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Jadu Nath Roy and ors. Vs. Kshitish Chandra Acharji Choudhury and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1945Cal177
AppellantJadu Nath Roy and ors.
RespondentKshitish Chandra Acharji Choudhury and anr.
Cases Referred and Suresh Chandra Basak v. Benode Lal Pal
Excerpt:
- .....yearly rests. on 10th march 1926 a suit was filed to enforce both the mortgages. a preliminary mortgage decree for rs. 4,21,851-1-6 was passed in april 1929 and the final mortgage decree in september of that year. in execution case no. 38 of 1930 all the mortgaged properties were sold in lots. they were purchased by the decree-holders for the total sum of rs. 2,35,200. those sales were duly confirmed, some in 1932 and the rest in 1935 and the decree-holder purchasers took delivery of possession of the different items of property on different dates ranging from 25th june 1933 to 9th march 1936. on 13th december 1937 they obtained a decree under order 34, rule 6, civil p.c., for the balance due to them, namely for rs. 3,30,903. that decree was put into execution and some of the.....
Judgment:

1. To secure two loans, one for Rs. 1,60,000 and the other for Rs. 73,000 the respondents executed in favour of the appellants predecessors-in-interest two mortgages on 16th August 1918. Interest payable was at 8 per cent. per annum with yearly rests. On 10th March 1926 a suit was filed to enforce both the mortgages. A preliminary mortgage decree for Rs. 4,21,851-1-6 was passed in April 1929 and the final mortgage decree in September of that year. In Execution Case No. 38 of 1930 all the mortgaged properties were sold in lots. They were purchased by the decree-holders for the total sum of Rs. 2,35,200. Those sales were duly confirmed, some in 1932 and the rest in 1935 and the decree-holder purchasers took delivery of possession of the different items of property on different dates ranging from 25th June 1933 to 9th March 1936. On 13th December 1937 they obtained a decree under Order 34, Rule 6, Civil P.C., for the balance due to them, namely for Rs. 3,30,903. That decree was put into execution and some of the personal properties of the mortgagors were sold. They were also purchased by the decree-holders on 8th August 1939 for Rs. 3899. The decree-holders took delivery of possession of those properties on 6th July 1940. On 9th December 1940 the defendants applied for reopening the mortgage decrees as also the personal decree under Section 36, Bengal, Money Lenders Act (10 of 1940). By an order dated 25th August 1941 the learned Subordinate Judge has reopened all those decrees. He passed a new decree for the sum of Rupees 3,76,324-12-6 on 10th May 1943. He has directed the payment of the said sum in 15 equal annual instalments, the first instalment being made payable within 'one year of the decision given by the highest tribunal,' on the said application made by the mortgagors under Section 36 of that Act and the succeeding instalments to be paid on the anniversary of the first kist. He directed restoration of possession of the properties purchased by the plaintiffs in execution of the reopened-decrees to the defendants. He also directed the defendants to file revenue chalans and other receipts and vouchers showing discharge of all up to date liabilities on account of revenue and cesses along with the instalments as they fall due. In default of payment of any instalment or of submission of the revenue chalans etc., 'without reasonable cause' the plaintiffs were to get back possession of the properties purchased by them and the unpaid balance of the new decree was to be set off against the amount at which the properties were purchased. The plaintiffs have filed this appeal against the new decree and the defendants have filed a memorandum of cross objections. None of the parties challenge correctness of the amount for which the new decree has been passed. In support of the appeal the following contentions have been put forward namely, (1) that the Court below had no power under the Money-Lenders Act to reopen the preliminary and final mortgage decrees; (2) that the form of the new decree is bad. It ought to have taken the form of a preliminary mortgage decree and the learned Judge ought to have given the plaintiffs the right to apply for a final mortgage decree if any default was committed by the mortgagors in the payment of instalments or in observing the other conditions. The right to obtain a personal decree ought also to have been reserved in favour of the mortgagees; (3) that the learned Subordinate Judge ought to have fixed definite dates for payment of the instalments, and (4) that he should have made the other conditions definite and precise.

2. In support of the cross objections the following points have been pressed: (1) that the instalments ought to have been spread over a longer period; (2) that the lower Court had no power to impose the conditions for due payment of revenue and cesses; and (3) that the learned Judge ought to have allowed the defendants mesne profits (a) for the period beginning from the date when the plaintiffs took possession of the properties they had purchased at the court sales up to the date of the order when the Court passed the order reopening the decrees, and (b) also for the period beginning from the last mentioned date till the date when the defendants would actually get back possession from the plaintiffs. The learned advocate for the defendants further contends that the amount of mesne profits for both those periods should be allowed to be set off against the first and succeeding instalments that may be payable under the new decree. The first point raised by the mortgagees is now concluded by the decision of the Full Bench in Mritunjoy Mitter v. Satish Chandra Bannerjee : AIR1944Cal193 . The learned Subordinate Judge was right in reopening the preliminary and final mortgage decrees as well as the personal decree passed under Order 34 Rule 6, Civil P.C. The second point raised by the plaintiffs and the second and third points raised by the defendants depend mainly upon the effect of Section 36 (2) of the Act. We will consider them together after the first point raised by the defendants.

3. The learned Subordinate Judge has found that Rs. 3,76,324-12 6 is payable to the plaintiffs. The correctness of that amount has not been challenged before us by the parties. He has made the sum payable in 15 annual instalments. Each instalment comes to about Rs. 25,088. The evidence is that the defendants have practically no property left to them and they can pay the instalments only out of the income of the properties purchased by the plaintiffs which are to be restored to them by reason of the provisions of Section 36 (2) Clause (c) of the Act. They are not in a position to say what the net annual income of those properties at present would be, for the plaintiffs have been in possession of the bulk of them from 1933 and of the rest at least from 1936. The plaintiffs were in a better position to prove what the net annual income would be but they have not chosen to give any evidence on the point, not even oral evidence. One of the defendants deposed and he said that they could re-pay the decretal amount in the course of 30 years. That evidence is vague and virtually amounts to an expression of opinion. In this state of the evidence, it would have been necessary to remand the case to the lower Court for further investigation as to what the net annual income of the properties purchased by the plaintiffs was, but the learned advocate for the plaintiffs asked us not to remand the case as that course would delay payment to his clients. Ultimately the defendants' advocate agreed to the view point of the plaintiffs advocate, and both of them asked us to proceed on considerations based on experience.

4. In view of the general practice of moneylenders in Bengal to keep as margin an amount almost equal to the value of the mortgaged properties when the loan is advanced on the security of zemindary and other moffusil properties, the value of the mortgaged properties at the time of the mortgage can be taken to have been about Rupees 5,00,000, The mortgage was in the year 1918 and at that time it was usual to value zemindary properties at 20 times the net annual income. On that basis the net annual income would be about Rs. 25,000 and in the absence of any evidence that the income has since then fluctuated that amount can be taken to be the net annual income now. The income of the properties purchased by the plaintiffs in execution of the decree made under Order 34, Rule 6 is negligible, for the price paid was only Rs. 3899. Some allowance must be made for the fact that the whole amount of rent may not be collected every year from the tenants and for bad years, and something must be left to the defendants for their maintenance. Taking all these facts into consideration we think that the instalments should be spread over a period of 20 years.

5. The new decree passed in this suit is for the sum of Rs. 3,76,324-12-6. It has directed the defendants to pay the same in instalments. It has also directed restoration of possession to them of the properties purchased by the plaintiffs in execution of the re-opened decrees. Leaving aside for the present the conditions imposed on the defendants regarding the payment of revenue and cesses during the time that they would remain in possession, the decree provides that in default in the payment of any one instalment the plaintiffs would get back possession, and in that case the amount at which they had purchased the same in execution of the reopened decrees would be set off against the balance that would be due under the new decree. Having regard to the fact that the new decree is for the sum of Rs. 3,76,324 odd and that the plaintiffs had purchased those properties for the sum of Rs. 2,39,098 (being the total of the sum of Rs. 2,35,200 for which the mortgaged properties had been purchased and of the sum of Rs. 3899 for which the other personal properties of the defendants had been purchased in execution of the re-opened personal decree) there may be a balance due to plaintiffs after the set off but there is no reservation in the new decree by virtue of which the plaintiffs would be entitled to apply for a decree under Order 34, Rule 6, Civil P.C., for recovering the balance of the new decree in case default be made by the defendants at a time when more than Rupees 2,39,098 would be payable under the new decree. It is for this reason that Mr. Gupta attacks the form of the new decree. He says that the new decree has to be passed in the form provided for in Section 34 (1) (a) of the Act. His contention amounts to this, that where the suit is to enforce a mortgage the new decree must take the form of a preliminary mortgage decree with the result that the right to apply for a final mortgage decree would flow from the provisions of Sub-clause (ii) of Sub-section (1) (a) of Section 34. To support his contention he relies upon the words 'in accordance with the provisions of the Act' used in Clause (a) of Sub-section (2) of Section 36, which according to him attract all the provisions of Section 34 to the new decree. He says that unless there be a new preliminary mortgage decree, there would be no final mortgage decree and it would be difficult for a mortgagee to get a balance decree under Order 34, Rule 6, for such a balance decree can only be passed if a balance remained due to the mortgagee after the mortgaged properties have been sold in execution of the final mortgage decree. The sale held under the re-opened final mortgage decree may not be held to be a sale in execution of a final mortgage decree on the ground that the final mortgage decree had been wiped out as a result of the proceedings under Section 36 of the Act.

6. Whenever a decree is re-opened, be it a mortgage decree or a money decree, and a new decree is passed that new decree must conform with the express provisions of the different clauses of Section 36, Sub-section (2) which may be applicable to the case. Any provision in the other parts of the Act which would be in conflict with those express provisions must give way on the principle that special provisions would derogate from the general. If, however, there be no conflict the special provisions would be considered to be in addition to the general ones. In the light of this principle the question raised before us must be examined.

7. The provision for instalments is made both in Section 34 and Section 36, Sub-section (2). In the case of a money decree a question may arise about the maximum number of instalments, for Section 34, Sub-section (1), Clause (b) enjoins annual instalments not exceeding 20 in number whereas under Clause (d) of Section 36 (2) the instalments need not be annual and may exceed 20 in number. But as that question does not arise before us we need not pursue the matter further. Where no sale had taken place in execution of the re-opened decree, the new decree would not have to embody the terms of Clause (c) and (e) of Section 36 (2) but when a sale has taken place in execution of the re-opened decree, be it a mortgage decree or a money decree, and at the sale the decree-holder had purchased the judgment-debtor's property it would be incumbent on the Court to pass the new decree embodying the terms of those clauses. A ease may occur where only some of the mortgaged properties, but not all, have been sold in execution of the re-opened mortgage decree. In such a case, if the new decree were to contain only the provisions of Sub-section (2) of Section 36 and nothing more, there would be obvious injustice to the mortgagee. Justice requires a decree for sale of those unsold properties if the mortgagor makes default in the payment of instalments given by the new decree and the balance payable under the new decree exceeds the price for which those mortgaged properties sold had been purchased by the mortgagee in execution of the re-opened final mortgage decree. Similarly, in the case where the mortgage decree had been reopened after sale of all the mortgaged properties to the mortgagee in execution of the re-opened mortgage decree and the balance of the new decree that remains due after the mortgagor had committed default in the payment of any instalment given by the new decree exceeds the price at which the mortgagee had purchased then in execution of the re-opened decree, it would be unfair if the right of the mortgagee to get a personal decree for the balance that would remain after the set off of the price is not reserved. It is to be seen if the provisions of Section 36 or any other provision of the Act prevents the Court from doing what justice requires. The last mentioned type is the case before us.

8. Order 34, Rule 6, Civil P.C., proceeds on the basis that there has been or would be a sale in execution of the final mortgage decree. The point therefore depends upon the question whether the mortgagee can still be considered to have purchased the mortgaged properties in execution of a final mortgage decree when that decree has been re-opened and the mortgagee purchaser's possession is again restored to him under Clause (e) of Section 36 (2) by reason of the default of the mortgagor in the payment of any instalment payable under the new decree. The question is not free from difficulty.

9. The general principle is that if a decree-holder purchases property in execution of a decree and that decree is either set aside or modified after the sale, his purchase falls through: 10 ALL. 166.2 If this general principle be applicable, the decree-holder purchaser's title would cease the moment the decree is reopened and a new decree passed under Section 36, Bengal Money-Lender's Act. He would become a trespasser and would be liable to pay mesne profits to the judgment-debtor at least from that date. If the judgment-debtor commits default in the payment of instalments payable under the new decree, the selfsame property would have to be sold again in execution of the new decree if the decree-holder wishes to realise his dues from the same. Accordingly in the case of a suit to enforce a mortgage the new decree would have to be in the form of a preliminary decree for sale of the mortgaged property to be followed up by a final decree for sale. But Clause (e) of Section 36 (2) provides for restoration of the properties purchased in execution of the re-opened decree to the decree-holder purchaser, which means that he is not to put it up to sale again in execution of the new decree. From this it necessarily follows that the Legislature intended to exclude the general principle formulated in Zain-ul-Abdin Khan v. Md. Asghar Ali Khan ('88) 10 All. 166 The title would remain in the decree-holder purchaser in spite of the fact that the decree in execution of which he had purchased had been re-opened. The Legislature has made it equally clear that when the judgment-debtor is restored to possession under Clause (c) of Section 36 (2) he is to be in possession on his own account, the intention of the Legislature being to give the judgment-debtor the means to repay the instalments payable under the new decree. The right conferred on the judgment-debtor under Clause (c) of that sub-section is therefore of the nature of jura in re alieno, the title being still in the decree-holder purchaser; but burdened with the enjoyment of the judgment-debtor as long as he pays the instalments payable under the new decree. When the new decree is fully paid up he becomes the owner, for the decree-holder purchaser would not be considered to be owner, for the debt due to him in consideration of which he had purchased the property had been discharged by payment. The consideration being extinguished the sale would be considered to have become void from the date of the payment of the last instalment payable under the new decree.

10. From what we have said above the following conclusions would follow: (i) where all the mortgaged properties have been sold in execution of the re-opened final mortgage decree and purchased by the decree-holder, a new preliminary mortgage decree followed on default of payment of instalment by a new final mortgage decree would be meaningless, for such decrees would have to be for sale of the mortgaged properties. In such a case there would be at the time nothing to sell, as the title to the mortgaged properties would not then be with the judgment-debtor but with the decree-holder himself by reason of his purchase in execution of the re-opened final mortgage decree; (ii) if all the mortgaged properties had not been sold in execution of the reopened final mortgage decree, there would be the necessity of passing a new preliminary decree for sale of the remaining unsold properties. The words of Clause (a) of Sub-section (2) of Section 36, that the new decree is to be in accordance with the Act would not only allow but require that a preliminary mortgage decree must be adapted to the circumstances of the case. It must provide for two things on default being made by the judgment-debtor in the payment of instalment payable under the new decree; namely (1) that possession of those properties which had been purchased by the decree holder in execution of the re-opened final mortgage decree is to be restored to him and the amount at which he had purchased the same to be set off against the balance of the new decree, and (2) that if after the set-off there remains a sum still payable to the decree-holder, the latter will have the right to apply for a new final decree for the sale of those unsold mortgaged properties in terms of Section 34 (1), Clause (a) (ii); (iii) that the decree-holder purchaser is not accountable to the judgment-debtor for mesne profits from the date at which he had taken possession of the properties purchased in execution of the re-opened decree till the date when the order for restoration of those properties to the judgment-debtor is made at the time of the re-opening of the old decree; and (iv) if the judgment-debtor commits default in the payment of any instalment payable under the new decree the decree-holder on getting back the properties from the judgment-debtor in terms of Clause (e) of Sub-section 2 of Section 36 would enjoy the same on the basis of the title he had acquired by his purchase in execution of the re-opened decree.

11. The third and the fourth propositions would be equally applicable when the re-opened decree is a simple money decree. The third and the fourth propositions which we have laid down are supported by the decisions in Tamluk Loan Office Co. Ltd. v. Ganga Narayan Kar ('42) 46 C.W.N. 919 and Suresh Chandra Basak v. Benode Lal Pal : AIR1943Cal628 respectively. As the decree-holder purchaser would hold the properties restored to him on default in the payment of any instalment payable under the new decree on the title acquired in execution of the final mortgage decree (though re-opened), the words of Order 34, Rule 6 would not stand in his way if he were to apply for a personal decree for the balance under Order 34, Rule 6, Civil P.C., even if by reason of the sale of all the mortgaged properties in execution of the re-opened decree the new decree has to take, and takes the form of a decree for a sum of money which simply directs payment of the decretal amount in instalments. As the Bengal Money-Lender's Act does not prevent the Court when passing a mortgage decree for the first time from imposing conditions on the mortgagor with a view to preserve the mortgaged properties till the decree is satisfied by the payment of all the instalments, we do not see why the Court cannot impose such conditions when passing the new decree.

12. We have held that the defendants are not entitled to get an account of mesne profits from the plaintiffs from the date when the latter took possession of the properties purchased by them till the date of the order for restoration made in favour of the defendants under Clause (c) of Sub-section (2) of Section 36. But as a judgment-debtor is to hold possession on his own account from that date, and so would be entitled to have the profits, he would be entitled to get mesne profits from the decree-holder purchaser if he be kept out of possession by the latter in spite of the order under Clause (c) for restoration of possession. In the case before us the original decrees were re-opened by the learned Subordinate Judge by his order dated 25th August 1941. As the new decree could only be passed after calculations, the learned Subordinate Judge made a direction in that order for taking accounts. On 13th September 1941 the defendants applied for restoration of possession. The Court fixed 15th September 1941 for the hearing of that application. But on 15th September 1941 the plaintiffs informed the Court that they had filed an appeal to this Court against the order of 25th August 1941, and prayed for postponement of the hearing of the defendants' application for possession for a short time in order that they may move this Court for stay of further proceedings. That prayer was granted by the lower Court, and the hearing was postponed to 11th November 1941. On 15th September 1941, the plaintiffs filed their appeal in this Court against the said order of the learned Subordinate Judge dated 25th August 1941. That appeal was numbered First Miscellaneous Appeal NO. 321 of 1941. On the same day they moved this Court and obtained a rule nisi for stay of further proceedings in the lower Court till the disposal of that appeal with ad interim stay. That rule was made absolute on 8th December 1941. On 23rd March 1943 the miscellaneous appeal was dismissed on the ground that no appeal lay from that order, as the proper procedure for the plaintiff was to wait till the new decree was passed and then to file an appeal against the new decree. The new decree was prepared and signed by the Subordinate Judge on 17th May 1943. In it the order for restoration of possession was made. On the next day the plaintiffs applied to the Subordinate Judge for stay of delivery of possession. They filed this appeal in this Court against the new decree and obtained an order for stay of delivery of possession to the defendants till this appeal was disposed of. If these proceedings for stay had not been started by the plaintiffs the defendants would have got the order for restoration of possession on 15th September 1941 and could have got back possession immediately thereafter. The plaintiffs are therefore liable to pay mesne profits to the defendants from 15th September 1941 till the defendants get back possession of the properties purchased by the plaintiffs in execution of the reopened decrees.

13. The third and the fourth points urged by the plaintiff's are sound. Definite dates for payment of instalments and for the performance of other conditions should be fixed. A question was raised as to whether the plaintiffs are in law bound to hand over the collection and other papers to the defendants. They did not receive any papers from the defendants or their predeeessors-in-interest and those papers the plaintiffs themselves had prepared for making collections. We are relieved of deciding that question as the parties have arrived at an agreement. The order which we are making regarding the papers is accordingly by consent of parties. The result is that both the appeal and the cross objections are allowed in part. The new decree would be as follows:

The plaintiffs do put the defendants in possession of all the properties they had purchased in execution of the reopened decrees and render to them an account of mesne profits of those properties from 15th September 1941 till the date when they restore or relinquish possession to or in favour of the defendants. The plaintiff do deliver to the defendants the collection papers of those properties, Which go by name of Touzis, Sehas or Karehas, for the years 1347 to 1350 B.S. and up to the time when they restore or relinquish possession to or in favour of the defendants. It is declared that a sum of Rupees 3,76,324 12-6 is due to the plaintiffs by the defendants. The defendants do pay the said sum in twenty equal annual instalments, the first of such instalment to be paid on or before the first anniversary of the date on which the plaintiffs restore or relinquish possession of all the properties purchased by them in execution of the reopened decrees to or in favour of the defendants, or of the date on which they deliver to the defendants, the aforesaid collection papers of the period as mentioned above, whichever date is later. And the defendants do pay to the plaintiffs the succeeding annual instalments on or before the same date of the succeeding years on which the first instalment becomes payable. And the defendants do pay the revenue of the aforesaid properties that would become payable after they are restored to possession, kist by kist, as they fall due at least three days before the kist dates and file the chalans in the Court below in proof of payment within ten days of the payments. And the defendants do pay road, public works and education cesses and rent due to superior landlords as they fall due in respect of the aforesaid properties that would become payable from the date when possession is restored to them--the cesses within 31st March of each financial year and the rent within the month of Chaitra of each Bengalee year and file in the Court below chalans and dakhilas in proof of payment, within fifteen days of the payments. In default of payment of any one instalment or in the payment of revenue, cesses or rent within the time as aforesaid the plaintiffs would be entitled to get back possession of the aforesaid properties from the defendants, and in that event the sum of Rupees 2,39,099 at which the plaintiffs had purchased those properties would be set off against the balance of the amount then due to them under this decree. If thereafter any amount is still due to the plaintiffs under this decree the plaintiffs would be entitled to apply in the Court below for a decree for the balance under Order 34, Rule 6, Civil P.C. And the Court below do make an enquiry into mesne profits for the period aforesaid, that is, from 15th September 1941 till restoration of possession to the defendants. The defendants would be at liberty to set off the amount that may be decreed in their favour for mesne profits towards the instalment that would fall in the year in which the amount is declared by the Court below and the next succeeding years till the said amount is wiped off. The plaintiffs do also give inspection of and true copies to the defendants at the cost of defendants of such other papers relating to the aforesaid properties as they may require. The parties would bear respective costs in this appeal.

14. In the application Srimati Sindhu Bala Debi prays for being made a party to this appeal and for an order on the plaintiffs directing them to pay her a sum of Rs. 3744. The application is a misconceived one in view of the scope of the appeal before us. The application is dismissed but without costs. She may pursue her claim against the plaintiffs by taking such proceedings she may be advised to take. No order is necessary on the application under Section 115, Civil P.C.


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