Audipuranam Pillay v. Gopalasamy Mudaly And Ors.

1. The plaintiff holding an usufructuary mortgage dated the 27th August 1901, containing a covenant to pay, sued for sale on his mortgage and, on the 16th December 1905, obtained a decree in the usual form fixing a term of 6 months for payment of the money due and directing a sale in default of payment. The mortgagors did not pay on the date fixed for payment, the 16th June 1906, but some months later, on the 22nd November 1906, paid the principal money into Court with an application in the form of an application for execution of a decree and obtained delivery of possession of the mortgaged property. Till then, the mortgagee remained in possession but had not, when he was ousted, applied for an order for sale under Section 89 of the Transfer of Property Act.

2. He refused to receive the money and now contends that the Court had no power in execution proceedings to permit the mort gagors to pay it into court and to direct delivery of possession to them, they not having paid on or before the 16th June 1906.

3. Now according to the view taken by the majority of a Full Bench of this Court in Mallaikarjunadu Setti v. Lingamurthi Pantulu, etc. (1902) I.L.R. 25 M. 244 at p. 282 a decree for sale under Section 88 of the Transfer of Property Act is a final decree, and all subsequent proceedings are proceedings in execution of that decree, and to them the provisions of the Civil Procedure Code are, so far as they may be applicable, to be applied.

4. Unless, then, there is something in the decree to debar him from so doing, the judgment-debtor is entitled to stop execution by payment of the debt at any time after the decree has been passed and before the execution sale is complete and it is not finally complete until he has had his opportunity of obtaining its rescission under Section 310-A of the Code.

5. As was pointed out by Geidt J. in Bibijan Bibi v. Sachi Bewah (1904) I.L.R. 31 C. 863 the decree for sale does not debar the mortgagor of any right in default of payment, the only penalty affixed to the default is the liability to have the property sold. In this view the mortgagor was entitled to pay the money, and the fact that his application took the form of an execution petition should not make any difference in the result.

6. The learned Advocate-General, however, contended, if we understood him aright, that the provision of the decree which directs that in the event of payment in due time the property be reconveyed and delivered to the defendant is a decree or order in the defendant's favour, and the defendant is therefore to that extent a decree-holder within the meaning of Section 2 of the Code of Civil Procedure. The decree or order which he holds is a decree or order for redemption, and his application for delivery on payment is an application for execution of that decree or order, and his case is, therefore, governed by the decision of the Full Bench of this Court in Vallabha Valia Rajah v. Vedapuratti (1895) I.L.R. 19 M. 40 where it was held that a mortgagor who has obtained a decree for redemption cannot apply for the execution of the decree after the time limited. The time limit fixed in the decree is in a suit for sale primarily and principally a restriction on the plaintiff. He is to stay his hands for 6 months and may then execute as if he held a simple decree for money by sale of certain property of the defendant. The provision for delivery of possession in the event of payment in time, may well be regarded as merely laying down the condition on which he is to receive payment and not as a decree or order in favour of the defendant, but, if it is to be regarded as a decree or order, what follows?

7. On failure to pay on the day fixed, the defendant has lost his right to redeem his property in execution of the decree or order in his favour. But it has to be remembered that he is a decree-holder in spite of himself, an involuntary decree-holder, and it is not easy why the plaintiff who has chosen to obtain this decree for him, should be enabled by doing so not only practically to foreclose his right of redemption but also to deprive him of the right which the law gives him as judgment-debtor. He did not seek for the decree and he does not want the decree and so he does not execute the decree. He thereby loses the privileges of a decree-holder which his creditor has thrust upon him but he does not thereby lose his rights as judgment-debtor to pay the debt into the execution court and require satisfaction to be entered up.

8. To place the defendant in a suit for sale in the same position as regards default in payment as the plaintiff in a suit for redemption in which the decree directs a sale in default of redemption within the time limited involves, it seems to us, an anomaly unless we can apply to his case all the provisions of Section 93 of the Transfer of Property Act; The defendant in a suit for sale though forced to redeem against his will has not, unless that section can be extended to him, the right to ask the Court to postpone the day fixed for payment, though that right is given by Section 93 to the successful plaintiff in a suit for redemption, who in most cases may choose his own time for instituting his suit.

9. It has been held by Sir Bhashyam Ayyangar J. in Mallikarjunadu Setti v. Lingamurthi Pantulu (1902) I.L.R. 25 M. at p. 282, etc., that the Transfer of Property Act ought to have provided for an application for postponement by a defendant in a suit in order to meet the case in which payement is not made by the defendant within the time limited and the mortgagee does not choose to apply for an order for sale under Section 89. But it seems to us unnecessary to hold that the Legislature which was careful to provide for postponement in cases of suits for foreclosure and redemption failed to perceive that a similar provision might be desirable in suits for sale. It is easier, we think, to take the view that such a provision was found to be unnecessary in a suit for sale, the reason being that once a decree is passed the defendant can pay at any time before the sale is completed. There is no necessity to give him in this respect any advantage which is not given to judgment-debtors in suits for money. He is in fact one way better off; as he is a judgment-debtor he can come in at any time before sale without showing good cause before his payment is permitted.

10. In his judgment in Vallabha Valia Rajah v. Vedapuratti (1895) I.L.R. 19 M. 40 Shephard J. notices the hardship which may ensue if the rules laid down in that case are to be applied in suits for foreclosure, and declines to express an opinion whether they ought or ought not to be applied in those cases.

11. We think, therefore, that we are justified in confining the operation of that case to suits to which it actually applies, that is to say, to cases in which the mortgagor is the successful plaintiff in a suit for redemption; and the more so perhaps in that the reasoning on which is based the decision of the Full Bench in Vedapuratti v. Vallabha Valia Raja (1902) I.L.R. 25 M. 300 F.B. renders it at least doubtful whether a suit for redemption could be maintained by a mortgagor who has failed as defendant in a suit for sale on the game mortgage. If this cannot be done by the mortgagor then the mortgagee may in many cases convert at his option his decree for sale into a decree for foreclosure, a course which is not contemplated by the Transfer of Property Act. Sale may under Sections 88 and 92 be ordered in lieu of foreclosure in a suit for foreclosure or redemption, but there is no provision for conversion of a decree for sale, into a decree for foreclosure. But even if Vallabha Valia Raja v. Vedapuratti (1895) I.L.R. 19 M. 40 be applied to the case of a defendant in a suit for sale it can only be applied to him qua decree-holder and his rights as judgment-debtor are not, as we have shown, affected by it.

12. The mortgagor then was entitled to pay the money into the Court executing the decree when he did, in satisfaction of the decree, and he was clearly not bound to sue for possession in a separate suit.

13. His claim is to enforce his right to possession which raised questions relating to the satisfaction of the decree and raised it between the parties to the suit, and by Section 244, Code of Civil Procedure, the Court executing the decree was the proper Court to determine it. It is not contended that it has been wrongly determined.

14. There remains the question of interest. By the mortgage the plaintiff was to take the usufruct, that is to say, the annual melwaram for his interest; and if paragraph 3(d) of the plaint correctly sets out the conditions of the deed in this regard, the mortgagors were entitled to redeem only in May of each year by which month the harvest would be over and melwaram ascertained and collected.

15. The plaintiff, however, put an end to the contract by suing and obtaining his decree and the learned Advocate-General did not make it clear on what principle his client could, in those circumstances, claim the whole melwaram for the year whereof he held possession for only a part. The decree does not direct the mortgagor to redeem only in the month of May.

16. The learned Advocate-General laid stress on the fact that the crops were grown by his client, but the affidavit on which he relies shows that he only means that the mortgagee had made advances to the ryots, and these, it is to be presumed, lie can recover out of the kudivaram. There is certainly no reason why they should be repaid to him out of the melwaram.

17. It will be just, in the circumstances of the case, to allow him the melwaram as from June to November inclusive or half the melvaram of the year as interest for the period until the money is paivi. According to the affidavit of Natesa Pillay dated the 5th December 1906 the amount payable to the plaintiff would then be Rs. 2,150, one moiety of Rs. 4,300, as the kist would, we imagine, fall to be paid after November by the mortgagor. The amount of Rs. 4,300 is between 14 and 15 per cent, on Rs. 30,000, - very heavy interest considering the nature of the security.

18. We must, therefore, unless the parties agree to adopt this or some other figure, direct an enquiry and finding as to the amount and value of the melvaram realised for the agricultural year 1905-1906.

ORDER

1. The parties have not arrived at an agreement and we heard argument again as to the amount to be awarded as interest. We think, on consideration, that the usual Court rate of 6 per cent, should be allowed as interest on the principal from the date fixed for payment in the decree as the 16th June 1906 to the date of payment into Court, namely the 17th November 1906 and 6 per cent, on that sum from the 17th November to the date of payment. Parties will pay and receive proportionate costs throughout.

2. There will be no costs in C.M.A. No, 26 which is dismissed in consequence of the decision in C.M.A. No. 25. In C.M.A. No. 25 costs will be calculated on the amount of the claim Rs. 30,000.