SOLI PESTONJI MAJOO & ORS. versus GANGADHAR KHEMKA

Citation: [1969] 3 S.C.R. 33 · Decided: 06-12-1968 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SOLi PESTONJI MAJOO & ORS. 
v. 
GANGADHAR KHEMKA 
December 6, 1968 
[J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.] 
33 
Practice and Procedure-Mortgage-Suit by first mortgagee-Puisne 
niortgagee a party-D.ecree passed but no sale-Prior mortgagee .Paid 
off by mortgagor-Suit by puisne mortgagee on his mortgage-Prayer for 
decree in Form SA Appendix D. C.P.C.-lf suit maintainable. 
Code of Civil Procedure (Act 5 of 1908), O. 34, r. 11-lnterest subse-
quent to date of suit-Contractual rate if should be decreed. 
The owner of a property executed three mortgages in favour of three 
persons on three different dates. The first mortgagee filed a suit to which 
he made the two puisne mortgagees also parties. A decree was passed 
against the mortgagor in Form 9, Appendix 'D', Civil Procedure Code, 
1908. 
As the mortgagor did not pay the amount, a final decree for sale 
of the mortgaged property was passed. The mortgagor, however, paid off 
the decreta! amount due to the first mortgagee and the property was not 
brought to sale. Thereafter, the second puisne mortgagee brought 
a 
suit on his mortgage and prayed for a mortgage decree in Form 5-A. It 
was contended on behalf of the mortgagor, that the pusine mortgagee 
was not entitled to file the suit and the only course open to him was to 
apply for a decree for sale and realise his dues from the surplus sale pro-
ceeds of the mortgaged property. The suit was decreed by 
the trial 
judge and in appeal, the Appellate Bench of the High Court varied the 
decree by reducing the amount declared due. The decree however granted 
interest at the contractual rate of 12% per annum with monthly rests even 
after the date of suit. 
In appeal to this Court, 
On the questions (!) whether, in the circumstances, the puisnc mort-
gall"e was entitled to institute a separate suit in respect of bis mortgage; 
and (2) whether interest on the amount adjudged should be at the con-
tractual rate even after the date of suit. 
HELD: (I) Under the Transfer of Property Act, 1882, and 0. 34 of 
the Code of Chi! Procedure, 1908, a puisne mortgagee is made a party 
to the suit by the first mortgagee in order that the puisne mortgagee 
might have an opportunity of redeeming if be wished, and in order that 
he might receive his mortgage monev, or part of it, out of the surplus sale-
l'roceeds after satisfaction of the first mortgage. But the decree is not 
really in his favour and he cannot insist upon a sale nor get a personal 
decree in his favour if the first mortgagee is satisfied by the mortgagor be-
fore the sale. Therefore, the puisne mortgagee was entitled to file the suit 
on his mortgage. [37 D-E] 
Chandra Roy Chowdhry v. M. M. 
Nahaplet, I.L.R. 37 Cal. 907, 
Vedavyasa Ayyar v. The Mcdum Hindu Labha Nldhl Co. Ltd· I.L..R. 
42 Mad. 90 and Shiv Kumar Prosad v. Tiu TruJtetJ /Dr the lmp"1V#fllfflt 
of Calcutta, SI C.W.N. 798, approved 
34 
SUPREME .COURT REPORTS 
[1969] 3 S.C.R. 
(2) Under 0. 34 r. 11 Civil Procedure Code, 1908, (inserted by Act 
21 of 1928), the Court may ord<:r payment of interest to the mortgagee 
upto the date fixed for payment at the rate 
payable on the principal. 
Hence, the Court has discretion not to decree the contractual rate so far 
as interest pendente lite and subsequent interest up to date of redemp-
tion is concerned, even if the rate was not penal, excessive or substantially 
unfair within the meaning of the Usurious Loans Act, 1918. In 
the 
circumstances of the present case simple interest at 6% per annum on 
the principal sum adjudged from date of suit till date of redemption is 
appropriate. [39 C-F] 
Jaigobind Singh v. Lachmi Narain Ram, [1940] F.C.R. 61; A.LR. 
1940 F.C. 20, applied. 
CIVIL APP ELLA TE JURISDICTION : 
Civil Appeal No. 24 of 
1966. 
Appeal by special leave from the judgment and decree dated 
Jainuary 17, 1962 of the Calcutta High Court in Appeal No. 82 
of 1959. 
Rameshwar Nath and Mahinder Narain, for the appellant. 
J.P. Mitter, Sardar Bahadur, Vishnu Bahadur and Yougindra 
Khusha/ani, for the respondent. 
The Judgment of the Court was delivered by 
Ramaswami, J. The appellant is the executor of the estate 
of Pestonji Sorabji Majoo deceased, hereinafter referred to as the 
'mortgagor'. 
During his lifetime the mortgagor was the owner 
of one-third share in premises no. 50, Chittaranjan Avenue, 
Calcutta. 
On November 21, 1938, the mortgagor executed a 
deed of mortgage in respect of hi' one-third share in favour of 
She

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