Asa Ram v. Ram Kali

988 SUPREME COURT REPORTS _1951_ ASA RAM AND ANOTHER (19581 _**1\'ovember,**_ **21 .** _**V.**_ MST. RAM KALI AND ANOTHER (VENKATARAMA AIYAR, S. K. DAs and ### GAJENDRAGADKAR, JJ.) _Tenancy-Hereditary_ _right,_ _when_ _can come into exist-_ _ence-Lease_ _by mortgagee-When_ _binding_ _on_ _mortgagor-_ _Transfer_ _of Property_ _Act,_ 1882 (IV _of_ 1882), _s._ 76(a)-U.P. _Tenancy_ _Act,_ 1939 (U.P. _XVII_ _of_ 1939), _s._ 29 (a). Section .29 (a) of the U.P. Tenancy Act, 1939, provides that every person who was at the commencement of the Act a tenant of land shall be entitled to all the rights of hereditary tenants under the Act. Some classes of tenants are expected from the operation of this provision, and one of them is tenants of Sir lands. The lands in question were originally held in Sir but in pursuance of a deed of usufructuary mortgage dated July 8, 1930, they were entered as Khudkasht in the names of the mortgagees. Subsequently the respondents took possession of the lands from the mortgagees under a Kabuliat dated May 26, 1936. After redemption of the mortgage the appellants, the representatives of the mortgagors, filed a suit for possession under s. 180 of the U.P. Tenancy Act, 1939, against the respondents on the footing that they were trespassers. The respondents contended, _inter alia,_ that they were legally in possession of the lands because (1) the lease on the basis of which the Kabuliat of May 26, 1936, was executed, was binding on the appellants, and (2) in any case, as the respondents were in possession of the lands as tenants on the date of the commencement of the Act, they were entitled to all the rights of hereditary tenants under s. 29 (a) of the Act. It was found that the action of· the mortgagees in leasing the lands to the tenants on the terms set out in the Kabuliat was neither prudent nor _bona_ fide: _Held:_ (1) that under s. 76(a) of the Transfer of Property Act, 1882, an agricultural lease created by a mortgagee would be binding on the mortgagor even though the mortgage has been redeemed, provided it is of such a character that a prudent owner of property would enter into it in the usual course of management; (2) that a person who claims rights as a hereditary tenant under s. 29 (a) of the U.P. Tenancy Act, 1939, must show that on the date of the commencement of the Act he was lawfully a tenant. Accordingly, as the lease in question could not be upheld under s. 76 (a) of the Transfer of Property Act, 1882, there was no admission of tenant by any person having S.C.R. SUPREME COURT REPORTS 989 authority to do so, and the transaction could not form the foundation on which any rights under s. 29 (a) of the U.P. Tenancy Act, 1939, could be based. _Mahabir_ Gope _and others_ v. _Harbans Narain Singh and_ _others,_ [1952] S.C.R. 775, referred to. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 56 of 1956. Appeal by special leave from the judgment and order dated February 4, 1954, of the U.P. Board of Revenue in Appeal No. 96 of 1948-49. _Dewan Charanjit Lai,_ for the appellants. _S._ _P._ _Sinha,_ _J._ _B. Dadachanji, S._ _N._ _AndLey_ and _Rameshwar Nath,_ for the respondents. 1957, November 21. The following Judgment of . the Court was delivered by ### VENKATARAMA AIYAR J.-The facts material for purposes of this appeal have been stated by us in our order dated February 6, 1957, and may be briefly recapitualted. The suit property is agricultural land of the extent of 10 Bighas, 13 Biswas. On July 8, 1930, the then owners of the land, Ram Prashad and Udairaj, executed a usufructuary mortgage over it and certain other properties, with which we are not concf;!rned in this litigation, in favour of Dwaraka Prashad, N aubat Singh and Munshilal. The lands were origi### nally held in Sir by the mortgagors, but as part of · their bargain with the mortgagee's, they applied to have their names removed from the _Sir,_ and that was done by an order dated June 18, 1930, the lands being ## thereafter entered as Khudkasht in the names of the mortgagees. In 1941, Ram Prashad, the surviving mortgagor, filed Suit No. 132 of 1941 for redemption ### of the mortgage. The suit was contested, but it was eventually decreed, the amount due to the mortgagees ### being fixed at Rs. 1,860. Subsequent to the decree, Ram Prashad died leaving him surviving, the appellants herein, as his legal representatives. On September 6, 1945, the amount due under the mortgage was # paid by them and the mortgage was redeemed. When they sought to take possession of the suit properties, they were obstructed by Govind Sahai and Bhagwan 1957 _Asa Ram_ v. _Ram Kali._ _Venkatarama_ _A.lyar_ _J._ 990 SUPREME COURT REPORTS [1958) t9S7 Sahai, who claimed to have been admitted as tenants _Asa Ram_ by the mortgagees. Thereafter, the appellants filed v. the suit, out of which the present appeal arises, under _Ram 14111_ s. 180 of the U.P. Tenancy Act No. XVII of 1939, _Venkatarama_ hereinafter referred to as the Act, to eject them, treat_Aiyar 1._ ing them as trespassers. The defendants resisted ### the suit on various grounds, of which only one is now material. They claimed that they were not trespassers ### but hereditary tenants under the Act, and could not therefore be ejected, and Issue 2 was raised with reference to this plea. ### The Revenue Officer, Meerut, who tried the suit held on this Issue that as the lands had been held by the mortgagors as _Sir,_ and that as the mortgagees had ### been themselves cultivating them as Khudkasht, the defendants could not be held to be hereditary tenants, and passed accordingly a decree in ejectment in favour of the appellants, and this decre~ was confirmed on appeal by the Commissioner, Meerut Division. The defendants took the matter in appeal to the Board of ### Revenue (Second Appeal No. 96 of 1948). By its judgment and decree dated February 4, 1954, the ### Board held that the defendants had been put in possession by the mortgagees under a Kabuliat dated ### May 26, 1936, that the rent fixed under the Kabuliat, Rs. 112 per annum, was a reasonable rate of rent as the circle rate was Rs. 76-6-0, and that, therefore, the settlement was binding on the mortgagors, as it was for "prudent and economic rent". On this finding, ### it allowed the appeal and dismissed the suit. Against this judgment, the plaintiffs have preferred this appeal by special leave. ### At the original hearing before us, the main conten- tion pressed by the appellants was that the Kabuliat dated May 26, 1936, was not referred to in the.written ### statement, and had not been exhibited at the trial, and that, therefore, no relief should have been granted on the basis of that document in second appeal. We, however, came to the conclusion that as the point had been raised, though not clearly in the written state### ment, it ought to be tried on the merits, and we ac S.C.R. SUPREME COURT REPORTS 991 cordingly remanded the case to the Board of Revenue for trial on the following two Issues : (1) Whether the lease deed dated May 26, 1936, ### by the mortgagees in favour of the respondents is true and legally valid; and ( 2 ) Whether the said lease is binding on the appellants. ### At the re-hearing which we directed, the ·parties have adduced fresh evidence on both the Issues, and the Board of Revenue has submitted its findings there### on. On the first Issue, it has held that no lease deed had been executed by the mortgagees in favour of the lessees, but that the latter had executed a Kabuliat in favour of the mortgagees on May 26, 1936, and that ### its truth had not been questioned. On the second Issue, its finding is as follows : 1957 _Asa Ram_ v. _Ram Kali_ _Venkatarama_ _Aiyar_ _J._ "Whether the Qabuliat was binding or not depen:ded on the question whether mortgagees had a right to settle the land and whether such settlement· was binding on the ~mortgagors. There was nothing in the mortgage deed which would prevent the mortgagees from settling the land, even though the land ### was khud-kasht or even if the period of settlement was beyond the period of mortgage. The mortgagees acted in the prudent management of the property settling the land on an economic rent. The .action of the mortgagees was, therefore, binding on the mortgagors. Hence the Qabuliat was binding on the appellants." The appellants attack. both these findings as incorrect. As regards the first Issue, their contention is ### that in view of the finding that the mortgagees had not executed any lease deed, Govind Sahai and ### Bhagwan Sahai could not claim the status of tenants solely on the strength of the Kabuliat executed by them on May 26, 1936, as that was merely a unilateral undertaking by them to cultivate. But the mort- _ gagees have given evidence that they accepted the Kabuliat and received rent as provided therein. There ## is, therefore, no substance in this objection, which must be overruled. 992 SUPREME COURT REPORTS [1958] 1957 The main controversy in this appeal relates to the _Asa Ram_ finding on the second Issue. The papellants complain v. that the Board has merely repeated its previous _Ram Kali_ finding on the point without reference either to the _Venkatarama_ requirements of s. 76(a) of the Transfer of Property _Aiyar_ _J._ Act, or to the evidence that had been adduced by the parties at the remand. We are constrained to observe that this complaint is well-founded. The law undoubtedly is that no person can transfer property so as to confer on the transferee a title better than what he possesses. Therefore, any transfer of the property mortgaged, by the mortgagee must cease, when the mortgage is redeemed. Now, s. 76 (a) provides that a mortgagee in possession "must manage the property as a person of ordinary prudence would manage it if it were his own." Though on the language of the statute, this is an obligation cast on the mortgagee, the authorities have held that an agricultural lease created by him would be binding on the mortgagor even though the mortgage has been redeemed, provided it is of such a character that a prudent owner of property would enter into it in the usual course of management. ### This being in the nature of an exception, it is for the person who claims the benefit thereof, to strictly establish it. Now, the question is whether the respondents have proved that the lease of which the Kabuliat dated May 26, 1936, is a counter-part, is one which a prudent owner would create in the management of his properties. The Board has answered the question in favour of the respondents on two grounds. One is that that the mortgage deed dated July 8, 1930, contains no prohibition against letting of the lands by the ### mortgagees. If there is such a prohibition, there is the authority of this Court in _Mahabir_ Gope _and_ ## others v. Harbans Narain Singh and others (' ) that the lease will not be binding on the mortgagors. But where there is no such prohibition, the only consequence is that the parties will be thrown back on their rights under the Transfer of Property Act, and the (1) [1952] S.C.B. 775. S.C.R. SUPREME COURT REPORTS 993 lessees must still establish that the lease is binding on the mortgagors under s. 76(a) of that Act. The second ground on which the Board has based ### its conclusion that the lease is binding on the appel- lants is that the rent fixed in the Kabuliat, Rs. 112 is higher than the circle rate of Rs. 76-6-0. But this is not decisive of the matter, as what has to be decided is not whether the rent fixed compares favourably ### with the circle rate, but whether it is reasonable and fair, having regard to the income which a prudent owner could have got from the lands, and that will depend on- proof of the net yield from the land and the ruling price of the produce at that time. The lessees have given no evidence on this point. One of the mortgagees stated that he and his brothers were themselves cultivating the lands till 1936, and that they then gave them on lease, because they were losing Rs. 50 to Rs. 100 per annum over the transaction. But he gave no particulars as to what the gross yield from the lands was, what the expenses of cultivation were, ## and what the price of the produce was. It is very difficult to believe that the tenants would have agreed to take over lands on the terms contained in the ## Kabuliat if, in fact, it was a losing concern. It is ### admitted by the mortgagee that the lessees made no complaint that they were working at a loss. His ev.idence on this point is vague and unconvincing, and we are not impressed by it. On the other hand, we have evidence which clinches the matter in favour of ## the appellants. It has been already stated that the Rev1mue Officer, Meerut granted a decree in favour of the appellants for ejectment. In execution of this decree, the appellants obtained possession of the suit properties. On February 4, 1954, the Board set aside the decrees of the Courts below, and dismissed the suit of the appellants. Thereupon, the respondents in execution of the decree got back possession of the properties. Then, they applied under s. 144, Code of Civil Procedure for recovery of mesne profits by way ### of restitution, and obtained a decree for Rs. 7,500 at 1957 _AsaR.am_ v. _Ram Kali_ _Venkatarama_ _Aiyar_ _J._ 994 SUPREME COURT REPORTS [1958] ### 1957 the rate of Rs. 1,000 per annum. If this figure is _Asa Ram_ any guide for the determination of what income could v. be got from the properties by a prudent owner, then _Rom Kali_ it is clear beyond doubt that the rent of Rs. 112 fixed _Venkatarama_ in the Kabuliat is unduly low, and it cannot be bind### Aiyar J. ing on the mortgagors. It is true that the decree re lates to a period much later than the date of the Kabu### liat, and that price!; had greatly risen during that period. But making all allowance for the rise, we think that the transaction is not one which a prudent owner would enter into in respect of his properties. ### It was argued by Mr. Sinha for the respondents that the decree passed in restitution proceedings is under appeal before the Commissioner of Meerut, and should not, therefore, be taken into account in determining whether the rent fixed in the Kabuliat was fair and such, as would be binding on the mortgagors. But this decree was passed on the application of the res### pondents claiming mesne profits at the rate of Rs. 1,000 per annum, assuming that they did not ask for more, and its importance lies not so much in its being an adjudication by the Court as in its evidencing an admission by them as to the net profits which could be realised from the lands. It would be material in this connection to refer to the character of the lands over. which the lease was created. They were held in _Sir_ by the mortgagors and after the execution of the mortgage, entered as _Khudkasht_ in the names of the mortgagees. They were home-farm lands under the direct cultivation of the proprietors, as distinguished from lands which were under cultivation by tenants, and having regard to the special rights which the tenancy laws all over India have recognised in the owner in respect of such lands, an act of the mortgagee which puts those rights in peril cannot, as held in _Mahabir Gope and others_ v. _Harbans Narain Singh_ and others (supra), be regarded as that of a prudent owner, and it requires exceptional grounds to justify it. Of that, there is no evidence. On the other hand, the uncontradicted evidence on the side of the appellants is that the lands S.C.R. SUPREME COURT REPORTS 995 have got facilities of canal irrigation, and are very 1957 ### fertile, and that it would not be economic to lease Asa Ram them to tenants. It also appears that the mortgagees v. created on the eve of redemption another lease, and _Ram Kali_ ### that has been set aside on the ground that it was en- Venkatarama tered into with a view to defeat the mortgagors. _Aiyar_ _J._ Their action in leasing the lands to tenants on the terms set out in the Kabuliat is neither prudent nor _bona fide,_ and on a consideration of the entire evidence, we are of opinion, differing from the Board, ### that the lease evidenced by the Kabuliat is not binding on the mortgagors. ## It was next contended by Mr. Sinha that even if the Kabuliat was not binding on the mortgagors, the respondents would, nevertheless, be hereditary tenants under the provisions of the U.P. Tenancy Act, 1939, and that the appellants would have no right to eject them, and he referred us to the provisions of the Act bearing oli the question. Section 29(a) of the Act provides that every person who was at the commencement of the Act a tenant of land shall be entitled to all the rights of hereditary tenants under the Act. Some classes of tenants are excepted from the operation of this provision, and one of them is tenants of _Sir_ lands. Section 30 ( 6) enacts that, "Notwithstanding anything in section 29, here# ditary rights shall not accrue in- Land transferred by a mortgage to which the pro~ visions of the second paragraph of sub-section ( 5) of section 15 of the Agra Tenancy Act, 1926 apply during the period specified in that paragraph." The provision in the Agra Tenancy Act, 1926, referred to above, runs as follows : "Notwithstanding anything in this section, where the property transferred by means of a mortgage of the kind specified in sub-section (5) of section 14 consists wholly of a specified a:rea or _sir,_ the mortgagor may by simultaneous agreement in writing waive his exproprietary rights, and in that case the mortgaged land shall, if the mortgagor regains within twelve years of the date of the transfer possession 996 SUPREME COURT REPORTS [1958} ### 1957 thereof on redemption of the mortgage, resume the _Asa Ram_ character of _sir._ In such land, statutory rights shall v. not accrue for twelve years from the date of transfer." _Ram_ _Kali_ One other provision to which reference was made is _Venkatarama_ the second proviso to s. 11 of the U.P. Tenancy Act, _Ai,va'_ _J._ 1939, which is as follows : "Provided further that if on redemption of a mortgage the mortgagor regains possession of land which under the provisions of the Agra Tenancy Act, 1926, ### ceased to be sir and to which the provisions of the second paragraph of sub-section (5) of section 15 of that Act applied, such land shall again become his _**sir."**_ ### Now, the argument of the respondents is that though the suit lands were originally held in _Sir,_ they ceased to be such when the mortgage was executed ### on July 8, 1930, that s. 29(a) of the Act therefore applied, thats. 30(6) and s. 11 of the Act and s. 15 of the Agra Tenancy Act, 1926, had no application, as the mortgage comprised also lands which were not _sir,_ and as further, possession had not been regained ## within twelve years of the mortgage. It is accordingly contended that the respondents who were in possession as tenants on January 1, 1940, when the Act came into force, had acquired the status of hereditary tenants under s. 29(a) of the Act, and the decision in Jai _Singh_ v. _Munshi Singh_ ( [1] ) is relied on, in support of this contention. The error in this argument lies in the assumption that Govind Sahai and Bhagwan Sahai became by virtue of the Kabuliat dated May 26, 1936, tenants for purposes of s. 29 (a) of the Act. The true scope of sub-s. ### (a) of s. 29 is that it posits that there is on the date of the commencement of the Act a person who is lawfully a tenant and proceeds to confer on him certain ### rights. It is therefore a condition precedent to the application of this provision that the person must have been admitted as tenant by a person who had the right to do so. Where, however, the person who purports to grant the lease has no authority to do so, (1) (19SSj A.L.J. 834. S.C.R. SUPREME COURT REPORTS 997 whatever the rights _inter_ _se_ between the lessor and 1957 the lessee, as against the true owner the latter does _Asa Ram_ not, in law, acquire the status of a tenant, ands. 29(a) v. has no 11pplication to him. Thus, if A is the owner of _Ram Kali_ certain lands and B trespasses on them and grants a _venkatarama_ lease to C, sub-s. (a) of s. 29 does not operate to con- _Aiyar_ _J._ fer any rights on C as against A. The crucial question for determination, therefore, is whether the person who claims rights as a hereditary tenant under s. 29(a) was admitted as tenant by a person who had the right to do so. An owner will of course be entitled to ad### mit a tenant, and a mortgagee in possession would have a right to do so, either if he is authorised in that behalf by the deed of mortgage, or if the transaction ### is one, which is protected by s. 76(a) of the Transfer Qf Property Act. But where the transaction is not one which could be upheld under s. 76(a), then there is no admission of tenant by any person having autho### rity to do so, and such a transaction though valid as between the mortgagee and the lessee, cannot form the foundation on which any rights under s. 29, sub-s. (a) <0f the Act could be based. In _Mahabir Gope and others_ v. _Harbans Narain_ ### Singh and others (supra), it was held that when a usufructuary mortgagee created a lease in spite of the prohibition against letting, contained in th~ mortgage deed, the tenant acquired no occupancy rights under the provisions of the Bihar Tenancy Act, even though ### he had been in possession for over 30 years, and that the same consequences would follow if the lease was not binding on the mortgagor under s. 76(a) of the ### Transfer of Property Act, or if it was not bona fide On the same principle, and on our finding that the Kabuliat dated May 26, 1936, is not binding on the appellants, we must hold that Govind Sahai and Bhagwan Sahai acquired no rights as hereditary ### tenants under s. 29(a) of the U.P. Tenancy Act. In _Jai Singh_ v. _Munshi Singh_ (supra), relied on for the ### respondents, it was held that "the agricultural lease granted by the mortgagee in favour of Jai Singh was a lease granted in the ordinary course of management", 998 SUPREME COURT REPORTS (1958] 1957 and that, accordingly, the tenant acquired the rights _Asa Ram_ of a hereditary tenant. That decision has no applicav. tion when the lease is, as held by us, not a prudent ### Ram KaU transaction binding on the mortgagors. In this view, _venkatarama_ the questions raised by Mr. Sinha on the construction ### Aiyar J. of s. 30(6) ands. 11 of the Act ands. 15 of the Agra Tenancy Act, 1926, do not arise for decision. In the result, the appeal is allowed, the decree passed by the Board is set aside, and that of the Revenue Officer, Meerut affirmed by the Commissioner, restored. The respondents will pay the costs of the appellants throughout, including the costs of the remand. _Appeal allowed._ 1957 _**November,**_ **25.** ## _v._ THE STATE OF PUNJAB AND OTHERS (S. R. DAS C. J., VENKATARAMA AIYAR, S. K. DAS, ### GAJENDRAGADKAR and A. K. SARKAR JJ.) _Preventive_ - _Detention-Failure_ _of_ _the Advisory Board_ ### to submit its report within time-Effect-Detenu, if must be set _at liberty-Preventive Detention_ _Act_ (No. _IV_ of 1950), _SS._ 10, 11. Submission of its report by the Advisory Board under s. 10 of the Preventive Detention Act within the time prescribed by that section is of the utmost importance to the detenu and if the Board fails to do so any further detention beyond that period becomes unlawful. Consequently, where the case of the detenu was tbat the.Advisory Board had not submitted its report within ten weeks of his detention and his detention thereafter had, therefore, become illegal and no attempt was made on behalf of the Government to controvert that case in the counter-affidavits filed on its behalf, the detenu must be set at liberty. CHOUDHURY DHARAM SINGH RATHI ORIGINAL JURISDICTION : Petition No. 135 of 1957 (Under Article 32 of the Constitution for a writ in the nature of _habeas_ corpus).