PETITIONER: <NAME> Vs. RESPONDENT: PARAS NATH DATE OF JUDGMENT: 27/09/1968 BENCH: <NAME>, K.S. BENCH: <NAME>, K.S. SIKRI, S.M. BACHAWAT, R.S. CITATION: 1970 AIR 971 1969 SCR (2) 297 CITATOR INFO : F 1970 SC1919 (2,6,8,9) R 1972 SC1910 (13) RF 1981 SC1284 (10) ACT: U.P. (Temporary) Control of Rent and Eviction Act 1947, ss. 3 and 7(F)--District Magistrate refusing permission to landlord to sue tenant for eviction--Commissioner in revision granting it--Landlord filing suit and obtaining decree--state Government thereafter revoking permission by order u/s 7(F)--Such order whether renders decree unenforceable, HEADNOTE: The appellant was a tenant of the respondent in respect of a shop in Agra, Uttar Pradesh. The respondent applied to the District Magistrate under s. 3(1) of the U.P. (Temporary) Control of Rent and Eviction Act , 1947 for permission to institute a suit against the appellant for evicting him from the shop. The application was rejected by the District Magistrate, but the Commissioner, by order under s. 3 (3 ), granted the permission. The appellant thereupon moved <ORG> under s., 7(F) of the Act, but it was only after the respondent had flied a suit and ,obtained a decree that <ORG> passed an order revoking the permission granted by the Commissioner. The first Appellate Court, in view of the order under 7(F) act aside the decree of the trial Court. However in second appeal <ORG>, relying upon a <ORG> decision of that Court in <CITATION> (1965) 1 All 545, decided in favour of the respondent. In appeal before this Court by. special leave, the question for consideration was whether a decree for eviction obtained in a suit instituted after obtaining the permission of the Commissioner under s. 3(3) of the Act becomes unenforceable if <ORG> acting under s. 7(F) of the Act revokes the permission granted by the Commissioner after the decree is passed. HELD: The order of the District Magistrate is by s. 3(1) specifically made subject to the order of the Commissioner in revision under s. 3 (3 ), but the Commissioner's order according to s. 3 (4 ) is final though subject to the order of <ORG> under s. 7(F) . There is no provision in the Act providing that a suit validly instituted after getting the required permission under s. 3 (1 ) ceases to be maintainable because of any order made by <ORG> under s. 7(F) . [305 G--H] Similarly there is no provision in the Act invalidating a decree passed after the Act came into force in a validly instituted suit. The finality or the force of a decree can be taken away by a statute, .but the Court will not readily infer that a decree passed by a competent Court has become unenforceable unless it is shown that a provision of law has specifically or by necessary implication made that decree unenforceable. [305 H--306 C-D] On an examination of the relevant provisions of the Act the conclusion must be that when the Commissioner sets aside the order passed by the District Magistrate granting permission to file a suit for ejecting a tenant, the order of the Commissioner prevails. If he cancels the permission granted by the District Magistrate, there is no effective permission left and the suit instituted by. the plaintiff without awaiting his decision must be treated as one filed without any valid permission by the District Magistrate. To this extent the decision in <NAME> and ant. v.<NAME>, (1958) A.L.J. 584 was correct. [305 D--F] Sup. C1/69--2 298 It follows that the <ORG> decision in <NAME> case to the extent it held that a suit filed by the landlord after obtaining the permission of the District Magistrate cannot become infructuous even if the Commissioner revokes the permission, was incorrect. [306 F] <NAME> case was however correctly decided in so far as it held that a suit validly instituted after obtaining a permission as required by s. 3(1) does not cease to be maintainable even if <ORG> revokes, after the institution of the suit, the permission granted. if <ORG> revokes the permission granted before the institution of the suit, then there would be no valid permission to sue. In other words <ORG>'s power to revoke the permission granted under s. 3(1) gets exhausted once the suit is validity instituted. [306 <CITATION> , (1965) 1, All. 545 and <NAME> and ant. v. <NAME>, (1958) A.L.J., p. 584; considered. <CITATION> , (1958) A.LJ., p. 724; <CITATION> , A.I.R. 1964 All. p. 210 and <NAME> and ant. v. <NAME> and anr., 1965 3 S.C.R., 218; referred JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1617 of 1968.

Appeal by special leave from the judgment and decree dated March 19, 1968 of <ORG> in Second' Appeal No. 2296 of 1961.

1. <NAME> and <NAME>, for the appellant. <NAME> and <NAME>, for the respondent. The Judgment of the Court was delivered by <NAME>, J. The question of law that arises for decision in this appeal by special leave is not free from difficulty. That question is whether a decree for eviction obtained in a suit instituted after obtaining the permission of the Commissioner under sub-s. 3 of s. 3 of the U.P. (Temporary) Control of Rent and Eviction Act , 1947 (to be hereinafter referred to as the Act) becomes unenforceable if the State Government acting under s. 7(F) of that Act revokes the permission granted by the Commissioner after the decree is passed ?

The appellant was a tenant of the respondent in respect of a shop in Balugani in Agra. On January 2, 1959, the respondent applied to the District Magistrate under s. 3(1) of the Act for permission to institute a suit against the appellant for evicting him from the shop in question. That application was rejected by the District Magistrate as per his order of July 9, 1959. The respondent took up the matter in revision to the Commissioner under sub-s. 2 of s.

3. The Commissioner reversed the order of the District Magistrate and granted the permission asked for on October 16, 1959. As against that order the appellant moved <ORG> under s. 7(F) on November 17, 1959. On January 1, 1960, the respondent served on the appellant a notice under s. 106 of the Transfer of Property Act. The appellant replied to that notice on January 6, 1960. In that reply he informed the respondent that he had already moved <ORG> to revoke the permission granted by the Commissioner. On February 13, 1960 the respondent instituted suit No. 115 of 1960 in <ORG>, Agra seeking the eviction of the appellant from the suit premises. The appellant filed his written statement in that case on May 7, 1960. Therein again he took the plea that the permission granted by the Commissioner is not final as he had moved the <ORG> to revoke the same. The suit was decreed by the learned <NAME> on November 2, 1960. The appellant went up in appeal as against that order to the Civil Judge, Agra. On January 27, 1961, <ORG> revoked the permission granted by the Commissioner during the pendency of the appeal. Relying on this order the Civil Judge of Agra allowed the appeal of the appellant on February 9, 1961. As against that decision the respondent went up in second appeal to <ORG>. <ORG> allowed the second appeal on 19th March 1968 following the <ORG> decision of the <ORG> in <CITATION> (1). This appeal is directed against that decision.

The Act was intended as a temporary measure as could be gathered from its title as well as the preamble. It is deemed to have come into force on the 1st day of October 1946 though it was passed in 1947. Under the Act as originally stood, the decision of the District Magistrate under s. 3 was neither appealable nor revisable. As per the amendments effected in 1952 a Limited power of revision was conferred on the Commissioner. By the Amending Act 17 of 1954, the power conferred on the Commissioner was enlarged and s. 7(F) was incorporated in the Act which says that:

"<ORG> may call for the records of any case granting or refusing to grant permission for the filing of a suit for eviction referred to in s. 3 ..... and make such order as appears to it necessary for the ends of justice."

The only sections in the Act material for the purpose of this appeal are ss. 3 and 7(F) . Section 3 reads thus.:

"Restrictions on evictions.--Subject to any order passed under sub-section ( 3 ), no suit shall: without the permission of the District Magistrate, be filed in any civil court against a tenant for his eviction from any accommodation, except on one or more of the following grounds:

(1) (1965) 1 A11. 545.

(a) that the tenant is in arrears of rent for more than three months and has ,failed to pay the same to the landlord within one month of the service upon him of a notice of demand;

(b) the at the tenant has wilfully caused or permitted to be caused substantial damage to the accommodation;

(c) that the tenant has, without the permission in writing of the landlord, made or permitted to be made any such construction as, in the opinion the court, has materially altered the accommodation or is likely substantially to diminish its value;

(d) that the tenant has created a nuisance or has done any act which is inconsistent with the purpose for which he was admitted to the tenancy of the accommodation, or which is likely to affect adversely and substantially the landlord's interest therein;

(e) that the tenant has on or after the 1st day of October, 1946, sub-let the whole or any portion of the accommodation without the permission of the landlord;

(f) that the tenant has renounced his character as such or denied the title of the landlord and the latter has not waived his right or condoned the conduct of the tenant;

(g) that the tenant was allowed to occupy the accommodation as a part of his contract of employment under the landlord and his employment has been determined.

Explanation. For the purposes of sub-

section (e) lodging a person in a hotel or a lodging-house shall not be deemed to be sub- letting.

(2) Where any application h:as been made to the District Magistrate/or permission to sue a tenant for eviction from any accommodation and the District Magistrate grants or refuses the permission, the party aggrieved by his order may within 30 days from the date on which the order is communicated to him, apply to the Commissioner to revise the order.

(3) The Commissioner shall hear the application made under sub-section (2), as far as may be, within six weeks from the date of making it, and he may, if he is not satisfied as to the correctness, legality or propriety of the order passed by the District Magistrate or as to the regularity of proceedings held before him, alter or revise his order, or make such other order as may be just and proper.

(4) The order of the Commissioner under subsection (3) shall, subject to any order passed.' by <ORG> under section 7 (F) be We have earlier quoted the relevant portion of s. 7 (F). Conflicting opinions were expressed by different Benches of <ORG> as to the scope of s. 3 , till the decision of the <ORG> in <NAME> case(x). The <ORG> held that a decree obtained in a suit for eviction instituted after obtaining the requisite permission will not become unenforceable even if <ORG> revoked, after the decree is passed, the permission granted, in exercise of its powers under s. 7(F) . Majority of the Judges in that case further held that once a suit is instituted after obtaining the permission of the District Magistrate, any further order made either by the Commissioner or <ORG> cannot affect the course of that suit or the decree passed therein. <NAME> the other Judge did not express any opinion on that question but even according to him in the appeal filed against the decree, the appellate court cannot receive in evidence the order made by <ORG> which means that the decree cannot be reversed on the ground that <ORG> had revoked the permission granted. The correctness of the <ORG> decision is challenged by the appellant in this appeal. In support of his interpretation of ss. 3 and 7(F) he placed reliance on the decision of <ORG> of <ORG> in <CITATION> (a). He also sought support from the decision of a Single Judge of that Court in <CITATION> (3). It is not necessary to refer to the various decisions of <ORG> on this question. Suffice it to say that in that Court there was serious cleavage of opinion on the question that we are considering in this appeal till the decision of the <ORG> in <NAME> case(x). We were given to understand that <NAME>, j. had doubted the correctness of the decision of the <ORG> and had requested the Chief Justice to constitute a larger Bench to consider the correctness of the decision in <NAME> case(1) but in view of the pendency of this appeal, the constitution of a larger bench was not considered necessary.

(1) (1965) 1 All. 545. (3) A.I.R. 1964 All p. 210. (2) (1958) A.L.J. 724.

The contention of Mr. <NAME>, the learned Counsel for the appellant was that the Act generally speaking,' has restricted the right of the landlord to evict his tenant, to one or other of the grounds mentioned in cls. (a) to. (g) of s. 3(1 ); but in order to meet any exceptional case, it is provided in s. 3 (1 ) that a suit for eviction may be instituted on any ground other than those mentioned in cls.

(a) to (g) if the permission of the District Magistrate is obtained; the order made by the District Magistrate is revisable both by the Commissioner as well as <ORG>; the only order that is final is that made by <ORG>.If a landlord chooses to institute a suit on the basis of the permission granted by the District Magistrate or the Commissioner without waiting for the decision of <ORG> he takes the risk; if <ORG> revokes the permission granted by the District Magistrate or the Commissioner then the suit must be deemed to have been instituted without permission and consequently not maintainable. Mr. <NAME> urged that if the decision in <NAME> case(1) is accepted as correct then so far as the tenant is concerned, generally speaking, he cannot invoke the powers of <ORG> under s. 7(F) because immediately after the decision of the Commissioner, if the same is in his favour, the landlord is likely to institute a suit for eviction and thus nullify the power of <ORG> under s. 7(F) . He urged that as s. 7(F) empowers <ORG> to revise the order made by the subordinate authorities whether the same is in favour of the landlord or the tenant we should not place an interpretation on s. 3 which would affect the power of <ORG> to do justice to the tenants for whose benefit the Act has been enacted.

On the other hand it was urged by Mr. <NAME>, learned Counsel for the respondent that the landlord has a right to sue for the eviction of his tenant under the provision of the Transfer of Property Act subject to the restrictions stipulated therein. That is a statutory right. The provisions contained in the Act to the extent they encroach upon the rights of the landlord either specifically or by necessary implication further control the rights of the landlord. In other respects the landlord's rights under the Transfer of Property Act remain unaffected. According to him the only restriction placed on the landlord in the matter of instituting a suit for eviction on grounds other than those mentioned in cls. (a) to (g) of s. 3(1) is to obtain the prior permission of the District Magistrate subject to the order made under sub-s. (3) of s. 3 by the Commissioner; once a suit is validly instituted in accordance with those provisions, no order of <ORG> can either interfere with the course of that suit or invalidate the decree obtained therein. He urged that if the position is as (1) 1965) 1 Ali. 545 contended by the. learned Counsel for the appellant, curious results are likely to follow. Section 7 (F) does not fix any period within which <ORG> must act. It can exercise its power under that provision at any time it pleases--may be after 10 years or 20 years; the power conferred on <ORG> is extremely wide as observed by this Court in Shri Bhagwan and anr. v. <NAME> and anr.(1). Therefore it can revoke the permission granted after the decree for eviction is confirmed by <ORG> or even <ORG> and thus make a mockery of the judicial process; this could not have been the intention of the legislature. According to Mr. <NAME> from the very scheme of the Act and from the very nature of the power conferred on <ORG>, it cannot be exercised after a suit is instituted after complying with the requirements of subs. (1 ) of s. 3 . His further contention was that on a proper construction of sub-s. ( 1 ) of s. 3 , it would be seen that the suit instituted after obtaining the required permission being a validly instituted suit, its progress cannot be interrupted; the permission required under s. 3 (1 ) is the permission of the District Magistrate subject to any order under s. 3(3) by the Commissioner; in other words the permission given by the District Magistrate is not final till affirmed by the Commissioner; till then it remains tentative; once the Commissioner affirms the same or grants the permission asked for it becomes final and thus amounts to a valid permission to sue; hence a suit filed on the basis of that permission is a validly instituted suit unless the permission granted was revoke by <ORG> before the institution of the suit. Proceeding further he stated that it is true that the order of the Commissioner though final yet it is subject to any order that may be passed by <ORG>; but s. 3 (1 ), the provision dealing with the permission to file a suit for eviction does not refer to the order under s. 7(F) ; it only speaks of the permission granted by the District Magistrate subject to the order of the Commissioner and not further subject to any orders made by <ORG>. In this connection he invited our attention to the fact that as against the order passed by the District Magistrate under subs. ( 1 ) of s. 3 , a revision petition can be filed before the Commissioner within 30 days of that order and not thereafter. The Commissioner has not even the power to condone the delay in filing the revision petition. Further under subs. (3) of s. 3 , the Commissioner is required to hear the application made under sub-s. (2) of s. 3 , as far as may be, within six week from the date of making it. All these provisions indicate that the legislature was of the opinion that the proceedings under s. 3 should be carded_on expeditiously and the decision of the Commissioner should be considered as final. According to Mr. <NAME> the question of granting or refusing to grant the permission under s, 3 are primarily to be (1)  3 S.C.R.218, dealt with only by the District Magistrate and the Commissioner. They are the only tribunals in the hierarchy of the tribunals constituted for that purpose. The power given to the <ORG> under s. 7(F) is merely a supervisory power. That is why no limitation is imposed on the exercise of that power either in the matter of time within which it should be exercised or the circumstances under which it can be exercised. Such a power according to him is a reserve power and therefore has to be exercised before the court's jurisdiction is invoked, He particularly laid emphasis on the fact that sub-s. (1) of s. 3 , the compliance of which is necessary before validly instituting the suit does not at all refer to an order under s. 7(F) . After examining the provisions of this Act, we are constrained to observe that the drafting of this Act leaves considerable room for improvement despite the fact that it was amended twice over. Though it was intended to be a temporary measure when it was originally enacted it has now reminded in the statute book for over 20 years and there is no knowing how long the same will continue to be in force. Therefore it is but appropriate that the provisions of this Act should be clear and unambiguous. From sub-s. (1 ) of s. 3 it is not possible to find out the contents of the powers of the District Magistrate. No guide-lines are laid down therein to regulate the exercise of the powers of the District Magistrate. It is not possible to find out from that provision under what circumstances the District Magistrate can grant the permission asked for and under what circumstances he can refuse the same. It is likely that different District Magistrates are exercising that power in different ways. One consideration may appeal to one District Magistrate and a totally different consideration may influence another District Magistrate. It would have been appropriate if the legislature had defined the scope of the powers of the District Magistrate or at least laid down certain guide-lines for regulating his discretion. Sub-s. (3 ) of s. 3 says that if the Commissioner is not satisfied as to the correctness, legality or propriety of the order passed by the District Magistrate, he may alter or reverse the order of the District Magistrate or make such other order as may be just and proper. It is not possible to find out on what basis the Commissioner can determine the correctness, legality or propriety of the order made by the District Magistrate. As seen earlier, no restrictions are placed on the powers of the District Magistrate in granting or refusing to grant the permission asked for under s. 3 (1 ). Therefore the only thing the Commissioner can do is to exercise his discretion in preference to the discretion exercised by the District Magistrate. Now coming to the power conferred on <ORG> under s. 7 (F), it would be seen that it is a power of wide amplitude. It can be exercised by it in any way it pleases. No restriction either as to the time within which it can be exercised or as to the circumstances under which it can be exercised is placed on <ORG>.Under these circumstances the anomalies pointed out by Mr.<NAME> as well as by Mr. <NAME> are inevitable. Therefore in construing this Act, no useful purpose will be served by taking into consideration the hardship to the parties. In whatever way we may construe ss. 3 and 7(F) hardship to one party or the other is inevitable. Neither Counsel suggested to us any interpretation which could steer clear of the anomalies pointed out at the bar. Therefore we have to fall back on the grammatical construction of sub-s. (1 ) of s. 3 and leave out of consideration all other rules of construction for finding out the intention of the legislature. Section 3(1) does not. restrict the landlord's right to evict his tenant on any of the grounds mentioned in cls. (a ) to (g) of that sub-section. But if he wants to sue his tenant for eviction on any ground other than those mentioned in those clauses then he has to obtain the permission of the District Magistrate whose discretion is subject to any order passed under sub-s. (3) of s. 3 by the Commissioner. These are the only restrictions placed on the power of a landlord to institute a suit for eviction of his tenant. If a landlord files a suit for the eviction of his tenant without obtaining the permission of the District Magistrate that suit is not maintainable but if he files a suit after obtaining the permission of the District Magistrate and if the Commissioner revokes the permission granted by the District Magistrate in a properly instituted application under s. 3(2) then the suit instituted by him will be considered as having been filed without the permission of the District Magistrate because s. 3 (1 ) in specific terms says that the permission given by the District Magistrate is subject to any order passed under sub-s. (3). In other words the permission given by the District Magistrate does not acquire any finality until either the period fixed for filing an application under sub- s. (2) of s. 3 expires and no application under that section was filed within that time or if an application had been filed within that time, the same had been disposed of by the Commissioner. The permission to file a suit for eviction assumes finality under s. 3 (1 ) once the Commissioner decides the revision petition pending before him. In fact sub-s. (4) of s. 3 says that the order of the Commissioner is final. It is true that that order despite the fact that it is final is subject to any order passed by <ORG> under s. 7(F) . There is no provision in the Act providing that a suit validly instituted after getting the required permission under s. 3 (1 ) ceases to be maintainable because of any order made by <ORG> under s. 7(F) . Similarly there is no provision in the Act invalidating a decree passed after the Act came into force in a validly instituted suit. Section 14 provides :--

"no decree for the eviction of a tenant from any accommodation passed before the date of commencement of this Act shall, in so far as it relates to the eviction of such tenant be executed against him 'as long as this Act remains in force except on any of the grounds mentioned in s. 3 :

Provided that the tenant agrees to pay to the landlord "reasonable annual rent" or the rent payable by him before the passing of the decree whichever is higher ."

This provision applies only to decrees passed before the date of the commencement of the Act. A decree of a <ORG> in a suit validly instituted is binding on the parties to. the same. It is true that the finality or the force of a decree can be taken away by a statute, but the <ORG> will not readily infer that a decree passed by a competent <ORG> has become unenforceable unless it is showy that a provision of law has specifically or by necessary implication made that decree unenforceable. No such provision was brought to our notice. On an examination o/the relevant provisions of the Act our conclusion is that when the Commissioner sets aside the order passed by the District Magistrate granting permission to file a suit for ejecting a tenant, the order of the Commissioner prevails. If he cancels the permission granted by the District Magistrate there is no effective permission left and the suit instituted by the plaintiff without awaiting his decision must be treated as one filed without any valid permission by the District Magistrate. To this extent we are in agreement with the decision of <NAME>, J. in <NAME> and anr. v. <NAME>). From this it follows that the <ORG> decision in <NAME> case(2) to the extent it held that a suit filed by the landlord after obtaining the permission of the District Magistrate cannot become infructuous even if the Commissioner revokes the permission, is incorrect. But we agree with the <ORG> that a suit validly instituted after obtaining a permission as required by s. 3 (1 ) does not cease to be maintainable even if <ORG> revokes after the institution of the suit, the permission granted. If <ORG> revokes the permission granted before the institution of the suit then there would be no valid permission to sue. In other words <ORG>'s power to revoke the permission granted under s. 3(1) gets exhausted once the suit is validly instituted. For the reasons mentioned above, this appeal fails and the same is dismissed. But in the circumstances of the case, we make no order as to costs.

R.K.P.S. Appeal dismissed.

(1) (1958) A.L.J., p. 584. (2) (1965) 1 All. 545,


JUDGMENT <NAME>, J.

(1) This judgment will dispose of Civil Revisions Nos. 458-D and 459-D of 1961.

(2) The revisions arise out of an application filed on July 15, 1959, before <ORG>, by <NAME> widow of <NAME> against <ORG> Respondent No. 1, <NAME>, truck driver, Respondent No. 2 and <ORG>, Respondent No. 3. According to the allegations of <NAME>, her husband <NAME> while driving a scooter on April 30, 1959, was knocked down by truck No. DLD-5628 belonging to <ORG> <NAME> was the driver of the truck at that time. It is alleged that <NAME> was an employee of <ORG>, and the accident occurred during the course of his employment. It is further stated that the above accident was due to reckless, rash and negligent driving of the truck by <NAME>. <NAME> died as a result of the injuries received by him on May 8, 1959. <ORG> was stated to be liable to pay compensation and damages to <NAME> because the truck was insured with that company. A claim of Rs. 50,000.00 was accordingly made by <NAME>.

(3) Written statements were filed on behalf of all the three respondents and they contested the application. The following issues were framed in the case :

(1)Whether it is nto a properly constituted <ORG> under section 110 of the M. V. Act ?

(2)Whether the injuries to <NAME> were caused by the negligence of the respondent No. 2, and whether the death of <NAME> occurred due to these injuries ?

(3)To what amount of compensation, if any, is the petitioner entitled, and from whom ?

(4)Whether the respondent No. 2 was driving the vehicle at the time of accident in course of employment of respondent No. 1 ?

(4) On September 8, 1960, an application was filed on behalf of <NAME> that the name of Respondent No. 3 be struck off as a party as the aforesaid respondent had taken grounds in the written statement which were nto covered by sub-section (2) of section 96 of the Motor Vehicles Act (hereinafter referred to as the Act). This application was resisted by Respondents I and 2 as well as by Respondent No. 3. Another application was filed by <NAME> petitioner, under Order 14 rule 5, Code of Civil Procedure praying that Issue No. 4 which arose out of the pleas raised by Respondent No. 3 might be deleted. This application too was resisted by all the respondents. <ORG> as per order dated September 24, 1960, held that <ORG> could become a party to the proceedings only if it was in a position to base its defense on one of the grounds mentioned in sub-section (2) of section 96 of the Act. It was further observed that as the pleas raised by <ORG> were nto covered by that sub-section, <ORG> could nto remain on the record as a party. The application of <NAME> for striking out the name of <ORG> from the list of respondents was allowed. Order was also made for the removal of the written statement of <ORG> from the record. It was further held that as Issue No. 4 arose out of the pleas taken in the written statement of <ORG> only, the said issue should be treated as deleted. Civil Revision 458-D/1961 has been filed by <ORG> against the above order.

(5) On February 14, 1961 <ORG> filed an application under section 151 of the Code of Civil Procedure for leave to defend the claim of <NAME> in the name of <ORG> This application was resisted by <NAME>. <ORG> as per order dated May 2, 1961 disallowed the above application. Civil Revision No. 459-D of 1961 is directed against that order.

(6) When the two revision petitions came up for hearing before <NAME>, C.J., he directed that the matter be referred to a larger Bench.

(7) In order to appreciate the points of controversy we may refer to the relevant provisions of the Act. Chapter Viii of the Act makes provision for the insurance of motor vehicles against third party risks. Section 94 makes insurance against third party risk compulsory, while section 95 provides for the requirements of policies and limits of liability with which a policy of insurance must comply. According to section 97 the insurer shall be under the same liability to the third party as the insured in case where the insured becomes insolvent. Section 96 deals with the duty of insurers to satisfy judgments against persons insured in respect of third party, risks. Sub-section (1) of that section provides that if, after a certificate of insurance has been issued in favor of the person by whom a policy has been effected, judgment in respect of such liability is obtained against any person insured by the policy, the insurer shall, subject to other provisions, pay to the person entitled to the benefit of the decree any sum nto exceeding the sum assured payable there under, as if he were the judgment debtor, in respect of the liability, together with the amount of costs and interest. Sub-section (2) of section 96 has a bearing and reads as under :-

"(2)No sum shall be payable by an insurer under subsection (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceedings, or in respect of any judgment so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely :- (2)That the policy was cancelled by mutual consent or by virtue of any provisions contained therein before the accident giving rise to the liability, and that either the certificate of insurance was surrendered to the insurer or that the person to. whom the certificate was issued has made an affidavit stating that the certificate has been lost or destroyed, or that either before or nto later than fourteen days after the happening of the accident the insurer has commenced proceedings for cancellation of the certificate after compliance with the provisions of section 105 ; or (B)that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:-

(F)a condition excluding the use of the vehicle.

(A)for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle nto covered by a permit to ply for hire or reward, or (B)for organized racing and speed testing, or (C)for a purpose nto allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or (II)a condition excluding driving by a named person or persons or by any person who is nto duly licensed, or by any person who has been dis-qualified for holding or obtaining a driving license during the period of disqualification; or (III)a condition excluding liability for injury caused or contributed to by conditions of war, civil war, rito or civil commotion; or (C)that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular."

(8) It is nto disputed before us that none of the grounds mentioned in clauses (a), (b) and (c) of sub-section (2) of section 96 exists in the present case.

(9) Bare perusal of the relevant part of sub-section (2), which has been reproduced above, makes it plain that an insurer, upon whom liability is sought to be fastened in respect of any amount regarding which legal proceedings are taken against the insured, has to be served with a notice of the proceedings through the <ORG>. The insurer on receipt of that notice has a right to be imp leaded as a party to the proceedings. The grounds, which the insurer can however take to defend the action in case the insurer is imp leaded as a party, have to be those confined to clauses (a), (b) and (c) of sub-section (2) of section 96 . It may also be mentioned that apart from the statute the insurer has no right to be made a party to the action by the injured person or the heirs of the deceased against the insured causing the injury. Sub-section (2) of section 96 , however, gives the right to the insurer to be made a party. The right is thus created by statute- and its scope and extent would necessarily be governed by the provisions of the statute. Dealing with sub-section (2) of section 96 of the Act, <NAME>, I, (as he then was) speaking for the <ORG>, observed in the case of <CITATION> , (1) :-

"To start with it is necessary to remember that apart from the statute an insurer has no right to be made a party to the action by the injured person against the insured causing the injury. Sub-section (2) of section 96 however gives him the right to be made a party to the suit and to defend it. The right therefore is created by statute and its content necessarily depends on the provisions of the statute. The question then really is, what are the defenses that sub-section (2) makes available to an insurer ? That clearly is a question of interpretation of the sub-section.

(6)Now the language of sub-section (2) seems to us to be perfectly plain and to admit of no doubt or confusion. It is that an insurer to whom the requisite notice of the action has been given 'shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely', after which comes an enumeration of the grounds. It would follow that an insurer is entitled to defend on any of the grounds enumerated and no others. If it were nto so, then of course no grounds need have been enumerated. When the grounds of defense have been specified, they cannto be added to. To do that would be adding words to the statute."

(10) Mr. <NAME> on behalf of <NAME> has argued that the insurer has a right to be imp leaded as a party only if the insurer takes up any of the defenses mentioned in clauses (a), (b) and (c) of sub-section (2) of section 96 of the Act. If the insurer does nto take those defenses the name of the insurer, according to the submission of Mr. <NAME>, would be liable to be struck out from the list of respondents. This contention, in our opinion, is nto well-founded. An insurer to whom notice under sub-section (2) of section 96 of the Act is given has a right to be imp leaded as party to the proceedings. The <ORG> at that stage is only concerned with the question of impleading the insurer as a party. It cannto at that stage compel the insurer to disclose his defense. It is only after the insurer is imp leaded as a party that he can be called upon to file his written statement. If the written statement discloses defense, which is nto covered by clauses (a), (b) and (c) of sub-section (2) of section 96 , the defense to that extent would be liable to be struck off. The insurer would, however, continue to remain a party to the proceedings.

(11) In the present case the insurance company was initially imp leaded as a respondent to the proceedings. Although the <ORG> was justified in striking off the defense of the insurance company to so far as it was nto covered by clauses (a), (b) and (c) of subjection (2) of section 96 , the <ORG>, in our view, was in error in striking off the name of the insurance company from the list of respondents in the case. Mr. <NAME> has referred to the case of <CITATION> , (2). In that case <ORG> of Bombay High Court (<NAME>, <NAME> and <NAME>) held :- "If the ex-parte decree was passed against the defendant and if <ORG> through the defendant satisfied the Court that <ORG> did nto have reasonable opportunity to defend the action, then the Court acting under its inherent jurisdiction would set aside the ex-parte decree, because although the defendant might have had sufficient cause to defend the action, if the defense was being conducted by <ORG> and the defendant was only a nominal defendant, then it is nto sufficient that the defendant should have had ample opportunity to defend the action, but <ORG> should also be given ample opportunity to defend the action.

(12) There is no question of setting aside an ex-parte decree at the instance of an insurer in the present case. In the circumstances, the observations made by the learned Judges, which were in the context of the facts of that case, cannto be of any material assistance in the present case.

(13) Reference has also been made by Mr. <NAME> to the case of <CITATION> (3). There is, however, nothing in that case which militates against the view we have taken in the matter.

(14) Mr. <NAME> on behalf of <ORG> has argued that the provisions of section 96 of the Act apply only to proceedings in a regular suit before a civil court and nto to proceedings before <ORG> (herein referred to as <ORG>). Reference in this context has been made to the case of <CITATION> narayanan and others, (4), wherein <ORG> of Madras High Court observed:- "Reading of Section 96 clearly show that it was nto intended to govern enquiry before <ORG>. Section 96 contemplates proceedings in a Court and nto a proceeding before a Tribunal."

(15) We have given the matter our consideration and are of the view that the provisions of section 96 of the Act are intended to govern all proceedings in which question arises about the liability of the insurer to satisfy judgment against persons insured in respect of third party risks. There is nothing in that section which restricts the applicability of its provision to proceedings in a regular suit in a civil court and which excludes from their ambit the proceedings before <ORG>. it may be mentioned that prior to the enactment of section 96 of the Act the remedy of the victim of the accident was only to proceed against the assured for damages and the insurer could nto intervene nor could the plaintiff implead the insurer as a defendant. The policy of insurance could be enforced only by the parties to the insurance and the third person being nto a party associated with the insurance could nto sue on its basis. Section 96 and the other provisions of Chapter Viii of the Act were enacted with a view to remove that difficulty and mitigate the harshness of the general law. It is, in our opinion, difficult to believe that the legislature intended to relieve the parties of that hardship only in proceedings in a regular suit and nto those before <ORG>. It is no doubt true that section 96 makes reference to <ORG> and to judgment and decree. In that respect we are of the view that the word "court" 'used in that section is comprehensive enough to include <ORG> and the words "judgment" and "decree" would include the award of that <ORG>. <ORG> have been established in pursuance of the provisions of Section 110 of the Act, and if it had been the intention of the legislature to exclude the proceedings before such <ORG> from the operation of section 96 a clear indication to that effect would have been given. It is significant that according to sub-section (2) of section 110 of the Act <ORG> shall have all the powers of <ORG> for the purpose of taking evidence on oath and of enforcing the attendance of witnesses and of compelling the discovery and production of documents and material objects and for such other purposes as may be prescribed. It has further been provided that <ORG> shall be deemed to be <ORG> for all the purposes of section 195 and Chapter xxxv of the Code of Criminal Procedure.

(16) In Civil Revision No. 459-D Mr. <NAME> has argued that <ORG> was in error in disallowing the application of the insurance company for leave to defend the claim of <NAME> in the name of the transport company. In this respect we find that the legal position, as laid down by their Lordships in the case of <ORG>. v. Captain <NAME> and others, (1) is that an insurer has the right provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defenses open to the assured can be urged by him. He can thus avoid all hardship, if any, by providing for a right to defend the action in the name of the assured. In the present case the insurance company mentioned in Para 6 of the application that there was a condition of policy between the insurance company and the transport company to allow the insurance company to defend the action in the name of the transport company. This allegation of the insurance company was denied by <NAME>. No effort was made by the insurance company to substantiate that allegation with the result that there is nothing on the record which might prove the existence of such a condition in the policy of insurance. There is also no ground of revision that the insurance company was denied the right to prove the existence of such a condition and that it should have been granted an opportunity for the purpose. In the circumstances, we find no sufficient ground to interfere with the order of the <ORG> by which the <ORG> disallowed the application of the insurance company to defend the claim in the name of the transport company.

(17) As a result of the above, we accept Civil Revision No. 458-D of 1961 and set aside the order of the <ORG> to the extent that the name of the insurance company was struck out from the list of the respondents. In other respects the aforesaid revision is dismissed. Revision No. 459-D of 1961 is dismissed to. Looking to all the facts, we leave the parties to bear their own costs of the two revisions.

(18) The parties are directed, through their counsel to appear before <ORG> on 22-9-69.


JUDGMENT <NAME>, J.

1. The plaintiff is the appellant. The appeal arises out of a suit instituted by the plaintiff for Rs. 21,000 due on a registered mortgage bond, dated 1st August, 1913. The sum secured by the mortgage was Rs. 5,000 and the debt was repayable in 7 years. The mortgagors are defendants 1 to 4.

2. The circumstances relating to the suit are these. In O.S. No. 59 of 1919 on the file of <ORG> one <NAME>, the late father of defendants 5 and 6 and the grandfather of defendants 7 and 8, obtained a money decree against the plaintiff's mortgagors, defendants 1 to 4, on 18th October, 1919. In E.P. No. 150 of 1919 the decree-holder asked for attachment and sale of the suit property. In Ex. A, the schedule attached to this Execution Petition, the decree-holder gave a list of five encumbrances said to be existing on the property. There is a note at the end of Ex. A which runs as follows:

These properties ought to be sold after issue of sale proclamation subject to the mortgage deed, dated 1st August, 1913 and executed in favour of <NAME> (the present plaintiff) for Rs. 3,000 - this is admittedly a mistake for Rs. 5,000. Except as regards item No. 2 specified in the certificate of the Registrar, that is the mortgage deed for Rs. 3,000, the remaining items Nos. 3, 4, 5 and 6 were executed fraudulently and without any consideration whatever.

3. A similar note appears at the end of the bidders' list also - see Ex. A-1. The sale of the property was fixed for 12th July, 1920, on which date the plaintiff put in a claim petition, E.A. No. 81 of 1920 (Ex. II), in which he stated that the suit mortgage bond of 1913 had been fully discharged by means of a registered sale deed, Ex. I, dated 10th September, 1919, for Rs. 8,000 under which he became the absolute owner of the property and that he has been in possession and enjoyment of the same ever since the sale - see paragraph 3 of Ex. II. This claim petition was dismissed on 12th July, 1920, because it was filed too late. On the same day, the property was purchased by <NAME>, the decree-holder in O.S. No. 59 of 1919. Ex. III is the sale certificate issued to him. The plaintiff did not institute a suit to establish his right to the property within a year from the date of the order, and so the order made against him became conclusive under Order 21, Rule 63, Civil Procedure Code. In 1923 <NAME>, the decree-holder-purchaser of the suit property, filed O.S. No. 131 of 1923 in the Berhampore District Munsif's <ORG> for recovery of mesne profits of the lands purchased by him in <ORG> auction. In this suit the plaintiff was the 10th defendant and he resisted it on the ground that some of the lands purchased by <NAME> were his property by virtue of the sale deed Ex. I. The learned District Munsif held that inasmuch as the plaintiff's claim based on the sale was dismissed and he did not bring a suit within a year to set aside the order, he lost his right wider the sale deed and was debarred from claiming' the property any longer - Ex. IV. This finding was upheld on appeal by the learned Subordinate Judge - Ex. V. Having lost his rights under the sale deed by his own default, the plaintiff instituted the present suit on 14th, October, 1926, to recover the money due under the mortgage bond, dated 1st August, 1913.

4. The plaintiff's argument is twofold. He argues first that the dismissal of his claim petition does not affect the suit mortgage and that, since the property was purchased by the decreeholder himself subject to the mortgage, what he purchased was only the equity of redemption and that therefore the contesting defendants are estopped from questioning the plaintiff's right as mortgagee under the suit mortgage. Next, he argues that, since as a result of the claim petition his sale deed became ineffectual and inoperative, the <ORG> should hold that the original mortgage to which the property was subject revived as a matter of law and that in equity he is entitled to sue on the same. The defendants argue (1) that, though the property was sold subject to the mortgage, the <ORG> did not as a matter of fact decide whether the mortgage subsisted or not, and that therefore the <ORG>-purchaser of the properties and those who, claim under him are not estopped from questioning its validity; and (2) that in law and also, as will appear from the contentions of the plaintiff himself, the suit mortgage became merged in and completely extinguished by the sale deed, Ex. I, which was valid when it was made and that therefore the plaintiff cannot invoke any equity at all in support of his contention that the suit mortgage should be enforced. The learned District Judge overruled the contentions of the plaintiff and dismissed the suit.

5. Dealing with the first contention of the plaintiff, it does not appear in the present case that the <ORG> made an order that the property should be sold subject to the suit mortgage. Under Order 21, Rule 62, Civil Procedure Code, "Where the <ORG> is satisfied that the property is subject to a mortgage or charge in favour of some person not in possession and thinks fit to continue the attachment, it may do so, subject to such mortgage or charge". There is nothing on the record to show that the executing <ORG> decided whether the suit mortgage subsisted or not and ordered attachment and sale subject to the mortgage as required under this provision. Under Order 21, Rule 66, "Where any property is ordered to be sold by public auction in execution of a decree, the <ORG> shall cause a proclamation of the intended sale to be made and the proclamation shall contain amongst other things the encumbrances to which the property is liable. "The Code makes a clear distinction between a case where the property is sold subject to a mortgage asunder Order 21, Rule 62 and a case in which the notice of an alleged encumbrance is given in the proclamation of sale as under Order 21, Rule 66. In the former case, the <ORG> is satisfied of the existence of the mortgage and sells only the judgment-debtor's equity of redemption and the purchaser has to redeem the mortgage. In the latter case, the purchaser buys the property with notice of the mortgage subject to such risks as the notice might involve; in other words, the executing <ORG> does not decide whether the mortgage subsists or not and the purchaser is not precluded from questioning the validity of the mortgage. In our opinion, the present case falls within the latter class and we are confirmed in this opinion by a comparison of the proclamation of sale with Form No. 56 given in the Civil Rules of Practice. We think that by the note appearing in the sale proclamation the decree-holder intended to give notice of the suit mortgage which he thought was prima facie valid and he gave also notice of other encumbrances which in his view were invalid. He is therefore, not precluded from questioning the validity of the suit mortgage. The so-called admissions of the decree-holder to the effect that the property has been sold subject to the suit mortgage, which are merely statements in the proclamation of sale and the bidders' list, cannot be made a ground for saying that the purchaser is liable under the mortgage unless it is proved by the plaintiff that the mortgage continued to exist in spite of the sale.

6. The next argument of the learned Advocate-General is that the sale deed proving unavailing as a result of the order passed in claim proceedings, the mortgagee-purchaser (the plaintiff) may in equity be allowed to fall back on his mortgage. This argument cannot be accepted for two reasons. In the first place, the facts of the case show that the plaintiff should not be allowed to invoke equity on his side and secondly, that the sale deed in spite of the order under Order 21, Rule 61, which became conclusive under Rule 63, does not become ineffective for all purposes in law.

7. Ever since the sale in question the plaintiff has always been relying on the sale deed in support of his claim to the property. In his claim petition under Order 21, Rule 58 (Ex. II) he stated with reference to the sale that he purchased the property under a registered sale deed, that it is supported by consideration and has been effected in partial discharge of the debt due to him under the registered mortgage bond, dated 1st August, 1913 (that is the suit bond) for Rs. 5,000 (see para. 3). Thus his case has been that the mortgage is discharged and that it has been supplanted by the sale. In the present suit also his attitude is the same. This is made clear in para. 4 of the plaint. If the plaintiff had pleaded in the suit adopting the previous averments of the defendants that the sale was fraudulent and without consideration and if that plea had been accepted it might be possible to find that the sale was a nullity which could not extinguish the mortgage. But he has always preferred to rest his case on the sale calling it a valid one. There is no case of estoppel here as in <NAME> v. <NAME> (1916) I.L.R. 39 All. 186. In that case the contesting defendants maintained that the two mortgage deeds, which were executed after the suit mortgage, were not binding on them, and then their Lordships observed that it does not appear to them "to be consistent with equity or good conscience" that they having successfully maintained that the two deeds were not binding should now claim the benefit of the transactions. The present claim of the plaintiff is in the teeth of his case in the claim petition as well as in the plaint. In our opinion the plaintiff cannot also plead that the order under Order 21, Rule 61, Civil Procedure Code, when it became conclusive under Rule 63, operated as an order in rem and so rendered void the sale deed upon which the plaintiff had based his claim when he moved the <ORG> under Order 21, Rule 58. The order precluded the plaintiff from proceeding upon the same cause of action against the attaching decree-holder or against the auction-purchaser whose title proceeded from the same attachment and sale, but otherwise it does not affect the validity of the sale deed; in other words, the mortgage is not revived by operation of this order. In this connection we may refer to the decisions in <CITATION> (1928) I.L.R. 52 Mad. 465 and <NAME> v. <NAME> (1928) I.L.R. 52 Mad. 465 relied on by the learned Advocate-General in support of his contention. In both these cases the subsequent transactions. - the settlement deed in <CITATION> (1928) I.L.R. 52 Mad. 465 and the two mortgage deeds in <NAME> v. <NAME> (1916) I.L.R. 39 All. 186 - executed after the suit morrgages were found invalid and not binding on the parties executing them and then the <ORG>s held that the plaintiffs were in equity entitled to fall back upon the prior mortgages. The same cannot be said with reference to the present case. The sale deed was a valid one when it was executed and in spite of the conclusiveness of the order under Order 21, Rule 63, as we have already pointed above, it has not become absolutely void. There is therefore no reason why the plaintiff should be allowed to fall back upon the previous mortgage. In our opinion the suit mortgage which formed the consideration for the sale deed was extinguished when the sale was effected. Under Section 101 of the Transfer of Property Act, where the owner of a charge or other encumbrance on immoveable property is or becomes absolutely entitled to that property the charge or the encumbrance shall be extinguished unless he declares by express words or necessary implication that it shall continue to subsist or such continuance would be for his benefit. The effect of the execution of the sale deed must therefore be taken to be the extinguishment of the suit mortgage unless there is an express of implied intention to keep the encumbrance alive. No such intention has been pleaded in this case, nor can it be found on the facts. We must therefore hold rejecting the arguments of the appellant that the suit mortgage in this case cannot be enforced inasmuch as it has become extinguished by the-sale of the property in favour of the plaintiff for which it formed the consideration. We have already shown that the sale deed has not been rendered void in the way contended for by the appellant. While rib doubt there is good authority for <ORG>s in equity allowing a party when one remedy has failed to take whatever other remedy lies ready to hand, <ORG>s can hardly go so far as to allow a party to revive a dead remedy merely because that best suits his convenience. Before the plaintiff can invoke equity in his favour he must show that there is a remedy available to him on which he can rely. This is precisely what he has been unable to do in this case.

8. For the above reasons we must hold that the appeal fails. It is dismissed with costs.