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Judgment
In this petition under Art. 226 of the Constitution, the petitioner has challenged the validity of the order passed by the Sub Divisional Magistrate, Mysore Sub Division, Mysore in KDR. 1062 of 1976-77, dated 13.8.76, allowing the application filed by the 3rd respondent under S. 4(f) of the Karnataka, Debt Relief Act, 1976 (hereinafter referred to as the Act).
The impugned order is not a speaking order and it was also not disputed by the learned Counsel for the 3rd respondent that the order as such, cannot be sustained; therefore, the learned Counsel submitted that the impugned order be quashed and the case be remitted to the first respondent for fresh consideration. On the contrary, the learned Counsel appearing for the petitioner submitted that there is no subsisting mortgage, therefore, there is no question of remitting the case to the first respondent for fresh consideration inasmuch as the first respondent can exercise the jurisdiction under Sec. 4(f) of the Act only when there is a subsisting mortgage and not otherwise. In order to decide the contention raised on behalf of the petitioner, it is necessary to notice the following facts which are not in dispute.
The property in question is a premises bearing No. 1249, situated in Narayanasastry Road, Mysore, originally belonged to the 3rd respondent who mortgaged the same to the petitioner for Rs. 4,000 under a registered mortgage dated 15-7-1950. There was a lease back of the mortgaged premises to the 3rd respondent who failed to pay the rent. Therefore the petitioner obtained an order for possession in HRC No. 42 of 1951 on the file of the Munsiff at Mysore and in execution of the said order obtained possession of the premises in question in Misc Case No. 118 of 1953. Thereafter, the petitioner filed the suit bearing O.S. No. 209 of 1956 in the Court of the first Munsiff, Mysore for recovery of arrears of rent. The said suit was decreed. In execution of the said decree, the premises in question was brought for sale and the petitioner purchased the same with the permission of the Court. The sale was also confirmed on 11-10-1957 in Misc. No. 223 of 1957,
On the basis of the aforesaid undisputed facts, the following two contentions were advanced on behalf of the petitioner: (i) that before the commencement of the Act, the sale of the property in question held by the court stood confirmed in favour of the petitioner; therefore, in view of the provisions contained in clause (ii) of the proviso to sub-clause (c) of S. 4 of the Act, such a sale is not affected by the Act, (ii) that even though the sale of mortgaged property in question held in execution of the decree obtained in a suit brought by the petitioner for recovery of the arrears of rent did really arise out of the mortgage claim only and the sale of the said property in execution of the decree obtained in such a suit, was opposed to the provisions contained in Order 34 Rule 14 of the C.P. Code; nevertheless, such a sale was not void ab initio, but ii was only a voidable sale; therefore, it was open for the 3rd respondent to object to such a sale being held or to take out a proceeding for setting aside the. sale. The 3rd respondent having failed to take any such action the remedy available to him in law having become barred by time long prior to the coming into force of the Karnataka Debt Relief Ordinance 1975, consequently, there was no right of redemption available to the petitioner on the date of coming into force of the aforesaid Ordinance; hence, the proceeding under S. 4(f) of the Act could not have been either initiated or entertained
On the contrary, it was contended by Shri R.V. Vasanthakumar, the learned Counsel for the 3rd respondent, that the sale held in contravention of the provisions or Order 34 Rule 14 ofthe C.P.C. was null and void inam much as the provisions contained in Or. 34 r. 14 of the C.P.C. are mandatory, as such, it was contended that any act done in violation of the mandatory provisions of law, is null and void. Thus, the question that arises for determination in this case is as to whether the sale of the mortgaged property held in execution of the decree obtained by the petitioner for recovery of the arrears of rent which arose out of the mortgage claim and as such the said sale being apposed to the provision contained in Order 34 Rule 14 of the C.P. Code was void or voidable.
Shri M.N. Seshafiri, the learned Counsel appearing for the petitioner, placed reliance on the decisions in: Mehr Bakhsh v. Sanjhe Khan, AIR 1916 Lah. 196, Lal Bahadur Singh v. Ahharan Singh, AIR 1915 All. 70, Panchapagesa Ayyar v. R. Rajamani Aiyar, AIR 1947 Mad. 72, and Kalyanasundaram v. Subramanya, AIR 1954 Mad. 675, in support of his contention that the sale held in contravention of the provisions contained in Order 34 Rule 14 of the C.P. Code in execution of the decree obtained by the mortgage in respect of the claim arising out of the mortgage, is not void but it is voidable and unless the mortgagor avoids such a sale by taking recourse to legal proceeding he will not be entitled to exercise his right of redemption. On the contrary, Sri Vasanthakumar, the learned Counsel for the 3rd respondent, relied upon the decisions reported in: Melegowda v. Gaibu Sab, (1978) 1 Kar.L.J. 155, Ravindra v. Special Deputy Commissioner, (1978) 2 Kar.L.J, AIR 1952 Mad. 877, AIR 1952 Madras 3777 and AIR 1957 Patna 24, AIR 1957 Pat. 24 in support of his contention that it was not at all open for the petitioner to bring the mortgaged property for sale in execution of the decree obtained by him in respect of the claim arising out of the mortgage transaction.
Order 34 Rule 14 of the C.P. Code; is as follows:
"14 (1) Where a mortgagee has obtained a decree for the payment of money in satisfaction of a claim arising under the mortgage he shall not be entitled to bring the mortgaged property to sale otherwise than by instituting a suit for sale in enforcement of the mortgage, and he may institute such a suit notwithstanding anything contained in Order II, rule 2.
(2) Nothing in sub-rule (1) shall apply to any territories to which the Transfer of Property Act, 1882 (4 of 1882), has not been extended".
The aforesaid provisions contained in Order 34 Rule 14 of the C.P. Code are not conceived in the public interest. The said provisions are intended to safeguard the interest of the mortgagor. It is not the violation of every mandatory provision that will lead to the invalidity or nullity of the act done thereof; but it is only the violation of such mandatary provisions which are conceived in the public interest, will result in the nullity of the action taken thereof. But in the instant case, as already pointed out, the provisions of Order 34 rule 14 of the C.P. Code, cannot be held to be provisions intended for the public interest. They are only intended to safeguard the interest of the mortgagor, as such, it was open for the mortgagor to object to the sale being held in contravention of Order 34 Rule 14 of the C.P. Code when the petitioner brought the mortgaged property for sale in execution of the decree obtained for recovery of rent of the mortgaged property which aross under the mortgage only. It was also open for the 3rd respondent to take such step as was necessary to prevent the sale being held on to institute such proceeding as was necessary to get the sale set aside. The 3rd respondent failed to avail the remedies available to him in law and thus allowed the sale to become final and inviolable. Therefore, the 3rd respondent waived his right which was otherwise available to him under Order 34 Rule 14 of the C.P. Code. In the cases reported in A.I.R. 1916 Lah., 196, A.I.R. 1915 Alld., 70, A.I.R. 1947 Mad., 72 and A.I.R. 1954 Mad., 675, it is specifically held that the sale held in contravention of the prohibition contained in Order 34 Rule 14 of the C.P. Code, is not void but only voidable and is good until it is set aside at the instance of the party who was entitled to get the sale set aside.
In the case of Dhirendra Nath Gorai v. Sudhir Chandra Gosh, AIR 1964 SC 1300, the Supreme Court has laid down in categorical terms that where the mandatory provision is conceived in the public interest the requirement of the same cannot at all be waived, whereas if it is conceived in the interest of the party, the stone can be waived. Therefore, in the aforesaid case, the Supreme Court has held that the sale held in contravention of the provisions of S. 35 of the Bengal Money lenders Act, which were intended only for the benefit of the judgment debtor, was not a nullity. The principle of law enunciated in the afore-said decision of the Supreme Court is equally applicable to the present case. The decisions of this Court relied upon by Sri Vasanthankumar, the learned Counsel for the 3rd respondent reported in 1978(1) Kar.L.J. 155 and 1978(2) Kar. L.J. 7 are not applicable to the facts of the present case, inasmuch as the point involved in those decisions are entirely different from the one involved in the present case. This Court in 1978(2) Kar.L.J. 7, has held that the provisions of sub-section (5) of S. 8 of the Karnataka Rent Control Act, were intended for the public interest therefore it was held that the violation of the same resulted in a nullity. As already pointed out, the provisions of Order 34 Rule 14 of the C.P. Code ape not conceived in the public interest bur are conceived in the interest of the mortgagor. Similarly, the decision reported in 1978(1) Kar.L.J. 155 is not on the point. There, the question that arose for consideration was as to whether the doctrine of merger embodied in S. 111 of the Transfer of Property Act, would apply to a case of a lease of an agricultural land followed by a mortgage and it was held that both the interests being different there was no question of merger. But, in the instant case, we are not concerned with the question of merger In the other two decisions reported in A.I.R. 1952 Mad., 877 and A.I.R. 1957 Pat. 24 it is held that in the case of usufructuary mortgage with lease back to the mortgagor, the claim for rent by the mortgagee against the mortgagor is a claim arising under the mortgage hence, the mortgagee cannot execute the decree for rent obtained against the mortgagor by sale of the equity of redemption. These two decisions would have been of great assistance to the 3rd respondent in a proceeding for setting aside the sale of the mortgaged property or for preventing the sale, being held of the mortgaged property in execution of the decree obtained by the petitioner for recovery of rent which claim arose out of the usufructuary mortgage in question. There is no doubt that in the instant case also, it was open for the mortgagor to prevent the sale being held or to get the sale set aside on the aforesaid ground but the. mortgagor (3rd respondent) failed to take any such, steps and allowed the sale to become final. Therefore, the aforesaid two decisions also cannot be of any assistance to the 3rd respondent.
The result is that the sale held in the year 1957 was the sale of the right of equity of redemption possessed by the 3rd respondent in; the mortgaged property in question which came to be purchased by the petitioner and the said sale having become final, there was no right of redemption subsisting on the date of coming into force of the Karnataka Debt Relief Ordinance 1975 That being so the 3rd respondent could not have maintained the application under S. 4(f) of the Act.
In the view I take regarding the 2nd contention raised on behalf of the petitioner, it is not necessary to go into the correctness of the first contention raised by Sri M.N. Seshagiri, the learned Counsel for the petitioner, based on clause (ii) of the proviso to S. 4(e) of the Act.
For the reasons stated above, this writ petition is entitled to succeed Accordingly, the same is allowed. The impugned order produced as Exhibit-C and also the consequential order passed thereon dated 5-2-1977 produced as Exhibit-E, are hereby quashed Rule is made absolute.