LAKSHMI KANTA JHA Vs. BHUNESHWAR PRASAD NARAIN SINGH

JUDGEMENT

(1.) This is an application under Articles 226 and 227 of the Constitution to quash the order of the sole member tribunal constituted under Section 18 of the Bihar Land Reforms Act, 1950, allowing the Appeal from the judgment of the claims officer, Tirhut Division.

(2.) The petitioner is the mortgagee (Zarpeshgi lease) the mortgage having been executed on the 30th June, 1930 by respondent No. 1, his father and grandfather, mortgaging the estate known as Madhuban Estate for a sum of Rs. 17,00,000. The mortgagee was put in possession of the estate and the annual income of the estate was said to be about Rs. 2,00,000 and odd. The estate vested in the State of Bihar under the provisions of the Bihar Land Reforms Act on the 14th November, 1951. The mortgagee then applied under Section 14 of that Act for the determination of the amount due to him out of the total compensation payable to the proprietors of the estate. In that application he gave a statement showing the rents and profits realised from the estate till the date of vesting. The learned Claims Officer held that the net profit realised by the mortgagee from the mortgaged property from the date of the mortgage till the date of vesting was Rs. 23,30,103-15-6.1/2. He calculated interest at 5 per cent on the principal (Rs. 17,00,000) and found that it came to Rs. 21,80,250. Deducting this sum from the total net profits he found that a sum of Rs. 1,49,853-15-6.1/2 was excess realisation by way of interest by the mortgagee, which under Clause (b) of Sub-section (2) of Section 16 of the Bihar Land Reforms Act should be deducted from the principal. Deducting this sum he arrived at the net figures Rs. 15,50,146-0-5.1/2 as the amount of the principal legally and justly payable to the applicant. He further held that the applicant was not entitled to any further interest as he had already realised profits by way of interest to the extent of more than the amount of the principal. For this limited purpose he applied the provisions of Clauses (c) and (d) of Sub-section (2) of Section 16 of the Act.

(3.) The learned sole member tribunal on appeal, however, construed the four clauses of Sub-section (2) of Section 16 differently. He held that under no circumstance was the mortgagee entitled to appropriate towards interest any sum in excess of the principal. Hence he thought that that portion of the net profits which was above Rs. 17,00,000 must be completely appropriated towards deduction from the principal. He, however, made a slight error in assuming that the total net profit was only Rs. 21,80,250 and made the calculations accordingly. Deducting Rs. 17,00,000 from the said sum he arrived at the figures Rs. 4,80,250 as the excess realisation of interest, and deducting that sum from the principal, namely, Rs. 17,00,000 he held that Rs. 12,19,750 was payable to the mortgagee. A review petition was filed before him for correction of this error in estimating the total net profits and that was numbered as Case No. 1 of 1962, which is said to be still pending. This need not, however, affect the disposal of this writ petition because the main question of law which is to be decided is whether on a construction of the four clauses of Sub-section (2) of Section 16 of the Act the Claims Officer's view was correct, or else, whether, the view taken by the sole member tribunal was correct.