Sm. Saila Bala Dassi vs Sm. Nirmala Sundari Dassi And Another

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeal No. 350 of 1957

Decision Date: 14 February 1958

Coram: A.K. Sarkar, AIYYAR, T.L. VENKATARAMA, Sudhi Ranjan Das (CJ), A.K. Bose, Vivian

In this case the Court recorded that the second respondent had sold certain properties to the appellant in 1952 and that the deed of sale stated the properties were conveyed free of all encumbrances. The first respondent had obtained a mortgage decree in respect of the same properties in 1935 but had not caused the decree to be drawn up in accordance with the Original Side Rules of the Calcutta High Court until 1954, when she initiated proceedings for the sale of the mortgaged properties. The second respondent objected that the execution of the decree was barred by limitation; that objection was rejected by a single judge of the High Court and the second respondent appealed that order. The appellant, fearing that the second respondent might collude with the first respondent to defeat her rights, filed an application in the High Court under Order 22 rule 10 of the Code of Civil Procedure seeking either substitution in the place of the second respondent or, alternatively, to be brought on record as an additional appellant. The High Court dismissed the application, and the appellant consequently filed the present appeal. The Court held that the application could not be sustained under Order 22 rule 10 because, first, assuming that the suit was deemed to have been pending until the decree was drawn up in 1954, no application had been made to the court where the suit was pending as required by Order 22 rule 10. Second, the application made to the appellate court was also not covered by Order 22 rule 10 because the transfer in question had been effected before the filing of the appeal and not during its pendency. However, the Court observed that the application fell within section 146 of the Code of Civil Procedure, which allowed the appellant to be brought on record, since an appeal constituted a proceeding within the meaning of that section and the right to file an appeal included the right to continue an appeal filed by the person under whom the appellant claimed. The Court relied on the authorities Jugalkishore Sayaf v Raw Cotton Ltd, Sitharamaswami v Lakshmi Narasimha and Muthia Chettiar v Govinddoss Kyishnadoss in reaching this conclusion.

Civil Appeal number 350 of 1957 was filed by special leave against the judgment and order dated 6 August 1956 of the Calcutta High Court, which had been issued in response to a notice of motion filed in Appeal number 152 of 1955. The appellant was represented by counsel N C Chatterjee and P K Mukherjee, while counsel B Sen and P K Ghosh, appearing on behalf of P K Bose, represented respondent number one. The judgment of the Supreme Court was delivered on 14 February 1958 by Justice Venicatarama Aiyar. The appeal challenged the High Court’s order of 6 August 1956 that had rejected the appellant’s request to be entered on the record as an appellant in the pending Appeal number 152 of 1955.

The factual backdrop involved the second respondent, Sudhir Kumar Mitter, who owned two houses located at number 86 / 1, Cornwallis Street and number 7-C, Kirti Mitter Lane in Calcutta. On 19 May 1934, Mitter executed a mortgage in favour of the first respondent, Smt Nirmala Sundari Dassi, for a principal sum of Rs 3,000. Pursuing the mortgage, Smt Nirmala Sundari instituted Suit number 158 of 1935 and obtained a preliminary decree on 8 March 1935. The suit subsequently proceeded to the stage of account settlement before the Registrar, who, in a report dated 23 July 1935, determined that a total of Rs 3,914-6-6 was payable to the mortgagee. Accordingly, a final decree was rendered on 20 April 1936.

Under rule 27 of chapter 16 of the Original Side Rules of the Calcutta High Court, a party in whose favour a decree is passed must apply for the drawing up of the decree within four days of the decree’s date. The rule further provides that if such an application is not made within the prescribed period, the decree or order shall not be drawn up except by specific order of the Court or a judge, unless a petition ex parte is filed ordering otherwise. The practical effect of this provision is that until the decree is formally drawn up, no certified copy can be issued to the entitled party, and without a certified copy, execution proceedings cannot be initiated.

Although Smt Nirmala Sundari acted promptly in initiating suit and obtaining the decree, she failed to apply for the drawing up of the decree for nearly eighteen years. On 12 May 1952, the second respondent sold both mortgaged houses to the appellant for a consideration of Rs 60,000, a sum that was reportedly used mainly to discharge earlier mortgages on which decrees had already been obtained and execution proceedings were underway. The deed of sale expressly stated that the properties were being transferred free of all encumbrances. After the sale, the first respondent, having previously taken no steps to have the decree drawn up, sought an ex parte order under rule 27 on 17 February 1954, requesting permission to have the decree drawn up and completed. The Court granted this order, and following the order, the first respondent filed the final decree on 29 April 1954 and commenced proceedings for the sale of the mortgaged properties.

After filing the final decree, the first respondent initiated proceedings for the sale of the mortgaged properties. Upon learning of these steps, the second respondent appeared before the Registrar and objected that the execution of the decree was barred by limitation. The Registrar expressed uncertainty on the point and therefore prepared a special report under chapter 26, rule 50, requesting the Court’s opinion on the limitation issue; the first respondent was also instructed to file a notice of motion seeking directions. The matter was subsequently placed before Justice P. B. Mukharji, who, after hearing counsel for both respondents, concluded that the execution of the decree was not barred by limitation, a view recorded in the judgment reported in Nirmala Sundari v. Sudhir Kumar (1). Dissatisfied with that judgment, the second respondent filed Appeal No. 152 of 1955, which, at the time of this writing, remained pending. The present appeal arose from an application filed in that context. On 25 July 1956, the appellant sought to be listed as an appellant in Appeal No. 152 of 1955. In support of the petition, the appellant asserted that she had purchased the properties from the second respondent on 12 May 1952 on the basis that they were free of all encumbrances; she further contended that the execution proceedings commenced by the first respondent were untenable because the decree had become time-barred. The appellant alleged that the second respondent, identified as Sudhir Kumar Mitter, had pursued opposition to the execution sale solely at her behest and for her benefit, had filed Appeal No. 152 of 1955 on her behalf, and subsequently entered into a collusive arrangement with the first respondent to defeat the appellant’s rights. Accordingly, the appellant prayed that she be substituted in place of the second respondent, or alternatively, be permitted to be recorded as an additional appellant so that she might protect her interests. Both respondents opposed the application vigorously, stating that they had reached a settlement of Rs. 17,670 to satisfy the amount due to the first respondent, that the settlement was fair, bona fide and binding on the appellant, and that the appellant’s application was not maintainable. The application was heard by Chief Justice Chakravarti and Justice Lahiri, who by their order dated 6 August 1956 dismissed it. The appellant then sought leave to appeal to this Court under Article 133 of the Constitution. In rejecting that request, the learned Chief Justice observed that the original application had been filed only under Order 22, rule 10 of the Civil Procedure Code, and that it was dismissed because the appellant, not being a person who had obtained a transfer pending appeal, was not entitled to rely on that rule; the alternative prayer that the applicant might be recorded without substitution under Order 22, rule 10 was noted but not granted.

The Court observed that the consideration at issue had not been raised during the earlier hearing, and consequently it could not issue a certificate under Article 133 of the Constitution for that point to be canvassed on appeal, because the order that was sought to be appealed was not a final order. Subsequently, the appellant obtained special leave to appeal under Article 136 of the Constitution, and it is on that basis that the present appeal was brought before the Court.

The appellant argued that her application was maintainable pursuant to Order 22, Rule 10 of the Civil Procedure Code. She relied on the premise that Suit No. 158 of 1935 should be deemed to have remained pending until the decree in that suit was finally drawn up in 1954, and that the transfer of her rights, effected on 12 May 1952, therefore occurred while the suit was still pending. In support of this position she cited the decision in Lakshan Chunder Dey v. Sm. Nikunjamani Dassi (1).

The first respondent countered that even if the suit were regarded as pending at the time of the transfer, the result would remain unchanged because the appellant had never moved the original court for her name to be entered on the record during the pendency of the suit. Moreover, the respondent contended that the application filed in the appellate court could not be sustained under Order 22, Rule 10, since the transfer in favour of the appellant had taken place before the filing of that appeal and not during its pendency. The Court found this line of argument to be well-founded, yet it considered that it did not finally resolve the issue.

In the Court’s view, the appellant’s application fell within the ambit of Section 146 of the Civil Procedure Code, and therefore she was entitled to be brought on record under that provision. Section 146 provides that, save as otherwise provided by the Code, any proceeding that may be taken by a person may also be taken by any person claiming under him. The Court referred to the decision in Sitharamaswami v. Lakshmi Narasimha (2), which held that an appeal constitutes a proceeding for the purpose of Section 146, and that the phrase “claiming under” is sufficiently wide to encompass devolution and assignment cases mentioned in Order 22, Rule 10. This authority was further endorsed by this Court in Jugalkishore Saraf v. Raw Cotton Co., Ltd. (1), where it was held that a transferee of a debt on which a suit was pending could execute the decree subsequently passed, on the basis of Section 146, as a person claiming under the decree-holder, even though an execution application by him would not fall under Order 21, Rule 16. The Court also observed that the words “save as otherwise provided” merely barred proceedings that would be incompatible with any other provision of the Code. Accordingly, the authorities indicated that any person who is entitled to be but has not been brought on record under Order 22, Rule 10, may be permitted to proceed under Section 146.

It was held that a person who is an assignee under rule ten in a pending suit or proceeding would be entitled to prefer an appeal against the decree or order passed therein if the assignor could have filed such an appeal, because the Code contains no prohibition against that possibility. Accordingly, the appellant, who had become the assignee of the second respondent’s mortgaged properties, would have been entitled to prefer an appeal against the judgment of Justice P. B. Mukharji.

The next argument advanced was that section 146 authorized only the initiation of a proceeding and that, although the appellant could have preferred an appeal against Justice Mukharji’s judgment, her failure to do so meant that she could not be brought on record as an appellant to continue the appeal that the second respondent had originally preferred. The Court was not prepared to adopt such a narrow construction of section 146, as suggested by counsel for the first respondent. This provision, introduced for the first time in the Civil Procedure Code of 1908, was intended to facilitate the exercise of rights by persons who acquired those rights through devolution or assignment, and, being a benevolent provision, it should be interpreted liberally to further justice rather than in a restricted or technical manner.

Support for this broader view was found in the decision of a Full Bench of the Madras High Court in Muthiah Chettiar v. Oovinddoss Krishnadass, where it was held that an assignee of a part of a decree was entitled to continue an execution application filed by the transferor-decree-holder. The Court also referred to the earlier authority in Moidin Kutty v. Doraiswami. Consequently, the right to file an appeal was deemed to include the right to continue an appeal that had been filed by the person under whom the applicant claimed. Accordingly, the petition seeking to have the appellant recorded as an appellant in Appeal No. 152 of 1955 was found to be maintainable under section 146.

Having resolved the procedural issue, the Court turned to the question of whether, on the merits, an order should be made in favour of the appellant. There was no doubt that the proceedings in which she sought to intervene arose out of the execution of a mortgage decree. The appellant had purchased the properties covered by the decree for rupees 60,000 under a covenant that the properties were free from any encumbrances. After this purchase, the first respondent commenced proceedings for the sale of those properties, nearly eighteen years after the original decree had been passed. The appellant contended that the execution proceedings were barred by limitation and asked to be heard on that point.

Justice P. B. Mukharji had previously rejected the limitation plea, but his judgment itself acknowledged that substantial questions of law remained for determination. Apart from the limitation issue, there also existed a dispute concerning the amount payable to discharge and satisfy the decree obtained by the first respondent in Suit No. 158 of 1935. The Court therefore recognized the necessity of addressing these substantive questions before reaching a final decision.

Both respondents in Suit No. 158 of 1935 claimed that they had settled the matter for a total of Rs 17,670, whereas the appellant contended that the decree sought to be executed permitted a maximum recovery of Rs 6,000 for principal and interest. In an affidavit sworn by Sanjit Kumar Ghose on December 20, 1956 and filed on behalf of the first respondent, the composition of the sum of Rs 17,670 was detailed. The affidavit disclosed that Rs 7,200 was claimed as interest payable up to March 8, 1956, calculated at the contract rate rather than at the rate specified in the final decree. In addition, the affidavit listed Rs 5,000 as costs incurred by the mortgagee in suits other than I.L.R. 1952 Mad. 622, Suit No. 158 of 1935, and in proceedings connected therewith. The appellant argued that the properties in her possession could not, under any circumstances, be made liable for that amount. Furthermore, a sum of Rs 1,750 was agreed to be paid as costs in the sale reference, in the proceedings before P. B. Mukharji J., and in Appeal No. 152 of 1955. The appellant then asked where the settlement was and how it could bind her. The Court observed that several substantial questions required determination and that, as the purchaser of the properties, the appellant was the only interested party. As a purchaser pendente lite, she would be bound by the first respondent’s execution proceedings, and equity demanded that she be afforded an opportunity to protect her rights. Consequently, the Court set aside the order dated August 6, 1956 and directed that the appellant be entered as an additional appellant in Appeal No. 152 of 1955. Since Sudhir Kumar Mitter, now the appellant on record, had withdrawn his dispute with the first respondent, the Court concluded that no embarrassment would arise from having two appellants with conflicting interests. Nonetheless, the Court retained the power to act suo motu under Order 1 rule 10 or its inherent jurisdiction and to transpose Sudhir Kumar Mitter as a second respondent in the appeal, following the precedents set in In re Mathews, Oates v. Mooney (1905) 2 Ch. 460, and Vanjiappa Goundan v. Annamalai Chettiar (1939) 2 M.L.J. 551. Regarding costs, the appellant was ordered, in accordance with the order granting leave to appeal, to pay the contesting respondent her costs in this appeal. The costs incidental to the application in Appeal No. 152 of 1955 before the High Court would be determined by the ultimate result of that appeal. The appeal was allowed.