1943 (3) TMI 21 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the preliminary and final decrees.
2. Compliance with the Bengal Money-Lenders Act, 1940.
3. Alleged material irregularities in the sale process.
4. Jurisdictional questions regarding the decrees and sale.

Detailed Analysis:

1. Validity of the Preliminary and Final Decrees:
The suit was filed in 1937 for the sale of mortgaged properties. A preliminary decree was passed on 2nd August 1940, declaring the properties charged with the payment of Rs. 79,273-14-0 with interest at 9% per annum. The decree directed the Registrar to take accounts and report to the Court. The final decree passed on 20th March 1942, fixed a different amount payable by the petitioner and provided for monthly instalments. The Court found that the new decree was not a final decree under Order 34, Rule 5, but rather a composite decree, partaking features of both preliminary and final decrees. The Court held that such a decree was binding on the parties as it was passed by consent.

2. Compliance with the Bengal Money-Lenders Act, 1940:
The petitioner argued that the final decree contravened the Bengal Money-Lenders Act, 1940, making it a nullity. The Court noted that the Act came into force after the preliminary decree was passed and that the final decree considered the petitioner's rights under the Act. The Court found that the provisions of Section 34 of the Act, although mandatory, were for the benefit of the debtor and could be waived. The Court held that the decree was valid as it was passed by consent and did not contravene the Act.

3. Alleged Material Irregularities in the Sale Process:
The petitioner alleged several irregularities, including the sale of the entire Cossipore properties in one lot, gross undervaluation, and the plaintiff's unauthorized bidding. The Court found that the properties were grossly undervalued and that the entire lot was sold unnecessarily, which prejudiced the petitioner. The Court held that these irregularities were material and vitiated the sale.

4. Jurisdictional Questions Regarding the Decrees and Sale:
The petitioner contended that the final decree was passed without jurisdiction and that the sale held thereunder was a nullity. The Court held that the final decree was not a nullity as it was passed with the consent of the parties and did not contravene any mandatory provisions of law. The Court also found that the failure to apply for a final order before the sale was an irregularity, not a jurisdictional defect.

Conclusion:
The Court set aside the sale held on 20th February 1943, due to material irregularities in the sale process. The application was allowed, and the petitioner was awarded costs. The purchaser was entitled to recover costs and charges from the plaintiff and get back the deposit made.