1. This is an appeal by the plaintiffs against an order passed by the Assistant Judge, Sholapur, confirming the decree of the Subordinate Judge of Barsi in Civil Suit No. 202 of 1937 dismissing the plaintiffs' suit with costs.
2. This was a suit filed by the plaintiffs to redeem a mortgage executed by their ancestor in the year 1872. The mortgage was a usufructuary one. The plaintiffs' father and other heirs of the original mortgagors applied to the conciliator under Section 39 of the Dekkhan Agriculturists' Relief Act, 1879, for redemption of the mortgage. The heirs of the mortgagees then claimed that Rs. 7,758 were due on the mortgage, but the parties eventually came to a settlement before the conciliator. The terms of the settlement were incorporated in the conciliator's award, exhibit 47, which provided for the payment of Rs. 5,200 by annual instalments of Rs. 200 each and further stated that on default in the payment of two instalments, the applicants' i.e., the mortgagors' right to redeem the property was not to remain. Possession of the lands, which were with the mortgagees, was to be continued and the mortgagees were to appropriate the income of the lands towards the interest. The sum of Rs. 5,200 was made repayable by twenty-six instalments, and on full payment of the amount the possession of the property was to be restored to the mortgagors. This kabulayat was accepted by the parties and was sent to the First Class Subordinate Judge of Sholapur under Section 44(1) of the Dekkhan Agriculturists' Relief Act. This was Suit No. 74 of 1888. In response to the Court's notice, the mortgagors appeared and admitted the kabulayat. The mortgagees did not appear, and the Court eventually ordered on February 5, 1889, that the kabulayat be filed. The mortgagors failed to pay the instalments as agreed upon. In the year 1894, the mortgagees applied by Darkhasti No. 1690 of 1894 to the Court for the foreclosure of the mortgage. But the Court held that as the mortgage was a usufructuary one, Section 93 of the Transfer of Property Act, as it then stood, did not apply and that it was not necessary to make a fresh order for making the previous order absolute. The application was, accordingly, dismissed. This order was passed1 although the mortgagors themselves had appeared and had raised no objection for granting the order of foreclosure that was prayed for therein. Forty-three years thereafter the heirs of the mortgagors filed the present suit asking for redemption of the original mortgage.
3. The suit was resisted principally by defendants Nos. 8 and 9, and their main contentions were that the suit was barred by res judicata and that the suit was not maintainable as the right of redemption was extinguished by the decree of the year 1889.
4. The learned Subordinate Judge held that the suit was barred by res judicata in view of the decision in Suit No. 74 of 1888 on the file of the First Class Court at Sholapur, and that by reason of the decree in that suit, the right of the plaintiffs to redeem the mortgage was extinguished, and the mortgage was foreclosed. He, therefore, dismissed the plaintiffs' suit with costs.
5. Against that order an appeal was filed in the District Court of Sholapur and was heard by the learned Assistant Judge. He held that although there was no bar of res judicata, the right to redeem was extinguished and that, therefore, the plaintiffs' suit for redemption was not maintainable. He, therefore, confirmed the decree of the lower Court and dismissed the appeal with costs. Against that order the plaintiffs have come in second appeal.
6. It was first contended by Mr. Murdeshwar that the mere order in the decree of 1889 that in default of payment of two instalments, the right of the applicants to redeem the property will not remain, would not automatically result in the right being extinguished. He urged that that decree was in the nature of a decree nisi and, therefore, until a decree absolute was passed by the Court, the plaintiffs' right of redemption could not be said to have terminated. In this connection he referred to Sections 92 and 93 of the Transfer of Property Act, IV of 1882, in which the relevant provisions regarding the mortgages and redemption were embodied prior to their transfer to Order. XXXIV of the Civil Procedure Code in the year 1908. Under Section 93, 'if the payment was not made of the amounts found due and as directed in a preliminary decree under Section 92, the defendant could, unless the mortgage was simple or usufructuary, apply to the Court for an order that the plaintiff and all persons claiming through or under him be debarred absolutely of all right to redeem, or (unless the mortgages were by conditional sale) for an order that the mortgaged property be sold. On the passing of an order under that section, the plaintiff's right to redeem and the security shall, as regards the property affected by the order, both be extinguished.' The contention of the learned advocate was that inasmuch as an order contemplated by Section 93 extinguishing the right to redeem was not passed, the decree of the First Class Subordinate Judge in Suit No. 74 of 1888, dated February 5, 1889, did not have that effect. In our opinion the principal objection to this line of reasoning is that when the decree was passed in the year 1889, the Transfer of Property Act was not in force in the Bombay Presidency to which it was first extended in the year 1893. When, therefore, as the law then stood, there was no provision for passing a, decree nisi and then a decree absolute, the order of the learned First Class Subordinate Judge could not be in conformity with the provisions of the law which came into force four years later. We are told that prior to the year 1893, the law governing the relations of the mortgagors and the mortgagees was that embodied in Section 15 of Regulation V of 1827. That section provides for the sale of mortgaged properties. Under Sub-clause (3) of that section, 'in the absence of any special agreement or recognised law or usage to the contrary, either party may at any time, by the institution of a civil suit, cause the property to be applied to the liquidation of the debt, the surplus1, if any, being restored to the owner.' It would be noticed that that provision applies in the absence of any agreement to the contrary. In the present instance, both the parties agreed to the terms of the decree by which the applicant-mortgagors obtained the privilege of paying the decretal debt in instalments ranging over a period of twenty-six years. They also agreed that the right to redeem shall be extinguished on default of payment of two instalments. There was, therefore, nothing illegal in the decree that was passed especially when at that time no particular form of decree was provided, and the order was based on the consent of the parties. It was argued by the learned advocate that even though the Transfer of Property Act did not in terms apply to the decree which was passed four years earlier, the principles of that Act should be applied, as a matter of justice, equity and good conscience, and in this connection he referred to the decision of the Privy Council in the case of Kader Moideen, v. Nepean (1898) L.R. 25 IndAp 241 and of the full bench of the Madras High Court in the case of Vasudevan Nambudripad v. Valia Chathu Achan I.L.R (1900) Mad. 47 . But even under the Transfer of Property Act, Section 60 lays down that the mortgagor has a right to redeem unless the right was extinguished by an act of the parties or by an order of the Court. In the present instance, there was not only an agreement between the parties, but also an order of the Court that in default of payment of two instalments, 'the right to redeem was not to remain,' which clearly means that the right to redeem was extinguished. Sections 92 an493 are in the nature of procedural sections when the right to redeem is extinguished by an order of the Court. But as these sections were not in force at the time when the decree was passed in Suit No. 74 of 1888, it is difficult to contend that merely because the precise form of order as contemplated in those sections was not followed, the right to redeem still remained intact. In 1889 it was not necessary for the Court to pass two such orders, and, therefore, the order of the Court in that suit must be given its plain meaning, viz. that if there was a default in the payment of two instalments, the right to redeem was extinguished.
7. The present suit is not very different from the case of Kushaba Ramji v. Budhaji Sakharam I.L.R (1921) Bom. 348 : 23 Bom. L.R. 1176. In that case also, the plaintiffs obtained a decree for redemption in the year 1897 which provided that on the mortgagors' failure to pay the mortgage money within the stipulated time they were to be finally debarred from all rights to redeem. The mortgage money was not, in fact, paid, and the plaintiffs filed a second suit for redemption in the year 1917. It was then held that the second suit for redemption did not lie and was barred under Sections 11 and 47 of the Civil Procedure Code. This ruling would apply to the present case, but then it was contended by Mr. Murdeshwar that this decision must be deemed to be impliedly overruled by the ruling of the Privy Council in the case of Raghunath Singh v. Hansraj Kunwar I.L.R (1934) All. 561 : 36 L.R. 1189 . In that case the decree in the earlier suit of 1896 provided 'that if the mortgagor failed to pay in accordance with the decree his' case will stand dismissed.' This decree was not in conformity with the then provisions of Section 92 of the Transfer of Property Act. No payment of the mortgage money was made; the mortgagee remained in possession, but did not apply for an order under Section 93 of the Act debarring the mortgagor's right to redeem. In 1924 a fresh suit to redeem the property was brought. It was held by their Lordships of the Privy Council that 'the decree of 1896 properly construed did not extinguish the right to redeem, and consequently by Section 60 of the Act that right still existed; the right was not barred by res judicata, because the former suit related to the right at a different date.' Their Lordships, in giving the judgment, referred with approval to the case of Sita Ram v. Madho Lal I.L.R (1901) All. 44. and the case of Hari Ram v. Indraj I.L.R (1922) All. 730. But in both these cases, as also in the case before their Lordships, the earlier suit ended in a decree that either 'the case will stand dismissed 'or 'in case of default the judgment should be deemed not in existence' or 'in case of default the suit will be considered dismissed.' In all these cases it was held that the second suit for redemption would lie. But their Lordships themselves observed (p. 566) :- 'If it could be said that the old decree involved a decision that the mortgagor's right to redeem was extinguished, that matter would indeed be res judicata, but this very question of the meaning and effect of the old decree arises for consideration under the third point''. It would thus be clear that if the earlier decree involves the decision that the mortgagors' right to redeem was extinguished, then the matter would be res judicata, and in the decree that their Lordships had to consider, it was held that the meaning and the effect of the earlier decree was that the right to redeem was not extinguished. In the case that arises for consideration before us, if we were to come to the conclusion that the meaning and the effect of the earlier decree was to extinguish the mortgagors' right, then obviously the second suit would be barred by the principles of res judicata. In our opinion the decree of 1889 can have no other meaning except that if there was any default in the payment of two instalments, the right to redeem was extinguished. It is stated so in so many words. That was also clearly stated in the case which this Court had to consider in Kushaba Ramji v. Budhaji Sakharam and this Court then held that the second suit for redemption did not lie. The observations of the Privy Council, therefore, at page 568, far from overruling the decision of this Court in Kushaba Ramji v. Budhaji Sakharam, emphasize that the second suit would be barred if the earlier decree involved the decision that the mortgagors' right to redeem was extinguished. The learned advocate for the appellants invited our attention to the remarks of their Lordships at p. 569 to the effect that 'The right to redeem is a right conferred upon the mortgagor by enactment, of which he can only be deprived by means and in manner enacted for that purpose, and strictly complied with.' But as in this case in the year 1889, there was not any special procedure provided for depriving the mortgagor of his right, we must hold that in view of the terms of Section 60 of the Transfer of Property Act, the right to redeem was extinguished, not only by an agreement between the parties but by an order of the Court. In the case before their Lordships, the earlier decree could not be construed as extinguishing the right to redeem. But in the case before us, no meaning can be attached to the decree of 1889 other than that the right to redeem) was to be extinguished if there was a default in the payment of two instalments.
8. It was lastly argued by the learned advocate that although there is a provision in the decree that in default of payment of any two instalments, the right of the applicants to redeem the property would not remain, the property was still to continue with the mortgagees for twenty-six years. His contention, therefore, was that in spite of the default, the relationship of the mortgagor and the mortgagee was to subsist. In our opinion, this is not the proper construction to be placed on the decree. After reciting that a sum of Rs. 5,200 was to be paid in annual instalments of Rs. 200 each, the decree goes on to recite as to what is to happen when there was a default in the payment of any two instalments, and it says that1 the right of the applicants to redeem the property would not remain. Then the later sentences of the same decree visualise the position that would obtain if the mortgagors made no default in the payment of two instalments, and the decree says that as the possession of the property was with the opponents, i.e. mortgagees, they would continue to remain in possession and enjoy the property in lieu of interest, and after the principal was paid off in twenty-six instalments of Rs. 200 each, the mortgagees would deliver possession to the applicants-mortgagors. In our opinion, on a proper reading of the decree, it cannot be contended that in any event, the relationship of the mortgagors and the mortgagees was to subsist for twenty-six years. This construction attributes no meaning to the clause that in default of payment of two instalments, the right of the applicants to redeem the property would not remain.
9. We are, therefore, of opinion that by reason of the decree in Suit No. 74 of 1888, the right of the plaintiffs to redeem the mortgage was extinguished, and that, therefore, the present suit to redeem the same mortgage does not lie and is barred by the principle of res judicata.
10. The appeal, therefore, fails and is dismissed with costs.