Case: K. Manickchand &amp; Ors Vs. Elias Saleh Mohamed Sait &amp; Anr

a Central Act or Regulation shall be construed as coming into operation immediately on the expiration of the day preceding its commencement. This sub-section clearly indicates that there is a distinction between an Act coming into operation, and the commencement of the Act. The date of coming into operation is not necessarily the date of commencement. In interpreting Section 2 (3) (b) and (c) of the Act, we are concerned with to this expression commencement of the Act and not with coming into operation of the Act. In view of the definition of commencement given in Section 3 (13) of the General Clauses Act which applies to this expression as used in the Act, it has to be held that the commencement of the Act for the purposes of the present suit must be held to be the date on which the Act came into force in Bangalore Civil and Military Station and, consequently, only 1st April, 1937 and not earlier. The document of 1933, treated either as an agreement or a security for purposes of clauses (b) and (c) of sub-section (3) if Section 2 of the Act, was made or given before the commencement of the Act and, consequently, the present suit is not a suit to which the Act can be held to be applicable under either of those clauses. 19. Mr. Aggarwala on this point drew our attention to the provisions of subsection (3) of Section 3 of the Act under which it is laid down that this section shall apply to any suit, whatever its form may be, if such suit is substantially one for the recovery of a loan or for the enforcement of any agreement or security in respect of a loan or for the redemption of any such security. He relied on a decision of the Punjab High Court in Vaishnu Dass v. Thakur Dass, ILR (1954) Punj 1= (AIR 1953 Punj l16), where the Court interpreted Section 3 (3) of the Act as laying own that the other provisions of Section 3 will apply to a suit for the recovery of a loan or for the enforcement of any agreement or security in respect of a loan or for the redemption of any such security, irrespective of the fact whether the loan or the agreement was made before or after the commencement of the Act, or the security was given before or after the commencement of the Act. We are unable to accept this interpretation.Sub-section (3) of Section 3 is not intended to take away the limitations laid down in Section 2 (3) (a), (b) and (c) of the Act. Its only purpose is to meet the contingency that a suit, to which the provisions of the Act are sought to be applied, may not be in the form of a suit for recovery of a loan, or for the enforcement of any agreement or security in respect of a loan or for the redemption of any such security. In such a case, these expressions used in Sec. 2 (3) of the Act are to be held to be covered even if the suit is substantially of such a nature. This sub-section (3) of Section 3 of the Act is thus intended to be in the nature of an explanation for the purpose of interpreting what is a suit for recovery of a loan or for the enforcement of an agreement or security in respect of a loan or for the redemption of any such security used in sub-section (3) of Section 2 of the Act in cases where the suit may not have been framed in such form as to indicate plainly that it is a suit of such a nature. Even if the form be different, but the suit is substantially of that nature, it has to be held that the requirements of Section 2 (3) of the Act are satisfied. Consequently, it cannot be held that this provision was in tended to take away the requirement that, for the applicability of the Act, the loan mentioned in clause (a) and the agreement mentioned in clause (b) of Section 2 (3) must have been made after the commencement of the Act and the security mentioned in clause (c) must have been given after the commencement of the Act. In the present case, the mortgage-deed, on, the basis of which accounting and decree for surplus were claimed by the respondents, was not executed after the commencement of the Act and clearly therefore, the Act cannot be applied to the present suit.The decree of the High Court to the extent of relief granted to the respondents on the basis of the applicability of the Act must be set aside. 20. Learned Counsel for parties were asked to indicate to us the amount for which the suit would have to be decreed applying Section 76 of the T. P. Act and ignoring the provisions of the Act, and they gave us the agreed figure that this amount will be Rs. 13,342/09 P. This is the amount which has been found by the High Court as due, if the provisions of the Act are not applicable. Consequently, the decree passed by the High court has to be reduced to this amount. 21. The High Court when decreeing the suit, granted interest to the respondents on this amount with effect from 3rd November, 1943, which was the date on which the suit was instituted. Learned Counsel for the appellants desired that interest should be granted only with effect from the date of the decree passed by the High Court in the appeal against decree in the suit. We can see no basis behind this submission. The amount, for which the suit is being decreed, was clearly payable by the appellants at the time when the suit was instituted and we cannot, therefore, hold that any error was committed by the High Court in granting interest on this amount from the date of the suit.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Even if the High Court, made such an incorrect order, the remedy of the appellants lay in seeking leave to appeal from this Court against that order itself. In fact, the judgment dated 13th February, 1951 was very clearly a final judgment in respect of all the points which were decided in the preliminary decree passed by the trial Court and confirmed by this judgment by the High Court. A preliminary decree in a suit for accounts cannot be said to be a mere interlocutory order. Such a decree finally decides the points which the court is required to decide at that stage or chooses to decide at that stage. The judgment of the High Court dated 13th February, 1951 having become final, it is no longer open the appellants to raise the ground of non-maintainability of this suit because of the earlier proceedings under Section 83 of the T. P. Act. The first point raised by learned counsel has, thus, no forceIn these circumstances, we have allowed learned counsel for the appellants to argue this point on merits on the basis that the judgment of the High Court confirming the preliminary decree had specifically left this question open for decision at the stage of final decree9. On merits, however, we think that the High Court was perfectly right in recording its finding that the mortgage in suit is governed by Section 76 of the T. P. Act and does not fall within the scope of Section 77 of the T. P. Act. This is very clear from the terms of the mortgage deed itself. The mortgage deed clearly lays down that the mortgagee is entitled to a sum of Rs. 700 per mensem in lieu of interest on the mortgage money. This term by itself indicates that the entire receipts from the mortgaged property were not to be taken by the mortgagee in lieu of interest on the principal moneyThe right to appropriate rent towards interest was confined to the sum of Rs. 700 per mensem only. All these terms of the mortgage deed clearly show that it was not of the character mentioned in Section 77 of the T. P. Act and, consequently, Section 77 did not apply. Section 76 was clearly applicable, as the mortgagee had taken possession of the mortgaged property and was liable to render accounts of administration of the property. The decision of the High Court on this point must also, therefore, be upheldThe Act, therefore, did not apply in this area when enacted. The Order in Council dated 11th June, 1902 was amended by the Civil and Military Station of Bangalore (Application of Laws) Order, 1937, and it was under this Order that the provisions of the Act were applied to this area with a very minor modification of omitting sub-section (2) of Section 1The first point is whether the present suit is a suit either for redemption of a security or for enforcement of an agreement in respect of a loan made either before or after the commencement of the Act. The second point is whether, if either of these two conditions is satisfied, it can be held that the agreement, for the enforcement of which this suit has been filed, was made after the commencement of the Act, or the security, for the redemption of which the suit has been filed, was given after the commencement of the ActIn the present suit, none of the prayers envisaged as reliefs to be granted in a suit for redemption finds a place. There is no prayer that the mortgagee be required to deliver the mortgage-deed and other documents relating to the mortgaged property and, though the mortgagee had been in possession under the mortgage, there was no prayer for delivery of possession of the property to the mortgagors, nor was there any request for re-transfer of the mortgaged property to the mortgagors. The reason why no such prayer was included in the suit is obvious. The transferee of the original mortgagors had filed an application under Section 83 of the T. P. Act after making a deposit.That deposit had been accepted by the mortgagee, whereupon the necessary documents had already been delivered to the mortgagors together with the possession of the mortgaged property. The reliefs, which could have been claimed in a suit for redemption envisaged by Section 60 of the T. P. Act, had thus been obtained under Section 83 of that Act even prior to the institution of the suit. There was, therefore, no occasion for claiming any of these reliefs. In these circumstances, we must hold that the High Court was not right in proceeding on the basis that this suit was a suit for redemption of security as mentioned in Section 2 (3) (c) of the ActWe are unable to accept the submission that a suit, which is purely for accounting and a decree for surplus, is a suit for redemption. The circumstance that, in a suit for redemption, apart from the prayers which form part of the enforcement of the right to redeem, certain other prayers can also be granted cannot lead to the conclusion that a suit, which is solely for those other incidental reliefs, must be a suit for redemption. The right to redeem, in fact, had already been enforced in respect of this mortgage of 1933 by the proceedings under Section 83 of the T. Act and this subsequent suit could not, therefore, be for the enforcement of that right. The suit for the enforcement of the incidental rights, which could have been claimed if a suit for redemption had been brought under Section 60 of the T. P. Act instead of obtaining all those reliefs under Section 83, cannot, therefore, be held to be a suit for redemptionWe are unable to accept this interpretation.Sub-section (3) of Section 3 is not intended to take away the limitations laid down in Section 2 (3) (a), (b) and (c) of the Act. Its only purpose is to meet the contingency that a suit, to which the provisions of the Act are sought to be applied, may not be in the form of a suit for recovery of a loan, or for the enforcement of any agreement or security in respect of a loan or for the redemption of any such security. In such a case, these expressions used in Sec. 2 (3) of the Act are to be held to be covered even if the suit is substantially of such a nature. This sub-section (3) of Section 3 of the Act is thus intended to be in the nature of an explanation for the purpose of interpreting what is a suit for recovery of a loan or for the enforcement of an agreement or security in respect of a loan or for the redemption of any such security used in sub-section (3) of Section 2 of the Act in cases where the suit may not have been framed in such form as to indicate plainly that it is a suit of such a nature. Even if the form be different, but the suit is substantially of that nature, it has to be held that the requirements of Section 2 (3) of the Act are satisfied. Consequently, it cannot be held that this provision was in tended to take away the requirement that, for the applicability of the Act, the loan mentioned in clause (a) and the agreement mentioned in clause (b) of Section 2 (3) must have been made after the commencement of the Act and the security mentioned in clause (c) must have been given after the commencement of the Act. In the present case, the mortgage-deed, on, the basis of which accounting and decree for surplus were claimed by the respondents, was not executed after the commencement of the Act and clearly therefore, the Act cannot be applied to the present suit.The decree of the High Court to the extent of relief granted to the respondents on the basis of the applicability of the Act must be set aside20. Learned Counsel for parties were asked to indicate to us the amount for which the suit would have to be decreed applying Section 76 of the T. P. Act and ignoring the provisions of the Act, and they gave us the agreed figure that this amount will be Rs. 13,342/09 P. This is the amount which has been found by the High Court as due, if the provisions of the Act are not applicable. Consequently, the decree passed by the High court has to be reduced to this amount21. The High Court when decreeing the suit, granted interest to the respondents on this amount with effect from 3rd November, 1943, which was the date on which the suit was instituted. Learned Counsel for the appellants desired that interest should be granted only with effect from the date of the decree passed by the High Court in the appeal against decree in the suit. We can see no basis behind this submission. The amount, for which the suit is being decreed, was clearly payable by the appellants at the time when the suit was instituted and we cannot, therefore, hold that any error was committed by the High Court in granting interest on this amount from the date of the suit.