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Durga Dass Vs. F. Balak Ram and ors. - Court Judgment

SooperKanoon Citation
SubjectCommercial
CourtPunjab and Haryana High Court
Decided On
Case NumberExe. Second Appeal No. 1553 of 1965, Civil Misc. No. 210-C of 1970 and Cross Objection No. 9-C of 19
Judge
Reported inAIR1973P& H326
ActsProvincial Insolvency Act, 1920 - Sections 4; Cantonments (House Accommodation) Act, 1923; Cantonments Act, 1924 - Sections 60, 99 and 99(2); Code of Civil Procedure (CPC), 1908 - Sections 60(1)
AppellantDurga Dass
RespondentF. Balak Ram and ors.
Cases Referred(ibid) and Pooran Chand v. Malik Mukhbain Singh
Excerpt:
.....if any order/judgment/decree is passed in exercise of jurisdiction under article 226, a writ appeal will lie. but, no writ appeal will lie against a judgment/order/decree passed by a single judge in exercising powers of superintendence under article 227 of the constitution. - on 21st may, 1963, durga dass, one of the creditors, made an application in the insolvency court alleging that the official receiver was amiss in the discharge of his functions in as much as he had failed to take possession of all the assets of the insolvents. it is well settled that section 4 of the act comes into play only after adjudication......held in agreement with the court of first instance, that though it was in the occupation of one lachhman dass yet the latter's occupation being that of a licensee must be deemed to be the occupation of the insolvents. it, therefore, upheld the objection of the insolvents that the chobara was exempt from attachment and sale under section 60(1)(ccc) of the code of civil procedure, aggrieved by that judgment, the creditor has come in second appeal to this court.3. cross-objections were also filed by the respondent that by a previous judgment dated february 13, 1959, the insolvency court had held that the shop in dispute was also exempt from attachment and sale under section 60(1)(ccc), and that the previous judgment being a judgment in rem, operates as judicata.4. civil miscellaneous.....
Judgment:

1. This execution second appeal is directed against an order, dated 23rd April, 1965, of the District Judge, Hoshiarpur. It arises out of these facts: Firm Balak Ram Mehar Chand were a contractual partnership, Mukhi Ram Thakar Dass and Amrit Lal were its partners. They were adjudicated insolvents on 24th July, 1959, by the insolvency Judge, Hoshiarpur, Ramesh Chand sood was appointed as the official receiver. On 21st May, 1963, Durga Dass, one of the creditors, made an application in the insolvency Court alleging that the official receiver was amiss in the discharge of his functions in as much as he had failed to take possession of all the assets of the insolvents. It was further averred that the insolvents had a big building at Hoshiarpur and that the official receiver should be directed to sell that property for the benefit of the creditors.

2. The insolvents resisted the application and pleaded that they had no assets excepting the main residential building which was exempt from sale under Section 60(1)(ccc) of the Code of Civil Procedure. The only point which was argued before the lower appellate Court on behalf of the creditors was, that one shop and one chobara above it, belonging to the insolvents though attached to the residential building of the insolvents, were not in their occupation, and, as such were not immune from attachment and sale. The lower Appellate Court found that the shop was in the occupation of tenants named. Lalji Ram Dass, under the insolvents. It, therefore held that it was not in the occupation of debtors, and as such, was available for liquidating the debts of the insolvents. With regard to the chobara, it was held in agreement with the Court of first instance, that though it was in the occupation of one Lachhman Dass yet the latter's occupation being that of a licensee must be deemed to be the occupation of the insolvents. It, therefore, upheld the objection of the insolvents that the chobara was exempt from attachment and sale under Section 60(1)(ccc) of the Code of Civil Procedure, Aggrieved by that judgment, the creditor has come in Second appeal to this Court.

3. Cross-objections were also filed by the respondent that by a previous judgment dated February 13, 1959, the insolvency Court had held that the shop in dispute was also exempt from attachment and sale under Section 60(1)(ccc), and that the previous judgment being a judgment in rem, operates as judicata.

4. Civil Miscellaneous 210/C of 1970 was made on December 23, 1969, on behalf of insolvent Amrit Lal by his counsel that Shri Mukhi Ram respondent had died on February 5, 1969 and Thakur Dass had died on September 14, 1968, that the deceased were necessary parties, and that the appeal in consequence had bated as a whole. As regards Civil Miscellaneous 210/C of 1970 it may be observed that the firm Balak Ram Mehar Chand, which was adjudged as insolvent, was a contractual partnership. It had three partners viz., Mukhi Ram, Thakur Dass and Amrit Lal. The firm as such is a respondent in this appeal. Each partner is an agent of the other and the right to continue action against the firm survives as against the surviving partner namely, Amrit Lal. The matter now appears to be concluded by the judgment of the Full Bench in Dharamdas Gokal Dass v. Messrs Krishan Chand Hari Chand 67 Punj LR 743=(AIR 1966 Punj 40) (FB) wherein it was held:--

'That the death of the partner through whom a firm had instituted the suit would not cause abatement of the appeal filed by the firm, when his legal representative had not been impleaded within the prescribed period.'

The facts placed before me are in the converse, but the principle remains the same and will govern the instant case, also. I, therefore dismiss Civil Miscellaneous 210/C of 1970 and overrule the first objection raised by Mr. Mittal.

5. The next contention of Mr. Mittal is that the previous judgment, dated February 13, 1959, was a judgment in rem of the Insolvency Court rendered under Section 4 of the Provincial Insolvency Act 1920 (hereinafter referred to as the Act). Consequently--maintains the counsel--that judgment holding that the shop was exempt from attachment and sale operated as respondent judicata in the subsequent insolvency proceedings.

6. I am afraid the contention cannot be accepted. It is to be noted that the former judgment was rendered by the Court on February 13, 1959, while the firm was adjudged insolvent on July 24, 1959. That is to say, the previous judgment was not that of an insolvency Court given under Section 4 of the Act. It is well settled that Section 4 of the Act comes into play only after adjudication. (See AIR 1938 Lah 490=ILR (1938) Lah 535: AIR 1935 Cal 558, AIR 1935 Mad 634; AIR 1955 Pat 413). The official receiver therefore, who came into the picture subsequently by the order of adjudication in July, 1959, was not a party to the proceedings in which the former judgment dated February 13, 1959 was pronounced. The former judgment was thus neither inter partes, nor a judgment in rem rendered by an Insolvency Court. It could not, therefore operate as respondent judicata. The contention is, thus rejected.

7. Mr. Mittal has frankly conceded that in view of the Full Bench decision in Ude Bhan v. Kapoor Chand, 68 Punj LR 591=(AIR 1967 Punj 53) the shop which was in the possession of the tenants, could not be deemed to be in the occupation of the debtor and as such was not exempt from attachment under Section 60(1)(ccc) of the Code of Civil Procedure.

8. Mr. Sarin learned counsel for the appellant, however, contends that the finding of the Courts below to the effect, that Lachhman Dass, occupant of the Chobara was merely a licensee under the debtors, was not factually correct. His grouse is that the evidence on the record on this point was not properly appreciated. He has referred to the statement dated May 31, 1962, of Mukhi Ram, insolvent who, in cross-examination, admitted that the chobara was previously in the occupation of Lachhman Dass, father, who used to pay rent to the witness. After Lachhman Dass' father's death however Lachhman Dass was allowed to continue in possession without payment of rent. Mr. Sarin also referred to the statement, dated December 5, 1963, of Thakur Dass, who deposed in cross examination, that Lachhman Dass was living in this chobara for the previous five or six years without payment of rent. He further admitted that Lachhman Dass' father had died.

9. I am afraid in second appeal, the High Court will not reappraise the evidence and lightly disturb that finding of fact. The first appellate Court has noted that the statement of Thakur Dass insolvent, in examination-in-Chief to the effect, that Lachhman Dass was in occupation of the chobara merely as licensee, was not challenged in cross-examination. Nor was any evidence led by the creditor to show that Lachhman Dass was in occupation of the chobara in a capacity other than that of a licensee. It is therefore, too late for Mr. Sarin to controvert this concurrent finding of fact recorded by the Courts below.

10. Next contention of Mr. Sarin is that even if it is assumed that Lachhman Dass was in occupation as a licensee, then also, this was a case which completely excludes the licensor from the use of the chobara. His occupation could to be deemed to be that of the licensing debtor who had been completely excluded our to its user. 'Occupied' for purposes of Section 60(1)(ccc) maintains Mr. Sarin means that the judgment-debtor should be in actual exclusive use of the house either personally or through somebody dependent on the judgment-debtor. In support of this contention reliance has been placed on a judgment of Falshaw, C. J., in Smt. Shakuntala Bawa v. Ram Parshad, (1963) 65 Punj LR 103: Jagat Singh v. Phuman Singh, AIR 1934 Lah 680; Kahn Singh v. Hardit Singh, 100 Pun Re 1908; and Kala Singh v. Boota Singh, AIR 1938 Lah 459.

11. In reply, Mr. Mittal contends that once it is held that the possession of Lachhman Das was merely that of a licensee and not of a tenant under the judgment debtor, it will be deemed that the chobara was in the occupation of the licensor. In short, the proposition propounded is that the occupation of a licensee is always to be deemed as the occupation of the licensor. In support of this contention, he has relied upon the judgment of the Supreme Court in The Cantonment Board v. Dipak Parkash, AIR 1963 SC 963 and some observations of the Full Bench in Ude Bhan's case 68 Punj LR 591=(AIR 1967 Punj 53)(ibid) and Pooran Chand v. Malik Mukhbain Singh, (1963) 65 Punj LR 490.

12. It appears to me that the contention of Mr. Sarin cannot prevail.

13. We must take it as has been concurrently held by the Courts below, that Lachhman Dass was in possession of the chobara merely as a licensee under the debtors. It was pointed out by Tek Chand, J. in Pooran Chand's case (1963) 65 Punj LR 490 (ibid) that 'in case of a lease the lessee has an interest in the estate which is protected by law whereas a licensee receives no such benefit in law.' 'Licence', according to Aiyer's Law Terms and Phrases, 6th Ed. 1969, 'is a permission given by one person to another to do in or upon the immovable property of the grantor something which would but for such permission be unlawful: and provided the right does not amount to an easement. It differs from lease in this respect:--

'(1) a lease gives an exclusive interest in the property whereas a licence does not,

(2) a lease can be assigned to a third party, while a licence cannot be,

(3) A lessee can bring an action for trespass, a licensee cannot,

(4) a lease is not revocable a licence is'.

In short, a licensee has no interest or right of his own in the property which he holds under the licence. He has no right to tenure and is entirely dependent on the sweet will and at the mercy of the lessor. The occupation of a licensee, therefore, is to be deemed, in the eve of law, as the occupation of the licensor.

14. The above principles appears to have been settled by not less an authority than the Supreme Court in Cantonment Board's case. AIR 1963 SC 963 (ibid). There a bungalow had been appropriated under the provisions of the Cantonments (House Accommodation) Act No. VI of 1923 on a lease by the Central Government and was being used at the relevant time by some Military Officer for his residence. The Assessment Committee of the Cantonment Board assessed house tax of the said bungalow. The assessee appealed to the competent authority. The appellate officer formulated three questions and referred them to the High Court for decision. Question No. 2 was as under:--

'2. Whether the occupation of the Military Officer of the portion of the Bungalow appropriated under Act No. 6 of 1923 amounts to its 'occupation' by the Central Government within the meaning of Section 99(2)(f) of the Cantonments Act 1924.'

15. The right to impose the tax is conferred by Section 60. Section 99(2) contains the provisions of exemption from the tax, Clause (f) of that sub-section reads:--

'(f) any buildings or lands, used or acquired, for the public service or for any public purpose, which are the property of the State or in the occupation of the Central or any State Government.'

16. It was contended on behalf of the Cantonment Board that the word 'occupation' in the aforesaid clause of S. 99(2) should be interpreted as actual occupation. Their Lordships rejected this contention in these terms:--

'We find it difficult to agree that when a person, entitled to actual occupation by reason of his lease permits another to occupy it then it ceased to be in the actual occupation of the person so permitting. Where the central or the State Government after obtaining the lease under Section 7 leases it out to any person it is itself not entitled to actual occupation but has to put the sub-lessee into occupation. In such a case it may be reasonably said that the Government has ceased to be in occupation. In the case where the Government after taking the lease merely gives licence to some person to come and live in it, it is entitled to take away the permission at any time and thus to come into possession itself......

In our opinion, where the person entitled to occupancy, permits some other person to being the building, he in actual occupation through such other person.

Accordingly we are of the opinion that the building in question was in occupation of the Central Government through the Military Officer whom it has permitted to reside in it.'

17. The scope of the principle laid down by the Supreme Court in the aforesaid Cantonment Board's case. AIR 1963 SC 963 was also examined by the Full Bench in Ude Bhan's case 68 Punj LR 591=(AIR 1967 Punj 53) (ibid). This is what S. B. Capoor, J. speaking for the majority, said on this point:-

'The Supreme Court.........making a clear distinction between a lease.............and a license held that it was only in the latter case that the Government could beheld to be in the occupation, while in the former it ceased to be in occupation....... The judgment-debtor in order to attract the exemption must be actually in the premises or at least have a right to actual physical possession of them any time he chooses to exercise that right, which would normally be the case if members of his family or other relations or dependents are residing in it.'

18. The above being the law on the point it is clear that occupation of the chobara by Lachhman Dass, being that of a licensee wholly dependent on the will of the judgment-debtors, would be deemed to be that of the latter. In short it was shown that the chobara was in the occupation of the judgment-debtors. It was, therefore, exempt from attachment and sale under clause (ccc) of S. 60(1) of the Code of Civil Procedure.

19. In the above view of the matter, it is not necessary for me to discuss the ruling cited by Mr. Sarin. The question as to whether the occupation of the licensee is to be deemed as the occupation of the licensor, was not in issue in those cases.

20. For the foregoing reasons, I would dismiss this appeal and maintain the order of the lower appellate Court. In the circumstances of the case, there will be no order as to costs.

21. Appeal dismissed.


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