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Posti Mal Vs. Firm Radha Kishan-lal Chand - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1932All439
AppellantPosti Mal
RespondentFirm Radha Kishan-lal Chand
Excerpt:
- - it is perfectly clear that the compromise in which the liability under the promissory note became merged, created a mortgage or charge and that the decree which followed it related to the payment of money in satisfaction of the claim arising under the mortgage or charge previously created by the compromise. 327, which is however clearly distinguishable from the case before us......9 per cent per annum was made payable. in default of payment of two consecutive instalments, the decree holder was declared entitled to obtain execution of his decree in respect of the entire decretal amount remaining unpaid. the defendant (the appellant in this court) further hypothecated certain properties which were detailed in the compromise. a decree was passed on foot of the compromise and embodied all its terms. default was made in payment of the first and all subsequent instalments. thereupon the decree-holder applied for execution of his decree by sale of the property-hypothecated under the compromise. thus defendant judgment-debtors objected infer alia, on the ground that the hypothecated property could not be sold in execution of the decree passed on the compromise and that.....
Judgment:

Niamatullah, J.

1. The decree-holder respondent instituted a suit against the appellant on foot of a promissory note for recovery of a certain sum of money.

2. The suit was contested on the ground which it is not necessary to mention for the purposes of this appeal. Eventually the parties entered into a compromise which provided that an instalment decree for Rs. 3,100 be passed in favour of the respondent. Rs. 500 was made payable every half, year; on nonpayment of first instalment, interest at the rate of 9 per cent per annum was made payable. In default of payment of two consecutive instalments, the decree holder was declared entitled to obtain execution of his decree in respect of the entire decretal amount remaining unpaid. The defendant (the appellant in this Court) further hypothecated certain properties which were detailed in the compromise. A decree was passed on foot of the compromise and embodied all its terms. Default was made in payment of the first and all subsequent instalments. Thereupon the decree-holder applied for execution of his decree by sale of the property-Hypothecated under the compromise. Thus defendant judgment-debtors objected infer alia, on the ground that the hypothecated property could not be sold in execution of the decree passed on the compromise and that unless the decree holder instituted a suit under Order 34, Rule 4, Civil P.C. he was not entitled to have the hypothecated properties sold. The Court of first instance upheld the objection but; the lower appellate Court overruled it. Hence this appeal.

3. The only question which has been argued before us is whether it is open to the decree-holder to obtain satisfaction of his decree by sale of the hypothecated property otherwise than by instituting a suit under Order 34, Rule 4, Civil P.C. It is argued on behalf of the appellant that Order 34, Rule 14, Civil P.C., is a bar to the decree-holder obtaining sale of the hypothecated property in execution of the consent decree. That rule provides that where a mortgagee has obtained a decree for the payment of money in satisfaction of a claim arising under the mortgage he shall not be entitled to bring the mortgaged property to sale otherwise than by instituting a suit for sale in enforcement of the mortgage. Rule 15 extends the operation of Rule 14 to cases of charge. Whether the compromise be regarded as creating a mortgage or merely a charge, a question which it is not necessary to decide, Order 34, Rule 14 read with Rule 15, would stand in the way of the decree-holder obtaining satisfaction of the decree by sale of the hypothecated property otherwise than by instituting a suit under Order 34, Rule 4, if other requirements of Rule 14 have been made out in the present case.

4. The learned advocate for the respondent has strenuously argued that it is open to the parties to contract themselves cut of the provisions of Order 34, Rule 14, Civil P.C. and that on a proper reading of the compromise the parties must be deemed to have contracted that the decree-holder can have the hypothecated property sold in execution of the consent decree. We have carefully read the compromise and are of opinion that it does not contain any provision which entitles the decree-holder to have the hypothecated property sold straight away without obtaining a decree under Order 34, Rule 4, Civil P.C. It merely declares the right of the decree-holder to obtain satisfaction of his decree by sale of the hypothecated property and is silent as regards the manner in which the sale of such property is to be obtained. It does not contain any words to signify that the decree-holder can have the hypothecated property sold in execution of the consent decree itself, nor does it lay down that the decree-holder must institute a suit under Order 34, Rule 4. In other words the compromise is silent in that respect. This being so, the manner in which the hypothecated property is to be sold must be determined in accordance with the provisions of the law on the subject. In our opinion Order 34, Rules 14 and 15 apply to the case. It follows that the decree-holder can proceed against the person and other property of the judgment-debtors in execution of the consent decree, but that if he desires to have the hypothecated property sold, he must institute a suit under Order 34, Rule 4, Civil P.C. and give to the judgment-debtors the usual period of grace for payment of the amount charged on the property sought to be sold.

5. Another contention put forward on behalf of the respondent is that Order 34, Rule 14, Civil P.C. contemplates cases in which the mortgage or charge existed anterior to the decree and cannot apply to a case in which the mortgage or charge is embodied in the decree itself. It is not necessary for us to pronounce an opinion on the comprehensive proposition of law involved in this contention. It is perfectly clear that the compromise in which the liability under the promissory note became merged, created a mortgage or charge and that the decree which followed it related to the payment of money in satisfaction of the claim arising under the mortgage or charge previously created by the compromise. In this view Order 34, Rule 14 is applicable to the case even if it be assumed that the mortgage or charge must precede the decree. Our view is in accord with Rameshar Upadhya v. Subhkaran Upadhya [1911] 10 L.C. 481. Reliance has been placed by the learned advocate for the respondent on Mukta Prasad v. Mahadeo Prasad [1916] 38 All. 327, which is however clearly distinguishable from the case before us. There was an express provision in the compromise in that casa that the decree-holder was entitled to obtain the sale of the hypothecated property in execution of the consent decree.

6. In the view of the case we have taken the order of the lower appellate Court must be set aside. Accordingly we allow this appeal with costs throughout, set aside the order of the lower appellate Court and restore that of the Court of first instance.


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