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Durga Prasad Vs. Dalpat Ram and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtAllahabad
Decided On
Case NumberExn. Second Appeal No. 799 of 1947
Judge
Reported inAIR1952All645
ActsUttar Pradesh Temporary Postponement of Execution of Decrees Act, 1937 - Sections 6; Limitation Act, 1908 - Article 182(5)
AppellantDurga Prasad
RespondentDalpat Ram and ors.
Appellant AdvocateS.B.L. Gour, Adv.
Respondent AdvocateM.L. Chaturvedi, Adv.
DispositionAppeal dismissed
Excerpt:
.....of amount due on account of court-fee - application for execution of mortgage decree for sale of mortgage property on basis of mortgage deed - liability of purchaser at auction-sale in absence of express contract as to his liability to mortgage-money - held, auction purchaser was liable to pay entire mortgage debt. (ii) interpretation - article 182 (5) of limitation act, 1908 - words 'step-in-aid' of execution used in section 182 (5) means step to further or to help in execution of decree or order to be taken out or proceeded with. - - he was a prior charge-holder as well as the subsequent transferee of the mortgaged property. it is well-known that when the property is sold 'subject to the mortgage' under the provisions of order 21, rule 62, the purchaser is not entitled to..........deed of 1925. a suit in forma pauperis was filed on the basis of a prior mortgage & ultimately the mortgaged property was sold for payment of the amount due to govt. on account of court-fee & was purchased by dalpat singh respondent for a sum of rs. 137. when the suit on the basis of the mortgage deed of 1925 was filed by the d.h. dalpat singh was impleaded as a subsequent transferee. his defence was that he was not a subsequent mortgagee, but was a prior charge holder. it was held that he was a prior charge holder to the extent of rs. 137 & the suit was decreed for sale of the mortgaged property subject to the payment of rs. 137 to him. this decree was made final on 20-10-1934.2. the first execution application was made on 24-4-1937. one of the j. ds. had died & in the application his.....
Judgment:

Agarwala, J.

1. This is a D-H's. appeal arising out of execution proceedings. The decree sought to be executed was a mortgage decree for sale on the basis of a mortgage deed of 1925. A suit in forma pauperis was filed on the basis of a prior mortgage & ultimately the mortgaged property was sold for payment of the amount due to Govt. on account of court-fee & was purchased by Dalpat Singh respondent for a sum of Rs. 137. When the suit on the basis of the mortgage deed of 1925 was filed by the D.H. Dalpat Singh was impleaded as a subsequent transferee. His defence was that he was not a subsequent mortgagee, but was a prior charge holder. It was held that he was a prior charge holder to the extent of Rs. 137 & the suit was decreed for sale of the mortgaged property subject to the payment of Rs. 137 to him. This decree was made final on 20-10-1934.

2. The first execution application was made on 24-4-1937. One of the J. Ds. had died & in the application his heirs had been impleaded. The Court required the D.H. to file an affidavit in support of his allegation. This affidavit was not filed & ultimately on 28-5-1937 the application was dismissed for default. On 7-9-1938 an application was made by the D.H. alleging that the record of the execution case had been consigned to the record room & that it may be sent to the Collectorate for proceeding with the sale of the property. This application was dismissed for default. The D. H. then made a second execution application on 1-9-7-1941. Dalpat Singh respondent filed an objection that the application for execution was time barred. The D. H. replied that limitation was saved on two grounds, firstly, that U. P. Act No. X [10] of 1937 prevented him from taking out execution against J. Ds. who were agriculturists within the meaning of that Act; & secondly, that the application of 7-9-1938 was a step-in-aid of execution & limitation was to be counted from the date of its dismissal. Dalpat Singh's case was that Section 6 of Act No. X [10] of 1937 permitted the D. H. to take out execution as the property was in his hands, he being a subsequent transferee & further that the application of 7-9-1938 was not a step-in-aid of execution. The execution Court allowed the objection & dismissed the execution application. This order was confirmed by the lower appellate Court. The D. H. has now come up in second appeal to this Court.

3. Three points have been urged before us firstly, that Dalpat Singh was a transferee of a part of the mortgaged property & not of the whole & as such Section 6 of Act x [10] of 1937 did not apply; secondly, that Dalpat Singh was not a subsequent mortgagee who could be said to have taken the transfer subject to the mortgage, within the meaning of that section, & thirdly, that the application of 7-9-1938 was a step-in-aid of execution & saved limitation.

4. It is not disputed that the J. Ds. were agriculturists & unless Section 6 of Act No. X [10] of 1937 applied, under Section 5 of that Act execution proceedings could not be taken out during the pendency of the Act which remained in force from 11-1938 to 31-12-1940. Section 6 of the Act runs as follows:

'Nothing herein contained shall ..... (c) apply to a mortgage decree sought to be executed by sale of the mortgaged property in the hands of a subsequent transferee who has taken the transfer subject to the mortgage on the basis of which the said decree has been obtained.'

The first point, as already stated, is whether Dalpat Singh was a transferee of a part of the mortgaged property & not of the whole & as such, Section 6 (c) of the said Act could not apply to his case. Reliance has been placed upon the observations made by Malik J., as he then was, in the F. B. case of Bharat Singh v. Mt. Chandi,1946 A. L. J. 377, at p. 381 and on the case of Ashfaqul Nabi Khan v. Syed Raza Husain,1947 A. L. J. 554. It is not admitted by the resp. that Dalpat Singh was a transferee of only a part of the mortgaged property. This point was not urged in any of the Courts below & as it involves investigation into facts, we are not prepared to allow the appellant to take this point for the first time in appeal before us. We must,therefore, proceed on the assumption that the entire mortgaged property was purchased by Dalpat Singh & under law, he had become liable to pay the entire mortgage amount due to the appellant.

5. The second question to be determined is whether Dalpat Singh is a subsequent transferee 'who has taken the transfer subject to the mortgage.' on the basis of which the decree under execution was obtained. The contention of Mr. Gour is two-fold. In the first place, he urges that it was decided in the suit itself that Dalpat Singh was not a subsequent transferee but was a prior charge-holder & in the second place, he contends that, in any case, be having purchased the property at an auction-sale without there being an order that it was being sold subject to the D.-H.'s mortgage, he could not be said to be a subsequent transferee who had undertaken the liability to pay the mortgage debt in question.

6. It is true that Dalpat Singh was declared to have a prior charge to the extent of Rs. 137, but all the same as he had purchased the property during the subsistence of the mortgage in favour of the appellant he was a subsequent purchaser of the equity of redemption, even though, he may have a prior charge. As the effect of the decree passed in the suit was that the property in the hands of Dalpat Singh was to be sold subject to the payment of Rs. 187, the D.-H. was entitled to sell it as soon as he paid the amount of Rs. 187 to Dalpat Singh. Dalpat Singh occupied a dual character. He was a prior charge-holder as well as the subsequent transferee of the mortgaged property. As soon as the prior charge was paid off, he became a pure & simple subsequent transferee.

7. If Dalpat Singh was a subsequent transferee, was he also a person 'who had taken the property subject to the liability of payment of the mortgage money'? To my mind, the answer to this question must be in the affirmative. It is true that the mortgaged property was not sold expressly subject to the mortgage in favour of the appellant, as the procedure laid down in Order 21, Rule 62 was not followed. It is well-known that when the property is sold 'subject to the mortgage' under the provisions of Order 21, Rule 62, the purchaser is not entitled to challenge the mortgage. But if the property is not sold subject to the mortgage the auction, purchaser is entitled to question the binding nature of the mortgage. In the present case, the mortgage was held binding on Dalpat Singh after the payment of the amount of Rs. 137 due to him under the prior charge. He was, therefore, under the decree in execution held to be a person who had taken the property subject to the liability of payment of the mortgage-money. The language used in the section does not necessarily connote the idea of an express contract between the purchaser & the mortgagor as to the liability for the payment of the mortgage-money. The words 'who had taken' are equivalent to the words 'who has acquired' & they do not imply any express contract about the payment of the encumbrances. The liability to pay the encumbrances may fall on the purchaser by reason of law, & the language used in the section is perfectly applicable to such a state of affairs.

8. In support of the appct.'s contention, however, reliance has been placed upon certain observations made in Radha Krishen v. Umrai Singh, 1943 A. L. J. 333 and in Ashfaqul Nabi Khan v. Syed Baza Husain, 1947 A. L. J. 554.

9. In Radha Kishen v. Umrai Singh, 1943 A. L. J. 333, after the execution of a mortgage either the whole or a part of the mortgaged property was sold to a subsequent transferee. The sale appeared to have been expressly made subject to the mortgage. A mortgagee obtained a decree against the mortgagors & the subsequent transferee & applied for execution of the decree once, but the second execution application was made beyond three years during which time Act X [10] of 1937 had come into force. It was heldthat as the subsequent transferee had taken the property with a contract with the mortgagors to pay the mortgage amount, the decree could be executed against him under Section 6 of the Act, & that, therefore, the application for execution was barred by time. During the course of the judgment, their Lordships observed :

'The Act was, however, not intended to provide relief to monied people who purchased properties subject to encumbrance with a stipulation that they will be liable to discharge those encumbrances. The reason for this is not far to seek. The implied covenant between a vendor& a vendee who purchases a property subject to mortgage is that the mortgage will be discharged by the vendee & there is nothing in the Act to absolve much a vendee from the performance of his obligation. To put the matter in another way, the consideration that a transferee stipulates to pay for a property which he purchases subject to a mortgage consists of the price that he agrees to pay for the equity of redemption as also of the amount of the mortgage debt. In such a case the transferee labours under a contractual obligation to the vendor to pay either the whole or part of the mortgage debt as the case may be, & the Act was not intended, nor does it profess, to relieve the transferee from such an obligation. In order to put this beyond doubt Clause (c) of Section 6 was enacted & its manifest object was to hold a subsequent transferee to his bargain & to ensure that he will discharge the mortgage debt according to the covenant in the deed of transfer.'

These observations, no doubt, lend colour to theargument that it is only when the subsequent transferee has taken the property subject to a stipulation that he will discharge the existing encumbrances, that Section 6 (c) comes into operation. But it must be remembered that their Lordships were dealing with a case of an express stipulation. The case of an auction-purchaser who had an implied liability to pay existing encumbrances on the property was not before their Lordships & obviously could not be considered by them. Ido not think that that case is, in any way, opposed to the contention of the J.D.

10. In Ashfaqul Nabi Khan v. Syed Baza Husain, 1947 A. L. J. 554, certain observations were made which, no doubt, support the contention of the appellant on the second point. The point for decision in that case was whether an auction-purchaser of a part of the mortgaged property could be said to be a subsequent transferee who had taken the transfer subject to the mortgage on the basis of which such a decree had been obtained. As the auction-purchaser was not ultimately responsible for the payment of the entire mortgage amount & was only liable to pay a proportionate part thereof, it could be said that he had not taken the property subject to the entire mortgage. It was, however, observed :

'It appears to us that the Legislature intended that the benefit of this Act should not be given to a transferee who has undertaken to pay up the mortgage. It was not intended that a transferee should be given protection against the terms of the contract entered into by him with his transferor. The same intention appears in the Debt Redemption Act which was also passed for the protection of agriculturists debtors. In Section 2, Sub-section (9), Debt Redemption Act, defining the word 'loan' it is said that it does not include a debt the liability for the repayment of which has, by a contract with the borrower or by sale in execution of a decree, been transferred to another person. In a Full Bench decision of this Court, Saran Singh v. Miththan Lal, 1946 A. L. J. 91, it was held that the transfer of liability here meant the transfer of the entire liability & where the whole of the mortgage money was not with the transferee, it could not be said that there was a transfer of liability & the mortgagor had been relieved of his liability for payment. We are, therefore, inclined to the view that the words 'who has taken the transfer subject to the mortgage' do not refer to the legal liability of a subsequent transferee for payment of his proportionate share of the liability having the right to claim contribution from the other debtors, but they refer to a case where the transferee has undertaken to pay the entire amount of the previous mortgage debt.'

11. I have no quarrel with the proposition that a subsequent transferee liable to pay only a part of the mortgage amount is not covered by Section 6 (c). But if it was intended to lay down that an auction-purchaser of even the whole of the mortgaged property with the consequent liability to pay the entire mortgage amount was given the benefit of the Act, I may respectfully point out that the reference to the Debt Redemption Act, Section 2 (a), & to the Pull Bench decision of this Court in Saran Singh v. Miththan Lal far from supporting the above proposition is destructive of it. It will be observed that Section 2 (9), Debt Redemption Act, expressly excludes from its benefit not only a person who has by a contract with the borrower undertaken the liability for the repayment of the debt, but also a person who is under law impliedly liable to pay the debt by virtue of his purchase at an auction sale; & the F. B. decision in Saran Singh v. Miththan Lal, merely held that the transfer of the liability, whether by express contract or impliedly by virtue of an auction-sale, must be the transfer of the entire liability & not a part of the liability. I can discover no good reason why the Legislature should have denied the benefit of Act No. X [10] of 1937 to subsequent transferees on whom the liability for payment of the mtge. amount happened to be cast by reason of a contract with the borrower, & should not have denied the benefit of the Act to auction-purchasers who were equally under law liable to pay the entire mortgage debt. Indeed if regard be had to the intention of the Legislature, as appears in the Debt Redemption Act 'which was also passed for the protection of the agriculturist debtors', auction-purchasers of the entire mortgage amount were equally denied the benefits of the Act. In one case, the liability for payment of the mortgage debt is express, in the other case it is implied by law. That circumstance should hardly be a reason for not placing both of them in the same category in the two Acts.

12. The last point urged is that the application dated 7-9-1938 was a step-in aid of execution & therefore, saved limitation. As already pointed out, the first execution application had been dismissed because the D. H. had failed to file an affidavit in support of his allegation made in the execution application in respect of the death of one of the J. Ds. & the succession to his estate by the persons named therein. In the application of 7-9-88 the D. H. mentioned that the file of the execution proceedings had been consigned to the record room by mistake & that the papers be sent to the Collector for proceeding with the auction sale.

13. Article 182 (5), Limitation Act, requires an execution application or a step-in-aid of execution to be made 'in accordance with law & tothe proper Court'. This application was undoubtedly made to the proper Court. The question iswhether it was a step-in-aid of execution, & whether it was 'in accordance with law'.

14. The words 'step in-aid of execution' mean what they say. There must be a step to further for to help an execution of the decree or order to be taken out or proceeded with. It is not necessary that the step should be in a pending execution proceeding. It may be the first step which law requires to be taken in order that the execution proceeding should be taken out, e. g., an application for transfer of a decree for execution to another Court (Ram Kali v. Bir Bhadraman Tewari, 56 ALL. 890); or it may be a step to remove an obstacle in the way of execution, e. g. an application for the restoration of an execution proceeding by setting aside the order of dismissal (Kartick Nath v. Juggernath Ram, 27 Cal. 285) But if the step in question does not or cannot help either in the starting of the execution proceeding or in the further progress of a pending execution proceeding or in removing an obstacle that lies in the way of execution proceedings, it cannot be said to be a step in-aid of execution. 15. In the present case, the execution proceedings had terminated by a final order of dismissal. The application of 7-9-1938 did not require the Court to set aside its order of dismissal & restore the execution case to its original file. It only asked the Court to send for the record from the record room & send it to the Collector without at the same time asking for the seating aside of the order of dismissal. Without asking for the setting aside of the order of dismissal, the application was not maintainable at all & could not possibly further the progress of the execution proceedings. It could not, therefore, be said to be a step in-aid of execution.

15. Further the application of 7-91938 could not be said to be 'in accordance with law'. The phrase 'in accordance with law' has been interpreted variously in different cases & it is difficult, to lay down the precise scope of its implications. In Khalilur Rahman v. Collector of Etah, 55 ALL. 993, the P. C. observed as follows:

'The applications were made in accordance with the provisions of Civil P. C. & therefore in accordance with the law applicable thereto, they were made to the proper Court, they were obviously steps in aid of execution & they were made within time'.

In order that an application may be 'in accordance with law', it should be in accordance with the provisions of Civil P. C. Obviously Civil P. C. does not contemplate an application like the one in question to be made in proceedings which have already terminated. In my judgment, the application was not even 'in accordance with law'.

16. I would, therefore, dismiss this appeal with costs.

Raghubar Dayal, J.

17. I agree.


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