Case: Rana Sheo Ambar Singh Vs. Allahabad Bank Ltd., Allahabad

The brief facts necessary for present purposes are these. The appellants father Rana Umanath Bakshsingh was the Talukdar of Khajurgaon. On July 13, 1914, Rana Umanath Bakshsingh executed a simple mortgage in favour of the Allahabad Bank Limited (hereinafter called the respondent). The mortgage was for a sum of Rs. 6,00,000/- and the property mortgaged consisted of sixty-seven villages. In may, 1924, the respondent filed a suit for the recovery of balance of the unpaid mortgage money by the sale of the mortgaged property. In January, 1925, a preliminary decree for the recovery of rupees four lacs and odd was passed, which was made final in July, 1926, and directed the sale of the mortgaged property, namely, the proprietary rights of Rana Umanath Bakshsingh in the sixty-seven villages. The followed execution applications with which we are nor concerned. In 1934, the U. P. Agriculturists Relief Act was passed and thereupon an application was made by the judgment-debtor for the amendment of the decree under that Act. On October 19, 1936, the decree was amended under the provisions of that Act and thereafter the pending execution proceedings were dropped as instalments had been fixed. Eventually, the respondent applied for execution on May 25, 1940. Objection was taken to this application on the ground that it was barred by time; but this matter was decided against the judgment-debtor and thereafter the execution has been proceeding uptil now on this application.2. On July 1, 1952, the U. P. Zamindari Abolition and Land Reforms Act, No. 1 of 1951 (hereinafter called the Act), came into force. As a consequence of this enactment, the zamindari rights of the judgment-debtor were abolished and it was no longer possible to sell these rights in the sixty-seven villages. Consequently, on September 20, 1952, the respondent made an application that as the zamindari rights could not be sold, only such rights of the judgment-debtor as remained in him after the coming into force of the Act might be sold, namely, the rights in trees and well in abadi and buildings situate in various villages under sale. It was also prayed that the judgment-debtors proprietary rights in grove land and sir and khudkashat land had been continued under S. 18 of the Act and these constituted substituted security in place of proprietary rights mortgaged with the respondent and they should also be sold. Finally it was prayed that compensation money payable to the judgment-debtor on the acquisition of the judgment-debtor on the acquisition of the proprietary rights by the State might be treated as substituted security.3. The appellant objected to these applications on various grounds. The execution court held that the buildings, trees and wells situated in the abadi were liable to be sold in execution of the decree. It further held that the respondent was entitled to compensation amount granted by the State to the appellant inieu of zamindari rights as substituted security. Finally, it held that the bhumidari rights acquired by the appellants under S. 18 of the Act could also be sold in execution of the decree.4. The appellant then took the matter in appeal to the High Court, and the two points urged before the High Court were (i) that the bhumidari rights created by S. 18 (1) of the Act could not be sold in execution of the decree, and (ii) that the application dated September 20, 1952, was a fresh application for execution and as it was filed over 12 years after the date of the amended decree it was barred by time. The High Court repelled both these contentions, and held that execution could proceed against the bhumidari rights created in favour of the appellant under S. 18 of the Act and further that the application dated September 20, 1952, was within time as it was not a fresh application and the decree-holder was only seeking to execute the decree in respect of the property for the sale of which he had already applied within time allowed by law. The High Court, therefore, dismissed the appeal. The appellant then obtained a certificate to appeal to this Court; and that is how the matter has come up before us.

Court's reasoning:
It is not in dispute that the Taluka of Khajurgaon was an estate within the meaning of the Act. It may be mentioned that the judgment-debtor had certain sir and khudkashat lands and zamindars grove in the sixty-seven villages comprised within the Talukdarilands therefore whether cultivable or barren or grove lands vested in the State on the notification under S. 4 having been made save as otherwise provided in this Act. Therefore, proprietary rights in sir and khudkashat land and grove land would vest in the State on the coming into force of the notification under S. 4 unless there was some provision otherwise in theprovision clearly creates an exception to the property which vests in the State on the making of a notification under S. 4. The exception is in favour of all wells and trees in abadi and all buildings and it is significant to note that these things will continue to belong to the intermediary, though the further provision shows that the site of the wells, and buildings with the area appurtenant thereto would vest in the Government and would be deemed to be settled with the intermediary on such conditions and terms as may be prescribed.legislature was therefore creating a new right under S. 18 and the old proprietary right in sir and khudkashat land and any intermediarys grove land had already vested under s. 6 in the State. Therefore, it cannot be said that S. 18 is an exception to the consequences provided in S. 6 and therefore sir and khudkashat land and grove land continue to be the property of the judgment-debtor in this case in the same manner as they were his property at the time of the mortgage and would therefore be available in execution of the decree as the proprietary rights mortgaged. We are of opinion that the proprietary rights in sir and khudkashat land and in grove land have vested in the State and what in conferred on the intermediary by S. 18 is a new right altogether which he never had and which could not therefore have been mortgaged inis true that under S. 44 of the Act when calculating net assets, the income from sir and khudkashat land and grove land has been excluded on the ground that bhumidari rights have been conferred therein under S. 18 of the Act. That is however for the purposes of calculating what should be paid to the intermediary as compensation and in that connection it was necessary to take into account the fact that the legislature was creating a new right in the intermediary with respect to certain lands and therefore it was not necessary to give money as compensation. That would not however make any difference in our view as to the legal effect of the notification under S. 4 and under the notification sir and khudkashat land and grove land would vest in the State and would not be an exception to the consequences of vesting in S. 6 and therefore the proprietary right in sir and khudkashat land and grove land which were mortgaged would be extinguished and the bhumidari right which is created by S. 18 would be a new right altogether and would not therefore be considered to be included under the mortgage in thisprovision has in our opinion a two-fold effect. In the first place, it makes it impossible for the mortgagee to follow the proprietary right after it vests in the State. Secondly it provides that the only way in which the mortgagee can recover his money advanced on the security of the property which vested in the State by virtue of the notification under S. 4 and the consequences thereof under S. 6 is to follow the procedure under S. 73 of the Transfer of Property Act.is no doubt that the property mortgaged has been compulsorily acquired in this case by the State under the Act. Therefore, S. 6 (h) read with S. 73 directs that the mortgagee shall proceed in the manner provided in S. 73, namely, follow the compensation money, and there is no other way possible for him in view of S. 6 (h) with respect to the property which has been acquired under the Act. We have held that sir and khudkashat land and grove land have been acquired under the Act and have vested in the State; therefore the mortgagee is relegated to enforce his rights against the mortgagor in the manner provided in S. 73 of Transfer of Property Act and in no other way. What we say here does not affect that property which is not acquired by the state, for example, property expectted under S. 9 of the Act; but where the property has vested in the State by virtue of a notification under S.4 and its consequences under S.6, the only course open to the mortageee is to follow the compensation money under S.6(h). The bhumidari rights created under S. are not compensation; they are special rights confered on the intermidiary by virtue of his cultivatory possession of the lands comprised therein. The respondent therefore cannot enforce his rights under the mortgage by sale of the bhumidari rights created in favour of the appellant under S. 18 so far as his sir and khudkashat land and grove land and concerned; it can only follow the compensation money as provided in S. 6 (h). The argumed that bhumidari rights can be followed as substituted security must therefore equally fail.We have not been able to understand how the provisions of the U. P. Zamindars Debt Reduction Act can affect the construction of S. 6 (h) of the Act read with other provisions of the Act. It is not necessary for us therefore to construe S. 8 (2) of the U. P. Zamindars Debt Reduction Act, for we are clear on the provisions of S. 6 (h) and the other provisions of the Act that bhumidari rights created in favour of the appellant cannot be sold in execution of the decree held against him by the respondent under the mortgage ofas the appellants succeeds on the first point we need not consider whether the application for execution by sale of bhumidari rights created under S. 18 is barred by limitation.