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Gurdev Singh and anr. Vs. Punjab National Bank and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Revn. No. 4569 of 1997
Judge
Reported inAIR1998P& H106; (1998)118PLR537
ActsCode of Civil Procedure (CPC) , 1908 - Sections 34, 34(1), 38 and 47 - Order 21, Rule 16 - Order 34, Rule 11
AppellantGurdev Singh and anr.
RespondentPunjab National Bank and ors.
Appellant Advocate Ashok Jindal, Adv.
Respondent Advocate J.S. Bhatti, Adv.
DispositionRevision dismissed
Cases ReferredN.M. Veerappa v. Canara Bank
Excerpt:
.....debtor-petitioners failed to pay the decretal amount and in accordance with the terms of the decree, the bank is stated to have filed the execution petition for a recovery of rs. kundu mal ganga ram, air 1960 sc 388). 12. altering the terms of the decree must be clearly understood in contrast of construing a decree or interpreting a decree or giving clarity to its terms and conditions. it is a settled rule of law that what is not permissible directly in law cannot be permitted to be achieved indirectly as well. 13. for example, executing court may look into the proceedings to find out the correct meaning of the decree and consequently may provide some clarity to the decree and may construe the decree to effectively implement the decree (bhavan vaja v. .15. aforestated well..........and application of the provisions of section 34 in face of the clear provisions of order 34 of the code. provisions of order 34 is a sell-contained chapter within the code itself. the suits relating to mortgage are filed, persued, decreed and the decree executed under the provisions of this order. a clear distinction has been made by the legislature in the ordinary suits of recovery and the mortgage suits filed under this special order. rule 11 of order 34 clearly postulates what interest is payable in relation to such suits which are controlled under the provisions of order 34 of the code. the said rule specifically stipulates the extent and manner of the interest which the court may award pendente lite and future. rule 11 of o. 34 has a restricted and limited application to the.....
Judgment:
ORDER

Swatanter Kumar, J.

1. Limitation and scope of powers exercisable by executing Court while execting a decree passed by the Court of competent jurisdiction is the precise question that falls for consideration of the Court in this revision petition.

2. The facts giving rise to this revision petition fall in a very narrow compass. Respondent plaintiff Punjab National Bank had filed a suit for recovery of Rs. 1,80,507/- as principal with interest in the Court of competent jurisdiction at Sirsa on 21-2-1990. The suit was contested by the petitioner-defendants. The learned trial Court ultimately passed a decree on 4-1 -1993 against the defendants and in favour of the plaintiff. The relevant part of the decree reads as under :--

'It is ordered that the suit of the plaintiff bank for recovery of Rs. 1,80,507/- succeeds and hereby decreed with cost in favour of the plaintiff bank and against the defendants jointly as well as severally with future interest @ 12.5% per annum which shall be calculated on the principal amount from the date of filing of the present suit i.e. 21-2-1990 till the realisation of the decretal amount. I accordingly pass a preliminary decree to the effect that the defendants shall pay the decretal amount within three months from the date of passing of this judgment. In default of the defendants, the plaintiff bank shall be entitled to apply for a final decree thereby directing that the mortgaged property or a sufficient part thereof the tractor which was hypothecated be sold, and the proceeds of the sale (after deduction therefrom of the expenses of the sale) be paid into Cout and applied in payment of what has been found or declared under or by the preliminary decree due to the plaintiff together with such amount as may have been adjudged due in respect of subsequent costs, charges, expenses and interest, and the balance, if any, paid to the defendants, or other, persons entitled to receive the same.'

3. It may be noticed here that in the plaint and specially in the prayer clause the plaintiff had claimed interest at the rate of 12.5% per annum based on the plea of mortgage in consonance with the provisions of Order 34 of the Code of Civil Procedure. The Court even in the last para of the judgment had clearly granted future interest at the rateof 12.5% per annum on the amount of principal calculated from the date of filing of the suit till the realisation of the decretal amount. On these basis the trial Court had passed the aforestated decree granting the relief to the bank as aforestated.

4. As the judgment debtor-petitioners failed to pay the decretal amount and in accordance with the terms of the decree, the Bank is stated to have filed the execution petition for a recovery of Rs. 2,31,931.50. It is during the pendency of the execution proceedings for recovery of the aforestated amount that an application was filed by the judgment debtor-petitioners stating that excess amount has been claimed in the decree. Their submission was that the decree-holder could not claim interst in excess of 6% per annum as the loan was taken for agricultural purposes. In support of this contention reliance was placed upon the case of Krishan Lal v. State Bank of Patiala, 1990 Pun LJ 249.

5. This application filed by the objector petitioner was contested by the bank. According to the bank they were entitled to recover the contractual rate of interest as it is a suit for recovery based on mortgage.

6. The learned executing Court vide its order dated 6-10-1997 dismissed the application of the objector and directed the amounts to be recovered by auctioning of the mortgaged property and fixed dates for the said purpose. It is this order of the executing Court dated 6-10-1997 which has been impugned in this revision petition.

7. The contention of the learned counsel for the petitioners is that the learned trial Court ought not to have granted 12.5% interest as claimed by the plaintiff, but could only grant future interest at the rate of 6% per annum. Further it is contended that the loan was for agricultural purposes and keeping in view the judgment of this Court in Krishan Lal's case (1990 Pun LJ 249) (supra) the decree of the trial Court in so far as it granted interest in excess of 6% is a nullity.

8. On the other hand, the learned counsel appearing for the decree-holder herein while supporting the order of the executing Court has argued that :--

a) The executing Court has no jurisdiction to go behind the decree and to alter its terms to the prejudice of one of the parties to the decree;

b) The loan in question was based on a specific contract between the parties and is a suit for recovery founded on a mortgage. Therefore, the interest chargeable would be 12.5% and not 6%.

c) That in any case even the tractor in question was used for a commercial purpose because the borrower was using the tractor to plough other fields and was charging money for the same. As such the exception carved out under the provisions of Section 34 of the Code is not applicable to the facts and circumstances of the present case.

9. It is clear from the above submissions of learned counsel for the parties that the basic question which arises oulof the controversy in the present revision is whether the executing Court can at all go behind the decree and alter its terms and conditions. It has become necessary to advert to this discussion in view of the submission of the learned counsel for the Bank that the application in the present form was not even maintainable before the executing Court.

10. Under Section 38 of the Code, a decree has to be executed either by the Court which passed the decree or by the Court to which it is sent for execution. The executing Court has to execute the decree strictly in adherence to the terms of decree passed and complete the execution by recording satisfaction of the decree. The decree has to be executed in terms of the provisions of Part II read with Order 21 of the Code. The effect of cumulative reading and scheme of these provisions is that the powers of the executing Court are restricted in their nature and scope. The executing Court would have no jurisdiction to go behind the decree and alter its terms and conditions, which could either be altered and changed by the Appellate Court or by the same Court which passed the decree, in accordance with law.

11. The legislative intent and meaningful rule of interpretation must necessarily avoid unnecessary and multifarious litigation. The decree which finally determines the controversy between the parties must attain its finality in the real sense of the term and would not be open to alteration in execution. !n the case of Jai Narain v. Kedar Nath, AIR 1956 SC 359, the Supreme Court had held that Court cannot go into question of executability of decree. An executing Court must take the decree as it stands for the decree is binding and conclusive between the parties to the suit. (Topan Mal Choota Mal v. Kundu Mal Ganga Ram, AIR 1960 SC 388).

12. Altering the terms of the decree must be clearly understood in contrast of construing a decree or interpreting a decree or giving clarity to its terms and conditions. In the garb of the latter, the Court cannot create a new decree which is neither intended nor passed by the Court of competent jurisdiction. It is a settled rule of law that what is not permissible directly in law cannot be permitted to be achieved indirectly as well. Executing Court can provide clarity, interpret or construe the decree, while keeping the decree as passed by the Court of competent jurisdiction intact and undisturbed. While exercising its jurisdiction if the executing Court in the guise of these ingredients materially alters the terms and conditions of the decree to the prejudice of any of the parties to the decree, which ought to have, if at all, falls in the domain of Courts of competent jurisdiction, i.e. appellate or the Court passed the decree, certainly the executing Court would outgres its jurisdiction as an executing Court.

13. For example, executing Court may look into the proceedings to find out the correct meaning of the decree and consequently may provide some clarity to the decree and may construe the decree to effectively implement the decree (Bhavan Vaja v. Solanki Hanuji Khodaji Mansang, AIR 1972 SC 1371. But the executing Court cannot entertain an objection that decree is incorrect in law or on fact (Vasudev Dhanjihhai Modi v. Rajabhai Abdul Rehman, AIR 1970 SC 1475). The above view has been reiterated by the Hon' ble Supreme Court of India consistantly. The scheme of the Code with specific emphasis to the provisions relatable to the powers of the executing Court can no way be interpreted to vest it with the power of nullifying or altering a lawful decree.

14. The principles aforestated are not open to any disarray. Permitting an executing Court to alter the terms of the decree would be opposed to all settled canons of Civil Jurisprudence. A decree which has been passed and has not been assailed in the regular appeals, which were available to the parties against whom the decree was passed, such party cannot be permitted to abuse the process of law before the executing Court to alter the decree, which has attained finality in all respects. The parties have a remedy of applying for review in accordance with law. The review of a decree has to be by a Court which passed the decree and such a jurisdiction would not be available to the Executing Court in execution proceedings. The channels of remedies available to a litigant must be expicited in their respective fields without transgression of basic and inherent jurisdiction vis-a-vis the other. The settled doctrine of finality of proceedings would stand minatory if the interpretation suggested by the objector is accepted. .

15. Aforestated well established principles of law have been reiterated with approval by the Hon'ble Supreme Court of India in a very recent judgment in the case of Rameshwar Das Gupta v. State of U.P., AIR 1997 SC 410, where comenting upon somewhat similar question, the Court held as under (para 4):--

'It is well settled legal position that an executing Court cannot travel beyond the order or decree under execution. It gets jurisdiction only toexecute the order in accordance with the procedure laid down under Order 21, IPC.

XX XX XX

The question that arises is whether the executing Court could step out and grant a decree for interest which was not part of the decree for execution on the ground of delay in payment or for unreasonable stand taken in execution? In our view, the executing Court has exceeded its jurisdiction and the order is one without jurisdiction and is hereby a void order. It is true that the High Court normally exercises its revisional jurisdiction under Section 115, CPC, but once it is held that the executing Court has exceeded its jurisdiction, it is but the duty of the High Court to correct the same. Therefore, we do not find any illegality in the order passed by the High Court in interfering with and setting aside the order directing payment of interest.'

16. Approaching the facts of the present case on the basis of the above enunciated principles the Court cannot overlook the facts that the suit in question was a mortgage suit based on a specific contract between the parties. A definite prayer was made in the plaint which was contested by the defendant. The Court decided the issue and granted the relief of interest at the rate of 12.5% per annum and passed the decree in terms thereof. The said decree has become final and binding between the parties. The executing Court would not be in its jurisdiction to come to the conclusion whether the rate of interest awarded by the Court of competent jurisdiction, while passing the lawful decree, was correct or incorrect. It could only enter into the computation with reference to pleadings etc. and may deal with other ancillary question relating to the satisfaction of the decree as passed by the Courts. The controversies of the afore-kind could only be the subject-matter of a review or appeal, as the case may be. The Court passing the decree does not for all purposes looses its jurisdiction and in any case the Code specifies definite provisions for giving jurisdiction which passed the decree, or the Appellate Court in case of an appeal. Reference can be made to the case of Mohinder Singh v. Gurdial Singh, 1997 (1) Indian Civil Cases 803.

17. In view of the above discussion I would have no hesitation in holding that the application filed by the objector ought to have been dismissed at the very threshold as being not maintainable.

18. Provisions of Section 34 of the Code do provide the rate of interest which the Court may grant to a decree holder while passing the decree on account of interest pendente lite and future interest. Proviso 10 Section 34 carves out an exception to the effect that if the transaction is a commercial transaction, the rate of future interest may exceed 6%, but shall not exceed the contractual rate of interest. The expression commercial transaction has been explained under explanation (ii) to Sub-section (1) of Section 34 of the Code. According to this a transaction is a commercial transaction if it is connected with the industry, trade or business of the party incurring the liability.

19. Agriculture simpliciter generally may find shelter under the explanation carved out under the proviso, but where agriculture is culbbed with the commercial activity, the protection must go. In the present case definite stand has been taken by the bank that the morgage/hypothecated property has been used for commercial purpose being the tractor was used by the borrower in fields of other persons for which he had earned money purely on commercial basis. To this stand nothing was placed on record before the trial Court in rebuttal. So, taking the facts of this case on their face value, it is a clear case where the petitioner would not be entitled to the benefit of the exception because tractor was not being used for agriculture purposes simpliciter and had been used as a regular source of income purely on commercial basis. The judgment of this Court in the case of Krishan Lal (1990 Pun LJ 249) (supra) as well as the case of Jagdish Chander v. Punjab National Bank, 1994 Pun LJ 304 : (AIR 1994 Punj & Har 98), would be of no help to the present peritioners because in these cases the stand of the petitioner was not that the borrower had not breached the contract. He had used the hypothecated items purely for a transaction which could be termed as commercial transactions.

20. Another factor which needs to be pondered as a necessary corollary is the effect and application of the provisions of Section 34 in face of the clear provisions of Order 34 of the Code. Provisions of Order 34 is a sell-contained Chapter within the Code itself. The suits relating to mortgage are filed, persued, decreed and the decree executed under the provisions of this order. A clear distinction has been made by the Legislature in the ordinary suits of recovery and the mortgage suits filed under this special Order. Rule 11 of Order 34 clearly postulates what interest is payable in relation to such suits which are controlled under the provisions of Order 34 of the Code. The said rule specifically stipulates the extent and manner of the interest which the Court may award pendente lite and future. Rule 11 of O. 34 has a restricted and limited application to the mortgage suits only, while Section 34 is a provision of larger scope and application. The provisions of Order 34 would apparently be specific and special provisions in relation to the general provisions contained in the Code, more particularly, Section 34 of the Code. In the case of Punjab National Bank v. Ram Darshan Singh, (1994) 2 Pun LR 122, a Bench of this Court had the occasion to discuss in some elaboration this question. While relying upon the judgment of the Supreme Court in the case of State of Punjab v. Krishan Dayal Sharma, AIR 1990 SC 2177. the Court held as under:--

'The decree specifically stated that the amount could be recovered by sale of mortgaged property. This is, thus, a decree under Order 34 and the provisions of Rule 11 of Order 34 would apply and not the provisions or Section 34 of the Code of Civil Procedre. This is the view which has been taken in Chanan Singh's case (supra). Thus, the Court granting the decree rightly determined the principal amount and the rate of interest payable thereon, which was the agreed rate between the parties.'

21. Similar view was taken by this Court in the cases of Ishwar Singh v. United Commercial Bank, 1996 ISJ (Banking) 45 and Santa Singh v. Punjab National Bank, 1996 ISJ (Banking) 114.

22. A bare reading of the provisions of Section 34 and Order 34, Rule 11 of the Code admit no conflict between them. They are distinct and different provisions which must operate in their own field without being meddlesome to the sphare Of the other. Mortgage suits are based upon a special contract. The terms and conditions of the mortgage including the rate of interest is the essenceof contract between the parties, but for the terms and conditions contained therein the banker would not have advanced loan to the borrower. The can tract provides for a specific rate of interest and if such a rate of interest is awarded by the Court after due deliberations at the time of passing of the decree, it cannot be altered or varied by the executing Court. The relief which is declined or granted by the Court of competent jurisdiction, which passed the decree, cannot be frustrated to the disadvantage and prejudice of the other party by the executing Court, because under no circumstances the executing Court sits in appeal over the judgment and decree passed by the Court of competent jurisdiction.

23. The Code of Civil Procedure is a procedural law and cannot be compared as such to the provisions of a substantive penal or criminal law. The provisions of Section 34 have been carefully worded by the law makers. The Legislature intentionally has not introduced any nonobstante clause in the Code. The language of Section 34 neither opens nor even mentions notwithstanding anything contained to the contrary under the provisions of the Code in any other law. In fact it does not even mention that anything contained to the contrary in any contract between the parties. In my humble view to read a nonobstante clause into the provisions of Section 34 to frustrate the protection available to the parties under Order 34 of the Code would be an interpretation impermissible in law. The contract between the parties to charge a specific rate of interest per se cannot be held to be a void contract or a contract which is opposed to public policy. If parties have entered into a contract (mortgage deed) the process of law would enforce the contract rather than frustrate the provisions thereof, specially in absence of any legislation principle or subordinate, in support thereof. In the case of Gurnam Singh v. UCO Bank, 1997 ISJ (Banking) 482, a Bench of this Court held as under :--

'In Everest Industrial Corporation v. Gujarat State Financial Corpn., AIR 1987 SC 1950, the Apex Court has held that even under the Code of Civil Procedure the question of interest payable in mortgage suits filed in Civil Courts is governed by Order 34, Rule 11 of the Code and not by Section 34, which may be applicable only to cases of personal decrees passed under Order 34, Rule 6 of Code.

In the present case, admittedly the judgment-debtors petitioners mortgaged their land as a security for the due payment of the advanced loan. Thus, it is obvious that it was not a loan for agriculture purpose only and in such cases the provisions of Section 34 of the Code are not applicable but interest is chargeable under Order 34 Rule 11 of the Code,'

24. It will be pertinent to make reference at this stage to a very recent judgment of the Hon'ble Apex Court in the case of N.M. Veerappa v. Canara Bank, (1998) 1 JT SC 221, where the Hon'ble Supreme Court held that Section 34 has no application to the mortgage suits which arc controlled by Order 34, Rule 11 of the Code and Court could only exercise its discretion within the limits provided thereunder.

25. In view of the detailed discussion, the submissions raised on behalf of the respondent-bank merit acceptance, while those raised on behalf of the petitioners need to be rejected. The learned executing Court has rightly held that the Bank was entitled to the rate of interest granted to it under the decree and such rate of interest could not be varied to 6% per annum instead of 12.5% per annum, which was decreed by the Court. The order docs not suffer from jurisdictional or other error apparent on the face of the record which would call for any interference by this Court in exercise of its rcvisional jurisdiction.

26. No other point was raised by either of the counsel in these proceedings.

27. Inevitable conclusion of the above discussion is that present revision petition has no merit and the same is hereby dismissed, though without any order as to costs.


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