Atmakuru Rama Rao vs Atmakuru Rajeshwar Rao and Others

Sinha, J.—This is an appeal from the decision of the learned Subordinate Judge of Berhampore, dated 17-12-1945, dismissing the appellant''s objection u/s 47, Civil P.C.

The facts leading upto this appeal lie with in a very marrow compass, and may shortly be stated as follows: A mortgage suit for sale was instituted by the plaintiff respondents against the appellant and other members of his family on the basis of a mortgage bond executed by his father as representing the family. The suit was decreed, and a first appeal, being first Appeal No. 6 of 1940, was preferred by the appellant only, the other members of the family being impleaded as pro forma respondents. During the pendency of the said appeal, the decree was made final on 23-12-1940. That decree was put into execution in E.P. No. 16 of 1941. For certain reasons, not necessary to be stated here the said execution was stayed. The first appeal was heard and decided by this Court on 1-5-1943. This Court held that the decision of the trial Court that the mortgage bond was justified by legal necessity and was executed by the father when the family was in straitened circumstances justifying the alienation by the father was correct. In the result, the appeal was dismissed with costs. In the judgment of this Court, it is not stated that the costs of the appeal will be paid by the appellant personally. A decree was drawn up in the present case, the relevant portion of which is in these terms:

It is Ordered and decreed that this appeal be and the same is hereby dismissed with costs.

And it is further ordered and decreed that the appellant do pay to the respondents 1-4 the sum of rupees five hundred and thirty only, as per details at foot being the amount of costs incurred by the latter in this Court.

I have quoted the relevant portion of the decree in order to dispose of the argument advanced in the Court below and in this Court on behalf of the decree-holders. It may also be stated that the mortgagee-decree-holders did not make any attempt to have a fresh final decree prepared after the decision of the first appeal by this Court as aforesaid. But the decree-holders put the decree for costs prepared by this Court into execution in O.B.P. Suit No. 190 of 1945 on the footing that this was a simple money decree for payment of costs amounting to Rs. 630. This execution was taken out against the appellant only. The appellant filed an objection to the execution of the decree on several grounds, of which it is necessary only to notice the second objection which is to the effect that costs in a mortgage suit cannot be realised personally from one of the judgment-debtors in the absence of a specific direction in the decree to that effect, inasmuch as ordinarily costs in a mortgage suit must be realised from the sale of the mortgaged properties as a part of the mortgage decree. This objection was overruled by the learned Subordinate Judge on the ground that, in the circumstances of this case, the decree of the High Court must be taken as having been passed personally against the appellant unless there was a specific direction that it would form part of the decree on the mortgage dues as also on the ground that the decree of the High Court was passed after the final mortgage-decree had been drawn up in pursuance of the preliminary decree by the trial Court.

Hence, the executing Court was of the opinion that the decree-holders had a double remedy available to them, namely, either to proceed against the mortgaged property or against the appellant personally, and that the decree-holders were not restricted to their remedy against the mortgaged property only, The lower Court based its decision on the consideration that the ordinary rule is that an unsuccessful appellant must ordinarily pay the costs of the appeal, and that equity also demanded that the person who appealed from the decree should only bear the burden of the costs decreed by the appellate Court, especially in view of the, fact that the appellant was the only defendant who preferred the appeal to the High Court, and got defeated in his attempt to get rid of the decree not only against himself but against his entire family. Hence this appeal.

Apart from authorities, the provisions of Order 31, Rules 2, 4, 6 and 10, Civil, P.C, make it clear that, in a suit for foreclosure or sale, ordinarily costs of the suit and other costs, charges and expenses since after the preliminary decree up to the time of actual payment shall be added to the mortgage money, that is to say, not only the mortgage debt, principal plus interest, but also all the costs incurred in enforcing the mortgage shall form part of the mortgage decree realisable by sale, in case of a simple mortgage, of the mortgaged properties. That this is one of the rights of the mortgagee is made clear by Rule 10 which provides for the exceptional cases in which the mortgagee may have deprived himself by his conduct of the benefit of those provisions. The personal remedy against the mortgagor is always available to the mortgagee provided that remedy is not barred by lapse of time. It is always open to the mortgagee to give up his higher rights under the mortgage, and to confine his claim to the personal remedy in respect of the mortgage money and interest due thereon as also for costs. Hence, in ordinary circumstances, the Code has provided the mortgagee with this additional advantage that he can claim the benefits of a secured creditor not only in respect of the mortgage debt but also in respect of costs incurred by him in enforcing the mortgage.

But in the present case it appears, as was said at the Bar on behalf of the decree-holders, that the mortgage property is not sufficient to discharge the mortgage debt proper, It was also stated that the personal remedy, in addition to the mortgage rights which may be enforceable under Rules 6 of Order 34 of the Code, is not available, as the suit had been instituted beyond six years of the due date of payment. Hence, naturally the decree-holders are anxious to execute the decree for costs of the appellate Court not as a part of the mortgage decree but as a simple money decree. But this remedy, in my opinion, is not available to the decree-holders unless they get a direction from the Court by way of an exception to the general rule that costs in the suit, including costs at the appellate stage, will form part of the mortgage decree. In other words, unless the decree-holders get a specific direction from the Court that the decree for costs would be payable personally by all or some of the judgment, debtors, as the case may be, the ordinary rule must prevail and the costs realised only as a part of the, mortgage decree. Learned Counsel, for the respondents invited our attention to Rule 85(3) of Order 41, Civil P.C. Rule 85 makes a general provision as to the date and contents of the decree, and Sub-rule (3) specifically provides that

the decree shall also Mate the amount of costs incurred in the appeal, and by whom, or out of what property, and in what proportions such costs and the costs in the suit are to be paid.

In my opinion, Rule 85 must be read as subject to the provisions of Order 34 of the Code which make specific provisions as to costs in a suit on a mortgage, whereas Rule 85 speaks of a decree in appeal generally. Hence, in my opinion, the general rule in a mortgage action is that costs incurred by the mortgagee form part of the mortgage decree unless there is a specific direction that the whole or a part of those costs shall be payable personally by some or other of the judgment-debtors. On the other hand, the decree-holders'' contention is that, unless there is a specific provision that the decree for costs shall form part of the mortgage decree, the direction in the decree that so much is payable by way of costs of the suit or the appeal, and particularly of the latter, must hare its ordinary meaning. There is no warrant for such a contention in the provisions of Order 84 of the Code, as referred to above. That being so, in my opinion, on principle, the appellant''s contention that, there being no specific direction (as an exception to the general rule) that the judgment-debtor is personally liable for the costs of the appeal, those costs must form part of the mortgage-decree is correct. Hence, in this case, though the words used in the decree as prepared by this Court may lend themselves to the construction that the judgment-debtor was personally liable) the realmeaning must be found in the judgment and decree as interpreted in accordance with the rules of Order 34 of the Code, discussed above. The Court must be deemed to have intended what the law enjoins it to do as a general rule, and the party, which contends that a departure from the general rule was intended, must clearly establish its contention from the words used in the judgment and in the decree following there under. In this case, the judgment, as already indicated, is simply to the effect that the appeal was dismissed with costs, there being no indication in the judgment or even in the decree that the liability for payment of the costs decreed was a personal one.

The decision of this Court in Matukdhari Singh v. Ramdas Singh AIR 1916 Pat. 1 was in respect of the decree for costs in the suit on a mortgage, and a Division Bench of this Court held that in a mortgage decree for sale costs are part of the amount due upon the mortgage and are recoverable from the mortgaged property, and not from the judgment-debtor, unless the decree makes such a specific provision, and that, in the absence of such a specific provision, there is no presumption that the decree entitled the decree-holder to proceed persoly against the judgment-debtor. But that case is not exactly in point, as in that case there was no question of the decree for costs in the appellate Court. The leading case on the subject is the Full Bench decision of the Allahabad High Court in Maqbul Fatima v. Lalta Prasad (98) 20 All. 523 . In that case the preliminary decree was affirmed on appeal by the High Court, and in the decree drawn up by the High Court there was a direction that the defendant pay to the plaintiffs the amount of costs incurred in the Court of appeal. The decree-holders caused the mortgaged property to be sold, and the sale proceeds proving insufficient to liquidate all the dues on the mortgage, they applied for a money decree. But that application was dismissed. Subsequently, the decree-holders applied for execution of the decree as to costs personally against the judgment-debtor. The executing Court allowed the application for execution against the person of the judgment-debtor. On appeal, the Pull Bench discussed the relevant provisions of the Code, and held that the clause in the decree directing the defendant to pay a certain sum to the plaintiffs was only a formal compliance with the provisions of the Code, and was never intended to be a direction for the recovery of costs personally from the judgment-debtor. Their Lordships further held that, if there was an ambiguity in the decree, it was the duty of the Court to construe those words in the decree by the light of the judgment. So construing the decree, their Lordships held that there was not the slightest indication in the judgment and the decree that the Court intended to award costs against the defendant personally. Though that decision was given under the old Code, it has been followed in later cases arising under the present Code of 1908. The Division Bench ruling of this Court, referred to above, has referred with approval to this decision. The decisions of the Allahabad High Court in Wahid Ali Vs. Durga Shankar and Others and of the same Court in Kannu Lal Vs. Bhagwan Das and Another are instances where the Full Bench decision, referred to above, was followed, and it was held that, in spite of the decree directing the payment of a certain sum of money by way of costs,, there was no personal liability in the judgment-debtor to pay that sum. The Calcutta High court in Raj Kumar Singh v. Sheo Narayan (08) 35 Cal. 431 and (Maharaj) Bahadur Singh Dugar Vs. Basiruddin Ahmmad and Another, has held that the costs awarded in a mortgage suit follow the character of the amount decreed in the suit, and form part of the entire decretal amount to be realised from the mortgaged property. All these decisions support the appellant''s contention that he is not personally liable for the payment of the amount of costs decreed by the Court of appeal.

On the other hand, learned Counsel for the respondents very strongly relied upon the decision of a Division Bench of the Allahabad High Court in Amina Bibi v. Ramashankar Misra AIR 1919 All. 297. That case, to a large extent, supports the respondents'' contention that the decree must be taken at its face value, and, if there is a direction that the judgment-debtor should pay a certain sum of money by way of costs, such costs are realisable personally from the judgment-debtor. Walsh J. has made the following relevant observations at p. 475:

There is nothing in this decree to indicate any special restriction upon the rights given to the decree-holders. The ordinary penalty of an unsuccessful appellant is that he must personally pay the costs of his appeal. There is no reason or principle why an exception should be made in favour of mortgagors.

But it would appear that the attention of their Lordships constituting the Division Bench which decided that case, was not drawn to the provisions of the CPC referred to above, namely, Rules 2, 4, 5 and 10 of Order 84 of the Code. Hence, those observations of their Lordships suffer from the infirmity that they do not take into consideration the special provisions of the Code relating to mortgage decrees. Another decision of their Lordships of the Allahabad High Court in Aziz Ahmad and Others Vs. Riaz-ul Hasan and Others was also relied upon on behalf of the respondents. The decision bearing on this question is contained in the penultimate paragraph of the long judgment which dealt with other matters of greater importance. On the question of costs, their Lordships held in circumstances similar to those of the present case that the unsuccessful appellants, who were only some of the judgment-debtors were personally liable for the costs of the appellate Court. Though their Lordships make a reference to the general rule that ordinarily costs awarded to a mortgagee-decree-holder in a mortgage suit or appeal, in the absence of any express direction to the contrary, should form part of the mortgage decree realisable from the mortgaged property, they hold that the terms of the decree make the appellants personally liable. But this judgment also makes no reference to the previous decisions of the same Court to the contrary, particularly the Full Bench decision which is the leading case on the subject. Reference was also made to another decision of a Division Bench of the Allahabad High Court in Het Ram Vs. Raja Dutt Prasad Singh, . But that case concerned costs incurred in proceedings in execution of the final decree in a mortgage suit, and their Lordships held that such costs were not chargeable against the mortgaged property, but were payable by the judgment-debtor personally. They make a reference to the provisions of Rule 10 of Order 34 of the Code; but they observe that Rule 10 has nothing to do with the costs awarded in execution proceedings. That case, therefore, is not exactly in point.

For the reasons given above, it must be held that the preponderance of judicial authority is in favour of the view I have taken on reference to the relevant provisions of the Code of Civil Procedure, and that the cases relied upon by the respondents are not of such compelling authority as to override those previous decisions; either they ignore the specific provisions of the CPC bearing on the question or ignore the binding authority of the Full Bench decision. It must, therefore, be held that the decision of the learned Subordinate Judge is erroneous in law. The appeal is accordingly allowed, and the judgment-debtor''s objection upheld. The execution against the person of the judgment-debtor cannot proceed. The appellant is entitled to his costs in this Court and in the Court below.

Shearer J.

I agree.