AMRATLAL AMARCHAND Vs. MULJI SAVCHAND

JUDGEMENT

(1.) This is an appeal from the judgment of Mr. Justice Coyajee. It arises out of mortgage transactions. On May 24, 1935, the Allahabad Bank, Limited, filed Suit No. 812 of 1935 to enforce the first mortgage on the Ballard Estate property executed by defendants Nos. 1 to 8 in their favour. Defendants No. 11 were the second mortgagees. Defendants Nos. 12 and 13 were the third mortgagees of that property, along wifti another property al Vikhroli, which was also their security for the amount advanced by them td the mortgagors. The third mortgage in favour of defendants Nos. 12 and 13 was dated April 10, 1030. The amount became due at the end of two years from the date of the mortgage. Defendants Nos. 12 and 13 filed their written statement on August 27, 1935. In that suit according to Order XXXIV, Rule 4, of the Civil Procedure Code, 1908, a decree was passed in accordance with Form No. 9 of Appendix D on September 10, 1937. It was a consent decree by which the amounts were declared, instead of accounts being taken by the Commissioner. The decree was drawn up on those lines. The property was sold on March 23, 1938, and the Commissioner's certificate was issued on April 9, 1938. Defendants Nos. 12 and 13 took out a notice of motion for a personal decree against the mortgagors on June 28, 1943. Appeal No. 2 of 1944 is from Suit 918 of 1935. That related to the Vikhroli property of which the plaintiffs in that suit were the first mortgagees. The firm of Messrs. Amarchand Madhavji & Co. were the mortgagors. Defendant No. 2 was the second mortgagee while defendants Nos. 3 and 4 (who are the same as defendants Nos. 12 and 13 in Suit 812 of 1935) were the third mortgagees. I have already pointed out that their claim arose out of one mortgage transaction which covered both" the Ballard Estate property and the Vikhroli property. In that suit defendants Nos. 3 and 4 filed their written statement on November 9, 1936. The preliminary mortgage decree was passed on November 18, 1936, in accordance with Form No. 9 of Appendix D to the Civil Procedure Code. The decree absolute was passed on April 13, 1938. The Vikhroli property was sold in January, 1943. Defendants Nos. 3 and 4 took out a notice of motion on July 17, 1943, for a personal decree.

(2.) The mortgagors are the appellants in both the appeals. Their contention is that the application for a personal decree is time-barred. It is contended that in neither of these two suits the third mortgagees had filed a counterclaim. In their written statement they had not asked for a personal decree. In fact in paragraph 5 of their written statement in suit No. 812 of 14)35 they had reserved their right to take such steps as they might be advised against the mortgagors for the.recovery of such deficiency. In my opinion this point has no substance because at the time of passing the consent decree the parties could, instead of incurring the cost of a formal amendment, have very well proceeded on the footing that the necessary amendment was made and the rights of the parties ascertained on that footing. The Court has not now to proceed on what was contained in the written statement but on what was contained in the preliminary and final decrees under which the rights of the parties have been declared and ascertained. The contention of the appellants is that in the absence of a suit or a counterclaim by the third mortgagees, their right to apply for a personal decree arises only under the consent decree, and as more than five years had expired since then their right was time-barred under Art. 181 of the Indian Limitation Act. It was contended, in the alternative, that if the rights of the parties are only under the mortgage, the right of these mortgagees to a personal decree was time-barred because no suit was filed by those mortgagees till 1943, and the liberty to apply lor a personal decree, contained in the final decree, did not give rise to any new right, but left the parties to put forth their claim for a personal decree under their original mortgage. If on the date of the application the right to obtain a decree under the personal covenant was barred, the mortgagees were not entitled to such a decree. In my opinion, these contentions are unsound.

(3.) The scheme of the Civil Procedure Code has been materially altered by the inclusion of Sub-rule (4) in Order XXXIV, Rule 4. That was done by the Transfer of Property (Amendment) Supplementary Act, 1929. Reading that Sub-rule with Forms Nos. 9, 10 and 11 in Appendix D, it is clear that in a suit filed by the first mortgagee against the mortgagor and the second mortgagee, it is the Court's duty, when passing the preliminary and final decrees, to adjudicate upon the respective rights and liabilities of all the parties to the suit in the manner set forth in the forms. It is not now necessary for the puisne mortgagee to file a substantive suit or counter-claim to get his rights, mentioned in the said forms, ascertained. The present two suits are clearly suits of that description. The form of the decree is on the lines of Form No. 9 in Appendix D. It declares the amounts due by the mortgagors to the first mortgagees, the second mortgagees and the third mortgagees. It specifies the times within which the amounts due to the respective mortgagees have to be paid and it further provides that in default of payment the property should be sold. It also provides the order in which the sale- proceeds have to be applied, and if a deficit arises, liberty is reserved to each of the parties, who does not receive satisfaction of his claim out of the security given to him, to apply for a personal decree for the deficit. Having regard to that, it seems clear that the question of ascertaining the amount personally payable by the mortgagors was deferred till the property was sold and the deficit ascertained. On that being done, the right of the mortgagees, who had not received satisfaction, for a personal decree had to be considered by the Court. If the claim was found valid and not barred, the Court would pass a decree. The contention of the appellants is that the relevant time to be considered for deciding the question of limitation is the date on which the application is made to the Court. In my opinion the wording of Order XXXIV, Rule 4, Sub-rule (4), negatives that argument. In Palaniappa Chettiar V/s. Narayanan Chettim (1935) I.L.R. 59 Mad. 188 the relief of a personal decree is fully discussed in the judgment of Mr. Justice Varadachariar. He observed as follows (p. 194):- A mortgagee's suit for sale may comprise two reliefs, one by way of sale of the properties mortgaged and the other by way of a personal decree against the mortgagor for what may remain due after the mortgaged properties have been sold. Though the plaint prays for both the reliefs, the Court is in the first instance expected to deal only with the relief by way of sale. The preliminary decree contains a declaration of the amount due on foot off the mortgage and contains directions as to what is to happen (i) if the defendant pays the amount into Court and (ii) V the payment is not so made; but both the directions relate only to the property mortgaged. The plaintiff's right to the other relief is not tried either at this stage or even at the stage of the final decree ; so that, the final decree under Order XXXIV, Rule 5, Civil Procedure Code, cannot be said to involve any adjudication as to this part of the suit and much less to have completely disposed of it.