Judgment Case ID: 1274

Judgment:
Appeal No. 301 of 1960. Appeal from the judgment and decree dated September 24	 1958	 of the Allahabad High Court (Lucknow Bench) at Lucknow in First Execution of Decree Appeal No. 8 of 1953. C. B. Agarwala	 Shankar Prasad and C. P. Lal	 for the appellant. Iqbal Ahmed	 N. C. Chatterjee	 D. N. Mukherjee and B. N. Ghosh	 for the respondent. April 27. The Judgment of the Court was delivered by WANCHOO	 J. This is an appeal on a certificate granted by the Allahabad High Court. The brief facts necessary for present purposes are these. The appellant 's 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 the 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. Then followed execution applications with which we are not concerned. In 1934	 the U. P. 443 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 installments 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. On July 1	 1952	 the U. P. Zamindari Abolition and Land Reforms Act	 1950 (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 29	 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 wells in abadi and buildings situate in various villages under sale. It was also prayed that the judgment debtor 's proprietary rights in grove land and sir and khudkashat land had been continued under section 18 of the Act and these constituted substituted security in place of the 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 proprietary rights by the State might be treated as substituted security. 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 in lieu of zamindari rights as substituted security. Finally	 it held that the bhumidari rights acquired by the 444 appellants under section 18 of the Act could also be sold in execution of the decree. 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 section 18 (i) 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 section 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. The main point urged on behalf of the appellant is that the decision of the High Court that bhumidari rights created under section 18 of the Act can also be sold in execution of the decree	 is not correct. Under the mortgage deed	 the property mortgaged consisted of the property forming part of the Talukdari of Khajurgaon detailed at the foot of the mortgage	 namely	 the sixty seven villages. Thus the mortgage consisted of the proprietary interests only of the mortgagor in the sixty seven villages	 and as it was a simple mortgage	 possession of no part of the property was given to the mortgagee. it is therefore contended by Mr. Aggarwala on behalf of the appellant that as the proprietary right in the sixty seven villages vested in the State under the Act	 the respondent who was only entitled to get the proprietary rights sold under the mortgage can now fall back only on compensation payable to the appellant under the Act	 and reliance in particular is placed on section 6 (h) of the Act in this connection. On the other hand	 the contention on 445 behalf of the respondent is that bhumidari rights arising under section 18 of the Act are liable to be sold as they represented the proprietary rights which were mortgaged and in any case they can be sold as substituted security in place of the property mortgaged. We have therefore to look into the scheme of the Act in order to decide between the rival contentions. 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 zamindar 's grove in the sixty seven villages comprised within the Talukdari estate. Section 4 of the Act provides for vesting of an estate in the State on the making of a notification thereunder and the Taluka of Khajurgaon has vested in the State by virtue of such a notification made under section 4. Section 6 prescribes the consequences of the vesting arising under section 4 and we may refer to section 6(a) (i) as that will show in what the interests of the judgment debtor ceased and became vested in the State: "(a) all rights	 title and interest of all the intermediaries (i) in every estate in such area including land (cultivable or barren)	 grove land	 forests whether within or outside village boundaries	 trees (other than trees in village abadi	 holding or grove)	 fisheries	 tanks	 ponds	 water channels	 ferries	 pathways	 abadi sites hats	 bazars or melas (other than hats	 bazars	 melas held upon land to which clauses (a) to (c) of sub section (1) of section 18 apply)	 and . . . . . . . . . shall cease and be vested in the State of Uttar Pradesh free from all encumbrances. " Clause (h) of section 6 is also material and is in these terms: "(h) no claim or liability enforceable or incurred before the date of vesting by or against such intermediary for any money	 which is charged on or is secured by a mortgage of such estate or part thereof shall	 except as provided in section 73 of the 	 be enforceable against his interest in the estate. " 57 446 All lands therefore whether cultivable or barren or grove lands vested in the State on the notification under section 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 section 4 unless there was some provision otherwise in the Act. The contention of the respondent therefore that sir and khudkashat land and grove land continued to be the property of the appellant and would therefore remain liable to be sold in execution proceedings would fail in view of the notification under section 4	 unless of course there is a provision otherwise in the Act. The only provisions otherwise on which the respondent relies are sections 9 and 18 of the Act. So far as section 9 is concerned	 it is certainly a provision otherwise and it provides as follows: "All wells or trees in abadi	 and all buildings situate within the limits of an estate	 belonging to or held by an intermediary or tenant or other person	 whether residing in the village or not	 shall continue to belong to or be held by such intermediary	 tenant or person	 as the case may be	 and the site of the wells or the buildings with the area appurtenant thereto shall be deemed to be settled with him by the State Government on such terms and conditions as may be prescribed. " This provision clearly creates an exception to the property which vests in the State on the making of a notification under section 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. The effect therefore of section 9 is that wells	 trees in abadi and buildings apart from the land under them continue to belong to the intermediary (and the appellant is undoubtedly an intermediary within the meaning of the Act); but even here the 447 land on which the buildings and the wells stand vest in the State and it is deemed settled with the intermediary on terms and conditions to be prescribed. So far therefore as wells and trees in abadi and all buildings are concerned	 these continue to belong to the appellant and if they are covered by the mortgage they would be liable to sale. As we have already pointed out	 there was no dispute before the High Court with respect to wells	 and trees in abadi and buildings and it was conceded there that these were liable to be sold	 the only dispute being with respect to bhumidari rights created under section 18. Let us now turn to section 18 and see whether it is also a provision otherwise like section 9. The relevant part of section 18 for our purposes is in these terms: "(1) Subject to the provisions of sections 10	 15	 16 and 17	 all lands (a) in possession of or held or deemed to be held by an intermediary as sir	 khudkashat or an intermediary 's grove	 on the date immediately preceding the date of vesting shall be deemed to be settled by the State Government with such intermediary	 lessee	 or tenant	 grantee or grove holder	 as the case may be	 who shall subject to the provisions of this Act be entitled to take or retain possession as a bhumidar thereof. " It is well to contrast the language of this section with the language of section 9. Section 9 lays down that trees and wells in abadi and buildings shall continue to belong to the intermediary and that shows that it was a provision otherwise excepting these three items from vesting in the State by virtue of the notification under section 4 and its consequence under section 6; but there is no provision in section 18 of the Act to the effect that sir and khudkashat land and intermediary 's grove shall continue to belong to the intermediary. Therefore	 sir and khudkashat land and grove land would vest in the State by virtue of section 6 (a) (i) for there is no provision otherwise in section 18 in that behalf. In this connection we may refer for comparison to section 23 of the 448 Rajasthan Land Reforms and Resumption of Jagirs Act	 No. VI of 1952 (hereinafter called the Rajasthan Act) which provides that "notwithstanding anything contained in the last preceding section (i.e. section 22	 which refers to consequences of resumption)	 all khudkashat lands of a Jagirdar etc. shall continue to belong to or be held by such jagirdar or other person". If the intention of the Act Was not to vest sir and khudkashat land and grove land in the State we would have found an exception similar to that found in the Rajasthan Act. Section 9 itself shows in what manner the legislature was making an exception when it did not intend that a particular property should vest in the State. If the intention were that sir and khudkashat land and grove land should not vest in the State	 section 18 would have been worded in the same way as section 9. Further the way in which section 18 is worded	 (namely that khudkashat and sir land and an intermediary 's grove shall be deemed to be settled with the intermediary and he would have bhumidari rights therein) shows that these three kinds of property vested in the State under section 6(a)(1) and were then resettled with the intermediary on a new tenure and not in the same right	 which he had in them before the vesting. The legislature was therefore creating a new right under section 18 and the old proprietary right in sir and khudkashat land and any intermediary 's grove land had already vested under section 6 in the State. Therefore	 it cannot be said that section 18 is an exception to the consequences provided in section 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 is conferred on the intermediary by section 18 is a new right altogether which he never had and which could not therefore have been mortgaged in 1914. Our attention in this connection was drawn to the 449 compensation sections in the Act	 and it was urged that what was given to the intermediary under section 18 was really his old right because no compensation was to be paid to him with respect to what was left to him under section 18. The first section to be considered in this connection is section 39 which deals with gross assets of a mahal. In these gross assets the amount computed at the rates applicable to the ex proprietary tenants of similar land for land in the personal cultivation of or held as intermediary 's grove	 Khudkashat or sir by all the intermediaries in the estate was to be included subject to certain exceptions which are immaterial for our purposes. The very fact that in the gross assets the rents of these lands in which the bhumidari rights were created under section 18 were taken into consideration shows that these lands also vested in the State; if that were not so there was no necessity for including these assets in the gross assets for the purposes of compensation. Here again we may refer to a similar provision in the Rajasthan Act for purposes of comparison. The second Schedule to that Act provides how gross income is to be calculated and in calculating the gross income the income from khudkashat land has not been taken into account because it was excepted from the consequence of resumption under section 23 of that Act. It is true that under section 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 section 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 section 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 section 6 and therefore the proprietary right in sir 450 and khudkashat land and grove land which were mortgaged would be extinguished and the bhumidari right which is created by section 18 would be a new right altogether and would not therefore be considered to be included under the mortgage in this case. This brings us to a consideration of section 6(h) of the Act. That lays down that "no claim or liability enforceable or incurred before the date of vesting by or against such intermediary for any money	 which is charged on or is secured by a mortgage of such estate or part thereof shall	 except as provided in section 73 of the 	 be enforceable against his interest in the estate". This provision 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 none advanced on the security of the property which vested in the State by virtue of the notification under section 4 and the consequences thereof under section 6 is to follow the procedure under section 73 of the . Section 73(2) provides that "where the mortgaged property or any part thereof or any interest therein is acquired under the Land Acquisition Act	 1894 (1 of 1894)	 or any other enactment for the time being in force providing for the compulsory acquisition of immovable property	 the mortgagee shall be entitled to claim payment of the mortgage money	 in whole or in part	 out of the amount due to the mortgagor as compensation". There is no doubt that the property mortgaged has been compulsorily acquired in this case by the State under the Act. Therefore	 section 6 (h) read with section 73 directs that the mortgagee shall proceed in the manner provided in section 73	 namely	 follow the compensation money	 and there is no other way possible for him in view of section 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 section 73 of the 451 and in no other way. What we say here does not affect that property which is not acquired by the State	 for example	 property excepted under section 9 of the Act; but where the property has vested in the State by virtue of a notification under section 4 and its consequences under section 6	 the only course open to the mortgagee is to follow the compensation money under section 6(h). The bhumidari rights created under section 18 are not compensation; they are special rights conferred on the intermediary 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 section 18 so far as his sir and khudkashat land and grove land are concerned; it can only follow the compensation money as provided in section 6(h). The argument that bhumidari rights can 'be followed as substituted security must therefore equally fail. Our attention in this connection was drawn to section 8(2) of the U. P. Zamindars Debt Reduction Act	 No. XV of 1953. That Act provides for scaling down of debts of zamindars whose estates have been acquired under the Act. It also provides that the debts due shall be realisable from the compensation and rehabilitation grant	 and in particular section 8(2) provides that "notwithstanding anything in any law the reduced amount found in the case of a mortgagor or judgment debtor as the case may be	 under section 3 or 4 as respects mortgaged estates shall not be legally recoverable otherwise than out of the compensation and rehabilitation grant payable to such mortgagor or judgment debtor in respect of such estates". We have not been able to understand how the provisions of the U. P. Zamindars Debt Reduction Act can affect the con struction of section 6(h) of the Act read with other provisions of the Act. It is not necessary for us therefore to construe section 8(2) of the U. P. Zamindars Debt Reduction Act	 for we are clear on the provisions of section 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 of 1914. 452 This brings us to the question of limitation. Mr. Aggarwala conceded that if the appellant succeeds on the first point it would not be necessary for us to consider the question of limitation. Therefore	 as the appellant succeeds on the first point we need not consider whether the application for execution by sale of bhumidari rights created under section 18 is barred by limitation. We therefore allow the appeal and direct that the execution of the decree by the respondent will not be levied against the bhumidari rights created in favour of the appellant under section 18 of the Act. The appellant will get his costs of this court and of the High Court. Costs of the execution court will be at the discretion of that Court. Appeal allowed.

Summary:
The appellant 's father	 a Talukdar of the Estate of Khajur gaon	 executed a simple mortgage of his proprietary interest in the estate consisting of sixty seven villages to the Allahabad Bank Ltd. While execution proceedings were pending	 the U. P. Zamindari Abolition and Land Reforms Act	 1950	 came into force from July 1952. As a result	 the Zamindari rights of the appellant judgment debtor were abolished and it was no longer possible to sell these rights in the 67 villages. The respondent Bank made an application before the executing court that as the Zamindari rights could not be sold	 only such rights of the judgment debtor as remained in him after coming into force of the Act might be sold along with certain other rights. Objections were taken and finally the matter came up by appeal to the High Court and it	 inter alia	 upheld the view of the executing court that the execution could proceed against the Bhumidari rights created in favour of the appellant under section 18 of the Act. The question was whether the Bhumidari rights created under section 18 of the Act could also be sold in execution of the decree in view of the fact that the proprietary rights bad vested in the State. Held	 that the intention of the U. P. Zamindari Abolition and Land Reforms Act was to vest the proprietary rights in the Sir and Khudkast land and grove land in the Estate by virtue of section 6(a)(i) and resettle it on the intermediary not as compensation but by virtue of his cultivatory possession of lands comprised therein and on a new tenure and confer upon the intermediary a new and special right of Bhumidari	 which he Dever had before	 by section 18 of the Act. The proprietary rights in Sir	 Khudkast land and grove land which were mortgaged were extinguished	 and the Bhumidari right which was altogether a new right could not be con sidered to be included under the mortgage. 442 The mortgagee could only enforce his rights against the mortgagor in the manner as provided by section 6(h) of the Act read with section 73 of the Transfer of Property Act and follow the compensation money; and so far as the Sir	 Khudkast land and grove land were concerned	 he could not enforce his rights under the mortgage by the sale of the Bhumidari rights created in favour of the mortgagor against them as a substituted security. In the instant case the Bhumidari rights created in favour of the appellant could not be sold in execution of the decree held against him by the respondent under the mortgage Of 1914.