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Sugan Chand Vs. Dina Nath and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtRajasthan High Court
Decided On
Case NumberCivil Misc. Appeal No. 40 of 1979
Judge
Reported inAIR1980Raj121; 1979()WLN703
ActsTransfer of Property Act, (1882) - Sections 66; Code of Civil Procedure (CPC) , 1908 - Order 39, Rule 1
AppellantSugan Chand
RespondentDina Nath and ors.
Appellant Advocate N.N. Mathur, Adv.
Respondent Advocate Lekh Raj Mehta, Adv.
DispositionAppeal partly allowed
Excerpt:
civil procedure code - order 39 rule 1--injunction--machinery is a part of mortgaged property and it cannot be removed and sold by mortgager.;the machinery is attached to the earth and is thus a part of the immovable properly mortgaged with the mortgagee.;a mortgager is entitled to make a second mortgage or sell the equity of redemption and be cannot be restrained from doing that, but he cannot be allowed to remove a part of the mortgaged properly and sell it in the shape of moveable properly, so as to jeopardize the interests of the mortgagee in the properly mortgaged for payment of the mortgage debt. since the defendants have expressed their intention they want to remove the machinery and sell it, it is only proper that they should be restrained from doing that.;appeal allowed - - ..........does not demand that for securing the loan of rs. 75,000 the defendants should be restrained from selling property worth rs. 3,00,000. on these premises, he held that the balance of convenience lies in not allowing the machinery to be wasted in the manner alleged by the defendants. in the result, he dismissed the application and awarded costs to the defendants.5. learned counsel for the appellant has urged that the order passed by the lower court cannot be sustained in law inasmuch as the defendant-mortgagors cannot be permitted to remove the machinery and sell it when the machinery forms part of the mortgaged property. on the other hand, shri lekh raj mehta learned counsel for the defendant-respondents, has contended that the mortgagors cannot be restrained from selling the mortgaged.....
Judgment:

Lodha, C. J.

1. This is an appeal under Order 43, Rule 1 (r) of the Code of Civil procedure, from the order dated April 20, 1979, by the Additional District Judge, Sri Ganganagar, whereby the learned Judge dismissed the plaintiff's application under Order 39, Rule 1, C.P.C. in a suit for mortgage money by sale of the mortgaged property.

2. The plaintiff-appellant brought the suit against the defendant-respondents for Rs. 81,000 on the basis of a mortgage-deed dated October 23, 1975, whereby, in lieu of a loan of Rs. 75,000, the defendants had mortgaged Plot No. 6 measuring. 6300 sq. ft. situated in Industrial area near Ganganagar Sugar Mill, Sri Ganganagar, along with the building standing thereon and machinery fitted therein. There was a stipulation in the mortgage-deed that the mortgagors would redeem the mortgage within two years, failing which the mortgagees would be entitled to recover the mortgage money by sale of the mortgaged property. Since the mortgagors had failed to repay the amount, the mortgagees claimed Rs. 75,000 as principal and Rs. 6,000 as interest, total Rs. 81,000. The plaintiff also made an application that the defendants were intending to dispose of the mortgaged property with a view to defraud the creditors, and hence he prayed for issue of a temporary injunction against the defendants restraining them from selling the mortgaged property including the machinery.

3. The mortgagors admitted the execution of the mortgage-deed, but denied that they had received consideration for the same. Their plea was that the plaintiff had got the mortgage-deed executed by them on the assurance that he would, later on, pay the mortgage money, but, in fact, the plaintiff never paid the same. They also pleaded that there had been loss in their business and therefore they first tried to let out the factory, but the plaintiff did not allow them to do so and hence they now want to sell the machinery fitted in the factory though they have no intention to sell the plot or the building standing thereon.

4. The learned Additional District Judge held that the plaintiff had a prima facie case. But he further observed that as the machinery installed in the suit premises is worth Rs. 1,50,000 and the building standing on the plot had been assessed at Rs. 1,60,000 during the assessment year 1973 in connection with assessment of land and building tax, the value of the mortgaged property by far exceeded the suit amount and consequently, there was no justification for restraining the defendants from transferring the property for their benefit. Curiously enough, at this stage, he observed that there was no prima facie case in favour of the plaintiff. To fortify his view, he has further observed that equity does not demand that for securing the loan of Rs. 75,000 the defendants should be restrained from selling property worth Rs. 3,00,000. On these premises, he held that the balance of convenience lies in not allowing the machinery to be wasted in the manner alleged by the defendants. In the result, he dismissed the application and awarded costs to the defendants.

5. Learned counsel for the appellant has urged that the order passed by the lower court cannot be sustained in law inasmuch as the defendant-mortgagors cannot be permitted to remove the machinery and sell it when the machinery forms part of the mortgaged property. On the other hand, Shri Lekh Raj Mehta learned counsel for the defendant-respondents, has contended that the mortgagors cannot be restrained from selling the mortgaged property in a suit for mortgage money,

6. It is important to remember that in the present case the machinery is attached to the earth and is thus a part of the immoveable property mortgaged with the mortgagee. We are wholly unable to understand how the provisions of Section 66 of the Transfer of Property Act relied upon by Shri Mehta can be pressed into service in a case like this. Section 66 of the Transfer of Property Act provides that a mortgagor in possession of the mortgaged property is not liable to the mortgagee for allowing the property to deteriorate; but he must not commit any act which is destructive or permanently injurious thereto, if the security is insufficient or will be rendered insufficient by such act. Of course, it cannot be denied that a mortgagor is entitled to make a second mortgage or sell the equity of redemption and he cannot be restrained from doing that, but he cannot be allowed to remove a part of the mortgaged property and sell it in the shape of moveable property, so as to jeopardize the interests of the mortgagee in the property mortgaged for payment of the mortgage debt. Since the defendants have expressed their intention that they want to remove the machinery and sell it, it is only proper that they should be restrained from doing that. However, if they only want to make a second mortgage of the mortgaged property or sell the equity of redemption, they cannot be restrained from doing that. That, they have right to do in law.

7. Accordingly, we allow the appeal in part, and hereby restrain the defendants from removing the machinery or any part of the mortgaged property from the site or otherwise damaging it or reducing its value. As observed above, they will, of course, be at liberty to make any further mortgage or sell the equity of redemption, if they so choose. In the circumstances of the case, we leave the parties to bear their own costs throughout.


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