BOMBAY HIGH COURT

                                          Manubhai Mahijibhai Patel

                                                        Vs.

                                              Trikamlal Laxmidas

                                      Civil Revn. Appln. No. 3 of 1957

                                                  (Miabhoy, J.)

                                            29.09.1956. 24.04.1958

                                                     ORDER

Miabhoy, J.

1. This revision petition raises an interesting point of law. The facts necessary to be stated in
order to dispose of this point of law are as follows : One Fakirbhai Jijibhai was the owner of S.
No. 53. He mortgaged the same on 13-3-1924 to one Mahijibhai Patel for Rs. 975/-. The
mortgage was a usufructuary mortgage. The mortgagor Fakirbhai subsequently sold on 3-4-1926
his equity of redemption for Rs. 1499/-, and the vendee was one Laxmidas. That! Laxmidas was
the father of opponent No. 1. Out of the sum of Rs. 1499/-, a sum of Rs. 524/- was paid to the
mortgagor Fakirbhai and the balance of Rs. 975/- was retained by the purchaser for payment to
the mortgagee Mahijibhai Patel. That mortgagee was the father of the present petitioners.
Subsequently, on 3-6-1926, the mortgagor Fakirbhai again purported to sell the same equity of
redemption for a sum of Rs. 1300/-, and the vendee was the mortgagee Mahijibhai himself. In
1947, Laxmidas, father of opponent No. 1. filed an application under Section 4 of the B.A.D.R.
Act for adjustment of the aforesaid mortgage-debt. An award was passed by the B.A.D.R. Court
on 21-7-1955. From that, an appeal was preferred to the District Court, and the same was
dismissed on 29-9-1956. The petitioners have come in revision to this Court against that
appellate order.

2. The only point which is urged on behalf of the petitioners is that, having regard to the
aforesaid facts, there was no debt which the purchaser Laxmidas owed to the mortgagee, the
father of the petitioners, and, therefore, the application for adjustment of that debt did not lie. The
contention is based upon the definition of the word 'debt' as given in section 2. sub-section (4) of
the B.A.D.R. Act. Before I mention that definition, it is necessary for me to state the provisions
of Section 4 of the B.A.D.R. Act, under which the application was made by Laxmidas, the father
of opponent No. 1. The relevant portion of that section is as follows :
        'Any debtor . . . . may make an application . . . . to the Court for adjustment of his debts.'

Therefore, it is quite clear that the object of the aforesaid application under Section 4 is the
adjustment of the debt of the debtor. In this connection, it is important to notice that a person may
be a debtor and, satisfy the conditions laid down in sub-section (5) of Section 2, but still, before
any debt can be adjusted it is necessary that the debt must be his debt. Therefore, the question for
consideration is whether, having regard to the aforesaid facts, the mortgage-debt which is sought
to be adjusted in the present case is the debt of the purchaser of the equity of redemption viz.
Laxmidas aforesaid.
3. Now, turning to the word 'debt', it is defined as follows :

        'debt' means any liability in cash or kind, whether secured or unsecured due from a debtor
        whether payable under a decree or order of any Civil Court or otherwise (and includes
        mortgage money the payment of which is secured by the usufructuary mortgage of
        immoveable property) but does not include arrears of wages payable in respect of
        agricultural or manual labour.'

Therefore, in order that a thing may come within the definition of the word 'debt', it is necessary
that there should be a liability, and that liability must be due from a debtor. Now, having regard to
the aforesaid facts, the debt was created by the mortgagor Fakirbhai Jijibhai. Therefore, the
mortgage debt was the debt which was owed by Fakirbhai. The question for consideration is
whether, having regard to the fact that Laxmidas became the purchaser of the equity of
redemption, and also, having regard to the fact that Laxmidas retained a sum of Rs. 975/- from
out of the purchase price to be paid to the mortgagee Mahijibhai Patel, Laxmidas became a
debtor of the mortgagee Mahijibhai in respect of the aforesaid mortgage debt. Mr. Hirendra K.
Shah, who appears on behalf of the petitioners, contends that, by the aforesaid transaction, the
purchaser of equity of redemption, Laxmidas, did not become a debtor of the mortgagee
Mahijibahi. For this purpose, he relies on the ruling reported in Jamnadas v. Ram Autar Pande1,
In that case, it was held

        'that the purchaser of an equity of redemption who by agreement with his vendor the
        mortgagor retains the amount of the mortgage debt out of the price due does not thereby
        become personally liable to the mortgagee in respect thereof. The mortgagee was not a
        party to the agreement, and Section 90 of the Transfer of Property Act does not apply.'

This is a direct ruling which is on all fours with the facts of the present case, and, having regard
to this particular ruling, there is no doubt whatsoever that, unless the opponent No. 1 is able to
satisfy that there was a tripartite agreement between the mortgagor, the mortgagee and Laxmidas,
under which Laxmidas took the liability of the mortgagor to pay the mortgage-debt, Laxmidas
would not become personally liable for the mortgage debt. Such is not the case of opponent No.
1. Therefore, there is no doubt whatsoever that, having regard to the aforesaid ruling, the
mortgage-debt was not one which was due from Laxmidas to the mortgagee Mahijibhai.

4. Mr. M. C. Shah, who appears on behalf of opponent No. 1, however, contends that, when the
aforesaid Privy Council ruling was given, section 59A of the Transfer of Property Act was not in
existence. He contends that Section 59A of the Transfer of

139 Ind App 7 (PC)

Property Act makes the difference. Now, that section is as follows :

        'Unless otherwise expressly provided, reference in this Chapter to mortgagors and
        mortgagees shall be deemed to include references to persons deriving title from them
        respectively.'

Now, in my opinion, this section cannot be brought into aid for making a purchaser of the equity
of redemption personally liable for a mortgage debt, where, otherwise, he is not so liable. This
section only states that wherever the word mortgagor occurs in the Chapter IV of the Transfer of
Property Act, the word Mortgagor shall also mean a transferee from the mortgagor. But that does
not necessarily mean that the transferee from the mortgagor becomes personally liable for the
mortgage-debt. Unless and until Mr. M. C. Shah is in a position to show some section in the
Transfer of Property Act which makes a purchaser of the equity of redemption personally liable
for the debt, the aforesaid argument cannot be accepted. Then Mr. M. C. Shah referred me to
Section 60 of the Transfer of Property Act. That section only deals with the right to redeem a
mortgaged property. But, it does not deal with the question of personal liability of the debtor.
That section only gives a right of redemption to the transferee from the mortgagor. But it does
not state that the transferee from the mortgagor will be personally liable for the mortgage debt,
where, otherwise, according to the substantive law, he is not so liable.

5. The next argument of Mr. M. C. Shah is based upon Section 7 of the B.A.D.R. Act. That
section is as follows :

        'No application shall lie under Section 4 for adjustment of any debt due from a debtor to
        whom such debt has been transferred or assigned after the 1st January 1938 by any person
        who is not himself a debtor.'

Mr. M. C. Shah contends that this section is clearly an authority for the proposition that an
application for adjustment of debts can be made not only by a person who is personally liable,
but also by a person who was not originally personally liable for the debts. I cannot agree with
this submission. In the first instance, it is important to notice that this is a disabling section. It
does not confer any right upon any person to make an application for adjustment of debts. That
right is conferred only by Section 4 and it is to that section that one must turn to answer the
question raised. But even if the principle of section 7 is brought in aid for the purpose of
interpreting Section 4 of the B.A.D.R. Act, in my opinion, it does not help opponent No. 1 in
meeting the point which is raised on behalf of the petitioners. Even if the aforesaid section is so
interpreted as to confer a right upon a transferee or assignee of the original debtor, the transferee
or assignee, in order to succeed, must prove that he is either a transferee or an assignee of the
mortgage debt. Therefore, in my opinion, Section 7 of the B.A.D.R. Act cannot help opponent
No. 1.

6. Mr. M. C. Shah also referred to Order 34, rule 1. He contended that, in a suit for redemption,
the mortgagor is a necessary party. This is so. But that does not mean that the debt which is to be
adjusted is the debt of the purchaser of the equity of redemption. It may be that if Fakirbhai
himself had filed an application under Section 4 of the B.A.D.R. Act, then, Fakirbhai would have
been entitled to get the present mortgage-debt adjusted. Whether a purchaser of the equity of
redemption would have got any benefit out of that or not is a question which does not fall to be
determined in the present application. But the fact is that Fakirbhai has not made an application.
The fact that Fakirbhai would be a necessary party to a suit for redemption does not necessarily
mean that the debt is one in which Laxmidas is personally interested. Therefore, in my opinion,
order 34, rule 1 of the Civil Procedure Code also cannot help opponent No. 1 in meeting the
aforesaid point.
7. The last point which was urged by Mr. M. C. Shah was based upon the definition of the word
'debtor' as given in the B.A.D.R. Act, in section 2, sub-section (5). That section states that a
debtor is one, who, amongst other things, is indebted. Mr. M. C. Shah contended that a person
may be indebted although he may be personally liable for the debt. He contended that though the
word 'debt' has been defined in sub-section (4) of Section 2 aforesaid, the word 'indebted' has not
been defined. He contended that, having regard to the object of the B.A.D.R. Act, which was to
adjust all the debts of agricultural debtors, in whatever way they may have been incurred, I
should put a liberal construction upon the word 'indebted' and construe the word in such a way as
to include the case of opponent No. 1. In my opinion, even if the aforesaid contention of Mr.
Shah were to be upheld, it would not help him at all. This is so because, as already pointed out, in
order that that person may be entitled to make an application under Section 4 of the B.A.D.R.
Act, the debt to be adjusted must be his debt. If a debtor has an adjustable debt and is entitled to
make an application, even then, he is not entitled to include in the application a debt which is not
his own according to the substantive law. The debt included in the application must be 'his debt'.
Therefore, before a person can succeed in an application for adjustment of a debt, it is necessary
for him to establish that the debt which he seeks to adjust is his debt.

8. In view of the aforesaid discussion, I have come to the conclusion that the opponent No. 1 has
failed to establish that the mortgage debt, which he seeks to adjust in the present case, is his debt,
and, consequently, in my opinion, the award which was passed by the B.A.D.R. Court and
upheld by the appellate Court is not sustainable.
9. The view which I have taken that a purchaser of equity of redemption is not liable for the
mortgage-debt also derives support from the observations made by Mr. Mulla in his Transfer of
Property Act (4th Edn.) at page 444. This is what Mr. Mulla says :

        'The personal covenant does not run with the land and no personal decree can be made
        against purchaser of the equity of redemption. Thus in 39 Ind App. 7 (PC) a purchaser of
        equity of redemption retained a part of the purchase money under an agreement with the
        mortgagor to pay the mortgage debt, but the judicial committee held that he was not
        personally liable to the mortgagee under Section 90 of the Transfer of Property Act, now
        the Code of Civil Procedure, Order 34, rule 6, as he was not party to the sale, nor could he
        be held liable on the ground that he held the money in trust for the mortgagee.'

Before I part with this case, there is one more point which I wish to mention, and that is
regarding that part off the definition of the word 'debt' which states that the 'debt includes
mortgage money the payment of which is secured by the usufructuary mortgage of immovable
property.' In my opinion, this part of the definition does not make the successor-in-title of a
usufructuary mortgagor personally liable for the debt. The aforesaid part of the definition is only
intended to include in the definition a case which otherwise would have been excluded from its
purview by the general law, and would have debarred a usufructuary mortgagor from taking
advantage of the B.A.D.R. Act. The general law is that usufructuary mortgagor is not personally
liable for the mortgage debt. Therefore, if the aforesaid part of the definition were not there, then,
it could have been contended that the usufructuary mortgagor was not liable for payment of the
mortgage debt, and, therefore, not entitled : to make an application under the B.A.D.R. Act. It is
in order to meet such an argument that the aforesaid part of the definition appears to have been
introduced by an amendment which was made in the Act by Bombay Act 70 of 1948.

10. For the aforesaid reasons, I have come to the conclusion that the debt which the present
opponent No. 1 seeks to adjust is not his debt within the meaning of section 4 of the B.A.D.R.
Act, and consequently, the application for adjustment of that debt did not lie. The revision
application, therefore, deserves to be allowed. Accordingly, I make the rule absolute. The award
and the order of the Appellate Court are set aside. The B.A.D.R. Application is dismissed.

11. Having regard to the fact that this point was not raised in any of the Courts below and was
raised for the first time in this Court, there will be no order as to Costs.
Revision allowed.