RAJKUMARI KAUSHALYA DEVI versus BAWA PRITMA SINGH AND ANOTHER.

570

SUPREME COURT REPORTS

[1960]

1960

Sftaorji Vatlabhdas & Co. v. Commissioner of lucome-laxf Excess Profits T1,x, Bombay

S . .K. Das J.

to

t.hc

India. As t.hir<l mauaged company whose business was stevedoring and t.rading and t.hc remun eration was payable at 2:"i per cent. of the net profits, there can be no doubt that the remuneration accrued at Bombay. Therefore, the High Court of Bombay correctly answerc<l the question against. the appellant.

The appeal accordingly fails and is dismissed with

cusr.s.

A j1j1eal dismissed.

1960

A.fHif 20

R/\JK!;f\JARI KAUSHALYA DE\11 v. BAWA PRJJ":'.JA SINGH AND ANOTHER.

(P. B. GAJEXDRAGADKAR, K. N. \VAl'\CHOO and K. c. DAS GUPTA, JJ.)

Mortgage-Whether a "pecuniary liability"-The Displaced Persons (Debts Adjustment) Act (LX X of 1951), ss. 2(6), sub-els. (a) (b) (c) 13, 15, 16(5), 17, 21.

two

executed

The appellant

usufructuary mortgages in favour of the respondents in 1946 with respect to two properties situated in Ferozepur city and herself took the properties on lease on the same date. 1~he respondents filed an application- under s. 13 of the Displaced Persons (Debts Adjustment) Act, LXX of 1951, for recovery of the principal sum due and also the arrears of rent. The appellant contested the application on the ground, inter alia, that the liability was not a debt under the Act as it was not a pecuniary liability and that mortgages in relation to in India were not covered by it. The properties situated now Tribunal allowed the application and passed a preliminary decree for sale. The appellant's appeal to the High Court and another dismissed. On appeal by under the Letters Patent were both special leave:

Held, that a mortgage debt would create a pecuniary liabi lity upon the 1nortgagor and would be covered bv, the definition of the word "debt" in s. 2(6) of the Act.

There is nothing in any provision of the Act which would cut down the plain meaning of the words "pecuniary liability" as used in s. 2(6) read with sub-cl. (c) thereof or restrict those wide words to liability other than that secured by a mortgage.

Under sub-cl. (c) o[ s. 2(6) a displaced

person to whom a mortgage debt is due f rorn any or her person, whether a displaced person or not, ordinarily residing in the territories to which the Act extends can take the benefit of this Act.

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1960

Rtefkumari Kausha/..yadevi v.

Bawa Prifma Singh

Wmzchoo ].

3 S.C.R.

SUPREME COURT REPORTS

571

The interest of the prior mortgagee or the subsequent mort if any would not be affected by a decree passed on an

gagee application under s. 13 of the Act.

CIVIL APPELLATE JURISDICTION: Civil Appeal No.

38 of 1960.

from the

Appeal by special leave

judgment and order dated October 6, 1958, of the Punjab High Court in Letters Patent Appeal No. 52 of l C)i)4, arising out of the judgment and order elated June Fi, 1954, of the said High Court· in First Appeal from Order No. 149 of 1953.

Y. Kumar, for the appellant. Bakshi Man Singh and Sardar Singh,

for

the

respondents.

1960. April 20. The Judgment of the Court was

delivered by

\VANCHOO, J.-This is an appeal by special leave against the judgment of the Punjab High Court. The brief facts necessary for present purposes are these. The appellant had executed two usufructuary mort gages with respect to two properties situate in Feroze pore citv in favour of the respondents in J 946. She also took both properties on lease on the same date. respondents under An application was filed by the s. 13 of the Displaced Persons (Debts Adjustment) Act, >Jo. LXX of J 951 (hereinafter called the Act), for recovery of the principal sum due as well as the rent which was said to be in- arrears. The application was resisted by the appellant on various grounds, one of which was that no snch application lay as the liability was not a debt under the Act. The tribunal negatived the contention of the appellant and passed a prelimi time was allowed nary decree for sale. Six month's to the appellant to pay failing respondents were at liberty to get a final which the decree prepared and bring the properties to sale. The appellant went in appeal to the High Court but the appeal was dismissed. Then there was a Letters Patent Appeal, which was also dismissed. The appel lant then applied for and was granted special leave bv this Court, and that is how the matter has come UJJ before us.

the decretal amount,

The only point for our consideration is whether t.he is a debt ·within

liability created under a mortgage

1960

Raj/,-umnri

Kausha~radeui

v. Bawa Prilmn Si11gh

Jf'anchnn J.

572 SUPREME COURT REPORTS

[19601

the meaning of s. '.2(G) of the Act. The rclev;mt part of that provision rum as follows:-

•

" 'Debt' meam any pecuniary liability, whether payable presently or in future, or under a decree or order of civil or revenue court or otherwise, or whether ascertained or to be ascertained, which-

(a) in the case of a displaced person who has left or been displaced from his place of residence in any area now forming part of West Pakistan, was in 111 any area now curred before he came to reside lorming part of India;

(b) in the case of a displaced person who, before and after the l.~th day of August, 1947, has been residing in any area now forming part of India, was incurred before the said date on the security of any immovable property situate in the territories now forming part of 'Vest Pakistan:

-

liability in relation

security of in India and in

Provided that where any such liability was in crn red on the immovable properties situate both 'Nest Pakistan, the liability shall be so apportioned between the said properties that the to each of the said properties bears the same proportion to the tutal amount of the debts as the value of each of transaction the properties hears to the total value of the properties furnished as security, for the purposes of this clause, shall be the liability which is relatable to the property in vVest Pakistan;

as at the date of the

and the liability,

(c) is due to a displaced person from any other person (whether a displaced person or not) ordi narily residing in the territories to which this Act extends;

x

x

x

x

The contention

1111<10 a mortgage

011 behalf of the appellant is that the liability is not a pecuniary liability and therefore s. 2(6) will not apply to a mort . gage debt. It is further urged that the scheme of the Act shows that mortgages in relation to properties situate in what is now India are not covered by the Act at all.

1960

Rajkumari Kaushalyia Devi v. Bawa Pritma Singh

Wanchoo J.

3 S.C.R.

SUPREME COURT REPORTS

573

"pecuniary liability"

nebt is defined in s. 2(6) as meaning any pecuniary three sub 1iability and has been restricted by the clauses _in the sub-~ection with reference to the person who might be o-wrng the debt 01~ to whom the debt might be owed. Sub-els. (a) and (b) refer to the debts owed by a displaced person as defined in the Act while sub-cl. (c) refers to a debt due to a displaced person. Sub-cl. (c) has therefore to be taken independently of snb-cls. (a) and (b), for it refers to a creditor who is a displaced person while the other two sub-clauses refer to a debtor who is a displaced person. Under sub cl. (c) a displaced person who is a creditor can recover the debt clue to him from any other person, ·whether a . displaced person or not, who is residing in the terri tories to which the Act extends. The main contention of the appellant in this connection is that a mortgage debt is not a pecunfary liability and therefore does not fall within the definition of debt at all. vVe are of opinion that there is no force in this contention; The words liability which is of a monetary. nature. Now the definition of a. mortgage in s. 58 of the Transfer of Property Act. No. 4 of 1882, shows that though it is the transfer of an interest in specific immovable property, the purpose of the transfer is to secure the payment of money advanced or to be advanced by way of loan or to secure an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability. The money advanced by way of loan, for example, which is secured by a mortgage, obviously It is true that a mort creates a pecuniary gage in addition pecuniary liability to creating the also transfers interest in the specific immovable pro perty to secure that liability; none the less the loan or debt to secure which the mortgage is created will remain a pecuniary liability of the person creating the mortgage .. Therefore a mortgage debt would create a pecuniary liability upon the mortgagor arid would be covered by the definition of "debt" in v\Te may in this connection refer to the Dis s. 2(6). placed Persons (Institution of Suits) Act, No. XL VII of 1948, which has been practically repealed by the

·will cover any

the word

liability.

ll-6 SCI/ND/82

"" r •

1960

Rajkwnari Ka11shaf.ya Devi v. Bawa Pritma Singh

JVm1rlwn J.

574

SUPREME COURT REPORTS

[ 19601

In LiiaL hw,

Act. Lo immO\';ible pro· >11.ils relating· pcny "·c1-c specially excepted 1I11<le1· s. 'f, but there is ,\g,,in s. 6 of the Dis no such prmision in the Act. placed Persons (Legal Proceedings) Act, No. XXV of I 'l·l'l, which has also ],.:·en repealed by the Act men tions decrees or orden for payment of money while in s. I :'i of the Act which deals with the same matter !hose words "re omitted and the words "proreerlings in respect of any debt" are used inste'ad. There can be no doubt in consequence that. the Act is a compre hensive law of pecuniary opinion that s. 2(6) liability. dearly incllldes a mortgage debt and under sub-cl. (c) thereof a displaced person to whom such a debt is clue from any other person, whether a displaced person or not, ordinarilv residing in the territories to which the Act extends c~n take die benefit of this Act.

dealing "'it.h 'Ve are therefore- of

all kinds

•

provision with

Let us now see whether there is anything in the scheme of the Act which in any way militates against the pbin words of s. 2(fi). Learned counsel for the appellant: in sub-cl. (b) of the first place refers to s. 2(ri) in this connection and points out that that sub clanse specifically deals with mortgage debts secured on arn· immovable property situate in the territories forn1ing part of 'Vest Pakistan. Tt is nrgcd that there respect to mortgage w:is a specific debts in relation to immovable properties in \\Test P"kistan and that if it were intender[ that mortgage of immovable properties situate in 'vhat is now India would also be dealt with under the Act there woulcl have been the Act. Further it. is the proviso to sub cl. (b) lo s. 2(6) provides for apportioning the mortgage debt in c;iscs where the property on which the clcb1· is secured is both in \\Test Pakistan and in India and restricts the application of sub-cl. (b) only to that part of the clebt winch "·as secured on the property i 11 '\'est: Pakistan and thm excludes from the operation of sub-cl. (h) th"t part: of the clebt which is secured on property so. The in India. That is undoubtedly reason howc1'C1" for this speci;il provision is to be found in the later prm·ision contained in s. 16 ll\· which a ch;ll'g·e was created on com1,cnsation to be ,;.i,·en to a '

a similar specific pronston in

pointed out th:it

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3 S.C.R.

SUPRE1\1E COURT REPORTS

575

1960

Rajkumari

there-

respect to the mortgage debt displaced person with secured on immovable property in Pakistan or in the alternative a charge vl'as created on property given in exchange for the property in Pakistan on which Kaushal;·a Devi the debt was charged. The special provision .. fore in sub-cl. (b) of s. 2(6) would not in these circum- Bawa Pntma Singh stances cut down the plain meaning of the words used in sub-cl. ( c) or restrict "pecuniary the, wide words to liability other than that secured by a liability" mortgage. Incidentally 1Ne may mention that sub- cl. (b) itself shows that pecuniary liability includes a mortgage debt, for it shO'ws that any liability which was incurred on the security of any immovable pro- perty situate in \'Vest Pakistan would be a debt within the meaning of s. 2(6) a pecuniary liability.

and therefore

- - Wanchoo J.

v.

It is next urged that when the legislature excepted .

India which was

the property in encumbered from being dealt with under sub-cl. (b) so far as displaced debtors were concerned, there is no reason why it should allow the displaced creditors to proceed under the Act with respect to iportgage debts. This argu ment, however, overlooks the provision in sub-cl. (a) under which a displaced debtor can take the benefit of the Act, once it is held that the words "pecuniary liability" also include mortgage debt. As we have said· before sub-cl. (b) was dealing with a· special situa tion which was worked out in s. 16 of the Act and the general right of a displaced debtor to take advantage of the Act is to be found in sub-cl. (a) and that sub clause will cover a mortgage debt as it is a pecuniary liability.

t J

Reliance was then placed on s. 16(5), which gives a right to the creditor to elect tq be treated as an un secured creditor in rebtion to the debt, in which case the provisions of the Act would. apply accordingly. that a It was urged that this creditor must make an electio'n before he can take the v\Te arc of opinion that this argu benefit of this Act. for sub-s. (rl) of s. Hi only deals ment has no force, with , a situation which arises where the mortgage, ch::irge or lien was on immovable property situate in all with cases \i\'cst Pakistan.

sub-section requires

not deal at

It does

576

SUPREl\1E COURT REPORTS

[1960]

1960

where the morlgage, charge or lien is on immovable property siluate outside

\\'est Pakistan.

Rajkumari Kaushalya Devi

v. Bawa Pritma Singh

Wanchoo J.

]

'd

lt Reference \vas Lhcn made to s. 17 of the Act. deals wi t:h debts secured on mm·a ble properties. That section is again concerned with displaced debtors and 'Jl ] prov1 es 10\v equ1t1es vv1 et\veen a displaced debtor and his creditor with respect to debts \\'e see nothing in this secured on movable property. section which can cut down the amplitude of the words used in s. 2(6)(c).

k Je \\·or cc out

· ·

b

\

·-

Reference was then macle to s. 21 which provides for scaling down debts. That is however a general provision dealing with debts of all kinds and there is nothing in that section which shows that the word "debt" as defined in s. 2(6) refers only to claims for money and does not i 11clucle a mortgag·e debt.

Tims we sec nothing in any provision of the Act or in its scheme which would cut down the meaning we have given to the words "pecuniary liability" as used in s. 2(6) read with sub-cl. (c) thereof.

le was also urged that if mortgage debts on property situate in J ndia were covered by the Act, there is no machinery (like s. )(i) for enforcemem of the creditors' rights in respect. thereof. This is not correct. Section 10 provides for the claim of a displaced creditor against a displaced debtor and s. 1 :; provides for the claim of a displaced creditor against any other person who is not a displaced debtor. Section 11 then provides how an application under s. JU will be dealt: with and under sub-s. (2) thereof ;i decree can be passed under certain circumstances against the displaced debtor. Similarly under s. 14(2) a tribunal can pass such decree in rela thinks fit. tion to an application under s. These decrees are executable under s. 28 of the 1s a mortgage Act. Therefore even when the debt debt there is provision in the Act for enforcement of that debt, though of course this provision is different from the provision contained in s. 16, which was dealing with the special situation of properties under mortgage situate in vV est Pakistan.

IB as it

\Ve mav also

s. !l of the Act which bvs down that the provisions of the Act and of t:lic Rules

refer to

3 S.C"R.

SUPREME COURT REPORTS

577

inconsistent therewith

and Orders made thereunder shaU have effect notwith- standing anything contained in any other law for the time being in force. The to make a suit effect of this overriding provision .is like the ]Jresem maintainable in spite of the provisions B applymg to such sutts 111 other laws.

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.

.

1960

Rajkwnari

!Caushalya Devi , s· rngrl

awa

Pv. ritma - - Wanchoo J.

-·

any local area

The last contention on behalf of the appellant is that if s. 2(6)(c) empowers a displaced creditor to make an application under respect s. 13 even with to a mortgage debt, there will be hardship to prior mortgagees or subsequent mortgagees inasmuch as the Act. these persons cannot be dealt with under Section 13 empowers a displaced person claiming .a debt from any other person who is not a displaced person to apply within one year of the coming into force of to the tribunal having the Act in jurisdiction in the matter. The provision is obviously e.nacted to give relief for a short period only. Section 25 of the Act provides for the regulation of all proceed- ings under the Act by the provisions contained in the Code of Civil Procedure save as expressly provided in the Act or in any rules made thereunder. But assum- ing that in spite of this provision, 0. XXXJV, r. 1 of the Code of Civil Procedure ·will not apply to proceed- ings under the Act and all -those having an interest in the mortgage security cannot be joined as parties as required by 0. XXXIV, r. I, the interest of prior or puisne mortgagees cannot in any case be affected by the decree passed under the Act. The Explanation to 0. XXXIV, r. I, shows that a prior mortgagee need not be made a party to a suit for sale by a puisne mort- gagee. So far .therefore as a prior mortgagee is con- cerned, his rights will not be affected by the decree passed under s. 13 of the Act, just as his rights are not ;iffected by the decree passed under 0. XXXlV. So far as mortgagees subsequent to the displaced credit- or who applies under s. l ;3 ;ire concerned, their inter- ests will also not be jeopardized by the deo:ee which may be passed under s. I :l. Even under 0. XXXlV, which requires puisne or wbsequent mortgagees to be joi 11ed as parties in a suit for sale, a <lecree obt;ii ned in a suit lo which the s11bscg11cnt mottgagce was not joined as a party cloes not affect his rights and Lhe

·

z96o Rajkumarl.

578 SUPREME COURT REPORTS • [1960] proceedings in such a. suit a.re not binding on him so as to affect his rights und.er the second mortgage. He Kaushalya v.V; can thus follow the property by suing his mortgagor, even though it may have been sold under the decree . . ilawaPritmaSingliofa.U: earlier mortgagee in a. suit to which he was not a.. pa.rty .• __ Therefore, .the interest of the prior mort-

v.

Wa,,.hoo' J • . · gagee or the subsequent mortgagee, if any, would not . be affected by a decree passed on an application under s. 13 and there is no reason therefore to cut down the plain meaning of the words ·used in B. 2 (6}(c) on the ground that the proc~edings: under the .Act would prejudicially-. affect' the -rights• of: prior or puisne ·' · · · . ., ·-· mortgagees>•·• • There is therefore no.· force· in this appeal and it is hereby dismissed with costs."

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•

r96o

April zo.

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.. , :r ,li ·.: .~.:,:~IAHAi>EOL.Ail·KANODIA,.· .. rr: l·i'. -, 11 •l .. ~:f-, · >, : .-THE -.AD~IINISTRATOR-GENERµ. OF-. · .; ... , ,, ; .:"' <:, ... WESTBENGA.L.• ;'-:\'-·" . (P .. B. GA.JENDRAGADKAR,- K. N; . w ANCHOO ' ' . : .•·· "' :.':and K. C. DAs Gm.A.; JJ:)- - .. '!\~-,~-- ,,_.',:.,_~.·- ~-' • . . ' . : ; ; - · .. , • .Thika Tenancy..,-Decree for possession against tenant-Applica iicln'f<W ·rdiefby lenant-,-Amendment. of Act with- retrospective 'operation~Effect-:.fnterpretation of Statute-Principles· of construc tion~Thika Tenancy• Act (W:B. z of r949f; s. 28-Thika. Tenancy Amendment Act (W .B. 6 of r953). s.'I(z). -:: ··with a" view to i;ive protection to Thika' tenants against eviction and in certain.other matters, the West Bengal -Legisla ture enacted -the Calcutta Thika Tenancy Acti 1949 .. That Act . was amended by the Calcutta Thika Tenancy Amendment Act, :i:g5j, which omitted s: 28 of the Act. The question for decision in - the appeal was whether . the cappellant against whom proceedings

·.

·

for' execution of a decree for ejectment was pending, who had appli~ __ . ed -for, relief under s; 28 when that section was in force, was - - · entitled:to have his ;application ,disposed of in accordance with the provisions of s. 28, which had ceased to exist retrospectively though. it remained undisposed of 'on the date the Amendment Act came into force:· • · ·· · · · · · ' - ",r; Held, thats, 1, 'sub-5: (2) Of the Calcutb. Thlka 'Tenanc{A.ct t953,• clearly intended that no reilef under s.' 28 of the brigfnal

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