1. The facts necessary for the disposal of the above civil miscellaneus appeals and civil revision petition can be shortly stated. In O.S. No. 15 of 1933, on the file of the District Judge of Morth Malabar, which was a suit for sale on a mortgage, a preliminary decree was passed on 13th September, 1934, followed by a final decree on 27th January, 1936. The mortgaged property was sold in execution and purchased by one Vengayil Madhavan Nayanar who is the appellant in the civil miscellanous appeals and the petitioner in the civil revision petition and who will hereinafter be referred to as the appellant. On 16th November, 1944, the first defendant in the mortgage suit applied in E.A. No. 52 of 1944 under Order 21, Rule 90 of the Code of Civil Procedure for setting aside the sale. This application underwent several adjournments. On 6th March, 1945, the decree-holders applied in E.A. No. 25 of 1945 under Order 21, Rule 2 for recording full satisfaction of the decree alleging that the first defendant agreed to pay and the decree-holders agreed to receive Rs. 6,750 in full satisfaction of the decree, that Rs. 4,695 out of the said amount was paid to the decree-holders by the first defendant that in discharge of the balance of Rs. 2,055 both parties agreed that an order for payment should be made in favour of the decree-holders of the sum deposited as security by the first defendant in E.A. No. 52 of 1944. In what is described as a 'statement' filed by the first defendant's advocate on 8th March, 1945, it was mentioned that 'Rs. 231-3-0 made up of poundage and sale commission due to the auction purchaser as per the auction sale held in O.S. No. 15 of 1933 was paid to the advocate for the auction purchaser by the first defendant's advocate.' The auction purchaser's advocate endorsed on it that he received the amount.
2. On 10th March, 1945, the learned District Judge directed that full satisfaction of the decree should be recorded and that the sale should be cancelled, overruling the auction purchaser's objection which, in the District Judge's language, was to the effect:
That the private adjustment of the decree ought not to be recognised but that the full decree amount due must be deposited in Court and then withdrawn by the decree-holders and that the decree-holders receiving the amount otherwise must not be upheld.
3. The learned District Judge characterised this objection as a technical one, after referring pointedly to the fact ' that the auction purchaser has been paid his commission of five per cent and poundage.' While noticing that Order 34, Rule 5. of the Civil Procedure Code prescribes that the defendant should deposit in Court the sum due as per the decree, the learned District Judge observed that it does not specifically prohibit private adjustments of the decree by any arrangement arrived at between the judgment-debtor and the decree-holders. The learned District Judge was of the opinion that this principle was established in Muthuvenkatapathi Reddi v. Kuppu Reddi : (1940)1MLJ629 in regard to deposit in Court required by Order 21, Rule 89 and held that the same principle must govern the requirement as to deposit under Order 34, Rule 5.
4. In this view the application under Order 21, Rule 90 was no longer necessary and it was accordingly dismissed. A.A.O. No. 508 of 1945 is against the order in E.A. No. 52 of 1944 while A.A.O. No. 507 of 1945 and C.R.P. No. 1060 of 1945 are against the order in E.A. No. 25 of 1945.
5. It is contended on behalf of the auction purchaser that the reliance by the learned District Judge on the 'decision in Muthuvenkatapathi Reddi v. Kuppu Reddi : (1940)1MLJ629 is misplaced, that the language of Order 34, Rule 5 is imperative and that as the amount due to the decree-holders was admittedly not deposited in Court for satisfaction of the decree, the sale cannot be set aside. For the judgment-debtor it is argued that Order 21, Rule 2 would apply even after the sale of the mortgaged property and that satisfaction of the decree can therefore be recorded when payment is made out of Court or the decree is otherwise adjusted notwithstanding that a sale has already taken place. It is also argued that the learned District Judge correctly interpreted the decision in Muthuvenkatapathi Reddi v. Kuppu Reddi : (1940)1MLJ629 and was justified in applying its principle to a case arising under Order 34, Rule 5 which is described as a provision analogous to Order 21, Rule 89. The respondents' advocate raises the further contention that it is not open to the appellant to question the correct-ness of the orders of that Court in view of what transpired before and at the time when those orders were made. We shall deal with this last aspect of the case separately and in due course.
6. The principal question that has to be decided is whether, after a sale of the hypotheca in execution of a final decree for sale, it is open to the mortgagor more than 30 days after the sale but before its confirmation, to pay, out of Court, the amount due to the decree-holder or otherwise satisfy him and claim the benefit of Order 34, Rule 5 of the Civil Procedure Code, or in other words, whether or not the requirement of the said rule that the said amount must be deposited in Court is obligatory and is strictly to be complied with.
7. Elaborate arguments have been addressed and a large number of decisions have been referred to by Mr. Achuthan Nambiar for the appellant and by Mr. Ramakrishna Iyer for the respondent. While it is conceded that there is no ruling which directly deals with the point arising for determination in this case it is claimed that some light is thrown on it and some guidance afforded by decisions which deal with various stages of suits and execution when a mortgage is sought to be enforced by a sale of the mortgaged property.
8. It will be convenient to deal with the provisions bearing upon and the decisions relating to each of these several stages in their sequence. First as to the stage between the preliminary decree and the final decree, Order 34, Rule 4(1) which prescribes the form of a preliminary decree for sale runs as follows:
In a suit for sale, if the plaintiff succeeds, the Court shall pass a preliminary decree to the effect mentioned in Clauses (a), (4) and (c)(i) of Sub-rule (1) of Rule 2, and further directing that, in default of the defendant paying as therein mentioned, the plaintiff shall be entitled to apply for a final decree directing that the mortgaged property or a sufficient part thereof be sold and the proceeds of the sale (after deduction therefrom of the expenses of the sale) be paid into Court....
9. How the amount so paid is to be applied is laid down in the latter portion of Sub-rule 1, but it is unnecessary to quote it. Order 34, Rule 2, Sub-rule (1) Clauses (a), (b) and (c)(i) have to be read into Order 34, Rule 4, Sub-rule (1) with the result that a preliminary decree for sale must contain an order directing.
That an account be taken of what was due to the plaintiff at the date of the preliminary decree for principal and interest on the mortgage, the costs of suit, if any, awarded to the plaintiff, and other costs, charges and expenses properly incurred by him upto that date in respect of his mortgage secutrity, together with interest thereon or in the alternative a declaration of ' the amount so due at that date.' There must besides be included in such preliminary decree a direction That, if the defendant pays into Court the amount so found or declared due on or before such date as the Court may fix within six months from the date on which the Court confirms and countersigns the account so taken, or from the date on which such amount is so declared. The plaintiff shall deliver up to the defendant all documents in his possession or power relating to the mortgaged property and shall if so required, retransfer the property to the defendant and shall also, if necessary, put the defendant in possession of the property.
10. We have omitted all mention of the further amounts which the defendant has to pay by way of subsequent charges and expenses as provided in Rule 10 or subsequent interest as provided in Rule 11, as that part of Order 34, Rule 2(1)(c)(i) which refers to them does not bear on the point now at issue. Order 34, Rule 5(1) contemplates two stages. One is before the day fixed for payment as contemplated by the combined operation of Order 34, Rule 4(1) and Order 34, Rule 2(1)(c)(i). If before that day the defendant makes payment into Court of all amounts due from him under Sub-rule (1) of Rule 4, the Court shall, on application made by the defendant in this behalf, pass a final decree which has the effect of cancelling the mortgage and of restoring the defendant to the position he occupied before he executed the deed of mortgage. If payment before the day fixed is not made the Court shall, under Order 34, Rule 5 Sub-rule (3) on application made by the plaintiff in this behalf pass a final decree directing that the mortgaged property or a sufficient part thereof be sold, and that the proceeds of the sale be dealt with in the manner provided in Sub-rule (1) of Rule 4. After a sale takes place in pursuance of a final decree the defendant is given by another part of Order 34, Rule 5(1) a further chance to save his property. We shall set out this portion of Order 34, Rule 5(1) when dealing with that stage in the course of the examination of the final decree. That in fact is the stage with which' we are in this case, directly concerned.
11. The form of the preliminary decree appended to the Code of Civil Procedure (see Schedule I Appendix D form No. 5-A which is the form to be followed when the Court declares, as is very often done, the amount due) closely follows the provisions of Order 34, Rule 4(1).
It is necessary only to refer to paragraph 2 of that form whereby it is ordered and decreed that the defendant do pay into Court on or before the... day of...or any later date up to which time for payment may be extended by the Court the said sum of Rs....
12. In view of the language of Order 34, Rule 4(1) read with the relevant portions of Order 34, Rule 2(1) the form of decree we have referred to and the allied form No. 5 which is adopted where accounts are directed to be taken, as also from the language of order 34, Rule 5(1) in so far as it relates to the stage before a final decree, the view was at one time taken in this Court that all adjustments made out of Court between the dates of the preliminary decree and the final decree cannot be pleaded against the passing of the final decree, that the provisions of Order 34, recognising only one method of payment, namely, payment into Court are imperative and that these provisions were advisedly inserted in modification of the corresponding provisions of Sections 88 and 89 of the Transfer of Property Act which provided for payment to the plaintiff or into Court (See Rasan Chettiar v. Rangayyan Chettiar : AIR1930Mad105 ). The same view was taken in an earlier decision in Singaraja v. Pethu Raja : (1918)35MLJ579 and in the later decisions in Adari Sanyasi v. Nookalamma (1930) 54 Mad. 708 and Periakaruppan Chettiar v. Doraiswami Naicken : AIR1940Mad461 .
13. These decisions, however, are no longer good law in view of the judgment of the Judicial Committee in Madan Theatres Ltd. v. Dinshaw and Co., Ltd. (1945) 2 M.L.J. 367 : L.R. 73 IndAp 277 : 20 Luck. 461. In that case the Privy Council pointed out that the mortgage suit must be taken to be continuing upto the final decree for sale and that payment or adjustment out of Court before the final decree would therefore come under Order 23, Rule 3 of the Civil Procedure Code. It was emphasised that there is no qualification to the wide terms of Order 23, Rule 3 nor any grounds limiting its application and it was therefore held that under that rule it is open to a debtor to allege and prove that an adjustment has taken place or payment in whole or in part has been made and received between the preliminary decree and the final decree. In this view of Order 23, Rule 3, the Privy Council refrained from considering the question
whether the provisions of order 34 are, if it stood alone, sufficiently precise to prohibit the compromise of the preliminary decree in a mortgage suit by payment or adjustment in some way other than that directed by the preliminary decree.
14. In C.M.A.No. 29 of 1945 it was noticed that the Madras decisions to which we have referred above are overruled by the recent decision of the Judicial Committee just mentioned. The learned Judges in A.A.O. No. 29 of 1945 added that the decision of the Full Bench in Palaniappa Chettiar v. Narayanan Chettiar (1945) 2 M.L.J. 367 : 1945 L.R. 73 IndAp 277 : 20 Luck. 461 must also be taken to have been overruled by the decision in Madan Theatres, Ltd. v. Dinshaw and Co., Ltd. (1945) 2 M.L.J. 367 : 1945 L.R. 73 IndAp 277 : 20 Luck. 461. We unable to follow this as the Full Bench in Palaniappa Chettiar v. Narayanan Chettiar : AIR1936Mad34 was concerned with the question whether an application for the passing of a personal decree under Order 34, Rule 6 is an application in execution. It was pointed out that such an application has reference to one of the reliefs in the plaint in a mortgage suit which must to that extent be still regarded as pending and that the application must therefore be regarded as an application in the suit, notwithstanding that it cannot be made before it is found that the proceeds of the sale of the mortgaged property are insufficient to pay the amount due to the plaintiff. We do not see how this can be said to be in conflict with anything said by the Judicial Committee in Madan Theatres, Ltd. v. Dinshaw and Co., Ltd. (1945) 2 M.L.J. 367 : 1945 L.R. 73 IndAp 277 : 20 Luck. 461 which dealt as has already been said, with another and a quite different stage, viz., that between the preliminary decree for sale and the final decree for sale. The learned Judges in Palaniappa Chettiar v. Narayanan Chettiar : AIR1936Mad34 refer no doubt to Singaraja v. Petharaja : (1918)35MLJ579 but they make the reservation that they do not wish to be understood as accepting its correctness and also point out that that decision has no bearing on the question under their consideration.
15. The inapplicability of Order 21, Rule 2 which relates to the stage of execution, to any payment or adjustment made between a preliminary decree and a final decree for sale is also pointed out in Madan Theatres, Ltd. v. Dinshaw and Co., Ltd. (1945) 2 M.L.J. 367 : 1945 L.R. 73 IndAp 277 : 20 Luck. 461.
16. The second stage is that between a final decree for sale and the sale itself. Under Order 34, Rule 5(3) and form No. 6 of Appendix D to schedule No. 1, a final decree for sale first recites that the payment directed by the preliminary decree has not been made by the defendant and then proceeds to provide that the mortgaged property or a sufficient part thereof be sold. If any payment is made or satisfaction is given during this period there is no reason why the provisions of Order 21, Rule 2 cannot be availed of. In fact the appellant's advocate admitted that that rule would be applicable. If the provisions of Order 21, Rules 64 to 103 are applicable to sales in execution of mortgage decrees, as they presumably are except where a particular rule is made inapplicable either by an express provision or possibly by the context, the mortgagor-judgment-debtor can avail himself also-of the provisions of Order 21, Rule 66 and bring to the notice of the Court at the time of the settlement of the sale proclamation any payment which he may have made or satisfaction which he may have given to the mortgagee-decree-holder previously thereto, provided he is within 90 days of such payment or satisfaction (see Article 174 of the Limitation Act).
17. After the sale of the mortgaged property the position is much more complicated. This constitutes the third stage. Within thirty days of the sale it is open to the mortgagor to apply under Order 21, Rule 89 for setting aside the sale provided he deposits into Court such balance as may remain out of the amount specified in the prolcamation of sale after giving credit to any amount which may have been received by the decree-holder and also deposits into Court for payment to the purchaser a sum equal to five per cent of the purchase money.
18. A question has arisen whether under Order 21, Rule 89 Sub-rule 1 Clause (b) credit could be given when the judgment-debtor paid no cash but gave the decree-holder money's worth or obtained from the decree-holder a waiver or remission of the whole or a portion of the amount due under the decree. In Muthuvenkatappa-Reddi v. Kuppu Reddi : (1940)1MLJ629 a Full Bench of this Court held, approving three earlier decisions, that any payment or adjustment made by the judgment-debtor to satisfy the decree-holder is ' receipt ' of an amount within the meaning of Order 21, Rule 89 Clause 1(b). The respondents' advocate referred to the observations of Krishnaswami Aiyangar, J., who was a member of the Full Bench, occurring at page 715 of the report which are as follows:
The true view to take of Order 21, Rule 89, Civil Procedure Code is that what is done by consent of parties as a substitute for the deposit is to be regarded as its equivalent in every respect and Judged by the same principles as those applicable to a deposit. By that consent, what was not in fact a payment in cash is turned into a deposit within the meaning of the rule to be acted upon by the Court in all respects as if it were a payment in cash.
19. Relying on these observations the respondents' advocate claimed that the decision in Muthuvenkatappa Reddi v. Kuppu Reddi : (1940)1MLJ629 is an authority for the wider proposition that, notwithstanding any requirement in a statutory provision, whether Order 21, Rule 89 or Order 34, Rule 5 that payment should be made into Court, it is open to the parties to dispense with it by agreement and receive payment or its equivalent outside Court. With great respect we are unable to agree with the observations of Krishnaswami Aiyangar, J., just referred to. On an examination of the judgment of the Chief Justice with whom King, J., agreed as also of the earlier decisions which have been referred to with approval by the Full Bench it is quite clear that what the Full Bench was concerned with in Muthuvenkatapathi Reddi v. Kuppu Reddi ( : (1940)1MLJ629 is whether the words 'amounts received by the decree-holder' occurring in Clause (b) of Sub-rule 1 of Order 21, Rule 89 must be strictly construed so as to exclude from their purview and operation all satisfaction or adjustment otherwise than in cash. It was held that they should not be so construed. We are therefore, unable to agree with the argument of the respondents' advocate and the view of the lower Court that the decision in Muthuvenkatapathi Reddi v. Kuppu Reddi : (1940)1MLJ629 laid down that a statutory requirement as to deposit can be ignored when the decree-holder is prepared to waive it or condone its non-observance.
20. If the application had been within thirty days of the sale it would no doubt have been open to the judgment-debtor to prove that the decree-holder ' received ' the amounts specified in the proclamation of sale in the manner alleged in E.A. No. 25 of 1945. But that application as also the payment of 5 per cent of the purchase money to the auction purchaser two days later, being obviously beyond thirty days of the sale, the judgment-debtor can if at all, avail himself only of the provisions of Order 34, Rule 5 which for the present purpose may be quoted as follows:
(1) Where,...at any time before the confirmation of a sale made in pursuance of a final decree passed under Sub-rule (3) of this rule, the defendant makes payment into Court of all amounts due from him under Sub-rule (1) of Rule 4, the Court shall, on application made by the defendant in this behalf, pass an order....
which would have the effect of cancelling the sale already held and restoring the property free from encumbrance to the mortgagor.
(2) ' Where the mortgaged property or part thereof has been sold in pursuance of a decree passed under Sub-rule (3) of this rule, the Court shall not pass an order under Sub-rule (1) of this rule, unless the defendant, in addition to the amount mentioned in Sub-rule (1), deposits in Court for payment to the purchaser a sum equal to five per cent of the amount of the purchase money paid into Court by the purchaser. Where such deposit has been made the purchaser shall be entitled to an order for repayment of the amount of the purchase money paid into Court by him, together with a sum equal to five per cent thereof.
21. There is no reason to think that the language of this rule is otherwise than imperative, and we see no ground for holding that a payment or adjustment out of Court would be compliance with the strict requirements of this rule.
22. It has, however, been argued by the respondents' advocate that Order 21, Rule 2 can be invoked by his client and that such payment or adjustment as was made by the judgment-debtor can be recognised and recorded under its provisions. To this argument the appellant's advocate has an effective answer. In the decision in Seth Nanhelal v. Umrao Singh (1930) 60 M.L.J. 423 : 1930 L.R. 58 IndAp 50 which has been cited on the appellant's behalf, the Privy Council rejected an argument similar to the one now advanced for the respondent. The following passage from their judgment may be usefully quoted:
In the first place, Order 21, Rule 2 which provides for certification of an adjustment come to out of Court, clearly contemplates a stage in the execution proceedings when the matter lies only between the judgment-debtor and the decree-holder, and when no other interests have come into being. When once a sale has been effected, a third party interest intervenes, and there is nothing in this rule to suggest that it is to be disregarded. The only means by which the judgment-debtor can get rid of a sale, which has been duly carried out, are those embodied in Rule 89, viz., by depositing in Court the amount for the recovery of which the property was sold, together with 5 per cent on the purchase money which goes to the purchaser as statutory compensation, and this remedy can only be pursued within 30 days of the sale: See Article 166, Schedule I of the Limitation Act, 1908. That this is so is, in their Lordships' opinion, clear under the wording of Rule 92, which provides that in such a case (i.e., where the sale has been duly carried out), if no application is made under Rule 89, the Court shall make an order confirming the sale and thereupon the sale shall become absolute.
23. In view of this decision there is, in our judgment, no room for the argument that Order 21, Rule 2 is applicable even after a sale of the mortgaged property. Dealing with a mortgage decree, we are of the opinion, that Order 21, Rule 89 and, or Order 34, Rule 5 alone can apply after the stage of sale, the former being obviously available only within thirty days of it.
24. We see no real hardship from the view we have indicated. The mortgagor-judgment-debtor has ample opportunities of reducing his indebtedness and having it recognised by Court whatever shape or form the satisfaction given to the mortgagee decree-holder may have taken. He could do so under Order 23, Rule 3 between the preliminary and the final decrees for sale. He could invoke the aid of Order 21, Rule 2, and Order 21, Rule 66 between the final decree and the sale itself. He could avail himself of Order 21, Rule 89 after the sale but within 30 days of it. A further chance has no doubt been given to him for saving his property by amending Order 34 Rule 5 in 1929, notwithstanding all his previous laches and default, but if he is to avail himself of this new privilege he must comply with its somewhat stringent provisions.
25. We may notice in passing that Seth Nanhelal v. Umrao Singh (1930) 60 M.L.J. 423 : L.R. 58 IndAp 50 was itself a case of a mortgage decree, but no reference was made therein to Order 34, Rule 5 because though the judgment of the Privy Council was given on the 16th December, 1930, all the events with which their Lordships had to deal happened in 1923, 1924 and 1925 and therefore several years before Order 34, Rule 5 was amended by the Transfer of Property (Amendment) Supplementary Act, 1929, which came into operation in 1st April, 1930, and, which, for the first time provided for a deposit and an application at any time before the confirmation of the sale. The reasoning however of their Lordships of the Privy Council in Seth Nanehelal v. Umrao Singh (1849) 4 Exch. Rep. 187 will apply with equal force even after the amendment and will exclude the application of Order 21, Rule 2 once a sale in execution of the final decree takes place... The result is that the application by the decree-holder under Order 21, Rule 2 on 6th March, 1945 cannot be regarded as compliance with the provisions of Order 34, Rule 5.
26. It is argued by the respondents' advocate that the statement signed by the advocates for the auction purchaser and the judgment-debtor on 8th March, 1945, and filed into Court on that day may be regarded as an application under Order 34, Rule 5 particularly in view of certain decisions which were relied on as holding that an application under Order 34, Rule 5 or Order 34, Rule 6 need not even be in writing. We agree that any informality in the manner in which the application was made or in its contents will not stand in the way of the judgment-debtor obtaining the appropriate relief under Order 34, Rule 5. It is, however, un-necessary to pursue this matter further, as in our view, the main requirement of Order 34, Rule 5 has not been satisfied in so far as the judgment-debtor did not deposit into Court what was due to the decree-holder.
27. It now remains to deal with a further contention raised by the respondents' advocate for maintaining the order of the lower Court. It is argued that whatever may be the correct position as regards the necessity of a deposit into Court of the amount due to the decree-holder, the appellant is precluded from raising this objection in view of his conduct in retaining the five per cent. on his purchase money which had been paid to his advocate on 8th March, 1945. It will be recalled that this amount was received without objection on that date and that on 10th March, 1945 when the applications were heard and disposed of, no objection was taken that the amount due to the auction purchaser was not paid or that it should have been paid into Court. The amount was not paid back then or since. On 10th March, 1945, there was no offer even to return it though about the effect of a mere offer of that kind we do not desire to express our opinion. It has been said that the advocate had no authority to receive it. Prima facie he would have and assuming he had not, there is no reason why this was not stated to the Court on 10th March, 1945, or why as between the auction purchaser and the defendant the former did not restore the amount or see that it was restored by his advocate. Having, in a question between himself and the mortgagor, retained the benefit of a payment which he would be entitled to only if the sale is to be set aside as contemplated by Order 34, Rule 5 we do not see how he can now be heard to say-that the mortgagor is not entitled to the benefits of that provision. The principle applicable to such situations is stated in Halsbury's Laws of England, Hailsham edition, vol. 13, para 512 to be merely an application of the doctrine that a man may not approbate and reprobate. It is stated further in that paragraph that
A party cannot, after taking an advantage under an order, be heard to say that it. is invalid and ask to set it aside or to set up to the prejudice of persons who have relied upon it a case inconsistent with that upon which it was founded.
28. The respondents' advocate drew our attention to Tinkler v. Hilder (1849) 4 Exch. Rep. 187 Venkatarayudu v. Chinna Ramakrishnayya (1929) 58 M.L.J. 137 Sriramulu v. Venkatanarasimham : AIR1938Mad1004 and Ranendramohan Tagore v. Keshebchandra Chanda (1934) 61 Cal. 433. It is unnecessary to refer to these decisions or to the rulings relied on in them as the governing principle is clear. We need refer only to the instance stated at page 142 of the report in Venkatarayudu v. Chinna Ramakrishnayya (1929) 58 M.L.J. 137 of a party liable under an order personally handing over the amount to his opponent, who, while insisting on keeping it, asserts that he receives it under protest, and it is pointed out that in such a case, his socalled protest cannot in the least avail him.
29. This argument for the respondent must, in the cirsumstances already pointed out, be upheld with the result that the two civil miscellaneous appeals and the civil revision petition are dismissed with costs with advocates' fee only in C.M.A. No. 507 of 1945. Two Counsel.
30. In C.M.P. No. 1466 of 1947, the appellant seeks the admission, as additional evidence in the appeals, of some correspondence which is said to have passed between him and his advocate after the disposal of the applications for the purpose of showing that the advocate had no authority to receive the amount which he did on the 8th. March, 1945. This has no bearing on the rights inter se of the auction purchaser and the judgment-debtor. This petition and the connected petition, C.M.P. No. 1465 of 1947 are therefore dismissed.