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Dattatraya Laxman Kulkarni Vs. Daulata Hari Chavan - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberSecond Appeal No. 1172 of 1944
Judge
Reported inAIR1950Bom136
ActsCode of Civil Procedure (CPC) , 1908 - Order 34, Rule 1
AppellantDattatraya Laxman Kulkarni
RespondentDaulata Hari Chavan
Appellant AdvocateP.V. Kane, Adv.
Respondent AdvocateK.N. Dharap and ;M.M. Virkar, Advs.
DispositionAppeal dismissed
Excerpt:
property - sale of mortgaged property - order 34 rule 1 of code of civil procedure, 1908 - mortgaged property subject to another puisne mortgage sold in court sale - prior mortgagee purchased same - non joinder of subsequent mortgagee will not vitiate either court sale or title of court purchaser. - - but he was defeated there, because the court took the view correctly that he had been dispossessed in due course of law. 21. 5. now, in a case, where there is no failure to join as a party a subsequent incumbrancer there is no doubt whatsoever that the purchaser at the auction held in execution of the decree upon the mortgage takes the estate as it stood at the date of the mortgage free from all subsequent incumbrances. the learned advocate contends that all that the puisne mortgagee.....bavdekar, j.1. this is a second appeal which raises a question as between the purchaser at an auction sale held in execution of a decree upon a prior mortgage and the puisne mortgagee who, oven though the mortgage was prior to the date of the suit, was not made a party to the prior mortgagee's suit. the prior mortgage was not with possession, and the puisne mortgage was, and it is common ground now that, at the date when the property was sold in execution of the prior mortgagee's decree, it was in possession of the puisne mortgagee. ho was dispossessed in execution of the decree and had gone to the court already under section 9, specific relief act; but he was defeated there, because the court took the view correctly that he had been dispossessed in due course of law.2. there were several.....
Judgment:

Bavdekar, J.

1. This is a second appeal which raises a question as between the purchaser at an auction sale held in execution of a decree upon a prior mortgage and the puisne mortgagee who, oven though the mortgage was prior to the date of the suit, was not made a party to the prior mortgagee's suit. The prior mortgage was not with possession, and the puisne mortgage was, and it is common ground now that, at the date when the property was sold in execution of the prior mortgagee's decree, it was in possession of the puisne mortgagee. Ho was dispossessed in execution of the decree and had gone to the Court already under Section 9, Specific Relief Act; but he was defeated there, because the Court took the view correctly that he had been dispossessed in due course of law.

2. There were several defences taken in this case by the purchaser, who is the prior mortgagee himself ; but one defence which was not taken was that the prior mortgagee had no notice of the puisne mortgage. The puisne mortgage was a registered mortgage. It is common ground that at the time when the suit was filed the puisne mortgage had been entered in the record of rights, though the prior mortgagee's suit being for sale it was not necessary for the plaintiff to produce extracts from the record of rights along with the plaint in respect of the land which had been mortgaged to him. But the fact remains that no question had been raised by the mortgagee auction purchaser that he had, as a matter of fact, no notice of the puisne mortgage when he filed the suit. The principal defence which was taken was on a point of law. It was contended on behalf of the prior mortgagee that, when there was a sale held in execution of the decree for sale which had been obtained by him, he, as the purchaser, took the interest not only of the mortgagee, but also of the mortgagor, and he took the interest of the mortgagor as it was not at the date of sale but at the date of the mortgage, and in support of this contention reliance was placed on behalf of the mortgagee upon three cases of this Court, the ones of Mohan Manor v. Togu Uka, 10 Bom. 224, Dadoba Arjunji v. Damodar Raghunath, 16 Bom. 486 and Desai Lallubhai Jethabhai v. Mundas Kuberdas, 20 Bom. 390.

3. On the other hand, the contention which was advanced on behalf of the plaintiff, the puisne mortgagee, was that, when the puisne mortgagee was not made a party to the suit which had been filed by the defendant, he was not bound by anything which took place as a result of the decree in that suit because he could not possibly be affected by proceedings to which he was not a party. As a puisne mortgagee he was entitled to remain in possession of the property, even though the mortgage of the defendant was prior, because the mortgage of the defendant was a simple mortgage. Subsequently, when the defendant purchased in execution of the decree the property in the suit from which the present appeal arises, he became entitled to the interest of the mortgagee at the date of the mortgage and the interest of the mortgagor as it remained to him at the data of the suit on the prior mortgage, and inasmuch as the puisne mortgagee intervened in between the purchaser took qua purchaser subject to the mortgage in favour of the plaintiff.

4. Now, the question before us is which of these two contentions is correct, and it must frankly be admitted at the outset that there is considerable authority in favour of the contention which has been made on behalf of the defendant the prior mortgagee. The first of the cases which has been relied upon is Mohan Manor v. Togu Uka, do Bom. 224), decided as early as 1885. What happened in that case was that in the year 1866 one R executed a san mortgage of certain land in favour of the plaintiff and four years afterwards mortgaged the same land with possession to the defendant. In 1875 the plaintiff brought a suit against R alone upon the mortgage, obtained a decree, and himself purchased the property at the court sale held in execution. In attempting to take possession he was obstructed by the defendant, who was in possession of the property as mortgagee. The plaintiff then sued the defendant for possession. It was held that the plaintiff was entitled to possession but only in case the defendant who had not been made a party to the plaintiff's suit against R and who was entitled to redeem the property if he wished was not prepared to do BO. In delivering the judgment Sargent C. J. observed that (p. 226):

'The plaintiff at the auction brought to sale the estate as it stood at the date of his mortgage free from all subsequent incumbrances;... and the fact that the plaintiff was himself the purchaser cannot affect the estate which passed by the sale. But, however, as the defendant was not made a party to the suit in which the decree of 1876 was made, he is still entitled to redeem the property if he go wishes.'

In support of his view that the plaintiff at the auction brought to sale the estate as it stood at the date of his mortgage free from all subsequent incumbrances he relied upon two previous cases of this Court: the first, Kasandas Laldas v. Pranjivan Asharam 7 Bom. H. O. (A. c.) 146 and second, Wasude v Balaji v. Narayan Krishna (1882) P, J. 21.

5. Now, in a case, where there is no failure to join as a party a subsequent incumbrancer there is no doubt whatsoever that the purchaser at the auction held in execution of the decree upon the mortgage takes the estate as it stood at the date of the mortgage free from all subsequent incumbrances. The only question is whether that is also true when a subsequent incumbrancer is not made a party to the proceedings. The principle that a party cannot be affected by anything done in proceedings in which he was not joined cannot be questioned and has not been questioned before us by Dr. Kane who appears on behalf of the defendant. He contends, however, that the only right which a puisne mortgagee who has not been joined as a party to the prior mortgagee's suit is that he should be allowed even afterwards, that is, after the purchase held in execution of the prior mortgagee's suit, to redeem the mortgage which had precedence over his. The learned advocate contends that all that the puisne mortgagee would have been entitled to do in case he had been made a party would have been, if he liked, to redeem the mortgage, and he contends that in case after the sale held in execution of the mortgage decree a puisne mortgagee who was not joined as a party is allowed the same right, the puisne mortgagee will have nothing to lose. Now, if this was a correct statement, then there may perhaps have been something to be said for the view which has been placed before us for our consideration. But it is not a correct statement of the puisne mortgagee's rights and one can easily conceive of cases in which enormous hardship would be caused to a puisne mortgagee if that view were taken. A puisne mortgagee has not only got the right to redeem the mortgage in case he is made a party in the prior suit; he has also got a right in case there is any surplus after the prior mortgage is satisfied to insist that before the mortgagor is paid anything he should be redeemed. If the puisne mortgagee is not joined as a party in the prior mortgagee's suit, it may well happen that after the prior mortgage has been satisfied there may be a surplus and the mortgagor may take away the balance which he would be enabled to do the puisne mortgagee not being a party to the suit. Thereafter the puisne mortgagee would not be able to proceed against the balance, and if the prior mortgagee tells him that the only right which he has got thereafter is that he can re-deem the property owing to the fact that the prior mortgagee had perhaps waited too long to execute his decree the puisne mortgagee might find that the debt which he must pay if he wants to redeem the property is more than what the property is worth. As against this, it is said that there are certain cases in which hardship could be caused to the prior mortgagee. One such case, for example, is mentioned by the Madras High Court in Sambasiva Ayyar v. Subramania Pillay : AIR1936Mad70 : They pointed out, for example, that in casa a prior mortgagee was to wait till the last day for filing the suit the mortgagor can defeat the prior mortgagee by parting with the equity of redemption or by creating a subsequent incumbrance on the day before the last day upon which the suit could have been filed. Ordinarily the prior mortgagee would not come to know of any such conveyance and would sue without joining as a party the vendee or puisne mortgagee, and in case it is held that the only right which a prior mortgagee had thereafter is that he could sue upon his mortgage the subsequent incumbrancer or purchaser of the whole or a portion of the equity of redemption, the prior mortgagee would be defeated. But then the reply to that is that to some extent the difficulties in the way of the prior mortgagee are due to negligence on his own part. It is true that in a sense one can say that a mortgagee has got time till the last day to file a suit upon his mortgage, but ordinarily prudence would indicate the inadvisability of waiting till then; but even if the prior mortgagee were to wait until the last day upon which the suit could be filed, he could take a search in the Registrar's office on the last day or on the day before that, and he would then cone to know of any incumbrances or conveyances which would have been created by the mortgagor.

6. Nor can it be said that there is really any reason why it should be held that, when a puisne mortgagee has not been made a party in a prior mortgagee's suit, he takes the interest of the mortgagor as it was at the time of the mortgage. The first of the cases which has been relied upon on behalf of the defendant merely follows the two previous cases of this Court which I have mentioned above without giving any reasons, The case in Wasudeo Balaji v. Narayan Krishna 1882 P. J. 21 also does not give any reasons for the view which was taken but follows the other case. It is also to be noticed that in both the cases the mortgagee who was not joined claimed under an unregistered instrument. At the time the mortgages were effected it appears that the mortgages were not compulsorily registrable, with the result that the prior mortgagee could not be blamed in case he sued upon his mortgage without joining the puisne mortgagee as a party. It is true that none of the two cases gives this as a reason for the view which was taken but then one can understand equities arising in the case of a prior mortgagee who has been unable to join the puisne mortgagee as a party to his suit upon the mortgage for the simple reason that the mortgage was not registered and he was not aware of it. In the case in Kasandas Laldas v. Pranjivan Asharam 7 Born. H. C. (A. C.) 146) what appears to have happened is that the mortgagee who was not joined as a party claimed under a mortgage which was prior in point of time but which could not claim priority because it was not registered, whereas the subsequent mortgage was. The mortgagee of the registered mortgage sued upon the mortgage without joining the mortgagee in the unregistered mortgage as a party for which he could not be blamed because that mortgage was not registered. The plaintiff represented the purchaser of the property in execution of the decree upon the registered mortgage. The defendants were the mortgagees of the unregistered mortgage. They obtained a decree upon their mortgage, and under the procedure then in force attached the property in execution of their decree. The plaintiff thereupon sued to have the attachment removed and to have his right to the property declared. It was held that when there was a sale in excution of the mortgage decree obtained by the mortgagee in the registered mortgage what was brought to sale was the right, title and interest of the mortgagor as it existed at the time of the mortgage. An argument was advanced on behalf of the mortgagee of the unregistered mortgage that what passed at such a sale was the right, title and interest of the purchaser as it stood at the time of the sale. Now, in a case in which the puisne mortgagee is joined as a party it is obvious that such an argument cannot be maintained; and the contention in the case appears to have been advanced not on the ground that the mortgagee in the mortgage which ranked as puisne to the registered mort-gage was not joined as party but on the general ground that the purchaser took interest of the mortgagor at the time of the sale. This argument was met by the following reasoning (p. 148): 'It such were the law, a prior mortgagee and the holder of the first decree against the property would, instead of being benefited, be prejudiced by the superiority of his claim against the property. A purchaser would give for the property no more than the difference between the market value of the property and the amount of the encumbrances to which it was subject. If the property were heavily mortgaged, this would amount to little or nothing. Thus the first decree-holder, who would probably be also prior mortgagee, would get little or nothing, while subsequent encumbrancers would be paid in full.'

While conceding that this is a sound argument to maintain where the puisne mortgagee is joined as a party, in my view it cannot prevail when he is not a party and the sale is held in his absence.

7. The subsequent cases really speaking follow the earliar cases. The next case which has been relied upon on behalf of the defendant is the case of Dadoba Arjunji v. Damodar Bayhunath 16 Born. 486, in which again the judgment was delivered by Sargent C. J. He appears to have relied, in support of the proposition which he had enunciated in the earlier cases, on two other cases of this High Court; one is the case of Shaik Abdulla Saiba v. Haji Abdulla, 5 Bom. 8 and the other is the case of Rupchand Dagdusa v. Davlatrav Vithalrav 6 Bom. 495. Now the case of Shailc Abdulla Saiba, v. Haji Abdulla 5 Bom. 8, undoubtedly took the same view as to what passes at an auction sale as the earlier case of Kasandas Laldas v. Pranjivan Asharam 7 Bom. H. C. (A. 0.) 146, which it referred to and followed. In the case of Rupchand v. Davlatrav 6 Bom. 495, the plaintiff was the holder of two unregistered mortgages, but in view of the Registration Act in force at the time when the mortgages were effected they were not compulsorily registrable. They were as a matter of fact not registered. In between the defendants took a registered mortgage, and suing upon the mortgage purchased the property which had been mortgaged. The plaintiff then filed a suit against the mortgagor upon the second mortgage in his favour and obtained a decree upon it, and in attempting to execute that decree was resisted by the defendant. The attachment which had been levied by the plaintiff was then removed. The plaintiff then filed the suit, which came in appeal to this Court, upon both his mortgages seeking to enforce them and the decree on the second mortgage against the property. This Court then held that the unregistered mortgages being each for a sum under Rs. 100 were not under the Registration Act then in force compulsorily registrable, with the result that the defendant's intermediate mortgage, though it was registered, did not bestow any priority upon it. It was true that the plain-tiff had obtained a decree upon his second mortgage, but that decree was inoperative against the defendant who was not made a party to the suit in which that decree was obtained, although the plaintiff had through registration constructive notice of the defendant's mortgage. The case therefore seems rather to support the principle upon which we base cur decision, that is no one could be bound by a decree in a suit to which he was not a party. It was true that the ultimate order was that the defendant should redeem the first mortgage within a time which was specified or in default should deliver possession to the plaintiff. But that order was specifically made on the ground that it would be hard that the plaintiff should be put to the expenses of another Suit because his pleader below mistook his remedy.

8. The case of Desai, Lallubhai Jethabhai V. Mundas Kuberdas 20 Bom. 390, was the case of a plaintiff who had purchased certain lands at a sale held in execution of a decree passed on an unregistered mortgage effected in 1862. The defendant was in possession as mortgagee under a subsequent registered mortgage of 1867. He was not a party to the suit and decree of 1887, and when the plaintiff sued him for possession, he claimed that the plaintiff could not recover possession without paying off his claim. It was held that at the execution sale the plaintiff bought the property in dispute free from all subsequent incumbrances, subject only to the right of the defendant, if he so desired, to retain possession on redeeming the plaintiff. But the argument as to why the only right which the defendant had was to retain possession of the property upon redeeming the plaintiff was stated in the following words (p. 392):

'The authorities -- Namdar Chaudhri v. Karam Baji 13 All. 318 : 1891 A. W. N. 90, Muhammad Samiuddin v. Man Singh 9 All. 125 : 1886 A. W. N. 318, Gajadhar v. Mul Chand 10 All. 520 : 1888 A. W. N. 210, Mohan Manor v. Togu Uka 10 Bom. 224.,--are quite cleat on the point, (1) that the purchaser stands in the place of the prior mortgagee, and (2) that he has a right to recover possession, (3) that the subsequent mortgagee cannot compel him to redeem his own mortgage, but (4) has a right himself, in case he has not been made a party to the suit on the prior mortgage, to pay off the prior incumbrance if he desires to retain possession.'

Now, that a purchaser stands in the place of the prior mortgagee is a proposition which no one doubts; but the second proposition that he has a right to recover possession with respect would be supportable only in case it was shown that the mortgage gave the mortgagee a right to obtain possession and the purchaser could claim as the representative of such mortgagee such right in view of his purchase. That was why when subsequently this case was considered in another Division Bench case of this Court, Ganapa Bama v. Timmaya Narayan 44 Bom, L. R. 111 : (A.I.R. (29) 1942 Bom. 146), Broomfield J. seems to have thought that that case was a case in which the auction purchaser was entitled to recover possession because he represented the mortgagee. This does not seem to be correct from the report of the case, because it is stated in the report of the case of Desai Lallubhai Jethabhai v. Mundas Kuberdas 20 Bom. 390 that in February 1862 one Nathubhai and his sons mortgaged the property in question by an unregistered san mortgage deed to Bhogilal and Kalidas, and a saw-mortgage is a mortgage without possession. It is true, however, that the case of Mohan Manor v. Togu Uka 10 Bom 224 was specifically referred to and the case may possibly, therefore, have proceeded upon the same view as was taken in Mohan Manor's case 10 Bom. 224 as to what an auction purchaser takes even when a subsequent incumbrancer is not added as a party.

9. But there are as against this two later cases of this Court which seem to us to throw doubt upon the proposition which was first enunciated in Kasandas Laldas v. Pranjivan Asharam 7 Bom. H. G. (A.O.) 146. It is true that in the two cases this Court was not concerned with a puisne mortgagee who had not been joined as a party. There are cases in which persons interested in the equity of redemption but not by way of a mortgage were not joined as parties. In the case of Dattatraya v. Venkatesh 24 Bom. L. Rule 741 : . I. R. 1922 Bom 334, the mortgagee had failed to make as a party a person who had purchased at a court-sale the right, title and interest of the mortgagor and who had gone in possession of the property by virtue of the court-sale. In execution of the mortgage decree which he obtained the mortgagee purchased the mortgagor's rights, and sold them to the plaintiff, and the plaintiff then sued the defendant to recover possession of the property. It was then held that what was purchased by the auction purchaser in 1912 was only the mortgage rights of the mortgagee since the owner of the equity of redemption was not a party to the suit; that as the auction purchaser was not in possession, he was bound to take proceedings to obtain the benefit of his purchase, and he could not get possession unless he had that right as a successor to the original mortgagee. In a case, therefore, where the equity of redemption was not represented at all in the proceedings upon the mortgage, it was held that what the purchaser took was only the interest of the mortgagee, and he stood in the position of the mortgagee. If, therefore, he wanted to sue for possession he had to show that as such mortgagee he was entitled to possession, and if he was not entitled to possession as a mortgagee, then if his suit upon the mortgage was barred, he could not recover possession. Now, we fail to understand that there is any difference in principle between a case in which the owner of a whole or a part of the equity of redemption is not represented and where a puisne mortgagee is not represented. When a mortgagor creates a second mortgage, in effect he parts with a portion of the estate which was vested in him at the time of the second mortgage. This estate cannot be said to be the whole or a half or a quarter or a similar proportion of the estate of the mortgagor; but that cannot possibly make any difference to the principle. If when the whole or portion of the equity of redemption is not represented, that interest does not pass at an auction sale held in execution of the decree upon the mortgage, then it must follow that where a puisne mortgage was not represented in the suit upon the mortgage, then that interest could not also pass at the sale held in execution of the decree upon the mortgage.

10. The position was subseqently considered at some length in the latest decision of this Court in Ganapa Rama v. Timmaya Narayan 44 Bom. L. R. 111 : `````` and even though the two judgments did not proceed quite on the same lines, the principle which was enunciated in the case of Dattatraya v. Venkatesh 24 Bom. L. R. 741 : A. I. R. . 1922 Bom. 334 was followed. The cases of Shaik Abdulla Saiba v. Haji Abdulla 5 Bom. 8, Mohan Manor v. Togu Uka, 10 Bom. 224, Dadoba Arjunji v. Damodar Raghunath 16 Bom. 486 and Desai Lallubhai Jethabhai v. Mundas Euberdas 20 Bom. 890 were cited in support of the contention that even when the whole or part of an interest in the equity of redemption is not represented the purchaser takes the interest which the mortgagor had at the date of the mortgage, and it was observed that the authorities do no doubt decide that the auction purchaser acquires the rights both of the mortgagor and the mortgagee, the totality of the rights being sometimes described as all the rights of the mortgagor as at the date of the mortgage. But the case of Dattatraya v. Venkatesh 24 Bom. L. K. 741 : A. I. R. 1922 Bom. 334 was followed on the ground that in none of the cases which was relied upon the Court had based its decision on the fact that the auction purchaser represented the mortgagor rather than the mortgagee, or held that as representative of the mortgagor he was entitled to possession. Broomfield J. remarked that the point was by no means free from difficulty, but the argument which was advanced did not show convincingly that Dattatraya v. Venkatesh 24 Bom. L. R 741 : A. I. R. 1922 Bom. 334 was wrongly decided.

11. In our view, it is quite obvious that the learned Judges who decided the case of Ganapa Rama v. Timmaya Narayan. 44 Bom. L. R 111 : A. I. R. ) 1942 Bom 146 were pressed by the earlier cases of this Court in Shaik Abdulla Saiba v. Haji Abdulla, (5 Bom. 8), Mohan Manor v. Togu Uka 10 Bom. 224, Dadoba Arjunji v. Damodar Raghunath 16 Bom. 486 and Desai Lallubhai v. Mundas Kubardas 20 Bom. 390. They tried to distinguish Desai Lallubhai's case 20 Bom 390 on the ground that it was held that the purchaser was entitled to possession as a mortgagee but the facts of the case as were mentioned in the report do not support that view. We think that it would perhaps have been just as well if the learned Judges had expressed their agreement with the view in Dattatraya v. Venkatesh 24 Bom. L. R 741 : A. I. R. 1922 Bom. 334, on the general ground that a party could not possibly be affected by proceedings to which he was not a party, and if any person who has any interest in the equity of redemption is not joined as a party his interest would not pass to the auction purchaser. But they seem to have, because they were concerned with a case in which a mortgagor was not represented rather than a puisne mortgagee, contented themselves with following Dattatraya v. Venkatesh 24 Bom. L. R 741 : A. I. R. 1922 Bom. 334 which was specifically a case in which the mortgagor was not represented; but there could be no distinction in principle between the cases in which the person who was not joined as a party was a mort. gagor and the case in which the person who was not joined as a party was a puisne mortgagee, and if the two cases of Dattatraya v. Venkatesh 24 Bom. L. R. 741 : A. I. R. 1922 Bom. 334 and Ganapa Rama v. Timmaya Narayan 44 Bom. L. R. 111 : A. I. R. 1942 Bom. 146 were correctly decided, as, in our view they were with respect correctly decided, the decisions in the earlier Bombay cases are not supportable on any principle. The criterion in deciding the question as to what passes at an auction sale in execution of a mortgage decree is whether all the persons who were interested in the equity of redemption were parties to the proceedings; in case they were so parties to the proceedings, then their interest would pass to the auction purchaser. If, on the other hand, they are not parties to the proceedings, then, in that case, the interest of persons who were not joined but who ought to have been joined does not pass; they will stand in exactly the same position in which they were before the suit upon the mortgage was filed, and where the question is one of possession and who is entitled to possession, it would be necessary for the party who claims possession to show that he was entitled to it as a representative of one of the persons whose interest has passed to him by virtue of the sale held in execution of the mortgage decree.

12. The learned advocate who appears for the defendant says that even though the case of Dattatraya v. Venkatesh 24 Bom. L, E. 741 : A.I.R. 1922 Bom. 334 appears to be against him, there are remarks in it in favour of the view which he wants us to take, and he contends that the remarks were especially applicable to a case in which the defendant having got in pos-session the plaintiff a puisne mortgagee who was not made a party to the suit of the mortgagee seeks to oust him. Now, it is true that it was observed in Dattatraya v. Venlcatesh 24 Bom. L. R. 741: A.I.R. 1922 Bom. 334 that it might have made some difference to the plaintiff's case if after having purchased the property in execution of his mortgage decree he had gone into possession, and as a matter of fact in the Privy Council case of Sukhi v. Ghulam Safdar Khan 43 ALL. 469 : A. I. R, 1922 P. C. 11 it was held that where a prior mortgagee had obtained a decree for foreclosure without making a puisne mortgagee a party and was in possession, the prior mortgagee was entitled being in possession to hold the mortgage as a shield, and the puisne mortgagee could obtain a decree for sale but only on condition that she paid to the prior mortgagee who had obtained a decree for foreclosure the amount due upon his mortgage. Their Lordships of the Privy Council observed, after referring to the repeal of S. 89, T. P. Act, 1882 (p. 475;)

'Now, the words being gone, their Lordships feel no difficulty in holding that the law remains as it certainly was before the Transfer of Property Act, 1882, viz., that an owner of a property who is in the rights of a first mortgagee and of the original mortgagor as acquired at a sale under the first mortgage is entitled at the suit of a subsequent mortgagee who is not bound by the sale or the decree on which it proceeded, to set up the first mortgage as a shield. Prom this it follows that the omission by the respondent Ghulam Safdar Khan to make the plaintiff a party to the suit instituted by him to execute his mortgage of 1883 does not prevent him from setting up that mortgage in cases where he would have been so entitled before the Act of 1882; and the present dispute is within the benefit of this ruling.' It follows that where a prior mortgagee has obtained a decree in execution of his mortgages purchased the mortgaged property and got into 'possession, he is entitled to hold the first mortgage as a shield in any suit which may be brought by the puisne mortgagee whom he has failed to join as a party to enforce the puisne mortgage. But that, in our view, is because the prior mortgagee has lawfully got into possession of the property. It may very well happen for example that neither the prior mortgagee nor the puisne mortgagee was entitled to possession under the mortgage and the prior mortgagee may sue upon it without joining the puisne mortgagee and having purchased the property obtain possession from the mortgagee in the right of the purchase. If, thereafter, the puisne mortgagee seeks to enforce his mortgage, then, in virtue of his purchase the prior mortgagee may hold his prior mortgage as a shield notwithstanding the fact that if not having got into possession he had been forced to sue upon his mortgage the suit would be barred by time. But in this case, the facts are different. The mortgage in favour of the defendant was a simple mortgage, and he was not entitled to possession under its terms. The plaintiff's mortgage was a mortgage with possession, and not only was he entitled to possession under its terms, but he had as a matter of fact obtained possession and was in possession when the defendant as the auction-purchaser went and ousted him from the property. It is true that the defendant ousted him from the property with the aid of the Collector who was the ministerial officer of the Court; but the Collector had no power whatsoever to put in possession the purchaser who had purchased the property in execution of a decree to which the plaintiff was not a party. It is obvious, therefore, that the Collector's order placing him in possession of the property was not a legal order, and we do not see any difference whatsoever between such a case and a case in which, for example, a prior mortgagee wishing to take advantage of the ruling of their Lordships of the Privy Council in Sukhi v. Ghulam Safdar Khan 43 ALL. 469 : A. I. R. 1922 r. c. 11 goes to the mortgaged property after his purchase and drives out the puisne mortgagee who is lawfully in possession by force. It would be futile to contend that in such a case the puisne mortgagee is entitled to hold his mortgage as a shield merely because when the puisne mortgagee goes to the Court the former is in possession. Before such possession would enable him to use the mortgage as a shield, he must show that the possession which he obtained was lawful, and in this case possession which he obtained as a matter of fact was, as I have already pointed oat, not lawful possession. It may or may not be that when the plaintiff was dispossessed he may have been in a position to take some proceedings under Order 21, Civil P. C.; but he was not bound to do so. He was entitled to come to Court and say that the defendant was not entitled to dispossess him, and as he dispossessed him actually the Court should intervene to repair the wrong and should restore the possession back to the plaintiff.

13. As a matter of fact, the remarks which I have quoted from the judgments of their Lordships of the Privy Council in the case of Suki v. Ghulam Safdar Khan 43 ALL. 469 : A. I. R. 1922 P. C. 11 seem to show with respect that the view which has been taken in the earlier cases of this Court is not a correct one. What their Lordships said happened in a case, where the puisne mortgagee had not been joined as a party to the mortgage suit or to the execution proceedings, was that the purchaser was in the rights of the first mortgages and of the original mortgagor acquired at a sale under the first mortgage and that he was entitled in the suit of a subsequent mortgagee who was not bound by the sale or the decree on which it proceeded, to set up the first mortgage as a shield. In our view, the language would have been entirely different if the true view was that even when the puisne mortgagee was not joined as a party the purchaser obtained the interest of the mortgagee and the interest of the mortgagor as it was at the date of the mortgage which would include the interest of the puisne mortgagee. This view is also consistent with the view which has been taken in other High Courts when a similar question arose before them for consideration. We would not refer in detail to all the cases, because there has been some difference of opinion even in the other High Courts; but the two cases to which we would refer are the cases of the Allahabad High Courts in Bam Sanehi Lal v. Janki Prasad 53 ALL. 1023: : AIR1931All466 and the case of the Calcutta High Court in Surendralal Kundu v. Ahammad Ali : AIR1933Cal912 . It was observed in the first mentioned case (p. 1049):

'There are three principles which are now well established and from which the right of the prior mortgagee as a defendant in possession to set up his prior mortgage as a shield follows logically.

The first principle is that the omission to implead a person interested in the mortgaged property in the suit does not make the whole suit defective and the proceeding null and void but only frees the person excluded from all liability under the decree ... A prior mortgagee therefore can bring a suit against his mortgagor without impleading a subsequent mortgagee; and if there were no defect of lis pendens and no suit by a subsequent mortgagee were pending, the prior mortgagee can sell up the rights and interest of the mortgagor in the mortgaged property, even behind the back of the subsequent mortgagee. It would be incorrect to Bay that the decree is null and void and the effect is the same as if the proceedings had never taken place. I adhere to the opinion expressed by me in Nannu Mal v. Ram Chandar : AIR1931All277 . 'No doubt the decree on the previous mortgage is not binding on the subsequent mortgagees, who had not been impleaded, to this extent that their rights under their mortgage have not been extinguished, as would have been the case if they had been impleaded and had not redeemed the prior mortgage. Bat it is not correct to say that the previous proceedings are totally a nullity. As between the prior mortgagee and the subsequent mortgagees the previous proceedings are ineffective, but that does not imply that the mortgagor's interest could not have been Bold, by the prior mortgagee behind the back of the subsequent mortgagees but subject to their subsequent mortgage. The mortgagor's interest in the property validly passed to the auction purchasers, no matter whether the subsequent mortgagees were parties to the suit or not. The auction purchasers cannot be in a worse position than a private transferee from the mortgagor.' It is true that the Calcutta High Court has not always been consistent in the view it has taken and in the same volume of the report of the case which is relied upon in support of our view there is reported a case which has taken up a contrary view. But for the reasons which we have already mentioned in our opinion, the correct view to take is the one which has been taken in Surendralal Kundu v. Ahammad Ali : AIR1933Cal912 . The plaintiff was, therefore, entitled to recover possession of the property of which he was unlawfully dispossessed by the defendant in execution of his own decree. That being so, the appeal must be dismissed with costa.

Dixit, J.

14. I agree. On behalf of the appellant Dr. Kane has contended that the respondent is not entitled to recover from the appellant possession of the suit land, and he has relied upon a number of Bombay decisions, which undoubtedly go to support his contention. The appellant had, at the date of his purchase in 1937, the rights of a prior mortgagee, and by the auction purchase he acquired fresh rights of the mortgagor. But before he acquired fresh rights of the mortgagor, the mortgagor had already parted with his interest in the equity of redemption by a possessory mortgage in favour of the respondent. This was in 1929. It is not contended for the appellant that the earlier right created in favour of the respondent is subject to the later right created in favour of the appellant as a result of his purchase in 1937. The contention urged in support of the appeal is that, notwithstanding that position, the earlier Bombay cases commencing with Mohan Manor v. Togu Uka, 10 Bom. 221 go to support the contention that the prior mortgagee-purchaser takes the property free from all subsequent incumbrances. Section 48, T. P. Act, provides that:

'Where a person purports to create by transfer at different times rights in or over the same immoveable property, and such rights cannot all exist or be exercised to their fall extent together, each later created right shall, in the absence of a special contract or reservation binding the earlier transferees, be subject to the rights previously created.'

In 1929 when the mortgagor created a right in favour of the respondent by a usufructuary mortgage he gave the possessory mortgage of the equity of redemption and what the appellant purchased in 1937 as a result of the auction purchase was the remaining right in the equity of redemption. Admittedly, the respondent was not a party to the suit which the appellant had brought to enforce his mortgagee rights, and if the respondent was not made a party to the suit brought by the appellant, it is obvious that the decree passed in that suit is not binding upon the respondent, and this is not disputed. Now, if the decree is not binding upon the respondent, it is difficult to see how he could be deprived of his possession which he had lawfully obtained under his possessory mortgage, and that is why he has filed this suit in order to recover from the appellant possession of the property which was illegally obtained from the respondent. There is undoubtedly some conflict between the earlier Bombay cases commencing with Mohan Manor v. Togu Uka 10 Bom. 224 and the later cases such as Dattatraya v. Venkatesh 24 Bom. L.R.741: A.I.R. 1922 Bom. 334 and Ganapa Rama v. Timmaya Narayan 44 Bom. L. R. 111: A. I. R 1922 Bom. 146. But I think the principle decided in the case of Ganapa Rama v. Timmaya Narayan 44 Bom. L. R 111 : A.I. R. 1942 Bom. 148 is correct. It is true that in that case the interest which was not represented was the interest of the mortgagor. In the present instance we are concerned with the interest of the puisne mortgagee, But that, I think, does not make any difference to the principle of the decision. The true principle, I think, is that if the prior mortgagee desires to acquire the rights of the mortgagor free from all subsequent incumbrances, he can do so only if he makes all subsequent mortgagees parties to the suit, and if he does not do so, it must be held that the prior mortgagee, purchaser can acquire only the limited rights which he acquired as a result of his purchase, those rights being subject to the puisne mortgage already effected in favour of the respondent. In my opinion, the principle of the decision in Ganapa Rama v. Timmaya Narayan 44 Bom. L. R. 111: A. I. R. 1942 Bom. 146 should be applied to the facts of this case, and accordingly the appeal fails.


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