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1961 Supreme(P&H) 120
PUNJAB & HARYANA HIGH COURT
Mehar Singh, A.N.Grover and D.K.Mahajan JJ.
Mangat Rai
Versus
Kidar Nath
First Appeal No. 184 of 1954,
Decided On : MAY 23, 1961
The rule of damdupat, as enacted in Section 30 of the Punjab Relief of Indebtedness Act, 1934, is immediately attracted, whether or not the party seeking its benefit is within or outside the scope of the word debtor as defined in S. 7(2).
Headnote:
PUNJAB RELIEF OF INDEBTEDNESS ACT, 1934 - SECTION 30 - USURIOUS LOANS ACT, 1918 - SECTION 3 - REDEMPTION OF MORTGAGE - APPLICABILITY OF SECTION 30 - INTERPRETATION OF SECTION 3(3) OF THE USURIOUS LOANS ACT - WHETHER SECTION 3 APPLIES TO REDEMPTION SUITS OF MORTGAGES EXECUTED BEFORE THE COMMENCEMENT OF THE ACT.
Fact of the Case:
Plaintiffs brought a suit for redemption of mortgaged properties and obtained a decree for possession of the properties by redemption on payment of Rs. 62,293/11/9, with costs amounting to Rs. 326/9/9. The defendants, mortgagees, appealed against the decree but failed. Subsequently, the plaintiffs made an application under the Restitution of Mortgaged Lands Act, (Punjab Act No.4) of 1938, for restitution of the agricultural land without payment of anything on the ground that from the income of the land the mortgage consideration had completely been paid off according to the provisions of that Act and for extinction of the mortgages on the land. The Collector accepted the application and extinguished the mortgages of the land. The present suit for redemption by the plaintiffs only concerns the nauhra and the two houses.
Finding of the Court:
1. It is open to the legal representatives of a debtor to invoke the help of section 30 of the Punjab Relief of Indebtedness Act in a suit for possession by redemption of a mortgage. 2. The provisions contained in Section 3 of the Usurious Loans Act, 1918, as amended in the Punjab, would not govern a suit for redemption of mortgage executed before the commencement of the Act.
Issues: 1. Whether it is open to the legal representatives of a debtor to invoke the help of section 30 of the Punjab Relief of Indebtedness Act in a suit for possession by redemption? 2. Whether the provisions contained in Section 3 of the Usurious Loans Act, 1918, as amended in the Punjab, would govern a suit for redemption of mortgage executed before the commencement of the Act?
Ratio Decidendi: 1. The definition of the word debt in Section 7(1) of the Punjab Relief of Indebtedness Act, 1934, is inclusive and not exhaustive. It includes certain liabilities of the debtor enumerated therein, at the same time it excludes from its purview certain others of the liabilities which otherwise would be included in it. 2. A usufructuary mortgage is not a debt as that word is defined in Section 7(1) of the Punjab Relief of Indebtedness Act, 1934, because in the case of such a mortgage the mortgagor is under no obligation to pay to the mortgagee and it is his option to redeem if and when the chooses. 3. The test, therefore, is that where there is no liability which can be enforced to recover the amount by coercive machinery of the law, it is not a case of debt. but otherwise where such recovery can be made by the coercive machinery of the law the amount recoverable is a debt. 4. Section 30 of the Punjab Relief of Indebtedness Act, 1934, makes no reference to a debtor as defined in S. 7(2), it only refers to a debt as defined in S. 7(1). It the suit relates to a debt as defined therein, the rule of damdupat, as enacted in Section 30, is immediately attracted, whether or not the party seeking its benefit is within or outside the scope of the word debtor as defined in S. 7(2). 5. Clauses (b) and (c) of section 2(3) of the Usurious Loans Act, 1918, apparently apply to enforcement of a security or redemption of it taken after the commencement of Act. The words of the clauses are unmistakably clear and there being no ambiguity in the language, the clauses cannot possibly apply to enforcement of a security or redemption of it taken before the commencement of the Act.
Final Decision: 1. The answer to the first question is that it is open to the legal representatives of a debtor to invoke the help of S. 30 of Punjab Act N0. 7 of 1934 in a suit for possession by redemption of a mortgage. 2. The answer to the second question is in the negative that section 3 of Act No. 10 of 1918 as amended in the Punjab, does not govern a suit for redemption of a mortgage executed before the commencement of that Act.
Mehar Singh, J.
1. The two questions referred to the Full Bench are--
1. Whether it is open to the legal representatives of a debtor to invoke the help of section 30 of the Punjab Relief of Indebtedness Act in a suit for possession by redemption?
2. Whether the provisions contained in Section 3 of the Usurious Loans Act, 1918, as amended in the Punjab, would govern a suit for redemption of mortgage executed before the commencement of the Act?
2. The grandfather of the plaintiffs, Ladhia, created three mortgages between July 20, 1886, and May 21, 1897, for a total consideration of Rs. 6,400/- by the deeds Exhibits P.1 to 3 in favour of Ramji Dass, father of defendants Nos. 1 to 4, in respect of some agricultural land, one nauhra and two houses. According to the conditions of the mortgages, the mortgagee was to be in possession of the mortgaged properties and to appropriate the rents and profits towards interest on the mortgages, the rate of interest having been specified in the mortgages, and in default of payment of interest a provision having been made for charging compound interest at considerable higher rate. The mortgagee was not given possession of a part of the mortgaged property, which was already in the possession of one Shugan Chand under a mortgage.
The mortgagee sued for possession of that property. In that suit there was a compromise under which the mortgagee paid Rs. 650/- to clear off the encumbrance in favour of Shugan Chand and the mortgagor contracted to have that amount as mortgage debt on the mortgaged properties. The decree in that suit is of February 28, 1904. So the total mortgage debt comes to Rs. 7,050/-.
3. The plaintiffs brought a suit for redemption of the mortgaged properties and obtained a decree on March 14, 1914, for possession of the properties by redemption on payment of Rs. 62,293/11/9, with costs amounting to Rs. 326/9/9. There was an appeal against that decree but that failed on November 24, 1919. However, pursuant to that decree the properties were not redeemed by the plaintiffs.
4. Subsequently, the plaintiffs made an application under the Restitution of Mortgaged Lands Act, (Punjab Act No.4) of 1938, for restitution of the agricultural land without payment of anything on the ground that from the income of the land the mortgage consideration had completely been paid off according to the provisions of that Act and for extinction of the mortgages on the land. The Collector accepted the application and extinguished the mortgages of the land. The date of the order is not on the record, but, as present litigation does not concern agricultural land, that is not material. The present suit for redemption by the plaintiffs only concerns the nauhra and the two houses.
5. On November 3, 1952, the plaintiffs instituted suit for redemption of the nauhra and the two houses without payment of any amount to the defendants, mortgagees, on the ground, among others, that the rule of damdupat, in accordance with section 30 of the Punjab Relief of Indebtedness Act (Punjab Act No. 7) of 1934, applies to the case, and the defendants have already received out of the income of the mortgaged properties more than twice of the original mortgaged debt under the mortgage deeds. The plaintiffs also seek to have the mortgage transactions reopened and accounts settled under section 3 of the Usurious Loans Act,(No 10) of 1918. The plaintiffs as pointed out, are the grandsons of the original mortgagor Ladhia.
6. The learned trial Judge has found that the rents and profits of the mortgaged properties approximate to Rs. 48,571/-. He further found that on the stipulations between the parties the mortgage amount would swell to about rupees seventy-seven lacs. He came to the conclusion that the rule of damdupat does not apply to the present case. The amount due under the mortgages was determined at Rs. 62,293/11/9 under the previous redemption decree of March 14, 1914. He was of the opinion that it was after that date th
