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1943 Supreme(SC) 49
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD ATKIN, LORD PORTER AND SIR GEORGE RANKIN.
THAKUR RAGHURAJ SINGH - Appellant
Versus
RAI BAHADUR LALA HARI KISHAN DAS - Respondents
On appeal from the Chief Court of Oudh at Lucknow.
Decided On : Dec. 21. 1943.
Solicitors for appellant: W. W. Box & Co.
Solicitors for first respondent: Douglas Grant & Dold.
A compromise decree directing the transfer of property to satisfy a debt is a "final decree for sale" under remedial legislation. Such acts are specifically intended to allow debtors to resile from agreements to provide relief from indebtedness.
Headnote:(A) Relief Act for Agriculturists - Sections 5 and 30 - Final decree for sale - Conversion of decree into installments and reduction of interest - A remedial statute must be construed, so far as it reasonably admits, to secure that the relief contemplated shall not be denied to the class intended to be relieved - A compromise decree that declares an amount due and orders it to be paid via the execution of a sale deed of mortgaged property is a final decree for sale, even if the parties dispensed with the preliminary decree process and arranged for a direct sale by the debtor to the creditor.
(B) Relief Act for Agriculturists - Section 30 - Reduction of interest - A decree passed on the basis of a loan is subject to the reduction of interest as provided under the Act.
(C) Nature of Relief Legislation - The object of such Acts is to provide relief from agreements; therefore, the fact that an applicant is seeking to resile from a compromise agreement is not a valid objection to granting relief.
Facts of the case:
A debtor borrowed sums of money on the security of mortgaged villages. A compromise decree was subsequently passed, declaring the amount due and providing that the debtor would execute a sale deed for certain villages to satisfy the debt, with a condition allowing the debtor to repurchase the property after a specified period. Following the enactment of a relief act for agriculturists, the debtor applied for the conversion of the decree into installments and the reduction of interest. The trial court granted the relief, but the revisional court set aside the order, holding that the compromise decree was not a decree for money or a final decree for sale.
Findings of Court:
The decree is a final decree for sale as it declares the debt and provides for its satisfaction through the sale of property. The debtor is entitled to the relief provided under the Act, and the prior compromise agreement does not preclude the application of the remedial statute.
Issues: Whether a compromise decree directing the execution of a sale deed to satisfy a debt constitutes a "final decree for sale" under the relief act, and whether the debtor's agreement to the compromise prevents them from seeking relief under the Act.
Ratio Decidendi: The court held that a decree which declares a debt and orders its satisfaction via the sale of property is a final decree for sale, regardless of whether the sale is conducted through court auction or via a direct sale deed agreed upon in a compromise. Furthermore, since the purpose of relief acts is to alleviate indebtedness, the fact that a debtor is resiling from a previous agreement is the very reason the law provides for such relief.
Result: Appeal allowed.
Legal Category Hierarchy
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practice and procedure
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civil procedure
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decrees
- compromise decrees
- final decree for sale
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decrees
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civil procedure
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property law
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mortgage
- foreclosure and sale
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mortgage
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debt and insolvency
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agriculturist relief
- interest reduction
- payment by instalments
-
agriculturist relief
Judgement
Appeal (No. 12 of 1940) from a decree of the Chief Court of Oudh at Lucknow (February 15, 1940), setting aside a decree of the Subordinate Judge of Sitapur (January n, 1936), which, under the provisions of ss. 5 and 30 of the United Provinces Agriculturists Relief Act (XXVII of 1934) amended a compromise decree, dated July 4, 1933, made in a suit in which the first respondent was the plaintiff, and the present appellants predecessor in title was the defendant.
64 Law. Rep. 71 Ind. App. 56 ( 1943- 1944) Thakur Raghuraj Singh V. Rai Bahadur Lala Hari Kishan Das 165
The following facts are taken from the judgment of the Judicial Committee Thakur Raghuraj Singh, hereinafter called the debtor, now deceased and represented by the present appellant, was the talukadar of a large property in the district of Sitapur. On February 17, 1928, he borrowed from the first respondent (hereinafter called the creditor) a sum of Rs. 1,40,000 at ten per cent, compound interest, with six-monthly rests, on the security of six named villages. On October 25, 1931, he borrowed from the creditor a further sum of Rs. 1,53,000 at twelve per cent, compound interest, with six-monthly rests, on the security of the former six villages and nine additional villages. The date of repayment of both loans was February 17, 1933. On April 25, 1933, the creditor commenced the suit out of which the present pro ceedings arose. It was an ordinary mortgage suit claiming a decree for payment of Rs. 3,88,300, the amount then due to the mortgagees, on default of payment sale of the mortgaged properties, and liberty to apply for the recovery of any balance after sale. The suit did not appear to have been contested the parties arrived at a compromise agreement to be enforced by a decree, and on July 4, 1933, the decree was made by the Subordinate Judge. As amended by the Chief Court it was as follows —
" Civil side decree for sale under the terms of compromise
" (Or. xxxiv r. 4, Act V of 1908 where the court declares " the amount due).
"In the Court of the Subordinate Judge, Sitapur.
“Suit No. 27 of 1933.
" Rai Bahadur Lala Hari Kishan Das, son of " Lala Gobind Prasad, Khunkhunji Road, " Lucknow …. …. …. …. …. …. …. …. …. …. Plaintiff.
"versus
"1. Thakur Raghuraj Singh, son of Thakur " Baldeo Singh, resident and Taluqdar of " Kanmau and Sita Rasoin, District " Sitapur,
"2. Thakur Sheo Ganga Bakhsh Singh, son of " Sheo Dan Singh, resident and Zamindar " of Bilahri, pargana Mahmudabad, " District Sitapur …. …. …. Defendants.
" Claim.- To recover Rs. 3,88,300-2-6 by sale of the " mortgaged property under mortgage-deeds dated " February 17, 1928, and October 25, 1931. Valuation for " jurisdiction of the court and court-fees is Rs. 3,88,300-2-6 " on which a court-fee of Rs. 4,500 has been paid.
" This suit coming on this day of July 4, 1933, in the " presence of Babu Bishambhar Dass, advocate for the " plaintiff, and of Pandit Raj Narain, advocate for defendant 1, " and defendant 2 in person.
" 1. It is hereby declared that the amount due to the " plaintiff on the mortgage mentioned in the plaint calculated " up to this 4th day of July, 1933, is the sum of Rs. 3,88,300-2-6 " for principal, the sum of Rs. 9,648-11-11 for interest on the " said principal, and the sum of Rs. 5,523 for the costs of the " suit awarded to the plaintiff, making in all the sum of " Rs. 4,03,471-14-5 with future interest at 0-8-0 per cent. " per month from July 5, 1933, till payment.
"2. And it is hereby ordered and decreed as follows
" That the said amount with interest be paid in the manner" provided in the compromise which forms
64 Law. Rep. 71 Ind. App. 56 ( 1943- 1944) Thakur Raghuraj Singh V. Rai Bahadur Lala Hari Kishan Das 166
part of this decree." After a schedule of the mortgaged properties " given under " my hand and the seal of the court this 4th day of July, " 1933 " —
" Translation of copy of compromise filed by the parties in " case No. 27 of 1933, decided on 4th July, 1933.
" Rai Ba
