Chhutan Lal v. Punjab National Bank Ltd. , Ajmer — 1971 DIGILAW 27 (RAJ)

JAGAT NARAYAN, C.J.—The two execution first appeals can conveniently be disposed of by one judgment. 2. Maharaja Kishangarh Mills Ltd., had dealings with the Punjab National Bank Ltd. Money was advanced to the Mills by the Bank on the surety of one Bhagchand Soni. Title deeds of the property belonging to the firm Jawaharmal Gambhirmal of Ajmer of which Bhagchand Soni was the Karta were delivered to the Head Office of the Punjab National Bank Ltd., at Delhi between 15.11.54 and 27.11.54. These pertained to the properties situated at Ajmer, Kishangarh, Jaipur and Jodhpur. When the Maharaja Kishangarh Mills became indebted heavily the matter was referred to the arbitrators. One award was given on 12-2-58 for Rs. 94,070. A decree was passed on the basis of this award on 18-2-58 by the Senior Civil Judge, Ajmer. It was a mortgage decree. 3. Another award was given on 8-6-58. It was for Rs. 2,81,724/72. A mort-gage decree was passed on the basis of this award on 30.5.59. 4. The first decree for Rs. 94,070 was put into execution on 4-2-61 for the recovery of Rs. 1,11,883/05. Bhagchand Soni was adjudged insolvent on 12-12-62 and a receiver of his estate was appointed and one Chhutanlal was appointed receiver of his estate. He filed a number of objections which were overruled by the executing court. Chuttan Lal has preferred execution first appeal No. 24/64 against that award. The first contention is that the decree which was passed was not executable as it was only a preliminary decree for mortgage. The decree is in the following terms— (1) That the plaintiff is entitled to recover a sum of Rs. 94,070 (rupees ninety four thousand and seventy only) from Messrs Maharaja Kishangarh Mills Ltd. and defendant No. 2 Seth Bhagchand Soni. In the first instance, the company will be liable for the amount and failing realisation from it, for any reason whatsoever, the defendant No. 2 will be liable for the full amount. (2) The company (defendant No. 1) and defendant No. 2 subject to above for self and as Karta of the family will pay Rs. 7500 half yearly; the first instalment to be due on 1.8.1958. (2) The company (defendant No. 1) and defendant No. 2 subject to above for self and as Karta of the family will pay Rs. 7500 half yearly; the first instalment to be due on 1.8.1958. (3) The properties mortgaged covered by the title deeds as mentioned in the Schedules 1 and 2 attached to the agreement of reference and as per plans attached will remain mortgaged with the plaintiff as before as security for the aforesaid dues of the plaintiffs. The plans of the Jaipur properties were not prepared and handed over to the arbitrator. (4) In case of default in payment of two instalments, the plaintiff shall be entitled to realise its full amount forthwith by execution against personal properties of the company (defendant No. 1) and/or by sale of the mortgaged properties and/or from the personal properties of defendant No. 2. (5) The interest of the other coparceners of the family; both adults and minors in the mortgaged properties above will remain liable for the dues of the plaintiff. (6) The rate of future interest till realisation will be 6% per annum with half yearly rests. 5. From a perusal of the above decree we are of the opinion that it was executable at the stage at which the execution application was made. Bhagchand Soni did not pay any instalment in accordance with the terms of the decree and therefore the whole amount had fallen due and had become recoverable by the sale of the mortgaged properties. This contention has therefore no force. 6. The next contention is that sec 58(f) of the Transfer of Property Act which defines mortgage by deposit of title-deeds was not applicable to the town of Delhi in November 1954 and therefore mortgage by deposit of title deeds was invalid. We find that the Transfer of Property Act was not applicable to Delhi in November 1954. It was accordingly open to the parties to make an oral mortgage. The intention of the parties clearly was to hypothecate immovable properties by delivery of title deeds. A valid simple mortgage of these properties thus came into existence by the voluntary act of the parties. A decree for sale could therefore be passed on the basis of this transaction. 7. In this connection we may refer to a decision of this Court in Ramchander vs. Jamna Shankar (1). The second contention also has therefore no force. A valid simple mortgage of these properties thus came into existence by the voluntary act of the parties. A decree for sale could therefore be passed on the basis of this transaction. 7. In this connection we may refer to a decision of this Court in Ramchander vs. Jamna Shankar (1). The second contention also has therefore no force. 8. The third contention is that the decree was nullity as it was passed on the basis of an unregistered award. The award was given in this case after the amendment of sec. 17(2) (vi) of the Registration Act by sec. 10 of the Transfer of Property (Amendment) Supplementary Act, 1929. It was therefore compulsorily registrable under sec. 17(1)(b). A decree was passed on the basis of the award because no objection was taken about it before the court which passed the decree. Relying on the following two decisions the learned counsel for the appellant contended that the decree passed on the basis of an unregistered award was a nullity and could not be executed —1. Ataat Husain vs. Mushtaq Ali (2), 2. Uttam Chand Motilalji vs. Wasudeo Deorao (3). 9. We however find that the consensus of judicial opinion is that a decree passed on an unregistered award is not a nullity. In this connection we may refer to the following decisions—1. Hansraj vs. Amarchand (4) 2 Lakhmichand vs. Bihari Lal (5) 3. Saburdas Mahasukhraw vs. Gopalji Nandas (6) 4, Lal Behary vs. Jagat Jiban(7) 5 Hukarnchand vs. Lorinda Ram (8) 6 Jain Jayantilal vs. Lakhan Mula (9) 7. Moolchand vs. Maginlal (10). 10. In the Saurashtra case (9) Ataat Husain vs. Mushtaq Ali (2) and Uttam Chand Motilalji vs. Wasudeo Deorao (3) were noticed and were dissented from. The decision in Uttamchand Motilalji vs. Wasudeo Deoraj was given without noticing the earlier Bench decision of the same Court in Lakhmichand vs. Biharilal 5) In Moolchand vs. Maganlal (10) the Full Bench dissented from Uttamchand Motilalji vs. Wasudeo Deorao 3) and agreed with Lakhmichand vs. Biharilal(5). 11. In Lakhmichand vs. Biharilal (5) the Division Bench expressed its view in the following words — "In our opinion, the same principle applies in respect of decrees consequent on an award as does in the case of all other decrees. The executing Court cannot go behind it. 11. In Lakhmichand vs. Biharilal (5) the Division Bench expressed its view in the following words — "In our opinion, the same principle applies in respect of decrees consequent on an award as does in the case of all other decrees. The executing Court cannot go behind it. It is true there are cases which hold that when the jurisdiction of the Court passing the decree is questioned, the executing court can consider the matter; also when it is contended that the decree is a complete nullity; and as a matter of fact that was the contention here. But in our opinion a decree given on the basis of an unregistered award is no more a nullity than a decree obtained in an ordinary suit on an unregistered mortgage or sale deed which requires registration." In Moolchand vs. Maganlal (10) it was observed— "A distinction must however be drawn between a decree which is a nullity and decree which is not according to law in that the Court passing the decree ignored certain provisions of the law. The equally well-settled rule with regard to the power of the executing Court to question the legality or correctness or validity of a decree is that a decree may not be according to law, yet it is binding and conclusive between the parties until it is set aside either in appeal or in revision, and the executing court has no jurisdiction to refuse to execute the decree on the ground that it is not according to law—see V. Ramaswami vs. Kallasa Thevar (l1), Jnanendra vs. Rabindra (12) and Bhagsingh vs. Govind Ram (13). If a court passing the decree had jurisdiction to pass it, then even if the decree is contrary to certain provisions of law, it would not be a nullity and a plea about the illegality of the decree cannot be entertained in execution proceedings. This matter has been put by Gajendragadkar, J (as he then was, in Harkishandas vs. Gulabdas Kalyandas (14) thus— "In determining the jurisdiction of the executing court to entertain pleas under S. 38, Civil P.C, it is always necessary to make a distinction between pleas that tend to show that the decree in question is a nullity and pleas that merely challenge the validity of the decree on the ground that it is contrary to the provisions of law. If the plea is that the decree is a nullity and so cannot be executed it would be open to the executing Court to entertain the plea. On the other hand, if the plea is that the decree is contrary to law in the sense that in passing the said decree certain provisions of the law have been ignored or contravened that would not necessarily make the decree a nullity and allegation about the impropriety or the illegality of the decree cannot be entertained in execution proceedings." 12. We are in respectful agreement with the view taken in the above Full Bench case and we hold that it is not open to the judgment-debtor to raise an objection in execution proceedings that the decree was invalid as the award on which it was based was not registered. 13. The last contention on behalf of the appellant is that as Bhagchand Soni has become insolvent the decree cannot be recovered by execution. This contention also has no force The Punjab National Bank Ltd. is a secured creditor and under sec. 47 of the Provincial Insolvency Act it can execute its decree despite the fact that Bhagchand Soni has become insolvent. 14. In the result we dismiss execution first appeal No 24/64 with costs. 15. Execution First Appeal No. 23/64 relates to the execution of the decree passed on the second award. The award was for Rs. 2,81,724.72. A sum of Rs. 1,54.719/82, was realised before Bhagchand Soni became insolvent. Against the execution application by which this sum was realised Bhagchand Soni did not raise any objection. The receiver of his estate raised objections similar to the objections raised in the decree passed on the basis of the first award after he was appointed on 21.12.62. He was estopped from raising these objections by the principle of res judicata. In this connection the following decisions may be referred to—1. Mohanlal Goenka vs. Benoy K. Shaha (l5) 2. Th. Amar Singh vs. Gulab Chand (16). 16. These objections were overruled by the executing court and he has preferred execution first appeal No. 23/64, against that award. He is barred by the principle of res judicata from taking these objections in subsequent execution applications. On merits also the objections have no force: Similar objections taken against the execution of the decree passed on the basis of the first award have been dealt with above. He is barred by the principle of res judicata from taking these objections in subsequent execution applications. On merits also the objections have no force: Similar objections taken against the execution of the decree passed on the basis of the first award have been dealt with above. 17. We accordingly dismiss executions first appeal No. 23/1964 with costs.