Lachman Dusadh and Others vs Suchit Rai and Another

Fazl Ali, C.J.—The question which this Bench is required to decide in this appeal is whether a judgment-debtor under a mortgage decree who is also an agricultural debtor within the meaning of the expression as used in the Bihar Money-Lenders (Regulation of Transactions) Act, 1939, is entitled to such relief as is afforded by Section is of the Act. This question arises upon the following facts: The respondents having obtained a mortgage decree against the appellants for the sale of the mortgaged property are proceeding with the execution of the decree. It has been found by both the Courts below that the appellant-judgment-debtors are agricultural debtors and that they hold only 2 bighas 15 kathas 16 dhurs of land (which is equivalent to about 2 acres). The mortgage was in respect of 1 bigha 18 kathas 9 dhurs only and the decree under execution is for the sale of this property. Out of the balance, an area of 14 kathas 18 dhurs has been given in usufructuary mortgage by the appellants to another creditor and only 3 kathas 18 dhurs remain in their khas possession. The only point which the appellants have put forward in the Courts below and in this Court is that u/s 15, Clause (2) of the Money Lenders Act, they are entitled to the exemption of one acre of land from the sale which is going to be held in pursuance of the decree. Both the Courts below have held that the appellants are not entitled to this exemption and hence they have come up in second appeal to this Court. Section 15 reads as follows:

(1)Notwithstanding anything to the contrary contained in any other law or in anything having the foroe of law, where a decree is passed before or after the commencement of this Act for the payment by an agricultural debtor of the amount due on any loan advanced to him by a money-lender, the Court executing the decree-

(i) shall exempt from sale one acre of the land oomprised in the holding or holdings of the judgment-debtor, if the area of such land does not exceed three acres; and

(ii) shall exempt one acre, and may exempt any further portion of such land if the area of such land exceeds three acres ; provided that the total area exempted from the sale does not exceed one-third of the total area of such land.

(2) For the purposes of this Section "agricultural debtor" means a raiyat the total area of whose holding or holdings does not exceed such area as the Provincial Government may fix for the district or part of the district in which such holding or holdings are situate.

It is contended that the object of the Section is to afford protection to agricultural debtors and the Section must be construed with reference to this object as liberally as possible. The rule of "beneficial construction" upon which reliance is placed is enunciated as follows in Maxwell on the Interpretation of Statutes, Edn. 8, at p. 61:

It is said to be the duty of the Judge to make such construction of a statute as shall suppress the mischief and advance the remedy. Even where the usual meaning of the language falls short of the whole object of the Legislature, a more extended meaning may be attributed to the words, if they are fairly susceptible of it.

The Courts below have in dealing with the matter relied on certain cases decided u/s 60, Civil P. C. This Section provides among other things that the houses and other buildings belonging to an agriculturist and occupied by him shall not be liable to attachment and sale in execution of a decree. In the cases upon which the Courts below have relied it has been held that if a house occupied by an agriculturist is specifically mortgaged, it is not protected from sale in execution of a decree upon the mortgage. The leading cases on the subject are Bhagwandas v. Hathibhai 4 Bom. 25, Bhola Nath v. Mt. Kishori 34 All. 25 and Jwala Prasad Vs. Sheikh Chuttan and Another, . In the last mentioned case there was a difference of opinion between Ryves and Mukerji JJ. and the case was referred to Walsh J. who agreed with the opinion of Mukerji J. and held that proviso (c) to Section 60 did not apply to sales in pursuance of mortgage decrees directing sale of the mortgaged property. In dealing with the matter, Walsh J. made the following observations among others:

I am doubtful whether according to the strictly juristic view, the sale of mortgaged property under a mortgagee''s decree for sale is really "execution" at all. It is satisfaction of the decree. When a creditor obtains a decree for a debt, and the debtor pays--after the decree, the decree is satisfied, not executed. If the debtor does not pay, the law executes the decree, if it can, by realising the amount out of any available property of the debtor which it attaches and sells. In the case of a mortgage decree, the property ordered to be sold is not something which is compulsorily substituted for the obligation contained in the contract and carried forward into the decree. It is the obligation itself. The sale is the satisfaction of the contract and of the decree. Sir Comer Petheram took this view in the course of a judgment in Maseyk v. Steel & Co. 14 Cal. 661 where he spoke of the decree being one ''for specific performance of the contract between the mortgagor and the mortgagee.''

Now, whether one agrees with the whole of Walsh J.''s observations or not the fact remains that there is a clear distinction between an ordinary money decree and a mortgage decree. A money decree is a decree for the payment of money in which generally the mode of execution is not provided for. A mortgage decree is in the majority of cases a decree for the sale of the mortgaged property. The decree has necessarily to be so framed because u/s 58 a mortgage is the transfer of an interest in a specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, etc., etc.

There being this essential difference between a money decree and a mortgage decree it may be assumed that the Legislature was fully cognizant of this difference when framing the Money-Lenders Act. That being so, one must attach some importance to the following expression used in the section:

Where a decree is passed before or after the commencement of this Act for the payment by an agricultural debtor of the amount due on any loan advanced to him.

The Section thus refers in so many words only to a decree for the payment of money. It does not refer to a decree for the sale of a property. Now in the present case the decree which is being executed is the final mortgage decree which is essentially a decree for the sale of the mortgaged property. It is true that a preliminary mortgage decree has reference to payment of money within a certain period but when that period expires and a final decree is passed, such a decree is passed as provided in Sub-rule (3) of Order 34, Rule 5, which is to the following effect:

Where payment in accordance with Sub-rule (1) has not been made, the Court shall, on application made by the plaintiff in this behalf, pass a final decree e directing that the mortgaged property or a sufficient part thereof be sold and that the proceeds of the sale be dealt with in the manner provided in Sub-rule (1) of Rule 4.

It is to be noted that there is no prohibition in the Act against the absolate sale or mortgage of land by an agriculturist. The question which we have to consider is whether notwithstanding the fact that there is no such prohibition, the Legislature intended that if an agriculturist had mortgaged his land, then notwithstanding the fact that he had "transferred an interest in the land" in its entirety he could turn round and claim exemption of a part before the executing Court after the mortgage decree was put into execution. It seems to me that if this had been the intention of the Legislature, that intention was capable of being expressed in much clearer language. There is in Section 15 no reference to the fact that the provisions of that Section were meant to override any contract though such language has been used in a number of other sections, for example, Sections 5, 6, 7 and 11. But assuming that no reference to any contract was necessary inasmuch as a contract would cease to exist after the decree had been passed, the fact remains that a final mortgage decree is (not a decree for payment of money but it is a decree for the sale of specific property. There being no reference to such a decree in Section 15, I find myself unable to hold that the intention of the Legislature was that even when there was a mortgage decree for the sale of the property, an agricultural debtor was entitled to claim exemption under the provisions of this Act. Under the ordinary law, a mortgagee is entitled to enforce his decree to its fullest extent and I have no doubt that if this right was intended to be overridden to any extent, the intention of the Legislature would have been expressed t in clear language. Upon the section, as it is worded, I do not think that we shall be justified in holding that the rights of the mortgagees-decree-holders were intended to be curtailed to any extent by Section 15.

In my opinion, the order passed by the Courts below is correct and I would dismiss this appeal, but in the circumstances of the case I would make no order as to costs.

Chatterji, J.

I agree.

Sinha, J.

I agree. I wish to make a few observations of my own in support of the conclusion just arrived at by my Lord the Chief Justice. It was suggested at the Bar that Section 15, Money Lenders Act, applies also to transactions of money lendnig secured on certain immovable property.

In other words, that even a mortgage transaction is affected by the exemption granted in Section 15 of the Act; but if it were so, the Legislature would have expressed itself more specifically as it has done in Sections 5 and 11, Money Lenders Act. In those Sections they have given clear indication that even loans secured by mort-gage of certain immovable property may be subject to the limitations imposed by those sections. No such indication has been given in Section 15.

In my opinion, therefore, that is another reason for holding that a transaction like a simple mortgage resulting in a decree for sale is not affected by the provisions of Section 15 of the Act. The Courts below seem to think that such a privilege can be waived by the borrower, but in my opinion, there is no question of any waiver, because waiver presupposes the existence of a privilege granted in favour pf the debtor which he is by law entitled to waive against himself, but as Section 15 in terms has not granted any privilege to the borrower, there is no question of waiver arising in the case.

With these observations I agree to the order proposed by my Lord the Chief Justice.