Case: Sital Parshad Vs. Kishorilal

Brief facts necessary for present purpose are these. The respondent obtained a preliminary decree in a mortgage suit against the appellants on March 13, 1952. The decree was for sale of the mortgaged property . As the preliminary decree did not allow interest to the respondent from the date of the suit to the date of the preliminary decree, he filed an appeal to the High Court in that connection. The appellants (Judgment-debtors) were apparently content with the preliminary decree for they filed no appeal. As there was no stay order passed by the High court, for, the judgment-detors had not appealed, the respondent applied for making the preliminary decree final and on August 16, 1954 the preliminary decree was made final under O. XXXIV R. 5 ofCode of Civil Procedure On August 18, 1954, the respondent took out execution of the final decree. On December 17, 1956, while the execution proceedings were pending, the respondent decree-holders appeal in the High Court was allowed and the High Court allowed interest to the respondent. On April 2, 1960, the appellants objected under S. 47 of theCode of Civil Procedure that as no final decree had been prayed for and passed after the judgment of the High Court in appeal and as more than three year had passed since the judgment of the High Court, there was no final decree to be executed, as the final decree which had been prepared on August 16, 1954 on the basis of which execution was going on must be held to have force and effect after the judgment of the High Court making a variance in the preliminary decree. The respondent, however, contended that it was not necessary to apply for a fresh final decree after the judgment of the High Court in appeal and that the final decree already passed on August 16, 1954 remained good and was executable2. The executing Court rejected the contention of the appellants. Thereupon the appellants went in appeal to the High Court and this appeal was dismissed by a learned Single Judge. Then the appellants came in Letters Patent Appeal which has also been dismissed. As, however, there was some difference of opinion amongst the High Courts on the question of law raised in the appeal, a certificate was granted by the High Court and that is how the matter has come before us.

Reasoning:
7. There can in opinion be no doubt that if in appeal the preliminary decree is reversed, the final decree must fall to the ground for there is no preliminary decree thereafter in support of it. It is not necessary in such a case for the defendant to go to the Court passing the final decree and ask it to set aside the final decree. Even if the defendant does not make an application to the Court for setting aside the final decree within three years because the preliminary decree has been reversed, the decree-holder cannot get the right to execute the final decree which has no preliminary decree in support of it. If an execution petition is made on such a final decree even though more than three years after the decree in appeal has been reversed, the defendant has simply to ask the Court where the execution petition is made to refuse to execute the decree on the ground that the preliminary decree in support of it has been set aside. It seems to us that in such a case it is the duty of the executing Court to take note of the fact that the preliminary decree in support of the final decree has been reversed and it should refuse to execute the final decree even through the fact is brought to its notice more than three years after the decree in appeal reversing the preliminary decree. In such a case in our opinion no question of limitation arisesIn that case the preliminary decree had given six months time for payment and this observation seems to suggest that where the preliminary decree is confirmed six months given therein begin from the date of the confirmation of the preliminary decree in appeal. With respect, the observation seems to be obiter for the point really in dispute in that case was whether a final decree could be asked for within three years of the judgment of the appellate Court confirming the preliminary decree and it was held that it could be so asked for, even through the time fixed in the preliminary decree for redemption had not been extended. In that case no final decree had been passed in-between and no question arose as to what would be the effect of the decree passed in appeal from the preliminary decree on a final decree passed in the meantime. This observation in that case is, therefore, in our opinion of no help to the appellants in determining the question before us10. It will thus be seen that the preliminary decree in a suit for sale determines the amount due on the date thereof after accounting if necessary and directs the defendant to pay that amount together with interest and subsequent costs, charges and expenses as provided in Rr.10 and 11. Thus the preliminary decree is complete in itself and the amount due to the decree-holder right upto the time that the execution is complete is either provided therein or worked out from the directions contained therein12. It will been seen from these provisions that a final decree does not mention any amount and is merely based on the preliminary decree and in a sense carries out that decree.13. It will be seen from this from of the final decree that it is entirely dependent upon the preliminary decree. Therefore, where the preliminary decree has been confirmed in toto and the appeal thereform has been dismissed, there is no change whatever to be made in the final decree, for that decree already provides for subsequent interest after the date of the preliminary decree and for subsequent costs, charges and expenses. Therefore, in such circumstances if the final decree has already been prepared before the judgment in appeal from the preliminary decree, there is nothing more to be done and the final decree as it stands needs no amendment. It is true that there is a general principle that a decree passed in appeal even where it confirms the trial Courts decree supersedes that decree. But where we are dealing with a decree passed in appeal from a preliminary decree and the final decree has already been passed in the meantime, the decree of the appellate Court on appeal from the preliminary decree only supersedes the preliminary decree; it cannot and does not supersede the final decree which was not taken in appeal. Therefore, if the decree in appeal from the preliminary decree confirms it in toto, the final decree already passed needs no change and must continue to stand. It is true that if no final decree has been passed before the appeal from the preliminary decree is decided, the decree holder gets three years from the date of the decree in appeal from the preliminary decree to apply for a final decree. That, however, is a question of limitation and Courts have held that in such a case three years run from the date of the decree in appeal from the preliminary decree in order apparently not to compel the decree-holder to apply for a final decree if he does not wish to do so and wants to await the result of the appeal from the preliminary decree. But if the decree-holder does not wish to await the result of the appeal from the preliminary decree he can ask for a final decree in the meantime, and if the preliminary decree is confirmed in toto the final decree will need no change and can be executed as it stands. The decree-holder in such a case need not apply for a fresh final decree and can execute the final decree already passed in the meantime. In such cases where a final decree has been passed in the meantime while an appeal from the preliminary decree is pending, it is well to remember the observation of Rankin, C.J. in Talebaslis case, ILR 57 Cal 1013  : (AIR 1929 Cal 689   FB), that the existence of the final decree ought to be brought to the notice of the appellate Court in all cases and that it is the duty of the appellate Court to give directions with respect to the final decree if it considers necessary14. Further we are of opinion that in a case where an appeal from the preliminary decree is dismissed and the preliminary decree is confirmed in toto, it does not follow that the period of payment allowed in the trial Courts decree is extended automatically even though a final decree has been passed in the meantime. It seems to us that it is the duty of the appellate Court to indicate when dismissing the appeal from a preliminary decree in toto whether the time for payment is to be extended and if it does not do so, the original time granted for the purpose must stand. In the present case the decree passed in appeal form preliminary decree shows that after setting out the decree of the trial Court, all that the appellate Court did was to say that the preliminary decree passed by the trial Court was amended to this extent that the plaintiff would also be entitled to interest at Rs. 6 per cent on the principal amount form the date of the suit till the date of the decree and also gave the plaintiff costs of the appeal. There was no direction for preparation of any fresh preliminary decree, nor was there any direction for changing the period fixed in the preliminary decree for payment of the amount. Where, therefore, the appellate Court in an appeal from a preliminary decree says nothing about the time fixed for payment and confirms the preliminary decree into that time in our opinion stands and does not automatically get extended for six months or such other period as might have been fixed in the preliminary decree form the date of the decree in appeal from the preliminary decree. We agree with the view taken in Rukhmabai v. Krishnarao, ILR (1952) Nag 243: (AIR1952 Nag 145 FB), that it is not obligatory on a Court of appeal to fix a fresh date for redemption in a mortgagors appeal form a mortgage decree for sale even where there is some variation in the amount payable under the preliminary decree15. Then we come to the third class of cases where there has been variation by the appellate Court in appeal from the preliminary decree. This variation can be of two kinds : firstly, the amount fixed for redemption may be increased as happened in the present case, or secondly, it may be reduced. In the first case we are of opinion that the matter stands on exactly the same footing as in the case where the appeal from the preliminary decree by the defendant is dismissed in toto. However, in the second case, where variation is in favour of the defendant and the amount fixed for redemption is reduced, a question may arise whether the period for redemption can be said to have been extended for six months or such other time as may be provided in or such other time as may be provided in the preliminary decree under appeal but beginning from the date of the decree in appeal. In such a case we are of opinion that it is the duty of the appellate Court when it is reducing the amount payable for redemption to fix some time for the purpose in the interest of justice. But it is not bound to do so and if it does not do so, the original time fixed in the preliminary decree stands even though the amount for redemption may have beenreduced.Nor do we think that any serious harm is done to the defendant-mortgagor in such a case for under O. XXXIV, R. 5 (1), even though no fresh time may have been fixed by the appellate Court where the amount for redemption is reduced, the mortgagor-defendant would have time upto the date of the confirmation of sale to deposit the amount and save the property. In these circumstances, we see no reason to distinguish even this case where variation results in reduction of the amount of redemption from the case where the decree of the appellate Court affirms the preliminary decree in appeal in toto16. We are further of opinion that even where there has been a variation in the decree, the final decree if passed in the meantime, requires no formal amendment in view of the form in which a final decree for sale is prepared. All that happens is that where the preliminary decree is varied one way or the other the final decree which is entirely depending on the preliminary decree stands varied by its own terms in accordance with the terms of the preliminary decree passed in appeal. It is the duty of the executing Court when it is executing the final decree passed in the meantime to see that the execution is in accordance with the preliminary decree passed in appeal which is the support of the final decree. Of course, if the appellate Court when deciding the appeal gives any particular direction with respect to the preparation of a fresh preliminary decree that direction has to be carried out. Ramnaths case. ILR (1947) All 40 : (AIR 1947 All 83), was of this latter kind. There the appellate Court directed the preparation of fresh preliminary decree in accordance with its judgment. In such a case it may be said that as there had to be a new preliminary decree in accordance with the direction of the appellate Court a new final decree in accordance with the new preliminary decree might have to be prepared. But where there are no specific directions of the appellate Court with respect to the preparation of a new preliminary decree, and all that the appellate Court orders is merely a variation in the amount for redemption - be it more or less than that provided in the preliminary decree - it is in our opinion the duty of the executing Court to see when it is asked to execute a final decree prepared in the meantime that the modifications made by the appellate Court in the appeal from the preliminary decree are given effect to during the execution proceedings. As we have said already, the language of the final decree in Form 6 is such that it requires no modification even though there might be modifications in the preliminary decree by the appellate Court, and all that is required is that the executing Court should in executing the final decree prepared in the meantime give effect to the decree in appeal from the preliminary decree, if it is a case of variation one way or the other. The only exception to this principle is a case where the appellate Court gives specific direction for the preparation of a fresh preliminary decree or gives further time after the decree in appeal from the preliminary decree. In such a case a fresh preliminary decree may have to be drawn up to be followed by a fresh final decree. The present, however, is not a case of this kind as already indicated, and in the circumstances it was the duty of the executing Court, when variations made by the appellate Court in appeal from the preliminary decree were brought to its notice, to take them into account in executing the final decree, which had been prepared in the meantime. The final decree in terms required no change in view of Form 6 already referred to and all that the executing Court had to do was to take note of the fact that the supporting preliminary decree had been varied and to execute the final decree in accordance therewith. In this view of the matter we are of opinion that the view taken in Periakaruppan Chettiars case, ILR (1947) Mad 132: (AIR l946 Mad 383), is correct subject to what we have said with respect to the case where there are specific directions by the appellate Court in an appeal from the preliminary decree for preparation of a fresh preliminary decree or for fixing a fresh time for payment17. We do not think it necessary to refer in detail to other cases cited before us. It is enough to say that the Andhra Pradesh High Court has followed the Madras High Court : (see Venkata Subba Rao v. Kesavayya, AIR 1955 Andhra 254, while the Calcutta High Court in Abdul Jalil v. Amar Chand Paul, (1913) 18 Cal LJ 223, and the Lahore High Court in Mewa Singh v. Tara Singh, AIR 1933 Lah 859 (2), seem to take the view that a fresh final decree is necessary within three years of the appellate decree in an appeal from the preliminary decree in a case of modificationBefore we consider this question we may state certain well settled propositions with respect to preliminary and final decrees in mortgage suits and the effect of an appellate decree in general on the decree of the trial Court. Generally speaking the decree of the appellate Court supersedes the decree of the trial Court even when it confirms that decree and therefore it is well settled that only the appellate Court can amend the decree thereafter : (see Muhammad Sulaiman Khan v. Muhammad Yar Khan, (1888) ILR 11 All 267 (FB) ). It is equally well settled that where an appeal as been taken from a preliminary mortgage decree and is decided, the time for preparation of final decree is three years from the date of the appellate decree even though the appellate Court may not have extended the time for payment provided in the preliminary decree where no final decree has been prepared in between : see Jowad Hussain v. Gendan Singh, 53 Ind App 197: (AIR 1926 PC 93). This applies even to a case where the decree of the appellate Court is made more than three years after the time fixed for payment in the preliminary decree : (see Fitzholmes v. Bank of Upper India, 54 Ind App 52 : (AIR 1927 PC 25  ) ). Further it is well settled that the mere fact that there is an appeal from a preliminary decree does not oust the jurisdiction of the trial Court to prepare a final decree even while the appeal is pending unless there is a stay order: see Sat Prakash v. Bahal Rai, ILR 53 All 283 : (AIR 1931 All 386 FB). Even if a final decree has been passed an appeal from a preliminary decree is not incompetent and it is not necessary for a party to appeal both from the preliminary decree and the final decree in order to maintain his appeal against the preliminary decree. In such a case where the preliminary decree is set aside the final decree is superseded whether the appeal is brought before or after the passing of the final decree: see Talebali v. Ahdul Aziz, ILR 57 Cal 1013  : (AIR l929 Cal 689 FB). Further it was observed in the last case that where an appellate Court sets aside or varies a preliminary decree it can and indeed should, give direction for the setting aside or varying of the final decree, if the existence of the final decree is brought to its notice as in all cases it ought to beThus the preliminary decree is complete in itself and the amount due to ther right upto the time that the execution is complete is either provided therein or worked out from the directions contained