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Banbihari Kapur v. Khetra Pal Singh Roy

Calcutta High Court
Jul 13, 1911
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Structured Summary of the Provided Opinion

Factual and Procedural Background

Ballav Lal Barman held a permanent tenure under defendant No. 1; in 1857 he executed a kabala in favour of his wife Radhamani but remained the registered tenant until his death around 1891. He was succeeded by his grandson Shyama Prosad, a minor living under the guardianship of his grandmother Radhamani and his mother Kali Moti. Collections were made in the name of Radhamani. Radhamani mortgaged the tenure to the plaintiffs on 7 December 1894 for Rs. 1,499 and again on 37 May 1896. On 28 December 1894 defendant No. 1 took from Radhamani an instalment (kistbandy) bond for arrears and thereby recognised her as tenant.

The plaintiffs sued on the two mortgages against Shyama Prosad (as heir/grandson of Radhamani and in possession) and obtained an ex parte decree on 26 February 1902; defendant No. 1 sued for arrears in April 1902, obtained an ex parte decree on 21 June 1902, and later purchased the property in execution on 9 February 1904 for Rs. 800. The plaintiffs executed their mortgage decree and purchased the mortgaged property on 15 September 1903 for Rs. 3,600. The plaintiffs applied to set aside defendant No. 1's sale on grounds of fraud/irregularity but were unsuccessful, and brought the present action alleging the decree and sale were fraudulent and seeking recovery of possession and a declaration that their rights were not affected by the sale.

The Lower Court held that the decree for rent was fraudulent and collusive and gave the plaintiffs a decree on that basis. Defendant No. 1 appealed against that finding.

Legal Issues Presented

  1. Whether the Lower Court's finding that the rent decree obtained by defendant No. 1 was fraudulent and collusive is supported by the evidence.
  2. Whether the decree obtained by defendant No. 1 was a rent decree under the Bengal Tenancy Act (and thus whether his subsequent sale was governed by the Act), or whether the sale related only to the judgment-debtor's right, title and interest.
  3. Whether the plaintiffs' mortgage lien survived the defendant No. 1's purchase and, if so, whether defendant No. 1 was required to annul that incumbrance under Section 167 of the Bengal Tenancy Act before ousting the mortgagee-purchasers.

Arguments of the Parties

Plaintiffs' Arguments

  • The plaintiffs alleged that the decree obtained by defendant No. 1 and the subsequent sale were fraudulent and irregular.
  • They sought recovery of possession and a declaration that their mortgage rights were not affected by the sale.

Defendant No. 1's (Appellant's) Arguments

  • The appellant contended that the Lower Court's finding of fraud was not supported by the evidence.—The opinion records explicitly that defendant No. 1 argued the fraud finding lacked evidentiary support.
  • It was argued (on the point whether the sale was under the Bengal Tenancy Act) that the decree was not a rent decree under the Act and that the sale related only to the judgment-debtor's right, title and interest, leaving purchasers under the mortgage decree unaffected.
  • It was also contended that the mortgage lien continued notwithstanding the sale and that, because no notice under Section 167 of the Bengal Tenancy Act had been served, defendant No. 1 was not entitled to khas possession.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ranee Lalun Monee v. Sona Monee Dahee (1874) 22 W.R. 334 Cited for the proposition that if the party sued was not the real tenant, a decree might be treated as a money decree for use and occupation rather than a rent decree. The Court cited this case (along with Surnomoyee) to explain that such a view would be legitimate if Shyama Prosad had not been the real tenant; but because Shyama Prosad was the real tenant in possession, the present decree was a valid rent decree.
Surnomoyee v. Denonath Gir Sunnyasee (1883) I.L.R. 9 Calc. 908 Same proposition as Ranee Lalun Monee—used to illustrate when a decree might be considered a money decree rather than a rent decree. Applied similarly: the Court held those authorities would support treating a decree as a money decree only if the defendant sued was not the real tenant; here the defendant in possession (Shyama Prosad) was the real tenant, so the rent decree was valid.
Nazir Mahomed Sirkar v. Girish Chunder Chowdhuri (1897) 2 C.W.N. 251 Addressed a sale described and treated as a sale of the tenure; held that description and sale certificate could mean sale of the tenure despite wording. The Court distinguished this case from the present facts, noting in that case the property was described as the tenure and the sale certificate described it likewise; the present case differed on facts and could not be guided by that decision.
Akhoy Kumar Soor v. Bejoy Chand Mohatap (1902) I.L.R. 29 Calc. 813 Discussed the effect of a mortgagee's decree and later purchase by a revenue claimant; held (as applied in that case) that the mortgagee's incumbrance continued notwithstanding a later purchase and that an application under Section 167 could be barred by limitation under Section 107. The Court relied on this decision to show that a mortgagee's incumbrance may survive and that the purchaser (here defendant No. 1) would, at best, have rights to annul the incumbrance under Section 167; the Court noted an obiter dictum in that case inconsistent with the main ratio and relied on the case principally for its treatment of limitation and the survival of incumbrances.
Bhawani Koer v. Mathura Prasad (1907) 7 C.L.J. 1, 20 In a revenue sale context, held that a mortgagee-purchaser was entitled to fall back on his mortgage as a shield against a purchaser at a later revenue sale, where the revenue sale was subject to all incumbrances. The Court invoked this authority to support the proposition that a mortgagee-purchaser could rely on his mortgage as a defence against defendant No. 1's purchase, i.e., that defendant No. 1 could not oust the mortgagee without annulling the incumbrance under Section 167.

Court's Reasoning and Analysis

The Court proceeded in a stepwise manner:

  1. On the fraud finding: The Court held that the Lower Court's finding of fraud against defendant No. 1 was not supported by the evidence. The opinion states explicitly that there was no allegation or proof that there were no arrears due or that defendant No. 1 had acted beyond his legal rights or breached any duty to the plaintiffs. For these reasons the Court concluded the fraud finding was wrong and must be set aside.
  2. On whether the decree was a rent decree under the Bengal Tenancy Act: The Court observed that defendant No. 1 had accepted an instalment (kistbandy) bond from Radhamani and thereby recognised her as his tenant. Upon her death, Shyama Prosad was in possession and had been treated by both contending parties as the tenant in possession. The Court held that because Shyama Prosad was the real tenant in possession, the suit for rent brought against him was correctly framed and the decree was a proper rent decree (not merely a money decree for use and occupation). The Court referenced Ranee Lalun Monee and Surnomoyee to show that those cases would only justify treating a decree as a money decree if the defendant sued had not been the real tenant — which is not the case here.
  3. On whether the sale was a sale of the tenure under the Bengal Tenancy Act: From the execution order sheet the Court concluded processes of attachment and sale were issued simultaneously, apparently under Section 163(1) of the Bengal Tenancy Act, and Clause 2(a) may be presumed complied with. Because the sale occurred on the first day and the bids did not meet the decretal amount, the sale could not be held under Section 164 (which would allow a sale subject to registered and notified incumbrances only if bids liquidated the decree and costs). There was no second proclamation and sale as required by Section 165. Therefore the Court concluded the sale was not a sale under the Bengal Tenancy Act. The Court emphasized that the special (and stringent) provisions of the Bengal Tenancy Act must be strictly followed to achieve their special results; having not been complied with, the purchaser could not claim rights superior to an ordinary purchaser at a Civil Court sale. The sale certificate, which described the purchase as of the judgment-debtor's "right, title and interest," supported the view that defendant No. 1 had only purchased the judgment-debtor's rights, not the tenure itself as a statutory tenancy sale.
  4. On the survival of the mortgage lien and effect of Section 167: The Court examined authorities (notably Akhoy Kumar Soor and Bhawani Koer) to explain that a mortgagee's incumbrance may survive and that a purchaser seeking to oust the mortgagee must proceed under Section 167 to annul the incumbrance. The Court discussed Akhoy Kumar Soor: there the mortgagee's incumbrance continued and an application under Section 167 was held to be barred by limitation in that case. The Court noted an obiter dictum in Akhoy that suggested there would be no incumbrance after a mortgage had culminated in decree, but treated that obiter as inconsistent with the decision on limitation and unnecessary to decide. The Court also relied on Bhawani Koer to support the proposition that a mortgagee-purchaser can fall back on his mortgage as a shield against a purchaser at a subsequent sale which is subject to incumbrances.
  5. Applying those principles to the present facts, the Court held that defendant No. 1, even had he taken all proceedings according to law, was not entitled to oust the plaintiffs without annulling their incumbrance under Section 167 of the Bengal Tenancy Act, and no such annulment had been effected in this case.

Holding and Implications

Holding. The Court held that the finding of fraud by the Lower Court was unsupported by evidence and must be set aside, but overall the Court confirmed the decree of the Lower Court (with the modification that the fraud finding is set aside) and ordered that there be no costs in either Court.

Implications:

  • The direct practical effect is that the plaintiffs' decree (and the protections flowing from their mortgage lien) is upheld as against defendant No. 1's purchase; defendant No. 1 could not be held to have ousted the mortgagee without having annulled the incumbrance under Section 167, which was not done.
  • The Court ruled that defendant No. 1's execution sale was not a sale under the Bengal Tenancy Act because statutory requirements (including sufficiency of bidding under Section 164 and a second proclamation under Section 165) were not met; thus defendant No. 1's rights were no greater than those of an ordinary purchaser at a Civil Court sale, and the sale certificate described it as purchase of the judgment-debtor's "right, title and interest."
  • No broader new legal principle or precedent was announced beyond the application and distinction of existing authorities; the decision operates as an application of established principles to the facts of this case (i.e., survival of mortgage incumbrances unless annulled under Section 167 and strict compliance required for Tenancy Act sales).

Note: This summary is strictly confined to and derived from the content of the provided opinion. No information beyond that opinion has been introduced.

Show all summary ...

1. One Ballav Lal Barman was the holder of a permanent tenure under defendant No. 1 and his predecessor in interest. In 1857 Ballav Lal executed a kabala in respect of this tenure in favour of his wife Radhamani. Ballav Lal, however, continued as the registered tenant until his death in 1891 or thereabout. He was succeeded by his grandson Shyama Prosad who was a minor at the time living under the guardianship of his grand-mother Radhamani and mother Kali Moti. The collections in the moffusil were made in the name of Radhamani and she mortgaged the

"tenure to the plaintiffs on the 7th December, 1894, for Rs. 1,499. About three weeks after this on the 28th December, 1894, defendant No. 1 took from Radhamani a kistbandy bond for the arrears due on the tenure. Jo this document Radhamani described her title under the purchase of 1857, and it can hardly be argued that the effect of the acceptance of that document was not to recognise Radhamani as the tea-1 ant of the mehal. On the 37th May, 1896, Radhamani executed another mortgage of the tenure in favour of the plaintiffs who brought a suit upon the two mortgages against Shyama Prosad as heir and grandson of Radhamani and in possession., of her estate and obtained an ex parte decree on the 26th February 1902. Defendant No. 1 in April 1902, brought a suit for arrears of rent against Shyama Prosad stating that Ballav Lai was the recorded tenant and Shyama Prosad was in possession of the tenure, and obtained an ex parte decree on the 21st June, 1902. The plaintiffs executed their mortgage decree and purchased the mortgaged property on the 15th September, 1903, for Rs. 3,600. Defendant No. 1 executed his, rent-decree and himself purchased the property in arrear on"
the 9th February, 1904, for Rs. 800. The plaintiffs applied for setting aside the sale on the ground of fraud and irregularities, but were not successful. They bring the present'.0|§t on the ground that the decree itself was fraudulent as well as the sale, and pray for recovery of has possession on the declaration that their rights were not affected by the Sale.

2. The Lower Court has given the plaintiffs a decree holding that the decree for rent was fraudulent and collusive. Defendant No. 1 has appealed, and on his behalf it has been contended that the finding of fraud is not supported by the evidence in the case. It is quite clear that the findings of fact arrived at by the learned Judge do not make out any case of fraud against defendant No. 1. It is not alleged or shown that there was no arrear due on the tenure and there is no evidence that defendant No. 1 did anything in respect of the suit that he was not entitled to do under the law. It does not also appear that he had any duty to perform towards the plaintiffs the breach of which would throw any discredit upon him. We think the finding of fraud is wrong and must be set aside.

3. The decree of the Lower Court, however, has been supported ton the ground that the decree obtained by defendant No. 1 was not a rent decree under the Bengal Tenancy Act, and in any case the sale brought about by him was not in respect the tenure but only the right, title and interest of Shyama Prosad, so that their rights as purchasers under the mortgage decree were not affected. It has been further contended that the mortgage lien exists notwithstanding the sale, and as no notice under Section 167 of the Bengal Tenancy Act has been served, the Baja defendant No. 1, was not entitled to khas possession.

4. With regard to the first point we have seen that defend ant No. 1 recognised Padhamani as his tenant by accepting from her the instalment bond for rent. She was, therefore, his recognised tenant from 1301. Upon her death no one took any steps to register himself or herself as her representative." If her purchase was a bona fide one, her daughter Lakhimoni, who was alive at the time of the rent suit, was her legal representative, if she was a benamdar for her husband then Shyama Prasad was the rightful heir. In any case Lakhimoni was not in possession and Shyama Prosad was sued as the party in possession and there is no dispute that he was really in possession. In fact, no claim has ever been made on behalf of Lakhimoni .and both the contending parties have treated Shyama Prosad as the tenant in possession and the question of benami has not been pressed by either party. The suit for rent was, therefore, rightly brought against Shyama Prosad who must be taken as the real tenant. It has been contended that as'Shyama Prosad was not recognised as the tenant but was sued merely as he was in possession, the decree obtained is a money decree for compensation for use and occupation. That would have been a legitimate view to take if as a matter of fact Shyama Prosad had not been the real tenant: see Ranee Lalun Monee v. Sona Monee Dahee (1874) 22 W.R. 334; Surnomoyee v. Denonath Gir Sunnyasee (1883) I.L.R. 9 Calc. 908. As it is, however, the decree was a good decree for rent.

5. As regards the second point, it appears from the order sheet in the execution case in which defendant No. 1 made his purchase that processes of attachment and sale were issued simultaneously, evidently under Section 163, Clause 1, of the Bengal Tenancy Act. It may be presumed that Clause 2(a) of that section was also complied with. As the sale took place on the first day of sale, the sale could be held under Section 5 164 only Subject to registered and modified incumbrances if the biddings were sufficient to liquidate the whole amount of the decree and the costs. The bidding, however, did not reach the level of the decretal amount and was in fact several hundred rupees less; so that the sale could not be held under Section 164, and as there was no second proclamation and sale as contemplated by Section 165, the sale cannot be taken as one held under the Bengal Tenancy Act. The provisions of the Bengal Tenancy Act regarding sales are very stringent and the results are generally destructive of various derivative rights belonging to third parties not before the, Court. The, State enforces its claims for revenue under the stringent provisions of the sunset law from the zemindars and has enacted the stringent provisions of the tenancy laws for enabling the zemindars and other landlords to realise rents from their tenants, providing safeguards for the protection of the tenants and those that deal with them. The special provisions for the sale of tenures are a part of a public policy intended for the benefit of all parties concerned. If the landlord wants the special results provided for by the Act, he must proceed strictly in accordance with its provisions. We think he has not done this in this case and he cannot, therefore, claim rights superior to those of an ordinary purchaser at a Civil Court sale. His sale certificate also supports this view as he is certified to have purchased the right, title and interest of the judgment-debtor. The learned vakil for the appellant has referred us to two cases in this connection: Nazir Mahomed Sirkar v. Girish Chunder Chowdhuri (1897) 2 C.W.N. 251, and Akhoy Kumar Soor v. Bejoy Chand Mohatap (1902) I.L.R. 29 Calc. 813.

6. These cases are clearly distinguishable; in the first case the property sold was described as the tenure and the proclamation was for the sale of the tenure under Section 59 of Act VIII of 1869 B.C. The learned Judges say

"the property advertised was the tenure and the property sold was the tenure,, according to the sale certificate, and the mere insertion of a statement that the sale was of the rights and interests of the judgment-debtors would not, we think, have the effect under the circumstances stated of limiting the sale to such rights and interests and not extending it to the tenure itself."

7. In the second case the description of the property ended with the words "the said lot in arrears," so that the facts are not similar. It was argued in that case that the property should have been put up first subject to registered and notified incumbrances and afterwards with power to avoid all incumbrances, but this argument was met by the remark that the mortgage in question in that case was not a registered and notified incumbrances. The report does not show under what section the safe took place or whether the amount of the bid ding was sufficient to meet the decree with costs. Under the circumstances we do not feel in any way hampered by that decision.

8. As regards the third point, the argument of the learned vakil for the respondent is that notwithstanding the decree and sale, he is still entitled to fall back upon his mortgage lien to defend himself from the attack of defendant No. 1 who claims to oust him. In the case of Akhoy Kumar Soor v. Bejoy Chand Mohatap (1902) I.L.R. 29 Calc. 813 hereinabove quoted, the mortgagee obtained his decree absolute in May 1892. The Maharaja brought his suit for arrears in 1893 and purchased the "lot in arrear" in 1893. The mortgagee then applied for executing his mortgage decree against the Maharaja as purchaser in 1901. The Maharaja then applied for the service of notice under Section 167 and the learned Judges Held that as this application was not made within the time limited by Section 107 it was barred and the mortgagee was entitled to execute his decree h against the mortgaged portion of the tenure. The result of this ruling is, that the incumbrance of the mortgage was in existence notwithstanding the decree absolute on the mortgage. There is, however, an obiter dictum in the case that after the mortgage had culminated in a decree there would be no incumbrance to annul under Section 167; in the first place the learned Judges say it is not necessary to decide that question and in the second place that opinion is quite inconsistent with the decision on the point of limitation under Section 167; for if there was no incumbrance there was nothing to annul and no application for annulment could be barred. In the case of Bhawani Koer v. Mathura Prasad (1907) 7 C.L.J. 1, 20 a revenue sale of an estate under Section 54 of Act XI of 1859 took place after a mortgagee had purchased in execution of a mortgage decree of his own and after the sale had been confirmed. The revenue sale was subject to all incumbrances. The Court held that the mortgagee-purchaser was entitled to fall back on his mortgage as a shield against the purchaser at the revenue sale. In the present case if the plaintiff had not proceeded to sale before the purchase of defendant No. 1, the latter would have been at best entitled to annul the plaintiff's incumbrance under Section 167; there is no reason why he should be in a worse position by reason of his diligence in proceeding to sale first. It is true he could have paid up the decree of the defendant and saved himself from this tortuous litigation, but he was not bound to do that. He was not liable for the rent before his purchase and his remedy over, if any, against his mortgagor by way of contribution might be an illusory remedy after all. In any case he is entitled to rely on all defences legitimate to his juridical position, and we think that the Raja defendant was, even if he had taken all proceedings according to law, not entitled to oust him without annulling his incumbrance under Section 167 of the Bengal Tenancy Act, and this has not been done in this case.

9. Under theses circumstances although we set aside the judgment of the Court below, we confirm the decree of the said Court but without costs in either Court.