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A. Rama Rao Vs. Venkataramanachar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberCivil Revn. Petn. No. 454 of 1948-49
Judge
Reported inAIR1951Kant20; AIR1951Mys20
ActsCode of Civil Procedure (CPC) , 1908 - Order 21, Rules 18 and 19
AppellantA. Rama Rao
RespondentVenkataramanachar and ors.
Appellant AdvocateM.A. Gopalaswamy Iyengar, Adv.
Respondent AdvocateK.R. Gopivallabha Iyengar, Adv.
Excerpt:
.....limitation. regular second appeal is dismissed. - , but also the amount of coats as well as the mesne profits due to the mortgagor on account of the failure of the mortgagee to allow the redemption when the mortgagor offered to redeem the property. nor does his case fall under section 247, because that section clearly refers to counter-claims in suits for recovery of money, and it would be stretching the language of that section to an unjustifiable extent to hold that the purchase-money which a pre-emptor-decree-holder has to deposit, as a condition precedent to obtaining possession under his decree, is a sum which the (vendor or vendee) judgment debtors 'are entitled under the same decree to recover' the question then arises, whether there is any other provision in the code to meet..........amount due on the suit mortgages. a decree was passed directing redemption and allowing costs and mesne profits. it was ordered that the mesne profits should be ascertained on an application filed for the purpose. such an application has been filed. meanwhile, respondent 4 obtained a decree is o. s. no. 85 of 1946-47 against respondents 2 and 3 and attached two-thirds of the mortgage amount due to them under the decree. the petitioner filed the application, i. a. no. vi, referred to above, contending that the amount due to his judgment-debtors is what remains after deducting costs and mesne profits due to him oat of the amount deposited by him for redemption. the learned subordinate judge dismissed the application stating that since the means profits have not yet been ascertained, the.....
Judgment:
ORDER

Mallappa, J.

1. This is a revision petition against the order passed by the Subordinate Judge, Mysore, on I. A, No. VI in O. S. No. 70 of 1944-45. The petitioner filed the suit for redemption against respondents 1 to 3. He deposited Rs. 2700 being the amount due on the suit mortgages. A decree was passed directing redemption and allowing costs and mesne profits. It was ordered that the mesne profits should be ascertained on an application filed for the purpose. Such an application has been filed. Meanwhile, respondent 4 obtained a decree is O. S. No. 85 of 1946-47 against respondents 2 and 3 and attached two-thirds of the mortgage amount due to them under the decree. The petitioner filed the application, I. A. No. VI, referred to above, contending that the amount due to his judgment-debtors is what remains after deducting costs and mesne profits due to him oat of the amount deposited by him for redemption. The learned Subordinate Judge dismissed the application stating that since the means profits have not yet been ascertained, the same cannot be deducted out of the amount due to the judgment-debtors.

2. The point that will have to be noticed in a case of this kind is that in the course of the same suit not only has the amount due to the mortgagee by the mortgagor to be determined under Order 34, Rule 7, Civil P. C., but also the amount of coats as well as the mesne profits due to the mortgagor on account of the failure of the mortgagee to allow the redemption when the mortgagor offered to redeem the property. The question that arises for consideration is whether the mortgagee is entitled to recover the entire amount determined to be due to him under Order 34, Rule 7, Civil P. C., without his giving deduction to what is due by him towards costs and mesne profits. In this connection, the provisions of Order 21, Rule 19, Civil P. C., deserve some consideration. According to this rule, where application is made to a Court for the execution of a decree under which two parties are entitled to recover sums of money from each other, then if the two sums are equal, satisfaction for both shall be entered upon the decree, and if the two sums are unequal, execution may be taken out only by the party entitled to the larger sum and for so much only as remains after deducting the smaller sum and satisfaction for the smaller sum shall be entered upon the decree. It is however rightly contended that in a case of this kind, it cannot be said that there is a decree for recovery of money in favour of the mortgagee as he cannot recover the mortgage amount by executing the decree. If the mortgage amount is not deposited within the time fixed, the mortgagor will not be entitled to redemption. The only point for consideration, therefore, is whether the principle laid down in Order 21, Rule 19, Civil P. C , can be extended by analogy to suits for redemption in which the mortgagee becomes entitled to a certain sum of money and is at the same time under that decree liable to pay costs and mesne profits.

3. In the decision reported in Sidu v. Bali, 17 Bom. 32, it will be noticed that the costs due to the mortgagor were allowed to be adjusted out of the mortgage amount deposited in the suit filed for redemption. Following the decision in Brijnath Dass v. Jugger Nath 4 Cal. 742 : (4 C L. R. 122), it was observed in the aforesaid case that Section 221, Civil P. C., 1882, is applicable to a case of this description and that

'the mortgagor is entitled to set off or deduct the amount of the costs payable to him under the decree against or deduct from the mortgage debt payable by him.'

It will be noticed that so far as costs are concerned, Order 20, Rule 6, Clause (3), Civil P. C., which corresponds to the old Section 221, enables the adjustment) of the same against the amount found due to the person who has to pay costs. I may next refer to a Madras decision in Sankara Menon v. Gopala Pattar, 23 Mad. 121. It was decided in that case as follows:

'The defendants were entitled under Section 247, Civil P. C., to set off the amount payable by them to plaintiff by way of costs against the mortgage amount and value of improvements payable by plaintiff to them.'

I may here state that the old Section 247, Civil P. C. corresponds to Order 21, Rule 13 of the present Code and the principle laid down in that rule has been extended to the adjustment of costs against mortgage amount and money due in respect of repairs. It is further observed is this decision that the principle laid down in the rule has been extended as being in 'accord with equity and commonsense.'

4. The extension of the same principle for adjustment of mesne profits, even in cases of pre-emption, is supported by the decision in Nakched Chowdhary v. Sukhdeo, : AIR1930All430 in which it has been laid down as follows :

'If in a suit for possession the Court passes a decree for possession conditional on plaintiff depositing a particular sum and grants costs and mesne profits till the date of delivery of possession, the amount of costs and mesne profits can be set off against amount of deposit under the decree.

It will be noticed that in Kalka Prasad v. Ram Din, 5 ALL. 272 it was observed by Straight J. with whom Brodhurst J. agreed as follows:

'To make Section 247 of the Code applicable we think that the parties entitled under one decree to recover from each other must hold the same character and possess identical rights of enforcing execution.'

The objection raised in this case is similar. The point however arose for consideration again in Ishri v. Gopal Saran, 6 ALL. 361 : (1884 A. W. N. 25) and Straight J. who was then Officiating Chief Justice was a party to it. Mahmood J., delivered the judgment of the Court. It was held :

'Applying, by analogy of Sections 221 and 247, Civil P. C. the equitable doctrine of set off, that the plaintiff was entitled, when depositing the purchase-money under the decree, to deduct therefrom the sum the decree awarded to him as costs, and that therefore the decree did not become null and void by reason that he had not deposited the full amount of the purchase-money within time.'

5. As the reasoning is applicable to cases in which it is claimed that costs and mesne profits which the mortgagor is entitled to under a decree in a suit for redemption, should be set off against the mortgage amount, it is desirable to give the following extract of the judgment in the above case:

'We have to determine whether the question before us falls under the purview of Section 221 or Section 247; and if the case does not fall under either of these sections, what rule should govern our decision in this case. We are of opinion that the case before us falls under neither of these clauses of the Code. The decree in the present case did not direct that the costs payable to the pre-emptor-decree-holder were to be set off against the purchase-money to be deposited by him, nor could the purchase money be regarded as 'a sum which is admitted or is found in the suit to be due' from the plaintiff-pre-emptor to the defendant-vendor or defendant-vendee, The appellant before us cannot therefore claim the benefit of the former section. Nor does his case fall under Section 247, because that section clearly refers to counter-claims in suits for recovery of money, and it would be stretching the language of that section to an unjustifiable extent to hold that the purchase-money which a pre-emptor-decree-holder has to deposit, as a condition precedent to obtaining possession under his decree, is a sum which the (vendor or vendee) judgment debtors 'are entitled under the same decree to recover' .... The question then arises, whether there is any other provision in the Code to meet exactly the exigencies of the present case.

* * * Is there, then, anything in the Code, or any equitable consideration which would prohibit a pre-emptor decree-holder from availing himself of the doctrine of act-off by deducting the costs allowed to him from the purchase-money which he has to deposit under the very decree which awards him costs? The Civil Procedure Code, as we have pointed oat, falls short of providing any specific rule to meet exactly the case before us. The doctrine of set-off, which owes its origin to Roman jurisprudence, was well known to the civil law under the more comprehensive title of compensation, which, In the words of Story J., may be defined to be the reciprocal acquittal of debts between two persons who are indebted, the one to the other; or, as it is perhaps better stated by Pothier, compensation is the extinction of debts, of which two persons are reciprocally creditors to one another. The civil law itself expressed it in a still more concise form compensations debited credit inter se contributio. The civil law treated compensation as founded upon a natural equity, and upon the mutual interest of each party to have the benefit of the set-off, rather than to pay what he owed, and then to have an action for what was due to himself--(Story's Eq. Juris, Sections 1438-39). The doctrine of compensation in the civil law, of course, has never been fully adopted, either in England or in this country, probably for reasons based upon the inconvenience and delay which would arise in the trial of suits. But in the cage before us, there can be no such inconvenience or delay; the decree which declares the plaintiff-pre-emptor entitled to obtain possession of the property in suit on payment of the purchase-money declares him, in the same breath, entitled to recover costs from those against whom the decree has to be enforced.'

6. It remains to add that I agree with respect with these observations which apply equally to decrees in redemption suits in which the mortgagor is entitled to costs and mesne profits.

7. The next point for consideration is whether the transfer or attachment of judgment-debtor's interest comes in the way of the application of this principle. Section 49, Civil P. C., is as follows:

'Every transferee of a decree shall hold the same subject to the equities (if any) which the judgment-debtor might have enforced against the original decree-holder.'

As observed in Monmohan v. Dwarka Nath, 12 C. L. J. 312 : (7 I. C. 55) by Mookerjee J.:

'In substance, the assignee stands in no better position than the assignor, as regards equities existing between the original parties to the judgment, and takes it subject to all the equities and defences, subsisting at the time of the assignment, which the judgment-debtor could have asserted against it in the hands of the judgment-creditor, notwithstanding the assignee may have had no notice thereof.'

This passage was quoted with approval in Suryanarayana v. Nageswara Rao, I. L. R. (1946) Mad. 30: (A. I. R. (32) 1945 Mad. 381). These decisions are based on the principle that every transferee of a decree shall hold the same subject to the equities, if any, which the judgment-debtor might have enforced against the original decree-holder as stated in Section 49, Civil P. C. The point that may be noticed here as in Suryanarayana v. Nageswara Rao, I. L. R. (1946) Mad. 30: (A. I. R. (32) 1945 Mad. 381) is that the principle laid down in Section 49 has been extended to cases where the claim was in respect of mesne profits not yet ascertained when the person in whose favour money was due under the decree was bound under equitable considerations to give deduction to mesne profits due by him.

8. It was contended that before applying the principles laid down in Order 21, Rule 19, Civil P. C., it must be remembered that when the interest of one of the persona to whom money is due is attached, it may not be correct to apply the principles which might become applicable to cases where no such attachment is made. It has to be stated that an attaching creditor can under no circumstances have any rights better than those of his judgment-debtor. It was held in Rajman Ram v. Sarju Prasad : AIR1937All422 as under:

'Where there are cross-decrees under Order 21, Rule 13, Civil P. C., a smaller decree must always be set off against the larger decree and if the smaller decree is attached by some other decree-holder that other decree-holder has no greater right than the decree-holder whose decree has been attached and the attaching decree-holder cannot claim that he has a right to execute the smaller decree in spite of the existence of a larger decree held by the judgment-debtor. In other words, the rule laid down by Order 21, Rule 18 must be first applied before any question can arise for rateable distribution under Section 78.'

The same view is confirmed in Mahalingam Chettiar v. Ramanathan Chettiar, . Referring to the decision in Rajman Ram v. Sarju Prasad : AIR1937All422 it was observed by their Lordships of the Privy Council in Mahalingam Chettiar v. Ramanathan Chettiar ( 'with these observations their Lordships desire to express their respectful agreement.'

9. It will thus be noticed that so far as applying the principle laid down under Order 21, Rule 18 or 19, Civil P. C., is concerned, it cannot be said that the attachment of the interest of the person to whom money is due makes any alteration in the position. As already stated, it cannot also be said that Order 21, Rule 13 or 19, can, strictly speaking, be applied to cases of this kind. But it is equitable to extend the principle on which Rules 18 and 19 of Order 21, are based, to cases in which money has to be deposited for payment to a mortgagee in suits for redemption when be is liable under the decree for costs and mesne profits.

10. The order of the lower Court is, therefore, set aside and the revision petition is allowed. The attachment will be effective only in respect of what is due to the mortgagee after the amount due towards mesne profits on ascertainment and costs are deducted in the amount deposited by the mortgagor for redemption. No order as to costs.


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