Civil Appeal Nos 12224 of 1975
From the Judgment and Orders dated 941974 of the Punjab  Haryana High Court in LPA Nos
213214 and 215 of 1973
SK Mehta Dhruv Mehta and Aman Vachher for the Appellants
KC Dua for the Respondents
The Judgment of the Court was delivered by K RAMASWAMY J
The appellants are mortgagees
The respondents are the heirs of Kala Singh the mortgagor
Kala Singh executed three mortgages in favour of the appellants Resham Singh Jaswant Singh and Harbans Singh on September 17 1962 June 17 1961 and May 31 1962 respectively hypothecating the agricultural lands of 16 kanals 16 marlas in each of the first two mortgages and 16 kanals in the third mortgage
The mortgagor filed an application under Sec 4 of the Redemption of Mortgages Punjab Act 2 of 1913 for short the Act 
He deposited a sum of Rs10 in each mortgage and sought redemption of the mortgages
Ultimately the parties compromised and the mortgagor agreed to pay the balance of Rs340 to each mortgagee within a month from May 1 1964
The Collector passed the order on compromise under s11 thereof on February 3 1964
He committed default in the payment thereof
The petitions were dismis 617 sed
He filed separate suits against each mortgagee for redemption within one year under Sec 12 of the Act on June 12 1964
Pending suits he died
Thereafter the suits were dismissed
After obtaining mutation of their names in the revenue records the respondents filed separate suits for redemption of the mortgages but beyond one year as contemplated under Sec
12 read with article 14 of the Limitation Act 1903
The suits were dismissed by the Trial Court and were confirmed by the First Appellate Court and by the High Court in Second Appeals
But the Division Bench under Clause 10 of the Letter of Patent allowed the appeals and set aside the Judgments and Decrees of the courts below and granted decree of redemption in terms of the prayer by Judgment dated April 9 1974
Assailing the legality thereof the appeals have been filed after obtaining leave under the article 136 of the Constitution
Since common questions of facts and law arise for decision in these appeals they are disposed of by a common judgment
The only question that was argued before the High Court and reiterated in this Court is whether the suits are barred by limitation
The contention of Shri Mehta the learned counsel for the appellants is that the order passed by the Collector under Sec
12 of the Act is conclusive between the parties unless the suits are laid under article 14 of the Limitation Act within one year from the date of the Order
Admittedly the present suits have been filed beyond such limitation of one year
The High Court committed a grave error of law in applying the provisions of Sec
60 of the Transfer of property Act and the ratio of the Privy council in Raghunath Singh  Ors
vs MT
Hansraj Kanwar  Ors AIR 1934 PC 205
He contends that the Act provides a right and remedy to the mortgagor and mortgagees
Section 12 of the Act makes the order conclusive and binding and Sec
13 bars second application in that regard unless the suit is filed within one year from the date of the order
It is not open to the Civil Court to go behind the order of the Collector and enlarge the limitation provided under article 14 of the Limitation Act
All the provisions of Transfer of Property Act were not applicable to State of Punjab
Certain Provisions relating to Sale deeds and gifts were made applicable to the State of Punjab with effect from April 1 1955 and to the area comprised in the erstwhile Pepsu State wef
May 15 1957
As on the date when the suits were laid section 60 of Transfer of Property Act did not apply to Punjab and so the ratio in Raghunath Singh s case supra is inapplicable
The High Court committed manifest error in applying s60
He cited decisions of Lahore High Court in support of the contention that the suit shall be laid within one year which we would advert to at a later stage
Shri Dua learned counsel for the respondents contended that the High 618 Court is justified in holding that the suit is not barred by limitation and the ratio of the decision cited by the appellants cannot be applied
The Act is a beneficial legislation giving right to the mortgagors to seek redemption and restoration of possession of the hypotheca in summary proceedings before the revenue courts
The Act applied only to mortgage of land where the principal money secured under the mortgage does not exceed Rs 5000 and the hypotheca does not exceed 50 acres of land
Section 4 gives right to the mortgagor and other persons entitled to sue for redemption at any time after the principal money becomes payable and before the suit for redemption is barred by presenting a petition to the collector for a direction ie mortgage be redeemed and erstwhile morgages shall put the mortgagor in possession of the hypotheca after following the procedure in that behalf
5 to 11 deal with the procedure
Under section 11 if the Collector on an enquiry forms an opinion that the sum is rightly due under the mortgage he shall unless he dismisses the petition under Sec 10 make an order under Sec6
If the sum is found larger than the sum deposited the mortgagor shall deposit the amount with any further sum that may be due on account of interest upto date of the deposit on making deposit within the period or extended period not exceeding 30 days thereafter the Collector shall make an order under Sec6 thereto
On committing default by the Mortgagor the Collector shall dismiss the petition
Section 6 provides the relief of redemption of restoration of possession to the martgagor delivery of the mortgage deed and payment of the mortgage money to the mortgagee
Section 12 which is material for the purpose of this case reads thus 1 Saving of suits to establish rights Any party aggrieved by an order made under Section 6 7 8 9 10 or 11 of this Act may institute a suit to establish his right in respect of the mortgage but subject to the result of such suit if any the order shall be conclusive
2 Setting aside ex parte orders or orders of dismissal Notwithstanding anything in this section a mortgagee against whom an ex parte order under section 7 has been made or a petitioner whose petition has been dismissed in default under section 6 may apply to the Collector to have such order of dismissal set aside and Collector may in his discretion set aside such order of dismissal on such terms as to costs or otherwise as he may deem fit provided that the order of dismissal shall not be set aside unless notice of 619 the application has been served on the opposite party
 Section 13 creates a bar to make any further petition under the Act by the mortgagor or his successor in interest
A reading of Sec
12 clearly postulates that the aggrieved party be it mortgagor or mortgagee against an order made under sections 6 to 11 is empowered to institute a suit to establish his right in respect of the mortgage subject to the result of the suit the order passed by the Collector shall be conclusive
Article 14 of the Limitation Act 1908 which is equivalent to article 100 of the  prescribes limitation of one year from the date of the decision or the order of the officer of the Government in his official capacity
Article 61 of the present provides 30 years for redemption and recovery of the possession of the hypotheca
The limitation of 30 years runs from the date when the right to redemption or possession accrues
Articles 105 134 and 145 of the Old would apply to the present litigation and the limitation is 60 years
In Tulsi Dass  Nirmal Das  Ors
vs Diala Ram 2 AIR 1943 Lah
176 a Full Bench for which Tek Chand
J wrote the leading judgment held at page 189 thus The order of the Collector does not affect the rights of the parties in any way it is conclusive to this extent only that the petition for summary redemption has been dismissed and no other petition under the Act would lie
No suit under section 12 being necessary or comptetent there was no bar to the mortgagor suing for redemption in the civil Courts within the period allowed by law in ordinary course
It must therefore be held that the mortgagor s suit in AIR 1929 Lah
513 was rightly decreed and that the contrary conclusion reached by the Single Bench in AIR 1927 Lah
461 and re affirmed by the Division Bench in AIR that it is the form of the order of the Collector which has to be seen and not the substance of it is erroneous
This view was approved by this Court in Sheo Lal  Ors
vs Sultan  Ors
  by a Bench of three Judges
The facts were that the Collector did not decide the dispute on merits but rejected the application filed under Sec 4 of the Act holding that the application raised complicated question of facts and law and thereby he declined to exercise summary jurisdiction under the Act
On institution of the suit the plea of limitation under article 14 of Old was raised which was upheld by the Trial Court but on 620 appeal the decree of redemption was granted and was confirmed by the High Court in Second Appeal
The same contention was reiterated before this Court
In that context Shah J as he then was speaking for the court held that it is not the form of the order of dismissal but its substance will determine the application of the period of limitation prescribed by article 14 of the 
An order relegating the mortgagor to a civil suit for obtaining an order of redemption event if becomes final does not bar a suit for redemption for it raises no cloud on the title of the mortgagor arising out of the mortgage
Such an order is not one which is required to be set aside
An order required to be set aside is one which the officer making it has jurisdiction to make it and has the effect of barring the claim for relief unless it is set aside
It is clear that an order passed by the Collector under sections 6 to 11 is only conclusive for what was decided therein and if the adjudication made by the Collector in summary proceedings are sought to be reopened certainly unless the order is got over either by the martgagor or by the mortgagee or any person claiming right title or interest through them being an aggrieved person within the meaning of Sec 12 the order of the Collector binds the parties or the persons claiming right title or interest from the parties
Take for instance there is a dispute as in the present case about the mortgage money before the Collector
Kala Singh disputed the money secured of hypothecation but had compromised and agreed to pay the amount mentioned in the mortgages bond namely Rs850 Rs
10 in each of the mortages disputed but in the suit filed within one year he reiterated his original stand
Had the same stand been taken by the respsondents disputing the mortgage money certainly it would not be open to the respondents as successor in interest of the mortgagor to contend that the money advanced under the mortgage was not Rs 850 but something less
That is not the case in the present suit
They agreed to pay Rs 850 as decided by the Collector and sought redemption in the civil suit
Thereby they are not seeking to set aside the order of the Collector but they are seeking redemption of the mortage
Take another instance where the mortgagor disputed the execution or validity of the mortgage bond itself and the finding was recorded against the mortgagee ie the mortgage bond was not either executed or is void for being vitiated by fraud coercion or undue influence etc
The mortgagor successfully avoided the mortgage by a specific order passed by the Collector under the relevant provisions of the Act
If no suit was filed within a period of one year the findings of the Collector become conclusive between the mortgagee and the mortgagor and it is not open to assail the order of the Collector after one year in a suit of 621 foreclosure or sale by the mortgagee
Therefore what was prohibited by Sec
12 is only the substance of the order and not the form
Once a mortgage always a mortgage and gets extinguished by payment of mortgage money by the mortgagor or decree of redemption is passed and satisfied
The creation of mortgage is an act intervivos and not a statutory or common law right
The Act accords summary remedy and the default of compliance entails with dismissal of the application and section 13 prohibits second applications for the self same relief
The remedy of civil suit for redemption available at common law subject to limitation is not taken away
Civil suit is not a declaratory suit but one to redeem the mortgage and to recover possession of mortgaged property
The question then is whether the respondents are entitled to redemption of the mortgage
Section 60 of the gives right to redemption of the mortgage by instituting a suit for redemption of the mortgage property
But as seen at the relevant time section 6D was not made applicable to Punjab
In Mussammat Bhagwan Devi vs Mussammat Bunyadi Khanum the Division Bench held that although the and the Indian Easement Act are not in force in Punjab the Punjab Courts when deciding cases in which principles of law dealt with by the provisions of those Acts are involved may adopt those provisions as embodying law applicable to the case especially when the law enunciated therein coincides with the principles of equity good conscience and justice for which there is no statutory law applicable to the Punjab
In that it was held that the mortgagor in possession had no authority without the consent of the mortgagee to do an act which was likely to prove destructive or permanently injurious to the property mortgaged
In Safdar Ali
vs Ghulam Mohi ud din  Ors the Full Bench was to consider whether Doctrine of Clogging would apply when the was not made applicable to Punjab
The Full Bench held that though the Doctrine of Clogging in terms does not apply in Punjab when there is no statutory prohibition governing the matter be restricted to case where something unconscionable or oppressive in the bargain calls for redress
In terms the Full Bench applied the Principles in the provisions of the consistent with the Doctrine of Justice Equity and Good Conscience
In Mian Nizam  Din Mohammad vs Lala Ram Sukh Das the right of prior mortgagee purchasing property mortgaged to him be deemed to keep alive for his benefit as against subsequent mort 622 gagee
It was held that the principles contained in section 101 of would be applicable and applied
In Milkha Singh vs Mst
Shankari  Ors AIR 34 Lahore 1 a Full Bench of five Judges applied the Doctrine of Part Performance under section 53A of the as a defence
It was further held that section 53A is based on equitable principles which were previously applicable to whole of India though the per se was not applied to Punjab
In Ms Ram Gopal Dula Singh vs Sardar Gurbux singh Jiwan Singh  Ors Kapur J as he then was speaking for the Division Bench held that though section 6 of the is not applicable to Punjab the right to expectancy may not be transferred
It was further held that in Punjab and Lahore there is no disagreement as to Principles of being applicable to Punjab because they are based on Justice Equity and Good conscience
This view was again reiterated in Atma Singh  Gian Singh vs Mangal Singh  Ors ILR1957 Jan June Vol10 79 and applied sections 58 92 and 100 Doctrine of Subrogation but excluded the applicability of the technical rules
This Court in Ganeshi Lal vs Jyoti Pershad held that though the does not apply to Punjab the priciple of equity justice and good conscience would apply to Punjab
If one of the several mortgagor redeems the entire mortage by paying a sum less than the full amount due under the mortgage he is entitled to receive from his co mortgagors only their proportionate shares on the amount actually paid by him
He is not entitled to claim their proportionate shares on the amount which was due to the mortages under terms of the mortgage on the date of redemption
The same principle laid down in Suryanarayan vs Sriramulu 1913 25 MLJ p 16 was referred to with approval in Ganeshi Lal s case
Though in Ganeshi Lal s case the entire claim under the suit for contribution was not decreed the provision of were applied on the Principles of equity justice and good conscience and granted degree pro rata
We hold that applying the principle of Justice Equity and Good Conscience though section 60 of the per se did not apply the principles in section 60 would apply
Though the application for redemption was dismissed under s11 of the Act and became conclusive under section 12 the mortgagor s right to redemption is not barred
A suit for redemption under section 60 of will be maintainable and civil court has jurisdiction to grant the decree of redemption
In Gangu  Ors vs Maharaj Das  Ors ILR 15 Lahore 380 a 623 Full Bench following Kaura vs Ram Chand Lah
206 held that unless the order of the Collector be challenged within one year the civil court has no jurisdiction to entertain the suit
In this case the right to redemption of mortgage itself was barred by limitation
Therefore the ratio does not apply
Though the ratio in Bhagat Ram  Ors
vs Jamna Ram  Ors is in favour of the appellants in our view the ratio therein is not good law
Thus we hold that the suits for redemption are admittedly within limitation either under the Old Limitation or under the new 
The bar of Sec
12 of the Act does not oust the jurisdiction of the civil Court to entertain and grant decree of redemption
The appeals are accordingly dismissed but in the circumstances parties are directed to bear their own costs throughout
YL Appeal dismissed


Summary:
Respondent No 1 a Private Limited Company was sanctioned a loan of Rs30 lakh by the Appellant Corporation for the setting up of a factory
To secure this loan a mortgage deed of certain properties was executed by the Company and Respondents 2 to 4 as its directors had executed a personal Surety Bond without any security for its repayment
After obtaining a part of the sanctioned loan which was to be given in phases the Company became disinterested in availing of the balance amount
Consequently the Corporation demanded back the amount ahead taken together with interest and on the company s failure to do so it took over the Industrial Concern under section 29 of the Act and initiated steps to realise its dues by putting the property to sale
Having failed to recover the amount as no adequate offer was forthcoming despite repeated advertisements it filed a petition before the Bombay High Court under sections 31 and 32 of the Act both against the Company as well as its directors sureties praying for a decree in the sum of Rs 158739120 to be passed against them jointly and severally
The respondents contested the petition contending a that a petition under sections 31 and 32 of the Act could be filed only before the City Civil Court and the High Court had no jurisdiction to entertain it b that no money decree can be passed under sections 31 and 32 of the Act and c that the provision in the Act relating to enforcement of the 481 liablity of surety were ultra vires of Article 149 of the Constitution
The learned single judge relying on an earlier decision of the Bombay High Court reported in 1987 Mah
LJ 243 held that the High Court had to entertain the petition but on merits took the view that no money decree could be passed under sections 31 and 32 even against the sureties and since in the instant case the sureties had not given any security except their personal guarantee the same could be enforced only in the ordinary course and not under the special machinery provided under the Act
In view of his findings on the first two pleas no arguments were entertained on the last plea and accordingly the petition was dismissed
The Division Bench while dismissing the appeal not only upheld the finding of the single Judge on merits but also overruled the decision reported in and held that the High Court had no jurisdiction to entertain a petition under sections 31 and 32 of the Act
The Corporation came up in appeal before this court by special leave against this decision of the High Court of Bombay
The impugned judgement was assailed by the Appellant Corporation both on merites and on the plea of juridiction
The respondents in reply asserted that the findings of the High Court on both pleas were unassailable
Allowing the appeal by a majority decision HELD A
By the Full Court iThe extent of the liability stated in the application as contemplated by sub section 2 of section 31 of the Act would represent the value of the claim of the Corporation and if since value is upto Rupees Fifty Thousand the application would lie in the City City Court and if it is more than that amount it would lie in the High Court
This interpretation would give meaning and relevance to the words having jurisdiction used in sub section 11 of section 32
A different interpretation would render superfluous or otiose not only the words having jurisdiction but also the words and in the absence such court by the High Court occurring in the said sub section 11 inasmuch as in a Presidency town in terms of territorial jurisdiction the jurisdiction of the City Civil Court and of the High Court is co terminus 495D F ii In the instant case the extent of liability of the surety being more than Rupees fifty thousand the application could only have been filed and was rightly filed in the High Court and the finding in the 482 judgment under appeal to the contrary for holding that the High Court had no jurisdiction to entertain the application cannot be sustained
497A B Per N
D Ojha J for himself and Ranganathan J iii There can be no doubt that the term any surety used in clause aa in sub section 1 of section 31 of the Act will include not only a surety who has given some security but also one who has given only a personal guarantee
In our opinion in a case where the relief claimed in the application under section 311 of the Act is for enforcing the liability of a surety who has given only a personal guarantee sub section 4A of section 32 where no cause is shown and clause da of sub section 7 where cause is shown contemplate cutting across and dispensing with the provisions of the Code of Civil Procedure from the stage of filing a suit to the stage of obtaining a decree against the surety the passing of an order which can straightaway be executed as if it were a decree against the surety which may be passed in the event of suit being filed
498F 499E iv In the absence of any provision such as sub section 8 of section 32 of the Act applying the manner provided in the Code for the execution of a decree against a surety only as far as practicable the entire provision contained in this behalf in the Code shall be applicable
This would be so in view of the use of the expression any other law for the time being applicable to an industrial concern used in section 46B of the Act
That the Code is applicable to an industrial concern also is not in dispute and cannot be doubted
50OH 501A v Even in the absence of section 46B of the Act the provisions of the Code would have been attracted in the matter of enforcing the liability of a surety in view of the decision of this Court in National Sewing Thread Co Ltd vs James Chadwick  Bros Ltd  inasmuch as the District Judge while exercising jurisdiction under sections 31 and 32 of the Act is not a persona designate but a court of ordinary civil jurisdiction
501B D Per section C Agrawal J Dissenting It cannot be comprehended that while making provision which would enable passing of an order in the nature of a money decree against a surety on an application under section 31 of the Act Parliament would have refrained from making a corresponding provision prescribing the procedure for carrying into effect such an order
It 483 appears to be more in consonance with the scheme of the Act and the object underlying sections 31 and 32 that by introducing the amendments in sections 31 and 32 of the Act the Parliament intended to place the surety on the same footing as the principal debtor so as to enable the Financial Corporation to obtain relief against the properties of the principal debtor as well as the surety 515E G If considered in this perspective the expression enforcing the liability of any surety in clause aa of section 311 would mean enforcing the liability of a surety in the same manner as the liability of principal debtor is enforced by attachment and sale of property keeping in view that the proceedings under sections 31 and 32 of the Act are akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of the decree
The relief of a money decree sought against the sureties respondents 2 to 4 was not maintainable and the said relief could not be granted to the appellant in proceedings under section 31 of the Act
As a result the petition filed by the appellant must be dismissed and for the same reason this appeal must fail
515G 516A 516D E Munnalal Gupta vs Uttar Pradesh Financial Corporation  Anr
AIR 1975 Allahabad 416 Thressiamma Varghese vs K section F Corporation AIR 1986 Kerala 222 Maharashtra State Financial Corporation vs Hindtex Engineers Pvt Ltd  Kayastha Training  Banking Corporation Ltd vs Sat Narain Singh All 433 M K Ranganathan  Anr
vs Government of Madras  Ors
1955 2 SCR 374 The Central Talkies Ltd Kanpur vs Dwarka Prasad   referred to
Maganlal V MIS
Jaiswal Industries Neemach  Ors   Ms Everest Industrial Corporation  Ors
vs Gujarat State Financial Corporation 1987 3SCC 597 Parkash Playing Cards Manufacturing Co vs Delhi Financial Corporation  Gujarat State Financial Corporation V Natson Manufacturing Co Pvt Ltd  Ors  distinguished
West Bengal Financial Corporation vs Gluco Series Pvt Ltd
AIR  approved