Srimati Oramba Sundari Dasi vs Sri Sri Iswar Gopal Jieu

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 130 and 131 of 1951

Decision Date: 12 March 1954

Coram: Ghulam Hasan, Mehar Chand Mahajan, B.K. Mukherjea, Vivian Bose

In the matter entitled Srimati Oramba Sundari Dasi versus Sri Sri Iswar Gopal Jieu, the Supreme Court of India rendered its judgment on 12 March 1954. The opinion was authored by Justice Ghulam Hasan and was delivered by a bench that included Justices Ghulam Hasan, Mehar Chand Mahajan, B.K. Mukherjea and Vivian Bose. The petition was filed by Srimati Oramba Sundari Dasi and the respondent was Sri Sri Iswar Gopal Jieu. The decision is reported in the 1954 AIR 307 and the 1954 SCR 982 reporters, and it has been subsequently cited in several later authorities, including the 1960, 1967, 1974, 1981, and 1987 Supreme Court reports. The dispute concerned the interpretation of section 36 of the Bengal Money-Lenders Act, 1940 (Bengal Act X of 1940), specifically whether a court, in proceedings under that provision, could inquire beyond the decree to determine whether a decree-holder recorded in the proceedings was in fact a benamidar for another person. The headnote of the judgment states that the court is not competent to go behind the decree and examine the benamidarity of the decree-holder under section 36. The judgment referred to earlier cases such as Renula v. Manmatha (72 I.A. 156) and Bank of Commerce Ltd. v. Amulya Krishna Basu Boy Chowdhury ([1944] F.C.R. 126) in discussing the scope of the statutory provision.

The appeals, numbered Civil Appeals Nos. 130 and 131 of 1951, were lodged against the judgment and decrees dated 12 August 1948 pronounced by a Division Bench of the Calcutta High Court. Those decrees had, in turn, affirmed the decision of the Subordinate Judge of Burdwan in two analogous proceedings that arose from original decrees numbered 214 of 1942 and 231 of 1943. Both original decrees were founded on judgments dated 16 June 1942 of the Subordinate Judge, Burdwan, in Money Suit No. 261 of 1932 (Miscellaneous Case No. 132 of 1941) and Money Suit No. 262 of 1932 (Miscellaneous Case No. 131 of 1941). Counsel appearing for the appellant were senior advocates assisted by junior counsel, while counsel for the first respondent represented the other side. The judgment of the Court was delivered by Justice B.K. Mukherjea. The two appeals, involving the same parties and identical questions of law, challenged the common judgment of the Calcutta High Court Division Bench dated 12 August 1948, which had confirmed the Subordinate Judge’s orders in two parallel cases under section 36 of the Bengal Money-Lenders Act. The material facts relevant to the present discussion are confined to a narrow field. The principal respondents were a group of idols, whose legal representation was undertaken by their managing Shebait, Ram Govinda Roy. These idols served as the family deities of the Roy family of Bonpash in Burdwan district. Because the number of Shebaits in the family was considerable, it was a well-recognised custom that the senior-most descendant of the founder would assume the role of managing Shebait. This managing Shebait bore the responsibility for administering the endowed properties of the idols and ensuring the proper performance of their worship.

In this case, the Court observed that the managing Shebait possessed the authority to obtain loans for the purposes of the idols and to execute any necessary documents. It was established that Adwaita Charan Roy had served as the managing Shebait of the deities from 1926 until 1930. While holding that office, he executed a Hatchita in favor of Nanitosh Chakraborty in April 1928, under which he periodically received advances from the creditor. The final entry recorded in that Hatchita dated March 1929 showed that the total sum borrowed up to that time amounted to Rs. 3,801. After Adwaita’s death in March 1930, Satish Chandra Roy succeeded him as managing Shebait and continued in that role until his own death in 1940. In October 1931, an adjustment of accounts was made between Nanitosh Chakraborty, the creditor, and Satish Chandra, who then issued a renewed Hatchita for Rs. 5,068, the amount found due to the creditor. It also emerged that, while Adwaita was still managing Shebait, some of his co-Shebaits instituted a suit seeking his removal. Pending the hearing, the court appointed another co-Shebait, Ramjanaki Roy, as Receiver of the debtor’s property. With the court’s permission, Ramjanaki borrowed three separate sums from the same Nanitosh Chakraborty, executing three distinct promissory notes on 27 September 1929, 1 October 1929 and 14 January 1930. The suit against Adwaita was ultimately dismissed for non-prosecution after his death. Nanitosh died in 1931 and, in 1932, his two sons, Aditya and Dhirendra, who appear as respondents 14 and 15, filed two money suits—Nos. 261 and 262 of 1932—before the Subordinate Judge of Burdwan, seeking recovery of the sums due under the Hatchita and the aforementioned promissory notes. Both suits were settled by a compromise dated 23 July 1933, resulting in two consent decrees: one for Rs. 5,800 and another for Rs. 2,200, each to be paid in sixteen annual instalments with a clause that default on any instalment would render the entire balance immediately payable. Because the instalments were not made, both decrees were enforced. In the execution proceedings numbered 76 and 77 of 1936, arising from Money Suits 261 and 262, the properties listed in Schedule Ka were attached and put up for sale; they were purchased, allegedly, by the two decree-holders, Aditya and Dhirendra. Three years later, further execution cases were instituted, leading to the eventual sale of additional properties to the decree-holders.

In 1939 the court reopened Execution Cases No. 17 and No. 18 that related to the earlier compromise decrees. In that proceeding the properties listed in Schedule Kha were again attached, auctioned and the successful purchasers were the decree-holders known as the Chakrabortys. Subsequently, in Execution Case No. 163 of 1939 and Execution Case No. 5 of 1940 the properties identified in Schedule GA were sold. The sale proceeded to Srimati Oramba Sundari Dasi, who appears before this Court as the appellant. It is relevant to note that she was the wife of Aghore Nath Roy, who was a son of Adwaita, the former managing shebait of the Debutter estate. After these sales, the decree-holders who had acquired the properties from Schedules Ka and Kha executed a registered kobala on 26 July 1940 transferring those properties to Oramba Sundari Dasi. As a result, the lands described in the three schedules – Ka, Kha and GA – vested in Oramba Sundari, the spouse of Aghore Nath Roy. On 28 August 1941 a group of deities, represented by certain shebaits, filed two applications under section 36(6)(a)(ii) of the Bengal Money-Lenders Act. They asked that the two compromise decrees be reopened and that fresh installment decrees be made in accordance with the Act. The applications also sought restoration of to the deities of all the lands mentioned in Schedules Ka, Kha and GA that had been purchased pursuant to the execution of the decrees. The principal opposite parties in those applications were the Chakraborty decree-holders, the ostensible purchaser Oramba Sundari, and her husband Aghore Nath Roy. The submissions alleged that the Chakrabortys were merely benamidars acting for Aghore Nath Roy, who was in reality the true lender and the true decree-holder in both suits. It was further alleged that Aghore Nath Roy had acquired the properties in the name of the decree-holders in two of the three execution proceedings and in the name of his wife Oramba Sundari in the third. The kobala executed by the Chakrabortys in favor of Oramba Sundari was also claimed to be a fictitious conveyance intended to vest the lands in Aghore Nath Roy under his wife’s name. In that context the judgment-debtors prayed that the two compromise decrees be reopened, that new installment decrees be issued. They also asked that the lands presently possessed by the real decree-holder be restored to the deities under section 36(2)(c) of the Bengal Money-Lenders Act. The trial judge agreed with the judgment-debtors, granting their prayers in both applications. The order directed that the decrees be reopened, fresh decrees be made pursuant to the Act, and that the properties described in Schedules Ka, Kha and GA be restored to the deities under section 36(2)(c). Dissatisfied with that judgment, Oramba Sundari appealed the order by filing two appeals before the High Court of Calcutta, and the learned

The judges who had examined the two appeals in the High Court confirmed the judgment of the trial court and rejected both appeals. The present appeal before this Court was filed by Oramba Sundari on the basis of a certificate issued by the High Court pursuant to sections 109(a) and 110 of the Civil Procedure Code. The counsel who represented the appellant in the High Court did not dispute the factual conclusions that had been reached by the lower courts. Those conclusions were that the appellant, Oramba Sundari, was merely a benamidar— that is, a nominal holder— for her husband Aghore concerning the purchase of the properties listed in Schedule Ga that had been acquired through a court sale, and that the deed executed by the Chakraborty family on 26 July 1940 in her favour was a fictitious conveyance. The only issue that the counsel pressed for consideration before this Court was whether, in a proceeding brought under section 36 of the Bengal Money-Lenders Act, the court was permitted to look beyond the face of a decree and investigate whether the persons named as decree-holders were in reality benamidars for another individual. In other words, the argument was that even if it were established that Aghore had supplied the money on which the Chakrabortys obtained their decrees, the court could, while reopening the decrees and determining the rights of the parties under the provisions of the Bengal Money-Lenders Act, simply treat the Chakrabortys as the actual decree-holders without examining the underlying benami relationship. To resolve this question, it was necessary to analyse the scope of section 36 of the Bengal Money-Lenders Act and the types of relief that the statute authorised the court to grant. Section 36 enumerates a range of powers that the court may exercise when it has reason to believe that exercising one or more of those powers will provide relief to the borrower as intended by the Act. Among those powers, clause (a) of sub-section (1) expressly authorises the court to reopen any transaction and to make an account between the parties. Although the drafting of section 36 is somewhat obscure and clumsy, the Privy Council has clarified that the power to reopen a transaction, as contemplated by the section, extends to the reopening of decrees. Sub-section (2) of the same provision sets out detailed rules governing what the court may and may not do when a decree is reopened. It is undisputed that the court may reopen a decree under section 36(2) solely for the purpose of granting relief to the borrower in accordance with the Act, which principally involves releasing the borrower from any interest liability that exceeds the limits prescribed in section 30 of the Act. When a decree is reopened, a fresh decree is issued not to overturn the original cause of action but to replace the method of accounting authorised by the Act for the calculations that formed the basis of the earlier decree, thereby giving the judgment-debtor an opportunity to satisfy the decretal liability as recalculated under the new accounting method.

The Court explained that when a decree is reopened, the purpose is to determine the instalment payments that will satisfy the decretal amount, but except for these instalments the original decree and the adjudications made under it are not erased, and the parties continue to hold the rights and liabilities that arose from the original cause of action. The method by which the parties’ rights are to be adjusted after a decree has been reopened is set out in detail in the various clauses of section 36(2) of the Bengal Money-Lenders Act. An examination of those clauses led the Court to conclude that the statute does not require, nor permit, an enquiry into whether the person recorded as decree-holder is in fact a benamidar, that is, a nominee, for some other individual. Clause (a) of section 36(2) authorises the Court to issue a fresh decree in accordance with the provisions of the Act. That fresh decree must be made in favour of the original decree-holder, and the only alteration it makes is to replace the original calculation, which was based on the parties’ contract, by the statutory method of accounting prescribed by the Act. Clauses (b) and (c) deal with situations where property was sold in execution of the original decree. If the purchaser of the property is the decree-holder himself and he is still in possession when the decree is reopened, the Court must, under clause (c), order that the property be restored to the judgment-debtor so that the debtor may use it to meet the instalment obligations. Conversely, if the property was acquired by a third-party purchaser, either at the execution sale or through a subsequent transfer from the decree-holder, that third party’s interest will be protected only if he acquired the property in good faith, as contemplated by clause (b). Clause (d) directs the Court to fix the manner and size of the instalments in which the decretal amount must be paid. Clause (e) imposes an additional duty on the Court to provide that, should the judgment-debtor default on any instalment, the property that had been restored to him under clause (c) must be taken back into the possession of the decree-holder. The Court noted that the purpose of restoring possession of the execution-sale property to the judgment-debtor is to enable the debtor to satisfy the decretal debt, but the original sale is not set aside; consequently, if the debtor defaults, the property reverts to the decree-holder purchaser. The Court further affirmed that where the purchaser is merely a benamidar for the decree-holder, clause (b) of subsection (2) of the section offers no protection to that purchaser, because he cannot be regarded as a person other than the decree-holder acquiring rights in good faith as envisaged by the statute.

For the purpose of giving effect to clauses (b) and (c) of section 36(2), the Court held that it not only possessed the authority but also the duty to investigate whether the apparent purchaser at the execution sale, or any person who claimed to have obtained an interest through a subsequent transfer from the decree-holder purchaser, had acquired such rights in good faith as contemplated by clause (b). However, the Court disagreed with the High Court judges who suggested that, when a new decree is issued under clause (a) of section 36(2) and the judgment-debtor is granted consequential relief under clause (c), the Court may examine whether the decree-holder recorded in the decree is in fact a benamidar acting for another party. The Court considered such an inquiry to lie beyond the scope of the various clauses of section 36(2) of the Bengal Money-Lenders Act. Those provisions, the Court observed, recognize only the decree-holder in whose favour the original decree was passed. The adjustment of rights must therefore occur between that decree-holder and the judgment-debtor; the instalments under any new decree are payable to that decree-holder alone, and only that decree-holder can be compelled to restore any property purchased in the execution proceedings. Consequently, only the decree-holder on record may give a valid discharge or record satisfaction of the decree. The Court deemed it irrelevant that Aghore, the husband of the appellant, was the actual source of the money on which the decrees were based. The Court fixed the Chakrabortys as the sole decree-holders and examined the extent to which the Act’s provisions could be applied to them in the present facts.

Regarding the properties listed in Schedules Ka and Kha, the Court noted that there was no dispute that these were bought by the decree-holders themselves. Although no cash price was paid by the decree-holders, the proceeds of the sale were set off against the decretal dues, rendering the decree-holders the purchasers within the meaning of clause (c) of section 36(2). Because the lower courts had held that the subsequent conveyance of those properties to Oramba Sundari, the appellant, was fictitious, the Court concluded that she did not acquire any right in good faith that could be protected under clause (b). Accordingly, the orders of the lower courts restoring possession of those properties were affirmed. In contrast, for the properties listed in the Ga Schedule, the Court observed that Oramba Sundari herself was the purchaser at the execution sale, and it was immaterial whether the purchase money came from her husband. These properties were not bought by the decree-holders, and there was no evidence that the decree-holders had any interest in them. Therefore, clause (e) of section 36(2) could not be invoked in favour of the judgment-debtor with respect to the Ga Schedule property, and the Court allowed the appeal in part, setting aside the lower courts’ order for restoration of possession of that particular property.

The Court observed that there was no evidence that the decreeholders had possession of the property either directly or through Oramba Sundari. Consequently, the Court held that clause (e) of section 36(2) could not be invoked in favor of the judgment-debtors with respect to this particular property. Clause (e) of section 36(2) provides that judgment-debtors may obtain possession of a property only when they themselves are the legal owners or have a vested interest recognized by law. Because clause (e) was not applicable, the Court concluded that the possession of the Ga Schedule property must continue to rest with the appellant, Oramba Sundari. Accordingly, the Court decided to allow the appeal in part and to set aside the order made by the lower courts that had restored possession of the Ga Schedule property. The remaining portions of the High Court’s judgment, which dealt with other properties and issues, were left undisturbed and continued to operate as originally decreed. Thus, the Court upheld the lower courts' findings on matters unrelated to the Ga Schedule property while correcting the error concerning possession of that specific asset. No order regarding the allocation of costs for either of the appeals was issued by the Court. The final disposition of the case therefore recorded that the appeal was partially allowed.