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Corporation of Calcutta Vs. Arunchandra Singha - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1934Cal325
AppellantCorporation of Calcutta
RespondentArunchandra Singha
Cases ReferredColedonian Ry. Co. v. North British Ry
Excerpt:
- .....67. t. p. act as well as in section 67-a, yet it could hardly be contended that owing to those words a charge-holder would not be entitled to the right of sale which is provided by section 67. again it is urged that the insistence on consolidation as claimed by the defendant would be productive of great inconvenience, and might deprive the mortgagee or charge bolder of the power of enforcing his charges, if for instance the properties charged were in different presidencies.6. it may well be that in such a case a single suit on all the properties charged would not be essential, for the legislature does not compel the institution of an incompetent suit. in the present instance, that consideration does not arise in view of the fact that the plaintiff corporation is only concerned with.....
Judgment:

McNair, J.

1. This is a suit by the plaintiff Corporation for Rs. 134-4-9, on account of consolidated rates payable in respect of premises No. 2, Pyari Das Lane, Calcutta, which is a debuttar property, of which defendant 1 is the shebait. Defendant 2 is a lessee of the property under a lease for 70 years granted by the then shebait on 29th November 1917, and defendant 3 is a mortgagee from defendant 2. Defendant 1 alone contests the suit. He contends that the suit is not maintainable, as the plaintiff Corporation is a charge-holder Under Section 205, Calcutta Municipal Act, over the property in suit, and also has charges over other properties belonging to the same defendant, for the enforcement of which it has brought five other suits, some of which have been decreed. His contention is that Section 67-A, T. P. Act, which was inserted by the amending Act 20 of 1929, makes it compulsory for a mortgagee or chargee, who holds several mortgages or charges over the same or different properties of the same debtor, to enforce all such mortgages or charges in a single suit. The plaintiff Corporation's charge arises Under Section 205, Calcutta Municipal Act (Bengal Act 3 of 1923) which provides:

The consolidated rate due from any person in respect of any land or building shall, subject to the prior payment of the land revenue (if any) due to the Government thereupon, be a first charge upon the said land or building and upon the moveable property (if any) found within or upon such land or building and belonging to the said person.

2. The language of this section, as was stated by this Court in Akhoy Kumar Banerjee v. Corporation of Calcutta AIR 1915 Cal 478, is perfectly plain, and the intention of the legislature to make the consolidated rate a first charge upon the premises is obvious. The nature and incidents of such a charge are found by reference to Section 100, T. P. Act, which is in the following terms:

Where immoveable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge.

3. Among the provisions applicable to a simple mortgage, and so applicable to a charge, are the provisions of Sections 67 and 67-A, T. P. Act. Section 67 defines the rights of a mortgagee 'in the absence of a contract to the contrary,' and among those rights is the right to obtain from the Court a decree for foreclosure or sale. Section 67-A provides:

A mortgagee who holds two or more mortgages executed by the same mortgagor in respect of each of which he has a right to obtain the same kind of decree Under Section 67, and who sues to obtain such decree on any one of the mortgages, shall, in the absence of a contract to the contrary, be bound to sue on all the mortgages in respect of which the mortgage money has become due.

4. The defendant's contention therefore is that, so soon as there are arrears of rates in respect of any property, the plaintiff Corporation becomes entitled Under Section 205, Calcutta Municipal Act, to a charge on that property. If there are several properties belonging to the same ratepayer, each of these properties is charged in favour of the plaintiff Corporation; such a charge is a charge within the meaning of Section 100, T. P Act., and can only be enforced subject to the limitations imposed by Section 67-A of that Act. For the Corporation various pleas have been urged with force and ingenuity. It is said in the first place that a charge is not a mortgage, inasmuch as it can be, and in the present instance is created by operation of Jaw, and the provisions of the Transfer of Property Act, which apply to a simple mortgage, are applicable, in the words of the Act, only ''so far as may be' to a charge. A mortgage, it is urged, can only be created by 'act of parties,' and Section 67-A shows clearly from the fact that it refers to 'two or more mortgages executed by the same mortgagor,' that it is intended only to apply to mortgages or charges created by 'act of parties' and is inapplicable to a charge created by operation of law; moreover, by the words 'in the absence of a contract to the contrary' in that section the mortgagee is given an opportunity of contracting out of the obligation imposed by the section, whereas the charge-holder has no such opportunity. The intention of the legislature in introducing the new Section 67-A in T. P. Act, was undoubtedly to compel a mortgagee, who is entitled to the same kind of decree in respect of several mortgages over the property of the same mortgagor, to consolidate his mortgages and enforce them in a single suit provided he has not contracted out of his obligation.

5. In my view the same obligation is placed upon a charge-holder Under Section 100; and the words 'so far as may be' in that section are inserted because the legislature realised that some of the provisions of the Act which deal with the rights and liabilities of mortgagors and mortgagees would be inapplicable to charges. The proviso that there may be a contract to the contrary is applicable to a charge by 'act of parties,' though it is not applicable to a charge by 'operation of law.' The words 'in the absence of a contract to the contrary' are contained in Section 67. T. P. Act as well as in Section 67-A, yet it could hardly be contended that owing to those words a charge-holder would not be entitled to the right of sale which is provided by Section 67. Again it is urged that the insistence on consolidation as claimed by the defendant would be productive of great inconvenience, and might deprive the mortgagee or charge bolder of the power of enforcing his charges, if for instance the properties charged were in different presidencies.

6. It may well be that in such a case a single suit on all the properties charged would not be essential, for the legislature does not compel the institution of an incompetent suit. In the present instance, that consideration does not arise in view of the fact that the plaintiff corporation is only concerned with the collection of rates in a circumscribed area. Finally, it is contended that where there are two distinct mortgages or two distinct charges in respect of the same property in the hands of the same debtor and in favour of the same creditors, the causes of action to enforce the two securities are distinct and the mortgagee or charge-holder has, like any other plaintiff, the right to bring a separate suit on each cause of action.

7. Section 67-A, it is said, purports to limit this elementary right, and any restrictive provision of this nature must be construed with the utmost strictness. Even if the section does provide that a mortgagee, who sues to obtain a decree on any one of the mortgages, shall be bound to sue on all the mortgages; it does not provide in so many words that he must sue on all the mortgages in the same suit. In this connexion, it is pointed out that no reliance can be placed on the marginal note for the purpose of interpreting the section: Balraj Kunwar v. Jagatpal Singh (1904) 26 All 393. Although the words of the section do not stress the need for a single suit, they do, in my opinion, clearly indicate that a mortgagee, who sues on any one mortgage, shall, where he holds two or more mortgages executed by the same mortgagor, include in his suit his claim to enforce all the mortgages. The intention of the legislature is undoubtedly to reinstate the doctrine of consolidation, and as was said by Lord Selborne in Coledonian Ry. Co. v. North British Ry, Co. (1881) 6 AC 114:

The more literal construction (of a statute) ought not to prevail, if it is opposed to the in-tentions of the legislature, as apparent by the statute; and if the words are sufficiently flexible to admit of some other construction by which that intention can be better effectuated.

8. One further point remains. Section 67-A, T. P. Act, was inserted by Section 32 of the amending Act 20 of 1929. Section 63 of the amending Act provides that, so far as is material, nothing in Section 32 of the amending Act shall be deemed in any way to affect.

(a) the terms or incidents of any transfer of property made or effected before 1st April 1930, and (c) any right, title, obligation or liability already acquired, accrued or incurred before such date.

9. A part of the plaintiff corporation's claim amounting to Rs. 74-9-9 refers to rates which became due prior to 1st April 1930, and the defendant admits that he has no defence to that portion of the claim. As regards the remainder of the claim, the suit is incompetent and must be dismissed. There will be: (1) a decree for Rs. 74-9-9 against all the defendants. (2) A declaration that the plaintiff corporation has a first charge on the premises No. 2, Pyari Das Lane, Calautta, for the said sum with interest at 6 per cent. The defendants will pay to the plaintiff corporation two thirds of their costs of suit. (3) A decree under Order 34, Rule 4, Civil P. C., in form No. 5 A in Appx. D, Schedule 1 thereto as amended by Act 21, of 1929.


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