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Raja Shatrunji v. Mohammad Azmat Azim Khan And Others
Factual and Procedural Background
On 4 October 1939 the present appellant (the decree-holder) obtained a money decree for Rs. 1,31,040-1-0 with interest at 3½ % per annum against Sardar Mujibul Rahman Khan under the U.P. Encumbered Estates Act, 1934. After the judgment-debtor’s death on 24 April 1949, his sons were substituted on 21 April 1953.
The heirs sought reduction of the decretal amount under Section 4 of the U.P. Zamindars’ Debt Reduction Act, 1952 (“the 1952 Act”). On 18 February 1957 the Special Judge, Kheri rejected the application, holding that the benefit of Section 4 could be invoked only when the decree itself charged the mortgaged property—something the decree did not do.
A revision filed by the judgment-debtors was dismissed by a Full Bench of the Allahabad High Court on 27 November 1962. On the same date the U.P. Zamindars’ Debt Reduction (Amendment) Act, 1962 (Act 20 of 1962) received Presidential assent; it was published on 4 December 1962 and made effective retrospectively from 25 May 1953. Crucially, the amendment deleted the requirement that the mortgaged property be “charged under the decree”.
Invoking the retrospective amendment, the judgment-debtors moved the High Court for review on 20 February 1963. By majority, the High Court allowed the review, set aside the Special Judge’s rejection, and remanded the matter for fresh determination under the statute as amended.
The decree-holder obtained a certificate of fitness, and the present appeal was heard by the Supreme Court.
Legal Issues Presented
- Whether Section 4 of the U.P. Zamindars’ Debt Reduction Act, 1952 (as retrospectively amended by Act 20 of 1962) could be invoked in respect of the decree in question.
- Whether the Allahabad High Court was competent to entertain and allow the judgment-debtors’ application styled as a review after the amendment came into force.
Arguments of the Parties
Appellant’s Arguments (Decree-holder)
- The High Court had correctly applied the law as it stood on 27 November 1962; a subsequent change in law cannot be a ground for review under Order 47 of the Code of Civil Procedure.
- The grounds enumerated in Order 47 permit review only for error apparent on the face of the record or discovery of new evidence, not for legislative change post-judgment.
Respondents’ Arguments (Judgment-debtors)
- The deletion of the words “charged under the decree” is retrospective; legally, those words are deemed never to have existed from 25 May 1953 onward.
- Consequently, the earlier judgment involved an error apparent on the face of the record because it applied a non-existent legal requirement.
- Section 4 itself operates “notwithstanding anything in the Code of Civil Procedure”, so the form of the application (review) should not defeat the substantive right created by the statute.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bennu Mal v. Bashir Ahmad Khan (1962 ALJR 83) | Held that courts could not reduce a debt unless the decree expressly charged the mortgaged property. | Identified as the decision whose effect the 1962 amendment was designed to neutralise. |
| State of Bombay v. Pandurang Vinayak Chaphalkar, AIR 1953 SC 244 | Doctrine that a statutory fiction must be given full effect and carried to its logical conclusion. | Used to support the view that the retrospective deeming clause in Act 20 of 1962 eliminates the “charged under the decree” requirement for all material dates. |
| East End Dwellings Co. Ltd. v. Finsbury Borough Council, 1952 AC 109 | Explanation of how to apply statutory fictions—courts must accept the imagined state of affairs and its inevitable corollaries. | Reinforced the conclusion that courts must treat the impugned words as though they never formed part of Section 4. |
| Rajah Kotagiri Venkata Subbamma Rao v. Rajah Vellanki Venkatrama Rao (PC) | Ordinarily, review cannot be granted on the basis of events occurring after the decree was passed. | Cited and distinguished; the Court held the amendment was not a “subsequent event” but a clarification of what the law had always been. |
Court's Reasoning and Analysis
The Court noted that Act 20 of 1962 expressly provides that the 1952 Act “shall … have effect … as if this Act had been in force on all material dates”. Applying the principle governing statutory fictions (affirmed in Pandurang Vinayak Chaphalkar and East End Dwellings), the words “charged under the decree” are to be treated as though they never existed from 25 May 1953 onward.
Consequently, the decree in question satisfied all three statutory tests: (1) a decree to which the 1952 Act applies, (2) relating to a secured debt, and (3) concerning mortgaged property that constitutes an estate acquired under the U.P. Zamindari Abolition and Land Reforms Act, 1950. Either party therefore had a right to invoke Section 4.
Addressing the appellant’s procedural objection, the Court held:
- The amendment is not a “subsequent law”; by legal fiction it was always operative. The earlier High Court judgment was therefore based on an error apparent on the face of the record.
- Section 4 operates “notwithstanding anything in the Code of Civil Procedure”, so the nomenclature “review” could not bar the High Court from granting the statutory relief.
- Given that the decree had already been the subject of appellate scrutiny, the High Court was the proper forum to apply the amended law; a remand to the Special Judge was therefore within its competence.
Holding and Implications
Appeal Dismissed. Each party is to bear its own costs.
By affirming the Allahabad High Court’s order, the Supreme Court confirms that the retrospective deletion of the words “charged under the decree” enables judgment-debtors (and decree-holders, where relevant) to seek debt reduction even if the decree did not expressly charge the mortgaged property. The decision underscores that when a statute retrospectively alters legal requirements, courts must apply the law as deemed to have always stood, and procedural labels such as “review” cannot defeat substantively conferred rights.
A.N Ray, J. — This appeal is by certificate from the judgment of the Allahabad High Court, dated April 30, 1963. Leave was granted by the Allahabad High Court on February 21, 1966.
2. The facts are these. On October 4, 1939, the appellant obtained a decree under the U.P Encumbered Estates Act, 1934, against Sardar Mujibul Rahman Khan for the sum of Rs 1,31,040-1-0 with costs and future interest at 3½ per cent p.a on the basis of a secured debt. Sardar Mujibul Rahman Khan the judgment-debtor died on April 24, 1949. Thereafter the judgment- debtor's sons who were brought on record on April 21, 1953 applied for reduction of the decretal amount under Section 4 of the U.P Zamindars' Debt Reduction Act, 1952 (Act 15 of 1953). The application was rejected by the Special Judge, Kheri on February 18, 1957. The Special Judge held that unless and until the decree charged the mortgaged property no reduction of debt could be ordered under the U.P Zamindars' Debt Reduction Act, 1952 and that the decree was not one such. The judgment-debtor filed an appeal against the said order of the Special Judge. The appeal was heard on November 27, 1962 by the Full Bench of the Allahabad High Court upholding the order of the Special Judge and dismissing the appeal which was treated as revision. Shortly after the dismissal of the revision petition the U.P Zamindars' Debt Reduction Act, 1952 was amended by U.P Zamindars' Debt Reduction (Amendment) Act, 20 of 1962. The Amendment Act of 1962 received the assent of the President on November 27, 1962 which happened to be the date of the order of the High Court on the revision application. The amendment was published in the Gazette on December 4, 1962 and came into force on that date. The judgment-debtor thereafter on February 20, 1963 filed an application for review against the order of the Full Bench, dated November 27, 1962.
3. The High Court in accordance with the order of the majority accepted the review application of the judgment-debtor and set aside the order of the Special Judge rejecting the judgment-debtor's application under Section 4 of the Zamindars' Debt Reduction Act, 1952 and remanded the case to the Special Judge for disposal of the same in accordance with the provisions of the U.P Zamindars' Debt Reduction Act, 1952 as amended by Act 20 of 1962.
4. Two questions arise in the present appeal. First, whether Section 4 of the U.P Zamindars' Debt Reduction Act, 1952 could be invoked by the judgment-debtor. Secondly, whether the High Court could accede to the application of the judgment-debtor.
5. Section 4 of the U.P Zamindars' Debt Reduction Act, 1952 (hereinafter referred to as “the 1952 Act”) insofar as it is necessary for the purpose of the present appeal is as follows:
“Powers to reduce debts after passing of decree.— (1) Notwithstanding anything in the Code of Civil Procedure, 1908 or any other law, the court, which passed a decree to which this Act applies relating to a secured debt, shall on the application either of the decree-holder or judgment-debtor, proceed as hereinafter stated.
(2) Where the mortgaged property (charged under the decree) consists exclusively of estate and such estate has been acquired under the provisions of the U.P Zamindari Abolition and Land Reforms Act, 1950, the court shall —
* * *
(3) Where the mortgaged property (charged under the decree) consists partly of estate and partly of property other than estate, the court shall —
* * *”
The words “charged under the decree” are shown in brackets only to indicate that these words were deleted by Amendment Act 20 of 1962. It is because of the amendment that the judgment-debtor made an application to the High Court for review of the order, dated November 27, 1962, rejecting the judgment-debtor's application under Section 4 of the 1952 Act. As to what the court shall do under sub-sections (2) and (3) of Section 4 of the 1952 Act are calculation of the amount and reduction of the same in accordance with the provisions of the Act. The working out of these details for calculation and reduction of debt does not arise in the present case.
6. The Amendment Act 20 of 1962 which deleted the words “charged under the decree” occurring in both sub-sections (2) and (3) of Section 4 of the 1952 Act immediately after the words “mortgaged property” was made effective as from the date of enforcement of the U.P Zamindars' Debt Reduction Act, 1952, namely, May 25, 1953.
7. The reason for this amendment given in the objects and reasons of the U.P Zamindars' Debt Reduction (Amendment) Act, 1962 was because the High Court of Allahabad in the case of Bennu Mal v. Bashir Ahmad Khan 1962 ALJR 83 held that the court was powerless to reduce debts after the passing of the decree unless the mortgaged property was charged under the decree. The effect of the amendment was to give relief to mortgaged property within the contemplation of the Act.
8. As a result of the amendment first it is to be a decree to which the 1952 Act applies, secondly, it is to be a decree relating to a secured debt and, thirdly, the mortgaged property is to consist of estate which has been acquired under the provisions of the U.P Zamindari Abolition and Land Reforms Act, 1950. If these tests are satisfied the decree-holder or the judgment-debtor has the right to apply to the court and the court shall on the application proceed in accordance with the provisions of the Act. The court under this section is the Court of the Special Judge which passed the decree. In the present case, it is indisputable that it is a decree relating to secured debt, and the mortgaged property consists of an estate which has been acquired under the provisions of the U.P Zamindari Abolition and Land Reforms Act, 1950.
9. The appellant applied under Section 4 of the 1952 Act as it stood prior to its amendment by Act 20 of 1962 on August 24/25, 1955 in the Court of the Special Judge, first-grade, Kheri. The Special Judge held that the decree against the appellant was not one which could be said to be against the mortgaged property charged under the decree. The appellant also lost before the High Court under the order, dated November 27, 1962. The appellant made an application for review of the judgment of the High Court, dated November 27, 1962.
10. The effect of the amendment of the 1952 Act is embodied in Section 2 of the Amendment Act, 1962 which is as follows:
“The U.P Zamindars' Debt Reduction Act, 1952, shall as to the date of this enforcement have effect subject to the amendments made by this Act as if this Act had been in force on all material dates:
Provided that nothing in this section shall apply to a debt which has been discharged prior to the date of enactment of this Act.”
11. The Amendment Act therefore provided that the amendment took effect as if the Amendment Act had been in force on all material dates. The effect of such a deeming clause was stated by this Court in State of Bombay v. Pandurang Vinayak Chaphalkar AIR 1953 SC 244, 1953 SCR 773 at p. 778, 1953 SCJ 330 as follows:
“When a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the court is entitled to ascertain for what purposes and between what persons the statutory fiction is to be resorted to and full effect must be given to the statutory fiction and it should be carried to its logical conclusion.”
The statutory fiction was introduced to give full effect to Section 4 of the 1952 Act by conferring on the debtors and creditors the right to apply to the court for calculation and reduction of debt. It was realised that courts always passed simple decrees. It was noticed that mortgaged property was not and could not be charged under the decree. It was therefore appreciated that unless the words “charged under the decree” were deleted the section could never give any relief to any landlord whose estate had been acquired.
12. This Court in the Bombay case referred to the observations of Lord Asquith in East End Dwellings Co. Ltd. v. Finsbury Borough Council, 1952 AC 109 that “If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it.... The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs”. These observations indicate that the words “charged under the decree” in Section 4(2) of the 1952 Act were never there with the inevitable consequence that the only statutory requirement is whether the mortgaged property consists of estate which has been acquired under the provisions of the U.P Zamindari Abolition and Land Reforms Act, 1950.
13. On November 27, 1962 when the matter was heard by the High Court, this amendment did not come into the statute-book. That is why the judgment-debtor made an application to bring it to the notice of the High Court that the law was that the words “charged under the decree” were always deemed to have been deleted and this law was effective from the date of coming into force of the 1952 Act on May 25, 1953. The High Court by a majority opinion was of the view that the judgment-debtors should be given relief under Order 47 of the Code of Civil Procedure the principles of review are defined by the Code and the words “any other sufficient reason” in Order 47 of the Code would mean a reason sufficient on grounds analogous to those specified immediately previously in that order. The grounds for review are the discovery of new matters or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or the review is asked for on account of some mistake or error apparent on the face of the record. In Rajah Kotagiri Venkata Subbamma Rao v. Rajah Vellanki Venkatrama Rao Lord Davey at p. 205 of the Report said that “the section does not authorise the review of a decree which was right when it was made on the ground of the happening of some subsequent event”. Counsel for the appellant submitted that when the High Court decided the matter, the High Court applied the law as it stood and a subsequent change of law could not be a ground for review. The appellant's contention is not acceptable in the present case for two principal reasons; first, it is not a subsequent law. It is the law which all along was there from 1952. The deeming provision is fully effective and operative as from May 25, 1953 when the 1952 Act came into force. The result is that the court is to apply the legal provision as it always stood. It would, therefore, be error on the face of the record. The error would be that the law that was applied was not the law which is applicable. Secondly, Section 4 of the 1952 Act confers power on the court to apply the law notwithstanding any provision contained in the Code of Civil Procedure. Therefore the application though intituled an application for review was not so. The substance and not the form of the application will be decisive.
14. The appellant could not have applied to the Special Judge at Kheri after the decision of the High Court on November 27, 1962 to apply the law as it stood to the facts and circumstances of the case. The appeal from the order of the Special Judge, Kheri was heard by the High Court and, therefore, the appellant rightly applied to the High Court. It appears from the record of the case that when the matter was heard before the High Court the appellant's counsel brought to the notice of the High Court that the Act was going to be amended and awaited assent of the President. In the present case, it is a pre-eminent consideration to be kept in the forefront that the 1952 Act was amended to confer benefit on judgment-debtors of the type of the appellant. This is a special legislation conferring rights and reliefs within a specially created jurisdiction. The decree is treated like a decree of the civil court. The execution of the decree is not within the province of the provisions of the Code of Civil Procedure. There are special Acts for execution of decrees of the type in the present appeal. The Special Courts have been given power to grant remedies or reliefs to the judgment-debtor as well as the decree-holder. Section 4 of the 1952 Act conferred right to apply to the court notwithstanding any provision contained in the Code of Civil Procedure. The High Court was, therefore, right in making the order as a court could have made at the date on which the appeal was heard.
15. For these reasons the appeal fails and is dismissed. Each party will pay and bear their own costs.
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