Krishnammal and another vs Kandasamy Nadar and Others

Mohan, J.—This case raises an interesting question, which is bereft of any legal authority. The short facts are as follows: The second and third defendant, (Appellants) executed a mortgage in favour of the first respondent herein (Kandasamy Nadar) for Rs. 15,000/-. On 24th December, 1969, a promissory note was executed for a sum of Rs. 7,500/- in favour of the first respondent, by the Appellants O.S. No. 805 of 1972 was filed before the Sub-Court, Salem, on the foot of the promissory note. The appellants herein submitted to a decree. In execution of that decree, several properties were attached and lot No. 1 formed the subject matter of the mortgage. In furtherance of the attachment, the properties were brought to sale. At that stage, the appellants filed R.E.A. 441 of 1974 under S. 47 and Order 34, R. 14 of the Code of Civil Procedure, for a declaration that the decree-holder was not entitled to bring lot No. 1 to sale, contending that the promissory note was really executed for the advance interest due on the mortgage and, therefore, Order 34, R. 14, CPC was a bar.

The learned Additional Subordinate Judge over-ruled this objection, and hence C.M.A. No. 115 of 1974 was preferred to the District Judge of Salem, who confirmed the finding of the Executing Court. Hence, the present Civil Miscellaneous Second Appeal.

Mr. O.V. Baluswami, learned counsel appearing for the appellants strenuously urges before me that the Courts below erred in holding that it has not possible for the appellants herein, to raise the plea of bar relating to Order 34, R. 14 of the Code of Civil Procedure, at the stage of the property being brought to sale. According to him, it is precisely for this contingency that the rule has been framed, so that the mortgaged property cannot be sold and thereby making it impossible for the mortgagor to redeem. In support of this submission, he relies on Abdul Mannan Mian Vs. Kalai Khan and Others Narasimbalu v. V.K. Ramanatha 1961 (I) M.L.J. 363:74 L.W. 212, and Jagannath Prasad v. Daulat Ram Manocha 1971-3 S.C.C. 836.

Mr. T. Somasundaram, learned counsel for the respondent, urges that no exception should be taken to the judgment of the Courts below. In so far as the appellants submitted to a decree in O.S. No. 805 of 1972, it would constitute an estoppel; and, therefore, it is not open to the appellants to raise that plea at the stage of the property being brought to sale. For this submission, reliance is placed on Raja Sri Sailendra Narayan Bhanja Deo Vs. The State of Orissa, . Even on the facts of this case, if such a plea had been raised in the suit itself, the basis of the suit being that each consideration pawed under the promissory note, the suit itself would have been liable to be dismissed. Therefore, virtually speaking, the appellants seek to put forth a new plea, which the Executing Court cannot decide.

Order 34, R. 14 of the CPC reads as follows:

(1) Where a mortgagee has obtained a decree for the payment of money in satisfaction of a claim arising under the mortgage, he shall not be entitled to bring the mortgaged properly to tale otherwise than by instituting a suit for sale in enforcement of the mortgage, and may institute such suit notwithstanding any thing obtained in Order 12, R. 2.

(2) Nothing is Sub-rule (1) shall apply to any territories to which the Transfer of Property Act, 1882, has not been extended.

To my mind, the basis for the application of this rule, is, that the claim must be under the mortgage, in the instant case, there is absolutely nothing to indicate that the claim has arisen under the mortgage. However, what Mr. Baluswami would contend is, that in a case like this, there would be no objection to the passing of the decree, nor even to the attachment, but only when the properties are sought to be brought to sale, the bar could be raised. That may be so. But, the question is, if this plea had not been put forth during the trial, where the suit ended in a decree by consent, can the appellants be allowed to do so at this stage? In my view, they cannot.

Abdul Mannan Mian Vs. Kalai Khan and Others is a case which related to a lease arising out of the mortgage. In that case, it was laid down that when there is a mortgage by way of conditional sale without any express stipulation for interest, and a lease for a specified term from the mortgagee to the mortgagor taken on the same day, and the mortgagor holds over, a suit for real for a period of such holding over, brought while no suit has yet been instituted on the mortgage, is maintainable - whether it be taken as really a suit for interest on the mortgage or a suit for rent based on the relationship of landlord and tenant.

This is not an authority for holding that this plea could be urged at the stage of the property being brought to sale.

Chinnappayan v. Narayana AIR 1940 Mad. 50:50 L.W. 677 is a case wherein where was a lease by mortgages back to mortgagor and a suit for rent under that lease was filed. It was held at page 60;

It is, I think, well established that when a lease back is part of a transaction of mortgage and is merely a piece of machinery for realizing the interest on the mortgage, a suit for rent under the lease would in fact be a suit to realize the interest on the mortgage and under a decree in such a suit the equity of redemption could not be brought to sale unless the suit was actually framed as a suit on the mortgage.

This again, therefore, does not lend support to the contention of Mr. Baluawami and hence, this ruling has no relevance.

It may be of interest to note that in Narasimhulu Chettiar Vs. K. Ramanatha Mudaliar, a Division Bench of this Court quotes with approval the dictum laid down by Chandra Reddi, J., as he then was, which is as follows:

The provision was enacted by the Legislators for the benefit of the mortgagor, so that the mortgagee may not purchase the equity of redemption in enforcement of a money decree which be may obtain against the mortgagor, in respect of a claim arising under the mortgage. The intention of the Legislature seems to be that all claims arising under the mortgage should be adjudicated by the civil court either at the time of the redemption of the mortgagor when the mortgagee brings a suit on his mortgage.

Again the decision in Jagannath Prasad v. Daulat Ram Manocha 1971 -(2) S.C.C. 883 does not help the appellant.

The passage in Mullah''s Commentary on the Code of Civil Procedure, at page 1479, after referring to very many decided cases, states that the sale made in contravention is voidable and the question that arises in this case is altogether different. Hence, I should necessarily held that the judgment-debtor (mortgagor) for reasons best known to himself has not taken this plea, and, therefore, the executing Court cannot decide that question. More than this, as teen above, there is no basis for holding that this claim is one arising under the mortgage.

In a way the decision in Raja Sri Sailendra Narayan Bhanja Deo Vs. The State of Orissa, supports the respondent. For the above reasons, I hold there is no merit in the Civil Miscellaneous Second Appeal and it will stand dismissed. However, there will be no orders as to costs. No leave.