OFFICIAL RECEIVER KURNOOL Vs. VALE PEDDA MOUNAMMA

JUDGEMENT

(1.) This second appeal comes before us on a reference by out learned brother, Chandrasekhara Sastry, J., in view of the question of general importance involved. The facts relevant for determination of the question in controversy are as follows:-- The second appeal is directed against the decision of the learned Subordinate Judge, Kurnool, in AS No. 54/1961 on his file, affirming the decision of the District Munsif, Kurnool, in O. S. No. 34 of 1960. Thai suit was filed by two persons. Vale Pedda Mounamma and Yasamuguru Lingamma for recovery of Rupees 1,500 due on the foot of a simple mortgage. Ex. A-1, dated 23-1-1950 executed by defendants 4 and 5 in their favour for Rs. 4,000 mortgaging items 1 to 3 of the plaint schedule They prayed for a decree for sale of items 1 and 3 and right to proceed against Rs. 1,232 14-0, the balance of sale-proceeds of item 2 (house in Kurnool Municipality), which was sold in execution of a prior mortgage decree in O. S. No 91 of 1954 on the file of that Court Items I and 3 of the plaint schedule belonged to the 4th defendant, Karnan Chidambara Rao, while item 2 belonged to his wife, the 5th defendant, K. Adi Laxamma Defendants 4 and 5 executed the mortgage deed, Ex. A-1, mortgaging all the items 1 to 3 for the discharge of Rs. 4,000 borrowed there under Item 2 was already mortgaged to one Rule Venkatarao under mortgage bond dated 14-11-1946 On the foot of that mortgage Venkatarao filed O. S. No. 91 of 1954 for salt of the hypothecate on the file of District Munsif Kurnool. To that suit he impleaded the present defendants 4 and 5 as defendants 1 and 2 (hereinafter referred to as mortgagors), and the present plaintiffs as defendants 3 and 4 (herein after referred to as puisne mortgagees). The mortgagors remained exparte The puisne mortgagees filed a written statement putting the plaintiff in that suit to strict proof, and alleged that the mortgagors executed in their favour a subsequent mortgage on 23-1-1950, (Ex. A-1) and that the sale proceeds remaining after the satisfaction of the first mortgage may be paid towards their mortgage debt. In that suit, the only issue framed was about the truth and validity of the first mortgage, and whether it is binding on the puisne mortgagees. That was found in the affirmative and the suit was decreed, granting six months time for redemption (Ex B-1). The preliminary decree (Ex B-6) drafted pursuant to the judgment, provided that the money realised by sale shall be paid to the plaintiff or other persons entitled to the same. The final decree Ex. B-7, passed on 5-10-1955, provided that the money realised by sale shall be paid into Court, and shall be duly applied in payment of the amount payable to the plaintiff under the preliminary decree, and under any further orders that may have been passed in this suit, and in payment of any amount which the Court may adjudge due to the plaintiff for costs of the suit and the costs of the application, and such costs, charges and expenses as are payable under Rule 10 together with subsequent interest as may be payable under Rule 11 of Order 34 Civil P. C., and that the balance, if any, shall be paid to the defendants or other persons entitled to the same.

(2.) Pursuant to the final decree, the mortgaged house was brought to sale, and the first mortgagee himself became the purchaser on 4-6-1956. Deducting the amount due to him, he deposited the balance of Rs. 1232-14-0 into Court.

(3.) The mortgagors having been adjudicated insolvents, the Official Receiver addressed a letter to the District Munsif to make over the balance of sale proceeds to him. The puisne mortgagees filed E. A. No. 257 of 1956, Ex. B-2, on 10-11-1956 under Order 34, Rules 1 and 4, and Sections 151 and 73 (c), Civil P. C., for payment of the balance of the sale amount on the ground that they were entitled to the same. Notice of that E. A. was ordered to the Official Receiver as well as the advocate for the decree-holder. The application was opposed by the Advocate for the first mortgagee (decree-holder) on the ground that the decree did not in terms provide for payment of the balance to the puisne mortgagees, though it should have contained such a term, and that contention was upheld by the District Munsif in his order dated 10-11-1958, wherein he observed that the puisne mortgagees were at liberty to apply for an amendment of the decree, but that as the decree stood, it did not recognise their rights and the cheque petition was not maintainable. Thereupon the puisne mortgagees tiled L.A. No. 198/1957 under Sections 151 and 132 Civil P.C., for amendment of the preliminary decree in O. S. No. 91/54 and I. A. No. 199/ 57 under Sections 151 and 152, Civil P. C., for amendment of the final decree. The District Munsif, by his order dated 19-6-1957, held, on a consideration of the circumstances of the case, that the omission to give a direction for payment of the balance of the sale proceeds to the puisne mortgagees was an inadvertent slip or error, and ordered the amendment of the judgment and the preliminary and final decrees which followed it, and provided for the payment of the balance of sale proceeds to the puisne mortgagees, petitioners in I. As. 198 and 199 of 1957.