Velayuda Mudali (Died) and anr. Vs. the Co-operative Rural Credit Society Represented by Its President Ayyathurai Padayachi and ors. - Court Judgment

Pakenham Walsh, J.

1. The plaintiff is the appellant. The suit relates to two items of property. The A schedule property belongs to one Kuppuswami Padayachi and was sold to the appellant and two others on 9th December, 1922(Ex. C). The other two vendees sold their share to the plaintiff on 19th December, 1923 (Ex. D). The B schedule property belonging to one Thangavelu Padayachi was sold to the plaintiff on 27th June, 1923 (Ex. E). The properties were sold as free of encumbrance. But plaintiff found that they were both subject to a mortgage on 17th August, 1917, for Rs. 460 in favour of the 1st defendant, the Cooperative Rural Credit Society of Ulakottai Village. Default having been made under the mortgage to the Co-operative Society, it proceeded by C. C. S. I of 1922 to obtain an award from the Assistant Registrar of Cooperative Societies. An award was passed on 31st August, 1922, directing the mortgagor to pay the amount. It was filed in Court with an execution petition, E. P. No. 1650 of 1922, on 17th November, 1922. Under this execution petition the properties were sold on 21st November, 1923 and the Society purchased the hypotheca. The sale was confirmed on 22nd February, 1924. Plaintiff wanted to redeem the properties but his right was denied and it was said that his vendor's right to redeem had disappeared. The sale to the plaintiff was subsequent to the filing of the execution petition on 17th November, 1922 and the main question at issue is whether his purchase was pendente lite or not. The 2nd respondent is the subsequent purchaser from the Society and his defence is the same as that of the Society. The trial Court held that the proceedings under Ex. I before the Registrar were proceedings before a Court and therefore attracted the provisions of Section 52 of the Transfer of Property Act. On appeal the Subordinate Judge held that the proceedings before the Registrar were not proceedings before a Court and therefore Section 52 does not apply, but he held that the execution proceedings on the award were proceedings under Section 52 and therefore the plaintiff's purchase was pendente lite. Against this decision this second appeal has been filed.

2. It may be more convenient first to discuss the matter from the respondents' standpoint since they contend that the trial Court was correct in considering that the proceedings before the Registrar were proceedings before a Court. If that is made out, except for a general argument, which was not, raised at all in the Courts below and to which I shall allude later on, it is clear that the plaintiff's purchase was pendente lite. There is one direct decision of this Court that the Registrar of Co-operative Societies is a Court for purposes of Section 195, Criminal Procedure Code. (In re Subbi Reddi : (1930)59MLJ229 It is a decision, no doubt, of a single Judge and is confined to Section 195, Criminal Procedure Code, but it is on the exact point and there is no decision to the contrary by this Court. In Nanda Lal Ganguli v. Khetra Mohan Ghose I.L.R. (1918) Cal. 585 it was held that a tribunal constituted by the Calcutta Improvement Act is a Court within the meaning of Section 195, Criminal Procedure Code. In Queen-Empress v. Munda Shetti I.L.R. (1900) Mad. 121 it was held that a Tahsildar enquiring into revenue registry is a revenue Court and In re Nataraja Iyer I.L.R. (1912) Mad. 72 : : (1912)23MLJ393 held that a Divisional Officer hearing appeals under the Income-tax Act is a Court. In Gopi Nath v. Ram Nath I.L.R. (1924) All. 374 at 376 it was remarked that the Registrar of Co-operative Societies or the arbitrators appointed by him are given the powers of a Civil Court for the purpose of summoning witnesses and that it is laid down that their award shall be enforceable by a Civil Court in the same manner as if it were a decree passed by such a Court.

3. For the appellant it is pointed out that an Official Assignee is not a Court, Beardsell & Co. v. Abdul Gunni Sahib I.L.R. (1912) Mad. 107, nor is a Registrar of Assurances in registering a will a Court for the purpose of rendering a statement made by an opposing party in an objection petition, a statement made on a privileged occasion, Krishnammal v. Krishna Ayyangar (1912) 15 I.C. 652 (F.B.) (Full Bench of this Court), that under the amended Section 195, Criminal Procedure Code, a Registrar of Assurances is not a Court for purposes of that section, that a revenue officer when exercising jurisdiction under Ch. XI of the Estates Land Act in relation to settlement of rents is not a Court (Rajah of Mandasa v. Jagannayakulu (1932) M.W.N. 350 ), that a District Registrar is also not a Court for the purpose of Section 622, Civil Procedure Code, 1882, as the High Court has no power to revise his order under that section, Manavala Goundan v. Kumarappa Reddi I.L.R. (1907) Mad. 326 : (1907) 17 M.L.J. 313 and that the Chief Judge of a Small Cause Court hearing objections on an election petition acts as a persona designata and is not a Court: Lakshmanan Chetty v. Kannappar I.L.R. (1926) Mad. 121 : : (1926)51MLJ738 .

4. None of the above instances cited for the appellant deals with the Registrar of Co-operative Societies acting under R.' 14 of the Rules framed under the Co-operative Societies Act. Several points with regard to his position may be noted. The first is that he is not an arbitrator in the sense in which that word is understood under the Arbitration Act or in Sch. II of the Civil Procedure Code, and therefore Section 3 of the Evidence Act which excludes arbitrators from the definition of Court is not of much assistance. The essential charateris-tic of an arbitrator is that the matter is referred to him by consent of both parties. But under Rule 14 any one party may make a reference to the Registrar and on receipt of such reference he is bound to dispose of the case. He can no doubt refer it to an 'arbitrator' appointed by him or to several arbitrators (the word is used in a special sense here). But his position in this matter is that of a Court to whose decision one party can compel the other party to submit. Then, it has to be noticed that the whole procedure under Rule 14 appears to be devised as a short-cut by which the Registrar takes the place of the Court, decides a matter which would otherwise have been referred to it, and passes an award which becomes a decree of a Civil Court having jurisdiction over the subject-matter of the decision when that Court is asked to enforce it. Unlike revenue officers appointed to fix rents there is no provision that the Registrar can disregard contracts between the parties or import his own knowledge into the matter. This makes his position entirely different from that of such an officer as is dealt with in the Full Bench decision, Rajah of Mandasa v. Jagannayakulu 1932 M.W.N. 350 (F.B.). It is argued that if he were a Court, he would be subject to the jurisdiction of the High Court beyond that which it can exercise by a writ of certiorari. But the fact that the High Court has not any other jurisdiction over him would not, in the light of the rulings in Queen-Empress v. Munda Shetti I.L.R. (1900) Mad. 121 and In re Nataraja Iyer I.L.R. (1912) Mad. 72 : (1912) 3 M.L.J 393, prevent his being a Court. Neither of the officers in those two cases is subject to direct control by the High Court. On the whole, following the only actual reported decision on the point, of this Court, namely, Subbi Reddi, In re : (1930)59MLJ229 , I hold that the Registrar is a Court acting in these circumstances. If that is so, it is clear that the plaintiff's purchase was made pendente lite.

5. Even if that view is not correct, I agree with the lower appellate Court that when once the award has been put before a competent Civil Court in execution, as in this case, and the Court directs the sale of the mortgaged property, any purchase during such proceedings is made pendente lite. No doubt, it is true that Section 141, Civil Procedure Code, does not apply to execution proceedings but I am not convinced that this argument applies to Section 52 of the Transfer of Property Act. Section 52 of the Transfer of Property Act is a general rule of Us pendens to avoid multiplicity of suits and the principle applies whether Section 52 is in terms applicable or not. It has been held that even sales in invitum would fall under it, and the principle has been applied even in the case of moveables so that it is a section of very wide application. It was argued for the appellant that in a mortgage suit the lis commences with the suit but that while ordinarily the lis terminates with the decree, there is an exception in mortgage suits if the decree directs the sale of the property.

6. That position, however, cannot be maintained because the lis may also continue in a suit for specific performance after decree: Mati Lall Pal v. Preo Lall Mitra (1908) 13 C.W.N. 226. In Ramasami Aiyangar v. Govinda Iyer : (1916)31MLJ839 it was laid down that in a mortgage suit the basis of the doctrine of lis pendens after the decree is the fact that the property is directed to be sold, and not the fact that applications are presented to enforce the terms of the decree. Therefore the argument that if the Registrar is not a Court the award which he passes can never become a decree of the executing Court cannot, I think, be sustained. Rule 14(56) of the Rules framed under the Co-operative Societies Act, 1912, says that on application to the Civil Court having jurisdiction over the subject-matter of the decision or award, that Court may enforce that decision or award as if it were a decree of the Court. In the case reported in Gladstone Wyllie & Co. v. Joosub Peer Mahomed & Co. 27 C.W.N. 666 it was held that for the purpose of recognising the transfer under Order 21, Rule 16, Civil Procedure Code, it was the Court in which execution was taken that must be deemed to be the Court which passed the decree. In Krishnaji Shridhdr v. Mahadeo Sakharam I.L.R. (1921) Bom. 128 it was held that an award of a Co-operative Officer filed for execution in one Court can be transferred by that Court to another Court inasmuch as that Court could execute it as if it had passed it. Ahmad Yar v. Co-operative Credit Society A.I.R. 1926 Lah. 547 is a decision of considerable importance with regard to another argument raised. There it was held that a Court executing an award under the Co-operative Societies Act has no power to do anything except to execute the award as if it were a decree of the executing Court, and that an order refusing to do so was appealable. On the other side was quoted Baijnath v. Ahmed Musaji Saleji I.L.R. (1912) Cal. 219 in which it was held that when an award under Section 16 of the Indian Arbitration Act has been filed, the result is not that there is a suit in which a decree has been passed but that there is an award which is enforceable as a decree, and in Jnanendra Mohan Bhaduri v. Rabindra Nath Chakravarty (1932) 64 M.L.J. 341, a case under the Indian Arbitration Act, it was held that a decree cannot be passed on the award as is done under Sch. II of the Civil Procedure Code. These last two decisions do not, I consider, throw any light on the question at issue here. It certainly cannot be held to be correct law that when a matter has been referred to.. arbitrators and they have submitted an award, subsequent to the award being filed in Court the property can be sold without such sale falling under the rule of Us pendens. Pranjivan Govardhan Das v. Baju I.L.R. (1879) Bom. 34 is a direct authority on the point. It was there held that the presentation in Court of the award obtained by the plaintiff was equivalent to the presentation of a plaint for the specific performance of the contract of mortgage and the proceedings consequent thereon constituted a Us pendens. I stated at the outset that a general argument had been raised in this Court for the first time which was not raised at all before the Lower Courts and which is in my opinion contrary to the pleading in the plaint. It is that Rule 14 of the Rules framed under the Co-operative Societies Act only enables the Registrar to pass a money decree and not a mortgage decree. The relevant words of the rule are these:

Similarly in the case of a dispute relating to a debt due to the Society by a member or past member or persons claiming through a member or past member, a reference, in writing may be made by either party to the Registrar.

7. It is argued that the only procedure by which a mortgage debt can be enforced is by the sale of the mortgaged property under Order 34, Rule 14, Civil Procedure Code, that under Order 34, Rule 1, all puisne mortgagees should be made parties to the mortgage suit, and that if the decree in a mortgage suit does not order the sale of the mortgaged property, the property could not be sold unless a proper suit is brought in the way prescribed by Sections 65, 86, 88 and 99 of the Transfer of Property Act: Chundra Nath Dey v. Burroda Shoondury Ghose I.L.R. (1895) Cal. 813 . It is argued that there might be puisne mortgagees who are not members of the Society and over whom the Registrar could have no control and it is urged that if the Registrar could pass a mortgage decree there would have been more elaborate and specific rules as to the parties to be added, the form of the decree, etc. On the other side, it is pointed out that a great part of the loans of these Societies are granted on mortgages (vide By-law 44, page 35 of the Manual). The legal question raised is no doubt of very great importance and the arguments of the learned Advocate for the appellant have considerable weight. But in the present case, I do not think the question arises for several reasons. The plaint recognises the decree distinctly. In paragraph 8 it says:

As the hypothecation effected in favour of the defendant Co-operative Rural Credit Society was a transaction which took place prior to the sale effected in favour of the plaintiff, the plaintiff is entitled to pay to the defendant the amounts, etc., due under the decree passed in respect of the said bond and redeem the hypotheca.

8. There is no doubt that if the decree had not ordered the sale of the property the plaintiff would have been the first to rely on such a fact. In this particular case there was no possibility of making the plaintiff a party either to the proceedings before the Registrar or to the execution proceedings because his purchase was subsequent to the award and also to the institution of the execution proceedings. In my opinion the executing Court could not refuse to execute the award nor could it amend it in any way. That is laid down in Ahmad Yar v. Co-operative Credit Society A.I.R. 1926 Lah. 547. It is no doubt the decision of a single Judge but with respect I entirely agree with it. It cannot be said that on the face of it the award was passed without jurisdiction. It is just possible that if the plaintiff brought a regular suit to set aside the award on the ground that such an award is not contemplated by Rule 14, he might possibly succeed on the legal arguments now addressed to me. But certainly it cannot be said that the award was on its face one passed without jurisdiction. The Court was therefore bound to execute it and a subsequent purchaser had no more rights against the purchaser at the Court sale in execution of the decree than his vendor had. It was the business of the latter to have paid up the decree amount at least before the confirmation of the sale Har Shankar Prasad Singh v. Shew Gobind Shew I.L.R. (1899) Cal. 966 .

9. In the result, therefore, the decree of the lower appellate Court is confirmed and the second appeal is dismissed with costs (one set).