1. The appellants were some of the defendants in a suit brought by the respondents on a simple mortgage for Rs. 2,192 dated July 19, 1926. The main defence to the suit was that the mortgage was void.
2. In order to understand how the point arose it is necessary to note the facts leading up to the mortgage suit and also certain statutory provisions. In a suit brought by the plaintiffs' predecessor against defendant No. 1 and the father of defendants Nos. 2 to 4 on a promissory note, Suit No. 200 of 1926, a decree was passed on March 12, 1926, for Rs. 1,610 and costs amounting to Rs. 228 and interest at the rate of six per cent, from the date of the suit, November 7, 1925. Execution was taken out, and in March, 1926, a darkhast was presented claiming Rs. 1,877 as due under the decree. On July 19, 1926, an application, exhibit 135, was put in by both parties asking the Court's permission for the execution of a mortgage of property belonging to the defendants in satisfaction of the decree. The application stated that the parties had settled amicably to get the darkhast disposed of by the execution of this mortgage and the Court was alsked to grant time for the purpose. The Court's order on this application was ' Granted subject to the usual conditions. Costs on the applicant. July 19, 1926.' In making the order subject to the usual conditions it is evident that the Court had in mind Rule 83 of Order XXI of the Civil Procedure Code, 1908, for on June 7, 1926, an order for sale of the defendants' property had been made and it was therefore necessary to get the Court's sanction for postponement of the sale and execution of the mortgage. The mortgage deed duly executed was put in on the same day. It provided that the amount due to the decree-holder had been settled to be Rs. 1,950 and it was agreed that to this sum Rs. 242 should be added as advance interest and the total amount of Rs. 2,192 was made payable in four instalments of Rs. 548 each. The mortgage was executed in consideration of this amount, and it was provided that in case of default in payment of these instalments interest at six per cent, was payable on the amount of any instalment in arrears. It was also provided that the darkhast should be dismissed without any further steps being taken in execution. The defendants failed to pay as provided in the mortgage deed and on August 4, 1931, the mortgagees filed the suit which has given rise to this appeal against the mortgagors and subsequent mortgagees of the property.
3. The statutory provisions which we have to consider are Section 257A of the old Civil Procedure Code and Section 13 (c) of the Dekkhan Agriculturists Relief Act. Section 257A was incorporated in the Civil Procedure Code of 1877 by an amending Act passed in 1879. It was then incorporated in the Code of 1882 but it was repealed by the present Code of 1908. The section was in these terms :-
Every agreement to give time for the satisfaction of a judgment-debt shall be void unless it is made for consideration and with the sanction of the Court which passed the decree, and such Court deems the consideration to be under the circumstances reasonable.
Every agreement for the satisfaction of a judgment-debt, which provides for the payment, directly or indirectly, of any sum in excess of the sum due or to accrue due under the decree, shall be void unless it is made with, the like sanction. Any sum paid in contravention of the provisions of this section shall be applied to the satisfaction of the judgment-debt ; and the surplus, if any, shall be recoverable by the judgment-debtor.
4. Clause (c) of Section 13 of the Dekkhan Agriculturists' Relief Act as it stood prior to a recent amendment by Bombay Act XIV of 1932 was in these terms :
In the amount of principal there shall not be debited to the debtor any money which he may have agreed to pay in contravention of section 257A of the Code of Civil Procedure.
5. It has been argued by the defendants, and the contention has been accepted by both the lower Courts relying on a decision in Dattatraya v. Salvo (1931) 34 Bom. L.R. 404, that for the purposes of Section 13 of the Dekkhan Agriculturists' Relief Act, Section 257A of the old Civil Procedure Code remained in force in spite of its repeal by the Code of 1908.
6. Looking at the matter first apart from authority, I find considerable difficulty in holding that this is the real and necessary consequence of the retention in Section 13 (c) of the Dekkhan Agriculturists' Relief Act of the reference to Section 257A. When one speaksi of a thing being done in contravention of the law, one normally means something illegal according to the law in force at the time. When the Dekkhan Agriculturists' Relief Act was enacted, agreements of the kind referred to in Section 257A without the sanction of the. Court were void, and it was natural therefore that in prescribing the method in which an account was to be taken under the Act the legislature should provide that such illegal agreements should be ignored. After Section 257A was repealed and agreements of the kind ceased to be illegal, Section 13 (c) of the Dekkhan Agriculturists' Relief Act could still be construed so as to give the words ' in contravention of' their ordinary meaning. For the Courts for a considerable time would still have to deal with transactions which took place prior to the repeal and were therefore void when they took place. The repeal of Section 257A was not retrospective and therefore the wording of Section 13(c) could not very well be changed, though in course of time it would become obsolete. The other view implies that the words ' in contravention of' in Section 13 (c) were merely descriptive of the kind of agreements made void by Section 257A and that the intention of the legislature was that such agreements should be ignored in taking accounts under the Dekkhan Agriculturists' Relief Act irrespective of whether the agreements were illegal or not. Speaking for myself, I doubt very much whether that intention can reasonably be presumed.
7. Trimbak Kashiram v. Abaji (1911) I. L. R. 35 Bom. 307 was a case of a suit brought while the Code of 1882 was still in force, though it fell to be decided after the repeal of Section 257A, The question was whether the repeal of that section rendered valid an agreement in contravention of its terms. It was held that it did not. Mr. Justice Chandavarkar's judgment is very short and may be given in full :
The question is whether Section 13(c) of the Dekkhan Agriculturists' Relief Act must be regarded as repealed in consequence of the repeal of section 257A of the old Code of Civil Procedure (Act XIV of 1882) by the new Code (Act V of 1908). That section of the) Dekkhan Agriculturists' Relief Act incorporates by reference section 257A of the old Code ; and it is argued by Mr. Patvardhan for the appellant that its repeal has the effect of repealing section 13, Clause (c) of the Act also. But in the words of Brett, L. J., in Clarke v. Bradlaugh (1881) 8 Q.B.D. 63 Where a statute is incorporated by reference into a second statute, the repeal of the first... by a third does not affect the second', See also Maxwell on Statutes, 3rd edition, page 590.
8. That is quite in accordance with the construction of Section 13 (c) which I have suggested and does not necessarily imply that Section 257A was to be treated as applying to transactions taking place after it had ceased to be law. The Court said that Section 13(c): was not repealed and that is clear. But the section still has to be construed and in Trimbak v. Abaji the Court was not concerned with any question of construction of the section. This case was followed in Dattatraya v. Salvo and there no doubt the Court took the view that Section 257A remained in operation for the purposes of the Dekkhan Agriculturists' Relief Act after its repeal and it was held to invalidate an agreement made in 1924. With all respect to the learned Judges who decided the case, I should feel great difficulty in following this decision because the only authority cited on the particular point is Trimbak v. Abaji which, as I understand it, decided no such thing.
9. The point has become more or less academic in view of the amendment of Section 13 (c) in 1932. The clause now contains no reference to Section 257A. Moreover, as it happens, it is not necessary to decide the point for the purposes of the present case. Assuming for the sake of argument that Section 257A is to be treated as applying to the mortgage with which we are concerned, we are not satisfied that there has been any contravention of its provisions. There is some force in Mr. Manerikar's argument that Section 13(c), which speaks only of an agreement by the debtor to pay, has reference only to the second part of Section 257A, for obviously it is the creditor and not the debtor who agrees to give time under the first part. However that may be, it has been held that the first part of the section refers to agreements which suspend the operation of a decree, not to those which put an end to the execution of the decree altogether : see Tukaram v. Anantbhat (1900) I.L.R. 25 Bom. 252 The judgment of Sir Lawrence Jenkina in this case contains an exhaustive discussion of previous authorities including the full bench case of Heera Nema v. Pestonji (1898) I.L.R. 22 Bom. 693 F.B. relied on by the appellants here. Tukaram v. Anantbhat was followed in Bhagabai v. Nara-yan (1907) I. L. R. 31 Bom. 552 and though it has been discussed in many cases it does not appear to have been dissented from or overruled. The mortgage agreement here expressly provided that no further steps were to be taken with the execution proceedings. It is therefore not within the mischief of the first part of Section 257A.
10. As regards the second part of the section we agree with the learned District Judge that, as the amount of Rs. 242 added as interest in advance to the amount claimable in the darkhast was less than the interest which would have accrued due under the decree, there is no question of any excess payment. The provisions in the mortgage bond as to payment of further interest in case of default were by way of penalty and could be regarded as a separable part of the agreement. The mortgage as a whole therefore would not be rendered void. On that point reference may be made to Bhagchand v. Radtiakisan (1903) I.L.R. 28 Bom. 62 and Chatru v. Kondaji Vithal (1913) I.L.R. 38 Bom. 219 . That being so there was no contravention of the second part of Section 257 A either.
11. We are unable to agree with the Courts below that the executing Court's order ' granted subject to the usual conditions ' can be regarded as equivalent to the sanction which Section 257A required. It is quite clear, we think, that the order was made with reference to ORDER XXI, Rule 83. The Court was not dealing with the case under the Dekkhan Agriculturists' Relief Act and there is no reason to suppose that it had Section 257A in mind at all. One of the anomalous results which would seem to follow from the decision in Dattatmya v. Salvo is that a Court not acting under the Dekkhan Agriculturists' Relief Act but under the Civil Procedure Code, when called upon to deal with an agreement which was perfectly legal under the ordinary law, must bear in mind the possibility that at some future date there might be a proceeding under the Dekkhan Agriculturists' Relief Act and in anticipation of that must pass an order under Section 257A of the old Civil Procedure Code which had been repealed. However that may be, the executing Court in the present case obviously did not do this. We think there was no sanction of the kind contemplated in Section 257A, but as we also think that no sanction was required, that is immaterial.
12. In the result we confirm the decrees of the lower Courts and dismiss the appeal with costs. Costs to be awarded to plaintiffs only.
13. It should be noted that so far as appellant No. 5 is concerned the appeal has abated, he having died and his heirs not having been brought on record.