1951 (5) TMI 2 - SC - Indian Laws

Whether the decrees were passed in a suit to which this Act applies. ? Whether the respondent as sub-mortgagee is an assignee within the meaning of sub-section (5) of section 36? Held that - Appeal dismissed. The reference to the sub-mortgage containing an assignment of all the rights 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

Summary

Issues Involved:
1. Whether the decrees in Suit No. 78 of 1922 could be reopened under the Bengal Money Lenders Act, 1940.
2. Whether the execution proceedings were pending on or after January 1, 1939.
3. Whether the respondent as a bona fide assignee for value of the mortgage debt was protected under section 36(5) of the Act.

Detailed Analysis:

1. Reopening of Decrees Under the Bengal Money Lenders Act, 1940:
The appellants sought relief under section 36 of the Bengal Money Lenders Act, 1940, to reopen transactions and take accounts. The primary issue was whether the decrees in Suit No. 78 of 1922 could be reopened. The High Court held that these decrees could not be reopened as they were not passed in "a suit to which this Act applies." The Supreme Court agreed, noting that the decrees were not passed in a suit instituted or pending on or after January 1, 1939, nor was any proceeding in execution pending on that date. Therefore, the decrees sought to be reopened were not decrees made in "a suit to which this Act applies."

2. Pending Execution Proceedings:
The appellants argued that the execution proceedings were pending on or after January 1, 1939, thus making the decrees eligible for reopening under the Act. The Court examined the order of January 30, 1937, which dismissed the execution case for non-prosecution but kept the attachment alive. The Court determined that this order was a final dismissal of the execution case, not an adjournment. The attachment continued due to a special order under Order XXI, rule 57, as amended by the Calcutta High Court. The Court concluded that the execution case ended on January 30, 1937, and the attachment did not constitute a pending execution proceeding.

3. Protection Under Section 36(5) of the Act:
The respondent claimed protection under section 36(5) of the Act, arguing that as a bona fide assignee for value, the mortgage debt should not be affected. The Court did not need to address this issue in detail as the primary issue was resolved against the appellants. However, Justice Patanjali Sastri provided an analysis, noting that the sub-mortgage contained an assignment of the debt and all rights of the mortgagee, making the respondent an assignee within the meaning of the Act. The Court referred to the Privy Council decision in Promode Kumar Roy v. Nikhil Bhusan Mukhopadhya, which supported this interpretation.

Conclusion:
The Supreme Court dismissed the appeal, holding that the decrees in Suit No. 78 of 1922 could not be reopened under the Bengal Money Lenders Act, 1940, as they were not passed in a suit to which the Act applies, and no execution proceedings were pending on or after January 1, 1939. The Court also noted that the respondent's claim to recover the decree debt was protected under section 36(5) of the Act as a bona fide assignee for value.