Geddam Subba Rao and Others vs Balantrapu Satyanarayanamurthy

Krishnaswami Nayudu, J.—The Judgment-debtors in a mortgage decree in O. S. No. 70 of 1939, Sub Court, Amalapuram, are the

appellants. The appeal is against the order dismissing the judgment-debtor''s application to determine the amounts due by them under the decree

and to order restitution of such amount as might have been overpaid by them to the decree-holder in the course of the execution of the decree.

A preliminary mortgage decree was passed by the High Court in App. No. 205 of 1942 on 13-7-1944. The decree directed the judgment-

debtors to pay on or before 13-10-1944 or any later date upto which time for payment may be extended by the Court a sum of Rs. 9892-12-9

with further interest on Rs. 5852-3-0 at 6 per cent per annum from the date of decree till the date of payment. The other clauses of the decree are

in conformity with form No. 5 of Appendix D, Schedule I, Civil P. C., (the form usually employed for a preliminary mortgage decree for sale).

Clauses 2, 3, 4 and 5 of the decree in this case are, in fact, copy of the corresponding clauses provided in form No. 5. In pursuance of the

preliminary decree a final decree was passed on 13-3-1945 which provided that as the payment directed by the preliminary decree inferred to had

not been made the mortgaged property would be sold.

The decree-holder filed E. P. No. 225 of 1947 for sale and in that application the Judgment-debtors did not raise any other objection except

the contention that the interest provided for at 6 per cent, must be reduced to 51/2 per cent. In the present E. A. No. 94 of 1949 filed by the

judgment-debtors for determining the amounts, their contention was that the amount for which the property was to be sold does not represent the

amount that is really due under the preliminary decree passed by the High Court, and that the decree-holder, in addition to the amount recoverable

under the decree, added interest on costs and on interest on the principal amount which, it is urged, was not provided under the preliminary decree

and that, therefore, the decree-holder would not be entitled to recover the same. The principal sum as appears from the preliminary decree is only

Rs. 5852-3-0 and the amount which was directed to be paid on or before 13-10-1944 namely Rs. 9892-12-9 represents not only the principal of

Rs. 5852-3-0 but includes within it the interest on Rs. 5852-3-0 till the date of the preliminary decree and the costs awarded. In so far as

subsequent interest is concerned, the decree, therefore, provides only interest at 6 per cent, per annum on the sum of Rs. 5852-3-0 representing

the principal sum and there is no specific provision in the decree as to any interest on costs and on interest on the principal.

It is contended on behalf of the appellant that where no provision is made in the decree as to subsequent interest under the provisions of Section

34 Clause (2), Civil P. C., the decree being silent with respect to payment of such further interest, it must be held that the Court must be deemed

to have refused such interest and there should therefore be no execution taken out for such additional interest. The power to award subsequent

interest in mortgage decrees has now been conferred under Act 29 of 1929 and a provision is incorporated in Order 34, Rule 11, Civil P. C.,

which empowers the Court to award interest in mortgage decrees. Rule 11 of Order 34, Civil P. C. says;

In any decree passed in a suit for foreclosure, sale or redemption (in this case it is a suit for sale), where interest is legally recoverable, this Court

may order payment of interest to the mortgagee. ..... (the several categories are noted.) (a) interest up to the date of payment which will comprise

interest on the principal amount due and declared on the mortgage, on account of costs awarded to the mortgagee, and on any amount adjudged

to be due to the mortgagee as for costs, charges and expenses, if any, incurred in respect of the mortgage security upto the date of the preliminary

decree.

Rule 11, Clause (b) deals with subsequent interest, that is, interest upto the realisation or actual payment which may be awarded by the Court if it

considers reasonable on the aggregate of all the sums referred to in clause (a) and interest calculated therein. The Court is, therefore, empowered

to award interest, such power having been conferred specifically under Order 34, Rule 11, Civil P. C., while prior to the amendment by Act 29 of

1929 Courts were exercising such power u/s 34, Civil P. C. But the question for determination here is whether the Court has, in pursuance of the

power under Order 34, Rule 11, Civil P. C., exercised its power in awarding subsequent interest after the period provided for payment end, if so,

to what extent.

Sub-clause (i) of Clause 2 of the decree is clear and unambiguous and what has been given as subsequent interest is only on the balance of the

principal sum of Rs. 5852-3-0 at the rate of 0 per cent, per annum. At any rate Sub-clause (ii) of Clause-2 is silent as to interest on costs. Any

omission to refer to subsequent interest on costs, must be taken to mean that the Court must be deemed to nave refused such interest; for this

position Mr. Krishnamurthi, the learned counsel for the appellant relies on Section 34(2), Civil P. C. After the enactment of Order 34, Rule 4, the

question is whether the power of the Court to award subsequent interest is exercisable only under Order 34, Rule 11 and not under any other

provision of the Civil Procedure Code. In so far as this power is concerned, discretion is vested in Courts to award interest and in what manner

that discretion has to be exercised is no doubt provided under Order 34, Rule II, Civil P, C. Section 34, Civil P. C. is a general provision relating

to interest and Section 34(2) does not confer on the Court any power to award Interest but embodies a rule of construction that where a decree is

silent as to interest, it must be deemed that the Court must have refused interest; and, even apart from Section 34, in the absence of any other

provision in the decree to justify the Court to come to a conclusion that subsequent interest has been awarded on the other sums also, applying the

ordinary rule of construction it must be held that the omission must be due to the fact that the Court intended not to award interest on these sums.

Mr. Bhimasankaram, However relies on Sub-clauses (2) (3) and (4) of the decree which make reference, in the working out of the decree, to

any subsequent interest as may be payable under Rule 11 of Order 34, Schedule I, Civil P. C. and contends that where there is a specific

reference to subsequent interest that is payable under Rule 11, the Court must have intended to award subsequent interest under the provisions of

Order 34 Rule 11 and the executing Court has only to calculate interest at such rate as it may deem at and the decree is one which cannot be said

to contain no provision for subsequent interest in respect of costs and interest. The mention of subsequent interest in sub-clauses (ii), (iii) and (iv)

only refers to ""such subsequent interest as may be payable under Rule 11 of Order 34."" Order 34, Rule 11, Civil P. C. does not lay down that all

mortgage decrees shall provide for subsequent interest at a certain rate, when, in that event, the contention of the learned counsel for the

respondent can be understood. The reference to subsequent interest in those clauses is only made to arrive at the exact amounts payable on the

occasions mentioned in these clauses in which subsequent interest also has to be taken into account which subsequent interest would be payable

under Rule 11 of Order, 34, only if the Court had awarded it by virtue of the power which it had at the time of the passing of the preliminary

decree & making provision for subsequent interest. Where there has been no such provision as is clear from ihe language of clause 2, sub-clause

(i) reliance cannot be placed on a reference to subsequent interest in the decree to Rule 11 of Order 34, Civil P. C- I have no hesitation in holding

on a construction of this decree that the decree-holder has been denied any interest apart from the 6 per cent on Rs. 5852-3-0, till the date of

payment.

Objection was taken to the maintainability of the petition as it is contended that the application would not lie and would be barred on the

principle of constructive ''res judicata'', for the reason that the judgment-debtors have not raised this question as to the exact amount due under the

decree in E. P. No. 225 of 1947, the execution petition for sale taken out by the decree-holder, they having confined their objection only to

reducing the rate of interest from 6 per cent to 5k per cent; and by failure to have raised this contention in the execution petition they must be held

to have barred by the principle of constructive ''res Judicata'' in raising it in the present petition. Attention is invited to the decisions reported in --

Ulaganatha Mudaliar and Others Vs. Molaveedu Alagappa Mudaliar, '' --'' Alluri Bapanna Vs. Inuganti Vengayya and Others, and -- ''Kailas

Thevar v. Ramaswami'', A. I. R. 1949 Mad. 238 (C) in support of the position that the mere fact that a judgment-debtor does not in a previous

execution proceeding object that the amount for which execution is taken out is in excess of the decree itself does not bar the judgment-debtor

from raising that objection in subsequent execution proceedings. In short the | principle of constructive ''res judicata1 in execution proceedings

would not be applicable to cases where the question of the amount for which execution is taken out is in dispute and that it would be open to the

Judgment -deb tors at any time in any execution proceedings to raise the objection that the amount for which execution is sought for is not the

correct amount due under the decree. Walsh J. in Ulaganatha Mudaliar and Others Vs. Molaveedu Alagappa Mudaliar, '' observed as follows at

page 906:

That the appellants did not then object that the amount for which execution, was taken out was in excess of the decree itself does not, we

consider, bar them from raising this plea in subsequent execution proceedings. To hold otherwise"" would imply that the decree is itself superseded

by orders in execution which allows more than what the decree granted.

The question that is in dispute is only as to the amount that will ultimately be payable under the decree which should depend upon a construction of

the decree itself. In -- AIR 1937 Mad. 511 (B)'' Horwill J. observed ''at p. 514'' that the principle of constructive ''res judioata'' must be applied

with caution to execution proceedings and that it can only be applied to cases where the Court could not have acted as it did if the judgment-

debtor had successfully raised the points which are sought to be held by this principle against him. In general, the learned Judge enumerated four

classes of cases where the Court cannot order execution unless it was satisfied that the petitioner has a right to execute, that the judgment-debtor is

liable to satisfy the decree, that the decree is executable and that it is not barred by limitation; and since these are matters that should necessarily be

considered by a Court before it orders execution and if the Court orders execution to proceed, it must be presumed that the Court has considered

these aspects and as the conditions were found to be satisfied, execution was ordered. As further observed by the learned Judge,

The mere fact, that the sum for which the decree is sought to be executed is not the correct amount due by the judgment-debtor to the decree-

holder would not prevent execution from proceeding, ............

The fact, therefore, that execution was ordered would not amount to an adjudication that the correct amount due under the decree was ascertained

as the amount for which execution was ordered. Further, especially as Section 11, Civil P. C. is not made in terms applicable to execution

proceedings it will be inequitable to extend and apply the principle of Section 11 in toto to execution proceedings as the application of Section 11

with all its implication to execution proceedings will result in hardship, in particular to Judgment-debtors. With respect, I agree with the

observations of Horwill J. in the case above referred to that caution must be exercised in applying the principle of constructive ''res Judicata'' to

execution proceedings. There can be no doubt that what is raised in E. A. No. 94 of 1949 is only an objection as to the exact amount due under

the decree. In E. P. No. 225 of 1947 the objection was not raised but that did not prevent the Court executing the decree as the decree was

executable otherwise. It will be open always to judgment-debtors at any stage in the execution proceedings, so long as the decree is not satisfied,

to contest the correctness of the amount for which execution is sought for. The judgment-debtor is only bringing to the notice of the Court that it

would not be open to the executing Court to go behind the decree in the sense that it could not order execution for an amount which is not

provided under the decree. As in the present case the ascertainment of the amount would depend upon a construction of the decree and it is

contended -- which contention I accept --there is no provision for subsequent interest it cannot be said that execution for a larger amount than that

provided in the decree could be permitted. The objection on the principle of the application of constructive ''res judicata'' cannot, therefore, stand.

In the result the appeal is allowed with costs and E. A. is remanded to the lower Court for disposal in the light of the observations herein.