Recovery of balance due on mortgage in suit for sale
Full Text
Where the net proceeds of any sale held under rule 5 are found insufficient to pay the amount due to the plaintiff, the Court, on application by him may, if the balance is legally recoverable from the defendant otherwise than out of the property sold, pass a decree for such balance.
Plain English Summary
Authorizes the court to pass a personal money decree against the mortgagor for the unpaid balance if the mortgage sale proceeds fall short, provided the personal liability is legally enforceable and not time-barred.
Key Legal Elements
- Deficiency Decree: Invoked only after the mortgaged property has been sold and net proceeds are proven insufficient.
- Prerequisite of Personal Covenant: Mortgage deed must contain an express or implied personal covenant to repay the loan.
- Legally Recoverable Test: The claim for personal balance must have been within limitation on the date of the original suit (normally 3 years under Limitation Act for personal debt).
- No Fresh Suit Required: Passed upon a simple application in the same mortgage suit without instituting a separate recovery suit.
- Execution as Money Decree: Once passed, it operates as a standard money decree executable against any personal assets of the mortgagor.
Practical Note
Limitation & Personal Liability Criteria: 1. Personal Covenant Must Be Alive: In Ram Raghubir Lal v. United Refineries (Burma) Ltd. (AIR 1933 PC 68), the Privy Council held that a personal decree under Rule 6 can only be passed if the personal remedy was not barred by limitation on the date the mortgage suit was filed. While a suit to enforce a mortgage has 12 years limitation under Article 62, personal liability on an unregistered loan is 3 years (or 3 years from default under Article 55/113). 2. Not Applicable to Pure Usufructuary Mortgages: Where there is no personal covenant to repay and the mortgagee relies solely on property usufruct, no decree under Rule 6 can be passed.
हिंदी पाठ
जहां नियम 5 के अधीन किए गए किसी विक्रय के शुद्ध आगम वादी को शोध्य रकम का संदाय करने के लिए अपर्याप्त पाए जाते हैं, वहां न्यायालय वादी द्वारा आवेदन किए जाने पर, यदि वह अतिशेष बेची गई संपत्ति से अन्यथा प्रतिवादी से विधिपूर्वक वसूलीय (Legally recoverable) है, तो ऐसे अतिशेष के लिए डिक्री पारित कर सकेगा।