Kumar Pashupatinath Malia & ANR Vs.
Deba Prosanna Mukherjee  INSC 29 (4 May 1951)
DAS, SUDHI RANJAN KANIA, HIRALAL J. (CJ)
SASTRI, M. PATANJALI
CITATION: 1951 AIR 447 1951 SCR 572
Bengal Money Lenders Act (X of 1940), ss. 2
(22), 36 (5)--Relief under s. 36--" Suit to which this Act applies
"--Suit in which execution proceeding was pending on Jan. 1,
1939--Execution Case struck off but attachment continuing in force on Jan. 1,
1939--Applicability of Act----Civil Procedure Code (V of 1908), O. 21, r.
57--Striking off execution case keeping attachment in force--Whether terminates
execution proceeding--Sub-mortgagee--Whether assignee of mortgage--Right to
claim protection under s. 36 (5).
A decree on a mortgage was passed in a suit
brought by the representatives in interest of a sub-mortgagee in 1929 and a
personal decree for recovery of the amount remaining due after the sale of the
mortgaged properties was passed in 1935. In 1936 the decree-holder started
execution of the personal decree and attached certain properties of the
judgment-debtor. The decree-holder filed a petition on January 30, 1937,
praying that the execution case "may be struck off for non-prosecution,
keeping the attachment in force" in view of certain negotiations for
amicable settlement, and the court passed an order that the execution case
"is dismissed for non-prosecution, the attachment 573 already effected
continuing". On June 2, 1939, the decree holder filed a petition stating
that the decree had been adjusted and attachment may be withdrawn. The Bengal
Money-lenders Act came into force on September 1, 1940, and on January 2, 1941,
the legal representatives of the judgment-debtor filed a suit under s. 36 of
the Act praying for re-opening the transactions. The question being whether any
proceeding for execution was pending on or after January 1, 1939, within the
meaning of the definition of "a suit to which this Act applies"
contained in s. 2 (22) of the Bengal Money-lenders Act:
Held, per KANIA C.J. and DAs J.--That the
order of January 30, 1937, was in form and in substance a final order of
dismissal of the execution petition of 1936. The attachment continued not
because there was a pending execution proceeding but because a special order
for continuing the attachment was made under O. 21, r. 57 of the Civil Procedure
Code as amended by the Calcutta High Court, and notwithstanding the fact that
the attachment was continued there was no execution proceeding pending on January
1, 1939, and accordingly the decree sought to be reopened was not one passed in
"a suit to which the Act applies" within the meaning of s. 2 (22) of
the Act and the Court had no power to re-open the transactions under s. 36 (2).
The petition of June 2, 1939, was also not a proceeding for execution but a
mere certification by the decree-holder of satisfaction of the decree.
PATANJALI SASTRI J.--The continuance of the
attachment notwithstanding the dismissal of the execution petition, indicated
that the proceeding which had resulted in the attachment was kept alive to be
carried forward later on by sale of the attached property. Attachment itself is
"a proceeding in execution" and so long as it subsists, the
proceeding in execution can well be regarded as pending. In this view a
proceeding in execution was pending on January 1, 1939, and the decree must be
taken to have been passed in "a suit to which this Act applies ". But
inasmuch as the sub-mortgage to the respondent's predecessor in title was bona
fide and he obtained by virtue of the sub-mortgage the right to sue the
original mortgagor for recovery of the mortgage debt, the decree-holder was a
bona fide assignee and his claim for the entire decree debt was protected by s.
36 (5) of the Act.
Renula Bose v, Manmatha Nath Bose (L.R. 72
I.A. 156), Promode Kumar Roy v. Nikhil Bhusan Mukhopadhya (50 C.W.N.
407) and Prom ode Kumar Roy v. Nikhil Bhusan
Mukhopadhya (L.R. 76 I.A. 74) referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 90 of 1950. Appeal against the Judgment and Decree dated the 22nd July 1948
of the High Court of Judicature at Calcutta (K. C.
Mitter, and K.C. Chunder J J) in appeal from
Original Decree No. 49 of 1942 arising 74 574 out of Decree dated the 8th
September 1941 of the Subordinate Judge at Asansole in Suit No. 1 of 1941.
Purusottam Chatterji (S. N. Mukherjee, with
him) for the appellants.
Panchanan Ghose, (P. C. Chatterjee, with him)
for the respondent.
1951. May 4. 'the following judgments were
delivered :-DAS J.--This appeal arises out of a suit filed by the appellants on
January 2, 1941, in the Court of the Subordinate Judge, Asansole. That suit
came to be filed in circumstances which may now be stated shortly.
A suit had been instituted by one Kumar
Dakhineswar Malia against Rameswar Malia, Rani Bhaba Sundari and others for
partition of the Searsole Raj Estate. One Bhagabati Charan Mitra was appointed
receiver of that estate in that suit. On August 10, 1908, the said receiver
with the permission of the Court which had appointed him as receiver granted
two mining leases, each for 999 years--one in respect of 5/16 share of the
Malias in Mouza Monohar Bahal and the other in respect of 230 bighas in village
Marich Kota--to a firm then carrying on business under the name and style of
Laik Banerjee & Company. On the same day the said receiver with like
permission mortgaged these properties to the said firm as security for the due
repayment of the loan of Rs. 100,000 advanced by that firm. The Malias joined
the receiver in executing the aforesaid leases and the mortgage.
As a result of these transactions the firm of
Laik Banerjee & Company became the lessees for 999 years of the two
properties as well as the mortgagee of the lessors' interest in the same. By diverse
processes not necessary to be detailed, the appellants have become the
successors in interest of the mortgagors and the respondent Deva Prasanna
Mukerjee has become the successor in interest of the mortgagee under the
mortgage of August 10, 1908.
575 On March 31, 1922, Deva Prasanna filed
suit No. 78 of 1922 for enforcing the mortgage of 1908. Preliminary decree was
passed in the last mentioned suit on ' July 31, 1928, and a final decree for
sale was made I on February 26, 1929.
In execution of this final decree the
mortgaged properties were sold at a Court i sale and were purchased by Deva
Prasanna for' Rs. 59,000. This sale was confirmed by the Court on June 30,
1931. A large sum remaining still due to Deva Prasanna, he applied for, and on
October 30, 1935, obtained a personal decree for Rs. 1,27,179-0-6 against Raja
Pramatha Nath Malia who had by inheritance acquired the lessors' interest and
become the borrower.
In 1936, Deva Prasanna started execution case
No. 118 of 1936 for execution of the personal decree and attached certain
properties alleging that the same belonged to the Raja. The exact date of the
attachment does not appear from the printed record. The Raja as Sibait of a
certain deity and his two sons, the appellants before us, objected to the
attachment of these properties and filed a claim case.
Negotiations for settlement started and
eventually, on January 30, 1937, a petition (Ex. 2) was filed in the executing
Court stating as follows :"The judgment debtor having made special requests
to the decree-holder for an amicable settlement of the aforesaid execution
case, the decree-holder has agreed to the same.
But some time is required to settle the talks
and all the terms etc. The judgment debtor has paid to the decree holder the costs
of this execution amounting to Rs. 76-14-0, and he having made requests for
this execution case being struck off for the present on keeping the attachment
in force, the decreeholder has agreed to it.
It is, therefore, prayed that under the
circumstances aforesaid, the Court may be pleased to strike off this execution
case keeping the attachment in force." Neither the original nor a
certified copy of the order made on that date by the executing Court on the 576
above petition is forthcoming but the parties have definitely agreed that the
order is substantially and correctly entered in column 20 of Ex. F which is a
certified copy of extract from the Register of applications for executions of
decrees relating to execution Case No. 118 of 1936. The heading of column 20 is
'Date on which execution case was finally disposed of and purport of final
order." The entry in column 20 under that head is:
"D. H. admits receipt of Rs. 76-14/as
costs of this case from the J.D. The execution case is dismissed for non-prosecution--the
attachment already effected in this case continuing.
30th January 1937." The entry under
column 11 of that very exhibit reads as follows :-"Claim case
automatically drops as the execution case is dismissed. It is, therefore,
rejected without any sort of adjudication.
30th January 1937." In May 1937, the
Searsole Raj Estate came under the charge of the Court of Wards. By a Kobala
executed with the permission of the Board of Revenue Raja Pramatha Nath Malia
and his two sons Kumars Pashupati Nath Malia and Kshitipati Nath Malia
represented by Kumar Kshitipati Nath Malia as the Manager of the Searsole Raj
Wards Estate conveyed a property known as Senapati Mahal to Deva Prasanna in
full settlement of his claim under the personal decree against the Raja. By an
agreement of even date, Deva Prasanna agreed to reconvey Senapati Mahal to the
Kumars if he was paid Rs. 90,000/within two years from that date. Senapati
Mahal orginally belonged to the Raja but had been tranSferred by him to his two
sons. A creditor, however, had filed a suit under section 53 of the Transfer of
Property Act challenging that transfer and had actually got a decree declaring
that transfer as fradulent and void as against the creditors of the Raja 577 An
appeal was filed by the Kumars which was pending at the date of the Kobala of
January 4, 1939, and, in the circumstances, it was considered safer to join the
Raja in the last mentioned Kobala in favour of Deva Prasanna.
On June 2, 1939, a petition was filed in the
Court of the Subordinate Judge, Asansole, on behalf of Deva Prasanna as the
decree holder. It was headed "Money Execution Case No. 118 of 1936. The
relevant portions of this petition were as follows;-"That the above
execution case was disposed of on the 30th January 1937 with the attachment of
the properties subsisting; since then the decree put into execution in the
above case has been adjusted after remission of a large amount of interest by
the out and out sale of certain properties by a registered Kobala dated 4th
January 1939 ... .................... ........................So there is no
longer any need of the said attachment remaining subsisting.
It is, therefore, prayed that the attachment
may be withdrawn." On the same day the following order was made on that
petition:-" Heard learned pleaders for the parties. They jointly ask me to
cancel the attachment (existing by special order) in Money Ex. 118 of 1936
though that case was dismissed.
Order The said attachment is cancelled and
the decree in question is recorded as adjusted as stated by learned pleader for
the decree-holder and pleader of the judgment-debtor according to the
adjustment mentioned but not detailed in this petition of to-day. Make
necessary notes and send this petition to the District Record Room." In
the remarks column No. 22 in Ex. F the following entry was made :-"The
said attachment is cancelled and the decree in question is recorded as adjusted
as stated by learned 578 pleader for the D.H. and the pleader of the Judgment
Debtor according to the adjustment mentioned but not detailed in this petition
of to-day. Dated 2nd June 1989." The Raja died in August, 1940, leaving
the two appellants as his sons and legal representatives. The Bengal Money Lenders
Act, 1940 (Bengal Act X of 1940) hereinafter called the Act, came into force on
September 1, 1940. On January 2, 1941, the appellants who, as the legal
representatives of the Raja, became "borrowers" within the meaning of
the Act filed the suit out of which the present appeal has arisen.
The suit was filed by the appellants against
the respondent under section 36 of the Act praying for reopening the transactions
and taking accounts and for release from all liabilities in excess of the
limits specified by law. In short, they asked the Court to give them relief by
exercising the powers given to the Court by section 36 of the Act. There was
also a prayer for reconveyance of the Senapati Mahal.
The respondent filed his written statement
setting up a variety of defences rounded on merits as well as on legal pleas in
bar. On May 8, 1941, the Subordinate Judge settled the issues and fixed June 9,
1941, "for a preliminary hearing of the suit and particularly of such of
the issues as have been based on the pleas in bar." Eventually, the case
was taken up for preliminary hearing on September 4, 1941, and by his judgment
delivered on September 8, 1941, the learned Subordinate Judge dismissed the
suit on issue No. 2 which was as follows:
"Does the plaint disclose a valid cause
of action for the suit ?" The appellants preferred an appeal to the High
Court at Calcutta. Although the High Court (R.C. Mitter and K.C. Chunder JJ.)
did not accept all the reasonings on which the learned Subordinate Judge had
based his decision, they, however, agreed that the appellants could get no
relief as the decrees in suit No. 78 of 1922 could not be reopened, as they
were not passed in 579 "a suit to which this Act applies" and
consequently dismissed the appeal. The appellants have now come up on appeal
before us after having obtained a certificate from the High Court under section
110 of the Code of Civil Procedure.
Learned Advocate appearing in support of this
appeal before us has contended that the High Court was in error in holding that
the decrees in Suit No. 78 of 1922 were not liable to be reopened under the
second proviso to section 36 (1). Learned advocate for the respondent while
joining issue on this point also raised a point which, however, did not find
favour with the High Court, namely, that the respondent as a bona fide assignee
for value of the mortgage debt was protected by sub-section (5) of section 36.
It is quite clear that if either of the two points is decided against the
appellants, this appeal must fail.
The main provisions of section 36 (1)are in
the following terms :-"Notwithstanding anything contained in any law for
the time being in force, if in any suit to which this Act applies, or in any
suit brought by a borrower for relief under this section, whether heard ex parte
or otherwise, the Court has reason to believe that the exercise of one or more
of the powers under this section will give relief to the borrower, it shall
exercise all or any of the following powers as it may consider appropriate
namely, shall (a) reopen any transaction and take an account between the
(b) notwithstanding any agreement, purporting
to close previous dealings and to create new obligations, reopen any account
already taken between the parties;
(c) release the borrower of all liability in
excess of the limits specified in clauses (t) and (2) of section 30;
(d) if anything has been paid or allowed in
account on or after the first day of January, 1939, in respect of the liability
referred to in clause (c), order 580 the lender to repay any sum which the
Court considers to be repayable in respect of such payment or allowance in
account as aforesaid;
(e) set aside either wholly or in part or
revise or alter any security given or agreement made in respect of any loan,
and if the lender has parted with the security, order him to indemnify the
borrower in such manner and to such extent as it may deem just." It will
be noticed (a) that the provisions of this section apply notwithstanding
anything contained in any law for the time being in force, (b) that the powers
conferred on the Court or to be exercised either in any suit to which this Act
applies or in any suit brought by a borrower for relief under the section and
(c) that the Court is called upon to exercise all or any of the powers
conferred on it by the section if the Court has reason to believe that the
exercise of one or more of the powers will give relief to the borrower. In the
present case the borrowers have instituted a substantive suit for relief under
section 36 and, therefore, if there was nothing also in the section and the
Court had the requisite belief, the Court could exercise all or any of the
powers and give relief to the borrowers in terms of the prayers of the plaint.
There are, however, two provisions to sub-section (1) of section 36. The
relevant portion of the second proviso is expressed in the words following:
"Provided that in exercise of these
powers the Court shall not(i) * * * * (ii) do anything which affects any decree
of a Court, other than a decree in a suit to which the Act applies which was
not fully satisfied by the first day of January, 1939, or * * * *" The
proviso makes it quite clear that in exercise of the powers the Court cannot
reopen or otherwise affect a decree of a Court unless such decree is one which
was passed in a suit to which this Act applies and' which was not fully
satisfied by January 1, 1939. In the light of the decision of the Full Bench of
the 581 Calcutta High Court in Mrityunjay Mitra v. Satis Chandra Banerji(1)
which was approved by the Privy Council in Jadu Nath Roy v. Kshitish Chandra
Acharyya(2), it has not been contended, in view of the fact that the personal
decree for the balance remained unsatisfied on January 1, 1939, that the
decrees in Suit No. 78 of 1922 were fully satisfied within the meaning of the
above proviso. Therefore, the only thing that remains to be ascertained is
whether the decrees were passed in "a suit to which this Act
applies." Section 2 (22) of the Act is as follows:
"2. In this Act, unless there is
anything repugnant in the subject or context"(22) "Suit to which this
Act applies "means any suit or proceeding instituted or filed on or after
the 1st day of January, 1939, or pending on that date and includes a proceeding
in execution-(a) for the recovery of a loan advanced before or after the
commencement of this Act;
(b) for the enforcement of any agreement
entered into before or after the commencement of this Act, whether by way of
settlement of account or otherwise, or of any security so taken, in respect of
any loan advanced whether before or after the commencement of this Act; or (c)
for the redemption of any security given before or after the commencement of
this Act in respect of any loan advanced whether before or after the
commencement of this Act." The words "instituted or filed on or after
the 1st day of January, 1939, or pending on that date" have been read and
understood as qualifying the words "any suit or proceeding" in the
beginning of the definition as well as the words "proceeding in
execution" occurring further down: see per Spens C.J. in Bank of' Commerce
Ltd. v. Amulya Krishna (3).
Accordingly, it has (1) I.L.R. 11944) 2Cal.
376; 48 C.W.N. 361.
(2) L.R. 76 I.A. 179 at p. 190.
(3)  F.C.R. 126;A.I.R. 1944 F.C. 18.
582 been held in Ram Kumar De v. Abhoya Pada
Bhattacharjee (1) that where a decree is such that the suit in which it was
passed had terminated before January 1, 1939, and no proceeding in execution
was started or was actually pending on or after that date it is not a decree in
"a suit to which this Act applies"and cannot be reopened. The same
view was upheld by a Special Bench of the Calcutta High Court in Aparna Kumari
v. Girish Chandra (2)which overruled two earlier decisions to the contrary. The
construction put upon section 2 (22)by the Special Bench and the reasons given
by them appear to us to be well-founded. In the case now before us, the Suit
No. 78 of 1922 was instituted and all the three decrees were passed long before
the specified date. The only question that has therefore, to be considered is
whether any proceeding in execution was pending on or after that date. The
answer to this question will depend on the true meaning and effect of the
orders made by the executing Court (i) on January 30, 1937, and (ii) on June 2,
As to (i)--It is not disputed that the order
of January 30, 1937, was made under Order XXI, rule57, as amended by the
Calcutta High Court. Order XXI, rule 57, is expressed in the following terms :"Where
any property has been attached in execution of a decree but by reason of the
decree-holder's default the Court is unable to proceed further with the
application for execution, it shall either dismiss the application or for any
sufficient reason adjourn the proceedings to a future date. Upon the dismissal
of such application the attachment shall cease." The marginal note of the
rule is determination of attachment. The reason why rule 57 was introduced in
the Code of 1908 has been explained by Rank in C.J. in Shibnath Singh Ray v.
Sheikh Saberuddin Ahmad(3) as follows:-(1) 46 C.W.N. 557; A.I.R. 1942 Cal. 441.
(2) 48 C.W.N, 406.
(3) I.L.R. 56 Cal. 416 at pp. 421-422 583
"Rule 57 of Order XXI was a new provision introduced in 1908. It is
evident from the language of the rule itself, and it is still more evident from
the circumstances under which it was passed, that it was intended to provide a
remedy for the grievance or inconvenience which is apt to arise, where, after
an attachment in execution, the application for execution cannot further be
proceeded with by reason of the decree-holder's default. This was, and still
is, a very common case. The decree-holder makes some informal arrangement to
give the judgment-debtor time without obtaining full satisfaction of the decree
;the application for execution is not further prosecuted; it is not withdrawn;
neither party attends. In these circumstances, the object of the rule is to say
that the Court must make either an order for adjournment or an order of
The reason why it was necessary to require
the Court, if it did not adjourn a proceeding to a definite date, to dismiss
the application for execution formally and definitely can be amply illustrated
from the decided cases. In the absence of a definite order of dismissal the
files of the Courts became encumbered with a number of applications for
execution which were water-logged and derelict, and a practice arose whereby
such applications were ordered to be 'struck off.' This was a practice not
justified by the Code and in cases where attachments in execution had already
been entered, the question arose whether the effect of an order 'striking off'
was that the attachment made upon application for execution was itself struck
off or whether it remained notwithstanding such an order. Many other awkward
and important questions arose out of this practice and the object of rule 57
was to ensure that this illogical and inconvenient practice should be stopped.
Applications for execution were to be definitely dismissed if they were not
adjourned to a future date. The object of the last sentence in rule 57 is to
settle the question whether, when the application in execution is dismissed any
attachment made under that application should fall to the ground or should
subsist, and 584 the legislature has provided that it is to fall to the
ground." The new rule thus' introduced left two distinct courses open to
the executing Court in the situation envisaged by the rule. Each course had its
advantage as well as its disadvantage. Thus the adjournment of the execution
proceedings kept the attachment alive without any special direction. While the
adoption of this course helped bona fide arrangement between the decree-holder
and the judgment-debtor as to the time and manner of satisfaction of the decree
it was calculated also to encourage desultory proceedings resulting in
undesirable congestion in the files of the Executing Court by keeping alive so
many execution proceedings. On the other hand, while the dismissal of an
application in the circumstances mentioned in the rule had the merit of
preventing a congestion of the file by finally disposing of the application by
a final order, it was calculated to discourage decreeholders from giving even
reasonable accommodation to the judgment-debtor on account of the destruction
of the attachment which left the judgment-debtor free to deal with the property
to the detriment of the decreeholder after the attachment ceased. It was
evidently with a view to preserve the advantage of a dismissal and at the same
time to avoid the disadvantage of the rigid rule of cesser of the attachment
that the Calcutta High Court amended rule 57 by adding the words "unless
the Court shall make an order to the contrary" at the end of the last
sentence of that rule. The rule thus amended leaves three courses open to the
Executing Court in case it finds it difficult to proceed with the execution
case by reason of the default of the decree-holder. It may (1) adjourn the
proceedings for good reason which will automatically keep the attachment alive
or (2) simply dismiss the application which will automatically destroy the
attachment or (3) dismiss the application but specifically keep alive the
attachment by an express order. The rule, as amended, therefore, contemplates
three distinct forms of order, any one of which may be made by the Court in the
585 circumstances mentioned in the rule. The question before us is as to the
category in which the order made on January 30, 1937, in Execution Case No. 118
of 1936 falls.
It will be recalled that the order of January
30, 1937, was made on a petition (Exhibit 2) filed on that day in Execution
Case No. 118 of 1936. Great stress was laid by the learned advocate for the
appellants on the words "struck off for the present" occurring in the
body of that petition.
It will be noticed that those words formed
part of the request of the judgment debtor which was being recited in the
petition. In the actual prayer portion the decree-holder did not use the words
"for the present" but only asked the Court "to strike off the
execution case keeping the attachment in force." Further, apart from what
the parties wanted, the Court made its intention clear in the very order that
it passed and which is entered in column 20 of Exhibit F. The Court regarded
the willingness of the decree-holder to enter into a long and protracted
negotiation with the judgment-debtor as evidence of unwillingness on the part
of the decree-holder to diligently prosecute the execution proceedings and
accordingly dismissed the execution case for non-prosecution but thought fit to
expressly keep alive the attachment. It is quite obvious that the Court made an
order of the third kind mentioned above. The three forms of order permissible
under rule 57 as amended by the High Court are quite distinct and independent
of each other and there is no room for their overlapping. If the mere
continuation of attachment will automatically convert an express order of
dismissal of the execution application which is a final order into an order of
adjournment which is not a final order then there was no point in the High
Court taking the trouble of amending rule 57 at all. The Court could by simply
adjourning the proceedings automatically continue the attachment without any
express direction in that behalf. The fact that the Court gave an express
direction that the attachment should continue clearly indicates that the 586
Court intended to make a final order of dismissal. Again, the heading of column
20 in Exhibit F clearly indicates that only a final order is to be entered in
that column. The fact that the order was entered in that column affords some
justification for the conclusion that the Court made a final order of
dismissal. That the claim case was automatically dropped is yet another
indication that the execution case was at an end. The fact that the
judgment-debtor had paid the full costs of the execution case is also a feature
which goes to show, to a certain extent at any rate if not decisively, that the
execution proceeding was finally disposed of by the order. The following
endorsement appears on the petition Ex. 2 (a), dated June 2, 1939:
"Heard learned pleaders for the parties.
They jointly ask me to cancel the attachment (existing by special order) in
Money Ex. 118 of 1936 though that case was dismissed." This endorsement
also clearly shows that the Court itself understood that the order that it made
on January 30;
1937, was a final order of dismissal and that
the attachment had been continued by a special order. On a consideration of all
these matters I have not the least doubt in my mind that the order of January
30, 1937, was in form and in substance a final order of dismissal of the
Execution Case No. 118 of 1936 and that the attachment was continued by a
special order such as is contemplated and authorised by the amendment made by
the Calcutta High Court in rule 57. Learned advocate for the appellants
contended that if the execution case came to an end the attachment could not be
left hanging in the air. There is no substance in this argument. Ordinarily, an
attachment is supported by an execution case and if the execution case is
simply dismissed the attachment must fail with it. But rule 57, as amended,
expressly empowers the Court to dismiss an execution application but at the
same time to keep alive the attachment by a special order.
That is what was done in this case. Here the
attachment does not, to use the expression of the learned advocate for the
appellants, 587 hang in the air. It rests upon the solid foundation of a
special order which rule 57, as amended, in terms authorises the Court to make.
The continuance of the attachment, in the circumstances, needs no execution
proceeding to support it.
Take the case of an attachment before
judgment. Under Order XXXVIII, rule 11, where after an order of attachment
before judgment a decree is passed in favour of the plaintiff, it is not
necessary upon an application for execution of such a decree to apply for
re-attachment of the property. It means that the attachment continues and the
judgment debtor cannot deal with the property to the disadvantage of the decree
holder. After the decree is passed, the attachment continues but nobody will
say that although there has been no application for the execution of the decree
at any time by the decree-holder there is, nevertheless, an execution proceeding
pending merely because the attachment continues. Here also the attachment
subsists and rests only upon the terms of Order, XXXVIII rule 11, and without
any proceeding. Such attachment cannot be called a proceeding in execution, for
none was ever initiated after the decree was passed. In my judgment, the order
of January 30, 1937, was a final order which brought the Execution Case No. 118
of 1936, to an and the attachment continued, not because there was a pending
execution proceeding but because a special order was made under Order XXI, rule
57, as amended by the High Court.
As to (ii)--Learned advocate for the
appellants then contended that the petition (Ex. 2a) dated June 2, 1939,
amounted to a proceeding in execution and as that was instituted and was
pending after January 1, 1939 the proceedings came within the definition in
section 2 (22)of "a suit to which this Act applies". I do not think
this argument is sound. The petition (Ex.2a) was not really an application at
all. See Raja Shri Prakash Singh v. The Allahabad Bank Ltd.
(1). In substance, it was nothing but a
certification by the decree-holder of the satisfaction of the decree. The mere
fact (1) 33 C.W.N. 267; A.I.R. 1929 P.C. 19, 588 that the document was in the
form of a petition could not convert what was really the usual certifying
procedure into a proceeding in execution for recovery of a loan or for
enforcement of any agreement. It was purely an intimation given to the Court by
the decree holder that the decree had been satisfied out of Court and the
prayer for withdrawal of the attachment was merely consequential and would
follow as a matter of course on full satisfaction of the decree being recorded.
The order made on that petition also shows that the decree was recorded as
adjusted and the attachment was cancelled. In my judgment, that petition (Ex.
2a) was not an application such as would initiate a proceeding in execution for
any of the purposes mentioned in clauses (a) or (b) or (c) of section 2 (22) of
For reasons stated above, the decrees sought
to be reopened were not decrees made in "a suit to which this Act
applies". Suit No. 78 of 1922 was neither instituted on or after January
1, 1939, nor was it pending on that date, all the three decrees having been
passed long before that date.
Nor was any proceeding in execution such as
is contemplated by section 2 (22) instituted or pending on or after that date.
The Execution Case No. 118 of 1936 was at an end on January 30, 1937, and the
petition of June 2, 1939, was not an application at all and was certainly not a
proceeding in execution within the meaning of section 2 (22) of the Act.
This conclusion is sufficient to dismiss this
appeal and it is not necessary for us to consider the other question raised by
the respondent on the strength of section 36 (5) of the Act and I express no
opinion on that question.
The result is that this appeal must stand
dismissed with costs and I order accordingly.
KANIA C.J.--I agree.
PATANJALI SASTRI J.--The facts bearing on the
dispute in this appeal are fully stated in the judgment of ray brother Das
which I have had the advantage of reading and it is unnecessary to recapitulate
589 The appellant mortgagor seeks in these
proceedings the reliefs provided by the Bengal Money-lenders Act, 1940
(hereinafter referred to as the Act) in respect of a decree debt payable by
him. The respondent who represents the sub-mortgagee decree-holder invokes the
protection of two exemptions contained in the Act: (1) Section 86 (1), proviso
(ii), which exempts inter alia "any decree other than a decree in a suit
to which this Act applies which was not fully satisfied by the first day of
January, 1939". This raises a dispute as to whether the respondent's
decree was passed in a suit to which the Act applies. (2) Section 36 (5) which
exempts "the rights of any assignee or holder for value if the Court is
satisfied that the assignment to him was bona fide and that he had not received
the notice referred to in clause (a) of sub-section (1) of section 28".
This raises the question whether a
sub-mortgagee is an assignee within the meaning of the Act.
On the first question "a suit to which
this Act applies" is defined in section 2 (22) as meaning "any suit
or proceeding instituted or filed on or after the 1st day of January, 1939, or
pending on that date and includes a proceeding in execution for (among other
things) the recovery of a loan advanced before or after the commencement of
this Act." This definition has been construed as requiring that the
"proceeding in execution "referred to therein should be pending on
1st January, 1939, and the question accordingly arises whether the order of the
executing court dated 30th January, 1937, which purported to dismiss the
respondent's execution case for non-prosecution while continuing the attachment
already effected, terminated the proceeding in execution which had resulted in
the attachment. It was said that the order was made in accordance with Order
XXI, rule 57, of the Civil Procedure Code as amended by the Calcutta High Court
and must, therefore, be taken to have been intended to put an end to the
execution proceeding altogether. I am not satisfied that such was the result of
the dismissal. The amendment which added the words "unless the court shall
make an order to the contrary" 200 at the end of the rule envisages a
dismissal of an "application for execution" while at the same time
continuing a subsisting attachment. The dismissal of 30th January, 1987, must,
therefore, be taken to be a dismissal of the execution application then before
the court and cannot be taken to have any wider operation. On the other hand,
the continuance, in express terms, of 'the attachment notwithstanding the
dismissal, indicates that the proceeding which had resulted in the attachment
was kept alive to be carried forward later on by sale of the attached property.
Attachment itself is a "proceeding in
execution" and, so long. as it subsists, the proceeding in execution can
well be regarded as pending. In re Clagett's Estate; Fordham v. Clagett (1)
Jessel M.R. declared that "a pending matter in any court of justice means
one in which some proceeding may still be taken". The attachment was
cancelled by the court only on 2nd June, 1939, when the decree in question was
recorded as adjusted and then, and not before, could execution of the decree be
properly considered to have terminated. In this view, a "proceeding in
execution" was pending on the 1st day of January, 1939, and the
respondent's decree must be taken to have been passed "in a suit to which
this Act applies' ', with the result that the respondent's claim to exemption
under proviso (ii) to sub-section (1) of section 36 of the Act must fail.
I am, however, of opinion that the
respondent's claim to recover his decree debt is protected under section 36
There is no question here but that the sub mortgage
to the respondent's predecessor in title was bona fide. Nor could he have
received the notice referred to in clause (a) of' sub-section (1) of section 28
as the transaction took place long before the Act was passed. It is not
disputed that section 36 (5) applies to pre-Act debts. [See Renula Bose v. Manmatha
Nath Bose(2)]. The only question, therefore, is whether the respondent as
sub-mortgagee is an assignee within the meaning of sub-section (5) of section
36. The learned (1) 20 Ch. D. 687. (2) L.R. 72 I.A. 156, 591 Judges in the
court below held that he was not, following an earlier decision of their own
court in Promode Kumar Roy v. Nikhil Bhusan Mukhopadhya(1). That decision,
however, was reversed by the Privy Council in Promode Kumar Roy v. Nikhil
Bhusan Mukhopadhya(2) where their Lordships dealt with the question now before
us in the following terms :"It was suggested, in the judgment of Mitter J.
(with which Waight J. agreed), and in the argument for the respondents that if
a sub-mortgagee were an `assignee' within section 36, sub-section (5), of the
Act., certain difficulties and anomalies would result. Their Lordships cannot
agree with this suggestion. They express no view as to the position which
arises if the sub-mortgage contains only a charge on the original mortgage
debt, but when it contains an assignment of that debt, and of all the rights of
the mortgagee, the position appears to be free from difficulty.
Relief can be given to the original mortgagor
as against the original mortgagee under section 36, but such relief must not
affect the rights of the assignee by way of sub-mortgage. To take an imaginary
case by way of illustration, let it be assumed that the amount due on the
original mortgage, for principal and interest at the original rate, is Rs. 1,000,
and the sum due on the sub-mortgage by assignment, for principal and interest
at the original rate, is Rs. 500.
Let it further be assumed that if relief
could be given, and were given, under section 36 as against both mortgagee and
sub-mortgagee, the sums due to them respectively would be Rs. 800 and Rs. 400.
By reason of sub-section (5), the sub mortgagee's rights cannot be affected. He
can therefore, as assignee of the mortgage debt: claim his full Rs. 500, as
against both mortgagor and original mortgagee. But if the court gives the
mortgagor relief as against the original mortgagee, the mortgagor will only be
liable to pay to the original mortgagee Rs. 300, the balance of the reduced
debt after paying the sub-mortgagee in full.
As to contention (b), it is impossible to
read subsection (5) of section 36 as referring only to an assignee (1) 50
C.W.N. 407. (2) L.R. 76 I.A. 74.
592 of a mortgage decree. The words and that
he had not received the notice referred to in clause (a)of subsection (1) of
section 28 make it plain that an assignee of a mortgage debt is within the
sub-section, since section 28, subsection (1) is concerned only with assignment
of debts" (pp.
The sub-mortgage here in question also
contains an assignment of the debt due under the original mortgage debt and of
"the entire interest" of the original mortgagee.
After reciting their original mortgage, the
mortgagees proceed to state in the deed of sub-mortgage:
"We mortgage all that is at present due
and that will in future become due to us, the first, second, third and fourth
parties, on account of the said one lakh of rupees together with interest and
the entire interest under the mortgage taken by us on the basis of the said
Indenture in respect of five annas share of the said Niskar Mouza Monoharbahal
and in respect of sixteen annas of the surface and underground rights in the
said Mouza Marichkota and we make over the said Deed of Indenture to you".
The decision referred to above is, therefore,
directly in point and rules the present case.
It was suggested that the said decision was
inconsistent with the earlier decisions of the same tribunal in Ram Kinkar
Banerjee v. Satya Charan Srimani(1) and Jagadamba Loan Co. v. Raja Shiba Prasad
Singh(2). Stress was laid upon the expression "all the rights of the
mortgagee" used by their Lordships in the passage quoted above, and it was
pointed out that in the earlier decisions they held that in India a legal
interest remained in the mortgagor even when the mortgage was in the form of an
English mortgage, and that the interest taken by the mortgagee was not an
absolute interest. This proposition, it was said, implied that in a
sub-mortgage all the rights of the original mortgagee are not assigned to the
sub-mortgagee and that the mortgagee still retains a legal (1) 64 I.A. 50. (2)
68 I.A. 67.
593 interest in the original mortgage. This
is a rather superficial view of the matter. In the earlier cases their
Lordships were considering the quantum of interest transferred by a mortgagor
to a mortgagee in a mortgage of leasehold interest for the purpose of
determining whether or not there was privity of estate between the landlord and
the mortgagee. If the mortgage could operate as an assignment of the entire
interest of the mortgagor in the lease, the mortgagee would be liable by
privity of estate for the burdens of the lease. If on the other hand, it
operated only as a partial assignment of the mortgagor's interest, no such
result would follow. It was in determining that issue that their Lordships held
that no privity of estate arose in India because a legal interest remained in
the mortgagor and the interest taken by the mortgagee was not an absolute
interest. These cases had no bearing on the question, which arose in Promode
Kumar Roy v. Nikhil Bhusan Mukhopadhya (1) and arises in the present case, as
to whether a sub-mortgagee becomes an assignee of the mortgage debt and of the
mortgagee's right to recover the debt from the original mortgagor. The Act
affords relief to certain classes of debtors by curtailing pro tanto the rights
of the creditors, subject to certain exceptions in regard to "assignments
of loans". In such a context the only relevant consideration could be
whether the assignment is such as to establish a debtor and creditor relation
between the assignee and the debtor so as to bring the case within the purview
of the Act. If the sub-mortgagee obtained, by virtue of the submortgage, the
right to sue the original mortgagor for recovery of the mortgage debt, that
would seem sufficient to make him an assignee within the meaning of the Act. It
was from this point of view that the question as to the nature of the right
transferred to a sub-mortgagee under his sub-mortgage was considered in Promode
Kumar Roy v. Nikhil Bhusan Mukhopadhya(1) as it has to be considered in the
present case, and the reference to the sub-mortgage containing an assignment of
all the rights (1) 76 I,A. 74.
594 of the mortgagee must, in that context,
be understood with reference to the sufficiency of the right assigned to enable
the sub-mortgagee to sue the original mortgagor in his own right, so as to
bring the relevant provisions of the Act into play as between them. The
reservation made by their Lordships in the case of a sub-mortgage containing
only a charge on the original mortgage is significant and supports this view. I
do not consider, therefore, that there is any inconsistency between Promode
Kumar Roy v. Nikhil Bhusan Mukhopadhya(1) and the earlier decisions, and even
if there be any such inconsistency it has no relevance to the present case.
In the result I agree that the appeal fails
and should be dismissed with costs.
Agent for the appellants: R.R. Biswas.
Agent for the respondent: Sukumar Ghose.