Gunendra Nath Mitra vs Satish Chandra Hui And Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 173 of 1951

Decision Date: 2 December 1952

Coram: Mehr Chand Mahajan, Natwarlal H. Bhagwati

In this matter, the Supreme Court of India heard an appeal titled Gunendra Nath Mitra versus Satish Chandra Hui and others, decided on 2 December 1952. The bench consisted of Justice Mehr Chand Mahajan together with Justice Natwarlal H. Bhagwati. The petitioner was Gunendra Nath Mitra and the respondents were Satish Chandra Hui and the additional parties. The judgment is reported in the 1953 volumes of AIR at page 42 and SCR at page 277. The dispute concerned the application of the Bengal Land Revenue Sales Act of 1859, specifically sections 6, 13, 14 and 37, which deal with the sale of estates that are composed of separate shares, the procedure for selling all such shares when arrears are due, the purchaser’s right to set aside a sale, and the required form of a sale notification. The Court observed that when a collector intends to sell an entire estate but the estate is divided into separate accounts for each share, the collector must first close or merge those accounts into a single demand before issuing a notification under section 6. Only after following this procedure may the collector legally put the whole estate up for sale. The Court further held that where a touzi was held in two shares, each with its own account, and a notification was issued for the sale of the two shares separately, the resulting sale could not be treated as a sale of the entire estate, even though the two shares together made up the whole estate. Consequently, the purchaser of those two shares was not entitled to the privileges given to a purchaser of an entire estate under section 37, and the notification issued under section 6 was decisive in determining whether the sale concerned the entire estate or merely the separate shares.

The appeal was listed as Civil Appeal No. 173 of 1951 and originated from a judgment and decree dated 22 February 1949 of the Calcutta High Court, authored by Justices Blank and Lahiri. That decree itself arose from Original Decree No. 23 of 1944, which was based on a judgment and decree dated 25 August 1943 of the Subordinate Judge of Zilla Midnapore in Title Suit No. 30 of 1941. Counsel for the appellant was represented by a senior advocate assisted by an associate, while the respondent No. 1 was represented by two advocates, and respondents numbered two (b) and fifteen were appeared for by a separate counsel. The judgment was delivered on 2 December 1952 by Justice Mahajan. In describing the factual backdrop, the Court noted that Touzi No. 2409 of the Midnapore Collectorate comprised several mouzas, one of which was Mouza Dingol. The total annual land revenue assessed for the whole touzi amounted to Rs. 2,892-8-0. This description set the stage for the subsequent analysis of the sale and the applicable statutory requirements.

The land revenue record showed that touzi No 2409 of the Midnapore Collectorate comprised several mouzas, one of which was mouza Dingol, and that the total annual revenue payable for the entire touzi amounted to Rs 2,892-8-0. This touzi was divided into two separate shares: a distinct account identified as No 249/1 and a residuary share. Over time both of these shares came to be owned by a single individual, namely Jiban Krishna Ghosh, and upon his death the shares passed to his two sons, Sudhir Krishna Ghosh and Sunil Krishna Ghosh, who were defendants 2 and 3 in the present suit. The two accounts were entered in the revenue records as being held jointly by the sons.

Within the bounds of touzi No 2409 there existed a patni that also included mouza Dingol. In 1885 Kritibas Hui acquired a share of this patni. Earlier, his father Ramnath Hui had purchased certain transferable occupancy ryoti lands that lay under the same patni. The ryoti lands that Kritibas Hui later bought while he was a co-sharer patnidar are listed in schedule “Kha” of the plaint. Kritibas Hui died in 1906 or 1907, and his father Ramnath died shortly thereafter, in 1908 or 1909. Upon the death of Kritibas Hui, his four sons and nephews—who were the plaintiffs—succeeded to the patni and to the other property left by him. Subsequently, when Ramnath Hui died, the plaintiffs, while still being co-sharer patnidars, succeeded to the transferable occupancy ryoti lands that had been purchased by Ramnath under the same patni.

The occupancy ryoti lands described in schedule “Ga” of the plaint were subsequently purchased by the plaintiffs on different dates through separate kabalas, after they had already inherited the lands mentioned in schedules “Ka” and “Kha”. In a similar manner, the niskar lands set out in schedule “Gha” of the plaint were acquired by the plaintiffs after they had taken the inheritance of their father and grandfather. By the same process they also acquired the mokarrari maurashi interest in the Bahali niskar lands of Sree Ishwar Dwar Basuli Thakurani, which are detailed in schedule “Una” annexed to the plaint.

On 22 April 1938 the plaintiffs executed a registered kabala by which they sold their interest in the patni to Upendranath Pal. Upendranath Pal thereby became the patnidar of the six-anna share that the plaintiffs had held up to that time. The remaining interest in the patni, which had been acquired by Satish Chandra Hui, respondent No 1, was also sold at the same time to Gouranga Sundar Das Gupta together with Upendranath Pal. After this transaction the plaintiffs no longer possessed any interest in the patni; they continued only as occupancy ryots or under-tenure holders of the lands.

When the plaintiffs sold their patni interest in 1938 they were heavily indebted to the landlords, Sudhir Krishna Ghosh and Sunil Krishna Ghosh, for arrears of patni rent. Consequently, on 25 March 1939 the landlords instituted a suit demanding a sum of Rs 16,835-3-6 as rent arrears alleged to be due from April 1935 to March 1939. This suit was filed in the court of the subordinate judge of Midnapore against the recorded patnidars, namely the plaintiffs, without recognising the transfer of the patni interest that had been effected by the plaintiffs earlier that year.

The landlords had instituted a suit against the recorded patnidars, namely the plaintiffs, without acknowledging the transfer of interest that the plaintiffs had previously effected. While that suit remained pending, the landlords failed to remit the March installment of revenue and the cesses applicable to the touzi in both of the accounts. Consequently, the two undivided half-shares of the touzi—one represented by separate account No. 1 and the other represented by the residuary account—were advertised for sale on 24 June 1939 pursuant to section 6 of the Bengal Land Revenue Sales Act, XI of 1859. The advertisement, reproduced as Exhibit H, announced the sale of the shares in the estate and did not indicate that the entire estate was to be sold. In the column of the notice the arrears due from each of the two shares were entered separately. Although the notice referred to the two shares, both were actually conveyed by a single notice and a single sale, and they were purchased by defendant 15, the appellant in this proceeding. The sale certificate records that the appellant acquired both the separate account share and the residuary share, thereby obtaining the whole of the touzi between them. On 9 January 1940, acting under the authority granted by section 37 of the Revenue Sales Act as a purchaser of an entire estate in a revenue sale, defendant 15 served a notice upon the maha declaring an unequivocal intention to annul and avoid all under-tenures, including patnis and darpatnis. On that same date the appellant is alleged to have taken possession of certain plots that were then occupied by under-tenure holders, encumbrance holders and niskardars. The revenue sale of 24 June 1939 subsequently gave rise to a series of litigations. As already noted, the landlords had, before the sale, sued for recovery of rent arrears owed by the patnidars, that is, the plaintiffs. That suit was decreed on 14 May 1940. An application for execution of the decree was filed on 21 June 1940, seeking attachment and sale of certain plots possessed by the judgment-debtors. The judgment-creditors contended that, because the whole touzi had been sold under the revenue sale, the purchaser had acquired the right under section 37 of the Revenue Sales Act to annul the tenure, and indeed had done so; consequently the tenure had expired, section 168-A of the Bengal Tenancy Act could not apply, and the decree could be executed against the other properties of the judgment-debtors. This contention was upheld by the subordinate judge but was reversed on appeal by the High Court. The High Court held that the revenue sale constituted only a sale of the shares in the touzi under section 13 of the Revenue Sales Act, that the purchaser had not acquired any right to the tenures because he was not a purchaser of the entire estate as such, and that, since the patni continued to exist, the decree-holder could not execute the decree for arrears against the remaining properties.

The Court observed that rent of patni could be claimed against properties owned by judgment-debtors, as held in Satish Chandra Hui v. Sudhir Krishna Ghosh (1) decided in February 1942 during pendency of present suit. The appellant had not been a party to those earlier proceedings, and consequently his position was not examined in that litigation. For the second time the question arose whether, in the same revenue sale, defendant fifteen purchased the whole estate or only two separate shares, this time as a party to the suit. Bimal Kumar Hui and another litigant filed a suit in 1941 seeking declaration of their rent-free title in certain lands and confirmation of their possession. In that suit the present appellant was impleaded as defendant two, described as the purchaser of the touzi and as claiming to have annulled the plaintiffs’ interest. Defendant two asserted that he had bought entire touzi at revenue sale, subsequently annulled the plaintiffs’ interest, and therefore the plaintiffs were disentitled to relief because they no longer possessed an interest in claimed plots. The plea was rejected by the High Court, and the suit was decreed in favour of plaintiffs, as reported in Gunendranath Mitra v. Bimal Kumar Hui (2) decided in September 1948. Chief Justice Harries and Justice Chakravarti, after reasoning, held that revenue sale in favour of the appellant constituted the sale of two separate shares under section 13 of Act XI of 1859, not entire estate. They concluded that the appellant had not acquired the power to annul the encumbrances under section 37 of the Revenue Sales Act. The third occasion on which the effect of the revenue sale dated 24 June 1939 was examined by the High Court arose in the suit that gave rise to the present appeal. On 28 June 1941 the plaintiff-respondents, Satish Chandra Hui and others, instituted title suit No. 30 of 1941 before the subordinate judge of Midnapore, seeking declaration of title and confirmation of possession of certain plots. The suit is reported in (1) (1942) 46 C.W.N. 540 and (2) (1949) 53 C.W.N. 428, reflecting the decisions of the subordinate judge of Midnapore. A preliminary skirmish between the parties preceded the suit, leading to criminal proceedings under section 144 of the Criminal Procedure Code. The District Magistrate seized the paddy crop growing on several plots, and later, by order of the High Court, the crop was handed over to defendant one, an employee of the appellant. In the same proceeding the present appellant was named as defendant fifteen, thereby becoming directly involved in the dispute over the title to the lands. The plaint alleged that the plaintiffs occupied the plots listed in schedules ‘Ka’, ‘Kha’ and ‘Ga’ as occupancy tenants. It further claimed that they held niskar rights in the lands described in schedules ‘Gha’ and ‘Una’ of the disputed property. Because the appellant had not purchased the entire estate in the revenue sale, the court held that he was not authorized to annul the patni and other tenures.

In the suit the plaintiffs asserted that the appellant could not, by virtue of having purchased the whole estate, cancel the patni tenancy, the other tenures, or the rent-free grants. They further argued that because the plaintiffs had transferred the patni rights to Upendranath Pal, and because those rights continued to exist, none of the existing encumbrances could be deemed extinguished. The appellant, for his part, claimed that he was the purchaser of the entire touzi at the revenue sale that took place on 24 June 1939. He contended that this purchase gave him the authority to set aside and annul all existing encumbrances. According to the appellant, a notice that he had lawfully published on 9 January 1940 served to annul every under-tenancy, including the patni. He maintained that the conveyance of the patni to Upendranath Pal was a benami transaction. Even assuming that the transfer was genuine, the appellant argued, the plaintiffs’ rights in the ryoti land had been extinguished because the ryoti rights had merged with the patni rights under section 22 of the Bengal Tenancy Act as it stood before its 1928 amendment. He further submitted that, by the sale of the patni to Upendranath Pal, the plaintiffs’ rights in those lands had passed to the new patni holder, rendering the plaintiffs incapable of instituting any suit concerning those particular plots.

The trial judge, after examining the evidence, granted a decree in favour of the plaintiffs in respect of certain plots, the details of which are recorded on page 144 of the paper-book. The judge dismissed the plaintiffs’ claim concerning the other lands listed in schedule “Gg” of the plaint. In addition, the court awarded the plaintiffs a monetary decree of Rs 416-4-0 against defendant 1 for the paddy crop harvested from 55½ bighas of land drawn from schedules “Ka”, “Kha” and “Ga”, where the plaintiffs had successfully proved title and were therefore entitled to recover khas possession. The court held that, contrary to the appellant’s assertions, the revenue sale did not transfer the entire touzi to him, and consequently he possessed no authority to cancel or avoid any under-tenancies or other encumbrances. It was further found that the ryoti holdings of the plaintiffs had merged into the patni and, following the patni’s sale to Upendranath Pal on 22 April 1938, those holdings passed to him. Nevertheless, Upendranath Pal subsequently resettled the lands with the plaintiffs, and as settled ryots of the village they acquired occupancy rights in the affected plots. The lands described in schedule “Ga” were held to be non-revenue-assessed, and on that basis defendant 15 was not entitled to possession of these niskar lands. Defendant 15 appealed the subordinate judge’s judgment to the High Court, while the plaintiffs filed cross-objections. Both the appeal and the cross-objections were dismissed by the High Court, which affirmed the findings of the trial judge. Before the High Court, it was contended that although the revenue sale had been conducted under section 13 of Act XI of 1859, it should be treated as having been held under section 3, thereby granting the appellant the full rights of a purchaser of an entire estate. The High Court rejected this contention.

The High Court observed that a straightforward reading of section 13 of the Bengal Land Revenue Sales Act could not support the appellant’s contention. It explained that the essential requirements for exercising jurisdiction under that provision were the existence of distinct accounts or shares and the liability of the whole estate for the recovery of revenue arrears. Both of these prerequisites had been satisfied in the present case, and therefore the Collector was correct in invoking section 13 to sell the respective shares. The Court further clarified that the additional clauses mentioned in the second paragraph of the section were intended to apply only in situations where a share existed that was free of arrears. Since no such share existed here, those extra provisions were not relevant. The Court also held that, although the plaintiffs’ earlier occupancy rights had merged into the patni and subsequently passed to Upendranath Pal after his purchase of the patni, the act of Pal collecting rent from the plaintiffs constituted a resettlement. By doing so, Pal effectively granted the plaintiffs a tenancy right, and because the plaintiffs were settled ryots of the village, they acquired an occupancy right over all the lands for which rent was being collected. This decision was announced on 22 February 1948 and is now before this Court on a certificate of appeal dated 25 August 1960. The same issue had been presented to the High Court four times after the earlier judgment, and each time the Court adhered to the view expressed in its prior rulings, as referenced in the earlier case of Gowranga Sundar v. Rakhal Majhi.

Counsel for the appellant raised two principal arguments. First, it was submitted that Defendant 15, as the purchaser of an entire estate in a revenue sale, was entitled to all the rights conferred by section 37 of the Bengal Land Revenue Sales Act, and that consequently every under-tenure was extinguished, leaving the plaintiffs without any rights in the contested lands because they possessed no occupancy rights. Second, counsel argued that the plaintiffs could not obtain a decree based on a claim of resettlement, contending that the resettlement case had never been established, was inconsistent with the pleadings and evidence, and that the facts did not permit any legal inference of a resettlement. The Court found neither argument persuasive. It noted that section 6 of Act XI of 1859 empowers the Collector, after the final day for payment prescribed in section 3 has passed, to issue a notification specifying the estates or shares to be sold for the recovery of revenue arrears and to conduct a public auction on the notified date. The notification for the present sale unambiguously listed two separate units of the estate, each bearing distinct arrears, and did not contain any entry in the column reserved for the sale of an entire estate. Accordingly, the Court concluded that the sale was correctly effected under section 13 as a sale of two separate shares that together comprised the whole estate, and rejected the appellant’s claim that the sale should be treated as one of an entire estate.

In this case the notification issued for the sale made clear that two distinct units of the estate were to be sold; the column that would indicate a sale of the whole estate was left blank. The counsel for the appellant, Mr Ghosh, acknowledged that the sale was conducted under section 13 of Act XI of 1859 and that the objects placed on the market were two separate shares which together comprised the entire estate. Nevertheless, the counsel argued that the transaction should be treated as a sale of the whole estate because the two shares together formed the whole and, according to his construction, section 13 could apply only where at least one share was not in default and needed protection from the default of another co-sharer. The Court found this line of reasoning attractive but ultimately erroneous. To deem a sale that in fact involved two different accounts as a sale of the entire estate would amount to converting a factual situation into a fictional one by means of a judicial declaration. The notification issued by the Collector under section 6, therefore, must be regarded as conclusive as to what was actually sold – either the whole estate or two separate shares. The appellant found himself in a difficult position. If the argument that the Collector’s sale of shares was not authorized by section 13 were accepted, the sale would be void, no provision of the Revenue Sales Act would support it, and the appellant would acquire no title whatsoever. Conversely, if the sale were deemed authorized by section 13, the appellant would still lack any right to set aside the undertenures. In either eventuality the plaintiffs’ suit could not be successfully resisted. The Court noted that the lower courts correctly held that, at this revenue sale, the appellant did not become the purchaser of the entire touzi and therefore was not entitled to the privileges afforded to such a purchaser under section 37 of Act XI of 1859. The contention that section 13 does not apply when all shares of an estate are in default, and that the Collector’s only authority in such a circumstance is to auction the entire estate, was also rejected as unsound. The Court recalled that before the Revenue Sales Act of 1869, estates were put up for sale for arrears irrespective of whether the majority of co-sharers had paid their shares. This practice led to serious hardship for co-sharers who had complied with their obligations, prompting the 1859 provision that sought to protect co-sharers who were willing and able to pay their portion of the revenue.

The Court noted that before the Revenue Sales Act of 1869 the entire joint estate could be sold for arrears irrespective of whether the individual co-sharers had paid their own portions, and that this practice disadvantaged those co-sharers who had met their obligations by the stipulated date. Consequently, the 1859 legislation introduced a protective measure for co-sharers who were willing and able to pay their share of revenue. Upon request, the Collector began maintaining separate accounts for each co-sharer, recording the amount paid by each individual. This accounting system did not alter the overall liability of the whole estate for the total revenue due; the estate as a whole remained liable for the full amount. The only benefit conferred by the separate accounts was that the Collector could identify and receive the revenue attributable to each co-sharer whose account had been opened. Initially, the shares of those co-sharers who had fully paid their allocated amounts were exempt from sale, even if one or more other co-sharers were in default. In the first instance, only the defaulting separate accounts were offered for sale. If, after such a sale, the Collector found that the proceeds would not satisfy the total revenue arrears, the Collector was required to halt the sale of the defaulting share and issue a notice that the entire estate would be put up for sale. The Court emphasized that the chief purpose of the Act was to preserve the government's ultimate security for revenue demand against the estate. By allowing separate accounts, the Act aimed to give recorded co-sharers an easy means of safeguarding their individual shares from being sold because of another co-sharer's default, while recognising that no ultimate protection existed if the government’s revenue claim remained unsatisfied. Even where all shares were in default, the protection could not be denied because the arrears owed by each share might differ. The Court then set out the language of Sections 13 and 14 of the Act, which provide that when the Collector has ordered separate accounts, only those shares shown by the accounts to be in arrears may be put up for sale, and that a notice excluding shares without arrears must be published in the sale advertisement. The sold shares and the excluded shares together continue to form one integral estate, with the sold shares bearing the separate portion of the assigned revenue.

The provision in the preceding section states that if the highest bid for the share offered for sale does not equal the arrear due on the sale date, the collector or other officer must stop sale. He must then declare that the whole estate will be offered for sale at a later date to recover revenue arrears. If the share-holder or share-holders, or any of them, purchase the arrearing share within ten days by paying the entire arrear due on that share to the Provincial Government, collector or officer shall issue a certificate. The purchaser shall also receive possession in accordance with sections 28 and 29 of the Act and shall enjoy the same rights as if the share had been bought at the original sale. If no purchase is made within the ten-day period, the entire estate shall be sold after giving notice for the prescribed period and publishing the notice in the manner required by section 6 of the Act. The final words of section 14 therefore give the interpretative key for these provisions. When a situation arises where two separate accounts have been kept and the authority wishes to sell the whole estate, a fresh notice must be issued in compliance with section 6. The notice must indicate that the entire estate is for sale. In the absence of such a notice, a sale of the whole estate is not authorized. Section 13 empowers the collector, where separate accounts exist, to sell each defaulting share individually; the provision does not allow the collector to apply paragraph 2 of the section where all shareholders are in default. Moreover, the section contains no language that deprives the collector, even when two separate accounts are both in default, of the power to issue separate sale notices for each account. It also does not allow the collector to bring several defaulting shares to sale simultaneously without following the procedure set out in section 13. If the collector intends to sell the entire estate while multiple accounts exist, the first step is to close the separate accounts or merge them into a single demand. The next step is to publish a notice for sale of the whole estate under section 6, and only after completing these steps does the collector acquire authority to sell the entire estate. In the present case, the collector did not merge the demands against the two shares into a single demand, and therefore could not lawfully sell the whole estate based on two separate demands. The estate could only be put up for sale to recover a single sum of arrears.

In this case the Court held that the sale of land for the purpose of recovering revenue arrears fell within the meaning of a sale under section 13 of the Act. The Court rejected the argument advanced by counsel for the appellant, identified as Mr. Ghosh, that such a sale could not be characterised as a section-13 sale unless there existed a portion of the estate from which no arrears were due and unless the advertisement issued under section 6 expressly disclosed an intention to exclude that portion from the sale. The Court found this contention to be incorrect. The second contention raised by Mr. Ghosh was that the lower courts should not have inferred that the lands which were the subject of the suit had been resettled by the purchaser of the patni in favour of the plaintiffs. The Court observed that the inference of resettlement was founded on factual allegations contained in the plaint, and that on the basis of those facts the inference could be fairly drawn. The plaint disclosed that the plaintiffs had been paying rent to the purchaser of the patni for the lands they occupied, and that the purchaser had accepted those payments as though the plaintiffs were his tenants. The Court therefore held that the absence of a specific pleading expressly stating a resettlement arrangement could not be said to prejudice the case of defendant 15. Because Upendranath Pal, the purchaser, had treated the plaintiffs as tenants, defendant 15 possessed no right to dispute the plaintiffs’ interest in the land, and the Court affirmed that the plaintiffs’ claim had been correctly decreed by the lower courts to the extent that they were able to prove it. The appeal that was before the Court was confined to certain plots of land which were not covered by the original sanads, or for which the plaintiffs had not been able to demonstrate that they were occupancy tenants. After reviewing the evidence, the Court concluded that even with respect to those particular plots the appeal lacked merit. Consequently the Court dismissed the appeal and ordered that the costs of the proceedings be awarded against the appellant. The order recorded that the appeal was dismissed. The appellant was represented by Sukumar Ghose, while the respondents numbered 1, 2 (b) and 15 were represented by S. C. Bannerjee.