PETITIONER: <ORG> Vs. RESPONDENT: <NAME> AND ANR. DATE OF JUDGMENT18/08/1992 BENCH: <NAME>, <NAME> BENCH: <NAME>, <NAME> ANAND, A.S. (J) CITATION: 1993 AIR 1222 1992 SCR (3) 892 1992 SCC (4) 196 JT 1992 (4) 590 1992 SCALE (2)209 ACT: Bihar and Orissa cooperative societies Act, 1935- sections 40 and 48-Whether remedy under a specific provision excludes remedy under a general provision-held, where two remedies are available, both continue till the election of one of them, and action commenced accordingly-Section 40 does not therefore exclude section 48-Plurality of Remedies- Principle of election. HEADNOTE: During the tenure of respondent 1 as Depot Manager of <ORG>, a shortage of coal was detected. The appellant-Cooperative Union made a claim for the loss, and a reference was made to the Assistant Registrar, cooperative societies under section 48 of the Bihar and Orissa Cooperative Societies Act 1935. section 48(1)(c) deals with disputes between the <ORG>. and a past or present officer or agent of the <ORG>. Section 40 provides for investigation by the Registrar where upon an audit or enquiry such officer has been found guilty of misappropriation or similar acts. The Assistant Registrar in an enquiry under Section 48 absolved respondent 1. This was reversed by the Joint Registrar and an award made accordingly. <ORG> in a writ application under Article 226 by respondent 1 held that since the matter was covered by Section 40 , Section 48 could not apply and set aside the award. <ORG> relied on the maxim generalia specialibus non derogant. The claim under section 40 was rejected on the ground of limitation under second proviso to Section 40 which prescribe a period of six years. Allowing the appeal, this <ORG>, HELD : 1. Validity of plural remedies, if available under the law, cannot be doubted. Even if the two remedies are inconsistent, they continue for the person concerned to choose from, until he elects one of them, commencing an action accordingly. A matter which may attract Section 40 will continue to be governed by Section 48 also if the necessary conditions 893 are fulfilled. In the present case no steps under Section 40 were ever taken by the appellant. The provisions of Section 48 are available to the appellant for the recovery of the loss. [896C- <CITATION> .,  Supp. 2 SCC 215 and <CITATION> .,  1 SCR 186, followed. 2. The claim of the appellant against respondent 1 is clearly covered by Section 48(1)(c) and therefore was validly referred to the Registrar under Section 48 . [895G] 3. The six year rule of limitation in Proviso under Section 40(1) is limited for the purpose of Section 40 , and cannot govern a reference under Section 48 . Even otherwise, on facts the claim is not barred by limitation. [897B] Purnea Ministerial Government Officers' Co-operative <ORG> Ltd. v. <NAME>, (1969) 11 BLJR 969, distinguished. Matter remitted to the High <ORG> for decision on the remaining issues. [897F] JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3047 of 1992.

From the Judgement and Order dated 30.7.1984 of <ORG> in Civil Writ Jurisdiction Case No. 373 of 1977.

<NAME> and <NAME> for the Appellant. <NAME> for the Respondents.

The Judgement of the Court was delivered by SHARMA, J. The question arising in this case is whether a matter, if it comes within the scope of section 40 of the Bihar and Orissa Co-operative Societies Act , 1935 (hereinafter referred to as the Act) has to be excluded from the purview of Section 48 of the Act.

2. Special leave is granted..

3. The facts relevant for the decision of this appeal are in a short compass. The respondent No.1 was Depot Manager under the appellant <ORG> and during his tenure as such, a shortage of coal was detected. A claim was accordingly made for the said loss by the appellant and a reference was made to the Assistant Registrar, Co-operative Societies respondent No.3, under Section 48 of the Act. The Assistant Registrar absolved the respondent No.1 from the alleged liability and an appeal was filed by the appellant under Section 48(6) of the Act before the Joint Registrar, Co-operative Societies, respondent No.2, who are accepted the appellant's case, rejected the defence and made an award accordingly. This was challenged before <ORG> by a writ application under Article 226 of the Constitution of India. <ORG> held that since the matter was covered by the provisions of Section 40 , Section 48 could not apply. Consequently the award was held to be illegal. So far section 40 was concerned, it was pointed out that the claim had to be rejected on the ground of limitation. Thus without considering the other questions raised by the parties, <ORG> allowed the writ petition by the impugned judgement which is under challenge in the present appeal.

4. It has been contended on behalf of the appellant that the provisions of Section 48 are wide enough to embrace the dispute which has been the subject matter of the present case and they cannot be given a narrow interpretation so as to exclude their application to cases which may also be covered by Section 40 . In reply reliance has been placed on behalf of the respondent No.1 on the decision in Purnea Ministerial Government Officer's Co-operative Society Ltd.v. <NAME>, (1969) B.L.J.R. Vol. 11 969 which has found favour with <ORG>.

5. Section 40 pertaining to surcharge, provides that if as a result of an audit or inquiry it appears to the Registrar that any person who has taken part in the organisation or management of the society or any past or present officer of the society has either made a payment contrary to law or has been guilty of misappropriation or of having committed similar acts detailed therein, the Registrar may inquire into the matter and make an order requiring him to contribute an appropriate sum by way of compensation to the assets of the society. The second Proviso to sub-section (1) of the said section says that no such order shall be passed in respect of any act or ommission which had occurred more than six years earlier. The provisions of sub-section (1) of Section 48 (omitting the explanations which are not relevant for the present issue) dealing with Disputes are in the following terms:

"(1) If any dispute touching the business of a registered society (other than a dispute regarding disciplinary action taken by the society or its managing committee against a paid servant of the society) arises-

(a) amongst members, past members, persons claiming through members, past members or deceased members, and sureties of members, past members or deceased members, whether such sureties are members or non-members; or

(b) between a member, past member, persons claiming through a member, past member or deceased member, or sureties of members, past members or deceased members, whether such sureties are members or non- members and the society, its managing committee or any officer, agent or servant of the society; or

(c) between the society or its managing committee and any past or present officer, agent or servant of the society; or

(d) between the society and any other registered society; or

(e) between a financing bank authorised under the provisions of sub-section (1) of Sec. 16 and a person who is not a member of a registered society; such dispute shall be referred to the Registrar: Provided that no claim against a past member or the estate of a deceased member shall be treated as a dispute if the liability of the past member or of the estate of the deceased member has been extinguished by virtue of Sec. 32 or Sec. 63". The claim of the appellant against the respondent No.1 is clearly covered by clause (c) of sub-section (1) above and, therefore, could have been validly referred to the Registrar under Section 48 . The argument, however, is that since the matter is covered by Section 40 , Section 48 should be held to be inapplicable. <ORG> agreed and made the following observations:-

"It is well-known proposition of law that when a matter falls under any specific provision then if must be governed by that provision and not by general provisions (Generalia specialibus non- derogant)".

<ORG> has in its judgement assumed that whenever a specific remedy is made available in law the other remedy, more general in nature, necessarily gets excluded.

6. Validity of plural remedies, if available under the law, cannot be doubted. If any standard book on the subject is examined, it will be found that the debate is directed to the application of the principle of election, where two or more remedies are available to a person. Even if the two remedies happen to be inconsistent,they continue for the person concerned to choose from, until he elects one of them, commencing an action accordingly. In the present case there is no such problem as no steps under Section 40 were ever taken by the appellant. The provisions of Section 48 must, therefore, be held to be available to the appellant for recovery of the loss.

7.Our view that a matter which may attract Section 40 of the Act will continue to be governed by Section 48 also if the necessary conditions are fulfilled, is consistent with the decision of this Court in <CITATION> ,  Supp. 2 S.C.C. 215, arising under the Delhi Co-operative Societies Act , 1972. The two Acts are similar and Sections 40 and 48 of the Bihar Act and Sections 59 and 60 of the Delhi Act are in pari materia. The reported judgement followed an earlier decision of this Court in <CITATION> - operative Marketing Society Ltd.,  1 S.C.R. 186. We accordingly hold that <ORG> was in error in assuming that the application of provisions of Section 48 of the Bihar Act could not be applied to the present case for the reason that Section 40 was attracted.

8. So far the question of limitation is concerned it is true that as in the Delhi Act , a period of six years was fixed under the Bihar Act also by second Proviso under Section 40 (1), which reads thus:-

"Provided further that no order shall be passed under this sub-section in respect of any act or omission mentioned in clauses (a), (b), (c) or (d) except within six years of the date on which such act or omission occurred."

It will be observed that the six years rule of limitation, however, is limited for the purpose of section 40 , and cannot govern the reference under section 48 . The relevant provision of section 48 is to be found in the Proviso to section 48(1) which has been quoted above. For determining its impact on the present case it is necessary to examine the Proviso closely. Firstly, both the Proviso and section 63 of the Act are concerned only where the claim is against a member. Even if the Proviso be assumed to govern a dispute between the society and its past or present officer or servant it cannot come to the aid of the present respondent No.1 because he was dismissed from service on 15.10.1966 and he was directed to deposit the disputed amount within 30 days therefrom. The dispute was referred for adjudication under section 48 on 12.12.1966 and the reference was registered as Award Case No. 25 of 1968 on 03.08.1968. Thus all these steps were taken within a period of two years. No reliance, therefore, can be placed on either section 32 or 63. The case of <ORG> (<ORG>) is clearly distinguishable. The respondent there was a member of the <ORG> in question and had taken a loan which was the subject matter of the dispute. As was pointed out by <ORG> the claim had stood barred by limitation and, therefore, it was held that the reference was incompetent in view of the Proviso to section 48(1) . <ORG> in the present case was, in the circumstances, not entitled to rely on this decision and its conclusions must be set aside as being erroneous in law.

9. However, since in the judgement it is stated that several other questions were also raised on behalf of the respondent No.1 (who was the writ petitioner) which remained undecided, the case requires reconsideration by <ORG> on the remaining points. Accordingly the impugned judgement is set aside and the writ petition is remitted to <ORG> for fresh decision in accordance with the observations in the present judgement. The appeal is allowed but in the circumstances without costs.

U.R. Appeal allowed.


JUDGMENT <NAME>, J.

1. The defendant appeals from a decree awarding the plaintiff possession of 1 acre and 32 cents of land comprised in A schedule with mesne profits. The dispute is between rival purchasers of the same property, in mortgage suits brought by the first and second (simple) mortgagees, without impleading each other. The following are the material facts. <NAME>, the owner of properties in A and B schedules, mortgaged them to the defendant on 21st July, 1905. On 4th November, 1905, he mortgaged A schedule properties together with 19 cents of other land to one <NAME>. <NAME>'s(the second mortgagee's)heirs sued the mortgagor in O.S. No. 601 of 1914. By Order 34, Rule 1 they were not required to join the first mortgagee'in his suit and he was not joined accordingly, though they must have known that there was a first mortgage on the A schedule property, as it was registered. The 19 cents of land which was not included in the first mortgage was sold first and a part of the debt was realised. The decree-holders seem not to have taken any further steps to execute the decree for a considerable time against A schedule property owing probably to the fact it was subject to a prior mortgage. In this state of affairs the defendant brought his suit on the first mortgage in O.S. No. 274 of 1917 without impleading the second mortgagee and obtained a decree and in-execution bought the properties in A and B schedules himself on 21st October, 1918 and obtained possession in January, 1919. The plaintiff obtained a transfer of the decree in O.S. No. 601 of 1914 from <NAME>'s heirs and brought the A schedule property again to sale and purchased it himself in January, 1924. As he could not get possession he brought this suit in 1924. Thus A schedule property is the only property common to both mortgages and in respect of it the plaintiff is a second mortgagee-purchaser who purchased in a suit first instituted, the purchase being later than that of the defendant; and the defendant is a first mortgagee-purchaser who purchased in a later instituted suit, the purchase being earlier than that of the plaintiff.

2. The plaintiff prayed for unconditional possession of A schedule property or in the alternative for permission to redeem A and B schedule properties on payment of the first mortgage debt. The defendant offered to redeem the plaintiff's second mortgage and if the Court should hold that the plaintiff is entitled to retain the property on redeeming the first mortgage he claimed the value of improvements effected on A schedule property. As both parties wanted to keep their purchase and for that purpose were willing to redeem each other, the real question was which of them had the better title to the land and on what terms, if any, he should redeem the other. The second issue sufficiently covered this point and the third issue raised the question of defendant's improvements.

3. At the trial the plaintiff, no doubt on advice, gave up the prayer for alternative relief, i.e., possession on condition of redeeming the defendant's first mortgage debt and as the <ORG> says elected to proceed to trial on the footing that he is entitled to unconditional possession of the property. The second issue which raised the question whether the plaintiff or the defendant was entitled to redeem the other and keep the property was thus dropped and with it the third issue was also dropped. The only issue left was whether the plaintiff was entitled to unconditional possession.

4. Both the Lower Courts have answered this question in the affirmative on the authority mainly of <CITATION> (1915) I.L.R. 40 M. 77 at 86 and 87 : 30 M.L.J. 347. The <NAME> held that the plaintiff has for the present become entitled to the property in A schedule subject of course to the mortgage in favour of the defendant, if any. The meaning and effect of this is that the defendant is not entitled to use his mortgage as a shield to protect his possession and that though the plaintiff as second mortgagee has only rights to the property subject to the first mortgage, the latter must enforce such rights as he may still have by another suit and in the meanwhile give up possession. The learned Subordinate Judge relying on certain passages in <CITATION> (1915) I.L.R. 40 M. 77 at 86 and 87 : 30 M.L.J. 347 took the same view. He concluded that the only right which the defendant as first mortgagee has now got is to again sue on his mortgage impleading the plaintiff and that he is not entitled to keep possession as against him. As any further suit on the first mortgage of 1905 would be time-barred after 12 years thereafter the result of the above decision is that the first mortgagee is totally deprived of all rights under his mortgage, notwithstanding their formal because futile reservation. And this for the single reason that he did not in his suit implead the second mortgagee.

5. In view of the numerous decisions of this Court on similar facts, V enkatanarasammah v. <NAME> (1879) I.L.R. 2 M. 108, <CITATION> (1900) I.L.R. 24 M. 171 : 10 M.L.J. 347, <NAME> v. <NAME> (1902) I.L.R. 26 M. 486, <CITATION> (1909) I.L.R. 32 M. 485 : 19 M.L.J. 728 as to the preferential title between competing purchasers in different mortgage suits I should have had no difficulty in deciding this case if it were not that opposite opinions have been expressed by two Benches of this Court as to the soundness of some of the above decisions by reason of the Full Bench decision in <CITATION> (1911) 21 M.L.J. 213 (F.B.) which laid down four general propositions as established by the decisions. In <NAME> v. Sadagopa-chariar (1911) 22 M.L.J. 129 a Bench consisting of <NAME> and <NAME>, <ORG>., considered that the Full Bench decision left untouched the principle of the above cases that the first purchaser is on a question of preferential title entitled to hold his possession against subsequent purchasers and the principle established by other cases that the right of puisne mortgagees who have been excluded from suits on prior mortgages is just what it would have been if they had been included, i.e., to redeem the prior mortgage and then either to proceed to sale for the amount due on both mortgages or if the property has already been sold in their own suit to hold it unless the purchaser in the prior mortgagee's suit, if he is the earlier purchaser and wants to keep his purchase, pays off both mortgages. <CITATION> (1915) I.L.R. 40 Mad. 77 : 30 M.L.J. 347 another Bench consisting of Coutts Trotter and <NAME>, <ORG>., dissented from <CITATION> (1911) 22 M.L.J. 129 and considered that the Full Bench decision must be taken to have disapproved of <NAME> v. <NAME> (1879) I.L.R. 2 Mad. 108, Muhammad Usan Row than v. <NAME> (1900) I.L.R. 24 M. 1714 : 10 M.L.J. 347 and <NAME> v. <NAME> (1902) I.L.R. 26 M. 486 and that these decisions must not be followed and laid down seven rules to determine the rights of two simple mortgagees suing separately each on his own mortgage. The remarks at pages 86 and 87 of Justice <NAME>'s judgment are those relied on by <ORG> for their decision. I do not propose to enter, more than is necessary to decide this case, into the general aspects of this controversy about the right of puisne mortgagees who have not been impleaded in the prior mortgagee's suit to bring suits for sale subject to prior encumbrances.

6. <CITATION> (1911) 21 M.L.J. 213 (F.B.) and <NAME> v. venkatasamy Chettiar (1915) I.L.R. 40 Mad. 77 : 30 M.L.J. 347 the contest was between a mortgagee on one side and a purchaser on a prior mortgage on the other. <CITATION> (1911) 21 M.L.J. 213 (F.B.) the purchaser on a prior simple mortgage sued a subsequent usufructuary mortgagee for possession on default of the latter redeeming the prior mortgage. The opinion of the Full Bench was that the usufructuary mortgagee could not be turned out of possession by a purchaser in a suit, to which he was not a party. The language of the reasoning and, of the four propositions established was quite general and not limited to the facts of the case.

7. In <NAME> v. Venkaiasamy Cheltiar (1915) I.L.R. 40 Mad. 77 : 30 M.L.J. 347 a third simple mortgagee sued the purchaser in a suit on a second simple mortgage who had paid off a first simple mortgage, for sale. The actual decree of <ORG> which was confirmed by <ORG> was for sale free of all encumbrances, unless the defendant (purchaser) redeemed the plaintiff (2nd mortgagee). But the discussion and opinions were not limited to the facts and in fact the judgment of <NAME>, J., is mostly devoted to a criticism of the observations in <CITATION> (1911) 22 M.L.J. 129 and the cases relied on in it. That case <CITATION> (1911) 22 M.L.J. 129 however was not between mortgagees or between a mortgagee and a purchaser but like the present case a claim for undisturbed possession by an earlier first mortgagee-purchaser who had got possession against a later second mortgagee-purchaser. It was held that the plaintiff as earlier purchaser who had been put into possession could not be disturbed by the later second mortgagee-purchaser whose only right was to redeem the prior mortgage and then to sell the property for the amount of both first and second mortgages. Though the language employed in these three decisions and the criticism of the earlier by the later was perhaps unavoidably more general than the facts of each case necessarily demanded, each case is authority only for what it actually decides. As <NAME>, J., said in <CITATION> (1921) 41 M.L.J. 399 at 406:

They (the <NAME>) naturally took full advantage of the general and broad expressions in favour of their respective contentions, found in the numerous cases quoted by them on the legal questions involved. Even learned Judges (if I may say so with respect) have been naturally unable to lay down the rules of law governing these questions in judgments pronounced by them in particular cases with all the necessary qualifications and limitations which would have to be applied to those rules if additional facts and circumstances of a special nature besides those appearing in the particular cases in which the decisions were given were involved therein.

8. The present case is exactly similar in principle to <NAME> v. <NAME> (1879) I.L.R. 2 M. 108, <CITATION> (1900) I.L.R. 24 M. 171 : 10 M.L.J. 347 <NAME> v. <NAME> (1902) I.L.R. 26 M. 486, <CITATION> (1909) I.L.R. 32 M. 485 : 19 M.L.J. 728 and <CITATION> (1911) 22 M.L.J. 129. In all these cases the contest was for possession between rival purchasers of the mortgaged property in two successive mortgage suits from each of which the other mortgagee was excluded. In all of them the earlier purchaser was held entitled to the property whether he purchased in the prior mortgagee's or puisne mortgagee's suit. In <NAME> v. <NAME> (1879) I.L.R. 2 M. 108 and <CITATION> (1900) I.L.R. 24 M. 171 : 10 M.L.J. 347 <CITATION> (1909) I.L.R. 32 M. 485 : 19 M.L.J. 728 and <CITATION> (1911) 22 M.L.J. 129, the purchase in the prior mortgagee's suit was earlier. In <NAME> v. <NAME> (1902) I.L.R. 26 M. 486 the purchase in the puisne mortgagee's suit was earlier. In <NAME> than v. <NAME> (1900) I.L.R. 24 M. 171 : 10 M.L.J. 347 and <CITATION> (1911) 22 M.L.J. 129 though the earlier mortgagee-purchaser had been nominally impleaded in the suit in the later mortgage, the purchase in the latter suit was subject to the rights of the prior mortgages which were not determined in that suit and hence the contest between the purchasers in the third suit. In the majority of cases even in the third suit the rights after purchase -on the footing of the rival mortgages were not determined but the question determined was confined to who had the better title by purchase. Only in one case, <CITATION> (1900) I.L.R. 24 M. 171 : 10 M.L.J. 347, was it held that though the earlier purchaser had the better title, he could hold the property only on default of the later purchaser redeeming the earlier mortgage. In the other cases it was found that the form of the suit which was in ejectment precluded the real dispute between the parties being determined, i.e., as to the order of mutual redemption of the mortgages and the consequence of default. The present is another instance in which though the suit as originally framed might have been used to determine the rights of the parties on their several mortgages, the form has been deliberately so limited by the plaintiff as to make it impossible to decide anything beyond the question whether the plaintiff is entitled to unconditional possession.

9. Having regard to the question before <ORG> and the language employed by the learned Judges with regard to the above decisions, I am unable to agree with the opinion expressed in <CITATION> (1915) I.L.R. 40 M. 77 : 30 M.L.<NAME> 347 that <NAME> v. <NAME> (1879) I.L.R. 2 M. 108 and <CITATION> (1900) I.L.R. 24 M. 171 : 10 M.L.<NAME> 347 and similar cases were disapproved by <ORG> and ought not to be followed. In fact <ORG> judgment at pages 230, 231 expressly refers to and approves of the principle of <NAME> v. <NAME> (1879) I.L.R. 2 M. 108 that the mortgagee who became first entitled to possession was awarded it against the other. Similarly at page 233 the judgment refers with approval to <NAME> than v. <NAME> (1900) I.L.R. 24 M. 171 : 10 M.L.<NAME> 347 pointing out that the first mortgagee being the first purchaser in possession could not be turned out in execution by the second mortgagee who had merely bought subject to the rights of the first purchaser. Referring to <NAME>, <NAME>'s judgment in that case <ORG> say that " the observation that the right of redemption and no other was all that remained to the second mortgagee in the circumstances of the case was perfectly right" and that no general proposition to that effect was laid down. The learned Judges of <ORG> could not have forgotten that the question referred to them was not which of two rival purchasers under simple mortgage decrees was entitled to possession but whether a puisne mortgagee in possession under a usufructuary mortgage could be turned out of possession or be compelled to redeem a purchaser in a simple first mortgagee's suit to which he was not a party. The principle that of two purchasers in successive mortgage suits, both mortgages being simple, the earlier purchaser is the one entitled to possession was therefore not only not disapproved but expressly approved by <ORG>.

10. In this view I am not called upon to enter into any lengthy discussion whether and in what circumstances a puisne mortgagee who has not been impleaded in a prior mortgagee's decree which has resulted in the sale of the property may maintain a suit for sale subject to the prior mortgage as if it ' had not been sued upon. That is not the question in this case. But the discussion in <CITATION> (1911) 22 M.L.J. 129 and <CITATION> (1915) I.L.R. 40 M. 77 : 30 M.L.J. 347 reveals a difference of opinion on the effect of the <ORG> decision in this question. The former case favours the view that such a suit by the puisne mortgagee is possible only till the first mortgagee lias obtained his own decree for sale. The only result of the puisne mortgagee not being impleaded in the prior mortgagee's suit being to put him in the same position as he would have been if so impleaded, i.e., to give him an opportunity to redeem the prior mortgage. But the latter case would appear to take the view that in such circumstances the puisne mortgagee has not merely the right to redeem but also the right to sell subject to the prior mortgage. This view is based on the principle that as against the puisne mortgagee the prior mortgagee's suit being an improperly constituted suit has no legal effect whatever and may be treated as non-existent. If so, the purchaser in the first mortgagee's suit got no title whatever against the puisne mortgagee and the only course open to the first mortgagee is to sue again. That this is not necessary, and that the purchase is good at least to the extent of enabling the purchaser to redeem the puisne mortgagee in the character of the ultimate owner of the equity of redemption is stated at page 86 where it is said that If he (2nd defendant in the case who "was the purchaser in the prior mortgagee's suit) wants to keep the property as purchaser he can only do so by redeeming the plaintiffs.

11. The same result follows from the 7th proposition (page 92) where the purchaser in the first mortgagee's suit is described as the ultimate owner of the equity of redemption. The main thesis is however maintained at pages 86 and 87 that the later purchaser in the second mortgagee's suit is entitled to possession of the property from the previous purchaser in the first mortgagee's suit for the reason that the latter suit was not properly constituted whereas the former suit was. But what about the rights of the earlier purchaser as first mortgagee? The answer is that in the second mortgagee's later suit for sale he may, if he is unwilling to redeem the second mortgage, get the balance of the sale proceeds after satisfying the second mortgage. That is to say, he becomes postponed to the second mortgagee who thus gets the advantage of becoming first mortgagee as a result of the improperly constituted suit brought by the original first mortgagee. It is difficult to see why the first mortgagee's suit which is not to affect the second mortgagee in any way should have the result of conferring a substantial advantage on him. And it is equally difficult to understand how if the sale in the first mortgagee's suit can, notwithstanding its improper constitution, convey to the purchaser the equity of redemption subject to the second mortgage and if the purchaser at that sale may still as plaintiff bring a suit as first mortgagee, impleading of course the purchaser in the second mortgagee's suit, he cannot successfully defend the possession already obtained in exercise of that mortgage right. Starting from the principle that the first mortgagee's suit being improperly constituted should have no legal effect whatever against the second mortgagee, the result is arrived at somewhat inconsistently that while on the one hand the purchaser becomes the ultimate owner of the equity of redemption who is as such entitled to redeem the second mortgage, on the other he retains the character of the first mortgagee sufficiently to enable him to sue again on that mortgage but not sufficiently to retain his priority in the sale proceeds in case of a sale by the second mortgagee or to keep the possession which he has already got against the purchaser in that sale.

12. I am not satisfied that this is the result of the Full Bench case, nor am I satisfied that the cases beginning with <CITATION> (1879) I.L.R. 2 M. 108 are overruled thereby. If they are to be followed the suit must be dismissed.

13. The questions involved in contests between rival purchasers in successive mortgage suits in which the other mortgagees were excluded were again elaborately considered by the Full Bench. of <ORG> in <CITATION> A.I.R. 1931 All. 466 (F.B.). There were two simple mortgages of 1911 and 1912. The second mortgagee sued the mortgagor first in March, 1922, without joining the first mortgagee and then the first mortgagee sued the mortgagor in August 23 without joining the second. One <ORG> purchased the property first in January, 1925, in the second mortgagee's suit but did not get actual possession. Then the first mortgagee purchased the property in his own suit in November, 1925 and got possession. <ORG> sued the first mortgagee-purchaser for possession. On a reference to a Full Bench* four out of five Judges held:

1. If the purchaser in the first mortgagee's suit is suing as plaintiff-

A. (a) he can sue again for money if his suit is not barred.

(b) he cannot sue for money if it is barred.

B. (a) If he was the earlier purchaser he can redeem the second mortgage and get possession even if a suit on the prior mortgage is barred.

(b) If he was the later purchaser he cannot even redeem.

2. If the purchaser in the second mortgagee's suit is suing as plaintiff-

(a) if the plaintiff was the earlier purchaser he must redeem the prior mortgage and the defendant cannot compel the plaintiff to be redeemed.

(b) if the plaintiff was the later purchaser he must first redeem the prior mortgage but the defendant can then compel the plaintiff to be redeemed in respect of the second mortgage.

14. It will be observed that according to this view the only case in which the first mortgagee-purchaser will be without remedy either to sue again for money or to compel the second mortgagee to redeem him is when a second suit for money has become barred and at the same time as purchaser he is later than the second mortgagee and not having possession is compelled to sue for it. In all other cases, the first mortgagee may have one or other of three remedies: (1) either a second suit for money, or (2) recovery of possession from the later purchaser, or (3) retention of possession as against even an earlier purchaser till he is redeemed. The other learned Judge gave his opinion separately but except on two points, viz., as to lis pendens and as to the right of the second mortgagee to sue again for sale subject to the first mortgage, he concurred with his colleagues. He agreed that the auction purchaser in execution of a prior mortgagee's decree without impleading the subsequent mortgagee acquires the right of the mortgagor including the right of possession. He also agreed that it is the first purchaser who gets the property without regard to the priority of the mortgage in enforcement of which the property is sold. Thus all the five Judges concurred in the principle of the earlier <ORG> decisions that the title to the property beltings to the earlier purchaser though the suit in which that purchase took place was improperly constituted in the sense that the subsequent mortgagee was not therein impleaded. The difference of opinion was only on the question whether the excluded second mortgagee is affected by the earlier proceedings to the extent that he is thereafter bound to redeem the earlier mortgage and can no longer sue for sale subject to the earlier mortgage. The majority in Allahabad approve the view taken in <CITATION> (1911) 22 M.L.J. 129 and <CITATION> (1908) I.L.R. 31 M. 425 : 18 M.L.J. 298 on this matter while <NAME>, J., took the view favoured in <CITATION> (1915) I.L.R. 40 M. 77 : 30 M.L.J. 347.

15. Quite apart from the title derived from the sale the right of the first mortgagee-purchaser to use his mortgage as a shield has recently been upheld by <ORG> in <CITATION> (1921) L.R. 48 I.A. 465 : I.L.R. 43 All. 469 : 42 M.L.J. 15 (P.C.), and by this Court in <CITATION> (1921). In the former case there were two simple mortgages in 1874 and 1875 to <NAME> and a third mortgage by conditional sale in 1883 to <NAME> In 1886 <NAME> brought a suit on the first two mortgages without making <NAME> a party and bought the property himself. After <NAME>'s death <NAME>, his widow, gave the property to <NAME> and <ORG> who in 1902 executed a fourth mortgage to her for securing an annuity. In 1909 <NAME> sued <NAME> and <ORG> on his mortgage without joining <NAME> and got a decree for foreclosure on payment to them of the mortgages of 1874 and 1875. In 1914 <NAME> sued <ORG>, <NAME> and <ORG> on the mortgage of 1902. From the above dates and facts it is seen that <NAME>, the plaintiff, occupied the position of fourth mortgagee. But her mortgagors were representatives in interest of <NAME> the 1st and 2nd mortgagee-purchaser in the suit of 1886 in which the 3rd mortgagee was not a party. Her security therefore included the right of <NAME> by that purchase which included the right of the 1st and 2nd mortgagees. The defendant <ORG> was the 3rdmortgagee who had foreclosed <NAME> and <ORG> as ultimate owner of the equity of redemption but without impleading the 4th mortgagee plaintiff.

16. The plaintiff claimed as mortgagee from <ORG> and <ORG> the security of their rights to the first and second mortgages. Though <ORG> had in his own suit paid this amount and it had been taken away by <ORG> and <ORG> <ORG> held that that payment could not bind the plaintiff who was not impleaded. It was, therefore, ordered that <ORG> should, in the first instance, pay the amount of the first and second mortgages to <NAME>, that in case he did so, the plaintiff should pay to <ORG> the amount of his third mortgage of 1883 and if she did so she could have the usual mortgage decree for the entire sum of all the mortgages including her own. As to the principle on which the payment of the first and second mortgages which were 40 years old at the time of the suit was ordered <ORG> said that an owner of a property who is in the rights of a first mortgagee and of the original mortgagor as acquired at a sale under the first mortgage is entitled at the suit of a subsequent mortgagee who is not bound by the sale or the decree on which it proceeded to set up the first mortgage as a shield. Applied to this case it shows that the defendant the first mortgagee-purchaser is entitled to retain his possession till he is paid off the amount of that mortgage and is not liable according to the observations in <CITATION> (1915) I.L.R. 40 M. 77 : 30 M.L.J. 347 to be turned out of possession on the ground that the suit on the first mortgage was improperly constituted and to be relegated to a fresh suit long ago barred by limitation. The same view as to using a mortgage as a shield was taken in <CITATION> (1921) 41 M.L.J. 399.

17. The only difference between the <ORG> case and the present is that there the purchase on the first two mortgages was before the suit on the third mortgage whereas in the present case the defendant's purchase was after execution had begun on the decree on the second mortgage. It was therefore argued on the strength of some remarks in <CITATION> (1915) I.L.R. 40 M. 77 : 30 M.L.J. 347 that the Court-sale in the defendant's suit was vitiated by lis pendens. At p. 87 it is stated that if a first mortgagee who has first obtained a decree without joining the second mortgagee purchases the property in execution after the second mortgagee has brought his suit on his own mortgage such purchase would be affected by lis pendens and that such a purchaser would have to give up possession to the later purchaser in the second mortgagee's suit. At p. 92 the same idea qf the proceedings in an earlier mortgage suit becoming affected by lis pendens by reason of the institution of a subsequent mortgage suit is repeated in the 5th and 7th propositions. The 7th proposition contains a repetition of the statement in p. 87 and the 5th proposition is the converse case of the purchaser in a second mortgagee's suit being affected by lis pendens by reason of a subsequent suit by the first mortgagor making the second mortgagee and mortgagor parties. I confess to great difficulty in correctly describing the ground of these remarks (whether they are right or not) to be lis pendens. With the greatest respect, I understand by lis pendens the rule by which by reason of a suit being pending about the rights to some property, subsequent dealings by the parties with that property so as to prejudicially afreet the determination of those rights in that suit are invalidated. The proceedings in earlier instituted suits cannot be affected by lis pendens by suits subsequently instituted. If earlier proceedings are affected or rendered ineffective by subsequent proceedings the reason must be not lis pendens but something else. Not only so, but I find difficulty in understanding how a mortgage suit brought by a first mortgagee can be affected by lis pendens because some one else who does not claim from him, i.e., another mortgagee, has already sued to enforce his own rights. Both have rights against the same property not derived from each other but from the same owner. In my view the opinion expressed by <NAME>, J. in <CITATION> A.I.R. 1931 All. 466 at 485 to 487 (F.B.) on the subject of lis pendens in mortgage suits is correct. It is that the rule only applies to transfers by the plaintiff or defendant of their respective interests after the suit including transfers by Court-sale in money decrees against either party. But it does not apply to previously existing transfers (including mortgages) or legal proceedings to enforce such transfers by those entitled. On principle the sale in pursuance of a mortgage decree, the mortgage having been executed before the institution of the suit is not affected by the doctrine of lis pendens. (Cf. per <NAME>, J. in <CITATION> (1905) I.L.R. 32 Cal. 891, <CITATION> (1923) 46 M.L.J. 258 and <CITATION> (1930) 33 L.W. 109.) No other authority has been adduced for invalidating the defendant's purchase on the ground of lis pendens.

18. For the above reasons the decrees of the Lower Courts are reversed and the suit dismissed with costs throughout.

Waller, J.

19. I agree and have nothing to add. We have been asked to reconsider the order as to costs on the ground that the plaintiff and the Courts below were right in relying on the decision in <CITATION> (1915) I.L.R. 40 M. 77 : 30 M.L.J. 347 We see no reason to do so. The trouble was started by the plaintiff himself in the first Court. He has in this Court been given every opportunity of settling, but has not taken advantage of it. We are asked further to say that, in our view, a further suit will not be barred by Order 2, Rule 2 of the Code of Civil Procedure. On that point, we decline to express any opinion.


REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.6580 OF 2008 ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 15449 OF 2004 ESSCO FABS PVT. LTD. & <ORG>. ... APPELLANTS VERSUS STATE OF HARYANA & <ORG>. ... RESPONDENTS WITH CIVIL APPEAL NO.6581 OF 2008 ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 15544 OF 2004 THE PANIPAT TEACHERS (RECOGNISED SCHOOLS)HOUSING CO-OPEATIVE SOCIETY LTD. & <ORG>. ... APPELLANTS VERSUS STATE OF HARYANA & ORS. ... RESPONDENTS WITH CONTEMPT PETITION NO. 30 OF 2007 IN CIVIL APPEAL NO.6580 OF 2008 ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 15449 OF 2004 ESSCO FABS PVT. LTD. & <ORG>. ... PETITIONERS VERSUS STATE OF HARYANA & <ORG>. ... RESPONDENTS J U D G M E N T

<NAME>, J.

1. Leave granted.

2. Both these appeals are filed by the appellants being aggrieved and dissatisfied with the judgment and order dated April 02, 2004, passed by <ORG> in Civil Writ Petition Nos. 1853 of 2003 and 2077 of 2002.

3. To appreciate the controversy raised in the present appeals, relevant facts in nutshell may be noted.

4. According to the appellant <ORG> (`<ORG>' for short), <ORG> intended to acquire land for public purpose, viz., for utilization of land as residential, commercial and industrial area in Sector Nos. 11, 12 and 25 Part-II by <ORG> (`HUDA' for short). For the said purpose, the Government issued a notification under sub-section (1) of Section 4  of the Land Acquisition Act, 1894 (hereinafter referred to as `the Act') on December 15, 1982. The land mentioned in the said notification situated in village Kheri Nangal was sought to be acquired. A final notification under Section 6 of the Act was issued on June 20, 1984. However, the land acquisition proceedings could not be completed within the stipulated period and the notifications lapsed and the land stood released.

5. It was the case of <ORG> that it bought the land which was sought to be acquired earlier for expansion of its Export Unit. According the appellant, it is engaged in manufacturing and exporting rugs, cushions, bed-spreads, bath mats, fabrics, kitchen towel, aprons, pot holders, gloves, mitten, curtains, napkins, carpets, etc. It is Export Oriented Unit and earns foreign exchange by export of goods manufactured in its unit. In the year 1992, it exported materials over Rs.2 crores. The appellant has stated that on June 6, 1991, it made an application to the Director, <ORG>, Haryana for permission for change of user of land. All necessary documents were appended to the application. The Director, however, vide an order dated September 5, 1991, rejected the permission on several grounds. One of the grounds weighed with the Director for refusing the permission was that the land in question was proposed to be acquired. The appellant has produced a copy of the application as also an order of rejection thereof in the present proceedings. But even thereafter no proceedings for acquisition of land were initiated for many years.

6. On August 1, 2001 i.e. after about twenty years of the first notification of 1982 and nine years after rejection of prayer of the appellant for change of user, <ORG> again issued notification under sub- section (1) of Section 4 of the Act for acquisition of land for the development and utilization for construction of road connecting Sanauli Road with G.T. Road for Sector 25 Part- II B, Urban Estate Panipat by <ORG>. The land of the appellant situated in village Kheri Nangal was sought to be included in the notification. Moreover, `urgency clause' under Section 17 of the Act was applied and a valuable right of raising objections under Section 5-A of the Act was taken away in an arbitrary manner. On the very next day i.e. on August 2, 2001, final notification under Section 6 of the Act was issued by the Government.

7. It is the case of the appellant that the preliminary notification under sub-section (1) of Section 4 of the Act was required to be published in the manner laid down in the Act. But it had not been published before issuance of final notification under Section 6 of the Act. The final notification was, therefore, illegal and the appellant could not be deprived of his property in a manner not known to law. The right of the appellant to own, possess and enjoy the property is not merely a Common Law right but also constitutional right under Article 300A of the Constitution which has a `flavour of fundamental right'. The acquisition proceedings, being not in consonance with law were vitiated and liable to be quashed.

8. The appellant, hence, filed Civil Writ Petition No. 1853 of 2003 in <ORG> by invoking Article 226 of the Constitution praying therein for quashing and setting aside acquisition proceedings. <ORG> entertained the petition and granted status quo with regard to possession of the land in question. Finally, however, by the impugned judgment it dismissed the petition. The said order is challenged by the appellant in this Court.

9. The other appeal is filed by <ORG> (`society' for short) challenging the acquisition proceedings. It was the case of the society that pursuant to the representation made by the society, <ORG> released 53 kanals and 8 marlas of land by executing an agreement dated October 19, 1985 and by granting land in favour of the society on conditions mentioned in the agreement. Possession of land was handed over to the society. The land was demarcated and was carved out into plots reserving requisite space for school, parks, temple, overhead water tank, roads, green belt etc. The society got the site plan designed strictly in accordance with <ORG> Rules. The society invested huge amount, approximately Rs.26 lakhs, for developing the land laying down sewer pipe lines, <ORG> pipe lines, construction of roads and boundary walls etc. The site plan, however, has not been cleared by the office of <ORG>, Haryana despite numerous attempts by the appellant-society. It is alleged by the society that the matter was kept pending for oblique and ulterior purposes on lame and untenable excuses. It is also stated by the society that <ORG> published public notice in `Daily Bhaskar' dated November 10, 2000 demanding development charges thereby acknowledging that the society's land has been rightly developed for teachers' colony. The public notice informed and instructed those land/plot owners who were in arrears to pay all the balance development charges and outstanding dues. No dues were shown as against the appellant-society. Thus, there is nothing due and payable to <ORG> by the appellant.

10. Ignoring all these material facts and with a view to cause serious prejudice to the appellant-society, a notification under sub- section (1) of Section 4 of the Act had been issued by the <ORG> for acquisition of land.

11. We have already stated facts relating to the issuance of preliminary notification, application of urgency clause under Section 17 and issuance of final notification under Section 6 of the Act while narrating the facts in the first case of <ORG>. It is, therefore, not necessary to repeat all those facts in the second matter.

12. The appellant-society, in the circumstances, approached <ORG> by filing Civil Writ Petition No. 2077 of 2002 which was also decided along with the petition of <ORG> and the petition of the appellant- society also came to be dismissed.

13. Third writ petition (Civil Writ Petitin No. 3324 of 2003) was filed by <ORG>/s <ORG>, Panipat which also met with the same fate. <ORG>, however, has not approached this Court.

14. Notices were issued by this <ORG> and interim relief was granted. Respondents thereafter appeared, affidavits and further affidavits were filed and the matters were ordered to be posted for final hearing. That is how the matters are before us.

15. We have heard learned counsel for the parties.

16. The learned counsel for the appellants <ORG> and <ORG> have challenged the acquisition on several grounds. It was contended that the land was not needed for public purpose as set out in the notification of 2001 and, hence, the acquisition is not legal or lawful. Moreover, initially an action was taken for acquisition of land before more than a quarter century in the year 1982. Final notification was also issued after more than one and half year of preliminary notification, but even thereafter, nothing was done by the <ORG> and the proceedings lapsed. Again, in 1991, when <ORG> applied for change of user of land, the prayer was turned down, inter alia, on the ground that the land in question was proposed to be acquired for public purpose. Nothing was done by the <ORG> for about a decade. Only in August, 2001, notification under Section 4 was issued. It was strongly urged by the learned counsel for the appellants that preliminary notification was issued on August 1, 2001 and urgency clause was applied though there was no urgency at all. The notification was published in the official gazette thereafter and in two daily newspapers on August 10 and 12, 2001. Final notification under Section 6 , however, was issued immediately on the next day i.e. on August 2, 2001, of the issuance of preliminary notification under sub-section (1) of Section

4. It was contended that on the facts of the case, no urgency clause could have been invoked. Even otherwise, the action was bad and de hors the Act since the conditions laid down in sub-section (4) of Section 17 of the Act have not been complied with inasmuch as there was neither grave urgency nor unforeseen emergency. It was submitted that there was lethargy on the part of officers of the Government in not taking steps for more than twenty years. The <ORG> cannot take undue advantage of its negligence or inaction and deprive the owners of their right to property in purported exercise of power of eminent domain. The Act is an expropriatory legislation which deprives a person of his property without his consent. The provisions of the Act, hence, have to be construed strictly. It was submitted that Section 5A confers a valuable right on the owners of land of submitting objections against proposed acquisition and such right cannot be taken away or curtailed by the <ORG>. On the facts of the case, invocation of urgency clause was not only uncalled for being contrary to law but otherwise arbitrary and unreasonable and on that ground also, the proceedings are liable to be quashed. It was urged that the expression `the date of publication' has been defined in sub-section (1) of Section 4 of the Act. While construing the said connotation under Section 17 , same meaning as contemplated under Section 4(1) has to be given. Since the final notification under Section 6 had not been published as required by the Act after `the last date of publication' of notification under  Section 4(1) , the action is unlawful and is liable to be set aside. It was asserted that no notice as required by Section 9 of the Act had been issued nor payment of 80 percent of the compensation as required by sub-section (3A) of Section 17 had been paid. There was also total non-application of mind on the part of the <ORG> Government in not considering the Government policy of granting exemption to functional units dealing with handloom and other industries. On that count also, the proceedings are liable to be dropped.

17. On behalf of <ORG>, the learned counsel adopted all the contentions raised on behalf of <ORG>. The learned counsel, however, further submitted that the society prayed for allotment of land and the prayer was granted. An agreement was entered into between the <ORG> and the society, possession of land was handed over to the society, which has spent substantial amount of several lakhs for development. Necessary permission was sought so that construction can be made which was also granted by the Authorities, requisite charges which were to be paid had already been paid and no dues had been shown so far as the appellant- society is concerned and yet the impugned action has been taken mala fide and with ulterior motive though the land is not required for public purpose. It was also submitted that even according to the authorities, the land of the appellant-society does not come in `road line'. It is situate at about 24 meters away (23.94 meters) from road line. It was, therefore, submitted that the proceedings should be declared against the provisions of law and may be quashed.

18. Learned counsel for the respondents, on the other hand, submitted that the action of the authorities is legal, lawful and in consonance with law. It was urged that the land was required for public purpose, viz., for construction of road. For acquisition of land, therefore, a notification was issued. It was submitted that there is no element of mala fide or colourable exercise of power which is clear form the fact that even in early eighties, the land was sought to be acquired. Since the proceedings could not be completed within the stipulated period, they lapsed. That, however, does not mean that the land was not needed for public purpose or that the public purpose disappeared or vanished. The counsel submitted that it was further clear when the prayer of <ORG> for change of user of land in 1991 was rejected. The applicant was told at that time also that the land was required for public purpose. According to the counsel, Government machinery took some time but it cannot be concluded that the land was not required by the <ORG> and only with a view to deprive the appellants of their ownership rights acquisition proceedings had been initiated.

19. Regarding notification of August 1, 2001 and August 2, 2001 under Sections 4 and 6  of the Act respectively, it was submitted that both the notifications were in consonance with law. A preliminary notification under sub- section (1) of Section 4 of the Act was issued showing the intention of the <ORG> for acquisition of land for public purpose. Since the acquisition was for construction of road, it was covered by Section 17 of the Act and urgency clause was rightly invoked and in exercise of power under sub-section (4) of Section 17 , inquiry contemplated by Section 5A of the Act had been dispensed with. The action was in consonance with law and no grievance can be made contending that the inquiry as contemplated by Section 5A and hearing of objections were illegally dispensed with by the authorities. All actions were consistent with the provisions of the Act and the appellants have no right to make complaint against those actions. It was, therefore, submitted that <ORG> was wholly right in dismissing the writ petitions and the appeals have no substance.

20. Before we deal with the matter on merits, it would be appropriate if we notice the relevant provisions of the Act. As the Preamble shows, the Act has been enacted with a view "to amend the law for the acquisition of land for public purposes (and for Companies)". Section 3 is a `definition clause' of various expressions used in the Act. Clause (f) defines `public purpose' and the definition is `inclusive' in nature. Purposes mentioned in Clauses (i) to (viii) are in the nature of `public purpose' and the land can be acquired for any such purpose. Part II ( Sections 4 to

17) deals with `Acquisition'. Section 4 enables the appropriate Government to issue preliminary notification for acquisition of land needed or likely to be needed for public purposes. The said section is relevant and reads thus;

Section 4 - Publication of preliminary notification and powers of officers thereupon-- (1) Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose or for a company a notification to that effect shall be published in the Official Gazette 1[and in two daily newspapers circulating in that locality of which at least one shall be in the regional language and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality 1[the last of the dates of such publication and the giving of such public notice, being hereinafter referred to as the date of publication of the notification.

(2) Thereupon it shall be lawful for any officer, either, generally or specially authorised by such Government in this behalf, and for his servants and workmen,--

to enter upon and survey and take levels of any land in such locality; to dig or bore in the sub-soil;

to do all other acts necessary to ascertain whether the land is adapted for such purpose;

to set out the boundaries of the land proposed to be taken and the intended line of the work (if any) proposed to be made thereon;

to mark such levels, boundaries and line by placing marks and cutting trenches, and, where otherwise the survey cannot be completed and the levels taken and the boundaries and line marked, to cut down and clear away any part of any standing crop, fence or jungle:

Provided that no person shall enter into any building or upon any enclosed court or garden attached to a dwelling-house (unless with the consent of the occupier thereof) without previously giving such occupier at least seven days' notice in writing of his intention to do so.

21. Section 5A is a salutary provision and enables any person interested in the land which is notified under sub-section (1) of Section 4 as being needed or likely to be needed for a public purpose to lodge objections against the proposed acquisition. It is equally important provision and may be reproduced' Section 5A - Objections : Hearing of objections--(1) Any person interested in any land which has been notified under section 4 , Sub-section (1), as being needed or likely to be needed for a public purpose or for a company may, within thirty days from the date of the publication of the notification, object to the acquisition of the land or of any land in the locality, as the case may be. (2) Every objection under sub-section (1) shall be made to the Collector in writing, and the Collector shall give the objector an opportunity of being heard in person or by any person authorised by him in this behalf or by pleader and shall, after hearing all such objections and after making such further inquiry, if any, as he thinks necessary, either make a report in respect of the land which has been notified under section 4 , sub-section (1), or make different reports in respect of different parcels of such land, to the appropriate <ORG>, containing his recommendations on the objections, together with the record of the proceedings held by him, for the decision of that <ORG>. The decision of the Appropriate <ORG> on the objections shall be final. (3) For the purposes of this section, a person shall be deemed to be interested in land who would be entitled to claim an interest in compensation if the land were acquired under this Act.

22. Then comes Section 6 which authorizes the appropriate <ORG> to issue final notification as to declaration that the land is required for public purpose. The said section is also material and reads as under;

6. Declaration that land is required for a public purpose.-(1) Subject to the provisions of Part VII of this Act, when <ORG> is satisfied after considering the report, if any, made under section 5A , sub-section (2), that any particular land is needed for a public purpose, or for a company, a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorised to certify its orders an different declarations may be made from time to time in respect of different parcels of any land covered by the same notification under section 4 , sub-section (!), irrespective of whether one report or different reports has or have been made (wherever required) under section 5-A , sub-section (2):

Provided that no declaration in respect of any particular land covered by a notification under section 4 , sub-section (1),--

(i) published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967 but before the commencement of the Land Acquisition (Amendment) Act , 1984 shall be made after the expiry of three years from the date of the publication of the notification; or

(ii) published after the commencement of the Land Acquisition (Amendment) Act , 1984, shall be made after the expiry of one year from the date of the publication of the notification:

Provided further that no such declaration shall be made unless the compensation to be awarded for such property is to be paid by a company, or wholly or partly out of public revenues or some fund controlled or managed by a local authority.

Explanation 1.-In computing any of the periods referred to in the first proviso, the period during which any action or proceeding to be taken in pursuance of the notification issued under Section 4 , sub-section (1), is stayed by an order of a <ORG> shall be excluded.

Explanation 2.-Where the compensation to be awarded for such property is to be paid out of the funds of a corporation owned or controlled by the <ORG>, such compensation shall be deemed to be compensation paid out of public revenues.

(2) Every declaration shall be published in the Official Gazette, and in two daily newspapers circulating in the locality in which the land is situate of which at least one shall be in the regional language, and the Collector shall cause public notice of the substance of such declaration to be given at convenient places in the said locality (the last of the date of such publication and the giving of such public notice, being hereinafter referred to as the date of publication of the declaration), and such declaration shall state] the district or other territorial division in which the land is situate, the purpose for which it is needed, its approximate area, and where a plan shall have been made of the land, the place where such plan may be inspected.

(3) The said declaration shall be conclusive evidence that the land is needed for a public purpose or for a Company, as the case may be; and, after making such declaration <ORG> may acquire the land in manner hereinafter appearing.

23. Section 9 requires issuance of notice to persons interested. Section 11 requires enquiry to be made and award to be passed by Collector. Section 16 authorises the Collector to take possession of the land acquired under the Act. Thereupon, the land vests absolutely in the <ORG> free from all encumbrances.

24. Section 17 is an exception to the normal rule of acquisition of land and deals with cases of urgency and emergency. The provision is of extreme importance and may be quoted in extenso.

17. Special powers in cases of urgency.-(1) In cases of urgency, whenever the Appropriate <ORG> so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9 , sub-section (1), take possession of any waste or arable land needed for a public purpose]. Such land shall thereupon vest absolutely in the <ORG>, free from all encumbrances.

(2) Whenever, owing to any sudden change in the channel of any navigable river or other unforeseen emergency, it becomes necessary for any Railway administration to acquire the immediate possession of any land for the maintenance of their traffic or for the purpose of making thereon a river-side or ghat station, or of providing convenient connection with or access to any such station, or the appropriate Government considers it necessary to acquire the immediate possession of any land for the purpose of maintaining any structure or system pertaining to irrigation, water supply, drainage, road communication or electricity,] the Collector may, immediately after the publication of the notice mentioned in sub-section (1) and with the previous sanction of the appropriate Government, enter upon and take possession of such land, which shall thereupon vest absolutely in the Government free from all encumbrances.

Provided that the Collector shall not take possession of any building or part of a building under this sub- section without giving to the occupier thereof at least forty-eight hours' notice of his intention so to do, or such longer notice as may be reasonably sufficient to enable such occupier to remove his movable property from such building without unnecessary inconvenience.

(3) In every case under either of the preceding sub-sections the Collector shall at the time of taking possession offer to the persons interested, compensation for the standing crops and trees (if any) on such land and for any other damage sustained by them caused by such sudden dispossession and not excepted in section 24 ; and, in case such offer is not accepted, the value of such crops and trees and the amount of such other damage shall be allowed for in awarding compensation for the land under the provisions herein contained.

(3A) Before taking possession of any land under sub-section (1) or sub- section (2), the Collector shall, without prejudice to the provisions of sub-section (3),-

(a) tender payment of eighty per centum of the compensation for such land as estimated by him to the persons interested entitled thereto, and

(b) pay it to them, unless prevented by some one or more of the contingencies mentioned in section 31 , sub-section (2), and where the Collector is so prevented, the provisions of section 31 , sub-section (2), (except the second proviso thereto), shall apply as they apply to the payment of compensation under that section.

(3-B) The amount paid or deposited under sub-section (3A), shall be taken into account for determining the amount of compensation required to be tendered under section 31 , and where the amount so paid or deposited exceeds the compensation awarded by the Collector under section 11 , the excess may, unless refunded within three months from the date of the Collector's award, be recovered as an arrear of land revenue.

(4) In the case of any land to which, in the opinion of the appropriate Government, the provisions of sub- section (1) or sub-section (2) are applicable, the appropriate Government may direct that the provisions of section 5A shall not apply, and, if it does not so direct, a declaration may be made under section 6 in respect of the land at any time after the date of the publication of the notification under section 4 , sub-section (1).

25. Whereas Part III relates to `Reference to Court and procedure thereon', Parts IV and V deal with `Apportionment of compensation' and `Payment', respectively.

26. It is vehemently contended on behalf of the appellants that on the facts and in the circumstances of the case, the respondents could not have invoked `urgency clause' by scuttling enquiry and dispensing with hearing of objections under Section 5A of the Act. It was submitted that no action could have been taken in view of the circumstances mentioned earlier. As early as in 1982 proceedings were initiated for acquisition of land but they were allowed to be lapsed in spite of final notification under Section 6 of the Act by not taking appropriate actions in time. Again, in 1991, when <ORG> applied for change of user of land, request was turned down on the ground that the land was likely to be needed for public purpose. It was, therefore, submitted that when preliminary notification under Section 4 was issued in 2001, there was no urgent need or compelling necessity nor it was a matter of urgency or emergency under Section 17 of the Act which could justify the action and the proceedings are liable to be quashed.

27. We find considerable force in the above argument of the learned counsel for the appellants. The scheme of the Act is clear which provides for issuance of preliminary notification under sub-section (1) of Section 4 of the Act empowering the appropriate Government to issue such notification for acquisition of land needed or likely to be needed for any public purpose. Since the property belongs to a private individual, unless there is a `public purpose' as defined in clause (f) of Section 3 of the Act, no acquisition of land can be made. It is in exercise of power of eminent domain that a sovereign may acquire property which does not belong to him. In the circumstances, as a general rule, before exercise of power of eminent domain, law must provide an opportunity of hearing against the proposed acquisition. Even without a specific provision to that effect, general law requires raising of objections by and affording opportunity of hearing to the owner of the property. The Land Acquisition (Amendment) Act , 1923 (Act 38 of 1923), however, expressly made such provision by inserting Section 5A in the Act. It is, therefore, clear that after issuance of preliminary notification under Section 4 before and final notification under Section 6 of the Act, the appropriate Government is enjoined to hear persons interested in the property before he is deprived of his ownership rights. But then there may be cases of `urgency' or `unforeseen emergency' which may brooke no delay for acquisition of such property in larger public interest. The <ORG>, therefore, thought it appropriate to deal with such cases of exceptional nature and in its wisdom enacted Section 17 .

28. Whereas sub-section (1) of Section 17 deals with cases of `urgency', sub-section (2) of the said section covers cases of `sudden change in the channel of any navigable river or other unforeseen emergency'. But even in such cases i.e. cases of `urgency' or `unforeseen emergency', enquiry contemplated by Section 5A cannot ipso facto be dispensed with which is clear from sub-section (4) of Section 17 of the Act.

29. Sub-section (4) of Section 17 is an enabling provision and it declares that if in the opinion of the appropriate <ORG>, the provisions of sub-section (1) or (2) are applicable, it may direct that the provisions of Section 5A would not apply. It is, therefore, clear that the <ORG> has contemplated that there may be `urgencies' or `unforeseen emergencies' and in such cases, private properties may be acquired. But, it was also of the view that normally even in such cases, i.e. cases of urgencies or unforeseen emergencies, the owner of property should not be deprived of his right to property and possession thereof without following proper procedure of law as contemplated by Section 5A of the Act unless the urgency or emergency is of such a nature that the <ORG> is convinced that holding of enquiry or hearing of objections may be detrimental to public interest.

30. In this connection, both the parties invited our attention to several decisions. We will deal with some of the important decisions.

31. In <NAME> <NAME> of Uttar Pradesh & Ors, (1964) 3 SCR 425, the land was acquired by the <ORG> for public purpose, viz. <ORG> under the Kanpur Urban Area Development Act, 1945. The Court considered the scheme of the Act that after issuance of preliminary notification under Section 4 of the Act, objections are to be heard under Section 5A of the persons interested in the property and thereafter final notification under Section 6 can be issued. The Court, however, noted that to that procedure, there is an exception under Section 17 which enables the <ORG> to apply urgency clause. Where an action is taken under sub-section (4) of Section 17 of the Act, it is not necessary to follow procedure laid down in Section 5A and notification under Section 6 can be issued without report from the Collector as envisaged by Section 5A .

32. The Court stated;

"It will be seen that s. 17(1) gives power to the <ORG> to direct the Collector, though no award has been made under s. 11 , to take possession of any waste or arable land needed for public purpose and such land thereupon vests absolutely in the <ORG> free from all encumbrances. If action is taken under s. 17(1) , taking possession and vesting which are provided in s. 16 after the award under s. 11 are accelerated and can take place fifteen days after the publication of the notice under s.9.

Then comes s. 17(4) which provides that in case of any land to which the provisions of sub-s. (1) are applicable, the Government may direct that the provisions of s. 5-A shall not apply and if it does so direct, a declaration may be made under s. 6 in respect of the land at any time after the publication of the notification under s. 4(1) . It will be seen that it is not necessary even where the Government makes a direction under s. 17(1) that it should also make a direction under s. 17(4) . If the Government makes a direction only under s. 17(1) the procedure under s. 5-A would still have to be followed before a notification under s. 6 is issued, though after that procedure has been followed and a notification under s. 6 is issued the Collector gets the power to take possession of the land after the notice under s. 9 without waiting for the award and on such taking possession the land shall vest absolutely in Government free from all encumbrances. It is only when the Government also makes a declaration under s. 17(4) that it becomes unnecessary to take action under s. 5-A and make a report thereunder. It may be that generally where an order is made under s.17(1), an order under s. 17(4) is also passed; but in law it is not necessary that this should be so. It will also be seen that under the Land  Acquisition Act an order under s. 17 (1) or s. 17(4) can only be passed with respect to waste or arable land and it cannot be passed with respect to land which is not waste or arable and on which buildings stand".

(emphasis supplied)

33. From the above observations, it is clear that even in cases falling under or covered by sub-sections (1) and (2) of Section 17 of the Act and the Government intends to acquire land in cases of `urgency' or `unforeseen emergency', it is still required to follow procedure under Section 5A of the Act before issuance of final notification under Section 6 of the Act. It is only when the Government also makes a declaration under sub- section (4) of Section 17 that it becomes unnecessary to take recourse to procedure under Section 5A of the Act.

34. <NAME> was decided by a three Judge Bench.

35. Recently, in <CITATION> , , a similar question came up for consideration before a three Judge Bench. There land was sought to be acquired at Mehrauli by the appropriate <ORG> for organizing Anjuman-Saire-e-Gul- Faroshan. Proceedings were initiated under the Act and urgency clause was applied. The notification mentioned the public purpose as `Planned Development of Delhi'. It was also stated that Lt. Governor was of the opinion that Section 17(1) of the Act was applicable to the acquisition and he directed to dispense with inquiry under Section 5A of the Act. Simultaneously, a declaration under Section 6 was issued. Intrested parties approached <ORG>, inter alia, on the ground that decision to dispense with inquiry contemplated by Section 5A of the Act was vitiated by non-application of mind. <ORG> upheld the contention and quashed the proceeding. The aggrieved <ORG> approached this Court.

36. It was contended on behalf of the <ORG> that in case of urgency, it was open to the appropriate Government to dispense with inquiry under Section 5A by invoking sub- section (4) of Section 17 of the Act. It was also contended that the urgency contemplated by sub-sections (1) or (2) of Section 17 of the Act was `by itself' sufficient to invoke sub- section (4) of Section 17 .

37. Negativing the contention and referring to <NAME> and other judgments, the Court held;

"A careful perusal of the above Section shows that Sub-section (1) of Section 17 contemplates taking possession of the land in the case of an urgency without making an award but after the publication of Section 9(1) notice and after the expiration of 15 days of publication of Section 9(1) notice.

Therefore it is seen that if the appropriate Government decides that there is an urgency to invoke Section 17(1) in the normal course Section 4(1) notice will have to be published, Section 6 declaration will have to be made and after completing the procedure contemplated under Sections 7 and 8 , 9 (1) notice will have to be given and on expiration of 15 days from the date of such notice the authorities can take possession of the land even before passing of an award.

Sub-section (2) of Section 17 contemplates a different type of urgency inasmuch as it should be an unforeseen emergency. Under this Section if the appropriate Government is satisfied that there is such unforeseen emergency the authorities can take possession of the land even without waiting fort 15 days period contemplated under Section 9(1) . Therefore, in cases, where Government is satisfied that mere is an unforeseen emergency it will have to in the normal course, issue a Section 4(1) notification, hold 5A inquiry, make Section 6 declaration, and issue Section 9(1) notice and possession can be taken immediately thereafter without waiting for the period of 15 days prescribed under Section 9(1) of the Act.

Section 17(4) as noticed above provides that in cases where the appropriate Government has come to the conclusion that there exists an urgency or unforeseen emergency as required under Sub-sections (1) or (2) of Section 17 it may direct that the provisions of Section 5A shall not apply and if such direction is given then 5A inquiry can be dispensed with and a declaration may be made under Section 6 on publication of 4(1) notification possession can be made".

38. The Court, therefore, proceeded to state;

"A careful perusal of this provision which is an exception to the normal mode of acquisition contemplated under the Act shows mere existence of urgency or unforeseen emergency though is a condition precedent for invoking Section 17(4) that by itself is not sufficient to direct the dispensation of 5A inquiry. It requires an opinion to be formed by the concerned government that along with the existence of such urgency or unforeseen emergency there is also a need for dispensing with 5A inquiry which indicates that the <ORG> intended that the appropriate government to apply its mind before dispensing with 5A inquiry. It also indicates the mere existence of an urgency under Section 17(1) or unforeseen emergency under Section 17(2) would not by themselves be sufficient for dispensing with 5A inquiry. If that was not the intention of the <ORG> then the latter part of Sub-section (4) of Section 17 would not have been necessary and the <ORG> in Section 17(1) and (2) itself could have incorporated that in such situation of existence of urgency or unforeseen emergency automatically 5A inquiry will be dispensed with. But then that is not language of the Section which in our opinion requires the appropriate <ORG> to further consider the need for dispensing with 5A inquiry in spite of the existence of unforeseen emergency. This understanding of ours as to the requirement of an application of mind by the appropriate <ORG> while dispensing with 5A inquiry does not mean mat in and every case when there is an urgency contemplated under Section 17(1) and unforeseen emergency contemplated under Section 17(2) exists that by itself would not contain the need for dispensing with 5A inquiry. It is possible in a given case the urgency noticed by the appropriate <ORG> under Section 17(1) or the unforeseen emergency under Section 17(2) itself may be of such degree that it could require the appropriate <ORG> on that very basis to dispense with the inquiry under Section 5A but then there is a need for application of mind by the appropriate <ORG> that such an urgency for dispensation of the 5A inquiry is inherent in the two types of urgencies contemplated under Section 17 (1) and (2) of the Act".

39. The learned counsel for the respondent authorities, however, strongly relied upon a two Judge Bench decision of this Court in <CITATION> ., . In <NAME>, the Court held that the question of `urgency' or `unforeseen emergency' is the mater which is entirely based on `subjective satisfaction of the Government' and the <ORG> do not interfere unless the reasons given are wholly irrelevant and there is non- application of mind. If the public purpose, on the face of it shows that the land is needed urgently, that by itself is relevant circumstance for justifying the action under Section 17(4) of the Act.

40. Again, a similar view was taken by a two Judge Bench in <CITATION> ., . In <NAME>, land was acquired for public purpose, namely, construction of houses for dalits. Urgency clause under Section 17 was applied which was challenged by the land- owners. Holding that the urgency clause was rightly applied and inquiry under Section 5A of the Act has been correctly dispensed with, the Court observed that acquisition of land for providing houses to dalits, tribes and poor would be sufficient to invoke Section 17 of the Act and the land-owners cannot challenge the validity of such acquisition on the ground that inquiry under Section 5A cannot be dispensed with.

41. The Court stated;

"It would thus be seen that this Court emphasised the holding of an inquiry on the facts peculiar to that case. Very often the officials, due to apathy in implementation of the policy and programmes of the <ORG>, themselves adopt dilatory tactics to create cause for the owner of the land to challenge the validity or legality of the exercise of the power to defeat the urgency existing on the date of taking decision under Section 17(4) to dispense with Section 5-A inquiry.

It is true that there was pre- notification and post-notification

delay on the part of the officers to finalise and publish the notification. But those facts were present before the <ORG> when it invoked urgency clause and dispensed with inquiry under Section 5A . As held by this <ORG>, the delay by itself accelerates the urgency: Larger the delay, greater be the urgency. So long as the unhygienic conditions and deplorable housing needs of Dalits, Tribes and the poor are not solved or fulfilled, the urgency continues to subsist When the <ORG> on the basis of the material, constitutional and international obligation, formed its opinion of urgency, the <ORG>, not being an appellate forum, would not disturb the finding unless the court conclusively finds the exercise of the power male fide. Providing house sites to the Dalits, Tribes and the poor itself is a national problem, and a constitutional obligation. So long as the problem is not solved and the need is not fulfilled, the urgency continues to subsist. The <ORG> is expending money to relieve the deplorable housing condition in which they live by providing decent housing accommodation with better sanitary conditions. The lethargy on the part of the officers for pre and post-notification delay would not render the exercise of the power to invoke urgency clause invalid on that account".

42. <CITATION> ., , a two Judge Bench again observed that case of existence of urgency under Section 17 of the Act is a matter of subjective satisfaction of appropriate <ORG> and a decision of <ORG> to dispense with inquiry under Section 5A by invoking urgency provision can be challenged only on the ground of non- application of mind or mala fide exercise of power by the <ORG>. Burden is always on the person alleging mala fide to prove it on the basis of specific materials. So long as the purpose of acquisition continues to exist, exercise of power under Section 17 cannot be held to be mala fide. Mere delay of the <ORG> subsequent to its decision to dispense with inquiry under Section 5A by exercising power under Section 17 would not invalidate the decision.

43. On the basis of above decisions, it was submitted that once a decision has been taken by the State Government to apply urgency clause, the decision of the Government cannot be interfered with by a <ORG> exercising writ jurisdiction.

44. In our judgment, from the above case law, it is clear that normal rule for acquisition of land under the Act is issuance of notification under sub-section (1) of Section 4 , hearing of objections under Section 5A and issuance of final notification under Section 6 of the Act. Award will be made by the Collector, notice has to be issued to the land- owners or the person interested and thereafter possession can be taken. Section 17 , no doubt, deals with special situations and exceptional circumstances covering cases of `urgency' and `unforeseen emergency'. In case of `urgency' falling under sub-section (1) of Section 17 or of `unforeseen emergency' covered by sub-section (2) of Section 17 , special powers may be exercised by appropriate <ORG> but as held by a three Judge Bench decisions before more than four decades in <NAME> and reiterated by a three Judge Bench decision in <NAME>, even in such cases, inquiry and hearing of objections under Section 5A cannot ipso facto be dispensed with unless a notification under sub-section (4) of Section 17 of the Act is issued. The legislative scheme is amply clear which merely enables the appropriate <ORG> to issue such notification under sub- section (4) of Section 17 of the Act dispensing with inquiry under Section 5A if the <ORG> intends to exercise the said power. The use of the expression `may' in sub-section (4) of Section 17 leaves no room of doubt that it is discretionary power of the <ORG> to direct that the provisions of Section 5A would not apply to such cases covered by sub-section (1) or (2) of Section 17 of the Act.

45. In our opinion, therefore, the contention of learned counsel for the respondent authorities is not well founded and cannot be upheld that once a case is covered by sub-section (1) or (2) of Section 17 of the Act, sub-section (4) of Section 17 would necessarily apply and there is no question of holding inquiry or hearing objections under Section 5A of the Act. Acceptance of such contention or upholding of this argument will make sub-section (4) of Section 17 totally otiose, redundant and nugatory.

46. It is true that in <NAME> and <NAME>, a two Judge Bench has observed that acquisition of land for housing accommodation or for construction of residential quarters for dalits and tribals can be said to be of an urgent nature falling under Section 17(1) of the Act. But as already held in <NAME> and <NAME>, even in such cases, procedure required to be followed under Section 5A cannot be dispensed with unless notification under sub-section (4) of Section 17 is issued. In <NAME>, the Court also held that the provision cannot be pressed in service by officers who were negligent and due to their lethargy, proceedings could not be initiated for a quite long time.

47. In the instant case, the facts are eloquent. Initial action of acquisition of land was taken as early as in 1982 but the proceedings lapsed. In 1991, when <ORG> made an application praying for change of user of land, it was rejected on the ground that the land was likely to be required for public purpose. Nothing, however, was done for about a decade. It is only in 2001 that again Notification under Section 4 was issued and urgency clause was applied. We are, therefore, satisfied that the ratio lad down in <NAME> squarely applies to the facts of the case. No urgency clause could have been invoked by the respondents and inquiry and hearing of objections provided by Section 5A of the Act could not have been dispensed with. The actions of issuance of urgency clause under sub-section (4) of Section 17 , dispensing with inquiry under Section 5A and issuance of final notification under sub-section (1) of Section 6 are required to be quashed and they are accordingly quashed.

48. The learned counsel for the appellant also contended that even if it is held that the respondent could have issued final notification without holding inquiry and hearing of objections under Section 5A of the Act, the notification under Section 6 of the Act is illegal and unlawful in view of the fact that the said notification has not been issued after the last of the dates of the publication and giving of public notice referred to as "the date of publication of the notification" under sub-section (1) of Section 4 of the Act.

49. It was submitted that even the said point is concluded by a decision of this Court in <CITATION> , .

50. The learned counsel for the respondents, on the other hand, relying on <CITATION> ,

(1995) 1 SCC 133 and <CITATION> .,  submitted that if urgency clause under Section 17(4) is applied by the appropriate Government, final notification under Section 6 of the Act can be issued on the next day of the issuance of preliminary notification under Section 4 of the Act. In the case on hand, the said procedure is followed. Notification under Section 4 was issued on August 1, 2001. Urgency clause was applied and the case was covered by Section 17 (4) of the Act. On the very next day i.e. on August 2, 2001, final notification under Section 6 was issued. Therefore, the procedure required by law has been strictly followed as held by this <ORG> in <NAME> and <NAME>.

51. We would have entered into the said question had it been absolutely necessary for us to decide it in the case on hand. But as observed hereinabove, we are of the view that the appellants are entitled to succeed on the first ground that on the facts and in the circumstances of the case, the appropriate Government was not justified in invoking urgency clause under sub-section (4) of Section 17 of the Act by dispensing with inquiry and hearing of objections under Section 5A of the Act and the final notification issued under Section 6 of the Act deserves to be set aside on that ground alone, we express no opinion one way or the other on the interpretation of the expression "the date of publication of the notification" used in sub-section (1) of Section 4 , sub-section (4) of Section 17 and Section 6 of the Act.

52. For the foregoing reasons, both the appeals are allowed. The action of the respondent authority of dispensing with the inquiry and hearing of objections under Section 5A and issuance of final notification under Section 6 of the Act is hereby quashed and set aside. It is, however, open to the authorities to take appropriate action after following normal procedure laid down in the Act.

53. Appeals are accordingly allowed with costs.

CONTEMPT PETITION NO.30 OF 2007 IN C.A.NO. ............... OF 2008 @ S.L.P. (C)NO. 15449 OF 2004

54. In the light of judgment in the above appeals, the contempt petition stands disposed of.

.........................................................J. (C.K. THAKKER) NEW DELHI, .........................................................J. NOVEMBER 07, 2008. (<NAME>)


JUDGMENT <NAME>, C.J.

1. In this case a Rule has been issued on the opposite party to show cause why the order of the <NAME> at Tangail, <ORG>, dated the 20th November 1909, should not be set aside or why such other order should not be passed as to this <ORG> might seem fit and proper. The occasion of this rule was that a decree was passed in <ORG> in March 1909 for a sum in excess of a thousand rupees. There was an application for transfer of the execution proceedings which resulted in their being transferred to the <NAME> at Tangail, <ORG>. Certain orders were passed by that <NAME>, and on the 20th of November, he made an order of release, and it is this order that is named in the Rule. Subsequently an exception being taken to the proceedings, the <NAME>, on the 8th of January, made an order to the effect that the proceedings before him were without jurisdiction. Though the Rule only mentions the order of the 20th of November 1909, I notice that the application on which the Rule was granted referred to the orders generally, and I think we can fairly treat this application as though the order of the 8th of January-was called in question, so that what we have to decide is whether or not the <NAME> had jurisdiction to entertain these execution proceedings. Now, his jurisdiction did not extend to suits in excess of a thousand rupees, so that if the matter had to be determined by the terms of the Code, then under the present Code as under the Code of 1882, the <NAME> bad not jurisdiction for the purposes of these execution proceedings. Nor do I think that jurisdiction was created by Clause (b) of Section 31 of the Presidency Small Cause <ORG>s Act. This Act is Act XV of 1882; and was passed on the same day as Act XIV of 1882 which was the Code of Civil Procedure of that year and, I think it would be reading into the words of Section 31 , Clause (b), a meaning of which they are not reasonably susceptible, when regard is had to the circumstances, if we were to hold that <ORG>, which was not competent for the purposes of the Code, would be competent by reason of the provisions in this section. I think the fair meaning of Section 31 , Clause (b), is that <ORG> to which a decree may be sent for execution is <ORG> competent to deal with it under the provisions of Act XIV of 1882 and so the <ORG> which under the provisions of the present Code is also competent to deal with it. Therefore, I think the <NAME> rightly held that he had no jurisdiction, and that being so not only will the order of the 10th of November 1909 be of no avail but the other orders must share the same fate, the order of the 8th of January 1910 being correct.

2. But then we have been asked to transfer this proceeding from <ORG> at Tangail to <ORG> Judge having jurisdiction in the matter. No rule has been granted which would invite our making any such order, so that in any case I should have felt slow to accede to this application. But apart from that, proceedings that were without jurisdiction were not proceedings that could be transferred under the provisions of the old Code and I think they are equally incapable of transfer under the new Code. The broad result of this is that the applicant has failed, and I think it would be meaningless for us to say that we make the Rule absolute so far as it relates to the order of the 20th November 1909, for that has already come to nothing. I think the proper order for us to make is to discharge the Rule with costs, hearing fee, three gold mohurs.

<NAME>

3. I agree.


JUDGMENT <NAME>, C.J. and <NAME>, J.

1. This appeal arises out of a suit in which the plaintiff <NAME> claimed the sum of Rs. 30,009 together with interest. It appears that on the 2nd of June, 1913, one <NAME> made a mortgage in favour of <NAME>. The mortgage consisted of zamiadari property and also mortgagee rights in other property. On the 21th of November, 1396, <NAME> sold the entire mortgaged property, that is to say, the zamindari and the mortgagee rights, to the defendant <NAME> for the sum of Rs. 41,100 leaving Ra. 40,000 with the vendee for payment of the money due to <NAME>. On the 9th of February, 1900, <NAME> sued for sale of the mortgaged property.--After a considerable amount of litigation he got a decree, but only for the sale of the zamindari the mortgagee rights were excluded. The sale of the zamindari property being insufficient to satisfy the decree, the plaintiff, on the 7th of January, 1907, applied for a decree under section. 90 of the Transfer of Property Act , and after some further litigation obtained a decree against the judgement-debtors other than the present defendant. It is alleged that a balance of Rs. 33,009 still remained due. He now brings the present suit alleging that <NAME> was a trustee for him because Rs. 40,000 out of Rs. 44,000 was left in his hands for payment of the plaintiff's debt. There is no doubt that it was due to certain rulings of tins <ORG> that mortgagee rights were excluded from the original decree which <NAME> obtained on foot of his mortgage, ever since the case of <CITATION> (1907) I.L.R. 29 All. 385 was decided a mortgagee of mortgagee rights that is, a sub-mortgagee) is entitled to pursue his remedy and realize his debt out of the mortgage security, even though that security be mortgagee rights. In the case we have referred to the authorities were fully discussed and the Court unanimously overruled the case of <NAME> v. <NAME> (1891) I.L.R. 13 All. 432. The latter decision of this Court is supported by the provisions of Order XXXIV. in reality the present suit has been brought because the plaintiff failed to realize his debt in the appropriate way. In our opinion the real nature of the sale of the 24th of November, 1896, was a sale by <NAME> to <NAME> for Rs. 4,000 subject to the mortgage of Rs. 40,000. In our Judgment it is absolutely clear that no trust was created in favour of the plaintiff', He was no party to the transaction and the sale did not in any way affect his rights to proceed against the property mortgaged to him. We consider that the decision of the Court below was quite correct and must be confirmed. We accordingly dismiss the appeal with costs.