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Lodd Govinda Doss Krishna Doss Varu and anr. Vs. the Rajah of Karvetnagar Minor by Guardian, W.A. Varadachariar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Judge
Reported in30Ind.Cas.357
AppellantLodd Govinda Doss Krishna Doss Varu and anr.
RespondentThe Rajah of Karvetnagar Minor by Guardian, W.A. Varadachariar and ors.
Cases Referred and Ramasami Naik v. Ramasami Chetii
Excerpt:
.....to what extent the decree has been satisfied. we are of opinion that in this paragraph the decree-holder distinctly intimated to the court that credit will be given for the amounts received as net profits during the years' that he was in possession. the plaintiff clearly wanted the court to apply its mind to the figure that should be so entered. we are of opinion that these words were intended to inform the court that the decree must be taken to have been satisfied to the extent of the net income received by the decree-holder. but where no intimation is conveyed by the decree-holder, it is doubtful whether the court can start an inquiry on the ground that the decree-holder should have certified payment or adjustment, the better view seems to be that in all cases where the court..........due, it is desirable that a commissioner should be appointed to ascertain it. his-order says: the decree-holder's vakil does not object to this being done.' then he referred to the suggestion of the vakil that the accounts should be examined at the village and not in court, and said that the request was reasonable. it is clear that on this date, the decree-holder through his vakil consented to the appointment of a commissioner. the only outstanding dispute was as to the place where the examination of the accounts should take place. but on the 8th of august and on the 11th of august, the vakil is said to have tiled two petitions requesting that the question whether the decree being one for sale, the petitioner decree-holder was bound to account at all under the terms of the decree in the.....
Judgment:

1. These appeals are from an application to execute a mortgage decree. The decree was passed in favour of the appellant's father on the 29th of September 1903. The suit itself was instituted in 1901. At the time of the institution of the suit, the Court of Wards was in charge of the estate a portion of which was mortgaged to the appellant's father. The possession of the Court commenced in 1900 and was relinquished in or about September 1905. The appellant took possession of the village thereafter. There is a dispute as to the exact date when be assumed management. He presented his application for an order absolute and for the sale of the mortgaged properties in December 1905. That order has not been exhibited in these proceedings. The District Judge says: 'Before the order for sale was passed, it was not, however, ascertained what the balance of the mortgage-debt outstanding at the time of the application was, nor was the order absolute made for the realisation of any-specific amount.' This statement of the Court below has not been contested before us. On the 2nd of September 1909, the District Judge granted a prayer for execution and called for an affidavit, a draft proclamation and an encumbrance certificate from the appellant. On the 7th of October 1909, the appellant filed his affidavit. The judgment-debtor filed a counter-affidavit objecting to the valuation of the property and to the 'amount stated to be due to the decree-bolder. On the 7th of August 1911, the District Judge passed an order to the effect that having regard to the dispute about the amount due, it is desirable that a Commissioner should be appointed to ascertain it. His-order says: The decree-holder's Vakil does not object to this being done.' Then he referred to the suggestion of the Vakil that the accounts should be examined at the village and not in Court, and said that the request was reasonable. It is clear that on this date, the decree-holder through his Vakil consented to the appointment of a Commissioner. The only outstanding dispute was as to the place where the examination of the accounts should take place. But on the 8th of August and on the 11th of August, the Vakil is said to have tiled two petitions requesting that the question whether the decree being one for sale, the petitioner decree-holder was bound to account at all under the terms of the decree in the execution proceedings, and whether the judgment-debtor could insist on accounts being rendered in these proceedings', should be determined before a Commissioner was appointed. These two petitions are said to have been withdrawn. We regret that this should have been allowed. The grounds on which the Vakil wished to recede from the position taken up by him on the 7th of August are material. The Vakils on both sides were heard on these petitions finally, the District Judge affirmed his previous order on the 11th October 1911. Civil Miscellaneous Appeal No. 266 of 1911 is presented against this final order. Civil Miscellaneous Appeal No. 267 of 1911 is against the earlier order of the 7th August.

2. The appeals have been argued at great length. A preliminary objection was taken that no appeal lay against the first order as that was passed on consent. We do not think Section 96(3) applies to an order directing the appointment of a Commissioner. Reference may also be made to Order XXXIII, Rule 4(2), and to Mata Palat v. Beni Madho 22 Ind. Cas. 961. Moreover, although the Vakil for the appellant accepted the suggestion to appoint a Commissioner, the District Judge formed his own conclusion on the materials placed before him. We must ever rule the preliminary objection.

3. The matter in dispute between the parties relates to the amount received by the decree-holder from the mortgaged property after he took possession of it from the Court of Wards. The judgment-debtor contended that the appellant should give credit for the net income received by the appellant and that execution should issue only for the balance. The decree-holder does not deny that he is liable to account to the judgment-debtor for the profits realised as mortgagee in possession, but argues that this liability does not prevent his levying execution for the full amount entered in the decree. There can be no manner of doubt that the conduct of the decree-holder led the judgment-debtor to believe that a separate suit for an account of the income need not be instituted and that credit will be given for the net profits in execution. It was said that a suit for the recovery of the profits will now be barred by limitation, whether there will be any such bar, and if so, to what extent, need not be gone into in these proceedings. The first question we have to decide is, whether under the decree the appellant is bound to give credit for the income received by him as mortgagee in possession. The decree says: This Court doth further order and decree that the plaintiff be entitled to the net rents and profits of the mortgaged property from the beginning of fasli 1310 according to the provisions of Section 43(5) of Madras Act I of 1902, and that all payments made to the plaintiff on account thereof be applied in reduction of the amount due to him under the compromise deed.' As we pointed out before, this decree was passed when the Court of Wards was in possession. Its intervention was sought by the zemindar for the purpose of liquidating the enormous debts which had accumulated over his estate and of saving, if possible, a portion of the estate for him. It was because the Court found that there was no possibility of securing to the zemindar way portion of the property it gave up possession in 1905. Therefore, when it assumed possession, it was with the object of paying to the secured creditors the income available from the properties mortgaged, so that after crediting a portion of the payment for the interest accruing due, the balance may be applied towards the discharge of the principal debt. The Court of Wards is in the position of a Receiver, Adipuranam Pillai v. Gopalasami Mudali 18 M.L.J. 259. When these facts are remembered, the provision in the clause for the payment of the net profits becomes intelligible. It is true, as pointed out by Mr. Govindaraghava Aiyar, Section 43(5) does not provide for any payment. By reference to Sections 32 and 55, it is clear that the calculation mentioned in Section 43 will determine the net income which the Court having management will be in a position to set apart for payment to the mortgagee. Section 32 distinctly provides for the payment of the debts due by the ward. However that may be, there is no warrant for reading into the clause a provision that when the mortgagee is in possession, he has to apply the net income towards the decree-debt. There are patent objections to such a construction. The clause speaks of payment and not of appropriation. Section 43(5) which is referred to in the clause, speaks of a dispossessed incumbrancer. That same section provides for the net profits being recoverable from the Court of Wards. Obviously, therefore, the decree had reference to the management by the Court and to the payment to be made by it and not to the resumption of possession by the decree-holder. It was by an oversight that the decree did not provide for the contingency of the Court withdrawing from the management. There is no warrant for importing into the decree a provision like the one which the judgment-debtor says was in the contemplation of the parties. That would be adding to the decree and not construing it. It was argued that if the parties understood the decree in a particular sense, the Courts should give effect to it. We have no clear evidence in this case of any course of conduct by the parties which placed the construction we are asked to adopt. For do we think that the contention that Courts are bound to construe a decree in the mode which the parties intend-ed it to operate is well founded. If a particular construction has been placed by the Court on a decree and if it has been enforced by the process of the Court, the parties may be estopped from claiming that the decree should be differently construed. Even this view has its limitations. But we know of no authority or principle which renders the executing Court a mere recording machine for the interpretation which the parties choose to put upon a decree, however incompatible such a construction may be with the plain language of the the decree. Secretary of State for India in Council v. Durbijoy Singh 19 I.A. 69 does not help the respondent. On other hand, Bakhtawar Begam v. Husaini Khanam 23 Ind. Cas. 26 M.L.J. 474 suggests that it is the duty of the Court to execute the decree as it finds it and not as understood by the parties. We must hold that the decree does not provide for the application of rents and profits received by the decree-holder in satisfaction of the decree.

4. One ether minor contention may be disposed of before dealing with the principal question. In the course of the execution application the Pleader for the decree-holder undoubtedly assented to the appointment of the Commissioner at one stage of the proceedings, although he subsequently withdrew his consent. In Venkata Narasimha Naidu v. Bashyakarlu Naidu 25 M.k 367 the Judicial Committee concurred with the view of the High Court that it is open to a Pleader to. abandon an issue relating to the impartibility of a zemindari. It was argued that this decision will not enable a Pleader to give up a question of law. It cannot be said that the point conceded before the District Judge related to a pure question of law. In his affidavit, the appellant had admitted his liability to account for the profits during the period he was in possession; and the Pleader was within his rights in following up this admission by consenting to the appointment of a Commissioner: Rama Iyengar v. Kasinivenda Iyengar 16 Ind. Cas. 746 only deals with an erroneous admission that a question of law was unarguable. See also Narayan v. Venkatacharya 6 Bom. L.R. 434. These do not affect the present case. However, having regard to the fact that the admission was withdrawn soon after, we do not wish to base our judgment on the consent alone.

5. The main point for decision is, whether the fact that the receipt of the income from the property has not been certified to the Court by the decree-holder, prevents the Judge from directing an inquiry into the amount realised. There are two provisions in the Code of Civil Procedure relating to this matter, Order XXI, Rules 2 and 11. The first of these rules deals with certifying to the Court and the latter with the contents of the application for execution. Rule 2 is an enabling1 provision. Rule 11, Clause (e), imposes a duty on the decree-holder to state to the Court whether any payment or other adjustment has been made. It was contended that whereas the right given to the judgment-debtor to apply within a specified period for certifying the payment or adjustment may necessitate an inquiry, when the decree-holder certifies the Court has to act solely on his representation and any enquiry, regarding the amount of the payment or adjustment is not within the competency of the Court. We are not prepared to place such a restricted (obstruction upon the powers of the Court. We fail to see why the arithmetic of the payment or adjustment is beyond the Court's jurisdiction. We cannot accede to the contention that when the manner of payment or adjustment has been notified, the Court has no power to ascertain to what extent the decree has been satisfied. To take a concrete case: suppose a decree-holder informs the Court that he desires that the judgment-debtor should be credited with the balance that may be found in his favour after taking account of a mutual and current account between the parties, we see no reason for holding that the Court is powerless to order an enquiry regarding the amount. The phrase 'adjustment in whole or in part' suggests that the Court is not confined to merely entering the figures supplied by the decree-holder. The further question for consideration is whether the decree-holder has certified any such adjustment to the Court. No particular words are necessary for this purpose. See Saadoollah Shaikh v.Kalee Churn 12 W.R. 358; Alathoor Badruddin v. Gulam Moideen 12 Ind. Cas. 562; Ramayyar v. Ramayyar 21 M. 356 and Lakhi Narain Ganguli v. Felamani Dasi 27 Ind. Cas. 11. Two statements made by the decree-holder are relied on. In the Execution Application No. 145 of 1905 presented by him, he says: 'this and a small amount collected by the plaintiff himself from the tenants have been appropriated towards the expenses of the management to which the plaintiff is entitled.' Then in the affidavit which he was called upon to submit prior to the settlement of the proclamation of sale, he stated: 'the amount for the recovery of which the sale was ordered is Rs. 23,11, 183 on the 29th March 1903, with further interest to be added. Accordingly with further interest up to 29th September 1909 deducting the amount of net rents paid to me by the Court of Wards, the total amount comes to Rs. 29,05,187-1-11. Credit will be given for the net income received by me up to the date of final settlement of accounts in execution proceedings. I may be permitted to add the amount of expenditure incurred over and above the net income received by me during the course of management of the said Narayanavanam Taluq.' Mr. Rangachariar argued that the last clause of the paragraph is an intimation that there was no surplus income We cannot accept this construction. The paragraph opens with a statement that 'the net revenue available after deducting the peishcush and the land-cess' will be about Rs. 97,500. In the middle of the paragraph it is said that credit will be given for the net income.' The last clause is only suggestion that if in the calculation of the net income, the decree-holder had omitted to give himself credit for any legitimate expenses incurred by him in the course of the management, he would submit a statement for making deductions in that behalf. To read the clause as the learned Vakil wants us to do will render the whole paragraph meaningless. We are of opinion that in this paragraph the decree-holder distinctly intimated to the Court that credit will be given for the amounts received as net profits during the years' that he was in possession. It was next contended (that the affidavit only provided that credit will be given for the net income received up to date;' and such language is not equivalent to asking the Court to certify the adjustment. The affidavit was filed with a view to enable the Court to fix the amount to be entered in the sale proclamation. The plaintiff clearly wanted the Court to apply its mind to the figure that should be so entered. It is not suggested in what other proceeding this credit was intended to be given by the decree-holder. We are of opinion that these words were intended to inform the Court that the decree must be taken to have been satisfied to the extent of the net income received by the decree-holder. We must, therefore, hold that the decree-holder intended to certify adjustment by his affidavit, that it is competent to the Court to inquire into the quantum of this adjustment arid that the appointment of a Commissioner for this purpose was justifiable.

6. There is one other aspect of the case which leads to the same conclusion. Under Order XXI, Rule 11, the decree-holder is bound to inform the Court of any adjustment or payment that has been made. It was held in Ramayyar v. Ramayyar 21 M.k 356 that if the decree-holder fraudulently keeps back information in this respect the executing Court will have power to order an inquiry. In Paupayya v. Narasannah 2 M.k 216, it was held that even apart from fraud the Court can determine whether any adjustment has been made. In neither of these cases, the effect of Rule 2 upon Rule 11 (Section. 235 or Section 253 of Act XIV of 1882) were considered. The cardinal principle, no doubt, is to see that neither party overreaches the other. But where no intimation is conveyed by the decree-holder, it is doubtful whether the Court can start an inquiry on the ground that the decree-holder should have certified payment or adjustment, The better view seems to be that in all cases where the Court is seined of the question either from intimation conveyed by the' decree-holder at any time before orders are passed or from the judgment-debtor within the prescribed period, the Court will be bound to inquire into the truth or correctness of the statement made. This view would give effect to the imperative provision in Rule 11, Clause (e), and to the permissive provision in Rule 2. In the present case, the decree-holder did say in the petition for execution that moneys have been received, but he coupled it with an assertion that it has been appropriated towards the expenses of the management. The truth of this assertion is a legitimate subject for inquiry. The decision in Tukaram v. Babaji 21 B.k 122 is very analogous to the present case. In that case, the decree-holder relied on uncertified payments to save limitation and the judgment-debtor denied them and pleaded that execution was barred. The Court held that it had power to direct an inquiry. If the truth of an assertion of an adjustment can be enquired into for the purpose of saving limitation, we fail to see why the same principle should not be extended to ascertain the exact amount for which credit should be given to the judgment-debtor. See also Roshan Singh v. Mata Din 26 A. d 36 . Fateh Muhammad v. Gopal Das 7 A.d 424 was strongly relied upon by the learned Vakil for the appellant. It only lays down that where an arrangement by which a decree is adjusted, is not certified, the executing Court should not recognise it. There are observations in that judgment which are not reconcilable with recent decisions, which place a more liberal construction on the manner of certifying. In Trimbak Ramkrishna v. Hari Laxman 12 Bom. L.R. 686 the question was whether a decree-holder who received moneys outside the Court without certifying was estopped from pleading that they should not be recognised as adjustments. We agree with Mr. Justice Heaton that Section 258 (Rule 2 of Order XXI) should be so construed as not to defeat justice. In Khushalchand v. Nandram 13 Bom. L.R. 977 the learned Judges of whom Mr. Justice Chandavarkar, who took part in the decision in Trimbak Ramkrishna v. Hari Laxman 12 Bom. L.R. 686 was one inclined to the view that a mere intimation of adjustment is equivalent to certifying, Jogendra Nath Sarkar v. Probhat Nath Chatterjee 21 Ind. Cas. 926 follows the view taken by Mr. Justice Chandavarkar in Trimbak Ramkishna v. Hari Laxman 12 Bom L.R. 686. These decisions do not compel us to hold that where a statement has been made in the execution petition that a certain payment was made, it is not within the province of the Court to inquire whether the mode of appropriation suggested in it is true or not. Our conclusion is that the District Judge was right in appointing a Commissioner to ascertain to what extent the profits received by the appellant and referred to by him in his petition should be applied towards the amount of the decree. The decree-holder in applying for an order absolute left the question of the amount duo open.

7. Mr. Govindaraghava Aiyar has raised a further contention that as the decree-holder has agreed to give credit to the income from the mortgaged property in execution and as the judgment-debtor did not object to this course, the appellant should not be allowed to invoke the aid of Order XXI, Rule 2. Mr. Rangachariar's reply to this is that as there can lie no estoppel against a plain provision of the law, the decree-holder is not precluded from pleading that his assent does not bind him; and he relies upon Jogendra Nath Sarkar v. Probhat Nath Chatterjee 21 Ind. Cas. 926; Trimbak Ramkriskna v. Hari Laxman 7 Ind. Cas. 940 and Komma Somakka v. Kodidala Pedda Ramiah 22 M.L.J. 193. There has been a tendency in recent years to push this doctrine so far. The principle is that parties should not be permitted by an arrangement between themselves to commit an illegality. The right should not be extended to cases which have the effect of enabling parties to make a law for themselves in violation of the law of the land. But where such a result will not follow, there is nothing to prevent the application of the provisions of Section 115 of the Evidence Act to agreements between the parties. There is nothing opposed to public policy or illegal in parties stipulating that a certain sum of money which is recoverable as between themselves in a regular suit should be adjusted in execution proceedings. The accountability arose after decree. It was between the parties to the suit and in respect of the subject-matter of the litigation. Clause 2 of Section 47 of the Code of Civil Procedure shows that an arrangement of the kind we have referred to is not obnoxious to legal procedure. The decision of the Judicial Committee in Sadasiva Pillai v. Ramalinga Pillai 24 W.R. 193 supports this view. Mr. Rangachariar distinguished this case on the ground that the sanction of the Court was given in that case to the mode of enforcing the claim. Although that distinction is well founded, we think that its extension to cases like the present will not be unwarranted, especially as the Code is in favour of treating applications as suits. Section 47 Clause 2. See Muhammad Sulaiman v. Jhukkilal 11 A. d 228; Lakshmana v. Sukiya Bai 7 M.k 400; Kondaji Bogaji v. Anam 7 B.K 448. Moreover, in the present case after the filing of the application by the decree holder, in which he referred to the receipt of income from the mortgaged property which he alleged he applied in a particular manner, the Court took action on It by issuing notices to the judgment-debtor. The Court by these orders must be deemed to have sanctioned the proposal of the decree-holder to give credit in execution proceedings to moneys which he is bound to account for in a regular suit. See also the observations of the Judicial Committee in Mahomed Musa v. Aghore Kumar Ganguli 28 M.L.J. 548 : 17 Bom. L.R. 420 : 21 C.L.J. 231 : 19 C.W.N. 250 . The decisions in Appa Rao v. Krishna Iyengar 25 M.K 537; Vaidhinadasawmy Aiyar v. Somasundaram Pillai 15 M.L.J. 126 and Ramasami Naik v. Ramasami Chetii 17 M.L.J. 201 relied on by Mr. Srinivasa Aiyangar do not affect the question. If the respondent in this case contended that receipts as mortgagee ought to be regarded as payments to the decree-holder, these decisions will be in appellant's favour. We are not deciding this case on that ground. We hold that the decree-holder has certified, that he has informed the Court of an adjustment and that he is not entitled to say that payments received by him are accountable by him only in a regular suit. The decision of the District Judge is right for the reason mentioned by us. We dismiss the appeals with costs of the sole respondent in Civil Miscellaneous Appeal No. 266.

8. The Commissioner will take accounts from the 1st July 1907 up to the 30th of June 1915. Credit will be given for the amount reported by the Commissioner to the judgment-debtor and in the sale proclamation the decree amount minus other amount will be entered. The judgment-debtor can pursue his ordinary resources regarding the amount that may become due after the 1st of July 1915.


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