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Mohammad Akbar Khan v. Mian Musharaf Shah And Another

Privy Council
Jul 20, 1934
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Summary of Opinion delivered by Lord Tomlin

Factual and Procedural Background

The appellant, prior to going on war service, granted leases including a registered lease dated 15 December 1914 that hypothecated certain lands (including 250 kanals in Maho Dheri) to secure rent. Clause 12 of the lease prevented the debtor from selling or mortgaging the hypothecated land during the lease, and permitted the appellant to recover rent by sale or mortgage of that land.

Rent fell into arrear and on 25 January 1918 the Assistant Collector in the revenue Court granted a decree for Rs. 1,484-8-0 with costs and future interest (the "first money decree"). By 6 August 1918 the Assistant Collector issued a prohibitory order restraining the debtor from transferring the property in the annexed schedule (apparently including the 250 kanals). An attachment of the 250 kanals was alleged.

On 31 July 1919 the Assistant Collector, considering the debtor to be a member of an agricultural tribe under S.16 of the Alienation of Land (Punjab) Act 1900, directed the file to be consigned to record. Further rent arrears resulted in a second decree on 23 August 1919 for Rs. 8,321-0-9 (the "second money decree"). On 18 May 1921 a further prohibitory order was made and by report dated 26 May 1921 some 1,675 kanals in Maho Dheri were stated to be attached; a proclamation announcing the attachment was issued on 17 August 1921.

Proceedings continued: the Collector (after advice from the Revenue Commissioner that leased lands or receivership could satisfy decretal amounts) appointed a receiver of the 1,675 kanals on 23 November 1926. An objector, respondent 1, claimed to be transferee of a 1915 mortgage-with-possession over part of the attached land (not including the 250 kanals) and also claimed to have purchased the debtor's interest in the attached lands after the prohibitory orders.

The Collector (after a change of office-holder) held the land belonged to respondent 1; an appeal to the Revenue Commissioner failed (the Commissioner held the appeal incompetent and advised remedy by suit). The appellant then sued in the District Court of Peshawar on 14 October 1928 seeking declarations that the attachments subsisted, that the attached lands could be leased to satisfy decretal sums, and that transfers to respondent 1 subsequent to hypothecation or attachment were null and void as against the appellant.

The District Judge held: (a) the 250 kanals were validly attached and could be leased to satisfy the appellant's claims; (b) the second attachment was valid but enforceable subject to respondent 1's rights as transferee of the 1915 mortgage over part of the land. Respondent 1 appealed to the Judicial Commissioner, who allowed the appeal, dismissed the suit and held the civil Court lacked jurisdiction and that there had been no valid attachment. This appeal to their Lordships followed.

Legal Issues Presented

  1. Whether the attachments of the hypothecated land (including the alleged attachment of the 250 kanals and the larger attachment of 1,675 kanals) were validly made and subsisted.
  2. Whether the Revenue Court had jurisdiction to determine the rights between the appellant and respondent 1 once the rights of respondent 1 intervened, or whether the matter required a suit in a civil Court of competent jurisdiction.
  3. What effect, if any, the attachments had against respondent 1 — in particular as against respondent 1's claimed 1915 mortgage-with-possession and his subsequent purchase of the debtor's interest.
  4. The distinction between the appellant's rights under the lease hypothecation and the appellant's rights as creditor under an attachment enforced to satisfy a money decree, and how those different rights may be enforced.

Arguments of the Parties

Appellant's Arguments

  • The appellant treated the decrees of 25 January 1918 and 23 August 1919 as money decrees and sought to enforce them by attachment and prohibitory orders; he claimed the 250 kanals and the remainder of the attached lands were subject to attachment and could be leased or otherwise made available to satisfy the decretal amounts.
  • The appellant asserted that transactions of mortgage or sale under which respondent 1 claimed, if subsequent to the date of the hypothecation or of the attachment, were null and void and ineffective against the appellant's rights in the attached lands.

Respondent 1's Arguments

  • Respondent 1: claimed to be transferee of a mortgage-with-possession created in 1915 over part of the attached lands (not including the 250 kanals) and therefore asserted rights superior or prior to the appellant's claims in respect of that portion.
  • Respondent 1 also asserted title as purchaser (acquired after the prohibitory orders) to the debtor's interest in the attached lands, and the Collector at one stage held the land belonged to respondent 1. In the Judicial Commissioner's Court it was contended that the civil Court had no jurisdiction and that, in any event, there had been no valid attachment.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court first criticised the poor state of the record but proceeded to outline the facts as it understood them. The Board treated the revenue decrees as money decrees (the "first money decree" and the "second money decree"), noting that the plaint initiating the revenue suit was not before the Board and expressing doubt whether the revenue Court would have had jurisdiction to entertain a suit framed solely to enforce the hypothecation.

On the question of attachment formalities the Board disagreed with the Judicial Commissioner: although direct evidence (such as proof that a copy of the order of attachment was fixed in the Collector's office) was not before the Court, their Lordships held there was evidence of attachment and applied the evidentiary presumption of regularity in official acts under S.114 of the Indian Evidence Act, so that in the absence of countervailing evidence it must be presumed necessary formalities were complied with.

The Board accepted the Assistant Collector's 31 July 1919 direction (consigning the file to record) as part of the administrative history (it had been based upon the view that the debtor was a member of an agricultural tribe under S.16 of the Alienation of Land (Punjab) Act 1900). But that administrative view did not displace the legal analysis of the attachments and their effect.

On jurisdiction, the Board held that the "real purpose" of the suit was to determine rights between the appellant and respondent 1 — a question which, in their Lordships' view, the Revenue Court was not competent to determine under S.77 of the Punjab Tenancy Act. Once respondent 1's rights intervened, Order 21, Rules 58–63 of the Civil Procedure Code applied (in conjunction with S.88 of the Punjab Tenancy Act and the rules made under it), and the Revenue Commissioner's conclusion that the matter could only be determined by a suit under Rule 63, Order 21 was correct. In short, the Revenue Court's jurisdiction is limited and not the appropriate forum to adjudicate these competing civil rights where those rules apply.

Having concluded the attachments were properly made, the Board then addressed their effect against respondent 1. The Board agreed with the District Judge that the interest of respondent 1 in the 250 kanals (which were not covered by the 1915 mortgage) was subordinated to the appellant's rights under the attachment; for the remainder of the land the attachment was effective only so far as it did not disturb respondent 1's prior rights as transferee of the 1915 mortgage. Thus the Board adopted a priority approach: attachments are effective except to the extent of prior valid mortgage rights.

Finally, the Board clarified that the appellant's hypothecation-rights under the lease are distinct from his rights under an attachment to enforce a money decree. Hypothecation enforcement requires a proper mortgage suit in a competent court; but before their Lordships' Board it had been admitted by respondent 1 that the hypothecation was valid. Taking all of the above together, the Board concluded the Judicial Commissioner erred in his conclusions on both jurisdiction and the validity/effect of the attachments.

Holding and Implications

Holding: The appeal is allowed and the order of the District Judge of Peshawar is restored. The opinion concludes: Appeal allowed.

Direct consequences for the parties (as set out by the Court):

  • The 250 kanals (which were not included in the 1915 mortgage) are treated as validly attached and respondent 1's interest in them (acquired after the prohibitory orders) is subordinated to the appellant's rights arising from the attachment; the appellant may recover his decretal money by leasing those attached lands.
  • The remainder of the attached lands (the broader 1,675 kanals) are subject to attachment and available to satisfy the appellant's decretal claims only to the extent they do not affect respondent 1's prior rights as transferee of the 1915 mortgage.
  • Rights arising solely under the hypothecation in the lease are distinct from rights under an attachment and must be enforced in a properly constituted mortgage suit; however, respondent 1 admitted the hypothecation was valid before their Lordships' Board.
  • Costs: the costs of this appeal are to be paid by respondent 1; there is no order as to costs below.

The opinion does not indicate that any new legal principle or binding precedent was established beyond the application of existing statutory provisions and evidentiary presumptions; the decision restores the District Judge's determinations between the parties.

Show all summary ...

Lord Tomlin:-

This is an appeal from the Court of the Judicial Commissioner, North-West Frontier Province, which reversed a decree of the District Judge of Peshawar. At the outset their Lordships desire to call attention to the unsatisfactory way in which the record in this case has been prepared. Many documents to which reference has necessarily been made have not been printed, and considerable difficulty has been encountered in ascertaining the facts and the nature of the points to be considered. In future, their Lordships will have to consider whether they should hear a case presented in so slovenly a manner until it has been put into proper shape. The time of their Lordships' Board should not be occupied in unravelling matters which it is the duty of the parties to present in an intelligible form. The facts of the case, as their Lordships understand them, are as next narrated.

In December, 1914, the appellant, being then about to proceed on war service, granted a number of leases of his lands to various persons. Among these leases was one contained in a registered dead dated 15th December 1914, whereby a lease of certain lands was granted to respondent 2, who is hereafter called the debtor, for five years, at a yearly rent. By Cl.12 of the lease the debtor hypothecated certain lands of his own, including 250 kanals in the area of Maho Dheri to secure the rent, and it was provided that the debtor should have no power to sell or mortgage the hypothecated land during the period of the lease, and that the appellant could recover his lease money by sale or mortgage of such land. The rent fell into arrear, and on 25th January 1918 the appellant obtained against the debtor, in the revenue Court before the Assistant Collector, a decree for Rupees 1,484-8-0, together with costs and future interest.

In April 1932, after the decision of the Judicial Commissioner, which is the subject of the present appeal, the appellant secured an alteration in the decree of 25th January 1918 by incorporating therein some additional words which had appeared in the antecedent judgment to the effect that the property hypothecated by the lease should be made liable for the payment. The plain or other initiatory proceeding in the suit which resulted in the decree of 25th January 1918 has not been included the record. Their Lordships are not satisfied that the revenue Court would have had any jurisdiction to entertain suit framed as a suit to enforce the hypothecation. At any rate, the present appeal must, in their Lordships' judgment, be dealt with on the footing that the suit was to recover a money debt, and that the decree in question was a money decree. It was in fact treated throughout as a money decree, and it will be hereafter referred to as the first money decree. By way of enforcing the first money decree, the appellant obtained from the Assistant Collector on 6th August 1918 a prohibitory order restraining the debtor from transferring the property in the annexed schedule by sale, gift, or otherwise. The schedule is not printed in the record, but it seems to be accepted by the Courts below that it referred to or included the 250 kanalas hypothecated by the lease.

It is alleged that an attachment of the 250 kanala followed. The Judicial Commissioner in the present case has held that that attachment has not been proved because there was no direct evidence that a copy of the order of attachment was fixed in the Collector's office. Their Lordships are of opinion that there is evidence that the land was attached, and that in the absence of any evidence to the contrary, it ought to be presumed that all necessary formalities were complied with (see S. 114, Evidence Act).

Subsequently, on 31st July 1919, the Assistant Collector, being of opinion that the debtor was a member of an agricultural tribe within the meaning of S. 16, Alienation of Land (Punjab) Act 1900, and that accordingly his land could not be sold, directed "the file to be consigned to the record" meaning presumably that no further proceedings under the first money decree and the subsequent attachment should be taken. In the meantime further rent became due from the debtor and on 23rd August 1919, the appellant obtained in the Revenue Court as against the debtor a decree (hereinafter called the second money decree) for Rs. 8,321-0-9 and - costs. On 18th May 1921 the Assistant Collector granted a further prohibitory order upon proof that the debtor had failed to satisfy the first and second money decrees. The schedule to this order is not printed but from the report of the attaching officer dated 26th May 1921 it appears that some 1,675 kanals in the area of Maho Dheri were attached and on 17th August 1921 a proclamation was issued announcing the attachment and inviting objectors to come forward. This land apparently included the 250 kanals covered by the first prohibitory order. Here again the Judicial Commissioner has held that because there is no direct evidence of the fixing of a copy of the order of attachment in the Collector's office, there was no valid attachment at all. Their Lordships do not agree with this conclusion. In their Lordships' judgment there was ample evidence of an attachment and in the absence of direct evidence to the contrary it must be presumed that all formalities were duly complied with.

It seems that the appellant was proceeding concurrently against other lessees of his who were also in default in paying their rent and that in each case the prohibition of sale by S. 16, Alienation of Land (Punjab) Act, was held to apply. An appeal however was taken to the Revenue Commissioner on this point. The appeal failed, but the Commissioner intimated that by lease or receivership the attached lands could be made available to satisfy the decretal amounts. As a result of this intimation, the Collector on 23rd November 1926, made an order appointing a receiver of the 1,675 kanals. This order is not printed. Meantime an objector in the person of the first respondent had appeared on the scene. His position was that he was the transferee of a mortgage with possession created in 1915 (that is before either of the prohibitory orders) on some part of the attached land. The mortgage did not include the 250 kanals, as appears from the judgment of the District Judge of Peshawar in the present suit. The objector was also the purchaser (but after both the prohibitory orders) of the debtor's interest in all the attached lands including the 250 kanals. Respondent 1 accordingly again brought the matter before Court. There had been a change of Collector after the order of 23rd November 1926, and the new Collector held that the land belonged to respondent 1 and was therefore not liable to attachment at all. An appeal to the Revenue Commissioner failed. He held that the appeal was incompetent and that the appellant's remedy was by way of suit. Accordingly on 14th October 1928, the present suit was begun by the appellant in the Court of the District Judge of Peshawar.

In this suit the appellant claimed that the 250 kanals hypothecated by the lease were attached under the first attachment and still remained under attachment and that the rest of the land in dispute was attached and still remained attached under the second attachment, and that the appellant could recover his decretal moneys by a leasing of the attached lands, and further that all transactions of mortgage or sale under which respondent 1 claimed, subsequent to the date of the hypothecation or that of the attachment, were null and void and ineffective against the appellant's rights. The above appears to be the effect of the claim, though there are discrepancies between the dates and amounts mentioned in the plaints and those appearing in other documents in the record. The District Judge held the 250 kanals were validly attached and were still attached and that the land could be leased to satisfy the appellant's claims and that it was unaffected by the subsequent sale to respondent 1 and that the second attachment was valid and subsisting, but that the appellant could only satisfy his claims against the lands comprised in the second attachment subject to the rights of respondent 1 as transferee of the mortgage of 1915, so far as these lands were affected by such rights. Respondent 1 appealed to the Court of the Judicial Commissioner where the appeal was allowed and the suit was dismissed with costs. Fraser, J.C., delivering the judgment of the Court held that the civil Court had no jurisdiction to entertain the suit and that even if it had there had been no valid attachment. Their Lordships are of opinion that the judgment below was wrong and that the District Judge was right.

The real purpose of the present suit is to determine the rights between the appellant and respondent 1. That is not a suit which in their Lordships' opinion, the Revenue Court was competent to entertain under S. 77, Punjab Tenancy Act. Having regard to S. 88 of the same Act and the rules made thereunder, O.21, Rr.58 to 63, Civil PC, applied to the case when once the rights of respondent 1 intervened, and the Revenue Commissioner was right in holding that the matter could only be determined by a suit under R.63, O.21. That suit had to be brought in a Court of competent jurisdiction. The Revenue Court, the jurisdiction of which is strictly limited, was not such a Court. Their Lordships have already expressed their view that the attachments must be taken to have been validly made, and this being so the only remaining question is as to their effect against respondent 1. Their Lordships agree with the District Judge that so far as the 250 kanals, which were not included in the 1915 mortgage are concerned the interest of respondent 1, who only came in after the prohibitory orders, is subordinated to that of the appellant. With regard to the remainder of the land, the attachment can only be effective against respondent subject to his rights as transferee of the 1915 mortgage.

The rights of the appellant under the hypothecation contained in the lease are of course distinct from his rights under an attachment of the hypothecated land to enforce a money decree. It is with the latter rights only that this suit deals. His rights as holder of the hypothecation can be enforced only in a properly constituted mortgage suit in a court of competent jurisdiction. It is to be noted however that before their Lordships' Board it was admitted on behalf of respondent 1 that the hypothecation is valid. Their Lordships are therefore of opinion that the appeal should be allowed and that the order of the District Judge should be restored. Their Lordships will humbly advise His Majesty accordingly. The costs of this appeal will be paid by repondent 1. There will be no order as to costs below.

Appeal allowed.