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GulamhusaIn Lalji Sajan Vs. Clara D'Souza (11.10.1928 - BOMHC) - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 1526 of 1928
Judge
Reported in(1929)31BOMLR988
AppellantGulamhusaIn Lalji Sajan
RespondentClara D'Souza
Excerpt:
.....to recover money by sale of pledged property-jurisdiction- high court-pledgee rights to recover money.;a suit to recover moneys due under a promissory note and to enforce a charge the movable property of an agriculturist-defendant does not fall within the description of suits mentioned in section 3(w), but is a suit mentioned in section 3(x) of the dekkhan agriculturists' relief act 1879, and can be tried on the original side of the high court, if the cause of action has arisen within its jurisdiction.;the scheme of section 3 of the dekkhan agriculturists' relief act is that clause (w) refers to pecuniary claims in respect of which a decree for the payment of money only can be passed; clause (x) refers to such claims in which, in addition to a decree for payment of money, some other..........within clause (w) are suits where decrees for payment of money or what are ordinarily known as money decrees only can be passed, and not suits in which one of the reliefs would be by sale of property. if it had been intended that in cases of pledge or hypothecation or mortgage of movable property an agriculturist should have the benefit of instalments or an account, it may reasonably be supposed that 88.36 and 17 would have been made applicable fee suits under clause (x) but the wording of section 16 shows it is not so. this distinction is pointed out by melvill j. in the case i have referred to.19. under section 176 of the indian contract act the pledgee has a right to bring a suit against the pledgor upon the debt or promise, and retain the goods pledged as a collateral security;.....
Judgment:

Rangnekar, J.

1. The plaintiff is the holder in due course of a promissory note dated September 1, 1927, executed by the defendant in favour of one Laduok. It appears that there were monetary dealings between Laduck and the defendant, an account in respect of which was made up on September 1, 1927, and a sum of Rs 1784 was found due by the defendant to Laduck. The defendant is the owner of Buick Car No. Bom. Z 6391, and at the time of the first loan to her she agreed to mortgage the said car and execute a regular indenture of mortgage in favour of Laduck to whom she handed over the car also at the same time as security for the loan. At the time the promissory note in suit was executed Laduck handed back the said car to the defendant, to ply the same as his agent till repayment of the amount for which the car had been handed over to him as security. The defendant at that time acknowledged in writing that the car continued to be mortgaged to Laduok and also agreed to execute a formal mortgage deed in respect thereof, and to keep and ply the car in Bombay and transfer the same to Laduok whenever called upon by him to do so. She further agreed not to sell or assign the car before paying off the debt. Since the assignment of the promissory note to the plaintiff, the plaintiff has paid Rs. 216 on March 16, 1928, as premium for the renewal of the insurance of the car.

2. The first defence to the suit is that the defendant is an agriculturist within the meaning of the Dekkhan Agriculturists' Relief Act and that this Court has no jurisdiction to try the suit.

3. The defence on the merits is that the plaintiff is not a holder in due course. The defendant admits the dealings between herself and Laduok, and admits that she agreed to hypothecate the car to Laduck to secure the money due to him. She alleges that when she handed over the car to Laduck the latter agreed to pay her Rs. 4 every day and agreed to credit the balance of the net income in her account with him, She further alleges that Laduck failed to carry out the agreement and pressed for payment, and therefore, as a result of great pressure brought on her by Laduck and as a result of representations made to her by Laduck's agent, she passed the promissory note in suit on September 1, 1927, in favour of Laduck, She alleges that she passed the said promissory note only on the condition that a statement of accounts in detail would be given to her, and that Laduck and plaintiff have failed and neglected to give an account of the income of and disbursements on the car in spite of repeated demands made by her. She further alleges that the car was in good condition when she handed it over to Laduek, and when Laduck returned it to her, she found the car to be damaged and had to take it to a garage for repairs, and she, therefore, charges Laduck with negligence, and reserves her right to 'sue him for damages. She does not deny that the car was insured, but states that the plaintiff was not entitled to insure the car. Finally, she states that on proper accounts being taken much smaller sum, if at all, would be found due by the defendant to the plaintiff, and she prays for accounts being taken of the transactions between herself and Laduck, and states the is ready and willing to pay any sure that may be found lawfully due by her the result of taking such accounts.

4. The suit came on before me as a short cause. In answer to the defendant's plea of being an agriculturist, the learned Counsel who then appeared on behalf of the plaintiff contended even if the defendant was an agriculturist within the meaning of the Dekkhan Agriculturists' Relief Act, the suit can lie in this Court as admittedly the cause of action has arisen within the jurisdiction. This contention was based on Section 3 of the Dekkhan Agriculturists' Relief Act, and it was argued that the suit fell under d. (a:) of that section. On behalf of the defendant it was argued that the suit fell under Clause (w) of b. 8 of the Dekkhan Agriculturists' Relief Act, I adjourned the suit for further arguments as the point raised was not free from doubt. It was agreed that the point should be treated as a preliminary point. Act the adjourned hearing I had the benefit of a further argument from the learned Counsel appearing for the parties.

5. The precise question which I have to decide is not covered by authority.

6. The following fact appear from the pleadings. The plaintiff's claim is in respect of moneys under a promissory note passed by the defendant, and to enforce his charge on the car pledged to Laduck. He prays for a declaration that there is a valid charge in his favour on the car to the extent of the amount due to him. The plaintiff further prays for the appointment of a receiver, and that the car may be sold by and under the directions of the Court, and the sale proceeds applied towards the payment of the plaintiff's claim, In para. 4 of the written statement the defendant admits what she calls an agreement of hypothecation in favour of Laduck but in para, 5 she admits that the car was hypothecated to him. In her writing of September 1, she states the car continued to be mortgaged to Laduck. It seems to me on the correspondence, the promissory note and the pleadings that the transaction between the plaintiff and the defendant was one of pledge. If then the plaintiff is a holder in due course, he is undoubtedly entitled to a charge on the said car and to enforce the same against the defendant. Under Section 8 of the Transfer of Property Act, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property, and in the legal incidents thereof. Suchi ncidents include inter alia, where the property is a debt or other actionable claim, the securities there for but not arrears of interest accrued before the transfer. Therefore, the 1928 suit in substance is to recover moneys due under a promissory note and to enforce the charge which undoubtedly the plaintiff has, if his allegations are true, on the car by sale thereof.

7. The difficulties of a logical construction of some of the provisions of the Dekkhan Agriculturists' Relief Act have now almost become proverbial, added to which the point I have to decide is not specifically covered by authority. The precise question which arises for determination is, whether the suit falls within the descriptions of suits referred to in Clause (w) or Clause (x) of Section 3 of the Dekkhan Agriculturists' Relief Act. The descriptions of suits referred to in Clause (w) are the following:-

[a] 'suits for the recovery of money alleged to be due to the plaintiff-

[b] on account of money lent or advanced to, or paid for, the defendant, or

[c] as the price of goods sold, or

[d] on an account stated between the plaintiff and defendant, or

[e] on a written or unwritten engagement for the payment of money not hereinbefore provided for.

8. Then comes Clause (x) which runs as follows:-

Suits for recovery of money due on contracts other than the above and suits for rent or for movable property, or for the value of such property, or for damages....

9. Section 11 of the Dekkhan Agriculturists' Relief Act states that every suit of the description mentioned in Section 3, Clause (w), may, if the defendant, or when there are several defendants, one only of such defendants is an agriculturist, be instituted and tried in a Court within the local limits of whose jurisdiction such defendant resides, and not elsewhere.

10. But for the provisions of the Dekkhan Agriculturists' Relief Act, there can be no doubt that this Court has jurisdiction to try the suit. In questions of jurisdiction the presumption is in favour of giving jurisdiction to the Highest Court-see Amanat Begam v. Bhajan Lala (1886) I.L.R.S. All. 438. In Tulsidas Dhunjee v. Virbussapa I.L.R(1880) . 4 Bom. 624 West J. observed (p. 629): 'The jurisdiction of a superior Court cannot be taken away, except by express words or necessary implication.' In Brohmo Dutt v. Dharmo Das Ghose I.L.R(1898) . Cal. 381. Sir Francis W. Maclean C.J. observed (p. 388):-

We must read the language of the Legislature if we can, so as to make it harmonize, and not conflict, with the general law, though remembering at the same time that the office of the Legislature by its legislative Acts is to define and even alter, the law.

11. In Shivram Udaram v. Kondiba Muktaji (1884) I.L.R. 8 Bom. 340 West J. observed as follows (p. 346):-

In construing Act I of 1868 (General Clauses Act), and Act XXII of 1882 (an Act) to amend the Dekkhan Agriculturists' Belief Act) together with the Code of Civil Procedure we must ascribe to the Legislature, as far as possible, the congruity of thought necessary for making its enactments work harmoniously together as a system.

12. It is clear that the usual rule of interpretation of statutes is that a statute encroaching on the ordinary jurisdiction of a Court must be construed strictly.

13. Now a careful consideration of the apparent scheme of the Act would show that suits mentioned in Clause (w) are of a pecuniary character arising out of contracts whether written or unwritten. Then Clause (a;) refers to certain other suits, and thereafter suits with regard to mortgages of immovable property and redemption etc. are mentioned in cla. (y) and (s). The scheme seems to me to be, first, pecuniary claims in respect of which a decree for the payment of money only can be passed (Clause w); secondly, claims in which, in addition to a decree for payment of money, some other relief, e.g., sale or declaration, may be granted (Clause a:); and, thirdly, claims arising under mortgages of immovable property (els. w and y).

14. It will be observed that suits mentioned in Clause (as) are suits for the recovery of money due on contracts other than the above, that is to say, other than those mentioned in Clause (w). These words 'other than the above' are to my mind very important.

15. Looking to the frame of the plaint in this case, in my opinion, it is not within Clause (w), the words of which contemplate a suit for money either simpliciter or primarily and substantially. The present suit is something far more than that and very different from it. It is a suit not only to recover money but to enforce a charge on property pledged or hypothecated and in respect of which the defendant agreed to execute a regular deed of mortgage. I am led to this conclusion by the scheme to be found from the provisions Section 3 and by the expression 'contracts other than the above' to be found in Clause (as). In Chapter III in which Section 11 occurs there is some indication as to the intention of the Legislature on this question. Section 16 runs as follows:-

Any agriculturist may sue for an account of money lent or advanced to or paid for him by a creditor, or due by him to the creditor as the price of goods sold, or on a written or unwritten engagement for the payment of money, and of money paid by him to the creditor, and for a decree declaring the amount, if any, still payable by him 1io the creditor....

16. Section 17 says :-

A decree passed under Section 16 may, besides declaring the amount due, direct that such amount shall be paid by instalments, with or without interest; and, when any such decree so directs, the plaintiff may pay the amount of such decree, or the amount of each instalment fixed by such decree, as it falls due, into Court, in default whereof execution of the decree may be enforced 1928 by the defendant in the same manner as if he had obtained a decree, in a suit to recover the debt.

17. It is clear that the transactions mentioned in these sections are the same as those mentioned in Section 3, Clause (w). A comparison of the words in Section 16 with those in Clause (w) shows clearly that the debts in respect of which an account may be sued for are those not secured by mortgage, and it is only in respect of such debts that Section 17 authorizes an order for payment by instalments. In Shankarappa v. Dunappa I.L.R(1881) . 5 Bom 604 the question arose whether in the case of a mortgage decree instalments could be granted under Section 20 of the Dekkban Agriculturists' Relief Act. The Court observed as follows (p. 607):-

Comparing the words of Section 16 with the words of Section 3, Clause (w), it is clear that the debts in respect of which an account may be sued for, are debts not secured by mortgage, and that it is only in respect of such debts that Section 17 authorizes an order for payment by instalments.' 'The words, 'decree passed against an agriculturist' in Section 20 of Act XVII of 1879 mean a decree passed against tn agriculturist personally, and do not include a decree for the recovery of money by the sale of mortgaged property 'Reference was made to the provisions of Section 211 of the old Code of Civil Procedure corresponding to Order XX, Rule 11, of the present Code, the words being 'decree for the payment of money.

18. It seems to me that suits falling within Clause (w) are suits where decrees for payment of money or what are ordinarily known as money decrees only can be passed, and not suits in which one of the reliefs would be by sale of property. If it had been intended that in cases of pledge or hypothecation or mortgage of movable property an agriculturist should have the benefit of instalments or an account, it may reasonably be supposed that 88.36 and 17 would have been made applicable fee suits under Clause (x) but the wording of Section 16 shows it is not so. This distinction is pointed out by Melvill J. in the case I have referred to.

19. Under Section 176 of the Indian Contract Act the pledgee has a right to bring a suit against the pledgor upon the debt or promise, and retain the goods pledged as a collateral security; or he may sell the thing pledged, on giving the pledgor reasonable notice of the sale.

20. It is clear under the law applicable to cases of a pledge that the creditor has two rights which are concurrent, and the right to proceed against the property pledged is not merely accessory to the right to proceed against the debtor personally, For the 1828 pledgee may have a right to sue for sale of the property even in the absence of a right; to sue for a personal decree.

21. The same principles would apply to the case of hypothecation or mortgages of movable property.

22. In Nim Ghand Baboo v. Jagabundhu Ghose I.L.R(1894) . Cal. 21 the same principles were laid down, This was a suit on a pledge of certain movable property made in respect of a loan of money on February 10, 1887. The suit was instituted on December 14, 1891, The plaintiff prayed for a decree for the money lent against the defendant personally and also that the charge might be enforced against the article pledged. It was held that so far as the prayer for a personal decree was concerned the suit was governed by Article 57 of Schedule II of the Indian Limitation Act and was barred, but no far as the plaintiff sought to enforce his charge against the property pledged the suit fell not within that Article but within Article 120 of the same Schedule and was therefore not barred. In the judgment the following observations occur (p. 23) :-

There can be no doubt that when moveable property is pledged to a person for money lent, he acquires a special property therein : he has a charge upon it for the satisfaction of the loan advanced, and be is entitled, under Section 175 of the Contract Act, either to bring a suit against the owner upon the debt or promise, retaining the goods pledged as collateral security, or he may sell the things pledged upon giving reasonable notice of the sale. And when he brings a suit for the purpose of a declaration of his right to sell the article pledged for the satisfaction of his claim, the suit is one to enforce his charge upon the said articles.

23. The same principles were laid down, and the Calcutta case followed, in Mahalinga Nadav v. Ganapathi Subbien I.L.R(1890) . 15 Bom. 30. It was further pointed out in this case that in the case of hypothecation or mortgage of movable property the same principles would apply.

24. Therefore, the claim of a pawnee to recover moneys advanced by him by sale of property pledged is a claim to enforce his charge upon the property.

25. In Kashiram Mulchand v. Hiranand SurairamI.L.R(1890) . 15 Bom. 30 it was held by Mr. Justice Birdwood that a suit for redemption of a chattel is one falling under Clause (x) of Section 3 of the Dykkhan Agriculturists' Relief Act. If then a suit for redemption of a chattel does not fall under Clause (w) of Section 3, but falls under Clause (a), it is difficult to see why in the converse case where the mortgagee or pledgee files a suit to enforce his charge upon the property mortgaged or pledged it should not fall under the same clause.

26. I think, therefore, the suit does not fall within Clause (w) of Section 3 of the Dekkhan Agriculturists' Relief Act. but falls within the section or suits mentioned in Clause (x) of that section, and even if the defendant is an agriculturist this Court has jurisdiction try the suit. I am led to this conclusion by the apparent scheme to be inferred from the provisions of the section and particularly by the expression 'contracts other than the above' to be found in Clause (x).

27. As pointed out by Lord Macnaghten in Mt. Bachi v. Bikhchand (1910) 13 Bom. L.R. 56. the Dekkhan Agriculturists' Relief Act gives extraordinary relief in certain particular oases specified in the Act, and there is no reason for extending the same.


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