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Mt. Prem Kuer v. Ram Lagan Rai And Others
Factual and Procedural Background
The appellant, Mt. Prem Kuer, obtained a decree on 9-1-1928 for past and future maintenance against her mother-in-law, Mt. Rambarat Kuer. This decree declared arrears of and future maintenance as a charge on properties styled as lots 1, 2, and 3. During the pendency of an appeal by Mt. Rambarat Kuer against the decree, the landlord of lot No. 1 instituted a suit for recovery of arrears of rent, obtained a decree, and purchased Lot No. 1 in execution of that decree, later transferring it to the respondents (transferees). The appellant executed her maintenance decree against lots 2 and 3, which were sold at auction and also transferred to the respondents. When future maintenance fell due in 1941, the appellant sought to execute the decree by selling lots 1, 2, and 3. The landlords and transferees objected on grounds that the charge was only for arrears up to the date of the decree, that Lot No. 1 had already been sold in execution of a rent decree and could not be sold again, and that the purchasers were bona fide without notice of the maintenance charge. Reuben, J. dismissed the appeals, concluding the decree created a charge only for future maintenance and that the bona fide purchasers were not bound by the charge, leading to these Letters Patent appeals.
Legal Issues Presented
- Whether the maintenance decree created a charge on the properties for future maintenance as well as arrears.
- Whether Lot No. 1, having been sold in execution of a rent decree, could be subjected to sale again under the maintenance decree.
- Whether bona fide purchasers without notice of the maintenance charge are bound by such a charge created by the decree.
- The applicability of provisions of the Transfer of Property Act, particularly Section 100, to charges created by court decrees.
- Whether the appellant could enforce the maintenance decree against lots 2 and 3 despite the bona fide purchase by transferees during the pendency of litigation.
Arguments of the Parties
Appellant's Arguments
- The decree under which Lot No. 1 was purchased by the landlord was not a rent decree but merely a decree for money.
- The landlord auction-purchaser should have annulled the encumbrance under Section 167 of the Bihar Tenancy Act within one year of knowledge.
- The provisions of Section 100 of the Transfer of Property Act do not apply to charges created by court decrees, so the bona fide purchase without notice should not affect the charge.
Respondents' Arguments
- Lot No. 1 was sold in execution of a rent decree, and the landlord purchaser is not bound by the maintenance charge.
- The purchasers of lots 2 and 3 are bona fide purchasers for value without notice of the charge and therefore are not bound by it.
- The maintenance decree-holder treated the sale proceeds of lots 2 and 3 as extinguishing her right to enforce the charge on the properties.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| 18 Pat. 676 (Full Bench) | Requirement under Bihar Tenancy Act to annul encumbrance within one year of knowledge | Rejected appellant's contention that landlord purchaser must annul encumbrance; held landlord purchaser can ignore mortgage without formal annulment when purchasing in execution of rent decree. |
| 7 Pat. 155 (Dawson Millar C.J.) | Clarification on effect of landlord purchasing in execution of rent decree | Supported the view that landlord purchaser can ignore mortgage without formal annulment. |
| 8 Pat. 439 (Sir Jwala Prasad) | Reiteration of principle regarding landlord purchaser's rights | Reiterated the principle that landlord purchaser is not bound by the mortgage without formal annulment. |
| 24 Pat. 245 (Division Bench) | Nature of charge created by court decree and applicability of Transfer of Property Act | Held that a charge created by court decree is neither by act of parties nor by operation of law; supported the argument that Section 100 of Transfer of Property Act applies differently. |
Court's Reasoning and Analysis
The Court agreed with Reuben, J.'s finding that the decree created a charge for future maintenance. It rejected the appellant's contention that the decree under which Lot No. 1 was sold was not a rent decree, confirming it was indeed a rent decree and that the landlord purchaser was entitled to ignore the mortgage without formal annulment, supported by precedents under the Bihar Tenancy Act. The Court also accepted the legal principle that charges created by court decrees are distinct from charges created by act of parties or operation of law, thus affecting the applicability of Section 100 of the Transfer of Property Act to lots 2 and 3. Despite the purchasers being bona fide without notice, the Court held that the charge created by the decree remains binding on them because they purchased in execution of the decree and thus had constructive notice. The Court rejected the argument that the appellant's acceptance of sale proceeds extinguished her right to enforce the charge, noting subsequent court orders denying the appellant's petition to retain surplus sale proceeds. Ultimately, the Court concluded that lots 2 and 3 remain charged with the maintenance decree and the appellant is entitled to execute the decree against these lots, but Lot No. 1 cannot be sold again under the maintenance decree.
Holding and Implications
Partly Allowed
The Court allowed the appeals in part, holding that the appellant is entitled to sell lots 2 and 3 in execution of the maintenance decree but affirmed the decision that Lot No. 1 is not saleable under the maintenance decree due to its prior sale in execution of a rent decree. The appellant is entitled to costs from the transferee respondents relating to lots 2 and 3, while the parties bear their own costs concerning Lot No. 1. No new precedent was established beyond the application of existing principles concerning charges created by court decrees and bona fide purchasers in execution sales.
Manohar Lall, J.:— These two Letters Patent appeals are from the decision of Reuben, J., who dismissed the appeals of the appellants in the following circumstances.
2. The appellant Mt. Prem Kuer obtained a decree for past and future maintenance on 9-1-1928, against her mother-in-law, Mt. Rambarat Kuer. By this decree arrears of and future maintenance were declared a charge on the properties which have been styled as lots 1, 2 and 3 in these proceedings. The defendant, Mt. Earn, barat Kuer, preferred an appeal against the decision in Title Suit No. 30 of 1926. The appeal was dismissed on 21-12-1928. But during the pendency of the appeal, the landlord of the raiyati holding, tot No. 1, instituted a suit for recovery of arrears of rent, obtained a decree and in execution thereof purchased Lot No. 1 on 21-5-1928 and obtained delivery of possession on 17-11-1928 and thereafter transferred Lot No. 1 for consideration to the respondents in one of the appeals whom I shall hereinafter describe as the transferees. The appellant executed her maintenance decree on 25-5-1929, against lots 2 and 3, and as the result of an auction sale these two tots were sold to the same landlords who transferred these lots to the respondents transferees, and the decree was satisfied. Future maintenance fell due and the decree holder again put the decree in execution seeking to sell lots 1, 2 and 3 in the year 1941 in Execution case No. 75. Two objections were preferred by the landlords under S. 47 and by the transferees under O. 21, R. 58 of the CPC, that the three lots could not be sold in execution firstly because the charge created by the decree was a charge for the realisation of the arrears of maintenance up to the date of the decree and not for future maintenance, secondly that Lot No. 1 having been sold is execution of a rent decree of the landlords could not be again sold in the present execution, and thirdly, that the landlords and the transferees are bona fide purchasers of value without notice of the charge of the maintenance decree-holder, assuming that such a charge has been validly created.
3. Reuben, J., in disagreement with the Courts below has come to the conclusion that the decree in Title Suit No. 30 of 1926 created a charge for future maintenance only, and this finding has not been challenged before us. All the Courts have found that the landlords and the transferees respondents are bona fids, purchasers for value without notice, and therefore, the charge created by the decree is not binding upon them. Hence these two Letters Patent appeals.
4. Mr. Dasu Sinha appearing for the maintenance decree-holder argues that the decree in which Lot No. 1 was purchased by the landlord was not a rent decree but merely a decree for money. Reuben, J., however, has shown that the decree was a decree for rent, and further this identical question has been decided adversely to the appellant in a suit instituted by her for a declaration that this rent decree and the sale held-thereunder were not binding upon her. It was then argued that the landlord auction-purchaser should have annulled the encumbrance under s. 167, Bihar Tenancy Act within one year of the date of the knowledge, and reliance was placed upon the Full Bench decision in 18 Pat. 676.1 But that decision is against this contention because I find it clearly stated in the judgment that “if the holding is sold in execution of a rent decree and the landlord himself purchases it, there is nothing to prevent him from ignoring the mortgage without formally annulling the encumbrance under S. 162 Ben. Ten. Act of 1885. This was very clearly pointed out by Dawson Millar C.J in 7 Pat. 155.2”
5. The same view was reiterated by Sir Jwala Prasad in 8 Pat. 439.3 I, therefore, overrule the first contention and would hold in agreement with Reuben, J., that the appellant cannot be allowed to sell Lot No. 1 in execution of the maintenance decree for subsequent arrears.
6. Regarding lots 2 and 3, the argument of Mr. Dasu Sinha is that the provisions of s. 100, Transfer of Property Act, have no application inasmuch as the charge created by a decree of the Court is not a charge created by operation of law or by act of persons, and, therefore, he contends that the finding that the landlord and the transferee purchased these two lots bona fide without notice of the charge is immaterial. In support of his contention he relies upon 24 Pat. 2454 where a Division Bench of this Court pointed out that a charge created by the decree of a. Court is neither a charge created by act of persons or created by operation of law. This argument is well founded and must prevail.
7. The learned Government Advocate drew attention to the order-sheet of the executing Court by which Lot No. 2 was sold for es. 345 and Lot No. 3 for Rs. 3000 to Earn Anugraha Narain Singh, the respondent, and to order No. 10 dated 14-6-1929, that the appellant decree-holder put in a petition in which she prayed that out of the purchase money of Rs. 3345 she may be allowed to withdraw her decretal dues together with her maintenance up to baisakh 1336 fasli and after deducting the amount of court-fee due to the Government “the balance may be kept in deposit in the custody of the Court for regular payment of her maintenance allowance and the judgment-debtor be restrained from withdrawing the surplus sale proceeds.”
8. He, therefore, argues that the appellant has herself treated that her maintenance decree in future must operate on the balance of the money into which these lots have been converted by the execution sale and, therefore, he cannot follow the properties by executing the decree. This plausible argument completely loses sight of the subsequent orders of the executing Court which make it clear that on the objection of the judgment-debtor the claim of the decree-holder that the surplus amount may be kept in deposit in Court was rejected by order No. 17 dated 16-7-1929 and order No. 23 dated 4-9-1929. The earlier argument of the learned Government Advocate would have been of some assistance to him if reliance could be placed on Section 39 of the Transfer of Property Act, but that section cannot be applied in the present case where the right of maintenance of the appellant is no longer an indefinite right but has now been created a charge by a decree of the Court.
9. The position, therefore, is that the transferee respondents have purchased lots 2 and 3 during the pendency of a litigation in which the right of the appellant to have her decree declared a charge on lots 3 and 3 was being prosecuted and s. 100, Transfer of Property Act, not being applicable the transferees have purchased the properties subject to the right of the decree-holder to sell lots 2 and 3.
10. The learned Government Advocate contended that in view of the finding that the purchasers had no notice of the charge, and the maintenance decree having been fully satisfied in the execution case started for the levy of the then decretal amount, no further charge can exist in law on these two properties. In my opinion, this argument is without any substance because even though the Courts have found that the transferees had no notice of the charge and the maintenance decree, the auction purchaser, be he the landlord or the transferee, must be deemed to have constructive notice of the charge when they purchased in the execution of the very decree which has now been held to amount to a charge decree for future maintenance also—it cannot be successfully urged that the auction-purchaser had no notice of the decree. Again it may be possible to take the view that every time the decree-holder is proceeding by way of execution, it is a fresh decree that is being put into execution, that is to say, it is a decree for maintenance, creating a charge on a certain property of the judgment-debtor and entitling the decree-holder to realise the same by taking out execution, without the necessity for fresh suits after every default in the payment of the decree, and is in the nature of a composite decree which is not one single decree, but comprises as many decrees for payment and realisation by sale of the properties charged as there are defaults—I am quoting from p. 248 of 24 Pat. 245.
11. In whatever way the matter is looked at, it seems to me that there is no escape from the conclusion that Lots Nos. 2 and 3 continue to remain for ever charged with the maintenance decree, and the transferee respondents cannot object to the sale of these two lots. The result is that the appeals must be allowed in part and it must be held that the appellant is entitled to sell lots 2 and 3, but the judgment of Reuben, J., is affirmed with regard to the non-saleability of Lot No. 1. The appellant is entitled to her costs from the transferees respondents in the two appeals of lots 2 and 3. Parties will bear their own costs as between the landlords and the transferees of Lot No. 1 and the appellant.
Agarwala, Ag.C.J:— I agree.
S.C
12. Appeals partly allowed.
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