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Allahabad High Court
Gauri Datt Pandey vs Bandhu Pandey And Ors. on 27 February, 1929
Equivalent citations: AIR 1929 All 394
Author: Ashworth


Ashworth, J.

1. This second appeal arises out of a suit brought by the plaintiff-appellant against the defendant-respondent for damages. The plaintiff is mortgagee under a deed dated 8th March 1916 wherein the mortgagor purported to give with possession two properties, one an occupancy tenancy and the other a grove. He asked damages because his peaceful occupation of the grove has been interfered with by his mortgagor.

2. Both the lower Courts have dismissed the suit on the ground that it was unlawful for the mortgagor to agree to the mortgagee having possession of his occupancy holding as security for the land. It may be mentioned that the amount advanced was secured by the mortgage of both properties and was not divided so as to show what amount was secured by possession of one property and what by possession of the other property.

3. The correctness of the decision of the lower Courts has been contested in this appeal on various grounds. One ground is that the mortgage as a whole can only be deemed unlawful by invocation of Sections 23 and 24, Contract Act, and that the Contract Act does not apply to transfers. It appears to me that it is too late in the day to take up the position that the principles of the Contract Act are not to be applied to transfers. The fact is that the Transfer of Property Act does not deal with such matters as good consideration, fraud, misrepresentation and it seems to show that the Act assumed the principles of the Contract Act, being applicable. Indeed Section 4, T.P. Act, provides that the chapters and sections of the Transfer of Property Act which relate to contracts shall be taken as part of the Contract Act of 1872, a provision which suggests that the Transfer of Property Act was to be read in the light of the Contract Act. The appellant’s counsel has endeavoured to draw a distinction between a contract, which has still to be executed, and a transfer which has taken full effect. Some such distinction was drawn by Richards, C.J., in the case of Rajendra Prasad v. Ram Jatan Rai [1917] 39 All. 539, but this is in effect to hold that a contract, which is void because it is forbidden by law, becomes valid if you act according to the contract. Such a position appears to me indefensible. Lastly the appellant’s counsel contests the position that the mortgage of an occupancy holding can be regarded as unlawful or forbidden by law. He admits that there have been certain decisions which suggest this, but he would distinguish them on one or other grounds. I do not consider that they can be distinguished. They are undoubtedly decisions that such a mortgage is unlawful and forbidden by law. The question is whether I am bound to follow them. I can find no decision of a Full Bench to this effect. There is the case of Har Prasad Tewari v. Sheogobind Tewari A.I.R. 1922 All. 134, which held that the entire contract of mortgage was void where an occupancy holding was mortgaged. It purported to follow the case of Bhawani Prasad v. Ghulam Muhammad [1896] 18 All. 121. Again there is the later decision of Sital Rai v. Ram Khelawan Pandey A.I.R. 1925 All. 543. On the other hand, there is a decision already referred to Rajendra Prasad v. Ram Jatan Rai [1917] 39 All. 539, which in effect decided that a transfer of an occupancy holding by a mortgage was not unlawful but merely inoperative so far as it disposed of the holding.

4. There, thus being divergence in the decisions of this Court I feel at liberty to allow my own view in the matter. I have never been able to understand on what ground it could be maintained that the Tenancy Act of 1901 could be construed to forbid a mortgage of an occupancy holding. The Act merely states that such a tenant shall not be competent to transfer his holding: see Section 21. Now a minor is not competent to make a valid transfer and yet no one could say that it was unlawful for him to attempt to do so. Indeed where the Act makes the doing of a thing impossible it does not appear that there is any room for a declaration that the doing of it is unlawful. A person cannot do what is impossible. The object of the Tenancy Act was to render innocuous such transfers. Reference is made to such a transfer in Section 6(1), T.P. Act, which provides that nothing in that section shall be deemed to authorise a tenant having an untransferable right of occupancy to assign his interest as such. 8. 24, Contract Act, refers to agreements to do something which the law has forbidden to be done. This is a very different thing from an attempt to do a thing which the law merely declares to be inoperative. It is quite conceivable that at a future date the legislature finding that much trouble and litigation is caused by attempts to mortgage occupancy holdings might declare the attempt to do so to be unlawful. In such a case it would have to provide a penalty. It is seldom that an Act can be construed to declare something unlawful unless that Act provides a penalty for breach of the provision.

5. Taking this view of the matter I hold that in the case of the present mortgage the parties with their eyes open (for ignorance of the law excuses no one) agreed to two properties being transferred by the one to the other as security for a debt. As they knew that the transfer of the holding would be inoperative, they must have intended in the eyes of the law the whole debt to be secured by the transfer of the other property, i.e., the grove. The consequence is that this appeal must succeed. The case having been decided on a preliminary point is remanded to the trial Court for re-admission and decision on the merits. Costs will abide the result. Leave to appeal is given in this case.

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