1. The points of law involved in the second appeal turn upon certain facts which are not in dispute and which may be shortly stated.
2. On the 16th of June, 1876, one Revapuri mortgaged the land in dispute to defendant No. 1, Bahirjirao bin Shidojirao. It was a mortgage with possession. The mortgagee, defendant No. 1, leased the land to defendant No. 2, Babaji. under a kabulayat for one year on the 26th of June, 1876.
3. On the 3rd of December, 1878, when defendant No. 2 was in possession as a tenant of the mortgagee (defendant No. 1), the mortgagor, Revapuri, sold to defendant No. 2 her equity of redemption for Rs. 95. The deed of sale was not registered, not being compulsorily registrable under the Registration Act then in force. From that time up to the date of the present suit defendant No. 2 has continued in possession of the land.
4. On the 8th of October, 1895, one Rampuri, an heir of Revapuri, sold the equity of redemption by a registered deed to the plaintiff, Shidrao Keshavrao Shinde.
5. The plaintiff brought this suit to redeem the land from defendant No. 1, adding defendant No. 2 as a party, and alleging that he was in possession as a tenant of defendant No. 1.
6. Both the lower Courts have awarded his claim, holding that the, plaintiff's registered deed is entitled to priority over the unregistered deed of defendant No. 2 under Section 40 of the Registration Act (III of 1877). Defendant No. 2 has filed this second appeal.
7. Mr. Chaubal, for the appellant, has contested the legal propriety of the decree of the lower Appellate Court on three grounds: (1) that there can be no competition under Section 50 of the Registration Act between the plaintiff's registered and defendant No. 2's unregistered deed, because the vendor in either case is not the same; (2) that, assuming that Section 60 applies, defendant No. 2, having dealt with the land as owner in possession for more than twelve years from the date of his purchase, acquired an indefeasible title to it by adverse possession at the date of the plaintiff's purchase, BO that the plaintiff's vendor had no title to sell; (3) that assuming no case of adverse possession arises in favour of defendant No. 2, his possession at the date of the plaintiff's purchase was notice to the latter of his title as owner acquired under his unregistered sale-deed.
8. As to the first of these points, it is, we think, unarguable and is, moreover, covered by authority by which we are bound. Though the person under whom the plaintiff claims is not the same from whom defendant No. 2 purchased the equity of redemption, he (i.e., the plaintiff's vendor) is found by both the lower Courts to be the heir of defendant) No. 2's vendor and to have sold the property to the plaintiff in that character. Legally, therefore, it is the same person who sold the property, in either case. This view is supported by the decision of this Court in Chunilal v. Ramchandra (1896) 22 Bom. 213 following Makandas v. Shankardas (1875) 12 Bom. H.C. 241.
9. The second of the grounds urged by Mr. Chaubal in this second appeal presents more difficulty, having regard to the fact that defendant No. 2 admittedly came into possession under and by virtue of an assignment from the true owner. The question is whether be can, under those circumstances, bo said to have been in possession adverse to the owner. The definition of adverse possession is that it is possession which is wrongful, and it cannot be said that defendant No. 2 first entered and then continued in possession for more than twelve years as a wrong-doer. We do not think, however, that it is necessary to decide the question of adverse possession which arises in the case, and we refrain from expressing any opinion on it because we are satisfied that the appellant must succeed on the third ground urged by Mr. Chaubal.
10. It is found by the lower Appellate Court that defendant No. 2 was in-actual possession at the date of the plaintiff's purchase. The law is too well established in this. Presidency to be doubted, that possession may have in certain cases, for the purposes of notice, the same effect as registration. The decided cases which have laid that down as the law have all been collected by Mr. Justice Batty in his recent judgment in Tajadin v. Govind (1901) 5 Bom. L.R. 143. The lower Appellate Court does not appear to have lost sight of that legal principle in deciding this case; but the view it has taken is that defendant No. 2's actual possession was not notice to the plaintiff of the previous sale, because that possession can be 'referred to the lease granted to him by the first defendant, the mortgagee.' We are of opinion that this view of the lower Appellate Court is erroneous. If the plaintiff had notice of defendant No. 2's actual possession--and on the finding of the lower Court we must hold that he had--it must be held also that he had constructive notice of the real title on which defendant No. 2 was in enjoyment of the land. Having had notice of defendant No. 2's possession, it was his duty to inquire of defendant No. 2 under what title defendant No. 2 really held, and had he inquired he would have discovered defendant No. 2's purchase.
11. The law on the subject is thus stated by the editors of White and Tudor's Equity Cases in their notes on the leading case of Le Neve v. Le Neve 2 W.T.L.C. 225 'As a general rule if a person purchases and takes a conveyance of an estate which he knows to be in the occupation of another than the vendor he is bound by all the equities which the party in such occupation may have in the land; for possession is prima facie seisin; and the purchaser has, therefore, actual notice of a fact by which the property is affected, and he is bound to ascertain the truth.' In Mancharji Sorabji Chulla v. Kohgoseoo (1869) 6 Bom. H.C. 59: Couch, C.J., went at some length into the question and came to the same conclusion. He there cited the English cases on the subject, the first of which was Taylor v. Stibbert (1794) 2 V J 437. I where Lord Rosslyn said: 'I have no difficulty to lay down, and am well warranted by authority, and strongly founded in reason, that whoever purchases an estate from the owner, knowing it to be in the possession of tenants, is bound to inquire into the estates these tenants have 2 It was sufficient to put the purchaser upon inquiry, that he was informed the estate was not in the actual possession of the person with whom he contracted; that he could not transfer the ownership and possession at the same time; that there were interests, as to the extent and terms of which it was his duty to inquire.' The next case cited by Couch, C.J., is that of Jones v. Smith (1841) 1 Har 43 where Vice-Chancellor Wigram said: 'First, it was said that if a person purchases an estate which he knows to be in the occupation of another than the vendor, he is bound by all the equities which the party in such occupation may have in the land. I do not dispute this proposition Allen v. Anthony (1816) 1 Mer. 262; Daniels v. Davison (1809) 16 Ves. 249 : 17 Ves. 433; Taylor v. Stibbert (1794) 2 Ves. Jan. 437 for possession is prima facie evidence of a seisin in fee.' Then of Daniels v. Dawson (1809) Ves. 249 : 17 Ves. 433 Couch C.J, said: 'The Lord Chancellor held that where there is a tenant in possession under a lease, or an agreement, a person purchasing part of the estate must be bound to inquire on what terms that person is in possession; that a tenant being in possession under a lease, with an agreement in his pocket to become the purchaser, those circumstances altogether give him an equity repelling the claim of a subsequent purchaser who made no inquiry as to the nature of his possession.' Couch, C. J., then says: 'Although Daniels v. Davison (1809) Ves. 249 : 17 Ves. 433 has always been considered an extreme case, beyond which the doctrine ought not to be extended, it has to that extent been repeatedly acted upon Bailey v. Richardson (1852) 9 Har 734; Barnhart v. Greenshields (1853) 9 M P.C.C. 18; Knight v. Bowyer (1857) 23 Bea. 609. I am not aware of any decision where the doctrine has been applied to the case of a person being in possession M the object of a charitable trust and under the trust, but I can see no difference in principle between this and the possession of a tenant, as the duty to make inquiry arises from the fact that the estate is not in the actual possession of the vendor. There is the same equity in both cases.'
12. This decision of Couch, C.J. was approvingly cited by Sargent, C. J. and Melvill, J. in Santaya v. Narayan (1883) 8 Bom. 182. The most recent case that we have been able to find where the same law is expounded is that of Hunt v. Luck (1902) 1 Ch. 428 where Vaughan Williams, L.J. says (Stirling and Cozens-Hardy, L. JJ., concurring): 'If a purchaser or a mortgagee has notice that the vendor or mortgagor is not in possession of the property, he must make inquiries of the person in possession--of the tenant who is in possession--and find out from him what his rights are, and if he does not choose to do that, then whatever title he acquires as purchaser or mortgagee-will be subject to the title or right of the tenant in possession. That, I believe, is a true statement of the law.'
13. It follows, then, both on principle and authority, that the plaintiff having had notice of defendant No. 2's actual possession at the date of his (plaintiff's) purchase, was bound to inquire of him as to the nature of his possession, instead of assuming that because that possession had originally commenced under a tenancy, it must have continued under that title on the day when the plaintiff purchased the land.
14. On this ground, therefore, we are of opinion that the decree of the lower Appellate Court should be reversed and the plaintiff's claim rejected with costs throughout on him.