Venkata Reddi vs T.V. Dorasami Pillai

Ramesam, J.—In this case the appellant before us is the 4th defendant in O.S. No. 1 of 1926. The plaintiff obtained a decree in that suit for

Rs. 4,214-0-4 towards peishkush and road cess. In O.S. No. 25-A of 1918, which was a suit for redemption of a mortgage, the defendant

obtained a final decree for Rs. 6,908-14-4. This final decree is a decree directing the sale of the mortgaged property and if there is any deficiency

it should be paid by the plaintiff. In the connected appeal No. 35 of 1931 we have held that that final decree should not have been amended by the

Subordinate Judge of Chittoor and should remain as it was originally passed. The result is the mortgage decree is a decree for an amount which in

the last resort may have to be paid personally by the plaintiff. In the petition against which this C.M.A. arises, E.A. No. 512 of 1928, the 4th

defendant seeks to set off the money decree against him in O.S. No. 1 of 1926 against the mortgage decree obtained by him and to stop all further

proceedings for his arrest in E.P. No. 86 of 1928 in execution of O.S. No. 1 of 1926. The question of law that arises before us is whether the two

decrees can be so set off against each other. Order 21, Rule 20 now enacts:

The provisions contained in Rules 18 and 19 shall apply to decrees for sale in enforcement of a mortgage or charge.

This shows that the mere fact that the decrees in which the set-off is sought are mortgage decrees or one of the two decrees is a mortgage

decree, does not by itself amount to an objection to the set-off claimed. I do not mean to say that there may not be some other objection. Without

any other objection the mere fact that one of the decrees is a mortgage decree is not enough to refuse the set-off. This is the view of the Allahabad

High Court in Nagar Mal v. Ram Chand ILR (1910) 33 All. 240 and this was always the view of the Madras High Court prior to the CPC of

1908. But the decision in Nagar Mal v. Ram Chand ILR (1910) 33 All. 240 had to be considered and was distinguished in Sheo Shankar v.

Chunni Lal ILR (1916) 38 All. 669. In that case the decree is a foreclosure decree which is of a nature giving simply an option to the mortgagor to

redeem and if he does not, his right to redeem is simply foreclosed. It is not a decree to which ordinarily Order 21, Rule 20 applies. Therefore that

case is distinguishable. But I will observe that even in a decree for sale it may be that the property is worth much less than the amount of the decree

and the mortgagor may find it convenient to allow the property to be sold and in such a case if he is not liable for the deficiency it cannot be said

that there is any decree for money against him and it may be proper to describe the decree as one giving an option like the decree for foreclosure.

In Sheo Shankar v. Chunni Lal ILR (1916) 38 All. 669 the person against whom the decree was sought to be set off was the purchaser of a

portion only of the mortgaged property and he was under no personal liability. In such a Case it may be said that he was filling a different character

in the mortgage suit from the one in the decree sought to be set off. In the present case there is a personal decree against the plaintiff. By saying he

is liable for all the deficiency that may remain after the sale, the true character of his liability is known. If the sale realises nothing, he is liable for the

whole amount. In such a case to say that the sale must first be held and only for the balance the judgment-debtor in the mortgage decree is

personally liable is to look at the matter too technically and to cause unnecessary expense to the parties. In such a case it may be very equitable

and just to deduct the amount of the money decree from the mortgage decree and to permit execution for the balance only. The case in The Burma

Oil Company, Ltd. v. Ma Tin ILR (1929) 7 Rang. 505 is also a case of a mortgage decree in which it is not clear that the mortgagor will be liable

personally for the deficiency. In that case the decree at the time the question arose was only against the property and the decree provides for

liberty to apply for a personal decree for the amount of the balance and one does not know how the application may end. On the actual facts I

think that the decisions in The Burma Oil Company, Ltd. v. Ma Tin ILR (1929) 7 Rang. 505 and Shed Shankar v. Chunni Lal ILR (1916) 38 All.

669 are correct; but they do not apply to the facts of the case before us. Therefore in this case there is no objection to the set-off claimed. The set-

off is a satisfaction of the decree to that extent and if the balance after set-off is paid, the whole decree must be regarded as satisfied. We now

direct the Subordinate Judge of Vellore to proceed with the execution of the mortgage decree after setting off the money decree towards it and to

proceed with the execution for the balance. The appellant will be entitled to his costs in appeal. In the Court below each party will bear its own

costs.

Walsh, J.

I agree.

[N.B. - The appellant gives an undertaking not to arrest the respondent in execution of the mortgage but will only proceed against his other

property or set-off.]