MEHARBANSINGH v. BHAGW ANTSINGH & Ors.

mortgage money but were not entitled to get possession of the mortgaged land, since according to the High Court, the proprietary rights including the right to get possession bad become vested in the State -under the aforesaid Act. It further held that the plaintiffs were only entitled to claim cornpensa· tion from the Government in lieu of their proprietary rights after redeeming the mortgage by making payment of the n1ortgege money. Against the decree of the High Court, the plaintiffs filed an appeal before this Court in Meharban Singh & Ors. v. Naresfz Singfz & Ors. [1970] 3 SCR 18. This Court set aside the decree of the High Court and remitted the case back to the High Court for a fresh decision on the question whether the lands in dispute were khud-kasht larxls and to p.:1ss a decree for possession if they were found to be so in view of sections 4(1)(f) and 4(2) of the Act. After the case went back to the High Court, the State Government was impleaded as a party to the suit and was·· permitted to file a written statement.

Certain additional issues were raised by the Higb. Court on the basis of the ne"v pleadings. The High Court C sent the case to the trial court for recording its finding on the issue 'whether the land in dispute was recorded as khud-ka.sht land immediately before the date of vesting?' after giving the parties an opportunity to adduce further evidence on the said additional issue and to resubmit the record to it. The trial court held that the suit land was khud-kasht land in possession of plaintiffs before the date of vesting of the estate and submitted the said find· ing to the High Court. The said finding was not in fact disputed before the D High Court. Aii that the High Court was plaintiffs were entitled to the benefit of sub-section (2) of section 4 of the Act but the High Court once again took the view that the plaintiffs were not entitled to get possession of the suit lands although they were entitled to a decree for redemption. above appeal has been filed. judgment of the High Court, to decide was whether It is against the Allowing the appeal and restoring the decree of the Court of first appeal, E HELD : When the case went back to the High Court all that the High Court was to decide was whether the appellant was entitled to the benefit of section 4(2) of the Act in terms of the directions given by this Court.

Since the suit lands there can be no dispute the plaintiffs were the proprietors of that till the time of mortgage the suit lands were in their possession. Secondly since the ]ands were recorded as khud-kas/lt lands of the mortgagors in the annual vilJage papers before the date of vesting, they were clearly entitled to a decree for possession in terms of section 4(2) and there was no occa- sion for the High Court to examine the consequences of their losing possession of the lands after the mortgage. When section 4(1) (f) read with s. 4(2) gave the mortgagor the benefit of the right to remain in possession of his khud-kasht, which we.s in his possession upto the date of mortgage, there could be no reason why it should bo denied to t:he plaintiffs. It was found •n G themselves evidence by the first court of appeal that the mortgagors were cultivating the lands and thereafter the mortgagee got them cultivated through his relatives.

Assuming that the mortgagee really lands, during the period of mortgage their tenure was bound to end on the redemption of the mortgage according to the ordinary- law of redemption unless they could lay claim to protection under any other law. [797 E-H] tenants in inducted F It is well settled that the normal law of mortgage would apply and tenants inducted by the mortgagee would go out of the lands on redemption of the 13-91SCI/8~ 8 ' ... • ' • • ---- 792 SUPREME COURT REPORTS [1980] 2 SC.II. • A mortgage if in the n1eanwhile the law has not been shown to intervene for their protection. 11! section 4t2) to a proprietor like the plaintiffs. The tenants inducted by the mortgagee would have no statutory right to possession .. 1800 A-B} In the instant case 1he law expressly gave the benefit Mahabir Gopc and others v. Jlarbans l\7arain Singh and others [1952]'5.C.R. 775; Narihar Prasad Singh and Another v.

Mst. of Munshi Nath Prasad and others [1956) SCR 1; Asa Ran1 and anotl1er v. Mst. Rani Klili 1111d £1no1/icr [1958] SCR 986; Prabhu v. Ramdev and othm [1966] 3 S.C.R. 676. referred to. Section 41 which deals with protection of tenancy rights of the n1ortgagees ~annot be invoked by the mortgagees in the case of section 4(2). [800 B·C] C'rv!L APPELLATE JURls.IJICTION: Civil Appeal No. 2113 of

1972. B c Appeal by Special Leave from the Judgment and Order dated 10-2-1972 of the Madhya Pradesh High Court in Second Appeal No. 310 of 1960. D Shiv Dayal and J. S. Sinha for the Appellant. M. C. Bhandare, Mrs. Urmila Kapoor and Shobha Dixit for the Respondent. The Judgment of the Court was delivered by E F SHINGHAL, J. This appeal of one of the plaintiffs, by special leave, is directed against the jndgment of the Madhya Pradesh High Court dated February 10, 1972, by which the suit for possession of the lands, which the plaintiffs had mortgaged, has been dismissed even though the trial court's decree for redemption has been maintained. As the matter has come up to this Court for the second time, at the instance of the plaintiffs it is not necessary to state all the facts for they have been mentioned in this Court's earlier decision is Meharbansingh and others v. Nareshsingh and others. (') It will be sufficient to refer to those facts which bear on the present controversy.

The suit lands belonged to Samle Singh, father of appellant Meharban Singh, and Jomdar Singh who executed a registered deed of mortgage in favour of Munshi Singh on May 20, 1939, Rs. 2242/14/-. It is not disputed before us that it was a usufructuary mortgage of land within the area of the former Gwalior State. The mortgagors gave a notice to the mortgagee on May 15, 1943, for redemp tion of the lands but he. refused to accept. The mortgagors filed the suit for redemption on June 15, 1943. As some other persons were alleged to be in possession of the suit lands, they were also impleaded G B (!) [1970] 3 S.C.R. 18 • J '\ ... ... ; , .._ MEHARBAN SINGH v. BHAGWANT SINGH (Shinghal, J.) 793 'l!s defendants. The Madhya Bharat Zamindari Abolition Act, 1951 •(Samvat 2008), hereinafter referred to as the Act, came into force on October 2, 1951, and leave was granted to the plaintiffs to amend the -plaint suitably.

The trial court decreed the suit on October 10, 1958, but disallowed the relief for the grant of mesne profits. Three appeals were preferred against that judgment and decree of the trial court. The appellate court dismissed the appeals of the defendants . .It held that the suit lands were the khud-kasht lands of the, mortgagors, ~nd allowed the appeal of the plaintiffs for mesne profits from the -date of the deposit of the mortgage-money. The defendants went in second appeal to the High Court; and the plaintiffs also preferred an appeal for refusal of mesne profits from the date of the cause of action. The High Court partly allowed the defendants' appeal by its judgment dated September 27, 1962. It relied on this Court's decision in Haji Sk. Subhan v. Madhorao(') and held that the plaintiffs were not entitl- It dismissed the appeal of plaintiff Meharbansingh. ed to possession. He applied to this Court for special leave, and that led to this Court's decision in Meherbansingh's case (Supra) mentioned above.

This' ·Court allowed the appeal and, after considering the relevant provisions of the Act, remitted the case to the High Court for fresh decision after notice to the state on the point whether the suit land were Khud-kasht of the plaintiffs and they were entitled to remain in possession under 1>ection 4 of the Act. The State was therefore allowed to be impleaded as a party and to file a written statement. Certain additional issues were framed by the High Court and the case was remitted to the trial court for its findings. When it came to the High Court again, with those findings it once again took the view that the plaintiffs were not entitled to possession of the suit lands although they were entitled to a decree for redemption. It is against that judgment of the High Court dated February 10, 1973, that plaintiffs Meherbansingh has come up to this Court by way of the present appeal. The facts of this case are thus quite simple, and its fate depends upon the answer to thz question whether the plaintiffs were entitled to possession of the suit lands under sub-section (2) of section 4 of the Act.

A' B ' c D E' F G The Act made provision for the abolition and acquisition of the rights of proprietors in villages, "muhals", "chaks" or blocks If therefore a person was a "proprie- settled on the zamindari system. tor" within the meaning of clause (a) of section 2, all his proprietary rights vested in the State free of all encumbrances by virtue of sub- n section (l) of section 3 of the Act from the date specified for the (I) {1962] Supp. I S.C.R. 123. ·- 1 •.. , ' .. A B c D E F G H 794 SUPREME COURT REPOR'l S [1980] 2 S.C.R. purpose in the notification issued by the State Government. It is not disputed that the sp2cified date for purposes of the present case was October 2, 1951. The consequences of the vesting of an estate under section 3 have been stated in section 4. We are not concerned with sub· section (3) of that section, and it will be sufficient to refer to clauses (a) and (f) of sub-section (1) and sub-section (2) of Section 4.

Clause (a) of sub-section (1) of section 4 provides that save as otherwise pro vided in the Act, the following consequences shall ensue notwithstand ing anything contained in any contract, grant or document or in any other law for the time being in force,- "(a) all rights, title and interest of the proprietor in such forest, area, including land (cultivable, barren or Bir), trees, fishe1ies, wells (other than private wells), tanks. ponds, water channels, ferries, pathways, village-sites, hats, and bazars and mela-grounds and in all sub-soil, including rights, if any, in mines and minerals, whether being worked or not, shall cease a'nd be vested in the Stat>o free from all encumbrances; " This provision therefore had the effect of terminating the propriel'ary rights of a proprietor in his estate and in vesting them in the State> free from all encumbrances. The legislature has taken care to deal with the fate of mortgages, in clause (f) of sub-section ( 1) of section 4, which reads as follows.- "(f) every mortgage wit!h possession existing on property so vesting or part thereof on the date immediately preceding the date of vesting shall, to the extent of amount s•2cured on such property or part thereof be deemed without prejudice to the rights of the State under ~ection 3, to have been substituted by a simple mortgage.

"' So a mortgage with possession, which ex.isled on th-: date immediate ly preceding the date of vesting of the property, was deemed to have been substitued by a simple mqrtgage. That was to be so without prejudice to the rights of the State under section 3. A mortgagee who was i'n possession of lands under a deed of mortgage, e.g. a usufructuary mortgagee, this lost possession of the lands by opera tion of the law, and his mortgage became nothing more than a simple In mortgage from the date of the vesting of the lands in the State. other words, he lost possession of the lands which were once mort gaged with him with possession, and was left only with the normal right of a simple mortgagee to realise the mortgage money. \ • . ' ' I 9" ' MEHARBAN SINGH v. BHAGWANT SINGH (Shinglzal, !.) 795 While that was the fate of the mortgagee under the Act, the fate -of the mortgagor, who was once the proprietor of the lands, was even worse, for he lost his proprietary rights in the lands because of their vesting in the State under section 3 as aforesaid and had, nonetheless, to fulfil his obligation as a mortgagor to the extent of the amount ·secured under the mortgag~. It appears that the legislature there fore thought of alleviating the lot of those of such proprietors whose ·cases fell under sub·section (2) of section 4 of the Act.

The sub :section reads as follows,- A B , ·" (2) No:withstanding anything contained sub-<>ection •(I), the proprietor shall continue to remain in possession oI the annual village his khud-kasht land, so recarded in papers before the date of vesting. " in clause "So only those proprietors were permitted to continue to remain in ·possession of their lands who had khud-kasht lands and were recorded as khud-kasht in the annual village papers before the date of vesting. The expression khud-kasht bas been defined clause (c) of section 2 of the Act to mean, inter alia, land cultivated by the zamindar himself or through employees or hired labourers. ·Clause ( c) of section 2 of the Act states that words and expressions, used in the Act, but not defined in it, shall have the same me.aning as assigned to them in Qanoon Mal, Gwalior State, Samvat 1983. The expression "zamindar" has been defined ( 13) of section 2 of the Qanoon Mal to mean a person who has the rights It is not disputed before us that the plaintiffs were mentioned in it. zamindars under that definition, and were proprietors of their la'nds.

It is also not disputed before us that if a person was a zamindar and <:ultivated the land himself or through employees or hired labourers, that would be his khud-kasht cultivation within the meaning of clause ( c) of section 2 of the Act. It would follow that if, in a given case, it was shown that a proprietor had khud-kasht land which was so recorded i'n the annual village papers bdore the date of vesting of the lands in the State, he was entitled to continue to remain in posses sion of those lands. This concession to the proprio>tor was by way of a rider to the rigorous provisions of section 3 of the Act regarding the vesting of his estate in the State, and if a proprietor was able to establish that ho was entitled to its benefit, there could be 'no reason why it should not be .allowed to him. It may be that provision for the vesting of the estate in the State under section 3 and, in particular, that relating to the loss of possession of the mort :gagee under clause ( f) of section 4, operated harshly on a mortgagee with possession, and he had to conte'nt himself with the other provi -sions in the Act for the satisfaction of the debt owed to him by the c D E G DI 796 SUPREME COURT REPORTS [1980] 2 S.C.R. , 'A B c D E F G H proprietor, but the law allowed him nothing more after the date of the vesting of the estate in the State.

The lot of the mortgagor-proprie tor was in fact far worse, for while the Act divested him of proprietary interest in the lands held by him and vested those right& in the State, it held him liable as if his; mortgage was a simple mortgage and left him only with the remedy of claiming compe'nsation, which. was itself overridden with his liability to his creditors. In the plight in which he was placed by the land reforms legislation which was the. subject-matter of the Act, it was quite reasonable for the legislature. to allow him, notwithstandini anything contained in sub-section (l) of section 4 which e'numerates consequences of the vesting of the estate in the State, the benefit of what sub-sectiQn, (2) of that section; provided, and that also on his satisfying the rigorous conditions of the sub-section mentioned above. Reference in this connection may also be made to section 37 of the Act, sub-sectio'n ( 1) of which provi<fos that every proprietor who• is divested of his proprietary rights shall be "a pacca tenant of the khud-kasht land in his possession and the land revenue payable by him shall be determin2d at the rates fixed by the current settlement In fact, when this Court examined the for the same kind of land.

" matter on the earlier occasion, it topk notice of the above provision& of the Act and observed as follows,- "The proprietor however, notwithstanding other conse quences of the vesting in a State, is entitled to continue to remain in possession of his khud-kasht land which is recorded in the annual village papers before the date of vest-· ing. Now it was clearly open to the plaintiffs to show that the land in question was khud-kasht and, therefore, in accord ance with s. 4 they were entit:ed to remain in possession· thereof. " In other \Vords, this Court took the view that while the mortgagor« (appellants) fulfilled the other requirements of the law, their claim to possession of the khud-kasht lands under sub-section (2) of sectiorr 4 of the Act had to be decided on the basis of the facts, and it was open to them to show that the lands were khud-kasht and they were· entitled to remain in possession in terms of sub-section (2) of section 4.

That was the purpose why the case was remanded to the High Court and an opportunity was give'n to the State to appear and con test the claim of the plaintiffs on that basis. As has been stated, the case went back to the High Court which, in its turn, impleaded the State as a party to the suit, permitted it to t<> file a written statement, added certain issues and sent the case / / ' MEHARBAN SINGH v. BHAGWANT SINGH (Shinghal, /.) 797 the trial court for submitting its findings after giving the parties an opportunity to adduce further evidence. And wh>~n it went back to the High Court with the findings of the trial court, the High Court stated as follows in its judgment under appeal,- "After imp!eading the State as a party, the following issue, inter alia was remitted to the lower court for record ing a finding after giving both the parties an opportunity to adduce evidence : '"Whether the land in suit was recorded as khud-kasht immediately before the date of vesting.

" The parties fil·~d certain documents bnt did 'not adduce any oral evidence on the point. The trial court has answer It was not disputed before ed the issue in the affirmative. me that lhe land was recorded as Khud-kasht in the names oE the plaintiffs at the time of vesting,. .... " There can be no doubt, therefore, that the trial court recorded the finding, on the basis of the '~vide'nce before it, that the suit lands were recorded as the khud-kasht lands of the plaintiffs before the date of the vesting of the "-state. That was in fact not disputed in the, High Court. All that the Hi;h Court had then to do was to decide whether the appellant was entitled to the benefit of sub-section (2) of section 4 of the Act, for that was the clear direction of this Conrt in the It is not disputed before us that the plaintiffs were earlier judgment. the proprietors of the suit lands, and it cannot be disputed that as they mortgaged them with possession with defendant Munshi Singh, they were themselves in possession upto the date of the mortgage, and as it has been found as a fact that the lands were recorded as khud kasht lands of the mortgagors in the annual village papers before the date of vesting, they were clearly entitled to a decree for possession in terms of sub-section (2) of section 4 and there was no .occasion for the High Court to examine the consequence of their losing the possession of the lands after the mortgage.

It has to be appreciated that possession is always lost by the mortgagor in the case of a (1) mortgage with possession. But when clause (f) of sub-section of section 4 gave the mortgagor the benefit of sub-section (2) of that section to claim the right to remain in possession of his khud kasht land which was in his possession upto the date of mortgage, if shown to exist, there the strict requirement of sub-s,~ction (2) was could be no reason why it should· be' denied to the plaintiffs. It may be mentioned In this connection that when the case came up in first appeal before the Second Additional District Jndge of Bhind, A R E p G - i "' • A B c D F F G n 798 SUPREME COURT REPORTS [1980] 2 S.C.R. • he examined the statements of Himachal Singh DW 1, Ram Krishan DW 2 and Hanumant Singh DW 3. Himachal Singh was a cousin of mortgagee Munshi Singh, Ram Krishan DW 2 was a nephew of Munshi Singh and Hanumant Singh DW 3 was himself a defendant.

On a consideration of their statemcn!s. the court of first appeal reached the conclusion that the mortgagors were themselves cultivating the land and thereafter the mortgagee got it cultivated through his relatives. But eve'n if it were assumed that the mortgagee really inducted tenants in the lands during the period of the mortgage, ~heir tenure was bound to end on the redemption of the mortgage according to the ordinary Jaw of pedemption unless, of course, they could Jay claim to protection under any other Jaw. Reference in this connection may be made to the decision of this Court in Mahabir Cope and others v. Harbans Narain Singh and others(') where the Jaw has been laid down as follows,- "The general rule is that a person cannot by transfer or otherwise confer a better title on another than he himself has. A mortgagee cannot, therefore, create an interest in the mortgaged property which will enure beyond the termi nation of his interest as mortgagee.

Further, the mortgagee, who takes p05session of the mortgaged property. must manage it as a persqn of ordinary prudence would manage it if it were his own; and he must not commit any act which is destructive or permanently injurious to the property; see section 76, sub-clauses (a) & (e) of the Transfer of Pro perty Act. It follows that he may grant leases not extend ing beyond the period of the mortgage; any leases granted by him must come to an end at redemption. " Care was taken to state further in that case that if during the per missible settlement by a mortgagee in possession with a tenant in the course of prudent management, any right sprang up in the tenant by "different matter conferral or creation by statute, that would be a altogether", for that would "exception to the general rule. " then be an The decision in Mahabir Gope's case (Supra) was applied or was followed in Harihar Prasad Singh and another v.

Mst. of Munshi Nath Prasad and others(') where it was held as follows,- "As the mortgagees are neither proprietors nor tenure holders as defined in the Act, the tenants holding under (1) [1952] S.C.R.'775. (2) [1956] S.C.R. I. \ l I • MEHARBAN SINGH v. BHAGWANT SINGH (Shinghal, !.) 799 them could not claim to be raiyats as defined in &Xtions 5(2) and 5(3), and no occupancy rights could therefore be acquired by them under section 21 of the Act. " That decision was again followed in Asa Ram and another v. Mst. Ram Kpli ·and another(!) also, and was held as follows,- "But where there is no such prohibition, the only conse quence is that the parties will be thrown back on their rights under the Transfer of Property Act, and the lessees must still establish that the lease is blinding on the mortgagors under s.76(a) of that Act. " A B Reference may also be made to Prabhu v. Ramdev and others(') C where again reference was made (supra) and the legal position was reiterated as follows,- to the decision in Mahabir Gope "Having made these observations, however, this Court bas taken th2 precaution to point out that even in regard to tenants inducted into the land by a mortgagee cases may arise where the said tenahts may acquire. rights of special character by virtue of statutory provisions which may, in the meanwhile, come into operation.

A permissible settlement by a mortgagee in possession with a tenant in the course of prudent management and the springing up of rights in the tehant conferred or created by statute ba&od on the 11ature of the land and possession for the requisite period, it was observed, was a different matter altogether. Such a case is clearly an exception to the general rule prescribed It will thus be seen that by the Transfer of Property Act. while dealing with the normal position under the Transfer of Property Act, this Court specifically pointed out that the rights of the tenants inducted by the mortgagee may cohceiv ably be improved by virtue of statutory provisions which may meanwhile come into operation. That is precisely what has happened in the present case. During the continuance of the mortgage s. 15 of the Act came into operation and that made the respondents Khatadars who are entitled to claim the benefit of s.

161 of the Act. " D E F G It is therefore well settled that the normal law of mortgage would apply and tenants inducted by the mortgagee would go out of the fonds on redemption of the mortgago, if, in the meanwhile, law has H (ll [19ssrs.c.R. 986. (2) [1966] 3 S.C.R. 676. .. i • _ .. 800 SUPREME COURT REPORTS [1980) 2 S.C.R. ' A 8 c not been shown to intervene for their protection. As, i"n the instant case, the law expressly gave the benefit of sub-section (2) of section 4 to a proprietor like the appellant, the tenants Inducted by the mort gagee will have no statutory right of possession. A vain a'.tempt was made to invoke section 41 of the Act for the protection of the tenancy rights of the mortgagees, but their learned Counsel was unable to show how they could claim th·~ benefit of that section iu face of the dear provision of sub-section (2) of section 4 of the Act. In fact all that Mr. Bhandare was able to contend on behalf of the respondents was that their case was covered by this Court's decision in Haji Sk.

Subhat!'J case (supra). That decision formed the basis of the ear; ier decision of the High Court dated September 27, 1962, but this Court clearly pointed out in its earlier decision that the High Court was· "in error in allowing the appeal before it and in dismissing the plaintiff-appel lants' suit for possession on the authority of this Court's decision in the case of Haji Sk. Subhan" (supra). It is therefore not necessary for us to say, once again, why that decision cannot govern the present dis pute. In the result, we, allow the appeal and restore the decree of the court of first appeal with costs. I P.B.R. Appeal allow~d. • ... • y