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Sukumari Debi Vs. Mugneeram Bhanger and Co. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in95Ind.Cas.908
AppellantSukumari Debi
RespondentMugneeram Bhanger and Co.
Cases ReferredIndar Pal Singh v. Mewah Lai
Excerpt:
civil procedure code (act v of 1908), section 115, order xxxiv rule 14 - security for performance of decree--charge upon properties--mode of realisation--execution. - .....such security is given the present security to remain. the defendant undertakes to obtain his wife's consent to these provisions.on failure to pay three consecutive instalments, the whole amount of the decree to become payable. decree-holders in such case may execute the decree irrespective of their rights against the security and may also execute against the security.neither party has any claim against the other in suits nos. 2750 and 2619 of 1922 and no order is made in those suits which will, therefore, stand dismissed, save that in all those suits there is a direction for taxation of costs as between attorney and client, including the fees actually paid to counsel.5. the appellant wrote a letter addressed to the plaintiffs mugneeram bhanger & co. on the same day. the letter runs.....
Judgment:

Sanderson, C. J.

1. This is an appeal by Sukumari Debi against a judgment of my learned brother Mr. Justice Buckland delivered on the 27th January 1926.

2. There was a suit which was brought by Mugneeram Bhanger & Co., who carried on business as stock and share brokers, against the defendant, Guru Pada Haldar. The appellant Sukumari is the wife of the defendant. An adjournment of the trial of the suit was obtained on or about the 15th August 1924, upon condition that the defendant should give security by depositing with the Registrar documents of title of properties to the extent of one lac of rupees for securing the plaintiffs claim to that extent. The case was adjourned until after the vacation.

3. It appears that the defendant and his wife deposited the title-deeds of certain properties with the Registrar. The properties are set out in the decree which was made by my learned brother on the 27th January 1926. The defendant was the owner of most of the properties, but the appellant, the defendant's wife, was the owner of one plot and had a leasehold interest in the other plots mentioned in the decree. The case came on for hearing in November 1924 and then a consent decree was made. The material parts of the decree which was dated the 14th November 1924 are as follows:---'The parties having agreed to the terms of settlement set forth in the schedule hereto annexed and marked 'A' and the defendant through his Counsel undertaking to obtain the consent of his wife to the said terms, it is declared with the consent of the parties by their respective Counsel that the said terms ought, to be carried out and the same are ordered and decreed accordingly.'

4. The terms of the, settlement in Sch. A, referred to in the decree, dated the 14th November 1924, are as follows:---'There will be a decree for Rs. 1,37,000 with interest at 6 per cent, in full payment of all claims and costs including all existing orders for co3ts payable by 22 monthly instalments commencing from the 2nd January 1925, the first 21 instalments to be at the rate of Rs. 6,000 each and the final instalment for the balance. Interest is payable on the amount outstanding at 6 per cent, to be paid on the 1st January 1926, and on the date fixed for payment of final instalment of decretal amount.

Security is to be furnished in the shape of immoveable property or war bonds to the extent of Rs. 1,60,000 on the certificate of Mr. C. K. Sarkar on or before the 1st January 1925: until such security is given the present security to remain. The defendant undertakes to obtain his wife's consent to these provisions.

On failure to pay three consecutive instalments, the whole amount of the decree to become payable. Decree-holders in such case may execute the decree irrespective of their rights against the security and may also execute against the security.

Neither party has any claim against the other in suits Nos. 2750 and 2619 of 1922 and no order is made in those suits which will, therefore, stand dismissed, save that in all those suits there is a direction for taxation of costs as between attorney and client, including the fees actually paid to Counsel.

5. The appellant wrote a letter addressed to the plaintiffs Mugneeram Bhanger & Co. on the same day. The letter runs thus:

With reference to the consent decree made in the suit to-day in which you have allowed my husband Guru Pada Haldar to pay the decretal amount by 21 monthly instalments of Rs. 6,000 each and the balance together with interest on same at 6 per cent, payable on the 1st January 1926 and at the time when the last instalment, is payable and with reference to the security bond executed by me in the above suit, I agree to the decretal security continuing until the decretal amount is paid off in full or other security for Rs. 1,60,000 in war bonds or immoveable property is furnished by my husband in substitution of such security.

6. Default was made in the payment of the instalments and on the 16th of December 1925 an application was made for execution of the consent decree and the mode in which the assistance of the Court was required was by the appointment of a Receiver of the plots which I have already mentioned. A Receiver was appointed on the 16th December 1925. It may be mentioned at this stage that that order of the 16th December 1925 appointing the Receiver was subsequently set aside, certain objections having been taken to it: but the appointment of the Receiver was made effective by he order of my learned brother on the 27th January 1926.

7. On the 22nd December 1925 the defendant and the appellant executed a bond which recited that they were held and firmly bound unto the Registrar of this Court to the extent of one lac of rupees, for which payment they bound themselves jointly and severally. It recited the order of the 15th August 1924, and that they had deposited the title-deeds by way of security for the plaintiffs' claim and that the Registrar had accepted the same and had also accepted the defendant and the appellant as(sic)ireties sufficient for the sum of rupees on lac. The condition of the bond was that if the defendant should duly pay the amount that might be decreed in favour of the (sic)intiffs or if the suits were dismissed, then i e bond should be void and of no effect.

8. It was stated during the course of the regument that the intention was that the and should be signed at the time, when the title-deeds were deposited with the Registrar. For some reason, which has not been made apparent to me, the execution of the bond did not take place until the 22nd of December 1925.

9. The matter came before my learned brother on notice calling upon the defendant and the appellant to show cause why a Receiver should not be appointed and why the decree should not be executed by ale of the property to which I have referred. The learned Judge stated in his judgment that the only point which was argued before him was whether the decree-holder could realise the security in execution or whether it was necessary for the decree-holder to file a suit for that purpose.

10. Several cases were cited before the learned Judge to which reference is made in, his judgment. I am not quite clear upon what principle the learned Judge purported to act. I think that the learned Judge regarded (in fact he so stated) the matter as simply one of form and that it did not present any difficulty in the way of the applicant's obtaining the order asked for.

11. Accordingly, he appointed a Receiver and directed that the Receiver should sell the property, to which I have referred, by public auction to the best purchaser that could be got, provided that he considered that a sufficient sum had been offered. There was a further direction as regards the disposition of the sale proceeds.

12. In this Court reference was made to the authorities, which were mentioned in the learned Judge's judgment, and an argument was presented with reference to Section 145 of the C. P. C.

13. It was argued on behalf of the appellant that Section 145 would not authorise the order which the learned Judge made in this-case.

14. I do not think it necessary to refer to any of the cases cited in this Court except one, which I will presently mention, because in: my judgment the facts of this case are such as to differentiate it from any of the authorities cited.

15. The position, in my judgment, is clear. The defendant agreed that a decree should be made against him for Rs. 1,37,000 with interest, and that it should be paid by instalments therein mentioned, that security should be furnished by the 1st January 1925 and that until such security was furnished, the 'present security' should remain, that is to say, the title-deeds which had been deposited in August 1924 by the defendant and his wife, the appellant, with the Registrar of this Court.

16. The defendant further agreed that if he failed to pay three consecutive instalments, the whole amount of the decree should become payable and the decree-holder in such case might execute the decree irrespective of his right against the security and might also execute against the security.

17. The security, against which the decree-holder was entitled to execute, was the property, the title-deeds of which had been deposited by the defendant and his wife and which were to remain as security upon the terms of the consent decree until further security was given or the money paid. That is what the defendant agreed to: and it is clear from the terms of the decree which I have already mentioned that the defendant through his Counsel undertook to obtain the consent of his wife to the said terms.

18. In my opinion, the consent of the appellant to the terms of the Consent decree was in fact obtained as appears from the appellant's letter of the 14th November 1924 to Which I have referred.

19. I am of opinion upon the terms of that letter, reading it by itself, that the appellant agreed to the terms of settlement which are contained in the decree. When, however, it is remembered that the defendant through his Counsel undertook to obtain the consent of his wife to the terms of the consent decree, there cannot be any doubt that the intention of the parties was that the properties, the title-deeds of which had been deposited with the Registrar by the defendant and his wife, the appellant, should remain as security for the performance of the terms of the consent decree.

20. In that event not only the defendant but also the appellant agreed that if three consecutive instalments remained unpaid, the whole amount of the decree should become payable and the security should be realised by means of execution.

21. The instalments were not paid as they became due, and no other security was furnished and in view of the terms of the consent decree, I see no answer to the application for execution which was made on behalf of the respondents.

22. I am, therefore, of opinion that the conclusion, at which my learned brother arrived, was right, although I am not able to agree with the grounds on which he relied.

23. Before I conclude my judgment I desire to refer to one case which was cited in the course of the argument, viz., Beti Mahalakashmi Bai v. Badan Singh (1). The head-note runs thus:---' Where a person stands surety for the due performance of a-decree and by way of security hypothecates immoveable property, without undertaking any personal liability thereunder, then so long as the surety still retains the equity of redemption of the hypothecated property, the security bond Under Section 145 of the C. P. C. be enforced against the property directly by execution, and there is no necessity for the filing of a separate suit on the bond.'

24. With great respect to the learned Judge, who decided that case, lam unable to say that, as at present advised, I should be prepared to adopt the conclusion which was therein made. It seems tome that the decision is inconsistent with the judgment of the Judicial Committee in the case of Raj Raghubar Singh v. Jai Indra Bahadur Singh (2).

25. In that case Lord Phillimore is reported to have said: 'In the course of the judgments in India Section 145 was referred to; but whatever might have been its effect if the sureties had been personally liable, it has no application now that their Lordships have construed the instrument as giving only a charge upon property.'

26. In the Allahabad case to which I have referred, the learned Judge came to the conclusion that the surety had not undertaken a personal liability, but that, there was a clear 'indication that the money which may be found due on the decree passed in appeal would be realisable in the first instance from the judgment-debtor and that if the judgment-debtor did not pay the same, it would be recoverable from, the property hypothecated by the surety.'

27. It seems to me, as at present advised, that in the circumstances stated in that case and having regard to the decisions of the Judicial Committee, to which I have referred Section 145 would not be applicable.

28. The learned Judge's order will stand, but by consent between the parties, the property will not be sold until the 30th June 1926. Either party may apply to the Court for such directions as may be necessary in connection with the sale. When the property is sold, the sale proceeds will be paid into Court. Bach party will then be at liberty to apply for such directions as may be necessary.The appeal is dismissed with costs. It has been agreed by the parties that the Receiver should not take possession of the property for a fortnight from this date.

Rankin, J.

29. I agree. In this case there was a consent decree of the 14th November 1924 snd, apart altogether from the terms of settlement which are scheduled to the decree, the consent decree itself says that the defendant through his Counsel undertook to obtain the consent of his wife to the said terms ; and it was ordered that the defendant on the 1st January 1925 should furnish security to the extent of Rs. 1,60 000 in immoveable property or in war bonds to take the place of the security already furnished which was security for the sum of Rs. 1,00,000 only. The terms of settlement need not be read again. They contain a provision that the decree-holders might execute against the security, and though it is arguable that this does not refer to the present security, I think it difficult to maintain this. The letter of the 14th November 1924 refers to the terms of the consent decree and, in my opinion, it is to be regarded as a consent on behalf of the lady to the whole arrangement made by her husband. The points which had to be made specially clear were, first, that there should be no question whether the surety had been released by giving time to the principal debtor, and, secondly, that there should be no question that the sums of money to be recovered under the consent decree wore in truth and in substance a bona fide adjustment of the plaintiffs' claim for which the lady had given security. In these circumstances, the question whether it is necessary to bring a new suit so far as the lady is concerned raises considerable difficulty.

30. Apart from cases where the security has been given to the Court itself and not to any person who can be regarded as a mortgagee, the main case that requires to be considered is the decision of Mr. Justice Harrington and Mr. Justice Mookerjee in 1905 in the case of Tokhan Singh v. Girwar Singh (3) 32 0. 494 : 9 C. W. N. 372 : 1 C.L.J. 118.

31. That case was not dissented from in any way by the Privy Council in 1919 by the judgment delivered by Lord Phillimore in. the case of Raj Raghubar Singh v. Jai Indra Bahahur Singh (2). On the other hand, it was sufficient for their Lordships' purpose that there was no mortgagee who could institute a suit. There are three points which have to be carefully considered in connection with Tokhan Singh's case (3).

32. The first point is that since that case was decided, the Code of 1908 has clarified and limited the provisions of what is now Section 145. I think the true construction of Section 145 is that 'which was laid down by Sir Promoda Charan Banerji in the., case of Amir v. Mahadeo Prasad 38 Ind. Cas. 33 : 39 A. 225 : 15 A.L.J. 76. decided in 1916. The case itself ultimately turned out to be erroneous in this respect that, as we now. know from the judgment of Lord Phillimore, it does not follow, because Section 145 does not apply, that a separate suit is necessary or possible. This is not so if the security is given to the Court itself and not to a mortgagee.

33. The second point about the decision in Tokhan Singh v. Girwar Singh (3) that re? quires attention to-day is that the terms of Section 99 of the Transfer of Property Act have been abolished and in place thereof there is the very different and much more limited provision of Rule 14 of Order XXXIV of the Code. The claim in that case was held to be one which did not arise under the mortgage as is the claim against the defendant here and it is doubtful whether the appellant can say that'the case as against her is within the words of Order XXXIV, Rule 14.

34. The third thing which has to be observed about that decision is that although in that case the plaintiff had taken an assignment of the security from the Registrar the learned Judges, do not appear to have directed their attention to the provisions of what is now Section 47 of the Code. The security in that case was given by the judgment-debtor himself and the cases of Sadasiva v. Rama-linga Pillai 2 I. A. 219 : 24 W.R. 193 : 15 B.L.E. 383 : 3 Sar. P.C.J. 549 : 3 Suth. P. C. J. 190 (P. C.) and Subramania Chettiarv.. Rajeswara Seihupathi 43 Ind. Cas. 187; 4TM. 327 : 6 L.W. 762: (1917) M.W.N. 872 : 34 M.L.J. 84. show that Section 47 makes it difficult as regards a judgment-debtor to insist upon or permit a separate suit for the enforcement of the security. It seems that it is open to a person giving security to waive the necessity for a suit subject at least to what was said by Lord Davey in the case of Khiarajmal v. Daim (7). I am not prepared to say that such an order as this could be obtained under Section 145. If this case is regarded as a purely monetary decree available against a surety, then execution under that decree must, it seems to' me, be on one or other of two principles---either it is execution against the bare equity of redemption for the mortgage debt, a thing which this Court will not allow and which would be directly contrary to what was laid down by Lord Davey in the case already mentioned, or it must be an execution on the basis that the rights under the mortgage have been waived entirely. I would like to point out that under the Transfer of Property Act, under Section 99, there was a very respectable body, of authority in the case-law to. the effect that a mortgagee could not execute upon the mortgaged subject and get out of the restrictions of Section 99 even by waiving the mortgage rights. One instance of such a case is Indar Pal Singh v. Mewah Lai (8). The same principle would seem to apply where Rule 14 of Order XXXIV is applicable and I am,, therefore, not prepared to commit myself to the proposition that this order could be upheld by the plaintiffs^ endeavouring to take their stand upon Section 145.

35. However in this case the two parties concerned in this joint bond, viz., the defendant and his wife, charged different interests in the same property which it would be inconvenient and wasteful to realise separately by sales in different Courts and at different times. I see great difficulty in realising the defendant's interests save by proceedings under Section 47 and as I think that both intended to agree that the matter should be thrashed out in execution, I think the judgment of the learned Judge should be supported.

36. It was suggested before us for the first time that'the letter of the 14th November 1924 was void for want of registration. I am not prepared to say that independently of any enquiry or investigation into the facts, it is plain that that letter was intended as a complete re-statement of the contract for security by Way of equitable deposit so as to constitute the bargain. As the letter does not even mention the amount of the original security it would be difficult, to say that: but in any case I do not think that that point can be taken in this Court for the first time in view of the necessity for investigating into the facts from that point of view. (1) We are not informed of any third parties whose interests require to be consulted, nor is there any difficulty, in providing that a reasonable further time for redemption shall elapse before the sale is held.


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