Rule 2 of CPC : Rule 2: Preliminary decree in foreclosure-suit.

Explanation using Example

Example 1:

Mr. Sharma took a loan from Mr. Verma by mortgaging his house. Mr. Sharma failed to repay the loan, and Mr. Verma filed a foreclosure suit. The court, after hearing the case, passed a preliminary decree stating:

• An account should be taken to determine the amount due to Mr. Verma, including the principal loan amount, interest, and any legal costs incurred.
• The court declared that Mr. Sharma owed Mr. Verma ₹10,00,000 as of the date of the decree.
• The court directed Mr. Sharma to pay ₹10,00,000 within six months. If Mr. Sharma pays this amount, Mr. Verma must return all documents related to the mortgaged house and re-transfer the property to Mr. Sharma.
• If Mr. Sharma fails to pay within the stipulated time, Mr. Verma can apply for a final decree, which would bar Mr. Sharma from redeeming the property.

Example 2:

Ms. Gupta mortgaged her commercial property to secure a loan from a bank. She defaulted on the loan, and the bank initiated a foreclosure suit. The court issued a preliminary decree with the following orders:

• An account should be taken to determine the total amount due to the bank, including the principal, interest, and any additional costs incurred by the bank.
• The court declared that Ms. Gupta owed the bank ₹25,00,000 as of the decree date.
• The court directed Ms. Gupta to pay ₹25,00,000 within six months. If she pays this amount, the bank must return all documents related to the mortgaged property and re-transfer the property to Ms. Gupta.
• If Ms. Gupta fails to pay within the given time, the bank can apply for a final decree, which would prevent Ms. Gupta from reclaiming the property.

Example 3:

Mr. Khan mortgaged his farmland to Mr. Singh to secure a loan. Mr. Khan defaulted on the loan, and Mr. Singh filed a foreclosure suit. The court passed a preliminary decree stating:

• An account should be taken to determine the amount due to Mr. Singh, including the principal, interest, and any legal costs incurred.
• The court declared that Mr. Khan owed Mr. Singh ₹15,00,000 as of the decree date.
• The court directed Mr. Khan to pay ₹15,00,000 within six months. If Mr. Khan pays this amount, Mr. Singh must return all documents related to the mortgaged farmland and re-transfer the property to Mr. Khan.
• If Mr. Khan fails to pay within the stipulated time, Mr. Singh can apply for a final decree, which would bar Mr. Khan from redeeming the property.

Example 4:

Mr. Patel mortgaged his shop to secure a loan from a cooperative bank. He defaulted on the loan, and the bank filed a foreclosure suit. The court issued a preliminary decree with the following orders:

• An account should be taken to determine the total amount due to the bank, including the principal, interest, and any additional costs incurred by the bank.
• The court declared that Mr. Patel owed the bank ₹30,00,000 as of the decree date.
• The court directed Mr. Patel to pay ₹30,00,000 within six months. If he pays this amount, the bank must return all documents related to the mortgaged shop and re-transfer the property to Mr. Patel.
• If Mr. Patel fails to pay within the given time, the bank can apply for a final decree, which would prevent Mr. Patel from reclaiming the property.