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Mritunjoy Roy and anr. Vs. Netai Chand Dutt and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1944Cal255
AppellantMritunjoy Roy and anr.
RespondentNetai Chand Dutt and ors.
Excerpt:
- .....which resulted in the reopening of the previous decrees and the passing of the new preliminary decree. clause (4) of this decree declared that several parties were entitled to payment of the sums due to them in the following order, viz. (i) the plaintiffs and (ii) the defendant benode behari choudhury. clause (5) of this decree directed that the defendants or any one of them do pay into court to the credit of this suit or to the plaintiffs such sums as may be found due in three equal annual instalments, the first of such instalments being payable within one month from the confirmation of the report of the registrar and the taxed costs of the suit awarded to the plaintiffs and that the defendant netai do pay into court to the credit of this suit within the. time specified therein such.....
Judgment:
ORDER

Das, J.

1. This is an application on the part of the plaintiffs decree-holders and purchasers at the Registrar's sale held on 12th September 1942 for leave to pay in the balance of the purchase money after setting off the amount of their claim and costs and for confirmation of the sale and issue of the sale certificate in their favour and other incidental reliefs. The facts material for the purpose of this application are not in dispute and are as follows: On 2lst July 1936, the defendants Netai, Tarak and Barid executed a mortgage in favour of the plaintiffs to secure the repayment of the sum of us. 26,000 with interest thereon at 7-1/2 per cent, per annum with quarterly rests.

2. On 18th August 1936 two of the defendants, viz., Netai and Barid executed a second mortgage on their shares in the mortgaged property in favour of the plaintiffs to secure the repayment of the sum of RS. 2500 with interest thereon at 12 per cent, per annum with quarterly rests. On 11th August 1938 one of the defendants, viz., Netai executed a third mortgage on his share in the mortgage property in favour of defendant 4, Benode Behari Choudhury for the repayment of Rs. 1500 with interest thereon at 10 per cent, per annum. On 25th August 1938 the plaintiffs mortgagees instituted this suit on the two mortgages dated respectively 21st July 1936 and 18th August 1936 impleading Netai, Tarak and Barid as mortgagors defendants and Benode Behari Chou-dhuri as the puisne mortgagee defendant. On 10th February 1939, the usual preliminary decree was passed in this suit and on 2nd July 1941 the usual final decree for sale was passed. The Bengal Money-Lenders Act 1940 having come into operation in the meantime the mortgagors defendants applied for relief under that Act and the preliminary and final decrees passed in this suit were re-opened and a fresh preliminary decree was passed under the provisions of Bengal Money-Lenders Act on 14th July 1941 a copy of which is annexure 'A' to the present petition. By Clause (1) of this new preliminary decree dated 14th July 1941 the Registrar was directed to take an account, amongst others, of what was due on that date to the plaintiffs for principal and interest on their two mortgages mentioned in the pleadings-such interest to be computed, subject to the Rule of Damduput if the same be applicable, at the rate of 8 per cent. per annum simple. By Clause (3) it was referred to the Taxing Officer of this Court to tax the plaintiffs their costs of this suit payable under the aforesaid decrees and also including the costs of and incidental to the applications which resulted in the reopening of the previous decrees and the passing of the new preliminary decree. Clause (4) of this decree declared that several parties were entitled to payment of the sums due to them in the following order, viz. (i) the plaintiffs and (ii) the defendant Benode Behari Choudhury. Clause (5) of this decree directed that the defendants or any one of them do pay into Court to the credit of this suit or to the plaintiffs such sums as may be found due in three equal annual instalments, the first of such instalments being payable within one month from the confirmation of the report of the Registrar and the taxed costs of the suit awarded to the plaintiffs and that the defendant Netai do pay into Court to the credit of this suit within the. time specified therein such sum as may be found due and the taxed costs of the suit awarded to the defendant Benode Behari Choudhury and that on payment of the amounts due to the plaintiffs by the defendants or any one of them in the manner prescribed above and on payment thereafter of the costs of the suit and other costs charges or expenses as may be payable under Rule 10 of Order 34, Civil P.C. the plaintiffs should bring into Court all documents in their possession or power relating to the mortgaged properties to be delivered to such person as the Court might direct and the plaintiffs should if so required reconvey or re-transfer the said property free from the said mortgages and from all encumbrances created by the plaintiffs or any person claiming under them. There was like direction on the defendant Netai and the defendant Benode Behari Choudhury in respect of the third mortgage. It will be noticed that under this paragraph all the defendants were directed to pay the whole amount due to the plaintiffs under both the mortgages and no separate directions were given for the payment of separate amounts by the respective mortgagors under the respective mortgages in favour of the plaintiffs.

3. Then by Clause (6) of this decree it was further ordered that in default of payment of any one of the said instalments or the aforesaid taxed costs the plaintiffs may apply to the Court after giving a month's notice to the defendant, for a final decree for sale of the mortgaged property subject to the provisions of the Bengal Money-Lenders Act, 1940, and on such application being granted the mortgaged property or a sufficient part thereof be directed to be sold. This Clause (6) further provides that in the event of such sale being held the moneys realised by such sale shall be paid into Court and be duly applied, after deduction of commission and expenses of sale, in payment of the amount or the balance thereof payable to the plaintiffs under this decree in respect of the mortgage dated 2lst July 1936 and under any further orders that may have been passed in this suit and in payment of the amount which may be adjudged due to the plaintiffs in respect of the costs of the suit and further costs charges and expenses and that the balance thereof, if any, be divided into three equal parts and that one of such equal parts shall be held subject to the further Order of this Court and that two of such equal parts shall be duly applied in payment of the amount payable to the plaintiffs under this decree in respect of the mortgage dated 18th August 1936 and that the then balance, if any, shall be held subject to the further Order of this Court. It will be noticed that under this part of Clause (6) the net sale proceeds were separately allocated to the two mortgages in favour of the plaintiffs and preserved l/3rd of the balance left after satisfaction of the plaintiffs claims under mortgage 1 and the costs of this suit for the benefit of the defendant Tarak. Clauses 7 and 8 are not material for the purpose of this application. Clause 9 reserves liberty to the parties to apply to Court. On 5th September 1941, the Registrar made his report that on 14th July 1941 there was due to the plaintiffs a sum of Rs. 39,771-15-8 for principal and interest upto 14th July 1941 as set forth in the schedule annexed to the report. The schedule to the report shows that this sum of Rs. 39,771-15-8 is made up of Rs. 36,365-5-0 for principal and interest due under Mortgage 1 dated 2lst July 1936 and Rupees 8406-10-8 principal and interest due under mortgage 2 dated 18th August 1936.

4. The defendants having failed to pay the first instalment the plaintiff caused a notice to be served on all the defendants on 7th January 1942 which is set out in para. 8 of the petition. By this notice the plaintiffs intimated that they intended to apply on or after 6th February 1942 for execution of the decree for recovery of the said instalment with interest thereon at 6 per cent, per annum from the date of default, i. e., 5th January 1942. Paragraph 8 of the petition and the terms of the notice itself clearly indicate that the notice was given under Sub-section (2) of section 34, Bengal Money-lenders Act, 1940. Notice under Sub-section (2) of section 34 of that Act, however, is appropriate only in the case of money decrees in respect of unsecured loans advanced before or after the commencement of that Act. It was not a notice such as is required under sub- section (1)(a)(ii) of section 34 of the Act, and it is doubtful whether this notice complied with the necessary requirements of Sub-section. (1)(a)(ii) so as to entitle the plaintiff to apply for the final decree. No point, however, has been taken by learned counsel for the defendants Netai, Tarak and Barid on the invalidity of this notice.

5. The final decree was passed on 3rd March 1942. Learned counsel for the defendants Netai, Tarak and Barid has not challenged the final decree on the ground of invalidity of the notice and consequently it is not necessary for me to consider whether the Court had jurisdiction to pass the final decree or whether, the final decree having been passed, I have any power to ignore the final decree in this suit as having been made without any jurisdiction. In view of the fact that no such point has been taken or argued before me I do not propose to go behind the final decree and I proceed on the footing that the final decree is a good decree binding on the parties.

6. Clause (1) of the final decree dated 3rd March 1942 directed that the mortgaged property be sold subject to a reserve price to be fixed by the Registrar. Clause (2) of the final decree directed that the monies realised by such sale shall, save as thereinafter mentioned be paid into Court and shall be duly applied, after deduction of commission and expenses of sale, in payment of the amount payable to the plaintiffs under the aforesaid preliminary decree and under any further orders that may ilttve been passed in this suit and in payment of the costs of the suit and subsequent costs as therein mentioned. Clause (3) of this final decree provides that the plaintiffs be at liberty to bid for and purchase the mortgage property and it declared the purchaser to set off the amount of the purchase money pro tanto against the total amount payable or due to them as hereinbefore mentioned. The sale directed by the above decrees was to be under the provisions of Bengal Money-lenders Act, 1940, and consequently the Registrar fixed Rs. 44,000 as the specified price under section 35 of that act which provides as follows:

Notwithstanding anything contained in any other law for the time being in force, the proclamation of the intended sale of property in execution of a decree passed in respect of a loan shall specify only so much of the property of the judgment-debtor, as the Court considers to be saleable at a price sufficient to satisfy the decree, and the property so specified shall not be sold at a price which is less than the price specified in such proclamation.

Provided that, if the highest amount bid for the property so specified is less than the price so specified, the Court may sell such property for such amount, if the decree-holder consents in writing to forego so much of the amount decreed as is equal to the difference between the highest amount bid and the price so specified.

7. On 12th September 1942, the mortgaged pro-perty was put up for sale by the Registrar and the highest bid that was offered was offered by the plaintiffs for Rs. 40,000. The plaintiffs having consented to forego Rs. 4000 being the difference between the specified price and their bid the Registrar accepted such bid and declared the plaintiffs as the purchase Rs.

8. The plaintiffs have now applied for leave to pay into Court the sum of Rs. 81-8-7 or such other sum as to this Court may seem fit and proper as the balance of the purchase money after setting off their claim and costs and for confirmation of sale and issue of sale certificate. As to how they have arrived at the figure of Rs. 81-8-7 will appear from paras. 12, 13, 15 and 16 of the petition. Broadly speaking, they have taken the reported amount and added to it interest at 6 per cent, on the amounts of the first instalment and the amounts of the taxed costs with interest thereon making up the total figure of Rs. 43,043-15-2. To this they have added the subsequent non-taxed costs amounting to Rs. 874-8-3 and have arrived at the total claim of Rs. 13,918-7-5. Out of this total claim of Rs. 43,918-7-5 they have deducted Rs. 4000 being the difference between the specified price (RS. 44,000) and their bid (RS. 40,000) and shown the sum of Rs. 39,918-7-5 as the total sum they are entitled to set off against Rs. 40,000 leaving a balance of Rs. 81-8-7 which is the amount they propose to pay into Court.

9. Mr. S. R. Das Gupta who appears in support of this application has conceded that his clients are not entitled to interest on the first instalment and that therefore the sum of Rs. 497-2-8 should go out. He has handed up to me two sets of accounts showing how the figures should be calculated. Those accounts are referred to in this judgment as accounts Al and A2. The account marked A1 is practically the same as the account set out in the petition except that the sum of Rs. 497-2-3 which Mr. Das Gupta conceded his clients were not entitled to charge has been omitted. In this account (A l) also he has arrived at the total claim by taking their reported amount and adding to it the costs taxed and untaxed and interest on taxed costs and then deducting Rs. 4000 out of the total sum. This account (A l) as well as the account set out in the petition appears to me to be fallacious in principle. Deduction of Rs. 4000 out of the total claim arrived at by adding the amounts due under both the mortgages and the costs can be permissible only if all the mortgagors-defendants are liable on both the mortgages. This method of calculation ignores the fact that only two of the mortgagors are liable on both the mortgages and the third mortgagor is liable only on the first mortgage and deduction of Rs. 4000 out of the total claim so computed works injustice to the third mortgagor who has nothing to do with the second mortgage. Further section 85, Bengal Money-lenders Act, requires the decree-holder to forego the difference between the specified price and the highest bid out of the 'amount decreed.' A. perusal of sections 31 and 34, Bengal Money-lenders Act, will make it clear that the expression 'decretal amount' or 'amount of the decree' mean the principal and interest covered by the decree and in my opinion the expression 'amount decreed' in section 35 also means the principal and interest covered by the decree, i. e., the reported amount. Therefore the difference of Rs. 4000 has to be deducted from the reported amount which is the 'amount decreed.'

10. Section 35 of the Act, proceeds on the basis that the amount decreed is one and the same lin respect of all the mortgago Rs. In other words, this section is easily applicable to a simple case where all the mortgagors are interested in and are liable on all the mortgages and the same amount for principal and interest is decreed against all of them. A question of nicety arises in the application of this section to a case where all the mortgagors are not liable on all the mortgages and consequently 'the amount decreed' is different as against the different mortgago Rs. In the case now before me Clause (1) of the new prelimmary decree, 14th July 1941, directed the Registrar to take an account of what is due on that date to the plaintiffs for principal and interest on their two mortgages. Clause 5 of this new preliminary decree directed the defendants or any one of them to pay such sums as may be found due in three equal annual instalments. Up to this Clause no distinction was made in this decree between the mortgagors according to their respective liabilities. Clause 6, however, which gave the plaintiffs liberty to apply for final decree for sale provided that in the event of such sale being held the moneys realised by such sale should be applied, after deduction of com- mission and expenses of sale, in payment of the amount payable under the first mortgage and the costs therein specified and then the balance should be divided into three equal parts and that one of such equal parts should be held subject to further Order of this Court and the remaining two equal parts should be applied in payment of the amount payable in respect of the second mortgage. These provisions preserve the share of Tarak in the balance left after the claim of the plaintiffs in respect of first mortgage and the costs are paid. Therefore it appears to me that the 'amount decreed' against Tarak is the amount reported to be due in respect of the first mortgage, viz., Rs. 86,365-5-0 and the 'amount decreed' against Netai and Barid is Rs. 39,771-15-5 being the total of the amounts due under both the mortgages.

11. The amount decreed being thus different the question arises as to how the difference of Rs. 4000 is to be deducted. Is the whole of Rs. 4000 to be deducted, so far as Tarak is concerned, out of Rs. 36,365-5-0 which is the amount decreed as against him and the whole of it is to be deducted, so far as Netai and Barid is concerned, out of Rs. 39,771-15-5 which is the amount decreed as against them or it is to be deducted proportionately from rupees 36,365-5-0 due under the first mortgage and Rs. 3406-10-5 due on the second mortgage according to the ratio between the said 2 sums? Mr. Das Gupta has strongly relied upon Clause 3 of the final decree which allowed the plaintiffs to set off the amount of the purchase money pro tanto against the total amount payable or due to them and he claims that the total amount payable to the plaintiffs is the aggregate of the two amounts due under the two mortgages less Rs. 4000 which his clients have agreed to forego. This argument, in my opinion, is untenable because the expression 'the total amount due to them' in Clause (3) is qualified by the following words 'as hereinbefore mentioned'. Thus we are referred back to Clause 2 of this final decree which again refers to the payment of the amount payable to the plaintiffs under the aforesaid preliminary decree which, as I have said, under Clause 6 is different in amount as regards Tarak on the one hand and Netai and Barid on the other. Mr. Das Gupta has in his statement of account marked 'A2' has purported to make up an account on the basis of proportionate reduction, but apart from other objection to be discussed later this statement of account also does not appear to me to be correct, because, he has not deducted proportionate shares of Netai and Barid in the difference of RS. 4000 out of the claim against them in respect of the first mortgage and has thrown the whole of their proportionate shares on the amount due by them in respect of the second mortgage, thus throwing an additional burden on Tarak.

12. Mr. S. Bannerjee who appears for the mortgagors defendants has argued that the previous preliminary and final decrees having been re-opened the taxation of costs thereunder and the alloeaturs issued in respect thereof must fall therewith and all the costs must be regarded as untaxed and the plaintiffs are not entitled to set off the amount of any of the alloeaturs against the purchase price. He further contends that the plaintiffs are not entitled to any interest on the amounts of the allocatur as the new preliminary decree provides for no interest on costs. I am not of opinion that the re-opening of the old decrees has in the present case the effect of setting aside the old decrees in toto. In my opinion they were only re-opened in so far as it was necessary for arriving at the amount due by calculating interest in accordance with the provisions of the Bengal Money-lenders Act. Further Clause 3 of the new preliminary decree directed the Taxing Officer to tax the plaintiffs their costs of this suit payable under the aforesaid decrees. This provision, to my mind, suggests that the provisions of the old decrees in so far as they related to costs were not intended to be altogether abrogated and I am not prepared to hold that the alloeaturs issued on taxation have become ineffectual or that the new preliminary decree abrogated the provisions for payment of interest on taxed costs. Mr. Bannerjee also argues, and I agree with him, that the plaintiffs are not entitled to set off the untaxed costs amounting to Rs. 874-8-3 at this stage.

13. Subject to his aforesaid contentions, the main argument of Mr. Bannerjee is that section 35 was designed to ensure, in case where the highest bid did not reach the specified price, that the mortgagors should be placed in the same position as they would be placed in if the specified price had been reached. He has handed up to me a statement of account in two parts which is referred to in this judgment as account 'B'. In the 1st part he has shown how the figures would have worked out if the specified price had been reached. He has taken the reported amount on the first mortgage and has added to it all costs taxed and untaxed without interest making a total of Rs. 39,810-4-3. Then he has deducted this sum of Rs. 39,810-4-3 from Rs. 44,000 and has shown that after satisfaction of the claim under the first mortgage and the costs of the suit there would have remained a balance of Rs. 4189-5-9. Then he shows that according to the preliminary decree this balance would be divided into three parts and Tarak's l/3rd share of this balance amounting to Rs. 1396-7-3 should be set apart and held subject to the further Order of the Court and remaining 2/3rd share of the balance amounting to rupees 2792-14-6 referable to the shares of Netai and Barid would be available to the plaintiffs in respect of the claim on the second mortgage on which Netai and Barid alone are liable. This is what would have happened if the property have been sold at the specified price and in such case the plaintiffs would have had to pay into Court at least Tarak's 1/3rd share in the balance amounting to Rs, 1396-7-3.

14. In the second part of this account marked 'B' Mr. Bannerjee had credited Rs. 40,000. He has in effect deducted the whole of Rs. 4000 against the claim on the first mortgage and the costs, because while adding Rs. 3406-10-8 in the beginning he has deducted the same amount at a later stage and arrived at a balance of Rs. 35,810-4-3 which he has debited against the highest bid of Rs. 40,000 leaving a balance of Rs. 4189-11-9. This accounting shows that if the whole of Rs. 4000 is debited against the claim on the first mortgage and the costs then the result works out precisely in the same way as it would if the property had been sold at the specified price and it is only by this method of computation that Tarak can be put in the same position as ha would have been in if the property has been sold at the specified price.

15. I agree with Mr. Banerjee that the method of calculation adopted by him is consonant with the language used in section 35 of the Act and the object it was designed to secure and in Order to put Tarak in the same position, as he would have been in the whole of Rs. 4000 is to be deducted out of the amount due under the first mortgage because that is ' the amount decreed' so far as Tarak is concerned. This method of calculation does no injustice to Netai and Barid, because, so far as their liability is concerned, it does not matter a bit whether the whole of RS. 4000 is deducted out of their liability under the first mortgage or out ofi their liability under the second mortgage or it is deducted proportionately out of their respective liabilities under the two mortgages. Mr. Banerjee's figures however are not correct in that he has not taken into account the Registrar's commission and the interest on the taxed costs and has included the untaxed costs. Applying, therefore, the correct principle as I conceive it to be the correct figures would be as follows:

Highest bid ... ... ... ... ... ... Rs. 40,000 00

Registrar's commission ... ... ... ... Rs. 1075 0 0

Reported amount under first mortgage and decreed against all

the three mortgagors ... ... ... ... Rs. 36,365 5 0

Allocatur dated 13-5-40 ... ... ... ... Rs. 933 4 0

Interest at 6 per cent, per annum from 13-5-40 to 12-9-42 ... Rs. 130 9 0

Allocatur dated 9th December 1942 ... ... ... Rs. 1637 6 3

Interest at 9 per cent, per annum from 9-12-41 to 12-9-42 ... Rs. 73 10 0

____________

Rs. 40,215 2 3

____________

Less difference between specified price and the highest bid ... Rs. 4000 0 0

____________

Rs. 36,215 2 3

___________

Balance Rs. 3784 13 9

One-third share of Tarak in the balance to be held subject to further

order of Court ... ... ... ... ... Rs. 1294 6 7

Due to plaintiffs from Netai arid Barid under second mortgage ... Rs. 3406 10 8

___________

Still due to the plaintiffs under second mortgage from Netai and Barid

besides untaxed costs of Rs. 874-8-3 ... ... ... Rs. 916 3 6

16. Thus the plaintiffs will have to pay into Court the sum of Rs. 1294-6-7 as Tarak's one-third share in the balance left after setting off the Registrar's commission, the amount decreed in respect of the first mortgage and the costs less lis. 4000. As against this sum the plaintiffs will be entitled as against Tarak to the subsequent costs when taxed. As against Netai and Barid the plaintiffs will have a claim for a personal decree for Rs. 916-3-6 plus the sub-sequent costs when taxed. The result is that I make an Order in terms of the summons exeept that the plaintiffs be at liberty to payinto Court the sum of Rs. 1294-6-7 instead of RS. 81-8-7. Certified for counsel.


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