Hardas Singh vs Ram Partap

Chopra, J.—The facts that gave rise to this "appeal of the judgment-debtor against an order of the District Judge, Patiala are these: Ram'' Partap Respondent brought a suit against Hardas Singh Appellant for realisation of Rs. 20,613/-charged on immovable property situate in Nabha known as ''Palta House''. The suit was decreed by the District Judge, Patiala on 19th Magh 2008 (23-1-1950). The decree-sheet prepared in the case was in the following term:

It is ordered that the suit of the Plaintiff is decreed with costs. The Plaintiff, of course, would be entitled to interest at the stipulated rate till the realisation of the decretal amount.

On an application by the decree-holder the decree was subsequently amplilied to include the following:

The judgment-debtor shall deposit the decretal amount by 20-5-1950, failing which the decree-holder shall have a right to realise the entire amount through the sale of the mortgaged property.

The amount having not been, paid by due date the decree-holder took out execution on 10-6-1950 and prayed for realisation of the amount by sale of the mortgaged property. The judgment-debtor claimed himself to be a displaced person and as such presented an application for stay of the execution proceedings u/s 6, Displaced Persons (Legal Proceedings) Act, 1949. Since the Act had not till then been enforced in the State this application was dismissed. After the said Act Was enforeed in the State the judgment-debtor again came forward with an identical prayer. The executing Court while finding in favour of the applicant that he was a displaced person reject-the application because in its view a mortgage or a decree for sale of the mortgaged pro-y could not be regarded as a decree ''for pay-t of money'' and the Act only applied to such deerees.

The execution proceedings were still pending and the house was being sold when the Displaced Persons (Legal Proceedings) Act was repealed and substituted by the Displaced Persons (Debts. Adjustment) Act 70 of 1951. This Act 70 of 1951 came into force in the State of Delhi on 10-12-1951 and in the State of Pepsu on 20-12-1951. Hardas Singh, the judgment-debtor, lost no time to take benefit of the provisions of the new Act and presented an application for adjustment of the debts u/s 5 of the Act to the Tribunal at Delhi. He also applied to the Tribunal for an order for stay of the execution proceedings. That prayer of his was turned down and he was directed to approach the executing court for the purpose. He then presented the application in question to the District Judge, Patiala and prayed that the proceedings be stayed and as provided by Section 15 of the Act records thereof be transferred to the Tribunal at Delhi. The District Judge holding the view that "a charge incurred on the security of property situate in India was not immune from attachment and sale in execution proceedings", rejected the application. The judgment-debtor has now come in appeal against this order of the executing Court.

Section 2(10) of Act 70 of 1951 defines a displaced person as follows:

Displaced person'' means any person who, on account of the setting up of the Dominions of India and Pakistan, or on account of civil disturbances or the fear of such disturbances in any area now forming part of West Pakistan, has after the Ist day of March, 1947, left, or been displaced from, his place of residence in such area and who has been subsequently residing in India, and includes any person who is resident in any place now forming part of India and who for that reason is unable or has been rendered unable to manage, supervise or control any immovable property belonging to him in West Pakistan, but does not include a banking company.

It is common ground between the parties, and has been so held by the executing court as well, that Hardas Singh Appellant is a displaced person falling within the first part of the definition and that the debt was incurred before he came (from West Pakistan) to reside in India. It is also not disputed that Hardas Singh had presented an application to the Tribunal at Delhi u/s 5 of this Act for adjustment of his debts including the debt in context. That application, however, has now been withdrawn and Anr. under the same provision of the Act and for a similar purpose has been presented to the Tribunal at Patiala. It is correct that the prayer of the judgment-debtor for stay of the execution proceedings u/s 15 of the Act was made on the basis of his application u/s 5 to the Tribunal at Delhi and that application has since been withdrawn. But that does not make this appeal infructuous as a similar application has already been presented and is pending before the Tribunal at Patiala.

The provisions of Section 15 are mandatory and if the case falls under that Section the proceedings have to be stayed because of the judgment-debtor I having approached the Tribunal at Patiala. In case this appeal is rejected on that ground alone the judgment-debtor can still present a fresh application to the Executing Court on the basis of the proceedings that are going on before the Tribunal at Patiala and that would simply prolong the litigation and result in unnecessary harassment of the parties. Shri Jagan Nath, learned Counsel for the Respondent, therefore concedes that this appeal may be decided on merits assuming that the application for stay of execution was based on the proceedings that are now pending before the Tribunal at Patiala.

The relevant portion of Section 15 of the Act is to the following effect:

Where a displaced debtor has made an application to the Tribunal u/s 5 or under Sub-section (2) of Section 11, the following consequences shall ensue, namely:

(a) all proceedings pending at the date of the said application in any civil court in respect of any debt to which the displaced debtor is subject (except proceedings by way of appeal or review or revision against decrees or orders passed against the displaced debtor) shall be stayed, and the record of all such proceedings other than those relating to the appeals, review or revisions, as aforesaid shall be transferred to the Tribunal and consolidated;

(b) all attachments, injunctions, orders appointing receiver or other processes issued by any such court and in force at the date of the said application in respect of any such debt shall cease to have effect and no fresh process shall, except as hereinafter expressly provided, be issued:

According to Section 2(9) a Displaced Debtor means a displaced person from whom a debt is due or Is being claimed. Clause (6) of Section 2 gives the ''following definition of ''debt'' for the purposes of the Act:

Debt means any pecuniary liability, whether payable presently or in future, or under a decree or order of a civil or revenue court or otherwise, or whether ascertained or to be ascertained, which-

In the case of a displaced person who has left or been displaced from his place of residence in any area now forming part of West Pakistan, was incurred before he came to reside in any area now forming part of redial, in the case of a displaced person who, before and after the 15th day of August 1947, has been residing in any area now forming part of India, was incurred before the said date of the security of any immovable property situate in the territories now forming part of West Pakistan;

Provided that where any such liability was incurred on the security of immovable proper-ties situate both in India and in West Pakistan,, the liability shall be so apportioned between the said properties that the liability in relation to-each of the said properties bears the same proportion to the total" amount of the debts as-the value of each of the properties as at the date of the transaction bears to the total value-of the properties furnished as security, and the liability, for the purposes of this clause, shall be the liability which is relatable to the property in West Pakistan;

(c) is due to a displaced person from any other person (whether" a displaced person or not) ordinarily residing in the territories to which this Act extends; and includes "

any pecuniary liability incurred before the commencement of this Act by any such person as is referred to in this clause which is based, on, and is solely by way of renewal of, any such liability as is referred to in Sub-clause (a) or Sub-clause (b) or Sub-clause (c);

Provided that in the case of a loan whether in cash or in kind, the amount originally advanced and not the amount for which the liability has been renewed shall be deemed to be-the extent of the liability; but docs not include any pecuniary liability due under a decree passed after the 15th day of August 1947, by any court situate in West Pakistan or any pecuniary liability the proof of which depends merely on an oral agreement.

5 The question that arises for decision is whether the decree, in the form in which it stands in the present case, amounts to a ''pecuniary liability'' of the judgment-debtor and therefore falls within the definition of ''debt'' given in the Act, Shri Jagan Nath has referred to certain provisions of CPC in which a distinction has been drawn between mortgage decree and a decree for the payment of money. His argument is that a decree which directs realization of the excretal amount from hypothecated property does not create a personal liability of the judgment-debtor and cannot, therefore, be regarded as a decree for the payment of money. As a general rule, every decree by virtue of which money is payable is to that extent a decree for money, but the legislature in enacting certain provisions of CPC intended to make a distinction between a ''mortgage decree'' and ''a decree for the payment of money'';

Order 21, Rule 11 Code of Civil Procedure, provides that where and in so far as a decree is for the payment of money the court may, for sufficient reason, at the time of passing the decree order that payment of the amount decreed shall be postponed or shall be made by instalments. This rule has been held to apply to decrees for the payment of money only and not to decrees for recovery of money by sale of property as in the case of mortgage decrees. Again similar words "decree for the payment of money" occur in Section 73, Code of Civil Procedure, which provides for the proceeds of the execution sale to be ratably distributed amongst such decree-holders. There has been a conflict of opinion as to whether a mortgage-decree is a decree for the payment of money and whether the holder of such a decree can "claim rate able distribution under this Section. The majority and more recent view, however, is that a mortgage-decree is not a decree for the payment of money even though it provides for the deficiency of the decreed amount being realised, after sale of the hypothecated property, personally from the mortgagor. A decree where the only direction is for the realisation of the amount by sale of the mortgaged property and where the question of insufficiency of the mortgaged property to satisfy the . '' decree and the balance to be recovered from the person or other property of the judgment-debtor has not yet arisen, may not possibly be a decree for the payment of money. The proper form of a preliminary decree in a suit by the mortgagee for realisation of his secured debt by sale of the mortgaged property is given in Order 34, Rule 4,Code of Civil Procedure Where payment of the decretal amount is not made within the period laid down by the court Order 34, Rule 5 provides for the passing of a final decree directing that the mortgaged property or a sufficient part thereof be sold. Where the net proceeds of the sale are found insufficient to pay the decretal amount the court on an appli-cation of the decree-holder under Order 34, Rule 6 may if the balance is legally recoverable from the Defendant otherwise than out of the property sold, pass a decree for such balance. A decree passed under this rule is no doubt a decree for ''the payment of money''.

In the present case no regard was paid to the procedure enjoined by law and a composite decree . was passed in the very first instance. Since the time fixed for payment of the decretal amount nan already run out when execution was taken out and the prayer in the execution application was one for sale of the mortgaged property I am prepared to agree with Shri Jagan Nath that the decree cannot be regarded as one for payment ol money. But that does not dispose of the question involved in this case. Here we have to interpret a different enactment where the words used are absolutely different. Section 2(6) of Act No 70 of 1951 while in viding that ''debt for the Durposes of the Act includes decretal debt as well does not confine it to the amount due on a decree for the payment of money. The words any decree or order for the payment of money'' do occur in Section 6, Displaced Persons (Legal Proceedings) Act of 1940 and the argument of the counsel would have been valid if the issue was to be decided under that Act.

As already observed that Act was repealed by Act 70 of 1951 and the definition of ''debt'' in the latter Act is much more comprehensive Debt in this Act is defined as any ''pecuniary liability incurred by a displaced person under the circumstances mentioned in Section 2(6) reproduced above. The question thus is whether a decree directing realisation of the decretal amount by sale of the property, is ''a pecuniary liability payable under a decree or order of a civil Court''. Pecuniary means consisting of" money, relating to money or entailing a money penalty. Liability is that Which one is under obligation to pay or for which one is liable. It moans an obligation or responsibility and obligation or responsibility may not necessarily be personal. If the obligation or responsibility is confined to the realisation of the decretal amount from the property of a person he can still be regarded as liable for the amount, although it cannot be realised from his person. The amount in such a case would be regarded as included in his liabilities.

The plural of the word ''liability'' means one''s pecuniary obligations or debts collectively, as opposed to assets. I cannot agree with Shri Jagan Nath that pecuniary liability means only the amount that is recoverable from the person of the debtor or that it does not also include a debt which is, recoverable from his property. The matter appears to have been made clear firstly, by the omission in the new Act of the words ''decree or order for the payment of money'' and secondly, by what is laid down in Clause (6)(b) of Section 2 of the Act. Sub-Clause 6(a) of Section 2 applies only to those displaced persons who fall within the first part, of the definition of ''displaced person'' given in Clause (10) of this Section, viz., persons who have left,, or have been displaced from, their place of residence in West Pakistan after 1-3-1947. In the case of such a. displaced person, a pecuniary. liability to constitute a debt within the meaning of this Act must have been incurred by him before he came to reside in India. Sub Clause''(6)(b) applies to those displaced persons who fall within the second part of the definition of ''displaced person.

In other words this sub-clause applies only to a person who before and after 15-8-1947 has been residing in India; provided he owns any immovable property in West Pakistan, which he is unable to supervise or control by reason of his being resident in India. The proviso added to this Sub-clause (6)(b) lays down that where such liability was incurred on the security of immovable property situate both in India and West Pakistan the liability, for the purposes of this clause, shah be liability, which is relatable to the property in West Pakistan. The liability relatable to property in India in such a case would not be regarded as ''debt'' for the purposes of the Act. In other words, the pecuniary liability incurred on the security of immovable property situate in India by a displaced person, who before and after 15-8-1947 has been residing in any area now forming part of India, is not included in the definition of ''debt'' for the purposes of the Act. But all the same this provision in the Act makes it| clear that pecuniary liability'' includes a loan incurred on the security of immovable property. The phrase equally applies to the decretal amount which is realisable only by sale of the property of a displaced person.

As already observed Harda Singh Appellant is a displaced person within first part of the definition of ''displaced person'' given in Clause (10) of Section. 2 of the Act and his case, therefore, falls under Sub-clause (6)(a) of Section 2. In my opinion any. pecuniary liability incurred by a displaced person, who has left or been displaced from his place of residence in any area now forming part of West Pakistan, on the security of immovable property situate in India, must also be regarded as ''debt for the purposes of the Act. A decree, on the basis of such a liability, for realisation of the amount by sale of the hypothecated property also falls under the definition of ''debt'' given in Clause (6) of the Act. That makes Section 15 of the Act applicable to the present case.

The result, therefore, is that the appeal is accepted, the order of the executing court is set aside and the record is sent back to him with the direction that he should deal with the case as provided by Section 15, Displaced Persons (Debts Adjustment) Act, 1951. The parties have been directed, through their counsel, to appear in his court on 20-7-1953. In view of the point involved in the case the parties are left to bear their own costs and the case is certified as one fit for appeal to a Division Bench.