Narayan Ganesh Ghatate vs Baliram and another

Lord Sumner

This is an appeal against a judgment of the Court of Judicial Commissioner of the Central Provinces, which affirmed an order of the District Judge made in execution proceedings on a fore-closure decree. The point has been very clearly argued, but their Lordships do not think, it necessary to take time to consider the matter further.

The history of the case, which is rather complicated, is set out chronologically and very conveniently in the judgment appealed against.*The point for decision is one dependent on the construction of section 45 of the Central Provinces Tenancy Act of 1898, Chapter IV, "Of Occupancy Tenancy," and particularly sub-section (6) of that section.

*Facts: On the 17th January, 1881 a deed of mortgage by way of conditional sale was executed by two brothers, Ganpathy and Tukaram in favour of Gopal Narain Gate and Gopal Hari Bhide. The consideration for this deed was a debt of Rs. 16,000 and the property mortgaged comprised fifteen villages and some cattle and grain. On the 11th December 1884 the same mortgagors executed another deed of mortgage by way of conditional sale in favour of the same mortgagees whereby they encumbered practically the same property with another Rs. 2000 as principal. On 16-2-1888 the mortgagees sued to enforce the said mortgages and obtained a foreclosure decree on 30-6-1899. Subsequently the parties referred the matter to a conciliation board and the Board dealt with the matter after having obtained a proper reference from the parties and made an arbitration award on 20-2-1905. This award showed the liability of the judgment-debtors upto 31-12-1902 amounting to Rs. 13,750, future interest on this sum was settled at six per cent. per annum and a certain mode of repayment was provided. The award further provided "the Sowcar has the same right to the mortgaged property which he had before the award by virtue of the mortgage deed. In case of the default of the instalment interest on the award, the conditions of the mortgage deed shall be enforced in connection with such debts as have been entered by us in the award." The award was subsequently filed in Court and a decree was passed under it. Thereafter upon failure of the judgment debtor to pay the amount as stipulated the mortgagee applied for execution by way of foreclosure and claimed also actual possession of the sir land in the mortgaged villages.

The substance of the decision of the Court below was that the Conciliation Award of February 1905 was, for the purposes of this case, a fresh origin of the rights between the parties, and that although it came into existence in consequence of the mortgages of 1881 and 1884, and transaction thereunder, it was, both for the purpose of enforcement and for the purpose of the application of this particular section, the transaction between the parties which was the foundation of their rights. Accordingly they concluded that the transfer made or decreed by the proceedings under review could not be said to be in pursuance of the older mortgages of 1881 and 1884 which, as documents expressly providing for the transfer of the right to occupy sir land as a proprietor within sub-section (6), would have been saved from the operation of sub-section (1), but that in truth sub-section (1) of section 45 must be applied, and that therefore, in spite of the terms of the award, which in virtue of the agreement of reference became the agreement of the parties, the mortgagor could not so transfer his right to occupy sir land as to divest himself of his right as an occupancy tenant under the Act.

The reasons, their Lordships think, are sufficiently and fully given in the judgment appealed against and do not require repetition. It is a question of construction, not incapable of being argued and even decided either way, but their Lordships see no reason to differ from the decision appealed against, and will humbly advise His Majesty that the appeal be dismissed, but without costs, as the respondents have not appeared.