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Case Number

AFAD No. 180 of 1953

Attorney(S)

Chandra Nath Mukherji
Nir-mal Ch. Chakravarty
Jogesh Ch. Das Gupta
for Mahendra Kumar Ghose

Judges

Das Gupta
Law, JJ.

Acts

provisions of clause (a) of sub-section (1) of section 168A of the Bengal Tenancy Act
provisions of Article 17, clause (iii) of Schedule II of the Court Fees Act
SECTION 4 WEST BENGAL ESTATES ACQUISITION ACT 1953
provisions of Article 17, clause (vi) of Schedule II of the Court-fees Act
clause (a) of sub-section (1) of section 168A of the Bengal Tenancy Act
section 12A of the Chota-nagpur Encumbered Estates Act, 1876,
provisions of section 168A of the Bengal Tenancy Act
provisions of clause (vi) of Article 17 of Schedule II
WEST BENGAL ESTATES ACQUISITION ACT 1953
section 16A of the Bengal Tenancy Act.8.
SECTION 11 CIVIL PROCEDURE CODE

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Smart Summary

Structured Summary of the Opinion (Das Gupta, J.)

Factual and Procedural Background

The appellant sued for recovery of arrears of rent and for a declaration that a charge existed on a one-sixth share in the putni mahal under a contract creating a darpatni. That one-sixth share later came into the hands of defendant No. 5. The plaint also prayed that if the decretal amount was not paid within the fixed time it might be realised by sale of the charged property and, if insufficient, by sale of other properties of the defendants.

Defendant No. 5 alone contested the suit, arguing that the one-sixth share he had purchased was not liable to be charged and that section 168A of the Bengal Tenancy Act barred execution against any property other than the defaulting tenure. The learned Subordinate Judge accepted that contention as correct, decreed arrears against defendants Nos. 1–4 and dismissed the suit as against defendant No. 5. The learned District Judge on appeal agreed that the earlier decision in Naresh Chandra Ray v. Dhirendra Nath De did not operate as res judicata, held that the appellant could not make any other property liable except the darputni tenure, and refused the declaration of charge against defendant No. 5. The appellant appealed to this Court (appeal filed 25 November 1952).

During the pendency of the appeal, under the West Bengal Estates Acquisition Act, 1953, both the putni and the darputni vested in the State of West Bengal and the erstwhile owner of the putni became entitled to compensation under that Act. The State and the Collector of Howrah were added as parties by order of this Court on 1 June 1956.

Legal Issues Presented

Whether the contract creating a charge on the one-sixth share in the putni mahal (the jaminnama/darpatni) is enforceable in the face of section 168A of the Bengal Tenancy Act.
Whether the earlier decision in Naresh Chandra Ray v. Dhirendra Nath De operates as res judicata as to the enforceability of that contract.
What is the effect of vesting of the putni and darputni in the State under the West Bengal Estates Acquisition Act, 1953 (section 4) on the operation of section 168A and on the remedy sought (i.e., whether a charge can be declared on the compensation now payable).
Whether the court-fee paid on the memorandum of appeal was adequate — specifically, whether the relief sought (a declaration of charge) is capable of valuation for purposes of Article 17 of Schedule II of the Court-fees Act.

Arguments of the Parties

Appellant's Arguments

The court-fee of Rs. 15 on the memorandum of appeal was proper because Article 17, clause (vi) of Schedule II of the Court-fees Act applied — the relief sought (declaration of charge) was not capable of valuation.
With vesting under the West Bengal Estates Acquisition Act, 1953, the proviso to clause (a) of sub-section (1) of section 168A has come into operation so that the main restriction in clause (a) (which bars execution by attachment and sale of any movable or immovable property other than the defaulting tenure) would not apply; accordingly the charge is enforceable.
Where the property subject to charge has ceased to exist and has been replaced by compensation, the charge should attach to the compensation; a decree declaring a charge on the compensation payable to defendant No. 5 should be made (and the point was raised in additional grounds of the appeal).

Defendant No. 5 and Supporting Arguments

Defendant No. 5 contended that the one-sixth share he purchased was not liable to be charged and that section 168A barred enforcement of the contract creating the charge.
The learned Advocate for respondent No. 5 argued that the court-fee paid on the memorandum of appeal was insufficient and that the relief (declaration of charge) was capable of valuation — relying on In re, Vinai theerthal Sahi (A.I.R. 1942 Mad. 152) which held such relief capable of valuation in a similar context.

Government Pleader / State

The learned Government Pleader and the advocate for respondent No. 5 jointly argued that clause (vi) of Article 17 did not apply and that the relief sought was capable of valuation; they relied upon precedent held in In re, Vinai theerthal Sahi.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Naresh Chandra Ray v. Dhirendra Nath De, I.L.R (1951) 1 Cal. 507	Held that section 168A does not apply where no attachment is necessary; decision on enforceability of the jaminnama contract.	The Court held that this decision operates as res judicata in the present litigation on the question of enforceability of the contract.
In re, Vinai theerthal Sahi, A.I.R. 1942 Mad. 152	Decided that where a lower court decreed the amount claimed but declined to give a first charge and the plaintiff appealed only against the first charge, the relief is capable of valuation.	Relied upon by respondent to argue that the relief (declaration of charge) was capable of valuation for court-fee purposes; the Court disagreed with that application and distinguished the valuation point.
Girijanand Datta Jha v. Sailajanand Dutta Jha, I.L.R 23 Cal. 645	Earlier authority where Article 17, clause (iii) of Schedule II was held applicable to an appeal for a declaration.	Cited for comparison; Court observed it was not possible to say the present appeal sought only declaratory relief without consequential relief, so clause (vi) applied here.
Amulya Chandra Ray v. Pashupati Nath Malia, I.L.R (1952) 2 Cal. 1 (Full Bench)	Later Full Bench decision construing section 168A and affecting prior construction.	The Court acknowledged that the Full Bench construed section 168A differently and that the earlier reasoning was erroneous in law, but held that such error does not defeat res judicata in respect of the earlier decision.
Tarini Charan Bhattacharjya v. Kedar Nath Haldar, I.L.R 56 Cal. 723	Affirmed that a decision will operate as res judicata even though the reasoning may be erroneous.	Cited to support that the earlier Naresh Chandra Ray decision operates as res judicata despite later Full Bench disagreement on reasoning.
Bindeswari Charan Singh v. Bageshwari Charan Singh, L.R 63 I.A 53 (Privy Council)	Illustrated that a previous finding on a question directly and substantially in issue operates as res judicata, even if the earlier court's construction was arguably incorrect.	Used as an authority to reinforce the application of res judicata to the earlier decision.
Debendra Nath Sen v. Mirza Abdul Samed Seraji, 10 C.L.J 150	Held that where property subject to mortgage or charge undergoes transformation, the mortgage or charge attaches to the form it takes after transformation.	The Court applied this principle to hold that the charge should attach to the compensation now payable in place of the vested putni.
Tarapada Sarkar v. Amitava Pal Choudhury (Appeal from Appellate Order No. 5 of 1957)	Held that where vesting in the State has taken place before an application for execution of a decree, the proviso to clause (a) of sub-section (1) of section 168A comes into operation and the main provisions of clause (a) do not apply.	The Court relied on this decision (the judge was a party to it) to support the view that where vesting occurred before execution was sought the tenancy had ceased and section 168A did not bar enforcement.

Court's Reasoning and Analysis

The Court addressed the matter in a sequence of legal questions which guided its analysis:

Court-fee and valuation of relief:
The Court examined whether the relief sought (a declaration of charge) was capable of valuation for the purposes of Article 17 of Schedule II of the Court-fees Act. The Court rejected the view (relied on by respondent authorities) that the value of the relief necessarily equalled either the amount of the decree or the value of the property sought to be charged. The Court reasoned that, in many cases, even without a declaration of charge the plaintiff would obtain some realisation (amicably or by execution) and that it is impossible to ascertain, in advance, what that amount would be. Therefore the true value of the declaratory relief (the marginal benefit obtained by the declaration of charge over what could be realised without it) is incapable of valuation. For that reason Article 17, clause (vi) of Schedule II applies and the court-fee of Rs. 15 was correctly paid.
Effect of the West Bengal Estates Acquisition Act, 1953:
The Court noted that the Act (section 4) vested the rights of patnidars and darputnidars in the State. The appellant argued that this brought the proviso to clause (a) of sub-section (1) of section 168A into operation so that the main bar in section 168A would not apply. The respondent contended the tenancy had not expired. The Court relied upon the earlier decision in Tarapada Sarkar v. Amitava Pal Choudhury and concluded where vesting has taken place before an application for execution, the tenancy has ceased (expired other than by surrender) and the main provisions of clause (a) of section 168A do not apply; consequently the respondent's contention based on section 168A fails.
Res judicata and the earlier Naresh Chandra Ray decision:
The courts below had held that the decision in Naresh Chandra Ray did not operate as res judicata in view of the later Full Bench decision in Amulya Chandra Ray. The Court considered the established law (including Tarini Charan Bhattacharjya and the Privy Council decision in Bindeswari Charan Singh) that a previous judgment operates as res judicata even if the reasoning is erroneous. Reading the Naresh Chandra Ray judgment as a whole, the Court concluded that the earlier decision did decide the question whether section 168A stood in the way of enforcement of the jaminnama contract; therefore that decision operates as res judicata between the parties and those claiming through them. The consequence was that section 168A could not be relied upon to defeat enforceability of the contract in the present litigation.
Transformation of property and attachment of charge to compensation:
The Court accepted that the specific property (one-sixth share in the putni) had ceased to exist by reason of vesting, and that compensation had replaced that proprietary interest. Applying the principle from Debendra Nath Sen, the Court held that where property subject to a charge is transformed, the charge attaches to the form it takes after transformation. Although no formal prayer for charge on compensation had been made originally (because the property existed when the suit was instituted), the Court considered it proper — and not hypertechnical — to declare a charge on the compensation when the factual correctness that the property had ceased and compensation would be payable was not disputed and the point was raised in additional grounds in the appeal.
Practical directions and remedies:
On the basis of the above, the Court concluded the appellant was entitled to a decree declaring a charge on the compensation payable to respondent No. 5 for the one-sixth share. The Court provided consequential directions: costs of the hearing to the appellant, a decree to be drawn in Form No. 5A of Appendix D of the Civil Procedure Code, the date fixed for payment was six months from the date of judgment, and upon non-payment the plaintiff would be at liberty to proceed against the compensation money on which the charge was declared.

Holding and Implications

Core Holding: The appeal is allowed and a decree is to be drawn declaring a charge on the compensation payable to respondent No. 5 in respect of the one-sixth share of the putni (the property having vested in the State). Section 168A of the Bengal Tenancy Act does not prevent enforcement of the contract creating the charge in the circumstances of this case.

Direct consequences for the parties:

Decree declaring a charge on the compensation payable to respondent No. 5 will be drawn (Form No. 5A of Appendix D, Civil Procedure Code).
Respondent No. 5 must pay the costs of this hearing to the appellant.
Payment under the decree is fixed for six months from the date of judgment; upon non-payment within that period the plaintiff may proceed against the compensation money on which the charge is declared.

Broader implications: The Court applied established principles on res judicata and on the attachment of a charge to transformed property. The opinion does not purport to create a novel rule of law; it applies existing authorities to the facts before it.

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Dhirendra Nath De v. Naresh Chandra Ray And Ors.

Das Gupta, J.:— The appellant instituted the suit out of which this appeal has arisen for recovery of arrears of rent from the defendants and also for declaration of a charge on one-sixth share in the putni mahal in the terms of the contract creating a darpatni. This one-sixth share of the putni had since then come into the hands of defendant No. 5. A further prayer was made that if the decretal amount was not paid amicably within the time fixed, it might be realised by sale of the charged property and if even that was not sufficient to realise the amount, by sale of other properties belonging to the defendants.

2. The suit was contested by defendant No. 5 alone. The main defence taken on his behalf was that the one-sixth share of the putni, which he had purchased from the orginal darpatnidar, was not liable to be charged for the arrears of rent. It was contended on his behalf that section 168A of the Bengal Tenancy Act being a bar to the execution of a decree for arrears of rent due in respect of a tenure or holding by attachment and sale of any movable or immovablle property other than the defaulting tenure, the contract made at the time of the creation of the darputni was not enforceable. This contention was accepted as correct by the learned Subordinate Judge who was further of opinion that as the decision as between the present plaintiff and the first four respondents in which the objection as to the enforceability of the charge as created by the contract was overruled, it did not operate as res judicata. In this view, he passed a decree for arrears of rent against defendants Nos. 1 to 4 with costs and dismissed the suit as against defendant No. 5. On appeal, the learned District Judge was also of opinion that the decision in the case of Naresh Chandra Ray v. Dhirendra Nath Dey, (1) [I.L.R (1951) 1 Cal. 507], did not operate as res judicata and holding that the appellant could not make any other property liable for the arrears claimed excepting the darputni tenure in suit, he agreed with the learned Subordinate Judge that the plaintiff appellant could not get any declaration of a charge as prayed for. The present appeal is directed against this decision of the learned District Judge. The appeal was filed on the 25th November 1952. During the pendency of the appeal, both the putni and the darputni have, under the terms of the West Bengal Estates Acquisition Act, 1953, vested in the State of West Bengal and all that the erstwhile owner of the putni is entitled to the compensation as will be awarded to him under the provisions of this Act. The State of West Bengal and the Collector of Howrah were added as parties to the appeal by an order of this Court passed on the 1st of June 1956, and the learned Government Pleader has appeared be fore us on behalf of the Collector of Howrah.

3. Before we proceed to consider the appeal on its merits, it is necessary tc decide a point that was raised by the learned Advocate, who appeared for respondent No. 5, Satyaban Ray. He contended that the court fees paid on the memorandum of appeal are not sufficient and so the appeal cannot be heard until and unless the deficit court fee is put in by the appellant. A court fee of Rs. 15 was paid on the memorandum of appeal. Mr. Mukherji, who appeared for the appellant, submitted that this was the proper court fee as the provisions of Article 17, clause (vi) of Schedule II of the Court-fees Act were applicable. Both the learned Government pleader and the learned advocate for the respondent No. 5 contended that the provisions of clause (vi) of Article 17 of Schedule II did not apply and that the appellant sought by this appeal to obtain a relief, the value of which could be ascertained. They argued that if the property on which a charge was sought to be declared was of a value more than the amount of the decree, this lesser value of the decree would be the value of the relief that the plaintiff would obtain by declaration of the charge, and if, on the contrary, the property sought to be charged was of a value less than the amount decreed, the lesser value of the property would be the value of the relief sought to be obtained by the plaintiff. Reliance was placed in this connection on a decision. In re, Vinai theerthal Sahi, (2) (A.I.R 1942 Mad. 152). It was there held that where the lower court had given a decree for the amount claimed but declined to give a first charge as prayed for and the plaintiff preferred an appeal against the prayer in respect of the first charge, the relief is capable of valuation.

4. With great respect, I am of opinion that this view is erroneous'. If it had been true that but for this declaration of charge, the plaintiff would not have been able to realise anything at all in respect of the decree that had been given, it would be right to say, that the value of the property sought to be charged to the extent of the decree, would be value of the relief obtained by the declaration of the charge. Where, however, as in most cases, the plaintiff would, even in spite of the refusal of the decree for declaration of a charge, be able to get something in respect of the decree either amicably or by execution the value of the relief he would get by the declaration of the charge would be the difference between the amount of the decree and what he would have obtained even without the assistance of a charge being declared. It is, however, impossible to ascertain what the plaintiff would be able to realise amicably or by execution without the assistance of a charge being declared. The necessary consequence must be that the relief he is seeking to obtain by a declaration of charge is incapable of valuation, I have, therefore, come to the conclusion that the relief being incapable of valuation, the court fee has rightly been paid in accordance with the provisions of Article 17, clause (vi) of Schedule II of the Court Fees Act. Our attention was drawn to a decision of this court in Girijanand Datta Jha v. Sailajanand Dutta Jha, (3) (I.L.R 23 Cal. 645), where in an appeal for a declaration, this court held that the provisions of Article 17, clause (iii) of Schedule II of the Court Fees Act applied. It is not possible to say however in the present case that even in the appeal, only a declaratory decree without any consequential relief is prayed for. On examination of the plaint and the memorandum of appeal, it appears to me that even in the appeal some consequential relief was also asked for. Cl. (vi) of Art. 17 of Sch. II is therefore applicable here, as the relief is not capable of valuation.

5. Coming now to the merits of the appeal, it is necessary to take notice of section 4 of the West Bengal Estates Acquisition Act, 1953. This Act was not on the statute book on the date the plaintiff brought his suit in April, 1948. As, however, the litigation is still pending, it is necessary and proper for this court to take note of the change in law which has taken place. Under section 4 of the West Bengal Estates Acquisition Act, 1953, the rights of patnidars and darputnidars have vested in the State. It is contended on behalf of the appellant that the necessary consequence is that the proviso to clause (a) of sub-section (1) of section 168A of the Bengal Tenancy Act has come into operation so that the main provisions in clause (a) under which a decree for arrears of rent canont be executed by attachment and sale of any movable or immovable property other than the tenure or holding in default shall not apply. Against this, it is urged by Mr. Das Gupta, on behalf of the respondent No. 5, that the term of the tenancy cannot be said to have expired. It is sufficient to mention that this point has already been raised and decided in Appeal from. Appellate Order No. 5 of 1957 (Tarapada Sarkar v. Amitava Pal Choudhury) and it has been held that where the vesting in the State has taken place before an application has been made for execution of a decree, the proviso comes into operation and consequently the main provisions of clause (a) of sub-section (1) of section 168A of the Bengal Tenancy Act have no application. I was a party to that decision and I have heard nothing to justify any doubt on the correctness of that decision. In my opinion, where the vesting has taken place before the application was made for execution of a decree, the tenancy has ceased to exist and the term of the tenancy must be said to have expired in a manner other than by surrender of the tenure or holding and consequently the provisions of clause (a) of the first sub-section of section 168A will not apply. The contention, that because of the provisions of section 168A of the Bengal Tenancy Act the contract creating the charge was not enforceable, must, therefore, fail.

6. Apart from the provisions of section 4 of the West Bengal Estates Acquisition Act, 1953, the position is that in a previous suit between the present appellant and the first four respondents, it was held by this court that section 168A could not stand as a bar in the way of the plaintiff in enforcing the contract upon the very jaminnama which has been relied on by the plaintiff in this case. The courts below seem to have been of the opinion that, inasmuch as the view taken by the learned judges of this court in this previous decision which was reported in Naresh Chandra Ray v. Dhirendra Nath De (1) (I.L.R 1951 (1) Cal. 507), that section 168A does not apply where no attachment is necessary, can no longer be considered to be good law in view of the later decision of the Full Bench in (4) Amulya Chandra Ray v. Pashupati Nath Malia I.L.R (1952) 2 Cal. 1. the previous decision as reported in Naresh Chandra Ray v. Dhirendra Nath De (1) [I.L.R (1951) 1 Cal. 507], cannot operate as res-judicata. It is well-settled, at least after the decision of the Full Bench of this court in Tarini Charan Bhatta-charjya v. Kedar Nath Haldar, (5) (I.L.R 56 Cal. 723), that a decision will operate as res-judicata even though the reasoning in law or on facts on which the decision is based may be erroneous. In the light of the Full Bench decision in Amulya Charan Ray's case we are bound to hold now that the construction of section 168A, on which the learned judges, who decided the previous case, based their decision, was erroneous. That cannot, hov/ever, affect the operation of section 11 of the Civil Procedure Code. Nor is it reasonable to say that there was no decision on the question of enforceability of the contract on that very jaminnama on which reliance is now placed and that the decision was only as regards declaration of a charge as regards the amount that was decreed on account of arrears of rent. Reading the judgment of this court, in Naresh Chandra Ray's case as a whole, I am clearly of opinion that for the purpose of deciding the appeal, the learned judges thought it necessary to decide the question whether the defence that had been raised, that the provisions of section 168A stood in the way of the plaintiff enforcing the contract entered into between the parties on the jaminnama, was sound and their lordships decided that it was not sound. In my judgment, there is no ground for saying that his decision was not intended to operate for all times. The effect of the general law of res-judicata as well as the law laid down in section 11 of the Civil Procedure Code is, that as between parties and people claiming through them, the decision on Matters directly and substantially in issue, is decided for all times. Reference may be made in this connection to the decision of the Privy Council in Bindeswari Charan Singh v. Bageshwari Charan Singh, (6) (L.R 63 I.A 53). In that case, in a suit brought for maintenance, the question of the validity of a grant of the year 1909 was raised and decided, the court being of opinion that it was a valid grant. When in a later suit, brought on a grant made in the year 1920 in accordance with the decision of the court in the earlier suit, the question was raised again, the trial court accepted the contention that the decision in the 1917 suit that the grant was valid operated as res-judicata, but the High Court in appeal was of opinion that that decision was based on a wrong construction of section 12A of the Chota-nagpur Encumbered Estates Act, 1876, and held that the previous decision did not operate as res judicata. The Privy Council set aside the decision of the High Court, being of opinion that the Subordinate Judge was right in his view that the findings in the previous suit did operate as res judicata and the decision in that suit as to the construction of section 12A was res judicata as to the validity of the grant of 192C which was made in fulfilment of the obligation of that decision.

7. On a consideration of these authorities, I am clearly of opinion that the decision of this Court in Naresh Chandra Ray v. Dhirendra Nath Dey (1) [I.L.R (1951) 1 Cal. 507], does operate us res judicata, in the present litigation on the question of enforceability of the contract in spite of section 16A of the Bengal Tenancy Act.

8. On behalf of defendant No. 5, a point was raised that he was not a party to the suit. It is clear, however, that his claim in this litigation is through the persons who were appellants in this Court in the previous suit, There can be no doubt, therefore, that though he himself was not a party to that decision, he is equally bound as much as the persons who actually were parties in that suit.

9. The necessary consequence of the above findings is that section 168A of the Bengal Tenancy Act does not stand in the way of enforceability of the contract creating the charge. The position, however, is that the property, on which the charge is sought to be created, namely, one-sixth share in the putni, has ceased to exist and its place has been taken by the compensation which is payable to the intermediary, the owner of the one-sixth share of the putni, by the State of West Bengal. It is well-settled that where property subject to mortgage or charge undergoes transformation, the mortgage or charge attaches to the form it takes after the transformation. (Vide the decision reported in Debendra Nath Sen v. Mirza Abdul Samed Seraji, (7) (10 C.L.J 150). It is true that no prayer for a charge being declared on the compensation money was made. It could not be made when the suit was brought as at that time the property was in existence. When however, a matter like this comes to the notice of the Court and the correctness of the allegation of fact, that the property has ceased to exist and its place has been taken by the compensation that will be payable, is not disputed, I think it wholly improper and hypertechnical for this court to refuse to give a decree declaring a charge on the compensation merely because there has been no formal prayer before this Court It may be mentioned that, in the additional grounds that were taken in this appeal, this point was definitely raised.

10. I have, therefore, come to the conclusion that this appeal should be allowed and that a decree declaring a charge on the compensation that becomes payable to respondent No. 5 for the one-sixth share of the putni be made.

11. The respondent No. 5 will pay costs of this hearing to the appellant.

12. Let a decree be drawn up in Form No. 5A of Appendix D of the Civil Procedure Code.

13. The date fixed for payment will be six months from the date of this judgment. The decree will further declare that upon non-payment within the specified date, the plaintiff will be at liberty to proceed against the compensation money on which the charge is being declared.

Law, J.:— I agree.

A.K.D.G

Dhirendra Nath De v. Naresh Chandra Ray And Ors.

Structured Summary of the Opinion (Das Gupta, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Defendant No. 5 and Supporting Arguments

Government Pleader / State

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Dhirendra Nath De v. Naresh Chandra Ray And Ors.

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