TaxTMI 
TaxTMI 
1962 (3) TMI 131
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....ning to khata No. 3 of the said Mouza. 2. The appellants sued on this mortgage to recover ₹ 69,816/5/17 in the court of the Sub-Judge at Patna. The said suit ended in a decree in favour of the appellants on the 26th August, 1946. The trial Judge ordered that for the satisfaction of the decretal amount, "the mortgage properties would be charged preliminary and if the decretal amount is not fully satisfied from them, then alone the respondent would be personally liable for the satisfaction of the balance, if any." That is how a composite decree came to be passed in the suit. By the final decree which followed on the 30th September, 1947, the respondent's liability to pay ₹ 52,950/3/- was determined. 3. The appellants then filed an Execution Case No. 6 of 1952 and claimed that the decretal amount should be realised by sale of the mortgaged Zamindari properties. The respondent raised an objection against the appellants' claim on the ground that the mortgaged properties had in the meanwhile vested in the State of Bihar under the provisions of the Act and so, they were not liable to sale in execution proceedings as the respondent had ceased to have any interest in them. Ult....
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....order by preferring a Civil Revision Application before the Patna High court and it was numbered as 590 of 1955. The High Court held that a personal decree had been passed in favour of the appellants, though that part of the direction given in the judgment had not been formally incorporated in the decree. The High Court therefore, rejected the respondent's contention that no personal decree had been passed since an application had not been made by the appellants under Order 34 Rule 6 of the C.P.C. The High Court also rejected the respondent's argument that a Review Application did not lie against the first order passed by the Executing Court, though it thought that there was some substance in the contention raised by the respondent that, on the merits, the review need not have been granted. Even so, the High Court did not choose to base its decision on this contention. It has allowed the Revision Application on the merits because it has held that the appellants have no right to execute the personal decree by proceeding to sell the other properties of the respondent, for section 4(d) of the Act constituted a bar against such proceedings. On this view, the High Court allowed the Revi....
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.... treated in substance to constitute a personal decree in the present proceedings, makes the position quite clear. The learned Judge directed that for the satisfaction of the decretal amount, the mortgaged properties would be charged preliminary and he added that if the decretal amount is not fully satisfied from them, then the appellants would be entitled to proceed against the respondent personally. In other words, the decree clearly and unambiguously provides that the appellants would be justified in executing the personal decree against the respondent only if and after they have exhausted their remedy against the mortgaged properties and have not been able to recover the whole of the decretal amount by that process. That is the second material fact which has to be borne in mind. 10. Then the third fact to which reference must be made is that after the prescribed notification was issued and the mortgaged properties belonging to the respondent had vested in the State of Bihar, the appellants applied under section 14 of the Act notifying their claim under the mortgage decree to the Claims Officer, and, in fact, on the 24th November, 1956, the Claims Officer has determined that a s....
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....e from time to time by notification that the estates or tenures of a proprietor or tenure-holder, specified in the notification, have passed to and become vested in the State. The notification contemplated by s. 3(l) has been issued in respect of the estate in question. Section 4 prescribes the consequences of vesting of an estate or tenure in the State. Broadly stated, the effect of s. 4(a) is that an estate in respect of which a notification has been issued shall, with effect from the date of vesting, vest absolutely in the State free from all incumbrances and the proprietor of the said estate shall cease to have any interests in such estate, other than the interest expressly saved by or under the provisions of the Act. That takes us to section 4(d) which provides 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. It is conceded that s. 4(d) takes in cases where decrees have been passed and that the word....
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....section 16(2) clearly suggest that the policy of the Act, inter alia, is to give relief to the debtors whose estates have by operation of the law vested in the State. Section 17 provides for an appeal against the decision of the Claims Officer to a Board whose constitution is prescribed by section 18(1). Section 18(3) lays down that the decision of the Board and, where no appeal has been preferred to the Board, the decision of the Claims Officer shall be final. So, the scheme of Chapter IV which consists of sections 14 to 18 clearly is that all claims based on mortgages relating to estates have to be submitted to the Claims Officer and the amounts due to the creditors have to be determined in accordance with the principles laid down by the Act. Where the whole of the property mortgaged is an estate, there can be no doubt that the procedure prescribed by Chapter IV has to be followed in order that the amount due to the creditor should be determined by the Claims Officer. The decision of the Claims Officer or the Board had been made final by the Act. 13. Chapter V deals with the problem of the assessment of compensation. Section 24 provides for the rates of compensation. Section 24(....
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....words of Section 4(d) it would be necessary to bear in mind the object of the Act which was merely to provide for the transference to the State of the interests of the proprietors and tenure-holders in land and of the mortgagees and lessees of such interests. It was not the object of the Act, says Mr. Jha, to extinguish debts due by the proprietors or tenure holders and so, it would be reasonable to confine the operation of s. 4(d) only to the claims made against the estates which have vested in the State and no others. In our opinion, this argument proceeds on an imperfect view of the aim and object of the Act. It is true that one of the objects of the Act was to provide for the transference to the State of the estates as specified. But as we have already seen, the provisions contained in section 16 in regard to the scaling down of the debts due by the proprietors and tenure-holders clearly indicate that another object which the Act wanted to achieve was to give some redress to the debtors whose estates have been taken away from them by the notifications issued under section 3. Therefore, in construing s. 4(d), it would not be right to assume that the interests of the debtors affe....
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.... applied. That, I take it, is the cardinal rule." We do not see how this principle can assist Mr. Jha in the present case. The scheme of the relevant provisions of the Act to which we have already referred unambiguously suggests that where the whole of the mortgaged property is an estate, certain consequences follow. The decree-holder has to make a claim; the claim has to be enquired into by the Claims Officer; the amount due to the decree-holder has to be determined by the Claims Officer and the amount so determined has to be paid to the decree-holder from out of the compensation money payable to the judgment-debtor. Having regard to the said scheme, it is difficult to confine the application of s. 4(d) only to execution proceedings in which the decree-holder seeks to proceed against the estate of the debtor. In fact, an execution proceeding to recover the decretal amount from the estate which has already vested in the State, would be incompetent because the said estate no longer belong to the judgment-debtor. That being so, we are satisfied that on the facts of this case, the High Court was right in holding that the application made by the appellants to execute the decree agai....
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....Court to which our attention was drawn during the hearing of this appeal. In Raghubir v. Basudevanand, I.L.R. (1953) 32 the High Court has held that section 4(d) of the Act is not 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 the others are not notified. In such a case, according to the High Court s. 4(d) will be a bar to the suit or execution proceedings so far as the vested estates are concerned, but the creditor will be entitled to prosecute the suit or execution proceedings as regards the estates or portions of estates which are not vested in the State. Since we are dealing with a case where the whole of the mortgaged property is an estate, it is unnecessary for us to consider whether the view taken by the Patna High Court in this case is correct or not. 19. In Mahanth Sukhdeo Das v. Kashi Prasad Tiwari AIR 1958 Pat 630 the full Bench of the High Court had occasion to consider whether a mortgagee decree-holder of the interest of the proprietor whose estate has vested in the State, is entitled to proceed against the Bakasht lands of the proprietor comprised in the said estate for recover....