Jose Vs. Federal Bank Ltd. & Ors  Insc 52 (2 February 2006)
Pasayat & Tarun Chatterjee
CIVIL APPEAL NOS. 1490-91/2000 ARIJIT PASAYAT, J.
in these appeals is to the judgment of a Division Bench of the Kerala High Court.
The Civil Revision petitions in proceedings under Order 34 Rule 5 of the Code
of Civil Procedure, 1908 (in short the 'Code') were dismissed by a common
judgment dated 2.6.1997.
position, which is practically undisputed need to be noted in brief.
decrees for sale in the above cases were passed on 8.2.1989 and 30.7.1985
respectively. At the time of passing the decrees in the case, amendments as
applicable to the State of Kerala were in
force. The amendment stood repealed by virtue of Section 97(1) of the Code of
Civil Procedure (Amendment) Act, 1976 (Act 104 of 1976)(in short the 'Amendment
Act') which came into force on 1.2.1977.
amendment effected under Section 122 of the Code, by the High Court of Kerala,
Order 34 of the Code as existed before 1.2.1977 was incorporated in the Code
with effect from 20.11.1990. It is thus clear that on the dates when decrees
were passed in the case, the Civil Procedure Code was in force in the State of Kerala.
prayer for redemption in terms of Order 34 Rule 5 of the Code as made by the
judgment debtors was rejected.
High Court held that the petitions under Order 34 Rule 5 were not maintainable
on two grounds namely.
Under Section 60
of the Transfer of Property Act, 1882 (in short the 'Act') right to redemption
continues to inhere in a mortgage only until it is extinguished by act of
parties or by a decree of Court. By the passing of a decree, the mortgage
security merges in the decree and is replaced by the security of the order of
sale. Accordingly the right of redemption is extinguished by the final decree
under Order 34 Rule 5(3) of Code. Reliance was placed on a decision of the Patna
High Court in Sheo Narain Sah v. Mt. Deolchan Kuer (AIR 1943 Patna 208).
Though a right
under Order 34 Rule 5 was available under the Code, after the substitution of
Order XXXIV by the Kerala amendment there is no such right available to the
counsel for the appellants submitted that the High Court's view is clearly
untenable. First, the Kerala amendment became non-est because of the Amendment
the view expressed by the Patna High Court was not approved by this Court.
counsel for the respondents on the other hand submitted that it was commonly
believed that the Kerala amendment introduced on 15.1.1974 was in force at all
times and the fresh amendment done in November, 1990 was just by way of
clarification that it was effective till the amendment.
Court has held that by the passing of the decree for sale, the mortgage debt is
merged into the decree and thereafter right to redemption is not available. In
taking that view, the High Court has relied on the decision of the Patna High
Court in Sheo Narayan's case (supra).
view taken by the Patna High Court was held to be not the correct view as
observed by this Court in Mhadagonda Ramgonda Patil and Ors. v. Shripal Balwant
Rainade & Ors. (1988 (3) SCC 298). It was held that unless and until a
decree of order debarring the mortgagor from redeeming the property is passed
under Sub Rule 3(a) of Rule 8 of Order XXXIV the right of redemption is
available. It was inter alia held as follows:
"It is thus manifestly clear
that the right of redemption will be extinguished
by the act of the parties or
by the decree of a court. We are not
concerned with the question of extinguishment of the right of redemption by the
act of the parties. The question is whether by the preliminary decree or final
decree passed in the earlier extinguished. The decree that is referred to in
the proviso to Section 60 of the Transfer of Property Act is a final decree in
a suit for foreclosure, as provided in sub-rule (2) of Rule 3 of Order 34 and a
final decree in a redemption suit as provided in Order 34, Rule 8(3)(a) of the
Code of Civil Procedure. Sub-rule (2) of Rule 3, inter alia, provides that
where payment in accordance with sub-rule (1) has not been made, the court
shall, on an application made by the plaintiff in this behalf, pass a final
decree declaring that the defendant and all persons claiming through or under
him are debarred from all right to redeem the mortgaged property and also, if
necessary, ordering the defendant to put the plaintiff in possession of the
property. Thus, in a final decree in a suit for foreclosure, on the failure of the
defendant to pay al amounts due, the extinguishment of the right of redemption
has to be specifically declared. Again, in a final decree in a suit for
redemption of mortgage by conditional sale or for redemption of an anomalous
mortgage, the extinguishment of the right of redemption has to be specifically
declared, as provided in clause (a) of sub-rule (3) of Rule 8 of Order 34 of
the Code of Civil Procedure. These are the two circumstances- (1) a final
decree in a suit for foreclosure under Order 34, Rule 3(2); and (2) a final
decree in a suit for redemption under Order 34, Rule 8(3)(a) of the Code of
Civil Procedure- when the right of redemption is extinguished.
In the instant case, the earlier
suit was not a suit for foreclosure nor was either of the mortgages, a mortgage
by conditional sale or an anomalous mortgage and, accordingly, there was no
declaration in the final decree passed in the earlier suit for redemption that
the respondents would be debarred from all right to redeem the mortgaged property.
Rule 5(1) of Order 34 expressly recognized the right of the mortgagor to redeem
the mortgage at any time before the confirmation of a sale made in pursuance of
a final decree passed in a suit for sale. Similarly, Rule 8(1) of Order 34
permits the mortgagor to redeem the mortgaged property before the confirmation
of the sale held in pursuance of a final decree in a redemption suit, unless
such final decree debars the mortgagor from all right to redeem the mortgaged
property which, as noticed earlier, is provided for in sub-rule (3)(a) of Rule
8 of Order 34 relating to a mortgage by conditional sale or an anomalous
the provisions of Order 34 have laid down in clear terms the circumstances when
the right of redemption of the mortgagor would stand extinguished. It is also
clear that in a suit for redemption, a mortgage other than a mortgage by
conditional sale or an anomalous mortgage, the mortgagor has a right of
redemption even after the sale has taken place pursuant to the final decree, but
before the confirmation of such sale. In view of these provisions, the question
of merger of mortgage-debt in the decretal-debt does not at all arise. We are,
therefore, of the view that the decision in Sheo Narain case in so far as it
lays down the merger of the mortgage-debt in the decretal debt and the
consequent extinguishment of the right of redemption of the mortgagor after the
passing of the final decree in a suit for redemption is erroneous." As
there is no such final decree in this case, the right of the mortgagor to
redeem the property is available to him till the confirmation of the sale in
pursuance to the decree.
High Court further held that the right of redemption provided for under Order
XXXIV Rule 5 is not available to the appellants in view of the fact that by the
time the applications were filed, the Code as amended by substituting Order
XXXIV do not contain a similar provision with effect from 20.11.1990.
view is also not correct. The decrees in the case were passed at a time when
the Code was in force in the State of Kerala and the amendment in 1974 so far as the State of Kerala is concerned was not operative.
Composite decrees were passed in both under order XXXIV Rule 4 and 5 together.
were the provisions in regard to enforcement of mortgages, and whatever may be
the wording of the decree, they shall be deemed to be passed under Order XXXIV
Rule 5 as it stood at the time of the passing of the decree. It is not
necessary that all the clauses mentioned in the provisions under which the
decree is passed should be incorporated in the decree. While interpreting such
a decree, it must be read as if all the provisions therein are incorporated in
Court may not at the time of passing of the decree, be aware as to which
contingency will happen in future. Each of the decrees was under Order XXXIV
Rule 5 of the Code as it stood before 20.11.1990.
effect of Section 97(1) of the Amendment Act is that all the local amendments
made to any of the provisions of the Code either by a State Legislature or by a
High Court which were inconsistent with the Code as amended by the Amendment
Act stood repealed irrespective of the fact whether the corresponding provision
of the Code had been amended or modified by the Amendment Act and that was
subject only to what was found in sub-section (2) of Section 97. (See Ganpat Giri
v. IInd Additional District Judge, Balia and Ors. (AIR 1986 SC 589). That being
so, till 20.11.1990, the Kerala amendment was not effective from 1.2.1977.
considering a case interpreting Order XX Rule 12 of 1965 SC 1325) this Court
laid down the principles to be followed in interpreting such decrees when the
decree has not specifically mentioned all the clauses in the provision under
which the decree is passed.
of redemption of a mortgage is a substantive right of Mortgagor which has
accrued to him to be exercised under Order XXXIV Rule 5 of the Code when the
decree was passed which cannot be taken away by the amendment of order XXXIV of
the Code which was made only after the decree in this case.
application under Order XXXIV Rule 5 is maintainable until the final
determination of proceedings to set aside the sale under Order XXXIV either by
way of appeal or revision. Raminder Kaur & Ors 2000(3) SCC 664, V.K. Palaniappa
2001 (4) SCC 413).
present appeals, the applications were filed before the proceedings for setting
aside the sale were pending before the executing court or in appeal. In C.A.
1488-89 of 2000 proceedings under order XXI Rule 90 were pending and they were
finally decided in C.M.A 353 of 1995 by order dated 2.6.1997, along with the
C.A. No.1490-91 of 2000 proceedings under Order 21 Rule 89 to set aside the
sale was finally decided only by the order dated 2.6.1997 in C.M.A. 18 of 1993
and the application under Order 34 Rule 5 was filed earlier. It is also seen
that no order has been passed by the Court confirming the sale as required
under Order 21 Rule 92.
being the position, the impugned judgment of the High Court is indefensible and
is set aside. Appeals are allowed. Costs made easy.