Nagina Mal vs Custodian General, E.P. and Others

Jia Lal Kilam, J.—The allegation of the petitioner in his writ petition is that one Mst. Hussain Bibi widow of Juma Khan had mortgaged with

possession her two storeyed house in Dhaki Hajaman Jammu in favour of the petitioner by virtue of a registered mortgage deed dated 29-2-2004

against a consideration of Rs. 2000/-. The petitioner had entered into possession of the mortgaged property and had spent a huge sum of money

for effecting repairs of the said house. After the disturbances of 2004, the whereabouts of Mst. Hussain Bibi became unknown.

The Custodian, Evacuees Property Jammu declared the said house as an evacuee property, though there is no proof that Hussain Bibi had

migrated to Pakistan. The Dy. Custodian Jammu without any rhyme or reason or authority, legal or otherwise, held a brief inquiry and came to the

finding that since the petitioner had received a greater amount of money than the one advanced by him as mortgage money, the petitioner be

evicted from the said house. Nagina Mal mortgagee petitioner has challenged the authority of the Custodian of ordering the eviction of the

mortgagee from the mortgaged property.

It has been argued on behalf of the petitioner that firstly the Custodian who stands in the shoes of the evacuee mortgagor cannot by a summary

inquiry held in a summary manner order the eviction of the mortgagee. According to the. petitioner what the Custodian should have done was to

sue for the redemption of the mortgage property according to law and not to order his eviction in a high-handed manner as he chose to do. It is not

denied by the petitioner's learned Counsel that in spite of the fact that the property was mortgaged, it still retained the characteristics of evacuee

property.

We may take it for purposes of this case that the mortgaged property can be declared as evacuee property, but subject to any interests which the

mortgagee may have acquired in the said property by means of a lawful transaction. The learned Advocate General who appeared on behalf of the

Custodian has drawn our attention to Section 8 of the Evacuee Property Act, according to which any person who claims any right to or interest in

any properly can prefer a claim to the Custodian on the ground of his interest in the property as not having been affected by the provisions of the E,

P. Act.

The Custodian according to Rule 8(2) shall hold a summary inquiry in the prescribed manner and then either accept or reject the said claim. His

argument is that the Custodian held an inquiry into the claim made by the mortgagee and found that the mortgage had ceased to be operative

because be had already received more than he had advanced to the mortgagor. The question is: does the E.P. Act authorise the Custodian to

arrogate to himself the powers of a civil Court, and deal with complicated questions of law and. fact which might necessitate going sometimes into

complicated factual and legal questions and then declare that the mortgage has ceased to exist?

In the present case nobody denies that the mortgage property is evacuee property. But the question is as to whether the mortgagee can be

deprived of his just claims by means of a summary inquiry held in summary proceedings. This point has arisen in Manohar Lal Vs. Custodian,

Rajasthan, Jodhpur and Others, . Here a debt was due to an evacuee which the Custodian tightly declared as being evacuee property. Later on the

Custodian tried to recover this debt as arrears of land revenue. But it was held that the Custodian had no authority to adjudicate upon the matter of

disputed debts and to recover them as land revenue. The proper remedy in such eases for the Custodian was to institute legal proceedings against

the debtor in a civil court.

In the case before us the Custodian had adjudicated upon a disputed fact. The mortgagee claims some money as mortgage dues and claims to

remain in possession till the property is redeemed according to law. According to the Rajasthan ruling the matter being a disputed one, the

Custodian could not just wipe out the debt by a mere executive fiat. The only course open for the Custodian was not to take the law into his own

hands, but to approach the proper civil Courts and get the matter decided according to law.

It is a matter of common knowledge that points of law and fact arising out of mortgage suits are of a very complicated nature. An elaborate

procedure is provided by ordinary law to decide matters pertaining to such questions. In the case before us, the Custodian has held that the

mortgagee has received more than was advanced by him. The mortgagee might dispute the findings arrived at by the Custodian in his summary

inquiry and also claim some more dues for himself. If there is a dispute and a bona fide dispute at that the Custodian cannot arrogate to himself the

right to be the judge and the prosecutor in his own cause. It has been pointed out in a Division Bench ruling of the Punjab High Court. Custodian

General of Evacuee Property, New Delhi and Others Vs. Harnam Singh, that:

It is a fundamental principle of law that every person who receives an injury is entitled to claim the protection of the courts. Broadly sneaking, the

courts alone have the power to decide justiciable controversies both on questions of fact as well as of law; they alone can protect the rights and

interests of individual citizens and they alone have power to hear, determine and to enforce.

Later on in the same judgment it has been held that ""the Administration of E.P. Act does not appear to bar the jurisdiction of ordinary courts or to

transfer the determination of rights and liabilities from ordinary courts to executive officers....

At Anr. place in the same judgment we find that ""the Custodian has no power to determine disputed questions of title....

The scheme of the E.P. Act as can be gathered from various provisions of this Act also points towards this direction. For instance, according to

Section 9(a) the Custodian has the power to ""carry on the business of an evacuee"". The business of an evacuee might involve payment to creditors,

realization from debtors, sales, mortgages and purchases of properties and all these transactions might give rise to hundred and one disputes at

different times. Now suppose a Custodian takes charge of the business of an evacuee and continues and carries on his business. In such a case it is

just possible that the Custodian might claim a debt as payable to the evacuee from somebody. He may also claim some property which the

evacuee may have in furtherance of his business mortgaged or sold to a third party. If in such cases the last word, to the exclusion of ordinary civil

courts, of declaring as to what was due to an evacuee was to lie with the Custodian, then that business would not be carried on even for a day. In

the business world it is the existence of an impartial third party i.e., Courts which inculcate a faith in the mind of the parties and which alone would

make business relations lasting and successful.

This by itself would show that the Custodian can realize only those debts or manage those properties about which there is no dispute. But if the

dispute is there, both the E.P. Act and the scheme of the Act show that the dispute can be resolved only by an impartial agency, i.e., a civil court.

This view has been followed by the Custodian General in more than one case. Reference may in this connection be made to a judgment of the

Custodian General, Jammu and Kashmir State, reported as Kewal Krishna v. Custodian, D/-5-12-57 (C). In this case the Custodian had held that

one of the shops was mortgaged with the applicant while the other was in his illegal possession.

On these findings, the Custodian had ordered that the whole property including the mortgaged shop be taken into possession. The learned

Custodian General held that the property was admittedly in the possession of the mortgagee, i.e., the applicant. The Custodian General has further

observed that ""I am afraid in such a case the Custodian could not resume possession unless he got the property redeemed from the mortgagee.

The order of the Custodian is not warranted by law. I, therefore, accept this revision application and set aside the order of the Custodian. The

possession of the property shall be delivered back to the mortgagee.

Taking all this into consideration, we are of the opinion that this writ application must succeed. We, therefore, issue a writ of certiorari and

prohibition by which the orders of the respondents are quashed and the respondents are prohibited from taking any steps towards evicting the

petitioner from the said house. It is further ordered that the respondents be prohibited from collecting rents and getting rent notes executed in their

favour from the tenants of the petitioner in occupation of the house in dispute. In view of the peculiar circumstances of the case; parties shall bear

their own costs.

Janki Nath Wazir, C.J.

I agree.