Judgement Appeal (No. 43 of 1948), by special leave, from a decree of the Chief Court (September 20, 1943) dismissing an appeal from an order of the Civil Judge of Lucknow in execution proceedings (June 4, 1942). The following facts are taken from the judgment of the Judicial Committee. The questions which arose in this appeal were whether the courts equitable jurisdiction to grant relief against penalties and forfeitures extended to the granting of relief in proceedings taken for the execution of a final decree for foreclosure, the decree having been passed by consent, and, if so, whether this was a proper case for the exercise of the jurisdiction. On January 16, 1934, the appellants mortgaged three houses on Lucknow to Raja Sir Mohammad Ejaz Rasool Khan to secure an advance of Rs. 32,000. Possession of the houses was given to the mortgagee, who had the right to collect the rents from the tenants and, after providing for repairs, to appropriate the balance of the money received by him as rent (in satisfaction of interest on the amount advanced. The mortgagors undertook to redeem the properties after five years by the payment in one sum of the total amount due. It was stipulated that if the mortgagors did not redeem within the five 97 Law Rep. 77 Ind. App. 53 ( 1949- 1950) Sardar Autar Singh V. Raja Sir Mohammad Ejaz Rasool Khan 198 years the mortgagee would have the right to obtain through the court a decree for foreclosure. It was subsequently agreed that the mortgagors should collect the rents and, after deducting outgoings, should pay the balance to the mortgagee. The mortgagors failed to redeem the mortgage at the end of the stipulated period of five years, and on May 16, 1939, the mortgagee instituted a suit in the court of the Civil Judge, Lucknow, claiming a decree for the payment of the Rs. 32,000, and in default a decree for foreclosure. He also claimed to be entitled to a further sum of Rs. 7,000, which he averred was the balance of the rents collected by the mortgagors in accordance with the arrangement made subsequent to the morgage. On October 18, 1940, an agreement of compromise was entered into and a copy of the agreement was filed in court. Clauses 1, 2 and 6 were important. They read as follows— "1. 7,000, which he averred was the balance of the rents collected by the mortgagors in accordance with the arrangement made subsequent to the morgage. On October 18, 1940, an agreement of compromise was entered into and a copy of the agreement was filed in court. Clauses 1, 2 and 6 were important. They read as follows— "1. That the plaintiff has given up all the profits due to him and has reduced his claim to a sum of Rs. 20, 3001/- inclusive of costs. "2. That a decree for the said sum of Rs. 20,300/- shall be passed in favour of the plaintiff against the defendants in accordance with the following conditions— "(a) That the said sum of Rs. 20,300/- shall be paid by the defendants to the plaintiff in two equal instalments of Rs. 10,150/- each on February 15, 1941, and February 15, 1942. "(b) That if the said two instalments are not paid by February 15, 1942, and a single pice remains due to the plaintiff on that date this decree shall be deemed to be a final decree for foreclosure in lieu of the full sum claimed in the suit and costs. "The plaintiff shall be entitled to obtain possession of the houses mortgaged and if there is any difficulty in his so doing he shall be entitled to obtain possession through court in execution of this decree. "6. That if at any time the defendants do not abide by the conditions of this compromise with regard to the payment of the money and make any application for further instalments then the reduction which the plaintiff has made in his claim shall be deemed to have been with-drawn and this decree shall be deemed to be a decree for foreclosure for the full amount claimed in the suit together with costs and profits occurring due since the date of the suit." On the same date a decree, described as a preliminary decree for foreclosure, was passed in accordance with the agreement. On February 24, 1942, the mortgagee applied for execution of the decree by delivery of possession. That was granted and possession was duly given. On March 16, 1942, the mortgagors filed objections to the execution under s. 47 of the Civil Procedure Code. On February 24, 1942, the mortgagee applied for execution of the decree by delivery of possession. That was granted and possession was duly given. On March 16, 1942, the mortgagors filed objections to the execution under s. 47 of the Civil Procedure Code. They asked the court in exercise of its equitable jurisdiction to set aside the order for delivery of possession and the warrant issued in pursuance thereof and to give sufficient time for payment of the amount. They said that the value of the three houses was twenty-five times greater than the decretal amount of Rs. 39,000 and therefore the decree was penal. According to the mortgagee the value was about Rs.80,000. The Civil Judge estimated the value to be Rs.1,50,000 on the footing that property in Lucknow had greatly increased in value since 1923. On June 4, 1942, the Civil Judge dismissed the mortgagors objections. He held that the decree passed in accordance with the agreement of compromise operated as a final decree for foreclosure and therefore the mortgagee could take out execution without first obtaining a final decree; that cl. 2 (ft) was not penal, as a clause providing for foreclosure in case payment was not made by a specified date could not be treated as such; and that cl. 6 did not give the mortgagors a right to claim extension of 97 Law Rep. 77 Ind. App. 53 ( 1949- 1950) Sardar Autar Singh V. Raja Sir Mohammad Ejaz Rasool Khan 199 time after the decree for foreclosure had become final. He had no doubt that it was a very hard case, but relief could not be granted to the objectors. The mortgagors appealed to the Chief Court of Oudh, which dismissed the appeal on September 20, 1943. The reasons were summarized at the end of the judgment in these words " We are clearly of opinion that the right to redeem the "property on payment of the amount of Rs. 39,500 was" not granted either by cl. 2 (ft) or cl. The reasons were summarized at the end of the judgment in these words " We are clearly of opinion that the right to redeem the "property on payment of the amount of Rs. 39,500 was" not granted either by cl. 2 (ft) or cl. 6 of the compromise." What was contemplated by the parties was that the final "decree for foreclosure was to follow automatically upon "default of payment of the reduced amount of Rs.20,300." The parties could well have omitted the words in lieu of the full sum claimed without interfering in any manner "with the dominant intention to make the decree operate as" a final and irrevocable decree upon the happening of the "default. We hold, therefore, that the aforesaid, clause "cannot be regarded as penal in my sense." The mortgagee was now dead and his estate was represented by the respondents. 1949. Oct. 27. Pringle K.C. and Chinna Durai for the appellants. There are two questions, first, whether the court could grant relief in the exercise of its equitable jurisdiction, and secondly, if it had such jurisdiction, whether it should be exercised in the mortgagors favour. The clause in respect of which relief is sought is cl. 2 (6) of the compromise it is on failure to pay the two instalments by February 15, 1942, that the forfeiture takes place. There is no apportionment, forfeiture is incurred even if the appellants had paid everything except " a single pice.” The point that the stipulation that if the sum of Rs.20,300 is not paid by February 15, 1942, then Rs.39,000 and costs will become due is also of a penal nature, is not now taken. With regard to Or. 34, rr. 2, 3, 4 and 5, of the Civil Procedure Code, it may be observed that while foreclosure is a remedy laid down, the court has discretion to grant sale as a remedy instead of foreclosure. The whole property may not be sold, but only sufficient to satisfy the debt. The first submission is that the stipulation that on non-payment of a sum certain by February 15, 1942, the mortgagors should lose their rights to the property is prima facie penal as involving forfeiture, and qua a contractual provision attracts the jurisdiction of the court to grant relief Halsburys Laws of England, 2nd ed., vol. The first submission is that the stipulation that on non-payment of a sum certain by February 15, 1942, the mortgagors should lose their rights to the property is prima facie penal as involving forfeiture, and qua a contractual provision attracts the jurisdiction of the court to grant relief Halsburys Laws of England, 2nd ed., vol. 13, p. 190—on the basis of that statement, which has been applied in India, this clause is prima facie penal. Another ground for saying that it is penal is that the right is a uniform one irrespective of the amount of the obligation remaining undischarged. Further, there is no provision for a refund of the payment which the appellants have made. On those grounds the provisions viewed simply as a contract, are penal provisions, and the court has jurisdiction to give relief. [Reference was also made to s. 74 of the Indian Contract Act, 1872.] On the second stage, the question is does the fact that the penal provision is embodied in a decree of the court oust the jurisdiction to grant relief? There are a great many authorities in India, and the matter is discussed most fully in Kandarpa Nag v. Banwai Lal Nag (( 1920) 33 Cal. L.J. 244.), and the principle is well established by the time Mussammat Nand Rani Kuer v. Durga Dass Narain (( 1923) I.L.R, 2 Pat. 906,) is reached; notwithstanding the decree the court will not be precluded from giving relief. Mohi-Uddin v. Kashmiro Bibi (( 1933) I.L.R. 55 A. 334.) simply raises the point of the jurisdiction of the court to consider an agreement when it has become a decree. There is nothing in Sheikh Mohidin v. Vadivalagianambia Pillai (( 1914) A.I.R. (Mad.) 18.) which enlarges the principle. This was a penal provision against which the courts had jurisdiction to grant relief, and such jurisdiction is not ousted by the fact that there has been a consent decree founded on the agreement, and the only remaining question is whether this is a case in which it would be proper for the court to exercise that jurisdiction. The circumstances of the case justify the exercise of such jurisdiction. The appellants are asking that further time should be given in which to pay; they admit that the debt is the larger figure of Rs. 39,000. Alternatively, they would agree to an order being made for sale of the property. The circumstances of the case justify the exercise of such jurisdiction. The appellants are asking that further time should be given in which to pay; they admit that the debt is the larger figure of Rs. 39,000. Alternatively, they would agree to an order being made for sale of the property. W. W. K. Page K. C. and Jopling for the respondent. It is agreed by both parties that there is no authority in India on the reopening of a decree for foreclosure. If the foreclosure decree is a final 97 Law Rep. 77 Ind. App. 53 ( 1949- 1950) Sardar Autar Singh V. Raja Sir Mohammad Ejaz Rasool Khan 200 decree then the court cannot reopen it, the reason for that being that the rights of the mortgagor and mortgagee in India are entirely statutory. There is no inconsistency between s. 60 and s. 98 of the Transfer of Property Act so far as the extinguishment of the right to redeem is given by the proviso to s. 60. With regard to Or.34, rr. 2 and 3, of the Civil Procedure Code, it is apparent that on the mortgagor failing to comply with the terms of the preliminary decree for foreclosure the court shall pass the final decree, and the effect of that is that the equity of redemption is extinguished. That is one of the decrees of court under s. 60 by virtue of which the right to redeem is extinguished. The second question, assuming that the jurisdiction did exist, is, should it have been exercised in favour of the appellants? From the time when the mortgage was made they had five years in which to pay the money. They were put into possession, with the result that they had the benefit of the rents and profits of the property during those five years. The only benefit which the respondent got was a payment on account of Rs.17,000. They made no attempt on the expiry of the five years to pay off the mortgage. They then had sixteen months in which to pay by two instalments much less than the actual mortgage debt. It is their own evidence that they did nothing whatever to raise the money. In these circumstances it is not a penalty; it is a consideration for the respondents agreeing to forgo his legal rights under the mortgage. They then had sixteen months in which to pay by two instalments much less than the actual mortgage debt. It is their own evidence that they did nothing whatever to raise the money. In these circumstances it is not a penalty; it is a consideration for the respondents agreeing to forgo his legal rights under the mortgage. Even, therefore, it there was jurisdiction to grant the relief claimed, these appellants are not persons in whose favour the court should exercise its discretion. Jopling followed. Pringle K. C. replied. What is put against the appellants is that the courts equitable jurisdiction has been taken away because there are statutory provisions dealing with the rights of mortgagor and mortgagee which would bar the equitable relief. It is submitted that the respondent cannot stand strictly on the method provided by the law to enforce the mortgage where both parties have placed themselves outside the statutory provisions there is no appeal to those provisions in this agreement— both sides have agreed to pass them by. Admittedly there appears to be no case on the point of reopening a final decree for foreclosure, and one reason for that is, perhaps, because foreclosure in India is not a very common thing; the nearest case is Supdu Dhaodu v. Madhavrao Jivram (( 1919) I.L.R. 44 Bom. 544.). The words "shall be deemed to be a final decree" for foreclosure " in cl. 2 (6) are simply descriptive only of the rights which the mortgagee would get on failure of the mortgagors to pay the sum by a certain date. It does not, and cannot, having regard to the form of the proceedings invoke the structure of the Civil Procedure Code. Being descriptive only, and the effect being that the mortgagors lose their property, it amounts to forfeiture, and it is a case in which the court has jurisdiction to grant relief, and is one in which relief ought to be given. Dec. 6. The judgment of their Lordships was delivered by SIR LIONEL LEACH, who stated the facts set out above and continued It is common ground that the mortgage is an anomalous one within the meaning of s. 58 of the Transfer of Property Act, 1882. Mr. Dec. 6. The judgment of their Lordships was delivered by SIR LIONEL LEACH, who stated the facts set out above and continued It is common ground that the mortgage is an anomalous one within the meaning of s. 58 of the Transfer of Property Act, 1882. Mr. Pringle, on behalf of the appellants, conceded that the decree passed in accordance with the agreement of compromise must be treated as a final decree in a suit for foreclosure and therefore there was no need for the mortgagee to take steps to obtain a fresh final decree before proceeding in execution. On the question whether an executing court can, in the exercise of its equitable jurisdiction, grant relief, notwithstanding the passing of a final decree for foreclosure Mr. Pringle relied on the judgments in Kandarpa Nag v. Banwari Lal Nag (( 1920) 33 Cal. L.J. 244.), Mussammat Nand Rani Kuer v. Durga Dass Narain (( 1923) I.L.R. 2 Pat. 906.), Mohi-Uddin v. Kashmiro Bibi (( 1933) I.L.R. 55 A. 334.), and Sheikh Mohidin v. Vadivalagianambia Pillai (( 1914) A.I.R. (Mad.), 18.). These cases are not really in point. They have no reference to the jurisdiction of an executing court to reopen a final decree in a foreclosure suit in order to grant equitable relief. It is in fact admitted that no case has been reported in which such relief has been granted. 97 Law Rep. 77 Ind. App. 53 ( 1949- 1950) Sardar Autar Singh V. Raja Sir Mohammad Ejaz Rasool Khan 201 Their Lordships will assume that in the case of a decree for the payment of money a court executing the decree has jurisdiction to grant relief against what is in fact a penalty, even when the decree has been passed by consent, but in order to decide whether it has jurisdiction in a case where there has been a final decree for foreclosure it must have regard to the pro-visions of the Transfer of Property Act and the Code of Civil Procedure, and when these are examined it is manifest that the court has not the jurisdiction to reopen a foreclosure decree in order to extend the time for redemption. Section 60 of the Transfer of Property Act relates to the rights and liabilities of a mortgagor. Section 60 of the Transfer of Property Act relates to the rights and liabilities of a mortgagor. The section states that at any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage money, to require the mortgagee to deliver to him the title deeds, and where the mortgagee is in possession to deliver possession of the mortgaged property to him and to re-transfer the property to him or such third person as he may direct, and where the mortgage has been effected by a registered instrument, to have registered an acknowledgment in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished. To this is added the proviso that the right conferred by the section has not been extinguished by acts of the parties or by decree of a court. Section 98 of the Transfer of Property Act says "In the case of an anomalous mortgage the rights and liabilities of the parties shall be determined by their contract as evidenced in the mortgage-deed, and, so far as such contract does not " extend, by local usage." Order 34, r. 2, sub-r. (2), of the Code of Civil Procedure, which relates to the preliminary decree in a foreclosure suit, says that the court may, on good cause shown and on terms to be fixed by the court, from time to time, at any time before a final decree is passed, extend the time for payment of the amount found or declared due under the preliminary decree. Order 34, r. 3, which deals with the final decree in a foreclosure suit, says "(1) Where, before a final decree debarring the defendant from all right to redeem the mortgaged property has been " passed, the defendant makes payment into court of all " amounts due from him under sub-rule (1) of rule 2, the court shall, on application made by the defendant in this " behalf, pass a final decree— "(a) ordering the plaintiff to deliver up the documents referred to in the preliminary decree, and, if necessary,— "(b) ordering him to re-transfer at the cost of the defendant the mortgaged property as directed in the said decree, and, also, if necessary,— "(c) ordering him to put the defendant in possession of the property. "(2) Where payment in accordance with sub-rule (1) Las " not been made, the court shall, on application made by the " plaintiff in this behalf, pass a final decree declaring that " the defendant and all persons claiming through or under " him are debarred from all right to redeem the mortgaged " property and also, if necessary, ordering the defendant " to put the plaintiff in possession of the property. "(3) On the passing of a final decree under sub-rule (2), all liabilities to which the defendant is subject in respect "of the mortgage or on account of the suit shall be deemed" to have been discharged." 97 Law Rep. 77 Ind. App. 53 ( 1949- 1950) Sardar Autar Singh V. Raja Sir Mohammad Ejaz Rasool Khan 202 The form of a final decree in a foreclosure suit is given in Appendix D to the Civil Procedure Code. It contains a declara tion that the defendant and all persons claiming through or under him are absolutely debarred and foreclosed of and from all right of redemption of and in the property. These statutory provisions when read together leave no loom for the contention that the court had power within its equitable jurisdiction to grant relief of the nature sought. The proviso to s. 60 and the provisions of s. 98 of the Transfer of Property Act in themselves may not be conclusive, but the provisions of Or. 34, rr. 2 (2) and 3 of the Code of Civil Procedure put the question beyond doubt. By Or. 34, r. 2 (2) the courts power to extend the time for redemption is limited to the period between the passing of the preliminary decree and its displacement by a final decree, and r. 3 expressly provides that the final decree shall declare that the mortgagor and persons claiming through or under him are debarred from all right of redemption. It is difficult to imagine clearer statutory directions precluding the reopening of a final decree for foreclosure on equitable grounds. Sufficient has been said for the decision of the appeal, but as the merits have been stressed in argument, their Lordships are constrained to observe that even if they had the power to grant the relief sought by the appellants they would not have been inclined to interfere with the decree of the Chief Court. Sufficient has been said for the decision of the appeal, but as the merits have been stressed in argument, their Lordships are constrained to observe that even if they had the power to grant the relief sought by the appellants they would not have been inclined to interfere with the decree of the Chief Court. Apart from the sum of Rs.17,000 which they paid over out of the rents collected by them, the appellants have made no payment to the mortgagee. By the mortgage deed they contracted to pay the debt in five years, that is five years from January 16, 1934. It is now nine years since the compromise decree was passed and there has been no evidence of good faith by tender or payment into court. Their Lordships will humbly advise His Majesty that the appeal should be dismissed. The appellants will bear the costs of the appeal.