M P KRISHNASWAMI PILLAI Vs. CHOCKALINGAM CHETTIAR

JUDGEMENT

(1.) The only question that awaits to be determined in this appeal relates to the form in which a preliminary decree in a suit for sale brought by a puisne mortgagee should be passed when the prior mortgagee was impleaded as a party to the action and was willing to have the property sold free from his incumbrance on the condition that he should be paid first out of the proceeds of the property mortgaged with him. The trial Court passed such a decree but on appeal by the puisne mortgagee, the District Judge of Trichinopoly modified it and ordered (he property to be sold subject to the prior incumbrance. He did so as he was of opinion that Order 34, Rule 12, Civil Procedure Code, could be of no avail to the prior mortgagee, and that he could not, according to a decision of this Court reported in Venkatesa Aiyangar v. Manikkavachakam Chetty (1935) 68 M.L.J. 738 make an application under that rule. The prior mortgagee, who figured as the 7 defendant in this litigation, appeals.

(2.) It might be mentioned at the outset that only one (the first) item of the property was mortgaged with the prior mortgagee while several other items were mortgaged with the plaintiff-respondent. The question to be decided is thus in respect of the first item alone. It might also be mentioned although it is not necessary for the decision of this case, that the first item was subsequently purchased by the 7 defendant in the name of his servant, the third defendant, on the 20 August, 1931, out of which a sum of Rs. 2,900 was to go towards the discharge of the first mortgage and the balance of Rs. 100 was paid in cash. The plaintiff (puisne mortgagee) and the 7 defendant had agreed on the 14 November, 1939, that the latter would be entitled to priority to the extent of Rs. 2,900 against item 1. The plea raised on behalf of the puisne mortgagee in regard to the application of the Agriculturists Relief Act to the debt due to the 7 defendant was repelled by the trial Court and it was ordered that a sum of Rs. 2,900 be paid first to the 7 defendant from the sale proceeds of item 1. This was done as the 7 defendant had not only no objection to the entire property being sold but had himself at one stage of the case asked for that course to be adopted.

(3.) The assumption underlying the judgment of the learned District Judge that but for the provision contained in Order 34, Rule 12 (even if it were construed in the manner in which he had), the decree of the lower Court could not be sustained is erroneous. The Civil Procedure Code is not exhaustive and unless there was a prohibition, the trial Court was fully entitled to make such orders and pass such decrees ex debito justitiae--even if not provided by the Code- -as appeared to be necessary in the circumstances of the case. The principle underlying Rule 12 is that the rights of a prior mortgagee could not be adversely affected and the property mortgaged with him could not be sold without his consent. The second condition of this rule is that the property must be such as to which an order for sale has been either given by a Court or is to be given. The rule does not provide, as I read it, that a decree for sale must necessarily have been passed before the date of the consent of the prior mortgagee. There can be no objection in my view in construing it in such a way as to take within it the consent of a prior mortgagee preceding the decree for sale. The decision in Venkatesa Aiyangar v. Manikkavachakam Chetty (1935) 68 M.L.J. 738, referred to by the learned District Judge has no application to the facts of the present case. In that case a puisne mortgagee had brought a suit for the sale of the property, but after the decree had been passed his claim was satisfied by the mortgagor and it was held that in those circumstances the . prior mortgagee, although a defendant in the suit, had no right under the terms of Order 34, Rule 12 to ask the Court to sell the property in order to discharge the debt due to him. This was because the decree which contained a direction to sell the property had been satisfied and the direction could not but have been found to be exhausted. This is different from the present case. The decision in Venkatesa Aiyangar V/s. Manikkavachakam Chetty (1935) 68 M.L.J. 738, although not on all fours, is more to the point. The provisions contained in the form of decrees, Appendix D, form 10 go to support my conclusion that the preliminary decree for the sale of the entire property was, in view of the consent of the prior mortgagee, more regular than that passed by the lower appellate Court. After all Order 34, Civil Procedure Code, does not relate to execution of decrees. It provides for the frame of the suit relating to mortgages, for the decrees, preliminary and final, to be passed in such suits and generally for the substantive rights of the mortgagees to be satisfied in respect of their debts out of their mortgage securities. These and other considerations of convenience as also the construction of Rule 12 leave no doubt in my mind that the order passed by the lower appellate Court could not be sustained. I would for the above reasons set it aside.