Calcutta High Court
Kartick Chandra Mullick vs Parshottam Das Goel And Anr. on 1 April, 1987
Equivalent citations: AIR1988CAL247, 92CWN63, AIR 1988 CALCUTTA 247, (1988) 92 CAL WN 63, (1987) 1 CAL HN 402, (1987) 1 CALLT 312
JUDGMENT Sankari Prasad Das Ghosh, J.
1. This appeal is directed against the passing of a final decree in a suit for foreclosure. The plaintiff-respondent No. 1 filed a suit in the City Civil Court, Calcutta, against the appellant and one Sri R. K. Mitra, appointed as Receiver in Partition and Administration Suit No. 2729 of 1968 pending in this Court, for passing of a preliminary decree for foreclosure under Order 34, Rule 2 of the Civil P. C. on the allegation that by a registered deed of mortgage by way of conditional sale dt. 6-6-68, the appellant (defendant No. 1) for a consideration of a sum of Rs. 4,000/- ostensibly sold his undivided 1/9th share in premises No. 155-B, Mahatma Gandhi Road, Calcutta, (hereinafter called 'the suit-property') to the plaintiff on condition that in default of payment of the principal sum of Rs. 4,000/- with interest at the rate of 9% per annum and all interest and expenses incurred by the plaintiff in respect of his claim under the deed of mortgage on or before 5-9-69, the sale should become absolute. On alleging that the appellant has failed to make any payment of the principal-amount together with interest and other incidental charges by 5-9-69 and on alleging further that by an order passed by this Court on 19-7-72, in the Partition and Administration Suit No. 2729 of 1968, the plaintiff was made a quasi-party to the partition proceeding in that suit, the respondent 1 (plaintiff) prayed for passing of a preliminary decree for foreclosure against the appellant and the respondent No. 2, the Receiver appointed in the petition and administration suit.
2. The defence of the appellant was that the transaction was a mortgage, that the defendant had received only Rs. 2,000/- and not Rs. 4,000/- on executing the deed and that under a subsequent agreement between the parties, the appellant was to repay to the respondent 1 his legitimate dues under the indenture out of the sale-proceeds to be received by him after sale of premises No. 36, Acharya Jagadish Chandra Bose Road, Calcutta, in connection with the Partition and Administration Suit No. 2729 of 1968 pending in this Court.
3. At the time of trial of the suit for foreclosure, the plaintiff examined himself as P.W. 1 and the appellant examined himself as D.W. 1. Considering the evidences of these witnesses and the registered deed of mortgage, Ext. 1, a preliminary decree for foreclosure was passed by the learned Judge, 8th Bench, City Civil Court, Calcutta, directing the appellant and the respondent 2 to pay to the respondent No. 1 the sum of Rs. 4,0007- in principal and a sum of Rs. 33167- for interest on the principal sum. It was stated in the preliminary decree for foreclosure that the decretal amount would carry interest at the rate of 6% per annum from the date of the decree till realisation. It was further stated in the preliminary decree, by which the suit was decreed on contest with cost against the appellant and ex parte against the rest without cost, that the defendants should pay the decretal amount into Court on or before 31-12-82, failing which the respondent No. 1 could apply for passing of a final decree according to law. On 16-2-83, the respondent No. 1 filed a petition under Order 34, Rule 3(2), C.P.C. for passing of a final decree as the defendants did not pay the decretal amount, as directed in the preliminary decree. On 4-8-83, the appellant filed a petition of objection regarding passing of a final decree. In that petition of objection the appellant gave out the grounds for his inability to pay the decretal amount within the time mentioned in the preliminary decree and prayed for granting him at least six months' time or, in the alternative, for allowing him easy yearly instalments to pay off the decretal dues under the preliminary decree. By Order No. 40 dt. 4-8-83, the learned Judge extended the time till 16-11-83 for payment of the decretal dues, on being satisfied that sufficient cause was shown. Subsequently, the defendant 1 again defaulted in making any payment on 16-11-83 or thereafter, as a result of which a final decree for foreclosure was passed by the learned Judge of the City Civil Court, Calcutta on 16-2-84. Being dissatisfied, the present appeal has been filed by the appellant.
4. During the pendency of this appeal, the appellant filed an application under Section 36 of the Bengal Money Lenders Act, 1940 (hereinafter referred to as "the Act" for the sake of convenience). By that petition the appellant prayed for reopening of the preliminary decree and the ex parte final decree and passing of a new decree to e nable the appellant to pay the whole amount of the new decree in twenty equal annual instalments or in such number of instalments as may be deemed fit and proper. There are also some ancillary prayers in that petition under Section 36 of the Act. Mr. Banerjee, the learned Advocate for the appellant, contended that in passing the preliminary decree, the learned Judge acted irregularly in allowing interest on the decretal amount, meaning the principal sum of Rs. 4,000/-, the interest of Rs. 3316/-, allowed by the preliminary decree on the principal sum and the costs of the suit to the tune of Rs. 1441.54P, as mentioned in the preliminary decree. The contention of Mr. Banerjee is that when under Section 31 of the Act no Court can allow any interest exceeding 6% per annum on the principal sum adjudged, the learned Judge erred in allowing interest on the interest of Rs. 3316/- as well as on the cost of the suit. No doubt, these are valid contentions on the basis of Section 31 of the Act. Even then, no appeal was preferred by the appellant against the preliminary decree for foreclosure. In view of the Division Bench decision of this Court in the case of Devraj Rayv. Lalji Morarji Ranchord, (1944) 48 Cal WN 200, the preliminary or the final decree for foreclosure cannot be reopened for contravention of Section 31 of the Act. Where a decree does not contravene the provisions of Cls. (1) and (2) of Section 30 of the Act, the fact that it contravenes Section 31 of the Act does not entitle the appellant to have the decree reop.ened under Section 36 of the Act. In other words, though there has been contravention of Section 31 of the Act by passing the direction in the preliminary decree for payment of interest on the decretal amount, meaning thereby the principal sum of Rs. 4,000/-, the interest of Rs. 3316/- and the cost of the suit, no relief can be granted to the appellant under Section 36 of the Act as there has been no contravention of the provisions in any of the clauses in Section 30 of the Act.
5. Mr. Mallick, the learned Advocate for the respondent No. 1, raised the bar of limitation by referring to Art. 137 of the Limitation Act, 1963. His contention was that the application under Section 36 of the Act was barred by limitation, as it was not filed within three years from the date when the right to apply under Section 36 of the Act accrued to the appellant. It is nodoubt true that on the basis of the decision of the Supreme Court in the case of Kerala State Electricity Board v. Rule P. Kunhaliumma, , the residuary Art. 137 of the Limitation Act, 1963 will apply to any petition or application filed under any Act in a Civil Court and is not to be confined to applications contemplated by or under the Code of Civil Procedure. Even then, a perusal of Sections 34 and 36 of the Act, will show that the right of a person to apply under these sections is a continuing right available to a person even in execution case and hence, the application under Section 36 of the Act filed by the appellant on 7-8-86, cannot be barred by limitation under Art. 137 of the Limitation Act.
6. Though this would have been sufficient to dispose of the appeal as the petition under Section 36 of the Act was to be rejected, on the ground stated above, we decided to hear the parties on another ground, not made out specifically by the appellant in the Memorandum of Appeal. That ground was whether the registered deed, Ext. 1, was actually a deed of mortgage by conditional sale with a condition for reconveyance or an English Mortgage. If the deed dt. 6-6-68, Ext. 1, was actually an English mortgage, there could not be a suit for foreclosure of the right of redemption, in view of the provision in Section 67 of the T. P. Act. Both the parties were heard in the matter. After hearing the parties in the matter, we are of the opinion that the deed, Ext. 1, is a deed of English mortgage and not a deed of mortgage by conditional sale. In the deed itself, it is not stated that it was a deed of mortgage by conditional sale. It is not the case of any of the parties that the indenture was a deed of out-and-out sale with a condition of repurchase. The deed cannot be a deed of out-and-out sale with a condition of repurchase, as there is relationship of debtor and creditor and the payment of the principal sum was secured by charge on the property. The appellant in his written statement denied that it was a deed of mortgage by conditional sale, though he also stated that the deed could not but be treated as a mortgage. A perusal of the written statement gives the impression that the appellant was not sure as to what type of mortgage was created by the deed, Ext. 1. In his evidence, D.W. 1, however, stated that he executed the deed of mortgage by conditional sale on receiving Rs. 4,000/- from the respondent 1. In fact, even in the petition under Section 36 of the Act, the appellant treated the deed as deed of mortgage by conditional sale. The defendant 1 (appellant) had thus, on the one hand, denied that it was a deed of mortgage by conditional sale and had, on the other hand, admitted it that it was such a deed. Be that as it may, we wanted to hear the parties as to whether it was a deed of mortgage by conditional sale or a deed of English mortgage in face of the evidences of P.W. 1, the respondent 1, that at the material time the value of the 1/9th share in the property was much more than Rs. 4,000/-. The question as to whether the deed, Ext. 1, is a deed or mortgage by conditional sale or a deed of English mortgage is one of the intentions of the parties to be gathered from the language of the deed, interpreted in the light of the surrounding circumstances. The condition of repurchase, embodied in the deed, goes to show that it was a deed of mortgage by conditional sale. There is, however, no mention of a deed of mortgage by conditionalsale in the deed itself. There is no provision in the deed that if the appellant fails to pay to the plaintiff the principal sum together with interest at the rate of 9% per annum as well as all costs and expenses on or before 5-9-69, the sale shall become absolute. The recitals in the deed go to show that by executing the deed, the appellant granted, conveyed, transferred, assured and assigned unto the purchaser (the plaintiff) his undivided l/9th share in the land and pucca brick-built house in the suit-property together with all deeds and documents, relating to the property. The deed further showed that the property was granted, transferred, conveyed, assigned and assured to the use of the purchaser absolutely and for ever and that the purchaser should thereafter peaceably and quietly enjoy and possess the property. These recitals in the deed go to show that it was a deed of English mortgage. Section 58(e) of the T. P. Act defines English mortgage. The transfer under an English mortgage would be absolute but for the provision for retransfer, without affecting the substantial right of the mortgagor dealt with in Section 58(a) and Section 60 of the T. P. Act. A perusal of the deed, using the expression "grant, convey, transfer, assure and assign unto the purchaser" shows that it was a case of transfer of undivided 1/9th share in the suit-property absolutely to the respondent 1, subject to the proviso for retransfer to the mortgagor upon payment of the mortgage-money as accrued and the right of redemption of the mortgagor. There are three essential conditions of an English mortgage. These are (1) that the mortgagor should bind himself to repay the mortgage-money on a certain date, (2) that the property mortgaged should be transferred absolutely to the mortgagee and (3) that the absolute transfer should be made subject to a proviso that the mortgagee will reconvey the property to the mortgagor upon payment by him of the mortgage-money on the day on which the mortgagor bound himself to repay the money with interest. All these conditions are satisfied on a scrutiny of the deed. It is to be stated, in this connection, that the evidence regarding possession do not throw much light. It is in the evidence of P.W. 1, that he (the plaintiff) has his business at 155B, Mahatma Gandhi Road, Calcutta, since about 1966 or 1967 and that the appellant resides in the front portion of the building. Though P.W. 1 stated that the appellant was the landlord of the premises, D.W. 1 stated that the tenants in premises No. 155B, Mahatma Gandhi Road, Calcutta, were not his tenants. Even according to the plaint the Receiver (the respondent 2), is in possession of the suit property. The evidence of D.W. 1 are that the Receiver was appointed on or about the time of the institution of the partition suit in this Court. The Partition and Administration suit was filed in 1968, the year of execution of the deed, Ext. 1, in which it was stated that the purchaser (the respondent No. 1) should and might at all times thereafter peaceably and quietly enjoy and possess the land. In these circumstances, we are to conclude that possession of the undivided 1/9th share in the suit property was made over to the respondent 1 at the time of execution of the deed, Ext. 1, and that thereafter, the Receiver (the respondent 2) was in possession of the property on being appointed as such in the Partition and Administration Suit No. 2729 of 1968. In these circumstances, when there was an absolute transfer of the undivided l/9th share in the suit-property by the appellant to the respondent No. 1 subject to the provision for retransfer and subject, of course, to the right of the mortgagor to redeem the mortgage, the transaction under the deed, Ext. 1, was an English mortgage and not a mortgage by conditional sale, under which the mortgagor was to sell the mortgaged-property ostensibly and not absolutely.
7. Though the transaction under the deed, Ext. 1, is an English mortgage and though a decree for foreclosure is incompetent under Section 67 of the T. P. Act in the case of an English mortgage, we are unable to set aside the final decree, keeping intact the preliminary decree for foreclosure, against which no appeal was preferred by the appellant. If the final decree for foreclosure is set aside, keeping in fact the preliminary decree for foreclosure, the respondent No. 1 will again be at liberty to apply for a final decree in the Court below and the Court below cannot refuse the prayer of the respondent No. 1, for passing of a final decree in that eventuality as, under the provisions of Order 34, Rule 3(2) of the Civil P. C., the Court shall, on application made by the plaintiff in this behalf for non-payment of the decretal dues by the appellant, pass a final decree for foreclosure. The setting aside of the final decree for foreclosure, on keeping intact the preliminary decree, will lead to absurd result. We cannot also interfere with the preliminary decree for foreclosure even on the basis of Order 41, Rule 33, C.P.C., in spite of violation of the provision in Order 34, Rule 1.1, C.P.C. what to speak of Section 31 of the Act, when no appeal had been preferred by the appellant against the preliminary decree for foreclosure. When this was a case of English mortgage, the respondent 1 had the right to apply for passing of a decree for sale of the mortgaged-property. Though this was not done by the respondent No. 1 and though a decree for foreclosure cannot be passed in the case of an English mortgage, for reasons already stated, we are unable to redress the plight of the appellant when no appeal was preferred by the appellant against the preliminary decree for foreclosure.
8. In the result, the appeal fails and the petition under Section 36 of the Act is rejected.
9. The appeal is dismissed. In the facts and circumstances of the appeal, the parties to bear their own cost of this appeal.
10. On the verbal prayer of the learned Advocate for the appellant, let the operation of this order be stayed for a period of six weeks.
L.M. Ghosh, J.
11. I agree.