IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.13209 of 1990 (O&M) Date of decision:09.05.2011 Shrimati Chandro ...Petitioner versus State of Haryana and others ....Respondents CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Mr.H.S.Gill, Senior Advocate, with Mr. Manoj Nagrath, Advocate and Mr. Vivek Goel, Advocate, for the petitioner. Mr. Satbir Singh Goripuria, DAG, Haryana. ---- 1. Whether reporters of local papers may be allowed to see the judgment ? Yes. 2. To be referred to the reporters or not ? Yes. 3. Whether the judgment should be reported in the digest ? Yes. ---- K.Kannan, J. (Oral) 1. The writ petitioner seeks for quashing of the order issued by the Financial Commissioner in proceedings under the Haryana Ceiling on Land Holdings Act, 1972, setting aside the order of the Collector holding that the property mortgaged by the landowner was a bona fide one and it was required to be excluded for computation of the land holding. This was in continuation of the proceedings that started at the instance of the petitioner seeking for exemption of the land held by him as a mortgagee. The application for exemption was rejected, but this was set aside by the Collector by his order dated 23.11.1983. Civil Writ Petition No.13209 of 1990 (O&M) - 2- 2. It is not now denied before me that if the property mortgaged in favour of the petitioner had also been included, the landowner certainly held property in excess of the permissible area. The petitioner as a mortgagee sought for exemption of the land on two grounds: (i) the mortgage had been effected prior to the notified date and consequently, the mortgage being a transfer could not have been included in big landowner's area and, (ii) the mortgage was a bona fide one and the proceedings for declaration of the property as surplus could not have been taken without notice to him. 3. I find that both the contentions are not tenable. The Haryana Ceiling on Land Holdings Act sets out through Section 4 the mode of computation of the permissible area. The holding could be either as a landowner or a tenant or a mortgagee in possession partly in one capacity and party in another. Section 8 which marks out an exception for certain proceedings or disposition as not to affect the surplus area protects, however, a transfer which is a bona fide transaction. Section 8(2) places the burden of proof that a transfer is bona fide only on the transferor. The contention of the learned senior counsel appearing on behalf of the petitioner is that since the transfer has been made prior to the notified date, the property secured under the mortgage ought to have been excluded. The learned counsel argues that the mortgage involves a transfer and consequently, a transfer which was made prior to the notified date would require to be excluded from the total holdings of the landowner. I find this contention to be unacceptable, for, the transfer that is contemplated under Section 8 is a Civil Writ Petition No.13209 of 1990 (O&M) - 3 - transfer that divests the owner of the right in the property. A mortgage which constitutes a transfer does not create any divestiture. The property which is mortgaged cannot, therefore, be removed from the permissible area of the landowner. The learned counsel refers to a Full Bench ruling of this Court to contend that the mortgage property will be excluded from the land holding and refers to a decision in Chet Ram and another Versus Amin Lal and others-1982 PLJ 115. This decision was rendered in the context of Punjab Security of Land Tenures Act and the effect of holding of a mortgagee. The reference to this decision is wholly inappropriate and misleading. Punjab Security of Land Tenures Act creates fiction by bringing within the definition of a 'landowner' also the property hold by a person as a mortgagee in possession. This fiction must be applied only to the holding that is relevant for considering the rights of Punjab Security of Land Tenures Act and cannot be extended for understanding the permissible area under the Haryana Ceiling on Land Holdings Act, 1972. 4. The learned counsel also refers to yet another decision of this Court in Chanan Mal Newar and others Versus State of Haryana- 1984 PLJ 547, to contend that a transferee is entitled to a hearing. The above definition is again in the context of deciding the rights of parties under the Punjab Tenancy Act and the Punjab Security of Land Tenures Rules. The Act grants some protection for persons, who hold the property as a tenant and also prescribes a ceiling area for a landowner. A right that is expressly vested in a tenant cannot again be imported in the provisions of Haryana Ceiling on Land Holdings Act, 1972 for a Civil Writ Petition No.13209 of 1990 (O&M) - 4- mortgagee. The learned senior counsel refers to a decision in Mange Ram and another Versus Dhan Singh and others-1992 PLR 391, to contend again that a Prescribed Authority cannot take any action for declaration of surplus area without issuing a notice to the mortgagee. This decision was in the context of Section 11(3) of the Haryana Ceiling on Land Holdings Act, 1972 which specifically requires a notice to be issued to a tenant when a surplus area of the landowner is declared. A notice to a tenant which is statutorily protected cannot be extended to a mortgagee in possession. 5. A mortgagee, who holds a security cannot, in any way, be prejudiced by declaration of the property as surplus. Any compensation that determined will avail to the mortgagee in terms of Section 73(2) of the Transfer of Property Act and if such an amount will fall short of the loan that was secured, the appropriate remedy under the Transfer of Property Act shall be for substitution of security. If it is not complied with, the mortgagee will be empowered to sue for mortgage money under Section 68 of the Transfer of Property Act. A mortgagee cannot at any time seek for exclusion of the property mortgaged to him from the permissible area under the Haryana Ceiling on Land Holdings Act, 1972 by any of the provisions. A landowner that transfers the property by mortgage continues to be its owner. Such a property shall, therefore, be reckoned in the holding of the land owner himself. A fortiorari, a mortgagee cannot treat himself as divesting the mortgagor of his ownership. Once a mortgagee, always a mortgage. It must be remembered that the holding of a mortgagee will have relevance while Civil Writ Petition No.13209 of 1990 (O&M) - 5- defining his own permissible area. The holding by a mortgagee as such mortgagee itself will go for a computation if he holds the property in excess either as a mortgagee or as an owner or as a tenant. Otherwise, under no reckoning can a property mortgaged be excluded from the landowner's holding. The decision taken by the Financial Commissioner upholding the dismissal of the application for exemption and reversing the decision of the Collector is perfectly in accordance with law and there is no scope for interference. 6. The writ petition is without merit and it is dismissed. (K.KANNAN) JUDGE 09.05.2011 sanjeev