K.S. Jayavani vs C. Narayanaswam Y.

Jawad Rahim

Legal heirs of Lt. Srinivas Murthy are in revision u/s under Section 115, C.P.C. assailing the order of dismissal of their Execution Petition in Exn.P.2/93 dated 15.9.2003 as not maintainable. Heard the learned counsel for the parties.

Before I advert to the contentious issues raised by the learned counsel on both sides, it is proper to observe that this is a classical case where the maxim ''Justice delayed is Justice denied'' is aptly applicable, as could be seen from the following factual matrix:

a) One K. Gururayachar was the owner of the properties bearing Nos. 3, 5 and 42 of Hogatukote village. He had borrowed Rs. 1,500/- from Shankarappa (father of respondent herein) on security of those properties and secured it under a deed of mortgage dated 20.8.1951 with a specific condition that Gururayachar or his successors would be entitled to recovery of the property within 8 years reckoned from 21.8.1951. On that term in the mortgage transaction, Shankarappa obtained physical possession.

b) Within a year, Gururayachar died, leaving behind Lt. Srinivas Murthy (plaintiff) and his brother K. Krishna Murthy to succeed to his estate. It is not very clear whether Krishna Murthy was alive, but Lt. Srinivas Murthy, the elder son, approached Shankarappa (mortgagee) to receive the mortgage amount of Rs. 1,500/- and to redeem the mortgage. Shankarappa (mortgagee) declined, consequent to which Lt. Srinivas Murthy filed a suit in O.S.74/75 for redemption of mortgage created on the properties and offered to deposit the entire sum of Rs. 1,500/-. He sought a decree for redemption of mortgage and for delivery of physical possession.

c) Shankarappa-defendant entered contest by filing written statement resisting the suit claim, but admitted in unequivocal terms that Gururayachar (father of the plaintiff) was the owner of the properties in question and by deed dated 21.8.1951 and delivered possession. While admitting such fact, he described the transaction as an ''absolute sale'' without any riders. His assertive contention was, the deed dated 21.8.1951 bears testimony to the fact that it was an outright sale and it was not a transaction of mortgage or conditional sale. Referring to the recital in the deed that if Gururayachar or his successors pay Rs. 1,500/-within 8 years, the property will have to be re-conveyed, he averred that condition was unenforceable as neither Gururayachar nor his successors had paid the amount within the stipulated period. Such lapse, according to him, clothed him with absolute right, title and interest and it was unimpeachable.

d) He further averred the transaction cannot be treated as mortgage because the deed describes it as absolute sale with the right of re-purchase and that right had dissipated due to afflux of time and the conveyance was an outright sale.

e) He further averred after obtaining physical possession, he had developed the property incurring heavy expenditure for levelling the land, digging and installing borewells and putting up structures.

f) To negate the suit claim, he further averred in the year 1970, he had entered into a partition with his brothers and other coparceners to divide the joint family property. During such partition, the properties described in the schedule to the plaint (covered under mortgage) fell to the share of his brother''s son-T. Jayaramaiah out of which Survey No. 42 was allotted to C. Tamanna and after his demise, it is in possession of his widow-Akalamma. On this plea, he submitted whatever right he had has now stood transferred to the other members of his family and he has no subsisting right, title and interest in the suit schedule properties to be made subject of the mortgage transaction as alleged in the plaint.

g) Based on the material propositions in the pleadings of the parties, learned trial judge framed the following issues:

1) Does the plaintiff prove that K. Gururayachar has mortgaged the suit property by way of conditional sale for Rs. 1,500/- on 21.8.1951 in favour of defendant?

2) If so, is the plaintiff entitled to redeem the mortgage?

3) Whether the plaintiff is entitled for mesne profits?

4) Whether the suit is bad for non-joinder of necessary parties?

5) What decree?

h) Applying the evidence tendered by the parties in support of their contentions, learned judge firmly opined Lt. Srinivas Murthy had established his right to seek redemption of mortgage with acceptable evidence and the defence put forward by Shankarappa was worthy of rejection. It, therefore, affirmatively held the transaction covered by deed dated 21.8.1951 was a mortgage transaction redeemable at the instance of the mortgagor or his successors. Accepting the plea of Srinivas Murthy that he, as successor, was entitled to redeem the mortgage, it decreed the suit by judgment dated 13.12.1976 in the following terms:

In the result, in view of my findings on issues 1 to 4 the suit is decreed with costs, declaring that the plaintiff is entitled to redeem the suit mortgage on his depositing a sum of Rs. 1,500/- into the court within 6 months from this day. It is further ordered and decreed that the defendant shall recovery the mortgaged property to the plaintiff at his costs free from the mortgage, after receiving the mortgage amount and defendant is also directed to put the plaintiff in possession of the suit properties. This shall be the preliminary decree.

i) The defendant Shankarappa assailed the said judgment in R.A.26/77 which met defeat by order dated 16.1.1978. It was again challenged in R.S.A.551/78 which was also dismissed, affirming the judgment and decree of the trial court, consequent to which he was bound to obey the decree. Thus, the judgment in O.S.74/75 reached finality despite appeal action and Lt. Srinivas Murthy became entitled to the fruits of the decree.

j) Though successful in the trial court and in appeals, Lt. Srinivas Murthy did not live to realize the benefit of the decree. He died leaving behind K.S. Jayvani and K.S. Sudarshan, daughter and son, to succeed to his estate which includes the right of redemption under the judgment in O.S.74/75. Similarly, Shankarappa also died leaving behind respondent-C. Narayanaswamy as his legal heir. The legal heirs of Srinivas Murthy (plaintiff) filed Ex. Pet. No. 2/93 to enforce the decree.

k) Upon issuance of cause notice in Exn.P.2/93, respondent herein entered contest and sought dismissal of the execution petition as not maintainable on the ground the decree passed in O.S.74/75 dated 13.12.1976 was a preliminary decree and without final decree being drawn, it was in executable.

l) The second ground was, the properties in question were the subject matter of partition and have now fallen to the share of other coparceners consequent to which he (Narayanaswamy) was not bound by the decree.

m) Petitioners-decree holders countered the contention of the judgment debtor that partition in the family would impact the decree under execution and relying on the decision in the case of Sibte Hasan Vs. State of Uttar Pradesh and Others, wherein it was held "a suit for redemption of the entire mortgaged property is maintainable despite encumbrance created on it."

n) Similarly they placed reliance on the decision in the case of SONNAKKA vs. D. MUNEKKA (AIR 1959 Mys. 39) to proceed against the entire properties. The decision in the case of Md. Sultan Moideen and Others Vs. Official Trustee, Madras and Another, was relied to contend if the plaintiff-decree holder deposits the amount covered under the mortgage, the trial court can straightaway pass final decree without passing preliminary decree in a suit for redemption. They also relied on the decision in the case Venkata Reddi and Others Vs. Pothi Reddi, wherein it was held ''if the amount directed by the trial court is deposited, then the decree is capable of being enforced.''

o) Per contra, the respodent-judgment debtor relied on the decision in the case of Subramaniam Chettiar and Another Vs. Muthiah Pillai, wherein it was held ''in a suit for redemption, there has to be a preliminary decree fixing time within which the amount of mortgage has to be deposited and only then final decree could be passed under Rule 8 of Order XXXIV, C.P.C. He also relied on the decision in the case of Mosa Rajayyan Vs. Jacob Haris, to contend passing of final decree in a redemption suit without passing preliminary decree is an omission and renders the decree null and void.

p) Learned judge of the executing court formulated a single point as to whether the execution was maintainable and being of the opinion that the decree in question should be treated as a preliminary decree and not final decree, dismissed the execution petition as not maintainable. Aggrieved by it, petitioners-decree holders are in revision.

Learned counsel for the petitioners, Smt. Revathi would contend that in terms of the decree in O.S.74/75 dated 13.12.1976, plaintiff-Srinivas Murthy had deposited Rs. 1,500/- within 6 months as ordered and therefore he had complied with the requirement of Rule 8 of Order XXXIV, C.P.C. Upon such deposit, judgment debtor was required to re-deliver documents and release mortgage and to put the decree holders in possession of the properties in question. Since nothing else had to be done in terms of the decree, by the plaintiff there was no need for final decree to be obtained and decree in itself was executable. She has placed reliance on the decisions cited before the trial court referred to above.

In negation to these contentions, Sri Srinivasa Gowda for the respondent-judgment debtor would contend that the decree passed in O.S.74/75 dated 13.12.1976 is admittedly in a suit for redemption and therefore, without final decree being passed as required under Rule 8 of Order XXXIV, the decree is in-executable and rightly the trial court has dismissed the execution petition. He reiterates all pleas urged before the trial court and submits, drawing my attention to the scheme of Order XXXIV, C.P.C. to contend that in a suit for foreclosure and redemption of mortgage, necessarily there has to be a preliminary decree and then final decree. The successful plaintiff will have to apply for final decree proceedings within the limitation period prescribed under the Limitation Act. If it is not done, then the decree would be unenforceable. Alternatively, he submits even if we construe the decree passed in O.S.74/75 to be executable, since the trial court has clearly spelled out it is a preliminary decree without final decree, it is no decree in the eye of law. His thrust is, even though the judgment and decree passed by the trial court has been affirmed in appeal action, as the legal heirs of the plaintiff had failed to apply for final decree proceedings within 3 years prescribed by the law of limitation, it is a nullity and is unenforceable.

To answer the contentions raised by both sides, necessarily the following points would arise for consideration:

1) In a suit for redemption, what is the nature of decree permissible? Does the provision of Rule 7 of Order XXXIV, C.P.C. compulsorily require preliminary decree to be passed, or is final decree permissible?

2) If the decree for redemption of mortgage finally adjudicates the rights of the parties, will it be executable, or does the provision of Rule 8 of Order XXXIV, C.P.C. require the plaintiff to obtain final decree?

3) Is the decree in question executable without applying for final decree?

Fortunately, between the parties there is no dispute that Lt. Srinivas Murthy was successful in obtaining the decree for redumption of mortgage schedule premises vide judgment and decree dated 13.12.1976 in O.S.74/75. It is also not in dispute that Shankarappa-original defendant and his legal heirs though preferred R.A.26/77, they failed in their attempt as it was dismissed by order dated 16.1.1978 and thereafter, second appeal in R.S.A.551/78 was also dismissed by this court on 8.10.1990, giving finality to the judgment and decree dated 13.12.1976 in O.S.74/75. It is also not in dispute that due to stay and pendency of R.S.A.551/78 till 8.10.1990, the decree in O.S.74/75 could not have been put to execution or any other process. It is only after 8.10.1990 after disposal of R.S.A. and when finality of decree in O.S.74/75 reached, petitioners-decree holders could realize its fruits and filed Exn.P.2/93.

At this stage, it is brought to my notice that the petitioners-decree holders had filed FDP.1/04 after dismissal of the execution petition in E.P.2/93 by the impugned order as not maintainable, and FDP.1/04 was dismissed by the trial court as being time-barred. Against it, they were in revision before this court in R.S.A.554/05 which was dismissed, confirming the over passed in F.D.P. Referring to the dismissal of FDP.1/04 and confirmation of the order of dismissal by this court in R.S.A.554/05, learned counsel, Sri Srinivasa Gowda had vehemently contended that this revision does not survive for consideration as it amounts to reopening the issue to test whether the decree executed. This issue shall be considered as one of the considerations after deciding the points raised for consideration.

The first two questions framed have to be examined in the light of conspectus of the provisions of Order XXXIV, C.P.C. Order XXXIV, C.P.C. which undoubtedly refers to suits relating to mortgages of immovable property and prescribes a detailed procedure to be followed in suits for foreclosure, sale of properties subject to mortgage and redemption. Rules 2 and 3 deal with suits relating to foreclosure; Rules 4 and 5 deal with suits for sale of mortgaged properties with which we are not concerned in these proceedings.

We are concerned with the procedure prescribed by Rules 7, 8 and 8A which deal with suits relating to redemption. Rule 7 reads thus:

Preliminary decree in redemption suit:

(1) In a suit for redemption, if the plaintiff succeeds, the court shall pass a preliminary decree-

(a) ordering that an account be taken of what was due to the defendant at the date of such decree for-

(i) principal and interest on the mortgage,

(ii) the costs of suit, if any, awarded to him, and

(iii) other costs, charges and expenses properly incurred by him up to that date, in respect of his mortgage security, together with interest thereon; or

(b) declaring the amount so due at the date; and

(c) directing-

(i) that, if the plaintiff pays into court the amount so found or declared due on or before such date as the court may fix within six months from the date on which the court confirms and countersigns the account taken under clause (a), or from the date on which such amount is declared in court under clause (b), as the case may be, and thereafter pays such amount as may be adjudged due in respect of subsequent costs, charges and expenses as provided in rule 10, together with subsequent interest on such sums respectively as provided in rule 11, the defendant shall deliver up to the plaintiff, or to such person as the plaintiff appoints, all documents in his possession or power relating to the mortgaged property and shall, if so required re-transfer the property to the plaintiff at his cost free from the mortgage and from all encumbrances created by the defendant or any person claiming under him or, where the defendant claims by derived title, by those under whom he claims, and shall also, if necessary, put the plaintiff in possession of the property; and

(ii) that, if payment of the amount found or declared due under or by the preliminary decree is not made on or before the date so fixed, or

the plaintiff fails to pay, within such time as the court may fix, the amount adjudged due in respect of subsequent costs, charges, expenses and interest, the defendant shall be entitled to apply for a final decree-

(a) in the case of a mortgage other than a usufructuary mortgage, a mortgage by conditional sale, or an anomalous mortgage the terms of which provide for foreclosure only and not for sale, that the mortgaged property to be sold, or

(b) in the case of a mortgage by conditional sale or such an anomalous mortgage as aforesaid, that the plaintiff be debarred from all right to redeem the property.

(2) the court may, on good cause shown and upon terms to be fixed by the court, from time to time, at any time before the passing of a final decree for foreclosure or sale, as the case may be, extend the time fixed for the payment of the amount found or declared due under sub-rule (1) or of the amount adjudged due in respect of subsequent costs, charges, expenses and interest.

From this, it is clear when the plaintiff succeeds in establishing his right for redemption of a mortgaged property, the court must pass a preliminary decree directing the account to be taken of what was due to the defendant on the date of such decree for principal and interest from the mortgage, cost of the suit, if any, awarded to him and other charges and expenses incurred by him upto that date in respect of mortgage security together with interest thereon, and under clause (b) declare the amount due on that date and then under clause (c), direct that ''if the plaintiff pays into court the amount so found due or declared due on or before such date as the court may fix within six months from the date on which the court confirms and counter-signs the account taken under clause (a) or from the date on which the amount is declared in court under clause (b) and pays such amount, the defendant shall deliver up to the plaintiff all documents in his possession or power relating to the mortgaged property and shall, if so required re-transfer the property to the plaintiff at his cost free from mortgage and from all encumbrances.''

Clause (c) (ii) makes it further clear that ''if payment of amount found or declared due under by the preliminary decree is not made on or before the date so fixed, or plaintiff fails to pay within such time as the court may fix, the amount adjudged due in respect of subsequent costs, charges, expenses and interest, the defendant shall be entitled to apply for a final decree.'' By clause (c) (ii) (b), the provision mandates ''in case of mortgage by conditional sale or such an anomalous mortgage as aforesaid, that the plaintiff be da-barred from all right to redeem the property.''

It is material to note sub-rule (2) of Rule 7 of Order XXXIV, C.P.C. permits the court on good cause shown and upon terms to be fixed from time to time, at any time before the passing of final decree for foreclosure or sale, as the case may be, extend time for payment of the amount found or declared due under sub-rule (1) or of the amount adjudged due in respect of subsequent costs, charges, expenses and interest.'' Thus, it is clear in a suit for foreclosure, when the plaintiff succeeds and only if circumstances warrant, the court must pass a preliminary decree in terms of clauses (a), (b) and (c) of sub-rule (1). The question is, if the court finds, based on the material propositions in the pleadings of the parties and the claim of the plaintiff and defendant, a direction as required under clause (a) is not necessary, can it pass a (final) decree declaring the amount due on that date as provided for by clause (b), and if the court does so, could such decree be executed without applying for final decree?

On a combined reading of clauses (a), (b) and (c) of sub-rule (1), the irresistible conclusion would be, in a suit for redemption, if the defendant has not pleaded or disputed the amount payable to him under mortgage towards principal and interest and if he has not claimed other costs, charges and expenses incurred by him up to the date of the suit in respect of the mortgaged property, then if the plaintiff succeeds in the suit, there may be no need for the court to order that account be taken as to what was due to the defendant at the date of such decree for principal and interest, cost of the suit ordered, it can justifiably decree the suit and such decree will not be a preliminary decree.

As could be seen, between clauses (a), (b) and (c) the Legislature has inserted ''or'' after clause (a) before clause (b). Therefore, the circumstances referred to in clause (a) are independent, while the circumstances enumerated in clauses (b) and (c) are inter-linked and have to be read together. That means, it all depends on the nature of claim of the plaintiff and defendant. If in a suit for redemption, the court finds, based on the claim of the defendant that there is a necessity to determine what was the proper amount, what was the interest payable thereon, cost, if any, other charges and expenses properly incurred by him (defendant) upto that date as mortgage security, then the court would order an enquiry into those aspects and it will be a preliminary decree. But if there is no such issue to be decided, then under clause (b), it can finally determine the amount.

Thus, the reasonable conclusion would be, in the absence of any claim from the defendant as referred to in clause (a), if the court finds no dispute on the principal amount secured by mortgage and interest payable thereon as on the date of the decree, the court may proceed to pass a decree as envisaged in clause (b) and (c). It wilt be ''FINAL DECREE.'' Such decree would undoubtedly finally determine the amount payable by the plaintiff and under clauses (b) and (c), the period for such payment is fixed, the plaintiff becomes liable to pay such amount within the time stipulated. On default, defendant may apply for final decree to debar him (plaintiff) from redeeming the mortgage but, plaintiff is not required to apply for final decree.

Sub-rule (2) of Rule 7 of Order XXXIV, C.P.C. clarifies that if the time fixed by the court under clause (c)(i) has lapsed, even then the court may extend the time fixed for depositing the amount as it may think fit, and if the plaintiff makes such deposit before the defendant applies for foreclosure or sale, the plaintiff will the have the right to get the property redeemed. This is what is required to be done under Rule 7 of Order XXXIV, C.P.C.

However, Rule 8 needs reference which refers to final decree in a suit. Rule 8 of Order XXXIV, C.P.C. permits the defendant to apply to the court to pass final decree debarring the plaintiff from all right to redeem the mortgaged property and such right is conferred on the defendant only if the plaintiff has failed to comply with the directions in the preliminary decree referred to under Rule 7, and not otherwise.

The crucial point is, what is the nature of final decree referred to by Rule 8. Rule 8 refers to the final decree debarring the right of the plaintiff to redeem the property. Therefore, final decree contemplated under Rule 8 is virtually to nullify or annul the right of the plaintiff who had succeeded in a suit for redemption, but fails to comply with the directions regarding deposit of amount, and thereby loses the right of redemption. Final decree referred to in Rule 8 is final decree to debar the plaintiff from exercising his right to redeem the mortgage and not final decree in the sense it is normally understood. For clarity, it is necessary to refer to the definitions of the expressions ''final decree'' and ''preliminary decree.''

Section 2(2), C.P.C. defines ''decree'' thus:

"decree" means the formal expression of an adjudication which, so far as regards the court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the sut and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within Section 144, but shall not include-

(a) any adjudication from which an appeal lies in appeal from an order, or

(b) any order of dismissal for default.

Explanation: A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final.''

Therefore, the terms of the decree needs scrutiny to decide whether it is a preliminary decree or a final decree, as spelled out in the explanation to Section 2(2), Cr.P.C. (extracted above).

In the result, I am satisfied that the decree obtained by the petitioners can safely be construed as ''final decree,'' capable of being executed under the provision of Order XXI, C.P.C.

The execution petition in question was filed by the petitioners within the period of limitation and Rs. 1,500/- being mortgage amount has also been deposited as early as on 30.5.1977. Therefore, nothing more had to be done by them It is the respondent-judgment debtor who had to receive the amount and execute documents to redeem the mortgage. On his failure, the decree holders are entitled to get the execution of the decree in the manner provided under Order XXI, C.P.C. The decree in question also entitles the petitioners to obtain possession of the mortgaged property.

Therefore, my answer to the first point formulated is: Even in a suit for redemption, the provision of Rule 7 of Order XXXIV, C.P.C. does not bar final decree to be passed by the court. Regarding the second point formulated, it has to be held that the plaintiff is not required to apply for final decree under Rule 8. It is only the defendant who could do so to debar the plaintiff from enforcing the decree for redemption of mortgage.

Based on the above conclusion and on facts and circumstances of this case, the decree in question is held as a ''final decree'' capable of execution. Hence, I pass the following order:

I) The impugned order is unsustainable and it is set aside.

II) Exn. Petition No. 2/93 is restored to the file of the executing court. The executing court is directed to proceed further in the matter and direct the respondent-judgment debtor to redeem the property in terms of the decree by recording discharge in favour of the decree holders.

III) The executing court shall also issue appropriate process for delivery of vacant possession of the property in question to the petitioners-decree holders.

IV) Considering the nature of lis and the period of time spent due to the litigious conduct of the respondent, cost of Rs. 20,000/- is imposed on him.

V) The trial court shall expedite the proceedings and dispose it in accordance with law within an outer period of six months from the date of receipt of a copy of this order.

The revision petition is disposed of in the terms stated above.