BABU RAMA CHAUGULE Vs. GOODWILL BANK LTD

JUDGEMENT

(1.) THIS appeal arises out of the execution proceedings. The facts are no longer in dispute. The respondent-Bank as a plaintiff filed Civil Suit No. 115 of 1949 against the appellant-defendant on the basis of a simple mortgage bond to enforce their debt by sale of a mortgaged property. This suit resulted in a final decree on 31-10-1949. It was an instalment decree payable by an annual instalment of Rs. 700. The first of such instalments was payable on 30th June, 1950 and regularly thereafter on the same date in the subsequent years. ON failure of payment of any two instalments, the entire decretal amount was due and payable. It appears that the first instalment was paid but thereafter there was no regular payment made within the time provided by the decree. Three Darkhasts were given from time to time in 1955, 1958 and 1961. After Special Darkhast No. 48/61 was disposed of on 6-5-1962, the present Darkhast has been filed on February 7, 1963. It is out of this last Darkhast that the present appeal arises.

(2.) THIS Darkhast in 1963 has been filed against the judgment-debtor himself by the plaintiff-Bank as a decree-holder. While these Darkhasts were being given from time to time, in Insolvency Petition No. 8/50 the appellant-judgment-debtor came to be adjudicated insolvent on 6-12-1957. In the present Darkhast the judgment-debtor raised several contentions which were all rejected. He subsequently gave an application, Ex. 38, dated 19-1-1965. In this application he pointedly mentioned that in Insolvency Petition No. 8 of 1950 he was adjudged insolvent and it was not lawful to continue the Darkhast against him. He also pointed out that a Receiver was appointed in insolvency in whom all his property including the equity of redemption vests and an execution could have been taken out only against the Receiver and not against him. The Darkhast given by the decree-holder against him in spite of his being adjudicated as an insolvent was unlawful and untenable. The decree-holder was called upon to give his say and on the same day and behind Ex. 38 itself the learned Advocate for the plaintiff-Bank gave in writing that the decree obtained by the Bank was long before the judgment-debtor was declared insolvent. In the circumstances, the question of joining the Receiver does not arise at all. This say was further amplified by filing a purshis, Ex. 40, in which not only the reasons for not joining the Receiver are stated but some case law is cited on which the learned Advocate for the plaintiff decree-holder relied upon. Thereafter elaborate arguments were addressed and the learned Executing Judge by his order date April 6, 1965, held that on the language of sub-section (6) of Section 28 of the Provincial Insolvency Act, the remedies of a secured creditor are preserved for him and are not affected by the insolvency of the judgment-debtor. It is therefore not necessary to make the Receiver a party and accepting the argument on behalf of the creditor Bank, the objections at Ex. 38 came to be dismissed.

(3.) AGAINST this order, the judgment-debtor filed First Appeal No. 310/65 which came up for hearing before Kantawala, j. (as he then was) without any appearance for the respondent-decree holder. The learned Counsel for the appellant relied upon the judgment of the Privy Council in Kalachand Banerjee v. Jagannath Marwari AIR 1927 PC 108, Indian Cotton C. Ltd. v. Ramcharanlal Chunilal. AIR 1939 Nag 128 and Kripa Nath v. Ganga Prasad, AIR 1962 All 256. The learned Judge observed that in each of these cases the question involved was whether an official receiver was a necessary party in suit to enforce the mortgage. In none of the cases, the Court had an occasion to consider the question whether after a decree absolute for sale is passed in favour of the mortgagee-decree-holder if he files an application for sale of the property, is the official receiver a necessary party? After these observations, the learned Judge proceeds to consider the provisions of the Provincial Insolvency Act, which preserve the right of a secured creditor. It is pointed out that sub-section (6) of Section 28 of the Act lays down that nothing in this Section shall affect the power of any secured creditor to realise or otherwise deal with his security in the same manner as he would have been entitled to realise or deal with if this section had not been passed. The conclusion drawn is that the mortgagee-decree-holder is entitled to proceed with the sale of the property with a view to realise the amount due under the decree and it was not obligatory to make the Official Receiver a party. Being aggrieved by this order, the judgment-debtor has carried the matter to the Letters Patent Appeal.