Khantabala Debya and Another vs Baijnath Marwari and Others

Wort, J.—This is an appeal from a decision of the Subordinate Judge of Dhanbad arising out of an application under Order 21, Rule 90, Civil P.C. by the judgment debtor seeking to set aside an execution and sale of certain property in the following circumstances: The judgment-debtor was the mortgagee and the proprietor of an estate which was subject to the control of the Court of Wards under a vesting order made under the Encumbered Estates Act 6 of 1876. The mortgagee''s share in the mortgage debt was a quarter of 2 annas 6 gandas. An attachment in the execution case and the execution case had taken place at Dhanbad. It is contended on behalf of the judgment-debtor, who is represented by Mr. Jyotirmoy Chatterji, that the Court at Dhanbad had no jurisdiction and that the only Court which had jurisdiction in the matter was the Court at Purulia.

A further argument both before the lower Court and this Court is that there was material irregularity regarding the sale proclamation and further that damage had ensued by reason of the fact that the price which was obtained was much less than the true value of the debt.

The only substantial point is that relating to jurisdiction. It is not denied that if this was a mortgage debt then the Court at Dhanbad, in which the property which was the subject-matter of the mortgage bond was situated had jurisdiction, whereas, if it was not a mortgage debt, it is not seriously denied that the only Court which had jurisdiction was that at Purulia. For this proposition Mr. Chatterji relies upon the cases of Begg Dunlop & Co. v. Jagannath Marwari [1912] 39 Cal. 104. This decision was followed by this Court in the case of Bank of Bengal v. Sarat Ch. Mitra [1918] 4 Pat LJ 141. The only question therefore which we have to determine in this case was whether this was a mortgage debt or whether it was merely a right to receive such sums as the manager under the Encumbered Estates Act thought fit in justice and equity to pay to the creditor which was in this case, as I have already stated, the judgment-debtor. For the purpose of this point reference must be made to Act 6 of 1876, The first section which is material is Section 3 which provides:

On the publication of an order u/s 2, the following consequences shall ensue: first, all proceedings which may then be pending in any civil Court in British India or in any Revenue Court in Bengal in respect of such debt or liabilities shall be barred; and all processes, executions and attachments for or in respect of such debts and liabilities shall become null and void.

Some reliance is placed by Mr. C.C. Das who appears on behalf of the respondents on Section 8 which provides:

The Manager shall, in accordance with the rules to be made under this Act, determine the amount of all principal debts and liabilities justly due to the several creditors of the holder of the property, and to persons holding mortgages, charges or liens thereon, etc.

He relies as I understand his argument on this section for the purpose of supporting his argument that in spite of Section 3 the mortgage still subsists; in other words, it is still a mortgage debt and has also the incidents of a mortgage. The restoration of the property and the circumstances which give a right to the Commissioner to restore the property are set out in the earlier part of Section 12; and the penultimate clause of that section goes on to say:

Where the holder of the property or his heir is so restored under the circumstances mentioned in Clause 2 of this section, such restoration shall be notified in the Calcutta Gazette, and thereupon the proceedings, processes, executions and attachment mentioned in Section 3 (so far as they relate to debts and liabilities which the manager has not paid off or compromised), and the debts and liabilities barred by Section 7 shall be revived.

It is contended, as I have stated, on behalf of the respondents that although there is a reviver in the circumstances in which the attachment is discharged if I may use the expression, yet at the same time the mortgage with all its characteristics was alive throughout the period of attachment.

It seems to me the matter can be shortly tested in this way: Had it not been for the fact that the estate was the subject-matter of an order under Act 6 of 1876 there is no doubt, as I have indicated in the first part of my judgment that the Dhanbad Court had jurisdiction because what would have been attached would have been the right, title and interest of the mortgagee in the mortgaged property itself. What has been attached and what would be attached in the events which have happened, that is to say, the estate being under the Encumbered Estates Act, was not the right, title and interest of the mortgagee in the property itself but the right, whatever that may have been, to receive such payment as the manager of the encumbered estate would have thought fit in justice and equity to pay to the creditor, that is to say, to the judgment-debtor in this case.

It seems to me therefore quite clear that the mortgaged property itself was not attached, that in the circumstances the rule which was laid down in the cases to which I have referred applied, and that therefore the Court which had jurisdiction in this matter was the Court where the judgment debtor himself resided, or in other words in this case, the manager under the Encumbered Estates Act, and that was the Court at Purulia. In these circumstances it seems to me quite clear that the Court at Dhanbad had no jurisdiction.

The other questions which came up for determination by the Subordinate Judge in these circumstances do not arise. For these reasons, in my judgment this appeal should be allowed. This judgment governs only that property to which reference is now made, namely, the Pandra debt. The appeal is dismissed as regards the other properties. There will be no order as to costs in the circumstances.

Fazl Ali, J.

I agree.