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2016 DIGILAW 2115 (BOM)

Shamrao Shankarrao Shiraskar and Smt. Gangabai Shamrao Shiraskar since deceased through L. Rs v. State of Maharashtra, Sachivalay Bombay

2016-11-25

R.K.DESHPANDE

body2016
JUDGMENT : 1. Special Civil Suit No. 40 of 1974 was filed by Shyamrao Shankarrao Shirsakar, claiming the relief of declaration that termination of the contract of sale of felled material in the coup No.24, Ajandi, Talegaon, Tq. Arvi, District Wardha, in favour of defendant No.4 was entirely void and hence, the defendant Nos. 1 and 2, the authorities under the Forest Department of the State, be directed to call back the recovery proceedings started against the plaintiff, who was a surety for performance of contract by the defendant No.4. A further declaration was claimed that resale price of Rs.12,000/- realized by the defendant Nos. 1 and 2 in respect of the same coup on 25.08.1972 be credited towards the amount recoverable with respect to initial contract of sale. The another relief of declaration sought was sale of plaintiff's property described in the plaint schedule in favour of defendant No.3 in the revenue proceedings be declared as void and not confirmed. Similar reliefs were also asked for in Special Civil Suit No. 33 of 1977 filed by Madhukar Shyamrao Shiraskar. Both the suits were tried together by the trial Court and by common judgment and order dated 29.04.1992, the same were dismissed. 2. Regular Civil Appeal No.76 of 1992 filed by Shyamrao Shankarrao Shiraskar and others challenging the decision in Special Civil Suit No. 40 of 1974, and Regular Civil Appeal No. 68 of 1992 filed by Madhukar Shyamrao Shiraskar and others, challenging the decision in Special Civil Suit No. 33 of 1997, were dismissed by the common judgment and order dated 06.04.1996 by the lower appellant Court. 3. On 25.09.1996, this Court admitted the second appeals on the substantial questions of law framed at Sr. Nos. 2, 4 and 5, which are reproduced below. 2. Whether both the Courts below were justified in not adjusting the proceeds of sale first in discharging such amount due and recoverable from the original defendant No.4, which was in the sum of Rs.12,000/-, on the face of the provisions of sections 82 and 83 of the Indian Forest Act, 1927? 4. Whether both the Courts below were justified in overlooking and not noticing the law laid down by the Supreme Court in State of M.P. Vs. Kaluram, AIR 1967 SC 1105 ? 5. 4. Whether both the Courts below were justified in overlooking and not noticing the law laid down by the Supreme Court in State of M.P. Vs. Kaluram, AIR 1967 SC 1105 ? 5. Whether the reasons sought to be given by the trial Court in para 13 of its judgment, and in para 33 of the judgment of the lower appellate Court, are legal and proper for denying the benefit of Section 141 of the Contract Act read with Section 83 of the Forest Act, 1927, coupled with Rules 3 and 32 of the Forest Contract Rules? 4. The facts of the case are as under; One Dhanraj s/o. Shyamrao Shiraskar, the defendant No. 4 in both the civil suits was the son of plaintiff Shaymrao Shankarrao Shiraskar and the brother of another plaintiff Madhukar Shyamrao Shiraskar. In the auction conducted by the Forest Department of the tree felled in Coup No.24 in question, the defendant No.4 was the highest bidder for an amount of Rs.15,100/- on 27.11.1971. Upon acceptance of his bid, he paid an amount of Rs.1,000/- and the balance amount was required to be paid in four equal installments of Rs.3,775/- each. The first installament was due on 19.01.1972, when the defendant No.4 paid an amount of Rs.2,775/- plus sales tax which is at Rs.528.35 and his sale was confirmed. The defendant No.4 failed to pay 2nd, 3rd and 4th installments due on 01.02.1972, 01.03.1972 and 01.04.1972 respectively. 5. The petitioner Shyamrao Shirsaskar was the surety for payment of this amount by the defendant No.1. In view of the default on the part of defendant No.4, the properties i.e. agricultural lands owned by the plaintiff Shyamrao were attached on 15.02.1973 and 18.02.1973 bearing Survey Nos. 207/1 and 234/2, admeasuring total 18.71 acre for recovery of Rs.11,325/-. It was sold in auction to the defendant No.3 for Rs.18,200/- on 04.12.2014. However, by virtue of interim order passed by this Court, the appellant remained in possession of the property. The sale also remained to be confirmed in view of the orders passed by the lower Courts. 6. On the plea raised by the plaintiffs that the security bond was signed without knowing and understanding the contents of it, the Courts below concurrently recorded the finding against the plaintiff and it is held that the plaintiffs have failed to establish that the security bods were void and illegal. 6. On the plea raised by the plaintiffs that the security bond was signed without knowing and understanding the contents of it, the Courts below concurrently recorded the finding against the plaintiff and it is held that the plaintiffs have failed to establish that the security bods were void and illegal. In respect of the contention that the attached property was a joint family property in which the plaintiff Madhukar had 3/5th share, which could not have been attached in the absence of he being a surety in the matter, the lower appellate Court proceeds on the footing that it was an ancestral and joint family property, but records the finding that it was a joint family business of the plaintiffs and the defendant No.4. These concurrent findings of fact recorded by the Courts below are based on oral as well as documentary evidence produced on record and no substantial question of law has either been framed or arises for consideration by this Court. 7. There is nothing on record to show the quantity of fell trees which were purchased by the defendant No.4 in auction for an amount of Rs.15,100/-. The auction was confirmed on 25.12.1971 and the defendant No. 4 had deposited an amount of Rs.3,303.35 inclusive of installment of Rs.3,775/- with the defendant Nos. 1 and 2. The defendant No.4 started working in the coup from 31.01.1972 and this was stopped by the Department on 11.05.1972. There is nothing on record to show the quantity of felled trees which the defendant No.4 took out on transit pass from the Forest coup No.24 where it was lying. The property belonging to the plaintiffs was attached for recovery of Rs.11,325/- and the felled trees lying in Coup No. 24 were reauctioned and amount of Rs.12,000/- was recovered. 8. The stand of the respondent Nos. 1 and 2 in the written statement was that the material in Coup No. 24 of felled trees became absolute property of the Government on termination of contract of the defendant No.4 and it was sold in auction. It was also the stand taken in the written statement against the balance due of Rs.11,325/- that the Government could realized only Rs.7,503.50 after deducting the expenses. 9. It was also the stand taken in the written statement against the balance due of Rs.11,325/- that the Government could realized only Rs.7,503.50 after deducting the expenses. 9. In the aforesaid background of factual position, the provisions of Section 82 and 83 of the Indian Forest Act are required to be seen and hence, the same are reproduced below. 82. Recovery of money due to Government. - All money payable to the Government under this Act, or under any rule made under this Act, or on account of the price of any forest produce, or of expenses incurred in the execution of this Act in respect of such produce, may, if not paid when due, be recovered under the law for the time being in force as if it were an arrear of land-revenue. 83. Lien on forest-produce for such money.- (1) When any such money is payable for or in respect of any forest-produce, the amount thereof shall be deemed to be a first-charge on such produce, and such produce may be taken possession of by a Forest-officer until such amount has been paid. (2) If such amount is not paid when due, the Forest officer may sell such produce by public auction, and the proceeds of the sale shall be applied first in discharging such amount. (3) The surplus, if any, if not claimed within two months from the date of the sale by the person entitled thereto, shall be forfeited to Government. 10. In view of the provisions of Section 82, the amount of balance installment of Rs.11,325/- was required to be recovered along with the expenses incurred as if it was an arrears of land revenue. Such amount creates a first charge of the Forest produce sold to the defendant No.4 in the auction in terms of subsection (1) of Section 83. Accordingly, the defendant Nos. 1 and 2 have taken possession of the Forest produce and since the amount was not paid, the same was sold in exercise of powers conferred by subsection (2) of Section 82 for an amount of Rs.12,000/-. This amount was required to be applied for discharge of Rs.11,325/- not paid by the defendant No.4. In spite of this, if certain amounts remained to be due against the defendant Nos. This amount was required to be applied for discharge of Rs.11,325/- not paid by the defendant No.4. In spite of this, if certain amounts remained to be due against the defendant Nos. 4, then only the plaintiff could have been proceeded against on the basis of security bond by attaching the agricultural lands bearing Survey Nos. 207/1 and 234/2, admeasuring 18.17 acres, situated at Mouza Pardi. It was open for the plaintiff to get the security discharged by paying the balance amount due against the defendant No.4. 11. In the decision of the Apex Court in case of State of Madhya Pradesh Vs. Kaluram, reported in AIR 1967 SC 1105 , the provisions of Section 141 of Indian Contract Act has been considered in the background of claim under Sections 82 and 83 of the Indian Forest Act and it is held in paragraph 11 as under:- "11. Kaluram by executing the surety bond had undertaken to discharge the liability arising out of any act, omission, negligence or default of the forest contractor. The surety Kaluram contends that because the State lost or parted with the security he stood discharged. By S.140 of the Indian Contract Act, 1872, where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety, upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor; and by S.141 it is provided : "A surety is entitled to the benefit of every security which the creditor has against the principal debtor at the time when the contract of suretyship is entered into, whether the surety knows of the existence of such security or not; and, if the creditor loses, or, without consent of the surety, parts with such security, the surety is discharged to the extent of the value of the security." The State had as already observed, a first charge over the goods: the State was also entitled to prevent the goods from being removed without payment of the amount of instalments due. The expression "security" in S.141 is not used in any technical sense: it includes all rights which the creditor had against the property at the date of the contract. The expression "security" in S.141 is not used in any technical sense: it includes all rights which the creditor had against the property at the date of the contract. The surety is entitled on payment of the debt or performance of all that he is liable for, to the benefit of the rights of the creditor against the principal debtor which arise out of the transaction which gives rise to the right or liability: he is therefore on payment of the amount due by the principal debtor entitled to be put in the same position in which the creditor stood in relation to the principal debtor. If the creditor has lost or has parted with the security without the consent of the surety, the latter is, by the express provision contained in S.141, discharged to the extent of the value of the security lost or parted with. The plaintiff being surety, was entitled on payment of debt or performance of all that he was liable for, to the benefit of the rights of the creditors against the principal debtor which arises out of transactions which gives rise to the right and liability and he is, therefore, on payment of the amount due by the principal debtor entitled to be put in the same position in which the creditor stood in relation to the principal debtor. It is held that if the creditor has lost or has parted with the security without the consent of the surety, the later is by the expressed provision contained in Section 141 of the said Act to the extent of the value of security lost or part with. 12. In the present case, the respondent Nos. 1 and 2 having sold the Forest produce for an amount of Rs.12,000/-, have lost the security to which the surety was entitled to against the principal debtor. There is nothing on record to show that the plaintiff was called upon either to give his consent for sale of the property or for the auction of the Forest produce, which were sold to the defendant No.4. The attachment of the property and its sale was, therefore, illegal and void so far as the plaintiff is concerned. Such a sale cannot be confirmed. The substantial questions of law at Sr. Nos. 2 and 5 are answered accordingly. 13. The attachment of the property and its sale was, therefore, illegal and void so far as the plaintiff is concerned. Such a sale cannot be confirmed. The substantial questions of law at Sr. Nos. 2 and 5 are answered accordingly. 13. Shri Khamborkar, the learned counsel appearing for the appellant in both these appeals submit that the plaintiffs are prepared to pay the balance of Rs.7,504/- with interest at the rate of 6% per annum from 01.04.1972 till this date to the defendant Nos.1 and 2 within the period of three months from today. The statement is accepted. 14. In the result, the appeals are allowed. Judgment and order dated 29.04.1992 passed by the trial Court in Special Civil Suit Nos. 40 of 1974 and 33 of 1977 along with the judgment and order dated 06.04.1992 passed by the lower appellate Court in Regular Civil Appeal Nos. 69 of 1992 and 76 of 1992 are hereby quashed and set aside. The attachment of the properties of the plaintiffs on 15.02.1973 and 18.02.1973 is declared to be null and void upon the plaintiffs depositing the balance amount of Rs.7,504/- with 6% interest per annum with effect from 01.04.1972 till this date, within the period of three months from today. No order as to costs.