A. G. A., Kegalla v. Wijevoardene.
1926Present: Dalton S.P.J., Akbar and Poyser JJ.
A. G. A., KEGALLA v. WIJEWARDENE et al.
223—C. R. Kegalla, 7,513.
Mortgage decree—No directions in decree regarding credit to judgment-creditor—Validity of sales—Law before Ordinance No. 21 of 1927 cameinto operation.
Where property was sold under a mortgage decree before OrdinanceNo. 21 of 1927 and directions for the sale and the giving of credit to thejudgment-creditor were not embodied in the decree itself,—
Held, that the sale was not invalid but merely voidable.
Walker v. Mohideen1 explained.
ASE referred by Maartensz J. to a Bench of three Judges. Thefacts are stated in the reference as follows : —
This is a proceeding under the Land Acquisition Ordinance, which was referred toCourt as no claimant appeared on the date fixed for inquiry into claims anddetermination of the value of the land.
The compensation awarded was Rs. 53. The first and second defendants eachclaimed the entire amount. The learned Commissioner held that the first defendantwas entitled to the land acquired and second defendant appeals from the order.
The facts are not in dispute. The land acquired is part of a land called Tibbotu-gollewatta, which belonged to Abraham Silva, who, by bond No. 7,974, datedOctober 19, 1918, mortgaged it to one Juwanis Fernando to secure payment of a sumof Rs. 2,500; the bond was registered on October 29, and addresses for service ofnotice furnished to the Registrar as required by sections 643 and 644 of the CivilProcedure Code.
The bond was put in suit in case No. 8,075 of the District Court of Kegalla, and inexecution of the decree dated August 12, 1927, the land was sold and purchased bythe second defendant, who obtained conveyance No. 680 of July 3, 1929. Thesecond defendant had been substituted plaintiff in the action before the sale inexecution as the decree had been assigned to him by the mortgagee by deed No. 221dated August 7, 1928….
The first defendant claims the land acquired under a Fiscal’s conveyance No. 6,612 -(1 D 2) dated December 18, 1926, issued in pursuance of a sale held on September 6,1923, in execution of a money decree entered in case No. 48,036 of the District Courtof Colombo. The conveyance is expressly subject to a mortgage for Rs. 2,500..This conveyance was registerd in the wrong folio and the registration is of no availto the first defendant.
The validity of the sale to the second defendant was contested in the Court ofRequests on the ground stated in issue 1 as follows : —
“ Is deed No. 680 of 3-7-29, a valid instrument to convey title of the land tosecond defendant on the ground that no directions have been given in thedecree as to giving of credit to the judgment-creditor, sale of the land byany auctioneer or to auctioneer Krishnapillai, or any authority to Krishna-pillai to execute a conveyance in favour of the purchaser?”
The plaint in the mortgage action was filed on August 11, 1927, and the prayer ofthe plaint contained the necessary requests to enable the Court to enter a decree inaccordance with the decision in the case of Walker v. Mohideen (supra) where itwas held that “ in an action to realize a mortgage under section 201 of the Civil Pro-cedure Code, the Court has no authority to give special directions for the executionof the decree except in the decree itself and that the terms under which the mortgageeis allowed to bid for and purchase the property must be embodied in the decree.”The directions given in the present case for the execution of the decree andpermitting the plaintiff to bid for and purchase the property sold under the
1 26 N. L. R. 310.
DALTON S.P.J.—A. G. A., Kegalla v. Wijewardene.
commission issued to Mr. Krishnapillai would have been directions given in pursu-ance of the decree if a decree in terms of the prayer of the plaint had been enteredby the Court. The first defendant has been able to raise a contest as to the validityowing to the carelessness of the clerk who drew up the decree for signature by theJudge.
The learned Commissioner has on the authority of Walker v. Mohideen (supra)held that the sale to the second defendant was invalid as the terms on which he wasallowed to bid for and purchase the property was not embodied in the decree.Walker v. Mohideen (.supra) is a decision of a Bench of two Judges and, whateverr.:y own view may be I am bound by it. But the contest as to the validity of thesale was raised by the mortgagee in the mortgage action itself and before the salewas confirmed.
The appellant’s contention is that the decision in the case of Walker v. Mohideen'.supra) does not apply to the contest in this case. It was argued that the sale inexecution of the mortgage decree is valid until it is set aside, and that the respon-dent who is bound by the decree, could only have the sale set aside by proceedingsin the mortgage action itself by reason of the provisions of section 344 of the CivilProcedure Code.
The replies to this argument were (1) that the respondent was not a party to themortgage action, (2) that-even if he was, the provisions of section 344 were notapplicable as there was in fact no decree in pursuance of which the sale could beheld, there being no direction for a sale in the decree.
The questions for decision are (1) whether the respondent was a party to themortgage action by reason of the provisions of section 644 of the Civil ProcedureCode which enacts that, [I cite the relevant part] “ every such mortgagee, lessee, ort ther incumbrancer whose deed shall not have been registered, or who shall not havefurnished such address as aforesaid, shall be bound by the judgment in the actionjn all respects as fully as though he had been a party thereto ”, (2) whether the saleunder the decree as entered in the mortgage action was valid.
H. V. Perera (with him B. H. Aluwihare and J. L. M. Fernando), forsecond defendant, appellant.
A. Tissaverasinghe (with him N. Nadarajah and J. E. Alles), forrast defendant, respondent.
Cur. adv. vult.
January 30, 1936. Dalton S.P.J.—
This appeal, which originally came before Maartensz J., was reservedby him for consideration of a Bench of three Judges.
The facts are fully set out in his order. The questions reserved fordecision of this Court, as stated by him, are : —
Whether the respondent was a party to the mortgage action by
reason of the provisions of section 644 of the Civil ProcedureCode which enacts that, citing the relevant part, “ every suchmortgagee, lessee, or other incumbrancer whose deed shall nothave been registered, or who shall not have furnished suchaddress as aforesaid, shall be bound by the judgment in theaction in all respects as fully as though he had been a partythereto ”.
Whether the sale under the decree as entered in the mortgage action
The learned Judge reserved the matter for a Bench of three Judges,lor the reason that in his opinion it might be, necessary to reconsider thedecision in the case* of Walker v. Mohideen ‘
i 28 N. L. R. 310.
DALTON S.P.J.—A. G. A., Kegalla v. Wijewardene.
The first question reserved for this Court can be disposed of in a fewwords. The deed of the first defendant (respondent in the appeal), 1 D 2,which, be it noted, was expressly subject to the mortgage, was registeredin the wrong folio, whilst no address for service was registered. It isconceded now that it was not necessary to make him a party to themortgage action, and that he is bound by the decree. Mr. Tissavera-singhe, to use his own words, made a present of that to the appellant, andrested his case mainly upon the second ground, that the sale under thedecree as entered in the mortgage action was invalid, and the seconddefendant’s deed, 2 D 5, was void.
To support this argument he relied upon the decision of Bertram C.J.and Jayawardene A.J. in Walker v. Mohideen (ubi supra). The validityof the deed 2 D 5 was contested in the Court of Requests (see issue 1), onthe ground that no directions had been given in the decree as to the givingof credit to the judgment-creditor, for the sale of the land by anyauctioneer or by auctioneer Krishnapillai, and no authority has beenthere given to Krishnapillai to execute a conveyance in favour .of thepurchaser. On the authority of the case relied upon, the terms uponwhich the mortgagee is allowed to bid for and purchase the propertymust be embodied in the decree, and the Court had no authority to givespecial directions for the execution of the decree, except in the decreeitself. The law, as it has been construed in that judgment, has beenchanged by Ordinance No. 21 of 1927, but Mr. Perera for the appellantconcedes that having regard to the facts in this case he cannot bring hiscase under the new Ordinance. He has, however, asked this Court toreconsider the decision in Walker v. Mohideen (ubi supra), if we areagainst him on the second point reserved.
Mr. Tissaverasinghe for the respondent is, on the facts here, able torely upon Walker v. Mohideen (ubi supra) as to the Court’s having noauthority to give the directions it did in this case subsequent to thedecree. When we come, however, to consider the effect of the Courtacting outside this power to give directions in the decree only, the case herelies upon no longer supports him. Bertram C.J. and Jayawardene A.J.held that the procedure followed in the sale dealt with by them wasirregular, and that the sale was not invalid or void, but merely voidable.The correctness of this judgment relied upon has not been questioned onthis point, in the argument before us. The learned Judges went on toconsider whether they should, in the circumstances of that case, then setaside the sale, but did not do so, directing that on the plaintiff certifying;satisfaction of the decree and cancelling a bond, the appeal be dismissedand the sale be confirmed.
This decision is then no authority to support Mr. Tissaverasinghe’sargument that the sale under the mortgage decree was invalid and thedeed void. There has been no attempt or request at any time to set itaside, and in the circumstances, relying on this authority, the answer tothe second question reserved for our consideration is that the sale underthe decree as entered in the mortgage action is not invalid. The answerto the first issue at the trial should accordingly have-been that the deed(2 D 5) is not an invalid instrument to convey title Jo the land to thesecond defendant. Mr. Perera’s argument on this point must thereforebe upheld.
Aserappa v. Aserappa.
In these circumstances, it is not necessary for the purpose of this appealto reconsider the decision in Walker v. Mohideen (ubi supra), that is,whether the learned Judges were correct in holding that at that tune theCourt had no authority to give directions for the execution of the decreesave in the decree itself. . It may be pointed out, however, that owing tothe provisions of section 12 of the Mortgages Ordinance, 1927, time itselfwill make it inapplicable.
The appeal of the second defendant is allowed with costs here and below.He is entitled to the order he sought, subject, however, to the plaintiffscosts being paid out of the sum in deposit. The decree of the lower Courtis set aside and a fresh decree must be entered- as denoted above.
Akbar J.—I agree.
Poyser J.—I agree.
A. G. A., KEGALLA v. WIJEWARDENE et al