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Chhutan Lal Vs. the Punjab National Bank Ltd., Ajmer and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtRajasthan High Court
Decided On
Case NumberFirst Appeal Nos. 23 and 24 of 1964
Judge
Reported inAIR1972Raj159; 1971(4)WLN173
ActsCode of Civil Procedure (CPC) , 1908 - Sections 38 and 145 - Order 21, Rule 10 - Order 34, Rule 4; Transfer of Property Act, 1882 - Sections 58; Provincial Insolvency Act, 1920 - Sections 47
AppellantChhutan Lal
RespondentThe Punjab National Bank Ltd., Ajmer and ors.
Appellant Advocate P.C. Bhandari, Adv.
Respondent Advocate D.P. Gupta, Adv.
DispositionAppeal dismissed
Cases ReferredAmar Singh v. Gulab Chand
Excerpt:
.....procedure code - execution--judgment debtor cannot raise objection in execution that decree is a nullity as award was not registered. ; it is not open to the judgment-debtor to raise an objection in execution proceedings that the decree was invalid as the award on which it was based was not registered. ;(c) provincial insolvency act - section 47--secured creditor can execute decree against an insolvent. ; the punjab national bank ltd. is a secured creditor and under section 47 of the provincial insolvency act it can execute its decree despite the fact that bhag chand soni has become insolvent. - - the intention of the parties clearly was to hypothecate immovable properties by delivery of title deeds. the equally well-settled rule with regard to the power of the executing court to..........relying on the following two decisions the learned counsel for the appellant contended that the decree passed on the basis of an unregistered award was a nullity and could not be executed:--1. ataat husain v. mushtaq ali, air 1937 all 282.2. uttamchand motilalji v. wasudeo deoras, air 1946 nag 311. we however find that the consensus of judicial opinion is that a decree passed on an unregistered award is not a nullity. in this connection we may refer to the following decisions:--1. ham raj v. amarchand, air 1940 lab. 107.2. lakhmichand v. biharilal, air 1943 nag 165.3. saburdas mahasukhram v. gopalji nandas, air 1943 bom 283.4. lal behary chatterjee v. jagat jiban, (1939) 43 cal wn 602.5. hukam chand v. lorinda ram, air 1933 pesh 83.6. jani jayantjlal v. lakha mula, air 1954 sau 22.7-.....
Judgment:

Jagat Narayan, C.J.

1. The twoexecution first appeals can conveniently be disposed of by one judgment.

2. Maharaja Kisnangarh Mills Ltd. had dealings with Punjab National Bank Ltd. Money was advanced to the Mills by the Bank on the surety of one Bhagchand Soni. Title deeds of the property belonging to the firm Jawaharmal Gambhirmal of Ajmer of which Bhagchand Soni was the Karta were delivered to the Head Office of the Punjab National Bank Ltd. at Delhi between 15-11-54 and 27-11-54. These pertained to the properties situated at Ajmer, Kishangarh, Jaipur and Jodhpur. When the Maharaja Kishangarh Mills became indebted heavily the matter was referred to the arbitrators. One award was given on 12-2-58 for Rs. 94,070/-. A decree was passed on the basis of this award on 18-2-58 by the Senior Civil Judge, Ajmer. It was a mortgage decree. Another award was given on 8-6-58. It was for Rupees 2,81,724.72. A mortgage decree was passed on the basis of this award on 30-5-59.

3. The first decree for Rs. 94,070/-was put into execution on 4-2-61 for the recovery of Rs. 1,11,883.05. Bhagchand Soni was adjudged insolvent on 21-12-62 and a receiver of his estate was appointed and one Chhutan Lal was appointed receiver of his estate. He filed a number of objections which were overruled by the executing court. Chuttan Lal bas preferred execution first appeal No. 24/64 againstthat award. The first contention is that the decree which was passed was not executable as it was only a preliminary decree for mortgage. The decree is in the following terms:--

1. That the plaintiff is entitled to recover a sum of Rs. 94,070/- (rupees ninety four thousand and seventy only) from Messrs. Maharaja Kishangarh Mills Ltd. and defendant No. 2 Seth Bhagchand Soni. In the first instance, the company will be liable for the amount and failing realisation from it, for any reason whatsoever, the defendant No. 2 will be liable for the full amount.

2. The company (defendant No. 1) and defendant No. 2 subject to above for self and as Karta of the family will pay Rs. 7,500/- half yearly; the first instalment to be due on 1-8-1958.

3. The properties mortgaged covered by the title deeds as mentioned in the Schedules 1 and 2 attached to the agreement of reference and as per plans attached will remain mortgaged with the plaintiff as before as security for the aforesaid dues of the plaintiffs. The plans of the Jaipur properties were not prepared and handed over to the arbitrator.

4. In case of default in payment of two instalments, the plaintiff shall be entitled to realise its full amount forthwith by execution against personal properties of the company (defendant No. 1) and/or by sale of the mortgaged properties and/or from the personal properties of defendant No. 2.

5. The interest of the other coparceners of the family, both adults and minors in the mortgaged properties above will remain liable for the dues of the plaintiff.

6. The rate of future interest till realisation will be 6% per annum with half yearly rests.

4. From a perusal of the above decree we are of the opinion that it was executable at the stage at which the execution application was made. Bhagaband Soni did not pay any instalment in accordance with the terms of the decree and therefore the whole amount had fallen due and had become recoverable by the sale of the mortgaged properties. This contention has therefore no force.

5. The next contention is that Section 58(f) of the Transfer of Property Act which defines mortgage by deposit of title deeds was not applicable to the town of Delhi in November 1954 and therefore mortgage by deposit of title deeds was invalid. We find that the Transfer of Property Act was not applicable to Delhi in November, 1954. It was accordingly open to the parties to make an oral mortgage. The intention of the parties clearly was to hypothecate immovable properties by delivery of title deeds. A valid simple mortgage of these properties thus came into existence by the voluntary act of the par-ties. A decree for sale could therefore be passed on the basis of this transaction.

6. In this connection we may refer to a decision of this Court in Ramchander v. Jamna Shankar, ILR (1961) 11 Raj 76 = (AIR 1962 Raj 12). The second contention also has therefore no force.

7. The third contention is that the decree was nullity as it was passed on the basis of an unregistered award. The award was given in this case after the amendment of Section 17(2)(vi) of the Registration Act by Section 10 of the Transfer of Property (Amendment) Supplementary Act, 1929. It was therefore compulsorily registrable under Section 17 (1) (b). A decree was passed on the basis of the award because no objection was taken about it before the court which passed the decree. Relying on the following two decisions the learned counsel for the appellant contended that the decree passed on the basis of an unregistered award was a nullity and could not be executed:--

1. Ataat Husain v. Mushtaq Ali, AIR 1937 All 282.

2. Uttamchand Motilalji v. Wasudeo Deoras, AIR 1946 Nag 311.

We however find that the consensus of judicial opinion is that a decree passed on an unregistered award is not a nullity. In this connection we may refer to the following decisions:--

1. Ham Raj v. Amarchand, AIR 1940 Lab. 107.

2. Lakhmichand v. Biharilal, AIR 1943 Nag 165.

3. Saburdas Mahasukhram v. Gopalji Nandas, AIR 1943 Bom 283.

4. Lal Behary Chatterjee v. Jagat Jiban, (1939) 43 Cal WN 602.

5. Hukam Chand v. Lorinda Ram, AIR 1933 Pesh 83.

6. Jani Jayantjlal v. Lakha Mula, AIR 1954 Sau 22.

7- Moolchand v. Maganlal, AIR 1965 Madh Pra 75 (FB).

8. In the Saurashtra case, AIR 1954 Sau 22, Ataat Hussain v. Mushtaq Ali, AIR 1937 All 282 and Uttamcband Motilalji v. Wasudeo Deoras, AIR 1946 Nag 311 were noticed and were dissented from. The decision in AIR 1946 Nag 311 was given without noticing the earlier Bench decision of the same Court in AIR 1943 Nag 165. In AIR 1965 Madb Pra 75 (FB) the Full Bench dissented from AIR 1946 Nag 311 and agreed with AIR 1943 Nag 165.

9. In AIR 1943 Nag 165 the Division Bench expressed its view in the following words:--

'In our opinion, the same principle applies in respect of decrees consequent on an award as does in the case of all other decrees. The executing Court cannot gc behind it. It is true there are cases which hold that when the jurisdiction of the Court passing the decree is questioned, the executing court can consider the matter; alsowhen It is contended that the decree is a complete nullity; -- and as a matter of fact that was the contention here. But in our opinion a decree given on the basis of an unregistered award is no more a nullity than a decree obtained in an ordinary suit on an unregistered mortgage or sale deed which requires registration.'

In AIR 1965 Madh Pra 75 (FB) it was observed--

'A distinction must however be drawn between a decree which is a nullity and. decree which is not according to law in that the Court passing the decree ignored certain provisions of the law. The equally well-settled rule with regard to the power of the executing Court to question the legality or correctness or validity of a decree is that a decree may not be according to law, yet it is binding and conclusive between the parties until it is set aside either in appeal or in revision, and the executing Court has no jurisdiction to refuse to execute the decree on the ground that it is not according to law. See V. Ramaswami v. Kailasa Thevar, AIR 1951 SC 189; Jnanendra Moban v. Rabindra Nath, AIR 1933 PC 61 and Bhagsingh v. Govindram, AIR 1943 Nag 325. If a Court passing the decree had jurisdiction to pass it, then even if the decree is contrary to certain provisions of law, it would not be a nullity and a plea about the illegality of the decree cannot be entertained in execution proceedings. This matter has been put by Gajendragadkar J. (as he then was) in Harkishandas v. Gulabdas Kalyandas, AIR 1956 Bom 513, thus--

'In determining the jurisdiction of the executing Court to entertain pleas under Section 38, Civil P. C. it is always necessary to make a distinction between pleas that tend to show that the decree in question is a nullity and pleas that merely challenge the validity or the propriety of the decree on the ground that it is contrary to the provisions of law. If the plea is that the decree is a nullity and so cannot be executed it would be open to the executing Court to entertain the plea. On the other hand, if the plea is that the decree is contrary to law in the sense that in passing the said decree certain provisions of the law have been ignored or contravened that would not necessarily make the decree a nullity and allegations about the impropriety or the illegality of the decree cannot be entertained in execution proceedings.'

10. We are in respectful agreement with the view taken in the above Full Bench case and we hold that it is not open to the Judgment-debtor to raise an objection in execution proceedings that the decree was invalid as the award on which it was based was not registered.

11. The last contention on behalf of the appellant is that as Bhagchand Sonihas become insolvent the decree cannot be recovered by execution. This contention also has no force. The Punjab National Bank Ltd. is a secured creditor and under Section 47 of the Provincial Insolvency Act it can execute its decree despite the fact that Bhagchand Soni has become insolvent.

12. In the result we dismiss execution first appeal No. 24/64 with costs.

13. Execution First AppealNo. 23/64 relates to the execution of thedecree passed on the second award. Theaward was for Rs. 2,81,724.72. A sum ofRs. 1,54,719.82 was realised before Bhagchand Soni became insolvent. Against theexecution application by which this sumwas realised Bhagchand Soni did not raiseany objection. The receiver of his estateraised objections similar to the objectionsraised in the decree passed on the basisof the first award after he was appointedon 21-12-62. He was estopped from raising these objections by the principle of resjudicata. In this connection the followingdecisions may be referred to:--

1. Mohan Lal Goenka v. Benoy Kishna, AIR 1953 SC 65.

2. Amar Singh v. Gulab Chand, 1960 Raj LW 149 = (AIR 1960 Raj 280).

14. These objections were overruled by the executing court and he has preferred execution first appeal No. 23/64, against that award. He is barred by the principle of res judicata from taking these objections in subsequent execution applications. On merits also the objections have no force. Similar Objections taken against the execution of the decree passed on the basis of the first award have been dealt with above.

15. We accordingly dismiss execution first appeal No. 23/1964 with costs.


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