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Vala Punja and ors. Vs. Puna Mavji and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Commercial
CourtGujarat High Court
Decided On
Case NumberCivil Revn. Appln. No. 196 of 1960
Judge
Reported inAIR1963Guj112; (1962)GLR1021
ActsDebt Law; Bombay Agricultural Debtors' Relief Act, 1947 - Sections 2(4), 4, 17, 17(1) and 43; Transfer of Property Act, 1882 - Sections 67 and 68(1); Limitation Act, 1908 - Schedule - Articles 132 and 147
AppellantVala Punja and ors.
RespondentPuna Mavji and anr.
Appellant Advocate M.P. Thakkar, Adv.
Respondent Advocate K.M. Chhaya, Adv. for; J.R. Nanavaty, Adv.
DispositionRevision allowed
Cases ReferredChattappa v. Dastgirsaneb
Excerpt:
commercial - realisation of debt - debt law, sections 2 (4), 4, 17, 17 (1) and 43 of bombay agricultural debtors' relief act, 1947 sections 67 and 68 (1) of transfer of property act, 1882 and articles 132 and 17 of schedule to limitation act, 1908 - appellant passed conditional sale in favour of respondents - appellant contended that transaction related to mortgage and so possession continued with them - civil judge concluded that sale by appellant absolute sale and not in nature of mortgage - article 147 not applicable to suit for foreclosure by mortgagee by conditional sale - article 132 applied which provides for period of 12 years time limit - debt time barred on personal covenant and also on enforcement by realisation of security. - - 11 as well as section no. after hearing of.....orderr.b. mehta, j.1. this is a civil revision application against an order passed by the learned extra assistant judge, mehsana, sitting at amreti, by which order the learned extra assistant judge set aside an order passed by the learned civil judge, jr. dn. amreli, by which the learned civil judge had dismissed an application made by a debtor under section 4 or the bombay agricultural debtors relief act, 1947, holding against the debtor that the transaction which was the subject-matter of the application was not in the nature of a mortgage. 2. the facts leading to this revision application are this way. the applicant-debtor's case was that he had passed a conditional sale of his land section no. 11, admeasuring 20 blghas and 3 vasas for a sum of rs. 500/-on 11th november 1929, in favour.....
Judgment:
ORDER

R.B. Mehta, J.

1. This is a civil revision application against an order passed by the learned Extra Assistant judge, Mehsana, sitting at Amreti, by which order the learned Extra Assistant Judge set aside an order passed by the learned Civil Judge, Jr. Dn. Amreli, by which the learned Civil Judge had dismissed an application made by a debtor under Section 4 or the Bombay Agricultural Debtors Relief Act, 1947, holding against the debtor that the transaction which was the subject-matter of the application was not in the nature of a mortgage.

2. The facts leading to this revision application are this way. The applicant-debtor's case was that he had passed a conditional sale of his land Section No. 11, admeasuring 20 blghas and 3 vasas for a sum of Rs. 500/-on 11th November 1929, In favour of Vala Puna and Nanji Narshi, who were opponents Nos. 1 and 2. The applicant's allegation was that the real nature of this transaction was that of a mortgage and that these respondents had passed an agreement to reconvey the said land within 3 years of the date of the transaction on repayment of the moneys advanced. The possession of the land, however, continued with the applicant. The applicant further alleged that the two respondents did not accept the loan money when offered and recovered possession forcibly from him. After presenting this application, it came to light that the lana in dispute was partly divided between the respondent No. 2 and his brother one Parbat Narshi. Consequently, an application was made by the applicant to join Parbat Narshi as the third respondent. The three respondents then filed a written statement in which they took up the contention that they had not purchased survey No. 11 from the applicant at all but that they had purchased it along with another piot from one Jivraj Khoda and that there was no agreement to treat the transaction as a mortgage. They also denied that the applicant had come to pay money and that they had refused to accept and that they had taken possession from the applicant by force. After tiffs written statement was filed, the applicant asked for leave to join Jivraj Khoda. Jivraj Khoda was joined as opponent No. 4 on 30th October 1952. Jivraj Khoda in his written statement contended that the applicant had given to him Section No. 11 as well as Section No. 67 by a conditional sale for Rs. 400/- on Chaitra Sud 2, S. Y. 1983 (April 4, 1927) and that at his (the applicant's) instance both these survey numbers were later conveyed by him (Jivraj Khoda to vala Puna and Nanji Narshi, opponents Nos. 1 and 2, by a sale deed, Ex. 74, for Rs. 800/- in S. V. 1984 (December 6, 1927). He further alleged that the transaction of sale (Ex. 74). entered into with these two opponents was in the nature of a mortgage and that the opponents (Nos. 1 and 2) had agreed (Ex. 50) on the same day i.e. December 6, 1927, to reconvey the lands within 5 years on repayment of their money; that thereafter Section No. 67 was repay to Jivraj Khoda for Rs. 500/- and Section No. 11 only remained with opponents Vala Puna and Nanji Narshi. After this written statement of Jivraj Khoda was filed, the applicant gave an application for amendment of his original application, by which the transaction, which was alleged to be one in the nature of a mortgage, was substituted to be one of conditional sale for Rs. 800/-, dated 6th December 1927 instead of the one for Rs. 500/-, dated 11th November 1929 as stated earlier. After hearing of the preliminary issues, the learned Civil Judge came to the conclusion that the sale by the applicant first to Jivraj Khoda, as well as the sale by Jivraj Khoda to the opponents Vala Puna and Nanji Narshi were both absolute sales and not transactions in the nature of a mortgage as alleged by the applicant. Under the circumstances, the learned Civil Judge dismissed the application Of the debtor-applicant.

3. Against this order of dismissal, the applicant-debtor preferred an appeal to the learned Extra Assistant Judge, Mehsana, who held that the said first transaction between the applicant Puna Navji and Jivraj Khoda, dated 4th April 1927 was in the nature of a mortgage, the learned Extra Assistant Judge further held trot the said second transaction of sale between Jivraj Khoda and the opponents Vala Puna and Nanji Narshi, dated 6th December 1927 was also in the nature of a mortgage. The learned Extra Assistant Judge also held that the said conveyance by Jivraj Khoda to Vala Puna and Nanji Narshi was at the Instance of the applicant Puna Navji. As the learned Extra Assistant Judge came to the conclusion that these transactions were in the nature of a mortgage, he passed an order remanding the case to the trial Court for taking accounts of the mortgage transaction of 6th December 1927 and to pass the requisite award for Section No. 11 in favour of the applicant and. proper orders for the delivery of the possession of Section No. 11. It is against this order of the learned Extra Assistant judge that the present revision application is filed.

4. It may be stated that the learned Extra Assistant Judge was of the view that it was due to a mistake on the part of the applicant that in his original application he referred only to the second sale transaction and that too as one of 11th November 1929 between Jivraj Khoda on the one hand and Vala Puna and Nanji Narshi on the other. The learned Extra Assistant Judge found that the applicant had passed a deed of conditional sale in favour of Jivraj Khoda for Rs. 400/- on 4th April 1927, for Section Nos. 11 and 67 and that there was an agreement between the applicant and Jivraj Khoda that Jivraj Khoda was to reconvey the land when the dues of Jivraj were paid on. It was further found by the learned Extra Assistant Judge that on 6th December 1927, Jivraj Khoda passed a sale-deed of both the said plots to opponents Vala Puna and Nanji Narshi for Rs. 800/-. On that very day i.e., on 6th December 1927, the opponents Vala Puna and Nanji Narshi passed an agreement, Ex. 50, in favour of the applicant that they would reconvey those plots to him (the applicant) if their dues were paid off with 12%p.a. Interest within 5 years from that date. It is stated in the agreement, Ex. 50, that Jivraj Khoda had passed a sale-deed to these opponents for Rs. 800/- at the instance of the applicant. Both these lands were in possession of the applicant and remained in his possession even after the execution of the sale-deed in favour of these opponents. It appears that thereafter on 11th November 1929, Section No. 67 was sold out to Jivraj Khoda again for Rs. 500/- at the instance of the applicant by the opponents Vala Puna and Nanji Narshi. That perhaps extinguished the applicant's debt to Jivraj Khoda. On that very day i.e. 11th November 1929, the opponents took a writing Ex. 73, for Rs. 500/-, whereby the applicant agreed to pay that amount with 12% interest to the opponents. That perhaps was in lieu of the new creditors' conveying Section No. 67 to Jivraj Khoda. In other words, after the execution of Ex. 73, the position was that the sale deed in favour of the opponents was left only in regard to Section No. 11 and the amount which remained to be paid in regard to the transaction of conditional sale had been reduced from Rs. 800/- to Rs. 300/-. Further, however, there was a Khata for Rs. 500/- created in favour of the two opponents by the applicant (as mentioned above). In this state of Indebtedness of the applicant, on the same day i.e. l1th November 1929, by Ex. 52, he agreed to repay Rs. 300/-, which remained due from the original land account and further Rs. 5007- of the Khata Account, within three years from the said date with interest there on at 12% p.a.

5. The applicant did not repay the amounts advanced to him i.e. the above amounts of Rs. 300/- and Rs. 500/- within the stipulated period of 3 years from the date of the execution of Ex. 52, dated 11th November 1929. As a result, on 18th March 1933, the possession of the land was taken by the applicant from the opponents and mutation entry was made in the names of the opponents Vala Puna and Nanji Narshi by consent between the parties. It was really after this mutation entry that Nanji Narshi had divided his portion of survey No. 11 between him and his brother, the third respondent. From the start of these series of transactions till the time that this mutation entry was made, the applicant was tilling the land as a tenant-at-will of the purchasers. After this mutation entry of 1933 was made and the possession was handed over by the applicant to the respondents In 1933, for the first time.In 1950, the present application for the adjustment of the applicants' debts was made by him. The defence of the opponents was that the transaction of 4th April 1927 was an outright sale from the applicant to Jivraj Khoda and further that the transaction of 6th December 1927 was again an outright Sale from Jivraj Khoda to them; and that the opponents had no connection whatsoever with the applicant. The further defence of the opponents was that the sale of 5th December 1927 by Jivraj Khoda to them was an absolute sale and not a mortgage at all and further that even it it was a mortgage by conditional sale, the 3 years' time for repayment had expired and that the conditional sale had become an absolute sale and that no mortgage in any event survived thereafter. It was further contended tit the opponents that in any event by the mutation entry of 1933, there was an arrangement between the parties, by which the debt was considered to be extinguished and in lien thereof possession was handed over by the applicant to the opponents and a mutation entry was made and that, therefore, in any event on this ground also no mortigage subsisted thereafter.

6. As I have stated earlier, the learned Extra Assistant Judge came to the conclusion that the first sale of 4th April 1927 in favour of Jivraj Khoda for Rs. 400/-was also a conditional sale in the nature of a mortgage and the second sale by Jivraj Khoda under Ex. 74 of 6th December 1929, in favour of the opponents was also a conditional sate In the nature of a mortgage and not an absolute sale. The learned Extra Assistant Judge further held that by merely non-payment of the money within the period of 3 years stipulated in November 1929, the conditional sale did not automatically become an absolute sale. In other words, the learned Judge held that the mortgage was not extinguished in this manner by efflux of time by non-payment. The learned Judge further rela that the possession which was handed over by the applicant to the respondents was not by reason of any settlement between the parties; but that as ha could not pay the dues of the opponents, the possession was delivered by him to his creditors as creditors, and not extinguishing the mortgage transaction itself.

13. Upto now it has been assumed that the transaction of 6th December 1927 was in the nature of a mortgage and that the mortgage was by conditional sale. Mr. Thakkar for the petitioner next contended that at the dale of the application, there was no debt of the debtor, which was due from the debtor and payable by the debtor and that, therefore, it was not competent to the applicant to make an application under Section 4 of the B, A. D. R, Act, 1947, for the adjustment of his debts. This argument was formulated in this way. That the time to recover monies due under the personal covenant under the agreement of 11th November 1929 had expired and consequently the recovery of the mortgage monies due under the personal covenant had become time-barred when the debt adjustment application was presented, in 1950, that as this was a mortgage by conditional sale, the only remedy (apart from the personal covenant) which was open to the mortgagee was one of foreclosure and that this remedy by way of foreclosure was also barred. Mr. Thakkar contended that such a suit for foreclosure would he governed by Article 132 of the Limitation Act, under which Article 12 years' period is available for the enforcement of the security from the time that the monies became due and payable. Accordingly, Mr. Thakkar contended that when the present application was made in 1950, a suit for foreclosure by the creditor was also time-barred. Mr. Thakkar further contended that both the remedies (1) for recovering the debt under the personal covenant and (2) by enforcing security were time-barred. In the circumstances, it was contended that there was no debt due and payable by the debtor and that, therefore, no application for adjustment of such a debt could be made under Section 4 of the Bombay Agricultural Debtors Relief Act. 1947. Now, Section 4(1) of the Act provides for making at application by the debtor as provided for in the said subsection for the adjustment of the debtor's debts. 'Debt' has been defined by Section 2(4) as follows:--

''debt' means any liability In cash or kind, whether secured or unsecured due from a debtor whether payable under a decree or order of any Civil Court or otherwise and includes mortgage money the payment of which is secured by the usufructuary mortgage of m-moveable property but does not include arrears of wages payable in respect of agricultural or manual labour;'

This definition shows that 'debt' means a liability which might be either secured or unsecured and further that it must be due from a debtor whether payable under a decree or otherwise. In other words, the debt must be due. Now it is obvious that a debt which is time-barred cannot be said to be a debt which is due, for the word 'due' connotes the concept of payability, if a creditor by reason of the law of limitation is not in a position to enforce the liability due from a debtor, then it would be difficult to say that any liability of such a debt is due and payable. This view of the definition of debt in the said Act was taken by Chief justice Chagla in Khushaichand Mohanlat v. Dada Bhika, 56 Bom LR 571.the learned Chief Justice observes at page 573 as follows--

'.... what the debt adjustment Court has got to consider is whether on the material date the debt was subsisting or was time-barred, x x x x x But the real question is whether on the material date, the debt was barred by limitation or not.'

At the end of the Judgment at page 575, the learned Chief Justice observes as follows:--

'Therefore, in my opinion, the Courts below were right In the view that they took that the debt on which the creditors relied was time-barred and therefore no application in respect of that debt could be maintained by him under the Bombay Agricultural Debtors Relief Act. It Is pertinent to observe that under Section 4 of the Act an application for adjustment of a debt can be made either by a debtor or by his creditor and the definition of the debt is the same whether the application is made by the creditor or the debtor. Therefore, there can be no doubt that for a 'debt' to fall within Section 4 of the Act, it must ! be a debt, which, in the words of the learned Chief justice 'Chagla, could be realised by the creditor. Now, in this case, it is not disputed, and In fact it cannot be disputed, that when the application was made under Section 4 of the said Act, the debt on the personal covenant was time-barred. Therefore, no application could have been made under Section 4 for the recovery of this debt on a personal covenant. The question, therefore, that remains to be considered is whether in this case the debt could be realised by the creditor by enforcement ,of his security. The answer on this question must depend again on the question whether at the time when the application under Section 4 was made was there any remedy open to the creditor-mortgagee to recover the debt by the enforcement of the security. Now, there can be no doubt that the only remedy available to a mortgagee by conditional sale, as it is in this case, for the enforcement of his security Is by foreclosure. Under Section 67 of the Transfer of Property Act, a mortgagee by conditional sale can realise his security only by a suit for foreclosure. Mulla in his Transfer of Property Act, 4th Ecltion, at pages 433-434 states as follows:-- 'In a mortgage by conditional sale, the mortgage works itself out into a sale or the conditional sale becomes absolute. The mortgagee is therefore not entitled under this section to an order for sale but his remedy Is tore-closure.'

In Mulla's Civil Procedure Code, 12th Edition at page 1091 It is again stated this way:--

'Under the Transfer of Property Amending Act, 1929, the remedy by way of foreclosure Is allowed only (1) in the case of a mortgage by conditional sale (2) as anomalous mortgage where there is an express stipulation in that behalf.'

It seems therefore to be clear that the remedy of a mortgagee by conditional sale to realise his security is any by instituting a suit for foreclosure. Now, Article 147 of that Limitation Act prescribes a limitation period of 60 years for a suit by a mortgagee for foreclosure or sale from the time when the money secured by the mortgage becames due. But It has been held by the Privy Council that that article was limited in its application only to one class of mortgage i.e. mortgages in the English form. In other words that article is not applicable to a suit for fore-closure by a mortgagee by conditional sale (vide Vasudevz v. v. Srinivasa, ILR 30 Mad 426 (P. C.).

14. U. N. Mitra, in his book on 'Limitation and prescription, 6th Edition, Vol. Il, at page 1797, says as follows:

'It will be seen, therefore, that this article (Article 147) is not left without scope for operation at all, except in cases of English mortgages not governed by the present Transfer of Property Act as in the territories to which the Act has not been applied or extended.'

For the present purpose it is enough to say that Article 147 is not applicable to a suit for foreclosure by a mortgagee by conditional sale and the article that is held to be applicable is Article 132 of the Limitation Act, which gives a period of 12 years, in the present case, it is (sic) contended that the remedy by way of foreclosure is also barred to the creditor and that It was not open to the oreditor to realise his debt even by enforcement of the security at the time when the application under Section 4 was made by the debtor. Therefore, the debt was time-barred both on the personal covenant as well as its enforcement by realisation of the security was concerned if, therefore, the debt was time-barred in both these ways, then ac(sic) ing to the decision, which I have cited earlier, of the learn-ed Chief Justice Chagla in 56 Bom LR 571 no application in respect of such a debt could be maintained by the debtor under the Bombay Agricultural Debtors Reliaf Act

15. Mr. Chhaya has strenuously urged That for the debt to be due under the said Act, it Is enough if (sic) debt exists and Mr. Chhaya said that the debt existed so long as the debtor could file a suit for redemption, of course, within the period of limitation, which is 60 years Mr. Chhaya said that the debt rests on the property which is the subject-matter of the security itself and so long as the debtor was able to redeem the mortgage, it could not be said that the debt did not exist. 1 am unable to accept this argument for the purpose of the definition of the debt as given in the said Act, for what the Act says is that the debt must be due and payable. It is beyond doubt that if it was a debt on 3 personal covenant(sic) could not be a debt within the definition of the said Act, on the ground that the same was time-tarred. I am unable to see what distinction on principle can be made on this particular point between a debt on a (sic) covenant and a debt which could be realised fry a security for if a simple debt is not a debt due if it is time-barred there is no cogent reason why should a secured debt (sic) be said to be not due, if the secured debt also (sic) (sic) be realised by the creditor by reason of the tar (sic) limitation. It is true that the remedy by way of redemption is there but that remedy depends on the sweet (sic) and volition of the debtor himself. If he chooses (sic) redeem, he may; If he does not, he may net. That (sic) not help the creditor. But if the creditor's remedy is time-barred, he cannot compel the debtor to redeem, in other words, the creditor in this case is not able in realise his security. In my view, there is, therefore, considerable force in the argument of Mr. Thakkar that the debt in the present case is not due and payable and that, therefore, no application could be made under Section 4 of the said Act. Mr. Chhaya said that this construction would, defeat the purpose of the Act itself, but the remedy in that caw is not by giving an interpretation which is not warranted by the language of the statute. The remedy, it at all the statute was defective, would lie with the legislature. A reference may be made to the definition of 'debt' which has been quoted earlier, where 'debt' includes mortgage money, payment of which is secured by usufructuary mortgage of Immovable property. now, in case of an ordinary usufructuary mortgage, no suit can tie for recovery of money, nor for sale and nor for fore-closure; yet it cannot be denied that in the case of a usufructuary mortgage there is a 'debt' in existence and me manner of its repayment is ordinarily by the appropriation of the usufruct of the subject-matter of the security by the creditor. But the legislature, to include such a debt, has purposely included in the definition of 'debt' the debt under a usufructuary mortgage by appropriate language, viz., 'mortgage money, the payment of which is secured by the usufructuary mortgage.' Therefore, in a case where it could not properly be said that a debt is due and payable, the Legislature where they desired to include another category of debts, have done so specifically. But apart, from this discussion, there is little doubt in my mind that a secured debt is not due from the debtor if the creditor cannot realise his debt by enforcing his security. Mr. Chhaya said that It would work a hardship on the debtor. I do not think that it Is so, for it is open to the debtor to redeem under the general law of Mortgage. The only thing is that in such circumstances where the. debt is time-barred, no application could be made under the Bombay Agricultural Debtors Relief Act.

16. In this connection, reference may also be made to a decision of my learned brother Mr. Justice Miabhoy in Manubhai Mahijibhai Patel v. Trikamlal Laxmidas, 60 Bom LR 1092: (AIR 1960 Bom 247) where it was held that it was not open to an assignee or a transferee of an equity of redemption to make an application under Section 4 on the ground that the debt was not a personal debt of the assignee or the transferee. The position that arises from this decision of Mr. Justice Miabhoy may be stated this way:--

17. A mortgages his property X by a simple mortgage in favour of B. After the date of the mortgage, A sells the property X to C. Now it will be open to be to enforce his security against the property in the lianas of C. C has become the owner of the property and yet that property will be liable to be sold in a mortgagee's suit for sale. In other words, even though C's property is liable to be sold in enforcement of the mortgage created by C's predecessor A, yet under the decision of Mr. Justice Miabhoy, it will not be open to C to make an application under Section 4 of the Bombay Agricultural Debtors Relief Act. C's property, is liable but C is not liable personally. Even though C's. properly is liable, C , cannot make an application under Section 4 of the Act for the adjustment of the debt.

18. Now the present case does not even go so far in the present case it is only sufficient to say that the personal remedy Is time-barred and the remedy to enforce the security, is also time-barred. It is not necessary to go to the length of saying in this case that where there is the only remedy of enforcing the debt by realisation of security, it would not be a debt under Section 4 of the B.A.D.R. Act. But the decision of Mr. Justice Miabhoy does, at any rate, reinforce the view that where the only available remedy to recover the debt is against the property and if that remedy is time-barred, there is, at least in such a case, no debt due and payable by the debtor. Now, in the present case, as the mortgagees remedy against the security is also time-barred, there is no debt due, for which an application for its adjustment can be made.

19. Mr. Chhaya however referred me to Section 68 of the Transfer of Property Act and contended that it was open to the mortgagee at any time during the subsistence of the mortgage to sue for the mortgage money even apart from any personal covenant, Mr. Chhaya particularly relied on Clauses (b) and (c) of Section 68(1) in supoprt of his contention. It is necessary to quote Section 68(1) here, which reads as follows;

'68(1) The mortgagee has a right to sue for the mortgage-money in the following cases and no others, namely:--

(a) where the mortgagor binds himself to repay thesame,

(b) where by any cause other than the wrongful act or default of the mortgagor or mortgagee, the mortgagee property is wholly or partially destroyed or the security is rendered insufficient within the meaning of Section 66, and the mortgagee has given the mortgagor a reasonable opportunity of providing further security enough, to render the whole security sufficient, and the mortgagor has failed to do so,

(c) where the mortgagee is deprived of the whole or part of his security by or in consequence of the wrongful act or default of the mortgagor. xxxxxxxxxx'

Mr. Chhaya contended that if under Clause (b) the security is destroyed or rendered insufficient and the mortgagee has not either substituted or replenished the security, as the case may be, the mortgagee would have a right to sue personally. So also under Clause (c), it was argued by Mr. Chhaya, that if the mortgagee was deprived of his security by any wrongful act or default of the mortgagor, the mortgagee could again sue for the mortgage money. In other words; it was the contention of Mr. Chhaya that the debt was due tilt such time as the mortgage was redeemed. The short answer to this argument is that the suit for the mortgage money under Clauses (b) and (c) is not a suit to enforce a personal covenant either express or implied in the mortgage. But it is a suit in the nature of a suit for compensation when the mortgagee is deprived of his security. In other words, a suit under Clauses (b) and (c) is not a suit to recover the mort gage-debt on the basis that the debt is due but it is a suit, as stated earlier, for compensation where the mortgagee is deprived of his security. This argument, therefore, based on the provisions of Section 68, Sub-section (1) Clauses (b) and (c) is of no assistance to Mr. Chhaya.

20. H is necessary before parting with this subject to refer to some of the decisions cited by Mr. Chhaya in support of his argument.

21. Mr. Chhaya referred to a decision in the case of Appasami Thevan v. Virappa Thevan, 1LR 29 Mad 362 The head-note thereof reads as follows:

'Where the owner of properties after having mortgaged them under an unregistered deed, sells them for valuable consideration by registered deed to one who has no notice of the mortgage, the mortgagee is deprived or his security by the wrongful act of his mortgagor and is entitled to sue the mortgagor for his money under Section 68(b) of the Transfer of Property Act. Such right exists independently of, and is not taken away by, any covenant to repay contained in the mortgage-deed. 'The purchaser under a registered sale-deed has no priority over a prior unregistered mortgage of which he has notice.'

This case has no relevance to the instant case, for, as I have already stated, that such a right, exists independently and is not taken away by any covenant to repay contained in the mortgage. Further it was observed by the learned Chief Justice Sir Arnold White at page 364 that it was not suggested that the plaintiffs' tights under paragraph (b) of the Section were, barred by limitation, so that we do not know whether the right to realise the mortgage amount by sale of the property was barred or not, as it is in this case. In either view, this case cannot help Mr. Chhaya.

22. Next Mr. Chhaya referred to a decision in the case of Unichaman v. Ahmed Kutti Kayi, ILR 21 Mad 242 where the head-note reads as follows:

'The defendants demised certain land to the plaintiff under a registered kanom deed in 1888. The plaintiff was evicted in February 1893. He now sued in 1896 to recover the amount of the Kanom.

Held, that the period of limitation applicable to the suit was six years and that the suit was not barred by limitation.'

The only question that arose in that case was whether the liability under Section 68 of the Transfer of Property Act in this particular case was time-barred or not this case equally has no relevance to the case with which I am dealing.

23. Next Mr. Chhaya referred to a decision in the case of Maung Yan Kwin v. Maung Poka, AIR 19Z5 Kang 223, where it was held that when a mortgagee is deprived of the security under a decree of a Civil Court, he is entitled to proceed personally against the mortgagor and the time for such a suit runs from the date the mortgagee was evicted from the land. This case also obviously cannot help Mr. Chhaya, for the cause of action, as I have stated earlier, is entirely different from the one to recover money due under the personal covenant under a mortgage-deed.

24. I should also refer to a further point raised by Mr. Chhaya in this connection. Mr. Chhaya said that under Section 17 of the B. A. D. R. Act, the Court has to decide preliminary issues in connection with an application under Section 4 and these preliminary issues are (a) whether the person for the adjustment of whose debts the application has been made Is a debtor; and (b) whether the total amount of debts due from such person on the date of the application exceeds Rs. 15,000/-. Sub-section (2) of Section. 17 provides that if the Court finds that such a person is not a debtor or that the total amount of debts due from such person on the date of the application is more than Rs. 15,000/-, the Court shall dismiss the application forthwith. In other words, it was Mr. Chhaya's contention that when in this case, the Court found on the preliminary issue, that the applicant was a debtor the Court had, in fact, adjudicated upon the question that the mortgage debt was a debt under Section 4. Mr. Chhaya's further contention was that under Section 43, an aggrieved party had a right of appeal from such an order and that no appeal having been preferred by the aggrieved party, it was not open to him to raise this question after the final decision of the application. I do not think that there is any substance in this argument, for even though there was a right of appeal under Section 43, from the mere tact that he had not exercised that tight, it does not follow that he is deprived of taking that point after the final decision of the trial Court. Reference may be made in this connection to Chattappa v. Dastgirsaneb, 53 Bom LR 793 : (AIR 1952 Bom 80), where it was held that mere failure to appeal from an order under Section 17(1), does not prevent a party from challenging its correctness when an appeal is filed against the final award.

25. I may also refer to another argument of Mr. Chhaya Mr. Chhaya said that where a debtor is (sic) to pay a certain amount by instalments and where the debtor makes an application for the adjustment of his debts before the instalments are due, it has been hem by the Courts that even though the Instalments are not due. and recoverable, they constitute a debt within the definition of term ''debt' under the B. A. .D. R. Act, that the word 'debt' should, therefore, be given a wider connotation. This is entirely a different position from the one with which I am dealing. The case which Mr. Chhaya postulates is a case where the liability is there. The liability is also enforceable, only the time for enforcement has not yet arrived. It is not a case where the liability is for all times unenforceable. I do not think, therefore, that this argument of Mr. Chhaya is of any assistance to him in this case.

26. In view of the above discussion, though Mr. Thakkar fails on the other points raised by him, he succeeds on the last point raised by him, viz., that the debt in question is not a debt due and payable on the ground that it is time-barred both on the personal covenant as well as for the realisation of the security. Under the circumstances, there is no debt due for which an application could be made under Section 4 of the B. A. D. R. Act.

27. In the result, the revision application will beallowed. The order of the learned Extra Assistant judgeshall be set aside and that of the trial Court shall berestored though on different grounds. Rule absolute writcosts.


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