Kabidi Venku Sah versus Syed Abdul Hai and Others

Code of Civil Procedure, 1908-0. 21, r. 58-Claim Petition for gettinz an attachment faised-By a ·simp/~ mortgagee having no interest in equity of redemption and not enjoying possession of property-JVhether competent?

¶13

On the basis of a sirilple mortgage executed in his favour· in- the year 1948, the appellant obtained· a decree on 4-9-1967, brought the mortgaged D property to sale, purchased it himself on 24-7-1968 and got the sale confirmed by court on 28-8-1968. The first respondent who held a promissory note exeC:uted in his favour by th~ oWner .of the. said property in 1961, istituted a suit for recovery of the sum on 24-9-1964 and got the property attached before judgment on the same day and thereafter obtained a · l_TlOney decree on "30-3-1967, and filed an execution petition for realising the money due under the decree by bringing the Property to sale. Thereupon the appellant filed a claim · E petition under 0. 21, r. '.'8 C.P.C., for getting the attachment raised. The claim petition was resisted by·the first respondent inter a/ia on the ground that it was incompetent as the appellant had neither any interest in the equity of redemption nor was he in possession of the property. The· trail court allowed the claim petition holding inter alia that what was ·attached on 24-9nl964 was the entire property and not the eQuity ·of redcption alone. F The Civil Revision Petition filed by the first respondent against the order of the trial court was allowed by the High Court which held that the appellant hav:ing failed to prove that he had an interest in the property ·on the date of the attachment and was in possession of the property, either actual or const_ructive, on that date he was not entitled to have the attachment raised·

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Dismissing the appeal, ~

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HELD : Th~ trial court erttd in observing that what was attached before judgment on "24-9-1964 was not the equity of rcdemPtion but the entire property .. There could be nO doubt that on 24·9·1964 when the ·property. was attached before judgment long a_fter the mortgage dated 3171948 and two years before the suit Was filed on the mortgage.in 1966, the mortgagor had the H equity of Tedemption and that what could have been attached in law on 24·9-1964 was the equity of redemption alone and not the entire interest in the property. The appellant had no doubt an interest i_n the property as mortgagee, bµt re <;outd not have been i~ possession of the property as he Was. only a

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113

K.B. SAH v. S.A. HAI (Varadarojan, J.)

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simple mOrtgagee. He was a secured creditor as he had a mortgage in his favour, and any attachment effected after the date of the mortgage and during its subsistence could on1y be subject 'to that mortgage. Since he had_ no interest in the equity of redemption on the date of attachment, he could not have had any objection to that right of the mortgagor being attached by the first respondent. Therefore, be was not a person who could, tin law, file any claim petition under 0. 21; r. 58 objecting to the attachmant of the equity of redemption. [116 A; C~D; F-H]

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B

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The attaching creditor can bring the property to sale only subject to the mortgage as long as it is subsisting. That is to say, he could bring only the· mortgagor•s equity of redemption to sale if it had not already been extinguished by its sale in execution of any decree obtained ,on that mortgage. But if the equity of redemption has already been sold after the date of the attachment, the attaching decree holder could proceed only against the balance, if any, of .the sale price left after.satisfying the mortgagee decree-holder's claim under the decree. The mortgagee's right is th~s not affected at all. [117 B-C] CIVIL APPELLATE JuR1so1c110N : Civil Appeal No. 1833 of 1970. Appeal by Special leave from the Judgment' and Order dated the 17.4.1970 of the Mysore High Court in Civil Revision Petition No. 1255of1969. / A.S. Nambiar, Ashok Kumar Sharma· and M. Veerappa for the Appellant. R.B. Datar, Divender Singh, Ms. Modhu Moo/chandani and Ms. Meenu Verma·for the' Respondent.

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E

The Judgment of the Court was delivered by

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VARADARAJAN, J. This appeal by special leave is directed against the Order dated 17.4.1970 of a learned single Judge of the erstwhile Mysore High Court (now Karnataka High Court) in CRP 1255 of 1969 which was filed against an Order dated 3.3.1969 of the Principal Civil Judge, Bangalore in Misc. Case 6 of 1969~ filed by Kabidi Venku Sah who was the first respondent in the Civil Revision Petition and is the appellant in this Civil Appeal. The Principal Civil Judge allowed the Misc. Case which j-as filed under Order 21 Rule 58 of the Code of Civil Procedure fc{r raising an attachment over the house 'property effectetl at the instance of Syed Abdul Hai who was the petitioner before the High Court in the Civil Revision Petition and is the first respondent in this Civil Appeal. The house property belonged· originally to one Vittal Sah who was the husband of the second respondent Sharada Bai. · Vittal Sah had executed a

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(1984] I s.c.R.

114

SUPREME COURT REPORTS

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simple mortgage over th~ property in favour of the appellant on A 31.7.1948. The appellant 9btained a decree on the mortagage on 4.9.1967 in O.S. 217 of 1966 on the file of the Principai Civil Judge and brought ~he property to sale in execution of that decree and purchased it himself on 24.7.1968 after obtaining the necessary leave· of the Court to bid and setoff. The sale was confirmed on 28.8.1968 and the appellant took delivery of the property on 28.11 .. 1969 in B Misc. Case 95·of 1968 as the court auction purchaser.

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Tlie first respondent Syed Abdul Hai obtained a money decree against Vittal Sah on 30.3.1967 in O.S. 386 of 1964 on the foqt of . a promissory note executed in 1961 for a suni of Rs. 20,000. He c obtained attachment before judgment over the same ·house property on .24.9.1964 on the same day on which filed that suit in the Court of the Principal Civil Judge; Bangalore. He filed E.P. 31 of 1968 for realising the money due. under the decree by bringing the house property to· s~le pursuant to the attachment before judgment effected D on 24.9.1964. Thereupon the appellant Venku Sah filed Misc. Case·· 6 of 1969 under Order 21 Rule 58 of the ·Code of Civil Procedure . . for getting the attachment raised, alleging that the second respondent Sharada Bai had no saleable interest in the property on the date of the attachment and that the first respondent's simple money decree oannot prevail over his murtagage decree and the sale of the property E obtained ·in his favour in executioff of that decree. ·

¶39

The.first respondent Syed Abdul Hai oppsed the claim petition, · contending that the court proceedings referred .to in the claim petition are colhisive and.fraudulent and that the delivery alleged F by the appellant is only a paper delivery possession con,tinued to be with the seco.nd respondent.

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·The Principal Civil Judge found that the mortgage decree, oxecutio)l sale and delivery of the property to the ·appellant cannot ,G be questioned in the first responden_t's claim petition sS' being collusive and could be questioned only' in a separate suit. He also found that there was no material on record to show that the second respondent continued to be in possession 'of the property after its delivery to the appellant pursuant to the court auction· sale in his favour. He rejected the contention that the appellant was not entitled fo file any· claim petition under Order 21 Rule 58 of the Code of Civil Procedure for raising the atachment before judgment cl!'ected 1mder Order 38 Rule 5 an! hefd that there is nothin on

¶41

K.B. SAH v. S.A. HAI (Varadarajan, J.)

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· ·record to show that the apJ,Jellant was ·aware of the attachment and therefore there was n_q, delay in filing the claim petition and that tho claim petition could be filed under Order 21 Rule 58 even in the case of attachment befgre judgment in view of the provisions of Order 38 of Rule 8 which says that when any claim is preferred to property which has been attached before judgment, such claim shall be adjudi· cated upon in the manner provided for the adjudication of claims io property attached in execution of a decree for paym~nt of -money. The Principal Civil Judge rejected the first respondent's contention that.the appellant had no interest in the equity of 'redemption even if the mortgage in his f;vour is true and that only the equity of redemption was attached, on 24.9.1964 ·and held that what was attached the entire property· and not the equity of redemption , ~lone. In this view, he allowed the' claim petition. ·

¶48

Before the High Court it was contended for the first respondent that the appellant should show not only that he had an interest in the properfy attached on the date of the attachment but also possession thereof on that date before he could get the attachment before he could get the attachment before Judgment raised and that the property belonged to the second respondent's· husband and was in ·his possession on the date of the attachment and . therefore the Principal Civil Judge could not .have allowed the claim petition. The appellant refuted that contention by peculiarly contending that he, a simple mortgagee, was in constructive possession of the property through the mortgagor.

¶49

The learned Judge of the High Court rightly rejected the contention that a simple mortgagee could be in possession of . the mortgaged.property constructively through the mortgagor- and· held that the appellant (claimant) should show that he had some inters! in the property attached on 24:9.1964 and was in actl!al or constructive possession thereof. He observed that the Principal Civil Judge has n9t recorded any finding on the question of the appellant's possession of the p'roperty on the date of the attachment and that he has thereby wrongly _exercised jurisdiction and acted with material irregularity in allowing the claim petition. He found that the appel· !ant had failed to prove that he i]ad an interest in the property ·on · the date of the attachment. and was ·in possession of the property, either actual or constructive, on that date and. held · that he was therefore not entitled to have the attachment raised.

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The matter is quite simple but has unfortunately dragged on for nearly 15 years 011 acco1mt of a wronii an! ill allvised step taken

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[1984] l s.C.R.

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116

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SUPRllME COuRT REPORTS

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by the appellant. The learned Principal Civil Judge erred in obse~, ving that what was attached before judgment on 24.9.1%4 is not the equity of redemption alone but the entire property. He has rightly held that in the claim petition the question of the mortagage of 1948,.the mortgage decree, the court auction sal~ and delivery of . possession of the property to the ·appellant pursuant to that- sale cann9t be contended to be collusive and. observed that the_ first respondent could, if at all, challenge them cmly in a separate suit. That being so, undoubtedly the mortgage of 1948 in favour of the appellant was there and what remained with the mortgagor was only the equity of redemption until it was brought to an end by the sale in execution of the mortgage decree confirmed by the court on 28.8.1968. Therefore, there could be no.doubt whatsoever that on 24.9.1964 when the property was attached before judgment long after the mortgage dated 31.7.1948 and two years before the suit on the mortgage was filed in 1966, the mortgagor had the equity ·Of · redemption and that what could have beeh attached in law on 24.9.1964 was the equity of redemption alone and not the entire interest in the property. There should have been no difficulty for the learned Judge of the High Court holding that the appellant t,could not have been in possession of the property, actual or constructive, for he was only a simple mortagagee who had nothing to do with possession until he got delivery of the property through the court as a decree _holder-court auction purchaser oa 28.4.1968 as noticed by the learned Judge in his judgment. The appellant had no doubt an insterest in the property as mortgagee, but he could not have been in possession of the property as he was only a simple mortgagee. The appellant was a secred creditor as he had a mortgage in his favour, and any attach· ment effected after the ·date of the mortgage and during its subsistence can be only subject to that mortgage. He had no interest in the equity of redemption on the date of the attachment and could not therefore have had any objection to that right o.f the mortgagor · being attached by the first · respondent. Therefore he was not a person who could in law file any claim petition under Order 2.1 Rule $ objecting to the attachment of the. equity of redemption: We may notice here what Order 21 Rule 58(1) says and it is this :

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"Where any claim is preferred to, or any objection is made to the attachment of, any property attached in exec\ltion ofa decree on the $fOUnQ that such property is

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B

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D

ltB. SAil v. S.A. HAI (Varadarajan, J.)

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not liable to such attachment, the Court shall proceed to adjudicate upou the claim or objection in accordance with the provisions herein contained." '.

¶72

The attaching creditor can bring the property to sale !>nlY

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· subject to the mortgage as long as it is subsisting. That is to say he could bring only the mortgagor's equity of redemption to sale if it had not already been extinguished by its sale in eecution of any deree obtained on tbat mortgage. But if the equity, of redemption has already been sold after the date of the attachment the attaching decree holder could proceed only against the balance, if any, of the. sale price left after satisfying the mortgagee decree-holder's claim under the decree. The mortgagee's right is thus not affected at all.

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• ' Therefore it is we had observed earlier that the appellant had taken a wrong and ill advised step in coming forwatd with the claim petition which bas resulted in the matter dragging on for over 14 years from 15. 1.1969. The appellant could not object to the attachment of the equity of redemption. The appeal fails and is dismissed, but under the circumstances of the case without costs. '

¶75

. H.L.C.

¶76

Appeal dissmissed.

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Kabidi Venku Sah v. Syed Abdul Hai and Others

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Kabidi Venku Sah v. Syed Abdul Hai and Others

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