Bansidhar Shroff and Others vs Thakur Ashutosh Deo Ghatwal and Another

Rowland, J.—This appeal and application arise out of execution proceedings in the Court of the Subordinate Judge of Deoghar in the Santhal Parganas. The order complained of, which is dated 6th April 1937, was passed in disposing of ah objection by creditors-decree-holders at whose instance the surplus profits of the Rohini Ghatwali Estate had been attached against certain items in the revised budget of receipts and expenditure for the estate. The Subordinate Judge was of opinion that the responsibility of the preparation of the budget and the determination of the surplus available for attachment lay with the revenue authorities and not the Civil Court. Accordingly he rejected the objection with-out recording definite findings on its merits. Aggrieved by this decision the decree, holders have presented this appeal and application in revision, in case it is held that an appeal does not lie. We are of opinion, that the order of the Subordinate Judge being an order passed u/s 47, Civil P.C., and determining matters in issue between decree-holders and judgment, debtors in the course of execution proceedings was appealable. In Civil Revision No. 260 of 1937, the rule will be discharged. "We shall proceed to consider the appeal.

The history of the case is that the principal respondent has been the ghatwal of Rohini since 1911, and it seems that he lost no time in incurring more debt than he was in a position to pay. In 1914 he made an arrangement with Major Agabeg where, by in consideration of an advance from the latter of money to pay off his creditors, he appointed Major Agabeg as his manager.

On 5th April 1917, on taking a further advance from Major Agabeg he gave him an ijara of the Basourhi Mahal consisting mainly of house property in Deoghar and Jasidih. The appellants are the holders of decrees against the ghatwal for debts, for the re-payment of which arrangement had not been made. They applied for the appointment of a receiver to realise the debts, due to them out of the surplus income of the estate and Major Agabeg objected to this. The matter came before this Court in Miscellaneous Appeals Nos. 242 and 215 of 1918 and on 25th May 1919, this Court framed a scheme of the nature of a composition in which the principal terms were that instead of putting the estate under a receiver, Major Agabeg should be placed in charge of the entire estate without remuneration; that for his own debts he would be entitled to appropriate the usufruct of the Basourhi Mahal and that as for the income and collections in respect of the rest of the estate, he should keep accounts and render them six-monthly to Babu Ramesh Chandra Sinha, Receiver, and make over to him the balance remaining, after deducting the collection expenditure of the rest of the estate other than the Basourhi Mahal, the Government revenue and road cess payable for the talukas other than Taluka Rohini''(the latter items being payable by Major Agabeg himself).

The surplus proceeds were to be distributed by the receiver to the creditors pro rata under the orders of the Subordinate Judge subject to a maintenance allowance of Rs. 350 per month to Thakur Ashutosh Deo, the ghatwal, and a remuneration of 6 percent, to the receiver on the amount received by him for rateable distribution. This arrangement continued until 1928 when Major Agabeg reported to the Court that his dues had been satisfied and he would be prepared to continue looking after the estate as a manager and not as an ijaradar. He died however on 15th April 1928, and thereafter further arrangement had to be made. During the above period, the case came before this Court again in 1923 in connexion with an objection by the creditors to payments having been made by the receiver on behalf of the ghatwal for charities. I shall have to refer to this matter later. In 1928 on Major Agabeg''s death the Subordinate Judge made a reference to the High Court for instructions regarding the scheme and the High Court directed that one man should be appointed as manager and receiver who should give security to the Subordinate Judge. The Subordinate Judge made an appointment which was on appeal reversed by the High Court and Babu Ramesh Chandra Sinha was appointed receiver. In succeeding years, it seems that budgets were prepared in consultation with the revenue authorities and the provisions of these do not appear to have been the subject of any serious objection by the creditors until we come to this budget of the year 1937-38 which has given rise to the present appeal.

The points raised by the creditors are that the budget makes excessively liberal provisions for maintenance and other expenditure of the ghatwal himself and that the scheme having been framed by this Court, alterations should not be made in it without the consent of all parties. Objection is also taken to a passage in the judgment of the Subordinate Judge in which he compares the ghatwal''s maintenance allowance to the salary of a public officer and regards it as being protected from attachment by Section 60, Civil P.C.

I will first deal with the last objection. The observation of the Subordinate Judge cannot be supported. The profits accruing to the ghatwal from his estate are certainly not a salary and Section 60, Civil P.C., does not enter into the matter at all. The question of attachability is to be decided with reference to the law regarding ghatwalis of the Birbhum type and the remedies of the creditors against them. The statutory provision regarding these ghatwalis is contained in Bengal Regulation 29 of 1814 and the incidents of such ghatwalis have been examined in a number of decisions, both of High Courts and of the Privy Council, such as in this Court in Damodhar Narain Singh Vs. Ganga Ram Marwari, It has been long ago established that such a ghatwali is inalienable and cannot be put up to sale for the debts of its holder but it was held in Raj Keshwar Deo v. Bunshidhur Marwari (1896) 23 Cal. 873, that a decree-holder can bellowed to attach for the satisfaction of his decree so much of the rents as may be left after the payment of the Government revenue, the wages of the chaukidars employed by the ghatwal and other like charges." The Court held that the surplus profits, after all necessary outgoings, were to be regarded as the personal property of the ghatwal, and as such, liable to be seized and appropriated by the decree-holder. That case was followed in Udoy Kumari Ghatwalin v. Hari Ram Saha (1901) 28 Cal. 483. In this case the Court below had allowed an attachment of the rents and profits and had made a prohibitory order to the ghatwal not to receive any rents and profits from the raiyats and also to the raiyats not to pay their rents to the ghatwal.

The High Court held that future rents and profits could not be attached but that there would be no objection to making an order appointing a receiver to take charge of the rents and profits as they fell due from time to time. The receiver would, in that case, receive the rents as they fell due from time to time and make provision for the payment of the wages of the chaukidars and other incidental expenses. This case was followed by Keshobati v. Mohan Chandra Mandal (1912) 39 Cal. 1010, where an order appointing a receiver to collect rents and profits was affirmed. Therefore it is indisputably the law that the surplus profits of a ghatwali can be attached and made available for satisfaction of the debts of the holder for the time being.

I have next to examine the procedure in ascertaining and realising the surplus rents and profits. It is manifest that in all the above cases the Courts were careful to secure in the first instance the discharge of the obligation of the ghatwal to provide for the payment of " the Government revenue, the wages of the chaukidars and similar outgoings" before anything could become available to the creditors; but there is nothing in the decisions of this Court to indicate that the receiver would be acting under the orders and control of any authority other than that of the Subordinate Judge from whom he held his appointment. In order that the decision in Raj Keshwar Deo v. Bunshidhur Marwari (1896) 23 Cal. 873 might be carried out by the local Courts and officers, a letter was issued by Mr. W.B. Oldham, the Commissioner of Bhagalpur Division, on 21st March 1897, which is reprinted in Mr. Heard''s book on "Ghatwali and Mulraiyati Tenures" and is refer, red to by the learned Subordinate Judge as laying down the procedure which is to be followed in such cases.

The letter deserves careful reading; it deals with two classes of cases; one comprises those in which the decree sought to be executed has been obtained in one of what are called the Santhal Civil Courts. These are Courts from whose decision appeal lies to the Deputy Commissioner and in respect of whom the functions of a High Court are discharged by the Commissioner of Bhagalpur Division. In that class of cases the Subdivisional Officer, the Deputy Commissioner and the Commissioner are the sole authorities both for securing the necessary outgoings, the safeguarding of the performance by the ghatwals of their duties and also for the execution of the decree. It was considered sufficient to direct in the letter that the Subdivisional Officer shall discharge his duty in the customary way. The other class is of cases in which the decree is made or attachment ordered by a Court under the Calcutta High Court, i.e. the Subordinate Judge''s Court. Here the Commissioner''s letter directs another course to be taken. It is said:

The Subdivisional Officer will at once file before it (the Court) an attested copy of this order with prayer that no proceedings might be taken till it is ascertained what part of the proceeds of the ghatwali mahal is the ''necessary outgoings'' referred to by the High Court''s decision above quoted and what part under the same decision, his profits or personal properties.

It is also the duty of the Subdivisional Officer to report the case to the Deputy Commissioner who will, in turn, report it to the Commissioner. Para 3 of the letter directs the Subdivisional Officer to

ascertain and inform the Civil Court what are the proceeds of the ghatwali mahal and what portion of them is required for the performance of the police duties and for the ''necessary outgoings'', and what portion is ''profits'' or personal property.

To ascertain what portion of the proceeds is "required", reference is to be made to the actual expenditure incurred annually by the ghatwal in discharging the duties specified in his muchalka and for the support of the Police. Mr. Oldham''s letter goes on to state that:

The Subdivisional Officers have no concern with the stipulated rents assessed on the ghatwali mahals or with cesses due by them to Government, and in the present connexion, these dues are considered to belong to the profits of the ghatwals and not to that portion of their proceeds which is required for the efficient performance of the Police duties and which cannot be the subject of a private decree or attachment.

It would seem that what Mr. Oldham contemplated was something very different from the preparation of a complete budget by the revenue authorities; on the contrary, his instructions limit the function of the Subdivisional Officer to reporting to the Court the amount of the Government demands for which the Court in dealing with the rents and profits is bound to make provision and the amount of which is not deemed to be private property of the ghatwal. It is particularly to be noticed that even stipulated rents or cesses are to be excluded from the public demands reported by the Subdivisional Officer to the Court which means they are expected to be arranged for by the Court itself out of the profits or personal property of the ghatwal. I have referred already to the scheme sanctioned by the High Court in 1919 and it may be pointed out that it contains special directions for the particular case and not anything in the nature of general rules and procedure governing similar attachments. But in that connexion a question of procedure did arise in 1923 when the creditors appealed to the High Court against the order of the Subordinate Judge overruling their objections to the accounts submitted by the receiver. It was observed in this Court that various sums of monies were said to have been paid by the receiver for charities and it was stated that "the learned Subordinate Judge must exercise some control over the ghatwal and over the receiver."

Whenever the ghatwal does make any application for grant of any sum of money to him for any particular purpose, the Court before acceding to the application must examine the circumstances with care and attention. There are various creditors to the estate and it is necessary that justice, if possible, should be done to the creditors before generosity is shown.

This passage makes it perfectly clear that the responsibility lay on the Subordinate Judge, that is to say, the Civil Court, under the directions of this Court, for permitting any sums to be paid for charitable and similar objects. Between 1923 and 1928 it appears that the practice was to submit the budget to the Deputy Commissioner and the Commissioner for sanction and that in some of these years alterations were apparently directed by the Commissioner to be made in the budget and the budget was amended accordingly. It is possible that the distinction was not clearly borne in mind between methods of administering an estate of which the profits were under attachment in execution of a decree of a Subdivisional Officer or inferior Court and the procedure in similar proceedings when the executing Court is a Subordinate Judge. The procedure followed in referring the budget to the Commissioner for settlement and final sanction appears to be the procedure "appropriate" to the former class of cases. In 1928, when after Major Agabeg''s death fresh arrangement had to be made, an order was passed by the Subordinate Judge on 18th September 1928, appointing a receiver, vesting him with certain powers, fixing his remuneration and giving him the following directions for the administration of the property.

The receiver will, as soon as possible, ascertain the profits and necessary outgoings and submit to this Court for approval at once and subsequently every year an estimate of collections and expenditure including (1) pay and uniform of village Police; (2) other Government dues, (3) dues decreed against the ghatwal, and (4) maintenance of ghatwal and his family including maintenance in proper condition of the residence of the ghatwal. Items 1 and 2 are of course the first charge upon the estate.

From this order an appeal was presented to the High Court, which is Miscellaneous Appeal No. 176 of 1928 and was disposed of on 28th January 1929. The terms of the appointment of the receiver would, it was said, be settled by the Subordinate Judge. These instructions make it clear that it is for the receiver to make an estimate of col. lections and expenditure which he is to submit for the approval of the Court and it is the duty of the Court to pass final orders settling the budget. In 1930 there appears to have been some difference of opinion between the creditors and the receiver as to the amounts which should be allowed in the budget under certain heads. The Subordinate Judge passed orders on 11th January 1930, dealing with these objections on merits. With the consent of the majority of the creditors the personal allowance of the ghatwal was raised from Rs. 350 to Rs. 400 per month. It does not seem to have been doubted so far that the Subordinate Judge was the proper authority for dealing with the objections and for settling the budget or that the amount of the ghatwal''s allowance could be raised without the creditors being heard in the matter. As far as I can ascertain, it is for the first time in the order now under appeal that the view is put forward that the Court as a Court has no authority and no responsibility in settling details of the budget and determining the amounts to be paid to the ghatwal as maintenance and to be expended on religious, charitable and other objects connected with the management of the estate. The contention of the creditors is thus stated in the order under appeal:

The expression ''necessary outgoings'' according to the petitioners ought to include only chaukidar''s dues and other dues incidental for the proper performance of the duties imposed on the ghatwal by his muchalka and kabuliyat. According to the argument put forth, the Sub-Divisional Officer and other officers are not concerned with other sums required to be spent such as ghatwal''s allowance, receiver''s remuneration, etc Their contention is that these are matters for the Subordinate Judge to decide and not for the revenue or executive authorities.

Sir Sultan Ahmad in the course of his argument for the respondent, the ghatwal, pointed out that the Government or the Commissioner was not represented before us in the hearing of this appeal and suggested that an opportunity should be given to Government or the Commissioner to be heard before any finding or decision adverse to the jurisdiction of the executive authorities was recorded. I do not think it necessary to stay our hands in the disposal of the appeal before us. If Government had wished to enter an appearance in these proceedings, they could have done so as the proceedings have been pending for a year and a half. It is not suggested that there has been any authoritative pronouncement on behalf of Government or the Commissioner modifying the letter of Mr. Commissioner Oldham, on which the Subordinate Judge relied and we rely also.

I may say that Sir Sultan Ahmad in the course of the argument for the respondent appears to have placed before us all the considerations which it was likely to be possible for the Government itself to raise. In my opinion the contention of the appellants is well founded. The Commissioner, Mr. Oldham''s letter on which the Subordinate Judge relies, does not support his conclusions. I must invite the particular attention of the Subordinate Judge to the direction that the Sub-Divisional Officer is to have regard to the actual expenditure incurred annually by the ghatwal in discharging the duties specified in his muchalka and for the support of the police" and to the passage where it is explained that "the portion of the proceeds which is required for the efficient performance of the police duties" is not considered to include even cesses due to Government or the stipulated rents assessed on the ghatwali mahals, with which it is said: "the Sub-Divisional Officers have no concern", these being expenses to be met by the ghatwal out of his personal income.

Perhaps the lower Court has been impressed with the idea that all the rents and profits capable of being attached in execution will have to be distributed to creditors, and that expenditure on such matters as cesses, cost of collection maintenance of the ghatwal himself and of property, such as, bungalows, tanks, roads etc., which are by law or custom to be maintained by the estate will be impossible unless the necessary funds are exempted from attachment.

This is not the correct view. On the attachment of so much of the income of the property as represents the surplus income of the ghatwal, over and above the matters excluded under Mr. Oldham''s letter, it is the duty of the Court to make provision for the appropriate expenditure under these heads, out of the attached income. The procedure in dealing with the attached income may be compared with that approved by the Privy Council in AIR 1925 176 (Privy Council) , where the property sought to be attached was the (rents and profits of sixteen villages which had been assigned to the judgment-debtor in lieu of maintenance. The procedure which their Lordships approved was the appointment of a receiver for realising the rents and profits of the property paying out of the sum a sufficient and adequate sum for the maintenance of the judgment-debtor and his family and applying the balance to the liquidation of the creditor''s debts. In this case also the receiver was spoken of as taking the place of the debtor and acting as an officer subject to the directions of the execution Court in collecting and disbursing the debtor''s income. If any other authority was necessary, this confirms us in the view that in collecting and disbursing the income, the receiver must be acting under the directions of the Court and not of the executive authorities.

It is now clear that the order of the Subordinate Judge in so far as he refused to enter into the merits of the objections of the creditors to particular items in the budget was erroneous and cannot be supported. He should have examined and dealt with the objections of the creditors on the merits. The principal objections taken were first to the allowances made to the ghatwal personally for his maintenance and expenses. Whereas his allowance was fixed at Rs. 350 per month in the scheme sanctioned by this Court in 1919 and was raised to Rs. 400 in 1930 with the consent of the majority of the creditors, it has now been budgeted for at Rs. 700, together with additional grants for Poojah Rs. 500, Holi Rs. 250, Mansik and Basanti Rs. 100, unforeseen expenditure Rs. 1420, medical Rs. 580 and house rent Rs. 300, total Rs. 11,550 per annum. Secondly, that whereas the allotment for upkeep of tanks, bandhs, roads, etc., was in former years Rs. 1000, it has been raised to Rs. 2500. Thirdly, that the general collection and administration expenses absorb 31 per cent, of the gross income and the estate ought to be more economically managed. And generally whereas in former days out of a gross income of about Rs. 41,000 the creditors used to get about Rs. 23,000, the present budget allows them out of a gross income of Rs. 67,000, a dividend of less than Rs. 20,000 with an expectation of its being still further reduced.

The figures, if correct, are disquieting: the more so as they appear to have been arrived at in some ex parte proceeding in which the creditors did not even get a hearing. At the same time, we find ourselves in this difficulty that the materials on which the propriety of each particular item of expenditure can be determined are not before us, and therefore we are not in a position to come to a finding as to which items ought to be reduced or excluded. Ordinarily, in such a case, the proper course would be a remand to the Court of first instance for the necessary findings of fact but to do that in the present case would be substantially infructuous, because, the budget, the preparation of which has given rise to this appeal, was for the year 1937-38 and realisation and disbursements must presumably have been already made and completed in pursuance of this budget.

All we can do in the present case, therefore, is to set aside the judgment of the Subordinate Judge and direct that in future, he should proceed with the preparation of the budget in accordance with the observations contained in this judgment and in the earlier judgments of this Court to which reference has been made. In the circumstances of this case, parties will bear their own costs; any Order that we may make for costs against the judgment-debtor would be substantially infructuous.

Chatterji J.

I agree.