1. This is an appeal from the order of the learned Additional Judge of the City Civil Court, Madras, in C.M.P. No. 1488 of 1938, dated the 12th May, 1938, in which he refused to issue a temporary injunction under Order 39, Rule 1 of the Civil Procedure Code.
2. The plaintiff in the suit O.S. No. 815 of 1938 prayed for a permanent injunction restraining the first defendant from exercising his power of selling out of Court three houses situated in the City of Madras. The three houses together with an oil engine, it is alleged, had been mortgaged in the first instance to the second defendant in 1934. The first defendant is a subsequent mortgagee whose deed was executed by the plaintiff on 28th January, 1935. It is not disputed that the deed gives first defendant power of sale without the intervention of Court and therefore under Section 69(i)(c) of the Transfer of Property Act, the first defendant has power to sell the mortgage property out of Court. The plaintiff's case is that he is an 'agriculturist' and that under Section 7 of the Madras Act IV of 1938, he is entitled to have his debt to the first defendant scaled down in accordance with the provision of the Act. His contention is that a sale out of Court for an amount in excess of what would be due from him to the first defendant after such scaling down is an injury which the first defendant should be prevented from inflicting upon him by means of a permanent injunction. The learned Judge of the City Civil Court considers that this point does not arise at the present stage. He thinks it will only arise after the property has been sold and that the plaintiff will have a remedy in damages under Section 69(3) of the Transfer of Property Act. I agree with my learned brother Stodart, J., who expressed the opinion in his order on C.M.P. No. 2464 of 1938 that it is no answer to say that under Section 69 of the Transfer of Property Act, the petitioner will be entitled to recover damages if the mortgagee exercises his power of sale in an improper or irregular manner. Section 7 of the Madras Act IV of 1938 expressly says:
Notwithstanding any law, custom, contract or decree of Court to the contrary all debts payable by an agriculturist at the commencement of this Act shall be scaled down in accordance with the provisions of this Chapter.
3. It goes on to say:
No sum in excess of the amount as so scaled down shall be recoverable from him or from any land or interest in land belonging to him.
4. There is nothing in this section that indicates that the scaling down must necessarily be the act of a Court. It appears to me to be implied that after the passing of this Act, it is the duty of the creditor to scale down the amounts due to him by his debtors. It will only be in case in which the creditor does not scale down his claim in accordance with the provisions of the Act that the intervention of the Court will be necessary. It is not alleged on behalf of the respondent that he has made any scaling down. I understand that he does not admit that the plaintiff is an 'agriculturist' and so entitled to the benefit of Madras Act IV of 1938. It is clear however that if the plaintiff is an 'agriculturist' the amount due from him to the first defendant will have to be scaled down in accordance with Chapter 2 of the Madras Act IV of 1938. And it is obvious as my learned brother has already held in the order referred to that the action of the creditor in bringing the debtor's property to sale for a sum in excess of the amount so scaled down is prima facie an injury. I am told by learned Counsel for the respondent that the respondent offered to postpone the auction if the plaintiff deposited in Court the amount of principal due under the mortgage bond. The plaintiff, it is said, refused to accept this offer. On the other hand I am informed by learned Counsel for the appellant that the amount of the principal is one of the main questions in dispute between these two parties. The plaintiff allege that though the bond recites a principal amount as Rs. 800, he actually received only Rs. 400, less a considerable sum deducted as advance interest. The learned Counsel for the appellant says that he offered to deposit Rs. 400 which according to him was the real amount of principal advanced by the respondent.
5. It is clear to me there is a case to be tried and therefore I think this is a case in which an injunction should issue. But it should be on condition that the plaintiff deposits the amount of Rs. 400 in the lower Court within a reasonable time. Learned Counsel on both sides are not agreed as to what is reasonable time and I shall therefore fix four weeks. This appeal is accordingly allowed and the order of the Court will be that an injunction do issue restraining the first defendant from exercising, his power of bringing the hypotheca to sale out of Court pending disposal of O.S. No. 815 of 1938 on the file of the City Civil Court. It is further ordered that if the plaintiff, fails to deposit in the City Civil Court the sum of Rs. 400 towards the amount due to the first defendant the temporary injunction will be cancelled forthwith. The appellant will be entitled to his costs of this appeal from the respondent and the respondent will be permitted to withdraw the money from the City Civil Court, if deposited, on furnishing security to the satisfaction of that Court.