Rajkumari Kaushalya Devi v. Bawa Pritma Singh

_1960_ _Sftaorji_ _Vatlabhdas_ & _Co._ v. _Commissioner of_ 570 SUPREME COURT REPORTS [1960] India. As to t.hc t.hir<l mauaged company whose business was stevedoring and t.rading and t.hc remuneration was payable at 2:"i per cent. of the net profits, there can be no doubt that the remuneration accrued at Bombay. Therefore, the High Court of Bombay correctly answerc<l the question against. the appellant. The appeal accordingly fails and is dismissed with cusr.s. _A j1j1eal_ _dismissed._ R/\JK!;f\JARI KAUSHALYA DE\11 _v._ BAWA PRJJ":'.JA SINGH AND ANOTHER. (P. B. GAJEXDRAGADKAR, K. N. \VAl'\CHOO and K. c. DAS GUPTA, JJ.) _Mortgage-Whether_ _a "pecuniary_ _liability"-The_ _Displaced_ _Persons (Debts Adjustment)_ _Act_ _(LX X_ _of_ _1951),_ _ss._ _2(6), sub-els._ (a) _(b)_ (c) _13, 15, 16(5), 17, 21._ The appellant executed two usufructuary mortgages in favour of the respondents in 1946 with respect to two properties ' . _lucome-laxf_ _Excess Profits_ _T1,x,_ _Bombay_ _S ._ _.K._ _Das J._ _1960_ _A.fHif_ _20_ situated in Ferozepur city and herself took the properties on lease ..... on the same date. 1~he respondents filed an application- under s. 13 of the Displaced Persons (Debts Adjustment) Act, LXX of 1951, for recovery of the principal sum due and also the arrears of rent. The appellant contested the application on the ground, 1 ['"7·~ ] inter alia, that the liability was not a debt under the Act as it "' was not a pecuniary liability and that mortgages in relation to properties situated now in India were not covered by it. The Tribunal allowed the application and passed a preliminary decree for sale. The appellant's appeal to the High Court and another under the Letters Patent were both dismissed. On appeal by special leave: _Held,_ that a mortgage debt would create a pecuniary liability upon the 1nortgagor and would be covered bv, the definition of the word "debt" in s. 2(6) of the Act. There is nothing in any provision of the Act which would cut down the plain meaning of the words "pecuniary liability" as used in _s._ 2(6) read with sub-cl. (c) thereof or restrict those wide words to liability other than that secured by a mortgage. Under sub-cl. (c) o[ _s._ 2(6) a displaced person to whom a mortgage debt is due f rorn any or her person, whether a displaced,. person or not, ordinarily residing in the territories to which the Act extends can take the benefit of this Act. 3 S.C.R. SUPREME COURT REPORTS 571 The interest of the prior mortgagee or the subsequent mortgagee if any would not be affected by a decree passed on an application under s. 13 of the Act. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 38 of 1960. Appeal by special leave from the judgment and order dated October 6, 1958, of the Punjab High Court in Letters Patent Appeal No. _52_ of l C)i)4, arising out of the judgment and order elated June Fi, 1954, of the said High Court· in First Appeal from Order ' ### __>_ No. 149 of 1953. _Y._ _Kumar,_ for the appellant. _Bakshi_ _Man_ _Singh_ and _Sardar_ _Singh,_ for the respondents. 1960. April 20. The Judgment of the Court was delivered by \VANCHOO, J.-This is an appeal by special leave against the judgment of the Punjab High Court. The brief facts necessary for present purposes are these. The appellant had executed two usufructuary mortgages with respect to two properties situate in Ferozepore citv in favour of the respondents in J 946. She also took both properties on lease on the same date. An application was filed by the respondents under s. 13 of the Displaced Persons (Debts Adjustment) Act, >Jo. LXX of J 951 (hereinafter called the Act), for recovery of the principal sum due as well as the rent which was said to be in- arrears. The application was resisted by the appellant on various grounds, one of which was that no snch application lay as the liability was _not_ a debt under the Act. The tribunal negatived the contention of the appellant and passed a preliminary decree for sale. Six month's time was allowed to the appellant to pay the decretal amount, failing which the respondents were at liberty to get a final decree prepared and bring the properties to sale. The appellant went in appeal to the High Court but the appeal was dismissed. Then there was a Letters Patent Appeal, which was also dismissed. The appellant then applied for and was granted special leave bv this Court, and that is how the matter has come UJJ before us. The only point for our consideration is whether t.he liability created under a mortgage is a debt ·within _1960_ _**Rtefkumari**_ _Kausha/..yadevi_ v. _**Bawa**_ _**Prifma**_ _Singh_ _Wmzchoo_ _]._ _1960_ _Raj/,-umnri_ Kausha~radeui v. _Bawa_ _Prilmn_ _Si11gh_ _Jf'anchnn_ _J._ 572 SUPREME COURT REPORTS [19601 the meaning of s. '.2(G) of the Act. The rclev;mt part of that provision rum as follows: " 'Debt' meam any pecuniary liability, whether payable presently or in future, or under a decree or order of civil or revenue court or otherwise, or whether ascertained or to be ascertained, which (a) in the case of a displaced person who has left or been displaced from his place of residence in any area now forming part of West Pakistan, was incurred before he came to reside 111 any area now lorming part of India; (b) in the case of a displaced person who, before and after the l.~th day of August, 1947, has been residing in any area now forming part of India, was incurred before the said date on the security of any immovable property situate in the territories now forming part of 'Vest Pakistan: Provided that where any such liability was incrn red on the security of immovable properties situate both in India and in 'Nest Pakistan, the liability shall be so apportioned between the said properties that the liability in relation to each of the said properties bears the same proportion to the tutal amount of the debts as the value of each of the properties as at the date of the transaction hears to the total value of the properties furnished as security, and the liability, for the purposes of this clause, shall be the liability which is relatable to the property in vVest Pakistan; (c) is due to a displaced person from any other person (whether a displaced person or not) ordinarily residing in the territories to which this Act extends; x x x x The contention 011 behalf of the appellant is that the liability 1111<10 a mortgage is not a pecuniary liability and therefore s. 2(6) will not apply to a mort. gage debt. It is further urged that the scheme of the Act shows that mortgages in relation to properties situate in what is now India are not covered by the Act at all. ### _1960_ _Rajkumari_ _**Kaushalyia**_ _**Devi**_ v. _Bawa Pritma Singh_ _Wanchoo_ _J._ _r_ "" 3 S.C.R. SUPREME COURT REPORTS 573 nebt is defined in s. 2(6) as meaning any pecuniary 1iability and has been restricted by the three subclauses _in the sub-~ection with reference to the person who might be o-wrng the debt 01~ to whom the debt might be owed. Sub-els. (a) and (b) refer to the debts owed by a displaced person as defined in the Act while sub-cl. (c) refers to a debt due to a displaced person. Sub-cl. (c) has therefore to be taken independently of snb-cls. (a) and (b), for it refers to a creditor who is a displaced person while the other two sub-clauses refer to a debtor who is a displaced person. Under subcl. (c) a displaced person who is a creditor can recover the debt clue to him from any other person, ·whether a . displaced person or not, who is residing in the territories to which the Act extends. The main contention of the appellant in this connection is that a mortgage debt is not a pecunfary liability and therefore does not fall within the definition of debt at all. _vVe_ are of opinion that there is no force in this contention; The words "pecuniary liability" ·will cover any liability which is of a monetary. nature. Now the definition of a. mortgage in s. _58_ of the Transfer of Property Act. No. 4 of 1882, shows that though it is the transfer of an interest in specific immovable property, the purpose of the transfer is to secure the payment of money advanced or to be advanced by way of loan or to secure an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability. The money advanced by way of loan, for example, which is secured by a mortgage, obviously creates a pecuniary liability. It is true that a mortgage in addition to creating the pecuniary liability also transfers interest in the specific immovable property to secure that liability; none the less the loan or debt to secure which the mortgage is created will remain a pecuniary liability of the person creating the mortgage .. Therefore a mortgage debt would create a pecuniary liability upon the mortgagor arid would be covered by the definition of the word "debt" in s. 2(6). _v\Te_ may in this connection refer to the Displaced Persons (Institution of Suits) Act, No. XL VII of 1948, which has been practically repealed by the ll-6 SCI/ND/82 574 SUPREME COURT REPORTS [ 19601 _1960_ _**Rajkwnari**_ _**Ka11shaf.ya**_ _**Devi**_ v. _**Bawa Pritma Singh**_ _**JVm1rlwn**_ _**J.**_ Act. In LiiaL hw, >11.ils relating· Lo immO\';ible pro· pcny "·c1-c specially excepted 1I11<le1· s. 'f, but there is no such prmision in the _Act._,\g,,in s. 6 of the Displaced Persons (Legal Proceedings) Act, No. XXV of I 'l·l'l, which has also ],.:·en repealed by the Act mentions decrees or orden for payment of money while in s. I _:'i_ of the Act which deals with the same matter !hose words "re omitted and the words "proreerlings in respect of any debt" are used inste'ad. There can be no doubt in consequence that. the Act is a comprehensive law dealing "'it.h all kinds of pecuniary liability. _'Ve_ are therefore- of opinion that s. 2(6) dearly incllldes a mortgage debt and under sub-cl. (c) thereof a displaced person to whom such a debt is clue from any other person, whether a displaced person or not, ordinarilv residing in the territories to which the Act extends c~n take die benefit of this Act. Let us now see whether there is anything in the scheme of the Act which in any way militates against the pbin words of s. 2(fi). Learned counsel for the appellant: in the first place refers to sub-cl. (b) of s. 2(ri) in this connection and points out that that subclanse specifically deals with mortgage debts secured on arn· immovable property situate in the territories forn1ing part of 'Vest Pakistan. Tt is nrgcd that there w:is a specific provision with respect to mortgage debts in relation to immovable properties in \\Test P"kistan and that if it were intender[ that mortgage of immovable properties situate in 'vhat is now India would also be dealt with under the Act there woulcl have been a similar specific pronston in the Act. Further it. is pointed out th:it the proviso to subcl. (b) lo s. 2(6) provides for apportioning the mortgage debt in c;iscs where the property on which the clcb1· is secured is both in \\Test Pakistan and in India and restricts the application of sub-cl. (b) only to that part of the clebt winch "·as secured on the property i 11 '\'est: Pakistan and thm excludes from the operation of sub-cl. (h) th"t part: of the clebt which is secured on property in India. That is undoubtedly so. The reason howc1'C1" _for_ this speci;il _provision_ _is_ to be found in the later prm·ision contained in s. _16_ ll\· which a ch;ll'g·e was ' created on com1,cnsation to be,;.i,·en - **h** to a ' #### • ###### t _J_ 3 S.C.R. SUPRE1\1E COURT REPORTS 575 displaced person with respect to the mortgage debt _1960_ secured on immovable property in Pakistan or in the alternative a charge vl'as created on property given _Rajkumari_ in exchange for the property in Pakistan on which _Kaushal;·a_ _Devi_ the debt was charged. The special provision there- v. .. fore in sub-cl. (b) of s. 2(6) would not in these circum- _Bawa_ _Pntma Singh_ stances cut down the plain meaning of the words used -_Wanchoo_ _J._ in sub-cl. ( c) or restrict the, wide words "pecuniary liability" to liability other than that secured by a mortgage. Incidentally 1Ne may mention that subcl. (b) itself shows that pecuniary liability includes a mortgage debt, for it shO'ws that any liability which was incurred on the security of any immovable property situate in \'Vest Pakistan would be a debt within the meaning of s. 2(6) and therefore a pecuniary liability. It is next urged that when the legislature excepted . the property in India which was encumbered from being dealt with under sub-cl. (b) so far as displaced debtors were concerned, there is no reason why it should allow the displaced creditors to proceed under the Act with respect to iportgage debts. This argument, however, overlooks the provision in sub-cl. (a) under which a displaced debtor can take the benefit of the Act, once it is held that the words "pecuniary liability" also include mortgage debt. As we have said· before sub-cl. (b) was dealing with a· special situation which was worked out in s. 16 of the Act and the general right of a displaced debtor to take advantage of the Act is to be found in sub-cl. (a) and that subclause will cover a mortgage debt as it is a pecuniary liability. Reliance was then placed on s. 16(5), which gives a right to the creditor to elect _tq_ be treated as an unsecured creditor in rebtion to the debt, in which case the provisions of the Act would. apply accordingly. It was urged that this sub-section requires that a creditor must make an electio'n before he can take the benefit of this Act. v\Te arc of opinion that this argument has no force, for sub-s. (rl) of s. Hi only deals with, a situation which arises where the mortgage, ch::irge or lien was on immovable property situate in \i\'cst Pakistan. It does not deal at all with cases _1960_ 576 SUPREl\1E COURT REPORTS [1960] where the morlgage, charge or lien is on immovable property siluate outside \\'est Pakistan. _Rajkumari_ Reference \vas Lhcn made to s. 17 of the Act. lt _Kaushalya_ _Devi_ deals wi t:h debts secured on mm·a ble properties. That v. section is again concerned with displaced debtors and _Bawa Pritma_ _Singh_ 'd ] - · 'Jl ] k \ b _**Wanchoo**_ _**J.**_ **prov1** _**es**_ **10\v equ1t1es** **vv1** **Je** **\\·or** **cc** **out** **et\veen a** displaced debtor and his creditor with respect to debts secured on movable property. \\'e see nothing in this section which can cut down the amplitude of the words used in s. 2(6)(c). Reference was then macle to s. 21 which provides for scaling down debts. That is however a general provision dealing with debts of all kinds and there is nothing in that section which shows that the word "debt" as defined in s. 2(6) refers only to claims for money and does not i 11clucle a mortgag·e debt. Tims we sec nothing in any provision of the Act or in its scheme which would cut down the meaning we have given to the words "pecuniary liability" as used in s. 2(6) read with sub-cl. (c) thereof. le was also urged that if mortgage debts on property situate in J ndia were covered by the Act, there is no machinery (like s. )(i) for enforcemem of the creditors' rights in respect. thereof. This is not correct. Section 10 provides for the claim of a displaced creditor against a displaced debtor and s. 1 _:;_ provides for the claim of a displaced creditor against any other person who is not a displaced debtor. Section 11 then provides how an application under s. JU will be dealt: with and under sub-s. (2) thereof ;i decree can be passed under certain circumstances against the displaced debtor. Similarly under s. 14(2) a tribunal can pass such decree in relation to an application under s. _IB_ as it thinks fit. These decrees are executable under s. 28 of the Act. Therefore even when the debt 1s a mortgage debt there is provision in the Act for enforcement of that debt, though of course this provision is different from the provision contained in s. 16, which was dealing with the special situation of properties under mortgage situate in vV est Pakistan. \Ve mav also refer to s. _!l_ of the Act which bvs down that the provisions of the Act and of t:lic Rules ## · # -· 3 S.C"R. SUPREME COURT REPORTS 577 and Orders made thereunder shaU have effect notwith- _1960_ standing anything inconsistent therewith contained in any other law for the time being in force. The _Rajkwnari_ effect of this overriding provision .is to make a suit _!Caushalya Devi_ like the ]Jresem maintainable in spite of the provisions _B_ _Pv._ _s·_, . . . _**awa**_ _**ritma**_ _**rngrl**_ applymg to such sutts 111 other laws. -The last contention on behalf of the appellant is _Wanchoo_ _J._ that if s. 2(6)(c) empowers a displaced creditor to make an application under s. 13 even with respect to a mortgage debt, there will be hardship to prior mortgagees or subsequent mortgagees inasmuch as these persons cannot be dealt with under the Act. Section 13 empowers a displaced person claiming .a debt from any other person who is not a displaced person to apply within one year of the coming into force of the Act in any local area to the tribunal having jurisdiction in the matter. The provision is obviously e.nacted to give relief for a short period only. Section 25 of the Act provides for the regulation of all proceedings under the Act by the provisions contained in the Code of Civil Procedure save as expressly provided in the Act or in any rules made thereunder. But assuming that in spite of this provision, 0. XXXJV, r. 1 of the Code of Civil Procedure ·will not apply to proceedings under the Act and all -those having an interest in the mortgage security cannot be joined as parties as required by 0. XXXIV, r. I, the interest of prior or puisne mortgagees cannot in any case be affected by the decree passed under the Act. The _Explanation_ to 0. XXXIV, r. I, shows that a prior mortgagee need not be made a party to a suit for sale by a puisne mortgagee. So far .therefore as a prior mortgagee is concerned, his rights will not be affected by the decree passed under s. 13 of the Act, just as his rights are not ;iffected by the decree passed under 0. XXXlV. So far as mortgagees subsequent to the displaced creditor who applies under s. l _;3_ ;ire concerned, their interests will also not be jeopardized by the deo:ee which may be passed under s. I _:l._ Even under 0. XXXlV, which requires puisne or wbsequent mortgagees to be joi 11ed as parties in a suit for sale, a <lecree obt;ii ned in a suit lo which the s11bscg11cnt mottgagce was not joined as a party cloes not affect his rights and Lhe 578 SUPREME COURT REPORTS - [1960] _z96o_ - proceedings in such a. suit a.re not binding on him so _Rajkumarl._ as to affect his rights und.er the second mortgage. He _Kaushalya v.V;_ can thus follow the property by suing his mortgagor, . v. even though it may have been sold under the decree . _ilawaPritmaSingliofa.U:_ earlier mortgagee in a. suit to which he was not a.. pa.rty .• __ Therefore, .the interest of the prior mort_Wa,,.hoo'_ _J •_ . · gagee or the subsequent mortgagee, if any, would not . be affected by a decree passed on an application under s. 13 and there is no reason therefore to cut down the plain meaning of the words ·used in B. 2 (6}(c) on the ground that the proc~edings: under the .Act would prejudicially-. affect' the -rights• of: prior or puisne mortgagees>•·• ·' · · · . ., ·-· _ • • r "' - There is therefore no.· force· in this appeal and it is hereby dismissed with costs." .... ·: '.,, _r96o_ _April zo._ ' ' . (P .. B. GA.JENDRAGADKAR,- -, ' _:•_ j K. N; . w ANCHOO . _:_ .•·· "' :.':and K. C. DAs Gm.A.; JJ:)- - .. hereby dismissed with costs." .... ·: « ~-. App~l _dis1nissed._,·· ##### ·:··r:, _;,'· -'. ;:T · .... · '.,, ' .., :r,li ·.: .~.:,:~IAHAi>EOL.Ail·KANODIA,.· **..** rr: l·i'. -, [11 ] - - '. •• -i ~-1 - . ~ ;_i _::· . .i_ ;_· •l .. ~:f-, - ·:.~·:_ -· ·' '«;·_,.::-,~ _**,,v•,**_ '•' _,-,;U'i_ ~. ' _('._ ":.<:· ' / >, : .-THE -.AD~IINISTRATOR-GENERµ. OF-. .; ...,,, ; .:"' <:, ... WESTBENGA.L.• _;'-:\'-·"_ '!\~-,~-- : .• _-:-.-~_!;:;i,,_.',:.,_~.·- ~-' •.. '.:;; -· .., • _.Thika Tenancy..,-Decree for possession against tenant-Applica-_ _iicln'f<W_ _·rdiefby_ _lenant-,-Amendment. of_ _Act with- retrospective_ 'operation~Effect-:.fnterpretation _of Statute-Principles· of construc-_ tion~Thika _Tenancy• Act (W:B. z_ _of_ _r949f;_ _s. 28-Thika. Tenancy_ _Amendment Act_ _(W .B. 6 of_ _r953)._ _s.'I(z)._ ·. -:: ··with a" view to i;ive protection to Thika' tenants against eviction and in certain.other matters, the West Bengal -Legisla ture enacted -the Calcutta Thika Tenancy _Acti_ 1949 .. That Act . was amended by the Calcutta Thika Tenancy Amendment Act, :i:g5j, which omitted s: 28 of the Act. The question for decision in - the appeal was whether . the cappellant against whom proceedings for' execution of a decree for ejectment was pending, who had appli~ __ . ed -for, relief under s; 28 when that section was in force, was - - entitled:to have his ;application,disposed of in accordance with the provisions of s. 28, which had ceased to exist retrospectively though. it remained undisposed of 'on the date the Amendment Act came into force:· • · - · · · ' - . '. . .. _·:_ - · ·· · ",r; _Held,_ thats, 1, 'sub-5: (2) Of the Calcutb. Thlka 'Tenanc{A.ct t953,• clearly intended that no reilef under s.' 28 of the brigfnal