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V. Rajammal Vs. P. Jesudhas and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberC.R.P. Nos. 3151 and 3152 of 1975
Judge
Reported inAIR1977Mad53
ActsCode of Civil Procedure (CPC), 1908 - Order 34, Rules 10 and 11
AppellantV. Rajammal
RespondentP. Jesudhas and ors.
Cases ReferredIn Gyasi Ram v. Brij Bhushan Das
Excerpt:
- - it also laid down that in the event of failure to so deposit the amount in the court, a final decree for foreclosure in favour of the mortgagee was to be drawn. on the question whether failure to pay the enhanced rate of interest as per the undertaking could result in the passing of final decree for foreclosure: --held, that this extra amount which was to be paid on account of mortgagor's undertaking did not come within the expression 'in respect of subsequent costs, charges, expenses and interests'.the decree for foreclosure could not be passed for failure to pay this amount......and the plaintiff herself purchased the same on 20th january, 1972, for a sum of rs. 27,050/-. the decree-holder plaintiff was allowed to set off the amount due under the decree and therefore a sum of s. 10,574/- being the balance was deposited into court. the first defendant filed e. a. no. 98 of 1972 for setting aside the sale. a conditional order was passed requiring him to deposit certain amount. that conditional order was not complied with. hence, the sale was confirmed on 6-9-1973. the 4th defendant (the son of the mortgagor) filed another application to set aside the sale. that was dismissed on 16-4-1974. this was in e. a. no. 326 of 1973. aggrieved by the said order defendants 2 to 8 filed a. a. o. no. 331 of 1974 and the matter was compromised. as per the terms of the.....
Judgment:
ORDER

1. These two C. R. Ps. can be dealt with together. The short facts are as follows:--In O. S. No. 47 of 1970 on the file of the Subordinate Judge, Nagercoil, the appellant herein obtained a decree for a sum of Rs. 15,933-75 on a simple mortgage executed by one Thankammal, wife of the 1st defendant. Thankammal died. Hence the suit was filed against her husband, the first defendant, and her legal representatives, defendant 2 to 8. Defendants 9 and 10 were the subsequent encumbrancers. The hypothecate was brought to sale and the plaintiff herself purchased the same on 20th January, 1972, for a sum of Rs. 27,050/-. The decree-holder plaintiff was allowed to set off the amount due under the decree and therefore a sum of S. 10,574/- being the balance was deposited into Court. The first defendant filed E. A. No. 98 of 1972 for setting aside the sale. A conditional order was passed requiring him to deposit certain amount. That conditional order was not complied with. Hence, the sale was confirmed on 6-9-1973. The 4th defendant (the son of the mortgagor) filed another application to set aside the sale. That was dismissed on 16-4-1974. This was in E. A. No. 326 of 1973. Aggrieved by the said order defendants 2 to 8 filed A. A. O. No. 331 of 1974 and the matter was compromised. As per the terms of the compromise, defendants 1 to 8 were required to pay a sum of Rs. 23,439-41 being the aggregate amount of the decree and the interest for the sale amount at 6%. The said amount was required to be paid in three instalments within a period of 6 months. It was provided that if the amount was so paid, the sale in favour of the plaintiff would stand cancelled, in which event, the decree-holder would be entitled to the refund of Rs. 10,574/- deposited by her. It was further provided that if, for any reason, the amount was not so paid, the decree-holder would be entitled to take delivery of the property and was entitled to 6 per cent. interest on the sale amount of Rs. 27,050/- from the date of the sale, namely 20th January, 1972 up to the date of delivery of possession. The interest was to be recovered from the sum or Rupees 10,574/- in deposit in court and the balance alone was to be withdrawn by defendants 1, to 8. The terms of the compromise were not complied with by the judgment-debtors. The 9th defendant filed E. A. No. 352 of 1973 praying for a payment out of Rs. 8,400/- being the amount due under the mortgage executed in his favour by the first defendant and his wife. The 10th defendant filed a similar application in E. A. No. 353 of 1973 for payment out of Rs. 2,194/- due under the mortgage executed in his favour. The decree-holder filed E. A. No. 250 of 1975 for a sum of Rs. 5,590-25 being the interest due as per the terms of the compromise decree in A. A. O. 331 of 1974. All these three applications came to be dealt with by the learned Subordinate Judge of Nagercoil under common order. Having regard to the fact that the amount in court deposit could not satisfy all the claims, the question was whether the decree-holder could claim priority for the sum of Rs. 5,590-25 over the claims of the 9th and 10th defendants. The learned Subordinate Judge by his order dated 13th November, 1975, allowed E. A. No. 352 of 1973 and dismissed E. A. Nos. 353 of 1973 and 250 of 1975. C. R. P. 3151 of 1975 is against E. A. No. 352 of 1973, while C. R. P. 3152 of 1975 is against E. A. No. 250 of 1975.

2. The only question that arises for my determination is whether the decree-holder could tack on that sum of Rs. 5,590-25 to his original loan and thereby claim priority to the said sum. In other words, whether the amount could be construed as due under the mortgage decree, in accordance with the provisions of Order 34, Rules 10 and 11 C.P.C.

3. Mr. S. Padmanabhan, learned counsel for the petitioner contends that having regard to the terms of the compromise in A. A. O. No. 331 of 1974, this amount is one which will form part of the mortgage decree and therefore priority could be claimed. The fact that neither the 9th defendant nor the 10th defendant were parties to that compromise would be of no consequence, since they are subsequent encumbrancers. The intention of the parties under the compromise was to provide for this amount and the additional sum which was intended to be a part of the mortgage decree, can also be recovered as if it is a part of the original decree. IN support of this submission, the learned counsel relies on Halsbury's Laws of England, Vol. 27, (Third Edition) paragraph 866 at page 436:--

'Where the mortgage provides for interest up to the day fixed for payment, but not beyond, a contract for the continuance of the same rate of interest until payment is not implied but subsequent interest will be given by way of damages for breach of contract, and if the original rate of interest is not above five per cent, it will generally be adopted as a proper measure of damages for the subsequent delay. This rule applies both to proceedings on the covenant, and to accounts taken in redemption or foreclosure. In taking such accounts interest cannot be ascertained as damages, but it will be awarded on the same footing as consideration for allowing the loan to remain unpaid.'

Mr. S. Ramaswami, learned counsel for the respondents submits that even in a case where interest was awarded by a Court, it cannot be considered to be a secured debt. If that be so, this amount can be recovered only as an ordinary debt. In support of this submission he relies on Gyasi Ram v. Brij Bhushan Das, : AIR1966SC1950 .

4. The important point to be noted here is the compromise decree provided payment of interest. But it cannot be construed as a claim arising out of the mortgage. That was only by way of a simple money decree. Of course, if there is any surplus, the mortgagee (decree-holder) can recover. Certainly it cannot be tacked on to the original loan under doctrine of tacking, since that doctrine having been abolished in 1929 itself.

5. The passage relied on by Mr. S. Padmanabhan in paragraph 866 at page 436 of Halsbury's Laws of England, Vol. 27, (Third Edition) is of no assistance to him since those were claims arising under the mortgage, but the position here is entirely different. The fact that the 9th and 10th defendants were not parties to the mortgage decree may be of no consequence in one sense, provided the amount claimed arose under the mortgage. But here it is not so.

6. In Gyasi Ram v. Brij Bhushan Das, : AIR1966SC1950 the scope of Order 34, R. 7 C.P.C., came up for consideration:--

'A preliminary decree declared the amount due upto a certain date towards principal and interest and also provided for certain rate of interest on a certain sum from that tad and directed, as required by cl. (c) of Order 34, Rule 7(1) a final decree to be passed in favour of a mortgagor, provided he paid in the court the amount found due before a certain date. It also laid down that in the event of failure to so deposit the amount in the Court, a final decree for foreclosure in favour of the mortgagee was to be drawn. The mortgagor appealed and obtained a stay order requiring him to pay the amount due under the preliminary decree till the disposal of the appeal. The stay was granted on the mortgagor's undertaking to pay enhanced rate of interest during the period of stay. The appeal was dismissed and the mortgagor deposited the amount due under the preliminary decree with interest but without the enhanced rate of interest. On the question whether failure to pay the enhanced rate of interest as per the undertaking could result in the passing of final decree for foreclosure:--

Held, that this extra amount which was to be paid on account of mortgagor's undertaking did not come within the expression 'in respect of subsequent costs, charges, expenses and interests'. The decree for foreclosure could not be passed for failure to pay this amount.'

This case fully supports the respondent.

7. For these reasons, I hold that there are no merits in these civil revision petitions and they will stand dismissed. However, I make no order as to costs.

8. Revisions dismissed.


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