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1918 Supreme(SC) 85

PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD BUCKMASTER, LORD DUNEDIN, AND SIR JOHN EDGE.
JEUNA BAHU - Appellant
Versus
PARMESHWAR NARAYAN MAHTHA - Respondents
On Appeal from the High Court at Calcutta.
Decided On : Dec. 3. 1918

Advocates:
Solicitors for appellants:T. L. Wilson & Co.; E. Dalgado. Solicitors for first respondent: Orr Dignam & Co.

Important Points

A decree for the balance of a mortgage debt under Section 90 of the Transfer of Property Act, 1882, can be passed simultaneously with the sale decree, provided it is conditional upon the sale proceeds being insufficient to satisfy the debt.

Subject

Civil Law - Property Law

Act Referred

Headnote

(A) Transfer of Property Act, 1882 - Section 90 - Mortgage - Decree for balance - Validity of decree passed simultaneously with sale decree - The provision that a decree for the balance may be passed when net proceeds of a sale are insufficient does not require the mortgaged property to be sold first as a condition precedent - A decree providing that if the sale proceeds are insufficient, the balance shall be paid, is valid and satisfies the statutory requirement as it operates at a future date upon the occurrence of the specified event.

(B) Code of Civil Procedure - Section 311 - Execution sale - Setting aside of sale - Where a prior execution sale is set aside by the court and such order is not appealed, the property is available for subsequent sale in execution of a decree.

Facts of the case:
A decree was passed for the sale of mortgaged property and further ordered that if the sale proceeds were insufficient to cover the decretal amount, the balance be paid from the estate of the deceased mortgagor. After the mortgaged property was sold for an insufficient amount, other properties of the estate were attached and sold. The legal representatives of the mortgagor challenged the second sale on the grounds that the decree for the balance was ultra vires under the Transfer of Property Act and that a prior execution sale of the same property had occurred.

Findings of Court:
The court held that the decree for the balance was not ultra vires as it was conditional upon the insufficiency of the sale proceeds. Regarding the prior sale, since it had been set aside by the court and the order was not appealed, it had no effect on the subsequent sale.

Issues: Whether Section 90 of the Transfer of Property Act requires the mortgaged property to be sold before a decree for the balance can be passed, and whether a subsequent sale is invalid if a prior sale of the same property was set aside.

Ratio Decidendi: The court ruled that a decree for the balance of a mortgage debt can be passed at the time of the sale decree, provided it is conditional upon the sale proceeds being insufficient. Additionally, a sale set aside by a court, where the order is not appealed, does not prevent a subsequent sale.

Result: Appeal dismissed with costs.

Legal Category Hierarchy

  • property law
    • mortgage
      • decree for balance
  • practice and procedure
    • execution of decrees
      • auction sale

Judgement

Appeal from a judgment and decree of the High Court (May 19, 1908) affirming a decree of the third Subordinate Judge of Mozufferpur.

The suit was brought by the deceased appellant claiming a declaration that an auction sale held on December 15, 1891, was null and void and that under it no title, passed to the respondents, the purchasers, and those claiming under them, for possession and other relief. Upon the death of the plaintiff in 1910; the appellant Musammat Ram Dei was brought upon the record as her heir and legal representative; there were also brought, upon the record the devisees of the property in suit under a will of Jeuna Bahu, probate having been granted without prejudice to the contention of Ram Dei that the testator had no right to dispose of the property.

The circumstances in which the auction sale of December 15, 1891, was held appear from the judgment of their Lordships.

The decree of April 17, 1890, obtained by the mortgagors under the mortgage of March 24, 1888, against the administrator of the estate of the deceased mortgagor declared that the amount due was Rs. 19,081 principal and interest, and ordered, in the usual form, that in default of payment with costs by July 19, 1890, the mortgage property be sold by auction, and further ordered as follows "It is also ordered and decreed that if the sale proceeds be not sufficient to cover the whole of the decretal amount, then the defendant do pay to the plaintiff the balance of the decretal amount, with interest at 6 per cent, per annum till the date of realization from the estate of the aforesaid Bal Krishan, deceased, and if the defendant does not admit the estate to be sufficient to cover the decretal amount then a statement be prepared of the properties of the aforesaid Bal Krishan, and that the estate be kept under the management of the Court."

The suit was dismissed by the Subordinate Judge and his decision was affirmed by the High Court.

1918. Oct. 17, De Gruyther K.C. and Dube for the appellants other than Ram Dei; Parikh for the appellant Musammat Ram Dei.

Sir Erle Richards K. C., and Sir William Garth for the first respondent.

The argument on behalf of the appellants sufficiently appears from the judgment. The respondents were not called upon.

1918. Dec. 3. The judgment of their Lordships was delivered by

LORD BUCKMASTER. In this case the appellants challenge the validity of an execution sale of a 16 anna share in certain mauzas appertaining to Mahal Sonkarsa. The sale took place on December 15, 1891, pursuant to an order of attachment of November 5, 1891, issuing out of the Court of the Subordinate Judge of Mozufferpur, and made in execution of a decree of the same Court passed on April 17, 1890.

There are two grounds upon which this case rests the first that the decree of April 17, 1890, was, so far as it formed a foundation for the sale of this property, ultra vires; and, secondly, that at the date of the sale there was, in fact, another order existing for the sale of the same property. For reasons that their Lordships will state, they think there is no efficacy in either of these contentions.

The facts that preceded the litigation out of which this appeal has arisen are very simple, though they have been the cause of many legal complications. On March 24, 1888, Bal Krishan Lal entered into a bond in favour of the members of the firm of Thomas and Co., to secure repayment of sums advanced to him by them up to the limit of Rs.55,000; and, to secure this repayment, entered into a covenant to execute in their behalf a full and complete mortgage of the block and crop of the Buriarpur indigo concern.

Bal Krishan Lal died a month after the execution of this deed on April 24, 1888, leaving a son by his first wife, his second wife (the appellant, Musammat Jeuna Bahu, his widow), and four illegitimate children by a Mohammedan concubine.

Questions-arose about the right to obtain letters of administration to the estate of Bal Krishan, which are irr











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