Anjengo Coir Mattings and Another vs Indian Overseas Bank

B.N. Patnaik, J.—The defendants in O. S. No. 24 of 1991 on the file of the Principal Sub-Court, Attingal, have preferred this revision against the order dated December 18, 1995, in E. P. No. 87 of 1993 arising out of the said suit. By the impugned order, the learned Sub-Judge ordered execution of the decree by arrest and detention of the second petitioner herein.

The plaintiff-respondent filed the suit against the petitioners for realisation of a sum of Rs. 60,000 with interest, which was advanced to the defendants in 1985. The second defendant judgment-debtor (second petitioner herein) had executed a demand promissory note and also hypothecated the plaint schedule properties consisting of two items as security. The trial court passed the decree on November 16, 1992, for recovery of an amount of Rs. 86,182.77 with future interest and cost. The decree which is a composite one reads as follows :

"For the reasons stated in the judgment, the plaintiff is allowed to realise Rs. 86,182.77 (rupees eighty six thousand one hundred and eighty-two and seventy-seven paise) with interest at the rate of 13 per cent. per annum with quarterly rests and costs of the suit from the defendants and from their properties and by sale of plaint schedule properties."

The respondent herein levied execution at the same time against the person and property of the judgment-debtor--second petitioner for realisation of the amount. It is contended by the second petitioner that the decreeholder should have proceeded against the hypothecated properties in plaint A schedule in the first instance without proceeding against his person. By the impugned order, the execution court directed for his arrest and detention in civil prison. This order is assailed as an illegal one.

Learned counsel for the petitioners by relying on the decision of the Supreme Court in Union Bank of India Vs. Manku Narayana, , contended that where the decree in execution is a composite decree personally against the principal debtor and the guarantor and also against the mortgaged property, and a portion of the decreed amount is covered by the mortgage, the decreeholder bank has to proceed against the mortgaged property first and then proceed against the guarantor. In this case, the second petitioner is the principal debtor.

Learned counsel appearing for the respondent bank has contended that the above decision was overruled by a larger Bench of the Supreme Court in State Bank of India Vs. Messrs. Indexport Registered and others, . where it has been laid down as follows :

"If a composite decree is a decree which is both a personal decree as well as a mortgage decree, without any limitation on its execution, the decreeholder, in principle, cannot be forced to first exhaust the remedy by way of execution of the mortgage decree alone and told that only if the amount recovered is insufficient, he can be permitted to take recourse to execution of the personal decree. . .

It is the right of the decreeholder to proceed with it in the way he likes. Section 128 of the Indian Contract Act itself provides that ''the liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract.''

... If on principle a guarantor could be sued without even suing the principal debtor there is no reason, even if the decretal amount is covered by the mortgage decree, to force the decreeholder to proceed against the mortgaged property first and then to proceed against the guarantor. It appears that the above-quoted observations in Union Bank of India Vs. Manku Narayana, , are not based on any established principle of law and/or reasons, and in fact, are contrary to law. It, of course, depends on the facts of each case how the composite decree is drawn up. But if the composite decree is a decree which is both a personal decree as well as a mortgage decree, without any limitation on its execution, the decreeholder, in principle, cannot be forced to first exhaust the remedy by way of execution of the mortgage decree alone and told that only if the amount recovered is insufficient, he can be permitted to take recourse to the execution of the personal decree. For a simple mortgage decree as prescribed in Form No. 5 of Appendix D to the Code of Civil Procedure, it could be so because the decree provides like that. It is only when the sum realised on sale of the mortgaged property is insufficient that the judgment-debtor can be proceeded against personally. But the observations of the court in Union Bank of India Vs. Manku Narayana, that even if the two portions of the decree are severable and merely because a portion of the decretal amount is covered by the mortgage decree, the decreeholder per force has to proceed against the mortgaged property first, are not based on any principle of law. With all due respect to the learned judges, in the light of the observations made by us earlier, we are constrained to observe that Union Bank of India Vs. Manku Narayana, was not correctly decided."

In view of the decision in the aforesaid State Bank of India Vs. Messrs. Indexport Registered and others, , the proposition laid down in Union Bank of India Vs. Manku Narayana, cannot be held to be good law. There is no bar in law to proceed simultaneously against the person and property of a judgment-debtor in execution of a decree.

The learned sub-judge does not seem to have committed any illegality in proceeding against the person of the second petitioner judgment-debtor and as such the contention of learned counsel for the petitioners does not appear to be well founded.

For the reasons stated above, the revision is dismissed.