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Mahesh Narain Singh v. Besheshar Lonia

Allahabad High Court

Mar 11, 1931

Judgment

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Concise Analytical Summary of the Opinion (Sen, J.; concurring Niamatullah, J.)

Factual and Procedural Background

Bisheshar Lonia executed a simple mortgage in favour of the plaintiffs-appellants on 15 September 1911. The mortgage security included two houses, certain trees and a holding described as Plot No. 12 (area: 1 bigha 19 biswas and 4 dhurs). The holding had earlier been an occupancy tenure in the hands of the predecessors-in-title of the mortgagor.

On 8 September 1887 Bisheshar Lonia relinquished the original occupancy holding to the zamindar Shah Mohammad Husain and obtained from him a patta/lease in perpetuity at a uniform rate of rent. The instrument described the tenure as "bataur sharamoian" and conferred possession and enjoyment "from generation to generation"; it did not prescribe a special rule of inheritance.

The mortgagee sued and obtained a preliminary decree on 4 July 1924 and a final decree on 4 December 1926. An execution application by the decree-holders followed; notice under Order 21, Rule 66, Civil P.O. was issued to the judgment-debtor, who did not object then that the property was not saleable. The decree was executed, the property sold and was ultimately purchased by the decree-holders.

The judgment-debtor applied under Order 21, Rule 90 of the CPC seeking avoidance of the sale on two grounds: (i) that proceedings were vitiated by fraud and material irregularity in publishing and conducting the sale; and (ii) that the property could not be sold in execution because it remained an occupancy holding. The trial Court dismissed this application on 19 November 1928.

On appeal to the Third Additional Subordinate Judge of Jaunpur the appellate bench agreed that no fraud or irregularity had been shown, but held that the leasehold property was not transferable (relying on Majid Husain v. Kurban Ali and Katwari v. Sita Ram) and allowed the plea that the property could not be sold. Sen, J. heard the further appeal to the Court giving the opinion summarized here.

Legal Issues Presented

Whether the lease dated 8 September 1887 (described as "bataur sharamoian") created a heritable and transferable interest in favour of Bisheshar Lonia such that the interest in Plot No. 12 was capable of being sold in execution of a decree.
Whether a judgment-debtor who had an opportunity to contest transferability at earlier stages (including in defence of the suit or to the notice under O.21 R.66) but did not do so, can raise non-transferability for the first time in an application under O.21 R.90.
Whether decisions such as Majid Husain v. Kurban Ali and other precedents relied upon by the lower appellate Court applied to the facts of this case where the lease was executed in 1887 (when Act 12 of 1881 was in force) and where later statutory provisions (e.g., S.20(3), Act 2 of 1901) post-dated the instrument.

Arguments of the Parties

Judgment-debtor's Arguments

The sale in execution should be avoided because the proceedings were vitiated by fraud and material irregularity in publishing and conducting the sale.
The holding could not be sold in execution of the decree because it was an occupancy holding and therefore not transferable.

Decree-holders / Plaintiffs-Appellants' Arguments

The opinion does not contain a detailed account of the decree-holders' specific legal arguments in response. It is, however, implicit that they sought execution of the mortgage decree and sale of the mortgaged property, and that they defended the regularity and validity of the sale.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Majid Husain v. Kurban Ali (A.I.R. 1926 All. 412)	Relied upon by the lower appellate Court to support the proposition that the leasehold/lease was not transferable.	The Court (Sen, J.) held this case inapplicable to the present facts because the present lease was executed in 1887 when Act 12 of 1881 was in force and before S.20(3), Act 2 of 1901 existed; therefore Majid Husain did not govern the present instrument's effect.
Katwari v. Sita Ram (A.I.R. 1921 All. 118)	Relied upon by the lower appellate Court as supporting non-transferability of certain leaseholds.	The appellate reliance was noted; Sen, J. disagreed with the lower Court's application of such precedents to the 1887 lease in this case.
Bachchi v. Bachchi (reported decision cited in text)	Decision (Banerji, J.) that a zamindar by executing a deed could not make a tenant a "fixed rate" tenant within the meaning of S.8, Act 2 of 1901; and that a tenant at fixed rates is not one who holds under a contract with the zamindar at a fixed rate of rent.	The Court distinguished Bachchi: that case did not involve conferment of a transferable right, and the lessor there did not confer a transferable right; the present lease granted rights resembling those of a fixed-rate tenant but did so before Act 2 of 1901.
Bhola Nath Tewari v. Suraj Bali Bai	Referenced by counsel; impliedly related to tenancy questions.	The Court stated that the point under consideration did not arise in that decision and therefore it did not control the present case.
Raghunath Tewari v. Buddhu Ram Tewari (A.I.R. 1930 All. 315 at p.317)	Discussed the principle underlying transactions by which landlords confer enlarged or altered rights on tenants by deed.	Sen, J. stated agreement with the view expressed in that decision and relied on it to support the validity of a contractual conferment of heritable and transferable rights prior to the later statute.

Court's Reasoning and Analysis

The Court's reasoning proceeds in two related strands: (A) procedural/estoppel aspects and (B) substantive character of the 1887 lease and its legal effect.

A. Procedural / Estoppel Analysis

The Court held that where a defendant/judgment-debtor has a specific right and opportunity to contest a suit or an execution application on a particular ground and does not avail himself of that opportunity, he cannot be permitted to raise that ground at a later stage. Allowing otherwise would undermine finality and repose in judicial proceedings and would be contrary to public expediency and the interests of the parties.
Applying that principle, the Court criticized the lower appellate Court's view that the judgment-debtor was not estopped from raising non-transferability in his application under O.21 R.90, because he had had earlier opportunities (in defence of the suit and in response to the execution notice) and had not raised the point.

B. Substantive Analysis of the Lease (8 September 1887)

The Court concluded that the holding in question was not, at the time of the mortgage and sale, an "occupancy tenure" in the sense that prevented its transfer. Although the holding had once been an occupancy tenure, Bisheshar Lonia surrendered it and accepted a new tenure under the 1887 lease.
The 1887 instrument created a tenure by special contract ("bataur sharamoian"). The tenure was heritable and in many of its incidents resembled a fixed-rate holding, but it was not literally a statutory fixed-rate tenancy (a fixed-rate tenancy in the technical sense required conditions laid down by statute).
The Court distinguished the Bachchi v. Bachchi decision: there, the lessor did not confer a transferable right and the question of transferability was not before the Court. The present instrument, by contrast, provided that the grantee should remain in possession "from generation to generation" and that he should enjoy rights akin to those of a fixed-rate tenant; the Court treated those rights as including the right to transfer.
Statutory context: the lease was executed in 1887 when Act 12 of 1881 was in force. The later provision S.20(3) of Act 2 of 1901 (which the Court described as relevant to subsequent cases) did not exist at the time of the lease and could not operate retrospectively to impair rights granted in 1887. Consequently, the later limitations in Act 2 of 1901 could not defeat the transferability of a right validly conferred in 1887.
The Court found nothing in the tenancy law or in public policy that precluded a landholder in 1887 from conferring a heritable and transferable interest by registered lease. The Court concluded that the landlord intended to confer transferable rights; the use of words such as "possession from generation to generation" and the characterization of the tenure led to that construction.
Sen, J. (and concurring Niamatullah, J.) emphasized that although a landlord cannot create a technical statutory fixed-rate tenancy by private contract where statute prescribes different requirements, it was open to parties then to create a transferable tenancy by contract when no statutory bar existed. They also observed that while succession rules prescribed by statute cannot be circumvented by contract, that particular question of altered succession did not arise in this case.
Niamatullah, J. added that the law does not prescribe precise words to create transferability; intention may be manifested by appropriate expressions in the instrument. He accepted that where the landlord and tenant agree to improve the tenant's position (by surrender and reconferment), a valid new grant with enlarged powers can be made.

Holding and Implications

Core Ruling: APPEAL ALLOWED. The order of the lower appellate Court (which had set aside the trial Court's dismissal of the O.21 R.90 application on the ground of non-transferability) is set aside, and the order of the Court of first instance (dismissing the application and upholding the sale) is restored.

Implications and direct consequences:

The Court held that the interest of the judgment-debtor in Plot No. 12 (created by the 8 September 1887 lease) was capable of being sold in execution of the decree; the sale and purchase by the decree-holders were therefore sustainable.
The judgment-debtor was precluded by his failure to raise the non-transferability point at an earlier, appropriate stage from raising it in the execution-avoidance proceedings.
The Court did not purport to lay down a new, sweeping precedent beyond the particular legal conclusions: it decided on the construction of the 1887 instrument in its statutory and factual context (i.e., leases executed before the provisions of Act 2 of 1901) and on the procedural principle regarding finality and opportunity to contest. No broader rule contrary to the statutory scheme was announced beyond what the opinion explains as the proper construction of the facts and law before the Court.

Disposition: Appeal allowed; decree of the lower appellate Court set aside; decree of the trial Court restored.

S.N/R.K

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Sen, J.:— This is an appeal from the appellate judgment of the Third Additional Subordinate Judge of Jaunpur oversetting a decision of a Munsif of the same district. Bisheshar Lonia executed a simple mortgage in favour of the plaintiffs appellants on 15th September 1911. The security consisted of two houses, certain trees and a holding described as No. 12 and having an area of 1 bighas 19 biswas and 4 dhurs. This was originally an occupancy tenure held by the predecessors-in-title of the mortgagor. On 8th September 1887, Bisheshar Lonia appears to have relinquished the holding in favour of the zamindar Shah Mohammad Husain and obtained from the latter a patta in perpetuity at a uniform rate of rent. The patta provided that the grantee was to remain in possession and enjoyment of the holding from generation to generation. The leasehold property was therefore heritable. The document however did not prescribe any special rule of inheritance. The tenure sought to be created under this instrument was described as bataur sharamoian. The tenure created therefore was not the creature of statute but was the creature of a special contract and unless there was something repugnant to the statute or opposed to principles of public policy, such a tenure could be validly created by a zamindar.

2. The mortgagee sued on his mortgage and obtained a preliminary decree on 4th July 1924. A final decree was obtained on 4th December 1926. Bisheshar Lonia does not appear to have contested the suit on the ground that the holding was not transferable and that no decree for sale should or could be passed in respect of the mortgage security. On an application for execution being made by the decree holders for sale of this property, notice under O. 21, R. 66, Civil P.O, was issued to the judgment-debtor in due course, but the latter did not raise any objection on the score that the property was not saleable in execution of the decree. In due course, the decree was executed, the property was sold and eventually purchased by the decree-holders. The judgment-debtor applied under O. 21, R. 90 of the CPC, for avoidance of the sale on the ground that the proceedings were vitiated by fraud and material irregularity in publishing and conducting the sale. He also contended that the property in dispute could not be sold in execution of the decree inasmuch as it was the occupancy holding of the judgment-debtor. These pleas were repelled by the trial Court and the application was dismissed on 19th November 1928.

3. The judgment-debtor preferred an appeal which was heard by the Third Additional Subordinate Judge of Jaunpur. The learned Judge agreed with the first Court that the judgment-debtor had failed to substantiate that the sale was vitiated by fraud or material irregularity in publishing and conducting the sale, but he held that in view of certain decisions of this Court the leasehold property was not transferable. Reliance was placed upon Majid Husain v. Kurban Ali (A.I.R 1926 All. 412) and Katwari v. Sita Ram (A.I.R 1921 All. 118). He further held that, although the defendant had not contested the suit on the ground of the nontransferability of the holding at earlier stages of the case either in defence of the suit or in response to the notice issued under O. 21, R. 66 of the Code, he is not estopped from raising the plea by his application under O. 21, R. 90 of the CPC. I may state at once that I do not agree with the lower appellate Court on this point. Where a defendant or a judgment-debtor has a right and opportunity to contest the suit or an application for execution upon a specific ground and has not availed himself of that opportunity with the result that the suit is decided against him or that the decree is allowed to be fully executed against him, he cannot be allowed to raise that point at a later stage of the case.

4. To permit him to raise that point is obviously to take away that finality and repose which should, after a certain stage indicated by the statute, attach to all judicial proceedings and pronouncements, both upon the ground of public expediency as also in the interests of the parties concerned.

5. I am further of opinion that the lower appellate Court has failed to appreciate the nature and incidents of the mortgaged property. The property in question was not an occupancy tenure. The holding in the hands of the predecessor-in-title of the mortgagor was at one time an occupancy holding. Bisheshar Lonia however relinquished that holding in favour of the zamindar, and under the lease, dated 8th September 1887, he obtained a fresh tenure and as already pointed out this tenure was not the creature of statute but was the result of a special contract between the parties. In some of its incidents, this tenure bore a close resemblance to a fixed rate holding, but it was not open to the parties to create a fixed rate holding by contract. It was held by Banerji, J., in Bachchi v. Bachchi (1) that a zamindar by executing a deed in favour of a tenant could not make him a fixed rate tenant within the meaning of S. 8, Act 2 of 1901. A tenant at fixed rates is “not a tenant who under a contract with the zamindar holds at a fixed rate of rent.” I do not however agree with the view that where a zamindar confers upon a person a right to occupy land in perpetuity at a fixed rate of rent, he makes him thereby an occupancy tenant of that land. It may be noticed here that under the terms of that instrument dealt with in Bachchia's case the lessor did not confer upon the lessee a transferable right and the question of transferability of the holding was not in issue in the case.

6. The decision in Bhola Nath Tewari v. Suraj Bali Bai (2) has been pressed upon this Court, but the point now under consideration did not arise there. I am not aware of any law which, precluded a land holder in the year 1887 from conferring upon a tenant a heritable and transferable interest in the land. Upon a true construction of the lease referred to above, the zamindar intended to confer a right upon the lessee which was both heritable and transferable. The right to transfer has not been granted in terms. The document however provides that the property is to remain in the possession of the grantee from generation to generation and that he should possess all the rights as are possessed by a fixed rate tenant. These rights include the right to transfer. The bestowal of such a right did not contravene the tenancy laws of the land and was not opposed to public policy. The principle underlying a transaction of this description has been discussed by my learned colleague in a case reported in Raghunath Tewari v. Buddhu Ram Tewari (A.I.R 1930 All. 315 at p. 317). I am in complete accord with his view. Reference has been made to the decision of this Court in Majid Husain v. Kurban Ali (A.I.R 1926 All. 412). This case has no application to the facts of the case in hand. The lease in the present case was executed when Act 12 of 1881 was in force. There was no provision in that Act corresponding to S. 20, sub-S. (3), Act 2 of 1901. This sub-section could not operate retrospectively upon the rights of the parties under the document, dated 8th September 1887. In my view the interest the judgment-debtor in plot 12 was capable of being sold in execution of a decree. I would accordingly allow the appeal, set aside the order of the lower appellate Court and restore that of the Court of first instance.

Niamatullah, J.:— I entirely agree. Apart from S. 20, sub-S. (3), Act 2 of 1901, which is not applicable to this case, there is nothing to prevent a landlord from creating a heritable and transferable tenancy by executing a registered lease in favour of the grantee.

7. Where the lease expressly confers upon the grantee the right to transfer the holding or part thereof, no difficulty can arise. The law does not prescribe any particular mode or expression by which alone transferable rights can be conferred upon a grantee. The intention to create such rights may be expressed by any appropriate words employed in the instrument conferring them. In the case before us the landlord professed to create a fixed-rate tenancy, which is transferable. He must therefore have intended to confer upon the lessee all the rights which are enjoyed by a fixed-rate tenant including the right to transfer.

8. A fixed-rate tenancy in the technical sense cannot however, be created by a landlord for the obvious reason that a holding of that description as defined in S. 5, Act 12 of 1881, and S. 8, Act 2 of 1901, must be in a permanently settled district and the tenant must have held it from the time of the permanent settlement, conditions which, unless the tenure already exists, cannot be brought into existence by the landlord. As already stated there was nothing to prevent a landlord from creating a transferable tenancy, at any rate before Act 2 of 1901 was passed. Where the law provides a particular mode of devolution on the death of a tenant, it is not permissible for the landlord to create a tenancy carrying with it a different rule of succession. Any attempt to circumvent the rule of inheritance laid down by special enactment will be abortive. This question however does not arise in the case before us. All we are concerned with is whether Bisheshar Lonia had a transferable right in the land to which the lease in his favour related, if it is conceded that the landlord intended to confer upon him the right of transfer, as I think he did by the use of he word “sharahmoian” in the lease, nothing in Act 2 of 1901 which was sub-sequently passed could affect the right of transfer which he previously enjoyed.

9. It has been argued that it is not open to a landlord to alter the terms of the tenancy already existing between the parties to a lease. Without expressing any opinion on the legal proposition involved in the contention, I am prepared a hold that the transaction we are concerned with was valid, even though Bisheshar Lonia was an occupancy tenant before he obtained the lease which considerably added to his rights. If the landlord and tenant are agreed on improving the position of the latter qua the end held by him, it is open to the tenant to surrender his holding and to the landlord to reconfer the same upon the tenant with enlarged powers. In the case before us this is what happened in substance. Bisheshar Lonia agreed to accept the rights mentioned in the lease granted to him. The landlord who was equally willing to confer those rights would be deemed to have accepted the surrender implied in the act of the tenant and to have made a fresh grant interms stated in the lease. For these reasons I am clearly of opinion that the argument above referred to is not sound, or the foregoing reasons I am in agree-ant with the view expressed by my ??? colleague. The decree passed by the lower appellate Court is not sustainable posed.