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TMI Blog1989 (8) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... tion) as security for a loan taken by him from the Corporation. The amount of loan not having been paid by Maganlal the Corporation initiated proceedings under section 31 of the Act for recovery of ₹ 51,799, which according to it was the amount due, by attachment and sale of the mortgaged property. This application was made as contemplated by Section 31 of the Act before the District Judge. After adopting the procedure contemplated by section 31 of the Act the District Judge passed an order for sale of the property which was ultimately sold for ₹ 53,000 in an auction. M/s Jaiswal Industries (hereinafter referred to as the first purchaser) was the highest bidder. Magahlal made an application under Order 21 Rule 90 of the Code for setting aside the sale. This application was allowed by the Additional District Judge and the sale was set aside. Aggrieved by that order the first purchaser preferred a miscellaneous appeal in the High Court and also made an application for staying further proceedings for re-sale. The High Court, however, did not stay further proceedings for re-sale but only ordered that the fresh sale should not be confirmed till the disposal of the appeal. Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lal that in case C.M.P. No. 9940 of 1982 is allowed it will not be necessary for him to press the merits of the appeals and it is only in the event of the said application being dismissed that merits of the appeal will have to be pressed. He, therefore, made a request that the said application may be decided first. Learned counsel for the first and the second purchasers did not seriously dispute the above contention. We have accordingly heard learned counsel for the parties on the said application and have not heard them on the merits of the appeals at this stage. The aforesaid application has been opposed by learned counsel for the first and second purchasers on the ground that an order of sale of the mortgaged property passed by the District Judge under Section 32 of the Act after affecting an attachment under section 31 thereof will not come within the purview of a final decree for sale of mortgaged property contemplated by Order 34 Rule 5 of the Code and as such the benefit of that provision could not be extended to Maganlal. According to learned counsel for the purchasers Order 34 Rule 5 of the Code could be applied only if in a suit instituted in this behalf on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to by the judgment debtors on the ground that they were barred by limitation under Article 180 of the Limitation Act, 1908 which provided that such an application must be made within three years from the time when the sale becomes absolute. The Subordinate Judge overruled the objection on the ground that in view of the pendency of the appeals filed by the judgment debtors against the order dismissing their applications under Order 21 Rule 90 of the Code time did not begin to run until March 17, 1927 when the said appeals were dismissed by the High Court. On appeal by the judgment debtors the High Court took the view that the sale became absolute on April 22, 1924 when the Subordinate Judge confirmed the sales. On further appeal by the auction purchasers the order of the High Court was reversed by the Privy Council and it was held: Upon consideration of the sections and orders of the Code, their Lordships are of opinion that in construing the meaning of the words when the sale becomes absolute in Act. 180, Tim. Act, regard must be had not only to the provisions of 0.21, R. 92(1) of the schedule to the Civil Procedure Code, but also to the other material sections and orders o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he situation when the mortgagor-judgment-debtor has preferred within time an appeal against the dismissal of his petition under Order 21 Rule 90. Though the confirmation of the sale does take the auction-purchaser a step further than before the confirmation of the sale, the confirmation by itself, is in one sense, inchoate. The confirmation gives the sale only viability but does not render the sale an indefeasible one, till such time as the appeal preferred by the mortgagor against the validity of the sale remains undisposed. In that sense, the confirmation effected by the executing Court may become final as far as the executing Court is concerned, but it certainly does not stamp the transaction with irrevocable finality when alone the rights of parties get crystallised beyond retracement. Consequently, the appeal preferred by the judgment-debtor has the effect of rendering a sale and its confirmation fluidal and nebulous. It, therefore, follows that the finality of the sale is rendered at large before the appellate Court in appeal and as such, the petitioners will be entitled to exercise the right conferred on them under Order 34, rule 5 to redeem the mortgage. The same view w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected the aforesaid objection and held: The right to redeem is a right conferred upon the mortgagor by enactment, of which he can only be deprived by means and in manner enacted for that purpose, and strictly complied with. In the present case the only basis for the claim that the right to redeem has been extinguished in S. 60; but in their Lordships view the old decree cannot properly be construed as doing that which it does not purport to do, viz., as extinguishing the fight to redeem. This question came up very recently before this Court in Mhadagonda Ramgonda Patil and others v. Shripal Balwant Rainade and others, [1988] 3 S.C.C. Page 298. The mortgagors in that case filed a suit for redemption and obtained a final decree for sale of the mortgaged property. They, however, did not execute that decree and allowed the same to be time barred. Subsequently, a second suit for redemption was, filed claiming that the mortgage still subsisted and the mortgagors were entitled to redeem the same and get possession of the mortgaged property. The suit was contested inter alia on the ground that as the mortgagors did not pay the decretal dues under the decree passed in the previo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption of an anomalous mortgage, the extinguishment of the right of redemption has to be specifically declared, as provided in clause (a) if sub-rule (3) of Rule 8 of Order 34 of the Code of Civil Procedure. These are the two circumstances--(1) a final decree in a suit for foreclosure under Order 34, Rule 3(2); and (2) a final decree in a suit for redemption under Order 34, Rule 8(3)(a) of the Code of Civil Procedure--When the right of redemption is extinguished. It was further held that in a suit for redemption of a mortgage other than a mortgage by conditional sale or an anomalous mortgage, the mortgagor has a right of redemption even after the sale has taken place pursuant to the final decree, but before the confirmation of such sale. In view of these provisions the question of merger of mortage-debt in the decretal-debt does not arise at all. In this view of the matter we are of the opinion that in case the provisions of Order 34 Rule 5 of the Code are held to be applicable to the facts of the instant case appropriate relief can be granted thereunder as the order of confirmation of the sale passed by the High Court in favour of the first purchaser has not become absolute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge shall forthwith make the ad interim order absolute and direct the sale of the attached property. Subsection (6) on the other hand contains the procedure to be followed by the District Judge if cause is shown by the industrial concern on receipt of the notice and provides that after making an investigation as contemplated the District Judge may inter alia confirm the order of attachment and direct the sale of the attached property. Sub-section (8) of section 32 provides: (8) An order of attachment or sale of property under this section shall be carried into effect as far as practicable in the manner provided in the Code of Civil Procedure, 1908 for the attachment or sale of property in execution of a decree as if the Financial Corporation were the decreeholder. In Gujarat State Financial Corporation v. M/s. Natson Manufacturing Co. (P) Ltd. Ors., [1979] 1 S.C.R. Page 372 the question as to what was the nature of proceedings under Sections 31 and 32 of the Act came up for consideration before this Court in connection with an objection about payment of court fee on an application under section 31(1). It was held that the form of the application, the nature of the relief, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, [1987] 3 S.C.C. Page 597 a question arose as to whether an order under section 34 of the Code could be passed in proceedings under section 31(1) of the Act. After referring to the decision in the case of Gujarat State Financial Corporation (supra) it was held that if as held by this Court in that case the proceeding instituted under section 31(1) of the Act is something akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of the decree no question of passing any other under section 34 of the Code would arise since that section could be applicable only at the stage of the passing of the decree and not to any stage posterior to the decree. In view of these two decisions the law seems to be settled that an application under section 31(1) of the Act cannot be put on par to a suit for enforcement of a mortgage nor the order passed thereon under section 32 of the Act be put on par as if it was an order in a suit between a mortgagee and the mortgagor for sale of mortgaged property. On the other hand the substantive relief in an application section 31(1) is something akin to an application for attachment of property in exec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch attachment does not have that effect either under the proviso to Section 60 of the Transfer of Property Act or under any provision of the Act, or Rule or Order made thereunder Sections 31 and 32 of the Act in so far as they contain the requirement of attaching the mortgaged property before its sale and ordering sale of the attached property read with Sub-section (8) of Section 32 of the Act will, therefore, have the only effect that the said requirement shall be in addition to, and not in derogation of the provisions contained in the Code for sale of mortgaged property. The purpose of enacting Sections 31 and 32 of the Act was apparently to provide for a speedy remedy for recovery of the dues of the Financial Corporation. This purpose however was, in cases covered by clause (a) of Sub-section (1) of Section 31 confined to the stage of obtaining an Order akin to a decree in a suit, in execution whereof the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation as security for the loan or advance could be sold. Sections 31 and 32 of the Act cut across and dispense with the provisions of the Code from the stage of filing a suit to the stage of ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was the Financial Corporation as decree holder in a suit for sale but was only deemed to be a decree holder by legal fiction because of the expression in execution of a decree as if the Financial Corporation were the decree-holder We shall first deal with the scope and import of the expression far as practicable and in execution of a decree as if the Financial Corporation were the decree-holder used in sub-section (8) of section 32 of the Act. Without anything more the expression as far as practicable will mean that the manner provided in the Code for attachment or sale of property in execution of a decree shall be applicable in its entirety except such provision therein which may not be practicable to be applied. It will be for the person asserting that a particular provision with regard to execution of a decree for sale of an immovable property contained in the Code of Civil Procedure will not apply to execution of an order under section 32 of the Act on the ground that it was not practicable to show as to how and why it was not practicable. As regards the second expression namely in execution of a decree as if the Financial Corporation were the decree-holder it may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 32 of the Act unless some provision is not practicable to be applied. It cannot be disputed that the provisions contained in Order 34 Rule 5 of the Code are attracted as is apparent from the plain language thereof during the proceedings in execution of a final decree for sale and are thus provisions contained in the Code with regard to and having a material beating on the execution of a decree as aforesaid. As seen above, the provisions contained in Order 34 Rule 5 of the Code in substance permit the judgment debtor to redeem the mortgage even at the stage contemplated by Order 34 rule 5 unless the equity of redemption has got extinguished. Since the contingency whereunder an equity of redemption gets extinguished is contained in the proviso to section 60 of the Transfer of Property Act and since as indicated above, in the instant case the equity of redemption has not extinguished we find no good ground to take the view that even though all the remaining provisions with regard to execution of a decree for sale of mortgaged property will apply to execution of an order under section 32 of the Act, the provision contained in Order 34 Rule 5 of the Code shall not apply. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udge of the Bombay High Court under section 76(1) of the Trade Marks Act, 1940 which provides that an appeal shall lie from any decision of the Registrar under the Act or the rules made thereunder to the High Court having jurisdiction. The Trade Marks Act, however, did not make any provision with regard to the procedure to be followed by the High Court in the appeal or as to whether the order of the High Court was appealable. Against the judgment of the Single Judge an appeal was preferred under clause 15 of the Letters Patent. That appeal was allowed and the judgment of the Single Judge was reversed. Before the Supreme Court an objection was raised that the Letters Patent appeal was not maintainable. While repelling the said objection it was held: Obviously after the appeal had reached the High Court it has to be determined according to the rules of practice and procedure of that Court and in accordance with the provisions of the charter under which that Court is constituted and which confers on it power in respect to the method and manner of exercising that jurisdiction. The rule is well settled that when a statute directs that an appeal shall lie to a Court already establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject to appeal under clause 15 of the Letters Patent there being nothing to the contrary in the Trade Marks Act. In view of the foregoing discussion we are of the opinion that the application made by Maganlal under Order 34 Rule 5 of the Code is maintainable and the requirements of the said provision having been satisfied the application deserves to be allowed. In the result, while C.M.P. No. 19760 of 1984 which is for initiating contempt proceedings is dismissed, C.M.P. No. 99409 1982 under Order 34 Rule 5 of the Code filed by Maganlal is allowed. Accordingly Civil Appeal No. 2990 of 1980 filed by Maganlal as also the application made by him under Order 21 Rule 90 of the Code are allowed. The order appealed against passed by the High Court is set aside and the order passed by the Additional District Judge setting aside the auction sale in favour of the first purchaser is restored. Civil Appeal No. 2991 of 1980 filed by the second purchaser is also allowed in so far as it prays for the setting aside of the order of the High Court. However, on the view we have taken the subsequent auction sale held in favour of the second purchaser cannot be sustained and is also hereby set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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