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Ambica Prosad Sanyal Vs. Soorajmull Nagarmull Firm and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1939Cal620
AppellantAmbica Prosad Sanyal
RespondentSoorajmull Nagarmull Firm and anr.
Cases ReferredSatindra Nath v. Shiva Prosad
Excerpt:
- .....which was one of the items of the property attached by the decree-holder, might be notified for sale subject to the plaintiff's mortgage. this application was rejected on 14th november 1933 on account of the failure of the plaintiff to produce the mortgage bond which he was asked to produce and the machinery was sold to defendant 3 in the execution sale. the present suit which was instituted on 16th april 1935 is admittedly filed more than a year after the date of the order passed on the plaintiff's claim petition. the lower appellate court was of opinion that it was incumbent upon the plaintiff to institute a suit after the adverse order was passed against him under order 21, rule 62, civil p.c., within a year from the date of the order and as he failed to do that, the summary order.....
Judgment:

B.K. Mukherjea, J.

1. This is an appeal on behalf of the plaintiff and the suit was one for enforcement of a mortgage bond alleged to have been executed by defendant 1 by which certain lands and machinery were hypothecated to secure an advance of Rs. 1000. The mortgage bond is dated 9th December 1926. Defendants 2 and 3 were impleaded as parties to the mortgage suit on the allegation that they had purchased portions of the mortgaged property subsequent to the execution of the mortgage' bond. Defendent 1 did not appear and contest the suit and the case was compromised with defendant 2. Defendant 3 who were the transferees of the machinery comprised in the mortgage were the only contesting defendant and they contended inter alia that the mortgage deed was without consideration and that the suit was barred by limitation under Article 11, Limitation Act, it being brought more than a year after an adverse decision was passed in a claim petition made by the plaintiff in respect of the machinery under Order 21, Rule 62, Civil P.C. The trial Court overruled these defences and passed a decree ex parte against defendant 1 and on contest against defendant 3. The suit was also decreed on the basis of the compromise as against defendant 2. Against this decree there was an appeal taken by defendant 3 alone, and the Additional District Judge who heard the appeal reversed the decision of the trial Court so far as defendant 3 were concerned and dismissed the plaintiff's suit as against them on the ground that it was barred by limitation under Article 11, Limitation Act. The decree against the other two defendants was kept intact. It is against this decision that the present second appeal has been preferred, and the only point for our consideration is whether the suit was barred under Article 11, Limitation Act. It appears that in the year 1933 a creditor who had obtained a money decree against defendant 1 started an execution case, in course of which certain properties including the machinery which was included in the mortgage were attached and proclaimed for sale. On 13th November 1933, the plaintiff made an application which was headed as one under Order 21, Rule 62, Civil P.C., and he prayed that the machinery which was one of the items of the property attached by the decree-holder, might be notified for sale subject to the plaintiff's mortgage. This application was rejected on 14th November 1933 on account of the failure of the plaintiff to produce the mortgage bond which he was asked to produce and the machinery was sold to defendant 3 in the execution sale. The present suit which was instituted on 16th April 1935 is admittedly filed more than a year after the date of the order passed on the plaintiff's claim petition. The lower Appellate Court was of opinion that it was incumbent upon the plaintiff to institute a suit after the adverse order was passed against him under Order 21, Rule 62, Civil P.C., within a year from the date of the order and as he failed to do that, the summary order passed by the executing Court became final and conclusive and it would not be open to the plaintiff mortgage to say that he had any subsisting mortgage in respect of the machinery.

2. Now the question, as to whether there is a mortgage on an attached property can be raised in two different ways in execution proceedings. It may be raised, in the first place, when the Court prepares the proclamation of sale under Order 21, Rule 66, Civil P.C., and it is the duty of the executing Court acting under that Rule to state as fairly and accurately as possible after giving notice to the judgment-debtor and the decree-holder, any incumbrance to which the property is liable. At this stage apparently the Court cannot decide the question as to whether the mortgage is a valid and a subsisting mortgage and the information given in the sale proclamation constitutes a warning to the purchaser who purchases the property subject to all risks which this notice involves. It does not preclude him afterwards from questioning the validity of the mortgage in any subsequent suit or proceeding. Another way of raising this question of the mortgage or charge during the execution proceedings is by way of an application under the Claim Sections contained under Order 21, Civil P.C. Order 21, Rule 62 is certainly an enabling provision and when the Court is satisfied that the attached property is subject to a mortgage or charge in favour of some person not in possession it Can direct the continuance of the attachment subject to such mortgage or charge. The order contemplated by this Rule clearly indicates that this is a judicial determination, though in a summary way of the question as to whether there is a valid mortgage or charge existing upon the attached property and when the Court passes an order directing the continuance of the attachment subject to such charge, what is put up to sale is nothing more than the equity of redemption which the judgment-debtor has got in the attached property. The decree holder or the purchaser cannot in such cases dispute the mortgage unless he brings a suit to set aside the summary order under Order 21, Rule 63, Civil P.C. The question is whether the same principle applies when the Court does not pass an order directing the continuance of attachment subject to a mortgage but the mortgagee's application to have such a direction is dismissed or refused.

3. It was held by the Bombay High Court in Ganesh Krishna v. Damoo Nathu (1916) A.I.R Bom. 179, under the old Code of 1882 that Section 282 (corresponding to Order 21, Rule 62 of the present Code) merely enables the Court to pass an order if it thinks proper that an attachment would continue subject to a lien or a mortgage. But the Section does not contemplate an order refusing to acknowledge the mortgage or lien and the Court has no power to direct the continuance of attachment free from such charge. In fact, it was held by the Bombay High Court that the executing Court had no authority to declare a mortgage to be invalid and in such circumstances it could do nothing except to notify the incumbrance under Order 21, Rule 66, Civil P.C. On the other hand, it was pointed out by the Allahabad High Court in Debi Das v. Rup Chand : AIR1927All593 that the expression 'where the Court is satisfied' would confer jurisdiction on the Court to come to a finding as to the existence of the mortgage. Without such finding of fact it can never be satisfied. Section 282 therefore in effect provides for two alternative and mutually exclusive orders. One is an order that as the mortgage exists the attachment shall be continued subject to it and the other is that no mortgage shall be deemed to exist. The latter order, no less than the former, is an order contemplated by Rule 63 or old Section 283. It seems to me that the view taken by the Allahabad High Court is sound. Whether the attachment on the property is directed to continue either subject to or free from the mortgage or charge, the order is one which comes within the purview of Order 21, Rule 62, Civil P.C. and if it is not set aside by a regular suit commenced under 0rder 21, Rule 63, the summary order becomes conclusive and the purchaser or the mortgagee cannot assert any right which that order denies. This is supported by the decisions of the other High Courts in India and reference may be made in this connexion to the decisions of the Madras, Lahore and Rangoon High Courts which are to be found in Muthiah Chetty v. Palaniappa Chetty (1922) 9 A.I.R. Mad. 447, Lakshmanan Chettiar v. Parasivan Pallai (1920) 7 A.I.R. Mad. 936, Nawal Kishore v. Khiyali Ram (1929) 16 A.I.R. Lah. 865 and Maung Aung My Myint v. Maung Tha Hmat (1931) 18 A.I.R. Rang. 310 The decision of the Bombay High Court in the case reported in Ganesh Krishna v. Damoo Nathu (1916) A.I.R. Bom. 179 referred to above can be distinguished not only on the ground that it was a decision under the old Code where the wording of Section 283 was different from that of 0rder 21, Rule 63 in the present Code but also on the ground, that on the facts actually found in that case the application by the mortgagee was held to come under 0rder 21, Rule 66, Civil P.C. It may seem somewhat anomalous no doubt that the question affecting the validity of the mortgage should be inquired in a summary manner in course of an execution proceeding. But the mortgagee is not obliged to prefer any claim at all and I concur with the observations made by the Lahore High Court that if he chooses to take advantage of a summary procedure he must suffer the disadvantages as well.

4. Mr. Sanyal who appears for the appellant has not disputed the correctness of the proposition stated above. His contention really is that the rule of law stated above does not affect his client and that on two fold grounds: The first is that as the dismissal of the claim matter was one for non-prosecution and there was no investigation of the claim in its merits, the necessity of instituting a suit under Order 21, Rule 63, Civil P.C. does not arise. The second ground is that the application made by his client was neither a claim petition made under Order 21, Rule 58 nor under Order 21, Rule 62, Civil P.C. It was a mere application for insertion of an incumbrance in the sale proclamation under the provisions of Order 21, Rule 66, Civil P.C. In support of the first contention Mr. Sanyal has relied amongst others on certain decisions of this Court which are to be found in Uma Charan v. Hieon Mayee Debi (1915) 2 A.I.R. Cal. 212 and Sarat Chandra Basu v. Tarini Prasad (1907) 34 Cal. 491. These are decisions under the old Code and it is not disputed that there have been changes introduced in the wording of the relevant Sections in the present Code. Order 21, Rule 63 is differently an much more generally worded than the corresponding Section 283 in the Code of 1882. It scrupulously omits any reference to the earlier Sections as were made under the old Code and provides in the most general manner that where a claim or an objection is preferred and an order rejecting or allowing the claim is passed, the party against whom the order is made is bound to institute a suit to establish the right which he claims to the property in dispute. There have been corresponding changes in the wording of Article 11, Limitation Act, also. In the circum. stances it seems to me that the conclusion is irresistible that in order to bring a case within the purview of Order 21, Rule 63, Civil P.C. the question as to whether the claim was investigated or not is immaterial and if an adverse order is made against the plaintiff in the claim proceeding he is bound to institute a suit under Order 21, Rule 63, Civil P.C. failing which the order becomes conclusive and final. This view has been accepted by this Court in Nogendra Lal v. Fani Bhusan Das (1919) A.I.R. Cal. 835 Jugal kishore v. Ambika Dabi (1912) 16 C.W.N. 882, Satindra Nath v. Shiva Prosad (1922) 9 A.I.R. Cal. 166 and Abdul Latif Aklu Mia : AIR1935Cal500 The first contention of Mr. Sanyal therefore must be overruled.

5. Now as regards the second point we have been referred to the petition that was filed by the plaintiff on 13th November 1933. As I have stated above it was headed to be one under Order 21, Rule 62, Civil P.C. though that description is not by any means conclusive. The petition sets out the facts that long before the attachment was made by the decree-holder, the judgment-debtor by a registered deed executed in November 1933 had mortgaged the machinery to the petitioner to secure an advance of Rs. 1000 which carried interest at the rate of 24 per cent, per annum. It was stated further that the mortgage money now amounted to Rs. 3400 and the petitioner prayed that the fact of the property attached being subject to a mortgage might be notified and proclaimed at the time when the sale took place. Mr. Sanyal has argued that really he did not want that the property should be sold subject to the mortgage but the plain reading of the petition does not lead to any other conclusion. Obviously, it was not the time when the sale proclamation was being prepared and the petitioner also did not make any prayer whatsoever that the sale proclamation might be amended by mentioning the incumbrance upon the attached property or that a fresh sale proclamation might be issued and served in the locality. The object of his reciting in extenso the fact of the mortgage and the interest it carried seems to me to point to the conclusion that he wanted that the property should be sold subject to the mortgage. This is strengthened by the fact that the petition was headed under Order 21, Rule 62, Civil P.C. In these circumstances I concur with the lower Appellate Court in holding that it was really a claim petition made under Order 21, Rule 62, Civil P.C. and as this was dismissed by the executing Court on 14th November 1933 it was incumbent on the plaintiff to institute a suit within one year from that date. That not having been done it is not open to him now to put for ward his rights as a mortgagee so far as the machinery is concerned. The result is that we affirm the decision of the lower Appellate Court and dismiss the appeal. There will be no order as to costs in this appeal.

Latifur Rahman, J.

6. I agree.


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