B.C. Chakrabarti, J.
1. This revisional application which has been heard on notice to the Opposite Parties, is directed against an order dated July 3, 1979 passed in T. Ex. Case No. 17 of 1975 of the 2nd Court of learned Sub-Judge at Alipore.
2. Facts leading to the impugned order are not very much in dispute and may be briefly stated thus :
The plaintiff-opposite party No. 1 instituted T. S. No. 40 of 1960 of the 2nd Court of Sub-Judge at Alipore against Opposite Party No. 2 Sabitri Debi Jhajaria and Nanda Kishore Jhajaria predecessor in interest of Opposite Parries 3 to 9 for a sum of Rs. 3,98,402.74P. due on account of mortgage and interest, for a declaration that premises No. 12 Sunny Park, Calcutta was validly mortgaged to the plaintiffs dues and for usual mortgage decree under Order 34 of the Civil P. C. with ancillary reliefs. The petitioner Hong Kong and Shanghai Banking Corporation was impleaded in the said suit as a second mortgagee of the suit property. The petitioner filed a written statement alleging that the Opposite Party No. 2 executed a simple mortgage on Apr. 21, 1961 by way of security for the debt to the tune of Rs. 4,00,000/-. The petitioner also claimed a decree for the sum with interest. By judgment and decree dated July 26, 1965 the suit was decreed in a preliminary form directing defendants 1 and 2 to pay Rs. 3,98,402.74P, to the plaintiff (O. P. No. 1) together with interest at 6 1/4% perannum from the date of institution of the suit till realisation, within 6 months. In default the plaintiff would be entitled to apply for a final decree for recovery of the amount by sale of the mortgaged property. The decree further directed payment of Rs. 4,00,000/- to the defendant No. 3 (petitioner before us) within six months. The decree also directed that the money realised by sale shall first be applied towards payment of the dues of plaintiff and the balance shall be applied in payment of the amount due to the defendant No. 3.
3. The contesting defendants 1 and 2 preferred an appeal, being F. A. No. 208 of 1966 of this Court and the appeal too was dismissed in July, 1971. The time for payment however was extended by six months from the date of the judgment.
4. Nothing having been paid under the preliminary decree, a final decree for sale was passed in August, 1974.
5. The final decree was put into execution by the plaintiff-Opposite Party No. 1 which was registered as Title Execution Case No. 17 of 1975.
6. On June 16, 1979, the plaintiff-Opposite Party No. 1 and Opposite Parties Nos. 2 to 7 filed a joint petition of compromise. In the said petition total dues up to June 18, 1979 was calculated at Rs. 8,83,619.79P. The J. drs. agreed to pay interest at the rate of 11 1/2% per annum. The J. drs. further agreed to pay Rupees 1,00,000/- immediately and the balance dues in 36 monthly instalments of Rupees 25,843.80P. The petitioner intervened at the hearing of the said petition for recording compromise contending inter alia that the Executing Court could not go behind the final decree and record a compromise contrary to the terms of the said decree (Contd. on Col. 2)and to the prejudice or the petitioners rights, under the decree.7. The learned Subordinate Judge by the impugned order overruled the contention of the petitioner holding that the first mortgagee is entitled to come to terms with the mortgagor towards liquidation of the debt and the petitioner being a puisne mortgagee is not entitled to oppose the recording of such compromise. The Ex. Case was accordingly disposed of in terms of the compromise. Being aggrieved the petitioner has preferred the present revisional application.
8. Mr. Das Gupta appearing in support of the application argued that the effect of the compromise is to supersede the final decree in regard to the total sum due to the Opposite Party No. 1, the rate of interest and the time for sale thereby nullifying the rights of the petitioner under the final decree. It was also contended that the executing Court had no jurisdiction to extend the time provided in the decree for payment of the mortgage dues, after the final decree had been passed.
9. Mr. Banerjee on the other hand argued that the petitioner being a puisne mortgagee has very limited rights and is not at any rate entitled to oppose a compromise as between the prior mortgagee and the mortgagor. He also contended that there has been no error in the matter of calculation of interest resulting in inflation of the total amount payable to the Opposite Party No. 1 in terms of the decree.
10. The amount admitted due up to 18-6-1979 according to the terms of settlement is Rs. 8,83,619,79P. This figure has been worked out in the following manner :--
Outstanding principal....Rs. 3,00,000.00Interest on outstanding principal amount up to 7-4-1960 (date of suit)..Rs. 98,402.74
....Rs. 3,98,402.74Decretal amount costs awarded in the decree..Rs. 7,489.96
....Rs. 4,05,892.70Interest on Rs. 3,98,402.74 from 8-4-1960 to 15-6-1979....Rs. 4,77,727.09
....Rs. 8,83,619.79Less lump sum paid on 15-6-1979....Rs. 1,00,000.00
11. The mortgagor agreed to pay this sum in instalments and further agreed to pay interest at the rate of 11 1/2% per annum.
12. In the affidavit-in-opposition inpara. 12 it is stated as follows :
'This amount of Rs. 7,83,619.79 has been turned to decretal principal as per compromise effected on 18-6-79 over which interest at the rate of 11 1/2% has been agreed to be paid and approved by the learned Court .
13. It is clear from the statement of accounts that interest on Rs. 3,98,402.74 from the date of the suit up to the date of compromise came to Rs. 4,77,727.09 and the sum of Rs. 7,83,619.79 (after deducting the sum of Rs. one lac) includes this amount of interest. When the compromise further provides that the decree-holder will get interest on the entire amount it amounts to grant of interest on interest. There cannot be any question of awarding interest on interest amounting to Rupees 4,7.7,727.09. Nor is the decree-holder entitled to interest on costs after deletion of the relevant provision by the Civil Procedure Code (Amendment) Act of 1956. The Court under the provisions of Order 34, Rule 11 (b) may award subsequent interest on the aggregate of the principal sums specified in Clause (a) and not otherwise. The admission of the Opposite Party as quoted hereinbefore makes it clear that interest has been claimed and sanctioned by the Court to an extent not covered by the statutory provisions.
14. The calculation of interest in the manner as has been done has resulted in fixing the amount due at a figure which exceeds the amount that could be legally claimed under the statutory provisions. These apart, the agreement to pay the sum of Rs. 8,83,619.74 less Rs. 1 lac already paid, by 36 instalments of Rupees 25,843.80 has resulted in enhancement of the dues by reason of calculation of interest at the rate of 11 1/2% per annum. In fact 36 instalments at the above rate gives a figure of Rs. 9,30,376.80 besides the sum of Rs. 1 lac already paid. Consequently a liability to the tune of Rs. 10,30,376.80 was admitted though according to their own calculation it should have come to Rs. 8,83,619.79P.
15. True that the J. drs. (O. Ps. 2-9) have consented to it but since the petitioner has also certain rights under the decree, the petitioner is entitled to show that such a compromise is likely to prejudice his rights however inchoate it maybe. The preliminary decree directs that the defendant No. 3 (petitioner here) shall be entitled to recover from defendants 1 and 2 a sum of Rs. 4,00,000/- and that the money realised by sale shall be applied after deduction therefrom the expenses of the sale, in payment of the amount payable to the plaintiff and the balance, if any, shall be applied in payment of the amount due to the defendant No. 3. Nothing having been paid, there was a final decree for sale dated Sept. 28, 1974. The decree therefore gives the puisne mortgagee impleaded in the prior mortgagee's suit a relief in the sense that he is declared entitled to obtain satisfaction of his dues out of the surplus sale proceeds, if any, be left after satisfying the plaintiff's dues. He has therefore at least a problematic benefit of finding something left over Such a benefit, however, inchoate, problematic or remote it may be, cannot he undone by some arrangement entered into by the prior mortgagee and the mortgagor. Such arrangement certainly works prejudicially to the puisne mortgagee in the sense that it defers, if not prevents a sale in order to work out the respective rights of the parties.
16. This apart, the erroneous calculation of interest has resulted in fixing the amount due at a higher figure with the result that if the property be sold and the sale proceeds are applied to the payment of the dues of the plaintiff, the balance available would necessarily be less than what it should have been. This also is a prejudice to the rights of the petitioner.
17. In our opinion the recording of the compromise to all intents and purposes has the effect of varying the terms of the preliminary decree which has subsequently been made final. This, the Executing Court has no jurisdiction to do.
18. In that view of the matter, the re-visional application ought to succeed. The impugned order is accordingly set aside. The payment so far made pursuant to the compromise and in terms of our order dated Nov. 20, 1979 shall be deemed to be adjusted towards the decree.
19. There shall be no order for costs.
Anil K. Sen, J.
20. I agree.