GARVIN S.P.J.—Svbasinghe v. Palaniappa Pillai.
1934Present: Garvin S.P.J. and Akbar J.
SUBASINGHE et al. v. PALANIAPPA PILLAI.
160—D. C. (Inty.) Colombo, 33,589.
Mortgage action—Decree entered—Sale of property hypothecated in executionof a money-decree—Intervention by purchaser under money-decree—Right to intervene—Distribution of proceeds of sale—MortgageOrdinance, No. 21 of 1927, s. 6 (2), (3), (4).
A person who during the pendency of a hypothecary action purchasesthe property under mortgage, in execution of a money decree, mayintervene under the provisions of section 6, sub-section (3), of the MortgageOrdinance, No. 21 of 1927, but such intervention may be permitted onlybefore the distribution of proceeds of sale under the mortgage decree.
^ PPEAL from an order of the District Judge of Colombo.
H. V. Perera (with him Nadarajah), for the petitioner, appellant.
S. W. Jayasuriya, for the first and second plaintiff, respondents.
Weerasooriya (with him E. B. Wikramanayake), for the fourth andfifth respondents.
R. Jayakoddy, for the sixth respondent.
February 21, 1934. Garvin S.P.J.—
This appeal raises a question of considerable interest and, I ventureto think, of considerable importance. The plaintiff in this action got ajudgment on a mortgage bond. The decree was in the usual form of ahypothecary decree. In due course the property hypothecated wasbrought to sale and was actually sold on March 7, 1930, to the thirdrespondent, Jinadasa. The deposit required by the conditions was paidbut the purchaser failed within the time allowed for the purpose to paythe balance purchase money into court. On May 20, 1930, upon theapplication of the plaintiff the court made order declaring the amount ofthe deposit forfeited and directed that the property be re-sold at the riskof the third respondent. In the meanwhile, in execution of a decreeobtained in another action against the same defendant the same propertyhad been seized and sold and at that sale the present petitioner-appellantbecame the purchaser. On May 2, 1930, the purchase price was paidin full into Court and all conditions were apparently complied with toentitle him to a conveyance. Before the sale could be confirmed certainothers intervened and objected to the confirmation of the sale. Variouspostponements were obtained for the consideration of the objectionstaken to that sale and, while that matter was still pending, an applicationwas made in this case to have the order made by the District Judge,declaring the deposit forfeited and the property under hypothecationto be sold at the risk of the third respondent, vacated and that further35/22
290GARVIN S.P.J.—Subasinghe v. Palaniappa Pillai.
time be given to the third respondent to complete his purchase. OnJuly 18, 1930, with the consent of all parties to the action the applicationwas allowed and the order vacated. On that same day the third respond-ent paid the purchase price into court and obtained from the Secretarya conveyance of the property purchased by him. It is in evidence thaton July 18 he transferred the property to the fourth and fifth respondentswho themselves executed a mortgage in favour of the sixth respondent tosecure a sum of Rs. 4,000. On July 21 upon the application of the plaintiffhe was permitted to draw the amount of Rs. 11,486.24 in satisfaction ofthe decree and a further order was made permitting a sum of Rs. 405.13to be drawn in and towards his taxed costs. After all these steps hadbeen taken, a conveyance had been issued and the purchase money drawnin satisfaction of the decree, Palaniappa Pillai, the present appellantpetitioned the Court and it is evident that the object and purpose of hispetition was to obtain from the Court an order declaring that all ordersand steps taken in this case from and including the order of July 18, 1930,vacating the earlier order of June 18, 1930, be set aside and that he bepermitted to intervene in the action for that purpose. The learnedDistrict-Judge after hearing argument held that the petitioner had nostatus to make the application, basing his conclusion upon his view ofsection 344 of the Civil Procedure Code. He felt constrained to treatthat section as one which gives only to the persons specified therein,namely “parties to the action in which the decree was passed or theirlegal representatives,” a status to raise in the same action any questionrelating to the execution of the decree.
It seems unnecessary to follow the learned District Judge or to examineor consider the view he has taken of the scope of that section for thereason that this question is really governed by Ordinance No. 21 of 1927,to which no reference whatever appears to have been made in the Courtbelow. This was a hypothecary action to which the provisions of section6 of Ordinance No. 21 of 1927, are applicable. Assuming that the peti-tioner was a person who, during the pendency of that action, had acquiredan interest in the property under hypothecation, then it was his dutyto avail himself of the provisions of section 6 (3) and intervene in theaction. Ordinance No. 21 of 1927 contains enactments which are mani-festly intended to afford to every person having an interest in propertyunder hypothecation which is the subject of a hypothecary actionopportunities to protect their interests in so far as they are imperilledby such an action. But such persons must avail themselves of the oppor-tunities which are afforded them by the provisions of this Ordinancewithin the time which the Ordinance prescribes. Sub-section (3) ofsection 6 enables every person who by sub-section (2) and the other pro-visions of this Ordinance would be bound by a decree in a hypothecaryaction to apply to be permitted to intervene, but this application mustbe made “at any stage of the proceedings before distribution of theproceeds of sale ”. There is a further provision in sub-section (4) whichreserves the rights of the parties to participate in the surplus proceeds ofsale but the right to intervene is at an end when the proceedings havereached the stage at which the proceeds of sale.have been distributed.It follows therefore that this application to intervene comes too late.
Hakim Bhai v. Commissioner of Income Tax
There is an indication in these proceedings that the salutary provisionsof Ordinance No. 21 of 1927 are not perhaps as generally known as theyshould be. That Ordinance, while it gives every opportunity to personsinterested in property hypothecated to conserve their interests, has anotherpurpose and that is to make the decree in the action a final determinationof every interest claimable in the property hypothecated. Section 10 (1)carries out this policy by giving a special effect to the conveyance issuedto a purchaser at a sale in execution of such a decree and its effect is toconvey the property sold …. freed from the interests, mortgages,and rights of (a) every party to the action and (b) every person who bysub-section (2) of section 6 is declared not to be a necessary party to theaction. Such a conveyance has been issued jin this case. It is notpossible at this stage to permit the petitioner to intervene in this actionexcept for the single purpose of participating in the surplus proceeds, ifany.
For these reasons I would dismiss this appeal with costs.
Aksap. J.—I agree.
SUBASINGHE et al. v. PALANIAPPA PILLAI