Patna High Court
Krishna Chandra Dhar vs Bipin Behari Padhi on 18 December, 1936
Equivalent citations: 174IND. CAS.834, AIR 1938 PATNA 179
JUDGMENT Courtney-Terrell, C.J.
1. This is an appeal from an order of the Subordinate Judge, in an execution case. There was a certain Tauzi No. 924 in the Balasore Collectorate in which separate accounts had been opened and there was a residuary share of 4 as. 7p. and odd and within this residuary share certain judgment-debtors had a 5p. 12kr share. This share had been mortgaged to one Bipin Behari Padhi and Bipin behari Padhi got a mortgage decree against this share for sale. Subsequent to the mortgage, the judgment-debtor No. 5 in the mortgage suit, Krishna Chandra Dhar, had purchased the 5p. 12kr. share and he was accordingly made a defendant with defendants Nos. 1 to 4 and the decree was against him also. The decree only affected him in so far as it was a decree for the sale of the mortgaged property. The 4as. 7p. residuary share in the estate which had included the mortgaged property was sold for arrears of revenue and in the circumstances by reason of Section 54 of the Revenue Sale Law, the sale was subject to the mortgagee's right in respect of the 5p. 12kr. share out of the property sold in the revenue sale. The property sold at the revenue sale was bought by Biswanath Paida on September 14, 1932, and the sale realised more than the amount of the revenue debt with the result that the surplus sale proceeds amounted to Rs. 22,662, The share of the judgment-debtor No. 5 out of this sum amounted to Rs. 2,307-3-10. Now Bipin Behari Padhi before executing his mortgage decree by putting up the mortgaged property to sale made an application for the attachment of the sum of Rs. 2,307-3-10, the shares of the surplus sale proceeds attributable to this particular part of the property and withdrew the amount and then, proceeded in executing to sell the mortgaged property and that sale has since been carried through.
2. Now certain facts are clear and beyond dispute. First of all it is clear that the revenue sale was in circumstances such as that the mortgagee was not deprived of his security, his mortgage was not affected by the revenue sale at all, and, therefore, his security remained undiminished. Bipin Behari, however, justifies his attachment of the surplus sale proceeds amounting to Rs. 2,307-3-10 by virtue of Section 73, Transfer of Property Act, and the learned Subordinate Judge was of opinion, that he had the right by reason of that section not merely to realise his security by means of his mortgage decree for sale, but also that he had the right to proceed against the surplus sale proceeds. Now, Section 73, Transfer of Property Act, creates no new law, but merely gives effect to the old law of substitution. The amendment of the Act which was effected by Act XX of 1929, however, extended the section, so that it dealt not only with the sale of the mortgaged property at a revenue sale but also to the sale of any part thereof or any interest therein.
3. The learned Subordinate Judge has, I fear, been misled by a judgment of this Court in Kapuri Sahu v. Mathura Das 15 P.L.T. 95 : 148 Ind. Cas. 972 : A.I.R. 1934 Pat. 209 : 6 R.P. 524. In that case a portion of the estate only which was subject to the encumbrance was sold for arrears of revenue and the result of the revenue sale was to diminish the security to a certain extent but without extinguishing it altogether; and in those circumstances, this Court applied the principle involved in the amendment and stated that to that extent the mortgage security was not diminished by the effect of the sale. The mortgagee had the right to proceed against the mortgaged property in addition to the right which he had to proceed against the sale proceeds in respect of the portion by which the security had been diminished. That is the only effect of the decision in Kapuri Sahu v Mathura Das 15 P.L.T. 95 : 148 Ind. Cas. 972 : A.I.R. 1934 Pat. 209 : 6 R.P. 524. In this case, however, the mortgagee's rights were not diminished by the sale at all and he had his full right to put the mortgaged property up to sale and to accede to the proposition that he can also proceed against the Bale proceeds would mean that by reason of the revenue sale the security held by the mortgagee was increased. This was clearly not the intention of the Legislature. The only reason for Section 73, was to protect a mortgagee whose security has in fact been diminished. The mortgagee has put the property up for sale and to that extent he has been satisfied. The Ra. 2,307-310 is no part of the property of judgment-debtors Nos. 1 to 4 but is the property of judgment-debtor No. 5 and that money which has been withdrawn by Bipin Behari Padhi must be replaced by him. If he has any further remedy for the balance of the mortgage debt against judgment-debtors Nos. 1 to 4 or indeed against judgment-debtor No. 5 by reason of the decree, then he must take such appropriate steps as he may be advised for recovery of that balance as may be available to him. In the meantime, however, he must re-pay the money which he has withdrawn and the appellant (defendant No. 5) will be able to levy execution for this sum. In my opinion, the appeal succeeds and I would allow it with costs. The respondent will re-pay the said sum of Rs. 2,307-3-10 with interest at the rate of six per cent, from the date of its withdrawal to date of its restoration.
James, J.
4. I agree.