Khosla C.J. & Tek Chand, J. - (1.) The point for consideration in this case is a simple one, namely, whether a sale by an agriculturist to a non-agriculturist effected during the validity of the Punjab Alienation of Land Act is liable to be treated as a mortgage after the repeal of that Act. The matter was considered on a previous occasion by a Division Bench of this Court on a reference made by Kapur J. when the matter came up before Bhandari, C.J., and Dulat J., they differed and it was then placed before Chopra J., and Chopra J. took the view (agreeing with Bhandari C. J.) that even after the repeal of the Alienation of Land Act, the transaction must be treated as a mortgage. The facts in that case were somewhat different and the period of twenty years envisaged by S. 14 of the Punjab Alienation of Land Act had already expired before the repeal of the Act, but certain observations made by Dulat J. in his judgment would apply with equal force to the present case. To resolve this dispute and to have an authoritative opinion of this Court on the point we order that this matter be referred to a Full Bench of three Judges. OPINION Khosla, C.J. This reference to the Full Bench has arisen out of a petition under Article 226 of the Constitution. Briefly stated, the point for out consideration is whether an alienation of land made by an agriculturist to an non-agriculturist before 1947 takes effect as a mortgage even after the repeal of the Punjab Alienation of Land Act, because no sanction to be sale had been given by the Deputy Commissioner as envisaged by S. 14 of the Act. (1a) The facts are as follows: Risaldar Major Amar Singh was owner of six biswas of land in the district of Ludhiana. He sold this land to Shera, a Muslim non-agriculturist, sometime before 1947. The Punjab Alienation of Land Act was at that time in force and so the sale could not become absolute until it had been sanctioned by the Deputy Commissioner as required by S. 14 of the Act. No such sanction was given, and in 1947 Shera migrated to Pakistan. On 17-51948 Sandhur Singh, a collateral of the vendor, Amar Singh, applied to the Deputy Commissioner, Ludhiana, for permission to purchase the land for Rs. 500/-. Sandhur Singh treated the land as evacuee property. No orders were passed on this application until 4-10-1951 when the Punjab Alienation of Land Act ceased to exist because it was repealed by the Adaptation of Laws (Third Amendment) Order, 1951, published in the Gazette of India on 4-4-1951. The Deputy Commissioner, Ludhiana, then passed an order rejecting Sandhur Singh's application and holding that the sale in favour of Shera was to be deemed a usufructuary mortgage and the vendor could apply for its redemption. Then on 31-10-1951, before the vendor could make the application suggested by the Deputy Commissioner, the Evacuee Interest (Separation) Act, 1951, came into force. The vendor, Risaldar Major Amar Singh, applied for the separation of his interest before the Competent Officer appointed under the Act. The Competent Officer on 24-7-1954 ordered that the land be redeemed on Amar Singh deposition Rs. 500/-within one month. The Custodian was present as a party to these proceedings. The amount was deposited, but one Harchand Singh filed an appeal under S. 14 of the Act. The Appellate Officer held that Harchand Singh had no locus standi but went on to observe that Amar Singh could not redeem the land, because by the repeal of the Punjab Alienation of land Act the sale in favour of Shera had become absolute and as Shera was an evacuee, his total interest vested in the Custodian. He thereupon dismissed Amar Singh's application for redemption. Amar Singh came to this Court with an application under Art. 226 of the Constitution and this application was heard by Bishan Narain J. who took the view that the sale in favour of Shera could not take effect as a mortgage after the repeal of the Act and so Amar Singh had no further interest in the land and was entitled to redeem it. Against this order Amar Singh came up in appeal under clause 10 of the Letters Patent and the appeal was heard by my brother Tek Chand and myself. Reliance before us was placed upon a Divisional Bench decision of this Court in Khazana v. Mst. Lachhmi, Regular Second Appeal No. 823 of 1949, and since it appeared to us that the matter should be considered more authoritatively, we referred it to a Full Bench, and the case has now been argued at considerable length before us by both parties.
(2.) The relevant provisions of law in S. 14 of the Punjab Alienation of Land Act which is in the following terms: "Any permanent alienation which under S. 3 or 3-A is not to take effect as such until the sanction of Deputy Commission is given thereto, shall until such sanction is given or if such sanction has been refused, take effect as a usufructuary mortgage in form (a) permitted by S. 6 for such terms not exceeding twenty years and on such conditions as the Deputy Commissioner considers to be reasonable". To interpret this section properly it is necessary to refer to the definition of 'usufructuary mortgage' as given in S. 2(5) which reads "the expression 'usufructuary mortgage' means a mortgage by which the mortgagor delivers possession of the mortgaged land to the mortgagee and authorizes him to retain such possession until payment of the mortgage money, and to receive the rents and profits of the land to appropriate them in lieu of interest or in payment of the mortgage money or partly in lieu of interest and partly in payment of the mortgage money;" Section 6(1)(a) defines the form of a usufructuary mortgage and reads: "6. (1) If a member of an agricultural tribe mortgages his land and the mortgagee is not a member of the same tribe, or of a tribe in the same group, the mortgage shall be made in one of the following forms: (a) in a form of a usufructuary mortgage by which the mortgagor delivers possession of the land to the mortgagee and authorizes him to retain such possession and to receive the rents and profits, of the land in lieu of interest and towards payment of the principal, on condition that after the expiry of term agreed on or (if no terms is agreed on or if the term agreed on exceeds twenty years), after the expiry of twenty years, the land shall be redelivered tot he mortgagor;" Section 7 sets out certain rules which apply to the permitted mortgages. But a reading of this section makes it quite clear that it relates to mortgages made voluntarily and not to sales which have the effect of mortgages under S. 14.
(3.) It will be clear from a careful perusal of the above mentioned provisions that when the Alienation of Land Act was in force, the sale of land by an agriculturist in favour of a non-agricultural was in substance, a sale, but it could not take effect a full-fledged sale unless and until sanction was given to it by the Deputy Commissioner. This sanction could be given at any time, for the Act does not place any bar upon the powers of the Deputy Commissioner with regard to the giving of such sanction. He could give his sanction at any time, and if he did not give the sanction and chose to let the sale have the effect of usufructuary mortgage, he could impose any conditions which he considered reasonable. It, therefore, follows that the sale was, in no way, void or illegal. It had all the characteristics of a sale, but it could not take effect as such until the Deputy Commissioner gave his sanction. In the many time the transaction was to take effect as a usufructuary mortgage of the form envisaged in S. 6(1)(a). It was argued before us that the Deputy Commissioner could give his sanction even after the expiry of twenty years, but whether this be so or not, it is undeniable that a valid sanction could be given with the period of twenty years. In the present case before the twenty years expired, the Act was repealed. It was repealed because it was against the provisions of the Constitution. Therefore, its repeal made the Act wholly non-existent. The question now arises what is the effect of this repeal upon the transaction of sale. The Deputy Commissioner had neither refused nor accorded his sanction to the sale and, therefore, it cannot be said that upon refusal by the Deputy Commissioner the sale was to take effect as a mortgage and that the vendor had thereby acquired a right to redeem the land or to enter into possession of it after the expiry of twenty years. Had the Act not been repealed, Shera or his representative could have asked for sanction and he may well have obtained such sanction. In that event the sale in favour of Shera would have taken effect as an absolute sale and the vendor would have been left with no rights whatsoever. In this view of the matter, it follows that the repeal of the Act left Amar Singh with no rights in this land and Shera must be treated as full owner of the property. Since he has gone away to Pakistan, his interest has devolved upon the Custodian, and Amar Singh has no right to redeem the land.;