P L D 1959 Supreme Court (Pak (PLP)

CORNELIUS, J.‑This appeal by the plaintiff‑appellant, the United Industrial Bank Limited is brought before the Court on a certificate granted by the Dacca High Court to call in question an appellate order of that Court whereby further proceedings ii, the suit of the plaintiff to recover monies from the defendant Mohan Bashi Saha on the basis of a mortgage of certain pro perties was ordered to be stayed sine die. The history of the case briefly is as follows. The suit was instituted in 1949, and was decreed, but upon appeal, it was remanded to the trial Court for rehearing on the 24th May 1954, proceedings were continued and the case was taken to the High Court once again on a matter, which is not relevant to the present appeal. In the t meantime, however, an objection was taken before the trial Court that since the defendant Mohan Bashi Saha was a rent- receiver, the suit could not be proceeded with until "all the interests of such rent‑receiver which are liable to be acquired under this Act have been so acquired and compensation in respect of the acquisition of such interests have been paid or deposited under section 58': as required by section 69 of the East Bengal State Acquisition and Tanancy Act, 1950. Two points were raised before the Subordinate Judge. The first was as to a "tenancy in respect of Dag 124". At the time of the mortgage, Dag 124 was Khas land of the mortgagor, but in the schedule of the mortgaged property, at a certain stage, it was shown as "tenanted land of Kalidas Saha, an admitted officer" of Mohan Bashi Saha. The trial Court found that this alleged tenancy was a concoction, and if it were eliminated, then, in respect of the properties in suit, Mohan Bashi was not a rent‑receiver, although he was a rent‑receiver in respect of other properties not covered by the mortgage. We note that this finding though challenged in the grounds of revision to the High Court, finds no mention in that Court's order. The argument in this Court has proceeded on the basis that no part of the property covered by the mortgage in. suit is a rent‑receiving interest, and it is thus wholly excluded from acquisition under the Act aforesaid. The second question raised before the Subordinate Judge was that the bar of section 69 did not apply to the mortgaged pro perty for the above reason, namely, that it was not a rent- receiving interest and therefore not liable to be acquired under the Act. The Subordinate Judge approached the question in the following way. He asked himself whether the debt secured by the mortgage was liable 'to be scaled down under section 70, because if it was not so liable, then the bar of section 69 did not apply to it. It will be convenient at this stage to reproduce the terms of section 69 relevant to the case which are as. " After the commencement of this Act, no Civil Court shall entertain any suit or execute any decree or order against any property of any rent-receiver, for the recovery of any debt which is liable to be scaled down under section 70 until all the interests of such rent‑receiver which are liable to be acquired under this Act have been so acquired and compensation in respect of the acquisition of such interests has been paid or deposited under section 58". ' The trial Court next considered the provisions of sub section (1) of section 70, and came to the conclusion that this subsection states exhaustively all the types of debts, which a Revenue‑officer is required to scale down upon application being made to him. The provisions of this subsection will be required to be examined in detail presently. It will suffice at this point to say that the Subordinate Judge 'came to the conclusion that the debt in the present case was not one for the scaling down of which provision had been made in section

70. On this basis, he asked himself the question concerning the debt before him. " How and in what manner the debt will be scaled down?" He concluded that the legal provision being of a penal nature, it must be strictly construed. If there were any lacuna in the Act, the plaintiff should get the advantage of it. The Court was not competent to add anything to the statute by way of a provision for the case in question. He accordingly declined to stay the suit. Thereupon Mohan Bashi Saha took the matter up before the Dacca High Court in its civil revisional jurisdiction. The case was heard by a Division Bench, which reversed the order of the trial Court and directed that the suit be stayed upon the following, arguments, viz., firstly, that the duty of the Civil Court at the initial stage was to consider whether the petitioner was a rent‑receiver, and "whether the debt in question is covered by the section and is liable to be scaled down," secondly, upon the true construction of section 69, it is apparent that its provisions cannot be interpreted to become effective only after all the pro ceedings leading to payment of compensation under section 58 have been completed [Birendra Chandra Das and others v. Naresh Ch. Bhattacharjee (P L R 1954 Dacca 625)] and thirdly that section 69 is applicable to all debts incurred by a rent‑receiver before the 7th April 1948, other than debts which are arrears of revenue, rent or cesses and other dues payable to the Provincial or the Central Government or to a Co‑operative Society [Kazi Abdul Hamid v. Kashi Charan Roy (7 D L R 115)]. It does not appear that the learned Judges of the Division Bench thought it necessary to deal with and decide the precise question which had been extracted with care by the trial Court, namely, whether section 70 provided a mode for the scaling down of a debt such as the present debt, i.e., a mortgage secured wholly upon properties not liable to be acquired under the Act. That, as will presently appear, was the sole question for decision in the case. No question was raised in the grounds before the High Court regarding the applicability of section 69 in advance of proceedings being completed for the assessment and payment of compensation under section

58. As has been mentioned, a ground was raised that the finding of the trial Court regarding the alleged tenancy in Dag No. 124 was not maintainable, but it appears that this question was not raised before the High Court in arguments. Nor was it raised before us in the appeal, which has been preferred against the order of the High Court. On the point whether, upon its‑ true construction, section 70 of the Act of 1950 makes provisions for the scaling down of the debts such as the debt In the present case, the learned Judges of the Division Bench have purported to follow an earlier decision of 0another Division Bench of the same Court in Kazi Abdul Hamid v. Kashi Charan Roy. On reference to that judgment, we find that it contains nothing in the way of discussion of the point in question., It was delivered in an appeal from an order of a Civil Court staying execution of a mortgage decree on the ground that the judgment‑debtor was a rent‑receiver. It was contended before the High Court that in respect of some of the properties the judgment‑debtor was not a rent‑receiver and the decree could be executed against hi those properties. Though the facts on the point are not stated with clarity, it appears from the language used in certain places that the mortgaged properties in that case included some pro perties, which were liable to be acquired under the Act as well as other properties, which were not so liable. Without entering upon any examination of the detailed provisions of section 70 (1), which fell to be interpreted in the case, the learned Judges delivered the following conclusion: ‑ "The only debts in respect of which exception is allowed are stated in section

70. These are arrears of revenue, rent or cesses and other debts and dues payable to the Provincial or Central Government or to a ‑Co‑operative Society. Barring these, section 69 is applicable to all debts incurred by a rent- receiver before the 7th day of April, 1948. The argument that if a rent‑receiver has properties in respect of which he is a rent receiver and other properties in respect of which he is not, decree in respect of a debt incurred before the 7th day of April 1948, can be executed against him by attach ment of properties in respect of which he is not a rent- receiver, is opposed to the scheme of this section and is not tenable at all . . . . . . . . . . . There is sufficient indication in clause (b) of subsection (1) of section 70, that section 69 is applicable to the rent‑receiver who has pro perties other than those liable to be acquired under the Act." Since this passage gives the impression that temporary immunity from suit or decree is claimable upon the con sideration whether the rent‑receiver has or has not properties in respect of which he is not a rent‑receiver, and since such a consideration is entirely outside the precise terms of section, it is desirable that we should here reproduce the terms of that section so far as they require to be interpreted and attempt to construe them upon right principle in relation to the facts of the present case. It will be sufficient to reproduce the content of the first subsection and the second proviso to the fifth subsection of section 70: ‑ " Section 70 (1):‑After the interests of a rent‑receiver in a district, part of a district of local area have been acquired under this Act, the debts incurred by such rent‑receiver before the 7th day of April, 1948, other than arrears of revenue, rent or cesses and other than debts and dues payable to the Provincial or Central Government or to a Co‑operative Society (and also other than loans advanced for financing tea industry), shall; notwithstanding anything contained in any other law for the time being in force, be scaled down in the following manner, if the rent‑receiver has applied in the prescribed manner for scaling down his debts to the Revenue‑officer authorised under subsection (1) of section 71 within 3 months of the publication under section 42 of the Compensation Assessment‑roll in respect to his interests or lands which (lands) have been acquired first under section 3 or section 44 :‑ . (a) in the case of a debt secured by a mortgage or charge on the interests of a rent‑receiver which have been acquired under the provisions of this Act, the debt shall be scaled down pro portionately to the reduction in the net income suffered by such a rent‑receiver as a result of the acquisition of the interests concerned (b) in the case of a debt secured by a mortgage or charge partly on the interests of a rent‑receiver which have been acquired under this Act and partly on other properties which have not been so acquired under this Act, the debt shall be divided into two parts in the same ratio as the net annual income of the rent‑receiver, as calculated in the manner pre scribed, from the interests mortgaged or charged which have been acquired bears to the net annual income from the properties mortgaged or charged which have not been so acquired, and the part of the debt proportionate to the net annual income from the interests which have been acquired shall be scaled down proportionately to the reduction of the net annual income suffered by the rent‑receiver as a result of the acquisition of the interests concerned ; (c) in the case of a debt not secured by any mortgage or charge on any interest or property, whether immovable or movable, of the rent‑receiver, the debt shall be divided into two parts in the same ratio as the net annual income of the rent‑receiver, calculated in the manner prescribed from the interests, which have been acquired under this Act, bears to the net annual income of the rent‑receiver from the properties which have not been so acquired and from other sources ; and the part of the debt proportionate to the net annual income from the interests which have been acquired shall be scaled down proportionately to the reduction in the net annual income suffered by the rent‑receiver as a result of the acquisition of the interests concerned Provided that no portion of the debt of any rent‑receiver shall be scaled down if the total of the debts apportioned under clauses (a), (b) and (c) on the interests or lands of the rent receiver acquired under this Act be less than one‑fourth of the total amount of the compensation money payable under this Act to such rent‑receiver Provided further that the debts liable to be scaled down under this section shall not be scaled down to an amount less than one‑fourth of the total amount of such compensation money." The second proviso to the fifth subsection reads as follows: ‑ " Provided further that no portion of the debt of a rent -receiver apportioned under clause (b) or (c) of subsection (1) on his properties which have not been acquired, and no portion of his debt secured entirely by a mortgage or charge on such properties, shall be recoverable from any compensation money payable to such rent‑receiver under this Act. It has been seen that the bar to further proceedings, in a suit or execution for recovery of any debt, imposed by section 0 is confined to debts which are " liable to be scaled down under section 70". Now, section 70 is not expressed as an exhaustive statement of debts subject to such a liability. The first sub section of section 70, in the first instance, specifies debts which are not liable to be scaled down, and these are arrears of revenue, rent or cesses, debts and dues payable to the Central or Provincial Government or to a Co‑operative Society, and by a later amendment, "loans advanced for financing tea Industry". The subsection then proceeds to state that with the exception of these debts, the debts incurred by the rent‑receiver before the 7th April, 1948, whose rent‑receiving interests have been acquired under the Act, "shall be scaled down in the following manner," following which a precise provision is made firstly, for debts incurred wholly upon a rent‑receiving interest which has been acquired, secondly, debts secured partly on a rent‑receiving interest which has been acquired and "partly on other properties which have not been so acquired," and thirdly, for debts "not secured by any mortgage or charge on any interest or property, whether immovable or movable of the rent‑receiver." Each clause states with exactness, the formula to be applied in scaling down the debts to which it applies, and these formulae differ each from the other. There is no general formula provided or indicated, to which these three special formulae could be regarded as exceptions. It is thus sufficiently clear that the learned Subordinate Judge of the trial Court had indeed pointed out a material omission in this part of the section, which rendered it inapplicable to debt secured by mortgages wholly upon interests, which have not been acquired and are not liable to be acquired under the Act. He opined that to make a provision of this kind was the function of the Legislature, and he himself had no authority to lay down any mode by which any reduction in such a debt could be effected. It is a matter for some regret that in the judgment delivered in the High Court reversing the order of the learned Subordinate Judge, no attention was paid to this point at all, but instead reliance was placed upon a judgment delivered in a case where the mortgage debt was apparently secured partly upon properties acquired or liable to be acquired under the Act, and partly upon properties not liable to be so acquired. For such a case, precise provision is made in clause (b) of subsection (1) of section 70, and therefore, it was clearly a case of a debt liable to be scaled down under section 70, which consequently had attracted the bar of section

69. Mr. U. K. Roy for the respondent Mohan Bashi attempted to repeat the argument, which had been refuted by the High Court, namely, that action under sections 69 and 70 must wait upon finalization of the compensation assessment‑roll and payment of the compensation. He referred to certain sections in the Act of 1950 relating to the assessment of compensation and its payment, but we find it unnecessary to consider those provisions, or the argument based thereon by Mr. U. K. Roy, in detail for the reason that we are satisfied that sections 69 and 70 upon their plain terms, do not support the conclusion for which the learned counsel contends. It is evident from the wording of section 69 and section 70 that the period during which proceedings of the specified kinds "shall not be entertained" is a period which commences with the acquisition of the rent‑receiving interest of the debtor in question and ends with the payment to him of compensation. The words of the section, in so far as they operate as a bar to the exercise of jurisdiction by the Civil Court, are of mandatory import, and the Legislature has clearly expressed itself as to the terminal points of the period during which the mandate is to remain in force. Accordingly, on this point we agree with the decision of the learned Judges in the High Court upon this aspect of the case. The argument of extension of the terms of section 70 (1) to a mortgage debt secured wholly upon properties excluded from acquisition under the Act of 1950, can only be rested upon the circumstance that in that subsection, the only excluded debts are those expressly mentioned, which have been stated in detail above, and as to other debts of a rent‑receiver, the provision is that they shall be scaled down "in the following manner" from which, it might perhaps be argued, the inference' should be that, although the "manner" may not have been exhaustively stated, yet the intention of the subsection is that all debts other than those expressly excepted should be liable to be scaled down. Now, it is evident that the scaling down of debts involves interference with private property, and that such interference cannot be assumed to have been placed within the discretion of the Courts or other authorities, particularly where in relation to the largest number of relevant cases, the Legislature has stated precise formulae which shall govern such interference. As has been seen above, the Act does not expressly or by implication provide any general formula for scaling down of debts. The three cases specified in clauses (a), (b) and (c) of subsection (1) of section 70 are clearly special cases, and do not constitute exceptions to any general rule. Therefore, the presumption would be that the fairly obvious omission in this subsection, namely, of a mortgage secured wholly upon properties not liable to acquisition under this Act would, if it had been the intention of the Legislature to provide for scaling down in this case as well, have been made the subject of a special formula like the other three cases. In, the alternative such a case may be provided for in a wholly different manner and as will presently be seen, section 70 itself contains such an alternative and different provision for the case in question. Therefore, the argument that all cases of debts other than excepted debts are intended by the Legislature to be dealt with under subsection (1) of section 70 despite the fact that the precise mode of scaling down has been prescribed in respect of only three specified categories of debts, is not one which can be accepted with any readiness. The learned Subordinate Judge was perfectly right when he pointed out that he could not assume the function of the Legislature and lay down a formula applicable to the case before him, out of his own mind. He regarded the case before him, as, qua subsection (1) of section 70, a casus omissus, for which he was himself unable to draw any provision by inference from the words of the statue, in the absence of express provision. It is on this point that the direct provision in the second proviso to subsection (5) of section 70, which in terms applies to such a case as the present, serves to exclude the argument of casus omissus. That proviso lays down that no portion of the debt of a rent‑receiver which is secured entirely by a mortgage or charge on his properties, which have not been acquired shall be recoverable from any compensation money payable to such rent‑receiver under the Act. We may proceed upon the assumption that all relevant rent‑receiving interests have by now been acquired, under the omnibus notifications issued district‑wise by the Provincial Government. In our opinion, the plain purpose of this provision is to exclude mort gages secured wholly upon properties of a rent‑receiver not liable to acquisition, from the scheme whereby the categories of debts scheduled in section 70 (1) are made liable to scaling down, and by subsection (5) are extinguished to the extent of the reduction thereby effected, and in addition, by the operation of the first proviso to subsection (5) are made recoverable "only from the compensation money payable for the acquisition of all (his) interests under this Act, and, shall be limited to and shall not exceed half of the total compensation money so payable." The purpose of the Legislature in relation to debts secured upon properties not liable to be acquired is thus made clear, i.e. these debts are applicable to and are recoverable in full from the properties upon which they are secured. The view of the High Court upon this point is, in our opinion, not sustainable upon a true construction of section 70 of the Act of 1950. In the F view we take, the debt here in question is not one which is liable to be scaled down under that section, and consequently, the bar of section 69 is not applicable to it. It follows that the decision of the High Court in this case trust be set aside and that of the 'a Subordinate Judge restored. A brief reference was made before us to certain rules, in particular Rules 73 and 74 and certain forms, viz. Forms XXIII, and XXV, prescribed under the Act of 1950, and it was suggested that the terms of these Rules and Forms give rise to the con clusion that section 70 (1) of the Act was intended to apply to a debt of the present kind. These Rules and Forms sere not discussed in any detail before us. They appear on their face to have been designed mainly for the purpose of ascertaining the total property of a rent‑receiver with a view to the formation of an estimate of his total income for certain purposes of the Act. It does not appear to be necessary for this purpose that they should have been drafted so as to exclude, or even specify debts which the Legislature intended should be recovered from the properties upon which they were secured. In any event, where the words of section 70 and in particular the second proviso to subsection (5) thereof are so plain in their meaning, it is nor possible to rely upon inferences derived from the matters contained in or omitted from the aforesaid Rules and Forms, for the purpose of defeating the clear intention of the Legislature expressed in tile main statute, We may also note briefly an argument, which was pressed, before us more than once by Mr. U. K. Roy, in bar of the appeal before us, viz. that the High Court had exercised a power not vested in it in granting the certificate which enabled the appeal to be brought. It was argued upon the footing that the suit halving been instituted in 1949 was governed in all respects by the law as it existed on that date, that since the judgment delivered by the High Court was not a "final order" in the case, no certificate could have been granted in terms of sections 109 and 110 of the Civil Procedure Code. Mr. U. K. Roy conceded that under Article 158 of the late Constitution of Pakistan, under which the High Court had purported to act in granting the certificate, leave could be granted in respect of any judgment of the High Court in civil proceedings, but he argued that this enlargement of power was not available in respect of a suit instituted before that Constitution came into force. Now, the decision of the Subordinate Judge that the case could not be stayed under section 69 of the Act of 1950 was given on the 31st August 1956, and this decision was reversed by the High Court in revision on the 30th January 1957. Both these dates are subsequent to the 23rd March 1956, the date on which the late Constitution came into force. Article 158, which directs that "an appeal shall lie to the Supreme Court from any judgment, decree or final order of the High Court" is expressed in terms of futurity and covers "any judgment" of the High Court. We can see no force in the argument that a judgment of the High Court delivered after the 23rd March 1956, but in relation to a case, which was instituted before that date is to be excluded from the meaning of the expression "any judgment". The right of appeal was derived from the Constitution, and not as an incident of the suit. Even if the matter be thought to the under sections 109 and 110 of the Civil Procedure Code, since the order under appeal before us was not passed by the High Court either in its original civil jurisdiction or in its final appellate jurisdiction, it must be regarded as an appeal from "a decree or order" as mentioned in clause (c) of section 109; Civil Procedure Code. Therefore, for the purposes of the grant of the certificate under section 109, the condition that the order should be a "final order" was not obligatory, and since the order in the case was one reversing that of the Court below, the only point which the learned Judges in the High Court were required to consider before they granted the certificate, was the question of valuation. The valuation found is in excess of the minimum prescribed by section 110 of the Act. In addition to this, it will be seen that the argument that the order in question is not a "final order" is unsustainable upon the consideration that, at any rate, in so far as concerns the application of the bar of jurisdiction provided by section 69 of the Act of 1950, it was a "final order." In the light of the facts that the case involved a point of construction of a difficult statute and that the inter pretation adopted by the High Court not only in this case, but at least in one other case which the learned Judges have purported to follow was incorrect, it is clear that this was an eminently suitable case in which, had the question come before us under Article 160 of the late Constitution, we should have felt obliged to grant special leave to appeal. For the reasons already given, this appeal is allowed with costs, and setting aside the order made by the High Court, we hereby restore the order of the Subordinate Judge directing that the suit before him shall proceed. A. H. Appeal allowed.