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Phul Chand Vs. Chhote Lal and ors. - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtAllahabad High Court
Decided On
Judge
Reported in(1898)ILR20All327
AppellantPhul Chand
RespondentChhote Lal and ors.
Excerpt:
act no. iv of 1882 (transfer of property act), section 185 - actionable claim--person claiming the benefit of section 135 not obliged to pay the amount paid by the assignee before judgment. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. the school tribunal constituted under section 8 of the maharashtra act cannot entertain appeals filed..........of the registration of the sale deed, but the amount paid to rao balwant singh as the price of the decree purchased from him must also be deemed to be a part of the consideration. the agreement under the sale deed was that rao balwant singh's decree should be discharged out of the consideration. instead of paying him the amount due upon the decree kishan lal took from him an assignment of the decree and adopted this mode of satisfying his claim. the amount paid to him must therefore, we think, be regarded as a part of the consideration for the sale deed of the 8th of november 1891. that amount, it has been proved was rs. 1,800. the total 8urn which was paid as the price of this mortgage debt in suit was thus rs. 2,400, and if section 135 of act no. iv of 1882 is applicable, that is the.....
Judgment:

Banerji and Knox, JJ.

1. This was a suit for sale under a mortgage dated the 3rd of September 1873, executed by one Mohan Singh for Rs. 4,300 in favour of Mansukh Das and his son Dungar Mal. After the death of the aforesaid mortgagees the widow of Dungar Mal, three of the sons of Mansukh Das and the widow of another son assigned, on the 8th of November 1891, their rights under the mortgage to the first four plaintiffs for a consideration of Rs. 10,000. Out of that amount Rs. 600 was paid in the presence of the registering officer and Rs. 1,858-9-3 was kept back for the purpose of discharging a decree held against the widow of Dungar Mal and Baldeo Das, one of the sons of Mansukh Das, by Rao Balwant Singh. That decree was, however, not satisfied, and it was purchased from Balwant Singh by Kishan Lal, the fifth plaintiff. He put the decree into execution, and having caused the two-fifths share of Baldeo Das and Dungar Mai's widow in the aforesaid mortgage to be sold by auction, purchased it himself, The five plaintiffs having thus acquired the rights of the mortgagees have instituted this suit, claiming Rs. 10,500 as due under the mortgage. The mortgaged property was sold in execution of a decree obtained upon a subsequent mortgage, and was purchased by Than Singh and Nathu Ram, who are now represented by the appellant Phul Chand. The defendants to the suit were the legal representatives of the mortgagor and subsequent transferees of the mortgaged property. The defence raised on behalf of the defendants, whom Phul Chand appellant represents, was that the mortgage had been discharged and the mortgage bond returned to the mortgagors; that the plaintiffs had not paid consideration for their purchase; that the purchase had been made to carry on litigation and that the plaintiffs were not entitled to recover any portion of the amount claimed. The defendants produced the mortgage bond bearing endorsements of payment, which, if genuine, showed that the mortgage had been discharged in full in 1889. The Court below has held the plea of payment not to be established, It found that the bond had somehow come into the possession of the mortgagors, that the indorsements on it were not genuine and that the mortgagors and their heirs had not the means to make the alleged payments. It also held that the assignment of the mortgage bond to the first four plaintiffs was the transfer of an actionable claim to which Section 135 of the Transfer of Property Act applied; that the purchase of the bond was in reality made by Kishan Lal in the names of the other plaintiffs; that only Rs. 600 were paid as consideration for that purchase, and that in virtue of that purchase the plaintiffs could not recover more than that amount and incidental expenses. As regards the share of the mortgage debt purchased by Kishan Lal at auction, the Court below was of opinion that by reason of Clause (d) of Section 2 of Act No. IV of 1882 the first portion of Section 135 of that Act did not apply. That Court accordingly made a decree for two-fifths of the mortgage money, with interest, and for Rs. 600 with incidental expenses and interest.

2. Both parties have appealed from this decree. In this appeal, which has been preferred by the defendant Phul Chand, two contentions have been raised on behalf of the appellant; first, that it has been proved that the mortgage has been discharged by payments, and, second, that since it has been found that Kishan Lal plaintiff was the real purchaser of the mortgage under the assignment of the 8th of November 1891, he took the place of the judgment-debtors to the decree of Balwant Singh, and the purchase of that decree by him had the effect of discharging that decree. Consequently by virtue of the auction purchase of the rights of Dungar Mal and Baldeo Das he acquired no interest in the mortgage in question and is only entitled to recover the price paid by him for the assignment of the 8bh of November 1891, with incidental expenses and interest. On behalf of the plaintiff it is urged that there is nothing to show that Kishan Lal is the real purchaser under the sale of the 8th of November 1891; that payment of the full amount of consideration for that sale has been proved and that Section 135 of Act No, IV of 1882 does not apply to a case like this.

3. As regards the discharge of the mortgage by repayment of the mortgage money we agree with the conclusion at which the learned Subordinate Judge has arrived. The mortgage deed is no doubt in the possession of the heirs of the mortgagor, Mohan Singh, by whom it has been produced. It also bears indorsements of payments. These circumstances certainly raise a presumption in favour of the defendants; but the evidence and the probabilities to which the Subordinate Judge has referred in detail completely negative that presumption. According to the indorsements on the mortgage deed, payments were made on account of it between the 9th of June 1883 and the 2nd of June 1889, and the number of payments was five. It is rather surprising that for ten years from the date of the mortgage not a farthing was paid to the mortgagees, but in the course of the next six years such a large sum as Rs. 7,025 was paid by the mortgagors, and the bond was taken back. The evidence on the record clearly shows that the mortgagor had not the means to make such large payments, that they were in very involved circumstances, that they were not even in a position to pay the Government Revenue, that their movable property had to be sold for the realisation of the revenue and that their zamindari share had to be let out in farm for the recovery of arrears of revenue. It is in the highest degree improbable that persons in such impecunious circumstances made the alleged payments. It appears from the evidence of Lala Lokman Das, a respectable pleader of the District Court of Aligarh, that shortly before February 1888, Dungar Mal, one of the mortgagees, showed the bond to him with a view to raise money for the purpose of bringing a suit on the basis of the bond, and, as far as Lala Lokman Das could recollect, it bore no indorsements of payment. If the indorsements which now appear on the bond are genuine, all of them, except the last, must have been on it at the time when it was shown to Lala Lokman Das, and his attention would undoubtedly have been attracted by them. Further, the only amount which would have remained due on the mortgage at that time would have been a sum below Rs. 800, upon payment of which about eighteen months afterwards the mortgage is alleged to have been discharged. It seems to us to be extremely improbable that for the purpose of meeting the expenses of instituting a suit to recover that small sum Dungar Mai would have been endeavouring to raise money by negotiating with Lala Lokman Das. There is another piece of evidence which to our minds clearly shows that no payments were made to the mortgagees on account of the bond in question. On the 16th of December 1889, Dungar Mal applied for the execution of a decree held by him against Chitra Singh and others, heirs of the mortgagor Mohan Singh, and he prayed for the sale of the 10 biswas share comprised in the mortgage now in suit subject to that mortgage. With his application he filed an affidavit in which lie stated that he held a mortgage over that property for Rs. 4,200, that is, the mortgage upon which the present claim has been brought. Had the mortgage been discharged in the preceding month of June, Dungar Mal's statement that there was a subsisting mortgage on the property for Rs. 4,200 would not have been allowed by the debtors to go unchallenged. It appears that they did raise objections in regard to Dungar Mai's application for execution, but they never traversed his statement that their property was subject to the mortgage for Rs. 4,200.

4. These facts, and the other facts stated in the judgment of the lower Court, clearly show that the mortgage was never discharged and that payments were never made on account of it. We agree with the learned Subordinate Judge in considering the oral evidence adduced on the point to be wholly unworthy of credit. The Subordinate Judge has also, in our opinion, conclusively shown that the purchase of the mortgage bond in suit in the names of the first four plaintiffs on the 8th of November 1891, was in reality a purchase by Kishan Lal, and that the amount paid as consideration for that purchase before or at the time of the sale was Rs. 600, the sum which was paid in the presence of the registering officer. We have carefully considered the evidence on the point to which cur attention has been directed, and we think it unnecessary to refer to it in detail further than to say that we fully concur with the Court below in its estimate of that evidence and with the conclusions at which that Court has arrived. The impecunious circumstances of the first four plaintiffs, the non-production of account-books, the fabrication of accounts, the non-production of the documents by which were secured the debts alleged to have been discharged with the consideration money, and the fact that the decretal amount due to Balwant Singh was not paid by those plaintiffs clearly show that the full amount of consideration for the sale deed of the 8th of November 1891 was nob paid and that the first four plaintiffs did not make that purchase on their own account. Had they been the real purchasers, why did they leave the decree of Balwant Singh unsatisfied? Why did they allow Kishan Lal to purchase that decree and why did' they allow the shares of the judgment debtors to that decree to be sold for the small sum of Rs. 200 and purchased by Kishan Lal himself? The fact is, as the learned Subordinate Judge has pointed out, that under the deed of the 8th of November 1891, Kishan Lal himself purchased the rights of the mortgagees, that, being apprehensive that the subsequent purchasers of the mortgaged property would olaim the benefit of the provisions of Section 135 of the Transfer of Property Act, he took an assignment of the decree held by Rao Balwant Singh, and, putting that decree into execution, purchased at auction the shares of Dungar Mal and Baldeo Das in the mortgage in order to avoid the operation of that section. We hold, in concurrence with the Court below, that Kishan Lal plaintiff was the real purchaser of the interests of the mortgagees by virtue of the sale deed of the 8th of November 1891; that the other plaintiffs were only benami for him and that they were not beneficially interested in the purchase. That being so, the contention of the learned Counsel for the appellant that the claim of the first four plaintiffs ought to have been dismissed must prevail.

5. It is next urged on behalf of the appellant that as Kishan Lal was the real purchaser under the sale deed of the 8th of November 1891, and thus acquired the rights of Dungar Mal and Baldeo Das in the mortgage of 1873, which Rao Balwant Singh had caused to be attached in execution of the decree held by him against Baldeo Das and the widow of Dungar Mal, he took the place of the judgment-debtors to that decree, and, as he subsequently purchased the decree from Rao Balwant Singh, the decree became extinct and incapable of execution, and consequently he acquired nothing under the auction purchase which subsequently took place at his instance in execution of that decree. The correctness of the proposition raised by this contention seems to us to be open to doubt. We are, however, of opinion, upon another ground, that no title passed to Kishan Lal under the auction sale referred to above. We have held that he was the actual purchaser of the property conveyed by the sale deed of the 8th of November 1891, so that he acquired the interests of Baldeo Das and Dungar Mal in the mortgage in question by virtue of that purchase. As the assignee of the decree held by Rao Balwant Singh against those persons he could not put up to sale and purchase the interest which those persons originally had in the mortgage and which he himself had purchased before the date of the assignment of the decree. Those interests had on the date of the auction sale ceased to be the property of the judgment-debtors to the decree and had become his own property. He could not, as the holder of Rao Balwant Singh's decree, cause his own property to be sold in execution of that decree, and, as that property had, as we have said, ceased to be the property of the judgment-debtors to the decree, the auction-sale of the interests of the judgment-debtors in that property, which were DO longer in existence at the time of the sale, could not and did not confer any title to the property on the auction purchaser. The auction-sale was only a device resorted to by Kishan Lal for the purpose of evading the operation of Section 135 of Act No. IV of 1882 and in our opinion he did not acquire any title by virtue of the auction purchase. His only title in respect of the mortgage in suit consequently rests on the sale deed of the 8th of November 1891. The consideration for that sale was not only the sum of Rs. 600 which was paid in cash at the time of the registration of the sale deed, but the amount paid to Rao Balwant Singh as the price of the decree purchased from him must also be deemed to be a part of the consideration. The agreement under the sale deed was that Rao Balwant Singh's decree should be discharged out of the consideration. Instead of paying him the amount due upon the decree Kishan Lal took from him an assignment of the decree and adopted this mode of satisfying his claim. The amount paid to him must therefore, we think, be regarded as a part of the consideration for the sale deed of the 8th of November 1891. That amount, it has been proved was Rs. 1,800. The total 8urn which was paid as the price of this mortgage debt in suit was thus Rs. 2,400, and if Section 135 of Act No. IV of 1882 is applicable, that is the only amount which Kishan Lal is entitled to recover, besides interest on that amount and the incidental expenses of the sale. The learned vakil for the respondent, however, contends that Section 135 of Act No. IV of 1882 has no application in this case.

6. This contention leads us to the consideration of the only point which remains to be determined, namely whether the appellant is entitled to the benefit of the provisions of Section 135 of Act No. IV of 1882. It is admitted that on the 8th of November 1891, when the mortgage-debt now in suit was assigned by the mortgagees, the debt had become recoverable by suit, and had matured into an actionable claim. It is also conceded that the provisions of Chapter VIII of Act No. IV of 1882 apply to a debt secured by a mortgage. That is the effect of the ruling of the Full Bench of this Court in Rani v. Ajudhia Prasad I.L.R. 16 All. 315. It is urged, however, that a debtor cannot claim the benefit of Section 135 of Act No. IV of 1882 unless he pays before judgment the amount paid by the assignee of the actionable claim, and in support of that contention the Full Bench ruling of the Calcutta High Court in Muchiram Barik v. Ishan Chunder Chuakerbutti I.L.R. 21 Cal. 568, has been cited. That ruling is no doubt an authority in favour of the respondents. But a contrary view has been held in this Court in Jani Begam v. Jahangir Khan I.L.R. 9 All. 476, and Hakim-un-nissa v. Deonarain I.L.R. 13 All. 103, and by a Full Bench of the Madras High Court in Nilakanta v. Krishnasami I.L.R. 13 Mad. 225. We agree with the learned Judges who decided the cases last mentioned. The object with which Section 135 was enacted was evidently to discourage trafficking in litigation by precluding the purchaser of an actionable claim from recovering any thing beyond the actual price paid by him and the incidental expenses of the sale together with interest. That object would surely be defeated were we to hold that it was the intention of the Legislature that a debtor could not avail himself of the provisions of Section 135 if he put the assignee to proof of the price paid by him and waited till the amount of the price had been determined and declared by the Court. The section, it is true, provides that the debtor is discharged by payment to the assignee of the price and incidental expenses and interest on the price, but it does not limit the period within which the payment must be made in order to secure a discharge. There is nothing in the section, as far as we can judge, which would preclude the debtor from securing his discharge by payment after decree. Clause (d) of that Section in our opinion contemplates the case of the sale of an actionable claim in respect of which at the time of the sale a judgment has been delivered affirming the claim or the claim has been made clear by evidence. The four Clauses of Section 135 were evidently intended to provide for oases of sale of actionable claims which would not be affected by the provisions of the first paragraph of the section, as in those cases the probability of gambling in litigation would be very remote. The 'claim' referred to in Clause (d), we consider, is the claim which is sold and which at the date of the sale has been affirmed by a judgment or is about to be so affirmed. Such a claim, if sold, would in the ordinary course of things fetch its proper value, and therefore, like the actionable claims referred to in the preceding clauses, it was excluded from the operation of the section. We fully agree with the observations contained in the judgment of Shephabd, J., in the Full Bench case of Nilakanta v. Krishnasami cited above, and we are of opinion that it would be placing an unreasonable construction on Section 135 to hold, as we have said above, that a debtor would lose the benefit of the Section if he called upon the assignee of the debt to prove the price paid by him. Such a construction would, we think, frustrate the very object with which the Section was enacted. We may refer to the present case as an instance in point. The assignee alleged the price to be Rs. 10,000. The defendant denied that any price had been paid. We have held the true price to be Rs. 2,400. We do not think the Legislature intended that such a case would not come within the purview of Section 135, and that the defendant must pay the full amount due upon the mortgage, namely, upwards of Rs. 11,000, although the plaintiff actually paid for his purchase a much smaller sum. We hold that Section 135 precludes the assignee of an actionable claim from recovering from the debtor any sum in excess of the price paid by him, the interest thereon and the incidental expenses of the sale. That being so, the plaintiff Kishan Lal was only entitled to a decree for Rs. 2,400, the price paid by him, to interest on that amount at the rate payable under the mortgage from the 8th of November 1891, and to Rs. 39, the incidental expenses of the sale.

7. We accordingly vary the decree below by making a decree in favour of Kishan Lal plaintiff for Rs. 2,400, together with interest thereon at the rate of 9 per cent, per annum from the 8th of November 1891, to the 20th of August 1898, which we hereby fix as the date on or before which the decretal amount should be paid, and also for Rs. 39 the incidental expenses of the sale to him. We award to him proportionate costs here and in the Court below, and we direct that, in the event of the amount decreed by us not being paid on or before the date above mentioned, the mortgaged property, or a sufficient part thereof, be sold. We dismiss the remainder of Kishan Lal's claim, and totally dismiss the claim of the other plaintiffs with costs. The appellant will recover from Kishan Lal his costs here and in the Court below proportionately to the amount of his success.


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