Srimati Ashalata Debi And Others vs Sri Jadu Nath Roy And Others

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 69 of 1952

Decision Date: 26 April 1954

Coram: Natwarlal H. Bhagwati, Mehar Chand Mahajan, B.K. Mukherjea, Vivian Bose

In this case the Supreme Court of India addressed a petition titled Srimati Ashalata Debi and Others versus Sri Jadu Nath Roy and Others, the judgment being delivered on 26 April 1954. The opinion was written by Justice Natwarlal H. Bhagwati and the bench was composed of Justices Natwarlal H. Bhagwati, Mehar Chand Mahajan, B.K. Mukherjea and Vivian Bose. The petitioner comprised Srimati Ashalata Debi and several other individuals, while the respondents were Sri Jadu Nath Roy and others. The decision is reported in the year‑books 1954 AIR 409 and 1955 SCR 150. The dispute arose under the Indian Independence (Legal Proceedings) Order, 1947, specifically paragraph 4(2), and concerned a new decree that had been passed in proceedings initiated under section 36 of the Bengal Money Lenders Act, 1940. At the time the decree was pending before the Subordinate Judge at Alipore on 15 August 1947, the bulk of the property involved had become situated in East Pakistan as a result of the territorial transfers effected by the Indian Independence Act. After that date an appeal was filed, and the central question before the Court was whether that appeal could be taken to the Calcutta High Court. Paragraph 4 of the Indian Independence (Legal Proceedings) Order, 1947, provided that notwithstanding the creation of new provinces and the transfer of certain territories from the Province of Assam to the Province of East Bengal, any appeal or application for revision concerning proceedings pending in a court would lie in the court that would have appellate or revisional jurisdiction over the original court if the proceedings had been instituted in that court after the appointed day. In the present matter the decree‑holder filed an application seeking re‑restoration of the properties on the ground that the judgment‑debtor had defaulted after the new decree was issued. The application was in substance an application for execution of the decree, and the orders passed on such an application were appealable. The respondents contended that the appeal filed after 15 August 1947 was not covered by paragraph 4(2) because the expression “if the proceedings were instituted in this Court” should be read to mean “if the proceedings could have been instituted in that Court.” The Supreme Court held that the appeal from the Subordinate Judge was indeed competent to be taken to the Calcutta High Court, reasoning that the only reasonable construction of paragraph 4(2) was that the appellate or revisional court would possess jurisdiction as if the proceedings had been instituted in the original court.

After 15 August 1947 the decree‑holder filed an application that was essentially a request for execution of the new decree issued under section 36 of the Bengal Money Lenders Act, 1940. The Court observed that any order made on such an execution application would clearly be subject to appeal. The High Court had argued that the application was a suit for a special remedy created by a special statute, that the provisions of the Civil Procedure Code applied, and that an appeal lay against the orders because they fell within the definition of “decrees” in section 2(2) of that Code. The Court rejected that reasoning as untenable and could not be accepted. The decision referred to the authority in Tirlok Nath v. Moti Ram and Others (AIR 1950 East Punjab 149). The present matter was a civil appeal, identified as Civil Appeal No. 69 of 1952, arising from the judgment and decree dated 27 April 1950 delivered by the Calcutta High Court (Hon’ble Judges Sen and Chunder). The appeal challenged an earlier decree numbered 19 of 1948, which itself stemmed from the judgment and decree of 27 September 1947 rendered by the Subordinate Judge of the Third Court of Zillah, 24 Parganas at Alipore, in Miscellaneous Judicial Case No. 31 of 1947. Counsel for the appellants was represented by a senior advocate, while the respondents numbered 1, 2, 8 and 9 were represented collectively by learned counsel. The judgment was delivered on 26 April 1954 by Justice Bagwati. This appeal contested the High Court’s reversal of the Subordinate Judge’s order that had dismissed the respondents’ applications seeking re‑restoration of certain immovable properties.

The factual matrix began with the predecessor‑in‑interest of the appellants, the late Romesh Chandra Acharji Choudhury, who on 16 August 1918 borrowed Rs 1,60,000 and Rs 73,000 from the predecessors‑in‑interest of the respondents under two separate deeds of mortgage. When the mortgagors defaulted, a suit for realization of the mortgage securities was instituted on 10 March 1926 before the Third Subordinate Judge’s Court at Alipore. A preliminary mortgage decree ordering payment of Rs 4,21,851‑1‑6 was entered on 4 April 1929, followed by a decree absolute for sale dated 13 September 1929. Execution proceedings in 1930 led to the auction of the mortgaged properties, which the decree‑holders purchased on 29 February 1932 and 23 April 1935 for a total of Rs 2,35,200. These sales were confirmed, and the purchasers took possession of the various properties at different times between 25 June 1933 and 9 March 1936. Subsequently, on 13 December 1937 the decree‑holders obtained a personal decree under Order XXXIV, Rule 6 of the Civil Procedure Code for the balance amount of Rs 3,30,903. That personal decree was executed, and on 8 August 1939 the decree‑holders bought additional mortgagor properties for Rs 3,899, with possession being delivered on 6 July of the same year.

In 1940 the predecessor‑in‑interest of appellants numbered one to three, the late Kshitish Chandra Acharji Choudhury, together with appellant number four, Jyotish Chandra Acharya Choudhury, who were sons of the mortgagor, filed a petition on 9 December 1940 under section 36 of the Bengal Money Lenders Act (Act X of 1940). Their petition sought the reopening of both the mortgage decree and the personal decree that had previously been entered against them. The learned Subordinate Judge acted on the petition by issuing an order on 25 August 1941 that reopened the two decrees. Subsequently, on 10 May 1943 the same judge passed a fresh decree directing that the judgment‑debtors should pay the decree‑holders a sum of Rs 3,76,324‑12‑4. The decree further stipulated that this amount be discharged in fifteen equal annual instalments and, in addition, ordered that the properties which had been purchased by the decree‑holders should be restored to the mortgagors. The respondents to this proceeding, who were the mortgagees, filed an appeal on 19 June 1943 before the High Court of Judicature at Calcutta. Cross‑objections to the appeal were filed by the late Kshitish Chandra Acharji Choudhury and by appellant number four.

The High Court delivered its judgment and decree on 29 June 1944. While affirming the Subordinate Judge’s decree, the High Court introduced substantial variations and ultimately issued a new decree that favored the mortgagors. Under this decree the mortgagees were required to reinstate possession of all the properties they had acquired in execution of the reopened decrees to the mortgagors. In addition, the mortgagees were ordered to render a full account of the mesne profits accrued on those properties from 15 September 1941 until the date on which possession was restored or until the collection papers for those properties were relinquished to the mortgagors. The Court declared that the mortgagors owed the mortgagees a sum of Rs 3,76,324‑12‑6, to be paid in twenty equal annual instalments. The first instalment was to be payable on or before the first anniversary of whichever later occurred: the date the mortgagees restored possession of all the properties or the date they delivered the collection papers to the mortgages. Subsequent instalments were to be paid on or before the same calendar date in each following year. The mortgagors were also required to discharge the annual revenue obligations of those properties as they became due, paying each amount at least three days before the respective due date and filing the corresponding challans in the subordinate court within ten days of payment as proof. The same procedure applied to the payment of road, public works, education cesses and rent payable to superior landlords. If the mortgagors failed to pay any instalment, cession or rent within the prescribed time, the mortgagees were entitled to regain possession of the properties. In such an event the purchase price of Rs 2,39,099 paid by the mortgagees for the properties would be set off against the amount then outstanding to the mortgagees under the decree.

The decree provided that if any sum remained unpaid to the mortgagees after the decree, the mortgagees could file a suit in the lower court for a decree for the balance under Order XXXIV, rule six of the Civil Procedure Code. An inquiry was directed to determine the mesne profits accrued from 15 September 1941 until possession was restored to the mortgagors. The mortgagors were permitted to set off any amount that might be decreed in their favour for mesne profits against the instalment that fell due in the year in which the court declared the amount, and against the instalments of the succeeding years, until the set‑off amount was fully exhausted. Possession of the mortgaged properties was returned to the mortgagors on 5 October 1944, although the delivery of the collection papers occurred later, on 28 March 1945. The mortgagors were subsequently alleged to have defaulted in paying the second instalment, which was due on 28 March 1947, as well as in paying the revenue kist and the cesses that were also due around that date. On those grounds, the mortgagees filed applications before the Third Subordinate Judge at Alipore on 6 September 1946 and again on 18 April 1947, requesting that the properties be re‑restored to them. Although several defaults were alleged, the mortgagees pressed only two specific defaults: the non‑payment of the second instalment due on 28 March 1947 and the non‑payment of the revenue and cesses of the Noakhali properties that were due on the same date. The learned Subordinate Judge dismissed both applications by an order dated 27 September 1947, holding that no default had occurred in the payment of revenue and cesses, and that the alleged default in the second instalment, although it had technically accrued, arose from the wrongful acts of the decree‑holders themselves; consequently, the decree‑holders could not benefit from their own misconduct. An appeal against this order was taken to the High Court of Judicature at Calcutta, which allowed the appeal on 27 April 1950. The High Court concluded that the mortgagors had indeed committed a default and ordered that the properties be re‑restored to the mortgagees. The present appeal challenges that High Court order and is filed under a certificate of appeal pursuant to article 133(1)(a) of the Constitution. Shri S. Ghosh, appearing for the appellants, argued that the majority of the properties forming the subject‑matter of the new decree had become part of East Pakistan after 26 January 1950; therefore, the Calcutta High Court, after that date, lacked jurisdiction and authority to entertain the appeal or to issue any order affecting immovable property situated in a foreign territory. He further contended that the order directing re‑restoration of the properties was not a decision that could be appealed, and that, in any event, the mortgagors had not committed any default. In support of these submissions, the appellants relied on the relevant constitutional and procedural provisions.

In the first point raised by the appellant, reliance was placed on paragraph 4(2) of the Indian Independence (Legal Proceedings) Order, 1947. That provision read in part: “Notwithstanding the creation of certain new Provinces and the transfer of certain territories from the Province of Assam to the Province of East Bengal by the Indian Independence Act, 1947 … (2) Any appeal or application for revision in respect of any proceedings so pending in any such Court shall lie in the Court which would have appellate, or as the case may be revisional jurisdiction over that Court if the proceedings were instituted in that Court after the appointed day.” The applications for re‑restoration of the properties were pending before the Third Subordinate Judge at Alipore on 15 August 1947. Those applications were saved by paragraph 4(1), which allowed the same Court to continue with the proceedings as if the Indian Independence Act, 1947 had never been enacted. The appellant argued, however, that paragraph 4(2) did not extend the benefit of the Order to the appeal that the mortgagees had filed after 15 August 1947. The Court could not accept that argument. Paragraph 4(2) expressly dealt with appeals or applications for revision of proceedings that remained pending after 15 August 1947, and it specified that such appeals or applications could be taken to the Court that would have appellate or revisional jurisdiction over the original Court, provided the proceedings had been instituted in that Court after the appointed day. The appellant suggested that the phrase “if the proceedings were instituted in that Court” should be read as “if the proceedings could have been instituted in that Court.” That interpretation could not be sustained, because the transfer of territory meant that no suit concerning the properties that had become part of Pakistan could have been maintained after 15 August 1947 in the courts that previously had jurisdiction. The only reasonable construction was that the higher Court would possess appellate or revisional jurisdiction as if the proceedings had indeed been instituted in the lower Court after the appointed day. Consequently, for the purpose of determining appellate or revisional jurisdiction, the lower Court had to be treated as the Court in which the proceedings ought to have been instituted, and the appeal or revision would lie with the Court that then exercised appellate or revisional jurisdiction over it. In the present case, no proceedings could have been instituted in the Third Subordinate Judge’s Court at Alipore concerning the properties that had passed to East Pakistan after 15 August 1947. Nevertheless, because those proceedings were already pending on that date, the higher Court retained jurisdiction to hear the appeal.

In the Third Subordinate Judge’s Court at Alipore, the proceedings that were pending on 15 August 1947 were deemed, for appellate and revisional purposes, to have been properly instituted in that Court after that date; consequently, the High Court of Calcutta, which possessed appellate and revisional jurisdiction over the Third Subordinate Judge’s Court, was identified as the proper forum for any appeal or application for revision arising from those proceedings. Counsel for the respondents referred the Court to the decision in Tirlok Nath v. Moti Ram and Others (A.I.R. 1050 East Punjab 149). In that precedent, a suit for possession of land at a place identified as “X” had been filed in Court B in 1943. The suit remained pending in Court B on 15 August 1947, and that Court subsequently dismissed the suit in 1948. Because the land in question lay within the territory that became East Punjab, an appeal from the dismissal was taken to the East Punjab High Court. The High Court, applying paragraph 4(2) of the Indian Independence (Legal Proceedings) Order, 1947, held that the appeal should lie before the East Punjab High Court rather than the Lahore High Court. The present case mirrors that situation, and the Court found the appellants’ argument on this point untenable. The appellants advanced a second argument, contending that the Calcutta High Court had treated the applications as special‑law remedies and therefore applied the Code of Civil Procedure, holding that the orders were decrees within the meaning of section 2(2) of that Code and thus appealable. The Court rejected this reasoning, observing that the applications were in substance applications for execution of the new decrees dated 29 June 1944, which had been granted in favor of the mortgagors. Under the terms of those decrees, the mortgagees were entitled only to seek execution when the mortgagors committed default. The filings made by the mortgagees in the Third Subordinate Judge’s Court at Alipore, although not framed in the correct form, were effectively applications for execution of the decree. Treating them as such makes clear that the orders issued on those execution applications were appealable, and no ground existed to claim that there was no appellate remedy. Accordingly, the Court found no merit in the appellants’ contention that the orders could not be challenged, and concluded that, when viewed as applications for execution, the appellants’ objection could not be sustained.

The appellants attempted to contest the decision that had been rendered by the High Court of Judicature at Calcutta concerning the mortgage proceedings. The Court of execution was not empowered to look beyond the terms of the decree. The factual record demonstrated that the mortgagors had failed to pay the revenue and the cess, and also had defaulted on the second installment required by the new decree. The appellants argued that no default had been committed by the mortgagors, but that contention could not be sustained in light of the evidentiary findings. Consequently, the High Court of Judicature at Calcutta was properly seized of the appeal and possessed the jurisdiction to determine whether the mortgagors had indeed defaulted in complying with the terms of the new decree. Because the appeal was essentially a rehearing, the appellate court was entitled to review the trial judge’s judgment, to declare it erroneous, and to order that the decree‑holder be granted re‑restoration of the mortgaged properties. The question of whether the decree‑holder could actually obtain possession of the immovable property was considered irrelevant to the scope of the rehearing. The decree‑holder might secure possession through appropriate proceedings in another jurisdiction, but such a procedural difficulty could not prevent the High Court from issuing the necessary orders for re‑restoration. The appellate court therefore concluded that the appeal failed and dismissed it with no order as to costs.