Research › Browse › Judgment

Kerala High Court · body

1975 DIGILAW 71 (KER)

Madhavann Nair v. Canara Bank Ltd

1975-03-13

P.S.POTI, S.K.KADER

body1975
JUDGMENT P. Subramonian Poti, J. 1. It is the construction of a decree that is in controversy in this appeal. The dispute arose in execution proceeding and that was whether the properties which were being put up for sale in execution were liable to be sold. The decree was one obtained on the basis of a mortgage executed by the 1st defendant in favour of the plaintiff, the Canara Bank. The decree obtained by the Bank reads. XXX XXX XXX The plaint amount and the costs are decreed to be recovered from the 1st defendant and A and B schedule properties. The contention of the 1st defendant counsel is that the decree obtained by the plaintiff is only a money decree and he is not entitled to bring the mortgaged property to sale otherwise than by instituting a suit for sale of the property and obtaining a decree. According to him the decree is not one for sale of the mortgaged property. The question for consideration is therefore whether the decree could be construed as a decree for sale of the properties mortgaged. 2. The case arose from an area of the Kerala State which prior to 1st November 1956, was a part B State, composed of the area of the erstwhile States of Travancore and Cochin. The provisions of the Transfer of Property Act were not applicable to that State until they were made applicable later. There were no rules corresponding to those in Order XXXIV of the Code of Civil Procedure, 1908 in the Code of Civil Procedure of the Travancore State. After the formation of the Travancore-Cochin State by the Code of Civil Procedure (Amendment) Act, 1951 (Act II of 1951) the provisions of the Code of Civil Procedure, 1908 were extended to the State of Travancore-Cochin and it was only thereafter the Order XXXIV was in force in that area. The Transfer of Property Act came into force in the Travancore Area only on 1st May 1952. Decrees were not being passed in conformity with the provisions of Order XXXIV of the Code of Civil Procedure. Evidently the decree before us has not been in conformity with such provisions. The Transfer of Property Act came into force in the Travancore Area only on 1st May 1952. Decrees were not being passed in conformity with the provisions of Order XXXIV of the Code of Civil Procedure. Evidently the decree before us has not been in conformity with such provisions. Had that been the only objection the appellant who, as 1st defendant, raised objection to the execution of the decree by sale of mortgaged property could not have much to say by way of objection to the execution. It is no doubt true that the provisions of Order XXXIV contemplates a preliminary decree directing payment of the amount under the mortgage within a specified period and passing of a final decree on failure to make such payment. But if a decree for sale is passed by a court without strictly complying with this procedure the irregularity in the procedure may be open to objection in an appeal. But it is not as if a decree so passed would be without jurisdiction. The learned counsel for the appellant does not canvass the correctness of this principle. But according to him the decree passed in this case cannot be read as a decree for sale. It is a decree for sale of properties and if there is no decree for sale of properties the only method to enforce recovery by sale of the properties would be another appropriately framed suit for sale of the properties. Therefore we are only concerned with the question here whether the decree before us is one which could be construed as a decree for sale of the property. 3. Sections 85 to 90, 92 to 94, 96, 97 and 99 of the Transfer of Property Act, 1882 were repealed by section 156 of the Code of Civil Procedure, 1908 and with certain alterations re-enacted as Order XXXIV of the Code of Civil Procedure, 1908. Section 88 of the Transfer of Property Act as it stood earlier read: "88. 3. Sections 85 to 90, 92 to 94, 96, 97 and 99 of the Transfer of Property Act, 1882 were repealed by section 156 of the Code of Civil Procedure, 1908 and with certain alterations re-enacted as Order XXXIV of the Code of Civil Procedure, 1908. Section 88 of the Transfer of Property Act as it stood earlier read: "88. In a suit for sale, if the plaintiff succeeds, the court shall pass a decree to the effect mentioned in the first and second paragraphs of section 86 and also ordering that, in default of the defendant paying as therein mentioned, the mortgaged property or a sufficient part thereof be sold and that the proceeds of the sale (after defraying there out the expenses of the sale) be paid into court and applied in payment of what is so found due to the plaintiff, and that the balance, if any, be paid to the defendant or other persons entitled to receive the same. In a suit for foreclosure, if the plaintiff succeeds and the mortgage is not a mortgage by conditional sale, the court may, at the instance of the plaintiff, or of any person interested either in the mortgage money or in the right of redemption, if it thinks fit, pass a like decree (in lien of a decree for foreclosure) on such terms as it thinks fit including, if it thinks fit, the deposit in court of reasonable sum fixed by the court, to meet the expense of sale and to secure the performance of the terms."� "The provision as to that payment of subsequent costs and interest to the mortgage out of the sale proceeds of the mortgaged property is new. The present rule is not retrospective in effect so as to affect decrees already passed under the Transfer of Property Act at the time of coming into force of the new Code."� After its repeal the provision relating to the redemption decree has found a place in Order XXXIV of the Code of Civil Procedure. The present rule is not retrospective in effect so as to affect decrees already passed under the Transfer of Property Act at the time of coming into force of the new Code."� After its repeal the provision relating to the redemption decree has found a place in Order XXXIV of the Code of Civil Procedure. It may be necessary to refer here to the provisions of Order XXXIV, Rules 4 and 5 which read: "Rule 4 (1) In a suit for sale, if the plaintiff succeeds, the court shall pass a preliminary decree to the effect mentioned in clauses (a), (b) and (c) (i) of sub-rule (1) of Rule 2 and further directing that, in default of the defendant paying as therein mentioned the plaintiff shall be entitled to apply for a final decree directing that the mortgaged property or a sufficient part thereof be sold and the proceeds of the sale (after deduction therefrom of the expenses of the sale) be paid into court and applied in payment of what has been found or declared under or by the preliminary decree due to the plaintiff, together with such amount as may have been adjusted, due in respect of subsequent costs, charges, expenses and interest, and the balance, if any, be paid to the defendant or other persons entitled to receive the same. (2) The court may, on good cause shown, and upon terms to be fixed by the court from time to time, at any time, before a final decree for sale is passed, extend the time fixed for the payment of the amount found or declared due under sub-rule (1) or of the amount adjudged due in respect of subsequent costs, charges, expenses and interest. (3) In a suit for foreclosure in the case of an anomalous mortgage, if the plaintiff succeeds, the court may, at the instance of any party to the suit or of any other person interested in the mortgage security or the right of redemption pass a like decree (in lieu of a decree for foreclosure) on such terms as it thinks fit, including the deposit in court to meet the expense of the sale and to secure the performance of the terms. (4) Where, in a suit for sale or a suit for foreclosure in which sale is ordered, subsequent mortgagees or persons deriving title from, or subrogated to the rights of, any such mortgagees are joined as parties, the preliminary decree referred to in sub-rule (1) shall provide for the adjudication of the respective rights and liabilities of the parties to the suit in the manner and form set forth in Form No. 9, Form No. 10 or Form No. 11, as the case may be, of Appendix D with such variations as the circumstances of the case may require." "Rule 5 (1") Where, on or before the day fixed or at any time before the confirmation of sale made in pursuance of final decree passed under sub-rule (3) of this rule, the defendant makes payment into court of all amounts due from him under sub-rule (1) of Rule 4 the court shall, on application made by the defendant in this behalf, pass a final decree or if such decree has been passed, an order” (a) Ordering the plaintiff to deliver up the documents referred to in the preliminary decree and if necessary” (b) Ordering him to transfer 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 the mortgaged property or part thereof has been sold in pursuance of a decree passed under sub-rule (3) of this rule, the court shall not pass an order under sub-rule (1) of this rule, unless the defendant, in addition to the amount mentioned in sub-rule (1) deposits in court for payment to the purchaser a sum equal to five per cent of the amount of the purchase-money paid into court by the purchaser. Where such deposit has been made, the purchaser shall be entitled to an order for payment of the amount of the purchase-money paid into court by him, together with a sum equal to five per cent thereof. Where such deposit has been made, the purchaser shall be entitled to an order for payment of the amount of the purchase-money paid into court by him, together with a sum equal to five per cent thereof. (3) Where payment in accordance with sub-rule (1) has not been made, the court shall, on application made by the plaintiff in this behalf, pass a final decree directing that the mortgaged property or a sufficient part thereof be sold, and that the proceeds of the sale be dealt with in the manner provided in sub-rule (1) of Rule 4.� As we have said earlier it is true that there has been no preliminary decree, not even a composite decree where the court directs that on failure to make payment the property shall be sold. But even if there is no preliminary decree, if there is decree for sale the executing court is bound to execute the decree. To that extent it is common ground. But as we said earlier the dispute here calls for examination of the question whether the decree, the relevant part of which we have extracted could be construed by this court as a decree for sale of the properties. 4. Though any express provision that the mortgage amount could be recovered by sale of properties are as such absent in the decree, we think the essence of the decree is one which enables the decree-holder to realise the decree amount by sale of the mortgage properties. We see no warrant for the contention that the decree is only a money decree and the decree-holder has no right to bring the mortgaged property to sale otherwise than by instituting a suit and obtaining a decree for sale. The right was there and no declaration was ever sought nor was such declaration necessary. If the decree provides that the amount due may be recovered by the plaintiff from A and B Schedule properties, it necessarily means that it could be recovered by sale of the properties and such sale could only be in execution of that decree and not in execution of another decree to be obtained in a suit to be filed by the party afresh. The decree follows the usual form which the courts in the Travancore area were used to pass prior to the commencement of operation of Order XXXIV of the Code of Civil Procedure. The decree follows the usual form which the courts in the Travancore area were used to pass prior to the commencement of operation of Order XXXIV of the Code of Civil Procedure. That furnishes the background form the manner in which the decree has been drawn up by the court. The situation is not something without any parallel, for prior to the commencement of the operation of section 88 of the Transfer of Property Act which provided for a decree for sale, decrees passed in terms similar to those of the decree with which we are concerned here had to be construed by courts. The case before the Madras High Court in Anna Pillai v. Thangathammal I.L.R. (1807) 20 Madras 78 is an instance in point. The decree there provided for the payment of the secured debt 'the property hypothecated in the bond being also held liable for the whole amount thus awarded. The court noticed the plea that under section 99 of the Transfer of Property Act the property cannot be sold unless the suit had been brought under section 67 and the decree is passed under section 88 of the Act. The court said: "The decree was not so formal as it should have been under the Transfer of Property Act. This is no doubt due to the fact that that Act had only just come into force at the time when the decree was passed. The decree is in reality a decree for sale. There is nothing to show that the property to be sold is not liable to the debt."� Before the Calcutta High Court a case arose where a decree was obtained for money against the defendant such decree directing that the sum found due should be realised from the property mortgaged and other properties of the defendant. Execution was attempted. It appears that in execution the amounts could not be realised and it also appears that the right to execute became barred. The decree-holder filed an administration suit. The maintainability of the suit was in controversy. In that context the fact that he had obtained an earlier decree on the mortgage for the sale of property and therefor was precluded from filing another suit arose for consideration by the Calcutta High Court. The decree-holder filed an administration suit. The maintainability of the suit was in controversy. In that context the fact that he had obtained an earlier decree on the mortgage for the sale of property and therefor was precluded from filing another suit arose for consideration by the Calcutta High Court. We are referring to the decision in Sooemaya Dassi v. Thackomini Desi I.L.R. 1897 (24) Calcutta 473 (F.B.) Maclean, C. J., dealing with this question, said at page 484 thus: Macpherson, J., dealing with the same question, said at page 488 of the report thus: "Then it is said that the mortgage lien still subsists, and that under section 99 of the Transfer of Property Act the plaintiff could still bring a suit for ˜the sale of the mortgaged property . Even if this can be regarded as a suit for that purpose, I agree with Mr. Justice Sale for the reason stated by him, that the court had no jurisdiction to entertain it. But it seems to me that the decree of 1882 is in substance a decree for the sale of the mortgaged properties. It sets out those properties, and directs that the sum decreed should be realised from them, which can only mean by the sale of them: and that was the relief asked for in this suit. Assuming that sections 88 and 89 of the Transfer of Property Act, which came into force while the suit was pending, applied to the suit, the decree was not, it is true, made in conformity with them as, instead of making a decree nisi, followed by a decree absolute, the court at once made a decree absolute. But the decree has never been questioned, and is now a final decree as between the parties. The case of Chandra Nath Dev v. Burrode Shoondury Ghose is distinguishable, as the court there in effect held that there was no decree for sale. No second suit to enforce the lien would therefore lie. "� 5. The view taken by us here is quite in consonance with the view taken by the learned Judges in the decision cited by us. 6. If we construe the decree as one for sale ”we do construe it so”then, there is no other question. The execution by the decree-holder is competent. In the result, the appeal fails and is dismissed. Parties are directed to suffer costs.