Research › Browse › Judgment

Supreme Court of India · body

1900 DIGILAW 22 (SC)

MAHARAJAH OF BHARATPUR v. RAM KANNO DEI

1900-11-10

LORD HOBHOUSE, LORD LINDLEY, LORD MACNAGHTEN, SIR HENRY STRONG, SIR RICHARD COUCH

body1900
Judgement Appeal from an order of the High Court (July 28, 1898) affirming an order of the Subordinate Judge of Agra (Sept. 25, 1897). The appeal arose out of an application dated February 17, 1896, for execution of a decree obtained by the appellant, on January 7, 1886, based upon a deed of mortgage. The respondent judgment debtor on April 14, 1896, objected, on the ground that interest claimed by the decree-holder after July 20, 1886, the date fixed by the Court passing the decree for payment of the amount decreed, was not recoverable under the decree. The appellant, on the other hand, contended! that he was entitled to interest up to the date of realization of the entire amount decreed, that interest up to that date was awarded by the decree, and that the judgment debtor never objected to the payment of the interest claimed, on the occasion of the two previous applications made after July 20, 1886, for execution of the decree, in which interest up to the date of payment had been claimed. The Subordinate Judge allowed the respondents objection, and dismissed the application for execution of decree, whereby the appellant had claimed the sum of Rs.144,791 ha. 4p. as due under the decree including interest up to the date of application. The decree in question, dated January 7, 1886, is sufficiently set out in their Lordships judgment. The material passage in the Subordinate Judges judgment is as follows — " It is an admitted fact that the plaintiff claims to recover interest even after July 20, 1886, which was the date fixed by the Court for the payment of the mortgage money under s. 88 of Act IV. of 1882. I have read the judgment and the decree of the original suit, and they are as clear and specific in awarding interest to the plaintiff up to July 20, 1886, as could be desired. of 1882. I have read the judgment and the decree of the original suit, and they are as clear and specific in awarding interest to the plaintiff up to July 20, 1886, as could be desired. Neither of these documents admits of any doubt, and I hold that according to those documents the decree-holder is entitled to interest up to July 20, 1886, but not after that.” With regard to the appellants contention that, as the judgment debtor had not up to April, 1896, objected to pay interest after July 20, 1886, she was estopped from disputing her liability .to pay interest after that date, the Subordinate Judge held that there " was hitherto no necessity for the judgment debtor to raise that objection, because there was always something due to the decree-holder out of the amount originally decreed in his favour. But now that the decree-holder claims to recover a sum over and above the amount decreed in his favour, the judgment debtor is justified in raising the plea." The Subordinate Judge also ruled that a plea of res judicata could not be successfully raised unless it were shewn that the matter had been heard and finally decided. The High Court affirmed this order. After commenting on the ambiguity in the terms of the decree of January 7, 1886, they held that "in the face of this conflict we are in the same position as the learned judges who had to put an interpretation on the decree in Amolak Ram v. Lachmi Narain. (( 1896) Ind. L. R. 19 Allah. 174.)" Following the ruling of the High Court in that case, that in a decree for sale of mortgaged property the Court has no power under s. 88, read with s. 86 of the Transfer of Property Act, 1882, to allow interest beyond the date fixed by the decree for payment of the mortgage money, the learned judges decided that the decree of 1886 did not grant interest beyond July 20, 1886. They also concurred with the First Court that the respondent was not estopped in her contention by having neglected to raise it earlier. Cohen, Q.C., and Ross, contended that the decree of January 7, 1886, should be construed as awarding interest not merely until July 20, 1886, but until realization of the amount decreed. That construction would make the decree in accordance with the existing law. Cohen, Q.C., and Ross, contended that the decree of January 7, 1886, should be construed as awarding interest not merely until July 20, 1886, but until realization of the amount decreed. That construction would make the decree in accordance with the existing law. As regards Amolak Ram’s Case (Ind. L. R. 19 Allah. 174.) relied upon by the High Court, it was contended that it was no longer of any authority. Subsequent to that decision, the High Courts at Calcutta and at Madras dissented in two cases therefrom, namely, Achalabala Bose v. Surendra Nath Dey (( 1897) Ind. L.11.24 Calc.. 766) and Sabbarayar v. Ponusami, (( 1897) Ind. L. R. 21 Mad. 364.) They held that a Court has power, in a decree under s. 88 of the Transfer of Property Act, to award interest subsequent to the decree and the date fixed by the decree for payment until realization. In view of this conflict of authority in the Indian High Courts, the High Court at Allahabad referred the case of Bakar Sajjad v. Udit Narain Singh (( 1899) Ind. .L. R 21 Allah. 361.), in which the facts were similar to those in the present case, to a Full Bench. In that case the Court, having before them a decree for sale of mortgaged property capable of two different constructions, observed " Which of the two would make the decree in accordance with law—the construction that it awards interest only up to the date fixed for payment, or the construction that it awards interest up to realization? The question depends upon the interpretation of ss. 86, 88, and 89 of the Transfer of Property Act, 1882, read, with ss. 90, 94, and 97 of the same Act, and with s. 209, and forms 109 and 128 of the 4th schedule of the Civil Procedure Code. Upon this point there is a conflict of authority." The Full Bench judgment then held that the Calcutta and Madras rulings had been approved by the Privy Council decision in Rameswar Koer v. Syed Nawab Mehdi Hossein Khan. (( 1898) L. R. 25 Ind. Ap. 179 ; S.C. Ind. L. R. 26 Calc. 39.) It follows that the order in this case should be reversed for that the respondents objection to paying interest after July 20, 1886, was without legal foundation. As to the point of estoppel, see Civil Procedure Code, s. 13, expl. (( 1898) L. R. 25 Ind. Ap. 179 ; S.C. Ind. L. R. 26 Calc. 39.) It follows that the order in this case should be reversed for that the respondents objection to paying interest after July 20, 1886, was without legal foundation. As to the point of estoppel, see Civil Procedure Code, s. 13, expl. 2. Reference was also made to s. 88 of Act IV. of 1882; and it was contended that its true construction did not prevent interest being payable up to date of realization. Mayne, for the respondent, contended that the decree in this case on its true construction did not give interest after July 20, 1886. The Court, in withholding interest after that date, followed the rules laid down in ss. 86 and 88 of Act IV. of 1882. Moreover, the decree-holder did not ask for subsequent interest in his plaint. The Civil Procedure Code, schedule Form No. 109, gives a special form of plaint expressly asking for interest beyond due date up to realization. That form was not adopted. No expressions were used in the plaint which directly asked for such interest. The Court decreed as prayed, and there was nothing in the judgment to shew that the Court which made the decree thought that subsequent interest ought to have been given. If the judgment was wrong, it could have been corrected in review or by appeal, but it cannot be altered in the execution department. There is therefore no decree for the interest claimed, and it would have been illegal for the Court in executing it to go beyond its terms. Counsel for the appellant were not heard in reply. The judgment of their Lordships was delivered by LORD HOBHOUSE. This is an appeal from an order made in execution proceedings. The plaintiff, now appellant, is a mortgagee; and the respondent represents the mortgagor who was defendant and is dead. The mortgage was made on December 11, 1882, to secure three lacs of rupees. The mortgagor failed to pay, and the mortgagee filed a plaint which is not in the record, but which from the Subordinate Judges recital in his judgment appears to have been of an ordinary nature, praying for payment of principal and interest on a day to be fixed by the Court, and for sale in default of payment. The mortgagor failed to pay, and the mortgagee filed a plaint which is not in the record, but which from the Subordinate Judges recital in his judgment appears to have been of an ordinary nature, praying for payment of principal and interest on a day to be fixed by the Court, and for sale in default of payment. The frame of the suit, however, so far as it explains the decree, is most properly taken from the decree itself, on the construction of which the whole case turns. The decree bears date January 7, 1886. It will make the discussions on it clearer if the material expressions in it are arranged under separate heads. " (a) The plaintiff seeks the following relief’s That the principal and interest due up to this time, together with such further interest as may accrue due from the date of the filing of the plaint up to the ate of payment, and also the costs of this suit with interest thereon up to the date which may be fixed by the Court may be ordered to be paid; “ {b) It is ordered and decreed that the plaintiffs entire claim be decreed " (c) with interest pendente lite on the principal at the rate claimed and costs of the suit; “ (d) The plaintiff will get future interest at 8 annas per cent, on the amount of decree and costs; " (e) Defendant to pay within six months the sum of Rs.3,00,000 on account of principal " ; Then follow directions for payment within the six months of specified sums of money under different heads I. Interest included in the claim, i.e., up to date of suit; II. Interest pendente lite at the rate of 9 per cent. ; III. Future interest to 20th January, 1886, at 6 per cent.; IV. Future interest to 20th July, 1886, at 6 per cent.; V. Costs of suit. " (f) In the event of default in payment of the entire decretal amount, the hypothecated property be sold by auction in satisfaction of the decretal amount by enforcement of the lien, and in the event of any portion of the decretal amount remaining unpaid, the balance of the decretal amount be recovered from the other property of the debtor deceased." The plaintiff has made applications for execution from time to time under which he has realized large sums. The last application was made on April 14, 1896, and on that occasion the defendant for the first time raised the objection that according to the decree no interest is payable subsequently to the day fixed for payment of the specified sums—namely, July 20, 1886. On September 25, 1897, the Subordinate Judge, who was not the judge who made the decree of 1886, allowed the objection. His reason is given thus — "It is an admitted fact that the plaintiff claims to recover interest even after the 20th of July, 1886, which was the date fixed by the Court for the payment of the mortgage money under s. 88 of Act IV. of 1882. I have read the judgment and the decree of the original suit, and they are as clear and specific in awarding interest to the plaintiff up to the 20th of July, 1886, as could be desired. Neither of these documents admits of any doubt, and I hold that according to those documents the decree-holder is entitled to interest up to the 20th of July, 1886, but not after that." The learned judge does not further examine the language of the decree, but his decision that it excludes interest after July 20, 1886, can only be supported by holding that the enumeration of sums specified under head (e) to be paid on that day in order to avoid a sale under head (/) has the effect of cutting down the general terms of heads (a), (6), (c), (d), which if not so cut down would give interest to the day of payment. On appeal, the High Court affirmed the decision of the Subordinate Judge. The learned judges take a different line of reasoning. They do not find the decree so clear against the plaintiff as it appeared to the Subordinate Judge. Their difficulties, and with them the precise ground of their decision will be best stated in their own words — " Thus we have before us a decree upon which the decree-holder places one interpretation and the judgment debtor another and a totally different interpretation. Each claims that the interpretation for which he or she contends is authorized by the operative words of the decree. Each claims that the interpretation for which he or she contends is authorized by the operative words of the decree. We have tried to see if those words are capable of being so read as to leave no room for doubt in the mind of the Court executing it, what the intention of the Court was which passed the decree. The words by themselves are not a sufficient guide. In one part they seem to point to an intention of the Court to grant all that the decree-holder asked for in his plaint. In another part details are given which cover each portion of the relief asked for with the exception of interest to date of payment, and thus the two parts are at conflict. The decree-holder urges that at the time of passing the decree the Court could not have possibly entered any detailed sum as representing what might eventually be due under this head. True, but we should expect that a Court which went into such details as the Court passing the decree did, would not if it had intended to grant interest subsequent to the date (July 20, 1886) have omitted to say, together with future interest at 6 per cent, to date of payment, or words to similar effect. In the face of this conflict we are in the same position as the learned judges who had to put an interpretation on the decree in Lachmi Narain v. Amolak Ram and Another. (See Amolak Ram v. Lachhmi Narain, Ind, L. R. 19 Allah. In the face of this conflict we are in the same position as the learned judges who had to put an interpretation on the decree in Lachmi Narain v. Amolak Ram and Another. (See Amolak Ram v. Lachhmi Narain, Ind, L. R. 19 Allah. 174.) In that case the learned judges held, first, that where it is possible to do so the construction to be placed upon a decree is that construction which would make the decree one in accordance with the law; and secondly, that if a decree goes beyond what the law allows and leaves no room for doubt as to the construction to be placed upon it, then the Court executing the decree has no option but to execute it for the sum decreed, even though it be a sum beyond what the law allows." In the case referred to it was laid down that under s. 88 of the Transfer of Property Act, which prescribes the nature of the decree to be made in a suit by a mortgagee for sale, it is not competent for the Court to give interest beyond the day fixed for payment into court of the amount declared necessary to effect redemption and to avoid sale. The view of the High Court then is quite clear in its application to the decree in this suit. They think that the specifications under head (e) are inconsistent with the results which would otherwise follow upon heads (a)} (b), (c), and (d); there is therefore a serious ambiguity in the decree ; and they are bound to incline to that construction which would make it in accordance with law, rather than to the opposite one. Their Lordships agree that all ambiguous documents should be construed rather to make them accord with law than to make them conflict with it. But they are unable to see any such ambiguity in this decree as to call for the application of that principle. In their view the foundation of the decree is contained in head (b). That head decrees the entire claim of the plaintiff. The claim so decreed is set forth in head (a). But they are unable to see any such ambiguity in this decree as to call for the application of that principle. In their view the foundation of the decree is contained in head (b). That head decrees the entire claim of the plaintiff. The claim so decreed is set forth in head (a). It is principal and interest due to the date of the plaint, plus interest to accrue due between the date of the plaint and the date of payment, plus the costs of suit with interest thereon up to the date which may be fixed by the Court. The plaintiff seeks that all this shall be ordered to be paid. The sentence is not happily constructed, but such is the reasonably clear outcome of it. Then heads (c) and (d) mention interest subsequent to date of suit. There is a reason for that, because the sums of interest allowed—first, up to date of suit; secondly, between that date and the decree (pendente lite, as it is called) ; and, thirdly, after decree—differ in point of rate. All the same, these two heads are included in the plaintiffs entire claim. Then comes head (e). In it the Court calculates beforehand, instead of leaving for subsequent account, the amounts which the mortgagor must pay on July 20 in order to redeem his property and avoid a sale. If he does not pay, the further part of the decree—head (f)—is to be executed. But there is nothing to say that if the mortgagee is kept out of his money beyond July 20 he is not to have interest upon it, nor any intimation that the Court considered the relief given by the first four heads to be restricted by head (e). As, -then, there is no inconsistency, the duty of the executing Court is, as the High Court rightly points out, to carry the orders of the decree into effect, as being conclusive between the parties whether it may or may not be disputable in point of law. As, -then, there is no inconsistency, the duty of the executing Court is, as the High Court rightly points out, to carry the orders of the decree into effect, as being conclusive between the parties whether it may or may not be disputable in point of law. Apart from the question whether the Court could lawfully give interest to the day of payment, the only difficulty of construction suggested by the learned judges is the omission of words equivalent to " with future interest to the day of payment." But it is not clear what difficulty this omission creates, nor at what point those words should be expected to come in. They could not come into head (e)y because that relates only to the period terminated by July 20. Head (/) does not specify any particulars, but uses the term " decretal amount." It is true that the term is used rather loosely, and has to be applied to subsequent changes of event. On its first appearance it does mean the sums specified under head (e), because it is then referring to July 20, the critical moment which is to determine whether there shall be redemption or $ale. On its subsequent appearances the Court might with propriety have used the words the omission of which has struck the High Court as strange. But there is no inconsistency or, indeed, difficulty in supposing that the term " decretal amount" means the amount due whenever the decree is speaking or being called into action under heads (a), (b), (d). It is far more difficult to suppose that the Court, though contemplating a sale, and more than one sale, with the inevitable delays, before the debt could be got in, should at each successive time have considered the "decretal amount" to be the amount required on July 20 in order to avoid any sale at all. This view of the decree is sufficient to decide the present appeal. But a question of such great and general importance has been raised by the judgment of the High Court that their Lordships cannot, with due regard to public convenience, avoid passing an opinion on it. If the effect of the Transfer Act be as alleged, it works a startling abridgment of the remedies of mortgagees as previously understood. But a question of such great and general importance has been raised by the judgment of the High Court that their Lordships cannot, with due regard to public convenience, avoid passing an opinion on it. If the effect of the Transfer Act be as alleged, it works a startling abridgment of the remedies of mortgagees as previously understood. So far as appears from reported cases, or from anything known to the counsel who argued this appeal, it was a new discovery in the year 1896 when the case of Amolak Ram (Ind. L. R. 10 Allah. 174.) was decided, and when the execution now under discussion was applied for. It is, therefore, not surprising that other Courts should have felt difficulty in following the Allahabad decision. Mr. Mayne rather flatly refused to argue his case on the ground that the decree of 1886 would be illegal if construed in favour of the plaintiffs view. But the authorities cited by Mr. Ross shew strong judicial reasons against taking such a ground. To the report of Achalabala Bose v. Surendra Nath Dey (Ind. L. R. 24 Calc. 766.) there is appended a note by the registrar of the High Court of Calcutta setting forth the rules of that Court and the practice under them, and the effect which the principle of the Allahabad decision would produce on the prevailing views of mortgagees rights. When the last-named case came to be decided, which was in July, 1897, the Calcutta High Court pointed out not only a departure from received practice in the Allahabad view of s. 88 of the Transfer Act, but its inconsistency with s. 97 of that Act, and with the form of suit sanctioned by No. 109 in the 4th schedule of the Procedure Code of 1882. And on this more extended view of the law they decided that the prevailing practice is a lawful practice, and that s. 88 should be construed so as not to interfere with it. The same question came before the High Court of Madras in the case of Subbarayar v. Ponusami (Ind. L. R. 21 Mad. 364.), when that Court expressed dissent from the Allahabad decision. In the recent case of Bakar Sajjad All (Ind. L. R. 21 Allah. 361.) the High Court of Allahabad itself overruled the decision in Amolak Ram’s Case. The same question came before the High Court of Madras in the case of Subbarayar v. Ponusami (Ind. L. R. 21 Mad. 364.), when that Court expressed dissent from the Allahabad decision. In the recent case of Bakar Sajjad All (Ind. L. R. 21 Allah. 361.) the High Court of Allahabad itself overruled the decision in Amolak Ram’s Case. (4) Perhaps they rested undue weight on a decision of this Board. It is true that in the case of Rameswar Koer (L. R. 25 Ind. A p.179.), decided in July, 1898, this Board upheld the High Court of Calcutta in awarding interest subsequent to the date fixed for payment by the mortgagor, which would have been wrong if the decision in Amolak Ram (Ind. L. R. 19 Allah. 174.) had been right. But that point was not raised, and probably never was thought of by anybody until Amolak Ram’s Case (4) came to be known, so that the decision of this Board is rather a proof of the prevalence of doctrines contrary to the principle of Amolak Ram (4) than a conscious pronouncement against it. Nevertheless, the Allahabad judges in giving their decision add a reason of their own for overruling Amolak Ram (4), which seems to their Lordships of importance, to the effect that the object of fixing a day for payment by the mortgagor is for the purpose of assigning a definite time at which the mortgagors right of redemption is to cease, and the mortgagees right to foreclose or sell is to attach, and not for the purpose of staying the payment of interest. It must be admitted that the language of s. 88 is calculated to cause difficulty, and a sort of difficulty which is a common cause of conflict in judicial interpretations of new statutes. It looks as if the draftsman of the Transfer Act had overlooked the difference between a foreclosure and a sale, and had forgotten that in the former case interest stops because the mortgagee gets the property in lieu of his debt, whereas a sale must be subject to some substantial delay, and in many cases is subject to long delays. It looks as if the draftsman of the Transfer Act had overlooked the difference between a foreclosure and a sale, and had forgotten that in the former case interest stops because the mortgagee gets the property in lieu of his debt, whereas a sale must be subject to some substantial delay, and in many cases is subject to long delays. However that may be, there is the difficulty, and, if s. 88 could be looked at as an isolated enactment quite detached from other legal considerations, it would be hard to construe it otherwise than was done by the Allahabad Court in the case of Amolak Ram. (Ind. L. R. 19 Allah. 174.) But, con sidering the universality of the long-established practice, its continuance for years after the Transfer Act was pasted, the manifest justice of it, the lack of any apparent reason for upsetting it, the conformity with it of s. 97 which is in pari material with s. 88, the presumption that s. 88 was framed with reference not to the running of interest but to the determination of the time for redemption or sale alternatively, and the form of suit sanctioned by the Procedure Code, their Lordships have no hesitation in expressing their concurrence with the Courts of Calcutta and Madras, and with the ultimate decision of the Court of Allahabad. Their Lordships are of opinion that the order appealed from and that of the Subordinate Judge should be discharged, and that the case should be remitted to the Subordinate Judge for execution of the original decree with a declaration that, according to the proper construction of that decree, the plaintiff is entitled to interest at 8 annas per cent, up to the date of payment. The plaintiff should have his costs in both Courts. Their Lordships will humbly advise Her Majesty to pass an order accordingly, and the respondent must pay the costs of this appeal.