Ramaswami, J.:— This appeal is presented on behalf of the decree-holder against an order of the Subordinate Judge of Hazarabagh dated the 8th December 1952, dismissing an execution case.
The history of the litigation is long and complicated. On 5th August, 1938, the proprietors of Mahal Gaddi Masnodih, touzi no. 32 of Hazaribagh Collectorate, executed a mortgage deed with respect to 3 annas 3 pies share of Mahal Gaddi Masnodih, touzi no. 32, in favour of the Chota Nagpur Banking-Association. The mortgage was subsequently assigned in favour of Brijraj Rastogi, father of the appellant. On 17th August, 1952, the Central Government acting under the powers conferred by rule 75A(2) of the Defence of India Rules acquired 16 annas share of four villages out of Mahal Gaddi Masnodih. Later on the assignee of the mortgagee instituted a mortgage suit in the court of the Subordinate Judge of Hazaribagh. On 14th August, 1944, a preliminary decree was granted in the suit against the judgment-debtors, D.N Banerji, U.N Banerji, Shamal Ram Surekha and Narhari Gir. On the 20th March, 1945, Narhari Gir executed a sale deed in favour of Kaviraj Basudevanand with respect to 3 annas 3 pies share of Mahal Gaddi Masnodih. It is stated on behalf of the appellant that Narhari Gir acquired in some way the interest of the other decree-holders and was competent to execute the sale deed. This fact is not challenged by the respondents. Final decree was prepared in the mortgage suit on 26th January 1946. It is necessary to state that while the mortgage suit was pending there was a reference under section 19 of the Defence of India Act with respect to the four villages acquired by the Central government. An award of Rs. 4,52,000 was granted, as compensation to the proprietors on 31st May, 1944. The defendants in the mortgage suit preferred an apneal to the High Court against the preliminary ??? the appeal was dismissed by the High Court but there was modification of the preliminary decree to the effect that the decree-holder was to proceed in the first instance against the compensation money payable by the Government in respect of the acquisition of four villages. On 15th November, 1949, Kaviraj Basudevanand put the award into execution under the provisions of Order 21, rule 15, Civil Procedure Code, in the court of the District Judge of Patna. The amount of Rs. 4,52,000 was deposited by the Government in this execution case in favour of Kaviraj Basudeva-nand. On 15th June, 1950, the decree-holder Raghubir Saran Rastogi took out execution of the final mortgage decree in the court of the Subordinate Judge of Hazaribagh. The execution case was contested and the Subordinate Judge held that the decree was not executable against the compensation money payable by the Central Government for the four villages. An appeal was taken by the decree-holder to the High Court against the order of the Subordinate Judge. On 9th August 1951 the appeal was allowed by the High Court and it was held that the decree could be validly executed against the compensation money. The decree-holder thereafter, moved the Subordinate Judge of Hazaribagh who on the 29th August, 1952, issued a precept to the District Judge of Patna for attachment of the amount of Rs. 83,000 which was the proportionate compensation for the 3 annas 3, pies share which was actually mortgaged. At this stage an important event happened. A notification was issued by the State Government under section 3 of the Bihar Land Reforms Act declaring that the entire Mahal of Gaddi Masnodih had passed to and become vested in the State. The notification was published in the Gazette on the 27th October 1952. Subsequently Kaviraj Basudevanand moved the District Judge of Patna stating that the mortgagee decree-holder cannot attach the amount of Rs. 83,000 lying in deposit, and that Section 4(d) of the Bihar Land Reforms Act was a bar to the execution. On the 6th December, 1952, the District Judge of Patna rejected the prayer of Kaviraj Basudevanand holding that Section 4(d) of the Land Reforms Act did not apply to the execution case and that the precept of the Subordinate Judge should be complied with. Two days later the same matter was raised before the Subordinate Judge of Hazaribagh who took the view that Section 4(d) of the Land Reforms Act was a bar to the execution of the mortgage decree and therefore the execution proceeding should be dropped. This order was passed by the Subordinate Judge of Hazaribagh on the 8th December, 1952.
The question at issue in this appeal is whether Section 4(d) of the Bihar Land Reforms Act is a bar to the attachment of the sum of Rs. 83,000 in execution of the final mortgage decree.
The question turns upon the proper construction of Section 4(d) of the Land Reforms Act. Before considering the provision of Section 4(d), it is however necessary to refer to other important sections of the Bihar Land Reforms Act. Section 3(1) enacts that the—
“State Government may, from time to time, by notification, declare that the estates or tenures of a proprietor or tenure-holder, specified in the notification, have passed to and become vested in the State”.
Section 4 deals with consequences of the vesting of the estate or tenure in the State. Section 4(a) provides that such estate or tenure including the interest of the proprietor or tenure-holder in any building used as office of cutchery and his interest in all subsoil including any right in mines and minerals shall with effect from the date of vesting, vest absolutely in the State free of all incumbrances. Section 4(d) then proceeds to state that
“No suit shall lie in any civil court for the recovery of any money due from such proprietor or tenure-holder the payment of which is secured by a mortgage of or is a charge on such estate or tenure and all suits and proceedings for the recovery of any such money which, may be pending on the date of vesting shall be dropped”
The contention of Mr. S.C Sinha on behalf of the respondents is that the sub-section must be construed in its plain grammatical meaning and if such a construction is adopted the present case would fall within the ambit of the sub-section. It was conceded by the learned counsel that the notification under section 3 of the Bihar Land Reforms Act could have no reference to the four villages which had been acquired by the Central Government under rule 75A(2) of the Defence of India Rules on the 17th August, 1942. Learned counsel further conceded that under section 73(2) of the Transfer of Property Act the appellant is entitled to claim payment of the mortgage money out of the amount of compensation. But the argument of the respondents is that the mortgage decree and the execution proceeding referred not merely to the compensation money but also to estates notified under section 3 of the Bihar Land Reforms Act. It was therefore contended that the payment of the money was partly, though not in whole, secured by mortgage of vested estates and the case fell within the purview of Section 4(d) of the Land Reforms Act. Grammatically the language of Section 4(d) may admit of the interpretation contended for the respondent, but the consequence of such an interpretation would be startling and unjust. For example, Section 4(d) would on such an interpretation prohibit a mortgagee from enforcing the personal covenant. If a purely grammatical construction is adopted the mortgagee would be deprived not merely of his security but he will be prohibited from obtaining even a money decree for the amount he has advanced. To take another example, suppose a debtor has executed a motgage bond with respect to 100 touzis out of which one touzi has been notified by the Government under section 3 of the Bihar Land Reforms Act. If the grammatical construction is right, the mortgagee cannot bring a mortgage suit even for the 99 touzis which have not been notified nor vested in the State Government, and the creditor would be left without any remedy for enforcing his security. It cannot be supposed that the Legislature would have contemplated a result so unreasonable and ???. It is necessary therefore to put some ??? on the general language of Section 4(d) or the Bihar Land Reforms Act. In a case of this description the principle to be applied is clear. The principle is that the section must be construed in the background of particular subject-matter of the statute. To put it in other words, the wide meaning of the section must be cut down and restricted with reference to the scope and object of the statute. In the classic words of Brett, M.R, “it is not because the words of a statute or the words of any document read in one sense will cover the case that is the right sense. Grammatically they may cover it; but whenever you have to construe a statute or document you do not construe it according to the mere ordinary general meaning of the words, but according to the ordinary meaning of the words as applied to the subject-matter with regard to which they are used…………………” [Lion Insurance Association v. Tucker(1).] Applying the principle in the present case it is plain enough that in Section 4(d) the Legislature is intending to deal with estates or tenures which had vested in the State under section 3 and that the object of Section 4(d) is that no suit should be instituted so far as the vested estates are concerned and any suit or proceeding already instituted should be dropped so far as the vested estates are concerned. In this connection the title of the Act is pertinent. The Act is entitled as an Act
“to provide for the transference to the State of the interests of proprietors and tenure-holders in land and of the mortgagees and lessees of such interests…………………………”.
The preamble is in the same terms:
“Whereas it is expedient to provide for the transference to the State of the interests of proprietors and tenure-holders in land and of the mortgagees and lessees of such interests……………”.
Section 3 empowers the State Government to declare that the estates or tenures of a proprietor or tenure-holder, specified in the notification have passed to and become vested in the State. Section 3 provides that, the State Government may by notification declare that the estates or tenures of a proprietor or tenure-holder, specified in the notification, have passed to and become vested in the State. Section 4 states what are the consequences of the vesting of an estate or a tenure in the State. Section 4(a) provides that
“such estate or tenure……………… shall with effect from the date of vesting, vest absolutely in the State free from all incumbrances and such proprietor or tenure-holder shall cease to have any interests in such estate or tenure…………………”.
Section 4(d) then goes on to state that
“No suit shall lie in any civil court for the recovery of any money due from such proprietor or tenure-holder the payment of which is secured by a mortgage of or is a charge on such estate or tenure and all suits and proceedings for the recovery of any such money which may be pending on the date of vesting shall be dropped”.
Chapter V relates to the assessment of compensation and sections 23 and 24 of this Chapter specify the principles on which compensation is to be granted to the proprietors and tenure-holders and to the mortgagees and lessees of the proprietary interest. Section 28 relates to the final publication of the compensation assessment roll. Section 32 provides for the manner of payment of compensation to the proprietors, tenure-holders and other persons who are shown in the compensation assessment roll. Upon a review of these provisions it is manifest that the Legislature is enacting a scheme for the acquisition of the interests of the proprietors and tenure-holders in the land and of the mortgagees and lessees of such interests. In my opinion the language of Section 4(d) of the Act must be given a limited, meaning with reference to the scheme of the statute. My conclusion is that Section 4(d) must be interpreted to mean that no suit shall be brought in any civil court for the recovery of the mortgage money or money secured by a charge so far as the vested estates are concerned and if a suit or proceeding is already instituted such suit or proceeding shall be dropped 50 far as the vested estates are concerned. To put it differently, Section 4(d) will, not be applicable to a case where money is secured by a mortgage or charge on estates, some of which are notified under section 3 of the Act and others are not so notified. In such a case Section 4(d) will be a bar to the suit or execution proceeding so far as the vested estates are concerned, but the creditor will be entitled to prosecute the suit or execution proceeding, as regards the estates or portions of estates which are not vested in the State.
In this connection it is important to state that the provisions of Section 4(d) appear to be redundant, for section 4(a) provides that all incumbrances shall be extinguished and the estate shall vest absolutely in the Government free of all incumbrances. In view of section 4(a) it is difficult to see how a suit or any execution proceeding could be brought to enforce a charge or mortgage on the vested estate. Perhaps Section 4(d) was inserted in the statute ex abundante cautela. In any case, Section 4(d) must be interpreted in a limited sense as I have already indicated. In this context Mr. S.C Sinha referred to sections 14 and 16 of the Act. Section 14(1) states that
“every creditor, whose debt is secured by the mortgage or a charge on any estate or tenure vested in the State under section 3 may, within six months of date of such vesting……………… notify in the prescribed manner his claim in writing to a claims officer to be appointed by the State Government for the purpose of determining the amount of debt legally and justly payable to each creditor in respect of his claim”.
Section 16 empowers the claims officer to determine the principal amount justly due to each creditor and the interest (if any) due at the date of such determination in respect of such principal amount. Section 16(2) is important. It gives authority to the claims officer to re-open accounts, irrespective of any order or decree of Court. Under section 16(2)(b) the claims officer is required to ascertain the amount of the interest already paid or realised and to set off towards the principal any amount paid or realised as simple interest in excess of six per centum per annum. Section 16(2)(d) states that if the claims officer finds that in any case the creditor has received or realised by way of interest an amount equal to or more than the amount of the principal, he shall not allow any] further interest to run on such principal. The argument on behalf of the respondents is that if a limited construction is placed upon Section 4(d) the creditor could prosecute his remedies in two jurisdictions which would come into conflict. The creditor would be entitled to execute a mortgage decree in the civil court as regards the properties which are not vested in the State but as regards the properties which are vested in the State and the creditor would file a claim under section 14 before the claims officer. If the creditor files such a claim the claims officer is authorised under section 16 to re-open the decree and to take a fresh account and scale down interest to the extent authorised by that section. The contention on behalf of the respondents is that the creditor cannot be permitted to execute the decree of the civil court and at the same time the claims officer cannot re-open the decree for the purpose of determining the claim of the creditor with respect to the estates notified under section 3. Mr. S.C Sinha therefore argued that the intention was that the creditor must prosecute his claim before the claims officer and that the remedy in the civil, court was barred. The argument is attractive, but there are more important considerations which support the view that Section 4(d) of the Bihar Land Reforms Act must be given a limited construction. The difficulty raised by Mr. S.C Sinha would be surmounted if sections 14 and 16 are construed in such a manner as to harmonise with the other sections of the statute. It is a familiar principle of construction that a statute must be read as a whole in order to ascertain the true meaning of its several clauses and that the language of each clause must be so interpreted as to bring it into harmony with the other provisions of the statute [see for instance Lord Davey in Canada Sugar Refining Company v. R,]. It should be noticed in the first place that section 14 is enacted in a permissive form a secured creditor may file a claim within the time prescribed under section 14 to the claims officer but he is not compelled to do so. In a case, therefore, where the mortgage relates to notified estates and to estates which are not notified it is open to the creditor to file a suit or to prosecute an execution case in the civil court, but he cannot pursue his remedy in the civil court so far as vested estates are concerned. It is open to the creditor to make an election as to the choice of his remedies in a case of this description. It is open to him either to give up his right of filing a claim under section 14 with respect to the vested estates and to prosecute the suit or execution proceeding exclusively in civil court. On the other hand, the creditor may give up his remedy in the civil court and prosecute his claim solely under section 14 before the claims officer who will proceed under section 16 to re-open the decree and to grant necessary relief. If sections 14 and 16 are construed in this manner there would be no occasion for conflict of jurisdiction between the claims officer acting under section 16 and a civil court hearing a mortgage suit or executing a mortgage decree. If this interpretation of sections 14 and 16 is adopted there would be no insuperable difficulty in holding that Section 4(d) of the Act refers only to a case where the mortgage or charge exclusively relates to the estates which are notified under section 3 and which have become vested in the State of Bihar.
My conclusion on this point is that Section 4(d) does not operate as a bar to the execution of the mortgage decree and that the appellant decree-holder is entitled in this case to obtain an order of attachment against the sum of Rs. 83,000 which is the amount of compensation for the four villages acquired by the Central Government under the Defence of India Rules.
Mr. K.D Chattarji on behalf of the appellant also submitted that the principle of constructive res judicata applied and the Subordinate Judge was precluded from holding that Section 4(d) of the Bihar Land Reforms Act was a bar to the execution of the mortgage decree. Learned counsel based his argument on the fact that on 6th December, 1952, the District Judge of Patna held on an application of the respondents that the Bihar Land Reforms Act did not apply to the execution of the mortgage decree and that the precept sent by the Subordinate Judge of Hazaribagh should be executed and the sum of Rs. 83,000 which was compensation money should be attached and sent to the court of the Subordinate Judge. In my opinion the argument of the learned counsel on this point is correct. The order of the District Judge of Patna, dated the 6th December 1952, was an order passed in an earlier stage of the same execution case. The order was passed by the District Judge on an application made by the respondents objecting to the attachment of the amount of Rs. 83,000 in compliance with the precept issued under section 46 of the Civil Procedure Code. The objection was rejected by the District Judge on the ground that Section 4(d) of the Land Reforms Act did not apply and that the amount of conrpensation money was liable to be attached. In view of this decision it was not open to the Subordinate Judge of Hazaribagh to come to a different conclusion on this point in his order, dated the 8th December, 1952. In Ram Kripal Shukul v. Mosammat Rup Kuari a judge had decided in the course of execution proceedings that the decree according to its true construction awarded future mesne profits and it was held by the Judicial Committee that such decision having been or become final was binding between the parties and could not in a later stage of the execution proceedings be set aside and future mesne profits be disallowed. It was observed by Sir Barnes Peacock in pronouncing the opinion of the Judicial Committee that the binding force of such a decision depended upon general principles of law and not upon section 13, Act X of 1877. The same principle has been enunciated in Ramachandra Rao v. Ramchandra Rao. In my opinion the principle of constructive res judicata applies to this case and the Subordinate Judge was bound by the decision of the District Judge of Patna, dated the 6th December, 1952, holding that Section 4(d) of the Bihar Land Reforms Act did not apply to the execution of the mortgage decree.
In view of these considerations I hold that the appellant is entitled to execute the mortgage decree by attaching the amount of Rs. 83,000 being the compensation money paid by the Central Government for the four villages of Mahal Gaddi Masnodih. I think that the order of the learned Subordinate Judge, dated the 8th December 1952, should be set aside and this appeal should be allowed with costs.
Jamuar, J.:— I entirely agree.
S.H
Appeal allowed.