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Jodhai Ramdayal Vs. Bharat Sukhdi - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMadhya Pradesh High Court
Decided On
Case NumberCivil Revn. No. 112 of 1957
Judge
Reported inAIR1959MP97
ActsProvincial Small Cause Courts Act, 1887 - Schedule - Article 15; Contract Act, 1872 - Sections 172 to 181
AppellantJodhai Ramdayal
RespondentBharat Sukhdi
Advocates:V.S. Pandit, Adv.
Cases ReferredBhubotarinee Ghosamy v. Juggernath Tewary
Excerpt:
- - it would be better to reproduce the observations at pages 124 and 125 of ilr 3 luck 118 :(at pp. it is from this point of view that a suit for redemption of pledged moveables is clearly distinguishable from cases of recovery of specific moveable property. their lordships appear to be of the view that the contract of pledge of moveables, like a contract of bailment, is an executed contract, and that no part of it is executory. in air 1919 oudh 73 and 61 ind cas 803; (air 1921 oudh 124 (1)) is no longer good law in lucknow......learned counsel for the defendant applicant contends that the suit fell within the meaning of a suit for specific performance of a contract and as such was excepted under article 15 of schedule ii of the small cause courts act from the jurisdiction of the small cause court. in support of this proposition, he relied on the case of baburam v. deputy commissioner, hardoi air 1921 oudh 124 1. the non-applicant was not represented in this court.4. there appears to be no reported case of this high court on the point. the point involved is of some importance and often arises, as pledging of moveables in an event of common occurrence. it is, therefore, necessary to consider the question so as to settle the law.5. the short question for consideration is whether a suit for redemption or.....
Judgment:

P.K. Tare, J.

1. The defendant has filed this revision under Section 25 of the Provincial Small Cause Courts Act against the decree passed by Shri S. N. Awasthy, Small Cause Judge, Bemetara.

2. The non-applicant filed the suit for redeeming the pledged ornaments. The plaintiff alleged that he had taken a loan of Rs. 140/- by pledging the ornaments and that he had repaid Rs. 130/- in July 1956. According to him, an amount of Rs. 68/ 10/- was due from him inclusive of interest. The defendant alleged that Rs. 250/- had been advanced, as loan and that no repayment was made. He contended that the redemption amount was Rs.. 250/-in addition to interest.

He also raised a plea that the Small Cause Court had no jurisdiction to try the suit. The learned Small Cause Judge decreed the plaintiff's claim for redemption upon payment of Rs. 120/- within 15 days, in default of which the amount was to carry interest at Rs. 6/- per cent per month. Probably the awarding of interest on the amount of Rs. 120/- at an exorbitant rate of Rs. 6/- per cent per month was either a slip or a typing mistake. I hope, such a slip or typing mistake would not be committed in future.

3. We are not concerned with the merits of the case at this stage. The question urged by the learned counsel for the applicant is one of jurisdiction. The learned counsel for the defendant applicant contends that the suit fell within the meaning of a suit for specific performance of a contract and as such was excepted under Article 15 of Schedule II of the Small Cause Courts Act from the jurisdiction of the Small Cause Court. In support of this proposition, he relied on the case of Baburam v. Deputy Commissioner, Hardoi AIR 1921 Oudh 124 1. The non-applicant was not represented in this Court.

4. There appears to be no reported case of this High Court on the point. The point involved is of some importance and often arises, as pledging of moveables in an event of common occurrence. It is, therefore, necessary to consider the question so as to settle the law.

5. The short question for consideration is whether a suit for redemption or recovery of pledged moveables is a suit for specific performance of contract. What are the essential ingredients of such a contract? A borrower takes a loan of money upon security of certain moveables, which he pledges with the creditor. The title to the pledged articles throughout remains with the debtor. He becomes entitled to their possession only upon repayment of the loan with or without interest as may be stipulated.

Upon offering repayment, he claims to redeem the pledged articles from the pledgee. As such, is it a mere suit for recovery of specific moveable property, so as to be cognisable by a Court of Small Causes? The Lahore High Court and the Chief Court of Oudh at Lucknow as also the Allahabad High Court in the cases Singer Sewing Machine v. Mt. Begam, AIR 1928 Lah 535, Mirza Zamin Abbas v. Lachhmi Narain, ILR 3 Luck 118: (AIR 1927 Oudh 476) and Mathura v. Raghunath, AIR 1920 All 137 have taken the view that such a suit is cognisable by a Small Cause Court.

The Lahore and Allahabad cases are Single Bench cases, while the Lucknow case is a Division Bench judgment. It would, therefore, be necessary to examine closely the reasons leading to the conclusion arrived at. Their Lordships have taken the contract of pawn on the same basis as bailment as provided by Section 148 of the Indian Contract Act. It would be better to reproduce the observations at pages 124 and 125 of ILR 3 Luck 118 : (at pp. 477-478 of AIR 1927 Oudh 476) :

'To make our meaning clearer: if the contract of bailment by pledge is not a completed transaction and, therefore, merely an executory contract and not an executed contract the suit would not be cognizable by a Court or Small Causes. For instance, where the pledgee has been delivered possession of the goods pledged but has not paid the money which he promised to advance; or where the pledger has received the money agreed to be advanced to him but has not delivered possession of the goods promised to be pledged, and a suit is brought in the one case by the pledgee for recovery of the goods promised to be pledged and in the other case by the pledger for recovery of money promised to be advanced, a suit of either of these descriptions would undoubtedly be a suit for specific performance of a contract. In short, it would be a suit asking the Court to grant relief by converting the executory contract into an executed one. If, however, the bailment of the goods has taken place and the money has also been advanced to the pledger of those goods, the contract of pledge becomes a completed contract in the sense that it must Be reckoned as an executed contract. If, therefore, subsequently anyone of the parties chooses to enforce any right arising out of that contract he cannot be deemed, in our opinion, to be suing for the specific performance of his contract.'

As observed in Halsbury's Laws of England, Vol. 31. page 356 onwards, page 327 (1938, Second Edition), no specific performance of an executed contract can be granted. The said relief is available in respect of executory contracts only. In the light of this proposition, we have to examine the instant case.

6. Firstly, we have to see if a suit for redemption of pawned moveables is a suit for recovery of specific moveable property. Secondly, if the redemption relates to an executed or an executory contract. Upon the answers to these questions will depend the final conclusion. Taking up the question whether a suit for redemption of moveables could be taken to be a suit for recovery of specific moveable property, I feel that it could not be termed so.

There may be cases of recovery of specific moveable property which may or may not arise out of contract. In the case of Makhanlal v. Biharilal ILR 46 All 688: (AIR 1924 All 571) a Division Bench of the Allahabad High Court held that a suit for recovery of specific moveable property is cognisable by a Small Cause Court. That was a case of lending of ornaments for some purpose which were not returned.

The matter arose not out of contract, but out of an obligation arising out of an implied contract, or an obligation analogous to a contract. Such an obligation can certainly not be specifically performed. A suit on such an obligation can by no stretch of imagination be termed a suit for specific performance of a contract. Therefore, a mere suit for recovery of specific moveable property not being covered by any other Article of Schedule II of the Provincial Small Cause Courts Act would naturally be cognisable by a Court of Small Causes.

But the position would be different in a suit for redemption of pledged moveables. Such a suit, in my humble opinion, is more or less of the type of a mortgage of immoveable property. Even if it is taken to be analogous to a contract of bailment, it is not on that account rendered to be a mere suit for recovery of specific moveables. A suit for recovery of moveables involves, on the one hand, executed consideration, and, on the other hand, executory consideration.

The party seeking to recover has no obligation to discharge. But in a case of bailment or mortgage, the party seeking to redeem has some obligation to discharge beiore it can claim to redeem the property. It is from this point of view that a suit for redemption of pledged moveables is clearly distinguishable from cases of recovery of specific moveable property.

7. Next, we come to the reasoning of the, learned Judges of the Lahore and Allahabad High Courts and the Oudh Chief Court. Their Lordships appear to be of the view that the contract of pledge of moveables, like a contract of bailment, is an executed contract, and that no part of it is executory. What is sought by way of redemption is only incident tal arising out of the original contract.

I find it difficult to persuade myself to accept this part of their Lordships' reasoning. The learned Judges take only a part of the contract into consideration and ignore its counter-part. The right to redeem is not incidental to the original contract of bailment. It cannot be said that the right to redeem arises incidentally or collaterally to the contract; of bailment.

In my humble opinion, the contract of pledge-or pawn consists of two contracts, or, a part and counterpart of the same contract. It is immaterial-whether they are considered two distinct contracts or counter-parts of the same contract. Can it be said, that the whole of the contract stands executed by payment of the money and pledging of the articles? I feel not.

The other contract or the counterpart, that of repayment and return of the articles still remains executory, which I would respectfully emphasise cold be specifically enforced by either side. If the pledgee at any time thinks that the amount of the loan with interest exceeds the value of the articles (say, on account of the falling price of the gold), could he not demand repayment upon return of the articles?

Or, if a pledger thinks that the price of the articles has increased on account of the enormous rise in price of gold, could he not claim immediate return of the articles upon repayment of the amount with interest? Had this aspect been presented before their Lordships, it is possible that the view taken might have been contrary. With deference to their Lordships and in all humility, I respectfully, though reluctantly, beg to differ from the view expressed in the cases of ILR 3 Luck 118: (AIR 1927 Oudh 476), AIR 1920 All 137 and AIR 1928 Lah 535.

8. The case of AIR 1921 Oudh 124(1) gives no elaborate reasons for accepting the contention that a suit for return of pledged moveables should beheld to a suit for specific performance of the contract. The said case was considered in the later case of ILR 3 Luck 118: (AIR 1927 Oudh 476), which I have discussed in details and with which I find myself unable to agree for the reasons aforesaid. Lindsay, J. C. who decided the case of AIR 1921 Oudh 124(1) (supra) had taken a similar view on an earlier occasion in the case of Mata Din v. Madho Charan, AIR 1919 Oudh 73.

Although the said reported Oudh cases record no elaborate reasoning as the reported Lucknow case, I feel that the conclusion arrived at by the former is correct. As the other side was not represented, I was deprived of the assistance of a lawyer who would propound the contrary view.

9. In order that the question be settled by an authoritative decision in view of the conflicting views, I would place the case before My Lord the Chief Justice with a recommendation that the case be placed before a Division Bench to answer the following question:

'Whether a suit for redemption of pledged moveables is a suit for specific performance of contract and as such excepted from the jurisdiction of the Small Cause Court under Article 15, Schedule II, of the Provincial Small Cause Courts Act'.

10. After the decision of the reference, the case would be heard on merits or consequential order, as the case may be.

OPINION OF THE DIVISION BENCH

G.P. Bhutt, J.

11. This revision was heard by Tare J. who has referred the following question for the opinion of a larger Bench, viz.,

'Whether a suit for redemption of pledged articles is a suit for specific performance of contract and as such excepted from the jurisdiction of the Small Cause Court under Article 15, Schedule II, of the Provincial Small Cause Courts Act.'

12. The suit, out of which this revision arises, was instituted in the Court of Small Causes, Bemetara, for recovery of the silver ornaments and brass utensils pledged, on payment of Rs. 68/10/- on account of two loans. The only dispute raised by the defendant-applicant was as regards the amount due which, according to him, was Rs. 250/-. The lower Court passed a decree for return of the pledged articles on payment of Rs. 120/-

13. The question under reference arose directly in ILR 3 Luck 118: (AIR 1927 Oudh 476) in which AIR 1920 All 137 decided by Sir P. C. Ba-nerji J., was cited with approval. There it was held that the contract of pledge is fully executed when the money is advanced to the pawner and the articles pledged are delivered to the pawnee; accordingly, when any one of the parties to the contract enforces his right arising out of the pledge, he cannot be deemed to be suing for specific performance of the contract. The same view was held by Jai Lal J., in AIR 1928 Lah 535. The contrary view held by Lindsav J. C. in AIR 1919 Oudh 73 and 61 Ind CaS 803; (AIR 1921 Oudh 124 (1)) is no longer good law in Lucknow.

14. In Ram Gopal Shah v. Ram Gopal Shah, 9 Suth WR 136 and also in Surajpal Singh v. Jairamgir, ILR 7 All 855 and Kalka Prasad v. Chandan Singh, ILR 10 All 20, the pawnee had sought to enforce the hypothecation against the transferees from the pawner. They were, therefore, suits for specific performance of the contract of pledge against third persons and stand on a different footing. The suit in ILR 46 All 688: (AIR 1924 All 571) was not on the footing of a pledge and, as rightly observed by the learned single Judge, is not helpful for the determination of the present question.

15. This question also arose in Bhubotarinee Ghosamy v. Juggernath Tewary, 16 Suth WR 58, where it was held that a suit for possession of moveable property pledged after tender of the amount of the loan would lie in the Small Cause Court, but if there has been no tender and the suit was for possession after ascertainment of the amount of the lien, the Small Cause Court would have no jurisdiction.

According to the decision in the case of Mirza Zamin Abbas, ILR 3 Luck 118: (AIR 1927 Oudh 476), however, the latter suit also would lie in the Small Cause Court. It may be noted that the case of Bhubotarinee Ghosamy 16 Suth WR 58 was decided before the enactment of the Indian Contract Act, 1872, which has now codified the rights between the pawner and the pawnee, arising out of a bailment of pledge.

16. We agree, with respect, with the decision in ILR 3 Luck 118: (AIR 1927 Oudh 476) (supra) that a pledge is complete when money is advanced to the pawner and the goods pledged are delivered to the pawnee. Thereafter, the rights of the parties are governed by Sections 172 to 181 of the Indian Contract Act. Therefore, where the pawner sues for redemption of the goods pledged, whether after a valid tender of the loan or an ascertainment of the amount due, he cannot be deemed to be seeking a relief of specific performance of the contract.

He is, in the one case, suing for his goods simpliciter, and, in the other, suing for them, coupled with an offer of the amount due on the loan. In either case, the suit is for delivery of specific goods, which is not excluded from the cognisance of the Small Cause Court.

17. We answer the question under reference in the negative.


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