Shankar dass and Others vs Smt. Shanti Devi and Others

D.B. Lal, J.—This appeal is brought from the judgment of the Senior Subordinate Judge, Mahasu district, Simla, where by Respondents suit has been decreed for Rs. 17,343.37 P. and the mode of realisation of the amount has been prescribed as by sale of the lands in dispute. The Plaintiff was Smt. Shanti Devi, Rajmata of Bushahr, and she brought the suit with the allegations that she was owner of 62 big has and 6 biswas of land described in the plaint which was put to auction on her behalf on 20-5-1952. Daulat Ram deceased, the predecessor-in-interest of the Defendants, gave the final bid for Rs. 13,000/- and this bid-was accepted by the Plaintiff. Subsequently, however, it was arranged that the sale-deed would be executed in favour of Daulat Ram and Shiva Nand, both deceased and predecessors-in-interest of the Defendants. The sale consideration was agreed to be paid before the Sub-Registrar. It was further alleged on behalf of the Plaintiff that the buyers did not possess sufficient money and hence wanted to defer the payment. At the same time they were eager that the sale deed should be got registered in their names. One Negi Ranbir Singh who was the Mukhtiyar of the Plaintiff, however, assured her on their behalf that the payment would be made. Accordingly the sale deed was executed and registered on 22-5-1952 and before the Sub-Registrar on behalf of the Plaintiff an acknowledgement was made that she had received the sale consideration. By way of collateral security, however, Negi Ranbir Singh got executed a pronote for Rs. 13,500/- on 21-5-1952 in his favour from Daulat Ram and Shiva Nand. After the sale was complete and the title passed to the buyers, they came in occupation of the property and enjoyed its usufruct. According to Plaintiff, a sum of Rs. 2,000/- however was paid to the Plaintiff out of the sale consideration on 16-1-1953 and that payment was shown as part payment of the aforementioned pronote. The remaining consideration amount which was Rs. 12,000/- remained to be paid and for that the Plaintiff being the vendor claimed unpaid vendor''s lien u/s 55(4)(b) of the Transfer of Property Act. She further claimed interest, and the present suit was filed for the recovery of the entire amount which would be a charge on the property sold to the Defendants.

It may also be, however, mentioned that in the year 1956 a suit was filed by Negi Ranbir Singh on the basis of the aforesaid pronote and the litigation went up to the Court of the Judicial Commissioner. The plea of the Defendants, however, in that suit was that the pronote was without consideration, although it was asserted on behalf of Negi Ranbir Singh that the consideration for the pronote flowed from the unpaid sale consideration. But that plea did not prevail before the Judicial Commissioner. The suit filed by Negi Ranbir Singh was thus dismissed.

Both Daulat Ram and Shiva Nand have since died, and the present Defendants being their successors-in-interest contested the suit. Their defence was that the entire sale consideration was already paid before the Sub-Registrar for which the acknowledgement was given by the Rajmata, namely the Plaintiff. It was denied that Negi Ranbir Singh acted as surety or that any pronote was executed. It was rather asserted that the pronote was written "under the influence of opium", and hence it was clamed that the pronote was invalid. It was, however, admitted that a sum of Rs. 2,000/- was paid to the Plaintiff, but this payment was in lieu of certain rent which they preferred to call "chakota" payment. It was, vehemently urged that the entire lands vested in the State Government u/s 27(1) of the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1953 (hereinafter to be referred as the Land Reforms Act, 1953), The State Government having become the owner of the lands and the said contract of sale having the effect of preventing the vesting of so much parcel of land as was made the subject-matter of the disputed sale, Section 85 of the Land Reforms Act, 1953, rendered the sale contract void. It was, therefore, contended that the charge over the property could not be enforced upon the simple ground that the property itself never remained in the ownership of the Plaintiff. In fact the Plaintiff wanted to enforce a contract which became void and as such, according to Defendants, the very basis of the'' claim would be devoid of any merit. It was also pleaded that interest could not be charged and the claim was also not sustainable, the property having vested with the State Government.

The learned Subordinate Judge considered the respective pleas raised by the parties and held that the sale consideration was not paid and except Rs. 2,000/- which were received by the Plaintiff the balance of the sale consideration was due and payable. He also held that the vestment of the property in favour of the State Government depended upon payment of compensation and as the same was not paid the contract of sale was not rendered void. The learned Subordinate Judge relied upon a decision of the Judicial Commissioner, of which the report is Rajkumar Rajinder Singh and Others Vs. Lieutenant Governor and Others, In that case it was held that the right, title and interest of the landowner could only vest in the State Government provided that compensation was determined and paid to the landowner. Since the compensation was not paid till then, the trial Judge held that the contract of sale did not become void and hence the unpaid vendor''s lien was enforceable u/s 55(4)(b) of the Transfer of Property Act. It was also held that interest was payable by the Defendants because they enjoyed the usufruct of the property. Accordingly a decree was passed for Rs. 17,343.37 P. and the amount is to be realised by sale of the property.

The very first point that arises for our consideration pertains to the payment of the sale consideration. In that connection, we have gone through the evidence led by the respective parties. The learned trial Judge has considered all that evidence, and after, careful consideration of this evidence we are of the opinion that the sale consideration was in fact not paid although a bare acknowledgement regarding payment was'' made on behalf of the Plaintiff at the time of registration. The learned trial Judge considered the statements of Pyare Lal (DW. 2) as well as of Shankar Dass Defendant in that connection. According to him, Pyare Lal (DW. 2) could not testify as to whether the sale consideration was paid or not. Shankar Dass Defendant, was of course, interested to give a deposition in his favour. As regards the statements of Shiva Nand and Daulat Ram deceased, the same were inadmissible having been made during the course ''of a proceeding in which the Plaintiff was not a party. The endorsement regarding sale consideration made in the mutation proceeding could not be attributed to be as an acknowledgement on behalf of the Plaintiff because obviously she was not present at that time. The recital in the sale deed itself decidedly never indicated that any cash payment was made before the Sub-Registrar. In the circumstances alleged on behalf of the Plaintiff, it was but natural on her part to have made that acknowledgement especially when the pronote was obtained by Negi Ranbir Singh as a collateral security for the unpaid sale price.

As against this evidence procured on behalf of the Defendants, the Plaintiff gave her own statement and produced Negi Ranbir Singh as well as one Shri G.C. Negi, Advocate. Besides these two witnesses, one Devki Nandan was also examined. The last witness was present on the date the sale deed was executed as he had arrived to execute some other sale deed of his own. All these witnesses categorically stated that no part of sale consideration was paid on that day before the Sub-Registrar. The learned Subordinate Judge rightly believed these witnesses, and we are in conformity with his finding that no part of the sale consideration was paid on the date the sale deed was executed and registered. The contention of the learned Counsel that the Plaintiff did not produce her account does not appear to be of any avail as long as reliance could be placed on the evidence produced on her behalf, and we find no reason to take a different view than what has been taken by the learned trial Judge.

Shri K.D. Sud, the learned Counsel for the Appellants, essentially based his argument on the interpretation of Section 27 and Section 85 of tie Land Reforms Act, 1953. The argument of the learned Counsel was that the contract having become void u/s 85 could not be enforced and the charge for unpaid vendor being a part and parcel of the said contract, similarly could not be enforced and the claim could not be based on that charge. The learned Counsel further contended that the Plaintiff having lost her title and the property having vested in the State Government, cannot claim a charge for the sale consideration of the said property.

The relevant portion of Section 27 of the Land Reforms Act, 1953, may now be reproduced:

"27. (1) Notwithstanding anything contained in the foregoing provisions of this Chapter, a landowner who holds land, the annual land revenue of which exceeds Rs. 125 per year, the right, title and interest of such owner in such land shall be deemed to have been transferred and vested in the State Government free from all encumbrances.

(2). Nothing contained in Sub-section (1) shall apply in respect of such land which is under the personal cultivation of the landowner.

(3). The landowner whose rights are acquired under Sub-section (1) by the State Government, shall be entitled to receive compensation which shall be determined by the Compensation Officer having regard to Sections 17 and 18 of this Act, in accordance with the provisions of Schedule II, but in the case of such occupancy-tenant who is liable to pay rent in terms of land revenue or the multiple of land revenue, the compensation payable to his landowner shall be computed in accordance with Schedule I.

(4) The right, title and interest of the landowner acquired under Sub-section (1) or (2) shall be transferred by the State Government on the payment of compensation in accordance with Schedule I to such tenant who cultivates such land.

(5)....

We may also, at this stage, take notice of Section 85 of the Land Reforms Act, 1953, which runs thus:

"85. Any contract or agreement made between the landowner and any other person on or after the 1st of April, 1952, which has the effect of directly or indirectly preventing the vesting of any land of the landowner in the State Government or, to defeat any other provision of this Chapter shall become void from the date of vesting.

As regards Section 27, according to the learned Subordinate Judge the vesting of the property depended upon the payment of compensation, and that view was upheld at one stage by the learned Judicial Commissioner. However, subsequently the said decision was taken to the Supreme Court and the view sustained by the learned Judicial Commissioner was set at naught and it was rather held that the vesting of the property is automatic on the very, date of the enforcement of the Act, which is 26th January, 1955. In that connection, we may refer to Lt. Governor of Himachal Pradesh v. Rajkumar Rajinder Singh 1971 H.L.R. 27 S.C. which approved the Full Bench decision of the Delhi High Court in Union of India v. Dinesh Kumar 1968 D.JLT. 419. In view of these decisions, the vesting was automatic and obviously it took place on 26th January, 1955. Therefore, the very basis of the decision of the learned Subordinate Judge is rendered nugatory. It could not be stated that the vesting of the property in favour of the State Government depended upon payment of compensation. Shri K.D. Sud, the learned Counsel, upon that contended that on 26th January, 1955, the contract of sale became void and the Plaintiff was doing nothing but enforcing the said contract to obtain the relief. In that connection, a bare reading of Section 85 would make it clear that the said section enures for the benefit of the State Government. Further it has a limited effect of preventing the vesting of the land of the landowner in the State Government. It is also to be noted that the contract or agreement becomes void only from the date of vesting. In other words, the said contract or agreement remains valid up to the date of vesting. The unpaid vendor''s lien being a covenant that goes with the land would have remained enforceable even against the State Government had it not been mentioned in Section 27(1) that the vesting takes place in the, State Government "free from all encumbrances". From this it is concluded that the unpaid vendor''s lien would not be enforceable vis-a-vis he State Government. In the instant case, the State Government is not a party and hence we are considering the rights and liabilities between the vendor and the vendee who are parties to the suit. It may be true to say that the vestment had taken place in favour of the State Government but, it is abundantly clear that the Defendants are in possession over the property as buyers, and within the meaning of Section 55(4)(b) of the Transfer of Property Act the property could be stated to be "in the hands of the buyer". In fact the Defendants are claiming that property as buyers and they have not acquired proprietary tide over the property on the basis of their being tenants within the meaning of Sub-section (4) of Section 27 of the Land Reforms Act, 1953. Therefore, upon the plain language used in Sub-section (4)(b) of Section 55 of the Transfer of Property Act, the property being in the hands of the buyers, the same could be traced for enforcement of the charge. As we have already observed, Section 85 of the Land Reforms Act, 1953, enures for the benefit of the State Government. The rights between the vendor and the vendee in the present suit have remained unaffected by that provision. It is also abundantly clear, as it is so evident from the mutation entries, that one of the Defendants, predecessor-in-interest Daulat Ram got these lands on a fixed term tenancy for five years. Therefore u/s 40 of the Punjab Tenancy Act a decree for ejectment could be claimed against Daulat Ram after elapse of that time, and obviously the Plaintiff having treated the Defendants as buyers has not exercised that right of ejectment. It is also manifest that the Defendants and their predecessors are enjoying the usufruct of the property. It is, therefore, evident that an element of estoppel is created in favour of the Plaintiff and that would prevent the Defendants from claiming any other title in their favour, except that of buyer under the disputed sale-deed. Acting upon the belief so created by the Defendants, the Plaintiff has no doubt worsened her position inasmuch as she neither claimed ejectment under the provisions of the Tenancy Act nor did she stop the Defendants from reaping the profits out of the property. Thus, in our opinion, the Defendants would also be debarred from setting up a different position from that of being buyers under the disputed sale deed. In the present suit, in fact we are not concerned with the vestment for which the State Government may or may not claim. It suffices for our decision that the status of the Plaintiff and the Defendants would nonetheless be that of vendor and vendee. And since the Plaintiff adhered to that contract and the Defendants very much asserted, there to and claimed possession as buyers, the equities between the parties would be settled as if the contract of sale between them was valid and the unpaid vendor''s lien as enforceable in the shape the Plaintiff has sought it to be enforced in the present suit.

Shri Ghhabil Dass, the learned Counsel for the Respondents, chose to strengthen his argument by canvassing that Section 85 of the Land Reforms Act, 1953, was confined to those category of contracts which he preferred to call executory as distinguished from executed. According to the learned Counsel, since the present contract of sale was an executed one and has been discharged in to, nothing remained to be executed and as such a contract would not be covered within the language of Section 85, which is rather in the present tense and the expression used is "has the effect of directly or indirectly preventing the vesting of any laud". It was stressed, that only such agreements are contemplated in the said provision, which are executory and which are yet continuing and have the effect of preventing the vesting, of any land. In our opinion, this construction of Section 85 is neither borne out from the language used nor would it be proper to deduce it, as it would defeat the very scheme of the Land Reforms Act, 1953. The intention behind Section 85 was obviously to prevent the vesting of any land as a result of any contrivance adopted by big landowner namely transferring parcels of land to other persons. The legislature chose to fix 1st April, 1952, as the date up to when the contracts or agreements were protected and such transfers were to be acknowledged as valid. Subsequent to that date, any contract or agreement which has the effect of preventing the vesting of any land necessarily became void. If all such contracts of dates between 1st April, 1952, and 26th January, 1955, which have become complete, are permitted to remain in tact and not held void, that would certainly afford opportunity to big landowners to alienate their lands in whatever manner they liked to do so. That would have rather gone to defeat the very purpose behind the Act. Therefore, in our opinion, such a construction of Section 85 would not be permissible. The learned Counsel thereafter contended that Section 85 falls in Chapter VIII and hence should be confined to refer to the provisions of that Chapter, especially when it was so asserted in that section. It was stated that Section 27 falls in Chapter III and therefore Section 85 should not be so construed as to refer to the vesting under that section. It is no doubt true that Chapter III which contains Section 27 talks of vesting in favour of the State Government merely because the lands held by the landowner bear a land revenue exceeding Rs. 125/- Chapter VIII, however, deals with the assumption of management and thereafter acquisition by the State. Section 83 which falls in that Chapter talks of vestment of proprietary rights in the State Government. But that vestment is obviously referable to mismanagement of cultivation as contemplated u/s 79. Therefore, the vestment under the two Chapters may be classified to be of different category, but nevertheless, upon a plain reading of the language used in Section 85, when they talk of preventing, directly or indirectly, the vestment of any land, in our opinion, they cover up also the other category of vestment u/s 27.

It was then contended by the learned Counsel that the expression "preventing the vesting of any land of the landowner" should be given the meaning in the context the other expression "to defeat any other provision of this Chapter" is used in the Section. It was stated that Ike any other provision of this Chapter, the vesting of the land under "this Chapter" alone is protected by Section 85. For this proposition, the learned Counsel relies upon the maxim that if several expressions are used in a particular clause bearing analogous meanings, while interpreting one expression, regard should be had to the meaning conveyed by the other expression, and both should be held to bear a harmonised construction. But in the instant clause, by no stretch of imagination, it can be considered that the two expressions are susceptible of analogous meanings. When they talk of "preventing the vesting of any land of landowner", they do not necessarily confine the meaning to the vesting only under Chapter VIII and not under Chapter III. Therefore, in our opinion, the two expressions having been expressed in a different language must be given a plain meaning attached to that language. If the legislature intended to prevent the vesting of any land of the landowner in the State Government, the meaning was to prevent the vesting of any land in the State Government, may be u/s 27 of the Land Reforms Act, 1953. Therefore, the correct interpretation of Section 85 would be that any contract or agreement which has the effect of preventing the vesting of any land of the landowner in the State Government would become void on the date of the enforcement of the Land Reforms Act, 1953. In Section 85 the expressions used are "contract" or "agreement", meaning thereby that the former includes completed contracts while the latter may even include executable contracts. In fact, both are covered under the provision so that the vestment of the land in favour of the State Government is not defeated.

It is abundantly clear that from the very language used in Section 85, the contract is not void ab initio, but becomes void on the date of the vestment in favour of the State Government. In the instant case, we are not concerned as to whether either party would be able to claim a right to the refund of the benefits u/s 65 of the Contract Act. Firstly, it is not a dispute between the State Government and either of the parties, and secondly, in point of fact the Defendants are, claiming possession as buyers, and when a stage arrives when the State Government claims vestment in its favour and the parties to the Suit are left to themselves, perhaps their mutual equities shall be decided with reference to Section 65 of the Contract Act. Since we are not concerned with that proposition in the present dispute, we refrain from expressing any opinion as to whether either party shall be liable to refund any amount to the other. At any rate, the relief claimed by the Plaintiff cannot be defeated upon any such consideration.

The other contention on behalf of the Appellant referred to what the learned Counsel canvassed as the novation of the contract which took place with reference to the unpaid vendor''s lien. Although specifically such a plea was not taken in the written statement, yet Shri Sud, the learned Counsel, contended that upon the very pleading set out on behalf of the Plaintiff the Defendants would be entitled to the plea that there was a novation of contract and as such a contract to the contrary was brought into existence so as to defeat the charge for the unpaid sale price. In that connection Shri Sud referred to the pronote which was brought into existence in favour of Negi Ranbir Singh. The argument of Shri Sud was that the said pronote, very much adhered to by the Plaintiff, was entirely a new contract which came into existence. As such, the learned Counsel contended that the charge created for unpaid sale price was defeated because a new enforceable liability was created in favour of a third party. The very first point which can be taken up to defeat this argument is the very contention of the Defendants in the previous suit based on the pronote as well as in the present suit, that the pronote was a faked document. In the suit between Negi Ranbir Singh and the Defendants it was specifically contended by the Defendants that the pronote was without consideration and that no such arrangement was made as contended by Negi Ranbir Singh so that the consideration for the pronote never flowed from the sale. The finding of the learned Judicial Commissioner is no doubt to the effect that the pronote was without consideration, and to that extent the finding became final between Negi Ranbir Singh and the Defendants. It is no doubt asserted by the Plaintiff that she financed that suit and perhaps had Negi Ranbir Singh succeeded in that suit the present claim for unpaid purchase money would not have been levied in another suit. The very contention of the Defendants defeating that arrangement and asserting before the Court that the pronote was never brought into existence to fulfil the need of the Plaintiff, rather indicates that according to them there was no novation of contract. The pleading is that the pronote was written under the influence of opium and it was a sham document. Therefore, the Defendants/defeat their claim for novation of contract. The essential point to be determined was as to whether a new enforceable liability in place of the old one was created between the parties. The pronote could as well be a collateral security or an additional guarantee, and in that contingency certainly there was neither a contract to the contrary nor the charge for the unpaid vendor''s lien was lost within the meaning of Section 55(4)(b) of the Transfer of Property Act.

Shri Chhabil Dass, the learned Counsel for the Respondents, relied upon Dyal Das Chanan Das v. Harkiskan Singh AIR 1930 Lahore 568, Krishnaswami Mudaliar v. Vijaraghava Pillai AIR 1939 Madras 590 and Somu Achari v. Singara Achari AIR 1945 Madras 407 because in these cases pronotes were executed for the unpaid purchase money. It was held that the charge for unpaid vendor is not lost and the pronotes could be considered to be additional security for that charge. Shri Sud attempted to distinguish these cases by asserting that the pronotes were executed in favour of the vendors and in those circumstances it was held that the charge was not defeated. In other words, his contention is that in a case in which a pronote for unpaid purchase money is executed in favour of a third party and not in favour of the vendor, the charge is necessarily defeated. We do not consider that the ratio of these decisions really depended upon that distinction as pointed out by the learned Counsel. The case relied upon by Shri Sud is Swaminatha Odayar v. Subbarama Aiyar AIR 1927 Mad. 219. In that case the following observation was made by their Lordships:

"When the vendor of immovable property takes a promissory note from the vendee in his own favour for the whole or part of the purchase money or when he directs the vendee to pay the whole or part of the purchase money to a third party, the vendor does not thereby lose the charge for unpaid purchase money 1 given by Section 55(4)(b). But if by agreement between the vendor and vendee, the vendee puts himself under an enforceable liability to a third party by executing, for example, a promissory note in favour of such third party for the whole or part of the purchase money, then in respect of the whole purchase money or the part of it, as the case may be, there is a "contract to the contrary" within the meaning of Section 55 and the vendor''s statutory charge on the property is so far defeated.

Their Lordships clearly referred to an enforceable liability to a third party by executing, for example, a promissory note in favour of such third party for the whole or part of the purchase money, meaning thereby that the distinguishing feature would be the enforceable liability created in favour, of a third party and thereby substituting a new contract for the old one, leading to novation of contract. The deciding factor would be this creation of a new enforceable liability in place of the old one either in favour of the vendor or in favour of a third party on behalf of the vendor. The intention to give up the charge u/s 55 should be there, and as long as that intention cannot be inferred the promissory note or any other liability would only be an additional guarantee to enforce the statutory charge. In the instant case, in our opinion, the intention on the part of the Plaintiff to give up the statutory charge cannot be inferred. In Raman Narayanan v. Velu Damodaran A.LR. 1973 KE 181 their Lordships provided a test for this, by referring to the observation of Wads worth, J., quoted in ILR (1904) 31 Cal. 57. The passage ran as below:

"You have to find something, either express contract, or at least something from which it is a necessary implication that such a contract exists, in order to exclude the charge given by the Statute. In their Lordships'' opinion there is no ground whatever for saying that that charge is excluded by a mere personal contract to defer payment of a portion of the purchase money, or to take the purchase money by instalments, nor is it, in their Lordships'' opinion, excluded by any contract, covenant or agreement with respect to this purchase money which is inconsistent with the continuance of the charge.

In the instant case it cannot even be considered that the execution of the promissory note was an act in any manner inconsistent with the continuance of the charge. Therefore, even that test of inconsistency is not satisfied and it cannot be held that the execution of the promissory note was an act to create a liability with the intention to defeat the statutory charge u/s 55. In our opinion, therefore, a case of novation of contract is not made out, nor can it be stated that there was a contract to the contrary within the meaning of Section 55 so that the unpaid vendor''s lien was defeated.

Another circumstance in this connection would be the payment of Rs. 2,000/- by the Defendants towards the sale consideration. On the back of the pronote Ex. P.B. there was an endorsement that Rs. 2,000/- were paid to the Plaintiff and that payment was obviously a payment of part of the purchase money. If a novation of contract had taken place and the pronote was executed in lieu thereof, what was the sense of making the payment of Rs. 2,000/- towards the sale consideration? The position is more than clear from the endorsement made on the back of the pronote Ex. P.B. and the receipt Ex. P.D. obtained in token of that payment. That circumstance also proves that the contract under the sale was kept alive for the charge for the unpaid purchase money.

As regards the interest, it is evident that the Defendants have been enjoying the income of the property, and since they delayed payment of the purchase money the Plaintiff would be entitled to claim interest on the unpaid balance of the purchase money. In our opinion, no exception can be taken to the payment of interest which has been awarded by the learned Subordinate Judge.

We, therefore, confirm the finding of the learned Subordinate Judge and hold that Rs. 17,343.37 P. are rightly held to be due from the Defendants to the Plaintiff. The charge created over the property was also legal and enforceable.

The appeal is thus without any merit and the same is dismissed with costs.