Rajkumari Kaushalya Devi v. Bawa Pritma Singh and Another.

Judgment

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 38 of 1960. Appeal by special leave from the judgment and order dated October 6, 1958, of the Punjab High Court in Letters Patent Appeal No. 52 of l C)i)4, arising out of the judgment and order elated June Fi, 1954, of the said High Court· in First Appeal from Order No. 149 of 1953. Y. Kumar, for the appellant. Bakshi Man Singh and Sardar Singh, for the respondents. 1960. April 20. The Judgment of the Court was delivered by \VANCHOO, J.-This is an appeal by special leave against the judgment of the Punjab High Court. The brief facts necessary for present purposes are these. The appellant had executed two usufructuary mortgages with respect to two properties situate in Ferozepore citv in favour of the respondents in J 946. She also took both properties on lease on the same date. An application was filed by the respondents under s. 13 of the Displaced Persons (Debts Adjustment) Act, >Jo.

LXX of J 951 (hereinafter called the Act), for recovery of the principal sum due as well as the rent which was said to be inarrears. The application was resisted by the appellant on various grounds, one of which was that no snch application lay as the liability was not a debt under the Act. The tribunal negatived the contention of the appellant and passed a preliminary decree for sale. Six month's time was allowed to the appellant to pay the decretal amount, failing which the respondents were at liberty to get a final decree prepared and bring the properties to sale. The appellant went in appeal to the High Court but the appeal was dismissed. Then there was a Letters Patent Appeal, which was also dismissed. The appellant then applied for and was granted special leave bv this Court, and that is how the matter has come UJJ before us.

The only point for our consideration is whether t.he liability created under a mortgage is a debt ·within Rtefkumari Kausha/..yadevi Bawa Prifma Singh Wmzchoo ]. Raj/,-umnri Kausha~radeui Bawa Prilmn Si11gh Jf'anchnn J. [19601 the meaning of s. '.2(G) of the Act. The rclev;mt part of that provision rum as follows:- " 'Debt' meam any pecuniary liability, whether payable presently or in future, or under a decree or order of civil or revenue court or otherwise, or whether ascertained or to be ascertained, which- (a) in the case of a displaced person who has left or been displaced from his place of residence in any area now forming part of West Pakistan, was incurred before he came to reside 111 any area now lorming part of India;

(b) in the case of a displaced person who, before and after the l.~th day of August, 1947, has been residing in any area now forming part of India, was incurred before the said date on the security of any immovable property situate in the territories now forming part of 'Vest Pakistan: Provided that where any such liability was incrn red on the security of immovable properties situate both in India and in 'Nest Pakistan, the liability shall be so apportioned between the said properties that the liability in relation to each of the said properties bears the same proportion to the tutal amount of the debts as the value of each of the properties as at the date of the transaction hears to the total value of the properties furnished as security, and the liability, for the purposes of this clause, shall be the liability which is relatable to the property in vVest Pakistan;

(c) is due to a displaced person from any other person (whether a displaced person or not) ordinarily residing in the territories to which this Act extends; x x x x The contention 011 behalf of the appellant is that the liability 1111<10 a mortgage is not a pecuniary liability and therefore s. 2(6) will not apply to a mort- . gage debt. It is further urged that the scheme of the Act shows that mortgages in relation to properties situate in what is now India are not covered by the Act at all. "" r • nebt is defined in s. 2(6) as meaning any pecuniary 1iability and has been restricted by the three subclauses _in the sub-~ection with reference to the person who might be o-wrng the debt 01~ to whom the debt might be owed. Sub-els. (a) and (b) refer to the debts owed by a displaced person as defined in the Act while sub-cl. (c) refers to a debt due to a displaced person. Sub-cl. (c) has therefore to be taken independently of snb-cls.

(a) and (b), for it refers to a creditor who is a displaced person while the other two sub-clauses refer to a debtor who is a displaced person. Under subcl. (c) a displaced person who is a creditor can recover the debt clue to him from any other person, ·whether a . displaced person or not, who is residing in the territories to which the Act extends. The main contention of the appellant in this connection is that a mortgage debt is not a pecunfary liability and therefore does not fall within the definition of debt at all. vVe are of opinion that there is no force in this contention; The words "pecuniary liability" ·will cover any liability which is of a monetary. nature. Now the definition of a. mortgage in s. 58 of the Transfer of Property Act. No. 4 of 1882, shows that though it is the transfer of an interest in specific immovable property, the purpose of the transfer is to secure the payment of money advanced or to be advanced by way of loan or to secure an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability.

The money advanced by way of loan, for example, which is secured by a mortgage, obviously creates a pecuniary liability. It is true that a mortgage in addition to creating the pecuniary liability also transfers interest in the specific immovable property to secure that liability; none the less the loan or debt to secure which the mortgage is created will remain a pecuniary liability of the person creating the mortgage .. Therefore a mortgage debt would create a pecuniary liability upon the mortgagor arid would be covered by the definition of the word "debt" in s. 2(6). v\Te may in this connection refer to the Displaced Persons (Institution of Suits) Act, No. XL VII of 1948, which has been practically repealed by the ll-6 SCI/ND/82 Rajkumari Kaushalyia Devi Bawa Pritma Singh Wanchoo J. Rajkwnari Ka11shaf.ya Devi Bawa Pritma Singh JVm1rlwn J. [ 19601 Act.

In LiiaL hw, >11.ils relating· Lo immO\';ible pro· pcny "·c1-c specially excepted 1I11<le1· s. 'f, but there is no such prmision in the Act. ,\g,,in s. 6 of the Displaced Persons (Legal Proceedings) Act, No. XXV of I 'l·l'l, which has also ],.:·en repealed by the Act mentions decrees or orden for payment of money while in I :'i of the Act which deals with the same matter !hose words "re omitted and the words "proreerlings in respect of any debt" are used inste'ad. There can be no doubt in consequence that. the Act is a comprehensive law dealing "'it.h all kinds of pecuniary liability. 'Ve are thereforeof opinion that s. 2(6) dearly incllldes a mortgage debt and under sub-cl. (c) thereof a displaced person to whom such a debt is clue from any other person, whether a displaced person or not, ordinarilv residing in the territories to which the Act extends c~n take die benefit of this Act.

Let us now see whether there is anything in the scheme of the Act which in any way militates against the pbin words of s. 2(fi). Learned counsel for the appellant: in the first place refers to sub-cl. (b) of s. 2(ri) in this connection and points out that that subclanse specifically deals with mortgage debts secured on arn· immovable property situate in the territories forn1ing part of 'Vest Pakistan. Tt is nrgcd that there w:is a specific provision with respect to mortgage debts in relation to immovable properties in \\Test P"kistan and that if it were intender[ that mortgage of immovable properties situate in 'vhat is now India would also be dealt with under the Act there woulcl have been a similar specific pronston in the Act. Further it. is pointed out th:it the proviso to subcl. (b) lo s. 2(6) provides for apportioning the mortgage debt in c;iscs where the property on which the clcb1· is secured is both in \\Test Pakistan and in India and restricts the application of sub-cl.

(b) only to that part of the clebt winch "·as secured on the property i 11 '\'est: Pakistan and thm excludes from the operation of sub-cl. (h) th"t part: of the clebt which is secured on property in India. That is undoubtedly so. The reason howc1'C1" for this speci;il provision is to be found in the later prm·ision contained in s. 16 ll\· which a ch;ll'g·e was created on com1,cnsation to be ,;.i,·en to a t J SUPRE1\1E COURT REPORTS displaced person with respect to the mortgage debt secured on immovable property in Pakistan or in the alternative a charge vl'as created on property given Rajkumari in exchange for the property in Pakistan on which Kaushal;·a Devi the debt was charged. The special provision therefore in sub-cl. (b) of s. 2(6) would not in these circum- Bawa Pntma Singh stances cut down the plain meaning of the words used Wanchoo J. in sub-cl. ( c) or restrict the, wide words "pecuniary liability" to liability other than that secured by a mortgage.

Incidentally 1Ne may mention that subcl. (b) itself shows that pecuniary liability includes a mortgage debt, for it shO'ws that any liability which was incurred on the security of any immovable property situate in \'Vest Pakistan would be a debt within the meaning of s. 2(6) and therefore a pecuniary liability. It is next urged that when the legislature excepted . the property in India which was encumbered from being dealt with under sub-cl. (b) so far as displaced debtors were concerned, there is no reason why it should allow the displaced creditors to proceed under the Act with respect to iportgage debts. This argument, however, overlooks the provision in sub-cl. (a) under which a displaced debtor can take the benefit of the Act, once it is held that the words "pecuniary liability" also include mortgage debt. As we have said· before sub-cl. (b) was dealing with a· special situation which was worked out in s.

16 of the Act and the general right of a displaced debtor to take advantage of the Act is to be found in sub-cl. (a) and that subclause will cover a mortgage debt as it is a pecuniary liability. Reliance was then placed on s. 16(5), which gives a right to the creditor to elect tq be treated as an unsecured creditor in rebtion to the debt, in which case the provisions of the Act would. apply accordingly. It was urged that this sub-section requires that a creditor must make an electio'n before he can take the benefit of this Act. v\Te arc of opinion that this argument has no force, for sub-s. (rl) of s. Hi only deals with , a situation which arises where the mortgage, ch::irge or lien was on immovable property situate in \i\'cst Pakistan. It does not deal at all with cases SUPREl\1E COURT REPORTS [1960] where the morlgage, charge or lien is on immovable property siluate outside \\'est Pakistan. Rajkumari Reference \vas Lhcn made to s.

17 of the Act. lt Kaushalya Devi deals wi t:h debts secured on mm·a ble properties. That section is again concerned with displaced debtors and Bawa Pritma Singh 'Jl ] Wanchoo J. prov1 es 10\v equ1t1es vv1 Je \\·or cc out et\veen a displaced debtor and his creditor with respect to debts secured on movable property. \\'e see nothing in this section which can cut down the amplitude of the words used in s. 2(6)(c). Reference was then macle to s. 21 which provides for scaling down debts. That is however a general provision dealing with debts of all kinds and there is nothing in that section which shows that the word "debt" as defined in s. 2(6) refers only to claims for money and does not i 11clucle a mortgag·e debt. Tims we sec nothing in any provision of the Act or in its scheme which would cut down the meaning we have given to the words "pecuniary liability" as used in s. 2(6) read with sub-cl.

(c) thereof. le was also urged that if mortgage debts on property situate in J ndia were covered by the Act, there is no machinery (like s. )(i) for enforcemem of the creditors' rights in respect. thereof. This is not correct. Section 10 provides for the claim of a displaced creditor against a displaced debtor and s. 1 :; provides for the claim of a displaced creditor against any other person who is not a displaced debtor. Section 11 then provides how an application under s. JU will be dealt: with and under sub-s. (2) thereof ;i decree can be passed under certain circumstances against the displaced debtor. Similarly under s. 14(2) a tribunal can pass such decree in relation to an application under s. IB as it thinks fit. These decrees are executable under s. 28 of the Act. Therefore even when the debt 1s a mortgage debt there is provision in the Act for enforcement of that debt, though of course this provision is different from the provision contained in s.

16, which was dealing with the special situation of properties under mortgage situate in vV est Pakistan. \Ve mav also refer to s. !l of the Act which bvs down that the provisions of the Act and of t:lic Rules 3 S.C"R. and Orders made thereunder shaU have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. The Rajkwnari effect of this overriding provision .is to make a suit !Caushalya Devi like the ]Jresem maintainable in spite of the provisions B Pv. s· , awa ritma rngrl applymg to such sutts 111 other laws. The last contention on behalf of the appellant is Wanchoo J. that if s. 2(6)(c) empowers a displaced creditor to make an application under s. 13 even with respect to a mortgage debt, there will be hardship to prior mortgagees or subsequent mortgagees inasmuch as these persons cannot be dealt with under the Act.

Section 13 empowers a displaced person claiming .a debt from any other person who is not a displaced person to apply within one year of the coming into force of the Act in any local area to the tribunal having jurisdiction in the matter. The provision is obviously e.nacted to give relief for a short period only. Section 25 of the Act provides for the regulation of all proceedings under the Act by the provisions contained in the Code of Civil Procedure save as expressly provided in the Act or in any rules made thereunder. But assuming that in spite of this provision, 0. XXXJV, r. 1 of the Code of Civil Procedure ·will not apply to proceedings under the Act and all -those having an interest in the mortgage security cannot be joined as parties as required by 0. XXXIV, r. I, the interest of prior or puisne mortgagees cannot in any case be affected by the decree passed under the Act. The Explanation to 0. XXXIV, r.

I, shows that a prior mortgagee need not be made a party to a suit for sale by a puisne mortgagee. So far .therefore as a prior mortgagee is concerned, his rights will not be affected by the decree passed under s. 13 of the Act, just as his rights are not ;iffected by the decree passed under 0. XXXlV. So far as mortgagees subsequent to the displaced creditor who applies under s. l ;3 ;ire concerned, their interests will also not be jeopardized by the deo:ee which may be passed under s. I :l. Even under 0. XXXlV, which requires puisne or wbsequent mortgagees to be joi 11ed as parties in a suit for sale, a <lecree obt;ii ned in a suit lo which the s11bscg11cnt mottgagce was not joined as a party cloes not affect his rights and Lhe • [1960] z96o · proceedings in such a. suit a.re not binding on him so Rajkumarl. as to affect his rights und.er the second mortgage.

He Kaushalya v.V; can thus follow the property by suing his mortgagor, even though it may have been sold under the decree . ilawaPritmaSingliofa.U: earlier mortgagee in a. suit to which he was not a.. pa.rty .• __ Therefore, .the interest of the prior mort- Wa,,.hoo' J • . · gagee or the subsequent mortgagee, if any, would not . be affected by a decree passed on an application under s. 13 and there is no reason therefore to cut down the plain meaning of the words ·used in B. 2 (6}(c) on the ground that the proc~edings: under the .Act would prejudicially-. affect' the -rights• of: prior or puisne r96o April zo. mortgagees>•·• _ • • r "' • There is therefore no.· force· in this appeal and it is hereby dismissed with costs." « ·:··r:, _; ~-. ,'· -'. ;:T · .... · App~l dis1nissed. ,·· .. , :r ,li ·.: .~.:,:~IAHAi>EOL.Ail·KANODIA,.· .. rr: l·i'. -, 11 -i ~-1 ~ ;_i ::· . .i •l .. ~:f-, · ·' '«;·_,.::-,~ ,,v•, '•' ,-,;U'i >, : .-THE -.AD~IINISTRATOR-GENERµ. OF-. .; ... , ,, ; .:"' <:, ...

WESTBENGA.L.• ;'-:\'-·" j . (P .. B. GA.JENDRAGADKAR,- K. N; . w ANCHOO . : .•·· "' :.':and K. C. DAs Gm.A.; JJ:)- - .. _-:-.-~_!;:;i .. , • .Thika Tenancy..,-Decree for possession against tenant-Applicaiicln'f<W ·rdiefby lenant-,-Amendment. of Act withretrospective 'operation~Effect-:.fnterpretation of Statute-Principles· of construction~Thika Tenancy• Act (W:B. z of r949f; s. 28-Thika. Tenancy Amendment Act (W .B. 6 of r953). s.'I(z). ·. -:: ··with a" view to i;ive protection to Thika' tenants against eviction and in certain.other matters, the West Bengal -Legislature enacted -the Calcutta Thika Tenancy Acti 1949 .. That Act . was amended by the Calcutta Thika Tenancy Amendment Act, :i:g5j, which omitted s: 28 of the Act. The question for decision in - the appeal was whether . the cappellant against whom proceedings for' execution of a decree for ejectment was pending, who had appli~ . ed -for, relief under s;

28 when that section was in force, was - - · entitled:to have his ;application ,disposed of in accordance with the provisions of s. 28, which had ceased to exist retrospectively though. it remained undisposed of 'on the date the Amendment Act came into force:· • · ",r; Held, thats, 1, 'sub-5: (2) Of the Calcutb. Thlka 'Tenanc{A.ct t953,• clearly intended that no reilef under s.' 28 of the brigfnal