Naubat Singh And Ors. vs Indar Sen And Anr. on 7 March, 1885

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Allahabad High Court
Naubat Singh And Ors. vs Indar Sen And Anr. on 7 March, 1885
Equivalent citations: (1885) ILR 7 All 553
Author: W C Petheram
Bench: W C Petheram, Straight, Oldfield, Brodhurst, Mahmood


W. Comer Petheram, C.J.

1. The question is, whether a Zamindar, who mortgages his mahal by usufructuary mortgage, and gives possession to the mortgagee, parts with his proprietary rights by that transaction. This of course depends upon what a usufructuary mortgage is. A mortgage of this description is defined by Section 58 of the Transfer of Property Act to be a transfer of an interest in specific immoveable property for the purpose of securing the payment of money, &c., and the mortgagor delivers possession of the property to the mortgagee, and authorizes him to retain possession and receive the entire profits. Under such a transaction it is evident that the mortgagee is entitled to the exclusive possession of the property until the loan is repaid, and becomes, in my opinion, the proprietor of the property during that time, inasmuch as I understand the proprietor of a thing to be the person entitled to the exclusive possession of it at the time. If it be true that the transaction has constituted the mortgagee the proprietor of the property, though only for the time being, it must follow that the mortgagor has parted with his proprietary rights as he has ceased to be proprietor. The difficulty in the case really arises from the decision of a Division Bench of this Court in the case of Bhagwan Singh v. Murli Singh I.L.R. 1 All. 459. Speaking for myself, I can only say that I think that decision is wrong, and that I decline to follow it. In my opinion, the meaning of the Legislature is that when a Zamindar ceases to be entitled to occupy the sir-land as proprietor, he shall have the right to occupy it as an ex-proprietary tenant under Section 5 of the Rent Act. It follows that I answer the question in the affirmative.

Straight, J.

2. I am of the same opinion. The mortgage transaction between the parties to the suit, out of which the reference has arisen, transferred the legal estate in the zamindari to the mortgagee, and entitled him to possession thereof to the exclusion of the mortgagor, which possession can only be terminated by surrender of his document of title and reconveyance either voluntarily made or enforced through the medium of a redemption suit. It is true that the words “lose” and “part with” in Section 7 of the Rent Act have no special legal significance, but they appear to me to have been intended to cover all cases in which a proprietor of land has either voluntarily or by operation of law deprived himself permanently or temporarily of the power to exercise full proprietary right over his property. The mischief at which this provision of the statute aimed is too well understood to need repetition here, and I can only add that if a usufructuary mortgage be held not to be a “losing” or “parting with” the proprietary right, then in future a usufructuary mortgage will invariably be resorted to instead of a sale, so as to defeat the ex-proprietary right,

Mahmood, J.

3. In this case I have arrived at the same conclusion as the learned Chief Justice and my brother Straight, but as the grounds of my conclusion are, though in a very small degree, different from those which they have stated, I think it necessary to explain my own reasons. Before I can go into the question referred to the Full Bench, it is necessary to consider the meaning of the words “proprietary rights” in Section 7 of the Rent Act (XII of 1881). I understand these words to be equivalent to the term “ownership,” which is not merely a word of technical legal meaning, but which, I hold, must, according to the general canons of construction, be interpreted in its broadest possible meaning in the absence of words to restrict such interpretation. In that light, the idea of full ownership corresponds to what, in the Roman Law, is termed a “dominium,” or to what, in the English Law, is called the “fee simple estate.” This has been denned by Austin in the following manner: “The idea of absolute property is a right indefinite in point of user, unlimited in extent of duration, and alienable by the actual owner from every successor who, in default of alienation by him, might take the subject of it.” This appears to me to correspond to the meaning of the term “proprietary rights” as used in Section 7 of the Rent Act. It is, as I take it, an elementary proposition of jurisprudence that dominium is an aggregate of component rights, such as the right of actual possession, the right of enjoying the usufruct of land, the power of sale, and so on. In my judgment in the case of Gopal Pandey v. Pursotam Das I.L.R. 5 All. 121. I explained what full ownership means and what its incidents are, and also what the exact nature of occupancy-right is in these provinces. I there said that a person in full ownership can alienate any one or more of its component elements. The question before the Court in that case related to simple mortgage or hypothecation, but my argument applies also to the case now before us, because I said, adopting another passage from Austin, that the full ownership being composed of these rights “indefinite in point of user, unrestricted in point of disposition, and unlimited in point of duration,” any alienation of these rights would be a mortgage, so long as the object of the alienation was security for the payment of a debt in money. I further said, quoting from another jurist, that any “one or more of the subordinate elements of ownership, such as a right of possession or user, may be granted out while the residuary right of ownership, called by the Romans nuda proprieties, remains unimpaired. The elements of the right which may thus be disposed of without interference with the right itself,–in other words, which may be granted to one person over an object of which another continues to be the owner,–are known as jura in re aliena.”–(Holland on Jur. p. 144). Such being my views as to the nature of proprietorship, I am unable to hold that the right of the usufructuary mortgagee is a right which can be called a transfer of proprietorship; and having regard to Section 58 of the Transfer of Property Act, and especially Clause (a), governing the whole section, and Clause (d), referring in particular to usufructuary mortgage, I cannot agree in holding that the execution of a usufructuary mortgage amounts to a transfer of the proprietary right. But here my difference with the learned Chief Justice ends. Upon the rest of the question, I entrirely agree with him. The question is then limited to this–what is the meaning of the words “lose” and “part with” as used in Section 7 of the Rent Act?–in other words, to the interpretation of two common English expressions. As to the word “lose” it means, in my opinion, the transfer of proprietary rights otherwise than by the will of the owner, as, for instance, by the sharer falling into arrears of government revenue, or by a decree of a Civil Court, or by a partition of the estate sanctioned by the supreme revenue authorities, or by some other incident of law. With these, however, we are not now concerned. But as to the expression “part with,” that is the sole point on which this case, in my opinion, depends. I think that “part with” does not exclude the idea of an alienation which falls short of sale or any other incident of law which absolutely transfers ownership out and out. To “part with” is an expression philologically connected with the term “separate,” it means to be separated from something. But a man may separate himself from a thing either for ever or only temporarily, and in this sense to “part with” may be called the Genus, of which absolute alienation and temporary alienation are species. In other words, the phrase must be taken to cover both forms of alienation–an interpretation which is in keeping with the rule of construction that words must be understood in their broadest meaning, unless there are reasons to restrict the meaning. Here no such reasons exist, and, as the learned Chief Justice and my brother Straight have implied, a usufructuary mortgage is a “parting with” some of the incidents of ownership, because the most important elements of ownership are the right of possession and of the enjoyment of the usufruct, though temporary and for a specific object. These rights are, in the case of usufructuary mortgage, transferred from the mortgagor to the mortgagee, and though such a transfer does not amount to a total alienation of proprietorship, it does fall within the expresion “part with” in Section 7 of the Rent Act. I do not hold this opinion on theoretical grounds only, but also on grounds of public policy as apparent from the statute itself. I mean by this that the right of occupancy in sir-land has been obviously intended by the Legislature as a protection to the owners of zamindari shares in villages in India against their own imprudence. Now the case of Bhaghwan Singh v. Murli Singh I.L.R. 1 All 459 goes directly against this view. In regard to that case, I will not say anything in the nature of an argument against the ratio decidendi upon which the judgment was based, beyond the observation that the reasons upon which my view is founded do not appear to have been considered. I agree with the learned Chief Justice in dissenting from that judgment. In another case Tarapat v. Kamalnain N.W.P. Legal Remembrancer 1880 R. & R. Series 212–which is binding upon the Revenue authorities in these Provinces, the Sudder Board of Revenue held the same view as the decision of the Division Bench of this Court to which I have referred. The reasons which prevent me from agreeing with the one decision apply equally to the other. In the Full Bench case of Gopal Pandey v. Parsotam Das I.L.R. 5 All. 121 I took pains to explain my views of the nature of occupancy-rights in these Provinces, and held that such rights were not capable of transfer by their holder, in the sense of Section 9 of the Rent Act, even by means of simple mortgage. I regret, and I say this with due respect, that that decision was not accepted by the whole Court, but in a subsequent case the Full Bench in Ganga Din v. Dhurandhar Singh I.L.R. 5 All. 495 laid down that a usufructuary mortgage was a “transfer” under Section 9 of the Rent Act. It is not necessary for me to consider whether the ratio decidendi in the one case can possibly be different to that in the other, as it is enough for the purposes of the case to accept the latter ruling which, in my view of the law, accords with the reasoning upon which my judgment in the former case proceeded. Now what is an ex-proprietary tenancy? It is nothing more or less than a right of occupancy which does fall within the prohibition of Section 9, and it was so held by the Full Bench in Qnlab Bai v. Indar Singh I.L.R. 6 All. 54, the effect of which I take to be a reversal of an earlier ruling of a Division Bench of this Court in Markundi Dial v. Rambaran Rai I.L.R. 2 All. 735. It appears to me that if the ruling in Gulab Rai v. Indar Singh is right and I take it to be right, no other view than that taken by the learned Chief Justice and my brother Stbaight is possible, because if a person holding an occupancy-right cannot alienate it by sale, it follows that he cannot by usufructuary mortgage create any such interest in the usufructuary mortgagee as would deprive him of the occupancy-right generated by the statute. Any other view seems to me to involve the conclusion that a person executing a usufructuary mortgage of his zamindari, including sir-land, might enable the usufructuary mortgagee to own the whole property at the end of sixty years when the right of proprietorship would cease by prescription, and the original owner would be prevented from keeping the occupancy-right, because during the continuance of the mortgage when the mortgagee would remain in possession, the sir-land would either be fallow (which is not likely), or the right of actual possession and cultivation thereof having once been conveyed to the mortgagee, he might let the land to tenants, and thus create rights which would take it out of the category of sir-land as defined in Section 3, Clause (4) of the Rent Act (XII of 1881). Such a result would, in my opinion, defeat the object of the statutory provision, and for the reasons my answer to the reference must be in the affirmative.

Oldfleld, J.

4. The reply to this reference depends on the meaning to be put on the words “lose or part with his proprietary rights in any mahal” in Section 7 of the Rent Act.

5. In my opinion, they mean a loss or parting which divests absolutely of all proprietary rights, leaving no interest of a proprietary kind in the mahal. This does not happen in the case of a usufructuary mortgage.

6. A mortgage is defined in the Transfer of Property Act to be the transfer of an interest in specific immoveable property for the purpose of securing the payment of money lent; and it becomes a usufructuary mortgage when the mortgagor delivers possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property, and to appropriate them in lieu of interest, or in payment of the mortgage-money, or partly in payment of the mortgage-money and the mortgagor has a right to recover possession of the property when the money is paid. The mortgagee therefore holds the estate merely as a security for the debt, and not absolutely, and he has therefore only a qualified and limited interest in it, confined to the object of satisfying his debt, and so long as the right of redemption remains in the mortgagor, the full proprietary interest and right cannot be said to have passed from him to the mortgagee, the right to redeem being dependent on the mortgagor remaining proprietor or owner of the property.

7. In a sale on the other hand, the proprietary rights pass in their full sense and absolutely. Sale is defined in the Transfer of Property Act to be a transfer of ownership in exchange for a price paid or promised, or part paid and part promised. The transfer of ownership marks the difference between it and mortgage.

8. The same distinction will be observed in the definition of English mortgage, by which the property is transferred absolutely. Nothing of this sort happens in a usufruotuary mortgage, and therefore the latter is not a loss of or parting with proprietary rights, as I understand those words in Section 7.

9. This is the view taken in Bhagwan Singh v. Murli Singh I.L.R. 1 All. 459 in which I concur.

Brodhurst, J.

10. The question that has been referred to us is whether a person who creates a usufructuary mortgage of zamindari property becomes an ex-proprietary or occupancy-tenant of the sir-land under Section 7 of the Rent Act (XII of 1881). Paragraphs 1 and 2 of Section 7 of the Rent Act are as follows: “Every person who may hereafter lose or part with his proprietary rights in any mahal shall have a right of occupancy in the land held by him as sir in such mahal at the date of such loss or parting, at a rent which shall be four annas in the rupee less than the prevailing rate payable by tenants-at-will for land of similar quality and with similar advantages.”

11. Persons having such rights of occupancy shall be called ‘ ex-proprietary tenants,’ and shall have all the rights of occupancy tenants.

12. I consider that the words “who may lose” in paragraph 1 mean involuntarily lose, for instance, by auction-sale, and that the words “part with” mean voluntarily and entirely divested of, by means, e,g., of gift or private sale. If the Legislature had intended that the person making a usufructuary mortgage should thereby become an ex-proprietary tenant of the sir-land, there could have been no difficulty in expressing their meaning in clear and unambiguous language. If the words “every person who may hereafter lose or part with his proprietary rights in any mahal” are meant to include every person who may, for however short a time, make a temporary transfer of a small portion of his zamindari property, I think it cannot but be admitted that the language used to convey that meaning is extremely obscure, and is calculated to mislead a large proportion of the persons interested in understanding it. Obviously a person cannot, in the general acceptation of the words, become an “ex-proprietary tenant,” until he has lost or parted with his proprietary rights, and, in my opinion, the words “proprietary rights” in Section 7 of the Rent Act clearly mean the whole of his proprietary rights. “Usufructuary mortgage” is defined in Clause (d) of Section 58 of the Transfer of Property Act, as follows: “Where the mortgagor delivers possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property, and to appropriate them in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest and partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage, and the mortgagee an usufructuary mortgagee.” A zamindar may make a usufructuary mortgage of the whole or of a portion of his estate on terms that will enable him to redeem the mortgage whenever he has the means to do so, He may mortgage the property for even less than half its value, and subsequently he may sell it for double the amount of the mortgage-money. A person who can redeem the property that he has mortgaged, or can, whenever it suits him to do so, sell that property, either to the mortgagee or to a third person cannot, in my opinion, be said to have “lost or parted with,” his proprietary rights in the property.”

13. A person can undoubtedly be the proprietor of an estate without being in actual possession of it. A person takes a house or a farm on a lease for a term of years; he is on certain conditions entitled to exclusive possession of the house or farm for the term of years, but nevertheless he is not the proprietor of the house or farm, but is merely the tenant in temporary possession. The money which he pays as rent to the landlord is paid on certain dates within the tenancy, whereas the money that is paid by the mortgagee with possession to the mortgagor–the landlord–is generally paid prior to occupation by the mortgagee. The mortgagor, being in immediate want of cash, raises a loan by giving over to the money-lender temporary possession of the whole or of a portion of his estate, and by this mortgage transaction he obtains, as it were, his rents in advance. My opinion on the question referred to us is in accordance with the judgment of a Bench of this Court (Pearson and Spankib, JJ.) in the case of Bhagwan Singh v. Murli Singh I.L.R. 1 All 459. That judgment was delivered on the 27th July 1877, when Act XVIII of 1873 was the Rent Act in force, and on the 26th October 1880, it was approved of and followed by both members of the Sudder Board of Revenue Messrs. Carmichael and Plowden in the case of Tarapat v. Kamalnain N.W.P. Legal Remembrancer 1880 R.& R. Series 212. I consider that not only are the judgments above mentioned in accordance with the law, but that no other conclusions could have been arrived at without straining the language of the section.

14. I believe it to be a duty of the Legislature, and one which they duly perform, to keep themselves acquainted with the reported judgments of the High Courts and Sudder Boards of Revenue, in order that the laws referred to in those judgments may, when requisite, be amended. The two judgments above mentioned were binding on all Subordinate Civil and Rent Courts throughout the North-Western Provinces, and therefore, if the Legislature had considered that a wrong construction had, in those judgments, been placed on the meaning of Section 7 of Act XVIII of 1873, they would surely have felt it their imperative duty to amend the law and to recast the section, so that no doubt could possibly remain as to its meaning; but Act XII of 1881 did not come into force until nearly four years after the date of the High Court judgment, and the two paragraphs of Section 7, Act XVIII of 1873, were reproduced in precisely the same words in Section 7, Act XII of 1881, with the addition of a third paragraph, which in no way affects the present case. I am satisfied, first, from the language of Section 7, and secondly, from that section having been reproduced in Act XII of 1881, notwithstanding the two judgments above referred to, that those judgments are correct, and therefore my answer to the reference is, that a person who creates an usufructuary mortgage of zamindari property does not, under the provisions of Section 7 of the Rent Act, become an ex-proprietary or occupancy-tenant of the sir-land.

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