JUDGMENT B.N. Sapru, J.
1. The petitioner, the New Bank of India Ltd., is a banking company carrying on its business in India. The respondents Nos. 3 to 6 applied to the petitioner bank for cash credits and offered 2535 acres of their bhumidhari land situate in village Meeduwala, Pargana and Tehsil Najibabad, district Bijnor as security. Apart from offering their land as security, they also offered certain movable properties as security. This was some time in the year 1969. This offer was accepted by the Bank and a mortgage of the aforesaid land was executed in favour of the bank and accordingly a cash credit account No. 127 was opened by the Bank in their favour. According to the Bank, a sum of Rs. 7,50,557.55 P. was outstanding in the aforesaid current account as on September 8, 1976 excluding interest from 1st July, 1976, Respondents Nos. 3 to 6 again requested the petitioner Bank to grant another cash credit limit of six lakhs. This offer was again accepted and a cash credit account No. 129 was opened on 8th October, 1969, in the name of Seth Mohan Lal, Hindu undivided family, to be operated by Seth Mohan Lal as karta of the family. As security for the aforesaid amount Respondents Nos. 3 to 6 executed a fresh mortgage of the agricultural holding comprising of 2535 acres of bhumidhari land situate in village Meeduwala Pargana and Tehsil Najibabad. district Bijnor including the buildings standing thereon. The creation of the aforesaid mortgage was affirmed by respondents Nos. 3 to 6 by two letters dated 8-10-1969. When the cash credit account No. 129 was opened, a number of documents were executed in favour of the petitioner Bank. It is stated that on July 24, 1976, a sum of Rs. 1,95,781.65 was outstanding towards the petitioner Bank, excluding interest accrued after 24th June, 1976.
2. It is stated in the petition that the Accountant of the petitioner Bank received a notice from the Prescribed Authority under the U. P. Imposition of Ceiling on Land Holdings Act, 1960 to bring a statement of accounts Nos. 127 and 129 of respondents Nos. 3 to 6. It is stated that it is only when this notice was received that the petitioner Bank discovered that proceedings were going on for the determination of surplus land held by respondents Nos. 3 to 6 as 'Bhumidhars'.
3. The petitioner states that after coming to know that the mortgaged land was likely to be declared surplus in proceedings under the U. P. Imposition of Ceiling on Land Holdings Act, 1960 (hereinafter referred to as the Ceiling Act), it moved an application under Order 1, Rule 10 C. P. C. for getting itself impleaded as a party in the aforesaid proceedings before the Prescribed Authority.
4. The main contention of the petitioner Bank in the application was that it was a mortgage of the bhumidhari land of respondents Nos. 3 to 6 and under the provisions of Section 5 (2) (d) of the Ceiling Act the Land sought to be declared surplus, could not be declared surplus as it was held by the petitioner Bank, because the petitioner was a Bank as defined in Clause (c) of Section 2 of the U. P. Agricultural Credit Act, 1973 (hereinafter referred to as the Credit Act). It was further the case of the petitioner Bank that the mortgage operated as a transfer of an interest in an immovable property, i. e., the mortgaged land, in favour of the Bank and, as such the land was held by the Bank and could not be declared surplus in view of Section 5 (2) (d) of the U. P. Ceiling Act, which excludes ]and held by a Bank from the operation of the Act. In this connection it was stressed that under Section 58 of the Transfer of Property Act a mortgage being a transfer of an interest in the immovable property the petitioner Bank after the creation of the mortgage had an interest in the land. In this connection it was submitted that respondents Nos. 3 to 6 had only an equity of redemption in the land.
5. The Prescribed Authority by its order dated 28-8-1976 rejected the application of the Bank. It found that the petitioner Bank cannot be deemed to hold the land; though it did have a charge on the land involved in the proceedings. It further held that Section 14 (2) of the Ceiling Act provides that surplus land shall stand transferred to and vest in the State Government free from all encumbrances and all rights, title and interest of all persons in such land shall, with effect from such date, stand extinguished. The Prescribed Authority pointed out in its order that the proviso to Section 14 (2) of the U. P. Ceiling Act provides that the encumbrances, if any, attached to the land shall stand attached to the compensation payable under Section 17 of the Act. It went on to hold that in view of this provision the interest of the petitioner Bank was amply safeguarded and it did not appear necessary to grant it any separate opportunity to file objections.
6. Aggrieved by the order of the Prescribed Authority the petitioner Bank has filed the instant writ petition. Basically, the submissions made in the writ petition are the same as were made in the application.
7. The first argument that has been urged before this Court is that the petitioner was a tenure-holder of the land involved in the proceedings, because in view of the provisions of Section 58 of the Transfer of Property Act, which provides that a mortgage shall operate as a transfer of an interest in the land, the petitioners must be held to be bhumidhars of the land in suit. In other words, it is urged that they are tenure-holders within the meaning of Section 2 (17) of the Ceiling Act. Thereafter the argument is that in view of the provisions of Section 5 (2) (d) of the Ceiling Act, land held by the petitioner Bank is exempt from the imposing of Ceiling. Section 5 of the Act provides that on and from the commencement of the U. P. Imposition of Ceiling on Land Holdings (Amendment) Act, 1972, no 'tenure-holder' shall be entitled to hold in the aggregate throughout Uttar Pradesh any land in excess of the ceiling area applicable to him.
8. Section 5 (2) provides as follows:--
"Nothing in Sub-section (1) shall apply to land held by the following classes of persons namely:--
(a) ...............................
(b) ......
(c) .....
(d) Bank as defined in Clause (c) of Section 2 of the U. P. Agricultural Credit Act, 1973, or a Co-operative Bank, or a Co-operative Land Development Bank."
9. There are, however, clear indications in the Act that land mortgaged to a Bank is not exempt from the operation of the Act. Section 12-A of the Ceiling Act provides as follows:--
"In determining the surplus land under Section 11 or Section 12, the Prescribed Authority shall, as far as possible accept the choice indicated by the tenure holder to the plot or plots which he had and other members of his family, if any would like to retain as part of the ceiling area applicable to him or them under the provisions of this Act, whether indicated by him in his statement under Section 9 or in any subsequent proceedings:
Provided that-
(a) the prescribed authority shall have regard to the compactness of the land to be included in the ceiling area applicable to the tenure-holder;
(b) where the tenure-holder's wife holds any land which is aggregated with the land held by the tenure-holder for purposes of determination of the ceiling area, and his wife has not consented to the choice indicated by the tenure-holder as to the plot or plots to be retained as part of the ceiling area applicable to them then the prescribed authority shall, as far as possible, declare the surplus land in such manner that the area taken out of the land held by the tenure-holder's wife bears to the total surplus area the same proportion as the area originally held by her bore to the total land held by the family;
(c) where any person holds land in excess of the ceiling area including any land mortgaged to the State Government or to a bank as defined in Clause (c) of Section 2 of the U. P. Agricultural Credit Act, 1973, or to a Co-operative Society or to the corporation or to a Government Company, the surplus land to be determined shall, as far as possible be land other than that so mortgaged;"
It will be noticed that under this provision the surplus land of a 'tenure-holder' has to be determined by the Prescribed Authority in such a manner that as far as possible, the land which is declared surplus, is land other than the land mortgaged to a Bank or other institutions mentioned in the sub-section. This provision obviously contemplates that surplus land of a 'tenure-holder' which is mortgaged can be declared to be surplus land. The other significant feature of Section 12-A is that the choice of indicating the land which the 'tenure-holder' wishes to retain, has been given only to the 'tenure-holder', and not to a Bank. In other words, a Bank cannot ask that any particular land which is mortgaged to it by a tenure-holder, should not be declared to be surplus.
10. A tenure-holder has been defined in Section 2 (12) of the Ceiling Act as follows :--
" 'Tenure-holder' means a person who is the holder of a holding but, except in Chapter III, does not include-
(a) a woman whose husband is a tenure-1 older;
(b) a minor child whose father or mother is a tenure-holder;" A holding has been defined in Section 2 (9) of the Ceiling Act as follows:--
" 'holding' means the land or lands held by a person as a Bhumidhar, sirdar, asami of Gaon Sabha or an asami mentioned in Section 11 of the U. P. Zamindari Abolition and Land Reforms Act, or a tenant under the U. P. Tenancy Act, 1939, other than a sub-tenant, or as a Government lessee, or as a sub-lessee of a Government lessee where the period of the sub-lease is co-extensive with the period of the lease."
11. The petitioner is claiming to be a tenure-holder of the land mortgaged in its favour by the bhumidhars of this land, viz. respondents Nos. 3 to 6. The tenure rights claimed are bhumidhari rights as denned in the U. p. Zamindari Abolition and Land Reforms Act. Section 130 of the Zamindari Abolition and Land Reforms Act provides as follows:--
'Bhumidhari--Every person belonging to any of the following classes shall be called a bhumidhar and shall have all the rights and be subject to all the liabilities conferred or imposed upon bhumidhar by or under this Act, namely,--
(a) every person who, as a consequence of the acquisition of estates becomes a bhumidhar under Section 18;
(b) every person who acquires the rights of a bhumidhar under or in accordance with the provisions of this Act."
The petitioner obviously did not become a bhumidhar under Section 18 of the Act as that conferred bhumidhari rights on person as from the date of the enforcement of the U. P. Zamindari Abolition and Land Reforms Act, i.e., from 1st July, 1952. The petitioner was not concerned with the land at all till 1969. Section 134 of the aforesaid Act provides as follows :--
"Acquisition of Bhumidhari rights by a sirdar -- (1) If a sirdar belonging to the class mentioned in Clause (a) of Section 131 pays or offers to pay to the credit of the State Government an amount equal to twenty times the land revenue payable or deemed to be payable on the date of application for the land of which he is the sirdar, he shall, upon an application. duly made in that behalf to an Assistant Collector, be entitled, with effect from the date on which the amount has been deposited, to a declaration that he has acquired the rights mentioned in Section 137 in respect of such land:
Provided that the rights to pay or offer to pay the amount aforementioned shall cease on the expiry of three months from the date to be notified by the State Government.
Explanation I -- In this sub-section 'land' includes share in land.
Explanation II -- For the purpose of this section the land revenue payable shall-
(a) in respect of land referred to in proviso to Clause (a) of Sub-section (1) of Section 246, be an amount arrived at after all the increases have been given effect to; and
(b) in respect of land to which the proviso to Section 247 applies, be an amount determined at hereditary rates under that section.
(2) The amount referred to in Sub-section (1) may be paid in cash or, if the State Government so prescribes, in form of bonds or otherwise.
Section 135 provides as follows:--
"The application referred to in Section 134 shall be accompanied where the amount is, paid in cash, by a Treasury challan and in any other case, by such document or evidence as may be prescribed showing that the 'amount has been deposited as aforesaid and shall briefly describe the right in which the applicant claims the land."
Section 136 says:--
"Where a sirdar or his predecessor-in-interest was, on the date immediately preceding the date of vesting, a hereditary tenant of the holding, the amount to be deposited under Section 134 shall notwithstanding anything contained in this Act, be equal to twenty times the land revenue payable by him or, if the said land revenue exceed an amount double that computed' at the applicable hereditary rates, twenty times such amount."
Section 137 says:--
"If the application has been duly made and the Assistant Collector is satisfied that the applicant is entitled to the declaration mentioned in Section 134, he shall grant a certificate to that effect.
(2) Upon the grant of the certificate, under Sub-section (1) the sirdar shall, from the date on which amount referred to in Sub-section (1) of Section 134 has been deposited-
(a) become and be deemed to be a bhumidhar of the holding or the share in respect of which the certificate has been granted, and
(b) be liable for payment of such reduced amount on account of land revenue for the holding or his share therein, as the case may be, one half of the amount of land revenue payable or deemed to be payable by him therefor on the date of application."
12. These sections provide the manner in which 'Bhumidhari' rights can be acquired by a 'tenure-holder'. The Act does not provide any other manner for acquisition of 'Bhumidhari' rights. The petitioner's claim that it acquired 'Bhumdhari' rights by virtue of mortgage executed in its favour by the 'Bhumi-dhars' of the land viz., respondents Nos. 3 to 6, cannot, therefore, be accepted.
13. The petitioner Bank is neither a 'Bhumidhar' nor a sirdar nor an asami of the Gaon Sabha, nor an asami mentioned in Section 11 of the U. P. Zamin-dari Abolition and Land Reforms Act; nor a tenant under the U. P. Tenancy Act, 1939.
14. It is necessary at this stage to consider why Section 5 (2) (d) of the Ceiling Act exempts land held by a Bank from the operation of the Act. With a view to encourage the flow of credit for the development of agriculture the U. P. Agricultural Credit Act, 1973 (hereinafter referred to as the Credit Act) was enacted. This Act was substantially amended in 1975. A bank was defined in the Credit Act in Section 2 (c). It is not necessary to reproduce that provision here, as admittedly, the petitioner Bank is a Bank within the meaning of the Credit Act. Under Section 3 of the Credit Act the State Government was granted power to vest subject to such restrictions as may be specified in a notification to be published in the Gazette, a right in all 'Bhumidhars', 'Sirdars', 'Asamis' and Government lessees to create a charge of mortgage in such land of their interest in favour of banks generally, or in any specified class of banks for the purpose of obtaining financial assistance from such banks provided that upon the issue of such notification, such bhumidhar, sirdar, asamis, and Government lessee shall notwithstanding anything contained in any law for the time being in force, or in any contract or other instrument to the contrary or any custom or tradition, have a right of alienation in accordance with the terms of the notification.
15. Under Section 4 of the Credit Act an agriculturist was enabled to create a charge, on the moveable properties owned by him or on crops raised by him in order to secure financial assistance from a bank, despite the fact that he was not the owner of the land on which such crop or produce was raised. Thereafter under Section 6 of the credit Act an agriculturist desirous of securing financial assistance from a bank could create a charge on the land or other immovable property which he owns or in which he had an interest. Thereafter, Section 6-A of the Credit Act provides :--
"Where any land held by an agriculturist is subject to a charge or mortgage created in favour of a bank by an agriculturist and the rights, title and interest of the agriculturist in the said land have ceased as a result of the enforcement of the final consolidation scheme under Chapter IV of the U. P. Consolidation of Holdings Act, 1953, such charge or mortgage shall be transferred and attached to the corresponding land allotted to the agriculturist and the compensation, if any, payable under the said scheme."
Section 8 (b) of the Credit Act provided for priority of charges and mortgages executed in favour of Government, a bank and a co-operative society. Under Section 8 (b) any charge or mortgage created on any land or interest in favour of a bank had priority over all charges or mortgages except those in favour of the Government. Section 9 of the Credit Act provided the procedure for the registration of a charge of mortgage in favour of a bank. Section 9-A is very significant it provides as follows :--
"Where a copy of the document creating charge, variation or mortgage has been sent for registration under Section 9, the bank may give intimation to the Tehsildar or such other official as may be designated in this behalf by the State Government, of the particulars of such charge, variation or mortgage. The Tehsildar or the other official shall make a note of the particulars of the charge, variation or mortgage in the record of rights relating to the land in respect of which such charge or mortgage has been created or variation has been made."
In view of the provisions of Section 9-A the moment a charge or mortgage was reported, the particulars of a charge or mortgage or any variation thereof was to be entered in the record of rights relating to the land in respect of which such charge or mortgage had been created or variation had been made. Section 10 thereafter provided that where an agriculturist had for the purpose of obtaining financial assistance from a bank created a charge or a mortgage on a land, or interest therein, then so long as such financial assistance continues to be outstanding the agriculturist would not lease out the land or create any tenancy in the land.
16. Chapter IV dealt with the recovery of dues by a bank. Section 10-A provided that:--
"Nothing in any law shall prevent in any manner a bank from causing any land or any interest therein charged or mortgaged to it by an agriculturist to secure any financial assistance, to be attached and sold through a civil court and applying the proceeds of such sale towards all moneys due to it from that agriculturist including the costs and expenses as may be awarded by the court."
Section 11 thereafter provides that if the dues of a bank were not paid by an agriculturist the bank could have the land charged or mortgaged in favour of the bank sold for the realisation of the amount. Section 11-A provided for the recovery of any amount due to a Bank from an agriculturist as arrears of land revenue.
17. Thereafter comes a very significant feature in the Credit Act, i.e., Section 12-A which provides as follows:--
"Right of a Bank to Acquire and Dispose of immovable property (1) notwithstanding anything contained in any law for the time being in force, but subject to the provisions of Sub-section (2), a bank shall have power to itself acquire any land or interest therein or any other immovable property which has been charged or mortgaged to it by an agriculturist in respect of any financial assistance granted to him.
(2) Where a bank acquires any land or interest therein or any other immovable property under Sub-section (1), it shall dispose of such land, interest or property by sale in favour of an agriculturist within a time to be prescribed, notwithstanding anything contained in any law for the time being in force.
(3) If the bank has to lease out any land acquired by it under Sub-section (1), pending sale thereof as indicated in Sub-section (2), the period of lease shall not exceed one year at a time, and the lessee shall not acquire any interest in that property, notwithstanding any provisions to the contrary in any other law for the time being in force."
Rule 41 of the U. P. Agricultural Credit Rules, 1975 runs as follows:--
"Disposal of property by Bank --(Sections 12-A and 25) -
(1) Where a bank acquires any land or any interest or any other immovable property under Section 12-A, it shall dispose it of by a registered sale deed in favour of an agriculturist within a period of one year from the date of such acquisition.
(2) A bank desirous or transferring the property referred to in sub-rule (1) after the expiry of the period referred to in the said sub-rule, shall have to obtain prior approval of the State Government, in the Revenue Department.
(3) Every application for permission to transfer a property under sub-rule (2) shall be sent to the Secretary to the Government of Uttar Pradesh in the Revenue Department, Council House, Lucknow, and if no reply is received within six months from the date of receipt of such application by the Government, the, application for permission shall be, deemed to have been granted."
It is well known that banks in this State did not own agricultural land; nor were they by and large tenure-holders. Under the provisions of this section a bank could hold agricultural land. This explains the provisions of Section 5 (2) (d) of the Ceiling Act. The Legislature was aware that there were possibly lands which were being held by banks in view of the provisions of Section 12-A of the Credit Act. In order to protect the interests of such banks Section 5 (2) (d) was enacted. As has been recited above a bank could not continue to hold the land indefinitely. Under Rule 41 of the rules framed under the credit Act, the land held by a bank has to be disposed of normally within a year of its being held by a bank. It was, therefore not considered necessary to bring such a land within the purview of the Ceiling Act.
18. The argument of the Bank that it is entitled to be heard in proceedings under Section 11 of the Ceiling Act, (in this objections have been filed) is also untenable. Section 12-A of the Ceiling Act provides that only a tenure-holder can indicate the choice of the land that he wishes to retain in proceedings under the Ceiling Act. Section 12-A (c) provides that in determining the surplus land of a tenure-holder the land mortgaged in favour of a bank should, as far as possible, not be declared to be the surplus land of a tenure-holder. The object of this provision obviously is to protect the interest of a bank, as far as possible, by retaining the rights of the bank created by a mortgage in its favour by an agriculturist. It is, however, clear that the Legislature did not confer a right on a bank to file a statement indicating the choice of the surplus land which was to be retained. This choice was only given to the tenure-holder.
19. The Prescribed Authority has also rightly pointed out that some protection is afforded to the petitioner Bank by the proviso to Section 14 (2) of the Ceiling Act which provides that the encumbrances, if any attached to the land shall be attached to the amount of compensation payable under Section 17 in substitution for the surplus land. Section 14 runs as follows:--
"Acquisitions of surplus land -- The Prescribed Authority shall-
(i) in case, where the order passed under Sub-section (1) of Section 11 has become final; or
(ii) in case, where no appeal has been preferred under Section 13, after the expiry of the period of limitation provided therefor; or
(iii) in case, where an appeal has been preferred under Section 13, after its decision;
notify in the official Gazette the surplus land determined under Section 11, 12 or 13, as the case may be (2) As from the beginning of the date of the notification under Sub-section (1), all such surplus land shall stand transferred to and vest in the State Government free from all encumbrances and all rights, title and interests of all persons in such land shall, with effect from such date, stand extinguished;
Provided that the encumbrances, if any, shall be attached to the amount payable under Section 17 in substitution for the surplus land.
(3) to (7) omitted.
(8) The collector may at any time after the publication of the notification Under Sub-section (1) take possession of the surplus land and also of any un-gathered crop or fruits of trees, not being crops or fruits to which Sub-section (1) of Section 15 applies, after evicting the tenure-holder or any other person found in occupation of such land and may, for that purpose, use such force as may be necessary;
Provided that a tenure-holder may at any time voluntary deliver possession to the collector over the whole or any part of the land held by him which has been or is likely to be declared surplus under and in accordance with the provisions of this Act, and thereupon the provisions of Sub-section (2) shall apply to such land as they apply to any surplus land specified in a notification under Sub-section (1)".
20. The petitioner bank's application under Order 1, Rule 10, C. P. C. has rightly been rejected by the Prescribed Authority.
21. In the result, the writ petition fails and is summarily dismissed.