1. The facts of the case to which these two appeals relate are confusing and complicated, and the parties have not chosen to place before us either all the relevant papers or their arguments in a comprehensible form. The substance of the contentions that have been urged however it is not difficult to understand once the facts are appreciated.
2. In a mortgage suit for sale in which the mortgagor and certain puisne mortgagees were impleaded as defendants the decree passed by the trial Court was taken on appeal to this Court by the heirs of the mortgagor and was varied by consent. The relevant terms of the decree as varied were the following:
1. One of the mortgaged properties. namely No. 1, had been sold at an auction for arrears of rent due to the landlords; and the plaintiff mortgagee had taken possession of it, having deposited the decretal amount under Section 171, Ben. Ten. Act. The plaintiff's gave up possession of that property.
2. A receiver was to be appointed in respect of all the properties and he was to remain in possession until the sale of the properties and until delivery of possession to the purchaser, and would pay all arrears of rent due on account of the mortgaged properties.
3. An account was to be taken for the period during which the plaintiff mortgagee was in possession of property No. 1. Such amounts as was actually realized by her and also what could be so realized but for her wilful default, would be deducted from such amounts as she would be entitled to under Section 76, T.P. Act, and Section 171, Ben. Ten. Act.
4. The mortgaged properties would be sold free from encumbrances.
5. From the sale-proceeds of property No. 1 the plaintiff mortgagor would get such amount as would be due to him under para. 3 above.
3. In accordance with the aforesaid settlement a preliminary decree was passed by the Court below under which the sale-proceeds were to be adjusted in the following order:
First.--The plaintiff was to get her dues in accordance with paras. 3 and 5 mentioned above. Second.--The plaintiff's mortgage of 1903 was to be paid up. Third.--Defendants 4 and 5's mortgage of 1904 was to be paid up. Fourth.-- Plaintiff's mortgage in suit was to be paid up. Fifth.--Defendants 4 and 5's mortgage of i91G was to be paid up.
4. Receivers were appointed one after another, but they were unable to make proper collections or to pay the rents due; and the plaintiff advanced money to the receivers under orders of the Court to enable them to meet the demands. Matters moved in this way till a final decree for sale was made in which the dues calculated on the footing of the directions in the preliminary decree were specified. A separate decree was also obtained by the plaintiffs in another suit for amounts which she had paid on account of rent. These two decrees were put in execution both together, in Execution Case No. 58 of 1927. Objection to this course was taken but it was overruled. In the application for execution both the mortgage-decree and the money-decree were mentioned as the decree under execution and the amounts for which execution was asked for consisted, besides insignificant items, of two main items, namely, Rupees 3,06) together with interest covered by the separate decree referred to above and Rs. 28,809 together with interest as due on the mortgage decree. On 6th February 1928 the sale was held free from encumbrance. The decree-holder herself was the purchaser. She purchased lot No 1 for Rs. 11,900, No. 2 for Rs. 11,510 and No. 3 for Rs. 2,000, i. e., for a total sum of Rs. 25,410. On 8th February 1928 she deposited Rs. 4,816 as moneys due to the puisne mortgagees, defendants 4 and 5, under the mortgage decree and the said amount was withdrawn by those defendants.
5. One of the defendants applied for setting aside the sale and at his instance a ease being No. 32 of 1928 was started, but eventually the sale was confirmed on 25th August 1928. On 24th November 1928, possession was delivered to the plaintiff as auction-purchaser. In the meantime on 1st October 1928 the plain, tiff had made an application purporting to be one under Order 47 and Section 151 of the Code and it is this application the order passed on which has given rise to the two appeals now before us.
6. Whatever shape the plaintiff's prayers may have taken before the Court below it is the prayers contained in this petition that we are really concerned with. She gave a list of her dues as follows:
(1) Under the decree which shehad obtained, (with interest) ... Rs. 8,063-8-0.(2) 11-2-1928. Advanced on account of sadar rent, (with in-terest on same) ... Rs. 3,129(3) From 11-4-1921 to 19-4-1928, advanced to receivers un-der orders of the Court, (withinterest) ... ... Rs. 1, 200(4) 20-9-1928. Paid into Court for rent of property No. 2, (withinterest.) ... ... Rs. 411-3-3.
7. She contended in the petition that under the consent decree which this Court had passed she was entitled to realize all the above amounts, she prayed that it might be declared that she was entitled to the said amounts and that proper orders might be passed for realization of the same out of the back rents due from tenants which the receiver had failed to realize. She also prayed that the receiver should be called upon to submit his papers, and accounts and all cash balance in his hands. She made it clear that she was not giving up her claim to the arrears of rent due from the tenants which she would be entitled to, in any case, on the ground of her being the purchaser at the auction.
8. To this petition various objections were taken on behalf of the judgment-debtor, namely, that for some of the items the plaintiff's remedy was not an application of this nature, but an application for a decree under Order 34, Rule 6, Civil P.C., but that an application for such a decree was barred; that as regards some other items a separate suit was necessary that the claim cannot be maintained without a proper accounting and so on.
9. Before the Court the contest took a more definite shape. The plaintiff appears to have contended that if the receivers had been diligent in collecting the rents due from the tenants and had managed the affairs in a proper manner all dues would have been paid off, and so she should be allowed to realize all back rents due and from such collections and also from such sums as may be in the hands of the receiver. She should be paid all the four items in the list of her dues quoted above. The judgment-debtor on the other hand, contended that the consent decree only contemplated such arrangements as could be made by the receiver during the period of his management which was in no case to last after possession was delivered to the purchaser, and inasmuch as that event had already happened the plaintiff must seek his remedy elsewhere and not in execution nor in an order of the nature she had asked for.
10. The Subordinate Judge made an order calling upon the receiver to submit his papers and accounts, as the receiver is bound to do before ho is discharged. To this order no objection can be or has been taken by either side. As regards the rest of the prayers made by the plaintiff the Subordinate Judge has held (1) that item 1 was not maintainable, inasmuch as when the plaintiff deposited the amount of Rs. 4,816 due to defendants 4 and 5 under the mortgage decree she must be taken to have been satisfied as regards her dues under the compromise, because under the terms of settlement and the consent decree she was not bound to make the deposit until her own dues had been paid up; and (2) that the remaining items namely, items 2, 3 and 4 were recoverable by the plaintiff in the present proceedings, because, to quote his words:
The applicant can. .. legitimately ask the Court to make some arrangement for the realization of the money which she had to pay on account of the receiver neglecting his duty.
11. He therefore made an order in these words:
I accordingly order that the applicant who has taken delivery of the properties may realize as a receiver of the Court these route. They will be first applied to the satisfaction of the money the applicant paid by way of rent to the superior landlord for which she has already got a decree, and the sums she paid under the directions of the Court to the receivers to carry on their work. The surplus if any would be held in deposit in Court to be paid to whomsoever is found entitled to it. The applicants will have to render full account to the Court in respect of the realization she makes.
12. The plaintiff decree-holder has preferred Appeal No. 179 from this order. Her learned advocate has said expressly that if the order means what it says ho does not dispute it. Appeal No. 205 has been preferred by a judgment-debtor, and he challenges the maintainability of the plaintiff's application as one under Sections 47 and 151 of the Code and also urges that no receiver can be appointed at this stage but that the plaintiff must look to some other means for her remedy if she has one.
13. Lot us therefore see what the order exactly means. It means that the plaintiff will be entitled to recoup herself out of the collections in respect of two classes of payments: (a) payments which she had made to the superior landlords on account of rent for the mortgaged properties and for which she had already obtained a decree, and (b) amounts which she had paid to the receivers under orders of the Court. Now out of the four items of claim sot forth above, item 1, i. e., Rs. 8,063-8-0 includes item (a) as is clear from the application for execution in Title Execution Case No. 58 of 1927. The remainder of item 1 is the balance of the decretal amount under the mortgage-decree and that she can no longer realise for the reason which the Subordinate Judge has given, namely, that her conduct in paying off defendants 4 and 5 shows that she regarded that decree to be fully satisfied. As regards item (b) it must include such of the items 2, 3 and 4 as were covered by orders of the Court. The plaintiff, under the Subordinate Judge's order will get only the principal amounts so advanced, unless, of course interest was agreed upon. In the absence of the Court's order having provided for interest no interest should be allowed. The Subordinate Judge's order is also plain that if payments were made on account of rent due to the superior landlord or on any other account, without there having been any order of the Court in regard to them, such payments are not to be recouped under the order complained of. For such amounts she will have to institute a separate suit.
14. This we understand to be the meaning of the order and in our judgment it is in every sense a right and proper order to pass. The maintainability of the plaintiff's application as one under Sections 47 and 151. of the Code having been questioned it is necessary for us to say a word. So far as item 1 is concerned, the amount being covered by the decrees and the decrees being under execution the applicability of Section 47 of the Code cannot be disputed. As regards the other items, the decree-holder herself having been the auction-purchaser and no third party having intervened, the adjustment sought for may not unreasonably be regarded as an adjustment by way of execution by the appointment of a receiver and so falling under Section 47 of the Code. But in any case Section 151 of the Code is amply wide to cover the case because if payments were made under Court's orders, the Court was bound to see that the plaintiff was recouped and no wrong is done to her by a party to the cause.
15. The result is that both the appeals should be dismissed subject to the interpretation that we have put up on the order appealed from. There will be no order for costs.