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Baburao Bhavadu Sonar Vs. Punamchand Onkardas Nahata and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtSupreme Court of India
Decided On
Case NumberCivil Appeal No. 443 .of 1966
Judge
Reported in(1969)3SCC670
ActsTransfer of Property Act, 1882 - Section 83; Bombay Money Lenders Act, 1946 - Section 30, 31
AppellantBaburao Bhavadu Sonar
RespondentPunamchand Onkardas Nahata and anr.
DispositionAppeal Allowed
Excerpt:
.....— appellant's rights as a purchaser of equity of redemption — constructive resjudicata — if duty of mortgagee with possession to account to the appellant purchaser -- on february 26, 1938 respondent 2 sold the equity of redemption to the appellant. respondent 2 in his written statement supported the application whereas respondent 1 resisted it. on december 28, 1958 the trial court dismissed the application. it was further held that the appellant was a debtor and respondent 2 was a trader. the appellant filed a petition for revision before the high court. respondent 1 preferred a petition for revision in the high court against the decision of the trial court. meanwhile on march 1, 1962 the appellant filed a suit under section 83 of the transfer of property act for..........of sections 30 and 31 of the act. in the opinion of the learned judge, though the appellant was a debtor entitled to claim redemption, he could not be regarded as such under the provisions of the act and his remedies lay only under section 83 of the transfer of property act. he also set aside the order of the trial court directing that the licence of respondent 1 should be cancelled.6. we find it difficult to accept the view of patel, j., expressed in the order under appeal that the question whether the appellant was a debtor who could invoke the provisions of the act was at large and could be re-opened. in the portion which has been extracted from his previous judgment, dated march 15, 1961, it is quite clear that the question which he was deciding at that stage was whether the.....
Judgment:

A.N. GROVER, J.

1. This is an appeal by special leave from a judgment of the Bombay High Court in a revision petition reversing an order of the Court of Civil Judge, J.D. Bhusaval.

2. The material facts are these: On January 28, 1957 Respondent 2 mortgaged with possession the suit house with Respondent 1 for Rs 6000. The period of redemption was fixed at 10 years. On February 26, 1938 Respondent 2 sold the equity of redemption to the appellant. On March 1, 1958, Respondent 2 served a notice on Respondent 1 asking for redemption of the possessory mortgage on a payment of Rs 6000 with interest. On March 20, 1958 the appellant sent a notice to Respondent 1 enclosing a cheque for Rs 6000 and offering to pay a further amount due as interest and called upon him to hand over the possession of the mortgaged property. Respondent 1 sent a reply saying that the mortgage was not redeemable before the expiry of the period of 10 years and he returned the cheque. On April 23, 1958, the appellant filed an application in the Court of the Civil Judge, J.D. Bhusaval under Section 83 of the Transfer of Property Act and Sections 30 and 31 of the Bombay Money Lenders Act, 1946, hereinafter called the “Act”, praying that Respondent 1 be ordered to render account as mortgagee in possession and be directed to hand over the possession of the mortgaged property to the appellant. Respondent 2 — the original mortgagor — was also made a party to the application. Respondent 2 in his written statement supported the application whereas Respondent 1 resisted it. He contended, inter alia, that the original mortgagor (Respondent 2) and the appellant were traders with the result that the Act did not apply to them. It was also asserted that the appellant was not a debtor within the meaning of the Act. Further more the application was described as premature as the mortgage was not redeemable until the expiry of 10 years from the date of the mortgage (i.e., January 28, 1957). The trial court raised issues including the question whether the mortgage money was loan for the purpose of Sections 30 and 31 of the Act; whether the appellant was a debtor and whether Respondent 2 was not a trader on the date of the mortgage. On December 28, 1958 the trial court dismissed the application. It was held that the mortgage money was not a loan within the meaning of Sections 30 and 31 of the Act. It was further held that the appellant was a debtor and Respondent 2 was a trader. The appellant filed a petition for revision before the High Court. The High Court by an order, dated March 15, 1961 set aside the order of the trial court and remanded the matter with a direction that it should proceed under Section 31 of the Act and dispose of the case in accordance with law. The findings and the conclusions of the High Court will be presently noticed.

3. When the matter went to the trial court after the remand, Respondent 1 contended, inter alia, that Respondent 2 was a trader and the petitioner having purchased the equity of redemption from him had stepped in his shoes and could not get the benefit of the provisions of the Act. The trial court, however, negatived that contention holding that the purchaser of equity of redemption was entitled to the benefit of Section 31 and that it had been so decided by the High Court. Respondent 1 was directed to furnish the statement of account within 8 days. The trial court also ordered the suspension of money, lender's licence of Respondent 1 for one year under the provisions of the Act. Respondent 1 preferred a petition for revision in the High Court against the decision of the trial court. Meanwhile on March 1, 1962 the appellant filed a suit under Section 83 of the Transfer of Property Act for redemption of the mortgaged property in Bhusaval court. In that suit Respondent 1 prayed for a stay pending the disposal of his revision petition. The trial court rejected that prayer. Respondent 1 filed a petition for revision against the order refusing stay. Both the revision petitions came up for hearing in the High Court before Patel, J. The learned Judge allowed the petition directed against the order of the trial court by which Respondent 1 had been ordered to furnish the statement of account, etc. It is unnecessary to mention the orders made on the other revision petition.

4. In order to decide the contention which have been raised before us on behalf of the appellant it is necessary to set out the relevant provisions of the Act. Section 2(9) defines “loan” to mean an advance at interest whether of money or in kind. According to Section 2(10) “moneylender” means an individual ... who carries on the business of moneylending in the State ... etc. Section 2(18) defines “trader” to mean a person who in the regular course of business buys and sells goods or other property whether movable or immovable. Section 30(1) provides that any debtor may make an application at any time to the Court whether the loan has or has not become payable for taking accounts and for declaring the amount due to the moneylender. Section 31(1) enables a debtor to tender to a moneylender any sum of money due from him in respect of a loan by way of principal, interest or both. Under sub-section (2) if the moneylender refused to accept any sum so tendered the debtor can deposit the same in court to the account of the moneylender.

5. The principal contention of the appellant is that the High Court by its first judgment dated March 15, 1961 had held that the original mortgagor was a non-trader and the loan under the mortgage was not to a trader. Thus Section 31 of the Act was applicable. It was further held that the appellant was a debtor and was entitled to claim relief under the Act. The High Court had remanded the matter to the trial court and had actually made a direction to it to proceed under Section 31. These points stood finally disposed of and could not be reopened. The contention that the appellant was a trader and could not maintain an application under the Act could not be raised at a subsequent stage as indeed it was done by virtue of the rule of constructive res judicata.

In the previous order, dated March 15, 1961 Patel, J., had said:

“How, the first point that was raised in the Court below and that has been pursued in this Court is whether the petitioner is a debtor. In the Act the word ‘Debtor’ would mean a person who is indebted, and if the petitioner purchased equity of redemption in this property he became indebted to Opponent 1. I do not see any reason why he cannot and should not be regarded as a debtor under the Act. No provision is brought to my notice which would in any manner suggest that the debtor must necessarily be the person who originally obtained the loan. If the contention that is now raised before me is accepted it might exclude from relief persons succeeding to the estate of a debtor. I do not think that it is reasonably possible to put such a restricted meaning on the word ‘debtor’. The petitioner would, therefore, be entitled to claim relief under the Act if he is otherwise entitled to it.”

It was also held that Respondent 2 was a non-trader and the loan under the mortgage document being to a non-trader was covered by Section 31 of the Act. In his subsequent judgment, dated April 13, 1963 the learned Judge proceeded to re-examine the question whether proceedings initiated by the appellant for redemption were maintainable under the Act. He did not consider that he was barred by the previous judgment from going into the matter whether the appellant was entitled to make an application under Sections 30(1) and 31. This is what the learned Judge observed:

“While dealing with Opponent 1, I rejected the present petitioner's contention that he not being the original debtor was not entitled to apply under Section 31 of the Money Lenders Act. I said at p. 2 of my judgment that he would be entitled to claim relief under the Act if he is otherwise entitled to it. The question, therefore, is, is Opponent 1 otherwise entitled to relief or not?”

He expressed the opinion that by reason of the transfer of the equity of redemption, instead of one debtor two debtors existed one being the original mortgagor and the other being the transferee or the assignee. If the latter was not a debtor or the transaction qua him was not a loan he would not be entitled to the benefit of Sections 30 and 31 of the Act. In the opinion of the learned Judge, though the appellant was a debtor entitled to claim redemption, he could not be regarded as such under the provisions of the Act and his remedies lay only under Section 83 of the Transfer of Property Act. He also set aside the order of the trial court directing that the licence of Respondent 1 should be cancelled.

6. We find it difficult to accept the view of Patel, J., expressed in the order under appeal that the question whether the appellant was a debtor who could invoke the provisions of the Act was at large and could be re-opened. In the portion which has been extracted from his previous judgment, dated March 15, 1961, it is quite clear that the question which he was deciding at that stage was whether the appellant could be regarded as a debtor under the Act and the answer which he himself gave was in the affirmative. He refused to put a restricted meaning on the word “debtor” and did not accept the suggestion that the debtor must necessarily be the person who had originally obtained the loan. The entire facts were present to the mind of the learned Judge as also the parties including the factum of assignment or transfer of the equity of redemption in favour of the appellant. If, as has been held at a later stage, an assignee or a transferee could not be regarded as a debtor there was no question of making any remand and the application which had been filed by the appellant under Sections 30 and 31 of the Act should have been dismissed. This was not done for the obvious reason that the appellant was held to be a debtor who could take advantage of the provisions of the Act.

7. We have no manner of doubt that the learned Judge of the High Court had, in his previous order, dated March 15, 1961, decided that the appellant who had purchased the equity of redemption was indebted to Respondent 1 and was therefore a debtor and could maintain an application under Sections 30 and 31 of Act. The argument that an assignee of a debtor could not be a debtor for the purposes of the Act was rejected by the learned Judge. The decision on that point became final and could not be set aside except by way of review under Order 67 Rule 1 of the Civil Procedure Code. The subsequent order of April 13, 1963, although made by the same learned Judge, does not show that the previous decision was sought to be reviewed. Indeed it is difficult to see how any review was possible or could have been made without there being any grounds as contemplated by Order 67, Rule 1 justifying a review.

8. Our attention has been drawn to a decision of a learned Single Judge of the Gujarat High Court in Bhatt Nanalal Bhogilal v. Chandhulal Bhailal Patel1 laying down that the purchaser of the equity of redemption has no right to ask for account from the mortgagee under Section 30(1) of the Act. It is unnecessary to express any opinion whether that view is correct or not. We are satisfied that in the present case it was not open to the High Court to go back on or change its previous decision with regard to the right of the appellant to file and maintain an application under Section 30(1) of the Act and take advantage of its other relevant provisions.

9. The appeal is consequently allowed with costs. The judgment of the High Court, dated April 13, 1963 is set aside with the exception of that part of by which it had reversed the order of the trial court suspending the licence under the Act of Respondent 1. In all other respects the judgment of the trial court shall stand restored.


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