Full Judgment Text
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PETITIONER:
NAUNIHAL KISHAN AND OTHERS
Vs.
RESPONDENT:
R. S. CH. PRATAP SINGH AND ANOTHER
DATE OF JUDGMENT:
13/03/1963
BENCH:
AYYANGAR, N. RAJAGOPALA
BENCH:
AYYANGAR, N. RAJAGOPALA
DAS, S.K.
SARKAR, A.K.
HIDAYATULLAH, M.
CITATION:
1964 AIR 1379 1964 SCR (2) 293
ACT:
Displaced Person-Debt-Adjustment-Usufructuary mortgage-
Whether mortgagor a debtor-Scaling down of mortgage debt-
Whether only in a suit for redemption of mortgageTribunal’s
jurisdiction-" Value of the lands"-How to be com-
puted--Whether in terms of market value alone-Whether in
terms of comparable Standard acres-Displaced Persons (Debts
Adjustments) Act, 1951 (LXX of 1951) ss. 2 (6), 2 (9), 4, 5,
16, 29.
HEADNOTE:
Both the appellants as well as the respondents originally
belonged to that part of Punjab which is now in Pakistan.
In 1933 respondent No. 2 effected an usufructuary mortgage
of a certain land to the father of appellants Nos. 1 to 3
and to the 4th appellant’s father to secure a sum of Rs.
39,000/-. Apart from the provisions for the payment of
interest the mortgage deed also fixed a term of 10 years
beyond which alone the mortgagee could sue for the recovery
of the mortgage money. Four years after the execution of
the mortgage deed the mortgagor sold a major portion of the
property to one Guranditta Ram. Out of the consideration
for this sale a sum of Rs. 26,500/- was left with the
transferee to be paid in discharge of the mortgage.This sum
was not paid to the mortgageeand thus the entire mortgage
amount remained outstanding.On the partition of the
country in 1947 both the mortgagoras well as the mortgagee
moved into India and they were "displaced persons".The
mortgagor was as displaced person allotted agricultural land
in India on the basis of his original holding in Pakistan.
The appellants as the mortgagees entitled to possession of
the lands were put in possession of this land.
The respondents applied under s. 5 of the Displaced Persons
(Debts Adjustment) Act, 1951, to get the mortgage debts
adjusted according to the provisions of s. 16 of the Act.
Certain objections raised by the appellants to this
application were overruled and the mortgage debt was scaled
down. An appeal was preferred to the Punjab High Court and
the Single judge who heard the appear dismissed it. A
Letters Patent Appeal preferred by the appellants was
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dismissed in limine,
294
and a certificate of fitness was refused. The present
appeal is by way of special leave granted by this Court.
The first contention raised before this Court was that the
first respondent was not a "debtor" within the meaning of s.
2 (6) of the Act because there was no contractual relation-
ship of debtor and creditor between him and the displaced
creditor i. e. the appellants. The next contention was that
the liability under a mortgage debt could be scaled down and
adjusted under the Act only in a suit for redemption filed
by the creditor and that it was incompetent for a debtor to
invoke the jurisdiction of the tribunal to effect the
scaling down by an application under s. 5. Finally it was
argued that under the proviso to s. 16 (4) of the Act the
reduction of the debt has to be in the game proportion as
"the value of the lands" allotted to the creditor in India
bears to the "value of the lands" left by him in Pakistan
and "value" according to the appellant meant market value.
Held, that having regard to the terms of s. 16 (4) the fact
that the security was by way of usufructuary mortgage and
the debtor had the right to redeem were sufficient to enable
the beneficient provisions of the section being attracted.
Apart even from the terms of s. 16 (4) the liability under
the mortgage in favour of the appellant would fall within
the definition of s. 2 (6). Even a usufructuary mortgage,
whatever its nature is within the definition of debt’ under
s. 16 and it is wholly immaterial whether or not the
creditor is entitled to proceed personally against the
debtor and recover the amount of the mortgage.
Lachhman Singh v. Natha Singh and Ors., 1. L. R. 1941 Lah.
71, Manubhai Mahijibhai Patel v. Trikamlal Laxmidas, I. L.
R. 1958 Bom. 1429, Lahori Lal v. Kasturi Lal (1956) 58 P. L.
R. 331, Rajkumari Kaushalya Devi v. Bawa Pritam Singh,
[1960] 3 S. C. R. 570.
Section 5 (1) of the Act enables a debtor to make an
application to the tribunal for the adjustment of his debts.
The amount due on or secured by a mortgage is a "debt"
within the meaning of s. 5 to settle which, an application
could be filed and the debt being a secured debt as
contemplated by s. 16 (4) the applicants were entitled to
have an adjustment in terms of that specified in the proviso
to that section.
Under the relevant rules the rehabilitation authorities arc
directed to take into account the income yield of the two
sets of land and thus the "value" of the land left behind in
Pakistan
295
is reflected in ascertaining the "standard acres". The
nature of the land left behind was taken into account and
numerical factors were prescribed based on these criteria
for ascertaining the equivalent of those lands in India.
When the proviso to s. 16 (1) spoke of value’ it must have
bad in contemplation the value as determined by the
procedure for fixing the same under the relevant rules.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 594 of 1960.
Appeal by special leave from the judgement and order
dated March 6, 1958, of the Punjab High Court in Letters
Patent Appeal No. 6 of 1958.
K.L. Gosain, C. L. Sareen and R. L. Kohli, for the
appellants.
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Roop Chand and Navnit Lal, for respondent No. 1.
Naunit Lal, for respondent No. 2.
1963. March, 13. The judgment of the Court was delivered
by
AYYANGAR J.-The facts necessary to appreciate the points
involved in this appeal by special leave against the
judgment of the High Court of Punjab are briefly these. By
a registered deed of mortgage dated March 6, 1933 Sham Singh
who is respondent No. 2 before us effected an usufructuary
mortgage of land measuring 7530 Kanals and 19 Marlas situate
in village Mohanpur in the District of Multan (now in
Pakistan) to the father of appellants 1 to 3 and to Topan
Das--the father of the 4th appellant. The sum secured by
the mortgage was Rs. 30,000/-. The stipulation in the
mortgage was that the income derived from the properties
transferred to the possession of the mortgagees was to be
treated as interest on Rs. 10,000/- out of the principal sum
and that the balance of Rs. 20,000/- was to carry a sum of
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Rs. 1,650/- per annum as interest. The deed further fixed a
term of 10 years beyond which the mortgagee could sue for
the recovery of the mortgage-money. Subsequent to the deed
of mortgage, about 4 years thereafter, the mortgagor-Sham
Singh sold a major portion of the mortgaged property
consisting of about 6,568 Kanals of land to Guranditta Ram
and others. Out of’ the consideration for this sale a sum
of Rs. 26,500/- was left with the transferee the same being
directed to be paid in discharge of the mortgage. The Sale
to Guranditta Ram was subject to a preemption claim and pre-
emptor exercised his rights to obtain that relief. Narain
Singh-father of Partap Singh, the 1st respondent-was the
preemptor and in a suit filed by him he obtained on February
16, 1940 a decree for sale in his favour by virtue of his
right of preemption and in pursuance of this decree he
obtained symbolical possession of the land, the mortagees
still containing to retain the actual possession of the
land. The sum of Rs. 26,500/-retained with the vendee under
the sale by Sham Singh was not paid over to the mortgagee
and thus the entire amount of the mortgage-money remained
outstanding.
While things were in this state, the country was partitioned
in 1947 and both the mortgagor as well as the mortgagees
moved into India and they were "displaced persons" . The
owners of the property, viz., the original mortgagor-
respondent No.2 Sham Singh and the pre-emptor-vendee were,
as displaced persons, allotted agricultural land in India on
the basis of their original holdings in Pakistan in
pursuance of the relevant rules under the Displaced Persons
(Compensation and Rehabilitation) Rules. The appellants as
the mortgagees entitled to possession of the lands were in
June-July 1950, under these rules put in possession of the
properties allotted to both Sham Singh-the original
mortgagor as well as of Pratap Singh-the legal
representative
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of the deceased pre-emptor (respondent No. 1). The total
extent of land which the respondent had been put in
possession was 51 standard acres and 9 units of land made up
of 37.4 standard acres as being the property belonging to
the pre-emptorvendee (respondent No. 1) and 14.5 standard
acres by virtue of the property allottable to Sham Singh the
original mortgagor (respondent No. 2).
The Union Legislature enacted in November, 1951 the
Displaced Persons (Debts Adjustment) Act, 1951 (Act LXX of
1951) which we shall hereafter refer to as the Act, being an
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Act to make provisions for the adjustment and settlement of
debts due by displaced persons. Section 5 of the Act
enabled an application to be made by a "’displaced debtor"
for the adjustment of his debts to a Tribunal which was
defined as meaning "a civil court having authority to
exercise jurisdiction under the Act" for the adjustment of
the debts due by the applicant. Section 16 made provision
for the manner in which debts secured on immovable property
due by displaced debtors were to be reduced, settled and ad-
justed. Sham Singh as well as Pratap Singh made separate
applications under s. 5 of the Act seeking to obtain the
benefit of the settlement and adjustment provision contained
in its s. 16. The two applications were, in view of their
having reference to the same mortgage debt, consolidated and
were heard to ether by the Senior Sub-judge, Karnal who was
the relevant Tribunal under the Act. Several objections
were raised by the mortgagee-appellants to these
applications but they were overruled and the mortgage debt
was scaled down under s. 16 and other relevant statutory
provisions which were applicable in the manner we shall
detail later. An appeal was preferred from this decision to
the High Court of Punjab but the same was dismissed by the
learned Single judge. A further appeal under the Letters
Patent to a Bench of the High Court was
298
dismissed in limine and a certificate of fitness being
refused, the appellants applied to this Court for special
leave and this being granted, the appeal is now before us.
Before we set out the grounds which have been urged before
us in support of the appeal it is perhaps convenient that we
extract the material portions of some of the provisions of
the Act on whose construction the appeal turns. The Act, as
we stated, earlier, was enacted inter alia, for making
provision for adjustment and settlement of debts due by
displaced persons. A "’displaced debtor" is defined as a
displaced person from whom a debt is due or is being claimed
(s. 2 (9) ). We might add that it is common ground that both
the appellant and the respondents are "displaced persons" as
defined in the Act. The word ,debt’ used in s. 2 (9) is
defined in s. 2 (6) thus :
"2. (6). ’debt’ means any pecuniary
liability, whether payable presently or in
future; or under a decree or order of civil or
revenue court or otherwise, or whether
ascertained or to be ascertained
Section 5 is the first of the sections in Chapter II which
is headed ’Debt Adjustment Proceedings’. It reads :
"5. (1) At any time within one year after the
date on which this Act comes into force in any
local area, a displaced debtor may make an
application for the adjustment of his debts to
the Tribunal within the local limits of whose
jurisdiction he actually and voluntarily
resides, or carries on business or personally
works for gain ........... "
Sub-section (2) and (3) of this section specify what the
application under sub-s. (1) should contain but
299
these need not detain us. The next section which is
relevant, having regard to the points raised before us, is
s. 16 which reads :
"16 (1) Where a debt incurred by a displaced
person is secured by a mortgage, charge or
lien on the immovable property belonging to
him in West Pakistan, the Tribunal may, for
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the purpose of any proceeding under this Act,
require the creditor to elect to retain the
security or to be treated as an unsecured
creditor.
(2) If the creditor elects to retain the
security, he may a ply to the Tribunal, having
jurisdiction in this behalf as provided in
section 10, for a declaration of the amount
due under his debt.
(3) Where in any case, the creditor elects
to retain his security, if the displaced
debtor receives any compensation in respect of
any such property as is referred to in sub-
section (1), the
creditor shall be entitled-
(a) Where the compensation is paid in cash,
to a first charge thereon :
Provided that the amount of the debt in
respect of which he shall be entitled to the
first charge shall be that amount as bears to
the total debt the same proportion as the com-
pensation paid in respect of the property
bears to the value of the verified claim in
respect thereof and to that extent the debt
shall be deemed to have been reduced;
(b) where the compensation is by way of ex-
change of property, to a first charge on the
property situate in India so received by way
of exchange :
300
Provided that the amount of the debt in
respect of which he shall be entitled to the
first charge shall be that amount as bears to
the total debt the same proportion as the
value of the property received by way of
exchange bears to the value of the verified
claim in respect thereof and to that extent
the debt shall be deemed to have been reduced.
(4)Notwithstanding anything contained in this
section, where a debt is secured by a mortgage
of agricultural lands belonging to a displaced
person in West Pakistan and the mortgage was
with possession, the mortgagee shall, if he
has been allotted lands in India in lieu of
the lands of which he was in possession in
West Pakistan, be entitled to continue in
possession of the lands so allotted until the
debt is satisfied from the usufruct of the
lands or is redeemed by the debtor :
Provided that in either case the amount of the
debt shall be only that amount as bears to the
total debt the same proportion as the value of
the lands allotted to the creditor in India
bears to the value of the lands left behind by
him in West Pakistan and to that extent the
debt shall be deemed to have been reduced.
(5)Where a creditor elects to be treated as
an unsceured creditor, in relation to the
debt, the provisions of this Act shall apply
accordingly. "
Section 29 (1) enacts
"29. (1) On and from the 15th day of August,
1947, no interest shall accrue or be deemed to
have accrued in respect of any debt owed by a
displaced person, and no Tribunal shall allow
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301
any future interest in respect of any decree
or order passed by it
Provided that-
(a) where the debt is secured by the pledge
of shares, stocks, Government securities or
securities of a local authority, the Tribunal
shall allow for the period commencing from the
15th day of August, 1947, and ending with the
date of commencement of this Act, interest to
the creditor at the rate mutually agreed upon
or at a rate at which any dividend or interest
has been paid or is payable in respect
thereof, whichever is less ;
(b) in any other case the Tribunal may, if
it thinks it just and proper to do so after
taking into account the paying capacity of the
debtor as defined in section 32, allow, for
the period mentioned in clause (a), interest
at a rate not exceeding four per cent, per
annum simple."
We shall now proceed to detail the points that were urged
before us by learned Counsel for the appellant : (1) The
first contention raised before us was that Pratap
Singh---the representative of the purchaser of the equity of
redemption-was not a "debtor" within s. 2 (6), because there
was no contractual relationship between him and the
displaced creditor i. e., the appellants. The argument was
broadly on these lines : Section 2 (6) of the Act defined
the word ’debt’ and the expression "debt’ is employed in s.
2 (9) as also in s. 5 (1) under which the application giving
rise to this appeal was filed. The essence of that
definition is that it involves a pecuniary liability -on
the part of the ’debtor’ enforceable by a creditor.Thus
it was urged that a mortgagor under a purely
302
usufructuary mortgage where there was no personal covenant
to repay the loan, could not be said to be a debtor and the
amount secured under such a mortgage could not therefore be
a "debt" within the definition. The position of a purchaser
of the equity of redemption Vis-a-Vis the mortgagee was,
learned Counsel urged, similar. He further urged that the
fact in the case of a purchaser of the equity of redemption,
even if the mortgagee could bring a suit for the recovery of
the mortgage-money and in enforcement of that liability the
mortgaged property could be sold was not sufficient to make
him a debtor as according to him the absence of a personal
liability to discharge the obligation out of his other
property not under mortgage was the essence of a debtor and
creditor relationship under the definition. In support of
this submission learned Counsel referred us to two decisions
one of the Lahore High Court in Lachhman Singh v. Natha
Singh (1), and the other of the Bombay High Court in
Manubhai Mahijibhai Patel v. Trikamlal Lakshmidas (2),
turned on the meaning of the expression "debt’ in the Punjab
Relief of Indebtedness Act (Act VII of 1934) and it was held
that the amount secured by a pure usufructuary mortgage
which neither stipulated for the personal liability of the
obligor to pay, nor conferred on the obligee the right to
recover the amount by the coercive machinery of law, could
not be called a ’debt’ in that essence of the concept of
’debt’ consisted in the personal liability of the obligor
which the obligee was entitled to enforce by action. This
decision, even apart from the terms of s. 16 of the Act
which in terms includes an usufructuary mortgage in the
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category of "’a debt" for the purposes of the Act, affords
little assistance to the appellant before us, because the
mortgage of 1933 in favour of the appellant contains a
covenant on the part of the mortgagor to repay the debt
after 10 years and in consequence the mortgagee was entitled
to file a suit
(1) I,L.R. 1941 Lah. 71,
(2) I.L,R. 1958 Bom, 1429
303
for the recovery of his debt and realise it from the sale of
the mortgaged property and also obtain a personal decree
under 0. XXXIV, r. 6 against the mortgagor-Sham Singh-though
he might not be entitled to a personal decree against the
purchaser of the equity of redemption. The other decision
of the Bombay High Court dealt with the construction of the
Bombay Agricultural Debtors’ Relief Act and the headnote
specifies the point decided as being that in the absence of
an agreement making a mortgagor personally liable to the
mortgagee, a purchaser of the equity of redemption was not
entitled to apply under s. 4 of that Act for the adjustment
of the mortgage debt, inasmuch as such a mortgage debt was
not "his debt" within the meaning of s. 4. This extract
sufficiently shows that decision turned wholly upon the
definitions contained in the enactment before the court and
could not be called in aid as laying down any general
propositions of universal application. On the other hand,
there is a decision of the High Court of the Punjab in
Lahori Lal v. Kasturi Lal (1), in which the Bench held that
a debt as defined in s. 2 (6) of the Act now under
consideration was not limited to personal liabilities only.
We consider that the Act has not left the meaning of the
expression "debt" where such debt is secured by a mortgage
including an usufructuary mortgage in any manner of doubt,
but on the other hand by making specific provision
therefore, has put beyond the pale of argument that these
are "debts" which could be scaled down under it. We have
already extracted s. 16 of the Act which contains the
provision for adjustment of debts where these are secured by
mortgage on immovable property. As the property which is
the security for the mortgagee is situate in West Pakistan
sub-s. (1) applies which affords the creditor an option
either to retain the security or to be treated as an
unsecured creditor.
(1) (1956) 58 P. L. R. 331,
304
It is common ground that the appellant desired to retain the
security. Sub-section (2) therefore comes into play and
enables the creditor to move the Tribunal for a declaration
regarding the amount due to him in respect of that mortgage.
In the present case the debtor himself having made the
application under s. 5, there was no need for any
application by the creditor. The reliefs which a creditor
might obtain in case of his election to retain the security
are set out in sub-ss. (3) and (4), the former being
applicable to simple mortgages and the latter where the
mortgage is usufructuary i.e., with possession. Sub-scction
(4) which is relevant to the mortgage debt involved in this
appeal runs :
"(4). Notwithstanding anything contained in
this section, where a debt is secured by
mortgage of agricultural lands belonging to a
displaced person in West Pakistan and the
mortgage was with possession, the mortgagee
shall, if he has been allotted lands in India
in lieu of the lands of which he was in
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possession in West Pakistan, be entitled to
continue in possession of the lands so
allotted until tile debt is satisfied from the
usufruct of the lands or is redeemed by the
debtor :-
Provided that in either case the amount of the
debt shall be only that amount as bears to the
total debt the same proportion as the value of
the lands allotted to the creditor in India
bears to the value of the lands left behind by
him in West Pakistan and to that extent the
debt shall be deemed to have been reduced."
It was not disputed that the debt due to the appellant was
secured by a mortgage of agricultural
305
lands and that those lands belonged to a displaced person
from West Pakistan.It was also common ground that the
mortgage in favour of the appellant was with possession. It
ought to be mentioned that it wasby virtue of provisions
on the lines of the opening words of sub-s. (4) contained in
the rules and executive orders which were in force in 1950,
that the appellant was put in possession of the 37.4 and
14.5 standard acres belonging respectively to Pratap Singh
and Sham Singh. It is therefore very difficult to
appreciate the argument urged on behalf of the appellant
that the provisions of sub-s. (4) of s. 16 are not attracted
to the present case. In the first place the words "and the
mortgage is with possession" are perfectly general and
therefore apt and comprehensive enough to include not merely
usufructuary mortgages in which there is personal convenant
on the part of the mortgagor to repay the debt, but also
what are usually termed "pure" usufructuary mortgages
containing no such personal covenant. There is, therefore,
no scope for the argument based on the analogy of other
enactments in which the word ’debt’ has been construed as
indicating the necessity for a personal liability or an
obligation to repay on the part of the debtor. Having
regard to the terms of s. 16 (4) the security being by way
of usufructuary mortgage and the right of a debtor to redeem
are sufficient to enable the beneficient provisions of the
section being attracted. It is only necessary to add that
what might have been apparentfrom what we have said
earlier, viz., (1) that the point based upon the definition
of a debt in s.2(6)is wholly inapplicable to the case of
Sham Singh,since the mortgage itself contained a personal
con(2) that even in regard to Pratap Singh, the other
applicant, the contention has a very limited application
since having regard to the personal covenant the mortgagee
had a right to sue for the enforcement of his mortgage and
recover the money from the sale of the mortgaged property.
So
306
that apart even from the terms of s. 16 (4) the liability
under the mortgage in favour of the appellant would squarely
fall within the definition in S. (6). The matter is,
however, put beyond the range of controversy by the specific
provision in regard to all usufructuary mortgages by s. 16
(4) of the Act. In this connection we might refer to the
decision of this Court in Rajkumari Kaushalya Devi v. Bawa
Pritam Singh (1), where it was ruled that a mortgage-debt
was within the definition of the word ,debt’ in s. 2 (6) of
the Act. No doubt., that case was not concerned with the
distinction between cases where the creditor has a right to
proceed personally against the debtor and cases where he has
not, as in the case of a pure usufructuary mortgage, but the
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decision is useful as indicating that the expression
pecuniary liability’ in s. 2 (6) has to be understood not in
isolation but with reference to other provisions of the Act
and particularly s. 16. We are, therefore, clearly of the
opinion that every usufructuary mortgage, whatever its
nature, is within the definition of ’debt’ under the Act for
the purpose of scaling down under s. 16 and that it is
wholly immaterial whether or not the creditor is entitled to
proceed personally against the debtor and recover the amount
of the mortgage.
(2) The next contention urged by the learned Counsel has
been less substance than the one we have just disposed of.
It was said that the liability under a mortgage debt could
be scaled down and adjusted under the Act only in a suit for
redemption filed by the creditor and that it was incompetent
for a debtor to invoke the jurisdiction of the Tribunal to
effect the scaling down and adjustment by an application
under s. 5. We do not consider that this argument merits
serious consideration. Section 5 (1) of the Act which we
have extracted enables a "debtor" to make an application to
the tribunal for the adjustment of his debts. In view of
what we have stated
(1) [1960] 3 S.C.R. 570,
307
earlier the amount due on or secured by the mortgage is a
"debt" within the meaning of S. 5 to settle which an
application could be filed and the debt being a secured debt
answering to the description contained in the main part of
s. 16 (4), the applicants were entitled to have an
adjustment in terms of that specified in the proviso to that
section. Though this point about the locus standi of the
respondent-debtors to file the application has been
persisted in by the appellants at every stage of these
proceedings, we consider that there is no merit in it and it
has to be rejected on the plain terms of s. 5 read with s.
16.
(3)The third and last objection urged by the learned
Counsel turns on the language of the proviso to s. 16 (4)
which we shall extract once again :
"Provided that in either case the amount of
the debt shall be only that amount as bears to
the total debt the same proportion as the
value of the lands allotted to the creditor in
India bears to the value of the lands left
behind him in the West Pakistan and to that
extent the debt shall be deemed to have been
reduced."
Learned Counsel pointed out that the scaling down effected
in the present case was on the following basis. The total
mortgage-debt under the mortgage deed was computed at Rs.
51,700/-calculating interest as permitted by the relevant
statutory provisions and taking into account s. 29 which we
have already extracted. The correctness of this figure was
not disputed. The quarrel of learned Counsel was in regard
to what follows and that is stated in the order of the
Tribunal which has been confirmed by the appellate Court in
these terms :
"The total mortgaged land now belonging to the
petitioner (Pratap Singh) and respondent No. 5
(Sham Singh) has been assessed as
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equivalent to 359 standard acres 14-3/4 units
(329 standard acres 13-3/4 units of the
petitioner plus 22 standard acres 6-1/2 units
of the respondent No. 5) and in lieu thereof
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the mortgagors have been given in all 51
standard acres 9 units (37.4 to the
petitioners and 14.5 to the respondent No. 5).
As provided under s. 16 (4) of the Act the
amount of the debt payable to respondents 1 to
4 has been reduced in the same proportion in
which the land has been allotted to the
mortgagors. For the land belonging to them
the mortgage debt amounting to Rs. 51,700/-
when reduced to this proportion comes
approximately to Rs. 7,420/-."
It is this reduction that learned Counsel complains as not
justified by the proviso. The argument is that under the
proviso to s. 16 (4) the reduction of the debt has to bear
the same proportion as "the value of the lands" allotted to
the creditor in India bears to "the value of lands" left by
him in Pakistan. "Value", learned Counsel says, means
market value. It is urged that value of neither of the
lands was computed on that basis but that the Tribunal took
into account merely the proportion between the two extents
or areas i.e., the standard acres left in Pakistan compared
to the standard acres allotted in India in lieu thereof.
This contention that the procedure adopted does not accord
with the requirements of the proviso has been rejected by
all the Courts and, in our opinion, correctly. The fallacy
in the argument of learned Counsel consists in ignoring the
fact that in computing the standard acres left by a
displaced person in Pakistan the rehabilitation authorities
are, under the relevant rules and instructions, directed to
take into account the income yield of the two sets of lands
and thus the "value" of the land left behind is reflected in
ascertaining the "standard acres." Thus though market value
in the sense of what a willing purchaser would pay for the
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land left behind was not ascertained-it was obviously not
practicable to ascertain it-the rules etc., made sufficient
provision for such a valuation to be reflected in the
computation of the area to be allotted instead. The nature
of the land left behind-whether it was canal-irrigated,
well-irrigated or dry or merely rain-fed-was taken into
account and numerical factors were prescribed based on these
criteria for ascertaining the equivalent of those, lands in
India. It was after such a computation was made that the
7531 Kanals and odd of land which belonged to the
respondents was equated to 359 and odd standard acres. If
therefore 359 standard acres were the equivalent in value of
the land left behind, regard being had to the circumstances
we have indicated, there cannot be any complaint that there
has been a departure from the method of adjustment specified
in the proviso to s. 16 (4) when the debt as ascertained and
computed in accordance with s. 29 of the Act and other
relevant statutory provisions was scaled down under s. 16
(4) by multiplying it by 51/359, or 1/7 th. We are further
of the opinion that when the provision in proviso to s. 16
(1) spoke of "value" it must have had in contemplation the
value as determined by the procedure for fixing the same
under the relevant rules for the computation of equivalents
of property of displaced persons left behind in Pakistan and
the allotment of evacuee property to them in India. There
is no substance, therefore, in this point either. These
were the only points urged before us. The appeal fails and
is dismissed with costs.
Appeal dismissed.
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