PETITIONER:
KUMAR PASHUPATINATH MALIA & ANOTHER
Vs.
RESPONDENT:
DEBA PROSANNA MUKHERJEE.
DATE OF JUDGMENT:
04/05/1951
BENCH:
DAS, SUDHI RANJAN
BENCH:
DAS, SUDHI RANJAN
KANIA, HIRALAL J. (CJ)
SASTRI, M. PATANJALI
CITATION:
1951 AIR 447 1951 SCR 572
ACT:
Bengal Money Lenders Act (X of 1940), ss. 2 (22), 36
(5)--Relief under s. 36--" Suit to which this Act applies
"--Suit in which execution proceeding was pending on Jan. 1,
1939--Execution Case struck off but attachment continuing in
force on Jan. 1, 1939--Applicability of Act----Civil Proce-
dure Code (V of 1908), O. 21, r. 57--Striking off execution
case keeping attachment in force--Whether terminates execu-
tion proceeding--Sub-mortgagee--Whether assignee of mort-
gage--Right to claim protection under s. 36 (5).
HEADNOTE:
A decree on a mortgage was passed in a suit brought by
the representatives in interest of a sub-mortgagee in 1929
and a personal decree for recovery of the amount remaining
due after the sale of the mortgaged properties was passed in
1935. In 1936 the decree-holder started execution of the
personal decree and attached certain properties of the
judgment-debtor. The decree-holder filed a petition on
January 30, 1937, praying that the execution case "may be
struck off for non-prosecution, keeping the attachment in
force" in view of certain negotiations for amicable settle-
ment, and the court passed an order that the execution case
"is dismissed for non-prosecUtion, the attachment
573
already effected continuing". On June 2, 1939, the decree-
holder filed a petition stating that the decree had been
adjusted and attachment may be withdrawn. The Bengal
Money-lenders Act came into force on September 1, 1940, and
on January 2, 1941, the legal representatives of the judg-
ment-debtor filed a suit under s. 36 of the Act praying for
re-opening the transactions. The question being whether any
proceeding for execution was pending on or after January 1,
1939, within the meaning of the definition of "a suit to
which this Act applies" contained in s. 2 (22) of the Bengal
Money-lenders Act:
Held, per KANIA C.J. and DAs J.--That the order of
January 30, 1937, was in form and in substance a final order
of dismissal of the execution petition of 1936. The attach-
ment continued not because there was a pending execution
proceeding but because a special order for continuing the
attachment was made under O. 21, r. 57 of the Civil Proce-
dure Code as amended by the Calcutta High Court, and not-
withstanding the fact that the attachment was continued
there was no execution proceeding pending on January 1,
1939, and accordingly the decree sought to be reopened was
not one passed in "a suit to which the Act applies" within
the meaning of s. 2 (22) of the Act and the Court had no
power to re-open the transactions under s. 36 (2). The
petition of June 2, 1939, was also not a proceeding for
execution but a mere certification by the decree-holder of
satisfaction of the decree.
PATANJALI SASTRI J.--The continuance of the attachment
notwithstanding the dismissal of the execution petition,
indicated that the proceeding which had resulted in the
attachment was kept alive to be carried forward later on by
sale of the attached property. Attachment itself is "a
proceeding in execution" and so long as it subsists, the
proceeding in execution can well be regarded as pending. In
this view a proceeding in execution was pending on January
1, 1939, and the decree must be taken to have been passed in
"a suit to which this Act applies ". But inasmuch as the
sub-mortgage to the respondent's predecessor in title was
bona fide and he obtained by virtue of the sub-mortgage the
right to sue the original mortgagor for recovery of the
mortgage debt, the decree-holder was a bona fide assignee
and his claim for the entire decree debt was protected by s.
36 (5) of the Act.
Renula Bose v, Manmatha Nath Bose (L.R. 72 I.A. 156),
Promode Kumar Roy v. Nikhil Bhusan Mukhopadhya (50 C.W.N.
407) and Prom ode Kumar Roy v. Nikhil Bhusan Mukhopadhya
(L.R. 76 I.A. 74) referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 90 of
1950. Appeal against the Judgment and Decree dated the 22nd
July 1948 of the High Court of Judicature at Calcutta (K. C.
Mitter, and K.C. Chunder J J) in appeal from Original Decree
No. 49 of 1942 arising
74
574
out of Decree dated the 8th September 1941 of the Subordi-
nate Judge at Asansole in Suit No. 1 of 1941.
Purusottam Chatterji (S. N. Mukherjee, with him) for the
appellants.
Panchanan Ghose, (P. C. Chatterjee, with him) for the
respondent.
1951. May 4. ‘the following judgments were delivered :–
DAS J.–This appeal arises out of a suit filed by the
appellants on January 2, 1941, in the Court of the Subordi-
nate Judge, Asansole. That suit came to be filed in circum-
stances which may now be stated shortly.
A suit had been instituted by one Kumar Dakhineswar
Malia against Rameswar Malia, Rani Bhaba Sundari and others
for partition of the Searsole Raj Estate. One Bhagabati
Charan Mitra was appointed receiver of that estate in that
suit. On August 10, 1908, the said receiver with the permis-
sion of the Court which had appointed him as receiver grant-
ed two mining leases, each for 999 years–one in respect of
5/16 share of the Malias in Mouza Monohar Bahal and the
other in respect of 230 bighas in village Marich Kota–to a
firm then carrying on business under the name and style of
Laik Banerjee & Company. On the same day the said receiver
with like permission mortgaged these properties to the said
firm as security for the due repayment of the loan of Rs.
100,000 advanced by that firm. The Malias joined the re-
ceiver in executing the aforesaid leases and the mortgage.
As a result of these transactions the firm of Laik Banerjee
& Company became the lessees for 999 years of the two
properties as well as the mortgagee of the lessors’ interest
in the same. By diverse processes not necessary to be
detailed, the appellants have become the successors in
interest of the mortgagors and the respondent Deva Prasanna
Mukerjee has become the successor in interest of the mortga-
gee under the mortgage of August 10, 1908.
575
On March 31, 1922, Deva Prasanna filed suit No. 78 of
1922 for enforcing the mortgage of 1908. Preliminary decree
was passed in the last mentioned suit on ‘ July 31, 1928,
and a final decree for sale was made I on February 26, 1929.
In execution of this final decree the mortgaged properties
were sold at a Court i sale and were purchased by Deva
Prasanna for’ Rs. 59,000. This sale was confirmed by the
Court on June 30, 1931. A large sum remaining still due to
Deva Prasanna, he applied for, and on October 30, 1935,
obtained a personal decree for Rs. 1,27,179-0-6 against Raja
Pramatha Nath Malia who had by inheritance acquired the
lessors’ interest and become the borrower.
In 1936, Deva Prasanna started execution case No. 118
of 1936 for execution of the personal decree and attached
certain properties alleging that the same belonged to the
Raja. The exact date of the attachment does not appear from
the printed record. The Raja as Sibait of a certain deity
and his two sons, the appellants before us, objected to the
attachment of these properties and filed a claim case.
Negotiations for settlement started and eventually, on
January 30, 1937, a petition (Ex. 2) was filed in the exe-
cuting Court stating as follows :-
“The judgment debtor having made special requests to the
decree-holder for an amicable settlement of the aforesaid
execution case, the decree-holder has agreed to the same.
But some time is required to settle the talks and all the
terms etc. The judgment debtor has paid to the decree
holder the costs of this execution amounting to Rs. 76-14-0,
and he having made requests for this execution case being
struck off for the present on keeping the attachment in
force, the decreeholder has agreed to it.
It is, therefore, prayed that under the circumstances
aforesaid, the Court may be pleased to strike off this
execution case keeping the attachment in force.”
Neither the original nor a certified copy of the order
made on that date by the executing Court on the
576
above petition is forthcoming but the parties have definite-
ly agreed that the order is substantially and correctly
entered in column 20 of Ex. F which is a certified copy of
extract from the Register of applications for executions of
decrees relating to execution Case No. 118 of 1936. The
heading of column 20 is ‘Date on which execution case was
finally disposed of and purport of final order.” The entry
in column 20 under that head is:
“D. H. admits receipt of Rs. 76-14/- as costs of this
case from the J.D. The execution case is dismissed for non-
prosecution–the attachment already effected in this case
continuing.
30th January 1937.”
The entry under column 11 of that very exhibit reads as
follows :–
“Claim case automatically drops as the execution case is
dismissed. It is, therefore, rejected without any sort of
adjudication.
30th January 1937.”
In May 1937, the Searsole Raj Estate came under the
charge of the Court of Wards. By a Kobala executed with the
permission of the Board of Revenue Raja Pramatha Nath Malia
and his two sons Kumars Pashupati Nath Malia and Kshitipati
Nath Malia represented by Kumar Kshitipati Nath Malia as the
Manager of the Searsole Raj Wards Estate conveyed a property
known as Senapati Mahal to Deva Prasanna in full settlement
of his claim under the personal decree against the Raja. By
an agreement of even date, Deva Prasanna agreed to reconvey
Senapati Mahal to the Kumars if he was paid Rs. 90,000/-
within two years from that date. Senapati Mahal orginally
belonged to the Raja but had been tranSferred by him to his
two sons. A creditor, however, had filed a suit under sec-
tion 53 of the Transfer of Property Act challenging that
transfer and had actually got a decree declaring that trans-
fer as fradulent and void as against the creditors of the
Raja
577
An appeal was filed by the Kumars which was pending at the
date of the Kobala of January 4, 1939, and, in the circum-
stances, it was considered safer to join the Raja in the
last mentioned Kobala in favour of Deva Prasanna.
On June 2, 1939, a petition was filed in the Court of
the Subordinate Judge, Asansole, on behalf of Deva Prasanna
as the decree holder. It was headed “Money Execution Case
No. 118 of 1936. The relevant portions of this petition
were as follows;–
“That the above execution case was disposed of on the
30th January 1937 with the attachment of the properties
subsisting; since then the decree put into execution in the
above case has been adjusted after remission of a large
amount of interest by the out and out sale of certain
properties by a registered Kobala dated 4th January
1939 … ……………….. ……………………So
there is no longer any need of the said attachment remaining
subsisting.
It is, therefore, prayed that the attachment may be
withdrawn.”
On the same day the following order was made on that
petition:–
” Heard learned pleaders for the parties. They jointly
ask me to cancel the attachment (existing by special order)
in Money Ex. 118 of 1936 though that case was dismissed.
Order
The said attachment is cancelled and the decree in
question is recorded as adjusted as stated by learned plead-
er for the decree-holder and pleader of the judgment-debtor
according to the adjustment mentioned but not detailed in
this petition of to-day. Make necessary notes and send this
petition to the District Record Room.”
In the remarks column No. 22 in Ex. F the following
entry was made :–
“The said attachment is cancelled and the decree in
question is recorded as adjusted as stated by learned
578
pleader for the D.H. and the pleader of the Judgment Debtor
according to the adjustment mentioned but not detailed in
this petition of to-day. Dated 2nd June 1989.”
The Raja died in August, 1940, leaving the two appellants as
his sons and legal representatives. The Bengal Money Lend-
ers Act, 1940 (Bengal Act X of 1940) hereinafter called the
Act, came into force on September 1, 1940. On January 2,
1941, the appellants who, as the legal representatives of
the Raja, became “borrowers” within the meaning of the Act
filed the suit out of which the present appeal has arisen.
The suit was filed by the appellants against the respondent
under section 36 of the Act praying for reopening the trans-
actions and taking accounts and for release from all liabil-
ities in excess of the limits specified by law. In short,
they asked the Court to give them relief by exercising the
powers given to the Court by section 36 of the Act. There
was also a prayer for reconveyance of the Senapati Mahal.
The respondent filed his written statement setting up a
variety of defences rounded on merits as well as on legal
pleas in bar. On May 8, 1941, the Subordinate Judge settled
the issues and fixed June 9, 1941, “for a preliminary hear-
ing of the suit and particularly of such of the issues as
have been based on the pleas in bar.” Eventually, the case
was taken up for preliminary hearing on September 4, 1941,
and by his judgment delivered on September 8, 1941, the
learned Subordinate Judge dismissed the suit on issue No. 2
which was as follows:
“Does the plaint disclose a valid cause of action for the
suit ?”
The appellants preferred an appeal to the High Court at
Calcutta. Although the High Court (R.C. Mitter and K.C.
Chunder JJ.) did not accept all the reasonings on which the
learned Subordinate Judge had based his decision, they,
however, agreed that the appellants could get no relief as
the decrees in suit No. 78 of 1922 could not be reopened, as
they were not passed in
579
“a suit to which this Act applies” and consequently dis-
missed the appeal. The appellants have now come up on appeal
before us after having obtained a certificate from the High
Court under section 110 of the Code of Civil Procedure.
Learned Advocate appearing in support of this appeal
before us has contended that the High Court was in error in
holding that the decrees in Suit No. 78 of 1922 were not
liable to be reopened under the second proviso to section 36
(1). Learned advocate for the respondent while joining issue
on this point also raised a point which, however, did not
find favour with the High Court, namely, that the respondent
as a bona fide assignee for value of the mortgage debt was
protected by sub-section (5) of section 36. It is quite
clear that if either of the two points is decided against
the appellants, this appeal must fail.
The main provisions of section 36 (1)are in the follow-
ing terms :–
“Notwithstanding anything contained in any law for the
time being in force, if in any suit to which this Act ap-
plies, or in any suit brought by a borrower for relief under
this section, whether heard ex parte or otherwise, the Court
has reason to believe that the exercise of one or more of
the powers under this section will give relief to the bor-
rower, it shall exercise all or any of the following powers
as it may consider appropriate namely, shall
(a) reopen any transaction and take an account between
the parties;
(b) notwithstanding any agreement, purporting to close
previous dealings and to create new obligations, reopen any
account already taken between the parties;
(c) release the borrower of all liability in excess of
the limits specified in clauses (t) and (2) of section 30;
(d) if anything has been paid or allowed in account on
or after the first day of January, 1939, in respect of the
liability referred to in clause (c), order
580
the lender to repay any sum which the Court considers to
be repayable in respect of such payment or allowance in
account as aforesaid;
(e) set aside either wholly or in part or revise or
alter any security given or agreement made in respect of any
loan, and if the lender has parted with the security, order
him to indemnify the borrower in such manner and to such
extent as it may deem just.”
It will be noticed (a) that the provisions of this
section apply notwithstanding anything contained in any law
for the time being in force, (b) that the powers conferred
on the Court or to be exercised either in any suit to which
this Act applies or in any suit brought by a borrower for
relief under the section and (c) that the Court is called
upon to exercise all or any of the powers conferred on it by
the section if the Court has reason to believe that the
exercise of one or more of the powers will give relief to
the borrower. In the present case the borrowers have insti-
tuted a substantive suit for relief under section 36 and,
therefore, if there was nothing also in the section and the
Court had the requisite belief, the Court could exercise all
or any of the powers and give relief to the borrowers in
terms of the prayers of the plaint. There are, however, two
provisions to sub-section (1) of section 36. The relevant
portion of the second proviso is expressed in the words
following:
“Provided that in exercise of these powers the Court
shall not-
(i) * * * *
(ii) do anything which affects any decree of a Court, other
than a decree in a suit to which the Act applies which was
not fully satisfied by the first day of January, 1939,
or * * * *”
The proviso makes it quite clear that in exercise of
the powers the Court cannot reopen or otherwise affect a
decree of a Court unless such decree is one which was passed
in a suit to which this Act applies and’ which was not fully
satisfied by January 1, 1939. In the light of the decision
of the Full Bench of the
581
Calcutta High Court in Mrityunjay Mitra v. Satis Chandra
Banerji(1) which was approved by the Privy Council in Jadu
Nath Roy v. Kshitish Chandra Acharyya(2), it has not been
contended, in view of the fact that the personal decree for
the balance remained unsatisfied on January 1, 1939, that
the decrees in Suit No. 78 of 1922 were fully satisfied
within the meaning of the above proviso. Therefore, the only
thing that remains to be ascertained is whether the decrees
were passed in “a suit to which this Act applies.” Section 2
(22) of the Act is as follows:
“2. In this Act, unless there is anything repugnant in
the subject or context”-
(22) “Suit to which this Act applies “means any suit or
proceeding instituted or filed on or after the 1st day of
January, 1939, or pending on that date and includes a pro-
ceeding in execution–
(a) for the recovery of a loan advanced before or after
the commencement of this Act;
(b) for the enforcement of any agreement entered into
before or after the commencement of this Act, whether by way
of settlement of account or otherwise, or of any security so
taken, in respect of any loan advanced whether before or
after the commencement of this Act; or
(c) for the redemption of any security given before or
after the commencement of this Act in respect of any loan
advanced whether before or after the commencement of this
Act.”
The words “instituted or filed on or after the 1st day
of January, 1939, or pending on that date” have been read
and understood as qualifying the words “any suit or proceed-
ing” in the beginning of the definition as well as the words
“proceeding in execution” occurring further down: see per
Spens C.J. in Bank of’ Commerce Ltd. v. Amulya Krishna (3).
Accordingly, it has
(1) I.L.R. 11944) 2Cal. 376; 48 C.W.N. 361.
(2) L.R. 76 I.A. 179 at p. 190.
(3) [1944] F.C.R. 126;A.I.R. 1944 F.C. 18.
582
been held in Ram Kumar De v. Abhoya Pada Bhattacharjee (1)
that where a decree is such that the suit in which it was
passed had terminated before January 1, 1939, and no pro-
ceeding in execution was started or was actually pending on
or after that date it is not a decree in “a suit to which
this Act applies”and cannot be reopened. The same view was
upheld by a Special Bench of the Calcutta High Court in
Aparna Kumari v. Girish Chandra (2)which overruled two
earlier decisions to the contrary. The construction put
upon section 2 (22)by the Special Bench and the reasons
given by them appear to us to be well-founded. In the case
now before us, the Suit No. 78 of 1922 was instituted and
all the three decrees were passed long before the specified
date. The only question that has therefore, to be consid-
ered is whether any proceeding in execution was pending on
or after that date. The answer to this question will depend
on the true meaning and effect of the orders made by the
executing Court (i) on January 30, 1937, and (ii) on June 2,
1939.
As to (i)–It is not disputed that the order of January
30, 1937, was made under Order XXI, rule57, as amended by
the Calcutta High Court. Order XXI, rule 57, is expressed in
the following terms :-
“Where any property has been attached in execution of a
decree but by reason of the decree-holder’s default the
Court is unable to proceed further with the application for
execution, it shall either dismiss the application or for
any sufficient reason adjourn the proceedings to a future
date. Upon the dismissal of such application the attachment
shall cease.”
The marginal note of the rule is determination of at-
tachment. The reason why rule 57 was introduced in the Code
of 1908 has been explained by Rank in C.J. in Shibnath Singh
Ray v. Sheikh Saberuddin Ahmad(3) as follows:–
(1) 46 C.W.N. 557; A.I.R. 1942 Cal. 441.
(2) 48 C.W.N, 406.
(3) I.L.R. 56 Cal. 416 at pp. 421-422
583
“Rule 57 of Order XXI was a new provision introduced in
1908. It is evident from the language of the rule itself,
and it is still more evident from the circumstances under
which it was passed, that it was intended to provide a
remedy for the grievance or inconvenience which is apt to
arise, where, after an attachment in execution, the applica-
tion for execution cannot further be proceeded with by
reason of the decree-holder’s default. This was, and still
is, a very common case. The decree-holder makes some
informal arrangement to give the judgment-debtor time with-
out obtaining full satisfaction of the decree ;the applica-
tion for execution is not further prosecuted; it is not
withdrawn; neither party attends. In these circumstances,
the object of the rule is to say that the Court must make
either an order for adjournment or an order of dismissal.
The reason why it was necessary to require the Court, if it
did not adjourn a proceeding to a definite date, to dismiss
the application for execution formally and definitely can be
amply illustrated from the decided cases. In the absence of
a definite order of dismissal the files of the Courts became
encumbered with a number of applications for execution which
were water-logged and derelict, and a practice arose whereby
such applications were ordered to be ‘struck off.’ This was
a practice not justified by the Code and in cases where
attachments in execution had already been entered, the
question arose whether the effect of an order ‘striking off’
was that the attachment made upon application for execution
was itself struck off or whether it remained notwithstanding
such an order. Many other awkward and important questions
arose out of this practice and the object of rule 57 was to
ensure that this illogical and inconvenient practice should
be stopped. Applications for execution were to be definitely
dismissed if they were not adjourned to a future date. The
object of the last sentence in rule 57 is to settle the
question whether, when the application in execution is
dismissed any attachment made under that application should
fall to the ground or should subsist, and
584
the legislature has provided that it is to fall to the
ground.”
The new rule thus’ introduced left two distinct courses
open to the executing Court in the situation envisaged by
the rule. Each course had its advantage as well as its
disadvantage. Thus the adjournment of the execution pro-
ceedings kept the attachment alive without any special
direction. While the adoption of this course helped bona
fide arrangement between the decree-holder and the
judgment-debtor as to the time and manner of satisfaction of
the decree it was calculated also to encourage desultory
proceedings resulting in undesirable congestion in the files
of the Executing Court by keeping alive so many execution
proceedings. On the other hand, while the dismissal of an
application in the circumstances mentioned in the rule had
the merit of preventing a congestion of the file by finally
disposing of the application by a final order, it was calcu-
lated to discourage decreeholders from giving even reasona-
ble accommodation to the judgment-debtor on account of the
destruction of the attachment which left the judgment-debtor
free to deal with the property to the detriment of the
decreeholder after the attachment ceased. It was evidently
with a view to preserve the advantage of a dismissal and at
the same time to avoid the disadvantage of the rigid rule of
cesser of the attachment that the Calcutta High Court amend-
ed rule 57 by adding the words “unless the Court shall make
an order to the contrary” at the end of the last sentence of
that rule. The rule thus amended leaves three courses open
to the Executing Court in case it finds it difficult to
proceed with the execution case by reason of the default of
the decree-holder. It may (1) adjourn the proceedings for
good reason which will automatically keep the attachment
alive or (2) simply dismiss the application which will
automatically destroy the attachment or (3) dismiss the
application but specifically keep alive the attachment by an
express order. The rule, as amended, therefore, contemplates
three distinct forms of order, any one of which may be made
by the Court in the
585
circumstances mentioned in the rule. The question before us
is as to the category in which the order made on January 30,
1937, in Execution Case No. 118 of 1936 falls.
It will be recalled that the order of January 30, 1937,
was made on a petition (Exhibit 2) filed on that day in
Execution Case No. 118 of 1936. Great stress was laid by
the learned advocate for the appellants on the words “struck
off for the present” occurring in the body of that petition.
It will be noticed that those words formed part of the
request of the judgmentdebtor which was being recited in the
petition. In the actual prayer portion the decree-holder did
not use the words “for the present” but only asked the Court
“to strike off the execution case keeping the attachment in
force.” Further, apart from what the parties wanted, the
Court made its intention clear in the very order that it
passed and which is entered in column 20 of Exhibit F. The
Court regarded the willingness of the the decree-holder to
enter into a long and protracted negotiation with the judg-
ment-debtor as evidence of unwillingness on the part of the
decree-holder to diligently prosecute the execution
proceedings and accordingly dismissed the execution case
for non-prosecution but thought fit to expressly keep alive
the attachment. It is quite obvious that the Court made an
order of the third kind mentioned above. The three forms of
order permissible under rule 57 as amended by the High Court
are quite distinct and independent of each other and there
is no room for their overlapping. If the mere continuation
of attachment will automatically convert an express order of
dismissal of the execution application which is a final
order into an order of adjournment which is not a final
order then there was no point in the High Court taking the
trouble of amending rule 57 at all. The Court could by
simply adjourning the proceedings automatically continue
the attachment without any express direction in that
behalf. The fact that the Court gave an express direction
that the attachment should continue clearly indicates that
the
586
Court intended to make a final order of dismissal. Again,
the heading of column 20 in Exhibit F clearly indicates that
only a final order is to be entered in that column. The
fact that the order was entered in that column affords some
justification for the conclusion that the Court made a final
order of dismissal. That the claim case was automatically
dropped is yet another indication that the execution case
was at an end. The fact that the judgment-debtor had paid
the full costs of the execution case is also a feature which
goes to show, to a certain extent at any rate if not deci-
sively, that the execution proceeding was finally disposed
of by the order. The following endorsement appears on the
petition Ex. 2 (a), dated June 2, 1939:
“Heard learned pleaders for the parties. They jointly
ask me to cancel the attachment (existing by special order)
in Money Ex. 118 of 1936 though that case was dismissed.”
This endorsement also clearly shows that the Court
itself understood that the order that it made on January 30;
1937, was a final order of dismissal and that the attachment
had been continued by a special order. On a consideration of
all these matters I have not the least doubt in my mind that
the order of January 30, 1937, was in form and in substance
a final order of dismissal of the Execution Case No. 118 of
1936 and that the attachment was continued by a special
order such as is contemplated and authorised by the amend-
ment made by the Calcutta High Court in rule 57. Learned
advocate for the appellants contended that if the execution
case came to an end the attachment could not be left hanging
in the air. There is no substance in this argument. Ordi-
narily, an attachment is supported by an execution case and
if the execution case is simply dismissed the attachment
must fail with it. But rule 57, as amended, expressly empow-
ers the Court to dismiss an execution application but at the
same time to keep alive the attachment by a special order.
That is what was done in this case. Here the attachment does
not, to use the expression of the learned advocate for the
appellants,
587
hang in the air. It rests upon the solid foundation of a
special order which rule 57, as amended, in terms authorises
the Court to make. The continuance of the attachment, in the
circumstances, needs no execution proceeding to support it.
Take the case of an attachment before judgment. Under Order
XXXVIII, rule 11, where after an order of attachment before
judgment a decree is passed in favour of the plaintiff, it
is not necessary upon an application for execution of such a
decree to apply for re-attachment of the property. It means
that the attachment continues and the judgmentdebtor cannot
deal with the property to the disadvantage of the decree-
holder. After the decree is passed, the attachment continues
but nobody will say that although there has been no applica-
tion for the execution of the decree at any time by the
decree-holder there is, nevertheless, an execution proceed-
ing pending merely because the attachment continues. Here
also the attachment subsists and rests only upon the terms
of Order, XXXVIII rule 11, and without any proceeding. Such
attachment cannot be called a proceeding in execution, for
none was ever initiated after the decree was passed. In my
judgment, the order of January 30, 1937, was a final order
which brought the Execution Case No. 118 of 1936, to an and
and the attachment continued, not because there was a pend-
ing execution proceeding but because a special order was
made under Order XXI, rule 57, as amended by the High
Court.
As to (ii)–Learned advocate for the appellants then
contended that the petition (Ex. 2a) dated June 2, 1939,
amounted to a proceeding in execution and as that was insti-
tuted and was pending after January 1, 1939 the proceedings
came within the definition in section 2 (22)of “a suit to
which this Act applies”. I do not think this argument is
sound. The petition (Ex.2a) was not really an application at
all. See Raja Shri Prakash Singh v. The Allahabad Bank Ltd.
(1). In substance, it was nothing but a certification by the
decree-holder of the satisfaction of the decree. The mere
fact
(1) 33 C.W.N. 267; A.I.R. 1929 P.C. 19,
588
that the document was in the form of a petition could not
convert what was really the usual certifying procedure into
a proceeding in execution for recovery of a loan or for
enforcement of any agreement. It was purely an intimation
given to the Court by the decreeholder that the decree had
been satisfied out of Court and the prayer for withdrawal of
the attachment was merely consequential and would follow as
a matter of course on full satisfaction of the decree being
recorded. The order made on that petition also shows that
the decree was recorded as adjusted and the attachment was
cancelled. In my judgment, that petition (Ex. 2a) was not an
application such as would initiate a proceeding in execution
for any of the purposes mentioned in clauses (a) or (b) or
(c) of section 2 (22) of the Act.
For reasons stated above, the decrees sought to be
reopened were not decrees made in “a suit to which this Act
applies”. Suit No. 78 of 1922 was neither instituted on or
after January 1, 1939, nor was it pending on that date, all
the three decrees having been passed long before that date.
Nor was any proceeding in execution such as is contemplated
by section 2 (22) instituted or pending on or after that
date. The Execution Case No. 118 of 1936 was at an end on
January 30, 1937, and the petition of June 2, 1939, was not
an application at all and was certainly not a proceeding in
execution within the meaning of section 2 (22) of the Act.
This conclusion is sufficient to dismiss this appeal and it
is not necessary for us to consider the other question
raised by the respondent on the strength of section 36 (5)
of the Act and I express no opinion on that question.
The result is that this appeal must stand dismissed
with costs and I order accordingly.
KANIA C.J.–I agree.
PATANJALI SASTRI J.–The facts bearing on the dispute
in this appeal are fully stated in the judgment of ray
brother Das which I have had the advantage of reading and it
is unnecessary to recapitulate them here.
589
The appellant mortgagor seeks in these proceedings the
reliefs provided by the Bengal Money-lenders Act, 1940
(hereinafter referred to as the Act) in respect of a decree
debt payable by him. The respondent who represents the
sub-mortgagee decree-holder invokes the protection of two
exemptions contained in the Act: (1) Section 86 (1), proviso
(ii), which exempts inter alia “any decree other than a
decree in a suit to which this Act applies which was not
fully satisfied by the first day of January, 1939”. This
raises a dispute as to whether the respondent’s decree was
passed in a suit to which the Act applies. (2) Section 36
(5) which exempts “the rights of any assignee or holder for
value if the Court is satisfied that the assignment to him
was bona fide and that he had not received the notice re-
ferred to in clause (a) of sub-section (1) of section 28“.
This raises the question whether a sub-mortgagee is an
assignee within the meaning of the Act.
On the first question “a suit to which this Act applies”
is defined in section 2 (22) as meaning “any suit or pro-
ceeding instituted or filed on or after the 1st day of Janu-
ary, 1939, or pending on that date and includes a proceeding
in execution for (among other things) the recovery of a loan
advanced before or after the commencement of this Act.” This
definition has been construed as requiring that the “pro-
ceeding in execution “referred to therein should be pending
on 1st January, 1939, and the question accordingly arises
whether the order of the executing court dated 30th January,
1937, which purported to dismiss the respondent’s execution
case for non-prosecution while continuing the attachment
already effected, terminated the proceeding in execution
which had resulted in the attachment. It was said that the
order was made in accordance with Order XXI, rule 57, of the
Civil Procedure Code as amended by the Calcutta High Court
and must, therefore, be taken to have been intended to put
an end to the execution proceeding altogether. I am not
satisfied that such was the result of the dismissal. The
amendment which added the words “unless the court shall make
an order to the contrary”
200
at the end of the rule envisages a dismissal of an “applica-
tion for execution” while at the same time continuing a
subsisting attachment. The dismissal of 30th January, 1987,
must, therefore, be taken to be a dismissal of the execution
application then before the court and cannot be taken to
have any wider operation. On the other hand, the continu-
ance, in express terms, of ‘the attachment notwithstanding
the dismissal, indicates that the proceeding which
had resulted in the attachment was kept alive to be
carried forward later on by sale of the attached property.
Attachment itself is a “proceeding in execution” and, so
long.as it subsists, the proceeding in execution can well be
regarded as pending. In In re Clagett’s Estate; Fordham v.
Clagett (1) Jessel M.R. declared that “a pending matter in
any court of justice means one in which some proceeding may
still be taken”. The attachment was cancelled by the court
only on 2nd June, 1939, when the decree in question was
recorded as adjusted and then, and not before, could execu-
tion of the decree be properly considered to have terminat-
ed. In this view, a “proceeding in execution” was pending
on the 1st day of January, 1939, and the respondent’s decree
must be taken to have been passed “in a suit to which this
Act applies’ ‘, with the result that the respondent’s claim
to exemption under proviso (ii) to sub-section (1) of sec-
tion 36 of the Act must fail.
I am, however, of opinion that the respondent’s claim to
recover his decree debt is protected under section 36 (5).
There is no question here but that the submortgage to the
respondent’s predecessor in title was bona fide. Nor could
he have received the notice referred to in clause (a) of’
sub-section (1) of section 28 as the transaction took place
long before the Act was passed. It is not disputed that
section 36 (5) applies to pre-Act debts. [See Renula Bose v.
Manmatha Nath Bose(2)]. The only question, therefore, is
whether the respondent as sub-mortgagee is an assignee
within the meaning of sub-section (5) of section 36. The
learned
(1) 20 Ch. D. 687. (2) L.R. 72 I.A. 156,
591
Judges in the court below held that he was not, following an
earlier decision of their own court in Promode Kumar Roy v.
Nikhil Bhusan Mukhopadhya(1). That decision, however, was
reversed by the Privy Council in Promode Kumar Roy v. Nikhil
Bhusan Mukhopadhya(2) where their Lordships dealt with the
question now before us in the following terms :-
“It was suggested, in the judgment of Mitter J. (with
which Waight J. agreed), and in the argument for the re-
spondents that if a sub-mortgagee were an `assignee’ within
section 36, sub-section (5), of the Act., certain difficul-
ties and anomalies would result. Their Lordships cannot
agree with this suggestion. They express no view as to the
position which arises if the sub-mortgage contains only a
charge on the original mortgage debt, but when it contains
an assignment of that debt, and of all the rights of the
mortgagee, the position appears to be free from difficulty.
Relief can be given to the original mortgagor as against the
original mortgagee under section 36, but such relief must
not affect the rights of the assignee by way of sub-mort-
gage. To take an imaginary case by way of illustration, let
it be assumed that the amount due on the original mortgage,
for principal and interest at the original rate, is Rs.
1,000, and the sum due on the sub-mortgage by assignment,
for principal and interest at the original rate, is Rs. 500.
Let it further be assumed that if relief could be given, and
were given, under section 36 as against both mortgagee and
sub-mortgagee, the sums due to them respectively would be
Rs. 800 and Rs. 400. By reason of sub-section (5), the sub-
mortgagee’s rights cannot be affected. He can therefore, as
assignee of the mortgage debt: claim his full Rs. 500, as
against both mortgagor and original mortgagee. But if the
court gives the mortgagor relief as against the original
mortgagee, the mortgagor will only be liable to pay to the
original mortgagee Rs. 300, the balance of the reduced debt
after paying the sub-mortgagee in full.
As to contention (b), it is impossible to read subsec-
tion (5) of section 36 as referring only to an assignee
(1) 50 C.W.N. 407. (2) L.R. 76 I.A. 74.
592
of a mortgage decree. The words and that he had not received
the notice referred to in clause (a)of subsection (1) of
section 28 make it plain that an assignee of a mortgage
debt is within the sub-section, since section 28, sub-
section (1) is concerned only with assignment of debts” (pp.
83-84).
The sub-mortgage here in question also contains an
assignment of the debt due under the original mortgage debt
and of “the entire interest” of the original mortgagee.
After reciting their original mortgage, the mortgagees
proceed to state in the deed of sub-mortgage:
“We mortgage all that is at present due and that will
in future become due to us, the first, second, third and
fourth parties, on account of the said one lakh of rupees
together with interest and the entire interest under the
mortgage taken by us on the basis of the said Indenture in
respect of five annas share of the said Niskar Mouza Mono-
harbahal and in respect of sixteen annas of the surface and
underground rights in the said Mouza Marichkota and we make
over the said Deed of Indenture to you”.
The decision referred to above is, therefore, directly
in point and rules the present case.
It was suggested that the said decision was inconsist-
ent with the earlier decisions of the same tribunal in Ram
Kinkar Banerjee v. Satya Charan Srimani(1) and Jagadamba
Loan Co. v. Raja Shiba Prasad Singh(2). Stress was laid upon
the expression “all the rights of the mortgagee” used by
their Lordships in the passage quoted above, and it was
pointed out that in the earlier decisions they held that in
India a legal interest remained in the mortgagor even when
the mortgage was in the form of an English mortgage, and
that the interest taken by the mortgagee was not an absolute
interest. This proposition, it was said, implied that in a
sub-mortgage all the rights of the original mortgagee are
not assigned to the sub-mortgagee and that the mortgagee
still retains a legal
(1) 64 I.A. 50. (2) 68 I.A. 67.
593
interest in the original mortgage. This is a rather super-
ficial view of the matter. In the earlier cases their
Lordships were considering the quantum of interest trans-
ferred by a mortgagor to a mortgagee in a mortgage of
leasehold interest for the purpose of determining whether
or not there was privity of estate between the landlord and
the mortgagee. If the mortgage could operate as an assign-
ment of the entire interest of the mortgagor in the lease,
the mortgagee would be liable by privity of estate for the
burdens of the lease. If on the other hand, it operated only
as a partial assignment of the mortgagor’s interest, no such
result would follow. It was in determining that issue that
their Lordships held that no privity of estate arose in
India because a legal interest remained in the mortgagor and
the interest taken by the mortgagee was not an absolute
interest. These cases had no bearing on the question, which
arose in Promode Kumar Roy v. Nikhil Bhusan Mukhopadhya (1)
and arises in the present case, as to whether a sub-mortga-
gee becomes an assignee of the mortgage debt and of the
mortgagee’s right to recover the debt from the original
mortgagor. The Act affords relief to certain classes of
debtors by curtailing pro tanto the rights of the creditors,
subject to certain exceptions in regard to “assignments of
loans”. In such a context the only relevant consideration
could be whether the assignment is such as to establish a
debtor and creditor relation between the assignee and the
debtor so as to bring the case within the purview of the
Act. If the sub-mortgagee obtained, by virtue of the sub-
mortgage, the right to sue the original mortgagor for recov-
ery of the mortgage debt, that would seem sufficient to make
him an assignee within the meaning of the Act. It was from
this point of view that the question as to the nature of the
right transferred to a sub-mortgagee under his sub-mortgage
was considered in Promode Kumar Roy v. Nikhil Bhusan Mukho-
padhya(1) as it has to be considered in the present case,
and the reference to the sub-mortgage containing an assign-
ment of all the rights
(1) 76 I,A. 74.
594
of the mortgagee must, in that context, be understood with
reference to the sufficiency of the right assigned to enable
the sub-mortgagee to sue the original mortgagor in his own
right, so as to bring the relevant provisions of the Act
into play as between them. The reservation made by their
Lordships in the case of a sub-mortgage containing only a
charge on the original mortgage is significant and supports
this view. I do not consider, therefore, that there is any
inconsistency between Promode Kumar Roy v. Nikhil Bhusan
Mukhopadhya(1) and the earlier decisions, and even if there
be any such inconsistency it has no relevance to the present
case.
In the result I agree that the appeal fails and should
be dismissed with costs.
Appeal dismissed.
Agent for the appellants: R.R. Biswas.
Agent for the respondent: Sukumar Ghose.
