Skip to content


Promode Nath Sinha Roy and ors. Vs. Smt. Raseshwari Dassi W/O Deb Narayan PaIn and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1942Cal128
AppellantPromode Nath Sinha Roy and ors.
RespondentSmt. Raseshwari Dassi W/O Deb Narayan PaIn and anr.
Cases ReferredSailendra Mohan De v. Accowrie Mukherjee
Excerpt:
- .....this appeal wherein they contend that (a) the decree ought to have been re-opened and a new decree passed giving them instalments; (b) that in the circumstances of the case the instalments ought to be spread over 20 years, and (c) in the new decree to be passed no post decretal interest ought to be awarded. the respondents do not seriously contest the first point urged by the appellants. mr. rama prosad mukherjee appearing for them however urges the following j additional points: (a) that we should impose conditions with a view to preserve the security during the period which the instalments would cover; (b) that simple interest at the rate of 8 per cent. per annum ought to be allowed up to the date of the new decree that we are to pass; and (c) the annual instalments ought not to.....
Judgment:

1. On 16th April 1934, the appellants took a loan of Rs. 12,000 from the respondents on a mortgage by which they hypothecated their zemindary interest in some properties and patni interest in others. The interest payable was 12 per cent. per annum with half yearly rests. Before suit they paid a sum of Rs. 300 only. In 1938 the respondents sued to recover the loan. On 22nd December 1939, an ex parte preliminary decree was passed in their favour. The Court reduced the rate of interest to 10 per cent. per annum (simple), allowed pendente lite interest at that rate on the principal of the loan up to the date of the decree and fixed the period of grace at three months from that date. No payment having been made by the judgment-debtors within the period of grace the final decree for sale was passed on 17th May 1940. Shortly thereafter the decree-holders applied for execution of their decree in the Court which had passed the final decree. While the application for execution was pending the Bengal Money-lenders Act (10 of 1940, hereinafter called the Act) came into force. On nth November 1940 the judgment-debtors filed an application under Section 36(6) of the Act, in which they claimed relief on the ground that the Court had in its decree awarded interest higher than what was payable under Section 30(1)(c) of the Act. They prayed for re-opening the decree, for instalments and for other reliefs.

2. The learned Subordinate Judge held that the interest allowed by that decree was Rs. 1363-15-2 in excess of what was allowable under the Act. He did not however reopen the decree that had been passed but simply reduced the decretal sum by that amount. He did not grant the prayer for payment in instalments. The reason that he gave in refusing that prayer was that the Court had power to grant instalments in the case of a loan secured by a mortgage only at the time of the passing of the preliminary decree and not thereafter in view of the provisions of Section 34(1)(a) of the Act. In support of this view he relied upon Sailendra Mohan De v. Accowrie Mukherjee ('40) 45 C.W.N. 11. He also refused the prayer of the judgment-debtors for revoking the order for payment of post decretal interest as made in that preliminary decree. In support of his decision on the last mentioned point he relied upon Ratan Chunder Gupta v. Nirmal Chunder Neogy ('40) 45 C.W.N. 13. The judgment-debtors have preferred this appeal wherein they contend that (a) the decree ought to have been re-opened and a new decree passed giving them instalments; (b) that in the circumstances of the case the instalments ought to be spread over 20 years, and (c) in the new decree to be passed no post decretal interest ought to be awarded. The respondents do not seriously contest the first point urged by the appellants. Mr. Rama Prosad Mukherjee appearing for them however urges the following J additional points: (a) that we should impose conditions with a view to preserve the security during the period which the instalments would cover; (b) that simple interest at the rate of 8 per cent. per annum ought to be allowed up to the date of the new decree that we are to pass; and (c) the annual instalments ought not to be more than four in number.

3. In this case the learned Subordinate Judge has held that the appellants are entitled to relief under the Act and has in fact exercised the power contained in Section 36(1)(c) of the Act. We do not see how that power can be exercised without reopening the preliminary decree that had already been passed. The suit in which that decree was passed is a suit to which the Act applied, for it was pending on 1st January 1939. The exercise of that power would affect that preliminary decree, for by that preliminary decree interest was allowed in excess of what is allowable under Section 30(1)(c). The Act requires the passing of a new decree as soon as the former decree is reopened. That is the import of Section 36(2)(a), and the new decree must be a decree in accordance with the provisions of the Act. The view we are taking is the view which has been taken by a Division Bench in Anath Nath Sarkar v. Rajendra Nath : AIR1942Cal120 and by Sen J. in Mritunjoy Roy v. Netai Chand Dutt : AIR1942Cal123 . We follow this view in preference to the view expressed by Edgley J. in Suresh Chandra v. Lal Mohan : AIR1942Cal121 and Manmatha Nath Bose v, Renula Bose : AIR1941Cal681 which has since been reversed by the appeal Court on another point. The learned Subordinate Judge was therefore wrong in not passing a new decree in supersession of the preliminary decree that had been passed on 22nd December 1939. With the supersession of that decree the final decree passed on the basis thereof must also go. The new preliminary decree which has to be passed must be in accordance with the provisions of the Act. That brings into operation Section 34(1)(a)(i) of the Act and as there is an application for instalments by the mortgagors instalments will have to be given. That is a statutory duty imposed on the Court. This aspect of the case distinguishes the case in Sailendra Mohan De v. Accowrie Mukherjee ('40) 45 C.W.N. 11 on which the learned Subordinate Judge has placed reliance. In that case the preliminary decree which had been passed was not re-opened, no grounds for exercising the powers contained in Section 36(1) having been established by the judgment-debtor, and so there was no question of passing a new preliminary decree after the Act had come into force. In the case before us, we must pass a new preliminary decree in accordance with Section 34(1)(a)(i) of the Act and must therefore give instalments.

4. The next question is what and how many instalments we should give. The amount of the new decree would come up to about Rs. 18,000 or so on a loan of Rs. 12,000. Rupees 300 only had been paid before suit although the loan was taken in 1934. Since the appeal to this Court Rs. 900 only has been paid. The affidavit of the judgment-debtors is that the net income from the mortgaged properties is Rs. 5215 per year. Making an allowance for bad years, the net profits would according to their own statement be more than Rs. 4000 a year. We have not the statement of the decree-holders but we must proceed on the statement of the judgment-debtors in considering the question of instalments and we, take the said amount as the annual profits only for the purpose of considering what must be the number of instalments. If any question as to the value of the properties arises in future for the consideration of the Court for the purposes of Section 35 of the Act or for other purposes that question must be determined without reference to what we have taken as the annual net profits. Taking all the facts into consideration, especially the amount of the net income as stated in the affidavit filed on behalf of the mortgagors we think they ought to be given the chance of paying up in five equal annual instalments, the first instalment to be paid on or before 16th February 1942.

5. We will now consider whether the mortgagees are entitled to claim interest up to the date of the new preliminary decree which we are passing after re-opening the preliminary decree passed on 22nd December 1939. That decree directed the scaled down interest (at 10 per cent. per annum) to be paid up to the date of that decree and interest thereafter in accordance with Order 34, Rule 11, Civil P.C. As under the Act do of 1940) simple interest at the rate not more than 8 per cent. per annum can only be allowed, the calculation of interest must be at that rate. The contract rate is thus interfered with by the Act but the Act does not totally abrogate the provisions of Order 34, Rules 2, 4 or 11, Civil P.C. Those provisions of Order 34 are only modified to the extent indicated in Section 34(1)(a) and Section 31 of the Act. The power to award pendente lite interest in a mortgage suit is not thus taken away by the Act. Three limitations only have in our judgment been imposed by the Act on those provisions of Order 34 in respect of the award of interest. Namely, (1) that the pendente lite interest and interest allowable under Order 34, Rule 11, Sub-rule (a)(i) up to the period of grace, which must be determined in terms of Section 34 (1)(a)(ii) of the Act would not be according to the contract rate, where there is such a rate, but Would be according to the rate scaled down by Section 30(1)(c) of the Act; (2) that the amount of that interest should not exceed the principal of the loan in accordance with the method of calculation to be made in accordance with Section 30(1)(a) & (b) of the Act, and (3) Order 34, Rule 11, Sub-rule (b) is not to apply where the loan was advanced before the Act. We accordingly hold that we have the power and should grant simple interest at the rate of 8 per cent. per annum on the principal of the loan (RS. 12,000) from the date of the institution of the mortgage suit up to this date when we are passing the new preliminary decree and thereafter at the same rate up to the date of default, should the judgment-debtors fail to pay the instalments which we have given them. The amount of interest up to this date does not exceed the principal of the loan. The interest which we have directed to be paid thereafter up to the date of default, if default be made, would however be subject to this proviso, that together with the interest allowed up to this date and the sum of Rs. 300 paid before the suit and Rs. 900 paid while this appeal was pending it is not to exceed the principal of the loan, namely Rs. 12,000. No interest is to run on the total decretal amount.

6. The last question is whether we have any power to impose further conditions on the judgment debtors and if we have the power whether we should impose any and what conditions. On the construction of Section 34 of the Act, we have come to the conclusion that the Court has the power to impose any suitable condition when directing the payment of the decretal amount by instalments. We cannot accept the contention of the judgment-debtors' advocate that Section 34(1)(a)(i) of the Act authorises the Court to fix the dates and number of annual instalments and to do nothing more. This contention would render redundant the phrase 'subject to such conditions as the Court may impose' employed in that clause. The same phrase occurs in Section 34(1)(b)(ii) of the Act which deals with loans other than those secured by mortgage. There the only limitation that is put is that the condition to be imposed must not be one which would make the whole or the balance of the decretal amount payable in default of payment of an instalment. That provision modifies the provisions of Order 20, Rule 11, Sub-rule (2), Civil P.C, only to the extent of not requiring the consent of the decree-holder for an order for payment of the decretal amount by instalments, but leaves the other parts of that Sub-rule untouched. That is indicated by the Legislature in Section 34(1)(b)(ii) of the Act by leaving it open to the Court to impose conditions. In the case therefore of a money decree it would be open to the Court to impose any term with a view to ensure the rights of the decree-holder as a condition to the granting of instalments to the judgment-debtors. It can in such a case require the judgment-debtor to furnish security for the decretal amount to be paid by instalments. We do not see why the same phrase 'subject to such conditions as the Court may impose,' used in Sub-section (1)(a)(i) of Section 34 of the Act should have a different or a more restricted scope. We accordingly hold that in the case of a loan on a mortgage the Court would have the power in a fit case to require additional security from the judgment-debtor as a condition of giving him instalments. It may also impose other conditions with a view to see that the decree-holder does not lose the full benefit of his security during the period that the instalments may be spread over by reason of any act or default on the part of the judgment-debtor.

7. In the case before us, the loan is secured on revenue paying properties and patni taluks. They can be summarily sold for par-amount charges, e. g., if the default is made by the judgment-debtors in the payment of revenue or patni rent. In that case the security of the decree-holders no doubt would not completely disappear but would assume a different form. It would fasten on the surplus sale proceeds. But in that eventuality, e.g., on a sale for paramount charges, the transformed security would be less valuable. It would be on the surplus. Moreover it is common experience that in such sales property does not fetch anything like its proper price. We do think that in this case we should impose the further condition that the judgment-debtors must pay up all past arrears of revenue, cess and patni rent by September next and pay the revenue and cess as they fall due and file the receipts of payment in the Court below at least a week before the last kist date. They must also pay the patni rent and cesses as they fall due and file the receipts thereof in the Court below within the first week of Kartik (and if the Court is closed at that time then on the date of reopening of the Court) and within the first week of Bysack of every year. In default then the decree-holders will be entitled to apply for a final decree on giving notice to the judgment-debtors through Court.

8. This is an additional condition which we impose. We do not consider that this additional right which we are giving to the decree-holders to apply for a final decree militates against the provisions of Section 34(1)(a)(ii) of the Act or proviso 2 thereto. In those provisions the Legislature had only in view the payment of instalments and had consequently set out the consequences of default in the payment of instalments, and has not done anything more. It has not dealt with and has not fettered in any way the power or discretion of the Court to impose terms and to say what would be the consequences if those terms are not complied with by the judgment-debtor who is given the privilege of paying in instalments.

9. In the exercise of discretion given to us by Section 36(2)(a) of the Act we direct that the same amount which had been decreed as costs to the respondents in the preliminary decree dated 22nd December 1939, which we have reopened, should be allowed as costs to the decree-holders respondents. That would be included in the new preliminary decree which we are now passing. The result is that this appeal is allowed in part. Let a preliminary decree be drawn up in this Court in terms of this judgment. The parties are to bear their respective costs of the lower Court and of this appeal.

10. 27 th August 1941. -- The learned advocate appearing for the decree-holder says that a sum of Rs. 428-4-3 was paid by his client, namely, the mortgagee, towards arrears of revenue on behalf of the mortgagors. That fact is admitted by the learned advocate appearing on behalf of the mortgagors. Let this sum be added to the decree that is to be drawn up in this Court. This sum will not carry any interest.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //