BRAHMPAL SINGH Vs. STATE OF U P

JUDGEMENT

(1.) JANARDAN Sahai, J. The facts are simple. In reference proceedings under the Land Acquisition Act the petitioners were called upon by an order of the District Judge to deposit a sum of Rs. 1,86,76,652/- an amount, which they had withdrawn as compensation wrongly so according to the respondents who claim that the title of the land for which the compensation was awarded has been finally decided in their favour. The order of the District Judge was challenged in writ petition. This Court modified the order of the District Judge and instead of cash deposit permitted the petitioners to furnish security other than cash or bank guarantee to the satisfaction of the District Judge. In compliance with the order of this Court the petitioners furnished security bonds as security of property and also separate undertakings as personal security. By the impugned order dated 22-5-2007 the Additional District Judge found that the security bonds furnished were not valid being unregistered. The petitioners have filed the present writ petition against this order.

(2.) SRI R. N. Singh, learned Senior Counsel assisted by SRI A. K. Rai who appeared for the petitioners submitted that a security bond does not require registration. In support of his contention he relied upon a decision of the Orissa High Court in AIR 1980 Orissa 44, M/s. Indian Metals and Ferro Alloys Ltd. v. Orissa State Electricity Board. The Orissa High Court noticed that there was a sharp cleavage of opinion upon the question amongst the High Courts. The difference of opinion relates to the application and interpretation of Section 17 (2) (vi) of the Indian Registration Act, which exempts from registration any decree or order of a Court (except a decree or order expressed to be made on a compromise and comprising immovable other than that which is the subject matter of the suit or proceeding ). The High Courts of Bombay Nagpur, Madhya Pradesh, Punjab Mysore, Delhi and Himachal Pradesh have taken the view that a security bond is a step in the judicial proceedings as it does not become enforceable unless accepted by the Court. It is, therefore, a part of the judicial proceedings and is exempt. The Orissa High Court also took notice of the Rangoon decision of the Patna, Allahabad, Kerala and Calcutta High Courts, which have taken the opposite view holding that a security bond is not a step in the juridical procedure or part of judicial proceeding. The decisions of the different High Courts have been cited in the judgment of the Orissa High Court and it is not necessary to refer to any of them here except for the Allahabad decision in Bishnath Sahu v. Prayag Din, AIR 1958 Allahabad 820, which has binding effect upon this Court. The Orissa High Court has followed the view that a security bond is a step in the judicial proceeding and does not require registration. The decision of the Orissa High Court was considered by the Andhra Pradesh High Court in Purra Pentaiah v. Madam Pandya, AIR 1980 Andhra Pradesh 290 and was dissented from. The Andhra Pradesh High Court held that the mere fact that the Court accepts the security bend before it becomes enforceable is not sufficient basis for drawing the conclusion that the bond becomes a part of the order of the Court so as to be exempt from registration.

(3.) AN examination of the provisions of the Indian Registration Act and the Transfer of Property Act would reveal that the contention of Sri R. N. Singh that a security bond creating a charge does not require registration has little force. Sub-section (1) of Section 17 of the Registration Act provides that the documents referred to in that sub-section consisting of Clauses (a) to (e) are compulsorily registrable. Clause (b) of Sub-section (1) of Section 17 covers other non-testamentary instruments, which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property. No doubt a charge does not create any title or interest in the immovable property upon which it is fastened but it does create an enforceable right to realize from the property charged the amount the charge secures. A charge is defined in Section 100 of the Transfer of Property Act as follows. "where immovable property of one person is by act of parties or operation of law made security for the payment of money to her, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property, and all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge. "