SHIVASHANKAR PRASAD SHAH & ORS. versus BAIKUNTH NATH SINGH & ORS.

SHIV ASHANKAR PRASAD SHAH & ORS.

BAIKUNTII NATH SINGH & ORS.

March 7, 1969

[S. M. SIKRI, R. S. BACHAWAT AND K. S. HEGDE, JJ.]

Code of Civil Procedure-Re.s·Judicata--Objection against execution proceeding, when barred.

Bihar Land Reforms Act, ss. 3, 4 & 6-Mortgaged Estate-Final Decree obtained-Effect of.

After preliminary decree was obtained by the appellants (mortgagees of an Estate including both Bakasht lands and other lands), the Bihar Land Reforms Act, 1950 came into force. The appellant filed petition for passing final decree. The Estate mortgaged vested in the State as result of notification issued under s. 3(1) of the Act, and later final decree was passed in the mortgage suit. Thereafter the appellants applied under s. 14 of the Act and got determined the compensation to which they were entitled under the Act. But yet they filed an execution petition to execute the mort~age decree against the Bakasht land. The respondents resisted that execution by filing an application under s. 47, Civil Pro· cedure Code contending that. the execution was barred under s. 4(d) of the Acjt. That application was dismissed for default of the respondents. second application raising, the same ground was filed by the respon-dents but this, too, was dismissed for their default. third application raising the same ground was filed by the respondents and in this, the execution court overruled the objection raised by the respondents on the grounds (i) that the objection was barred by the principles of res judicata and (ii) that the bar of s. 4(d) pleaded was not tenable. This decision was affirmed in appeal, but reversed in second appeal by the High Court. Dismissing the appeal this Court;

HELD ; ( i) The objection was not barred by the principles of res iudicata. Before plea can be held to be barred by res judicata that plea must have been heard and determined by the court. Only decision by court <lould be res judicata, whether it be statutory under s. 11, Civil Procedure Code or constructive as matter of public policy on which the entire doctrine rests. An execution petition having been dismissed for the default of the decree·holder though by the time that petition came to be dismissed. the judgment debtor bad resisted the execution on one or more grounds, docs not bar the further execution of the decree in pu'r· suance of fresh execution petitions filed in accordance with law. Even the dismissal for default of objections raised under s. 47, Civil Procedure Code does not operate as res judicata when the same objections are raised again in the course df the execution. [911 B-HJ

Maharaja Radha Parshad Sinf!h v. Lal Sahab Rai & Ors. L.R. 17 I.A. 150 Pulvarthi Venkata Subba Rao v. Velluri lagannadha Rao & Ors. [196"4] 2 S.C.R. 310, Lakshmibai Anant Kondkar v. Ravji Bhikaji Kond· kar, XXXI B.L.R. 400, Bahir Das Pal cl: Anr. v. Girirh Chandra Pal, A.l.R. 1923 Cal. 287, Bhagwati Prasad Sah v. Radha Kishun Sah & Or~. A.I.R. 1950 Pat. 354, lethmal & Ors. v. Mst. Sakina. A.l.R. 1961 Ra1. 1959 Bishwannth Kundu v. Smt. Subala Dassi, A.l.R. 1962 Cal. 272, referred to.

S. P. SHAH v. B. N. SINGH (Hegde, J.)

Ramnarain v. Basudeo, I.LR. XXV Pat. 595, disapproved.

(ii) Proceedings under s. 4(d) of the Bihar Land Reforms Act, 1950 included execution proceedings and the execution could not be proceeded with. The only remedy open to the appellants was to get compensation under Chapter IV of the Act. [913 G, Hl

Reading ss. 3, 4 and 6 together, it followed that all Estates notified under s. 3 vested in the State free of all encumbrances. The quondum proprietors and tenure holders of those Estates lost all interests in those Estates. As proprietors they retained no intere"t in respect of them whatsoever. But in respect of the lands enumerated in s. 6 the State settled on them the rights of raiyats. Though in fact the vesting of the Estates and the deemed settlements of raiyat rights in respect of certain classes of lands included in the Estates took place simultaneously. in law the two must be treated as different transactions; first there was vesting of the Estates in the State absolutely, free of all encumbrances. Then followed the deemed settlement bv the State of raiyat's rights on the quondum proprietors. Therefore in law it would not be correct to say that what vested in the State were only those interests not coming within s. 6. [913 C-E] Section 4 ( d) provided that "no suit shall lie in any civil court for the recovery of any money due from such proprietor (proprietor whose estate has vested in the State) or tenure holder the payment of which is secured by mortgage of, or is charge on, such estate or tenure and all suits and proceedings for the recpvery of any such money which may be pend-ing on the date of ve·sting shall be dropped". Proceedings in this section undoubtedly included execution proceedin!l!. [913 Fl

RGmnarain v. Basudeo I.LR. XXV Pat. 595, Raj Kishore v. Ram Pratap, A.1.R. 1967 S.C. 801; [1967] ! S.C.R. 56, Rana Sheo Ambar Singh v. Allahabad Bank Ltd .. Al/a/what!, [1962] 2 S.C.R. 441 and Krishna Prasad &: Ors. v. Gauri Kumari Devi. [1962] Supp. 3 S.C.R. 564, referred to.

Sidh<shwar Prasad Singh v. Rem Saroop Singh, 1963 B.L.J.R. 802, majority view disapproved.

CIVIL. APPELLATE JURISDICTION: Civil Appeal No. 368 of 1966.

Appeal by special leave from the judgment and order dated February 3, 1964 of the Patna High Coun in Appeal from Appel-late Order No. 99 of 1963.

Sarjoo Prasad and R. C. Prasad, for the appellants.

K. K. Sinha allld S. K. Bisaria, for the respondents.

The Judgment of the Court was delivered by

Hegde, 1. This appeal against the judgment of the Patiia High Court dated the 3rd F~~ruary, 1964 in its Appellate Order No. 99 of 1963 was file.d obtammg special leave from this Court. It arises from proceeding under s. 47, Civil Procedure Code: In execution of mortgage decree, the decree-holders sough~ to proceed against

Bakasht Ja.nds of the judgment debtors. The judgment debtors ob-jected to the same on the ground that the execution was barred under s. 4(d) of the Bihar Land Reforms Act, 1950 (to be herein-after referred to as the Act). But that objection was overruled by the executing court on two different grounds namely (1) that the objection in question is barred by the principles of res judicata and (2) the bar of s. 4{d) pleaded is lllOt tenable. The decision of the execution court was affirmed in appeal but reversed in second appeal by the High Court.

The two questions that arise for decision in this appeal are ( 1) whether the objection as regards the executability of the decree pleaded by the judgment debtors is barred by the principles of res judicata and ( 2) whether the mortgage decree has become un-executable in view of the provisions of the Act.

We shall now briefly set out the material facts of the case. The mortgages, the appellants ijll this appeal obtained preliminary decree on June 26, 194 7 on the basis of mortgage. The property mortgaged was an Estate within the meaning of the Act. That property included both Bakasht lands as well as other lands. The Act came into force after the passing of the aforementioned preli-minary decree. The decree-holders filed petition for passing final decree on September 19, 1955. The Estate mortgaged vested in the State of Bihar on January l, 1956 as result of notification issued under s. 3 ( 1) of the Act. final decree was passed in the mortgage suit on October 1, 1956. Thereafter the mortgagees applied under s. 14 of the Act and got determined the compensa-tion to which they were eintitled under the Act. It is said that they did not proceed any further in that proceeding but on the other hand filed on June 18, 1958 an execution petition to execute the mortgage decree against the 8akasht lands. The judgment debtors resisted that execution by filing an application under s. 4 7, Civil Procedure Code (Misc. Case No. 94 of 1959) on the ground that the decree cannot be executed in view of the provisions of the Act. That application was dismissed ior the default of the judgment-debtors on SepteJ?.1ber 12, 1959. second application raising the same J?round (Misc. Case No. 110of1959) was filed by the judg-ment debto·~ is barred on the principles of res ;udicata and further on July 23, 1960 •or default of the jud!!lllent debtors. third application raising the same ground of objection (Misc. Case No. 91 of 1960) was filed by the judgment debtors on September 12. 1960. That application was dismissed on January 4, 1962 after examining the conkltltions of. the parties. Therein the execution ·court came to the conclusion that the objection raised by the judg-ment de,btors is barred on the principl~s of res judicata and further that the same has no merits. This decision as mentioned earlier ·was affirmed by the appellate court but reversed by the High Court. We shall first take up the conrention that the objection taken

s. P. SHAH v. B. N. SINGH (Hegde, /.)

by the judgment debtors is harried by principles of res judicata. Though at one stage, learned Coll)lseJ for the appellants-decree holders attempted to bring the case within Explanation 5, s. 11, Civil Procedure Code, he did not pursue that line of argument but tried to support his contention on the broader principles of res judicata. The real question for decision in this case is whether the dismissal of Misc. cases Nos. 94 and 110 of 1959 for default of the judgment debtors can be said to be final decision of the court after hearing the parties. Before plea can be held to be barred by the principles of res judicata, it must be shown that the plea in question had not O\llly been pleaded but it had been heard and finally decided by the court. . dismissal of suit for default of the plaintiff, we think, would not operate as res judicata against plaintiff in subsequent suit on the same cause Of action. If it was otherwise there was no need for the legislature to enact rule 9, Order 9, Civil Procedure Code which in specific term say that where suit is wholly or partly dismissed under rule 8, the plaintiff shal! be precluded from bringing fresh suit in respect of the same-cause of action. The contention that the dismissal of previous suit for default of the plaintiffs operates as res judicata in subse-quent suit in respect of the same claim was repelled by the Judicial Committee of the Privy Council in Maharaja Radha Parshad Singh v. Lal Sahab· Roi and Ors.('). Therein the Judicial Committee observed thus: "None of the questions, either of fact or law raised by the pleadings of the parties, was heard or det~rmined by the Judge of the Shahabad Court in 1881; and his decree dismissing the suit does not constitute res judicata within the mea,ning of the Civil Procedure Code It must fall within ~:me or other of the sections of Cbapte~ VII ~f the <;ode; m the preseQt case it is immaterial to C?ns:der ~h1ch, the severest penalty attached to such dISmtssa! 1~ any case being ~at the plaintiff cannot bring another suit for the same relief."

t at [From this decision it ]before plea can be held to [is ][clear that ]be [the ]b [Judicial Cotnm'tt ]. [1 ]~ op"""" , __ ,, plea must have been heard and Elet . a~~ by res 1ud1cata that decision by court could be . ~e Y the court. Only under s 11 c·vi·1 p res JU lcata, whether it be statutory • • ' I roce ure Code or 0 1 ti' public policy on which the entire do t .c ns rue ve as matter of decision can be considered as . J: nne ~ests. Before an earlier heard and finally decided r st" 1cath .t same must have been 1Velluri Jaga11(1adha Rao ;;:ee"(,.,,)art [1 ]Venkata Subba Rao v. , 0 rs. .

The courts in India have ge al! ak execution petition which has been nde~s 1 'f edt ~n tthhe view that an miss 1or default of the (1) L.R. 17 J.A. ISO. (2) [19641 2 S.C.R. JIO

der,ree-holder though by the time that petition came to be dismiss-ed, the judgment debtor had resisted the executiqn on one or more grounds, does not bar the further execution of the decree in pur-suanoe of fresh execution petition filed in accordance with law-see Lakshmibai Anant Kondkar v. Ravji Bhikaji Kondkar('). Even the dismissal for default of objections raised under s. 47, Civil Procedure Code does lllKlt operate as res judicata when the same objections are raised again in the course of the execution-see Bahir Das Pal and Anr. v. Girish Chandra Pa/([2]); Bhagawati Prasad Sah v. Radha Kishun Sah and Ors.([8]); Jethma/ and Ors. v. Mst. Sakina(4); Bishwanath Kundu v. Sm. Suba/a Dassi('). We dq not think that the decision in Ramnarain v. Basudeo([6 ]} on which the learned Counsel for the appellant placed great deal of reliance is correctly decided. Hence we agree with the High Court that the plea of res judicata advanced by the appellant is unsustainable.The next question is whether the execution is barred under the provisions of. the Act. The contention of the judgment debtors is that it is so barred whereas according to the appellants as the Bakasht lands which form part of the mortgaged property had not v~ted in the State, the execution can proceed against those lands. Therefore we· have to see whether the entire mortga~ed property had vested in the State in pursuance of the notification under s. 3 or ootly the mortgaged property minus the Bakasht lands.

There is no dispute that the property mortgaged was an Estate within the meaning of s. 2(i) and the notification issued under s. 3 covered the entirety of the Estate. But what was urged on behalf of the appellants is that what had vested in the State was the nqn-bakasht lands as well as the proprietory interest in the Bakasht lands and hence the Bakasht lands do not have the pro-tectiOJ! of s. 4 ( d) ; Consequently it is not necessary for them to exclusively proceed under s. 14.

But what was urged on

The consequences of the vesting of an Estate is set out iJli s. 4. Section 4 (a) provides that once an Estate vests in the State the various rights in respect of that Estate enumerated therein shall also vest in the State, absolutely free from all encumbrances. Among the rights enumerated therei.n undoubtedly includes the right of possession. In view of s. 4 (a) there is hardly any doubt that the proprietor loses all his rights in the estate in .question. After settina out the various interests lost by the proprietor that section pro~eeds to say "such proprietor or tenure holder shall ----· A.I.R. 1923 Cal. 287.

(ll xxxr, B.L.R. <IQO.

(2). A.I.R. 1923 Cal. 287. (4) A.1 .1961 Raj. 59. (6) U •. R. XXV pat. 595.

(3) l.R. !950 Pat. 354. (5) Al.R. 1962 Cal. 272.

s. P. SHAH v. B. N. SINGH (Hegde, J.)

cease to have any interests in such estate br tenure, other than the interests expressly saved by or under the provisions of this Act"· In order to find out the implication of the clause extracted above we have to go to s. 6 which provides that on and from the date of vesting all lands used for agricuJture or horticultural purposes which were in khas possession of ain intermediary on the date ol. vesting (including certain classes of land specified in that section) shall subject to the provisions of ss. 7 and be deemed to be settled by the State with such intermediary and he shall be entitled to retain possession thereof and hold them as raiyat uinder the State having occupancy rights in respect of such !ands, subject to the payment of such fair and equitable rent as may be determined by the Collector in the prescribed manner.

Reading ss. 3, 4 and 6 together, it follows that all Estates notified 111n<ler s. 3 vest in the State free of all encumbrances. The quondum proprietors and tenure-holders of those Estates lose all interests in those Estates. As proprietors they retain no interest in respect of them whatsoever. But in respect of the lands enu-D merated in s. 6 the State settled on them the rights of raiyats, Though in act the vesting of the Estates and the deemed settle-ment of raiyats rights in respect of certain classes of lands in-cluded in the Estates took place simultaneously, in law the two must be treated as different transactions; first there was vesting of the Estates in the State absolutely, and free of all encum-E brllplces. Then followed the deemed settlement by the State of raiyat's rights on the quondum proprietors. Therefore in law it would not be correct to say that what vested in the State are only those interests not coming within s. 6.Section 4 ( d) provides that "no suit shall lie in any Civil Court fo~ the recovery of any moner, due from such proprietor (pro-F pnetor whose estate has vested m the State) or tQn\lre holder the payment of which is secured by mortgage of, or is charge on, such estate or tenure ~d all swts and p~ings for the recovery of any such money which may be pendmg on the date of vesting .~hall be drop~"· Proc~ings in this section undoubtedly 1Jllclude execution pr<;>ceedmgs. This is not case where only pan of the moi:igaged prope~ has vested in the State and as such the ~te laid down by this Co~ in Raj Kishore v. Ram Pratap ([1]) is not attracted. As mentioned earlier the entire Estate mortgaged had vested though some interest in respect of portion of the mortgaged property had been settled by the State on the mortgagors.

Under the circumstances the only remedy open to the decree-holders is that provided in Chap. IV of the Act i.e. claim under

(I) (1967] 2 s.c.R. S6; A.I.R.. 1967 s.c. 801.

s. 14 be.fore the Claims Officer for "determining the amount of debt legally and justly payable to each creditor in respect of his claim". The procedure to be followed in such proceedii!lg is prescribed in ss. 15 to 18. Provisions relating to the assessment and payment of compensation payable to the quondum proprie-tors and tenure-holders are found in Chap. V of the Act (ss. 19 to 31.) Section 24(5) provides that "in the case where the interest of proprietor or tenure-holder is subject to mortgage or charge, the compensation shall be first payable to the creditor holding such mortgage or charge and the balance, if any, shall be payable to the proprietor or tenure-holder concerned ... " That sub-section further prescribes the maximum amount that can be paid to such creditor.

In view of what has been stated above it follows that under the circumstances of this case it is not OMIL to the appellants to proceed with the execution. Their only remedy is to get com-pensation under the Act.

Our conclusion receives strong support from some of the deci-sions of this court. In Rana Shea Ambar Singh v. Allahabad Bank Ltd., Allahabad('), question identical to the QOO before us, but arising under the U.P. Zamindari Abolition and Land Re-forms Act, came up for consideration by this Court. One of the questions that arose for--Decision in that case was whether the Bhurnidari right settled by the State on previous proprietor whose estate had vested in the State was liable to be proceeded agai,tlst in execution of mortgage decree against the Estate that had vested in the State. This Court held that it was not liable to be proceeded against. Therein it was ruled that the intention of the U.P. Zamindari Abolition ·and Land Reforms Act was to vest the proprietary rights in the Sir and Khudkasht l~nid and grove land in the State and resettle on intermediary not as compensation but by virtue of his cultivatory possession of lands comprised therein 'and on new tenure aind confer upon the intermediary new and special right of Bhumidari, whlch he never had before by s. 18 of the Act. The provisions in that Act relating to vesting and settlement of Bhumidari rights are in a!l essential particulars similar"to those in the Act relating to vesting and settlement of Bakasht lands. This Court further ruled in that casi: that the mortgagee could only enforce his rights against the mort~gor in the manner as provided ins. 6{h) .of the U.P. Act read withs. 73 of the Transfer of Property Act and follow the compensation money under the Act.

In Krishna Prasad and Ors. v. Gauri Kumari Devi([2 ]) the ques-tion that arose for decision by the Court was whether mortgage decree-holder could proceed against the properties of the mortga---ol[1.962J 2, s.c.R. 441. (2) (1962] Supp. 3 S.C.R. 564.

gor other than those mortgaged in enforcement of the personal 'ovenant when the property mortgaged had vested in the State under the provisions of the Act. That question was answered ip the negative. In the course of the judgment Gajendragadkar, J. (as he then was) who spoke for the Court observed that there is no doubt "that the scheme of the Act postulates that where the provisions of the Act apply, claims of the creditors have to be sub-mitted before the Claim Officer, the claimants have to follow the procedure prescribed by the Act and cannot avail of any remedy ,1utside the Act by institutiing suit or any other proceeding in the court of ordinary civil jurisdiction." Proceeding further he observed:

"It is in the light of this scheme of the Act that we must revert to section 4 (b) and determine what its true scope and effect are. . Mr. Jha contends that in constru-ing the words of Section 4 ( d) it would be necessary to bear in mi.nd the object of the Act which was merely to provide for the transference to the State of the interests of the proprietors and tenure-holders in land and of the mortgagees and lessees of such interests. It was not the object of the Act, says Mr. Jha, to extinguish debts due by the proprietors or tenure-holders and so, it would be reasonable to confine the operation of s. 4 ( d) only to the claims made against the estates which have vested in the State and no others. In our opinion, this argument pro-E ceeds on an imperfect view of the aim and object of the Act. It is true that one of the objects of the Act was to provide for the transference to the State of the estates as specified. But as we have already seen, the provi-sioms contained in section 16 in regard to the scaling down of the debts due by the proprietors and tcnure-F holders clearly indicate that another object which the Act wanted to achieve was to give some redress to the debtors whose estates have been taken away frQIII them by the notifications issued under section 3. Therefore in construing s. 4(d), it would not be right to assum~ that the interests of the debtors affected by the provisiOillS of the Act do not fall within the protection of the Act" and again at page 578 :

"Having regard to the said scheme it is difficult to confine the application of s. 4(d) oniy to execution proceedings in which the decree-holder seeks to pro-ceed against the estate of the debtor. In fact, an execu-H tiQn proceeding to recover the decretal amount from the. estate which has already vested in the State, would be mcompetent because the said estate no longer belong to the judgment-debtor."

l Sup Ci-69-9

Summarising the effect of the aforementioned decisions thts is what this Court observed in Raj Kishore's case(' )-a case aris· ing under \)le Act :

"From the principles laid down by this Court in the above two decisi<>ins, it follows that where the whole of the property mortgaged is an est'llte, there can be no doubt that the procedure prescpbed by Chapter IV has to be followed, in order that the amount due to the ere· ditor should be determined by the claims officer and the decision of the claims officer or the Board has been made final by the Act."

For the reasons mentioned earlier we are of the opinion that the decision of the majority of the judges in the Full BtW:h deci-sion in Sidheshwar Prasad Singh v. Ram Saroop Singh(') is not correct. The true ·effect of the decisions of this Court in Rana Sheo Ambar Singh's case([8 ]) and Krishna Prasad's case(') is as explained by Kamla Sahai, J. in that case.

In the result this appeal fails and it is dismissed with costs.

Appeal dismissed

(I) (1967]2 s.c.R. 56 A.l.R. 1967 s.c. 801.

(3) [1962] 2 S.C.R. 441.