KHUNNI LAL Vs. BANKEY LAL

JUDGEMENT

(1.) This is a decree-holder's appeal arising out of execution proceedings. Khunni Lal, decree-holder, obtained a decree for money on 19 July 1928, against Firanga Lal, Ram Gopal and Ram Bharose Lai, judgment-debtors, and a sum of Rs. 20,376-8-0 is due on it. On 24tti February 1930, the judgment-debtors executed a possessory mortgage-deed in favour of Bankey Lal for a sum of Rs. 65,000 under which it was shown that a sum of Rs. 25,000 had been left with the mortgagee out of the entire consideration of Rs. 65,000 for payment to one Lala Nandlal Shah. The case of the decree-holder is that no money was due to this gentleman, nor was this amount paid to him as agreed upon under the terms of the mortgage- deed. The decree-holder made an application for execution, praying for the attachment of this sum of Rs. 25,000 which according to him was lying with the mortgagee in deposit. The application was resisted by that objector, Bankey Lal, who pleaded that no such sum was held by him for the mortgagors and further contended that the decree-holder was not entitled to execute his decree against him. The learned Subordinate Judge held that no money belonging to the judgment-debtor was in the hands of the objector and he therefore dismissed the application for execution against him. The present appeal has been preferred by the decree-holder against this order of dismissal.

(2.) The first point for consideration in this case is whether a debt was due by the mortgagee to the judgment-debtor. The word "debt" means an actually existing debt that is a perfect and absolute debt. Where such is the case the decree-holder who holds a decree against the judgment-debtor has a right to attach it. The method of attachment is provided for under Rule 46, Order 21, Civil P.C. A debt cannot be attached unless it is actually due from the garnishee to the judgment- debtor, the respondent in the case before us has contended that even if it be assumed that out of the Consideration of the mortgage-deed in his favour, he did not pay a sum of Rs. 25,000 to the mortgagors, it cannot be said that the unpaid money is a debt due by him to the judgment-debtors which can be attached at the instance of the decree-holder. This is the principal question for consideration in the appeal before us. For the purpose of disposing of this question, we will assume that out of the entire consideration of Rs. 65,000 the mortgagee who is the objector in this case did not pay to the mortgagors a sum of Rs. 25,000. The learned Counsel appearing for the respondents has relied on Phul Chand V/s. Chand Mal (1908) 3 All. 252. It was held in this case that where money promised as a loan by a mortgagee is not advanced in full, the mortgagor is only entitled to recover, if anything, damages for non-payment of the balance; he cannot sue for specific performance of the agreement to lend the full sum promised, and the non- payment of a portion of the loan does not constitute a debt which can be the subject of attachment and sale under the provisions of Section 266, Civil P.C. The facts of that case were as follows : Two persons had executed two mortgage- deeds in favour of Phul Chand and Gulab Chand to secure-the principal sums of Rs. 1,000 and Rs. 6,000, respectively. It was found that only a sum of Rs. 2,135- 11-0 was paid by the mortgagees and the remainder amount remained unpaid. Some of the creditors of the mortgagors obtained a money decree against them and in execution of that decree attached and put to sale what was described as "the right of the mortgagors to receive the balance of the mortgage money." The purchaser after the sale instituted a suit praying for a decree for the unpaid balance of the mortgage money. A bench of two learned Judges of this Court, relying on an English authority The South African Territories Co. Ltd. V/s. Wallington (1898) A.C. 309, held that the unpaid mortgage money could not be said to be a debt due from the mortgagee to the mortgagors. They held that it was not open in a case like this to the mortgagors or his representatives to sue for the recovery of the unpaid balance for the reason that it was not a debt and that if any portion of the mortgage money was not paid by the mortgagees to the mortgagor, then the only remedy of the mortgagor was to institute a suit for the recovery of damages which might have resulted on account of the non-payment of the full consideration by the mortgagee. In the concluding portion of the judgment the learned Judges observed: The mortgagees were never in a position to enforce specific performance of the agreement of the mortgagees to advance the full sum agreed to be lent by them. The unpaid portion of the loan did not constitute a debt due by them to the mortgagors such as could be attached under the Civil P. C..

(3.) Another case on which reliance has been placed by the respondent's counsel is Sheikh Galim V/s. Sadarjan Bibi A.I.R. 1916 Cal. 530. The facts of that case were very similar to the one before us. There the mortgage-deed by conditional sale was executed by the plaintiffs in favour of the defendants for a sum of Rs. 150. The plaintiff's received Rs. 104 out of this sum. The balance was not paid and so they instituted a suit to recover the amount together with interest. The learned Judges held that a suit for specific performance of the contract in such a case would not lie and that the only remedy which the mortgagors had was to sue for damages. The next case on the point is Rama Nand V/s. Nakched (1905) 8 O.C. 5. The facts were briefly these : The defendant there agreed to land to the plaintiffs a certain sum of money on the security of some property, the arrangement being that the defendant should pay Rs. 700 in cash and retain the balance in order to pay off a prior mortgage. The defendant did not pay off the prior mortgage nor did he pay to the plaintiffs the sum of Rs. 700. Thereupon the plaintiffs instituted a suit to recover the sum of Rs. 700 which had been agreed to be paid. The learned Judge who decided the case held that the suit was for enforcement of a contract to lend money upon a mortgage and therefore having regard to Clause (a), Section 21, Specific Relief Act, was not maintainable. In that case it was contended on behalf of the mortgagors that the suit was one for the recovery of a debt due from the mortgagee to the mortgagors and that if it was a suit for specific performance, it was maintainable because an interest in the property had been transferred to the mortgagee and because on the findings it must be taken that the defendant was in possession of the mortgage deed. The learned Judge on the authorities cited by him held not only that an agreement to lend money will not be specifically enforced, but also that the rule holds good even where a deed of mortgage has been executed in favour of the defendant. The suit before him was to enforce a contract to lend money upon a mortgage and therefore could not be maintained. In Fry's Specific Performance of Contracts, Edn. 6, pp. 54 and 25, para. 54, the law is stated to be as follows: It is however settled that the Court will not enforce a mere agreement to lend, advance or pay money (though the loan be one to be secured by mortgage), while it rests entirely unperformed either by the intended lender or by the intended borrower.