Input:
ition No. 84 of 1975.
Petition under article 32 of the Constitution of India.
A. k. Sell, D. N. Mukherjee, Narayan Gupta and C. section Chatterjee, for the petitioner.
Girish Chandra, for respondent No. 1.
D.P. Uniyal and O. P. Rana, for respondent nos.
The Judgment of the Court was delivered by FAZAL ALI, J.
By an order dated November 8, 1974 passed by the District Magistrate, Badaun, the petitioner was detained under section 3(1)(a)(iii) of the hereinafter referred to as 'the Act ' because the allegations made in the grounds of detention disclosed that he had committed acts prejudicial to the maintenance of supplies and services essential to the community.
The grounds of the order of detention were served on the petitioner by the District Magistrate, Badaun, on November 13, 1974.
The State Government approved the order of detention on 18 November 19, 1974 and made a report to the Government of India on November 22, 1974.
According to the respondents, the Government of U.P. had made a reference to the Advisory Board constituted under the Act on November 22, 1974 but as it had not received The representation from the petitioner, the same was forwarded later.
The representation, according to the respondents, was received on November 28, 1974 which was rejected on December 6, 1974.
The representation was sent to the Advisory Board on December 18" 1974 which gave 13 its report holding that the grounds were sufficient for detention of the petitioner and after receipt of the opinion of the Advisory Board on January 7, 1975 the order of detention was finally confirmed by the Government on January 17, 1975.
We might mention at the very outset that there was some controversy on two points before us.
In the first place the petitioner did not accept the stand of the Government that the reference to the Advisory Board was made on November 22, 1974 but relied on a counter affidavit filed by Mr. section K. D. Mathur, the then District Magistrate of Badaun, in this Court to support his plea that the reference to the Advisory Board was made on December 20, 1974 vide paragraph 2(vi) of the counter affidavit appearing at p. 118 the Paper Book.
It was therefore contended by the learned counsel for the petitioner that as the reference was made to the Advisory Board beyond the period mentioned in section 10 of the Act, there being a violation of the mandatory provision of the statute, the order of detention fell on this ground alone.
We gave an opportunity to the Government to produce before us materials to show the exact position and from the original file produced before us we find that the counter affidavit filed by Mr. section K. D. Mathur in this court to the effect that the reference was made to the Advisory Board on December 20, 1974 was factually incorrect and that the reference was really made on November 22, 1974 by the Government by virtue of letter No. 107/2/48/74.
The file also contains a letter of the Registrar dated January 7, 1975 forwarding the opinion of the Advisory Board wherein also it was mentioned that the reference was made on November 22, 1974.
In view of these cogent materials Mr. Sen learned counsel for the petitioner did not choose to press this point.
We cannot, however.
Leave this matter without expressing our strong disapprobation on the careless and irresponsible manner in which the counter affidavit has been filed by the respondents, particularly by Mr. section K. D. Mathur who happened to be the then District Magistrate, Badaun.
We hope the Government will be careful in future and see that such incorrect affidavit are not filed before this Court, which may create unnecessary confusion and controversy and make a simple issue so very much involved.
The petitioner was admittedly a partner of the firm called Bharat Oil Company which was dealing in the storage and sale of high speed diesel oil since 1965.
According to the petitioner the business was started at Badaun and Ujhani but later a branch was opened at Bareilly and the firm transferred its headquarters to Bareilly in 1971.
We are not, however, concerned with the business at 19 Bareilly in this case.
Under the , the petitioner could have carried on his business only after obtaining a licence from the prescribed authority.
The District Authorities could grant licence only to the extent of 22,000 liters but if the dealer wanted to store high diesel oil to the extent of more than 22,000 litres he had to get a licence from the Chief Controller of Explosives, Nagpur.
The petitioner 's further case is that as high speed diesel oil ran in short supply, the Indian oil Corporation and the District authorities impressed on the dealers the necessity of keeping light diesel oil which was available in sufficient quantities and was necessary for running, crushers and pumps in the rural areas.
The petitioner had undoubtedly secured a licence for storage of li ht diesel oil which was valid upto March 31, 1975 and had applied for renewal of the licence thereafter and had also complied with all the necessary formalities about no objection and the safety certificate to be given by the District Authorities.
But on the date in question the licence of the petitioner had not been renewed so far.
We might intention in this connection that the stand taken by the respondents is that although the petitioner had a licence to stole light diesel oil to the extent of 22,000 litres he did not possess any licence for storing it at Ujhani.
It appears that the godown of the petitioner was searched by the excise authorities on October 17, 1974 and November 5, 1974 and in inspection of the godown about 1.64 lakhs litres of light diesel oil was found stored it Ujhani.
The stock register was produced by the petitioner before the authorities which appeared to be in order and there is no allegation that there was any manipulation or interpolation in the stock register Thus the simple allegation against the petitioner is that he had stocked huge quantity of light diesel oil without waiting for the licence to be cleared by the Chief Controller of Explosives at Nagpur This forms the subject matter of the allegations mentioned in grounds (1)(a) & (b) of the grounds of detention served on the petitioner.
The sheet anchor of the argument of Mr. Sen learned counsel for the petitioner was that in so far as ground No (1) was concerned it was wholly irrelevant and totally unconnected with the nexus of the Act, because even if the grounds be taken at their face value they did not disrupt or disturb the essential supplies to the community.
Before dealing with this contention it may be necessary to quote in extenso the grounds mentioned in (1)(a) & (b) of the detention order: "(1) That you a partner in the firm named Bharat oil Company, Mohalla Ayodhya Nagar, Ujhani District Badaun, on Bareilly Mathura Road, authorised only to deal in High Speed Diesel and Motor Spirit were found hoarding Light Diesel oil, without having obtained a licence for the same from the Chief controller of Explosives, Nagpur as is evident from the following: (a) On 17 10 74 at about 4 P.M. the premises of your aforesaid firm was inspected by Sri section N. Pandey, District Excise officer, Badaun and it was found that in the underground tanks within the premises mentioned aforesaid 96,000 litres of Light 20 Diesel oil was stored, for which no licence could be produced on demand by the District Excise officer aforesaid and thereafter a complaint has also been lodged in the court of the Chief Judicial Magistrate, Badaun by the District Excise officer on 8 11 74 (b) On 5 11 74 the premises of your aforesaid firm Bharat oil Company, Ujhani, was again inspected at about 4.15 P.M. by Sri N. N. Verma S.D.M. Badaun accompanied by District Excise officer Badaun and Sri Fateh Singh, Dy.
S.P. Badaun and it was found that 68,000) litres of Light Diesel oil had during 7th October 1974 to the time of this inspection been added to the store kept by you of the said Light Diesel oil of 96,000 litres, in three underground tanks within the premises mentioned aforesaid and no licence could be produced on demand by the S.D.M. Badaun.
For this also, a complaint has been lodged by the S.D.M. Badaun in the Court of Judicial Magistrate II Badaun on 8 11 74.
" Analysing these grounds it would appear that there is no allegation by the detaining authority that by storing the huge quantity of light diesel oil the petitioner had in any way affected the distribution or sale of that commodity, nor is there any allegation to show that the petition had refused to sell light diesel oil to any body who required it.
The High Court which was moved in the first instance for a writ of habeas corpus, appears to have drawn an inference based purely on speculation that the petitioner had transferred huge quantities of light diesel oil from his depot at Badaun to his godown at Ujhani.
There is, however, no material on the basis of which the High Court could have drawn such an inference.
There is, however, no suggestion.
far less any allegation, in these grounds that the petitioner had tried to divert his stocks of light diesel oil from Badaun to Ujhani and thereby deprived the people of Badaun of their share of the light diesel oil.
In these circumstances, therefore, we arc satisfied that there is absolutely no correlation between the act of the petitioner and the disruption of distribution of the essential supplies to the community.
The learned counsel appearing for the respondents submitted that by storing such huge quantities of light diesel oil in Ujhani the petitioner has committed a clear violation of the mandatory provisions of the and the Rules made thereunder and must be presumed to have disrupted the essential supplies because light diesel oil had been declared by the order of the Government of U.P. to be an essential commodity.
We are, however, unable to agree with this argument.
Mr. Sen appearing for the petitioner does not dispute that the light diesel oil was an essential commodity, but his argument was that he has in no way tried to disrupt the essential supplies of this commodity and he merely committed a technical offence in storing the quantities of light diesel oil in anticipation of the licence which had been cleared by the District Authorities and which awaited the 21 sanction of the Chief Controller of Explosives, Nagpur and which would have in normal routine been granted.
It is also admitted in the ground itself that a complaint had been lodged in the Court of the Chief Judicial Magistrate against the petitioner for the storage.
We have already held in several cases that the commission of an offence at a private place or a violation of a provision of law by itself does not attract the Act unless by the act committed by the petitioner the essential supplies to the community are disrupted or even flow of the life of the community is disrupted.
Reading grounds (1)(a) & (b) we are unable to hold that they are in any way germane or relevant to the disruption of maintenance of essential supplies to the community.
In Manu Bhusan Roy Prodhan vs State of West Bengal and others(1) this Court observed as follows: "This kind of a solitary assault on one individual, which may well be equated with an ordinary murder which is not an uncommon occurrence, can hardly be said to disturb public peace or place public order in jeopardy, so as to bring the case within the purview of the Act.
It can only raise a law and order problem and no more; its impact on the society as a whole cannot be considered to be so extensive, widespread and forceful as to disturb the normal life of the community thereby rudely shaking the balanced tempo of the orderly life of the general public.
This ground is, therefore, not at all relevant for sustaining the order of detention for preventing the petitioner from acting in a manner prejudicial to the maintenance of public order.
The ratio of this case fully tallies with the facts of the present case where also grounds (1) (a) & (b) taken at their face value appear to be irrelevant and do not disclose any causal connection with the disruption of the essential supplies to the community.
We now take up the other ground, namely, ground No. (2), which is as follows: "(2) That you as partner of the firm M/s Bharat oil Company located at Badaun licensed at Badaun to deal with Light Diesel oil and required by rule 9(1) of the U.P. Essential Commodities (Price Display and Control of Supply and Distribution) order, 1971.
as amended by Second Amendment dated ' June 13, 1973 framed under Rule 114(2) of the Defence of India Rules, 1971 to issue every purchaser a correct receipt showing, inter alia, the name and address of the customer were found to have sold Light Diesel Oil repeatedly without complying with the said requirement and with the object make fictitious sale of the 22 Light Diesel Oil a scheduled commodity within the meaning of the said order, as is evident from the following: (i) Cash memo No. 62 dated 8 8 74 | | (ii) Cash memo no, 63 dated 14 8 74 | | (iii)Cash memo no 134 dated 7 10 74 | Name and address | of the customer (iv) Cash memo no, 135 dated 7 10 74| not given" | (v) Cash memo No. 145 dated 7 11 74| | (vi) Cash memo No. 146 dated 7 11 74| This ground no doubt discloses a clear overt act on the part of the petitioner from which an inference can be drawn that the petitioner had made a number of fictitious sales.
The details of the cash memos by which the sales had been made have also been given but the cash memos do not disclose the names and addresses of the customers, as required by the rules.
The petitioner has himself admitted in paragraph 13 of his petition filed in this Court that there had been a violation of the U.P. Sale of Motor Spirit Taxation Act and the Rules made thereunder but he sought to explain the omission on the ground that it was due to the mistake of the Munim and the quantities alleged to have been sold were actually purchased by the petitioner himself for the use of the pumps in his own agricultural farm.
This explanation does not appear to be convincing at all.
From the file produced before us by the respondents it appears that the total amount of sale of light diesel oil under these cash memos mentioned in the ground comes to 21 ,000 litres.
We find it impossible to believe that the petitioner would consume such huge quantity of light diesel oil for his personal agricultural farms particularly when the petitioner had given no details of the number of farms and other machines for which this oil was said to be used.
In these circumstances there can be no doubt that these were fictitious sales made by the petitioner with a view to hoard light diesel oil and by his conduct the persons who were in genuine need of light diesel oil were deprived of the same.
Ground No. (2), therefore is quite specific, but the difficulty is that in view of our finding that ground No. (1) is irrelevant it is not possible to determine as to what extent the subjective satisfaction of the detaining authority was influenced or affected by Ground No. (1) which has been found by us to be extraneous and irrelevant.
It has been held by us in several cases that where out of two grounds one ground is vague or irrelevant, then the entire order of detention falls to the ground.
In this view of the matter the order of detention suffers from this serious infirmity and must be quashed.
Secondly it was argued by the learned counsel for the petitioner that on the materials produced before us the subjective satisfaction of the detaining authority has also not been established.
To begin with it is not clear at all as to who passed the order of detention and who was satisfied regarding the sufficiency of the grounds.
In the second place the grounds appear to have been served by Mr. R. C. Arora the permanent District Magistrate of Badaun who has also signed the same which shows that he was the detaining 23 authority also.
On a consideration of these two points we are of the opinion that the contention of the learned counsel for the petitioner is well founded and must prevail.
Coming to the first point we find that Mr. section K. D. Mathur has clearly alleged in his counter affidavit that Mr. R. C. Arora the permanent District Magistrate of Badaun had proceeded on leave from October 21, 1974 to November 11, 1974 and during his absence the deponent section K. D. Mathur was acting as the District Magistrate of Badaun.
It is further stated in the affidavit that Mr. R. C. Arora rejoined his duty in November 12, 1974 and took charge of his office.
The order of detention, however, appears to have been passed while Mr. section K. D. Mathur was officiating as District Magistrate of Badaun and Mr. Mathur makes no secret of the fact that the order of detention was passed by him after being satisfied of the grounds of detention.
In the counter affidavit submitted by Mr. section K. D. Mathur before the High Court, which is Annexure at p. 66 of the Paper Book Mr. Mathur categorically stated that he himself had passed the detention order after recording his satisfaction.
In this connection paragraph 1 of the counter affidavit before the High Court is as follows: That the deponent was District Magistrate, Badaun on 8 11 1974, and he has passed the detention order against the petitioner after being fully satisfied that the petitioner was acting in a manner prejudicial to the maintenance of supplies and services essential to the community and as such he is well acquainted with the facts deposed to below.
" This allegation is reiterated and over emphasised in paragraph 23 of the same affidavit wherein Mr. Mathur makes a categorical averment which is as follows: ". the deponent submits that in his capacity as the District Magistrate he was fully competent to make the impugned order of detention.
The deponent further submits that on the basis of the evidence and the material placed be before him, to which he has referred above he was personally and fully satisfied as to the existence of sufficient basis to make the impugned order with a view to prevent the petitioner from indulging in activities prejudicial to the maintenance of essential services and supplies.
" In this very affidavit Mr. Mathur goes on to state that he had also farmed draft of the grounds on November 8, 1974 and that Shri R. C. Arora who took over on November 12, 1974 served these grounds on the petitioner which were drawn by the deponent Mr. section K. D. Mathur.
In this connection the averment runs as follows: "Sri R. C. Arora took over charge on November 12, 1974 and under his signature Sri Arora served these same grounds which the deponent had earlier drawn upon the petitioner.
" According to the clear and categorical averments made by Mr, section K. D. Mathur in his affidavit before the High Court the only role which was 24 assigned to Mr. R. C. Arora the permanent District Magistrate was A that he signed the grounds and served them on the detenu.
In other words, according to Mr. section K. D. Mathur, Mr. R. C. Arora was merely the serving officer and did not perform any other function in so far as the order of detention passed against the petitioner was concerned and yet this officer is imprudent enough to allege in paragraph 25 of the counter affidavit filed in this Court that the order of detention was passed not only by him but by the two detaining authorities, namely Mr. R. C. Arora and Mr. section K. D. Mathur.
In this connection Mr. Mathur averred as follows.
"That the order of detention was passed by the detaining authorities after they had fully satisfied themselves about the existence of the grounds.
" It would thus appear from this averment that the order of detention was not passed by one single person but by more than one person and taking the facts mentioned by the deponent it would appear that the order of detention appears to have been passed in two stages in he first instance by Mr. section K. D. Mathur who was full fledged District Magistrate on November 8, 1974 when the order of detention was passed, but who according to his own statement had first prepared a draft of the grounds.
The order of detention was then signed by Mr. R. C. Arora on November 13, 1974 and served on the detenu.
While Mr. section K. D. Mathur took the clearest possible stand before the High Court that he alone had made the order of detention and he alone was satisfied about the sufficiency of the grounds, but in his affidavit before this Court he seems to suggest that there were two detaining authorities both of whom were satisfied.
This shows the casual and cavalier manner in which the order of detention against the petitioner appears to have been passed in this case.
Even if the order had been made by Mr. section K. D. Mathur and signed, by him, there could have been no objection in Mr. R. C. Arora serving the grounds on the petitioner, because the law does not require that the person who actually signs the order or the grounds must also serve the same on the detenu.
But in this case it is not possible to determine as to who in fact made the order of detention.
F It is true that the Court cannot go behind the subjective satisfaction of the detaining authority, but such satisfaction does not confer a blanket power which may authorise the detaining authority to act in a ruthless or arbitrary fashion and the judicial decisions have undoubtedly carved out an area, though limited.
within which the subjective satisfaction of the detaining authority can be tested on the touchstone of objectivity.
It is obvious that the subjective satisfaction of the detaining authority is a sine qua non for the exercise of power of detention and it has got to be exercised properly and discreetly.
In Khudiram Das vs The State of West Bengal and others(1) this Court made the following observations: "The basic postulate on which the courts have proceeded is that the subjective satisfaction being a condition precedent for the exercise of the power conferred on the executive, the 25 court can always examine whether the requisite satisfaction is arrived at by the authority; if it is not, the condition precedent dent to the exercise of the power would not be fulfilled and the exercise of the power would be bad." In the instant case, in view of the contradictory stand taken by the detaining authorities, we are satisfied that the exercise of jurisdiction to detain the petitioner has not been made with due care and caution or in a proper and fair manner.
On this ground also the order of detention stands vitiated.
Section 3(1) of the Act runs.
thus: "3.
(1) The Central Government or the State Government may, (a) if satisfied with respect to any person (including a foreigner) that with a view to preventing him from acting in any manner prejudicial to (i) the defence of India, the relation of India with foreign powers, or the security of India, or (ii) the security of the State or the maintenance of public order, or (iii)the maintenance of supplies and services essential to the community, or (b) if satisfied with respect to any foreigner that with a view to regulating his continued presence in India or with a view to making arrangements for his expulsion from India; It is necessary so to do, make an order directing that such person be detained.
" This power can also be exercised by the officers mentioned in sub section
(2), and in the instant case we are concerned with the District Magistrate.
The words "make an order directing that such person be detained " clearly postulate three conditions (1) that the order must be made by the authority mentioned in section 3; (ii) the order must be duly signed by the said authority; and (iii) that only one authority and one authority alone can pass such order of detention.
The statute does not contemplate a sort of composite or a joint order passed by several authorities.
In the instant case the original order of detention passed by Mr. section K. D. Mathur bears his signature and even the grounds mentioned bear his signature.
In these circumstances we are unable to accept the affidavit of Mr. section K. D. Mathur that the grounds framed by him were merely draft grounds prepared by him which were signed by the permanent District Magistrate later.
It is obvious that unless the order made and the grounds prepared are signed by the authority concerned, the order is not made as contemplated by section 3 of the Act.
Further more, since the order is based on grounds to be served on the detenu, the order of detention could be passed only if the grounds are in existence and are prepared contemporaneously, otherwise the order 26 of detention becomes purely illusory.
In view, however, of the contradictory affidavits given by Mr. section K. D. Mathur, it is difficult to determine whether Mr. section K. D. Mathur or Mr. R. C. Arora passed the order of detention and as to who among them was satisfied regarding the grounds of detention.
This is also a very serious infirmity from which the order of detention suffers and as a result of which the order has to be set aside.
There appears to us to be a clear violation of the provisions of section 3 of the Act in this case.
Lastly we may mention that although the petitioner has pleaded he question of mala fides in the instant case, it is not necessary for us to decide the same in the view we take in this case, and that is why it was not seriously pressed by Mr. Asoke Sen ill the course of his arguments before us.
For the reasons given above, we allow the petition and quash the order of detention passed against the petitioner on November 8, 1974 and direct the petitioner to be released forthwith.
V.P.S. Petition allowed.

Output:
The petitioner was carrying on business in diesel oil, an essential commodity, in two places.
He was detained under section 3(1)(a)(iii) of the , on the basis of allegations in two grounds that as had committed sets prejudicial to the maintenance of supplies and services essential to the community.
The allegation in the first ground was that he had stocked a large quantity of light diesel oil in one of the places without waiting for the licence to be cleared by the Chief Controller of Explosives in violation of the provisions of the Petroleum Act.
It was also stated in the ground that a complaint had been lodged in the Magistrate 's court for the offence.
The allegation in the second ground was that the petitioner violated the U.P. Sale of Motor Taxation Act and the rules made thereunder, in that the names and addresses of customers who had purchased light diesel from tho petitioner, had not been given in the cash memos.
Allowing The petition, ^ HELD: (1)(a) There is no allegation by the detaining authority in the first ground that by storing the huge quantity of light diesel oil the petitioner had in any way affected the distribution or sale of that commodity; nor is there any allegation to show that the petitioner had refused to sell the oil to anybody who required it.
Also there is no suggestion, far less any allegation, that the petitioner had tried to divert his ' stocks from one place to the other and thereby deprived the people of one place of their share of the oil.
Therefore, there is absolutely no correlation between the act of the petitioner and the disruption of distribution of essential supplies to the community.
[20D E, F G] (b) From the violation of the mandatory provisions of the Petroleum Act and the Rules made thereunder, no presumption can be drawn that there was disruption of supply of the essential commodity.
[20G H] (c) The commission of an offence at a private place or a violation of a provision or a law by itself does not attract the unless, by the Act committed, the supply or an essential commodity to the community is disrupted or the even flow of the life of the community is disrupted.
[21B] Manu Bhushan Roy Prodhan vs State of Bengal and others, A. I. R. , referred to.
(2) The second Ground does disclose a clear overt act from which an inference can be drawn that the petitioner had made a number of fictitious sales.
But, in view of the finding that the first ground is irrelevant it is not possible to determine to what extent the subjective satisfaction of the detaining authority was influenced or affected by the first ground.
When out of 2 grounds one is ague or irrelevant, then the entire order of detention falls to the ground.
[22C, F G] (3) The Court cannot go behind the subjective satisfaction the detaining authority but such satisfaction does not confer a blanket power which may authorise the detaining authority to act in a ruthless or arbitrary fashion.
Judicial decisions have carved out an area though limited, within which, the subjective satisfaction of the detaining authority, which is a sine qua non for the exercise of the power, can be tested on the touchstone of objectivity.
[24F G] 17 (a) The words "make an order directing that such person be detained" in Section 3 (1) of the Act postulates three conditions: (i) that the order must be made by the authority in the section; (ii) The order must be duly signed by the said authority; and (iii) that only one authority and one authority alone can pass the order of detention.
Therefore, unless the order made and the grounds prepared are signed by the authority concerned, the order is not made as contemplated by the section.
[25F G] (b) Further, since the order is based on grounds to be served on the detenu, he order of detention could be passed only if the grounds are in existence and are prepared contemporaneously, otherwise the order of detention becomes illusory.
[25H 26A] In the present case, the District Magistrate who filed the counter affidavit was acting in place of the permanent District Magistrate.
In the High (court which was moved in the first instance for a writ of habeas corpus, the District Magistrate stated that the order of detention was passed by him after being satisfied of the grounds of detention, that he also framed the draft of the grounds and that the permanent District Magistrate, who took over from him merely signed and served those grounds on the detenu.
But, in this Court he stated that the order of detention was passed by the two detaining authorities, namely, both the District Magistrates, after they had fully satisfied themselves about the existence of the grounds.
It is, therefore.
not possible to determine as to who in fact made the order of detention.
and in view of the contradictory stand taken in the counter affidavits filed by the detaining authorities, the exercise of the jurisdiction to detain the petitioner has not been made with due care and caution or in a proper and fair manner.
[23B 24F] Khudiram Das vs The state of West Bengal and Other, A. 1.
R. 1975 section C. 550, referred to.
The Court also expressed strong disapproval of the careless and irresponsible manner in which the counter affidavit had been filed by the District Magistrate because the date on which reference was made to the advisory Board was in correctly stated in the counter affidavit which created unnecessary confusion and controversy over a simple issue] [18F G]


Input:
Appeals Nos. 988 and 989 of 1964.
Appeals from the judgment and decree dated February 16, 1961 of the Patna High Court in Appeal from Original Decree No. 390 of 1953.
D. Goburdhun, for the appellants (in C.A. No. 899 of 1964).
section C. Agarwal and R. K. Garg, for the appellants (in C.A. No. 989 of 1964).
D. N. Mukherjee and section Mustafi, for respondent No. 1 (in both the appeals).
The Judgment of the Court was delivered by Bachawat, J.
One Harbans Narain Singh was the proprietor of villages Seha and Dhobaha and other villages.
He created several encumbrances over these villages including a mortgage 127 dated February 10, 1886 in favour of Basanti Bibi, two mortgages dated September 9, 1907 and February 5, 1910, in favour of Harprasad Das and a mortgage dated August 2, 1911 in favour of defendant No. I Ramanandan Lal.
On June 23, 1915, Harbans Narain sold the villages to Mahabir Missir subject to the above mortgages.
Mahabir Missir redeemed the mortgages in favour of Basanti Bibi and Harprasad Das and became subrogated to their rights.
Ramanandan Lal instituted a suit to enforce his mortgage, obtained a final decree for sale, put the decree into execution, at the execution sale purchased villages Seha and Dhobaha and obtained possession of the villages in 1919 and 1920.
In 1924, Mahabir instituted suit No. 17 of 1924 to enforce his mortgage lien praying for ratable contribution of his dues in respect of villages Seha and Dhobaha from Ramanandan Lal and obtained a final decree on August 22, 1931.
Mahabir died leaving his son Kashinath as his legal representative.
Kashinath put the decree in suit No. 17 of 1924 into execution.
On July 13, 1934, Ramanandan Lal paid the decreetal dues in respect of village Seha.
On November 4, 1935, village Dhobaha was sold in execution of the decree in suit No. 17 of 1924 and was purchased by Kashinath.
In June, 1934, Ramanandan Lal through his constituted attorney, Munshi Sheobaran Lal granted five leases in respect of the suit lands in the village to defendants 2 to 7.
At the time when the leases were created, Ramanandan Lal was the mortgagor in possession of the suit lands over which Kashinath had a mortgage lien.
One of the questions in issue in these appeals is whether the leases were binding on Kashinath.
It appears that Kashinath obtained a money decree against Ramatahal Pandey, husband of defendant No. 3 and in execution of the money decree attached the suit lands.
Defendants 2 to 7 filed claim petitions objecting to the attachment under 0.21, r. 58, CPC.
The claim petitions were allowed and the lands were released from attachment by orders of the executing court dated November 20, 1942 and February 26, 1944.
The executing court found that the leases were genuine.
Kashinath did not file any suit under 0.21, r. 63, CPC.
One of the questions in these appeals is whether the orders passed in the claim proceedings under 0.21, r. 58 precluded Kashinath from setting up his claim in the present suit.
On June 11, 1946, Kashinath instituted the suit out of which these appeals arise against Ramanandan Lal and the lessees for recovery of possession of the suit lands and mesne profits alleging that the leases were collusive transactions and were otherwise not binding on him.
The defendants contested the suit.
In the meantime, in other proceedings, it was declared that Mahabir was a benamidar for Shri Thakur Taraknathji and the deity was the real owner of the villages.
In view of this adjudication, Kashinath lost 128 all interest in the present suit.
By order dated August 25, 1952, the deity was added as a coplaintiff in the suit.
The subordinate Judge, Arrah, held that the leases were genuine, were granted by Ramanandan Lal in due course of management and were binding on the plaintiffs.
On this finding, he dismissed the suit.
The deity preferred an appeal to the High Court of Patna.
The High Court allowed the appeal and decreed the suit.
It held that the leases were sham transactions were made in contravention of section 65A of the Transfer of Property Act and were not binding upon 'the plaintiffs.
Before the High Court, it was contended on behalf of the defendants that the plaintiffs were precluded from challenging the leases in view of the orders passed against Kashinath in the proceedings under 0. 21, r. 58, CPC, but the High Court rejected this contention.
Defendants Nos. 2, 6 and 7 and the widow of defendant No. 5 have filed C. A. No. 988 of 1964 and defendants 1 and 4 have filed C. A. No. 989 of 1964 under certificates granted by the High Court, The appellants contend that as Kashinath did not file any suit under O. 21, r. 63, CPC, the adverse orders passed against him in the proceedings under O. 21, r. 58, CPC operated as res judicata, and lie and the deity who now stands in his shoes, were precluded from alleging that the leases were not binding on them.
We think that this contention should be rejected.
In view of the orders passed against Kashinath in the claim proceedings and his failure to institute suits under O. 21, r. 63, CPC, Kashinath was precluded from claiming that he had the right to attach the suit lands in execution of his money decree, but he was not precluded from claiming that he had the right to sell the lands in execution of his mortgage decree.
Rules 58 to 62 of Order 21, CPC, provide for a summary investigation of the claims and objections to the attachment of any property attached in execution of a decree.
The issue in the proceeding is whether "such property is liable to such attachment".
If the claim is allowed, the property is released from attachment (r. 60).
If the claim is disallowed, the attachment continues (r. 61).
If the property is subject to mortgage or charge in favour of some person not in possession, the attachment may be continued subject to such mortgage or charge (r. 62).
The party against whom an order is made in the claim proceeding may institute a suit to establish the right which he claims to the property in dispute, but subject to the result of such suit, if any the order is conclusive (r. 63).
If no suit is brought under r. 63 within the prescribed period of limitation, the order in the claim proceeding is conclusive on the question whether the property was or was not liable to attachment and sale in execution of the particular decree.
But the order is not conclusive for all purposes, see Kandai Narasimhachariar vs Raghava Padayachi 129 and others().
A claim proceeding under r. 58 is not a suit or a proceeding analogous to a suit.
An order in the claim proceeding does not operate as res judicata.
It is because of rule 63 that the order becomes conclusive.
The effect of r. 63 is that unless a suit is brought as provided by the rule, the party against whom the order in the claim proceeding is made or any person claiming through him cannot re agitate in any other suit or proceeding against the other party or any person claiming through him the question whether the property was or was no, liable to attachment and sale in execution of the decree out of which the claim proceeding arose, but the bar of rule 63 extends no further.
In support of the contention that the orders in the claim proceedings operated as res indicate, counsel for the appellant relied on several decisions.
In Subbier vs Moideen Pitchai(2), the decree holder in execution of a money decree attached a debt alleged to be due to the judgment debtor.
The garnishee objected to the attachment on the ground that the debt was not due to the judgment debtor, it had been assigned and he had premised to pay to the assignee and the amount of the debt was Rs. 300 and not Rs. 350.
The objection was disallowed.
The attached debt was sold in execution of the decree and was purchased by the decree holder.
The decree holder purchaser then sued to recover the debt.
As the garnishee did not file a suit under 0. 21, r. 63, the order passed against him in the claim proceeding became conclusive, and he was precluded from re agitating his objections in the suit.
In the course of his judgment, Schwabe, C .J. referred to section 11 of the Code of Civil Procedure and his observations give some support to the contention of the appellants in the present case that the order in the proceeding under r. 58 operates as Yes judicata.
But we cannot agree with those observations.
The order in the summary proceeding under r. 58 does not operate as res judicata.
The reason why the garnishee could not reagitate his objections was that in view of r. 63 he was precluded from asserting that the decree holder was entitled to attach and sell the particular debt on the footing that it was due to the judgment debtor.
In Sarju Prasad Missir and others vs Maksudan Choudhuri and others(3), one Lalji Lal obtained a decree for sale of the property mortgaged to him.
In execution of the decree Lalji Lal attached 'the property.
One Karoal Narian Choudhary filed a petition objecting to the attachment. 'By an order dated September 14, 1886 passed under section 278, CPC of 1992, corresponding to 0.
21 58 CPC of 1908.
file executing court directed that the property should not be sold under the decree obtained by Lalji Lal.
Sarju Prasad, an assignee of the decree executed the decree, at the execution sale purchased the property and subse (1) I.L.R. (2) A.I.R. 1923 Mad.
(3) A.I.R. 1922 P.C. 341.
130 quently instituted a suit against the heir of Kamal Narain for recovery of possession of the property.
The Privy Council held that the order dated September 14, 1886 became final and binding upon Lalji Lal and all persons claiming title under him.
Sir John Edge observed : "The petition of objection was a petition which the Subordinate Judge had to consider and dispose of and any party to that proceeding who was dissatisfied with the order which the Subordinate Judge might make could have appealed from it.
Lalji Lal was a party to that proceeding and he did not appeal, and the order became final and binding upon Lalji Lal and upon those who claim title under him.
" The observation that the party dissatisfied with the order made under section 278 of the Code of Civil Procedure, 1882, could have appealed from the order, seems to have been made per incuriam.
It seems that no appeal lay from such an order.
The reason why Lalji Lal was precluded from contending that the property was liable to be attached and sold in execution of the decree obtained by him was that in the absence of a suit under section 283 of CPC of 1882, he and Sarju Prasad claiming title under him, could not subsequently contend that the property was liable to be sold in execution of the decree.
In the two cases discussed above, the adverse orders in the claim proceeding became conclusive on the question whether the property was liable to attachment and sale in execution of the particular decree then sought to be executed.
Equally, in the absence of any suit under O. 21, r. 63, CPC, the adverse orders passed against Kashinath conclusively decided that the suit lands were not liable to be sold in execution of the money decree obtained by him against Ramtahal Pandey.
But those orders were not conclusive on the question whether the lands were liable to be sold in execution of the mortgage decree obtained by Kashinath against Ramanandan Lal.
On the merits, the question is whether the leases granted by Ramanandan La].
while he was the mortgagor, in possession of the suit lands were binding on the mortgagee Kashinath.
The High Court held that the leases were in contravention of section 65A of the .
Section 65A was inserted in the by section 30 of the Transfer of Property (Amendment) Act, 1929, which came into force on April 1, 1930 Section 63 of the Transfer of Property (Amendment) Act 1929 provided that nothing in the provisions of section 30 of the amending Act would be deemed if any to affect the "terms or incidents of any of property made or effected before the 1st day of April, 1930".
Now Kashinath was entitled to the rights of the mortgagees under the mortgages dated February 10, 131 1886, September 9, 1907, February 5, 1910.
All these mort gages were executed before April 1, 1930 and nothing in section 65A affected their incidents.
The power of the lessor to make leases binding on the mortgagee , was an incident of the mortgages and was not affected by section 65A.
The validity of the leases granted by the mortgagor in June 1934 must be determined with reference to the law as it stood before the enactment of section 65A.
In Madan Mohan Singh vs Raj Kishori Kumari(1) Mookerjee, J, held that a mortgagor in possession may grant a lease conformable to usage in the ordinary course of management, for instance lie may create a tenancy from year to year in the case of agricultural lands or from month to month in the case of houses.
But he is not competent to grant a lease on unusual terms or to alter the character of the land or to authorise its use in a manner or for a purpose different from the mode in which he himself had used before he granted the mortgage.
This view of the law as it stood before the enactment of section 65A was approved in Raja Kamakshya Narayan Singh Bahadur vs Chohan Ram and Another(2) and this court held that the question whether the mortgagor in possession has power to lease the mortgaged property must be determined with reference to the authority of the mortgagor as the bailiff or agent for the mortgagee to deal with the property in the usual course of management.
In Gobinda Chandra Saha and others vs Sasadhar Mandal(3), B. K. Mukherjea, J., pointed out that normally a permanent lease with rent fixed in perpetuity is not sanctioned by the ordinary course of management.
He observed "The mortgagor might be within his rights to create a lease which is from month to month or from year to year as the case might be, but he cannot grant a permanent lease with a rent fixed in perpetuity.
This amounts to an alienation of his right to increase the rent in future and is as good as the sale of the property itself.
This is not sanctioned by the ordinary course of management as has been mentioned above nor is it warranted by the previous user of this particular property." In the present case, defendants 2 7 were lessees under five leases granted by the mortgagor in June 1934.
All 'these defendants claimed to be Permanent lessees with rent fixed in perpetuity.
Four of the leases were granted by registered pattas.
In respect of four leases the mortgagor received nazrana or premium.
All the leases were created after the property was advertised for sale in execution of the mortgage decree.
The High Court has found (1) , 92.
(2) ,118.
(3) A.I.R.1947Cal.73,75.
132 that the leases were created by the mortgagor in bad faith with a view to cause loss to the mortgagee decree holder.
The leases were not in the ordinary course of management of the mortgagor as the agent or bailiff of the mortgagee, and were not binding on the mortgagee.
On behalf of the appellants it was argued that the leases might not be binding on Kashinath while he was the mortgagee, but after he purchased the property he ceased to be a mortgagee, and he could not thereafter assert that the leases were not binding on him.
This novel argument is ingenious but unsound.
An auction purchaser at a sale held in execution of a mortgage decree buys not only the interest of the mortgagor but also the interest of the mortgagee.
If the lease does not 'bind the mortgagee, it does not equally bind the auction purchaser.
It is interesting to notice that in Rust vs Goodale(1), Harman, J. held that the right of the mortgagee to treat a tenant of the mortgagor as a trespasser was a right which passed on sale or foreclosure to his assignee.
A lease granted by the mortgagor, out of the ordinary course of management, though not binding on the mortgagee, is binding as between the mortgagor and the lessee.
Such a lessee acquires an interest in the right of redemption and is entitled to redeem.
If such a lease is created before the institution of a suit relating to the mortgage, the lessee must be joined as a party lo the suit under 0 34, r. 1, CPC; otherwise he will not be bound by the decree passed in the suit and will continue to retain his right of redemption.
But in view of section 52 of the , if the mortgagor grants such a lease during the pendency of a suit for sale by the mortgagee, the lessee is bound by the result of the litigation.
If the property is sold in execution of the decree passed in the suit, the lessee cannot resist a claim for possession by the auction purchaser.
The lessee could apply for being joined as a party to the suit and ask for an opportunity to redeem the property.
But if he allows the property to be sold in execution of the mortgage decree and they have now lost the present case, the lessees allowed the suit lands to be sold in execution of the mortgage decree and they have now lost the right of redemption.
They cannot resist the claim of the auction purchaser of recovery of possession of the lands.
If a mortgagor in possession of the mortgaged property exe cutes a lease of the property in the ordinary course of management as the agent or bailiff of the mortgagee during the pendency of a suit by the mortgagee to enforce the mortgage, a question may arise whether such a lease is in the eye of the law a lease granted by the mortgagee through his agent and therefore binding on him.
But in the present case, that question does not arise (1) ,42,43. 133 as the leases were not granted by the mortgagor in the ordinary course of management as the bailiff or agent of the mortgagee.
The High Court held that the leases were sham transactions.
We do not think it necessary to decide this question.
Even assuming that the leases were not sham transactions they were not binding on Kashinath and the deity.
The High Court rightly decreed the suit.
The appeals are dismissed with costs.
There will be one hearing fee.
Y. P. Appeals dismissed.

Output:
The owner of certain properties over which K had a mortgage granted leases to certain persons.
The lands were sold in execution of the mortgage decree of K, and were, purchased by K at the auction The lessees allowed the property to be sold and did not apply for being joined as parties.
K obtained a money decree against one of the lessees and in execution attached the lands.
The lessees filed claim peti tions objecting to the attachment under 0.21 r. 28 C.P.C.
The claim petitions were allowed and the executing court found that the leases were genuine.
K did not file any suit under O.21 r. 63 C.P.C.
But later, K filed a suit against the mortgagor and the lessees for recovery of possession of the lands alleging that the leases were collusive transactions and were otherwise not binding on him.
The trial court dismissed the suit holding that leases were genuine,, but the High Court decreed the suit holding that the leases were sham transactions and made in contravention of section 65A of the Transfer of Property Act.
In appeal to this Court, the appellants contended that (i) as K did not file any suit under Order 21 r. 63 C.P.C. the adverse Orders passed against him in the proceedings under 0.21 r. 58 C.P.C. operated as res judicata and he was precluded from alleging that the leases were not binding on him; and (ii) the leases granted by the mortgagor were binding on K. HELD: In view of the orders passed against K in the claim proceedings and his failure to institute suits under 0.21, r. 63 C.P.C., K was precluded from claiming that he had the right to attach the suit lands in execution of his money decree, but he was not precluded from claiming that he had the right to sell the lands in execution of his mortgage decree.
[128 E] A claim proceeding tinder 0.21 r. 58 C.P.C. is not a suit or a proceeding analogous to a suit.
An order in the claim proceeding does not operate as res judicata.
It is because of 0.21 r. 63 that the order becomes conclusive.
The effect of r. 63 is that unless a suit is brought provided by the rule, the party against whom the order in the claim proceeding is made or any person claiming through him cannot reagitate in any other suit or proceeding against the other party or any person claiming through him the question whether the property was or no, liable to attachment and sale in execution of the decree out of which the claim proceeding arose but the bar of rule 63 extends no further.
[129 A C] Kandadai Narasimhachariar vs Raghava Pedayachi & Ors I.L.R. ; approved.
126 Subbier vs Moideen Pitchai, A.I.R. 1923 Mad.
562, and Sarju Prasad Missir and Ors.
vs Maksudan Choudhuri & Ors.
A.I.R. ; referred to.
(ii) 'The validity of the leases granted by the mortgagor was not affected by section 65A of the Transfer of Property Act as the leases were granted before the enactment of section 65A. [131 A B] The leases were not in the ordinary course of management of the mortgagor as the agent or bailiff of the mortgagee and were not binding of the mortgagee.
[132 A B] A lease granted by the mortgagor,, out of the ordinary course of management, though not binding on the mortgagee, is binding as between the mortgagor and the lessee.
Such a lessee acquires an interest in the right of redemption and is entitled to redeem.
If such a lease is created before the institution of a suit relating to the mortgage, the lessee must be joined as a party to the suit under 0.34, r. 1.
C.P.C.; otherwise he will not be bound by the decree passed in the suit and will continue to retain his right of redemption.
But in view of section 52 of the Transfer of Property Act, if the mortgagor grants such a lease during the pendency of a suit for sale by the mortgagee, the lessee is bound by the result of the litigation.
If the property is sold in execution of the decree passed in the suit, the lessee cannot resist a claim for possession by the auction purchaser.
The lessee could apply for being joined as a party to the suit and ask for an opportunity to redeem the property.
But if he allows the property to be sold in execution of the decree.
, he loses his right of redemption.
In the present case, the lessees allowed the suit lands to be sold in execution of the mortgage decree and they have now lost the right of redemption.
They can of resist the claim of the auction purchaser for 'recovery of possession of the lands.
[132 D G] Raja Kamakshya Narayan Singh Bahadur vs Chohan Ram and Anr. ; ; followed.
Madan Mohan Singh vs Raj Kishori Kumari , , 92; Gobinda Chandra Saha & Ors.
vs Sasadhar Mandal, A.I.R. 1947 Cal.
73, 75 and Rust vs Goodale, , 42 and 43; referred to.