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PETITIONER: KABIDI VENKU SAH

       Vs.

RESPONDENT: SYED ABDUL HAI AND OTHERS

DATE OF JUDGMENT28/09/1983

BENCH: VARADARAJAN, A. (J) BENCH: VARADARAJAN, A. (J) DESAI, D.A. REDDY, O. CHINNAPPA (J)

CITATION:  1984 AIR  117            1984 SCR  (1) 112  1983 SCC  (4) 570        1983 SCALE  (2)1054

ACT:      Code  of  Civil  Procedure,  1908-O.  21,  r.  58-Claim Petition  for  getting  an  attachment  raised-By  a  simple mortgagee having no interest in equity of redemption and not enjoying possession of property-Whether competent ?

HEADNOTE:      On the  basis of  a simple  mortgage  executed  in  his favour in  the year 1948, the appellant obtained a decree on 4-9-1967, brought  the mortgaged property to sale, purchased it himself  on 24-7-1968 and got the sale confirmed by court on 28-8-1968.  The first  respondent who  held a  promissory note executed  in his  favour  by  the  owner  of  the  said property in  1961, instituted a suit for recovery of the sum on 24-9-1964  and got  the property attached before judgment on the  same day  and thereafter  obtained a money decree on 30-3-1967, and filed an execution petition for realising the money due under the decree by bringing the property to sale. Thereupon the  appellant filed  a claim petition under O.21, r. 58  C.P.C., for  getting the attachment raised. The claim petition was  resisted by the first respondent inter alia on the ground  that it  was incompetent  as the  appellant  had neither any  interest in the equity of redemption nor was he in possession  of the  property. The trail court allowed the claim petition  holding inter alia that what was attached on 24-9-1964 was  the entire  property and  not the  equity  of redemption alone.  The Civil  Revision Petition filed by the first respondent  against the  order of  the trial court was allowed by  the High  Court which  held that  the  appellant having failed  to prove  that he  had  an  interest  in  the property on the date of the attachment and was in possession of the property, either actual or constructive, on that date he was not entitled to have the attachment raised.      Dismissing the appeal,      HELD: The  trial court erred in observing that what was attached before  judgment on 24-9-1964 was not the equity of redemption but  the entire property. There could be no doubt that on  24-9-1964 when  the property  was  attached  before judgment long  after the  mortgage dated  31-7-1948 and  two years before the suit was filed on the mortgage in 1966, the mortgagor had  the equity  of redemption and that what could

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have been  attached in  law on  24-9-1964 was  the equity of redemption  alone   and  not  the  entire  interest  in  the property. The  property.  The  appellant  had  no  doubt  an interest in the property as mortgagee, but he could not have been in possession of the property as he was only a 113 simple mortgagee.  He was  a secured  creditor as  he had  a mortgage in  his favour,  and any  attachment effected after the date  of the  mortgage and  during its subsistence could only be  subject to  that mortgage. Since he had no interest in the  equity of  redemption on  the date of attachment, he could not  have had  any objection  to  that  right  of  the mortgagor being attached by the first respondent. Therefore, he was  not a  person who  could, in  law,  file  any  claim petition under  O. 21;  r. 58 objecting to the attachment of the equity of redemption. [116 A; C-D; F-H]      The attaching  creditor can  bring the property to sale only subject  to the  mortgage as  long as it is subsisting. That is  to say,  he could bring only the mortgagor’s equity of  redemption   to  sale   if  it   had  not  already  been extinguished by  it sale in execution of any decree obtained on that  mortgage. But  if  the  equity  of  redemption  has already been  sold after  the date  of the  attachment,  the attaching decree  holder  could  proceed  only  against  the balance, if any, of the sale price left after satisfying the mortgagee  decree-holder’s   claim  under  the  decree.  The mortgagee’s right is thus not affected all. [117 B-C]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1833 of 1970.      Appeal by  Special leave  from the  Judgment and  Order dated the  17.4.1970 of  the  Mysore  High  Court  in  Civil Revision Petition No. 1255 of 1969.      A.S. Nambiar,  Ashok Kumar  Sharma and  M. Veerappa for the Appellant.      R.B. Datar,  Divender Singh, Ms. Madhu Moolchandani and Ms. Meenu Verma for the Respondent.      The Judgment of the Court was delivered by      VARADARAJAN,  J.   This  appeal  by  special  leave  is directed against  the Order  dated 17.4.1970  of  a  learned single  Judge  of  the  erstwhile  Mysore  High  Court  (now Karnataka High  Court) in  CRP 1255  of 1969 which was filed against an  Order dated  3.3.1969  of  the  Principal  Civil Judge, Bangalore  in Misc.  Case 6  of 1969, filed by Kabidi Venku Sah who was the first respondent in the Civil Revision Petition and  is the  appellant in  this Civil  Appeal.  The Principal Civil Judge allowed the Misc. Case which was filed under Order  21 Rule  58 of  the Code of Civil Procedure for raising an  attachment over  the house  property effected at the instance of Syed Abdul Hai who was the petitioner before the High  Court in  the Civil  Revision Petition  and is the first respondent  in this  Civil Appeal.  The house property belonged originally to one Vittal Sah who was the husband of the second respondent Sharada Bai. Vittal Sah had executed a 114 simple mortgage over the property in favour of the appellant on  31.7.1948.  The  appellant  obtained  a  decree  on  the mortgage on  4.9.1967 in O.S. 217 of 1966 on the file of the Principal Civil  Judge and  brought the  property to sale in execution  of  that  decree  and  purchased  it  himself  on 24.7.1968 after  obtaining the  necessary leave of the Court to bid  and set-off. The sale was confirmed on 28.8.1968 and

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the appellant took delivery of the property on 28.11.1969 in Misc. Case 95 of 1968 as the court auction purchaser.      The first  respondent Syed  Abdul Hai  obtained a money decree against  Vittal Sah  on 30.3.1967 in O.S. 386 of 1964 on the  foot of a promissory note executed in 1961 for a sum of Rs.  20,000. He  obtained attachment before judgment over the same  house property  on 24.9.1964  on the  same day  on which filed  that suit  in the  Court of the Principal Civil Judge, Bangalore. He filed E.P. 31 of 1968 for realising the money due under the decree by bringing the house property to sale pursuant  to the attachment before judgment effected on 24.9.1964. Thereupon  the appellant  Venku Sah  filed  Misc. Case 6  of 1969  under Order 21 Rule 58 of the Code of Civil Procedure for  getting the  attachment raised, alleging that the second  respondent Sharada  Bai had no saleable interest in the  property on  the date of the attachment and that the first respondent’s  simple money  decree cannot prevail over his mortgage decree and the sale of the property obtained in his favour in execution of that decree.      The first  respondent Syed  Abdul Hai opposed the claim petition, contending  that the court proceedings referred to in the  claim petition are collusive and fraudulent and that the delivery  alleged by  the  appellant  is  only  a  paper delivery  possession   continued  to   be  with  the  second respondent.      The Principal  Civil  Judge  found  that  the  mortgage decree, execution  sale and  delivery of the property to the appellant cannot  be questioned  in the  first  respondent’s claim petition  as being  collusive and  could be questioned only in  a separate  suit. He  also found  that there was no material on  record  to  show  that  the  second  respondent continued to  be in  possession of  the property  after  its delivery to the appellant pursuant to the court auction sale in his favour. He rejected the contention that the appellant was not  entitled to  file any claim petition under Order 21 Rule 58  of the  Code of  Civil Procedure  for  raising  the attachment before  judgment effected  under Order  38 Rule 5 and held that there is nothing on 115 record  to   show  that  the  appellant  was  aware  of  the attachment and  therefore there  was no  delay in filing the claim petition  and that  the claim  petition could be filed under Order 21 Rule 58 even in the case of attachment before judgment in  view of  the provisions  of Order  38 of Rule 8 which says  that when  any claim  is preferred  to  property which has been attached before judgment, such claim shall be adjudicated upon in the manner provided for the adjudication of claims  to property attached in execution of a decree for payment of  money. The  Principal Civil  Judge rejected  the first respondent’s  contention that  the  appellant  had  no interest in the equity of redemption even if the mortgage in his favour  is true  and that  only the equity of redemption was attached  on 24.9.1964  and held  that what was attached the entire  property and not the equity of redemption alone. In this view, he allowed the claim petition.      Before the  High Court  it was  contended for the first respondent that  the appellant  should show not only that he had an  interest in the property attached on the date of the attachment but  also possession  thereof on that date before he  could  get  the  attachment  before  he  could  get  the attachment before  Judgment raised  and  that  the  property belonged to  the second  respondent’s husband and was in his possession on  the date  of the attachment and therefore the Principal Civil  Judge could  not  have  allowed  the  claim petition.  The   appellant  refuted   that   contention   by

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peculiarly contending  that he,  a simple  mortgagee, was in constructive  possession   of  the   property  through   the mortgagor.      The learned  Judge of  the High  Court rightly rejected the  contention   that  a   simple  mortgagee  could  be  in possession of  the mortgaged property constructively through the mortgagor  and held that the appellant (claimant) should show that  he had  some interest in the property attached on 24.9.1964 and  was  in  actual  or  constructive  possession thereof. He  observed that the Principal Civil Judge has not recorded any  finding on  the question  of  the  appellant’s possession of the property on the date of the attachment and that he has thereby wrongly exercised jurisdiction and acted with material  irregularity in  allowing the claim petition. He found  that the appellant had failed to prove that he had an interest  in the  property on  the date of the attachment and was  in possession  of the  property, either  actual  or constructive, on  that date  and held  that he was therefore not entitled to have the attachment raised.      The  matter  is  quite  simple  but  has  unfortunately dragged on for nearly 15 years on account of a wrong and ill advised step taken 116 by the appellant. The learned Principal Civil Judge erred in observing  that   what  was   attached  before  judgment  on 24.9.1964 is  not the  equity of  redemption alone  but  the entire property.  He has  rightly held  that  in  the  claim petition the  question of the mortgage of 1948, the mortgage decree, the court auction sale and delivery of possession of the property  to the  appellant pursuant to that sale cannot be contended  to be  collusive and  observed that  the first respondent could,  if at  all,  challenge  them  only  in  a separate suit.  That being  so, undoubtedly  the mortgage of 1948 in  favour of the appellant was there and what remained with the  mortgagor was  only the equity of redemption until it was  brought to  an end  by the  sale in execution of the mortgage  decree   confirmed  by  the  court  on  28.8.1968. Therefore, there  could  be  no  doubt  whatsoever  that  on 24.9.1964 when  the property  was attached  before  judgment long after the mortgage dated 31.7.1948 and two years before the suit  on the  mortgage was  filed in 1966, the mortgagor had the  equity of  redemption and that what could have been attached in  law on  24.9.1964 was  the equity of redemption alone and  not the  entire interest  in the  property. There should have  been no difficulty for the learned Judge of the High Court holding that the appellant could not have been in possession of  the property,  actual or constructive, for he was only  a simple  mortgagee who  had nothing  to  do  with possession until he got delivery of the property through the court  as   a  decree   holder-court  auction  purchaser  on 28.4.1968 as  noticed by  the learned Judge in his judgment. The appellant  had no  doubt an  interest in the property as mortgagee, but  he could  not have been in possession of the property as  he was  only a  simple mortgagee. The appellant was a  secured creditor  as he had a mortgage in his favour, and any  attachment effected  after the date of the mortgage and during  its subsistence  can be  only  subject  to  that mortgage. He  had no interest in the equity of redemption on the date  of the attachment and could not therefore have had any objection  to that right of the mortgagor being attached by the  first respondent.  Therefore he was not a person who could in  law file any claim petition under Order 21 Rule 58 objecting to  the attachment of the equity of redemption. We may notice  here what  Order 21  Rule 58(1)  says and  it is this:

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         "Where any claim is preferred to, or any objection      is made  to the attachment of, any property attached in      execution of  a decree on the ground that such property      is 117      not liable  to such attachment, the Court shall proceed      to adjudicate upon the claim or objection in accordance      with the provisions herein contained."      The attaching  creditor can  bring the property to sale only subject  to the  mortgage as  long as it is subsisting. That is to say he could bring only the mortgagor’s equity of redemption to  sale if  it had not already been extinguished by its  sale in  execution of  any decree  obtained on  that mortgage. But  if the  equity of redemption has already been sold after  the date  of the attachment the attaching decree holder could  proceed only  against the  balance, if any, of the sale  price left  after satisfying the mortgagee decree- holder’s claim  under the  decree. The  mortgagee’s right is thus not  affected at  all. Therefore  it is we had observed carrier that the appellant had taken a wrong and all advised step in  coming forward  with the  claim petition  which has resulted in  the matter  dragging on  for over 14 years from 15.1.1969. The  appellant could not object to the attachment of the  equity  of  redemption.  The  appeal  fails  and  is dismissed, but  under the  circumstances of the case without costs. H.L.C.                                    Appeal dismissed. 118