Case: Pandurang Dhoni Chougule Vs. Maruti Hari Jadhav

The respondent Maruti Hari Jadhav and two others moved the B. A. D. R. Court at Karad on May 26, 1949, for adjustment of the debt alleged to be due from them to the appellants, Pandurang Dhondi Chougule and others. Their case was that the debt in question was due under a mortgage deed executed by their grand-father in favour of the grand-father of the appellants on August 29, 1881. By this mortgage, six agricultural lands situated at Kapil in the former State of Oundh had been mortgaged to the mortgagee with possession for a sum of Rs. 575. In 1908, the respondents predecessors-in-interest sued on this mortgage in the Court of the Sub-Judge at Kapil (Civil Suit No. 28 of 1908-09). This suit was, however, withdrawn with liberty to file a fresh suit. Then followed another suit by the respondents in the same Court for redemption of the mortgage (No. 102 of 1932-33). On September 2, 1936, a decree came to be passed in the said suit. According to the respondents, the decree directed them to pay Rs. 3,677-12-6 within six months from the date on which it was drawn, but the said money had not been paid; even so, the relationship between the parties continued to be that of the mortgagors and the mortgagees, and so, they were entitled to claim adjustment of the debt in question. The respondents also pleaded that the decree which was passed in the said suit was in the nature of a preliminary decree and though the appellants were entitled to apply for making the said decree final after the expiration of the six months period prescribed by it, they took no such action and the mortgage debt, therefore, remains unpaid and the equity of redemption vesting in the respondents is unextinguished,. That, in brief, is the nature of the claim made by the respondents in the application made by them under the Act for adjustment of their debt due to the appellants2. It appears that the State of Oundh merged in the erstwhile State of Bombay and thereafter, the Act was extended to the said State. That is how the respondents commenced the present proceedings under the provisions of the Act thus extended to the State of Oundh3. The appellants also made an application for the adjustment of the debt due under the decree in Suit No. 102/1932-33 in the Court of Joint Civil Judge, Karad; but in doing so, they made it perfectly clear that they were making the application as a matter of precaution and without prejudice to their contention that the equity of redemption had been extinguished and the parties no longer stood in the relationship of creditors and debtors. In fact, it was the appellants who first made the application on May 19, 1949, and the respondents followed by their application on May 26, 1949, For the purpose of hearing, these two applications were consolidated by the trial Court4. At the hearing of these proceedings, the appellants raised several contentions. They urged that the mortgage was extinguished and the respondents were, therefore, not entitled to claim adjustment of the debt, and they also contended that the application made by the respondents was barred by time. The trial Judge rejected the appellants argument that the mortgage had been extinguished, and held that the equity of redemption still vested in the respondents. He, however, found that the respondents application for adjustment of the debt was barred by time. In the result, the respondents failed and their application was dismissed5. The matter then went in appeal to the District Court, North Satara. The appellate Court held that the decree in suit No. 102 of 1932-33 amounted to a final decree which absolutely debarred the right of the mortgagors to redeem the property in view of the fact that they had failed to pay the decretal amount within the time prescribed by it. It also agreed with the view taken by the trial Court that the respondents application was barred by limitation. In the result, the appeal preferred by the respondents was dismissed6. The dispute then reached the Bombay High Court in its revisional jurisdiction under S. 115 of the Code. Before the High Court it was urged that theCode of Civil Procedure did not apply to the State of Oundh at the relevant time; that is why by an interlocutory judgment, the High Court remanded the proceedings to the trial Court with a direction that the issue as to whether theCode of Civil Procedure applied to the State of Oundh at the relevant time, should be tried. On remand, the trial Court made a finding that theCode of Civil Procedure had been made applicable to the State of Oundh as far back as 1909-10. The High Court had also directed that the issue as to who was in possesssion of the property at the relevant time, should be tried; and the finding returned by the trial Court was that the appellants were in possession of the mortgaged property not as mortgagees but as owners from 2nd March, 19377. After these findings were returned; the revision application was urged before the High Court; and the main point which was urged before the High Court at that stage was whether the respondents right to redeem the mortgage had been extinguished by the decree passed in civil suit No. 102 of 1932-33. The High Court has differed from the District Court and has taken the view that the decree did not determine the respondents right to redeem the mortgage. In regard to the finding recorded by the Courts below that the respondents application was barred by time, the High Court took the view that the question as to whether the application is within sixty years from the expiry of the period prescribed in the mortgage-deed for repayment is entirely irrelevant inasmuch as the said application is substantially for the adjustment of debt under the decree passed in suit No. 102 of 1932-33. On that view of the matter, the High Court has set aside the orders passed by the Courts below and has remanded the proceedings to the trial Court with a direction that the application made by the respondents for adjustment of the debt should be tried in accordance with law. It is against this order that the appellants have come to this Court by special leave.

Court's reasoning:
Considering the point raised by Mr. Sinha in the light of this position, it seems to us that the High Court was in error in assuming jurisdiction to correct what it thought to be the misconstruction of the decree passed in civil suit No. 102 of 1932-33. As we have already seen, in the present debt adjustment proceedings, one of the points which arose for decision was whether the mortgage debt was subsisting at the time when the respondents made their application, and the District Court had found that the respondents equity of redemption had been extinguished. This finding was based on the construction of the said decree. It is difficult to see how the High Court was justified in reversing this finding under S. 115 of the Code. The construction of a decree like the construction of a document of title is no doubt a point of law. Even so, it cannot be held to justify the exercise of the High Courts revisional jurisdiction under S. 115 of the Code because it has no relation to the jurisdiction of the Court. Like other matters which are relevant and material in determining the question of the adjustment of debts, the question about the existence of the debt has been left to the determination of the Courts which are authorised to administer the provisions of the Act; and even if in dealing with such questions, the trial Court or the District Court commits an error of law, it cannot be said that such an error of law would necessarily involve the question of the said Courts jurisdiction within the meaning of S. 115 of the Code. We are, therefore, satisfied that on the facts of this case, the High Court exceeded its jurisdiction in interfering with the conclusion of the District Court that the decree in question had extinguished the respondents equity of redemptionThis conclusion is enough to dispose of the present appeal, because the main ground on which the High Court has reversed the concurrent decision of the Courts has reversed the concurrent decision of the Courts below dismissing the respondents application for adjustment of the debt, is furnished by its finding that the decree in question did not extinguish the equity or redemption vesting in the respondents. In fact, it was as a result of this decision that the High Court reversed the finding of the Courts below that the respondents application was barred by time.Having regard to the fact that we are inclined to take the view that the High Court exceeded its jurisdiction in reversing the finding of the District Court as to the effect of the decree in question, we do not think it is necessary to consider the further question as to whether the High Court was right in holding that the decree in question was a preliminary decree and the clause which purported to extinguish the equity of redemption was inoperative and invalid and as such, it did not affect the essential character of the decree as a preliminary decree.