Nripendra Nath Chatterjee vs Kuldip Misra

Wort, Ag. C.J.

This case was referred to a Pull Bench as there seemed to be some questions with regard to the decision in Jugal Kishore Narayan Singh v. Bhatu Modi AIR 1923 Pat. 517 particularly having regard to a decision in the Calcutta High Court on the point at issue.

The short facts are these. The appellant who was the landlord and a decree-holder obtained a decree for rent and taking out execution got the property sold on 3rd August 1934 becoming the purchaser. Between the time of the rent decree and the date which I have just stated other arrears of rent accrued and there can be now no dispute that in the sale arising out of the execution of the rent decree to which I have already referred, the property was put up for sale subject to these arrears of rent, in other words subject to these encumbrances.

Mr. Mazumdar who argues the case on behalf of the appellant contends that on a proper reading of the sale proclamation this was not the fact. But this being a second appeal and both the Courts below having held that it was so sold it is impossible to accept the contention of Mr. Mazumdar in this regard. We can take it therefore that the property was sold subject to these encumbrances and the real point at issue is whether Mr. Mazumdar''s client, being the decree-holder and a purchaser, is in a different position from a third party purchaser. It is conceded, indeed it has been decided in a number of cases, that a third party purchaser would be liable to pay off the encumbrance which was notified in the proclamation : in other words liable for the payment of rent. The argument on behalf of the appellant is that the decree-holder is in a different position.

In this connexion and in support of the argument which I have stated, the case in Jugal Kishore Narayan singh v. Bhatu Modi AIR 1923 Pat. 517 is relied upon. Before dealing with that case however I would refer to the decision of my learned brother James in Kamaldhari Lal v. Tarachand Marwari AIR 1935 Pat. 118 an authority for the proposition, which I stated a moment ago, to the effect that

an auction-purchaser who purchased a holding with notice that it is saddled with liability for arrears of rent for a period anterior to the date of the sale is liable for the rent of that period.

There was an argument addressed to us by Mr. Mazumdar to the effect that the notification in the sale proclamation in the circumstances was illegal and that therefore no liability can accrue on the footing that there was such a notification. James, J. in the case to which I have referred pointed out that in Jugal Kishore Narayan Singh v. Bhatu Modi AIR 1923 Pat. 517 the decision of this Court was not that it was an illegality but an irregularity. In my opinion, no support can be got by the decree, holder from that contention. We come back to the point at issue, namely whether the decree-holder was in any different position from that of a third party purchaser.

On the one hand, the case to which I referred a moment ago, reported in Jugal Kishore Narayan Singh v. Bhatu ModiA.I.R. 1923 Pat. 517, is relied upon by Mr. Mazumdar, and on the other hand, against that contention is the case in Sailoja Prosad Chatterjee v. Gayni Das (1913) 18 C.L.J. 29 I propose to deal with that case first. The facts of that case were that two decrees had been obtained by the decree-holder, one in 1904 and another in 1906. The decree of 1906 was a money decree, the earlier one a rent decree; and in putting up the property in execution of the second decree there was a notification with regard to the decree of 1904. The argument addressed to the Court in that case was the same argument as Mr. Mazumdar addresses to us in this case, namely that the decree, holder had two remedies open to him. He could put up the property for sale, in other words execute for his charge upon the property or he could obtain a money decree; in other words, hold the judgment-debtor personally liable; and it is his contention in the case before us that in bringing an action for rent he is pursuing the personal remedy against his judgment-debtor or tenant. Mookerjee, J. in the case made this observation:

It may he conceded...that a decree-holder who has obtained a decree for rent is free to proceed against any property of the judgment-debtor; he is under no obligation to proceed in the first instance against the defaulting tenure. This principle however is of no assistance to the decree-holder.

The learned Judge then goes on to point out what was the real question in the casa and subsequently made this observation:

It was thus, at their instance, that the proclamation was very properly made that the tenure would be sold subject to the judgment-debt under the decree of 1904. Whoever therefore purchased at the sale, would take the property subject to the liability notified, and it makes no difference that the decree-holders themselves are the purchasers; the judgment-debt in their favour must consequently be deemed to have been extinguished.

If I may say so with respect to the learned Judge, it is impossible to add to the reasoning which he there gives in dealing with a proposition similar to the on& before us. Now, as regards the authority upon which Mr. Mazumdar relies, Jugal Kishore Narayan Singh v. Bhatu Modi AIR 1923 Pat. 517, particular stress is laid upon the observation of late Sir Basanta Mullick to this effect,

in such cases (that is to say, in cases where there is a notification such as in the case before us) the auction-purchaser is concluded by res judicata and the landlord is competent to proceed in the first instance against the holding and to call upon the auction-purchaser to discharge the liability which he has undertaken.

He then referred to the decision in Haradhan Chattaraj v. Kartik Chandra Chattopadhaya 6 C.W.N. 877 and said: "But that case has no application at all where the decree, holder is himself the purchaser." The Subordinate Judge in the case in which Sir Basanta Mullick was delivering judgment had held that the decree-holder himself being the auction-purchaser and having, bought the holding subject to the liability, the debt was satisfied and the execution could not proceed. The learned District Judge whose judgment this Court reversed had held that there was an equitable estoppel and the proper remedy for the decree-holder was to sell the holding and then, if the decree remained unsatisfied, to proceed against other properties of the judgment-debtor. The effect of the High Court judgment was to hold that the decree-holder was under no such obligation as stated by the District Judge. But the vital difference between that case and the case before us is that it was recognized by all parties concerned that the decree was alive contrary to the decision of the Subordinate Judge.

In my judgment, therefore that decision can be of no assistance to the decree-holder in this case, and speaking for myself, I fail entirely to see any error (if I may use the expression) in the reasoning of Mookerjee, J. in the case reported in Sailoja Prosad Chatterjee v. Gyani Das (1913) 18 C.L.J. 29. To state the matter, in other words, on principle, it is impossible to distinguish between the position of a third party purchaser who purchased the property subject to the encumbrance and that of the decree-holder who himself purchased under like circumstances.

In my opinion therefore the appeal fails and is dismissed with costs, and the suit dismissed with costs throughout.

Yarma, J.

The facts of the case have been quite clearly summarized by the Courts below. There was a decree for rent for the years 1334 to 1337 and in execution of that decree the property was sold on 3rd August 1934. In the sale proclamation it was mentioned that there were arrears of rent for the subsequent period, i.e. 1338 to 1341-F, which were an encumbrance on the property. The present appellant filed a suit on 26th September 1934 to recover rents for the years 1338 to 1341. This suit was dismissed on 16th September 1935, about six days after the sale (that was held on 3rd August 1934) was confirmed. The suit was dismissed on the ground that when the decree-holder purchased the property in execution of his decree and subject to the encumbrance, he put himself in the position of the tenant and therefore he combined in himself for the time being the attributes of a landlord as well as a tenant, and therefore he was not entitled to get a decree. On appeal also the same view was held and the lower Appellate Court confirmed the judgment of the trial Court.

Mr. Mazumdar appearing on behalf of the appellant before us has relied mainly upon the decision in Jugal Kishore Narayan Singh v. Bhatu Modi A.I.R.1913 Pat. 517. But as has just now been pointed out there were certain points that are at issue in this case which were taken for granted in Jugal Kishore Narayan Singh v. Bhatu Modi A.I.R.1913 Pat. 517. The case that is really similar to the case in hand was the one reported in Sailoja Prosad Chatterjee v. Gyani Das (1913) 18 C.L.J. 29 there the argument that was so strenuously advanced by Mr. Mazumdar in this case had been amply disposed of. To make my meaning clear, I would just mention that Mr. Mazumdar always insisted upon saying that the landlord had two remedies (1) that he could proceed against the tenure and (2) that he could also proceed against the tenant. While advancing this theory there seems to have been some misapprehension as to what the real nature of the remedy of the landlord was, whether these two kinds of remedies overlapped or whether the landlord could get two distinct decrees with regard to his dues against the tenant.

Now, as I have already stated the case reported in Sailoja Prosad Chatterjee v. Gyani Das (1913) 18 C.L.J. 29 has sufficiently met this line of argument. It is said by Mookerjee, J. in that case:

It may be conceded, as was pointed out by this Court in Fotick Chunder Dey v. Folez (1888) 15 Cal. 492 and Sourendra Mohan Tagore v. Surnomoyi (1899) 26 Cal. 103 that a decree-holder who has obtained a decree for rent is free to proceed against any property of the judgment-debtor; he is under no obligation to proceed in the first instance against the defaulting tenure. This principle however is of no assistance to the decree-holders. The real question in the present case is, whether the effect of the purchase by the appellants has been to extinguish their rights under the rent decree. When they took out execution of the money decree against the tenure, they would be bound to notify that they held a decree for rent enforceable against it; if they had not notified the rent charge, they could not have subsequently pursued the property, in the hands of a bona fide purchaser for the satisfaction of their dues.

I have no hesitation in holding that the decision in Sailoja Prosad Chatterjee v. Gyani Das (1913) 18 C.L.J. 29 applies to the facts in this case and I would therefore dismiss the appeal with costs.

Manohar Lall, J.

I entirely agree with the judgment just delivered by my Lord the Chief Justice. The sale proclamation printed at p. 11 states that the annual rental of this holding was Rs. 20 besides cess. The holding was sold for a sum of Rs. 40-2-3 which is obviously far below the real value.

In those circumstances the landlord cannot be heard to say that, notwithstanding the fact that he (the plaintiff in the present case) purchased the tenure subject to the encumbrance contained in the proclamation (just referred to), the tenant is liable for the arrears, for which the present suit has been instituted, as this would make the landlord a gainer at the expense of the tenant-defendant: see Haradhan Chattaraj v. Kartik Chandra Chattopadhaya 6 C.W.N. 877.

The case in Sailoja Prosad Chatterjee v. Gyani Das (1913) 18 C.L.J. 29 contains an accurate exposition of the law on the subject and concludes the present appeal. The decision of this Court reported in Jugal Kishore Narayan Singh v. Bhatu Modi A.I.R.1923. Pat. 517, as I pointed out in the course of the argument, assumes that the decree was alive and therefore never attempted to decide the question before us.