Mahabir Gope And Others vs Harbans Narain Singh And Others

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 143 of 1951

Decision Date: 14 April 1952

Coram: N. Chandrasekhara Aiyar, Mehr Chand Mahajan, Vivian Bose

In this case the Supreme Court of India delivered its judgment on 14 April 1952 in the matter of Mahabir Gope and Others versus Harbans Narain Singh and Others. The judgment was authored by Justice N Chandrasekhara Aiyar, who sat on the bench together with Justices Mehr Chand Mahajan and Vivian Bose. The petitioners were Mahabir Gope and other appellants and the respondents were Harbans Narain Singh and others. The decision is reported in the 1952 volume of the All India Reporter at page 205 and also appears in the 1952 Supreme Court Reporter at page 775. Subsequent citations of the case appear in various law reports, including the 1956 Supreme Court Reporter (page 305), the 1958 Supreme Court Reporter (page 183), the 1966 Supreme Court Reporter (page 1721), the 1968 Supreme Court Reporter (page 1466), the 1972 Supreme Court Reporter (page 637), the 1980 Supreme Court Reporter (page 696), the 1981 Supreme Court Reporter (pages 1881 and 2146), the 1988 Supreme Court Reporter (page 299) and the 1989 Supreme Court Reporter (pages 436). The dispute concerned the application of sections 5(2), 20 and 21 of the Bihar Tenancy Act 1937 to a lease known as a Zuripeshgi lease. The lease had been granted by a mortgagee for a term of three years, yet the lessee remained in possession for more than thirty years. The Court was asked to determine whether the lessee had acquired occupancy rights, how the lease should be construed, the extent of the mortgagee’s power to grant a lease, the relevant limitations under the Transfer of Property Act of 1882 (section 76(a) and (e)), and the effect of the statutory provisions.

The headnote of the judgment set out the general principle that a person may not transfer or create a better title in another person than the title he himself possesses. Accordingly a mortgagee cannot create an interest in mortgaged property that survives the termination of his mortgagee interest. Moreover, while the mortgage is subsisting, the mortgagee is prohibited from acting in a manner that is detrimental to the mortgagor’s rights, such as by granting a lease that might enable the tenant to acquire permanent occupancy rights and thereby defeat the mortgagor’s right to khas possession. The Court recognized an exception to this rule when a mortgagee, while in possession, settles with a tenant as part of prudent management and when statutory law confers rights on the tenant because of the nature of the land and the duration of possession; however, the settlement must be proved to be bona fide. The exception does not apply where the mortgage instrument expressly or by necessary implication bars the mortgagee from settling any tenants on the land.

The judgment also examined a specific Zuripeshgi ijara deed that contained a clause stating that the ijaradar should take possession and cultivate the share of land let out in ijara, pay a reserved rent annually to the executants and appropriate the produce each year because of his ijara interest. The accompanying kabuliat, executed by the tenant who received the land from the mortgagee for a three-year period, expressly referred to the ijara deed and provided that the tenant would surrender possession of the tika land at the expiry of the lease without asserting any claim on the grounds that the land was his own cultivated (kasht) land.

The Court observed that the lands in question were the kasht lands of the tenant. It affirmed the decision of the High Court, holding that the settlement of those lands had not been a bona-fide settlement. Consequently, the Court found that the successors of the tenant, who were the defendants, did not obtain permanent rights of occupancy in the demised lands under the Bihar Tenancy Act, even though the tenant and his successors had possessed the lands for more than thirty years after the lease had expired. The Court further held that the defendants could not claim occupancy rights under sections 20 and 21 of the Bihar Tenancy Act because the mortgagee was neither a “proprietor” nor a “tenure-holder” or an “under-tenure-holder.” Accordingly, the tenant and his successors could not be described as “settled raiyats” within the meaning of section 5, clause (2) of that Act. The Court distinguished the authorities cited in Manjhil-Lal Biswanath Shah Deo v. Shaikh Mohiuddin (I.L.R. 24 Cal. 272), Babu Bairo Nath Ray v. Shanke Pahan (I.L.R. 8 Pat. 31) and Binda Lal Pakrashi and Others v. Kalu Pramanik and Others (I.L.R. 20 Cal. 708).

This judgment was delivered in a civil appellate jurisdiction concerning Civil Appeal No. 143 of 1951. The appeal was taken by special leave from a judgment and decree dated 23 March 1950 of the Patna High Court (Reuben and Jamuar JJ.). The appeal arose from Original Decree No. 206 of 1946, which itself stemmed from a decree dated 31 January 1946 of the Subordinate Judge at Patna in Title Suit No. 55/4 of 1943-45. Counsel for the appellants was Saiyid Murtaza Fazl Ali, while counsel for respondents Nos. 1 to 9 was N.C. Chatterjee assisted by A.N. Sinha, and counsel for respondents Nos. 11 to 16 was B.K. Saran. The judgment was pronounced on 14 April 1952 by Justice Chandrasekhara Aiyar. The appeal was filed by the defendants against a decree of the Patna High Court that had reversed an earlier decree of the Subordinate Judge’s Court at Patna and had dismissed the plaintiffs’ suit for possession against the first defendant, here referred to for convenience as “the Gopes.” The lands were identified as khudkhasht lands, partially owned by the first plaintiff and partially by Mussammat Anaro Kuer, from whom the second and third plaintiffs derived title. On 28 September 1899, the ancestors of the first plaintiff granted an ijara with possession to Lakhandeo Singh, an ancestor of the second defendant, under Exhibit I(b) for a term of six years from Fasli 1307 to Fasli 1312 for a cash payment of Rs. 540. The poshgi money was to be repaid in a single instalment at the end of Fasli 1312, and if redemption did not occur, the ijara would remain effective until repayment. Subsequently, on 10 June 1905, Mussammat Anaro Kuer orally assigned her share in ijara to the same Lakhandeo Singh for a period of three years for Rs. 542. Lakhandeo Singh, now represented by the second defendant, settled the land he had acquired—totaling eight point twenty-six acres or thirteen bighas—with Ram Lal Gope, an ancestor of the first defendant.

In the matter before the Court, the tenancy of the first party was granted for a term of three years covering the period from Fasli 1315 to Fasli 1318. A patta was issued in favour of the tenant and a kabuliyat was recorded in favour of the landlord, and these documents were executed in the year 1908. The mortgage on the land was subsequently redeemed in June 1942 through a payment made under the provisions of section 83 of the Transfer of Property Act. When the plaintiffs proceeded to take possession of the land after redemption, they encountered resistance from the Gopes, who were the defendants in the first party position. The plaintiffs first attempted criminal proceedings to enforce possession, but those proceedings were unsuccessful, prompting them to institute the present civil suit. The Subordinate Judge who heard the suit dismissed the plaintiffs’ claim, holding that the Gopes were raiyats who had acquired permanent occupancy rights in the land as a result of a settlement made by the mortgagee, Lakhandeo Singh. On appeal, the High Court set aside the Subordinate Judge’s order and granted a decree of possession to the plaintiffs, finding that the defendants were not raiyats and that they possessed no permanent rights of occupancy. The present Court subsequently granted special leave to appeal to the defendants. The suit was pleaded alternatively for either the recovery of the value of the land as compensation or damages against the second-party defendant in the event that the first-party defendant could not be removed. The trial court adjudicated the alternative claim and awarded the plaintiffs compensation calculated at a rate of two hundred rupees per bigha. The second-party defendant appealed this award to the High Court and succeeded on that point, although the present appeal does not concern that particular decision. At the trial stage, the plaintiffs asserted that the lands constituted their zirat lands as defined by section 116 of the Bihar Tenancy Act, and consequently that the first-party defendants could not acquire any occupancy rights. The Subordinate Judge rejected this contention, holding that the lands were khud-kasht or bakasht lands belonging to the proprietor, a category of land in which occupancy rights may be acquired. He also rejected the defendants’ claim that the lands were their ancestral raiyati holdings and found that there was no collusion between the mortgagee Lakhandeo Singh and Ram Lal Gope in the settlement of the lands. These findings, which were accepted by both parties, formed the basis for the appeal heard before the High Court. The Court also referred to the decision of the Privy Council in Bengal Indigo Company v. Roghobur Das, where it was held that a zuripeshgi lease is not merely a contract for cultivating land at a rent, but constitutes a security for the tenant against the money advanced. The Privy Council observed that such leases were intended to, and did, create a real and valid security for the principal sums advanced by the tenant, together with interest, and that the tenant’s possession under these leases was partly that of a creditor repaying the debt, not solely that of a cultivator.

The Court observed that the passage describing “by means of their security” applied directly to the ijara deed under consideration, whose principal purpose was to secure the loan that had been advanced and not to create any landlord-tenant relationship. The Court then restated the well-known principle that a person may not, by any transfer or other means, convey to another a title superior to the one he himself possesses. Consequently, a mortgagee is unable to fashion an interest in the mortgaged property that would survive the termination of his mortgagee interest. Moreover, when a mortgagee takes possession of the mortgaged land, he must manage it with the same care and prudence that an ordinary owner would employ, and he must refrain from any act that is destructive or permanently injurious to the property, as endorsed by the cited precedent (1) (1897) 24 Cal. 272 and the provisions of section 76, sub-clauses (a) and (e) of the Transfer of Property Act. From this duty it follows that a mortgagee may grant leases only for a period that does not extend beyond the term of the mortgage, and any such lease must automatically terminate upon redemption of the mortgage.

The Court further explained that during the existence of the mortgage a mortgagee may not act in a way that harms the mortgagor’s interests, such as by granting a lease that enables a tenant to acquire permanent oroccupancy rights, thereby defeating the mortgagor’s right to khas possession; such conduct would contravene section 76, sub-clause (e) of the Transfer of Property Act. However, the Court recognised an exception to this general rule: a settlement made by a mortgagee in possession with a tenant, undertaken as part of prudent management and resulting in statutory rights for the tenant based on the nature of the land and the period of possession, is permissible. Under this exception the tenant cannot be evicted by the mortgagor even after the mortgage is redeemed, and the tenant may become either an occupancy raiyat or a non-occupancy raiyat, provided the settlement was made in good faith. The exception does not apply where the mortgage expressly or implicitly forbids the mortgagee from settling tenants on the land. When the mortgage grants the mortgagee all zamindari rights, it may be inferred that he may settle the land with tenants in the ordinary course of management, allowing tenants to acquire certain rights as tenants. The Court cited Manjhil-Lal Biswa Nath Shah Deo v. Shaikh Mohiuddin (1) to illustrate that a bona-fide settlement of mortgaged rayati land by the mortgagee with tenants barred the mortgagor from evicting them after redemption. The Court also referred to the earlier decision in Babu Bhairo Nath Ray v. Shanke Pahan (2), which dealt with bakasht lands.

In this case, the Court observed that the zuripeshgi lease contained no clause limiting the mortgagee-lessee’s authority to settle tenants. It further explained that khudkasht and bakasht lands are essentially raiyati lands that become possessed by a proprietor through surrender, abandonment or purchase. The Court then cited a specific provision from the ijara deed, which stated that the ijaradar was required to take possession and occupation of the share let out in ijara—identified as khudkasht land cultivated by him—cultivate it, pay two annas as reserved rent annually to the executants, and appropriate the produce each year because of his ijaradari interest. The Court interpreted that this clause effectively barred the mortgagee from locating tenants on the mortgaged land. The Court noted that Ram Lal Gope, the grandfather of the first-party defendants, who executed the kabuliat in 1908, must have been aware of Lakhandeo Singh’s title as mortgagee and of the terms by which Singh held the lands under the registered zuripeshgi ijara deed. Consequently, the tenant entered into a lease for a period of three years and expressly agreed to surrender possession of the thika lands at the end of the lease term, without asserting any claim that the lands were his former kasht lands. The Court observed that the kabuliat (Exhibit 11) expressly referred to Lakhandeo Singh’s ijaradari interest. Based on these facts, the High Court judges expressed that they were not prepared to find the settlement to be bona fide or to conclude that the mortgagee acted within his rights in settling the lands. The appellants heavily relied on the Full Bench decision in Binad Lal Pakrashi and Others v. Kalu Pramanik and Others, which had held that a person who entered possession of land as a raiyat—even if initially a trespasser—became a non-occupancy raiyat under section 5(2) of the Bengal Tenancy Act and was protected from ejectment. However, the Court noted that this decision had been subsequently explained away in several later cases because it rested on the proposition that the rights were acquired bona fide from a person whom the claimant reasonably believed possessed the authority to grant possession. The Court found that such a circumstance did not exist here, given the recitals in the ijara deed favoring Lakhandeo Singh and the kabuliat executed by Ram Lal Gope. The Court further recorded that counsel for the appellants referred to sections 20 and 21 of the Bihar Tenancy Act, arguing that the land had been continuously held by the appellants and their predecessors from 1908 to 1942, the time when they faced ejection. The Court indicated that for those sections to apply, it must be established that the appellants were “settled raiyat…”.

In this case the Court examined the definition of “raiayat” contained in sub-clause 2 of section 5, which describes a raiyat as primarily a person who has obtained the right to hold land for the purpose of cultivating it either personally or through members of his family. Sub-clause 3 further provides that a person will not be considered a raiyat unless he holds land either directly under a proprietor or directly under a tenure-holder. The Court observed that Lakhandeo Singh could not be described as a “proprietor,” because that term means a person who owns, whether in trust or for his own benefit, an estate or a portion of an estate; Lakhandeo Singh was only a mortgagee. Likewise, the Court found that he could not be regarded as a tenure-holder or under-tenure-holder, since he did not satisfy the definition in sub-clause 1 of section 5, which requires that a tenure-holder be a person who has acquired from a proprietor or another tenure-holder a right to hold land for the purpose of collecting rent or for the purpose of bringing the land under cultivation by establishing tenants on it. The evidence presented in the present matter only demonstrated that the lands were being cultivated by the plaintiffs and that the possession of those lands had been transferred to the mortgagee so that the mortgagee might cultivate them himself. Consequently, the Court concluded that Ram Lal Gope could not successfully claim that he was a settled raiyat of the village, nor could he rely on the statute to claim occupancy rights in the lands that he had taken on lease from Lakhandeo Singh. The Court then turned to the argument concerning the ijara executed by Mst. Anaro Kuer, which was admitted to be an oral transaction. The appellant asserted that there was no evidence of any restriction on settlement with tenants concerning her share of three point nine seven acres, and that the rights of the parties with respect to this portion should be assessed on a different basis from the rights concerning the four acres and twenty-nine cents belonging to the first plaintiff. The Court noted that the lower courts had not distinguished between the two ijaras granted to Lakhandeo Singh; they had treated them as a single transaction, attributing common rights and liabilities to both. The Court held that it could not now permit the appellant to raise that distinction. As a result, the Court affirmed the decree of the High Court, dismissed the appeal and ordered that the costs of the plaintiffs-respondents be awarded. No order was made regarding costs of the other respondents. The appeal was dismissed. The agents representing the parties were recorded as follows: S. P. Varma for the appellants; M. M. Sinha for respondents numbers 1 to 9; and K. L. Mehta for respondents numbers 11 to 16.