sale set aside. But in this case the mortgagee, being a party to the suit, was himself apparently a judgment-debtor under the decree. Then, the sale was not under the Bengal Tenancy Act, a sale under which the law does not in my opinion in any way affect the rights of mortgagees.
50. For all these reasons I would discharge this, rule.
51. The question which we are called upon to decide is whether a mortgagee of a holding sold in execution of a decree for arrears of rent due in respect of it, is a person whose immoveable property has been sold within the meaning of Section 310A of the Code of Civil Procedure.
52. The first question which arises is whether a mortgagee's interest is or is not immoveable property. A mortgage is defined in Section 58 of the Transfer of Property Act as 'the transfer of an interest in specific immoveable property' for the purpose of securing the payment of a loan, etc.
53. The General Clauses Act says that ' immoveable property shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened W anything attached to the earth' and 'moveable property shall mean property of every description, except immoveable property.' It seems to me impossible to hold that a mortgage can be moveable property; rather I would regard it in the nature of a benefit to arise out of land, for though this expression is usually applied to what is known as 'profits a prendre,' there is no reason why it should be entirely restricted to them.
54. Let us next consider what passes at the sale of a holding in execution of a rent decree.
55. I would exclude from consideration the case of a holding at fixed rates put up to auction under Section 164 of the Bengal Tenancy Act, subject to registered and notified encumbrances, because in such a case the mortgagee's interest must necessarily remain unaffected by the sale, and the mortgagee could therefore have no right to make a deposit under Section 310A of the Code of Civil Procedure.
56. In the case before us no doubt the holding itself was sold, but the holding comprises two separate rights, viz., (hat of the mortgagor and that of the mortgagee, the latter being, to use the langage of Section 161 of the Bengal Tenancy Act, 'a right or interest created by the tenant on his tenure or holding or in limitation of his own interest therein.' The one right is complementary of the other, and the two rights in combination constitute the property that is sold. And here I may observe in passing that as the mortgagor's right is necessarily immoveable property, its complement, or the mortgagee's right cannot, in the nature of things, * be anything else than immoveable property.
57. As then the mortgagee's interest passes to tire purchaser at the auction sale, and that interest is itself immoveable property, I conclude that the mortgagee is a person entitled to make an application under Section 310A of the Code of Civil Procedure.
58. I have confined my arguments to the case of the sale of a tenant's holding, because that is what seems to have been sold in the particular case under reference. But the same reasoning will apply when a tenure is the subject of sale.
59. In my opinion the question under consideration is not practically affected by the contingency that the purchaser may fail to annul the encumbrance within the prescribed period of one year. The tenure or holding is sold free of encumbrances, and the purchaser has only to comply with the provisions of Section 767 in order to reap the full benefits of the transaction. The mortgagee ought not to be denied the right to protect his interest under Section 310A of the Code of Civil Procedure, simply on the contingency that the purchaser's future inaction may make the exercise of that right superfluous.