Research › Browse › Judgment

Allahabad High Court · body

1945 DIGILAW 115 (ALL)

Bisheshar Nath v. Ram Nath

1945-03-23

KAUL

body1945
JUDGMENT Kaul, J. - This is an application for revision of an order passed by the learned Munsif South, Unao, in a matter relating to execution of a decree. 2. The material facts are as follows : On the 13th of September, 1916, one: Badri Singh created a mortgage for a consideration of Rs. 250 in favour of Bisheshwar Nath and Balgovind, the present applicants. The property mortgaged consisted of a sixth share in village Barua Khurd in the district of Unao and certain specific plots of land. On the 22nd of August 1918, Badri Singh sold the property mortgaged to Jagannath and directed him to pay the applicant's debt. Jagannath and his nephews, Ram Nath and 'Sarju Prasad formed a joint family. At a partition of the family property the property covered by the sale deed executed by Badri Singh was allotted to the share of Ram- Nath and Sarju Prasad. On the 18trrof September, 1929, Bisheshwar Nath and Balgovind put-their deed in suit. Badri Singh as well as Ram Nath and Sarju Prasad were impleaded as defendants. A preliminary "decree for sale was passed on the 5th of March 19-30. This was followed by a final decree on the 24th of January 1931. The decree reserved to the decree-holder the right to. apply for passing of a personal decree under Order 34 rule 6 of the CPC if the proceeds of sale of the mortgaged property were found insufficient to satisfy the debt. On the 11th of May, 1934, the decree-holders applied for a personal decree against all three judgment-debtors, Badri Singh, Ram Nath and Sarju Prasad, for the balance which had remained unsatisfied after the sale of the mortgaged property. The trial Court by an order dated the 3rd of November, 1934, dismissed this application so far as Ram Nath and Sarju Prasad were concerned. This order was challenged by a revision petition and a Bench of this Court set aside the order of the Court below. It appears that simultaneously with preferring a revision petition in this Court, (Section 115 application No. 71 of }934) the decree-holders had filed an appeal also before the District Judge. After the decision of the revision application the appeal was allowed on the 14th of May, 1936, and a personal decree for the unpaid decretal money was passed against all the judgment-debtors. After the decision of the revision application the appeal was allowed on the 14th of May, 1936, and a personal decree for the unpaid decretal money was passed against all the judgment-debtors. The decree-holders applied for execution of their personal decree on the 14th of December, 1936 by attachment of a decree obtained by Ram Nath in a case under the Encumbered Estates Act. The attachment was ordered on the 6th of May, 1939, and it was actually - effected on the 27th of July, 1939. After the Debt Redemption Act came into force an application purporting to be under Sections 47 of the CPC and 21 of Act XIII of 1940, Debt Redemption Act, was made on behalf of Kam Nath and Sarju Prasad stating that in view of the Provisions of Section 21 of Act XIII of 1940, the personal decree obtained by Bisbeshwar Nath and Balgovind should be deemed to have been satisfied. It was prayed accordingly that the attachment of the decree obtained by Ram Nath. in the Encumbered Estates Act proceedings should be set aside. This contention was accepted by the learned Munsif. Dissatisfied with this decision Bisheshwar Nath and Balgovind have come to this Court in revision. 3. It was argued by the learned Counsel for the petitioners that Section 21 had no application to the facts of the present case and that the Court below acted with material irregularity in the exercise of its jurisdiction in allowing Ram Nath's application setting aside the attachment. Before a person can take advantage of the provisions of Section 21 of the U. P. Debt Redemption Act he must show that the suit in which the decree for sale was passed was based on a loan as defined in Section 2 sub- Section (9) of the U. P. Debt Redemption Act. It was argued that in view of the decisions of this Court inasmuch as the liability for the repayment of the advance made to Badri Singh had by a contract with him been transferred to Ram Nath and Sarju Prasad the mortgage debt could not be deemed to be a loan for the purpose of the Debt Redemption Act. It was held by a learned Judge of -this Court in the case of Pirthi Nath v. Raj Dutt 1944 OA 87 AWR (CC) 87 : OWN 144. It was held by a learned Judge of -this Court in the case of Pirthi Nath v. Raj Dutt 1944 OA 87 AWR (CC) 87 : OWN 144. that the word "contact" occurring in the definition of "loan" in Section 2 (9) of the U. P. Debt Redemption Act does not confine itself to an express contract but includes also a contract which is implied by the terms of the deed or by law. The learned Judge- further held that for the purposes of this section the test is not whether the contract is express or implied, but whether there was a transference of liability. In the case of Muneshwar Bux Singh v. Jang Bahadur Singh 1944 OA 307 : AWR (CC) 307 : OWN 505, a Bench of this Court, Ghulam Hasan and Madeley JJ. referred to the previous decision with approval. The facts of the latter case were in certain respects analogous to those of the present case, and it was held that sub-Section (9) of Section 2 on a plain interpretation of its language shows that 'once the liability for the repayment of the advance has been transferred by a contract with the borrower, the advance ceases to be a loan. It was pointed out that the sub-section did not lay down that the creditors affected by the transfer must be a party to the transaction if the exception was to take effect. It was argued before the Bench that there could be no transfer of liability within the meaning of the execution contained in sub-Section (9) unless the mortgagee was a party to the sale for his remedy to enforce his claim on the mortgage deed against the mortgagor continues to subsist in spite of the transfer. This contention was repelled. The learned Judges held that the word "liability" was used in the sub-section in a wide sense and not in the limited sense as "exposedness to civil proceedings". They proceeded to observe as follows: Whether the transfer of liability from one person to another binds the creditor is besides the point. As between the transferor and the transferee, the transfer is binding and no action can be taken against the transferor after the transfer. They proceeded to observe as follows: Whether the transfer of liability from one person to another binds the creditor is besides the point. As between the transferor and the transferee, the transfer is binding and no action can be taken against the transferor after the transfer. In the present case the property itself which is subject to a liability existing in favour of the prior mortgagee is transferred with a specific direction to the transferee to discharge that liability and money is left with him for the purpose. There can be no doubt that on the true construction of the language of the exception the liability for the repayment of the money due to the prior mortgagee has by a contact with transferor been transferred to the transferee. 4. It is thus clear that according to the Bench decision, to which reference has been made, where a property subject to a mortgage is sold by the mortgagor to an- other person, and part of the sale consideration is left in his hands with the direction to pay it to the mortgagee, there is a transference of the liability for repayment of the debt which takes it out of the definition of the word "loan" as contemplated by Section 2 (9). It was contended that in such circumstances the person in whose hands money is left for payment to the creditor is only an agent of the mortgagor and there is no transfer of liability to pay the debt. Sitting as a single Judge I am bound by the bench decision and following it hold that the personal decree passed against the judgment-debtor s was not in respect of a loan secured by a first mort- gage as contemplated by Section 21 read with Section 2 (9) of "the U. P. Debt , Redemption Act. The result therefore is that the provisions of Section 21 could Dot be taken advantage of by Ram Nath and Sarju Prasad. This was not a case to which Section 21 could apply. The application for revision is therefore allowed and the order of the Court below is set aside. The applicants shall get their costs from the opposite-party in both the Courts.