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Life Insurance Corporation of India Vs. Rajiv Lochan and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtDelhi High Court
Decided On
Case NumberE.A. Nos. 250/81 and 14 and 89/82 in Execution No. 132/80
Judge
Reported inILR1983Delhi125
ActsCode of Civil Procedure (CPC)
AppellantLife Insurance Corporation of India
RespondentRajiv Lochan and anr.
Appellant Advocate Vijay Kishan, Adv
Respondent Advocate K.K. Choudhary, Adv.
Cases ReferredMeghraj and Ors. v. Mst. Bavabai and Ors.
Excerpt:
.....on mortgage of a certain property. six months time was allowed to pay the amount after which the decree holders applied for grant of final decree. a final decree was passed and the decree holders filed an application for execution in which after giving adjustment of the amount paid amount of principal interest and insurance premium was claimed. proclamation of sale was affixed but it was found out that due to renumbering in the area proclamation was affixed on the wrong property. the sale was ordered to be cancelled. before the decree holders filed an application giving fresh particulars, (e.a. 14/82) the judgment debtors filed their objections (e.a. 250/81) saying that the amounts paid by them after the passing of the preliminary decree had not been properly appropriated. the..........and decided by this order.2. the life insurance corporation of india (hereinafter referred to as 'decree holder') brought a suit for the recovery of rs. 57691.22 with future interest at the rate of 9 per cent per annum from the date of institution of the suit till realization on the basis of mortgage of a residential plot no. 10 block d measuring 500 sq. yds. situate in maharani bagh, new delhi together with building thereon from shri rajiv lochan and his wife smt. kanta gupta, (hereinafter referred to as 'judgment debtors').3. on september 23, 1974, a preliminary decree was passed to the effect that the judgment debtors shall pay a sum of rs. 55,209.67 along with interest at the rate of 7-12 per annum from the date of the aforesaid decree till the payment of the decretal amount. the.....
Judgment:

G.R. Luthra, J.

1. There application E.A.S. 250/81, 14/82 and 89/82 are being taken together and decided by this order.

2. The Life Insurance Corporation of India (Hereinafter referred to as 'decree holder') brought a suit for the recovery of Rs. 57691.22 with future interest at the rate of 9 per cent per annum from the date of institution of the suit till realization on the basis of mortgage of a residential plot No. 10 block D measuring 500 sq. yds. situate in Maharani Bagh, New Delhi together with building thereon from Shri Rajiv Lochan and his wife Smt. Kanta Gupta, (hereinafter referred to as 'judgment debtors').

3. On September 23, 1974, a preliminary decree was passed to the effect that the judgment debtors shall pay a sum of Rs. 55,209.67 along with interest at the rate of 7-12 per annum from the date of the aforesaid decree till the payment of the decretal amount. The judgment debtors were allowed six months' time to pay the decretal amount. They filed an application, for permission to pay the decretal amount in Installments. That application was rejected on 29th January, 1976. Thereafter, the decree-holder filed an application for grant of final decree. On July 26, 1977 a final decree was passed in terms of Sub-rule (13) of Rule 5 of Order 34 of the Code of Civil Procedure (in short the Code).

4. On November 24, 1980, the decree holders filed Execution Petition No. 132/80 for execution of the final decree. It stated that a sum of Rs. 18,000 was received from the judgment debtors and that after giving the adjustment of the same, following amount was due from them:

(i) PrincipalRs.47,677.15(ii) Fire Premiums paid after passing the decree.Rs. 776.75(iii) Interest up to 8.9.1980Rs. 17,067.45 TotalRs. 65,521.35

It prayed that the mortgaged property be sold in terms of the final decree.

5. Notice of the aforesaid application was sent to the judgment debtors who filed an objection petition (E.A. 149/81) which was dismissed on October 13, 1981. The mortgaged property was directed to be sold. Even the proclamation of sale was affixed. But it was found out that sexually there was re-numbering of the properties in Maharani Bagh and that the mortgaged property had been allotted No. 2, Park Avenue, Maharani Bagh, New Delhi and proclamation of sale had been affixed on a wrong property and not on No. 2, Park Avenue, Maharani Bagh, New Delhi. By means of an order dated 18th December, 1981 the sale was cancelled. The decree-holder was called upon to file fresh application under Order 21 Rule 66 of the Code in respect of 2, Park Avenue, Maharani Bagh, New Delhi. Before the decree-holder filed such an application, the judgment-debtors came up with objections and their objection petition was registered as E.A. 250|81. It is common ground between the parties that the judgment-debtors made the following payments after the preliminary decree:

Date of paymentAmount paid25-2-1976 Rs.7,000.0026-6-1976 Rs.5,000.0025-9-1976 Rs.3,000.0018-11-1976 Rs.3,000.00 Total :Rs. 13,000.00

6. According to the judgment-debtors, the aforesaid amounts had not been properly appropriated towards the principal sum. According to them, after first adjusting the amount towards interest and the remaining towards principal, the amount payable by the judgment debtors came to Rs. 34,755.70 while the amount due was wrongly calculated by the decree holder at Rs. 70,298.97 and also as mentioned in the order of the Deputy Registrar dated 26th November, 1981.

7. The decree holder contested the aforesaid application and pleaded that the calculation was correct and that it was actually a sum of Rs. 70,298.97 which was due from the judgment debtors as on 26th November, 1981.

8. E.A. No. 14 82 is an application filed by the decree-holder under Order 21 Rule 66 of the Code for drawing of a proclamation for sale. After giving the particulars of the property to be sold, the decree-holder states that the amount due and recoverable from the judgment-debtors is Rs. 60,699.13 as on January, 4, 1982 as per calculations mentioned in Annexure 'D' with future interest at the rate of 71/2% p.a. from January 4, 1982 till payment. The aforesaid application is dated January 4, 1982. The approximate value of the property is mentioned as Rs. 4,00,000.

9. The aforesaid application was contested by the judgment-debtors. It is pleaded by them that as property No. 2, Park Avenue, Maharani Bagh, New Delhi was not mentioned in the preliminary or final decree, the same cannot be sold. The judgment debtors further state that the amount due from them was about Rs. 27,700 on the date of the application i.e. January '4, 1982. It is also stated that the value of the property is much more than Rs. 4,00,000.

10. The last application (E.A. No. 89/82) is under section 151 of the Code. The said application was filed by the judgment-debtors. It assails the calculations in respect of the decretal amount by the decree-holder. Along with the said application, the calculations of the decretal amount have been mentioned in Annexure 'A'. During the pendency of the main execution petition No. 132 of 1980, the judgment-debtors paid a sum of Rs. 30,000 by three Installments of Rs. 10,000 each on 16th December, 1981, 18th February, 1982 and 21st February 1982 respectively. The judgment-debtors want to appropriate the said amount of Rs. 30,000 towards the principal while the decree-holder has appropriated the said amount towards payment of interest and after liquidation the interest, the balance towards the principal. thereforee, the dispute is if the said amount is to be first of all appropriated towards interest and balance towards principal or the same is to be appropriated towards principal sum alone.

11. The decree-holder states that it had paid premium for getting the house in Maharani Bagh insured against fire and that it is entitled to add the said premium to the decretal amount. Further the decree holder claims a sum of Rs. 550 as fee of its counsel during the execution proceedings. The judgment debtors deny their liability to pay the aforesaid premium or fee paid to the counsel for the decree-holder.

12. It is apparent from the above that the main contest between the parties is in respect of calculation of the decretal amount. The first question for determination is if the fire insurance premium paid by the decree-holder can be recovered from the judgment-debtors. The second question not determination is if the amount of fee paid to the counsel for the decree-holder is recoverable from the judgment-debtors. The third question for determination is if the amount of Rs. 30,000 is wholly adjustable towards the principal amount.

13. There can be no manner of doubt that it is only the decretal amount which is recoverable from the judgment-debtors. The decretal amount was arrived at in the preliminary decree itself which was Rs. 55,209.67 along with interest. If and whatever fire insurance premium was included in the same is recoverable. But nothing can be recovered beyond that decree and, thereforee, any premium paid after the passing of the decree cannot recoverable in these execution proceedings. Such premium cannot be considered as cost of litigation also. thereforee, that amount has to be excluded.

14. Obviously the amount of the fee paid to the counsel for the decree-holder is not recoverable unless and until properly allowed by the court. In fact, the fee paid by the decree-holder to the counsel can form part of costs of the execution proceedings. That cost will be calculated when the money is actually received in court. Under these circumstances, the fee paid to counsel for the decree-holder should be excluded from calculation for the present.

15. The third question for determination is very important. It is to be seen as to what is the normal rule of appropriation of the amounts paid by a judgment-debtor to a decree-holder and whether such payments are to be appropriated towards the principal first and then towards interest and costs. In this respect there is a direct authority of Supreme Court reported as Meghraj and Ors. v. Mst. Bavabai and Ors., : [1970]1SCR523 . It is laid down that the normal rule is that in case of a debt due with interest, any payment made by the debtor is in the first instance to be applied towards satisfaction of interest and thereafter to the principal. However, a mortgager or a debtor can plead and prove an agreement between him and the mortgagee or creditor to the effect that the amount must be applied first towards principal and then towards interest. That means that the law is that first of all payment must be applied towards the liquidation of the costs and interest and then towards principal amount. It is only an agreement between the parties which can change such normal rule.

16. In the present case there was no question of agreement between the parties for changing the aforesaid normal rule. From the very start, the judgment debtor was insisting that the money should be applied towards principal amount. The decree-holder was refusing to do so. thereforee, the normal rule must have its application and the way of calculation of the decree holder is correct.

17. Then there is a contention of the judgment-debtors to the effect that as 2, Park Avenue, Maharani Bagh, New Delhi does not find mention in the preliminary or final decree, the same cannot be sold. However, it is admitted by the judgment-debtors (see statement of Rajiv Lochan, judgment-debtor, recorded on December 18, 1981 in this court) that the property now known as 2, Park Avenue, Maharani Bagh, New Delhi is the same which was known as D-10, Maharani Bagh, New Delhi previously and that the change has come about on account of the re-numbering of the properties by the Municipal Corporation of Delhi. That being so, the property 2, Park Avenue, Maharani Bagh, New Delhi is the one which was mortgaged. Changing the number, label or name of the property does not mean that a different property than the mortgaged one has come into existance. The property was and still remains the same, notwithstanding re-numbering. Hence, the said property can be sold in execution of the present decree.

18. Under these circumstances, I do not find any force in the objection petitions bearing E.As No. 250/81, and 89/82 except that the decree-holder is not entitled to add fire insurance premium and counsel fee towards decretal amount. thereforee, these execution position are dismissed except that the counsel fee and fire insurance premium shall be excluded from the decretal amount. As far, as E.A. 14/82 is concerned, the proclamation to be issued in respect of sale of the mortgaged property shall mention the number of the property as previously D-10, Maharani Bagh, New Delhi and now 2, Park Avenue, Maharani Bagh, New Delhi. It shall also further mention that according to the decree-holder, the value of the property is about Rs. 4,00,000 while according to the judgment-debtors, the value is much more. The exact amount shall be calculated by the Deputy Registrar having, regard to this judgment and up-to-date decretal amount be calculated before issuing the proclamation.

19. It may be mentioned that at the time of arguments it was stated by the counsel for the judgment-debtors that the value of the mortgaged property to be sold is much more as compared to the decretal amount and that, thereforee, it will be very unreasonable to sell the same. However, it has to be sold ultimately for liquidation of the decretal amount but having regard to the fact that it is very difficult to obtain any immovable property in Delhi and also to the fact that the value of such property is soaring very high, I am of the opinion that the judgment-debtors should be given some time for paying the decretal amount either in lump sum or by way of Installments. First of all, the decretal amount shall be calculated by the Deputy Registrar and the judgment-debtors shall be given a time of 3 months for paying the said amount including interest up to date. If the judgment-debtors do not pay the amount by that time, the property will have to be put to auction for which date for auction will be fixed by the Deputy Registrar.

List the matter before the Deputy Registrar for further proceedings for 12th October, 1982.


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