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Ram Prasad and anr. Vs. Lala Hansraj and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Case NumberExn. Second Appeal No. 1650 of 1948
Judge
Reported inAIR1950All106
ActsUttar Pradesh Debt Redemption Act, 1940 - Sections 2(9); Code of Civil Procedure (CPC) , 1908 - Sections 11; Uttar Pradesh Agriculturists' Relief Act, 1934 - Sections 30; Debt Law
AppellantRam Prasad and anr.
RespondentLala Hansraj and anr.
Appellant AdvocateS.N. Sahai and ;H.N. Seth, Advs.
Respondent AdvocateSuraj Nath Singh, Adv.
DispositionAppeal allowed
Cases ReferredMohd. Shibli Khan v. Ish Datt
Excerpt:
- - the success of the appellants on this plea depended upon the fact whether the transaction on the basis of which the decree was passed was a 'loan' or 'in substance a loan,'the contention of the opposite party was that the transaction was not a loan or in substance a loan and, therefore, the appellants could not take advantage of the benefits conferred by the u. therefore, in lieu of the unpaid price, a mortgage deed had been executed by which the shares purchased in the lorry as well as certain plots were mortgaged by the defendant to the plaintiff. then followed a decree on the basis of it, which remained partly unsatisfied and the promissory note was in lieu of this amount which was partly unsatisfied......or 'in substance a loan,' the contention of the opposite party was that the transaction was not a loan or in substance a loan and, therefore, the appellants could not take advantage of the benefits conferred by the u. p. debt redemption act, xiii [13] of 1940.3. the respondents relied, in this connection, on the case of mohd. shibli khan v. ish datt : air1939all398 . that was a case where the plaintiff had sold certain shares in a lorry to the defendant who was unable to pay the entire purchase price. therefore, in lieu of the unpaid price, a mortgage deed had been executed by which the shares purchased in the lorry as well as certain plots were mortgaged by the defendant to the plaintiff. a decree was obtained by the plaintiff. when it was being put in execution, the defendant objected.....
Judgment:

Wanchoo, J.

1. This is an appeal by Ram Prasad and Jagannath against the order of the District Judge of Banaras by which be confirm-ed the order of the Munsif, Havali, Banaras in an execution matter.

2. The facts leading up to this appeal are these. The present appellants had purchased certain property from the respondents. They were unable to pay up the entire purchase price and, in lieu of the unpaid balance, had executed a mortgage in favour of the respondents. The respondents sued on the basis of this mortgage and got a decree. The appellants being agriculturists, this decree was amended in accordance with the provisions of the U. P. Agriculturists' Relief Act. Later when the decree was put in execution, the appellants claimed that the land was 'protected land' and could not be sold. The success of the appellants on this plea depended upon the fact whether the transaction on the basis of which the decree was passed was a 'loan' or 'in substance a loan,' The contention of the opposite party was that the transaction was not a loan or in substance a loan and, therefore, the appellants could not take advantage of the benefits conferred by the U. P. Debt Redemption Act, XIII [13] of 1940.

3. The respondents relied, in this connection, on the case of Mohd. Shibli Khan v. Ish Datt : AIR1939All398 . That was a case where the plaintiff had sold certain shares in a lorry to the defendant who was unable to pay the entire purchase price. Therefore, in lieu of the unpaid price, a mortgage deed had been executed by which the shares purchased in the lorry as well as certain plots were mortgaged by the defendant to the plaintiff. A decree was obtained by the plaintiff. When it was being put in execution, the defendant objected and prayed for reduction under Section 30, U. P. Agriculturists's Relief Act, XXVII [27] of 1934. Under that section relief of interest can only be granted to an agriculturist where the transaction is a 'loan' as defined in that, Act. It was held that this transaction was not a loan or in substance a loan as defined in, the Act and, therefore, no reduction in interest could be granted.

4. The definition of 'loan' in the Debt Redemption Act is the same as in the Agriculturists' Relief Act except in so far as the date, namely, 1st June 1940, is mentioned in Section 2 (9), Debt Redemption Act which is not to be found in the Agriculturists' Relief Act. Therefore, the principle of this authority will apply on all fours to the fact of the present case. Learned counsel for the appellants relies on the cage of Padam Singh v. Munwar Chand Rajsaran : AIR1945All144 . It is remarkable that the learned Judge who decided the case of 1939 was also a party to this decision. However, the case in Mohd. Shibli Khan v. Ish Datt : AIR1939All398 was not cited on this occasion. The facts of this case were that a certain decree had been obtained on the basis of a loan. A substantial part of the decree had been paid up by the judgment-debtor. For the remainder, he executed a promissory note in favour of the decree-holder. When a suit was brought on that promissory note, the question arose whether the transaction was a 'loan' within the meaning of the Agriculturists' Relief Act. It was then held that the transaction did amount, in substance, to a 'loan'. I am of opinion that there is a clear distinction between the facts of the 1945 case and the facts of the 1939 case. In the 1945 case, the original transaction was certainly a loan. Then followed a decree on the basis of it, which remained partly unsatisfied and the promissory note was in lieu of this amount which was partly unsatisfied. Under these circumstances, the transaction, which resulted in the execution of a promissory note, would amount in substance to a loan, though this has not been specifically mentioned as the reason for the view taken by the learned Judges in that case. In the present case, the decree-holders are the sellers. There is no question of their advancing any money to the judgment-debtors appellants who are the purchasers. The mortgage was taken merely as a security for the unpaid price and the transaction cannot, therefore, amount in substance to a loan.

5. The next point that is urged is that the decree was amended under the U. P. Agriculturists' Relief Act and it was held between the parties that the transaction amounted to a loan and, as such, it is not open to the respondents to contend that the transaction did not amount to a loan. Now it does appear from the, judgment of the Munsif that there was some amendment under the Agriculturists' Relief Act at some time. However, if the amendment was under Section 5, Agriculturists' Relief Act, it would not help the appellants because under that section all that is required is that the judgment-debtor should be an agriculturist, It is not necessary that the transaction should be a loan. If, on the other hand, the amendment was under Section 30 and the interest was reduced, that could only be done if it was held that the transaction amounted to a loan. Learned counsel for the appellants has drawn my attention to an application made by the appellants in the Court below in November 1935, by which they prayed for the benefit of the Agriculturists' Relief Act and also prayed for reduction of the rate of interest. The record does not show that any objection was filed to this application on behalf of the decree-holder respondents. On the other hand, counsel for the decree-holders stated in the lower Court that the judgment-debtors were agriculturists. The original decree had provided interest at the contractual rate, that is, twelve per cent. per annum upto the date of the preliminary decree and at six per cent. per annum thereafter. An order was passed on 1st February 1936 by which the interest upto the date of the preliminary decree was reduced from twelve per cent. to eight and a half per cent. and interest thereafter from six per cent. to three and a half per cent. to bring it in accord with the rates prescribed in the rules under Section 30, Agriculturists' Relief Act.

6. The contention, therefore, on behalf of the appellants is that when the Court reduced the rate of interest under Section 30 of the Act, it, by implication, decided that the transaction was a loan as, otherwise, it could not reduce the interest. It is, therefore, urged that the point is now res judicata between the parties and it was not open to the respondents to urge that the transaction did not amount to a loan. The contention, on behalf of the respondents, however, is that the question whether the transaction was a loan or not was not heard and decided by the Court and, therefore, there can be no question of the application of the principle of res judicata in this case. It seems to me, however, that when the appellants claimed reduction of interest under Section 30, Agriculturists' Relief Act, it was the duty of the respondents to object and point out to the Court that the transaction did not amount to a loan and, therefore, there could be no reduction of interest. The principle of Expln. 4 to Section 11, Civil P. C., is that 'any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit.' When, therefore, the Court amended the decree and reduced the interest without any objection by the appellants, it must be deemed to have decided, by necessary implication, that the transaction was a loan as, otherwise, it could not have reduced the interest. I am, therefore, of opinion that the principle of constructive res judicata now bars the respondents from raising the plea that the transaction did not amount to a loan.

7. I, therefore, allow the appeal, set aside the orders of the Courts below and send the case back to the Court of the Munsif, Havali, Benaras through the District Judge, Benaras, for disposal of the objections of the appellants on the merits. Costs throughout will abide the final result.


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