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Arunachala Velan Vs. Venkatarama Aiyar - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported in(1920)38MLJ93
AppellantArunachala Velan
RespondentVenkatarama Aiyar
Cases ReferredIn Gopal Panda v. Baikunta Mahapatra
Excerpt:
- - it is doubtful whether this view of the subordinate judge is well founded, in the face of the decree and having regard to the language of the document. 890 this was distinctly laid down. 19, and was accepted as good law in pirbu narain singh v......suit. rule 5, clause 2 speaks of the mortgaged properly being brought to sale. that means all the items mortgaged. the next clause 'or a sufficient part thereof' indicates that discretion is given only where it is possible to get full satisfaction out of a portion of the properties mortgaged. rule 6 directly makes it a condition precedent to the application that the net proceeds of ' such sale ', namely the sale of the entire hypo-theca, should be found insufficient to pay the amount due to the plaintiff. in jones on mortgages vol. ii, section 1228-b the rule is thus stated: 'the purpose of the foreclosure suit is to enforce the right of redemption and personal judgment in such a suit can only be awarded when the mortgaged premises will not produce the amount found to be collectable.'.....
Judgment:

Oldfield, J.

1. I concur with conclusion reached in the judgment, which my learned brother is about to deliver, Each case, as I understand him to hold, must be decided on its own merits; and it is sufficient here that appellant, who by his own choice has proceeded and obtained a decree against a portion only of the mortgaged property, has suggested no reason whatever for exempting the remainder. That is a sufficient ground of decision in the present case: and whilst I agree that special circumstances may conceivably justify the grant of a personal decree, before the whole property comprised in the mortgage has been exhausted, I do not feel called on to attempt any definition of those circumstances or any estimate of the degree of difficulty in proceeding against the remaining profits, which would entitle the mortgagee to other relief.

2. The appeal fails and is dismissed with costs.

Seshagiri Aiyar, J.

3. This appeal can be disposed of on a short point. The respondent executed a mortgage to the appellant in respect of six items of property. In the suit on the mortgage the appellant relinquished his claim to four items of property and obtained a decree for sale of only two of the six items. After selling the two items, he made an application for a personal decree under Order 34 Rule 6, Civil Procedure Code. The District Munsif granted the application, relying upon Sheo Prasad v. Behari Lal I.L.R (1902) A. 79 and Ghafur Hasan Khan v. Muhamad Kifayatullah Khan I.L.R (1905) a 19. The Subordinate Judge was of opinion that the mortgage contained no personal covenant to pay and dismissed the application. It is doubtful whether this view of the Subordinate Judge is well founded, in the face of the decree and having regard to the language of the document. But I think that his decision can be supported on the ground that as the appellant has not exhausted his remedies in respect of all the items of the mortgaged property he is not entitled to a personal decree. I accept the reservation stated by Sir John Woodroffe in Satish Ranjan Das v. Mercantile Bank of India Ltd. I.L.R (1917) C. 702 that the matter must be looked at rationally and that the personal remedy should be enforced only when there is a deficiency after the sale of all the mortgaged property available for sale. In other words, if the mortgagee does all that is reasonably possible to bring to sale the mortgaged properties, his action should not be scanned with undue severity. The principle is that the decree-holder should take steps to bring the entire mortgaged property that may be available for sale. Sanderson, C.J., says: 'that not less than the whole of the properties mentioned in the decree must be sold in order to comply with the provisions of the rules and with the terms of the decrees, that the question of sufficiency could not arise unless it was intended the whole should be sold, if necessary, to liquidate the amount secured by the mortgage.' The case before the Calcutta High Court was one in which there was a decree in respect of all the mortgaged properties. But the mortgagee claimed a personal decree after selling only some items in the decree. The principle of that decision will apply with equal force to a case where the mortgagee without any reason relinquishes his claim in respect of some of the properties mortgaged. In the earlier case in that court Ratan Ranjan Chakravarthi v. Indra Narain Dass I.L.R (1906) C. 890 this was distinctly laid down. In that case substantial portions of the mortgaged property were not included in the decree and the application under Section 90 of the Transfer of Property Act was made after selling all the properties comprised in the decree. The learned Judges held that the mortgagee was not entitled to this relief. In the Madras High Court there is no direct decision. The observations in Shanmugam Pillai v. Ramanathan Chetty : (1894)4MLJ91 point to the same conclusion. In that case one of the properties in respect of which decree was obtained was claimed by the brother of the judgment debtor. He was not a party to the decree. He had also instituted a suit for partition. In that suit, the property in dispute fell to the share of the brother. Thereupon the mortgagee without taking steps to sell that property, asked for a personal decree against his judgment-debtor. Muthusami Aiyar, J., held that he was entitled to such a decree. The learned Judge says: 'The respondent was therefore justified in not proceeding against Tyagaraja Pillai's share, lest by so doing he may run the risk of involving himself in litigation which may entail on him expense.' This dictum shows that it is not the duty of a mortgagee to put himself to unnecessary expense and to involve himself in fruitless litigation before seeking for a personal decree. But it is clear from this case and from the Calcutta cases that it is not open to a mortgagee to give up his rights unreasonably against portions of the mortgaged property, with a view of making the judgment-debtor personally liable. The language of Rules 5 and 6 of Order 34, Civil Procedure Code, suggests that such a procedure is not what the legislature contemplated. prima facie the mortgagee must include all the properties in the suit. Rule 5, Clause 2 speaks of the mortgaged properly being brought to sale. That means all the items mortgaged. The next clause 'or a sufficient part thereof' indicates that discretion is given only where it is possible to get full satisfaction out of a portion of the properties mortgaged. Rule 6 directly makes it a condition precedent to the application that the net proceeds of ' such sale ', namely the sale of the entire hypo-theca, should be found insufficient to pay the amount due to the plaintiff. In Jones on Mortgages Vol. II, Section 1228-B the rule is thus stated: 'The purpose of the foreclosure suit is to enforce the right of redemption and personal judgment in such a suit can only be awarded when the mortgaged premises will not produce the amount found to be collectable.' The Allahabad High Court has consistently taken a different view. In Sheo Prasad v. Behari Lal I.L.R (1902) A. 79 it was stated that there is nothing to prevent a mortgagee relinquishing his claim against a portion of the mortgaged property and then obtaining a decree under Section 90 of the Transfer of Property Act. With all deference, it seems to me that the meaning put upon the words ' of any such sale' is too narrow. The same view has been taken in Ghafur Hasan Khan v. Mohamad Kifayatullah Khan I.L.R (l905) A. 19, and was accepted as good law in Pirbu Narain Singh v. Amir Singh I.L.R (1907) A. 369. In Gopal Panda v. Baikunta Mahapatra (1917) 2 Pat. L.J. 538 the learned Judges say that if the mortgagee is not prejudiced by the giving up of certain items of property a personal decree can be passed. It is difficult to say how this prejudice can be ascertained. Prima facie when a personal decree is asked without recourse to the property mortgaged it would ordinarily prejudice the judgment-debtor.

4. I am free to confess that a great deal can be said for either view of the question. But the reason of the rule seems to be in favour of the Calcutta view and as a learned Judge of this Court had very early adopted the same view, I prefer to follow those decisions and to hold that the mortgagee is not entitled to a personal decree in the present case. I would therefore dismiss the appeal with costs.


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