Skip to content


Usafali Ibrahim Vs. Falzullabhai Sheikh Mahomedbhai - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case Number First Appeal No. 516 of 1927
Judge
Reported in(1930)32BOMLR439
AppellantUsafali Ibrahim
RespondentFalzullabhai Sheikh Mahomedbhai
DispositionAppeal allowed
Excerpt:
.....procedure code (act v of 1908), order xxxiv, rule v - mortgage-decree for sale-decree passed in terms of award-absence of provision about personal liability-decree can be executed against mortgagor personally.;a decree passed in terms of an award, resulting on a reference by the parties without the intervention of the court, can be executed personally against the mortgagor, even though the award and the decree only provides specifically for satisfaction of the mortgage amount out of the mortgaged property. - maharashtra scheduled castes, scheduled tribes, de-notified tribes (vimukta jatis), nomadic tribes, other backward classes and special backward category (regulation of issuance and verification of) caste certificate act (23 of 2001), sections 6 & 10: [s.b. mhase, a.p. deshpande &..........expressly excluded, such a decree also has similar attributes.12. the main difference between an award decree and one made by a regular court is that, in the former case, the arbitrator, provided he has observed certain elementary rules of fairness, is not bound by those of evidence and judicial form, and may within certain limits and those of the terms of reference, make any decree that he considers proper.13. the provisions of the second schedule enable a decree of the court to be passed in the terms of such an award. the fulfilment of this procedure ends in a decree of the court, which is subject to the same rules of judicial interpretation as would be a decree arrived at in the ordinary way, and involving very similar implications from its nature. in this case we have what would.....
Judgment:

Murphy, J.

1. The point for decision is whether a decree passed in the terms of an award, resulting on a reference of the differences between the parties, without the intervention of the Court, can be executed personally against the mortgagor, where the award and therefore the decree, only provides specifically for satisfaction of the mortgage amount out of the mortgaged property.

2. The facts are implied in the above statement of the point for decision, but will bear stating more precisely. The advance secured by the mortgage, which was executed on January 7, 1920 was Rs. 14,999 and the two original mortgagees assigned their rights under the mortgage to the plaintiff on August 31, 1923. The disputes arose between these assignees and the original mortgagor, and were referred for the decision of Mr. Bhagubhai Chhabildas on November 23, 1924. The award was made on December 2, 1924. An application to fib the award was made on January 9, 1925, and a decree was passed in its terms on January 12, 1925. This is the decree now in question. Execution proceedings followed on the decree and the mortgaged property has been sold and realized Rs. 8,517. There is, therefore, a deficit of Rs. 9,469-6-5 which the decree-holder seeks to recover personally from the judgment-debtor.

3. There has, however, been an intervening proceeding. The decree-holder had applied for a final decree, and one was made on April 6, 1925, and this so-called final decree contains a Clause to the following effect:-

If there is any deficit after doing that (i.e., realizing the amount due out of the mortgage security) plaintiff is at liberty to apply under Order 34 Rule 6. No order as to costs of this application.

4. The relevant terms of the original decree were:

And if the said Faizullabhai makes default in paying money according to the same after the expiry of the said period, the said Esufalli ibrahim shall, be entitled to recover the said principal of Rs. 56,678 in words Rupees sixteen thousand six hundred and seventy eight together with the interest thereon at the rate mentioned above from the property described below at the cost and risk of Faizullabhai.

5. There is one other small point. Though the decree in para 4 states that the reference was ' for the settlement of the said disputes and for ascertaining the amount due under the mortgage and for deciding how to recover the said dues', the original reference does not contain the terms of the last clause as to the manner of recovery.

6. It is plain, as held by the learned Subordinate Judge, that a mortgage decree made in terms of an award does not come within Order XXXIV, Rule 5, and would not require the further step of drawing up a final decree. In the present case, however, a final decree was made after due notice to the judgment-debtor and no appeal by him followed. On the ground of its not having been appealed against, the learned Subordiate Judge has based his finding that the liberty to apply granted by the final decree was not illegal; but he has gone on to observe that the liberty to apply stopped there, and could in its turn only afford ground for a further decree to recover the deficiency from the mortgagor personally ' if the balance is legally recoverable from the defendant otherwise than out of the property sold '.

7. Finding, on a scrutiny of the award and the decree based on it, that no personal remedy was provided, he has dismissed the application, for such further relief.

8. The mortgage in this instance had a clause enabling the mortgagee to recover any deficit in the amount due from the mortgagor personally; and the general rule is that any mortgage carries with it the liability to pay the amount personally; but a mortgagee must sue for his remedy against the property first, and where the personal liability is not taken away by the decree, an application under Order XXXIV, Rule 6, would ordinarily be proper: cf. Musaheb Zaman Khan v. Inayat-ul-lah ILR (1892) All. 513, It has also been held in a recent case by the Patna High Court, that where a decree is passed in the terms of an award, it is not necessarily one in conformity with the provisions of Order XXXIV, and that a final decree is unnecessary.

9. It has also been held in a recent case by the Calcutta High Court, the report being so far only available in unofficial publications, of which I quote Sundermull v. J.C. Galstaun [1929] SI.R. 387, that the power of the Court to give a mortgagee relief by granting a personal decree does not depend upon Order XXXIV, Rule 6, which is only a provision giving direction to the Court as to the time at and manner in which the relief is to be given. It is open to the Court on motion in a consent decree to give a personal judgment against the mortgagors, even though the terms of the consent decree do not include one for a personal judgment.

10. The general rule seems to be, that where such a relief is not expressly excluded by the terms of the mortgage, or of the decree, or both, the mortgagee, after exhausting his remedy against the mortgage security, has a right to recover the balance personally from the mortgagor, if such balance is legally recoverable ; and that in the case of a compromise decree, and by analogy, for they are very similar, of a decree on an award, an application under Order XXXIV would not be necessary for that order does not apply to such decrees. In the case before us the mortgage has a provision for the personal remedy; but the award and decree are silent on the point. The Calcutta case is also an authority for holding that in these circumstances, in the case of a decree based on a compromise of a suit, the personal relief is also available, as it would be in an ordinary mortgage decree for sale. The difference between these examples of mortgage decrees and the one before, us is essentially one of form. In the ordinary case, the form of the decree is in the Court's control in the second the decree is in a form accepted by the parties the implication being that unless any of them are expressly excluded, such a decree has the same attributes as would an ordinary decree.

11. May we in the case of a decree made in the terms of an award make a similar inference and assume that except where any of them are expressly excluded, such a decree also has similar attributes.

12. The main difference between an award decree and one made by a regular Court is that, in the former case, the arbitrator, provided he has observed certain elementary rules of fairness, is not bound by those of evidence and judicial form, and may within certain limits and those of the terms of reference, make any decree that he considers proper.

13. The provisions of the second Schedule enable a decree of the Court to be passed in the terms of such an award. The fulfilment of this procedure ends in a decree of the Court, which is subject to the same rules of judicial interpretation as would be a decree arrived at in the ordinary way, and involving very similar implications from its nature. In this case we have what would ordinarily be a preliminary decree for sale, had it been made in the usual way, the decree-holder would have been entitled to have recourse to his personal remedy, on failure to satisfy it out of the mortgaged property. It seems to me that in spite of the different manner in which the decree came to be made, and the inapplicability of Order XXXIV, a matter of procedure, to its terms, it is actually a decree based on a mortgage and must be held to have all ordinary qualities of such a decree not expressly excluded by its terms including the alternative of a personal remedy implied in all such decrees.

14. We allow the appeal, set aside the Subordinate Judge's order of dismissal of the application for execution, and direct execution to proceed for the balance duo.

15. The appellants will got the costs of this appeal from respondent who will pay his own and the costs so far incurred in the Court below.

Broomfield, J.

16. I have little to add to the judgment of my learned brother, with which I fully agree. Once it is perceived that we are not concerned with the provisions of Order XXXIV the case resolves itself into a simple question of the construction of the award. The right to the personal remedy is part of the ordinary law of mortgage. That right might be negatived by the mortgage deed; but that is not so here. It might be barred _ by limitation ; but that is not so here. It might in this ease be barred by the award ; but that also, I think, is clearly not so. The method of recovery was not one of the matters referred to arbitration. The reference, Exhibit 11, was in these terms:- 'We give this reference and appoint you arbitrator and you should decide on the disputes about the mortgage and all disputes that may be put before you, after hearing our evidence, and your decision will be acted upon,' The principle that an award is conclusive, and that the Court cannot go behind it, does not mean, on a reasonable application of it, that an award should be treated as deciding something which it did not decide at all, a matter not included in the terms of reference and to which, as far as one can tell, the arbitrator never applied his mind. The appellant, therefore, is entitled to his personal remedy, and the appeal must be allowed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //