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Mt. Khairunnissa Bibi Vs. Oudh Commercial Bank - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1933All269
AppellantMt. Khairunnissa Bibi
RespondentOudh Commercial Bank
Excerpt:
- - , 1908, no difficulty like the one that arose in the case before their lordships could arise, because in documents executed according to the forms some individual would be mentioned as the mortgagee. jai indra bahadur singh air 1919 pc 55. the main reason that guided their lordships was that the bond before them, like the bond in rai raghubar singh v. the security bond distinctly states that the oudh commercial bank would be entitled to realize the security......the decree no. 383 of 1923, is a wholly different decree. it was the decree passed in khairunnissa bibi's suit to obtain a declaration that the decree no. 50 of 1913 was not executable against her and the property belonging to her. the decree in the appeal ended by dismissing the appeal and maintaining the order of dismissal of the suit. the only decree that could be executed was a decree for costs and it is not that decree which is being executed at the instance of the oudh commercial bank. the decree no. 50 of 1913 was a decree for realization of the mortgage amount and that is not the decree under execution and the present controversy has not arisen either in execution of decree no. 50 of 1913 or in execution of decree no. 383 of 1923. in this view there is no controversy which is to.....
Judgment:

Mukerji, Ag. C.J.

1. This appeal has been referred to us by a Bench of two learned Judges of this Court because the point involved is of importance and it was thought necessary that the law on the point should be laid down by a Full Bench.

2. The facts of the case will have to be stated at some length in order to appreciate the point or points of law that arise.

3. The Oudh Commercial Bank obtained a decree for sale in Suit No. 50 of 1913 of the Court of the Subordinate Judge of Fyzabad against Riasat Husain and Saleha Bibi. The suit was based on a mortgage bond. The final decree in the suit was passed on 16th December 1915. Execution was taken out and Khairunnissa Bibi, who is the appellant before us, was impleaded as an heir to one of the deceased judgment-debtors. She however it appears claimed some of the property mortgaged in her own right and therefore she instituted a suit, being Suit No. 383 of 1923, in the Court of the Subordinate Judge at Azamgarh, to obtain a declaration that she was not bound by the decree No. 50 of 1913 obtained in the Court of the Subordinate Judge of Fyzabad by the Oudh Commercial Bank. Her suit was dismissed on 18th April 19,25 and she filed a first appeal, being Appeal No. 313 of 1925, in this Court. The Oudh Commercial Bank having taken out execution of the decree No. 50 of 1913 obtained by it, Khairunnissa Bibi applied to this Court for an order of injunction restraining the Oudh Commercial Bank from executing its decree. In the course of the consideration of the applications. It transpired that a part of the decree obtained by the Oudh Commercial Bank did not carry any interest and it was pointed out to the Court, on behalf of the bank, that if the execution of the decree was stayed, the bank would suffer loss of interest. The amount which did not carry interest was about Rs. 27,000 and the learned Judges of this Court calculated that in the course of the average period of the pendency of a first appeal the Oudh Bank would lose a sum of Rs. 6,000 in interest, the sum being calculated at 6 per cent per annum. The plaintiff was told that her application for stay of execution would be granted if she executed a security bond in a sum not less than Rs. 6,000 to secure the loss of interest. Such a security bond was furnished on 14th May 1926 and the execution of the decree No. 50 of 1913 was stayed, by issue of a temporary injunction.

4. Khairunnissa Bibi's appeal (383 of 1923) was eventually dismissed by this Court. The bank brought the property, as to which it had obtained an order for sale, to sell and realize a large amount of money. Thereafter it proceeded to execute the decree of Appeal No. 383 of 1923 with respect to Rs. 6,000 by sale of the property which Khairunnissa Bibi had hypothecated under the security bond of 14th May 1926. An objection was taken by Khairunnissa Bibi that it was not open to the bank to bring the property to sale without a suit. The objection was dismissed and she has filed the appeal now before us. The question to be determined is whether for the realization of the security given on 14th May 1926 by Khairunnissa Bibi, the Oudh Commercial Bank should have recourse to a suit or whether it can execute any decree or order, and if so, what decree or order. Before the learned Judges hearing the appeal as a Division Bench several rulings were cited and we have to consider the bearing of those rulings on the question before us.

5. The rulings that were cited before the learned Judges related mostly to securities furnished by third parties as sureties, under the Civil Procedure Code of 1908. To start with we have got the case of Mukta Prasad v. Mahadeo Prasad (19161 38 All 327. In this case the person who offered security was one Mahadeo Prasad. He not only made himself personally liable but also hypothecated some property. The learned Judges of this Court (Piggott and Walsh, JJ.,) treated the case as if if there was no hypothecation of property by way of security, but only a personal liability. Their Lordships held that, in the circumstances, there was no bar to the decree being executed personally against Mahadeo Prasad nor was there any bar to the property of Mahadeo Prasad (which had been mentioned in the bond) being attached and sold. This case therefore is no guide to us.

6. The next case is that of Amir v. Mahadeo Prasad (1917) 30 All 225 decided by Richards, C.J., and Banerji, J. This was a case in which a third party stood surety and mortgaged his property. Their Lordships definitely held that the earlier case Mukta Prasad v. Mahadeo Prasad (1916) 38 All 327 was decided according to its peculiar circumstances and in the case before their Lordships, Jaggannath's property could be sold only by means of a suit and not in execution of the decree. Raj Raghubar Singh v. Jai Indra Bahadur Singh AIR 1919 PC 55 is a decision of their Lordships of the Privy Council. In this case the surety agreed that the mesne profits to be declared in favour of the opposite party might be realized from his property. The security bond was given in favour of the Court and not in favour of any individual. Their Lordships said that Section 145, Civil P.C., did not apply. Their Lordships pointed out that there was no mortgage because there was no mortgagee. In the circumstances, their Lordships held that the only way to enforce the security was by execution. Their Lordships pointed out that in the case of securities given in accordance with the forms to be found in appendix (g) Nos. 2 and 3, Civil P.C., 1908, no difficulty like the one that arose in the case before their Lordships could arise, because in documents executed according to the forms some individual would be mentioned as the mortgagee.

7. The next case that we have been asked to consider in the case of Bed Mahalakshmi Bai v. Badan Singh AIR 1924 All 105. Two learned Judges of this Court (Walsh and Kanhaiya Lal, JJ.,) purported to follow the case of Raja Ra-ghubar Singh v. Jai Indra Bahadur Singh AIR 1919 PC 55. The main reason that guided their Lordships was that the bond before them, like the bond in Rai Raghubar Singh v. Jai Indra Bahadur Singh AIR 1919 PC 55, had no mortgagee mentioned therein. At p. 652 there occur the followings words:

The security bond does not purport to have been executed in favour of the decree-holder It contains an undertaking given to an appellate Court which granted the stay of execution subject to the production of such security....

8. There is no doubt a remark at p. 651 of the report as follows:

In the clause, 'to the extent to which he has rendered himself liable' the word 'personally' was added by the present code of Civil Procedure, but by the addition of that word it could hardly have been intended to limit the enforcement of the security to a personal liability, for forms 2, 3 and 4 of appendix G, appended to the Code of Civil Procedure, provide for the hypothecation of property to secure the performance of the obligation undertaken by the surety.

9. If by this remark their Lordships meant to say that where a surety gave a mortgage Section 145, Civil P.C., would be a sufficient warrant for selling the mortgaged property in execution, we would respectfully dissent from that view. We are fortified in our opinion by what fell from their Lordships of the Privy Council in Raj Raghubar Singh v. Jai Indra Bahadur Singh AIR 1919 PC 55 and by the plain language of Section 145 itself. In Ram Kishun v. Lalta Singh : AIR1928All527 , it was laid down, at p. 1163, that the security furnished, if it had to be realized from the property given as security, the realization must be by a suit and not in the execution department. The actual words used are:

It is also clear that if he executed a valid hypothecation bond as security, the charge could be enforced by a separate suit

10. To this decision one of us was a party. In the case before us the security was furnished not by a third' party but by a party to the litigation. The question is whether in the circumstances stated, the remedy of the bank is by a suit or by execution of a decree or order. There is no decree-or order which directs Khairunnissa Bibi to pay a sum of Rs. 6,000 or any sum of money to the Oudh Commercial Bank, except such amount as was decreed against her for costs of the two-Courts. The order as to security need not be quoted at length but the following quotations will show the nature of it:

The third objection is that a portion of the decree bears no interest and if the sale is stayed and the bank prevented from realizing the decretal money, considerable loss will accrue to the bank.

11. The quotation shows the argument of the bank against the passing of an order staying execution of the decree. No. 50 of 1930. The following extract from the same judgment will show the reason that led the Hon'ble Judges to make an order as to security:

As regards the interest which the bank claims to be entitled to as compensation for the delay in executing the decree it seems desirable that the bank should be allowed interest at 6 per cent on that portion of the decretal money which bears no interest, as compensation for the delay which' would accrue if the sale be stayed. The amount of such interest for a period of three years will approximately amount to Rs. 6,000.

12. This then was the reason why the appellant was called upon to furnish security in the amount of Rs. 6,000. The following is the order that was made on the application:

The appellant will be required to file an additional security for Rs. 6,000 for payment of interest as compensation on that portion of the decree which does not bear interest for the period for which the recovery of the decretal money may be delayed and the bank will be entitled to enforce the security if the appeal is dismissed but not otherwise.

13. We may take it that on the security being furnished on 14th May 1926, the Division Bench passed an order staying the sale till the decision of the Appeal No. 313 of 1925.

14. On the facts stated above, it seems to be clear to us that there is no order directing Khairunnissa Bibi to pay the amount of Rs. 6,000 to the Oudh Commercial Bank that could be executed by the bank against Khairunnissa Bibi. It was argued that the order quoted was itself executable as an order, but the order, in its nature, is declaratory. It declared that if the appellant Khairunnissa Bibi furnished the security the impending sale would be stayed and the bank would be entitled to recover compensation, at the rate of 6 per cent interest, on the amount of money which did not carry interest. The amount of money which the bank could realize by way of compensation was not Rs. 6,000 but depended on the period during which the execution of the decree No. 50 of 1913 might be stayed. As a matter of fact, the appeal was decided in. less than three years, that is to say, in January 1929. It is only after the dismissal of the appeal that the liability of Khairunnissa Bibi could have been determined. Evidently there is no 'order' which professed to determine that liability and to direct Khairunnissa Bibi to pay anything to the Oudh Commercial Bank by way of compensation. In the circumstances, it is difficult for us to say how the bank could execute what it supposed to be a decree or order standing in its favour in the manner it is sought to execute it. The remedy declared by the order of the High Court dated 6th April 1926 lay, in our opinion, in the institution of a suit for sale of the property mortgaged by Khairunnissa Bibi.

15. The learned Counsel for the respondent has laid great stress on the decision of their Lordships of the Privy Council in Raj Raghubar Singh v. Jai Indra Bahadur Singh AIR 1919 PC 55. He has argued that in the case before us there is no mortgagee and therefore the security is to be realized by execution. To start with, the assumption is wrong that there is no mortgagee. The security bond distinctly states that the Oudh Commercial Bank would be entitled to realize the security. Secondly, as we have pointed out, there is no decree or order that is capable of execution. Both these facts distinguish the case before us from the case before their Lordships of the Privy Council in Raj Raghubar Singh v. Jai Indra Bahadur Singh AIR 1919 PC 55. The learned Counsel for the respondents has addressed us on the applicability of Section 47, Civil P.C. He has argued that as the controversy has arisen between the parties to the suit therefore the dispute that has arisen must be decided in execution and not by way of a separate suit. But to this contention the clear answer is that there is no order or decree which can be executed. We have already pointed out that this Court never passed any order to the effect, that the Oudh Commercial Bank was to realize the sum of Rs. 6,000 or anything less than that by way of compensation from Khairunnissa Bibi, by virtue of that very order. As there is no order or decree in execution of which the question has arisen, Section 47, does not apply. Section 47 reads:

All questions arising between the parties to the suit in which the decree was passed...and relating to execution, discharge or satisfaction of the decree shall be determined by the Court executing the decree and not by a separate suit.

16. As there was no decree or order in existence, none could be executed. The decree which is sought to be executed, namely, the decree No. 383 of 1923, is a wholly different decree. It was the decree passed in Khairunnissa Bibi's suit to obtain a declaration that the decree No. 50 of 1913 was not executable against her and the property belonging to her. The decree in the appeal ended by dismissing the appeal and maintaining the order of dismissal of the suit. The only decree that could be executed was a decree for costs and it is not that decree which is being executed at the instance of the Oudh Commercial Bank. The decree No. 50 of 1913 was a decree for realization of the mortgage amount and that is not the decree under execution and the present controversy has not arisen either in execution of decree No. 50 of 1913 or in execution of decree No. 383 of 1923. In this view there is no controversy which is to be settled by the application of Section 47, Civil P.C.

17. For the reasons given above we are of opinion that the respondent has misconceived his remedy and his application to realize Rs. 6,000 from Khairunnissa Bibi in execution was not maintainable. We allow the appeal, set aside the order of the Court below and dismiss the respondent's application for execution with costs throughout.


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