Case: Raghu Nath Vs. Competent Officer, Delhi &amp; Ors

cancelling or varying the terms of the lease or before evicting any leases the Custodian must serve a show cause notice on such lessee and afford him a reasonable opportunity of being heard. If the custodian is satisfied on hearing the concerned lessee that he is not liable to eviction under a rent control Act in force in the State where the property is situate or has not contravened any of the provisions of the lease, he cannot cancel the lease nor can he evict the lessee except only as provided by clause 5 of that rule on the ground that such eviction is necessary or expedient for the preservation or proper administration or management of such property or for carrying out any other object of the Act. He therefore, cannot evict a tenant or an allottee on the ground that it is necessary to do so for the separation of an interest of a nonevacuee mortgagor as that would not be one of the purposes of the Administration Act.10. The result which emerges from the discussion of the relevant provisions of the two Acts and the rules thereunder made is (1) that though the Competent Officer must accept the mortgage amount when tendered by a mortgagor and the mortgage debt thereupon would be satisfied, he cannot exercise the power to redeem the mortgaged property and order the Custodian to deliver up its vacant possession to the mortgagor in the absence of any agreement between the mortgagor and the Custodian, and (2) that in exercising his Jurisdiction under Sec. 10 the Competent Officer cannot direct the Custodian to cancel or vary the terms of the leases or allotments made or granted by him firstly because he has no such power under Sec. 10 or any other provision of the Separation Act, and secondly, because such an order would amount to compelling the Custodian to act in a manner contrary to the provisions of the aforesaid Rule 14. The exercise of the power to redeem being subject to the rules, it would not be competent for the Competent Officer, by reason of Rule 11B (b), to order delivery of possession by the Custodian in the absence of an agreement between him and the mortgagor-claimant.11. In view of this position, the appellant could not have insisted that he would tender or pay the mortgage debt only against delivery of vacant possession of the property in the absence of any agreement between him and the Custodian. The only thing which the Competent Officer could do in the circumstances was to accept the mortgage amount whereupon interest would cease to run. It is not in dispute that the appellant, insisting as he was all throughout upon being given vacant and not merely symbolical possession, did not actually tender or make payment of the mortgage debt. The mortgage debt, therefore, remained outstanding. The mortgage also stood intact, and therefore, the only measure which the Competent Officer could adopt and which in fact he adopted was to order sale of the property and satisfy the mortgage debt from the sale proceeds thereof. The order which he passed and which was confirmed by the Appellate Officer was in the circumstances then prevailing validly and competently made. The appellants grievance against it, therefore could not be sustained (Cf. in this connection the position of an auction purchaser as decided in Ek Nawaz Khan v. The Competent Officer, AIR 1960 All 626 ).12. But it is conceded that since the passing of the said order the appellant has paid up the full mortgage amount and the Competent Officer has, as he was bound to do under Section 10, proviso, accepted that amount. Presumably that amount has been paid by him to the Custodian. Therefore, the mortgage debt is no longer outstanding. Though this event has happened after the impugned order was passed, we must in fairness take notice of the fact that the mortgage debt is no longer outstanding and the mortgaged property is now free from the mortgagees security, and therefore. from the interest vested in the Custodian It is true that the Competent Officer, as already stated, can adopt any of the three measures set out in Sec. 10 (b) of the Separation Act or adopt a combination of all or some of them, but as emerging from the discussion above, he cannot redeem the property and order delivery of vacant possession in the absence of an agreement between the Custodian and the appellant. That is quite clear. But the order of sale passed by him and confirmed by the Appellate Officer also cannot stand, firstly, because the mortgage debt now stands satisfied, and secondly because he can order sale only for satisfaction of the mortgage debt and for distribution of the sale proceeds thereof between the mortgagor and the mortgagee. There being now no question of the satisfaction of the mortgage debt since it now stands satisfied and the property being now freed from the mortgagees security, the order for sale cannot stand and cannot be allowed to stand. At the same time the Competent Officer cannot order the Custodian to deliver vacant possession although the appellant has paid the mortgage amount and the Competent Officer has accepted it in satisfaction of the mortgage debt. In view of Ss. 10 and 12 of the Administration Act, the powers and duties of the Custodian thereunder and under the rules made under that Act, the provisions of Sec. 10 of the Separation Act and Rule 11B of the rules made thereunder, the only thing that could be offered and given to the appellant was symbolical possession of the property. Such a result, no doubt, would be inconvenient, and may even appear to be harsh and unfair as the appellant would be driven to file proceedings for eviction of tenants and allottees now in possession of the property. (See All India Film Corporation Ltd. v. Raja Gyan Nath, Civil Appeals Nos. 2416 and 2417 of 1966, D/26-9-1969 (SC) ).

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]10. The result which emerges from the discussion of the relevant provisions of the two Acts and the rules thereunder made is (1) that though the Competent Officer must accept the mortgage amount when tendered by a mortgagor and the mortgage debt thereupon would be satisfied, he cannot exercise the power to redeem the mortgaged property and order the Custodian to deliver up its vacant possession to the mortgagor in the absence of any agreement between the mortgagor and the Custodian, and (2) that in exercising his Jurisdiction under Sec. 10 the Competent Officer cannot direct the Custodian to cancel or vary the terms of the leases or allotments made or granted by him firstly because he has no such power under Sec. 10 or any other provision of the Separation Act, and secondly, because such an order would amount to compelling the Custodian to act in a manner contrary to the provisions of the aforesaid Rule 14. The exercise of the power to redeem being subject to the rules, it would not be competent for the Competent Officer, by reason of Rule 11B (b), to order delivery of possession by the Custodian in the absence of an agreement between him and the mortgagor-claimant.11. In view of this position, the appellant could not have insisted that he would tender or pay the mortgage debt only against delivery of vacant possession of the property in the absence of any agreement between him and the Custodian. The only thing which the Competent Officer could do in the circumstances was to accept the mortgage amount whereupon interest would cease to run. It is not in dispute that the appellant, insisting as he was all throughout upon being given vacant and not merely symbolical possession, did not actually tender or make payment of the mortgage debt. The mortgage debt, therefore, remained outstanding. The mortgage also stood intact, and therefore, the only measure which the Competent Officer could adopt and which in fact he adopted was to order sale of the property and satisfy the mortgage debt from the sale proceeds thereof. The order which he passed and which was confirmed by the Appellate Officer was in the circumstances then prevailing validly and competently made. The appellants grievance against it, therefore could not be sustained (Cf. in this connection the position of an auction purchaser as decided in Ek Nawaz Khan v. The Competent Officer, AIR 1960 All 626 ).12. But it is conceded that since the passing of the said order the appellant has paid up the full mortgage amount and the Competent Officer has, as he was bound to do under Section 10, proviso, accepted that amount. Presumably that amount has been paid by him to the Custodian. Therefore, the mortgage debt is no longer outstanding. Though this event has happened after the impugned order was passed, we must in fairness take notice of the fact that the mortgage debt is no longer outstanding and the mortgaged property is now free from the mortgagees security, and therefore. from the interest vested in the Custodian It is true that the Competent Officer, as already stated, can adopt any of the three measures set out in Sec. 10 (b) of the Separation Act or adopt a combination of all or some of them, but as emerging from the discussion above, he cannot redeem the property and order delivery of vacant possession in the absence of an agreement between the Custodian and the appellant. That is quite clear. But the order of sale passed by him and confirmed by the Appellate Officer also cannot stand, firstly, because the mortgage debt now stands satisfied, and secondly because he can order sale only for satisfaction of the mortgage debt and for distribution of the sale proceeds thereof between the mortgagor and the mortgagee. There being now no question of the satisfaction of the mortgage debt since it now stands satisfied and the property being now freed from the mortgagees security, the order for sale cannot stand and cannot be allowed to stand. At the same time the Competent Officer cannot order the Custodian to deliver vacant possession although the appellant has paid the mortgage amount and the Competent Officer has accepted it in satisfaction of the mortgage debt. In view of Ss. 10 and 12 of the Administration Act, the powers and duties of the Custodian thereunder and under the rules made under that Act, the provisions of Sec. 10 of the Separation Act and Rule 11B of the rules made thereunder, the only thing that could be offered and given to the appellant was symbolical possession of the property. Such a result, no doubt, would be inconvenient, and may even appear to be harsh and unfair as the appellant would be driven to file proceedings for eviction of tenants and allottees now in possession of the property. (See All India Film Corporation Ltd. v. Raja Gyan Nath, Civil Appeals Nos. 2416 and 2417 of 1966, D/26-9-1969 (SC) ).