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Judgment
Balasubrahmanyan, J.—The State Bank of India, the Petitions in this civil revision Petition obtained a mortgage decree against the Respondent for Rs. 2,79,145 and for costs. The preliminary decree was passed on 18th October, 1975. The final decree was passed on 24th July, 1976. Subsequently, the Bank moved the Court for bringing the mortgage property to sale. The Court ordered the sale of the hypotheca. On 4th January, 1978 the property was purchased by one Periasami for Rs. 4,40,500. The purchase price was deposited into Court by the auction-purchaser. The Bank withdraw from Court deposit the decree amount with subsequent interest and costs. Later it was found that the Bank had paid insurance premia on the mortgage property, amounting in all to Rs. 5,412.46. The Bank accordingly filed on execution application before the court for an Order for payment out of this sum from the balance of the sale price in deposit in Court. This application was opposed by the judgment-debtor. The learned Subordinate Judge, Tiruchirapalli, upheld the judgment-debtor''s objection and dismissed the application as not maintainable. He held that the decree-holder cannot claim the amount of Rs. 5,421.46 by Way of an application for payment out of the money in Court deposit. According to the learned Judge, the only remedy of the decree-holder was to file a suit for that amount, obtain a decree therein and attach the amount in Court deposit.
This revision has been brought against the Order of the learned Subordinate Judge. I am clear in my mind that the learned Judge was in error in holding that the application for payment out of Rs. 5,421.46 did not lic. I agree with the submission of Mr. T.R. Mani, Learned Counsel for the Bank, that the provisions found in Order XXXIV, Rule 10 of the CPC are especially fashioned to provide for a proceeding of this kind. This provision is concerned with how a final adjustment has to be arrived at for determining the amount payable to a mortgage in a suit for for foreclosure, sale or redemption of mortgage. The provision is to the effect that over and above the amount for which the preliminary mortgage decree has been passed, the Court should add to that amount the costs of the mortgages other than suit costs as well charges and expenses which the mortgagee has properly incurred since the date of the preliminary decree and upto the date of actual payment.
A reference to the terms of Order XXXIV, Rule 10 brings out more than one significant feature of that provision. In the first place, it lays down an exception to the general Rule in execution that a decree holder is unalterably fixed to the amount decreed provided for in the suit. Indeed, this provision enables the mortgagee to claim, over and above the amount decreed under the preliminary mortgage decree, certain further sum of money. These additional sums are of a kind which could not possibly have entered into the reckoning in the preliminary decree, for the simple reason that they relate to costs, charges and expenses incurred by the mortgagee as mortgagee and subsequent to the passing of the preliminary decree. In this (SIC), the provision takes particular note, in execution proceedings, of claims accruing subsequent to the decree. Mark the use of the phrase since the date of the preliminary decree in Order XXXIV, Rule 10.
The second significant feature of this provision is that where a claim is made under this Rule in proceedings is execution of a mortgage decree, the executing Court has no choice in the matter excepting to entertain the mortgagee''s claim, and to proceed to determine it. And, if on enquiry, the Court finding that the claim relates to costs, charges and expenses which had been incurred by the mortgagee subsequent to the preliminary decree then the Court has got to add these amounts also, as a matter of, final adjustment of the amount to be paid to the mortgagee. The Court has no discretion or option in the matter, either to entertain the claim and deal with it in the execution proceedings, or to refer the mortgagee to an independent suit for the purpose. The Court, on the contrary, is under a mandatory duty to add these post-decree costs, charges and expenses in the very processes of execution of the mortgage decree. Mark the use of the word shall.
There is yet another (SIC) feature of Order XXXIV, Rule 10. The mortgagee, it would seem, can go on seeking the aid of the executing Court for recovery of his post-decree claims against the mortgager till the amount as finally adjusted, is paid to the last pie. Mark the use of the word upto the time of actual payment.
Order XXXIV Rule 10 of the Code may be described, more or less, as a procedural case of Section 72 of the Transfer of Property Act, 1882. This provisions enables a mortgagee to spend money for the preservation of the mortgage property, for supporting the title both of the mortgager himself and for renewal of the lease where the mortgage is of a leasehold .The money so expended is declared by this provision to form part of the mortgage debt, recoverable as such by the mortgage from the mortgager, unless the contract otherwise provides. The expenses incurred by a mortgagee to preserve the hypotheca cannot, in reason, include payments made by him for insuring the property against loss or, damage, since insurance does not protect the property insured, but only covers risks and indemnifies the insurer in case of loss or damage. Hence, Section 72 makes a separate, but similar, provision relating to insurance premia by the mortgagee. Under the section, these payments towards insurance also are amenable to be incorporated in the mortgage debt and recoverable as such by the mortgagee.
Order XXXIV, Rule 10 of the Code does not, in terms, refer to Section 72 of the Transfer of Property Act while referring to the amounts which a mortgagee is entitled to consolidate u/s 72 with the mortgage money. The Rule refers generally, and without exception, to all costs, charges and expenses incurred by the mortgagee, their only qualification being that they must have been Properly incurred. This epithet might cover the several items of expenditure provided for by Section 72 of the Transfer of Property Act, but it is wide enough to include also other costs, charges and expenses properly incurred by the mortgagee although they do not strictly fall within the ambit of Section 72.
The whole idea behind Order XXXIV, Rule 10 seems to be not only to deal with the execution of mortgage decree as sui generis, but to avoid a multiplicity of proceedings between the mortgagee and the mortgagor as respects the same subject-matter. The provision certainly makes for a quick and easy-free remedy to the mortgagee. But it is also a convenient proceeding both for the parties to the mortgage suit and for the court itself. It is quite conceivable that already at the trial of 1he mortgage suit, materials might have been brought on record by either party, some of which might well form the very basis of the mortgagee''s subsequent claim before the executing Court for reimbursement of post-decree costs, charges and expenses. In any case, the executing Court cannot (SIC) at an inquiry into the mortgagee''s subsequent claims since the whole object of Order XXXIV, Rule 10 is that the mortgagee''s does must obtain a final adjustment once and for all, in the very suit and its follow-up execution proceedings, With a provision such as this, and a mandatory provision at that, I must be held that a separate suit not only does not lie, but it would be no good to anybody in this world-parties, Counsel and Court included, if it does lie at all.
Learned Counsel in this case did not dispute the nature of the present claim made by the Bank is execution. He only urged that the claim has to be enforced against his client only by way of an independent suit. For the reasons I have earlier mentioned, however, this contention must be rejected.
Learned Counsel referred me to a ruling of a Bench of the Allahabad High Court reported in Dambar Singh v. Kallyan Singh (1922) 20 All. L.J. 170. That case had to deal with the application of Order XXXIV, Rule 10 of the Code before its amendment by Act XXI of 1929. The Court expressed the view that under these provisions nothing could be added to the mortgage decree excepting Costs of the (SIC) proceedings. This decision had to do with Order XXXIV, Rule 10 of the Code, as it stood (SIC) to its amendment by Act XXI of 1929. But, there is a subsequent decision by a Full Bench of the same High Court, which takes a comprehensive view of the provision as it now stands after the amendment in 1929. The Full Bench ruling is reported in Uttam Kunwar v. Krishna Pal Singh A.R.I. 1960 All. 659 (F.B.). This Full Bench decision is authority for two position. In the first place, it was held by he Full Bench that Order XXXIV, Rule 10 covered not only the items of expenditure mentioned in section 72 of the Transfer of Property Act, but it also covered other costs, charges, and expenses incurred for purposes analogous to these mentioned in Section 72. The second position laid down by the Full Bench was that under Order XXXIV, Rule 11, the mortgagee can claim amounts which were not included either in the preliminary mortgage decree or even under the final decree.
Both on the terms of Order XXXIV, Rule 10 and on the authorities the Court below erred in dismissing the Bank''s application for payment out. The said Order is accordingly set aside. The Banks application in Execution Application No. 330 of 1978 stands allowed. The revision is allowed as the above terms. There will, however, be no Order as to costs.
This Petition having been set down this day, for being mentioned, in the presence of MR. T.R. Mani, Advocate for the Petitioner and of Mr. C. Chirnaswami, Advocate for the Respondent, the Court made the following Order.
I had disposed of the above revision on 20th October, 1980.
I posted the revision again for further elucidation and clarification as respect the break-up figures contained in the Bank''s application for payment out in the lower Court.
In their application for payment out the Bank had asked for payment out of Rs. 5,421.46, being the (SIC) amount of instance premia paid by the Bank in respect of the mortgaged property, and for which they claimed (SIC). It seems that more than one premia had made up the amount of Rs. 5,421.46.
The argument of the learned Counsel in the revision, which was based on the provisions of Order XXXIV, Rule 10 of the Code of CPC covered the whole of the said amount of Rs. 5,421.46. A reference to the record as well as the Order under revision reveals the amounts and dates of payment by the Bank of the insurance premia. The details are as under:
Insurance Premia (1)
Date of payment (2)
Rs.
1,598.82
20th August, 1974
1,598.82
21st August, 1975
1,598.82
27th July, 1976
625.00
30th August, 1977
Total 5,421.46
The above table shows that the first two payments of Rs. 1,598.82 each were made before the passing of the preliminary decree in the suit. In my Order, dated 20th October 1980 in this revision. I had held that the provision of Order XXXIV, Rule 10, CPC under which the Bank had based its claim in the present proceedings refers only to costs, charges and expenses properly incurred by the mortgagee subsequent to the date of the preliminary decree. This means, they cannot relate to costs, charges and expenses incurred prior to that date. It follows, therefor, that the two payments made on 20th August, 1974 and 21st August, 1975 are not eligible for being claimed by the mortgagee in the present proceedings under Order XXXIV, Rule 10 of the Code of Civil procedure. However, the Bank would be entitled to have its claim for the two subsequent payments of Rs. 1,598.82 and Rs. 625 made on 27th July, 1976 and 30th August, 1977 respectively.
Since these materials are already on record and are disclosed by the very Order of the Court below, there is no need to ask that Court to determine the amount. Hence, in clarification of my Order, dated 23th October, 1980 in this revision, it is hereby Ordered that sums of Rs. 1,598.82 and Rs. 625 aggregating to Rs. 2,223.82 shall be paid out to the Plaintiff Bank from out of the amount of money in deposit in the lower Court.
Mr. T.R. Mani, learned Counsel for the Bank, submitted that in view of the decision to limit the claim of the Bank under Order XXXIV, Rule 10 , CPC only to the two post-decree payment of Rs. 1,598.82 and Rs. 625 the remedy of the Bank for reimbursement and realisation of the two earlier payments towards the insurance premia may be left open to be pursued in appropriate proceedings.
Learned Counsel even suggested that I might indicate the lines on which the Bank might pursue its remedy in regard to these expenditure. I am, however, not willing to be drawn into a discussion as to what would be the appropriate remedy open to the Bank in respect of the other two amounts of Rs. 1.598.82 each. I would contend myself by saying that the Bank would be at liberty to take proceedings as it may be advised and which are open to it according to law for the realisation of the said amounts. I make it quite clear once again that the Plaintiff mortgagee Bank would be entitled to payment out only of the sum of Rs. 2,223.82.
Let this Order be read as part and parcel of my Order, dated 28th October, 1980 in this revision.