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2015 DIGILAW 1745 (HP)

Raj Rani v. State of Himachal Pradesh

2015-11-30

DHARAM CHAND CHAUDHARY

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JUDGMENT : Dharam Chand Chaudhary, J. Plaintiff is in second appeal before this Court. She is aggrieved by the judgment and decree passed on 13.11.2003, by learned District Judge, Solan, in Civil Appeal No.38-S/13 of 2003, whereby the appeal has been dismissed and while affirming the judgment and decree passed by learned trial Court in Civil Suit No.92/1 of 2001/96, the Cross- Objections allowed and resultantly the findings as recorded by learned trial Court on issues No.1, 3 and 4 reversed. 2. The plaintiff was owner in possession of the suit land entered in Khata/Khatauni No.21/23, Khasra Nos.223/149, 235/224/149 and 238/227/150, Kita 3, measuring 16 Biswas, situate in village Bawara, Tehsil and District Solan, as per Jamabandi for the year 1991-92, Ext.P-10. She raised a loan of Rs. 27,500/- under the ‘Middle Income Group Housing Scheme’ sponsored by Union of India for construction of a house. She mortgaged a portion of the suit land measuring 5 biswas of land comprised in Khasra No.238/227/150, as detailed in the schedule of property given below the mortgage deed Ext.P-2/ Ext.DW-1/F. The loan so sanctioned in her favour was sanctioned and received by her. She constructed a house on making investment of a sum of Rs. 35,000/- from her own pocket. Defendants No.1 and 2 started recovery proceedings against her illegally, as she never refused to return the loan amount. She was never served in the proceedings so initiated against her and to the contrary the entire suit land was auctioned knowing fully well that a portion thereof, i.e., land measuring 5 biswas was under mortgage. The proceedings and the order of auction of the suit land, therefore, was assailed by her on the following grounds: “(a) That the plaintiff was not issued any notice in respect of the auction and realization of the amount. (b) That the defendant No.1 and 2 had no right, title and interest to put in auction the property other than mortgaged with them. (c) That the defendant could only sell the property to the extent of mortgage which is equivalent to the amount of the loan and interest. (d) That the defendants had no right, title and interest to put the entire land in auction where the value of the suit land is equal to 98,000/- at the time when the loan was obtained and the entire process is against the provisions of law.” 3. (d) That the defendants had no right, title and interest to put the entire land in auction where the value of the suit land is equal to 98,000/- at the time when the loan was obtained and the entire process is against the provisions of law.” 3. The order qua possession of the suit land obtained by defendant No.3 in connivance with defendants No.1 and 2 is also stated to be illegal, null and void, hence the suit for declaration that she is owner in possession of the suit land and the order of auction as passed in contravention of the procedure, is also illegal and without any jurisdiction. Consequential relief of injunction restraining the defendants from interfering, dispossessing and alienating the suit land in any manner whatsoever was also sought. 4. In written statement, defendants No.1 and 2 while admitting that the plaintiff was owner in possession of the suit land and also that she had raised house loan to the tune of Rs. 27,500/-, it is contended that when she failed to repay the loan amount, the same was ordered to be recovered from her as arrears of land revenue. The proceedings under the provisions of HP Land Revenue Act were initiated against her and ultimately the property and house constructed thereupon was confiscated and put to open auction to realize the loan amount from her. It is denied that she was not served in the recovery proceedings initiated against her. In this behalf it is pointed out that she was duly served through her husband Govind Singh. Defendant No.3 allegedly being auction purchaser has rightly been put in possession of the suit land. 5. Defendant No.3 in separate written statement filed on his behalf has questioned the maintainability of the suit and on merits, contended that now it is he who is owner in possession of the suit land. As per his further version, since defendants No.1 and 2 made a proclamation qua auction of the suit land, therefore, he having given highest bid purchased the suit land and was put in possession thereof. The suit has, therefore, been sought to be dismissed. 6. In replication, the plaintiff has denied the contentions to the contrary in the written statement being wrong and reiterated her case as set out in the plaint. 7. On such pleadings of the parties, the following issues were framed: 1. The suit has, therefore, been sought to be dismissed. 6. In replication, the plaintiff has denied the contentions to the contrary in the written statement being wrong and reiterated her case as set out in the plaint. 7. On such pleadings of the parties, the following issues were framed: 1. Whether plaintiff is owner in possession of the suit land as alleged? OPP. 2. Whether the plaintiff has mortgaged five biswas of land comprised in Khasra No.238/ 227/150 without possession to the Union of India, as alleged? OPP. 3. Whether the order of auction passed by defendants No.1 and 2 is illegal, null and void and without jurisdiction and against the provisions of law as alleged? OPP. 4. Whether this Court has no jurisdiction to entertain and try the present suit as alleged? OPD. 5. Whether the suit of the plaintiff is not maintainable as alleged? OPD. 6. Relief. 8. The parties have produced evidence documentary as well as oral in proof of issues so framed. Learned trial Court on appreciation of the evidence available on record while answering issues No.1 and 2 has concluded that the plaintiff is owner in possession of the suit land and that she had mortgaged a portion thereof measuring 5 biswas of land bearing Khasra No.238/227/150 without possession in favour of Union of India. The declaration that the order of auction was illegal, null and void and without any jurisdiction, however, was not inclined while answering issue No.3 against her. Issues No.4 and 5 qua jurisdiction of the Court to entertain and try the suit and its maintainability were, however, answered against the defendants. The suit for declaration and the relief of permanent prohibitory injunction was, therefore, dismissed. 9. The plaintiff feeling aggrieved and dissatisfied by the findings recorded by learned trial Court on issue No.3, has preferred an appeal, whereas defendant No.3 aggrieved by the findings recorded on issues No.1, 4 and 5 cross-objections before learned lower appellate Court. Learned lower appellate Court has dismissed the appeal, however, reversed the findings recorded by learned trial Court on issues No.1, 4 and 5 and while holding defendant No.3 as owner in possession of the suit land has decreed the counter-claim. 10. Learned lower appellate Court has dismissed the appeal, however, reversed the findings recorded by learned trial Court on issues No.1, 4 and 5 and while holding defendant No.3 as owner in possession of the suit land has decreed the counter-claim. 10. The legality and the validity of the judgment and decree passed by learned lower appellate Court has been assailed before this Court on the grounds inter alia that the same is contrary to the law and facts of the case and also that the findings on issues No.1 and 2 qua she is not owner in possession of the suit land are not only illegal, but perverse also being not based upon the evidence available on record. Learned lower appellate Court has allegedly failed to appreciate that the procedure adopted by defendants No.1 and 2 to auction the suit land was illegal and the order of auction passed behind the back of the plaintiff was vailative of principle of natural justice. The findings recorded by learned lower appellate Court are the result of misappreciation and misreading of oral and documentary evidence particularly Exts.DW-1/Z to DW-1/Z7, Ext/DW-2/A, Ext.DW-3/A, Ext.DW-5/A, Exts.DW-6/A and DW-6/B. The zimini orders on record amply demonstrate that the plaintiff or her attorney never received the notice and the warrant of possession has not been executed under any valid order. The provisions of the HP Land Revenue Act could have not been invoked in this case, therefore, the entire approach on the part of learned lower appellate Court is stated to be contrary to the given facts and circumstances of this case and evidence available on record. 11. The appeal has been admitted on the following substantial questions of law: 1. Whether the judgment and decree of the learned District Judge reversing the decree of the trial court and decreeing the counter claim is perverse, based on misreading or oral as well as documentary evidence particularly Ex.DW-1/Z to DW-1/Z7, DW-2/A, DW-3/A, DW-5/A, DW-6/A and DW-6/B and P-3 to P-9? 2. Whether the Civil Court has jurisdiction to try the suit when the property of the plaintiff was auctioned without notice to the appellant and affording an opportunity to him and without following the procedure for sale? 3. Whether the suit property could be sold for recovery of the mortgaged amount as arrears of land revenue and the excessive sale of the property was justified? 4. 3. Whether the suit property could be sold for recovery of the mortgaged amount as arrears of land revenue and the excessive sale of the property was justified? 4. Whether the provisions of the H.P. Public Moneys (Recovery of Due) Act, 1973 was applicable to the mortgaged property and the property could be sold by Tehsildar Revenue (Recovery)? 12. Shri Rajnish K. Lall, Advocate, learned Counsel has strenuously contended that only a portion of the suit land, i.e., 5 biswas was mortgaged in favour of respondents No.1 and 2 vide mortgage deed Ext.P-2/DW-1/F, therefore, the entire land could have not been put to auction. The auction of the suit land is also stated to be contrary to the provisions contained under Section 69 of the Transfer of Property Act, as according to Mr. Lall, the suit land could have only been sold with the intervention of the Court. The plaintiff was never served with the show cause notice(s) and as such no recovery proceedings could have been initiated behind her back. The order of auction, according to Mr. Lall, is illegal and violative of the principle of natural justice. Also that the land over and above the one mortgaged in favour of defendants No.1 and 2 could have not been put to auction without recording satisfaction that the mortgaged land was not sufficient to satisfy the liability to repay the amount by the plaintiff. 13. On the other hand, Mr. D.S. Nainta, learned Additional Advocate General, has forcefully contended that the procedure under Section 23 of the HP Land Revenue Act has been followed while putting the suit land for auction. While making reference to the notice Ext.DW-1/Z-3 it is pointed out that she herself had received the same by putting her signatures thereon. 14. Mr. Bhupender Gupta, learned Senior Advocate while supporting the arguments addressed on behalf of the defendant-State has contended that defendant No.3 is a bonafide purchaser and in confirmation of the sale by the competent authority has been put in possession of the sit land, hence owner in possession thereof. 15. Substantial questions of law Nos.3 and 4 are with regard to the applicability of the procedure prescribed under HP Land Revenue Act and HP Public Moneys (Recovery of Dues) Act, 2000 to recover the loan amount in view of the default in repayment thereof made by the beneficiary. 16. 15. Substantial questions of law Nos.3 and 4 are with regard to the applicability of the procedure prescribed under HP Land Revenue Act and HP Public Moneys (Recovery of Dues) Act, 2000 to recover the loan amount in view of the default in repayment thereof made by the beneficiary. 16. The grievance as highlighted in this regard is that in terms of Clause 7 of the mortgage deed Ext.P-2/DW-1/F, the mortgaged property could have not been sold without the intervention of the Court, as envisaged under Section 69 of the Transfer of Property Act. It is canvassed that the word “Court” finds mentioned in the mortgage deed and under Section 69 of the Transfer of Property Act, means civil Court and not revenue Court. Therefore, according to Mr. Lall, the auction of the suit land held contrary to the terms of the mortgage deed and Section 69 of the Transfer of Property Act being vitiated is illegal and invalid. 17. True it is that learned lower appellate Court has not dealt with this aspect of the matter in the judgment and decree under challenge irrespective of the same raised in the grounds of appeal. Even in the plaint also, the auction of the suit land being violative of procedure has been sought to be declared as illegal, null and void, however, there is no substance in this aspect of the matter for the reason that as per the schedule of property it is land measuring 5 biswas bearing Khasra No.238/227/150, was mortgaged by the plaintiff with defendants No.1 and 2 in order to ensure the repayment of the loan amount. 18. If coming to Clause 7 of the mortgage deed thereby in the default of the payment of the installment of loan, the premises, i.e., the house constructed out of the loan amount was to be auctioned, of course with the intervention of the Court. If coming to Section 69 of the Transfer of Property Act, the mortgaged property could have not been sold without the intervention of the Court in three situations detailed thereunder. We are concerned only with a situation, i.e., Clause (b). As per the same, if the mortgage deed confers expressly the power to sell the mortgaged property without the intervention of the Court and the mortgagee is the Government only then it can be sold without the intervention of the Court. We are concerned only with a situation, i.e., Clause (b). As per the same, if the mortgage deed confers expressly the power to sell the mortgaged property without the intervention of the Court and the mortgagee is the Government only then it can be sold without the intervention of the Court. Here the mortgagee though is Government; however, the mortgage deed provides that the premises cannot be sold without the intervention of the Court. The mortgaged property, however, is not the premises, but the land as aforesaid. There is no denial that the plaintiff failed to repay even a single penny towards the loan amount she raised. She, therefore, is definitely a defaulter in terms of the mortgage deed. 19. Section 3 of the HP Public Moneys (Recovery of Dues) Act, 2000, provides that the authorized officer without prejudice to any other mode of recovery under any other law for the time being in force shall send a certificate to the Collector mentioning the sum due from such person and requesting that such sum together with the costs or any other sum be recovered as if it were an arrear of land revenue. Sub-section (2) of Section 3 further provides that Collector on receiving the certificate as provided under sub-section (1) shall proceed to recover the loan amount stated therein as an arrear of land revenue. Sub-section (4) of Section 3 further provides that in case there is mortgage of property in favour of the State Government, it is first the mortgaged property to be sold in proceedings for recovery of the amount due from the loanee and if the proceeds of the sale of the property are less than the sum due, then proceedings may be taken for recovery of the balance against the other property of such person. 20. As regards the procedure to put the mortgaged property to auction, the same is provided under the HP Land Revenue Act. 21. As noticed hereinabove, it is only 5 biswas of land bearing Khasra No.238/227/150 was mortgaged. Therefore, in view of the provisions contained under the HP Public Moneys (Recovery of Dues) Act, 2000, without recording satisfaction that the auction of the property mortgaged was not sufficient to discharge the liability of the plaintiff the other property of the plaintiff should have been put to auction. Therefore, in view of the provisions contained under the HP Public Moneys (Recovery of Dues) Act, 2000, without recording satisfaction that the auction of the property mortgaged was not sufficient to discharge the liability of the plaintiff the other property of the plaintiff should have been put to auction. Record of Case No.29 of 1993 produced by Shri Dhani Ram, Senior Assistant in the office of Collector, Solan, reveals that the entire suit land was proposed to be sold. When the entire suit land was not mortgaged and it is only 5 biswas of land in lieu of the loan so raised by the plaintiff, the entire land could have not been put to auction. At the most, 5 biswas of mortgaged land could have been sold and in the event of outstanding due remains unsatisfied in terms of sub-section (4) of Section 3 of the HP Public Moneys (Recovery of Dues), Act, 2000, proceedings should have been taken for recovery of the balance against the other property of the plaintiff, obviously the property which was not mortgaged. 22. Much has been said about the following order (page 39 of the record) passed by the Commissioner, Shimla Division, Shimla: “The proposed sale of landed property mentioned in column No.5 of the sale statement is allowed upto the extent by which the whole amount of loan is adjusted.” 23. In column No.5 of the statement of land the entire suit land measuring 16 biswas has been mentioned. As noticed supra, the entire land could have not been put to sale without first auctioning the mortgaged property as per the mortgage deed, i.e., 5 biswas and if the loan amount still remained, steps to sell the other property of the plaintiff could have been taken. Therefore, the order passed by the Commissioner that too without recording satisfaction that the mortgaged land, i.e., 5 biswas and for that matter even the house constructed out of the loan amount was not sufficient to satisfy the outstanding loan amount. 24. Therefore, the order passed by the Commissioner that too without recording satisfaction that the mortgaged land, i.e., 5 biswas and for that matter even the house constructed out of the loan amount was not sufficient to satisfy the outstanding loan amount. 24. It is worth while to mention here that even if it is believed that the provisions of HP Public Moneys (Recovery of Dues) Act were not applicable in this case and the auction rather should have not been conducted without the intervention of the Court, the plaintiff should have come forward and contest the recovery proceedings initiated against her as she was initially served through her daughter Poonam and thereafter through her husband Govind Singh and even personally vide Ext.DW-2/A. The ratio of the judgment of the Apex Court in Desh Bandhu Gupta v. N.L. Anand & Rajinder Singh, (1994) 1 SCCC 131, is not at all attracted in the case in hand for the reason that in the case before the Apex Court the appellant-tenant was never given any notice and the warrant of sale was executed in violation of the principles of natural justice whereas in the case in hand, as noticed hereinabove, the appellant-plaintiff was duly served not only personally, but also through her husband and daughter. Therefore, it lies ill in her mouth to say that auction of the mortgaged land without the intervention of the Court is not legally sustainable. The only irresistible conclusion would be that defendants No.1 and 2 though have followed the right procedure prescribed for conducting the auction, however, the sale of the entire suit land is neither legally nor factually sustainable. The sale of a portion of the suit land measuring 5 biswas of land bearing Khasra Nos.238/227/150 and also that of the house constructed on investment of the amount of loan sanctioned to the plaintiff could have only been put to auction. Therefore, the findings recorded by both Courts below that the entire suit land has rightly been mortgaged are neither legally nor factually sustainable and being perverse, deserve to be quashed and set aside. Defendants No.1 and 2, however, have not committed any procedural lapse in view of the reasons stated hereinabove. Substantial questions of law No.3 and 4 are accordingly answered. 25. Defendants No.1 and 2, however, have not committed any procedural lapse in view of the reasons stated hereinabove. Substantial questions of law No.3 and 4 are accordingly answered. 25. Now, if coming to second substantial question of law, it has already been held hereinabove that the plaintiff was duly served during the course of the proceedings initiated for auction of the suit land, therefore, she cannot be said to have any grievance in this regard nor the judgment and decree under challenge is vitiated on this score. This question of law is also answered accordingly. 26. If coming to the first substantial question of law, learned lower appellate Court was not justified in decreeing the counter-claim and holding the auction purchaser, i.e., defendant No.3 as owner in possession of the entire suit land for the reason that at the first instance only mortgaged property or at the most the house constructed by the plaintiff out of the loan so raised from defendants No.1 and 2 under the Scheme known as ‘Middle Group Housing Scheme’. The auction of the remaining property of the plaintiff could have only been resorted to by the competent authority after recording satisfaction that the auction of the property mortgaged was not sufficient to discharge the liability of the plaintiff. No such satisfaction has, however, been recorded and to the contrary the entire property has been sold to defendant No.3 in auction in an illegal and arbitrary manner. Defendant No3, therefore, cannot be held to be owner in possession of the entire suit land. The sale of only 5 biswas of land bearing Khasra No.238/227/150, which was mortgaged with defendants No.1 and 2 vide mortgage deed Ext.P-2/ DW-1/F is held legal and valid. The confirmation of the sale and issuance of sale certificate as well as the attestation of mutation on the basis thereof, the entire suit land in favour of defendant No.3 is absolutely illegal, arbitrary and without any basis. Consequently, the delivery of possession of the entire suit land is also illegal and invalid. It is held so by the Apex Court in Ambati Narasayya v. M. Subba Rao and another, AIR 1990 SC 119 . The findings to the contrary recorded by learned lower appellate Court have, therefore, vitiated the judgment and decree under challenge. Substantial question of law No.1 is also answered accordingly. 27. It is held so by the Apex Court in Ambati Narasayya v. M. Subba Rao and another, AIR 1990 SC 119 . The findings to the contrary recorded by learned lower appellate Court have, therefore, vitiated the judgment and decree under challenge. Substantial question of law No.1 is also answered accordingly. 27. In view of what has been said hereinabove, the appeal is partly allowed. Consequently, it is only the sale of 5 biswas of land bearing Khasra No.238/227/150 is held legal and valid and as regards that of the remaining suit land bearing khasra No.223/149 and 235/224/149 illegal, null and void. Consequently, the entries in the revenue record, i.e., Jamabandi for the year 1991-92 Ext.P-10 showing defendant No.3 as owner in possession of the suit land bearing Khasra Nos.223/149 and 235/224/149 are held illegal, null and void and not binding on the rights of the plaintiff. The proportionate price of 5 biswas of land be worked out and adjusted towards the repayment of the loan amount due and admissible and the plaintiff to refund the remaining sale consideration to defendant No.3 within two months from today, failing which together with interest at the rate of 6% per annum till the realization of the entire amount. In case the entire amount due and admissible is not satisfied out of the sale proceeds of 5 biswas of land as aforesaid, defendants No.1 and 2 shall be at liberty to take steps in accordance with law for realization of the outstanding amount. The judgment and decree under challenge is ordered to be modified to the above extent. No order so as to costs.