Mewa Lal v. Rukumpal Singh — 1968 DIGILAW 339 (ALL)

JUDGMENT Jagdish Sahai, J. - This second appeal has come to us on a reference made by our brother S.N. Singh. The relevant facts giving rise to this second appeal are: Tej Singh, the father of the Respondent No. 1 Rukum Pal Singh, owned certain zamindari property and groves. He also held certain sir and khudkasht plots. Tej Singh mortgaged his zamindari share, sir and khudkasht plots, as also some groves with Khet Pal Paliwal, adoptive father of the Appellant Mewa Lai. Some time, thereafter, Khet Pal died. Mewa Lal filed a suit on the basis of the mortgage aforesaid against Tej Singh. The suit was decreed and the decree was transferred to the Collector for execution. The Collector granted Mewa Lal, u/s 17 of the UP Debt Redemption Act, a self liquidating usufructuary mortgage for a certain period. Mewa Lal obtained possession over the zamindari share, the sir and khudkasht plots and the groves, on the basis of the order granting self-liquidating usufructuary mortgage to him. In July 1952, the UP ZA and LR Act (hereinafter referred to as the Act) came into force. In 1953, Rukum Pal Singh, the Plaintiff-Respondent, filed Suit No. 53 of 1953 in the court of the Civil Judge, Farrukhabad for possession over the groves that the Defendant Mewa Lal held by virtue of the self-liquidating mortgage mentioned above and for recovery of a sum of Rs. 100/- by way of damages for the trees alleged to have been cut by the Defendant as also for the recovery of Rs. 500/- as mesne profits for wrongful use and occupation of the said groves by Mewa Lal. On 25-10-1956 the learned Civil Judge decreed the suit for possession of the disputed groves and for recovery of a sum of Rs. 350/- . He directed the parties to pay and receive costs in proportion to their success and failure. Against that decree Mewa Lal appealed to the District Judge, Farrukhabad. The appeal was dismissed with costs by the District Judge on 19-11-1957. Against the decree of the learned District Judge dated 19-11-1957 the instant second appeal has been filed in this Court. 2. He directed the parties to pay and receive costs in proportion to their success and failure. Against that decree Mewa Lal appealed to the District Judge, Farrukhabad. The appeal was dismissed with costs by the District Judge on 19-11-1957. Against the decree of the learned District Judge dated 19-11-1957 the instant second appeal has been filed in this Court. 2. The question which was canvassed before the courts below and which has been canvassed before us is whether Under Clause (g) of Section 6 of the Act, Rukum Pal Singh was entitled to get back possession of the groves in dispute from Mewa Lad, on the ground that the "self-liquidating usufructuary mortgage" in favour of Mewa Lal was converted into a simple mortgage. The courts below held that Mewa Lal was a mortgagee in possession and the mortgage held by him was substituted by a simple mortgage and for that reason Rukum Pal Singh is entitled to get back possession over the groves in dispute. 3. The contention of the Learned Counsel for Mewa Lal before us is that Mewa Lal is entitled to continue in possession for the remaining period of the self-liquidating usufructuary mortgage because a "self-liquidating mortgage" is not a mortgage with possession within the meaning of Clause (g) of Section 6 of the Act. 4. Before I deal with this submission of the Learned Counsel, I would like to dispose of an objection made on behalf of the Respondents that the present appeal has abated u/s 5 of the UP Consolidation of Holdings Act (hereinafter referred to as the Consolidation Act) because the village in which the groves in dispute lie has been notified for consolidation operations u/s 4 of the Consolidation Act. This objection was taken by means of a written application, as also orally, during the course of arguments. 5. In this connection I would like to point out that Mewa Lal is not claiming any tenure-holder rights over the grove or any permanent interest in it. He only wants that he may be allowed temporary occupation of the grove for the years that remain of the period for which he was given the self-liquidating mortgage u/s 17 of the Debt Redemption Act. He only wants that he may be allowed temporary occupation of the grove for the years that remain of the period for which he was given the self-liquidating mortgage u/s 17 of the Debt Redemption Act. It may be stated that the suit giving rise to this appeal was also for recovery of mesne profits and damages and those reliefs are involved in the instant second appeal also. Section 5 of the Consolidation Act, so far as relevant for our purposes, reads: 5. (1) ... (2) Upon the said publication of the notification Under Sub-section (2) of Section 4 the following further consequences shall ensue in the area to which the notification relates, namely-- (a) every proceeding for the correction of records and every suit and proceeding in respect of declaration of rights or interest in any land lying in the area, or for declaration or adjudication of any other right in regard to which proceedings can or ought to be taken under this Act, pending before any court or authority whether of the first instance or of appeal, reference or revision, shall, on an order being passed in that behalf by the court or authority before whom such suit or proceeding is pending, stand abated: ... 6. The expression "interest in any land" occurring in this section does not mean the right to occupy the land temporarily. 7. The suit giving rise to this appeal or the appeal itself is not a simple proceeding for correction of records nor is it a suit or proceeding in respect of a declaration of rights or interest in any land. The two deal with mortgagee's rights and complicated questions of civil law are involved. In this connection the only other question that remains to be examined is whether the suit and the appeal are for a declaration or adjudication of any other right in regard to which proceedings can or ought to be taken under the Consolidation Act. 8. The suit giving rise to this appeal was for possession on the ground that Mewa Lal was no longer the mortgagee in possession under the law and for mesne profits and damages. The defence of Mewa Lal was not that he was the owner or the tenure-holder of the groves in dispute. 8. The suit giving rise to this appeal was for possession on the ground that Mewa Lal was no longer the mortgagee in possession under the law and for mesne profits and damages. The defence of Mewa Lal was not that he was the owner or the tenure-holder of the groves in dispute. He claimed no other rights than those of occupation for the remaining years of the period for which he was granted the self-liquidating mortgage. Even the Plaintiff's case is not that Mewa Lal has no occupation with the grove. His case is that Mewa Lal is a simple mortgagee and not a mortgagee with possession. 9. In my opinion, the suit giving rise to this second appeal or the appeal itself do not fall in Clause (a) of Sub-section (2) of Section 5 of the Consolidation Act. The consolidation authorities are not competent to decide whether Mewa Lal is a simple mortgagee or one with possession or whether any damages or mesne profits are payable by him. Even according to the Plaintiff, Mewa Lai's name will continue to be recorded in the revenue papers, though as a simple mortgagee instead of as a mortgagee in possession. These matters are clearly beyond the jurisdiction of the consolidation authorities. 10. Mr. Laxmi Saran has placed reliance upon Ram Adhar Singh v. Ram Roop Singh and Ors. 1968 AWR 14 (SC): 1967 UPRC 396. In my judgment that case is distinguishable. In that case no damages or mesne profits were claimed nor was the mere right of occupation as opposed to possession over the land claimed. 11. I, therefore, over-rule the preliminary objection that the appeal has abated and now proceed to consider the merits of the second appeal. Section 6(g) of the Act reads: 6. Consequences of the vesting of an estate in the State. When the notification u/s 4 has been published in Gazette, then, notwithstanding anything contained in any contract or document or in any other law for the time being in force and save as otherwise provided in this Act, the consequences as hereinafter set form shall, from the beginning of the date of vesting ensue in the area to which the notification relates, namely-- ... ... ... ... ... (g)(i) every mortgage with possession existing on any estate or part of an estate on the date immediately preceding the date of vesting shall, to the extent of the amount secured on such estate or part, be deemed without prejudice to the rights of the State Government u/s 4, to have been substituted by a simple mortgage; (ii) ... ... ... 12. The submission of Mr. S.N. Misra, the Learned Counsel for the Appellant is that Section 6(g) of the Act would not apply to the case of his client (Mewa Lal) because the self-liquidating usufructuary mortgage granted to him is not a "mortgage" within the meaning of Section 6(g) of the Act. Learned Counsel contends that the word "mortgage" used in Section 6(g) of the Act is used in the sense in which the expression "mortgage" has been defined by the Transfer of Property Act. Learned Counsel submits that the so called self-liquidating usufructuary mortgage granted by the Collector u/s 17 of the UP Debt Redemption Act is not the result of an agreement between the parties but of the order of the Court. Section 17(1), third proviso, of the Debt Redemption Act reads: Provided also that the court may execute a decree to which this Act applies by granting to the decree-holder a self liquidating usufructuary mortgage, for a period of not more than twenty years, of such land as is protected from sale, transfer or foreclosure by the provisions of this section: Provided also that when a mortgage has been granted under the provisions of this section the same land shall not be mortgaged in execution of any other decree to which this Act applies against the same debtor or his heir or successor if the term of the mortgage together with the term or terms of previous mortgage or mortgages exceed twenty years. Sub-section (2) of Section 17 of the Debt Redemption Act reads: The form, terms and conditions of a mortgage granted under the second proviso to sub Section (1) and the amount to be paid by the debtor at any time for the redemption of such mortgage shall be such as may be prescribed. Rule 9 of the Rules framed under the UP Debt Redemption Act (hereinafter referred to as the Rules) reads: 9. Rule 9 of the Rules framed under the UP Debt Redemption Act (hereinafter referred to as the Rules) reads: 9. Forms of mortgage.--The form of the mortgage granted under the second proviso to Sub-section (1) of Section 17 of the Act shall be that prescribed in Clause (a) of Sub-section (1) of Section 13 of the Uttar Pradesh Regulation of Agricultural Credit Act, 1940 (UP Act XIV of 1940) and its conditions will be those prescribed by S Hand those which the Collector may, consistent with the provisions of Section 15 of that Act, think fit to impose. 13. Mr. Misra, the Learned Counsel, contends that the language of the third proviso to Section 17 clearly shows that it is the Court which grants a self-liquidating usufructuary mortgage and not the judgment debtor. He also points out to the form and submits that it cannot be treated to be an agreement between the parties or a deed of mortgage and that it is only an order of the Court. 14. The Act does not define the word "mortgage", nor does the UP Debt Redemption Act define the expression "self-liquidating usufructuary mortgage." These expressions have also not been defined in the UP General Clauses Act. 15. Normally, the following five conditions are necessary to constitute a mortgage: (a) The transferor and the transferee of mortgage rights must be living person; (b) the mortgagor must be the owner of the property mortgaged; (c) there must be an agreement between him and the mortgagee, for the creation of the mortgage; (d) the transaction must amount to a transfer of interest in an immoveable property; (e) the mortgagor retains the right to transfer the equity of redemption and the mortgagee his interest in the property. 16. Section 58 of the Transfer of Property Act defines the mortgage as follows: 58. (a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. (a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage money and the instrument (if any) by which the transfer is effected is called a mortgage deed. ... ... ... 17. The mortgages contemplated by Section 58 of the Transfer of Property Act are: (a) simple mortgages, (b) mortgage by conditional sale, (c) English motgage, (d) mortgage by deposit of title deeds and (e) anomalous mortgages. 18. Section 58 of the Transfer of Property Act does not mention a self-liquidating usufructuary mortgage. It defines an usufructuary mortgage as follows: Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until payment of the mortgagee-money and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest or partly in payment of the mortgage money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee. 19. Section 58(a) of the Transfer of Property Act describes mortgage as a transfer of interest. Section 5 of the Transfer of Property Act defines "transfer of property" as follows: 5. In the following sections "transfer of property" means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, or to himself and one or more other living persons and "to transfer property" is to perform such act. 20. In this section "living person" includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals. 21. 20. In this section "living person" includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals. 21. From what I have said above it follows that a mortgage can be created only by a living person. It is, however, well settled that the Court is not a juristic person within the meaning of Section 5 of the Transfer of Property Act : See Raj Raghubar Singh v. Jai Indra Bahadur Singh AIR 1919 PC 55 , Mehandi Ali Khan v. Ghunni Lal (1929) 27 ALJ 902, Mangat Lal Vs. Ghasi Khan and Others, AIR 1929 All 800 and Har Narain and another v. Bank of Upper India AIR 1938 Oud 84. In Raj Raghubar Singh's case (supra) the question was whether a particular instrument could be treated to be a mortgage deed. Their Lordships observed: Their Lordships have to examine whether in this case there is any mortgagee, any person to whom the security was given.... It is suggested that they are bound to the Court. But the Court is not juridical person. It cannot be sued. It cannot take property and as it cannot take property it cannot assign it. In Mangat Lal's case (supra), the question was whether a person, who was auction purchaser at a court sale, was entitled to the benefit of Section 41 of the Transfer of Property Act. Bennet and Iqbal Ahmad, JJ. while dealing with the submission, observed: It appears to us that the Appellant being an auction-purchaser, was not entitled to the benefit of Section 41, T.P. Act at all. That section begins: Where with the consent, express or implied, of the persons interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration. The section, therefore, relates to a transfer by the ostensible owner. Transfer is defined in Section 5 as: an act by which the living person conveys property, in present or in future, to one or more other living persons etc., that is to say, for a transfer there must be a person who conveys. In the case of an auction sale there is no person who conveys. Transfer is defined in Section 5 as: an act by which the living person conveys property, in present or in future, to one or more other living persons etc., that is to say, for a transfer there must be a person who conveys. In the case of an auction sale there is no person who conveys. It was argued by the Learned Counsel for the Appellant that the judgment debtor was the person who had conveyed. No doubt the judgment-debtor upto the period of the auction sale is the owner. But he does not do act which can be said to be an act conveying the property. On the contrary the transfer of his rights to the auction-purchaser is made without his free will or consent or active participation. In Har Narain and Anr. v. Bank of Upper India (supra) it was held that a purchase by an auction-purchaser in execution sale is not a transfer to which the Transfer of Property Act applies. It was observed that "this sale was not a sale by the judgment-debtor to his decree-holder but a sale by the Court in execution of a decree and it is impossible to hold that the Court was a living person or a 'party' under meaning of Section 5, T.P. Act." 22. In the present case Mewa Lal has no right to transfer his interest to a third person. I have already said above that Section 58 of the Transfer of Property Act does not mention self-liquidating usufructuary mortgage. 23. For the reasons mentioned above it appears to me that the "self-liquidating usufructuary mortgage" granted to Mewa Lal is not a mortgage within the meaning of the Transfer of Property Act. 24. In order to understand the pith and substance of the grant to Mewa Lal it is necessary to find out as to what has exactly been given to him. The grant of the self-liquidating usufructuary mortgage u/s 17 of the Debt Redemption Act has enabled him to temporarily occupy the grove for the period of the grant. The grantee is permitted to realise as much of his debt as he can by the occupation of the grove for the period for which it is granted. Such an arrangement is not, in my opinion, a regular mortgage nor is it a mortgage within the meaning of the Transfer of Property Act. The grantee is permitted to realise as much of his debt as he can by the occupation of the grove for the period for which it is granted. Such an arrangement is not, in my opinion, a regular mortgage nor is it a mortgage within the meaning of the Transfer of Property Act. But the arrangement has some, though not all, the ingredients of a "mortgage" e.g. it entitles to grantee to enjoy the usufruct for the period of the grant to the exclusion of the judgment-debtor and gives to the grantee dominion and control over the property for a fixed period. The arrangement is clearly similar or akin to "mortgage". Besides, the provisions and the scheme of the Act also show that the "self-liquidating usufructuary mortgage" is comprehended by Section 6(g) of the Act. In my opinion the expression 'mortgage' in Section 6(g) of the Act includes not only regular mortgage, but also transactions which are similar to a mortgage. 25. Section 4 of the Act provides that the State Government may by means of a notification declare that, as from a date to be specified in the notification, all estates situate in Uttar Pradesh shall vest in the State and shall stand transferred to and vest, except as hereinafter provided, in the State free from all encumbrances. Section 6 deals with the consequences of the vesting of an estate in the State. Section 6 deals with the consequences of the vesting of an estate in the State. Clause (a) of this section provides that "all rights, title and interest of all the intermediaries--(i) in every estate in such area including land cultivable or barren, grove land, forests whether within or outside village boundaries, trees other than trees in village abadi, holding or groves, fisheries, tanks, ponds, water-channels, ferries, pathways, abadi sites, hats, bazars and melas other than hats, bazars and melas held upon land to which Clauses (a) to (c) of Sub-section (1) of Section 18 apply and (ii) in all sub-soil in such estates including right, if any, in mines and minerals, whether being worked or not, shall cease and be vested in the State of Uttar Pradesh free from all encumbrances." Clause (b) of Section 6 of the Act provides that "all grants and confirmations of title of or to land in any estates so acquired, or of or to any right or privilege in respect of such land or its land revenue shall, whether liable to resumption or not, determine." Clause (c)(i) of the said section is to the effect that "all rents, cesses, local rates and sayar in respect of any estate or holding there-in for any period after the date of vesting and which, but for the acquisition, would be payable to an intermediary, shall vest in and be payable to the State Government and not to the intermediary and any payment made in contravention of this clause shall not be valid discharge of the person liable to pay the same." Clause (d) of Section 6 of the Act provides that all arrears of revenue, cesses or other dues in respect of those estates so acquired and due from the intermediary or an arrear on account of tax on agricultural income assessed under the UP Agricultural Income Tax Act, 1948 for any period prior to the date of vesting shall continue to be recoverable from such intermediary. Clause (e) of the said section provides that "all amounts ordered to be paid by an intermediary to the State Government Under Sections 27 and 28 of the UP Encumbered Estates Act, 1934 and all amounts due from him under the Land Improvement Loans Act, 1883, or the Agricultural Loans Act, 1884, shall, notwithstanding anything contained in the said enactments, become due forthwith and may, without prejudice to any other mode of recovery provided therefor, be realised by deducting the amount from the compensation money payable to such intermediary u/Ch. III". Clause (f) of Section 6 of the Act provides that "the interest of the intermediary so acquired in any estate shall not be liable to attachment or sale in execution of any decree or other process of any court, civil or revenue and any attachment existing at the date of vesting or any order for attachment passed before such date shall, subject to the provisions of Section 73 of the Transfer of Property Act, 1882, cease to be in force." Clause (h)(i) of Section 6 of the Act provides that "all suits and proceedings of the nature to be prescribed pending in any court at the date of vesting and all proceedings upon any decree or order passed in any such suit or proceeding previous to the date of vesting, shall be stayed." Clause (j) to Section 6 of the Act provides that "all mahals and their subdivisions existing on the date immediately preceding the date of vesting and all engagements for the payment of land revenue or rent by a proprietor, under-proprietor, sub proprietor, co-sharer, or lambardar as such shall determine and cease to be in force." 26. These provisions show that all estates vest in the State of UP free from all encumbrances and that all proprietary rights of intermediaries came to an end. 27. In the instant case the intermediary was Tej Singh. Mewa Lal was the transferee of the interest of the intermediary, Tej Singh, under the grant from the Collector for a fixed period. Inasmuch as the intermediary's right to possess or occupy the estate disappeared, Mewa Lal, who was the transferee of the intermediary, must also be deemed to have lost his right of possession over the grove. 28. Mewa Lal was the transferee of the interest of the intermediary, Tej Singh, under the grant from the Collector for a fixed period. Inasmuch as the intermediary's right to possess or occupy the estate disappeared, Mewa Lal, who was the transferee of the intermediary, must also be deemed to have lost his right of possession over the grove. 28. It is also clear from the provisions discussed above that the claims against the "intermediary" have been maintained and that is why a mortgage with possession is converted into a simple mortgage. That being the scheme of the Act it would be subversive of its provisions to hold that a "self-liquidating usufructuary mortgage" is not covered by Section 6(g) of the Act. The view that I am taking finds support from Section 14(1) of the Act which provides that a mortgagee in possession of an estate or share therein shall, with effect from the date of vesting, cease to have any right to hold or possess as such any land in such estate. The legislature was keen that no one except the State of UP should possess the estate and hold proprietary rights in respect of whole or part of it. In Basant Lal v. Jagdish Narain 1956 AWR 11 this Court took a similar view. 29. No other point was urged before us. 30. For the reasons mentioned above I dismiss the appeal, but direct the parties to bear their own costs. Pathak, J. 31. I am of the same opinion. The third proviso to Sub-section (1) of Section 17 of the UP Debt Redemption Act provides for the grant of a self liquidating usufructuary mortgage. It may be that such a mortgage cannot be identified with a mortgage under the Transfer of Property Act. But if regard is had to the scheme of the UP ZA and LR Act it will be apparent that a self-liquidating usufructuary mortgage must fall within the purview of Clause (g) of Section 6 of that Act. Section 4 provides for the vesting in the State of all estates situated in Uttar Pradesh free from all encumbrances. The consequences of the vesting of an estate in the State are set out in Section 6. The several provisions of that section demonstrate beyond doubt that with minor exceptions the Legislature intended the destruction of all existing private rights in an estate. The consequences of the vesting of an estate in the State are set out in Section 6. The several provisions of that section demonstrate beyond doubt that with minor exceptions the Legislature intended the destruction of all existing private rights in an estate. The exceptions relate to trees in a village abadi, holdings or groves and to hats, bazars and melas held upon land to which Clauses (a), (b) and (c) of Sub-section (1) of Section 18 apply. Certain other exceptions are set out in Sections 7 and 9 of the Act. Barring those exceptions, all vestige of rights, title and interest in the estate has been brought to an end. While all possible claims against the estate have been extinguished the personal liability of the intermediary relative to such claims has been expressly left intact and in some cases made recoverable from the amount of compensation payable to the intermediary. Transactions which created an interest in the estate in consideration of an advantage obtained by the intermediary have been substituted by transactions in which the liability of the estate stands replaced by a right against the intermediary personally. It seems to me that when the Legislature clearly intended that every description of right, title and interest in the estate, whether belonging to an intermediary or created in favour of any other person, stands extinguished upon the vesting of the estate in the State, it would be anomalous to hold that the Legislature permitted a self-liquidating usufructuary mortgage to subsist under which the mortgagee is entitled to possession of the land. There is another aspect from which the question may be examined. The Act has created tenures not known before. The new tenure-holders are classified as bhumidhars, sirdars and asamis. Then there are adhivasis. Ss, 18, 19 and 20 respectively expressly state that bhumidhars, sirdars and adhivasis are entitled to take or retain possession of the, land held by them as such. Asamis are entitled to possession in certain circumstances. In furtherance of the scheme embodied in the Act, Sub-section (1) of Section 14 declares that a mortgagee in possession of an estate or a share therein shall, with effect from the date of vesting, cease to have any right to hold or possess as such any land in the estate. Asamis are entitled to possession in certain circumstances. In furtherance of the scheme embodied in the Act, Sub-section (1) of Section 14 declares that a mortgagee in possession of an estate or a share therein shall, with effect from the date of vesting, cease to have any right to hold or possess as such any land in the estate. In the alternative class of cases contemplated by Sub-section (2) of Section 14 a mortgagee may, upon payment of a certain amount, be deemed, for the purpose of conferring the rights of a sirdar upon him, to be a hereditary tenant of the land. The right of possession now flows from the Act and no longer from the self-liquidating usufructuary mortgage. As the right to possession of land comprised in an estate must be traced after the date of vesting to a status newly created under the Act, it is not possible to countenance simultaneously a right of possession under a pre existing grant. In conformity with this objective, Clause (g) of Section 6 must be construed to include a self-liquidating usufructuary mortgage granted under the UP Debt Redemption Act. 32. I agree with my learned brother that the appeal must be dismissed and the parties should bear their own costs.