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Raychand Jivaji Vs. Basappa Virappa Bellary - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberAppeal under Letters Patent No. 52 of 1938
Judge
Reported inAIR1941Bom71; (1940)42BOMLR1113
AppellantRaychand Jivaji
RespondentBasappa Virappa Bellary
DispositionAppeal dismissed
Excerpt:
.....and the automobile sales co. ltd. v. anant subrao yatgiri (1935) f. a. no. 61 of 1934, decided by barlee j., on august 22, 1935 (unrep.), distinguished;; janardan v. krishnaji (1920) 22 bom. l.r. 953 and gurupadappa mallappa v. basappa shiddappa (1940) 42 bom. l.r. 592, referred to;;(3) that the right to proceed against the judgment-debtor personally was not independent of the charge but only arose, if at all, after the right against the charged property had been exercised:; heptulla v. mahomed (1909) 11 bom. l.r. 356, applied.; the principles underlying order xxxiv of the civil procedure code, 1908, although, they may not strictly apply in the case of a charge, may be applied or ought to be applied by analogy to charges created by a decree, unless indeed the terms of the decree make it..........for the payment of the decretal amount the decree-holder should first exhaust his remedy against charged property before proceeding against other property. in the event of the charge proving insufficient, there is nothing to prevent the decree-holder from proceeding against other property.'at the same time', it was stated in the judgment, 'by specially indicating this property the parties evidently intended it to be the primary remedy and the judgment-debtor was entitled to act on this belief with regard to the rest of his property. it therefore might be prejudicial to him if the decree-holder were allowed to desert his charge completely and suddenly pounce upon the other property.' (p. 131).the judgment seems to have been based, therefore, on general grounds of equity rather than on.....
Judgment:

Broomfield, J.

1. This is a Letters Patent appeal from a decision of Mr. Justice N. J. Wadia. The appeal arises out of execution proceedings. The appellant is the assignee of a decree obtained by one Kapurji Magniram in July, 1931. The terms of the decree which was passed on an award were as follows:-

' Defendant do pay to plaintiff Rs. 22,900, Defendant do pay to plaintiff the said amount by annual instalments of Rs. 4,000. And interest on the said amount of Rs. 22,900 at the rate of 6 per cent. per annum should be paid until the amount is paid off. The first instalment should be paid before the end of July 1932. Subsequently before the same fixed time every year the instalments should be continued to be paid. As this amount is large, and as instalments are granted to defendant, for security of the plaintiff's amount a charge of the said amount has been placed on the property mentioned below. In case defendant fails to pay the amount of instalment at the time fixed, plaintiff do recover the amount of the said instalment out of the property over which a charge has been placed.'

2. Then follows a description of the property and there is a further recital:

The charge of the amount has been placed on the property as above.

3. This decree was transferred to the appellant on March 12, 1935, for Rs. 15,000, and on April 6, 1935, he filed the darkhast from which the appeal arises to recover Rs. 8,680 as the amount of the second and third instalments. The judgment-debtor contended that the transfer of the decree was invalid because it was not made by a registered deed. That was treated as a pre-liminary issue and the trial Judge having held that the transfer was compul-sorily registrable dismissed the darkhast. In appeal before Mr. Justice N. J. Wadia two points were argued (1) that registration of the deed of assign- ment was not necessary and (2) that the decree could in any case be executed against the judgment-debtor personally. This was a point not taken in the trial Court. On both the issues N. J. Wadia J. decided against the appellant.

4. As regards the first point, the necessity for registration, the relevant provision of the Indian Registration Act is Section 17(1) (e), which is as follows:-

Non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or1 contingent, of the value of one hundred rupees and upwards, to or in immoveable property.

This provision by which transfers and assignments of decrees are made compulsorily registrable was added by an amending Act in 1929.

5. There was formerly a conflict of authority as to whether an assignment of a decree creating or declaring rights to or in immoveable property exceeding Rs. 100 in value was compulsorily registrable under Section 17 (J) (b). The Calcutta and Allahabad High Courts said registration was not necessary because the assignment was not of any immoveable property but of the decree itself and the assignment did not of itself create an interest in the property. This High Court took a different view in Gopal Narayan v. Trimbak Sadashiv 1876 I.L.R. 1 Bom. 267 and Heptulla v. Mahomed (1909) 11 Bom. L.R. 356. But we are concerned not with Section 17(1) (b) but with the new provision Section 17(2) (e), which I have just read, and it is now quite clear that all that has to be considered is whether the decree or order or award as the case may be creates or declares etc. a right to or in immoveable property of a value exceeding Rs. 100. If it does, the assignment of it is compulsorily registrable.

6. In Gopal Narayan v. Trimbak Sadashiv the facts were that a mortgagee had obtained a decree against his mortgagors for the payment of the mortgage moneys and in default for the sale of the mortgaged property, and his heir executed an assignment of the decree to the plaintiff who proceeded to execute it by sale of the mortgaged property. It was held that the assignment was a document of which the registration was compulsory. No judgment appears to have been delivered by this Court which merely expressed concurrence in the decision of the lower Courts. But in the report a passage is cited from the judgment of the District Judge, which was the Court of first appeal:

The deed of sale, under which this decree was transferred from Damodar to Gopal, purported to assign to Gopal certain interest in immoveable property; for it gave to him the liberty to sell by auction, by executing the decree against it, the defendant's house; and this liberty to sell was certainly an interest in immoveable property, and the derision of the Subordinate Judge was, I think, right, and must, therefore, be confirmed.

We must take it, I think, that this Court in dismissing the appeal concurred in this reasoning. It is a very old case, but it does not appear to have been dissented from, and on the contrary it was followed in Heptulla v. Mahomed, as I have said.

7. Apart from these Bombay cases there are several other authorities fort the view that a charge is a right to or in immoveable property within the meaning of the Indian Registration Act. One of these cases was cited by the learned ' counsel for the appellant himself, Mama v. Bachchi I.L.R. 1906 28 All. 655. In his judgment in that case Mr. Justice Richards said (p. 659):

It would appear that the provisions as to registration contained in the Registration and Transfer of Property Acts apply to charges (when created by acts of parties) just as much as to mortgages. . .

8. In Imperial Bank of India v. Bengal National Bank, Limited I.L.R. 1930 58 Cal. 136 it was held by Rankin C.J. that a mere charge on immoveable property is within cl.(1) (b) of Section 17 of the Indian Registration Act, because, as he said, it is a right in immoveable property-a right to' have it brought to sale to realise a sum of money to be paid to the chargee. The decision in this case was reversed in Imperial Bank of India v. Bengal National Bank : but on another point unconnected with the question of registration.

9. Then there is a very recent decision of the Calcutta High Court in Siv Narayan v. Basanta Kumar (1939) 43 C. W. N. 858, in which the Court was concerned with a decree for arrears of rent which created a charge on immoveable property. It was held that because it created a charge it came within the terms of Section 17 of the Indian Registration Act.

10. Mr. Desai referred us to Gobinda Chandra Pat v. Dwarka Nath Pal 1908 I.L.R. 35 Cal. 837, in which the question was whether a decree by which immoveable property was hypothecated was void because there was no duly registered instrument as required by Section 17. The Court disallowed the argument but that was done by reason of a provision which was then contained in the Act by which decrees were exempted from the rule as to compulsory registration of documents. We think there can be no doubt that Mr. Justice N. J. Wadia was right in holding that this deed of assignment required registration.

11. The second point really includes two entirely different matters viz. (1) whether this decree can be executed personally against the defendant and (2) whether, whatever the rights of the decree-holder may have been, the right to proceed against the judgment-debtor personally has been validly assigned. On the first of these questions Mr. Desai's argument is that this is a decree for the payment of money to which has been added a charge on certain property by way of additional security for the benefit of the decree-holder. He relies on Order XXI, Rule 30, which provides that every decree for the payment of moneys including a decree for the payment of money as the alternative to some other relief, may be executed by the detention in the civil prison of the judgment-debtor, or by the attachment and sale of his property, or by both. He also cites Hargobind Kishm Chand v. Hakim Singh I.L.R. (1925) Lah. 548, where it was held that the law confers upon the decree-holder the right to decide whether he should execute the decree for payment of money by the arrest of the judgment-debtor or by the attachment and sale of his property, or by both, and that though the Court has a discretion to refuse execution against the person and property simultaneously, it has no authority to refuse execution against the person of the judgment-debtor on the ground, that the decree-holder must in the first instance proceed against the property of the judgment-debtor. In that case, however, the Court was concerned with an ordinary money decree and no charge was created by it. That being so, it cannot be said that these observations have much applicability in the case before us.

12. We were also referred to Ambalal Bapubhai v. Narayan Tatyaba I.L.R. (1919) 43 Bom. 631: 21 Bom. L.R. 698 s.c.and in particular to some observations of Mr. Justice Shah at p. 638 of the report:

The decree contains a distinct direction that the defendant should pay the sum to the plaintiffs. This gives the plaintiffs the right to attach and sell the property of the judgment-debtor under the Code of Civil Procedure; and in the exercise of this right he can seek to realise the decretal amount or the balance thereof by the sale of the property in question. The declaration in the decree as to the charge on the property in favour of the decree-holder in order to secure repayment of the amount of the decree has the effect of protecting them against any transfer of the property by the judgment debtor and not of reducing or modifying the right which the plaintiffs have got in virtue of the direction that the defendant should pay the amount.

It is to be noted, however, that the only question before the Court there was whether the property charged could be sold in execution of the decree or whether a separate suit was necessary. It was held that no separate suit was necessary. The observations relied on by Mr. Desai cannot be said to support the view that the decree so far as it directed payment of money could be executed separately from the provision as to the charge. No such question came before the Court for determination.

13. The case on which the learned Counsel mainly relies is a decision of Mr. Justice Barlee sitting alone in The Automobile Sales Co., Ltd. v. Anant Subrao Yatgiri (1935) F. A. No. 61 of 1934, decided by Barlee J., on August 22, 1935 (Unrep.). The decree which had to be construed in that case was a rather complicated one. It is thus summarised in the judgment:

The decree, which is based on award, provides as follows:-Firstly that the defendant should pay a certain sum to the plaintiff; secondly that the amount so found due should be a charge on the immoveable property of the defendant....; thirdly that some motor-buses then in the possession of the defendant were the properties of the plaintiff. Then there is a clause for instalments, and a default clause which gave the company a right to seize the buses and to sell the immoveable properties which have been charged, and there is also a provision about a surety.

What Mr. Justice Barlee had to decide was whether this decree could be termed a decree for the payment of money within the terms of Section 73 of the Civil Procedure Code which deals with rateable distribution among decree-holders. There are no doubt observations in the judgment of the learned Judge which may be used in support of the case put forward for the appellant here. But the point which we have to decide did not actually arise in the case decided by Mr. Justice Bailee and it is not therefore an authority on the present point. We note also that he has not in his judgment referred to Rule 15 of Order XXXIV of the Civil Procedure Code which provides that all the provisions in this Order which apply to a simple mortgage, shall, so far as may be, apply to a charge within the meaning of Section 100 of the Transfer of Property Act, 1882.

14. Mr. Justice N. J. Wadia in the judgment which is now under appeal has relied mainly on Janardan v. Krishnaji : (1920)22BOMLR953 in which the facts were these. A decree passed in a mortgage suit directed that the defendant should pay a certain amount to the plaintiff in fixed annual instalments: in default of the payment of any two instalments, the plaintiff was at liberty to recover the whole amount then due by sale of the mortgaged property. The defendant having fallen into arrears, the plaintiff applied to execute the decree not only by sale of the mortgaged property, but also by attaching other property belonging to the defendants. It was held that he was not entitled to proceed simultaneously against the other property, since there must be a decree made personally against the defendants before it could be executed against property other than the mortgaged property. In the course of his judgment Macleod C.J. said (p. 958):

It seems clear to me that there must be a decree personally made against the mortgagor before it can be executed against property other than the mortgaged property. The decree in this case cannot be said to be a personal decree merely because it directs that the defendant should pay the amount. It directs specifically how the plaintiff shall recover the decretal amount if default is made in payment, and it says nothing about, what shall happen supposing the mortgaged property when sold is insufficient to pay the mortgage debt.

It is quite true, as Mr. Desai says, that that; was a case of a mortgage to which the provisions of Order XXXIV specifically apply. But it has been recently followed and applied by Mr. Justice Kania in Gurupadappa Mallappa v. Basappa Shiddappa : AIR1940Bom276 to the case of a charge created by a decree. It is true that the charge in that case was a statutory charge under Section 55(4) {b) of the Transfer of Property Act and the decree was not in the same form as the one which we have to construe. But nevertheless the case is an authority for the view which Mr. Justice N. J. Wadia adopted, viz. that the principles laid down in Janardan v. Krishnaji may reasonably be applied by analogy to decretal charges.

15. In the argument before us no case directly bearing on the point in issue has been cited, and so far as we are aware there is no decision in the authorised reports. But in Fatehchand v. Indian Cotton Co. Ltd., BombayA.I.R. [1935] Nag. 129, it was held that where a charge is created in the decree over certain specified properties for the payment of the decretal amount the decree-holder should first exhaust his remedy against charged property before proceeding against other property. In the event of the charge proving insufficient, there is nothing to prevent the decree-holder from proceeding against other property.

'At the same time', it was stated in the judgment, 'by specially indicating this property the parties evidently intended it to be the primary remedy and the judgment-debtor was entitled to act on this belief with regard to the rest of his property. It therefore might be prejudicial to him if the decree-holder were allowed to desert his charge completely and suddenly pounce upon the other property.' (P. 131).

The judgment seems to have been based, therefore, on general grounds of equity rather than on the application of the provisions of Order XXXIV, in particular Rule 6. It is, however, a direct authority on the point before us, and we agree that the principles underlying Order XXXIV, although they may not strictly apply in the case of a charge, may be applied and ought to be applied by analogy to charges created by a decree, unless indeed the terms of the decree make it clear that the remedy of recovering the decretal amount from the property charged was not given in lieu of the personal remedy, but in addition to it. In every case it must be essentially a question of construction of the decree, but unless the contrary appears, we think the ordinary rule should be that when a charge is created by act of parties the specification of the particular fund or property negatives a personal liability and the remedy of the holder of the charge is against the property charged only or at any rate against the property charged in the first instance. In my opinion that is the way in which the decree in this case should be construed.

16. The question whether the right to proceed personally against the judgment-debtor has been validly assigned to the appellant therefore becomes academic because we hold that there was no such right, at any rate until recourse had been had to the sale of the charged property. Whether, if that right had existed, it could be taken to have been assigned, in view of the fact that the assignment deed is invalid so far as the charge is concerned for want of registration, would depend on the question whether the decree is indivisible or whether it can be split up into two parts, viz. the direction for payment of money and the direction as to the charge. In the view we take of the construction of the decree it must be held that the right to proceed against the judgment-debtor personally is not independent of the charge but only arises, if at all, after the right against the charged property has been exercised. In that view of the case Heptulla v. Mahomed is an authority against the appellant.

17. For these reasons we hold that Mr. Justice N. J. Wadia's judgment is correct and dismiss the appeal with costs.


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