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1934 Supreme(SC) 36
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD RUSSELL OF KILLOWEN, SIR LANCELOT SANDERSON AND SIR SHADI LAL.
RAGHUNATH SINGH - Appellant
Versus
HANSRAJ KUNWAR - Respondents
On appeal from the High Court at Allahabad.
Decided On : July. 19. 1934.
Solicitors for appellants :Barrow, Rogers & Nevill.
A statutory right to redeem a mortgage can only be extinguished by a court order that strictly complies with the prescribed legal form. A decree stating that a redemption suit "stands dismissed" upon default of payment does not absolutely debar the right to redeem.
Headnote:(A) Transfer of Property Act, 1882 - Sections 60, 92 and 93 - Right of mortgagor to redeem - Extinguishment of right - Decree for redemption providing that in case of default the suit shall stand dismissed - Whether such a provision constitutes an order of the Court extinguishing the right to redeem - Right to redeem is a statutory right conferred by enactment, of which a mortgagor can only be deprived by means and in the manner enacted for that purpose and strictly complied with - A decree that merely provides that the case will stand dismissed upon default of payment does not equate to an order absolutely debarring the right to redeem as required under Section 92 or Section 93 - Second suit for redemption maintainable.
(B) Code of Civil Procedure, 1908 - Section 11 - Res judicata - Whether a previous decree for redemption, not executed, bars a subsequent suit for redemption - If the previous decree did not extinguish the right to redeem, the subsequent suit is a fresh action for redemption and not an application to enforce the old decree - No res judicata if the right to redeem still exists.
Facts of the case:
A mortgage by conditional sale was executed. A previous suit for redemption resulted in a decree allowing redemption upon payment of a specific sum by a certain date, with a provision that in case of default, the case would stand dismissed. No payment was made, and the mortgagees remained in possession. Subsequently, a second suit for redemption was filed by the heirs of the mortgagor, claiming that the mortgage money had been satisfied from profits of the mortgaged properties.
Findings of Court:
The court found that the right to redeem had not been extinguished because the previous decree departed from the form required by the Act. The phrase "his case will stand dismissed" cannot be construed as an order absolutely debarring the right to redeem.
Issues: Whether a second suit for redemption is maintainable when a previous decree for redemption provided that the suit would be dismissed upon default of payment, and whether such a decree extinguished the statutory right to redeem under the Transfer of Property Act.
Ratio Decidendi: The right to redeem is a statutory right and can only be extinguished by an order of the Court in the manner prescribed by law. Under Section 92, a decree must specifically order that the plaintiff shall be absolutely debarred of all right to redeem the property upon default of payment. Similarly, Section 93 provides a mechanism for the defendant to apply for such an order. A decree that simply states the case will stand dismissed upon default does not purport to extinguish the right to redeem and therefore does not operate as a foreclosure.
Result: Appeal dismissed.
Legal Category Hierarchy
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property law
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mortgages
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redemption
- mortgage by conditional sale
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redemption
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mortgages
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practice and procedure
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civil procedure
- res judicata
- execution of decrees
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civil procedure
Judgement
Appeal (No. 96 of 1930) from a decree of the High Court (February 6, 1929) affirming, with a modification, a decree of the District Judge of Ghazipur (September 4, 1925) which affirmed a decree of the Additional Subordinate Judge.
The respondents instituted a suit in 1924 to redeem a mortgage by conditional sale executed in 1864. The question arising upon the appeal was whether the suit could be maintained having regard to a decree for redemption made in 1896 which had not been further proceeded upon.
The facts, and the material provisions of the Transfer of Property Act, 1882, appear from the judgment of the Judicial Committee.
The High Court (Boys and Ashworth JJ.)3 affirming the lower Courts, held that the suit could be maintained, but modified the decree as to the interest recoverable.
1934. June 22, 25. Hyam for the appellants. The suit was in reality a claim to enforce the decree of 1896, but that could be done only by proceedings in execution Code of Civil Procedure, 1908, s. 47 ; Hari Ravji Chiplunkar v. Shapurji Hormusji (( 1886) L. R 13 I. A. 66.) ; and proceedings of that nature were barred by s. 48 of the Code. Secondly, the suit was barred by s. 11 of the Code, as the same issue had been tried in the earlier suit. The Full Bench of the Madras High Court held in Vedapuratti v. Vallabha Valiya Raja (( 1902) I. L. R. 25 M. 300.) that when a decree for redemption has been made but not executed, a subsequent suit is not maintainable. If that is so the question whether the decree of 1896 extinguished the right to redeem under s. 60 of the Transfer of Property Act, 1882, does not arise. It is submitted, however, that it did so. The words in the decree that upon default the mortgagors case " was to stand dismissed " should be construed as a provision, in accordance with s. 92 of the Act, that upon default all right to redeem was to be debarred. The words are capable of that meaning, and it should be presumed that the Court intended to make a decree in accordance with the Act. Sita Ram v. Madho Lal (( 1901) I. L. R. 24 A. 44.) and Hari Ram v. Indraj (( 1922) I. L. R. 44 A. 730.), which were relied on, are distinguishable. Neither of them related to a mortgage by conditional sale; the Court therefore had power under s. 92 to decree a sale, and it was not possible to say which alternative the decree intended. The judgment of the Board in Maina Bibi v. Chaudhri Vakil Ahmad (( 1924) L. R. 52 I. A. 145.) does not affect this case, because the Board held that the position there was not analogous to that arising under a mortgage. [ Siva Per shad Maity v. Nundo Lall Kar Mahapatra (( 1890) 1. L. R. 18 C. 130.) was also referred to.] The respondents did not appear.
July 19. The judgment of their Lordships was delivered by
LORD RUSSELL OF KILLOWEN. This appeal from the High Court at Allahabad arises in a suit for redemption of a mortgage and further charge, the appellants being the heirs of some of the original mortgagees.
The relevant facts leading up to the present litigation must first be stated.
The mortgage and further charge are both dated June 22, 1864. By the mortgage certain shares in five villages were mortgaged by way of conditional sale, the mortgagees being placed in possession, with no liability to account for mesne profits. The principal money was repayable at the end of three years. A further principal sum was secured by the further charge.
In the year 1892 the mortgagor instituted a redemption suit alleging that nothing was due under the securities, and claiming to be put into possession of the shares in the five villages, or, if the Court should find that any sum was due, that it might order redemption subject to the payment of such sum. The result of that suit was that as to the shares in two of the villages it was decided that (for reasons which need not here be stated) there was no right of redemption any longer existing, and that as to the shares in the other three villages the plaintiff could redeem
