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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The plaintiff claimed ownership of certain suit lands in village Arigaon (Sonepur) that fell to him in a partition with his brothers. He alleged that in 1943 his father took a loan of Rs. 30 from the original defendant, the late Baikuntha (alias Beda Mali), and executed a deed described in the plaint as a usufructuary mortgage. The father and Baikuntha are said to have agreed that the mortgage debt would be repaid out of the usufruct of the suit lands. Baikuntha was alleged to have remained in possession since 1943 and, though the mortgage had been statutorily discharged after fifteen years, had refused to vacate the lands despite demands. The plaintiff sued for redemption, return of the mortgage bond, a declaration that the lands were released from the mortgage debt, and recovery of possession through the Court.

The defendants (legal representatives of the late Baikuntha) adopted the earlier written statement of Baikuntha, denying the mortgage character of the transaction and asserting that the 12-1-1943 instrument was a deed of sale for Rs. 30, placing Baikuntha in possession on his own right. They also stated that occupancy rights had been conferred on Baikuntha in Bhogra Conversion proceedings by the Collector and denied other plaint allegations.

The learned Munsif found for the plaintiff: that the transaction was a usufructuary mortgage, that the mortgage had been statutorily discharged, that no occupancy rights were conferred by the Collector on Baikuntha, and that the defendants had not acquired title by adverse possession. The Munsif decreed redemption and directed return of the mortgage deed and delivery of possession. The defendants' first appeal was dismissed by the Subordinate Judge, Sonepur. The defendants then filed the present second appeal to this Court.

While this appeal was pending, the plaintiff-respondent filed a petition (not pressed at hearing) seeking a declaration that the appeal had abated because village Arigaon had been brought under consolidation operations by Notification No. 69036-R dated 21-10-1978 under Section 3 of the Orissa Consolidation of Holdings and Prevention of Fragmentation of Land Act, 1972 (the Act). The Court proceeded to decide whether the suit and the appeals had abated under Section 4(4) of the Act.

Legal Issues Presented

  1. Whether the substantial question earlier formulated — whether a plaintiff whose claim is based on statutory discharge of a usufructuary mortgage could file a suit for redemption instead of a suit for recovery of possession — was applicable in this case (the Court found the question did not arise because the plaint also prayed for recovery of possession).
  2. Whether the suit and the appeals arising therefrom have abated by virtue of Section 4(4) of the Orissa Consolidation of Holdings and Prevention of Fragmentation of Land Act, 1972, in view of the State Government notification under Section 3 bringing village Arigaon under consolidation operations.

Arguments of the Parties

Plaintiff's Arguments

  • The suit lands were recorded in his and his brothers' names and fell to him in partition.
  • In 1943 his father took a loan of Rs. 30 and executed a deed which was a usufructuary mortgage; the debt was to be repaid from the usufruct.
  • The mortgagee (late Baikuntha) remained in possession since 1943 and although the mortgage had been statutorily discharged after fifteen years, he refused to vacate.
  • The plaintiff sought redemption, return of the mortgage bond, declaration of release from mortgage debt, and recovery of possession through Court.

Defendants' Arguments

  • The 12-1-1943 instrument was a deed of sale for Rs. 30, not a mortgage; Baikuntha took possession on the strength of that sale and held title and possession on his own right, title and interest.
  • Occupancy rights in Bhogra Conversion proceedings were conferred on Baikuntha by the Collector after enquiry.
  • There was no mortgagor–mortgagee relationship and no agreement that the debt would be repaid out of usufruct; other plaint allegations were denied.
  • The defendants prayed for dismissal of the suit.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
AIR 1968 SC 714 — Ram Adhar Singh v. Ramroop Singh & Others The Supreme Court held that expressions in consolidation legislation referring to "declaration of rights or interest in any land" are comprehensive enough to include "suits for possession," because a claim for possession requires adjudication of the claimant's right or interest. The appellants relied upon this authority to support the contention that a suit concerning possession/rights in land should abate once consolidation proceedings are initiated; the Court considered that the reasoning supports covering suits like the present by the abatement provision of the consolidation statute.
AIR 1973 SC 2451 — Gorakh Nath Dube v. Hari Narain Singh The Supreme Court differentiated between (a) documents that are wholly/partially invalid (which consolidation authorities can disregard) and (b) documents whose legal effect can be taken away only by cancellation by a competent court. The consolidation authorities can adjudicate on existence and quantum of rights and declare documents effective or ineffective to the extent permitted by their statutory powers; but they may lack power to cancel certain deeds. The appellants invoked this authority to argue that consolidation authorities are competent to adjudicate rival claims to rights or interests in land (including where a party alleged invalidity of a purported sale); the Court applied this principle in concluding that where rival title claims exist, consolidation authorities should determine them under the Act.
(1980) 49 Cut LT 297 — Abas Ali Khan v. Sahabuddin Khan Held (per the Court's summary) that where parties do not dispute that the main transaction is a mortgage and the mortgage is discharged on payment or offer of payment, no question of declaration of rights or interest in land is involved and therefore the consolidation bar did not apply. The respondent relied on this decision to argue that S.4(4) should not apply where the claim is based on statutory discharge of a mortgage. The Court found the facts distinguishable (in the present case the defendants dispute that the transaction was a mortgage) and held the cited decision inapplicable here.

Court's Reasoning and Analysis

The Court first noted an earlier formulated substantial question (whether a plaintiff whose claim is based on statutory discharge of a usufructuary mortgage could file a suit for redemption rather than a suit for recovery of possession) but observed that the plaint in fact prayed both for redemption and for recovery of possession, so that specific question did not arise for decision.

The Court identified the main question as whether the suit and the appeals abated under Section 4(4) of the Orissa Consolidation of Holdings and Prevention of Fragmentation of Land Act, 1972, given that village Arigaon had been brought into consolidation operations by a State Government notification under Section 3.

Examining the record and authorities relied upon by the parties, the Court treated two lines of authority as relevant: (a) precedents establishing that consolidation statutes' bar on suits in respect of rights or interest in land is broad enough to include suits for possession, and (b) authorities explaining that consolidation authorities can adjudicate competing claims to rights and interests in land where the effect of documents can be assessed within their statutory competence (subject to the limitation that some deeds may require cancellation by courts).

The Court contrasted the present facts with the facts of Abas Ali Khan v. Sahabuddin Khan, where there was no dispute that the transaction was a mortgage and the mortgage had been discharged; in that earlier case the consolidation bar did not apply. Here, by contrast, the defendants expressly deny that the transaction was a mortgage and assert it to be a sale. Because the parties advance adverse claims of title (mortgagee versus purchaser), the dispute involves declaration of rights or interests in land that are within the ambit of the consolidation authorities under Section 4(4).

On that basis the Court concluded that the suit and the appeals are "clearly covered by the provisions of S. 4(4) of the Act" and therefore must be held to have abated. The Court expressly held that the rival claims concerning title and rights should be put forward before the consolidation authorities for determination.

Holding and Implications

Core Ruling: The appeal is allowed and the suit and the appeals arising therefrom are held to have abated under Section 4(4) of the Orissa Consolidation of Holdings and Prevention of Fragmentation of Land Act, 1972.

Consequent orders and immediate effects on the parties:

  • The judgments and decrees of both Courts below are set aside.
  • The appeal is allowed (final order of this Court: "Appeal allowed").
  • Each party will bear their own costs.

Broader implications: The Court's decision is limited to the facts of this case as analyzed in the opinion — specifically where the character of the impugned instrument (mortgage v. sale) is disputed and thus raises competing claims to rights or interests in land that fall within Section 4(4)'s bar. The opinion distinguishes prior authority where no dispute existed about the mortgage character and where statutory discharge removed the need for a declaration of rights.

    Prasanna Mali And Others v. Raghumani Misra .

    1. The defendants have filed this appeal against the affirming decision of the learned Subordinate Judge, Sonepur. Plaintiff's case is that the suit lands were recorded in his name and in the names of his brothers in the Fourth Settlement of village Arigaon in Sonepur. In the partition between the plaintiff and his brothers the suit lands had fallen to the share of the plaintiff. In the year 1943, the plaintiff's father took a loan of Rs. 30 from the original defendant, the late Baikuntha alias Beda Mali (the present defendants are the legal representatives of the late Baikuntha), and executed a deed of mortgage in respect of the suit lands. The father of the plaintiff and the late Baikuntha had agreed that the mortgage debt would be repaid out of the usufruct of the suit lands. The late Baikuntha had been in possession of the suit lands since 1943 and though the entire mortgage debt had been paid off several years ago, he was not vacating possession of the suit lands in spite of demands by the plaintiff. The mortgage stands discharged after expiration of fifteen years from the date of the mortgage, yet the late Baikuntha was not giving up possession. The plaintiff was therefore compelled to file the present suit for redemption and return of the mortgage bond, for a declaration that the suit lands were released from the mortgage debt and for recovery of possession through Court.

    2. The written statement filed by the late Baikuntha has been adopted by the present defendants. According to the written statement, the father of the plaintiff had not executed a mortgage bond for Rs. 30 in respect of the suit lands, but he had executed a deed of sale on 12-1-1943 in respect of the suit lands in favour of the late Baikuntha for a consideration of Rs. 30. The father of the plaintiff had put the late Baikuntha in possession of the suit lands on the strength of the deed of sale and since then the latter went into possession of the suit lands on his own right, title and interest. In the Bhogra Conversion proceeding of village Arigaon occupancy rights were conferred on the late Baikuntha by the Collector after due enquiry. The defendants have denied that the relationship between the father of the plaintiff and the late Baikuntha was that of mortgagor and mortgagee. It is also denied that there was any agreement between the plaintiff's father and the late Baikuntha that the mortgage debt was to be repaid out of the usufruct of the suit lands. The other allegations contained in the plaint have also been denied and the defendants have prayed for dismissal of the suit.

    3. The learned Munsif who tried the suit found that the plaintiff's father had not sold the suit lands to the late Baikuntha, that the latter was in possession of the suit land as a usufructuary mortgagee even after the statutory discharge of the mortgage, that occupancy rights in respect of the suit lands had not been conferred on the late Baikuntha by the Collector and that the defendants have not acquired title over the suit lands by adverse possession. The plaintiff's suit was accordingly decreed for redemption and the defendants were directed to deliver possession of the suit lands to the plaintiff and to return the mortgage deed within three months and in case of default, the plaintiff was to recover possession through Court. The appeal filed by the defendants having been dismissed, they have filed the present second appeal.

    4. On the basis of submission made by the learned counsel for appellants, the substantial question of law which was formulated by this Court on 16-11-1977 is whether the plaintiff whose claim is based on statutory discharge of the usufructuary mortgage could have filed a suit for redemption instead of filing a suit for recovery of possession. This question does not arise as on going through the plaint I find that in addition to redemption the plaintiff has prayed for recovery of possession through Court.

    5. The main question for consideration is whether the suit and the appeals arising out of the suit have abated in view of the provisions contained in Section 4(4) of the Orissa Consolidation of Holdings and Prevention of Fragmentation of Land Act, 1972 (hereinafter referred to as the Act). I find from the records that while this appeal was pending in this Court, on 18-6-1979 the plaintiff-respondent filed a petition praying for a declaration that this appeal has abated. In the petition it is stated that the present suit filed by the plaintiff is for declaration of his full right and interest over plot No. 683 of village Arigaon and that by Notification No. 69036-R dated 21-10-1978 under S. 3 of the Act village Arigaon has come under consolidation operation. However, at the hearing of this appeal learned counsel for the plaintiff-respondent did not press this petition. In any event since it is admitted on both sides that village Arigaon where the suit lands are situated has been brought under consolidation operations by virtue of the aforesaid notification of the State Government, a decision is necessary on the question as to whether the present suit and the appeals have abated by virtue of the provisions contained in S. 4(4) of the Act.

    6. Learned counsel for the appellants relies upon AIR 1968 SC 714 (Ram Adhar Singh v. Ramroop Singh & Others) and AIR 1973 SC 2451 (Gorakh Nath Dube v. Hari Narain Singh) in support of his contention that the present suit must abate after the Government Notification under S. 3(1) of the Act. In the former case the question which arose for consideration was whether a suit for possession of agricultural land under S. 209 of the U.P Zamindari Abolition and Land Reforms Act, 1950 filed by the plaintiff who claimed to be a bhumidar would abate under S. 5 of the U.P Consolidation of Holdings Act, 1953, when the aforesaid S. 5 after amendment did not directly refer to “suits for possession of land”. The Supreme Court held (at p. 716):—

    “…… ‘Suits for possession’, as such, has not been expressly referred to, in the new S. 5, but, in our opinion, the expression ‘every suit and proceeding in respect of declaration of rights or interest in any land……are comprehensive enough to take in suits for possession of land, because, before a claim for possession is accepted, the Court will have necessarily to adjudicate upon the right or interest of the plaintiff, in respect of the disputed property, taking into account the claim of the opposite party. Therefore, in our opinion, the suit, instituted by the respondent, is covered by the amended S. 5 of the Act.

    (Emphasis added).”

    In the latter case the Supreme Court held (at p. 2453):—

    “……We think that a distinction can be made between cases where a document is wholly or partially invalid so that it can be disregarded by any court or authority and one where it has to be actually set aside before it can cease to have legal effect. An alienation made in excess of power to transfer would be, to the extent of the excess of power, invalid. An adjudication on the effect of such a purported alienation would be necessarily implied in the decision of a dispute involving conflicting claims to rights or interests in land which are the subject matter of consolidation proceedings. The existence and quantum of rights claimed or denied will have to be declared by the consolidation authorities which would be deemed to be invested with jurisdiction, by the necessary implication of their statutory powers to adjudicate upon such rights and interests in land, to declare such documents effective of ineffective, but, where there is a document the legal effect of which can only be taken away by setting it aside or its cancellation, it could be urged that the consolidation authorities have no power to cancel the deed, and, therefore, it must be held to be binding on them so long as it is not cancelled by a court having the power to cancel it. In the case before us, the plaintiff's claim is that the sale of his half share by his uncle was invalid, inoperative, and void, such a claim could be adjudicated upon by consolidation courts………”

    In the present suit the plaintiff's case is that the deed in question was a deed of usufructuary mortgage and that it has been statutorily discharged by virtue of the provisions contained in S. 17 of the Orissa Money-Lenders' Act. On the other hand, according to the defendants, that deed was not a deed of mortgage but a deed of sale executed by the father of the plaintiff in favour of the late Baikuntha. It is submitted by learned counsel for the appellants that in these circumstances intervention of the Civil Court is not necessary and that the consolidation authorities are competent to adjudicate upon the rival claims of the parties. Learned counsel for the respondent has urged that the plaintiff's claim for recovery of possession is based upon statutory discharge of the mortgage and once it is held that there has been a statutory discharge of the mortgage, there is no further question of declaration of any right or interest in the suit lands and as such the bar of S. 4(4) of the Act should not apply to the present case. In support of this contention reliance is placed on a decision of this Court reported in (1980) 49 Cut LT 297 (Abas Ali Khan v. Sahabuddin Khan). On going through the decision I find that the facts of that case are clearly distinguishable from the facts of this case. In that case there was no dispute that the main transaction between the parties was a mortgage and it was held that the mortgage having been discharged on payment or offer of payment no question of declaration of any right or interest in land was involved in the suit and therefore S. 4(4) of the Act was not applicable. In the present case, as already noted, while the plaintiff claims the suit transaction to be a usufructuary mortgage, the defendants deny this assertion and claim that the transaction is an outright sale. Therefore the aforesaid decision cannot have any application to the facts of this case. Since the plaintiff and the defendants adversely claim title to the suit lands, the rival claims involving rights and interest in the suit lands should be put forward before the consolidation authorities for a proper determination of the same. The suit is clearly covered by the provisions of S. 4(4) of the Act. The suit and the appeals arising therefrom must therefore be held to have abated.

    7. This appeal is accordingly allowed. The judgments and decrees of both the Courts below are hereby set aside. In the circumstances of this case, parties will bear their own costs throughout.

    Appeal allowed.

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    Comments

    Prasanna Mali And Others v. Raghumani Misra .
    (Apr 5, 1982)