JUDGMENT C.S.P. Singh, J.
1. This appeal is directed against a decision of a learned single Judge of this court dated 14-4-1970. The facts necessary for the disposal of this appeal may be shortly stated. Maheshwari Devi Jute Mills Ltd. (hereinafter referred to as the Jute Mills) was in arrears of Sales Tax, Provident Fund Contributions and Employees' State Insurance dues amounting to nearly Rupees 20,06,136.40 Paise. Certificates were sent to the Collector. Kanpur to recover this amount as arrears of land revenue. The National Industrial Development Corporation (hereinafter referred to as N. I. D. C.) had advanced an amount of Rupees 8,00,000 to Jute Mills under an English Mortgage dated 20-7-1971 and another amount of Rs. 9.5 lacs under like mortgage on 27-6-1964. Certain amounts had been paid to the mortgages and the amount outstanding against the Mills was Rs, 13,31,186.28 Paise. On the properties of the Mills being attached 'by the Collector for recovery of the Sales Tax, Provident Fund Contribution and Employees' State Insurance Dues, an objection was filed in June 1966 by the National Industrial Development Corporation asserting that it had a first charge over the properties and the Government dues be recovered only after payment of the dues of N.I.D.C. It was also prayed that the properties be released till such time that dues of the objector are not paid. On 15-9-1966 the Provident Fund Commissioner filed a written statement to the objection preferred by the N.I.D.C. stating that he bad no objection to the prior claim of the N.I.D.C. but the surplus after satisfying that claim, be adjusted towards the Provident Fund Dues. On 2-11-1966, the Sales Tax Commissioner filed a reply to the same effect. On behalf of the Employees' State Insurance Corporation, it was stated before the Collector that it would abide by his decision in the matter. On 3-11-1966, another application was filed by the N.I.D.C. before the Collector praying that 'without prejudice to the rights of the National Industrial Development Corporation in terms of the mortgage deeds dated 20-7-1961 and 27-6-1964, it has no objection if the properties attached be sold subject to prior charge of the said Corporation, by the Collector and 'whatever monies are realised from sale of the properties or received otherwise, shall first be utilized towards the payment of the dues of the Corporation'. On 7th November, 1966 the Collector passed an order, the relevant portion of which runs as under:--
"In view of what has been said by the learned counsel on behalf of the N. I. D.C. Ltd. and on behalf of the opposite parties Nos. 1 to 4, I hold that the properties attached could be sold but the claim of N.I.D.C. will have priority which would get effect in order of the receipt of recovery certificate of the respective dues by the Collector from Department concerned."
A sale proclamation was thereafter drawn up on 7-11-1969 purporting to be one under Order XXI, Rule 66, C.P.C. and in Form 29 thereof. In the schedule of the properties, in the column relating to the details of encumbrances, the mortgage debt of N.I.D.C. Ltd. was specified. An amount of Rs. 13,31,186.28 False was shown as due together with interest On 27-9-1967 an auction was held and the immovable properties were sold to Messrs Jaipur Udyog Limited, one of the appellants before us for a sum of Rupees 20.00,000 and the movable properties for Rs. 15,000. Thereafter, the Collector reported the sale of the immovable properties to the Commissioner Allahabad for confirmation. An application was filed by the N.I.D.C. before the Commissioner drawing his attention to the order of the Collector dated 7-11-1966 and praying that N.I.D.C. be paid first out of the sale amount realised. On 23-10-1967, the Jute Mills filed an application before the Commissioner alleging certain irregularities in the sale. On 25th October, 1967, the Employees' State Insurance Corporation filed an application for setting aside the sale on the allegation that the sale had been effected for a grossly inadequate consideration, and that after paying the dues of the N.I.D.C., which had a prior claim, no amount would be left for payment to them. The Regional Provident Fund Commissioner also filed an application on the same lines. On 1-12-1967, the Sales Tax Officer also filed an application for setting aside the sale. Subsequently, the objections filed by the Sales Tax Officer, the Employees' State Insurance Corporation and the Provident Fund Commissioner were withdrawn and they took the stand that they would have no objection if the sale was confirmed subject to the encumbrances and that their dues were paid out of the sale proceeds. By his order dated 31-10-1968, the Commissioner rejected the objection of the Jute Mills and held that the immovable properties had been sold subject to the encumbrances of the N.I.D.C., and that the order of the Collector dated 7-11-1966 was without jurisdiction and illegal, and the N.I.D.C. should recover its dues by enforcing its mortgages. Thereafter, three petitions were filed, one by the N.I. D.C. the other by the Jaipur Udyog Limited, the auction purchaser, and the third by the Jute Mills. In the present special appeal, we are only concerned with the writ petitions filed by the N.I. D.C. and the Jaipur Udyog Ltd. The Learned single Judge has dismissed all the two petitions and has upheld the order of the Commissioner.
2. Sri Jagdish Swarup appearing on behalf of the N.I.D.C contended that inasmuch as the N.I.D.C. held two English mortgages of the properties of the Mills, and had concurred in the sale of the properties by the Collector, the sale proceeds had to be disbursed in accordance with the provisions of Section 69 of the Transfer of Property Act, and secondly that in any event, it was not open for the Provident Fund Commissioner or the Employees' State Insurance Corporation or the Sales Tax Commissioner to claim priority in payment on account of the fact that they had agreed before the Collector for payment of the dues of the N.I.D.C. on a priority basis and as such they were estopped from setting up any claim to payment before payment to the N. I. D. C. Sri Shanti Bhushan appearing on behalf of Jaipur Udyog Limited has likewise contended that inasmuch as the sale was under Section 69 of the Transfer Property Act the auction purchaser got the property free from encumbrances, and has also contended that all the parties including the auction purchaser always understood that the sale was free from encumbrances, and the mere fact that the encumbrance was mentioned in the sale proclamation, did not in the circumstances of the present case, make the sale one in which the properties were sold subject to the mortgage debt. On behalf of the Sales Tax Commissioner, Sri V. K. Mehrotra raised the contention that Section 69 of the Transfer of Property Act did not apply to the present sale, and in any event, claims of the State had priority over the debts of the N.I.D.C. in view of Section 73(1) of the Act. Sri B. N. Asthana on behalf of the Employees' State Insurance Corporation contended that the sales in question being under the Land Revenue Act, the provisions of Section 69 of the Transfer of Property Act were not attracted, and adumbrating this contention contended that the sales contemplated under Section 69 were sales of the nature specified in Section 54 of the Transfer of Property Act, and not a revenue sale. It was also contended by him that no question of estoppel at all arises, as the sale proceeds had to be dealt with by the Collector in accordance with Section 179 of the Land Revenue Act, and any admission made could not bind the Collector, who had to disburse the amount in accordance with the statutory provision contained in the Land Revenue Act.
3. Now, if the sale was one, to which provisions of Section 69 of the Transfer of Property Act are attracted, it would 'destroy the equity of redemption in the property and would constitute the mortgagee exercising the power of trustee of the surplus proceeds, after satisfying his own charge, the first for the subsequent encumbrancers and ultimately for the mortgagor'. (1878) 6 Ind App 145 (PC) Rajah Kishendatt Ram v. Rajah Mumtaz AH Khan). This would be so, because the N.I.D.C. held an English mortgage as contemplated by Section 69(1)(a) and Sub-section (4) of the Transfer of Property Act. We are, however, constrained to hold in this case that the sale in question cannot be taken to be one under Section 69 of the Transfer of Property Act. The relevant provision of Section 69(1) of the Transfer of Property Act runs:--
"69 (1). A mortgagee, or any person acting on his behalf, shall, subject to the provisions of this section, have power to sell or concur in selling the mortgaged property, or any part thereof, in default of payment of the mortgage money, without the intervention of the Court in the following cases and in no others, namely:
(a) where the mortgage is an English mortgage, and neither the mortgagor nor the mortgagee is a Hindu, Muhammadan or Buddhist or a member of any other race, sect, tribe or class from time to time specified in this behalf by the State Government in the official Gazette;
(b) where a power of sale without the intervention of the Court is expressly conferred on the mortgagee by the mortgage deed and the mortgagee is the Government;
(c) where a power of sale without the intervention of the Court is expressly conferred on the mortgagee by the mortgage deed and the mortgaged property or any part thereof was, on the date of the execution of the mortgage deed, situate within the towns of Calcutta, Madras, Bombay or in any other town or area which the State Government may, by notification in the official Gazette, specify in this behalf."
Sub-section (2) of Section 69 mandates that the power shall not be exercised unless and until a notice in writing has been served on the mortgagor. In the present case, there is no dispute that a notice has been served. Sub-section runs:--
"The money which is received by the mortgagee, arising from the sale, after discharge of prior in cumbrances, if any......"
4. Now, Sri Jagdish Swarup has urged that the section is attracted because the N.I.D.C. had concurred in the sale by the Collector. We may assume concurrence on the part of the NI.D.C. but the question is whether it is a concurrence in the sale of the type contemplated by the Transfer of Property Act. Section 54 of the Transfer of Property Act defines sale thus:--
"54. 'Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
In the case of tangible immovable property, of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.
It does not of itself, create any interest in or charge on such property."
5. Now, since sale has been defined in Chapter III of the Transfer of Property Act, and Section 69 occurs in the same chapter, it will not be doing any violence to the scheme of the Act in case the word 'sale' as occurring in Section 69 of the Transfer of Property Act is ascribed the same meaning as given to it under Section 54 of the Act. Section 54 of the Transfer of Property Act does not only define sale as one in which transfer of ownership of property takes place in exchange for a price paid or promised to be paid, but such transfers have to be effected in a particular manner, and that is in case of tangible immovable property of the value of Rs. 100 and upward by a registered instrument. In the present case, no such instrument has been executed, and neither was any such instrument in the contemplation of the parties. After a revenue sale takes place, the matter was to be proceeded with in accordance with the provisions of the Land Revenue Act. It thus appears to us obvious that Section 69 of the Transfer of Property Act does not take within its embrace a statutory sale of the type contemplated under the Land Revenue Act. There is another difficulty in upholding the contention of Sri Jagdish Swarup. Section 69(4) of the Act contemplates control over the sale proceeds of the mortgage, for the mortgagee has after receiving the money on sale, to deal with it in the manner set out in Section 69(4). In a sale effected under the Land Revenue Act such a situation is not possible on account of Sections 179 and 180 of the Land Revenue Act. Sections 179 and 180 of the Land Revenue Act run -as under:--
"179. When a sale of land under this Act has been confirmed, the proceeds of the sale shall be applied in the first place to the payment of any arrears, including costs incurred for the recovery thereof, due to the Government from the defaulter at the date of the confirmation of the sale, whether the arrears are of revenue, or of sums recoverable as arrears of revenue; and in the second place, if the sale took place for the recovery of an amount recoverable as an arrear of revenue, but not due to Government, to the payment of that amount including costs as aforesaid; and surplus (if any) shall be paid to the person whose land has been sold; or if the land sold was held in shares, then to the co-sharers collectively, or according to the amount of their recorded interests, at the discretion of the Collector."
"180. Such surplus shall not, except under an order of a Civil or Revenue Court, be paid to any creditor of the person whose Land has been sold, nor shall it (except under a like order) be retained by the Collector."
6. Sri Shanti Bhushan appearing, on behalf of Jaipur Udyog has contended that Section 179 of the Land Revenue Act does not apply to the sale of immovable property. The argument appears to be plausible at first, but is not correct Although Sections 171, 172, 176 and 177 set out 'land' and 'immovable property' as different categories of properties, the mere fact that Section 179 only talks of the application of proceeds of sale of land, does not lead to the result that sale proceeds of immovable property other than land have to be dealt with otherwise than in the manner laid down in that section. The reason is this. Under Section 162 (1) of the Land Revenue Act, if an arrear cannot be recovered by other processes, the Collector is entitled to proceed against immovable properties of the defaulter, 'as if it were the land on account of which the revenue is due'. The use of the expression 'as if it were land' in Section 162 (1) of the Laud Revenue Act, in our view, creates a fiction, and immovable properties for the purposes of the various other provisions of the Land Revenue Act becomes 'Land' for the purposes of the Act. Once this is so, it was not necessary for the legislature to make separate provision for distributing the sale proceeds of immovable property as it could be dealt with under Section 179 on account of the fiction created under Section 162 (1). We are also not inclined to accept the contention of Mr. Shanti Bhushan that the property was not sold subject to any encumbrance. In the first place, under Section 162 of the Land Revenue Act, only the interest of defaulter in the immovable property could be sold i.e. in the present case, the mortgagor's right of redemption. The Collector could not sell anything more than the mortgagor-defaulter's interest. This apart, the sale proclamation clearly mentioned the encumbrance on the property sold. The Commissioner has found that the bid sheet also showed that the bidders were making bids for the properties subject to the mortgage of the N. I. D. C. Sri Shanti Bhushan in this connection drew our attention to the decision in the case of Parsotam Das V. Syed AH Haidar, (AIR 1937 Oudh 493) where it was held that the mere fact that encumbrances, are notified in a sale proclamation of the encumbered property, does not establish that the property is sold subject to these encumbrances. In Shib Kunwar Singh v. Sheo Prasad Singh, ((1906) ILK 28 All 418) a similar view has been taken. These decisions do not really touch the point. All that these cases lay down is that where the Court at the time of attachment makes an inquiry as to whether the mortgagee's claim does really exist and then the sale proclamation is drawn up, the auction purchaser cannot Challenge the mortgage, and cases where that is not done, then it is open to the auction purchaser to challenge the validity of the mortgage or the encumbrance that is alleged to attach to the properties. Sri B. N. Asthana rightly relied on the decision given in the case of Emdad Ali v. Haran Sheikh, (AIR 1936 Cal 590); Ramnath Balibhadra v. Sundarbai, (AIR 1948 Nag 290); Mishrilal Seth v. Barik Tursi, (AIR 1939 Nag 305); and Gailu v. Lakha Singh, (AIR 1935 Oudh 23) to highlight this distinction and to establish that the mere fact that the mortgages are not shown in the sale proclamation, does not lead to the result that the auction purchaser takes the property free of encumbrance. We are also unable to appreciate as to how mortgaged property on sale goes to the buyer free from the mortgage. After a mortgage has been executed, it attaches to the property and the mere fact that it is not notified in the sale proclamation does not alter the position.
7. Mr. Shanti Bhushan also made an effort to rely on Section 73(b) of the Code of Civil Procedure to show that the property was sold free from encumbrances. In the first place, the provisions Of the Code of Civil Procedure have not been made applicable to the Land Revenue Act, and in the second place, the Collector while selling immovable property under the Land Revenue Act cannot be equated with a Court as contemplated by Section 73.
8. We do not see any substance in the plea of estoppel raised on behalf of the appellant, as it is well settled that there cannot be any estoppel against a statute. Assuming that the respondents had consented to the sale being made subject to the payment of dues of the N. I. D. C. the Collector was bound to disburse the money in accordance with Section 179 of the Land Revenue Act, and once this' position is reached, the N. I. D. C. cannot claim any priority of Its mortgage money. This really disposes of the appeal. We may, however, in passing refer to the contention raised by Sri V. K. Mehrotra that the State Government had priority over the mortgaged debt of the N. I. D. C. in view of Section 73 of T. P. Act. This contention is misconceived. Section 73 of the Transfer of Property Act applies only to such eases, where the mortgaged property is sold owing to failure to pay revenue or other charges of a public nature or rent due in respect of the mortgaged property. The words "due in respect of such property" governs not only the words "rent due" but also the words "ar rears of land revenue and other charges of a public nature". The Sales Tax arrears, the Employees' State Insurance Contribution and the Provident Fund dues can on no basis be held to be sums due in respect of the mortgaged properties. They were the liabilities of the Maheshwari Devi Jute Mills Company and were not due in respect of mortgaged property.
9. Counsel for the appellant also drew our attention to the equitable aspect of the case that the N. I. D. C., on account of the statements made by the Government authorities before the Collector did not exercise its powers under Section 69, before the Revenue sale, and that the Jaipur Udyog was also misled on account of this concession, and thought that it purchased the property free from encumbrance. So far as Jaipur Udyog is concerned, it cannot in the circumstances be said that it purchased the property in ignorance of the encumbrance. The sale proclamation specially mentioned the mortgage debt of the N. I. D. C. The bid sheet also shows that bids were made on the understanding that it was being sold subject to the mortgage. So far as N. I. D. C. is concerned, we do not think that substantial prejudice has resulted to its claim, as the property having been sold subject to its mortgage, it can enforce its mortgage. We are informed that it has already taken steps to appoint a receiver of the property, but the matter has been stayed on account of a stay order in the present special appeal, We discharge that stay order.
10. We accordingly dismiss the special appeals. There shall, however, be no order as to costs. The stay orders are also discharged.