# [1971] 1 S.C.R. 851

- **Citation:** [1971] 1 S.C.R. 851
- **Court:** Supreme Court of India
- **Decided:** 1970-08-20
- **Case number:** ': Civil Appeal No. 36 of 1967
- **Bench:** J. M. Shelat, c. A. YAIDIAUI\GAM
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1971-1-s-c-r-851-5294
- **Pages:** 12

## Headnote

Administration of Evacuee Property Act (31 of 1950)
12
ministration of Evacuee Property (Central) Rules 1950 ,: t~;nd Adcustodicm to kase cmd c:twcel /ea.,·es-E,·ucw:e lnterrst '(S
. ow)er of
5 I)
I 0
d E
rparatwn Act
(64 of 19. of]i' s;
wet
,~VIICIIL'e ,~nteresct (Separation) . Ru/,·s. r. liBCompetent
cu1en 1e cw1 c ~rect
ustotlian 1o ddil'er l'act~nl
_
c sesnnn of mortgage/ property.
pas
The app~lla~t ~xecuted a usufructuary .mortgage of his house and continued to rcs1dc In tt as a, tenant un~cr a lease obtained from the mortgagee·
In 1949, the mortgagee left for Paktstan. He was declared an evacuee and his
mortgagee interest in
!h~ mgrtgaged property vested in the Custodian
under s. 8 of the Adm101~tratton of Evacuee Property Act, 1950. Under
s. 12, the Custodian evicted the appellant and allotted it to others
as
D tenants. In spi t~ of demands by the appellant and the appellant tendering
the mortgage amount, the Custodian refused to hand over vacant possl!:ision of the house to the appellant. The appellant applied 10 the Compc·
tent Officer under the Evacuee T ntc·rest (Separation) Act, 1951. The Officer
determined the mortgage debt due from the appell~nt and the appellant
claimed vacant possession against
tender of payment by
him of the
amount. The Olliccr rejected the claim _nnJ ordered the _sale of the prot
pcrty undeT s.lO(b) ( ii) of the Scparauon Act, for sat1sfact1on of the
mortgage debt.
Thereafter, the appellant paid. the cn11re morl!!agc debt
and the Competent Officer acccpled the mnount.
. On thc question whether the app~lhmt w;~s cntitkd to v.a=ant pos>.::>-
SIOn and have the order of sale sci u~1dc .
F
HELD · ( 1) Section 4 of the Adrninistralion of Evacuee
Phropc1·rtY
A
.
•
. ·
IT •1 ·
•l•t1'on to any ot er aw
et g1vcs to th'lt Act an ovcrwhng c cc 10 rc "
f
f
fo• the iime b;ing in force, und hence the law unuc; .:h~n;~,~~r t~c
Property set, is not applicable.
Though s.l2 of rhe . 1 ·d bv ~im under
Custodian to cancel an nllotment or a tcnanc~,
~r~,, c (Ccntr,l) 'Rules.
r.l4(2) of the Administr;~_tion of Evacuee
ropc~Jund justifying cvic·
1_950, the Custodian can. cv1ct a p~rson only on n~rgl or for :u~y violation
G t1on of a tenant under a law rclalln!l tO' rent cTh. Custodian could not.
o~ the conditions of the lea.~ or allotment. rt
~0 the :1ppdlant on his
I ercforc, give vacant po,scss1on of the propel} H· s56 A·B D·fl
lender of payment of the mortgage amount. !! ' ·
' '
'
.
1951 was pa..;sed
on
(2) The Evacuee Interest (Separation) ,\ct, 10 ·rties'in which there
account of the difficulty of administerin)l evacuc~ pd ro n.'Solve the hardw~re both evacuee and non-evacuee mterf~u~~ properties being in tl;e
I! •hlp felt by non-evacuees. who, by rcas~t" ~ obtain satisfaction °~ thc!r
~tssion of the custodinn were una . ~
0
of that Act. But t ere
1
'
c ar~m in view of the prohibitive .Pr0':S1ons
sub'e<:t to the power or
no Provision bv which the eu.~to<.l,:m t'~ ~~~~bks lthe Competent Officer
COntrol of the Competent Officer or w nc
~~
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852
SUPREME COURT REPORTS
[197l) 1 S.C.R.
to pass an order which would curtail or otherwise affect the powers of
A
the Custodian.
Though under s.lO(b)(i) of the Separation Act, the
Q>mpctcnt Officer can pay to the Custodian the mortgage debt and
redeem the mortgaged property, his power is subject to the rules made
under that Act. [856 F-G; 858· B-C. G-HJ
( 3) Re.ading the rclevan t provisions narn~ l y, s. 12 of the AdminC.tration of Evacuee Property Act and r. 14 of the Rules made thereunder
and s. 10 of the Separation Act and r. llB of the rules made thereunder:
B
together, the position is : (i) that though the C<>mpetent Officer must
accept the mortgage amount when
tendered by a mortgagor and the
mortgage debt is thereupon satisfied, he cannot
ex~rcise the . power to
redeem the mortgaged pro

## Text

851
RAGUU __ NATH
1'.
COMPETENT OFFICER, DElHI & ORS.
August 20, 1970.
[J. M. SHELAT AND c. A. YAIDIAUI\GAM, JJ.]
Administration of Evacuee Property Act (31 of 1950)
12
ministration of Evacuee Property (Central) Rules 1950 ,: t~;nd Adcustodicm to kase cmd c:twcel /ea.,·es-E,·ucw:e lnterrst '(S
. ow)er of
5 I)
I 0
d E
rparatwn Act
(64 of 19. of]i' s;
wet
,~VIICIIL'e ,~nteresct (Separation) . Ru/,·s. r. liBCompetent
cu1en 1e cw1 c ~rect
ustotlian 1o ddil'er l'act~nl
_
c sesnnn of mortgage/ property.
pas
The app~lla~t ~xecuted a usufructuary .mortgage of his house and continued to rcs1dc In tt as a, tenant un~cr a lease obtained from the mortgagee·
In 1949, the mortgagee left for Paktstan. He was declared an evacuee and his
mortgagee interest in
!h~ mgrtgaged property vested in the Custodian
under s. 8 of the Adm101~tratton of Evacuee Property Act, 1950. Under
s. 12, the Custodian evicted the appellant and allotted it to others
as
D tenants. In spi t~ of demands by the appellant and the appellant tendering
the mortgage amount, the Custodian refused to hand over vacant possl!:ision of the house to the appellant. The appellant applied 10 the Compc·
tent Officer under the Evacuee T ntc·rest (Separation) Act, 1951. The Officer
determined the mortgage debt due from the appell~nt and the appellant
claimed vacant possession against
tender of payment by
him of the
amount. The Olliccr rejected the claim _nnJ ordered the _sale of the prot
pcrty undeT s.lO(b) ( ii) of the Scparauon Act, for sat1sfact1on of the
mortgage debt.
Thereafter, the appellant paid. the cn11re morl!!agc debt
and the Competent Officer acccpled the mnount.
. On thc question whether the app~lhmt w;~s cntitkd to v.a=ant pos>.::>-
SIOn and have the order of sale sci u~1dc .
F
HELD · ( 1) Section 4 of the Adrninistralion of Evacuee
Phropc1·rtY
A
.
•
. ·
IT •1 ·
•l•t1'on to any ot er aw
et g1vcs to th'lt Act an ovcrwhng c cc 10 rc "
f
f
fo• the iime b;ing in force, und hence the law unuc; .:h~n;~,~~r t~c
Property set, is not applicable.
Though s.l2 of rhe . 1 ·d bv ~im under
Custodian to cancel an nllotment or a tcnanc~,
~r~,, c (Ccntr,l) 'Rules.
r.l4(2) of the Administr;~_tion of Evacuee
ropc~Jund justifying cvic·
1_950, the Custodian can. cv1ct a p~rson only on n~rgl or for :u~y violation
G t1on of a tenant under a law rclalln!l tO' rent cTh. Custodian could not.
o~ the conditions of the lea.~ or allotment. rt
~0 the :1ppdlant on his
I ercforc, give vacant po,scss1on of the propel} H· s56 A·B D·fl
lender of payment of the mortgage amount. !! ' ·
' '
'
.
1951 was pa..;sed
on
(2) The Evacuee Interest (Separation) ,\ct, 10 ·rties'in which there
account of the difficulty of administerin)l evacuc~ pd ro n.'Solve the hardw~re both evacuee and non-evacuee mterf~u~~ properties being in tl;e
I! •hlp felt by non-evacuees. who, by rcas~t" ~ obtain satisfaction °~ thc!r
~tssion of the custodinn were una . ~
0
of that Act. But t ere
1
'
c ar~m in view of the prohibitive .Pr0':S1ons
sub'e<:t to the power or
no Provision bv which the eu.~to<.l,:m t'~ ~~~~bks lthe Competent Officer
COntrol of the Competent Officer or w nc
~~
I , ·i1
~·
q l
.
,.
);· 'j
' , 'I
!· ) II
:.' : ,I
;: ·:1
'l!
" il ,,
,,
" ·:
.:i
: ' t
; ·.:!
., . 't
i!
'I ·'
,,
( i .
·. •\:
~ Hi
! 'I
·. i !
.: ,, i
, ..
I • . .
::':d
·I
:. ··'
.t·.
852
SUPREME COURT REPORTS
[197l) 1 S.C.R.
to pass an order which would curtail or otherwise affect the powers of
A
the Custodian.
Though under s.lO(b)(i) of the Separation Act, the
Q>mpctcnt Officer can pay to the Custodian the mortgage debt and
redeem the mortgaged property, his power is subject to the rules made
under that Act. [856 F-G; 858· B-C. G-HJ
( 3) Re.ading the rclevan t provisions narn~ l y, s. 12 of the AdminC.tration of Evacuee Property Act and r. 14 of the Rules made thereunder
and s. 10 of the Separation Act and r. llB of the rules made thereunder:
B
together, the position is : (i) that though the C<>mpetent Officer must
accept the mortgage amount when
tendered by a mortgagor and the
mortgage debt is thereupon satisfied, he cannot
ex~rcise the . power to
redeem the mortgaged property and order the Custodian to deliver up its
vacant possession to the mortgagor in the absence of any agreement between tlze mortgagor and the Custorlian; (ii) that the C<>mpetent Officer
can order sale only for satisfaction of the mortgage debt and for distribuC
tion of the sale proceeds between the mortgagor and mortgagee. Since
in the present case, the mortgage amount bad been paid by the appellant
and accepted by the Compctcnr Officer, the order 'directing sale is untenable and should be set aside; and (iii) that in exercising his jurisdiction
under s. 10, the Q>mpctent Officer cannot direct the Custodian to cancel
or vary the terms of the leases or allotments made or granted by him.
Therefore the C<>mpctent Officer calli direct only symbolical possession of
the mortgaged property to be given to the appellant, however, harsh and
D
unfair it may apparently be. [860 D-G; 861 B. E-H: 862 A-C']
The All India Film Corporation v. Raja Gyan Nath, [ 1970] 2 S.C.R.
581 referred to.
CIVIL APPELLATE JURISDICTION':
Civil Appeal No. 36 of
1967.
Appeal by special leave from the judgment and order dated
Augu~t 25, 1966 of the Punjab High Court Circuit Bench at
Delhi i.n Letters :Patent Appeal No. 36-D of i966.
Bishan Narain,
appellant.
R. Mahalingier and Ganpat Rai, for the
R. H. Dhebar and S. P. Nayar, for respondent Nos. 1 and 3.,
The Judgment of the Court was delivered by
. Shelat, J. In 1933 the
appellant built a
bungalow
Situate at 27, Curzon Road, New Delhi on a plot acquired by h!Jn
under a permanent lease from the Secretary of State for India.
In 1943 he mortgaged the said property with possession in favour
of one. K. B. Bunyad Hussain but obtained a lease thereof at the
same time. from the mortgagee and continued to reside therein as
E
F
'
:.
~ l ! I
d
I
a tenant. In Novemb~r 1949, the mortgagee left for
Pakista~
''.here~pon the Custodmn of Evacuee Property under the Admt01~tra1Jon o~ Ifvact.Iec Property Act, 1950 (hereinafter referred ~0 Jt
~<; the '\dmimstratiOn Act) declared him to be an evacuee and Jus
111~rest m the said property as the mortgarree as evacuee property.
Th~ appellant alleged. that sometime in eNovember 1949 the
J~
l
l
I
.. 1 ;,
.,
A
B
c
D
E
F
G
H
RAGHU NATH V. COMPETENT OFFICER (She/at, J.)
853
Custodian forcibly dispossessed him and either allotted or let out,
or allowed the said premises to be occupied by certain persons.
In 1954, the appellant made an application to the Competent
Officer under the Evacuee Interest (Separation) Act, 1951 (hereinafter r~ferred to as the Separation Act)
for separating his
interest as the mortgagor and tenant in the said property.
In
those proceedings a sum of Rs. 1,45,735/- was ultimately held to
be due as the mortgage debt under the said mortgage.
The
appellant claimed that he was entitled to obtain vacant possession
of the said property against payment by him of the mortgage debt.
The claim was rejected on the ground that there was no agreement between the appellant and the Custodian for getting tb,e
vacant possession and also on the ground that the Competent
Officer, under the Separation Act, had no power to direct the
Custodian to hand over to the appellant vacant possession. From
that time onwards the appellant made diverse applications to the
Competent Officer and the Appellate Officer under the Separation
Act for obtaining vacant possession against payment · of the
mortgage debt.
In one such P.pplication made in 1958 he alleged
that a compromise had been arrived at between him and the
Custodian under which he would pay the mortgage debt and the
Custodian thereupon would simultaneously hand over to him
vacant possession.
By his order dated March 23, 1959, the
Appellate Officer, however, held that no such comptmnise had
been entered into by the Custodian and that the correspondence
between the appellant and that authority merely indicated that
what was agreed to was that upon the appellant lodging certain
verified claims an open portion shown as A, B, C and D in 'he
plan of the property would be handed over to him.
On this
finding the Appellate Officer dismissed the appellant's application
as he had·neither paid the mortgage money nor put in the verified
tlaims as suggested in t.he said correspondence and confirmed the
order of the Competent Officer under which the property had been
ordered to be sold in the absence of any agreement with the
Custodian or the payment of the mortgage debt.
The appellant then filed a writ petition in the High Court of
Punjab (in the Circuit Bench at Delhi) for quashing the said Nder
of sale and for a direction to the Competent Officer to hand over
vaca·nt possession against payment by him of the mortgage debt.
A learned Single Judge dismissed the p~tition holding that !he
Competent Officer had no jurisdiction to order such vacant pos~es
sion against the Custodian or against the tenants or
allot~ees
inducted on the property by the ·Custodian.
The Letters P3!ent
appeal against that judgment and order was also dismissed.
The
appellant then filed the present appeal after obtaining special
leave from this Court.
854
SUPREME COURT REPORTS
[1971] 1 S.C.H.
It is not disputed that until the time when the Competent
Officer passed his order for sale of the property and the Appe1late
Officer confirmed it the appellant had not paid the mortgage
amount. nor was there any agreement between him and the Custodian whereunder the latter would hand over vacant possession of
the property against payment of the mortgage debt.
However. it
is conceded by counsel for respondents 1 and .3 that the appellant
ha.; since then paid the entire mortgage debt and the Competent
Officer has under s . .I 0 of the Separation Act accepted that
amount.
Two questions on these ~acts, therefore, arise for deter·
mination: ( I) whether the order for sale passed by the Competent
Officer and confirmed by the Appellate Officer was rightly passed
although th,e appellant had repeatedly offered to pay the mortgage
debt on condition. however, that he would be given vacant po~se.s
sion at the same time, and (2) assuming that the Competent
·Officer had no power to direct the Custodian to hand over vacant
possession. what was the effect of the/repayment of the mortgage
debt by the appellant since then :~.rur the acceptance thereof by
lhe CQmpetent Officer.
The rights in the property in question which vested in the
C\l)todian were those of the mortgagee on his being declared un
eva~uee and his rights as such mortgagee in the property in ques·
A
B·
c
D
tion. as evacuee property.
Under the Transfer of Property Act,
188:2 the interest which the Custodian could claim
was
the
.inte!·est in the property transferred to the mortgagee for securing
E
repayment of the money advanced by him.
Since the mortgage
wa.; usufructuary, the mortgagee, and after his having been declar·
cd ln evacuee, the Custodian. could claim and retain possession
till the mortgage debt was paid and the mortgage was discharged.
If the property is let out in the meantime. the mortgagee and those
claiming his interest therein are entitled to receive the rents and
profits accruing from the property in lieu of interest or towards
:F:
parr payment of the mortgage debt. Under s. 60 of that Act, the ·
mortgagor has a right at any time after the principal amount has
become due to require the mortgagee on payment or tender of
the mortgage debt (a) to deliver to him the mortgage deed and all
otha documents relating to the mortgaged property which are in
the- mortgagee's possession or power, (b) to deliver possession
G
where the mortgagee is in possession of the mortgaged property
and (c) to retransfer the mortgaged property to him or to such
thirJ person as he may direct at his cost.
Under s. 76. the mort·
gage.: in possession has to manage the property as a person of
ordmary prudence would manage it if it were his own. Under s.
83. the mortgagor, provided his right of redemption is not barred, . H
may deposit in the court where he might have. instituted a suit for
redemption to the account of the mortgagee the mortgage debt
then due.
The court thereupon has to issu~ !l notice to the mort-
A
B
c
D
E
F
G
H
RAGHU NATH V, COMPETENT OFFICER (Shelat, /.)
855
gagee and. on the mortgagee stating the amount due to him ~a
his willingness to accept the money so deposited in full discharge
of the mortgage debt, pay the amount to the mortgagee On hiS
depositing the mortgage deed and ali other documents relating to
the mortgaged property. Where the mortgagee is in possession· of
the property, the court before paying the amount has to ask him
to deliver possession thereof to the mortgagor.
When the mortgagor has tendered or deposited in court the mortgage debt
to~
gether with interest thereon and has done all that is to be done by
him to enable the mortgagee to take such amount out of court, and
a. notice, as aforesaid, has been served on the mortgagee under
s. 83 interest ceases to run. If the mortgagee thereafter refuses
to accept the amount so deposited or to deliver the mortgage deed
and other documents or possession of the property where it is in
his possession, the remedy of the mortgagor is to file a suit for
redemption.
The position, therefore; is that upon the mortgage
being paid off, the mortgagor is entitled to have the property
restored to him free from the mortgagee's security. The repayment of the debt would be ¢ade. against delivery of possession·
and of the mortgage deed and other documents, and these have to
be simultaneous transactions. A tender of the mortgage deed or
-a deposit thereo~ in court conditional upon the mortgagee than
and there deliverin~ possession or executing reconveyance, if
required, and handing over the deeds would be a good tender so
that if it were to be refused interest would cease running. It
follows that a mortgagee is not pennitted to deal with the property
in such a-way that upon discharge of the debt the property cannot
be restored.
[see Fisher & Lightwood's Law of Mortgage {8th
ed.) p. 4821.
ls the position of a mortgagor any the different than under the
Transfer of Property Act by reason of the evacuee property legislation? In other words, could not the appellant have tendered to
the Competent Officer the mortgage amount due by him on con..-
dition that he should. be given physical and not merely symbolical
possesc;ion of the mortgaged property.
Upon the mortgagee being declarea an evacuee and his interest
a~ st_Ich mo~gagee in the premises in question an evacuee property,
hts mterest 1n the mortgaged property vested under s. 8 of the
Administration Act in the Custodian from the date of the notice
issued under s. 7 of the Act. Under s. 8 ( 4) any person in posses~
sion of the mortgaged property would be deemed thenceforth to
be holding the property on behalf of the Custodian and would be
bound on demand by him to surrender possession to him. Tlie
Act having under s. 4 an overriding effect on any other law for the
time being in force or a~y instrument having effect by virtue of
any such Act, the Custod1an, under the powers conferred on bii:n
by s. 10, could take all such measures he might consider necessary
856
SUPREME COURT REPORTS
[1971] 1 S.C.R.
for securing, admini~tering, preserving and managing any evacuee
property including transferring "in any manner whatsoever" the
evacuee property "notwithstanding to the contrary contained in
any law or agreement relating thereto". Under s. 12, the Custodian
is empowered, notwithstanding anything contained in any other law
for the time being in force, to cancel any allotment, terminate any
lease, or amend the terms of such lease or agreement under which
any evacuee property is held or occupied by a person whether such
allotment, lease or agreement was granted or entered into before
or after the commencement of the Act.
Under sub-s .. 3, he is
authorised to eject such person and take possession, if such person
fails to surrender possession on demand made by him in the manner provided by s. 9 i.e., by eyen using--such force as would be
necessary for taking possession. It is conceded by the respondents that under these powers the Custodian had taken over possession of the mortgaged property and the property has since then
been in possession of persons who were either allotted portions of
it or who were inducted therein as tenants by the Custodian. It
is also conceded that the Custodian bas refused, notwithstanding
demands made by the appellant, to evict these persons from the
property and hand over vacant possession to the appellant even on
the appellant tendering the., mortgage amount. This was
presumably done by reason of the fact that though s. 12 empowers·
him to cancel an allotment or a tenancy made or ere~ red by him,
r. 14(2) of the Administration of Evacuee Property (Central)
Rules, 1950 lays down that in the case of a lease or an allotment
granted by the Custodian he may evict a person on a ground justifying eviction of a tenant under a law relating to the Rent Control
or for any violation of the conditions of the lease or allotment.
From the provisions dealing with the vesting of the evacuee pro·
perty, the pow.ers of the Custodian, appeals and revisions from his
ordei and the overriding nature of the provisions of the Act it is
clear that the Administration Act is a self-contained code.
In ·1951, Parliament passed the Evacuee Interest (Separation).
Act, LXIV of 1951 (hereinafter referred to as the Separation
-Act).
The statement of objects and reasons shows that it was
passed on ac_count of the difficulty of administering evacuee pro-.
perties in which there were both evacuee and non-evacuee interests
and to solve the hardship felt by ndn~evacuees, who by reason of
~uch properties being in possession of the Custodian, were unable
to obtain satisfaction of their claims in view of the prohibitive
provisions of the Administration Act and in particular its s. 17.
The Act, as its long title declares, was passed for the separation of
interests of evacuees from those of non-evacuee persons in composite properties.
Sections 4 and 5 of the Act provide for the
appointment of Competent Officers and their jurisdiction.
Sec. 7
provides for submission of claims by a person claiming interest in
A
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
RAGHU NATH V, COMPETENT OFFICER (Shelat, J,)
S57
a composite property.
Cl. (e) of sub-s. 2 requires that where a
claim is made by a mortgagor the total amount due on the mortgage debt and the particulars necessary to determine the same
should be set out in such a claim.
Sec. 8 provides for an inquiry
to be made by the Competent Officer and provides that the order
to be made by him shall contain, amongst other things, the amount
due to the evacuee in a case where the claim is made by a mortgagor.
Sub-s. 2 of ·s. 8, however, provides that where the Custodian has determined that the property in question or any interest
therein is evacuee property, such determination is binding on the
competent officer.
The proviso to that sub-section lays down that
nothing contained in sub-s. 2 shall debar the competent officer
from determining the mortgage debt in respect of such property
or any interest therein or from separating the interest of the evacuee
from that of the claimant under s. 10.
Sec. 10 provides that notwithstanding anything to the contrary in any law or contract or
any decree or order of the civil court or other authority, the competent officer may, subject to any rules that may be made in this
behalf, take all such measures as he may consider necessary for
the purpose of separating the interest of the evacuee from ~hose
of the claimant in any composite property and in particular may:
"(b) in the case of ·any claim of a mortgagor or a
mortgagee,-
( i) pay to the Custodian or the claimant the amount
payable under the mortgage debt and redeem the
mortgaged property; or
(ii)
(iii)
sell the mortgaged propert,Y for satisfaction of
the mortgage debt and dtstribute the sale proceeds thexeof; or
.
partition the property between the
mortgagor
and the mortgagee having regard to the share to
which the mortgagee would be entitled in lieu of
his claim~"
Cl. (c) empowers him to adopt a combination of all or some of
these measures.
The proviso to the section provides that in any
case where the claimant is a mortgagor and tenders the amount
due, the competent officer shall accept the same in full satisfaction
of the mortgage debt. The competent officer, by virtue of the
provi.5o, is thus under an obligation, where the claimant is a mortgagor and tenders the mortgage amount due, to accept such amount
in full satisfaction of the mortgage debt and thereupon interest en
the mortgage amount would cease to run.
Under cl. (b), he is
also empowered in such a case to redeem the mortgaged property.
The argument was that where the mortgage amount is tendered by the mortgagor and the competent officer accepts it in satis1
858
SUPREME COURT REPORTS
[1971] 1 s.c.R.
faction of the debt due under the mortgage, the mortgage debt is
satisfied, interest thereon ceases to run and the mortgage is discharged.
Consequently, there would be no question of the competent officer adopting any of the measures provided in sub-cis.
(ii) and (iii) of cl. (b) of the section, that is to say, there could
be no occasion for him either to sell th~ property for satisfaction
A
of the mortgage debt or to partition the property between the. B
mortgagor and the mortgagee, as, on satisfaction of the mortgage
debt the mortgage is discharged and the mortgagee's interest in the
mortgaged property ceases or comes to an end.
The only measure which in that event he can adopt would be that under cl.
(b) (i), i.e, to pay to the Custodian the mortgage debt and
redeem the mortgaged prope1·ty.
It was, said that that being tlie
QOsition under s. "1 0, the appellant was entitled to tender the mortgage amount in satisfaction of the debt due under the mortgage
·on condition that the mortgage should be redeemed and possession
·of the property &iven to him.
The Competent Officer in the proceedings befQre him under s. 7 was bo~nd to accept the mortgage
amount and redeem the mortgaged property.
The argument wouJd
be valid if s. 10 had been untrammelled and the powers given
therein to the Competent Officer were not made subject to the
· rules which may be made under the Act.
The . Legislature, it
seems had a purpose in making the pJwers contained in s. 10 and
their exercise by the Competent Officer subject to the rules.
It
must have been aware of ( i) that the Administration Act is, as
aforesaid, a self-contained code, (ii) that the Custodian appointed
thereunder is not an authority subject to the power or control of
the Competent Officer, and (iii) that the Administration Act, by
ss'.- I 0 and 12 thereof, confers several power~ on the Custodian
incl.uding the power to trun!lfer the property vested in him.
He
can therefore. create a lease or grant allotment and thus induct on
the property tenants or allottees.
Under s. 12 of that Act the
Custodian has been empowered to cancel or tenninate a lease or
allotment.
But no such power is conferred on the Competent
Officer either under s. 10 or under any other section of the Sepa·
ration Act. nor have the powers of the Custodian been made sub·
ject to the powers of the Competent Officer or his orders.
On the
other hand. it would appear from a reading of the provisions of
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the Separation Act that the object of enacting it was to enable
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, non-evacuees to have their interests separated in composite properties and to grant power to the competent officer to achieve that
-object.
But we do not find anywhere in either of the two At;ts
any provision by which the Custodian is made subject to the power
or control of the Competent Officer or enabling the Competent
Officer to pass any order which would curtail or otherwise affect
·· the powers of the Custodian. It would seem thatthe two Acts
have different objects and schemes and the authorities established
.under them are independent of each other. ·The powers conferred
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RAGHC NATH 1'. Cm11' ETE!'« OFFICER (She/at, J.)
859•
on the Competent Officer had. therefore. to be so provided that
they could be exercised in harmony and consistently with the pro·
visions of the Administration Act and the duties and functions of
the Custodian thereunder.
lt was for that reason that the Legislature laid down in s. I 0 of the Separation Act that the powers con·
ferred 1:hereunder on the Competent Officer were to be subject to
the rult~s made under that Act.
Had it not been so, there would
have resulted a conflict in the exercise of the respective powers
given 10 the ·Custodian and the Competent Officer by the
tWO·
Acts. and consequently. a failure in the smooth working out of
the provisions of the two Acts.
Rule II B of the Rules made under the Separation Act provides that a Competent Officer ''having regard to the provisions of
the proviso to s. I 0 of the Act'' shall, for the purpose of separat·
ing the evacuee interest from other interests in a composite pro··
perw, adopt any of the measures in the order of preference set out
tbefein. Cl. (b) of that rule provides that in the case of a claim by
~ mortgagor or a mortgagee ( 1) where both the Custodian and
Claimant agree. the Competent Officer can exercise the powers.
conferred on him under sub-c1. (i) or sub-cl. (iii) of cl. (b) of
s. 10 of the Act and (it) where there is no such agreement, he can
sell the nwrtgaged property for satisfaction of the mortgage debt
and distribute the sale proceed~; thereof. The effect of this rule·
read in !;Onjunction with s. 10 of the Act. however harsh it may
apparently ·seem to be, is that though the Competent Officer has _
to accept the mortgage amount tendered by a mortgagor and thus
discharge the mortgage debt and interest th.er~upon ceases to run
on the principal amount and though he can adopt any one of themeasures set out in s. 10, including redemption of tpe mortgage,
he cannot order such redemption and direct th~ Custodian to
deliver vucant possessi011 uf the property in the absence of an
agreement between the Custodian and the mortgagor claimant. It
follows that in Lhe absem·e of such agreement the mortgagorclaimant <:annot demand from the Competent Officer that the latter
'ihou1d accept the mortgage amount 'l:endered by him and direct
simultaneous delivery of possess,ion of the mortgaged property.
The power to redeem the mortgaged property being subject to
rule 1 l B ( b). the only thing that the Competent Officer can at the
most do is to order symbolical possession. but he cannot direct the
Custodian to give vacant possession.
The reason is clear, for,
such an order \l.·ould in effect be an order directing the Custodian
to cancel the lea~e~ or allotments granted by him and eject the
ten:1r.ts or allottces from the. property.
Such an order would at
once be in contiict with r. 14 of the Administration of Evacuee
Property (Central) Rules. 1950.
That rule provides that while
exercising his power under s. 12 of that Act, namely, the power
to cancel or vary the tenns of a lease or allotment. the Custodian,·
8 60
SUPREME COURT REPORTS
[1971] 1 s.c.R.
in the case of a lease or allotment granted by him, can evict a
person only on any of the grounds justifying eviction of a tenant
under any rent control law for the time being in force in the State
concerned or for any violation of the conditions of the lease or !he
allotment.
CJ. 4 of that rule further lays down that before can··
ceiling or ·varying the terms of the lease or before evicting
~my
Jesse the Custodian must serve a show cause notice on such le~see
and afford him a reasonable opportunit:r of being heard. If tbe
Custodian is satisfied on hearing the concerned lessee that he is not
liable to eviction under a rent control Act in force in the · State
where the property is situate or has not contravened any · of the
provisions of the lease, he cannot cancel the lease nor can he evict
.the lessee except only as provided by cl. ( 5) of that rule on the
ground that such eviction is necessary or expedient for the preser·
vation or proper administration or management of such property ·
.(.)I for carrying out any other object of the Act.
He, therefore,
cannot evict a tenant or an allottee on the ground that it is neces~
sary to do so for the separation of an interest of a
non~evacuee
mortgagor as that would not be one of the purposes of the Admi~
nistration Act.
The result which emerges from the discussion of the relevant
provisions of the two Acts ~nd the rules thereunder made is (i)
that though the Competent Officer must accept the mortgage
amount when tendered by a mortgagor and the mortgage debt
thereupon would be satisfied, he cannot exercise the power to
redeem the mortgaged property and order the Custodian to deliver
up its vacant possession to the mortgagor in the absence of any
agreement between the mortgagor and the Custodian, and ( il)
that in exercising his jurisdiction under s. 10 the Competent Officer
cannot direct the Custodian to cancel or vary the terms of the
leases or aHotments made or granted by him, firstly because
he
has no such power under s. 10 or any other provision of the
Separation Act, and ~econdly, because such an order would am0unt
to compelling the Custodian to act in a manner contrary to lhe
provisions of the aforesaid r. -14.
The exercise of the power to
redeem being subject to the rules, it would not be competent for
the Competent Officer, by reason of r. 11 B (b), to order delivery
of possession by the Custodian in the absence of an agreement
between him and the mortgagor-claimant.
In view of this position, the appellant dould not have in~~sted
that he would tender or pay the mortgage debt only against deli~
very of vacant possession of the property in the absence of any
agreement between him and the Custodian.
The only thing which
the Competent Officer could do in the circumstances wac to
accept the mortgage amount whereupon interest would
cea~e to
run. It is not in dispute that the appel1ant, insisting as he was
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RAGHUNATH v. COMPETENT
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861
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all throughout upon bein" given vac
possession, did not actuaily tender oarn~~~d not merely symbolical
gage debt.
The mortgage debt, theref
e payll?ent of the m~>rtThe mortgage also stood intact and ;re, remamed outstandmg.
which the Competent Officer could ado e~efo~e, t~e o~ly measure
adopted was to order sale of the ro ert an W~lch m fact he
debt from the sale proceeds tber~f p ftt and Jallsfy _the mortgage
. B
and which was confirmed by the A.
ella~e or er Which ~e pass~
cumstances then prevailing validly ~~d conlOpffietcertlwas
1
.~ theThclrll t,
·
.
.
en y rnaue
e
appe_ an .s gnevanc_e ag:unst It, therefore, could not be s~tained
[c/. 1n th1s connection the position of an auction
h
·
decided in Ek Nmvas Khan v. The Competent O[fice~(f)].aser as.
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But it is con_ceded that since the passing of the said order the·
a~~ellant_ l~a~ patd up the full mortgage amount and the Competent
O,ficer has, as he was bound to do under s. 10, proviso. acce:_Jted
that amou~t. Presumably thnt amount has been paid by him to
the C:ustodJan.
Ther~fore, the mortgage debt is no longer outstandmg.
Though th1s event has happened after the impuoneu
order was passed, we must in fairness take notice of the fact"tbat
the mortgage debt is no longer outstanding and the mortgaged property is now free f-rom the mortgagee's security, and therefore,
from the interest vested in the Custodian. It is true that the Competent Officer. as already stated, can adopt any of the three measures set out ins. IO(b) of the Separation Act or adopt a combiE nation or all or some of them, but as emerging from the discussion
~hove, he cannot redeem the property and order delivery of vac~nt
possession in the absence of an agreement between the Custod1an
and the appellant.
Th:l! is quite clear.
But the _order of sale
passed by him and confirmed by the Appellate Officer n!so cannot
stand, fil'$tly, because the mortgage debt now sta.nds s.at1sfied, ana
secondly because he can order sale only for satisfaction of the
mort"U"~ debt and for distribution of the sale procee.ds thereof
be " "'
d h
trra"ee
There bemg now no
tween the mortoagor an t e mor "' e-
•
•
•1 now
l'
. question of the s~isfaction of the n~ortgage 1~~~ i~: th~ mortstands satisfied and the property 1bemg :n~~~ta~d :llld cannot be
gagec's security, the order for sa~ canna
om etent Officer canallowed to stand.
At the s:un_e ume th~ ;oss~sion although the
G not order the Custodian to dehver vac~n d the Competent Officer
appe11ant has paid the mor~gagc amoun ~':raoe debt.
In view of
has accepted it in satisfact_IO.n .Of .the r~ th; powers and duties of
ss. 10 and 12 of the Admm1strallon
~
lcs made under that
the Custodian thereunder and unders ~ ~r~ion Act and r. liD of
Act. the provisions of s. I 0 of the thl~" that could be offt:red and
}{
the rules made thereunder. the onlr 1 p<>ossession of the property.
!lil'!!n to the appellant was syW~~~~convcnient, and may e\'en
Su::h a result. no doubt. won
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(1 1 A .I R. I'J(i() i\11. 61C..
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SUPREME COURT REPORTS
[1971] 1 S.C.R.
:appear to be harsh and unfair as the appellant would be driven to
file proceedings for eviction of tenants and allottees now in posses::
sion of the prpperty.
(see The All India Film Corporation Ltd.
v. Raja Gyan 'Nath) ( l).
ln view of the payment of the mortgage amount by the appel-
.lant and the acceptance of it by the Competent Officer, the order
directing sale has now become untenable and has, therefore, to be
set aside.
The mortgage stands discharged anct the Competent
Officer is bound to direct symbolical possession of the mortgaged
. property to the appellant.
To this extent the appeal succeeds.
The order for costs of the appeal would ordinarily follow the
·result,. but in view of the fact that the Competent Officer was
entitled to pass t~e order of sale in the circumstances then prevailing it is fair" and equitable, though his order is set aside, that
. the parties should bear their own costs.
V.P.S.
Appeal allowed in part.
(1) {1970] :! S C.R. 5~1.
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