Research › Browse › Judgment

Calcutta High Court · body

1902 DIGILAW 138 (CAL)

Jogendra Nath Mukerjee v. Methana Abraham

1902-05-19

body1902
JUDGMENT Stephen, J. - This is an undefended suit for the usual sale decree under a mortgage; and the only point I have to consider is what rate of interest I am to allow in respect of the mortgagor's debt after the six months' period allowed for redemption under the Transfer of Property Act, 1882, read so far as this Court is concerned, with Rules 476, 477 and 605, the legality of the combined operation of which has not been called in question. The case is admittedly covered by No. 605 of the Rules applicable to the Original Side of this Court; according to which the rate of interest provided in the mortgage deed is to be allowed till the expiration of the six months period : and six per cent, afterwards, presumably till the mortgagor's debt is paid. But it is argued that recent cases have given a mortgagee a right to have the mortgage rate of interest paid till actual realization of the mortgaged property; that he is entitled to this under the Transfer of Property Act, 1882; that therefore Rule No. 605, so far as it prescribes the payment of six per cent. in place of the mortgage rate of interest, is inconsistent with a statute and therefore ultra vires and bad. This argument is based on a chain of cases which may generally be taken as showing that an order giving the mortgagee interest up to the date of the realization of the mortgaged property is not bad : but it must be premised that only one of these cases was concerned with a mortgage to which Rule No. 605 applied, as being decided on the Original Side of this Court; that the existence of that Rule is not noticed in any of them; and that in none of them has any question been raised as to the power of the Court to make a difference between the rate of interest to be paid before the expiration of the period of redemption, and that to be paid after such period. 2. The first case I need notice is Bakar Sajad v. Udit Narain Singh ILR 21 All. 361 (1899). In that case the mortgage rate of interest was decreed to be paid after the decree. 2. The first case I need notice is Bakar Sajad v. Udit Narain Singh ILR 21 All. 361 (1899). In that case the mortgage rate of interest was decreed to be paid after the decree. The question was for how long it was to be paid, and the decision was that it was to be paid till the value of mortgaged property was realised. This ruling was contrary to the decisions in Amola Sam v. Lachmi Narain ILR 19 All. 174 (1896) and certain other cases; but was in accordance with a Calcutta case, Achalabala Bose v. Surendra Nath Dey 1 C.W.N. 550: s.c. ILR 24 Cal. 766 (1897), and was based on a decision in the Privy Council, Rameswar Koer v. Mahomed Mehdi Hossain Khan ILR 26 Cal. 39 (1898), in which the point raised in Amola Ram's case ILR 19 All. 174 (1896) was not considered. That case however was considered by the Privy Council in Maharajah of Bharatpur v. Rani Kanno Dei 5 C.W.N. 137 (1900) in which the legality of awarding interest up to the date of realization was affirmed. The rule there laid down was followed in this Court in Manoo Lal v. Durga Prasad Singh 5 C.W.N. 653 (1901) when the earlier Privy Council case and the decision in Bakar Sajad's case ILR 21 All. 361 (1899) were followed. In none of the cases however does any distinction made between interest before and after the period of redemption occur, except indirectly in the Privy Council case of Rameswar Koer v. Mahomed Mehdi Hossain Khan ILR 26 Cal. 39 (1898) in which, as appears from the judgment in Bakar Sajad's case ILR 21 All. 361 (1899), this Court in effect allowed the mortgage rate of interest to the end of the period of redemption, and four per cent, as decreed by the Subordinate Judge afterwards. And on that occasion the decree of this Court was upheld by the Privy Council. 3. Under these circumstances the decisions make it clear that the Court may allow the mortgage rate of interest up to the date of the sale of the mortgaged property; and the question becomes, Has the mortgagor any right to demand this interest, or has this Court power to give him interest at a lower rate? 3. Under these circumstances the decisions make it clear that the Court may allow the mortgage rate of interest up to the date of the sale of the mortgaged property; and the question becomes, Has the mortgagor any right to demand this interest, or has this Court power to give him interest at a lower rate? If so much of the decree as gives interest after the period for redemption is a decree for the payment of money, the first question must be answered in the negative, the second in the affirmative. In the first place I do not think that the equitable right of the mortgagor to redeem at any time before the property is sold need be considered: as the mortgagee's claim must be based on the Transfer of Property Act, and his equitable claim is wholly outside that Act. In the second place it must be observed that the proceedings under the decree entirely alter their character when the period for redemption is passed. Till then the gist of the decree is that the contract of mortgage is to be carried out; afterwards it is that the property or a part of it is to be sold and the money realised to be applied in certain specified ways, in other words, the end arrived at by the decree is the payment of money. The fact that an order for the sale of the property has still to be made does not seem to me material, as the order is merely ancillary to the decree. It may also be worth remarking that the power of the Court to order a sale of part only under sec. 88 shows that the nature of the action changes at the expiration of the period for redemption, at least in so far as the subject-matter of the decree is concerned. A part of the judgment in Rameswar Koer's case ILR 26 Cal. 39 (1898) seems inconsistent with the view, and suggests that sec. 209 of the CPC is wholly superseded by the provisions of the Transfer of Property Act; but the actual point does not seem to have been decided. 4. The case of Surja Narain Singh v. Jogendra Narain Roy Chowdhury ILR 20 Cal. 360 (1892) has also been quoted to the same effect; but I do not think this can be taken as applying to the operation of sec. 4. The case of Surja Narain Singh v. Jogendra Narain Roy Chowdhury ILR 20 Cal. 360 (1892) has also been quoted to the same effect; but I do not think this can be taken as applying to the operation of sec. 209 of the CPC in the period now under consideration. On the other hand, the case of Achalabala Bose v. Surendra Nath Dey 1 C.W.N. 550 : s.c. ILR 24 Cal. 766 (1897) is a plain, and I venture to suggest strong authority for the proposition that the provisions of sec. 209 of the CPC have some effect on proceedings such as the present under the Transfer of Property Act. 5. It must also be observed that by sec. 89 of the latter Act, the mortgagee's right to redeem and his security are both extinguished on the order for sale being made absolute. The change so effected in the position of the mortgagee, that is his loss of any power of control over the course of the execution of the decree seems to indicate that there comes a time when the effect of the decree also is varied when in fact it becomes a decree for the payment of money. And since the order for sale is merely ancillary to the decree, I think that the time when this change takes place may reasonably be referred back to the moment when the order may legally be made, that is the expiration of the six months period allowed for redemption, as that is certainly the last moment when any legal right to redeem ceases. 6. Under these circumstances, therefore taking into consideration the force, of the rules of this Court merely in their declaratory capacity, and having regard to the constant practice on the Original Side of this Court I hold that the decree of interest at six per cent, in accordance with Rule No. 605, is a decree for the payment of money, and that the rule is therefore not void. I accordingly order that the decree in this case be made in accordance with this order. Mr. J.C. Dutt, Attorney for the Plaintiff.