Mt. Gahan Priya and Another vs Bharat Chandra Mahanta and Others

Ram Labhaya, J.—This appeal arises out of a suit for declaration of title to and confirmation of possession or in the alternative for khas possession of the land in suit.

the suit was decreed in part by the trial Court. The decree was in respect of an area of 11 B. 4 K. 7 L. of land in thirty years patta No. 895 of village Majhirgaon of mouza Ramsha Rani. Defendants appealed from the decree. Plaintiffs put in cross-objections. The appeal was allowed; cross-objections were disailowsd. The result was that the suit was dismissed in its entirety. Plaintiffs have appealed to this Court.

The learned Counsel for the appellants has not pressed for a decree in respect of the area not allowed to him by the trial Court. He has merely asked for the restoration of the decree of the Court of the first instance by which the suit was decreed in respect of 11 B. 4 K. 7 L. The controversy, therefore, is narrowed down to the rights in this area.

The land in dispute originally belonged to Hutharam Gaonbura, defendant 4, in this case. He mortgaged it with other lands to Garhal Goalia Co-operative Bank on 24th September 1924. Defendants 1 and 2, the contesting defendants in this case, purchased this land from defendant 4 on 30th June 1925. Some years after the Bank went into liquidation, the liquidator had the land sold in execution of a certificate made under the Public Demands Recovery Act of 1913. It wag purchased by the liquidator himself on 19th May 1936. He sold it to plaintiff-appellants on 20th March 1912. They applied for a mutation in their favour on the strength of the sale-deed. This claim was resisted by defendants 1 and 2, who had purchased the land in 1935 long before its sale under the Public Demands Recovery Act. The mutation in plaintiffs'' favour was refused. This led to the suit from which the present appeal arises.

The facts above stated are not in dispute. It is, however, contended by the learned Counsel for the appellants that the liquidator of the Bank had all the powers of a registrar in the exercise of which he could make an award and direct that the amount due be realised from the mortgage-security. Such an award, he contends, was given and the certificate was based on the award. The case, therefore, according to him, was covered by AIR 1933 211 (Nagpur) in which it was laid down that a decision given by the Registrar directing the sale of the property comprised in the mortgage deed did not militate against Order 34, Rule 14, Code of Civil Procedure. The correctness of the proposition laid down in the Nagpur case is not at all in question. What is disputed is whether the liquidator ever made an award directing sale of the property. The learned Second Additional Judge came to the conclusion that there was absolutely no evidence on the record in support of the allegation that the liquidator made an award or passed an order directing the sale of the property mortgaged. He referred to the statement of P. W. 1, the successor of the liquidator, and observed that he was not aware of the contents of the award or the requisition for a certificate, The liquidator himself was not examined. There was thus, according to him, no basis for the finding that the award or the requisition made any mention of the mortgaged property or asked for its sale. The learned Judge found further that there was no evidence on the record showing that the certificate directed sale of the mortgaged property in enforcement of the security. These are findings of fact. They are not open to question at this stage and the learned Counsel for the appellants has made no attempt to challenge them. The Nagpur case in these circumstances can have no application to the facts of this case.

The learned Counsel has also relied on two other cases. The first of these is Kalu Sharip v. Abhoy Charan 25 C.W. N. 253 : A.I.R.1921 Cal. 157). This case has no bearing on the question now before the Court. The sale in this case was not under the Public Demands Recovery Act.

The second case is reported in Ananda Chandra Nandy and Another Vs. Jhulon Singh and Others, In this case a Division Bench of the Calcutta High Court laid down that it was not open to a defendant to challenge a sale held under the Public Demands Recovery Act by way of defence in a suit for possession brought by the purchaser. This proposition is unquestionably correct. But the respondents are not challenging the sale. Their contention is that a purchaser at a sale in execution of a certificate under the Public Demands Recovery Act acquires nothing but the right, title and interest of the certificate debtor. This contention does not militate against the view taken in Ananda Chandra Nandy and Another Vs. Jhulon Singh and Others, which is therefore of no avail to the appellants.

I now proceed to examine the hurdle placed in the way of the learned Counsel from the respondents'' side. It has been contended that the effect of a sale under the Public Demands Recovery Act is to pass to the purchaser merely the right, title and interest of the certificate-debtor. Reliance has been placed in support of this proposition on Nanda Kumar v. Ajodhya Sahu 16 C. W N. 351: (11 I. C. 465) and Lachmi Narain Singh v. Nandkishore 29 Cal. 537 : (6 C. W N. 481). These authorities no doubt support this proposition but they are under the Public Demands Recovery Act of 1895.

In Nanda, Kumar v. Ajodhya Sahu 16 C. W. N. 351: (11 I. C. 465), Mookerjee, J. examined the provisions of the Act which were then in force and came to the conclusion in view of the scheme of the Act and the provisions contained in Section 10 and Sub-section (2) of Section 19 of that Act that the Public Demands Recovery Act did not contemplate the realisation of the security and if a sale was held under that Act, the security must be deemed to have been abandoned.

It is noteworthy that the Public Demands Recovery Act of 1895 did not contain any express provision to the effect that a purchaser at a sale in execution of a certificate shall acquire nothing more than the right, title and interest of the certificate debtor, Section 10 of the old Act merely provided that from and after the date of notice of the certificate on the certificate debtor the certificate shall bind all immovable property of the judgment-debtor within the jurisdiction of the District Collector in the same manner as if it had been attached under the provisions of the Code of Civil Procedure. Section 19 (2) embodied a provision to the effect that the certificate under the Act shall be executed in the manner provided in chap. XIX, Code of Civil Procedure., for the enforcement of decrees for money. Section 10 now has been replaced by Section 8, Public Demands Recovery Act of 1913, which provides that from the date of the service of notice on the Certificate-debtor all private transfer or delivery of immovable property situated in the district in which the certificate is filed, or of any interest in such property shall be void against any claim enforceable in execution of the certificate. It further provides that the amount due from time to time in respect of the certificate shall be a charge upon the immovable property of the certificate-debtor, wherever situated, to which every other charge created subsequently to the service of the said notice shall be postponed. This section provides greater facilities for the realisation of the amount due under the certificate. The whole of the amount is charged on the entire immovable property of the certificate-debtor. There is no provision in the new Act which would correspond to Section 19 (2) of the old Act, but Section 20 provides in express terms that:

Where property is sold in execution of a certificate, there shall vest in the purchaser merely the right, title and interest of the certificate-debtor at the time of the sale, even though the property itself be specified.

There was no such provision in the old Act. The scheme of the Act was in the main the basis for the view consistently held in the Calcutta High Court that what passed to the purchaser at a certificate sale was merely the right, title and interest of the certificate-debtor at the time of sale. Section so gives statutory recognition to that view and thus shuts out all speculation as to the intention of the Legislature. There are no provisions in the new Act on the lines of those which are contained in Order 34, Code of Civil Procedure. It cannot be argued in view of the express pro. vision contained in Section 20 of the present Act that the purchaser can acquire the right, title and interest not only of the mortgagor but that of the mortgagee which would happen if the sale is for the realisation of the security. In fact, the effect of Section 8 of the present Act is to remove all distinction between the property mortgaged and that which is free from the mortgage. The amount of the certificate becomes automatically a charge on the entire property of the certificate debtor, and what is sold at a certificate sale is not the property but merely the existing interest of the judgment-debtor at the time of the sale. Section 20 emphasises that it is merely the right, title and interest of the certificate-debtor that passes even though the property itself is specified.

It has now to be found out what interest Hutharam, pro forma defendant 4, had at the time of sale in favour of the liquidator. It is not denied that the land had been sold to defendants 1 and 2 in 1925 long before the certificate sale. The equity of redemption vested in them and not in the judgment-debtor at the time of sale. He had no title in the property then. The Bank took advantage of the summary and more effective procedure provided by the Public Demands Recovery Act with the result that what could be sold at the certificate sale was the existing interest of the judgment-debtor, if he had any. In this case he having already parted with all his interest in the property, the liquidator acquired nothing by the sale. The conclusion arrived at by the learned Second Additional Judge is therefore correct.

The appeal, therefore, must fail and is dismissed with costs.