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1906 DIGILAW 2 (ALL)

Baldeo Prasad v. Sheo Nandan

1906-01-03

BANERJI, STANLEY

body1906
JUDGMENT : STANLEY, C.J.:— The suit which has given rise to this appeal was one for foreclosure of a mortgage by way of conditional sale, dated the 17th of May, 1900. When the case came before the Court of first instance it was found that the plaintiff was entitled to a decree for foreclosure but consequent upon that finding, the Court thought it necessary to refer the case to the Collector under the provisions of section 9, sub-section (3) of Act II of 1903, with a view to the exercise of the power conferred by sub-sections (1) and (2) of that section. Accordingly, on a reference to the Collector, the Collector struck out of the mortgage-deed the conditional sale clause, the mortgagee having elected under the provisions of sub-section (2) to the sticking out of this clause. Thereupon the case again came before the Subordinate Judge, who passed an extraordinary order. That order is in the following terms:— “The conditional sale clause has been struck out of the mortgage-deed by the Collector. Therefore’ there remains no prayer in the plaint which can be granted by the Court. The claim is dismissed with costs.” Now we may point out that the first prayer in the plaint is a prayer for payment by the defendant to the plaintiffs of the principal amount due to them. The second prayer in the plaint is that in default of payment of the debt a foreclosure decree may be passed. We find it hard therefore to understand how the learned Subordinate Judge came to the conclusion that by reason of the election of the mortgagees to the striking out of the conditional sale clause, he was precluded from passing any decree and was bound to dismiss the suit. Such a course, if open, would work a great injustice. We are happy, however, to be able to hold that no such necessary consequence follows from the language of the Statute. Such a course, if open, would work a great injustice. We are happy, however, to be able to hold that no such necessary consequence follows from the language of the Statute. Subsection (2) of section 9 provides that “if a member of an agricultural tribe has before the commencement of this Act made a mortgage of his land in which there is a condition intended to operate by way of conditional sale, the Collector shall have authority to put the mortgagee to his election whether he will agree to the said condition being struck out, or to accept in lieu of the said mortgage a mortgage in form (a) as provided by section 6, which shall be made for such period, not exceeding the period permitted by the said section, and for such sum of money as the Collector considers to be equitable.” This section is followed by sub-section (3) which provides that “if a suit is instituted in any Civil Court on a mortgage to which sub-section (1) applies, or if a suit for the enforcement of a condition intended to operate by way of conditional sale in a mortgage made before the commencement of this Act is instituted or is pending at the commencement of the Act in any Civil Court against a member of an agricultural tribe, or if an appeal in any such suit is instituted, or is pending at the commencement of this Act in any Civil Court other than the High Court, the Court shall, if it finds that the mortgage is enforceable, or that the mortgagee is entitled to a decree absolute for foreclosure, refer the case to the Collector with a view to the exercise of the power conferred by sub-sections (1) and (2) respectively.” Now when it was referred to the Collector under sub-section (2) to put the mortgagee to his election whether he would agree to the striking out of the conditional sale clause, or in lieu of his mortgage to have a mortgage in the form prescribed by section 6, the Collector passed an order with the concurrence of the mortgagees striking out the conditional sale clause. The effect of this was to leave the mortgagees to the only relief which remained available under their mortgage, that is, a simple money decree as claimed in the plaint. The effect of this was to leave the mortgagees to the only relief which remained available under their mortgage, that is, a simple money decree as claimed in the plaint. If the mortgagees had elected in lieu of their mortgage to take a mortgage in the form prescribed by section 6, no doubt then the mortgage in respect of which the suit was brought would be satisfied by the new mortgage, and in that case the Court, on the matter coming up for consideration, would be bound to dismiss the suit. But when the mortgagees elected to stand by their mortgage with the omission of the conditional sale clause, the obvious course, as it appears to us, for the Court to have taken was to give judgment in favour of the mortgagees for their money demand. We are unable to agree with the learned District Judge in the view which he expressed, namely, that the jurisdiction of the Court ceased when the question was referred to the Collector under the provisions of sub-section (3). He says in the course of his judgment: —” In my opinion the Civil Court's jurisdiction ceases with the reference to the Collector.” There is nothing in the Act which justifies this view. The proceedings in the Civil Court must no doubt be stayed until a reference has been made to the Collector and the mortgagee has had an opportunity of making his election within the meaning of the section. But there is nothing in the Act which curtails or limits the jurisdiction of the Court in other respects. 2. We accordingly allow the appeal, set aside the decrees of both the lower Courts, and give a decree to the plaintiffs for the amount claimed, with interest at the stipulated rate up to this date, and thereafter at the rate of 6 per cent, per annum. The plaintiffs will have their costs in all Courts.