- Bookmark
- Share
- CaseIQ
Wasif Ali Mirza Nawab Bahadur Of Murshidabad v. Karnani Industrial Bank Ltd.
Factual and Procedural Background
By an order dated 15th July 1929, the High Court of Judicature at Fort William in Bengal allowed an appeal from an order of Lord Williams, J., and appointed a receiver of the rents, issues, and profits of certain properties in Calcutta. This appointment was made in execution of several decrees obtained by the respondent bank against the appellant. The central legal question concerned the competence of the Court to appoint a receiver over these properties in light of the Murshidabad Act, 1891 (No. 15 of 1891), which governs these properties.
The Murshidabad Act confirmed an indenture dated 12th March 1891 between the Secretary of State and the then Nawab Bahadur of Murshidabad (the appellant's predecessor). The indenture involved the relinquishment by the Nawab of a former title in exchange for new titles with associated privileges and a guaranteed annual payment of Rs. 2,30,000 for maintenance and support. The properties in question were to be held inalienably by the Nawab Bahadur and his lineal male heirs, subject to certain conditions restricting sale, mortgage, or alienation except by limited leases.
The indenture further provided that if the Nawab or his heirs contravened these terms or mismanaged the properties, the Secretary of State could take possession and apply the rents for the Nawab's benefit. The appellant contended that appointing a receiver over the rents would defeat the statute's and indenture's purpose and be against public policy.
Legal Issues Presented
- Whether the High Court had the competence to appoint a receiver of the rents, issues, and profits of the properties subject to the Murshidabad Act, 1891, in execution of decrees against the appellant.
- Whether the appointment of a receiver would contravene the terms of the Murshidabad Act and the indenture, particularly concerning the inalienability and intended use of the rents for maintaining the Nawab Bahadur's dignity and station.
- Whether the rents in question constituted a political pension and were therefore exempt from attachment under the Civil Procedure Code.
Arguments of the Parties
Appellant's Arguments
- The appointment of a receiver would defeat the intention of the Government as expressed in the Murshidabad Act and indenture by depriving the Nawab Bahadur of income designed for his maintenance and dignity.
- The appointment would be against public policy.
- The appointment of a receiver could embarrass the Court if the Secretary of State exercised his power to take possession and apply the rents for the Nawab's benefit.
- The rents constituted a political pension and were exempt from attachment under the Civil Procedure Code.
Respondent's Arguments
The opinion does not contain a detailed account of the respondent's legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Lachmi Narain v. Makund Singh, [1904] 26 All 617 = 1 ALJ 338 = (1904) AWN 144 | Definition of "pension" as periodical payments by Government to a pensioner under the Pensions Act, 1871, Civil Procedure Code, and Transfer of Property Act. | The Court rejected the appellant's claim that the rents were a political pension exempt from attachment, holding that the appellant was a limited owner drawing rents, not a pensioner receiving government pension payments. |
Court's Reasoning and Analysis
The Court examined the Murshidabad Act and the confirming indenture, noting that while the immovable properties were inalienable except for limited leases, there was no restriction on the Nawab Bahadur's enjoyment and disposal of the rents derived from these properties. The Court emphasized that the Nawab had a disposing power over the income, and if he failed in maintaining his dignity, the Secretary of State could intervene and take possession to apply the rents for the Nawab's benefit.
The Court referred to the Code of Civil Procedure, particularly Section 51(d), which empowers the Court to appoint a receiver for execution of decrees, and Section 60, which allows attachment and sale of saleable property belonging to a judgment-debtor or over which he has disposing power.
Since the Nawab had disposing power over the rents, the appointment of a receiver did not contravene public policy or the terms of the statute and indenture. The Court acknowledged that the receiver's powers would be superseded if the Secretary of State exercised his statutory powers.
On the point that the rents constituted a political pension exempt from attachment, the Court rejected this argument, relying on the precedent in Lachmi Narain v. Makund Singh, clarifying that "pension" implies periodic government payments to a pensioner, which did not apply here.
Holding and Implications
The Court DISMISSED THE APPEAL, affirming the High Court's appointment of a receiver over the rents, issues, and profits of the properties in execution of the decrees against the appellant.
The direct effect of this decision is that the respondent bank may recover debts through the appointment of a receiver over the income of the properties, notwithstanding the provisions of the Murshidabad Act and indenture. The decision does not establish a new precedent beyond affirming the applicability of execution provisions to income from inalienable properties where the owner has disposing power. Costs of the appeal were awarded to the respondent bank.
Lord Macmillan
By an order dated 15th July 1929, the High Court of Judicature at Fort William in Bengal, allowing an appeal from an order of Lord Williams, J., appointed a receiver of the rents, issues and profits of certain properties in Calcutta in execution of several decrees obtained against the present appellant by the respondent bank. The sole question is whether it was competent to make this appointment in view of the terms of the Murshidabad Act, 1891 (No. 15 of 1891), which has reference to these properties.
The purpose of that Act was to confirm and give effect to an indenture between the Secretary of State and the then Nawab Bahadur of Murshidabad, dated 12th March 1891. The indenture, which is duly confirmed by the Act and scheduled thereto, narrates at great length the circumstances which led up to it. It appears that the then Nawab Bahadur, the appellant's predecessor, who was the eldest son of the late Nawab Nazim of Bengal, Behar and Orissa, had agreed to relinquish the latter title with its appurtenant rights in consideration of his receiving the titles of Nawab Bahadur of Murshidabad and Amir-ul-Omrah, carrying with them the precedence, rank, dignity and privileges of the premier noble of Bengal, Behar and Orissa and also in consideration of provision being made for the maintenance and support of the holder of these titles for the time being and for the maintenance of the honour and dignity of his station.
On these and other recitals the Secretary of State covenanted,
"for the duo maintenance and support of the said titles of Nawab Bahadur of Murshidabad and Amir-ul-Omrah and the position and station thereto attaching and of the honour and dignity thereof."
to pay to the Nawab Bahadur and his lineal heirs male in perpetuity an annual sum of Rs. 2,30,000 by monthly instalments of Rs. 19,166-10-8, and further agreed and declared that the immovable properties mentioned in the schedules to the indenture (which include the properties of the rents of which the High Court has appointed a receiver) should
"henceforth and for ever be held and enjoyed by the said Nawab Bahadoor and such one among his lineal heirs male as may be successively entitled to hold the said titles in perpetuity with and subject to the incidents, powers, limitations and conditions as to inalienability and otherwise"
thereafter in the indenture contained.
The first of these conditions is in the following terms :
First : The said Nawab Bahadur shall not nor snail any of his successors in the said titles sell, mortgage, devise or alienate the said properties respectively or any of them otherwise than by lease or demise for a term not exceeding 21 years and under a rent without bonus or salamee."
The indenture also provided as follows :
"In case the said Nawab Bahadur or any of his lineal heirs male successors to the titles shall at any time in contravention of the terms of these presents attempt to sell, mortgage, devise or alienate (otherwise than by such lease or demise as aforesaid) any of the immovable properties aforesaid or shall by a course of extravagance or by waste or mismanagement of their said immovable properties in the opinion of the Secretary of State for the time being disable himself from duly maintaining the dignity of the said position and station, then, and from time to time whenever and as often as the same shall happen, it shall be lawful for the Secretary of State for the time being at his discretion to enter into and upon the said immovable properties and to hold and take possession thereof and also to take and retain the said monthly sum of Rs. 19,l66-10-8 payable from the Government Treasury at Berhampore as hereinbefore mentioned for such period during the lifetime of the Nawab Bahadur of Murshidabad and Amir-ul-Omrah so acting as aforesaid as to the said Secretary of State shall seem necessary or expedient, and the net rents, issues and profits of the said immovable properties and the said monthly sum of Rs. 19,166-10-8 so to be received and taken by the Secretary of State as aforesaid shall be applied for the benefit of the said Nawab Bahadur of Murshidabad and Amir-ul-Omrah for the time being for the maintenance of the position and dignity of the said Nawah Bahadur of Murshidabad and Amir-ul-Omrah for the time being in such manner as the Secretary of State in his discretion shall think proper."
The fifth section of the confirming statute is in the following terms :
5. All property, moveable and immovable, mentioned in the said indenture or in any of the schedules thereto.....shall descent and subject to the provisions of the said indenture, be enjoyed for ever by the Nawab Bahadur of Murshidabad for the time being."
The contention of the appellant, to which Lord Williams, J., gave effect, but which the High Court on appeal rejected, was that to appoint a receiver of the rents of any of the properties embraced in the indenture would defeat the intention of the Government as expressed in the statute and indenture by depriving the Nawab Bahadur pro tanto of income designed for the maintenance of his exalted position and would be against public policy. It was also submitted that the appointment of a receiver might prove embarrassing and place the Court in an invidious position in the event of the exercise by the Secretary of State of his power of entering into possession of the properties and applying the rents for the Nawab's benefit:.
In considering the question thus raised it is important to bear in mind the provisions of the Code of Civil Procedure on the subject of execution. By S. 51 the Court is empowered on the application of a decree-holder to order execution of the decree inter alia, (d) by appointing a receiver. Then by S. 60 [1904] 26 All 617=1 ALJ 338=(1904) AWN 144 there is rendered liable to attachment and sale in execution of a decree all saleable property, moveble or immovable, belonging to the judgment-debtor or over which or the profits of which he has a disposing power which he may exercise for his own benefit with certain enumerated exceptions.
Now, while the Murshidabad Act renders the immovable properties to which it relates inalienable except to the limited extent permitted, it imposes no restriction on the enjoyment of the rents by the Nawab Bahadur for the time being. So long as he is entitled to draw the rents he may dispose of them as he pleases. It is true that the income of the properties was conferred on him to enable him to maintain his dignity and station, but should he fail so to apply it the Secretary of State is given the special power of stepping in and drawing the rents himself and applying them for the Nawab's benefit. Unless and until the Secretary of State intervenes the Nawab may employ his income as he chooses, nor is there any restraint on anticipation imposed by the statute or the indenture. The Nawab therefore has a disposing power over the income. Once this is established no question of public policy is involved and their Lordships are unable to see that either the terms of the statute or the indenture are contravened by aiding the creditors of the appellant to effect payment out of his income of the debts which he has incurred. The appointment of a receiver in the present case is, of course, subject to the special powers of the Secretary of State, and should the latter at any time decide to intercept the rents the receiver's powers will be superseded. This is fully recognized by the appellate Court's judgment.
Before their Lordships the additional point was taken on behalf of the appellant that the rents in question formed part of a political pension and were thus exempt from attachment under head (g) of the enumerated exceptions in S. 60 [1904] 26 All 617=1 ALJ 338=(1904) AWN 144, Civil P. C. This belated attempt to assimilate the rents to a political pension plainly fails.
Their Lordships agree with the view expressed in Lachmi Narain v. Makund Singh, [1904] 26 All 617=1 ALJ 338=(1904) AWN 144. that the word "pension" alike in the Pensions Act, 1871 (No. 23 of 1871) and in the Civil Procedure Code, and their Lordships may add also in the Transfer of Property Act, 1882 (No. 4 of 1882), S. 6, "implies periodical payments of money by Government to the pensioner." The appellant draws the rents in question not as a pensioner, but as the limited owner of the properties which yield them. Their Lordships, finding themselves as they do in complete agreement with the judgment of the learned Chief Justice and his colleague, will humbly advise His Majesty that the appeal be dismissed. The respondent bank will have its costs of the appeal.
Appeal dismissed.
Alert