JUDGMENT

1. These two appeals have arisen out of a decree which purports to have been made under Order 34, Rule 6, Civil P.C. The suit was commenced by the plaintiff on 8th November 1924 against four sets of defendants namely, defendant 1 <NAME>, defendant 2 <NAME>, defendants 3 to 5 the <NAME> and defendant 6, <ORG> The bank having subsequently gone into liquidation, the liquidators were brought in as defendant 6. On 24th February 1925 a firm carrying on business under the name and style of <ORG> were added as defendant 7.

2. On 6th March 1919 defendant 1 had obtained a coal mining settlement in respect of coal lying under 366 bighas of land in mauzha Banbahal from the plaintiff and executed in his favour a kabuliyat stipulating to pay royalty at certain rates for the different kinds of coal to be taken and a minimum annual royalty of Rs. 5,000 that is to say at the rate of Rs. 400 a month from January to November and Rs. 600 in December and undertaking that if the royalty for each month was not paid within the 15th day thereof he would pay interest at the rate of Rs. 2 per cent per month till realization, and further stipulating that if the minimum royalty for two consecutive months be not paid within the third month the plaintiff would be competent to take khas possession of the colliery with all its appurtenances and creating a first charge on the leasehold lands machinery, stores, furniture etc., for the royalty and for all sorts of dues of the plaintiff. The suit was for recovery of minimum royalty from January 1923 to October 1924, both months inclusive, together with interest. The prayers were on the lines indicated in Order 34 of the Code. A more detailed reference will be made hereafter to the averments and prayers made in the plaint.

3. As regards the connexion of the other defendants with the subject-matter of the suit it would be sufficient to state the following: On 29th March 1923, defendant 1 executed a mortgage in favour of defendant 2 on receipt of Rs. 42,000 and assigned to the latter the leasehold together with the colliery and all its appurtenances, the deed being in the form of an English mortgage. On 4th April 1923 defendant 1 executed a further mortgage in similar terms in favour of defendants 3 to 5, assigning over the same properties, subject to the mortgage in favour of defendant 2, as security for Rs. 70,000 said to have been due to the said defendants on advances previously made by them. On 14th December 1923 defendant 2 assigned his mortgage debt and security to <ORG>, defendant 6. On 14th November 1924 a managing agency agreement was executed by defendant 1 in favour of defendant 7 and to this deed defendants 3 to 5 and 6 were parties.

4. On 28th April 1925 a solenama was filed as between the plaintiff and defendant 1 and on the same day, after examination of a witness who proved the charge-created by the kabuliyat executed by defendant 1 in plaintiff's favour and also said that defendant 1 had mortgaged the properties to the other defendants, a decree was passed on the solenama as between the plaintiff and defendant 1 and ex parte as against the other defendants. To the terms of this decree referenee will hereafter be made. The properties charged were sold in pursuance of this decree but fetched Rs. 1,525 only, a small part of the decretal dues.

5. About two years after, on 1st March 1928, the plaintiff applied under Order 34, B. 6, Civil P. C., for a personal decree against all the defendants for a sum of Rs. 14,843 which, he alleged, was due and unrealized on account of the decree of 28th April 1925. He asserted that defendant 1 was the original lessee and the other defendants were mortgagees in; possession and were, in fact, in possession by receipt of the usufructs of the colliery. To this prayer the defendants objected. The Subordinate Judge took evidence and eventually held that the plaintiff was entitled to such a decree as against defendants 1 to 6 and made it for Rs. 17,000 odd on 30th September 1929.

6. The two appeals are from the said decree: No. 8 has been preferred by defendant 2, <NAME>; and No. 15 by defendants 3 to 5, the <NAME>.

7. One singular feature of this case is. that if the pleadings and proceedings leading up to the decree of 1925 and the terms of that decree are carefully examined, it would seem that till that decree was passed the plaintiff never thought of obtaining in this suit anything beyond what he got under that decree, and it would also seem that the idea of having proceedings on the lines indicated in Order 34, Rule 6 as against defendants other than defendant 1 originated only at or about the time when the application was made for a decree under that rule. In the plaint the only averments relevant on the point were contained in paras. 11 and 17 which ran thus:

11. After taking a settlement of the colliery from the plaintiff defendant 1 came into possession thereof from the date of the settlement and he is possessing the same under the plaintiff, "17. Defendant 1 has been in peaceful possession of the property settled, under the plaintiff, since the date of the settlement. The plaintiff has come to know that defendant 1 has mortgaged the leasehold property to' defendants, 2, 3, 1 and 5 and that defendant 2 has again hypothecated the mortgage deed to defendant 6. The plaintiff makes defendants 2 to 6 parties for the purpose of getting the property described in Schs.(ka) and (kha) below, free from all encumbrances, and for realizing his dues from the said property as a first charge thereon.

8. In prayer (ka) a decree for Rupees 10,000 odd against all the defendants was asked for prayer (kha) was for declaration of a first charge for the money due to the plaintiff. In prayer (ga) it was prayed that if the defendants did not pay the decretal amount within the time fixed by the Court the decree might be made absolute and orders might be passed for realization thereof by sale of the properties charged. Prayer (gha) asked for a personal decree against defendant 1 in case of deficiency. Prayer (una) related to interest and costs. Besides, there was a general prayer for such additional or alternative reliefs which the plaintiff might be entitled to under the agreement and according to law, justice and equity.

9. The solenama effected as between the plaintiff and defendant 1 was that a decree for the amount claimed together with interest and costs should be passed, that a first charge as asked for should be declared and that 15 days' time should be given to defendant 1 to pay up the royalty and interest which had not been sued for. It was provided that if such payment is made, but not otherwise, defendant 1 will have four months' time to pay up the decretal amount, or else on the expiry of the said 15 days the decree shall be regarded an final and absolute and the properties charged would be sold. It was further provided that if the entire dues be not realized by the sale plaintiff shall realize the balance of his dues by the attachment and sale of defendant 1's other moveable and immovable properties or from his person.

10. The only evidence then adduced by the plaintiff was what was barely sufficient to prove the settlement which defendant 1 had taken and the witness who gave that evidence only said in addition that defendant 1 had mortgaged the properties to the other defendants. And thereupon the following decree was passed.

It is ordered and decreed that the suit be and the same is hereby decreed in terms of solenamah against defendant 1 and ex parte as against other defendants. The period fixed by the solenamah is also fixed as against the absentee defendants as the period of grace within which the decretal amount is to be paid up. In. default the leasehold properties Ka and Kha are to be sold for satisfaction of the decree. And that the sum of Rs. 990-6-3 be paid by defendant 1 to the plaintiff on account of the costs of the suit with interest thereon at the rate 'of 12 per cent per annum from this date to date of realization.

11. We are unable to see that any further questions remained to be decided or determined by the <ORG> upon the pleadings in the plaint and the prayera contained thereon. This view has been contested on behalf of the plaintiff upon various grounds which may perhaps be put in order and summarized as follows: It has been urged that the suit was a suit for sale on the basis of a mortgage and the decree should be regarded as a preliminary decree for sale under Order 34, Rule 4 or in any event as including a final decree for sale under Order 34, Rule 5 of the Code and can on no account be regarded as a. decree under Order 34, Rule 6. It has also been argued that at least so 'far as the defendants other than defendant 1 are concerned the decree was nothing more than a decree for sale following which there can always be a decree under Order 34, Rule 6. It has further been contended that in the plaint a decree against all the defendants had been asked for and. that although it may be that for some reason or other a personal decree against defendant 1 only had been prayed for it was always open to the plaintiff to apply for a personal decree against the other defendants later because it was not until a decree under Order 34, Rule 5 had been passed and a sale held thereunder had proved insufficient that the stage would arrive when such a decree could be made. It has lastly been argued that at the stage at which the decree was passed a decree under Order 34, Rule 6 would be entirely without jurisdiction. The matters to which our attention has been drawn in support of the grounds aforementioned have therefore to be dealt

12. In support of the contention that the Subordinate Judge had no jurisdiction to make a personal decree at the stage at which the decree referred to above was made the decision of this Court in the case of <NAME> v. Kirtibas Das [1931] 19 I.C. 971 has been cited. That the procedure prescribed in Sections 89 and 90, T. P. Act 1882 and by the rules in Order 34 of the Code did not and does not contemplate such a decree at such a stage cannot be disputed. The very terras of Section 90 and of Rule 6, Order 34 show that such a decree can be passed only after it has been ascertained that the nett proceeds of the sale of the mortgaged properties are insufficient to pay the amount of the decree. Though this is so in many cases on some of which the plaintiff himself relies for establishing this position decided both under the Transfer of Property Act and under the Code, composite decrees embodying not merely what the decree for sale should be but also decisions as regards personal remedies have been passed by Courts. And when so passed they have not been regarded as altogether invalid but only the question whether a further decree could be had or not has been held to depend upon the terms of the decree already made: e. g. <CITATION>  17 I. C. 263 Khulna Loan Co. Ltd. v. Jnanendranath Base A.I.R. 1917 P.C. 85 <CITATION> [19191 53 I.C. 904 and <CITATION>  31 Bom. 244 If ever there was a doubt as regards the validity of such a decree that doubt has been completely removed by the decision of <ORG> in the case of <CITATION> A.I.R. 1918 P.C. 159 in which it was pointed out that it is not necessary to put such a construction on Section 90 , T. P. Act  as would establish as a condition precedent to the power of decreeing personal payment of the balance that the mortgaged property must first be sold and found insufficient to satisfy the debt but that the words of the section are satisfied in cases where the Court passes a decree that on the happening of the event when the nett proceeds of the sale are found to be insufficient the balance should be paid. It is therefore unnecessary to proceed on the assumption that it is impossible in any case to regard the decree that was passed in this case as a combined decree. The real question is: Can it be so construed. The decree expressly says:

The suit be and the same is hereby decreed in terms of the solonamah against defendant 1 and the solenamah itself is appended to the decree, and one of the terms of the solenamah is term No. 7, viz. that:

if all the dues of the plaintiff be not realized from the said colliery and machineries etc. the plaintiff shall realize the balance of his decree by an attachment and sale of other moveable and immovable properties of the defendant or from his person.

13. It is difficult to imagine how it can be contended that the decree is not a combined decree unless it be on the following grounds which the plaintiff has put forward. It has been said in the first place that as it was not a matter within the province of the <ORG> to consider at that stage whether a personal decree should be passed or not the decree should be construed as being limited to the other provisions of the solenama and as not including term No. 7. Such a supposition is impossible in view of the ex-press terms of the decree and further because such a construction would have for its basis an impossible assumption that the terms of the solenama were varied by the <ORG> in so far that one of its essential terms will have to be regarded as having been left out. Three oases have been cited which it has been said would favour such a construction. The first one is the case <NAME> v. <NAME> the bearing of which decision upon the question before us is not apparent unless it be the plaintiff's contention that the compromise was unlawful or in contravention of law or was one which did not satisfy the requirements of Order 23, Rule 3, and therefore unfit to be recorded. We cannot conceive why it should be held that it was not open to the plaintiff and defendant 1 to adjust the suit as between themselves and put an end to it altogether by entering into a compromise by providing for a personal remedy also. The next case referred to is the case of <NAME> v. <NAME> . What happened in that case was this. A suit was brought by mortgagee 1 to enforce a mortgage security, and in it the mortgagors as well as second mortgagees were made parties.

14. The claim was decreed in part by the primary <ORG>. During the pendency of the appeal a petition of compromise was filed which purported to settle the differences between the plaintiffs and the mortgagors. The second mortgagees ware not parties to the settlement. The effect of the compromise was to increase the amount payable under the decree to the plaintiffs. It was held that a decree could not be passed in accordance with the compromise. The case in our opinion has decided nothing which may be useful in the present case. The third case is that of <NAME> v. <NAME> which has been affirmed by <ORG> in <NAME> v. .<NAME> [1931] 137 I.C. 672 (P.C.). This case was cited, as far as we could understand, in support of the contention that even though the solenama and the decree based on it, passed at an antecedent stage, may have dealt with the question of personal remedy, yet when the stage arrives at which a decree under Order 34, Rule 6 can be passed the <ORG>'s power is absolutely unfettered to make a decree in accordance with that rule irrespective of the terms of the solenama. We are unable to hold that the case is an authority for any such proposition. What was contended in that case was that even supposing there was no bargain to the effect that the defendants should be relieved of their personal liability when the preliminary decree under Rule 4 and the final decree under Rule 5 were not in complete accordance with law by reason of the fact that they were in terms of the solenama between the parties, a decree under Section 6 could not be tolerated. This contention was rejected and it was held that strict compliance with the terms of the previous rules was not an invariable antecedent to the awarding of a personal decree. The learned advocate of the plaintiff also took his stand upon another position. He urged that at least so far as defendants other than defendant 1 are concerned, the decree under consideration was nothing but a decree for sale in accordance with Rule 5, Order 34 and that therefore it was open to the plaintiff to apply for a decree 'against them under Rule 6 when the sale proceeds proved insufficient. But as against them, what was the true meaning of the decree ? It has been urged that it was a decree against them as such a decree could be against the mortgagor, defendant 1 himself. Beading the averments in the plaint, to which reference has already been made, it is plain beyond the faintest doubt that those defendants were made parties to the suit in their capacity of puisne encumbrancers and not on the ground of any liability for the mortgage debt, nor on the ground of their having been in possession. Indeed, it was never suggested that they were ever in possession, while in the clearest possible words the possession of defendant 1 was averred and pleaded.

15. In the evidence of the one witness who was examined on plaintiff's behalf which formed the basis of the decree that was passed against 'them ex parte, not one word is to be found as regards the possession of those defendants, and even the encumbrances in their favour were not specifically proved. But, in any case, there was nothing disclosed either in the plaint or in the evidence which would suggest even remotely that as against them any decree except such as could be made against puisne encumbrancers was intended. It has not been, nor can it be, disputed that a personal decree against a' puisne encumbrancer, merely on the footing of his being a puisne incumbrancer, is out of the question. But it has been argued that the prayers in the plaint in which the word defendants " in the plural is used, show that a joint and several decree for the money as against all the defennants was asked for and that the use for the money as against all the defendants was asked for and that the use of the word in the decree is indicative of an intention to make such a decree. On the averments to which we have referred such an interpretation is not possible : it would mean that a prayer for a joint and several decree was made against the mortgagor as well as the puisne incumbrancers on no other footing than that;they were puisne encumbrancers; and it would leave unexplained why in prayer (gha) a personal decree against defendant 1 only was asked for. Moreover if the decree is to be construed in the way contended for on behalf of the plaintiff, namely as being a decree for money against all the defendants, where was the room for a personal decree at all? In that case the money could have been realized from their personal and other properties even on the decree as it stands.

16. Having considered the terms of the decree with care we can find no escape from the conclusion that it was a combined decree under Rules 5 and 6 against defendant 1 on the basis of the solenama and embodying all its terms; and as against the defendants other than defendant 1 it meant to give the plaintiff all the reliefs that he was entitled to under his plaint, namely such reliefs as he was entitled to in order to have the properties concerned sold free from their encumbrances--'which was the prayer he had made--and all that was necessary to provide for that purpose was embodied in the decree. The question whether the plaintiff could ask for a further decree against defendant 1 under Rule 6 when the amount left unrealized by the sale was ascertained does not arise for consideration here. But so far as the other defendants are concerned, we are clearly of opinion, there was no room for any further decree.

17. Some papers have been produced before us on behalf of the plaintiff to show that in the proceedings relating to the sale that was held, the other defendants or some of them joined with defendant 1 in making an application under Section 47 of the Code in which the insufficiency of the value stated in the sale proclamation was pleaded. It has been argued that from this fast it should be inferred that a joint and several decree as against all the defendants had in fact been passed, because they must have joined in that application on that assumption. We cannot say why those defendants did so; but even such an assumption cannot, in our judgment, alter the character of the decree such as it really was. We are therefore of opinion that the proceedings which led to the passing of the decree from which the appeals before us have boon taken were entirely misconceived and that the decree itself cannot stand. What we have already said is, in our opinion, sufficient for disposing of this appeal. But the appellants have sought to repudiate their liability for a personal decree upon various other grounds. Inasmuch as the case may not rest here, we proceed to deal with those grounds, though quite shortly. It has been urged that the settlement in this case created a charge which, since the provisions of the Transfer of Property Act , 1882 came to be introduced in the Code of 1908 in the shape of Order 34, and prior to the amendments of that order in 1929, could only be enforced by the provisions as to sale or redemption contained in that order. Rule 15 of that order ran in these words:

All the provisions contained in this order as to the sale or redemption of mortgaged properties shall, so far as may be apply to property subject to a charge within the meaning of Section 100 , T. P. Act, 1882.

18. In the case of <NAME> v. <NAME> [l905] 2 A.L.J. 379 Banerjee, J., expressed the view that the holder of a charge was like a mortgagee suing for sale entitled to ask for and obtain a decree under Section 90 , T. P. Act, and unless he be a person who is not entitled to a personal remedy against the person whose property is subject to the charge, he was entitled to obtain such remedy in view of the wide words of that section. He was of opinion that the words all the provisions hereinbefore contained as to a mortgagor shall so far as may be apply to the owner of such property and the provisions of Sections 81 and 82 and all provisions hereinbefore contained as to a mortgagee instituting a suit for the sale of the mortgaged property shall so far as may be apply to the person having the charge although they referred to the rights of a mortgagee instituting a suit for the sale of the mortgaged property and did not in terms refer to any other property, were wide enough to include the right to obtain a personal decree in accordance with Section 90 of the Act. <NAME>, J., was of opinion that the words referred to only those provisions which deal with a sale of the mortgaged property. In the same case when it went up on appeal under the Letters Patent, <NAME> v. <NAME>  28 All. 365 the question was not decided, but the view of Banerjee, J., was approved. In 1908 the words of Section 100 were cut down; the words all provisions hereinbefore contained as to a mortgagee instituting a suit for the sale of the mortgaged property were deleted and the matter was reproduced in Order 34, Rule 15 as set out above. The words of that rule in their ordinary significance would limit the applicability of only those provisions in the order which relate to the sale or redemption of mortgaged property to property which is subject to a charge. The remedy by way of a personal decree therefore was |not provided for in the order. But from this we are not inclined to hold that the charge-holder would not have a personal remedy. Holders of charges, which are not recognized as mortgage under any statutory enactment, have always been treated by the <ORG> as on much the same footing as mortgagees, and if it was the intention of the amendments of 1908 to take away the personal remedy from a charge-holder we think the matter would have been expressly dealt with. In the case of <CITATION> A.I.R. 1918 P.C. 159 the charge created by deposit of title-deeds which was not recognized as a mortgage under the then existing law was allowed to be attended with a personal remedy. There is also a decision in the case of <NAME> v. <NAME> A.I.R. 1930 Oudh 10 in favour of this view in which however no reason is given. We are inclined to overrule this contention. Then it has been contended that these defendants, on the footing of the assignments they obtained under the mortgages in their favour, were not liable for the plaintiff's dues. This contention has been urged on two grounds. In the first place it has been said that the settlement itself was not a lease. A lease of immovable property under Section 105 , T. P. Act, is the transfer of a right to enjoy such property. It is said that in the settlement in the present case there was no question of any enjoyment of the property, but what was given by it was the right to take out coal, and therefore the settlement did not amount to a lease. In support the observations of Lord <NAME> in <NAME> v. <NAME>  2 H. L. Sc. & Div. 273 at p. 284 have been quoted:

Although we speak of a mineral lease or a louse of mines the contract is not in reality, a -lease at all in the sense in which we speak of an agricultural lease. There is no fruit that is to say there is no increase, there is no sowing or reaping in the ordinary sense of the term; and there are no periodical harvests. What we call a mineral lease is really, when properly considered a sale out and out of a portion of land. It is the liberty given to a particular individual for a specific length of time, to go into and under the land and to got certain things if he can find them and to take them away just as if he had bought so much of the soil.

19. Other cases also have been cited in support in which <NAME> v. Christie Supra has been referred to: Coltness Iron Co. v. Black [1881] 6 A.C. 315 at p. 335 <NAME> v. Wardlaw [1883] 8 A.C. 641 Munro v. Didcott [1911] A.C. 140 <CITATION>  7 Bom. 425 Prince Mahomed Baktyar Shah v. <NAME>  2 C. L. 3. 20. Reliance has also been placed upon the observations of their Lordships of <ORG> in the cases of <NAME> v. <NAME> A.I.R. 1917 P. C. 163 and <NAME> v. <NAME> A.I.R. 1928 P. C. 234 that the essential characteristic of a lease is that the subject is one which is occupied and enjoyed, and the corpus of which does not in the, nature of things and by reason of the user disappear.

20. In the present case the <ORG> states that if any surface is required lease thereof would have to be taken, and this too supports the appellant's contention that what was payable under the settlement was not rent but only the price by instalment of the quantities of coal taken. For certain purposes therefore and in order to consider whether some particular principle or dictum applicable to leases strictly socalled to mining leases, a distinction may have to be drawn since such a distinction undoubtedly exists. But settlements of this character are everywhere regarded as leases, and indeed the mortgagor as well as the appellants have, as the documents show, dealt with the subject-matter on the footing of its being a leasehold. We are not prepared to regard the settlement as anything else than as a lease though not falling strictly within the definition contained in Section 105 , T. P. Act, or partaking of the essential character of a lease within the meaning of the statute. Some portion, however small, of the surface had to be used for carrying on the mining operations and taking the coal out, and to that extent the transaction may be taken to (satisfy the requirements of the definition, We have not here to determine the extent of the leasehold. The second ground urged, so far as this contention is con-corned, is that oven if the transaction amounted to a lease, its assignment by way of English mortgage did not create a liability on such mortgagee in respect of the royalty. The decision upon which the <ORG> below has relied for holding that such liability was created is the case of <CITATION> A.I.R. l927 Cal. 725.

21. In that case <NAME>, <NAME>, expressed the view that the English law as to the liabilities of assignees of leaseholds depends entirely upon a distinction between legal and equitable estates a distinction for which the Transfer of Property Act has loft no room in India and which is not to be imported into Indian law, that when a lessee executes an English mortgage his right to redeem is a right on certain conditions to get it back and in India this right cannot be looked upon as an equitable estate existing before re-assignment and that it cannot be held that in India a lessee does not part with his whole estate under an English mortgage and further that the whole of the interest of the lessee having been assigned over to the mortgagee the latter becomes liable for the rent. There are difficulties in the way of adopting this view in its entirely, or in any event in applying it to the present case. The definition of an English mortgage as given in the Transfer of Property Act , Section 58 , Clause (e) must be read subject to the definition of a mortgagor as given in Clause (a) of that section and consequently an English mortgage in India can hardly be regarded as the transfer of the entire estate of the mortgagor to the mortgagee; it is correct however not to regard what is left in the mortgagor as an equitable estate, but it is nevertheless some estate, an interest only in the estate having been transferred under the mortgage. In our opinion therefore it is not easy to say of an assignment by way of an English mortgage in India executed by a lessee that the whole of his estate passes under the [mortgage to the mortgagee.

22. The provisions of the Transfer of property Act must be regarded first before resorting to the law and practice as it obtains in England : <CITATION> . Then, the rule in William v. Bosanquet  3 Moore 500 that when a party takes an assignment of lease by way of mortgage as a security for money lent, the whole interest passes to him and he becomes liable on the covenant for payment of rent though he has never occupied or become possessed in fact, which is the rule on which the decision in the case of the <CITATION> A.I.R. l927 Cal. 725 has proceeded is itself a rule which applies only if there is no special provision to the contrary : see <NAME> v. <NAME> 4 Bligh. N. Section 380 . Indeed in the case of <ORG> supra A.I.R. l927 Cal. 725 there was an express covenant in the mortgage for payment by the mortgagee of the rent reserved by the lease. In the case before us the mortgagor covenanted with the mortgagees, i. a., both sets of appellants, that so long as any money remained due under the mortgage he would go on paying the royalties, etc. We are accordingly of opinion that the appellant <NAME> merely by reason of his being an English mortgagee was not liable for the royalties due under the lease. Then again the case of the appellants, the <NAME>, seems to us to rest on a still higher footing. They were as already stated subsequent mortgagees the dead in their favour being also in the form of an English mortgage. It is very difficult to see what estate, if at all, passes to such mortgagees. If the English law is to be applied they are not liable. <NAME>, J., in the case of In re Gee Ex parte Official Receiver  24 Q. B. D. 65 observed:

Undoubtedly in an ordinary ease of assignment for value the assignor after the assignment remains liable on his covenants, and the assignee is also liable on them by virtue of privity of estate. It is only on the ground of privity of estate that the trustee would ever become liable on those covenants; and, inasmuch as the previous assignment has transferred that liability to the assignee, leaving on the bankrupt (i. e., the mortgagor) only the liability under the covenants arising out of privity of contract he ceases to have the land burdened with onerous covenants. It is true that some years ago a question did arise as to whether in the case of a mortgage the general rule applied. This however was decided in the affirmative a considerable time ago; and it cannot be doubted at this day that where there is an assignment of the whole term to a mortgagee, the mortgagee becomes by virtue of the assignment the owner of the lease burdened with the covenants, and the assignor no longer possesses any land with onerous covenants which can by virtue of the statute become vested in the trustee. It is true that the assignor, where the assignment is by way of mortgage, retains the equity of redemption; but that is an equitable right which is not burdened with onerous covenants. It is not because he is the owner of the equity of redemption that he can be compelled to perform the covenants, but solely by virtue of the privity of contract that exists between him and the lessor, and that liability cannot by bankruptcy be transferred to the trustee.

23. In the Mayor, etc., of Carlisle v. <NAME> [1807] 8 East. 487 at p. 497 it was said:

Whether a mortgagee who has not entered be or be not liable to an action of covenant as assignee, it is quite clear that the devisees of an equitable estate are not so.

24. We are therefore of opinion that even in a, suit properly framed for recovery of royalty from all the defendants none but defendant 1 could be made liable. Lastly it has been contended that a decree for personal liability against the appellants on the footing of their having been in possession is also not supportable, because, apart from anything else, they were in point of fact never in possession. The Subordinate Judge in holding against the appellants on this point has relied upon three pieces of materials: that there was no express denial on their part that they were in possession; that there was an admission of such possession contained in a petition of claim; and that they were parties to the agreement under which defendant 7 was appointed managing agents. As regards the omission to deny we do not set much store by it as it is not so clear that such denial was necessary. The admission contained in the petition of claim, to which however it should be stated, the appellant <NAME> was not a party, is explained by the appellants the <NAME>, and in our opinion that explanation is not unworthy of acceptance. So far as the managing agency agreement is concerned it is clearly an agreement by which only the mortgagor, defendant 1, appointed the managing agents with the concurrence of the <NAME> and of the <ORG>, their consent being necessary to vary the order of their respective charges and to create a first charge in favour of the managing agents and from this deed no inference can legitimately be made that the appellants were in possession.

25. On the other hand, the statements in the plaint, an affidavit of the plaintiff's agent one <NAME> dated 1st December 1924, the returns submitted under the Mines Act , and the letters Ex. A series and the other evidence on the record, oral and documentary, negative the position that the appellants wore in possession. The Subordinate Judge has drawn an adverse inference against the appellants for nonproduction of their accounts but we are unable to agree with him in his conclusions. In the result we allow the appeals, and set aside the decree complained of in so far as it is against the defendants other than defendant 1. The appellants will be entitled to their coats in this <ORG> as against the plaintiff-respondent, one hearing fee, which is to be divided equally between the appellants in the two appeals being allowed.

26. Any security, which the appellants may have deposited in pursuance of the order of this Court relating to stay of execution, will be returned to them.


PETITIONER: <NAME> Vs. RESPONDENT: <NAME> & ORS. DATE OF JUDGMENT: 17/10/1969 BENCH: <NAME>, K.S. BENCH: <NAME>, K.S. SHAH, J.C. CITATION: 1970 AIR 967 1970 SCR (2) 903 1969 SCC (3) 447 CITATOR INFO : R 1988 SC1340 (7) R 1988 SC2054 (8) ACT: Limitation Act , Art. 158- Limitation for setting aside award-Commencement of-Decide in 'Whatever Manner' he may think-Whether enables arbitrator to import personal knowledge-<ORG> exercising revisional powers-Discretion of <ORG> to interfere in appeal by special leave under Art. 136. HEADNOTE: Disputes between the appellant and the first respondent were referred to five arbitrators as per the agreement entered into between the parties. The agreement provided that the decision could be derived at by the arbitrators 'in whatever manner' they think. The arbitrators made their award, on the basis of their personal knowledge. The appellant filed a suit for passing a decree in terms of the award on November 1, 1955. Though the respondents had notice of the suit, they had no notice of the filing of the award into court. The respondent filed his written statement on February 3, 1956, challenging the validity of the award on certain grounds. While the first appellate court held that the arbitration agreement empowered the arbitrators to import their personal knowledge, the <ORG>, in revision held that it did not so empower, that the award was vitiated by legal misconduct, and that the objection to the award by the respondent was not barred by time. In appeal to this Court, HELD: (1) Article 158 of the Limitation Act , 1908, gives to the party 30 days time for applying to set aside an award from the date of the service of the notice of filing of the award. Since there was no such notice, the objection by the respondent was within time. [905 G-H] (2) Parties to an agreement of reference may include in it such clauses as they think fit, except those prohibited by law, but the phrase 'in whatever manner' they think does not mean that the arbitrators can decide the disputes on the basis of their personal knowledge. Further, arbitrators must act in accordance with the principles of natural justice, and inform the parties to the submission about the nature of their personal knowledge but in the present case, it was not done so. L906 F-G; 907 A-B, C-E] <NAME> v. <ORG>,  K. B. 240, referred to. (3) The decision of the <ORG> being eminently just, this Court will not interfere with it under Art. 136 of the Constitution, assuming that the <ORG>, in exercise of its revisional powers, could not have corrected the first appellate court's interpretation. JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1369 of 1966.

Appeal by special leave from the judgment and order dated September 11, 1962 of <ORG> in Civil Revision No. 653 of 1959.

<NAME>, <NAME> and <NAME>, for the appellant.

<NAME> and <NAME>, for the respondents. The Judgment of the Court was delivered by <NAME>, J. This appeal by special leave arises from an arbi- tration proceeding. The appellant, the 1st respondent and one <NAME> who died during the pendency of these proceedings referred their disputes to five arbitrators as per the written agreement executed by them on September 9, 1955. Arbitrators made their award on October 11, 1955. They duly served on the parties to the arbitration agreement, notice of making and significant award. The award was thereafter registered. On November 1, 1955 the appellant filed a suit in the court of <NAME> praying that the award in question be made a rule of the court and decree passed in accordance with the same. It is said that the notice taken in that suit could not be personally served on the defendants as they refused to accept the same. That fact was reported to the court by the process server as per his report dated 19-11-1955. Thereafter the defendants filed their written statement on February 3, 1956 wherein they challenged validity of the award on various grounds. They contended that the award was vitiated because of misconduct on the part of the arbitrators inasmuch as the arbitrators decided the disputes referred to them primarily on the basis of their personal knowedge. They also contended that the arbitration agreement was obtained from them by exercise of undue influence. Their further contention was that the subject matter of the dispute could not under law be referred to, arbitration in view of the provisions of U.P. Act 1 of 1951. It was also contended by them that the suit was barred by time.

The trial court accepted the contention of the defendants that the arbitrators were guilty of misconduct. Dealing with the issue of undue influence, it came to the conclusion that the arbitration agreement was not executed by the defendants according to their free will. But it held that the plea of undue influence was not made out. It upheld the contention of the defendants that the subject matter of the dispute could not have been referred to arbitration in view of the provisions of U.P. Act I of 1951.

In appeal the learned Civil Judge reversed the decree of the trial court. While agreeing with the trial court that the arbitrators had used their personal knowledge in deciding the disputes referred to them, that court held that under the terms of the agreement, it was open to the arbitrators to decide the disputes in question on the basis of their personal knowledge. Dealing with the question of the arbitrators' competence to decide the dispute, that court held that the question whether the dispute came within the scope of U.P. Act 1 of 1951 or not is a question of law and the same could have been referred to arbitration. It went further and held that as the defendants had not taken their objection. to the award within the time prescribed, the same could not have been entertained by the trial court.

<ORG> in revision differed from the appellate court on all the points mentioned above. It came to the conclusion that the arbitration agreement did not specifically empower the arbitrators to decide the disputes referred to them on the basis of their personal knowledge; they having utilized their personal knowledge in deciding the disputes, they were guilty of legal misconduct and consequently the award made by them is vitiated. It also came to the conclusion that the disputes in question could not have been referred to arbitration in view of the provisions of U.P. Act 1 of 1951. It overruled the decision of the appellate court that the defendants had not taken their objections to the award within the prescribed time. We may at this stage mention that the contention that the suit was barred by time was not pressed before the trial court or in any other court.

There is no basis for the finding of the appellate court that the objection taken by the defendants to the award was barred by time. As seen earlier, the suit to make the award a rule of the court was brought by one of the parties to the arbitration agreement and not by any arbitrator. The plaint filed does not disclose that the award given had been produced along with it. There was some controversy as _to whether that award was produced along with the plaint. There is no need to go into that question as we shall presently see. It is not said that along with the plaint copy, a copy of the award had been sent to the defendants. Nor is it said that notice of the suit sent to the defendants mentioned the fact that the award had been filed into court along with the plaint. Art. 158 of the Limitation Act , 1908 gives to party 30 days time for applying to set aside an award or get an award remitted for reconsideration from the date of the service of the notice of filing of the award. There is absolutely no proof in this case that a notice of the filing of the award into court had ever been given to the defendants. Hence the objections taken by the defendants to the award could not have been rejected on the round of limitation. Now coming to the question of misconduct on the part of the arbitrators, that allegation is founded on the fact that the arbitrators decided the disputes referred to them on the basis of their personal knowledge. That allegation has been accepted as true both by the trial court as well as the appellate court. In fact the award says :

"We gave our consideration to the entire dispute which is in full knowledge of us, the panchas".

Therefore there is hardly any room to contest the allegation that the arbitrators had decided the disputes referred to them primarily ,on the basis of their personal knowledge. Under these circumstances all that we have to see is whether the appellate court was right in concluding that under the arbitration agreement, the arbitrators had been empowered to decide the disputes referred to them on the basis of their personal knowledge.

The material portion of the arbitration agreement which is in Hindi translated into English reads thus :

"All the panchas and Sarpanchas are residents of village Keli Pargana Sarawa. The power is given to them that the said <NAME> and Sarpanch, whatever decision, in whatever manner will give in relation to our land described below, whatever land may be given to any party or whatever party may be decided to be the tenant of the entire land, whatever compensation they may decide to be given to any party, whatever decision they will give that will be final and acceptable and they will have the right to inform us of their decision, unanimous or of majority and get the same registered and we will fully comply with their decision."

This agreement does not empower the arbitrators either specifically or by necessary implication to decide the disputes referred to them on the basis of their personal knowledge. The recital in that agreement that the arbitrators may decide the disputes referred to them in "whatever manner" they think does not mean that they can decide those disputes on the basis of their personal knowledge. The proceedings before the arbitrators are quasi-judicial proceedings. They must be conducted in accordance with the principles of natural justice. The parties to the submission may be in the dark as regards the personal knowledge of the arbitrators. There may be misconceptions or wrong assumptions in the mind of the arbitrators. If the parties are not given opportunity to correct those misconceptions or wrong assumptions, ,-rave injustice may result. It is no body's case that the parties to the submission were informed about the nature of the personal knowledge, the arbitrators had and that they were given opportunity to correct any misconception or wrong assumption. Further in the present case there were as many as five arbitrators. It is not known whether the, award was made on the basis of the personal knowledge of all of them or only some of them. Arbitration is a reference of a dispute for hearing in a judicial manner. It is true that parties to an agreement of reference may include in it such clauses as they think fit unless prohibited by law. It is normally an implied term of an arbitration agreement that the arbitrators must decide the dispute in accordance with the ordinary law-see <NAME> v. <ORG>). That rule can be departed from only if specifically provided for in the submission. The appellate, court, in our opinion, has misread the arbitration agreement and hence it erroneously came to the conclusion that the arbitrators had been empowered to decide the dispute on the basis of their personal knowledge. It was contended on behalf of the appellant that in exercise of its powers under s. 115 of the Code of Civil Procedure, <ORG> could not have corrected the erroneous interpretation placed by the appellate court as to the scope of the arbitration agreement. We have not thought it necessary to go into that question as, in our opinion, the decision reached by <ORG> is an eminently just one. Hence we do not feel called upon in exercise of our discretionary power under Art. 136 of the Constitution to interfere with the decision of <ORG>. In view of our above conclusion, there is no need to go into the question whether the subject matter of the disputes could have been referred to arbitration.

In the result this appeal fails and the same is dismissed with cost.

Appeal dismissed.

V.P.S.

(1) 11951] K.B. 249.


CASE NO.: Appeal (civil) 8624 of 2002 Special Leave Petition (civil) 10315 of 2001 PETITIONER: M/s. Unique Butyle Tube Industries Pvt. Ltd. RESPONDENT: <ORG> & Ors. DATE OF JUDGMENT: 20/12/2002 BENCH: <NAME> & ARIJIT PASAYAT. JUDGMENT:

J U D G M E N T ARIJIT PASAYAT, J.

Leave granted.

The only question that falls for determination in this case is whether the proceedings for recovery initiated by <ORG> (hereinafter referred to as 'the <ORG>') under the Uttar Pradesh Public Monies (Recovery of Dues) Act, 1972 (in short 'the U.P. Act ') on 6.1.2001 are maintainable in view of Section 34 (2) of the Recovery of Debts Due to Bank and Financial Institutions Act, 1993 (in short 'the Act').

Factual position sans unnecessary details is as follows:

Certificate was issued under the U.P. Act for recovery of certain dues from the appellant for its alleged failure to comply with the terms and conditions of loan granted to it; similar failure was alleged by three Directors and three guarantors. On 14.2.2001 Citation for recovery was issued by the Tehsildar, Varanasi, for recovery of the alleged dues as arrears of land revenue. Appellant challenged the said action before <ORG> in CMWP No.13738 of 2001 on the ground that after the enactment of the Act, the proceedings were not maintainable. Reliance was placed on the provisions contained under Section 32(G) of the State Financial <ORG> Act, 1951 (in short 'the Financial Act ') to contend that no other proceeding is permissible to be taken under the Act. Reference was made to Sections 17 and 34 of the Act to substantiate his stand. Stand of the <ORG> before <ORG> was that alternative modes of recovery were prescribed under different statutes and one cannot stand on the way of the other mode. Choice was left upon to the <ORG> to act either under the Act or under the modes permissible under the Financial Act . Proceedings initiated under the U.P. Act were covered by the said Act. <ORG> of <ORG> on consideration of the rival submissions held that the language of Section 34(2) of the Act placed the position beyond controversy and concluded as follows:

"The choice is clearly left open to the Financial Corporation which may proceed under the D.R.T. Act or may proceed under the other modes of recovering the debts as are permissible under the S.F.C. Act , i.e. it can proceed under the provisions of the U.P. Public Money (Recovery of Dues) Act."

Judgment of <ORG> dated 27.4.2001 is under challenge.

In support of the appeal learned counsel for the appellant submitted that the field of operation so far as the Act is concerned, has been clearly delineated in <CITATION> . (2000 (4) SCC 406). Section 34 of the Act confers overriding effect vis--vis others statutes. The only exceptions to such overriding effect are enumerated in sub-section (2) thereof. Proceedings under the U.P. Act are not encompassed by the exceptions. On the contrary, the action permissible so far as Financial Act is concerned, can be spelt out from Section 32 (G) of the said Act.

In response, learned counsel for the <ORG> submitted that <ORG> case (supra) has no application to the facts of the case. Under the U.P. Act , there is no question of any adjudication of dues payable and once there is default, there is statutory empowerment to issue a certificate in terms of Section 3 of the said Act. With reference to the decision of this Court in <CITATION> (1980 (2) SCC 332), it was submitted that validity of the said provisions has been upheld by this Court and the procedure adopted in the present case has been held to be legally permissible. The authorized functionary can take action, the moment there is default and no adjudicatory process is involved. The procedure is not in conflict with any proceeding that can be taken under the Act. The statutory intention for enactment of the Act was to do away with the cumbersome procedures involved for recovery and provisions are not inconsistent with any provision of the U.P. Act , which in terms of Section 3(3) prohibits institution of a case for recovery of the sums due. Therefore, <ORG> was justified in its conclusion. In any event, according to him, the procedures under the Act are in pari material with those which can be taken under the Financial Act . So such a prescription has to be read into sub-section (2) of Section 34 of the Act by application of the principle known as casus omissus and the deficiency, if any, can be reconciled by purposive interpretation by reading the said statute as a whole, and finding out the true legislative intent.

In order to appreciate the rival submissions a few provisions throwing light on the controversy need to be noted.

Act:

"34: Act to have over-riding effect-

(1) Save as otherwise provided in sub-section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.

(2) The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Industrial Finance Corporation Act , 1948, the State Financial Corporations Act , 1951 , the Unit Trust of India Act , 1963 , the Industrial Reconstruction Bank of India Act , 1984 , the Sick Industrial Companies (Special Provisions) Act , 1985  and the Small Industries Development Bank of India Act , 1989.

Financial Act :

"32G: Recovery of amounts due to <ORG> as an arrear of land revenue. Where any amount is due to <ORG> in respect of any accommodation granted by it to any industrial concern, <ORG> or any person authorized by it in writing in this behalf, may, without prejudice to any other mode of recovery, make an application to <ORG> for the recovery of the amount due to it, and if <ORG> or such authority, as that <ORG> may specific in this behalf, is satisfied, after following such procedure as may be prescribed, that any amount is so due, it may issue a certificate for that amount to the Collector, and the Collector shall proceed to recover that amount in the same manner as an arrear of land revenue.] U.P. Public Moneys (Recovery of Dues) Act, 1972:

3. Recovery of certain dues as arrears of land revenue (1) Where any person is party

(a)........

(b)........

(c) to any agreement relating to a guarantee given by <ORG> or the <ORG> in respect of a loan raised by an industrial concern; or

d) to any agreement providing that any money payable thereunder to <ORG> or the <ORG> shall be recoverable as arrears of land revenue; and such person

(i) makes any default in repayment of the loan or advance or any instalment thereof; or

(ii) having become liable under the conditions of the grant to refund the grant or any portion thereof, makes any default in the refund of such grant or portion or any instalment thereof; or .................

(2) The Collector on receiving the certificate shall proceed to recover the amount stated therein as an arrear of land revenue.

(3) No suit for the recovery of any sum due as aforesaid shall lie in the civil court against any person referred to in sub-section (1).

(4) In the case of any agreement referred to in sub-section (1) between any person referred to in that sub-section and <ORG> or the <ORG>, no arbitration proceedings shall lie at the instance of either party for recovery of any sum claimed to be due under the said sub-section or for disputing the correctness of such claim:

Provided that whenever proceedings are taken against any person for the recovery of any such sum he may pay the amount claimed under protest to the officer taking such proceedings and upon such payment the proceedings shall be stayed and the person against whom such proceedings were taken may make a reference under or otherwise enforce an arbitration agreement in respect of the amount so paid, and the provisions of Section 183 of the Uttar Pradesh Land Revenue Act, 1901, or Section 287-A , of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, as the case may be, shall mutatis mutandis apply in relation to such reference or endorsement as they apply in relation to any suit in the civil court."

<ORG> case (supra) did not specifically deal with Section 34(2) of the Act. However, certain observations made in the said judgment are of relevance:

"20. We shall refer to Sections 17 and 18 in Chapter III of the RDB Act which deal with adjudication of the debt:

"17. Jurisdiction, powers and authority of Tribunals (1) A Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions.

(2) <ORG> shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a <ORG> under this Act.

18. Bar of jurisdiction On and from the appointed day, no court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority (except <ORG>, and <ORG> exercising jurisdiction under Article 226 and 227 of the Constitution) in relation to the matters specified in Section 17 ."

It is clear from Section 17 of the Act that the <ORG> is to decide the applications of the banks and financial institutions for recovery of debts due to them. We have already referred to the definition of "debt" in Section 2(g) as amended by Ordinance 1 of 2000. It includes "claims" by banks and financial institutions and includes the liability incurred and also liability under a decree or otherwise. In this context Section 31 of the Act is also relevant. That section deals with transfer of pending suits or proceedings to the <ORG>. In our view, the word "proceedings" in Section 31 includes "execution proceedings" pending before a civil court before the commencement of the Act. The suits and proceedings so pending on the date of the Act stand transferred to the <ORG> and have to be disposed of "in the same manner" as applications under Section

21. In our opinion, the jurisdiction of the <ORG> in regard to adjudication is exclusive. The RDB Act requires the <ORG> alone to decide applications for recovery of debts due to banks or financial institutions. Once the <ORG> passes an order that the debt is due, the <ORG> has to issue a certificate under Section 19(22) formerly under Section 19(7) to the Recovery Officer for recovery of the debt specified in the certificate. The question arises as to the meaning of the word "recovery" in Section 17 of the Act. It appears to us that basically the <ORG> is to adjudicate the liability of the defendant and then it has to issue a certificate under Section 19(22) . Under Section 18 , the jurisdiction of any other court or authority which would otherwise have had jurisdiction but for the provisions of the Act, is ousted and the power to adjudicate upon the liability is exclusively vested in the <ORG>. This exclusion does not however apply to the jurisdiction of <ORG> or of <ORG> exercising power under Articles 226 or 227 of the Constitution). This is the effect of Sections 17 and 18 of the Act.

Section 34 of the Act consists of two parts. Sub- section (1) deals with the over-riding effect of the Act notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than the Act. Sub-section (1) itself makes an exception as regards matters covered by sub-section (2). The U.P. Act is not mentioned therein. The mode of recovery of debt under the U.P. Act is not saved under the said provision i.e. sub- section (2) which is of considerable importance so far as the present case is concerned. Even a bare reading therein makes it clear that it is intended to be in addition to and not in derogation of certain statutes; one of which is the Financial Act . In other words, a Bank or Financial institution has the option or choice to proceed either under the Act or under the modes of recovery permissible under the Financial Act . To that extent, <ORG> conclusions quoted above were correct. Where <ORG> went wrong is by holding that proceedings under the U.P. Act were permissible. U.P. Act deals with separate modes of recovery and such proceedings are not relatable to proceedings under the Financial Act .

Since a plea of casus omissus for purposes of interpretation was urged, we think it necessary to deal with that plea also.

It is well settled principle in law that the <ORG> cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The first and primary rule of construction is that the intention of the Legislation must be found in the words used by the <ORG> itself. The question is not what may be supposed and has been intended but what has been said. "Statutes should be construed not as theorems of Euclid". Judge <NAME> said, "but words must be construed with some imagination of the purposes which lie behind them". (See <ORG> v. <NAME> 218 FR 547). The view was re-iterated in <CITATION> (AIR 1990 SC 981).

In D.R Venkatchalam and Ors. etc. vs. Dy. Transport Commissioner and Ors. etc. (AIR 1977 SC 842) it was observed that Courts must avoid the danger of apriori determination of the meaning of a provision based on their own pre- conceived notions of ideological structure or scheme into which the provision to be interpreted is somewhat fitted. They are not entitled to usurp legislative function under the disguise of interpretation.

While interpreting a provision the <ORG> only interprets the law and cannot legislate it. If a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary. [ <CITATION> . (2000 (5) SCC 515)]. `The legislative casus omissus cannot be supplied by judicial interpretative process. Language of Section 6(1) is plain and unambiguous. There is no scope for reading something into it, as was done in <CITATION> . etc. (1996 (3) SCC 88). <CITATION> . (1996 (10) SCC

619) the period was further stretched to have the time period run from date of service of <ORG> order. Such a view cannot be reconciled with the language of Section 6(1) . If the view is accepted it would mean that a case can be covered by not only clauses (i) and/or (ii) of the proviso to Section 6(1) , but also by a non-prescribed period. Same can never be the legislative intent.

Two principles of construction one relating to casus omissus and the other in regard to reading the statute as a whole appear to be well settled. Under the first principle a casus omissus cannot be supplied by the <ORG> except in the case of clear necessity and when reason for it is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the <ORG>. "An intention to produce an unreasonable result", said <NAME>, L.J., in <NAME> v. <NAME> (1966 1 QB 878), "is not to be imputed to a statute if there is some other construction available". Where to apply words literally would "defeat the obvious intention of the legislation and produce a wholly unreasonable result" we must "do some violence to the words" and so achieve that obvious intention and produce a rational construction. [Per Lord <NAME> in <NAME> v. I.R.C. (1966 AC

557) where at p. 577 he also observed: "this is not a new problem, though our standard of drafting is such that it rarely emerges".] Therefore, <ORG> conclusions holding proceedings under the U.P. Act to be in order are indefensible.

We may notice here that to strengthen his arguments, learned counsel for the appellant referred to the decision of this <ORG> in <CITATION> . (1998 (5) SCC 170). The said case related to Haryana Public Moneys (Recovery of Dues) Act, 1979 (in short 'Haryana Act'). With reference to certain observations in paragraph 8 of the said judgment, it was submitted that a process of adjudication is inbuilt, even when the Managing Director of the Corporation takes action. We notice that Section 3 of the Haryana Act is couched differently from Section 3 of the U.P. Act. Reference was made in the said case to Director of Industries's case (supra), and held that while upholding the validity of Section 3 of the U.P. Act, the <ORG> was not called upon to deal with the question as to whether the principles of natural justice were implicit in the said Section. We also do not think it necessary to go into that question.

The impugned order is set aside and the proceedings under the U.P. Act are quashed. It shall be, however, open to the <ORG> to take such action under the Act or the Financial Act as is legally available to it. The appeal is allowed without any costs.


JUDGMENT

1. This judgment will dispose of three appeals and two revisions, all arising out of the award given by <ORG> on 18th of January, 1961.

2. As a result of a collision in Chandigarh at about 3 P.M. on 7th of September, 1959, between an omnibus of <ORG> and the truck driven by <NAME> and belonging to <NAME>, <NAME>, who was an occupant of the bus, was killed while <NAME>, who was going on a cycle, received injuries. <ORG> awarded a sum of Rs. 35,840/-to the legal representatives of <NAME> and a sum of Rs. 600/- to <NAME>. According to the award, two-thirds of the total compensation, that is to say Rs. 24,293/-is made payable by the Punjab State on behalf of <ORG> and the balance of Rs. 12,147/- by <ORG> on behalf of the owner of the truck.

Against this award, the Punjab State has filed an appeal (F. A. O. No. 86 of 1961) while the legal representatives of the deceased have questioned the sufficiency of the sum awarded and have asked for enhancement of the compensation to Rs. 50,000/- for which they had laid a claim before the <ORG>, in the separate appeal which is F. A. O. No. 89 of 1961. <NAME>, <NAME> and <ORG> have filed an appeal (F. A. O. No. 193 of 1961) in respect of their liability which has been apportioned at one-third by the <ORG>. Civil Revision No. 617 of 1961 has been filed at the instance of the Punjab State against the compensation awarded to <NAME> (an appeal not being competent under Sub-section (2) of Section 110-D of the Motor Vehicles Act for the amount in dispute is less than Rs. 2,000/-), while Civil Revision No. 721 of 1961 by <ORG>, on behalf of <NAME>, is likewise directed against the liability imposed in respect of the injuries caused to <NAME>, on the truck owner.

3. So far as the facts are concerned, these do not appear to be much in dispute or doubt. The Punjab Roadways bus No. PNE 4350 started from the <ORG> end and after picking up fares, including <NAME>, from the New Secretariat, had just completed the last stretch of its route in Sector 16 when at the intersection of the roads leading to Sector 23 and the <ORG> it got struck by truck No. PNE-7324, coming at a fast speed from the side of the <ORG>. <NAME>, the driver of the bus, saw the truck coming from the side of the <ORG> when on his own showing he was still at a distance of 20 yards from the point of intersection. He still chose to rush through the crossing in the hope of getting clearance before the other vehicle passed that position. According to <NAME>, he was driving at a speed of seven miles per hour, having made a slop at <ORG> which is at a distance of about 50 yards from the crossing. It was a rainy day and the road was slippery. The truck was on the main road coming from the <ORG> side and according to the statement of <NAME>, the driver of the truck, its speed was 10 to 12 miles per hour. There can be no doubt that both the drivers of the bus and the truck have grossly minimised the speeds at which their vehicles were being driven.

According to the evidence which has been believed by <ORG>, the truck was travelling at a spend of 30 to 40 miles per hour while the omnibus was being driven at 15 or 20 miles per hour. The occupants of the bus have given evidence to the effect that it had not stopped at New Era School, the last stoppage being at the hospital. According to the finding of the tribunal which I accept without hesitation, the story with regard to the stoppage at New Era School is an improvement and must be put aside. It has been contended by the counsel for the State of Punjab that the accident was due entirely to the negligence of the truck driver whose business it was to stop dead when he saw the omnibus coming from the side of Sector 16. The case of the truck driver is that being on the main road he was entitled to proceed and the bus driver should have stopped before the crossing. Be that as it may, each of the two drivers acted according to his own expectations with the result that just before the omnibus had cleared, its back was struck by the truck and the impact was so tremendous that the omnibus was overturned. <NAME> who was sitting in the front seat was hurled out of the vehicle which was without any exit door and the bus fell on top of him. <NAME> was extracted and taken to the hospital where he died within an hour. <NAME> who was coming on a bicycle also received injuries.

4. In the claim proceedings before the <ORG> constituted under the Motor Vehicles Act , both the drivers of the Punjab Roadways and the truck blamed each other for the accident. The <ORG> apportioned the blame to both the drivers and fixed their liability at two-thirds and one-third respectively.

5. <NAME> and <NAME> were both travelling in the bus and their evidence is clear on the point that the bus did not stop anywhere near the crossing and it was travelling at an approximate speed of 20 miles per hour. The truck coming from the University side had been noticed by these witnesses at a distance of 45 to 50 yards from the crossing. The truck was coming from the main road and under the 7th clause of the "Driving Regulations" embodied in the Tenth Schedule of the Motor Vehicles Act, "tile driver of a motor vehicle shall on entering a road intersection, if the road entered is a main road . . . give way to the vehicles proceeding along that road . . . .". The truck was travelling at some speed and it was the clear responsibility of the driver of the omnibus to have at least slowed down. Obviously he made a desperate effort to make good the crossing before the truck reached there. I cannot agree to the suggestion of Mr. <NAME>, the learned counsel for the <ORG>, that the driver of the omnibus displayed only a lack of anticipation. I have no doubt in my mind that the driver of the omnibus was negligent and cannot be said to be guilty of a mere error of judgment. It was his business to have slowed down the vehicle as the truck was travelling on the main road and there was imminent danger of collision.

6. Though the driver of the truck was entitled to expect a degree of caution from the person driving the omnious, he could see that the bus did not show any sign of slowing down or stopping near the crossing. Even as a person driving on the main road, <NAME> cannot be exonerated of his duty altogether especially when the evidence points out to the effect that he was not driving on the left side of the road but actually in the middle of the road. The photographs taken at the scene of occurrence and the evidence of the expert shows that the driver of the truck made no attempt to swerve to avoid an impact with the bus. Drivers are not entitled to drive on the assumption that other users of the road will always behave with reasonable care. As pointed out by Lord <NAME> in a <ORG> case in <ORG> v. <NAME>, 1949 AC 155, at p. 173, "a driver is not, of course, bound to anticipate folly in all its forms, but he is not, in my opinion, entitled to put out of consideration the teachings of experience as to the form those follies commonly take.' It is the common experience that drivers sometimes behave unreasonably and strangely on occasions and may suddenly emerge out in a way which cannot be expected.

The driver of the truck in the present instance was alive to the dangerous possibilities of the situation inasmuch as on his own showing he saw the driver of the omnibus coming at a speed which he regarded as excessive. It behaved the driver of the truck in such circumstances to adopt caution for himself and slow down his vehicle. No doubt' the truck was loaded at the time but the evidence clearly points out that <NAME> was driving at the rate of 30 to 40 miles per hour and not 10 miles per hour as stated by him. He had left a brick-kiln a few minutes earlier and if he had been travelling at a speed of 8 to 10 miles an hour as asserted by him he could not have reached the crossing at the time when the accident took place. Moreover, if the truck was going at a crawling speed as is suggested by <NAME> R. W. 15, there could have been no collision at all as the vehicle would have been under control and capable of being brought to a stop instantly.

The accident speaks for itself and the loud thud with which the impact took place and which was heard by witnesses who came to the spot leaves no manner of doubt that the truck struck the omnibus when it was being driven at a consider-able speed, in the judgment of the <ORG>, the possibilities have been weighed very carefully and I have no hesitation in affirming its conclusion that drivers of both the vehicles were to be blamed, aS The truck driver was on the main road, his responsibility for the accident is somewhat less. The authority of <NAME> v. <ORG>, (1959) 3 All ER 609, relied upon by the <ORG> has been rightly applied in apportioning the liability.

In that case, a person riding a solo motor cycle emerged from a minor side road on to a major road and collided, at the junction of the two roads, with an omnibus which was travelling along the major road. The traffic on the major road was clearly visible from the side road from a distance of forty yards from the mouth of the side road. The driver of the motor cycle was driving at twenty miles an hour along the side road and when he approached the junction, he did not slow down but continued at the same speed, straight out on to the major road. The bus was travelling along the major road at a speed of not more than twenty miles an hour. The driver of the motor cycle was killed and in an action for compensation it was held that the possibility of danger was reasonably apparent and the bus driver was negligent in not taking the precaution of looking at the traffic in the side road as he approached it to see whether the motor cycle was still moving at twenty miles an hour and obviously intending to cross the major road. It was held by <NAME> that the responsibility should be apportioned as two-thirds to the motor cycle and one-third to the bus driver.

Where by the fault of two or more persons damage is caused the liability to make good the damage or loss shall be proportionate to the degree to which each person was at fault. The apportionment made by the <ORG>, in my opinion, appears to be reasonable and I have no reason to differ from this conclusion.

It may be well to point out that the appeal preferred by <NAME> and others (F. A. O. No. 193 of 1961) questioning the liability of the truck driver cannot be entertained having been filed after the statutory period of limitation.

Under Sub-section (1) of Section 110-D of the Motor Vehicles Act, a person aggrieved by an award of <ORG> may file an appeal within ninety days from the date of the award The award was made on 18th of January, 1961, and the appeal was filed on 26th of September. 1961. On behalf of the appellants, it is urged that the final award was made on 3rd of August. 1961, as some correction was made in the amount of costs. It is conceded that if no amendment had been made in the costs by the <ORG> this appeal would be barred by time. Admittedly, the slight amendment in the matter of costs was made not at the instance of the appellants in F. A. O. No. 193 of 1961, but suo motu.

The appeal filed on behalf of the truck owner being barred by time, the liability which has been fixed by the <ORG> on the truck owner cannot be disputed. In order to appreciate the point raised by we counsel for the <ORG>, however, I have discussed the responsibility which attached to the drivers of both the vehicles and on merits I have come to the same conclusion which has been reached by the <ORG>.

7. There now remains to discuss the question of the sums awarded by way of compensation. It is axiomatic to say that the basis of the action is the pecuniary loss suffered by the dependants in consequence of the death of the person involved in the accident. Nothing is to be paid by way of solatium and the fundamental basis of a claim is pecuniary loss suffered by the dependants as a result of the death of the deceased. In the oft-quoted words of Lord <NAME> in the <ORG> case in <NAME> v. <ORG>, 1942 AC 601, at page 607, "there is no question here of what may be called sentimental damage, bereavement or pain and suffering. It is a hard matter of pounds, shillings and pence, subject to the element of reasonable future probabilities."

It has to be seen how much the dependants have suffered by way of pecuniary loss by the death of <NAME>. The claimants are the parents of <NAME>, his wife and three minor children. <NAME>, who was 25 years at the time of his death, was a mechanical engineer drawing an aggregate salary of Rs. 360/- per mensem from his employers as a teacher. He was on the threshhold of his career and according to the evidence of the Principal he should have arisen quite high in the calling of his choice. There can be no certain or precise standard of computation of such loss. The numerous hazards and imponderables of life must bo set off against the expected benefits and advantages which the dependants have come to lose by the premature death of the deceased. Recently this matter came up for consideration of their Lordships of <ORG> in <CITATION> , AIR 1962 SC 1, and the position was summarised by Mr. Justice <NAME> in these terms:

"In calculating the pecuniary loss to the defendants many imponderables enter into the calculation. Therefore, the actual extent of the pecuniary loss to the dependants may depend upon data which cannot be ascertained accurately, but must necessarily be an estimate, or even partly a conjecture. Shortly stated, the general principle is that the pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever source comes to them by reason of the death that is, the balance of loss and gain to a dependant by the death must be ascertained." The principle adopted by the <ORG> in the light of these principles cannot be regarded as unreasonable or unjust. 8. In a very careful analysis the <ORG> has considered the claims of <NAME> and Smt. <NAME>, father and mother of the deceased. <NAME> widow and the three minor children. The widow has been allowed

Rs. 30/- per mensem for a period of 18 years on the basis that after the expiry of that period she would very probably be looked after by her children. In the case of the minor son <NAME>, he has been allowed an average sum of Rs. 30/-per mensem for a period of 18 years and a sum of Rs. 2,000/- for his marriage making an aggregate of Rs. 8,120/-.

In the case of two daughters likewise similar sums have been calculated till they attain the age of 18 years and allowances have been made for their marriages. Considering the record of longivity in the family, the father and mother have been allowed a maintenance of Rs. 40/- per month for a period of ten years. A sum of Rs. 600/ has been calculated to be the pecuniary loss suffered by <NAME>.

9. On a consideration of the entire material, I would readily uphold the method and calculation of the <ORG>. Intervention of an appellate Court in assessment of damages in such cases is called for only when the figure has been reached by application of some wrong principle of law, or the amount is so inordinately low or so inordinately high that it must be a wholly erroneous estimate of the damage. This is the principle laid down by Lord <NAME> in <NAME> v. <ORG>, 1951 AC 601, at p. 613. In 1942 AC 601, to which reference has been made, a similar principle was enunciated by Lord <NAME> at page 616 in these words:

"Where, however, the award is that of the judge alone, the appeal is by way of rehearing on damages as on all other issues, but as there is generally so much room for individual choice so that the assessment of damages is more like an exercise of discretion than an ordinary act of decision, the appellate court is particularly slow to reverse the trial judge on a question of the amount of damages".

There are also two decisions of this Court to the same effect: <CITATION> , 1959-61 Pun LR 683: (AIR 1959 Punj 297), and <CITATION> , 1960-62 Pun LR 571: (AIR I960 Punj 490).

Mr. <NAME>, for the appellant <ORG>, contends that the <ORG> erred in computing the quantum of compensation only till the minors had attained the age of 18 years. It is well to point out that the claimants themselves had asked for nothing beyond Rs. 50,000/- and no basis or method was at all indicated in the claim in support of the amount claimed. Any rational method which may be adopted would be open to some objections but it cannot be said that in the present instance the Claims <ORG> has been unreasonable or unjust to the claimants. Nor can there anything be said to reduce the amounts awarded to the claimants.

10. I would accordingly unhold the award of the <ORG> in all its various aspects: the appeals and revisions alike must fail and are dismissed with costs.