1. These two appeals arise out of almost identical facts and raise common questions for decision. They can, therefore, be conveniently dealt with together.
2. The parties to both the appeals are the same and figure in the same capacities. The appellant and respondent No.2 are brothers. They owned three lands bearing S. Nos.19,20 and 15 situate at village Bhagur in Ahmednagar District. On 5-4-1954 the first two of these lands came to be transferred to respondent No.1 by a conditional sale-deed for a consideration of Rs.5000. Respondent No.2 being then a minor, the sale-deed was executed by the appellant and by Rambhai, the mother of the appellant and respondent No.1, acting as guardian of respondent No.2 A similar conditional sale-deed was executed in favour of respondent No.1 on 1-6-1954 in respect of the third land, viz. S. No.15, for a consideration of Rs.4000. Possession of the lands comprised in the two sale-deeds was delivered to respondent No.1 on the dates of the respective sale-deeds.
3. In 1956 the appellant filed two suits against respondent No.1 in the Court of the Civil Judge at Shevgaon in respect of the aforesaid two transactions alleging that the transactions were really mortgage transactions and praying for the relief of redemption and possession. Respondent No.2 was joined in both the suits as defendant No.2. The suits were resisted by respondent No.1 but the trial Court held the transactions to be mortgages and passed preliminary decrees for redemption in both the suits on 14-3-1958. The decree in suit No.63/56 relating to S.Nos. 19 and 20 declared the amount due on the mortgage to be Rupees 5000 and gave time to the appellant to pay the same till 14-9-1958 and to get the mortgaged lands redeemed. It was further directed that the appellant was entitled to a credit of Rs. 300 per annum on account of the income of the suit lands from the date of the decree. It was also directed that on failure of the appellant to deposit the amount within the time fixed or the extended time. If any, respondent No.1 would be entitled to apply for a final decree for foreclosure. The parties were directed to bear their respective costs. Respondent No.2 had contended that the mortgage was not binding on him and that contention was accepted by the Court but that aspect of the matter is no material for the purposes of these appeals. An exactly similar decree was passed in Suit No. 101 of 1957 relating to the mortgage of S. No.15. The only difference being that the amount due on the mortgage was determined as Rs. 4000 and the annual income for which the appellant was to get credit was fixed at Rs. 240 per annum.
4. The appellant appealed against the said decrees to the District Court at Ahmednagar and respondent No.1 filed cross-objections in both the appeals. Those appeals were decided on 19-2-1960 and the decrees of the trial Court were modified by directing respondent No.1 to pay the costs of the appellant in the trial Court. The cross-objections were dismissed and the parties were directed to bear their respective costs of the appeals and of the cross-objections. It may be mentioned that the costs of the appellant in the trial Court which were thus awarded to him were Rs. 598-3-0 and Rs.553-8-0 respectively in the two suits.
5. While the appeals against the preliminary decrees were pending, respondent No.1 applied for making the decrees final in both cases as the appellant had neither paid the amounts decreed nor got the time for payment extended. In those applications the appellant contended that respondent No.1 had given him two years time to pay the amounts and hence the applications were premature. That contention was rejected by the trial Court which accordingly passed final decrees for foreclosure in both the cases on 5-1-1960, i.e. before the appeals against the preliminary decrees were decided, no reference to the pending appeals however seems to have been made before that Court.
6. Against the final decrees passed by the trial Court the appellant preferred appeals to the District Court at Ahmednagar. The contention that respondent No.1 had given two years' time to the appellant was urged in the appeals also but was rejected. By the time the appeals against the final decrees came up for admission the appeals against the preliminary decrees had been modified as stated above. That fact was brought to the notice of the learned District Judge. What contention was urged before the learned District Judge on that basis is not clear from the judgment but presumably it was that the time allowed for payment would start from the date of the decrees in appeal and not from the decrees of the trial Court. That is the indication one can get from ground No.2 out of the grounds of appeal in those appeals which is identical in both the cases and reads:-
'That the appellant had filed appeal against the preliminary decree in the District Court. Ahmednagar, and the lower Court should have extended time until the disposal of this appeal.'
7. The learned District Judge rejected that contention with the following observations:
'The only result was that the plaintiff was entitled to set off the costs awarded to him by the appellate Court against the mortgage money payable by him. The Appellate Court did not extend the time for payment of the mortgage amount as already fixed by the preliminary decree.'
8. The learned District Judge also rejected the prayer made on behalf of the appellant for extention of time as he was of opinion that it was only the Court of first instance which had the power to enlarge the time in redemption suit. The learned Judge accordingly dismissed both the appeals summarily on 14-3-1961. The present appeals have been filed by the appellant for challenging the final decrees passed by the trial Court and confirmed by the lower Appellate Court.
9. The contention that respondent No.1 had given two years time to the appellant for payment is concluded by the concurrent finding of the Courts below and is not open to the appellant in the present appeals.
10. Mr. Shahane for the appellants has, however, argued that as the preliminary decrees were modified in appeal, the time for payment and redemption fixed by those decrees must be deemed to have been extended by an equivalent period beginning with the date of the Appellate Decrees. He has alternatively argued that when the fact of the modification of the decrees by reducing the amounts payable, was brought to the notice of the lower Appellate Court before which the final decree proceedings were pending, that Court should have refixed the amounts payable by the appellant and fixed a fresh period for payment of that amount. That Court, according to him, was in error in confirming the final decrees without doing this.
11. Mr. Chitale for respondent No.1 has on the other hand argued that an appeal does not operate as a stay of further proceedings in pursuance of a preliminary decree. The time given by the preliminary decree does not also get extended unless it is expressly extended by the Appeal Court even if the preliminary decree is varied in appeal. He has argued that if pending an appeal from a preliminary decree, the preliminary decree is made final the final decree must stand and if it debars the mortgagor from redeeming the property thereafter he must thank himself for the result. As the appellant mortgagor in the present case neither made payment within the time fixed by the preliminary decree nor got the time extended either from the trial Court or from the appeal Court, respondent No.1 was fully justified in applying for passing final decree for foreclosure and the final decree passed on his application by the trial Court and confirmed in appeal by the District Court cannot now be challenged. These rival contentions will, therefore, have to be considered.
12. In support of his arguments Mr. Chitale placed strong reliance on the decision of the Supreme Court in Sital Parshad v. Krishnarao Lal. : 3SCR101 which, according to him, places the matter beyond controversy. According to Mr.Chitale, the ratio of this decision is that whatever the decision in an appeal against a preliminary decree in a mortgage suit, if the decree is made final before the decision of the appeal, the final decree can never be challenged on the ground that the preliminary decree was modified thereafter.
13. Now, the appeal before the Supreme Court arose out of a suit for sale of mortgaged property by the mortgagee and was decided on considerations peculiar to such suit which as I will presently point out, are not applicable to a decree passed in a suit for redemption by a mortgagor. It had been mentioned at more than one place in the judgment that the decree with which their Lordships were concerned was a decree in a suit for sale of the mortgaged property. It is pointed out in paragraph 6 of the judgment that in an appeal from the preliminary decree for sale in a mortgage suit one of three possible things may happen. The appeal may be allowed and the preliminary decree reversed, or the appeal may be dismissed and the preliminary decree confirmed in toto, or there may be modification of the preliminary decree in appeal and the modification may be of one of two kinds, viz. the amount decreed may be increased or the amount decreed may be reduced. Their Lordships were conscious of the fact that the third case could possibly raise certain difficulties and observed in paragraph 15 of the judgment:
'Then we come to the third class of cases where there has been variation by the appellate Court in appeal from the preliminary decree. This variation can be of two kinds: firstly, the amount fixed for redemption may be increased as happened in the present case, or secondly, it may be reduced. In the first preliminary decree by the defendant is dismissed in toto. However, in the second case, where variation is in favour of the defendant and the amount fixed for redemption is reduced. a question may arise whether the period for redemption can be said to have been extended for six months or such other time as may be provided in the preliminary decree under appeal but beginning from the date of the decree in appeal. In such a case we are of opinion that it is the duty of the appellate Court when it is reducing the amount payable for redemption to fix some time for the purpose in the interest of justice. But it is not bound to do so and if it does not do so, the original time fixed in the preliminary decree stands even though the amount for redemption may have reduced ........................ 'Nor do we think that any serious harm is done to the defendant mortgagor in such a case for under Order XXXIV, R. 5(1) even though no fresh time may have been fixed by the appellate Court where the amount for redemption is reduced the mortgagor defendant would have time unto the date of the confirmation of sale to deposit the amount and save the property. In these circumstances we see no reason to distinguish even this case where variation results in reduction of the amount of redemption form the case where the decree of the appellate Court affirms the preliminary decree in appeal in toto'' (The underlining here into ' ' is mine).
14. The portion which I have under lined (here in ' ') above clearly shows that the decision was based on considerations peculiar to a suit for sale, viz. that even after the final decree the mortgagor has ample time to pay the amount as the final decree would only be for the sale of the mortgaged property and the property can be saved by the mortgagor by making payment at Any time till the sale is confirmed.
15. These considerations would obviously not apply to a case where the suit is by a mortgagor for redemption of a mortgage by conditional sale, for in foreclosure debarring the mortgagor from all right to redeem the property. Even if the mortgagor succeeds thereafter in his appeal against the preliminary decree and the amount decreed is substantially reduced so that he finds himself in a position to pay it, he cannot get the benefit of that decree because he would have already lost his property on account of the decree for foreclosure. The decision relied upon by Mr. Chattel has, therefore, no application to the facts of the present case. On the contrary, there are certain observations in paragraph 16 of the judgment which would go to support the alternative argument of Mr. Shane. These are:-
'We are further of opinion that even where there has been a variation in the decree, the form in which a final decree for sale is prepared. All that happens is that where the preliminary decree is varied one way or the other, the final decree which is entirely depending on the preliminary decree stands varied by its own terms in accordance with the terms of the preliminary decree passed in appeal. 'It is the duty of the executing Court when it is executing the final decree passed in the meantime to see that the execution is in accordance 'with the preliminary decree passed in appeal which is the support of the final decree'.'
16. (The under lining here into ' ' is mine) These observations show that even in the case of a decree for sale of mortgaged property, the preliminary decree of the trial Court as modified in appeal. If that is so, then in a case where the final decree proceedings pursuant to the preliminary decree in a redemption suit are still pending either before the Court of first instance or before the appeal Court when the appeal against the preliminary decree is decided and that decree is varied by reduction of the amount, the Court dealing with the final decree proceedings must evidently take into account the modification of the preliminary decree which is brought to its notice and must give effect to it. It cannot pass or confirm a final decree for foreclosure thereafter, on the basis of the preliminary decree as passed by the trial Court and the only way in which it can give effect to the modified preliminary decree is by extending the time for payment unless that has been already done by the modified preliminary decree itself.
17. In the present case when the final decree proceedings were pending before the lower Appellate Court, the fact of the modification of the preliminary decree in appeal had been brought to its notice and it was, therefore, its duty to determine the amount due on the mortgage in the light of the modified preliminary decree and to fix a fresh period for payment of that amount. As that Court has not done this, the matter will have to be remanded for following the procedure indicated above.
18. In view of the above conclusion which I have arrived at, it is not necessary for me to discuss the merits of the first contention urged by Mr. Shahane. I may, however, mention that that contention receives support from the decision of a Division Bench of this High Court in Satwaji Balajirao v. Sakharlal Atmaramshet : AIR1914Bom132 .
19. I may also mention that Mr. Chitale invited my attention to the decisions in the following cases; Ram Golam Lal Sahu v. Chowdhry Babu Barsatising 10 C Wn 910; Chiranji Lal v. Dharma Singh, ILR (1896) All 455 Aminabai v. Sidu, (1893) ILR 17 Bom 547; Mahant Ishwargar v. Chudasama Bhai ILR (1889) Bom 106; Ali Momud v. Miarish AIR 1918 Cal 424. I have considered these decisions but in my opinion none of them has any bearing on the present case as the facts therein were materially different. Mr. Chitale also invited my attention to the Full Bench decision of the Nagpur High Court in Rukhmabai v. Krishnarao AIR 1952 Nag 145. This last decision was no doubt approved by the Supreme Court in the ruling to which I have referred above but it was also a case of a suit for sale of mortgaged property by the mortgagee.
20. It is not necessary for me to consider here as to what would happen if even in a case like the present one, a final decree for foreclosure is passed before the decision of the appeal against the preliminary decree and that decree has become really final because of the same not having been appealed against. The point does not arise in the present case.
21. In the result both the appeals are allowed.. The final decrees for foreclosure passed by the trial Court and confirmed in appeal by the District Court are set aside and the original applications of respondent No. 1 for making the preliminary decree final are remanded to the trial Court. That Court will determine the amount now due to the mortgages under the preliminary decrees as modified in appeal and will fix such time as it thinks fit for payment of those amounts. If the appellant mortgagor pays the amount so determined within the time thus fixed by the trial Court, the applications of respondent No. 1 for making the decree final shall stand dismissed. If on the other hand the appellant fails to pay the amount within the period fixed, the trial Court will proceed with the applications of respondent No. 1 and dispose them of according to law. The parties in both the appeals shall bear their respective costs.
22. Appeals allowed.