Bharat Singh v. Mt. Chadi — 1946 DIGILAW 154 (ALL)

JUDGMENT Iqbal Ahmed, C.J. - This is a judgment-debtor's execution first appeal and arises under the following circumstances: 2. On 14-12-1922, Bharat Singh, appellant executed a simple mortgage in favour of the decree-holder respondents, Mt. Chaoli and Mt. Anar Dei. The property mortgaged was zamindari land measuring 82 bighas and odd. 3. Thereafter, on 20-1-1930, Bharat Singh executed a usufructuary mortgage in favour of one Ram Chandar Sahai who is not a party to the present appeal. The property mortgaged under this deed was 76 bighas and odd out of 82 bighas and odd covered by the simple mortgage of 1922. Out of the consideration of the deed of usufructuary mortgage, Bharat Singh left a sufficient amount in the hands of Ram Chandar Sahai with the direction that the latter should pay up and redeem the mortgage of 1922. Ram Chandar Sahai, however, did not pay any portion of the amount due on the mortgage of 1922 with the result that the decree-holder respondents put the mortgage of 1922 into suit and obtained a preliminary decree for sale on 15-1-1935. Bharat Singh, his 2 sons and Ram Chandar Sahai were defendants to the suit for sale. The decree-holder respondents obtained a final decree for sale on 10-2-1938. 4. In the meantime, on 1-1-1938, the Temporary Postponement of Execution of Decrees Act (x of 1937)hereinafter referred to as Act, X of 1937 had come into force. It is common ground that Bharat Singh and his 2 sons were agriculturists within the meaning of the said Act and that the annual land revenue payable by them was less than Rs. 250. The provision of S. 3 (1) of the Act which directs stay of execution of decrees during the period that the Act shall remain in force was, therefore, applicable to the final decree for sale held by the decree-holder respondents. It is also an admitted fact that the land mortgaged under the deed of simple mortgage was, in view of the provisions of S. 17 (1) (a), Debt Redemption Act (XIII of 1940), "protected land". 5. On 3-2-1942, the decree-holder respondents applied for execution of the decree impleading all the judgment-debtors. The prayer contained in the application was that ft self-liquidating mortgage be executed in favour of the decree-holders with respect to the entire land covered by the mortgage of 1922. 5. On 3-2-1942, the decree-holder respondents applied for execution of the decree impleading all the judgment-debtors. The prayer contained in the application was that ft self-liquidating mortgage be executed in favour of the decree-holders with respect to the entire land covered by the mortgage of 1922. This prayer was in pursuance of proviso 2 to S. 17 (1), Debt Redemption Act. A note was appended to the application for execution to the effect that, as the judgment-debtors were agriculturists within the meaning of Act X of 1937, the decree holders were entitled, in the computation of the period of limitation for the application for execution, to exclude the time during which the Act was in force. The judgment-debtors contested the application for execution on the ground that the same was barred by limitation. This contention of the judgment-debtors was overruled by the Court below with the result that Bharat Singh has filed the present appeal. It is to be noted that Ram Chandar Sahai, the usufructuary mortgagee, has not assailed the decision of the Court below and is not a party to the present appeal. 6. Section 5 (1) (b) of Act x of 1937 enacts that in the computation of the period of limitation for the execution of such decree as is referred to in S. 3, and not covered by S. 6, "the period during which this Act shall remain in force, shall be excluded." It is not disputed that the decree-held by the respondents falls within the purview of S. 3 of the Act, and, as such prima facie, the decree-holders were entitled, in the computation of the period of limitation, to exclude the period during which Act, X of 1937 was in force. The Act was in force from 1-1-1938 to 31-12-1940, and if this period is to be excluded, the application for execution, which was presented on 3-2-1942, is well within time. 7. Reliance is, however, placed by the appellant on the words "and not covered by S. 6" that find a place in S. 6 (1) (b) of the Act. It is maintained by the appellant's counsel that the decree in question is covered by S. 6 and, therefore, the period during which the Act remained in force cannot be excluded in the computation of the period of limitation. It is maintained by the appellant's counsel that the decree in question is covered by S. 6 and, therefore, the period during which the Act remained in force cannot be excluded in the computation of the period of limitation. The relevant portion of S. 6 is as follows: Nothing herein contained shall......(c) apply to a mortgage decree sought to be executed by sale of the mortgaged property in the hands of a subsequent transferee who has taken the transfer subject to the mortgage on the basis of which such decree has been obtained. 8. It is argued that, as the bulk of the mortgaged property had been transferred to Ram Chandar Sahai and as he had taken the transfer subject to the simple mortgage of 1922 that culminated in the final decree for sale, the decree was a decree covered by S. 6. 9. It was held by a Full Bench of this Court in Radha Kishan Vs. Umrai Singh, AIR 1943 All 316 that Act 10 [x] of 1937 is not intended to provide relief to monied people who purchase properties subject to encumbrance with a stipulation that they will be liable to discharge that encumbrance and that cl. (c) of S. 6 of the Act was enacted to hold a subsequent transferee to his bargain and to ensure that he would discharge the mortgage debt according to the covenant in the deed of transfer. It cannot, therefore, be disputed that a purchaser of the whole or a part of the mortgaged property, who has purchased the property subject to a pre-existing mortgage, cannot invoke to his aid the benefit of the provisions of Act, 10 [x] of 1937. The learned counsel for the appellant, however, proceeds further and maintains that the legislature has denied not only to a subsequent purchaser but to all subsequent transferees of mortgaged property, who have taken the transfer subject to the mortgage with which the property is encumbered, the benefit of the provisions of the Act. In this connection he places reliance on the word "transferee" used in cl. (c), S. 6 of the Act and contends that as Ram Chandar Sahai, the usufructuary mortgagee, was a "transferee" of a part of the mortgaged property, the decree was covered by S. 6 (c). I am unable to agree with this contention. 10. In this connection he places reliance on the word "transferee" used in cl. (c), S. 6 of the Act and contends that as Ram Chandar Sahai, the usufructuary mortgagee, was a "transferee" of a part of the mortgaged property, the decree was covered by S. 6 (c). I am unable to agree with this contention. 10. It is no doubt a recognized canon of construction of statutes that, when the language of the enactment is clear, the Court is bound to give effect to it even though the Court is satisfied that the legislature did not contemplate the actual result of the language employed, but it is also equally well established that a statute may be construed contrary to its literal meaning when a literal construction would result in an absurdity or inconsistency, and the words are capable of another construction which will carry out the manifest intention; vide Ex parte Walton : In re Levy (1881) 17 Ch. D. 746 (756) : 50 L.J. Ch. 657 : 45 L.T. 1 : 30 W R 395. 11. The word "transferee" is, no doubt, a word of wide import and embraces not only a purchaser, but a donee, a mortgagee or a lessee as well. But the context in which the word "transferee" occurs in S. 6 (c) does, to my mind, point to the conclusion that that word was used by the legislature in a restricted sense as denoting a purchaser or a transferee out and out and not in its wide sense. The phrase "subsequent transferee" is preceded by the words "in the hands of a". Now, in the case of a mortgage, it would be wholly inappropriate to say that the property mortgaged wholly passes into the hands of the mortgagee. A mortgage is no more than the transfer of an interest in specific immoveable property. On the execution of a mortgage two distinct interests in the mortgaged property are carved out, viz., (1) the mortgagee's right, and (2) the right to redeem. The latter right remains vested in the mortgagor. In the case of a mortgage, therefore, the property mortgaged does not pass wholly "in the hands of" the mortgagee, The property, on the other hand, is, from the date of the mortgage, split up into two parcels of distinct interests one of which becomes vested in the mortgagee and the other remains with the mortgagor. In the case of a mortgage, therefore, the property mortgaged does not pass wholly "in the hands of" the mortgagee, The property, on the other hand, is, from the date of the mortgage, split up into two parcels of distinct interests one of which becomes vested in the mortgagee and the other remains with the mortgagor. It follows that on the execution of a mortgage the mortgaged property, in the eye of law, is in the hands not only of the mortgagee but in the hands of both the mortgagor and mortgagee. The words "in the hands of a subsequent transferee" are, therefore, wholly inappropriate to the case of a mortgage and, in my judgment, are applicable only to a person in whom the property has vested absolutely. 12. There is yet another consideration that, points to the same conclusion. A prior mortgagee, who has obtained a decree for sale against the mortgagor and a subsequent mortgagee, does, in execution of his decree, sell not only the interest of the subsequent mortgagee but also the interest of the mortgagor in the mortgaged property. In other words, the execution of a prior mortgage decree entails the sale of the mortgaged property which is in the hands both of the mortgagor and the subsequent mortgagee. Clause (c) of S. 6 of Act 10 of 1937 is, however, confined in its operation to a decree that is executed by sale of the mortgaged property in the hands of a subsequent transferee alone. It is, therefore, manifest that it can have no application to a case where the subsequent transferee is a mere mortgagee. 13. Again the words "in the hands of" are wholly inappropriate to the case of a simple mortgagee. By virtue of a usufructuary mortgage, the property mortgaged does, in one sense, pass into the hands of the usufructuary mortgagee. This is, however, not so in the case of a simple mortgage. The word "transferee" in S. 6 (c) cannot, therefore in the context in which it occurs, be applicable to a simple mortgagee. It would, therefore, be anomalous to hold that that word is applicable to a usufruotuary mortgagee. If the word "transferee" was used by Legislature to denote a mortgagee, it should embrace both a usufructuary and a simple mortgagee. The word "transferee" in S. 6 (c) cannot, therefore in the context in which it occurs, be applicable to a simple mortgagee. It would, therefore, be anomalous to hold that that word is applicable to a usufruotuary mortgagee. If the word "transferee" was used by Legislature to denote a mortgagee, it should embrace both a usufructuary and a simple mortgagee. As that word cannot, in view of the wording of the section, be interpreted to include a simple mortgagee, it must be held that the Legislature did not intend that word to denote a mortgagee of any description. 14. For the reasons given above, I bold that the word "transferee" in S. 6 (c) has been used in the limited sense of a person who has purchased the mortgaged property. The decision of the Court below is, therefore, perfectly correct and I would dismiss this appeal with costs. Verma J. 15. I agree. Yorke J. 16. I agree. Sinha J. 17. agree. " Malik J. 18. The facts of this case are set out in the judgment of his Lordship the Chief Justice. The only point for determination is whether the application for execution filed on 3-2-1942, was beyond time. The decree-holders have in this application asked for a self-liquidating mortgage to be executed in their favour of the entire 82 bighas, 8 biswas and 10 biswansis. This they have evidently done as they were no longer entitled to ask for sale of the property by reason of S. 17, U.P. Debt Redemption Act (XIII of 1940). The final decree for sale was passed on 19-2-1938. The decree-holders urge that limitation is saved as they could not have executed their decree during the period when the United Provinces Temporary Postponement of Execution of Decrees Act (x of 1937) was in force. The reply of the judgment-debtor to that contention is that the decree could have been executed while that Act was in force and therefore the period of limitation was not saved. The only point for consideration, therefore, is whether the decree could have been executed while the Temporary Postponement of Execution of Decrees Act was in force. The reply of the judgment-debtor to that contention is that the decree could have been executed while that Act was in force and therefore the period of limitation was not saved. The only point for consideration, therefore, is whether the decree could have been executed while the Temporary Postponement of Execution of Decrees Act was in force. Under S. 5 of that Act, limitation prescribed by the Indian Limitation Act, 1908, for execution of such decrees as are referred to in S. 3 of Act against an agriculturist is extended and the period during which the Act remained in force is excluded. It is common ground that the defendant judgment-debtor is an agriculturist. It is also clear that the decree under execution is a decree such as is mentioned in S. 3 of the Act, being a decree for sale against an agriculturist. Under S. 5 the period is, however, not extended if the decree is covered by S. 6 of the Act. The only relevant provision in S. 6 which is said to apply to this case is S. 6 (c) which reads as follows : Nothing herein contained shall....... apply to a mortgage decree sought to be executed by sale of the mortgaged property in the hands of a subsequent transferee who has taken the transfer subject to the mortgage on the basis of which such decree has been obtained. 19. As I have already said, the application for execution was filed on 3-2-1942, and therefore at that time neither S. 5 nor S. 6, Temporary Postponement of Execution of Decrees Act was in force, that Act having been repealed by Act XIII of 1940, the U.P. Debt Redemption Act. Though S. 5 or S. 6 of the Act may have been repealed on the date when the application for execution was filed, in computing the period of limitation for the application for execution the period during which the decree-holders were prevented from executing their decree must be excluded. This point has now been set at rest by the decision of a Full Bench of this Court in [Radhey Lal v. Roop Ram], (42) AIR 1942 All. 396 (398): ILR (1943) All. 55 : 203 I.C. 331 : 1942 A.L.J. 571 (F B). It is, therefore, necessary to consider whether the decree-holders could or could not execute their decree. This point has now been set at rest by the decision of a Full Bench of this Court in [Radhey Lal v. Roop Ram], (42) AIR 1942 All. 396 (398): ILR (1943) All. 55 : 203 I.C. 331 : 1942 A.L.J. 571 (F B). It is, therefore, necessary to consider whether the decree-holders could or could not execute their decree. It is argued on behalf of the judgment-debtor that because after the date of the mortgage in favour of the decree-holders the mortgagor had executed a usufructuary mortgage of 76 bighas out of 82 bighas 8 biswas and 10 biswansis included in the first mortgage, the mortgage property or at any rate a part thereof must be deemed to have been in the hands of a transferee. One of the questions that has arisen for consideration is whether the mortgaged property in such cases means the entire mortgaged property or only a part thereof. If we were to hold that it means a part of the mortgaged property, the difficulty that may arise is as to where to draw a line. The decree-holders have a right to proceed against the entire mortgaged property. It is true that they can, if they so want, give up a portion of their security, but they cannot be compelled, nor are they expected, to confine their claim to a portion of the mortgaged property in the absence of any statutory provision to that effect. There can be no doubt that to the extent of the 6 bighas odd that were not transferred the mortgagee decree-holders were not entitled to proceed against that property by way of sale. Under the circumstances it cannot be said that the decree became barred by limitation as regards a part of the property and was not so barred as regards the rest of it. I am, therefore, inclined to the view that the mortgaged property means the entire mortgaged property and not merely any portion of it. 20. Under the circumstances it cannot be said that the decree became barred by limitation as regards a part of the property and was not so barred as regards the rest of it. I am, therefore, inclined to the view that the mortgaged property means the entire mortgaged property and not merely any portion of it. 20. Apart from this, there is the further question whether it can be said, in the circumstances of this case, that the mortgaged property was 'in the hands of a transferee.' It cannot be seriously urged that if a mortgagor had executed two simple mortgages the decree-holder on the basis of the first mortgage could claim the right to execute his decree even though the judgment-debtor was an agriculturist entitled to the benefit of the Temporary Postponement of Execution of Decrees Act, on the ground that the property was 'in the hands of a transferee,' the second mortgagee. In the case of a usufructuary mortgage, it is true the actual physical possession of the fields is with the usufructuary mortgagee, but, to my mind, the Legislature was not dealing with the question of the actual physical possession but with the question of the legal rights of the parties. It could not be said that the property that had been mortgaged to the first mortgagee and which was to be sold in execution of the decree was in the bands of the second mortgagee. After the first mortgage the mortgagor remained the owner of the property and only certain rights in the property had passed to the first mortgagee. After the second mortgage, though it was a usufructuary mortgage, the mortgagor still remained the owner of the property but some more rights were carved out in favour of the second mortgagee. The second mortgagee could never claim that the property which had been mortgaged to the first mortgagee and which was liable to sale in execution of his decree had at any stage come to the hands of the second mortgagee. In this view of the matter also, the judgment-debtor's appeal must fail. 21. For the reasons given above I would dismiss this appeal with costs and uphold the order passed by the Court below. 22. The appeal is dismissed with costs.