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1987 Supreme(Cal) 96
High Court Of Calcutta
Sankari Prasad Das Ghosh, L. M. Ghosh
KARTICK CHANDRA MULLICK - Appellant
Versus
PARSHTOM DAS GOEL - Respondent
C. A. J. D. 311 Of 1984
Decided On : 04/01/1987
HAFIZ-UR-REHMAN, KINJAL BARAL, P.K.MULLICK, SHIBDAS BANERJI, SHIPON DAS, SUBHAS CHANDRA KARAR
An English Mortgage is a transfer of property that is absolute but for a provision for re-transfer, without affecting the substantial rights of the mortgagor. A decree for foreclosure cannot be passed in the case of an English Mortgage.
Headnote:
ENGLISH MORTGAGE - DEED INTERPRETATION - TRANSFER OF PROPERTY ACT, 1882 - SECTIONS 58(E), 67, 68 - FORECLOSURE DECREE - COMPETENCY - BENGAL MONEY LENDERS ACT, 1940 - SECTIONS 30, 31, 36 - LIMITATION ACT, 1963 - ARTICLE 137 - CIVIL PROCEDURE CODE, 1908 - ORDER 34 RULES 2, 3(2), 11 - ORDER 41 RULE 33:
Fact of the Case:
Plaintiff filed a suit for foreclosure of mortgage against the defendant, alleging that the defendant had failed to pay the principal sum and interest on a loan secured by a registered Deed of Mortgage by way of conditional sale. The defendant claimed that the transaction was a mortgage and that he had received less than the amount stated in the deed. The trial court passed a preliminary decree for foreclosure, which was upheld by the High Court.
Finding of the Court:
The High Court found that the Deed of Mortgage was actually an English Mortgage, not a Mortgage by conditional Sale. The court noted that the deed did not contain a provision that the sale would become absolute if the defendant failed to pay the loan by a certain date. The court also found that the defendant had admitted in his written statement that the transaction was a mortgage. The court further held that the final decree for foreclosure was incompetent under Section 67 of the Transfer of Property Act, which prohibits foreclosure decrees in the case of English Mortgages. However, the court declined to set aside the final decree, as the defendant had not appealed the preliminary decree.
Issues: 1. Whether the Deed of Mortgage was an English Mortgage or a Mortgage by conditional Sale? 2. Whether the final decree for foreclosure was competent under Section 67 of the Transfer of Property Act? 3. Whether the defendant's petition under Section 36 of the Bengal Money Lenders Act was barred by limitation?
Ratio Decidendi: 1. The court held that the Deed of Mortgage was an English Mortgage based on the following factors: - The deed did not contain a provision that the sale would become absolute if the defendant failed to pay the loan by a certain date. - The deed used the language of an absolute transfer, subject to a proviso for re-transfer upon payment of the loan. - The defendant had admitted in his written statement that the transaction was a mortgage. 2. The court held that the final decree for foreclosure was incompetent under Section 67 of the Transfer of Property Act, which prohibits foreclosure decrees in the case of English Mortgages. 3. The court held that the defendant's petition under Section 36 of the Bengal Money Lenders Act was not barred by limitation, as the right to apply under that section is a continuing right available to a person even in execution cases.
Final Decision: The appeal was dismissed, and the petition under Section 36 of the Bengal Money Lenders Act was rejected. The court also stayed the operation of its order for a period of six weeks.
( 1 ) - This appeal is directed against the passing of a final decree in a suit for foreclosure. The plaintiff-respondent No. 1 filed a suit in the City Civil Court; Calcutta, against the defendant-appellant and one Sri R. K. Mitra, appointed as Receiver in Partition and Administration Suit No. 2729 of 1968, pending in this Court, for passing of a preliminary decree for foreclosure under Order 34 Rule 2 of the Code of Civil Procedure on the allegation that by a registered Deed of Mortgage by way of conditional sale, dated 6. 6. 68, the appellant for a consideration of a sum of Rs. 4,000 ostensibly sold his undivided 1/9th share in Premises No. 155-B, Mahatma Gandhi Road, Calcutta (hereinafter called the suit property) to the plaintiff on condition that in default of payment of the principal sum of Rs. 4,000 with interest at the rate of 9% per annum and all interest and expenses incurred by the plaintiff in respect of his claim under the Deed of. Mortgage on or before 5. 9. 69, the Sale should become absolute. On alleging that the appellant has failed to make any payment of the principal amount together with interest and other incidental charges by 5. 9. 69 and on alleging further that by an Order passed by this Court on 19. 7. 72, in the Partition and Administration Suit No. 2729 of 1968, the plaintiff was made a quasi party to the partition proceeding in that Suit, the respondent No. 1 (plaintiff) prayed for passing of a preliminary decree for foreclosure against the appellant and the respondent No. 2, the Receiver appointed in the Partition and Administration Suit.
( 2 ) THE defence of the appellant was that the transaction was a mortgage, that the defendant had received only Rs. 2,009 and not Rs. 4,000 on executing the Deed and that under a subsequent agreement between the parties, the appellant was to repay to the respondent No. 1 his legitimate dues under the indenture out of the sale proceeds to be received by him after sale of Premises No. 26, Acharya Jagadish Chandra Bose Road, Calcutta, in connection with the Partition and Administration Suit No. 2729 of 1968 pending in this Court.
( 3 ) AT the time of Trial of the Suit for foreclosure, the plaint examined himself as P. W. 1 and the appellant examined himself as D. W. 1. Considering the evidences of these witnesses and the registered Deed of Mortgage, Ext. 1, a preliminary decree for foreclosure was passed by the learned Judge, 8th Bench, City Civil Court, Calcutta, directing the appellant and the respondent No. P, to pay to the respondent No. 1 the sum of Rs. 4,000 in principal and a sum of Rs. 3316 for interest on the principal sum. It was stated in the preliminary decree for foreclosure that the decretal amount would carry interest at the rate of 6% per annum from the date of the decree till realisation. It was further stated in the preliminary decree, by which the Suit was decreed on contest with cost against the appellant and ex parte against the rest without cost, that the defendants should pay the decretal amount into Court on or before 31. 12. 82. failing which the respondent No. 1 could apply for passing of a final decree according to law. On 16. 2. 83, the respondent No. 1 filed a petition under Order 34 Rule 3 (2) C. P. C. for passing of a final decree as the defendants did not pay the decretal amount, as directed in the preliminary decree. On 4. 8. 83, the appellant filed a petition of objection regarding passing of a final decree. In the petition of objection the appellant gave out the grounds for his inability to pay the decretal amount within the time mentioned: in the preliminary decree and prayed for granting him at least six months time or in the alternative, for allowing him easy yearly installments to pay off the decretal dues Under the preliminary decree. By Order No. 40, dated 4. 8. 83, the learned Judge extended the time, till 16. 11. 83 for payment of the decretal dues, on being satisfied that sufficient cause wa
