# RAJ KISHORE PRASAD NARAIN SINGH v. RAM PARTAP PANDEY & ORS

- **Citation:** [1967] 2 S.C.R. 56
- **Court:** Supreme Court of India
- **Decided:** 1967
- **Case number:** Civil Appeal No. 759 of 1964
- **Bench:** K. N. Wanchoo, G. K. Mitter, C. A. Vaidialingam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/raj-kishore-prasad-narain-singh-v-ram-partap-pandey-ors-4161
- **Pages:** 14

## Headnote

Bi/Jar Land Reforms Act, 1950 (Biliar Act 30 of 1950), s. 14Mortgaged land \'esting in State-Claim in respect of mortgaged property
including land filed before claims officer-Claim sought to be withdrawn
at appellate stage-Mortgagee whether fret to pursue remedlu under
ordinary law In respect of non-vested proptrties-Applica1io11 und'T s. 14
whether amounts to a final election of .emedies under the Act only.
The appellant had obtained a usufructuary mortgage from the respondents in 1925 in respect of three sets of properties in Bihar : (a) live
items of milkiat properties; (b) a three storey houso in the town of Gaya;
and ( c) certain bakasht lands.
By viriue of a notification issued under
s. 3 of the Bihar Land Reforins Act, 1950, the milkiat properties vested
in the State of Bihar in January 25, 1955., and in respect of the bakasht
lands, the respondents became statutory tenants under s. 6.
On April 24,
1955, the appellant filed an application under s. 14 of the Act before the
Claims Officer alleging that no amounts had been paid by the morlgagor.1
towards their liability. The respondent,; filed objection.• disputing the
amounts claimed by the appellant.
The Claims
Officer partly allowed
the claim of the appellant. The respondent thereupon filed an appeal
before the Board consisting of a single Judge Of the High Coun constituted under s. 18(1) of the Act. On November 9, 1959 the appellant filed
an application for permission to withdraw the claim case preferred by him
before the claims officer and further requested that the proceedings
in
the claim appeal filed by the respondent be dropped. This application
was rejected by the Board on the ground that having once elected the
procedure under the Act the appellant was not entitled
to enforce hi.•
right under the ordinary law
even in respect of propenies not affected
by the Act. On the merits, the respondents' appeal was allowed.
The
appellant came lo this Court by special leave.
The question that fell for consideration was whether in a case. where
a mortgage related to two sets of propcrlies-those which vested in the
State and those which had not-the right of the morigagee
to pursue
remedies under the ordinary law in respect of non-vested properties had
in any way been curtailed by the Act.
HELD : (i) The Act gives jurisdiction to the authorities concerned
only in respect of propenies which have vested in the State; and the claims
that are filed and adjudication made by the authorities concerned, nnder
the Act, can only be with reference to estates that have vested in the
State. Tbe prohibition contained in ss. 4(d) and 35 of the Act mnst also
relate only to matters which can form properly the subject of a claim or
an adjudication under the Act. [67 E-F]
Therefore while in respect of the estates which have vested in the State
under the Act, the mongagee will be bound to have recourse to the procedure laid down in the Act, in so far as his morl$a&e takes in other pn>-
pertles his right to enforce his claim under the ordinary law has not been,
10 any manner, infringed or taken away by the Act. [67 OJ
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(ii) The High Court was wrong in holding that the appellant when he
filed an application under s. 14 must be considered to have elected bis
remedy unde,r the Act and therefore be should not be permitted to withdraw the claim. There is no bar to a tribunal permitting the withdrawal
of any proceeding if it is satisfied that the said request can be granted
otherwise, .even though, technically, the provisions of O.XXIII C.P.C. may
not apply. There could be no l",'Ssible prejudice to the respondents by
the appellant being allowed to withdraw his claim petition to enable him
to seek his remedy under the ordinary law in respect of the nor-vested
properties. But, as and when the, appellant sought his remedy to enforce
bis mortgaae as against t!ie properties which had not vested in the State
tho Tribunal or Court

## Text

RAJ KISHORE PRASAD NARAIN SINGH
v.
RAM PARTAP PANDEY & ORS.
l'/ovember 7, 1966
[K. N. WANCHOO, G. K. MITTER AND C. A. VAIDIALINGAM, JJ.)
Bi/Jar Land Reforms Act, 1950 (Biliar Act 30 of 1950), s. 14Mortgaged land \'esting in State-Claim in respect of mortgaged property
including land filed before claims officer-Claim sought to be withdrawn
at appellate stage-Mortgagee whether fret to pursue remedlu under
ordinary law In respect of non-vested proptrties-Applica1io11 und'T s. 14
whether amounts to a final election of .emedies under the Act only.
The appellant had obtained a usufructuary mortgage from the respondents in 1925 in respect of three sets of properties in Bihar : (a) live
items of milkiat properties; (b) a three storey houso in the town of Gaya;
and ( c) certain bakasht lands.
By viriue of a notification issued under
s. 3 of the Bihar Land Reforins Act, 1950, the milkiat properties vested
in the State of Bihar in January 25, 1955., and in respect of the bakasht
lands, the respondents became statutory tenants under s. 6.
On April 24,
1955, the appellant filed an application under s. 14 of the Act before the
Claims Officer alleging that no amounts had been paid by the morlgagor.1
towards their liability. The respondent,; filed objection.• disputing the
amounts claimed by the appellant.
The Claims
Officer partly allowed
the claim of the appellant. The respondent thereupon filed an appeal
before the Board consisting of a single Judge Of the High Coun constituted under s. 18(1) of the Act. On November 9, 1959 the appellant filed
an application for permission to withdraw the claim case preferred by him
before the claims officer and further requested that the proceedings
in
the claim appeal filed by the respondent be dropped. This application
was rejected by the Board on the ground that having once elected the
procedure under the Act the appellant was not entitled
to enforce hi.•
right under the ordinary law
even in respect of propenies not affected
by the Act. On the merits, the respondents' appeal was allowed.
The
appellant came lo this Court by special leave.
The question that fell for consideration was whether in a case. where
a mortgage related to two sets of propcrlies-those which vested in the
State and those which had not-the right of the morigagee
to pursue
remedies under the ordinary law in respect of non-vested properties had
in any way been curtailed by the Act.
HELD : (i) The Act gives jurisdiction to the authorities concerned
only in respect of propenies which have vested in the State; and the claims
that are filed and adjudication made by the authorities concerned, nnder
the Act, can only be with reference to estates that have vested in the
State. Tbe prohibition contained in ss. 4(d) and 35 of the Act mnst also
relate only to matters which can form properly the subject of a claim or
an adjudication under the Act. [67 E-F]
Therefore while in respect of the estates which have vested in the State
under the Act, the mongagee will be bound to have recourse to the procedure laid down in the Act, in so far as his morl$a&e takes in other pn>-
pertles his right to enforce his claim under the ordinary law has not been,
10 any manner, infringed or taken away by the Act. [67 OJ
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(ii) The High Court was wrong in holding that the appellant when he
filed an application under s. 14 must be considered to have elected bis
remedy unde,r the Act and therefore be should not be permitted to withdraw the claim. There is no bar to a tribunal permitting the withdrawal
of any proceeding if it is satisfied that the said request can be granted
otherwise, .even though, technically, the provisions of O.XXIII C.P.C. may
not apply. There could be no l",'Ssible prejudice to the respondents by
the appellant being allowed to withdraw his claim petition to enable him
to seek his remedy under the ordinary law in respect of the nor-vested
properties. But, as and when the, appellant sought his remedy to enforce
bis mortgaae as against t!ie properties which had not vested in the State
tho Tribunal or Court may have to apply the principle of Marshalling.
[68 A-F; 69 Bl
Case law considered. Observations contra in Sukhtko Das v. Ka.<hi
Prasad :A.l.R. 1958 Pat. 630 and Sidheshwar Prasad IV. Ram Saroop A.I.R.
1963 Pat. 412, disapproved.
Raja Sallendra Narayan Bhan; Deo v. Kumar Jagat Kishore Prasad
Narayan Singh [1962] SupP. 2 S.C.R. 119, and Krishna Prasad v. Gaurl
Kurriarl Devi [1962] Stipp. 3 S.C.R. 564, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 759 of
1964.
Appeal by special leave from the judgment and order dated
May 13, 1960 of the Patna High Court (before the Board constituted under s. 18(1) of the Bihar Land Reforms Act, 1950 in Claim
Appeal No. 22 of 1956.
N. C. Chatterjee and D. Goburdhun, for the appellant.
B. P. Jha, for the respondents.
Tue J~dgment of the Court was delivered by
Vaidialingam, J. In this appeal, by special leave, the judgment and order of a single Judge of the Patna High Court, constituted as the Board, under s. 18(1) of the Bihar Land Reforms Act,
1950 (Bihar Act XXX of 1950), (hereinafter referred to as the
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Act), are under attack.
Tue appellant had taken three mortgages from the respondentson JUiy 20, 1915 for Rs. 15,000/- on April 24, 1917 for Rs. 33,000/,
and on November 12, 1917 for Rs. 42,500/-. He had filed a suit
for recovery of the mortgage amounts and also obtained a decree.
On November 18, 1925, the appellant had obtained a usufrucG
tuary mortgage for a total. sum of R~. 84,000h
~omprising
three different sets of properties : (a) five items of milkiat properties · (b) a three-~torey house in the town of Gaya and (c) certain
babsht lands. The deed 6f mortgage is marked as Exhibit I.
By this mortgage, the earlier decree was repaid.
By virtue of a no~cation issued un~er s. 3 of the Act, the milkH
kiat properties vested m the State of B1har on January 25, 1955 ;
and, in respect of the bakasht lands, the respondents became
statutory tenants, under s. 6.
M!9SupCl/6~S
58
SUPREME COURT REPORTS
[1967] 2 S.C.R.
The appellant filed an application, dated April 24, 1955, under
s. 14 of the Act before the Claims Officer.
In that application,
he had stated. after giving particulars of the items mortgaged under
Exhibit I, that the principal amount advanced was Rs. 84,000/-
and that. no amounts had been paid by the mortgagors towards
their hab1hty.
The appellant requested the Claims Officer to allow
his claim, as per the provisions of the Act.
The respondents filed objections to the claim made by the
appellant.
In short, their plea was that the appellant had not
given credit for a sum of Rs. 20,000/- which amount, according to
them, had been paid by one \faheshwari Singh, a purchaser of an
item of mortgaged properties. They also alleged that the appellant
had not given credit, similarly to another sum of Rs. 3,250/- paid
by one Baldco Singh, a purchaser of another item of the mortgaged
properties. The last contention raised by them was that the appellant had realised, as income from the properties, a sum of Rs.
9,00,000/- and therefore the entire mortgage liability stood disch:irged.
It may be mentioned at this stage that, according to
the appellant, he had realised only a sum of Rs. 23,250/- as income
from the properties, which were in his possession.
The Claims Officer, by his order dated April 18, 1956, ultimately held that the appellant was entitled to recover a sum of
Rs. 40,514/10/- out of the compensation money in respect of his
mortgage claim. The Claims Officer was not prepared to accept
the pica of the respondents regarding the payment of Rs. 20,000/-
by Mahcshwari Singh.
On an admission made by the appellant, the Claims Officer
held, that a sum of Rs. 2,309/8/- had been received by the appellant from a purchaser of one item of the mortgaged properties
and that the respondents were entitled to be given credit for that
amount. The Claims Officer accepted the plea of the respon-
·dents that, in respect of the house in Gaya, a ratable reduction of
Rs. 2,500/- might be made, out of the principal amount. The
Claims Officer was not prepared to accept the plea of the respondents that the appellant had received, by way of income from the
mortg:iged properties in his possession, a sum of Rs. 9,00,000/-.
On the other hand, the abstract of accounts submitted by
the app~Uant showing the net income received, as Rs. 22,340/3/2,
has been accepted by the Clairiis Officer.
The Claims Officer
had also held that the principal amount advanced by the appellant should be fixed in the sum of Rs. 45,324/-.
On these findings, the Claims Officer came to the conclusion
that no portion of the principal amount had been satisfied out of
.the unsufruct of the property given on mortgage, except the sum
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l\ISHORF. PRASAD v. RAM PRATAP (Vaidialingam, J.)
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of Rs. 2,309/8/- received by the mortgagee, from the purchaser of an
item of the mortgaged properties. A further reduction of Rs. 2,500/-,
out of the principal amount, was made in respect of the value. of
the house in Gaya fixed by the Officer. In the result, the Claims
Officer allowed the claim of the appellant in the sum of
Rs. 40,514/10/-.
The respondents challenged this decision of the Claims Officer,
in Claim Appeal No. 22 of 1956, before the Board, constituted
under s. 18(1) of the Act. Inasmuch as the claim appeal involved
a claim exceeding Rs. 10,000/-, the Board, as per s. 18(1)(a) of the
Act, coPsisted of a Judge of the Patna High Court, namely
Misra, J.
In the appeal before the Board, the respondents had attacked
the various findings, recorded against them, by the Claims Officer.
Before we refer to the findings recorded by the Board, it is
necessary to advert to an application filed by the appellant before
the Board. The appellant filed an application, dated November
9, 1959, before the Board, for permission to withdraw the claim
case preferred by him before the Claims Officer and also requesting
that further proceedings in the claim appeal, filed by the respondents,
be dropped. In that application, the appellant had stated that the
claim appeal arose, out of an order, passed by the Claims Officer,
. on an application filed by the appellant under s. 14 of the Act.
It was further stated that the respondents were the proprietors and
that they had mortgaged certain properties by way of a usufructuary mortgage to the appellant for a total sum of Rs. 84,000/-.
The appellant referred to the fact that the Claims Officer had found
that the principal amount still remained unsatisfied, and that the
decision of the Claims Officer was being challenged by the respondents. The appellant then stated that he had been advised, and that
he also believed it to be in his interest, not to proceed with his claim
case and that he would follow such other remedy, as the law permitted.
That application was opposed by the respondents. The learned
Judge, by his Order dated December 7, 1959, dismissid the said
application. In the order dismissing the application, after referring to the circumstances, under which the claim application was
made by the appellant, and the findings recorded by the Claims
Officer, the learned Judge referred to the fact that the appellant's '
request was for withdrawal of the claim, without any reservation
whatsoever. The learned Judge adverted to certain decisions,
quoted before him, and was of the view that the principles laid
down in those decisions were to the effect that if the result of allowing the prayer for withdrawal would be to prejudice the interest of
the opposite party, the application for withdrawal should not be
60
IUPUKJI couaT UPO&TI
(1967) 2 s.u.
granted. But the learned Judge did not actually record in this
order, what exactly would be the prejudice caused to the respondents by allowing the appellant to withdraw his claim application.
Nevertheless, the learned Judge was not inclined to allow the
request of the appellant to withdraw his claim application.
When the claim appeal was being he~rd hy the learned Judge,
the appellant again appears to have reiterated his request to withdraw the claim application, as originally asked for, in his application dated November 9, 1959. The learned Judge, again, was not
inclined to accept that request. In this connection, he referred to
a decision of the Patna High Court in Sukhdeo Das v. Koshi Prasad(1)
to the effect that though it was open to a mortgagee either to pro·
cced against the compensation money, as part of the mortgage
security, or enforce his right against the mortgagor personally
or against the mortgage security that had not vested in the State,
nevertheless. it was not open to the mortgagee to proceed simulta·
neously, to enforce his right under the ordinary law, as also under
the Act. The learned Judge also referred to the principle laid.
down in the said decision that, under those circumstances, the
mortgagee would have to elect ; and that, once he had elected his
remedy by having recourse to the procedure under the Act, he
was bound down to it and he could not resile from that position.
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The learned Judge was also of the view that in this case the ap·
pellant, having filed his claim under s. 14 of the Act, and a deeision
having been given by the Claims Officer, it was the duty of the ·
Board, sitting in appeal, only to decide the correctness or otherE
wise of the order passed by the Claims Officer. In consequence,
he was of the view that when once the prayer of the appellant for
withdrawal had been rejected, he had to proceed to decide the
case on merits, as per the provisions of the Act.
After having expressed his view in the manner indicated above,
on the request of the appellant for withdrawing the claim application, the learned Judge then considered the appeal filed by the reipondents, on merits. He was not prepared to accept the finding
of the Claims Officer that the sum of Rs. 20,000/- had not been
established to have been paid to the appellant by Maheswari Singh,
the purchaser of one item of mortgaged properties. In this connection, he referred to the evidence adduced by the parties and, ultimately, held that the sum of Rs. 20,000/- must have been paid by
Maheshwari Singh to the mortgagee-appellant and the mortgagors
should be given credit for that amount.
There was no controversy regarding the receipt by the appellant of Rs. 2,309/8/- in respect of the purchase of an item of the
mortgaged property by Baldeo Singh; and that amount also was
given credit to in favour of the respondents. Regarding the claim
(I) A.I.R. t9S8 Pal. 6'.IO.
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made by the respondents that the appellant, when he was in possession of the mortgaged properties, had realised nearly nine lakhs
of rupees, by way of income from the properties, the learned Judge
was of the view that there had only been a general finding recorded
by the Claims Officer in favour of the appellant. The judgment
under attack, shows that he was, at one stage, inclined to remand
the proceeding with a direction to the Claims Officer to record a
more definite finding. But he ultimately came to the conclusion
that it was not necessary to remand the proceeding, inasmuch as
the claim of the respondent could be adjudicated upon on the basis
of the evidence adduced by the parties and other circumstances.
In this connection, the learned Judge adverted to the plea
of the appellant that he had realised, by way of rents and profits,
only a sum of Rs. 22,000/-. He was, ultimately, of the view that
the appellant should have derived at least income, at the rate of
3 %, and on that basis he should have received a sum of Rs. 75,600/-
by way of interest on the sum of Rs. 84,000/- claimed to have been
advanced as principal.
The learned Judge, after giving credit to the additional sum
of Rs. 23,CIJ9/- mentioned above, ultimately held that the total
amount received by the appellant would be Rs. 97,909/- ; and,
after referring to the provisions of s. 16 of the Act, was of the view
that the appellant would be entitled to a total sum of Rs. 85,000/-
which is double the amount of principal of Rs. 42,500/-. But,
in view of the finding recorded that the appellant had already received a sum of Rs. 97,909/-, he held that the appellant-creditor
had realised more than double the amount of principal, and therefore, further held that the mortgage claim of'the appellant should
be considered to have been fully discharged and that no further
amounts were due to him. In the result, the claim appeal, No.
22 of 1956, filed by the respondents, was allowed and the claim
application filed by the appellant was dismissed.
Mr. N. C. Chatterjee, learned counsel for the appellant,
challenges the decision, substantially, on two grounds : (i) that the
view of the learned Judge that the appellant, having filed a claim
petition under s. 14 of the Act, must be considered to have elected
to adopt the remedy available to him under the Act and, as such,
is not entitled to proceed under the general law, as against the
properties, which have not vested in the State under the Act, to
enforce his mortgage claim, is not correct ; (ii) the findings recorded by the learned Judge, on facts, differing from the conclusions arrived at by the Claims Officer, are not correct.
In this appeal, the appellant has also attacked the reasons
given by the learned Judge for declining to grant pernrission to
him to withdraw the claim application.
62
SUPREME COURT REPORTS
[1967] 2 S.C.R.
Mr. Chatterjee has urged that, inasmuch as the mortgage
comprises properties which have vested in the State under the
Act and properties which have not so vested, there is no question
of the appellant being bound to seek relief before the Claims
Officer, under the Act, in respect of properties which have not
vested in the State. According to counsel, the various provisions
of the Act will clearly show that the scheme of the Act is only to
confer jurisdiction on the Claims Officer to entertain claims, in
respect of the mortgages, which take in either the entire properties
or part of the properties which have vested in the State. The Act
does not, in any manner, take away the right of such a mortgagee
to realise his dues, by having recourse to the remedies available to
him from the properties, which have not vested in the State.
It is argued that the request made by the appellant before the
learned Judge was to permit him to withdraw his claim petition ;
and the appellant had made it clear that his object was to seek
remedy, in law, as against the mortgaged properties which have
not vested in the State. According to the appellant, the learned
Judge has also not found, as to what exactly is the prejudice which
will be caused to the respondents by the appellant being allowed
to withdraw the claim petition. The only reason given by the
learned Judge, according to the appellant, for not permitting the
withdrawal of the claim petition, is that the appellant has filed a
claim petition under the Act and that he must be considered to
have elected to adopt the remedy available under the Act. The
question of election, does not arise, inasmuch as the appellant
has got a right to seek relief under the general law to enforce his
mortgage claim in respect of the properties which have not vested
in the State. If the appellant is not, in any way, prohibited from
seeking such relief, according to Mr. Chatterjee, the application
for withdrawal made by his client should have been allowed.
Mr. Jha, learned counsel for the respondent, has urged that
the appellant voluntarily filed a claim petition before the Claims
Officer, under s. 14 of the Act, in which he has specifically prayed
for adjudicating upon the claim made by him. According to Mr.
Jha, the Act, in question, is a self-contained Code and it gives
jurisdiction to the Claims Officer to adjudicate upon all matters
pertaining to the mortgage claim made by the appellant.
Having filed the claim in question and, after obtaining a .decision at the hands of the Claims Officer, the counsel urges, it is
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no longer open to the appellant to seek withdrawal of the same.
According to Mr. Jha, the Act gives jurisdiction to the Claims
Officer, even if the mortgage consists of properties which have
vested in the State as also properties which have not so vested.
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In this connection, Mr. Jha referred us to the provisions contained in ss. 4(d) and 35 of the Act as a bar to any claim being
made by the appellant before any other Court.
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Mr. Jha points out that the application for withdrawal, made
by the appellant, purported to be under Order XXIII, r. 1, C.P.C.,
which has no application at all to proceedings under the Act, which
does not contain any provision relating to withdrawal of claims.
It is also pointed out that the request for withdrawal was made in
the appeal filed by his clients challenging the decision of the Claims
Officer to the extent it was against the respondents. Mr. Jha
further points out that the respondents, in such an appeal, cannot,
as of right, ask for withdrawal of his claim and, in any event,
in this case the learned Judge has declined to exercise his discretion
in favour of the appellant. Therefore, Mr. Jha points out, no
circumstances have been made out by the appellant, justifying an
interference with the discretion so exercised.
the findings recorded on facts, by the learned Judge, are also
challenged on behalf of the appellant ; and those findings no doubt
are sought to be supported on behalf of the respondents. But, in
the view that we take, that the appellant's request for withdrawal
of the claim petition should have been allowed, we do not propose
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to consider and express any opinion on the second ground of attack
that is made in these proceedings.
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From what is stated above, it will be seen that the question
that arises for consideration is, as to whether, in a case where a
mortgage takes in two sets of properties, viz., properties which have
vested in the State, under the Act, and properties which have not
so vested, the right of the mortgagee to pursue the remedy available
to him under the ordinary law, as against the properties which
have not vested in the State for enforcing his mortgage claims,
is in any manner taken away by the Act. If we are of opinion
that such a right has not been taken ~way by the Act, it will follow
that the view of the learned Judge that it is not open to the appellant to proceed simultaneously to enforce his right under the ordinary law, as also under the Act, is not correct. It will also follow
that the further view that a party, situated like the appellant in
this case, is bound to elect the remedy which he wants to pursue,
cannot also be correct.
The scheme of the Act has been considered by this Court in
two decisions : Raja Sai/endra Narayan Bhanj Deo v. Kumar Jagat
Kishore Prasad Narayan Singh(') and Krishna Prasad v. Gauri
Kumari Devi.(2)
In Sai/endra Narayan's case('), the question related
to the
effect of a decree for redemption obtained by the mortgagor, after
the coming into force of the Act, and the entire property, which
was the subject of mortgage and the decree, vesting in the
State. After referring to the material provisions contained in the
(I) [1962] Supp. 2 S.C.R. 1!9.
(2) [1962] Supp. 3 S.C.R. 564.
64
SUPREME OOUlt'l'
REPORTS
(1967J 2 s.c.a.
Act, including ss. 4{d) and 35 of the Act, this Court hcl<l that the
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decree for redemption, which had been passed prior to the Act,
became infructuous.
In Krishna Prasad's case,(') this Court had to consider the
question as to whether a mortgagee, who had obtained a decree,
can execute his personal decree against the mortgagor by attachment and sale of properties which were not the subject of mortgage,
without having recourse to the provisions of the Act. In that
case, the whole of the property mortgaged had vested in the State
under the Act. The mortgagee bad filed a suit on the mortgage
and obtained a decree providing that the mortgagee-decree holders
will be entitled to have a personal decree against the mortgagorjudgment debtor, after exhausting his remedies as against the Mortgaged property.
Before the decree-holders could realise the decree amount by sale of the mortgaged properties, the Act bad
come into force ; and, under the provisions of the Act, the entire
mortgaged properties had vested in the State of Bihar.
Under
those circumstances, the decree-holders attempted to recover the
decree amount, by attachment and sale of certain other properties,
belonging to the judgment-debtor. Objection was taken by the
judgment-debtor on the ground that the decree-holders were bound
to seek their remedies, from the compensation amount payable
to the mortgagors under the Act and that the decree-holders could
not proceed against the non-mortgaged properties. This Court,
again, after referring to the various provisions of the Act, held that
the scheme of the Act postulates that where the provisions of the
Act apply, claims of creditors have to be submitted before the
Oaims Officer and that the claimants have to follow the procedure
prescribed under the Act. This Court has also held that the creditors cannot avail of any remedy outside the Act by instituting
a suit or any other proceeding in the court of ordinary civil jurisdiction.
Ultimately, this Court held that without having recourse
to the remedy provided under the Act, a creditor had no right to
execute a personal decree as against the non-mortgaged properties.
This Court also held that inasmuch as the whole of the mortgaged
properties in that case was an estate, it was unnecessary to consider
what would be the effect of the provisions of s. 4{ d) in cases where
part of the mortgaged property is an estate and part is not. In
that decision, this Court also observed that it was unnecessary to
consider whether s. 4{d) would create a bar, even in cases where
the compensation amount payable to the mortgagor is insufficient
to satisfy the mortgagec-rlecree holder's claim even to the extent
of the amounts scaled down under s. I 6. -
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(I) [1962) Supp. 3 S.C.R. 564.
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gaged is an estate, there can be no doubt that the procedure prescribed by Chapter IV has to be followed, in order that the amount
due to the creditor should be determined by the Claims Officer
and the decision of the Claims Officer or the Boa rd has been made
final by the Act.
What then is the position, when a mortgage comprises, not
only properties which have vested in the State under the Act but
also takes in other items of properties which are outside the purview of the Act ? Under those circumstances, is the mortgagee
still bound to apply to the Claims Officer and follow the procedure
indicated by the Act ? This raises the question left undecided in
Krishna Prasad's case.(')
According to Mr. Chatterjee, learned counsel for the appellant,
there is absolutely no indication in the Act that any such obligation has been imposed on the mortgagee to invoke the provisions
of the Act. The counsel points out that whatever may be the position, so far as the properties which have vested in the State are concerned, the mortgagee is entitled to enforce his claims, under the
ordinary law, as against the properties which have not vested in
the State. Learned counsel points out that the prohibition enunciated in ss. 4(d) and 35, have no application at all to any action
that may be taken by the appellant in the ordinary civil courts, as
against the properties which have not vested in the State. The
mere fact that his client, counsel points out, has filed an application
before the Claims Officer under s. 14 of the Act, cannot, in law,
take away his ordinary right to enforce his claim as against the
non-vested properties. Counsel also points out that in order to
enable the appellant to work out his rights as against the non-vested
properties, be made a request to the learned Judge for witbdrnwing
his claim petition. According to learned counsel, inasmuch as
bis client bas two independent remedies in respect of the two sets
of properties, viz., of making a claim under the Act in respect of
the vested properties and of having recourse to his right, under the
ordinary law to enforce the mortgage liability as against the nonvested properties, the appellant cannot be forced to make any election. The application made by the appellant, for withdrawal,
was for the purpose of enforcing his rights, as against the non-vested
properties and that request should have been allowed.
Mr. Jha, learned counsel for the respondents, pointed out
that the Act gives jurisdiction to the authorities to adjudicate
upon all claims arising under a mortgage when a claim petition
is filed under s. 14 of the Act and therefore, in this case, inasmuch
as the appellant had filed an application under s. 14, it should be
considered thl!t the appellant had elected to adopt the remedies
available to him under the Act.
·
(I) (1962] Supp. 3 S.C.R. 564.
66
SUPlll!ME
COUl.T
UPO&TS
(1967) 2 S.C.&.
Mr. Jh?. referred us to the Full Bench decision of the Patna
High Court in Sukhdeo Das· case,(1) referred
to earlier. In
that decision, the Patna High Court has held that if there are other
properties comprised in the mortgage which have not vested in the
State, the Act does not say that those properties will not be available for the recovery of the mortgage money. S0 far as this observation is concerned, in our view, ti.at seems to be correct, having
due regard to the provisions of the Act. But later on, the Full
Bench has also held that a mortgagee has to elect between the two
remedies and cannot have recourse to both of them simultaneously
and that a Court can compel the mortgagee to elect between the
remedy under s. 14 and the ordinary remedy available to him under
the general law.
These later observations have also beer. approved by another
Full Bench of the same High Court in Siddheshwar Prasad v. Ram
Saroop(').
In this case, the High Court poses one of the questions arising for consideration thus : 'What is the remedy of the
mortgagee where the mortgaged property partly vests and partly
not?'. In discussing this question, the High Court has held that
s. 4(d) will be a bar to a suit or execution proceeding, so far as
vested properties are concerned : but the creditor-mortgagee will
be entitled to prosecute the suit or execution proceedings as regards the estate or portions of estates which have not vested in the
State.
But the High Court also observes :
"Where the mortgaged property consists of both vested
and non-vested property it is open to the creditor to make
an election as to the choice of his remedies.
He may
give up his right offiling a claim under section 14 with respect
to the vested estate, and prosecute the suit or execution
proceeding so far as estates 'vhich have not vested, in the
Civil Court. Or he may give up his remedy in the Civil
Court and prosecute his claim solely under section 14 before
the claims officer."
Here, again, it will be noted that the opinion expressed by the
Patna High CoPrt, that so far as claims relating to properties which
have vested in the State are concerned, the procedure indicated
in the Act will have to be followed and thats. 4{d) will be a bar to
a suit or execution proceedings in respect of the vested estates, is
correct. Considerable reliance has been placed by learned counsel
for the respondent. on the observations of the Full Bench that a
creditor ·will have to make an election as to the choice of his
remedies.
No doubt, the observations extracted above, prima facie,
support the contentions of the learned counsel for the respondent.
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(I) A.•.R. 1958 Pat. 630.
(2) A.l.R. 1963 Pat. 412.
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KfSHORE PRASAD v. RAM PRATAP (Vaidialingam, J.)
67
But the question is whether those obscnations arc justified, having
due regard to the various provisions contained in the Act. We
have referred to the two decisions of this Court in Sai/endra Narayan'.• case(') and Krishna Prasad's case(2), dealing with cases of
mortgages, comprisin~ wholly of properties which ha\e vested in
the State under the Act. We have also referred, in the earlier
part of this judgment, to the principles laid down by those decisions
to the effect that where the w;.ole of the property mortgaged is an
estate, there can be no doubt that the· procedure prescribed by
Chapter IV bas to be followed in or.ler that the amount due to
a creditor is determined by the Claims Officer. No provision in
the Act, bas been brought to our notice by learned counsel for
the respondent, giving jurisdiction to the at11!10rities, functioning
under the Act, to adjudicat~ upon the claim;, of a mortgagee with
reference to properties which do not vest in the State. Nor has
any provision of the statute been brought to our notice prohibiting
or placing a bar on the right of a creditor to pursue the remedy
available to him under the ordinary law, as again5t properties which
have not vested in the State. Therefore, under those circumstances,
we are not inclined to agree with the observations of the Patna
Hight Court in the decisions reforred to above that in cases where
a mortgaged property consists of both vested and non-vested items,
it is open to the creditor to make an election as to the choice of
his remedies and that election is to be made by a creditor giving
up his right of filing a claim under s. 14 with respect to the vested
estate or prosecuting a suit or execution proceeding in a civil court
in respect of items which have not so vested in tre State. The
Act, 50 far as we can see, gives jurisdiction to the authorities concerned only in respect of properties, which have vested in the State;
and the claims that are filed and adjudications made by the authorities concerned, under the Act, can only be with r~ference to estates that have vested in the State. In our opinion, the prohibition
contained in ss. 4(d) and 35 of the Act must also relate only to mat
ters which can form properly the subject of a claim or an adjudication under the Act.
We are further of opinion that, while i:c respect of the estates,
which have vested in the State under the Act, the mortgagee will
be bound to have recourse to the procedure laid down in the Act,
so far as his mortgage takes in other properties, his right to enforce
his claim under the ordinary law, has not been, in any manner,
infringed or taken away by the Act. If that is so, it follows that
in this case the appellant, notwithstanding the fact that he had
filed a claim under s. 14 of the Act, with reference \A properties
which have vested in the State, is entitled to avail himself, of any
other remedy open to him in law, to enforce his claim as against
the non-vested properties comprised in the mortgage. The main
(I} (1962] Supp. 2 S.C.R. 119.
(2) [1962] Supp. 3 S.C.R. 564.
·68
SUJ'llBMB OOUJ.T llBPOllTS
(1967) 2 S.C.R.
reason given by the learned Judge, for rejecting the application
filed by the appellant for withdrawing his claim, is that the appellant, when he filed an application under s. 14, must be consi-
·dered to have elected his remedy under the Act, and therefore he
should not be permitted to withdraw the claim.
Here, again, when once we have held that there is no scope
for the application of the doctrine of election, the reason given
by the lower Court for declining to grant permission to withdraw
the claim, also falls to the ground. Then the question is whether
.the appellant should be given leave to withdraw the claim filed by
him before the Claims Officer under s. 14 of the Act.
No doubt, technically, the provisions of Order XXIII, C.P.C·
may not apply ; but we do not see any bar to a tribunal permitting
'the withdrawal of any proceeding, if it is satisfied that the said
request can be granted otherwise. No doubt, before permission
is granted to withdraw a proceeding, the tribunal can consider
as to whether the withdrawal, if granted, will prejudice the opposite
party.
In this case, as we have already pointed out, the learned
Judge has not found any positive prejudice, that will result to the
respondents, by th~ appellant being permitted to withdraw his claim
application. If the doctrine of election applies, as held by the Patna
High Court, which decision has been followed by the learned Judge
in this case, quite naturally, permitting the appellant to withdraw
his claim, may result in prejudice to the respondent, in whose
favour certain findings have also been recorded by the Claim~.
Officer. But we have already pointed out that there is no question
of the appellant being put to election in circumstances like this ;
and if, that is so, there cannot also be any question of prejudk.e
being caused to the respondent hy the appellant's request for -..·:;n-
<lrawing the claim being granted, more especially, in view of the
limited request made by him, to which we will advert presently.
As we have already indicated, the appellant's request was
for permitting him to withdraw his claim application on the ground
that he proposed to seek the remedy that might be avail~l:-le to
him in law, as against the mortgaged properties, which hav~ not
vested in the State. If the appellant's request for withdrawing his
claim petition had been made with liberty to enable him again to
seek his remedies, as against the properties which have vested in
the State, the position may be different, because, in those circumstances, the respondents can forcibly urge that they have obtai·,1ed
a decision on certain aspects in their favour at the hands of the
Claims Officer and that, if permission to withdraw is granted to
the appellant. it would be prejudicial to them. When the appellant was making a very simple request for withdra11.ing his claim
petition, only to enable him to seek any remedy available to him
in law, as against the non-vested properties, we do not see any
reason a~ to why that request should not be granted.
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KISHORE PRASAD v. RAM PRATAP (Vaidialingam, /.)
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We accordingly grant the request of the appellant to with--
draw Claim Case No. 14 of 1956 filed by him before the Claims.
Officer, Gaya, in terms of the appellant's application dated
November 9, 1959, and made to the Board. But, as and when the·
appellant seeks any remedy, to enforce his mortg'lge, as against
the properties which have not vested under the Act, that Tribunal
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or Court may have to apply the principle of Marshalling.
In the result, the appeal i~ allowed and the claim petition is
permitted to be withdrawn, as indicated above. We make it very
clear that we have not expressed any opinion on the various findings
recorded, either by the Claims Officer, or by the learned Judge.
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Inasmuch as the appellant himself initiated the proceedings.
under s. 14 of the Act, which brought about this situation, we direct:
that the parties will bear their own costs in this appeal.
G.C.
Appeal allowed ..