Harpal Singh v. Sukhdeo Prasad — 1966 DIGILAW 208 (ALL)

JUDGMENT S.N. Katju, J. - This is a decree-holder's appeal which is directed against the decree of the learned Addl. Civil Judge Hamirpur by which, affirming the decree of the trial court, he allowed the objection of the judgment-debtor-respondents against the execution of the decree. The respondents had executed a mortgage of their zamindari properties in favour of the appellants. They obtained a final decree on 19-9-12 against the respondents for Rs. 3424-8-0. It was transferred to the Collector for execution and a self-liquidating mortgage was executed on 15-9-44 for 16 years in favour of the appellants. It was alleged by them that they had realised Rs. 1,843-7-0 from the mortgaged land when the Zamindari Abolition and Land Reforms Act came into force and the said land was vested in the State. Thereafter the appellants proceeded to execute the decree for the balance; of the decretal amount. That led to the objection of the respondents that there was a complete adjustment of the decree after the grant of the self-liquidating mortgage and the appellants could not take any further steps for the execution of the decree. 2. The trial court allowed the objection on the ground that the application for execution was barred by limitation and "the mortgage granted by tire Collector under Sec. 17 (U.P. Debt Redemption Act) takes place of a completed execution proceedings which actually terminates the proceeding and furnishes evidence of satisfaction of the amount due to the decree-holder at the time." It, therefore, held the "application to be not maintainable both on the point of limitation and complete adjustment and satisfaction of the decree." The lower appellate court did not express any view on the question of limitation but agreed with the view of the trial court that the grant of the self-liquidating mortgage resulted in a complete adjustment of the decree and it was not open to the decree-holders to take any further steps in execution of the decree. 3. The relevant provisions of the U.P. Debt Redemption Act (U.P. Act XIII of 1940) (hereinafter called the Act) are as follows:- 4. Sec. 17 (1)................... 3. The relevant provisions of the U.P. Debt Redemption Act (U.P. Act XIII of 1940) (hereinafter called the Act) are as follows:- 4. Sec. 17 (1)................... Provided also that the court may execute a decree to which this Act applies by granting to the decree holder a self-liquidating usufructuary mortgage, for a period of not more than twenty years, of such land as is protected from sale, transfer or foreclosure by the provisions of this section : (2) The form, terms and conditions of a mortgage granted under the second proviso to sub-Sec. (1) and the amount to be paid by the debtor at any time for the redemption of such mortgage shall be such as may be prescribed. Sec. 20(2). When a decree is executed by the grant of a mortgage under the provisions of the second proviso to sub-Sec. (1) of Sec. 17 the court shall grant a certificate of 128 mortgage with such particulars as may be prescribed and shall follow the procedure laid down in sub-Sec. (2) of Sec. 89 of the Indian Registration Act, 1908, as if such certificate was a certificate of sale of immoveable property and the registering officer shall file the copy of the certificate in his book no. 1. Such certificate of mortgage shall be exempt from stamp duty. Sec. 21. Notwithstanding anything contained in rule 6 or rule 8-A of Order XXXIV of the First Schedule of the Code of Civil Procedure, 1908, where in a suit based on a loan secured by a first mortgage a decree for sale has been executed and the net proceeds of the sale of mortgaged property are found insufficient to pay die amount due to the plaintiff or to the defendant, as the case may be, no decree shall be passed for the balance due to such plaintiff or defendant, as the case may be, and if any decree for such balance has been passed before the commencement of this Act, it shall be deemed to have been satisfied." 5. The proviso to Sec. 17 (1) clearly says that the decree is executed by the court when it grants a self-liquidating usufructuary mortgage to the decree-holder. Sec. 20(2) by implication treats the grant of a certificate of mortgage as if it were a sale and it is required to be registered under Sec. 89 of the Indian Registration Act. The proviso to Sec. 17 (1) clearly says that the decree is executed by the court when it grants a self-liquidating usufructuary mortgage to the decree-holder. Sec. 20(2) by implication treats the grant of a certificate of mortgage as if it were a sale and it is required to be registered under Sec. 89 of the Indian Registration Act. Sec. 21 further says that where a decree for sale has been executed and the net proceeds of the sale of mortgaged property are found to be insufficient to discharge the decretal debt, no decree shall be passed for any balance due under the decree. Where the mortgaged property is sold for the satisfaction of the mortgage debt, the net proceeds of the sale are treated as sufficient for the discharge of the mortgage debt. It would appear that where a self-liquidating mortgage has been executed that by itself amounts to the satisfaction of the decretal debt and, therefore, it would not be open to the decree-holder to pursue the judgment-debtor again on the ground that the decree, in spite of the aforesaid mortgage, has remained unsatisfied. 6. In the present case, the self-liquidating mortgage became ineffectual after the lapse of some years because of the coming into force of the U.P. Zamindari Abolition and Land Reforms Act and the mortgaged land vested in the State. The consequences flowing from the coming into force of the U.P. Z. A. and L. R. Act could not give the decree-holder any further opportunity to take proceedings for the recovery of any balance of the decretal debt that might still be due from the judgment-debtor. The grant of the self-liquidating mortgage itself operated as a complete satisfaction of the decretal debt. The decree-holder was given full possession of the mortgaged land for the period of the mortgage and he was given the right to recover all rents and dues from the mortgaged land. The grant of the self-liquidating mortgage itself operated as a complete satisfaction of the decretal debt. The decree-holder was given full possession of the mortgaged land for the period of the mortgage and he was given the right to recover all rents and dues from the mortgaged land. In Anant Narain Misra v. Bhawani Pher Dubey, 1959 ALJ 743 it was observed : - "The net position, therefore, is that a mortgage granted under the 2nd and 3rd provisos to Sec. 17 (1) is a mortgage whereby proprietary possession of the land is delivered to the mortgagee and he is authorised to retain such possession and to receive the rents and profits of the land in lieu of interest and towards the payment of the principal on the condition that after the expiry of such term not exceeding 20 years, as may be agreed upon, the land shall be re-delivered to the mortgagor. Therefore, it is clear to us that the person in whose favour a mortgage of the land is granted under the 2nd and 3rd proviso to Sec, 17(1) of the Debt Redemption Act will be considered to be as in proprietary possession thereof with a right to retain and to receive the rents and profits and the mortgagor has no concurrent interest left during the term of the mortgage." 7. It would thus be clear that the mortgagor has been given the right to get back the mortgaged land after the expiry of the period of the mortgage. If for some reason the mortgagee is deprived of the possession of the mortgaged land during the period of the mortgage for no fault of the mortgagor himself, then in that case the mortgagee cannot turn round and take further steps for the recovery of the balance of the mortgage debt that might have remained unpaid. Once a self-liquidating mortgage had been granted in favour of a mortgagee the judgment-debtor is relieved from all obligations for the discharge of the mortgage debt. The proprietary possession of the property is transferred to the mortgagee who is given the authority to receive the rents and profits of the lands in lieu of the amount of the principal and interest due to him and the judgment-debtor could not again be saddled with any further responsibility for the discharge of the decretal debt. The proprietary possession of the property is transferred to the mortgagee who is given the authority to receive the rents and profits of the lands in lieu of the amount of the principal and interest due to him and the judgment-debtor could not again be saddled with any further responsibility for the discharge of the decretal debt. I respectfully agree with the following observations of Mushtaq Ahmad, J., in Ram Lakhan v. Sumesar Rai, AIR 1952 Allahabad 861. "This must mean that the mortgage granted by the Collector under Sec. 17 takes the place of a completed execution proceeding which actually terminates the proceedings and furnishes evidence of the satisfaction of the amount due to the decree-holder at the time. Such a transaction is meant in all essentials to be equivalent to a sale in execution. But just as a sale in execution brings the proceedings in execution to a successful close, so does a mortgage granted by the Collector under the Debt Redemption Act bring the proceedings in execution to an end." 8. I, therefore, agree with the view of the court below that the grant of the self-liquidating mortgage resulted in a complete adjustment of the decree and it was not open to the decree-holder to take any further steps in execution of the decree. 9. The appeal fails and is dismissed with costs.