{"id":258511,"date":"2003-09-10T00:00:00","date_gmt":"2003-09-09T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/bhavsingh-dead-by-lrs-vs-keshar-singh-and-ors-on-10-september-2003"},"modified":"2017-10-05T09:59:21","modified_gmt":"2017-10-05T04:29:21","slug":"bhavsingh-dead-by-lrs-vs-keshar-singh-and-ors-on-10-september-2003","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/bhavsingh-dead-by-lrs-vs-keshar-singh-and-ors-on-10-september-2003","title":{"rendered":"Bhavsingh (Dead) By Lrs vs Keshar Singh And Ors on 10 September, 2003"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Bhavsingh (Dead) By Lrs vs Keshar Singh And Ors on 10 September, 2003<\/div>\n
Bench: M.B. Shah, Dr. Ar. Lakshmanan<\/div>\n
           CASE NO.:\nAppeal (civil)  13382-83 of 1996\n\nPETITIONER:\nBHAVSINGH (DEAD) BY LRS.\n\nRESPONDENT:\nKESHAR SINGH AND ORS.\n\nDATE OF JUDGMENT: 10\/09\/2003\n\nBENCH:\nM.B. SHAH & DR. AR. LAKSHMANAN\n\nJUDGMENT:\n<\/pre>\n
JUDGMENT<\/p>\n
2003 Supp(3) SCR 607<\/p>\n
The Judgment of the Court was delivered by<\/p>\n
SHAH, J. : These appeals are filed against the judgment and order dated
\n11.9.1993 and order dated 21.3.1994 passed by the High Court of Madhya
\nPradesh, Jabalpur Bench at Indore, in M.P. No. 274 of 1987 and in review
\npetition bearing MCC No. 550 of 1993. By the impugned judgment and orders,
\nthe High Court allowed the writ petition filed by respondent No. 1
\n(deceased) and his son, respondent no. 2, namely, Narendra Kumar and set
\naside the order dated 11.2.1986 passed by the competent authority – SDO
\nholding that the appellant was entitled for a declaration that the sale
\ntransaction in question was prohibited transaction of loan as contemplated
\nunder Section 2(0 of the Madhya Pradesh Samaj Ke Kamjor Vargon Ke Krishi-
\nBhumi Dharakon Ka Udhar Dene Walon Ke Bhumi Hadapane Sambandhi Kuchakron Se
\nParitran Tatha Mukti Adhiniyam, 1976 (M.P. Act<\/a> No. 3 of 1977) (hereinafter
\nreferred to so ‘the Act of 1977’) and was null and void under Section 7(2)<\/a>
\nof the Act. The order for handing over possession of the land in question
\nadmeasuring 9.71 acres situated in village Kanadia to the appellant Bhav
\nSingh son of Bheraji was also set aside.\n<\/p>\n
The aforesaid order was passed on an application filed by the appellant
\nclaiming relief under Section 5<\/a> of the Act of 1977 contending that the
\ntransfer of the land by registered sale deed dated 20.7.1960 for a sum of
\nRs. 2500 was a mortgage transaction as said transfer was for the loan
\namount. R was his contention that at the time of said transaction, it was
\nagreed upon by the parties that whenever the appellant re-pays the amount
\nof Rs. 2500 possession of the land in question would be redelivered to the
\nappellant. It was his case that despite the fact that full amount had been
\nrepaid, the respondent has not restored the possession of the land
\nmortgaged by him. That application was allowed by the S.D.O. by order dated
\n29th January 1982.\n<\/p>\n
Being aggrieved by the said order, respondents preferred appeal before the
\nCollector, Indore, which was dismissed on 8th December, 1982. That order
\nwas challenged by filing Misc. Petition No. 724 of 1982 before the High
\nCourt of Madhya Pradesh at Indore. The High Court allowed the said petition
\nand set aside the order of the SDO and remanded the matter directing that
\nthe case be disposed of on merits after holding fresh enquiry.\n<\/p>\n
During the fresh enquiry, as stated in the order, witnesses were examined
\non behalf of the parties and written arguments were also submitted before
\nthe SDO. After considering the written submissions made by the parties and
\nappreciating the evidence which was led before him, the SDO rejected the
\ncontention that the present proceedings were barred by the principles of
\nres-judicata on the ground that in the previous proceedings initiated by
\nthe appellant under the provisions of the M.P. Anusuchit Jan Jati Rini
\nSahayata Adhiniyam, 1967 (hereinafter referred to as ‘Debit Relief Act’),
\nit was held that the transfer deed was not a mortgage and was not covered
\nby the Debt Relief Act. The contention that application was time barred was
\nrejected taking into consideration relevant facts. No contention was raised
\nthat proper opportunity of leading evidence or cross-examining the
\nwitnesses was not given. SDO further held that there was a money lending
\ntransaction between the appellant and deceased respondent and that the
\naforesaid instrument was executed as a sale-deed but deceased – respondent
\nNo. 1 had assured the appellant that after the amount of loan is repaid,
\nthe land in question would be restored to him. He considered the evidence
\non record indicating that the appellant was to repay a sum of Rs. 2000 on
\naccount of the debt incurred by him from the respondent but because there
\nwas emergent need, he further took a loan of Rs. 500. Thus, the appellant
\nowed a total sum of Rs. 2500, upon which the respondent was charging
\ninterest @ 1.5% per month. He also arrived at the conclusion that the
\nmarket value of the land at the relevant time was much higher than Rs.
\n7000. Thereafter, the S.D.O. passed the impugned order holding that the
\ntransaction was null and void under Section 7(2)<\/a> of the Act of 1977. That
\norder was confirmed in appeal by the Additional Collector, Indore (MP) by
\njudgment and order dated 27th February, 1987. He also negatived the
\ncontention that the proceedings were barred by the principles of res-
\njudicata as both the Acts are different. He also negatived the contention
\nthat S.D.O. has not made proper enquiry and, therefore, the entire
\nproceedings were unconstitutional.\n<\/p>\n
That judgment and order was challenged by filing the writ petition before
\nthe High Court. The High Court arrived at the conclusion that previous
\napplication filed by the appellant under the Debt Relief Act was decided
\nagainst the appellant and it was held that the transaction was of sale and
\nnot of a mortgage. In such a situation, the principles of res-judicata
\nwould be attracted otherwise there would be no finality in the matter and
\nthe purchaser of the land would be subject to harassment all the time.\n<\/p>\n
Learned counsel Mr. Jain appearing on behalf of the appellant submitted
\nthat the aforesaid findings recorded by the High Court are, on the face of
\nit, illegal and erroneous. He pointed out that the amplitude of the
\n‘prohibited transaction’ under the Act is much wider than what is provided
\nunder the Debt Relief Act. As against this, learned senior counsel Mr.
\nGambhir submitted that the High Court rightly arrived at the conclusion
\nthat the present proceedings are barred by the principles of res-judicata
\nin view of the previous decision whereby the application filed by the
\nappellant was rejected and it was held that the transaction between the
\nparties was not a mortgage but outright sale.\n<\/p>\n
For appreciating the contention raised by the parties, we would first refer
\nto Preamble as well as Section 2(f)<\/a> of the Act 1977, which are as under :\n<\/p>\n
“An Act<\/a> to better economic condition of holders of agricultural land in the
\nweaker sections of the people by providing further relief from agricultural
\nindebtedness by nullifying the land grabbing designs resorted to in many a
\nform by lenders of money while and after extending credit to them and
\nmatters connected therewith.\n<\/p>\n
Whereas a holder of agricultural land in the weaker sections of the people
\nis quite often compelled to seek loan from private money lending agencies
\nto meet his various obligations of urgent nature;\n<\/p>\n
And whereas such private agencies seldom if ever advance loan to him
\nwithout security of land, his only wherewithal;\n<\/p>\n
And whereas due to ignorance of niceties of law or urgency of financial
\nneed or both, he falls an easy prey to them scarcely realizing the legal
\nconsequences arising out of the documents which he executes or which they
\nget executed from him seemingly by way of security for the loan;\n<\/p>\n
And whereas it is necessary to relieve the holders of agricultural land in
\nthe weaker sections of the people from such exploitation by nullifying such
\npast transactions of loan as also to put a stop to such transactions”.\n<\/p>\n
2. Definitions. – In this Act, unless the context otherwise requires, –\n<\/p>\n
(f) “prohibited transaction of loan” means a transaction in which a lender
\nof money advances loan to a holder of agricultural land against security of
\nhis interest in land, whether at the time of advancing the loan or at any
\ntime thereafter during the currency of the loan in any of the following
\nmodes, namely :\n<\/p>\n
(i)     agreement to sell land with or without delivery of possession;\n<\/p>\n
(ii) outright sale of land with or without delevery of possession
\naccompanied by separate agreement to re-sell it;\n<\/p>\n
(iii) outright sale of land with or without delivery of possession with a
\ndistinct oral understanding that the sale shall not be acted upon if the
\nloan is re-paid;\n<\/p>\n
(iv) outright sale of land with or without delivery of possesion with a
\ncondition incorporated in the sale deed to re-sell it on re-payment of the
\nloan;\n<\/p>\n
(v) transaction in any modes other than those specified in clauses (i) to\n<\/p>\n
(iv) affecting interest in land including a fraudulent transaction or a
\ntransaction designed to defeat the provisions of any law regulating money
\nlending or interest, for the time being in force, and includes all those
\ntransactions in which a lender of money has, after the appointed day but on
\nor before the date of publication of this Act in the Gazette, obtained
\npossession of land of the holder of agricultural land through court or by
\nforce or otherwise or obtained a decree for such possession towards
\nsatisfaction of loan.”\n<\/p>\n
From the aforequoted preamble of the Act, it is amply clear that the object
\nof the Act is to provide further relief to the weaker sections of the
\npeople agriculturists from agricultural indebtedness by nullifying the land
\ngrabbing designs resorted to by the money lenders while and after extending
\ncredit to them. Section 2(f)<\/a> defines the phrase “prohibited transaction of
\nloan” and inter alia declares that a transaction of outright sale of land
\nwould also be covered by the phrase “prohibited transaction of loan” if
\nthere was a distinct oral understanding that the sale shall not be acted
\nupon if the loan is repaid. Further, Section 6<\/a> provides for enquiry to be
\ncarried out by Sub-Divisional Officer on an application which may be filed
\nby an holder of agricultural land who belongs to weaker section of the
\npeople. Sub-section (4) of Section 6<\/a> provides that, in that enquiry, for
\nthe purpose of ascertaining the true nature of transaction of loan, SDO
\nshall collect, as far as may be, information with respect to the following
\nfacts, namely :\n<\/p>\n
(i)     the amount of principal money,\n\n(ii)    the market value of the land at the time of transaction;\n\n<\/pre>\n
(iii) adequacy of the amount of principal money as consideration for sale
\nin the context of then market value under clause (ii);\n<\/p>\n
(iv) whether the consideration shown in the document was paid in whole or
\nin part privately or before the Sub-Registrar.\n<\/p>\n
(v) whether possession of the land was actually delivered to the lender of
\nmoney as per recitals in the said document. If not, when and in what manner
\nthe lender of money obtained possession of the land;\n<\/p>\n
(vi) what were the terms of the actual agreement between the lender of
\nmoney and the holder of agricultural land including the rate of interest;\n<\/p>\n
(vii) the extent of urgency for the loan and the availability of other
\nsources to the holder of agricultural land to obtain the same;\n<\/p>\n
(viii) payment, if any, made by the holder of agricultural land to the
\nlender of money towards the loan;\n<\/p>\n
(ix) whether the lender of money is registered money lender or not;\n<\/p>\n
(x) any other surrounding circumstances which the Sub-Divisional Officer
\nmay deem fit to consider.\n<\/p>\n
Thereafter, Section 7<\/a> inter alia provides that if after enquiry, the SDO is
\nsatisfied that the transaction of loan in substance is a prohibited
\ntransaction of loan, he shall declare such transaction to be void and pass
\nan order setting aside the transfer of land to the lender of money
\nconsequently restoring the possession of land to the holder of the
\nagricultural land.\n<\/p>\n
After following the aforesaid procedure, the authorities below arrived at
\nthe conclusion that during currency of loan transaction, sale deed was
\nexecuted by the appellant in favour of respondent No. 2. The SDO also
\narrived at the conclusion that there was a distinct oral understanding that
\nthe sale shall not be acted upon if the loan is repaid. For this purpose,
\nSDO took into consideration that the appellant was indebted for a sum of
\nRs. 2000\/- and thereafter he took further loan of Rs. 500 and for the said
\namount sale deed was executed. It is stated in the sale-deed that appellant
\nwas agriculturist and the sale consideration was Rs. 2500 but it is not
\nmentioned that amount of Rs. 2500 was paid in cash. He arrived at the
\nconclusion that market value of the land at the relevant time was more than
\nRs. 7000\/-. Admittedly, the appellant belongs to Bagri community which is a
\nSchedule Tribe. He was entitled to get the benefit under the Act, if the
\ntransfer was for the loan amount with distinct oral understandings as
\nstated above.\n<\/p>\n
Therefore, it cannot be said that the order passed by the SDO which was
\nconfirmed in apeal by the Additional Collector was, in any way, erroneous
\non facts.\n<\/p>\n
The next question would be – whether the present proceedings are barred by
\nprinciples of res-judicata presuming that principles of res-judicata are
\napplicable to such proceedings.\n<\/p>\n
For appreciating this contention, it would be necessary to refer to the
\nrelevant provisions of the Debt Relief Act, under which previous
\napplication was filed for relieving the appellant from the debt incurred by
\nhim. Under the said Act, definition of the debt is given under Section
\n2(4)<\/a>, which reads as under :\n<\/p>\n
“2. In this Act, unless the context otherwise requires : (4)    “Debt”
\nincludes;\n<\/p>\n
(i)     all liabilities owing to a creditor in cash, or kind, secured or
\nunsecured, payable under a decree or order of a Civil Court or otherwise,
\nand subsisting on the appointed date whether due or not due;\n<\/p>\n
(ii)   arrears of wages or salary subsisting on the appointed date.”\n<\/p>\n
Section 8 of Debt Relief Act provides for filing of an application by the
\ncreditor and also the debtor. If the creditor has not filed his claim
\napplication against the debtor, sub-section (4) of Section 8<\/a> provides that
\ndebtor is discharged from his liability. Sub-section (3) empowers the
\ndebtor also to apply to the Debt Relief Court. Section 14<\/a> provides that the
\nCourt shall calculate the interest in accordance with the rate specified in
\nthe First Schedule or such lower rate of interest as may have been agreed
\nbetween the parties. Section 14(4)<\/a> also empowers the Debt Relief Court of
\nreduce the principal amount determined under sub-section (1) in accordance
\nwith Second Schedule appended to the Act. Thereafter, the Act further
\nprovides for preparation of a scheme of repayment of the debt.\n<\/p>\n
Hence, it is apparent that the provisions of the Debt Relief Act and the
\nAct of 1977 operate in different fields. Debt Relief Act provides for
\nrelief to the debtor, who belongs to Schedule Tribe by scaling down the
\nprincipal amount and the rate of interest as provided under the Schedule.
\nAs against this, the Act of 1977 is of wider amplitude and even if there is
\noutright sale transaction by a debtor, it would be considered to be
\nprohibited transaction of ‘loan’ and that can be declared null and void
\nunder the provisions of the Act. The Legislature has specifically stated in
\nthe preamble that the Act was for providing further relief to the holders
\nof agricultural land from agricultural indebtedness by nullifying the land
\ngrabbing designs resorted to by money lenders. Therefore, it provides not
\nonly for nullifying of mortgage deeds but also outright sale of land if
\nconditions mentioned therein are satisfied.\n<\/p>\n
Further, the relief which is required to be granted under the provisions of
\nthe Act of 1977 is altogether different from the relief which is granted
\nunder the Debt Relief Act. One provides for declaring the sale transaction
\nto be null and void while other provides only for scaling down the amount
\nof the debt and the interest. Therefore, even in the previous proceedings
\nif it is held that the transaction was not a mortgage but a sale, that
\nwould not mean that in the present proceedings, the appellant can not prove
\nthat the sale deed was executed for the loan amount with a specific
\nunderstanding that on refund of the amount, property was to be redelivered
\nto the transferor. In this view of the matter, even though in a previous
\nproceeding there was a specific finding that the deed was not a mortgage
\ndeed (which is a fact), the present proceeding would not be barred by the
\nprinciples of res-judicata. The cause of action and reliefs in the first
\nand second proceedings are altogether different. This is also provided
\nunder Section 3<\/a> of the Act of 1977 by giving over-riding effect to the
\nprovisions of the Act. It inter alia provides that the provisions of the
\nAct and the Rules made thereunder shall have effect notwithstanding
\nanything inconsistent therewith contained in any other law for the time
\nbeing in force.\n<\/p>\n
The learned counsel for the respondent submitted that enquiry held by the
\nSDO was defective. In our view, no such contention was raised before the
\nAdditional Collector who heard the appeal. In any set of circumstances,
\nfrom the written submissions which are reproduced in the judgment and order
\npassed by the SDO, no such contention is appeared to have been taken.
\nHence, this contention is without any substance.\n<\/p>\n
Learned counsel for the respondents lastly submitted that these appeals
\nabate as the appellant has not brought on record all the heirs of the
\ndeceased respondent no. 1 as party-respondents. In the present case, it is
\nadmitted fact that the sale-deed were executed in favour of respondent No.\n<\/p>\n
2. who is the son of deceased respondent No 1. The sale transaction was
\nbetween the appellant and respondent No. 2. No doubt, it was for a loan
\ngiven by respondent No. 1 but the question involved in this proceeding is
\nfor declaration of sale deed executed in favour of respondent No. 2 to be
\nnull and void and that can be granted even without bringing on record the
\nother heirs of respondent No. 1. In the alternative, from the facts of the
\npresent case, it has been rightly pointed out by the learned counsel for
\nthe appellant that the estate is fully represented by respondent No. 2.
\nHence, there is no question of abatement of appeal. In this view of the
\nmatter, we have thought it fit not to issue notice to remaining legal heirs
\nof respondent No. 1 on an application filed by the appellant.\n<\/p>\n
In the result, the appeals are allowed. The impugned judgments and orders
\npassed by the High Court are set aside and quashed. The judgment and order
\npassed by the SDO is restored. There shall be no order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Bhavsingh (Dead) By Lrs vs Keshar Singh And Ors on 10 September, 2003 Bench: M.B. Shah, Dr. Ar. Lakshmanan CASE NO.: Appeal (civil) 13382-83 of 1996 PETITIONER: BHAVSINGH (DEAD) BY LRS. RESPONDENT: KESHAR SINGH AND ORS. DATE OF JUDGMENT: 10\/09\/2003 BENCH: M.B. SHAH & DR. AR. LAKSHMANAN JUDGMENT: JUDGMENT 2003 Supp(3) […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-258511","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nBhavsingh (Dead) By Lrs vs Keshar Singh And Ors on 10 September, 2003 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/bhavsingh-dead-by-lrs-vs-keshar-singh-and-ors-on-10-september-2003\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bhavsingh (Dead) By Lrs vs Keshar Singh And Ors on 10 September, 2003 - 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