Patna High Court
Kapildeo Narain Singh vs Deputy Collector, Land Reforms And Ors. on 6 June, 1984
Equivalent citations: AIR1985PAT183, AIR 1985 PATNA 183, 1985 BBCJ 119 (1984) PAT LJR 846, (1984) PAT LJR 846
Author: Lalit Mohan Sharma
Bench: Lalit Mohan Sharma
JUDGMENT Lalit Mohan Sharma, J.
1. The point involved in this case relates to the interpretation of Section 12 of the Bihar Money Lenders Act, 1974. The section deals with the automatic satisfaction of the dues in respect of a usufructuary mortgage after expiry of a period of seven years from the date of execution of the mortgage bond.
2. Each of the respondents 3 and 4 executed a mortgage deed in favour of the petitioner on 29-5-1973 in respect of certain agricultural lands. The respondents filed separate applications before the respondents No. 2 (Collector within the Act) for evicting the petitioner from the lands. A single case registered as Redemption Suit No. 26 of 1982 was started on their basis. The petitioner objected, but the respondent No. 2 allowed the prayer of the respondents 3 and 4 by order in Annexure 1 to the writ petition. The petitioner appealed before the Land Reforms Deputy Collector, respondent No. 1. but without waiting for its disposal, filed this writ application on 14-7-1983. The case was admitted on 19-7-1983. Subsequently, the appeal before the respondent No. 1 was dismissed for default in absence of the parties. The petitioner prays for quashing the entire redemption proceeding.
3. In the original writ petition, several grounds were mentioned in paragraph 2 which are apparently not happily worded. The points urged at the time of hearing of the case, do not appear to have been taken therein. The petitioner later filed an application for amendment of the writ petition and prayed for the grounds mentioned herein to be allowed to be taken.
4. Mr. Shreenath Singh, appearing in support of the writ petition pressed the following points: --
(i) Section 12 is ultra vires of Article 14 of the Constitution;
(ii) The section applied only in case of a usufructuary mortgage as defined by Section 58(d) of (he Transfer of Property Act and not to any other mortgage merely by reason of the mortgagee being in possession of the mortgaged land and since the mortgages in the present case are anomalous mortgages as defined in Section 58(g) of the Transfer of Property Act, the section has no application; and
(iii) The application of the respondents should have been dismissed in view of the exemption granted under Section 3 by the State Government under Notification No. S. O. 207 dated 13-2-1981.
5. The Act was passed in 1975 with the object to consolidate and amend the law relating to regulation of money lending transactions and to grant relief to the debtors. The relevant portion of Section 12 is in the following terms : --
"12. Usufructuary mortgages and their redemption-- Notwithstanding anything to the contrary contained in any law or anything having the force of law or in any agreement, the principal amount and all dues in respect of a usufructuary mortgage in relation to any agricultural land, whether executed before or after the commencement of this Act, shall be deemed to have been fully satisfied and mortgage shall be deemed to have been wholly redeemed on expiry of a period of seven years from the date of the execution of the mortgage bond in respect of such land and the mortgagor shall be entitled to recover possession of the mortgaged land in the manner prescribed under the rules."
The State Government has been empowered by Section 3 to exempt any class of money lenders from the operation of the provisions of the Act. Section 47 deals with the rule-making power of the State Government for carrying out the purposes of the Act.
6. On the question of vires of the section. Mr. Singh contended that the provisions suffers from discrimination in the reverse by ignoring the length of different periods, for which individual mortgagees have in the past remained in possession of the mortgaged lands and the varying quality of the lands and thus treating all usufructuary mortgages similarly in respect of the quantum of profits realised by the creditor. The validity of the section was examined by five Judges of the Full Bench of this Court in Madho Singh v. State of Bihar. 1978 BB CJ (HC) 86 : (AIR 1978 Pat 172) and it was held that the section was intra vires. 1. therefore, do not consider it necessary to mention the argument addressed on behalf of the petitioner in any detail. The point having been authoritatively decided by this Court against the petitioner must be overruled.
7. Mr. Singh next urged that in view of a promise by the respondents to pay off the loan, as included in the mortgage deeds, the transactions must be interpreted as anomalous mortgages and not usufructuary mortgages as defined in the Transfer of Property Act. The expression 'usufructuary mortgage' should be understood in the same sense, because it has not been given a different meaning by the Money Lenders Act. On the interpretation of the mortgage deeds, reliance was placed on the decision in Kangaya Gurukal v. Kalimuthu Aunavi (1903) ILR 27 Mad 526 (FB), Sheikh Akbar Ali v. Sheikh Mafijuddin, AIR 1942 Cal 55 and Rahimuddin Choudhury v. Nayan Chand Das, AIR 1950 Assam 18.
8. There is no dispute in this case that the petitioner has been in possession of the land since 1973 (there is a statement in the writ application about some Bataidar being in possession, but this plea has not been relied upon on behalf of the petitioner during the argument). The point pressed on behalf of the petitioner is that since there is a statement in the mortgage deeds by the mortgagors that the loans would be paid off, the transactions cannot be held to be usufructuary mortgages.
9. Mr. Shreenath Singh laid great stress on the following recitals in the mortgage deeds which (translated by the Translation Department of this Court) read as follows : --
(i) "Hence, 1 ....... let out in rehan the aforesaid land with possession to the claimant mentioned in column No. 2 of this deed for a consideration of Rs. 13,000/- half of which is Rs. 6500/- in Government coins for a period of five years beginning from the month of Jeth 1380 fasli to the month of Jeth 1385 fasli and mortgage the same....."
(ii) ''I shall pay the entire rehan money to the rehandar in one lump sum and I shall enter into seer (exclusive) possession of the rehan property."
It has been urged that in view of the promise to repay the mortgage money and in view of the period of the mortgages having been confined to a term of five years, the transactions are not strictly usufructuary mortgages as defined in the Transfer of Property Act. Before proceeding further three other terms which also appear relevant in this regard may be considered. The documents stated that the mortgagee should maintain his direct possession of the lands and not permit others to enter into possession and appropriate the produce thereof in the following terms : --
(iii) "The rehander should himself enter into possession and occupation of the said rehan property, cultivate it or get it cultivated by others and apporpriate the entire produce of the mortgaged property after payment of rent as per laggit of the Zamindar in lieu of the rehan money and he should not allow others to enter into possession thereof." (Emphasis added).
The statement quoted in Clause (iii) above is immediately followed by the sentence as quoted below : --
(iv) "In case of non-payment of the rehan money, these very writings of this deed shall remain in force exactly in the same way. Whenever after expiry of the due date I shall pay the rehan money. 1 shall do so at the end of the month of Jeth or any year".
Further,
(v) "If due to action of me the executant or of my heirs and on account of diluvion and alluvion by the Ganges the aforesaid rehander be dispossessed from the rehan property, in that case, rehander is and shall be competent to realise the entire consideration money.........."
10. On an examination of the documents in their entirety, it appears that the petitioner entered into possession of the lands in question and apporpriated the produce "in lieu of the mortgage amounts" and even after Jeth 1385 fasli (equivalent to May-June, 1978 A.D.) the petitioner's possession continued as mortgagee. The promise to pay the debt, which has been emphasised by Mr. Singh is not an unconditional promise on the basis of which the petitioner could have sued for the mortgage moneys. This is clear from the statement quoted in Clause (iv) above. The statement regarding payment is mentioned in the sense in which every debtor including an usufructuary mortgagor is liable to discharge his debt. In case of non-payment, the usufructuary nature of the transactions were to continue. I, therefore, do not agree with the petitioner's contention that anomalous mortgages were created in the present case.
11. Assuming in favour of the petitioner that in view of the statement in relation to payment of debt made by the mortgagors, the resultant transactions were not usufructuary mortgages within the meaning of the Transfer of Property Act, still it is not possible to exclude the application of Section 12 to them. The Money Lenders Act does not state that a 'usufructuary mortgage' shall be given the same meaning as in the Transfer of Property Act nor does it define, the expression in any other manner. The meaning of the word 'usufruct' from which the expression 'usufructuary mortgage' has been derived is stated in the Random House Dictionary thus: The right of enjoying all the advantage derivable from the use of something which belongs to another, as far as is compatible with the substance of the thing not being destroyed or injured. The Shorter Oxford English Dictionary also has given a similar meaning. The question arises as to in which sense the Money Lenders Act has used the expression in Section 12. By enacting the section, the legislature has assumed that a creditor in possession of a mortgaged property repays himself the loan along with interest calculated on a reasonable rate by remaining in possession for seven years, and it is therefore unjust and inequitable to deprive the debtor the possession of the mortgaged property after this period. This aspect applies with same force to a case of usufructuary mortgage strictly construed in accordance with the Transfer of Property Act and another mortgage where the creditor is in possession of the mortgaged property. A recital stating the liability of the debtotr for payment of the loan to the creditor does not put the creditor under any disadvantage and does not suggest any ground for differentiating the case from a usufructuary mortgage within the strict terms of the Transfer of Property Act. The object of the section covers the two classes of cases in the same manner and if the section is interpreted, as suggested on behalf of the petitioner, it may be rendered ultra vires on the ground of illegal discrimination. It is well established that in such a case, the Statute must be interpreted, if that is permissible by its language, in a manner which will uphold its validity. I, therefore, hold that the Section 12 shall apply to all cases of mortgages where the creditors are put in possession for appropriating the income of the property in lieu of the debt.
12. The last point pressed on behalf of the petitioner is based on the notification dated 13-2-1981 exempting under Section 3 of the Act such small land holder mortgagees from the operation of Section 12 who hold land not more than a particular area. The petitioner claimed to be covered by the notification. It was contended that since the applications in the present case were filed by the respondents in 1982, that is, after coming in operation of the notification, the applications were not maintainable. In the impugned order, the Circle Officer wrongly assumed that the limitation of the area applied to the mortgagor and not to the mortgagee and on that basis rejected the plea. The argument has, therefore, to be considered on merits.
13. The procedure for resumption of mortgaged property is dealt with in Rules 9 and 10 of the Money Lenders Rules, 1977 which became effective on 6-9-1977. The Sub-rule (1) of Rules 9 and 10, which are relevant in this regard, are as follows : --
"9. Procedure in case of resumption of mortgaged property by a mortgagor from the mortgagee under Section 12 of the Act-- (1) On the expiry of the period of mortgage as mentioned in Section 12 of the Act, the mortgagor shall send a notice in Form M.L. 4 by registered post with acknowledgment due requiring the mortgagee to deliver possession of the mortgaged property within thirty days from the date of notice."
"10. Filing of application by mortgagor to eject the mortgagee in case of the latter's failure to put the mortgagor in possession--(1) If, on the expiry of the period of notice in Form M.L. 4, the mortgagee fails or refuses to deliver possession of the mortgaged property to the mortgagor, the mortgagor shall file an application in Form M.L. 5 to the Collector within whose jurisdiction the mortgaged property or any part thereof is situated, to eject the mortgagee from the mortgaged property."
Mr. Singh contended that the right of the mortgagor is dependent on sending of formal notice under Rule 9 and since this was not done before the notification under Section 3 dated 13-2-1981, the petitioner became entitled to the benefit of the exemption. The applications under Section 12 filed in 1982 must, therefore, be dismissed. I do not find any merit in this argument. The claim of a mortgagee gets determined by virtue of Section 12 of the Act. Without the aid of the rules or notice referred to therein, the right of the mortgagee is completely extinguished by reason of the words in the Section 12 quoted in paragraph 5 above and underlined by me. The Rules 9 and 10 merely deal with the procedure for enforcing the right. The proceeding is similar to an execution proceeding. In the present case, on completion of a period of 7 years in May 1980. the entire loan got automatically satisfied and the mortgages stood redeemed. The possession of the petitioner, therefore, was not in pursuance of any lawful claim. Of course, he was not liable to eviction before the service of a formal notice in accordance with the Rules. But that does not clothe him with any right. The notification under Section 3 issued in 1981 was not and could not be retrospective in operation. It did not, therefore, unsettle the settled position in regard to the rights and liabilities of the petitioner and the respondent. It follows that the petitioner cannot get any benefit out of the same.
14. For the reasons mentioned above, the Writ application fails and is dismissed; but, in the circumstances of the case without costs.