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1969 Supreme(Pat) 92
PATNA HIGH COURT
Anwar Ahmad and M.P.Varma JJ.
Sanwarmal Agarwalla
Versus
Benoy Krishna Mukherjee
Appeal from Original Decree No. 459 of 1963 ;
Decided On : MAY 19, 1969
A mortgage decree for sale of the mortgaged property is not maintainable after the vesting of the estates and tenures in the State of Bihar, under the provisions of the Bihar Land Reforms Act, on the 1st January, 1956, as the entire interest in the estate in question, including the interest of the plaintiff-respondent and the defendant-appellant, vested in the State of Bihar absolutely and free from encumbrance.
Headnote:
MORTGAGE - Suit for recovery of loan - Maintainability - Bihar Money-Lenders Act (Bihar Act VII of 1939), Sec. 4 - Mineral Concession Rules, 1949, Rule 37 - Bihar Land Reforms Act, 1950, Sec. 10 - Whether suit is barred under Sec. 4 of the Bihar Money-Lenders Act - Whether the mortgage bond was for consideration and whether the mortgage money was realisable from the defendants - Whether the impugned mortgage, being in violation of Rule 37 of the Mineral Concession Rules, 1949, was inoperative - Whether, after the vesting of the estates and tenures in the State of Bihar, under the provisions of the Bihar Land Reforms Act, on the 1st January, 1956, the entire interest in the estate in question, including the interest of the plaintiff-respondent and the defendant-appellant, vested in the State of Bihar absolutely and free from encumbrance and, as such, a mortgage decree for sale was illegal.
Fact of the Case:
Plaintiff filed a suit for recovery of Rs. 18,000/- along with interest at 6% p.a. from 1st July, 1950 till realization, on the basis of a registered mortgage bond executed by the defendants in his favor. The defendants contested the suit, contending that the mortgage bond was without consideration, was executed under undue influence and coercion, and that the suit was not maintainable as the plaintiff was not a registered money-lender. The trial court decreed the suit in favor of the plaintiff.
Finding of the Court:
1. The suit was not barred under Sec. 4 of the Bihar Money-Lenders Act, 1939, as the plaintiff was not a professional money-lender and the transaction did not represent a loan. 2. The mortgage bond was for consideration and the mortgage money was realisable from the defendants. 3. The impugned mortgage, being in violation of Rule 37 of the Mineral Concession Rules, 1949, was not void and ineffective. 4. After the vesting of the estates and tenures in the State of Bihar, under the provisions of the Bihar Land Reforms Act, on the 1st January, 1956, the entire interest in the estate in question, including the interest of the plaintiff-respondent and the defendant-appellant, vested in the State of Bihar absolutely and free from encumbrance, and as such, a mortgage decree for sale was illegal.
Issues: 1. Whether the suit was barred under Sec. 4 of the Bihar Money-Lenders Act, 1939? 2. Whether the mortgage bond was for consideration and whether the mortgage money was realisable from the defendants? 3. Whether the impugned mortgage, being in violation of Rule 37 of the Mineral Concession Rules, 1949, was inoperative? 4. Whether, after the vesting of the estates and tenures in the State of Bihar, under the provisions of the Bihar Land Reforms Act, on the 1st January, 1956, the entire interest in the estate in question, including the interest of the plaintiff-respondent and the defendant-appellant, vested in the State of Bihar absolutely and free from encumbrance and, as such, a mortgage decree for sale was illegal?
Ratio Decidendi: 1. The onus to prove that the suit is entertainable without registration, is on the plaintiff, in view of the bar under the first paragraph of Sec. 4 of the Bihar Money-Lenders Act, 1939. 2. The transaction in question does not represent a loan so as to attract the provisions of the Bihar Money-Lenders Act, 1939. 3. The lease in question was not void and ineffective, as the lessee had not violated the provisions of Rule 37 of the Mineral Concession Rules, 1949. 4. With the vesting of the estate in the State of Bihar, the old lease came to an end and a new statutory lease came into effect, and the remedy available to the plaintiff is to follow the compensation in the first instance and then look forward as to what consequences would follow in future.
Final Decision: The judgment and decree of the court below are upheld and the appeal is dismissed with the modification that the decretal dues will not be a charge on the mortgaged property and the same shall not be sold for the satisfaction of the mortgage dues.
M.P.Verma, J.
1. This appeal has been directed against the preliminary decree passed by the Second Subordinate Judge. Dhanbad, in Title (Mortgage) Suit No. 16 of 1962 decreeing the plaintiffs suit with costs on contest against defendant No. 2 and ex parte against defendant No. 1. He directed the defendants to pay a sum of Rs. 33,882.88 paise to the plaintiff on or before the 22nd August, 1963, failing which the mortgaged property, or a sufficient portion thereof, was to be sold to satisfy the decree.
2. The case of the plaintiff, shortly stated, was that coal lands measuring 50 bighas lying in village Baromesia, P. S. Baghmara, in the district of Dhanbad, as described in Schedule "A" of the plaint, belonged to the plaintiffs. On the 31st December, 1949, both the defendants took settlement of those coal bearing lands from the plaintiff under a registered Indenture of Mining Lease, together with all inclines, quarries, houses, tools, machineries etc. This colliery was then known as "Central Sindhi Colliery", which name was subsequently changed into "South Muraidih Colliery. The defendants agreed to pay a salami of Rs. 18,000/-; but they were not in a position to pay so much in cash and so they executed a registered mortgage bond on the same date in favour of the plaintiff in consideration of the said amount of Rs. 18,000/-. Under this mortgage bond, the defendants hypothecated, by simple mortgage, the very same 50 bighas of coal lands as described in Schedule "A" of the plaint. They further agreed to pay the mortgage money to the plaintiff on or before the 30th June, 1950; and, in default thereof, the defendants made themselves liable to pay interest on the same amount at 6 p. c. p. a. from the 1st July. 1950 till realisation. In spite of repeated demands and notice, the defendants mortgagors did not pay any amount to the plaintiff, and so the plaintiff had to bring the suit for recovery of the principal amount of Rs. 18,000/-, together with interest at 6 p. c. p. a. from the 1st July to June 1962, amounting to Rs. 12.960.00. The plaintiff prayed that a mortgage decree for the above mentioned sum, together with costs and interest, pendente lite and further, be granted in his favour, and the said decretal amount be declared a charge on the leasehold coal lands. The plaintiff further prayed that, if the defendants fail to pay the decretal dues within the time fixed by the Court, the mortgaged property be put to sale and. should the sale proceeds be insufficient to satisfy the decretal dues, a personal decree be passed against the defendants.
3. Both the defendants filed separate written statements. But at the time of hearing only defendant No. 2 contested the suit, and the lawyer for the defendant No. 1 endorsed "no instruction". In the written statement filed on behalf of defendant No. 1, it was contended that defendant No. 2 was never his adopted son; rather he was the karta of his joint family. He, along with defendant No. 2, purchased the lands in suit from one Satyaprasad Chatterjee under a registered deed of sale dated the 15th December, 1949; but when the defendants, along with other members of their families, entered into possession of the property in Suit, the plaintiff represented that he had interest in the property, and advanced a claim in respect of the said property. So, in order to buy peace and under the coercion of the plaintiff, the defendants were forced to execute the mining lease in question. The mortgage in question is without consideration, inasmuch as the very same property was also charged under the mining lease in question. According to defendant No. 1, defendant No. 2 had deceived him because he stopped sending return about the income etc., In respect of the colliery in question since after May, 1949, and for this he (defendant No. 1) had brought Title Suit No. 29 of 1960 against defendant No. 2. Another plea taken was that the plaintiff was not a registered money-lender, and so the suit was not
