(1) Survey No. 110 situate at Takli originally belonged to one Girgouda Rayagonda Patil. On 5-3-1924,. Girgouda executed a simple mortgage in respect of the said land in favour of one Appaji Payangonda Patil. Appaji Payangonda Patil will hereafter be described as the first mortgagee. Thereafter, Girgouda executed a possessory mortgage in respect of the same land, first on 2-7-1924 and later on 26-11-1928, in favour of Yogabai, the present plaintiff. Yogabai will hereafter be described as the second mortgagee.
(2) The first mortgagee's son Babagouda instituted suit No. 276 of 1931 against the mortgagor for recovery of the mortgage money due under the mortgaged property. To this suit the second mortgagee was not made a party. A final decree for sale of the mortgaged property in this suit was passed on 18th June 1933.
(3) The second mortgagee filed a similar suit being suit No. 718 of 1931 against her mortgagor. Although her mortgages were possessory mortgages, it appears that she was entitled to recover the mortgagee money due under her two mortgages by sale of the mortgaged property. To this suit the first mortgagee's heir Babagouda was not a party. A final decree for sale of the mortgaged property was passed in favour of the second mortgagee on 5th January 1933.
(4) The second mortgagee filed a darkhast, being Darkhast No. 200 of 1933 for sale of the mortgaged property. In the darkhast proceedings, Babagouda intervened and contended that his mortgagees' rights should be shown in the proclamation to be prepared for sale of the mortgaged property. Accordingly, the proclamation mentioned the prior encumbrance in favour of Babagouda son of the first mortgagee, and in the auction sale, which was held on 25th September 1934, one Vasudev Phadke purchased the mortgaged property for Rs. 600/-. The amount was paid to be decree-holder, the second mortgagee, and Vasudev Phadke got the sale certificate on 18th March 1935.
(5) In the same year (1935), the first mortgagee's son Babagouda filed Darkhast No. 312 of 1935 against the mortgagor Girgouda and the auction purchaser Vasudev Phadke. In the darkhast it was mentioned that Vasudev Phadke had been made a party as he had purchased the mortgaged property in darkhast No. 200 of 1933 and in order that Vasudev Phadke should have an opportunity of redeeming the mortgage encumbrance in favour of the darkhastdar. Vasudev Phadke appeared in the darkhast proceedings and stated that he had purchased all the rights of the mortgagor in darkhast No. 200 of 1933, which had been filed by the second mortgagee; but he contended that he could not be compelled to redeem the first mortgage in favour of the first mortgagee, as he was in possession of the mortgaged property on the strength of the possessory mortgage.
(6) While the darkhast proceeding - Darkhast No. 312 of 1935 - were pending, Vasudev Phadke sold his right, title and interest in the property purchased by him to the present plaintiff on 10th November 1936 for a stated consideration of Rs. 400 and in reply to a notice which was served upon him under Order XXI, Rule 66 of the Code of Civil Procedure, he stated to the executing Court that he had ceased to have any interest in the property as he had sold the same to the present plaintiff. At the auction sale on the darkhast proceedings held on 20th April 1939 Nemu Tatya Desai, the predecessor-in-title of the present defendants purchased it for Rs. 625 and got possession of the property in due course.
(7) Yogabai, the present plaintiff, presumably on the strength of the sale deed executed in her favour by Vasudev Phadke, instituted suit No. 23 of 1950 against the present defendants in ejectment. This suit was dismissed by the trial Court. She preferred an appeal to the District Court. Her appeal was Appeal No. 148 of 1951. In appeal, she was allowed to withdraw her suit, with permission to bring another suit on the same cause of action. This order of withdrawal was challenged by the defendants in Civil Revision Application No. 66 of 1953, which was filed in the High Court. The revision application succeeded on 16th July 1954 and the District Court was directed to re-hear the appeal on merits. After the re-hearing as directed, the appeal came to be dismissed.
(8) The present suit has been instituted by Yogabai on 7th February 1955 for redemption of the mortgage dated 5th March 1924.
(9) The defendants resisted the suit. They contended that Yogabai was not entitled to redeem the property as under the sale deed executed in her favour by Vasudev Phadke, she did not get the equity of redemption which could entitle her to redeem the mortgage dated 5th March 1924, and that even assuming that she got such a right of redemption under the aforesaid sale deed, her sale deed having been executed in her favour during the pendency of the darkhast proceeding was hit by the bar of Lis Pendens.
(10) The points for consideration in this appeal are-
(1) Whether Yogabai has not acquired the equity of redemption in respect of the first mortgage dated 5th March 1924?
(2) What right, title and interest passed to Vasudev Phadke in the auction sale held in Darkhast No. 200 of 1933? Did he by right of his auction sale become a representative of the judgment-debtor Girgouda, in view of the fact that the auction sale took place during the pendency of the suit No. 276 of 1931, which had been filed by the first mortgagee's son, Babagouda, and in which he had obtained a final decree for sale of the mortgaged property in the year 1933?
(3) What right, title and interest passed to Nemu Tatya Desai in the auction sale held on 20th April 1939, in Darkhast No. 312 of 1935?
(11) Both the courts below have held that Yogabai has the right of redemption in her on the date of the suit and have therefore passed a decree for redemption in her favour.
(12) This is defendants' second appeal.
(13) Yogabai can claim the equity of redemption if only her vendor Vasudeo Phadke had acquired it in the auction sale held in Darkhast No. 200 of 1933 filed by her as decree-holder in her mortgage suit. In my view, it cannot be disputed that Vasudev Phadke in the auction sale held in darkhast No. 200 of 1933 got the right of redemption which could entitle him to redeem the first mortgage in favour of Appaji. The effect of the auction sale was that the second mortgage was completely satisfied, Yogabai was paid her decretal dues and Vasudev Phadke became the owner of the property purchased by him subject only to the prior encumbrances in favour of the first mortgagee, or, to be more precise, in favour of the first mortgagee's son Babagouda, the decree-holder in suit No. 276 of 1931. The equity of redemption, which vested either in the original mortgagor Girgouda Patil or, by reason of the second mortgage, in the second mortgagee and by virtue of which the first mortgage could be redeemed, passed to the auction purchaser Vasudeo Phadke under the auction sale. For the purpose of this appeal it is not necessary to find out how much of the equity of redemption was still retained by the mortgagor even after the second mortgage. In execution of the decree passed in favour of the second mortgagee there was an auction sale. That sale had obviously the effect of satisfying the decree in favour of the second mortgagee and as the second mortgagee had not been impleaded in the earlier suit instituted by the first mortgagee's son, the right to redeem the first mortgage could not be in any way affected. But the result of the auction sale held in darkhast No. 200 of 1933 was to satisfy the second mortgage in its entity and to pass the right of redemption in regard to the first mortgage to the auction purchaser and it was because of this right which came to him under the auction purchase he could redeem the first mortgage and it was for this reason that in darkhast No. 312 of 1935 which came to be filed he had been, in my view, rightly made a party. It was stated that he had purchased the property in the auction sale held in darkhast No. 200 of 1933 and that he had been given an opportunity to satisfy the first mortgage and the decree passed thereon. In fact, Vasudev Phadke himself asserted that he had purchased the mortgagor's interest in the auction sale held in darkhast No. 200 of 1933. Therefore, there cannot be any doubt that under the auction sale Vasudev Phadke had the right of redemption in him which entitled him to redeem the mortgage in favour of the first mortgagee.
(14) But, then, if the auction sale was held during the pendency of the suit No. 276 of 1931, which had been instituted by Babagouda the son of the first mortgagee earlier than suit No. 718 of 1931, it is contended by Mr. Shrikhande for the appellants-defendants that, in view of the principles embodied in Section 52 of the Transfer of Property Act the auction purchaser must be regarded as representative of the judgment-debtor Girgouda Patil and therefore in the auction sale held on 20th April 1939 in Babaouda's darkhast No. 312 of 1935, to which, as I have already stated, Vasudev Phadke had been made a party, the equity of redemption passed to the auction purchaser Nemu Tatya Desai. It is true that in the meanwhile Vasudev Phadke himself had purported to sell away his right, title and interest in the property purchased by him to the present plaintiff. But the argument proceeds that the sale which was held in 1936 was hit by the principle of Lis Pendens, as it had been brought about during the pendency of the proceedings in Darkhast No. 212 of 1935.
(15) Mr. Paranjape contended that section 52 of the Transfer of Property Act or the principles underlying that section do not apply when the right to bring the sale the mortgaged property had been conferred upon the mortgagee under the instrument of mortgage and that that section applied only when such right was purported to be created for the first time during the pendency of the suit. In support of this contention Mr. Paranjape relied upon a decision reported in : AIR1950Ori210 , Sheikh Bikala v. Sheikh Ali where it was held
'A right acquired before the commencement of a suit is not affected by the rule of Lis Pendens even though the remedy for the enforcement of that may be sought during the pendency of the suit. A sale in execution of a mortgage decree will not be hit by the doctrine of Lis Pendens if the mortgage had taken place long before institution of the suit even though the sale might have taken place during the pendency of that suit.'
In that case there were two mortgages - on executed in favour of defendant No. 1 on 18th October 1924 and the second mortgage on 9th June 1927, in favour of the plaintiff. The first mortgage was a simple mortgage, while the second was usufructuary in nature and related to only one-half of the property covered by the first mortgage. The second mortgagee filed a suit for recovery of the mortgage amount by sale of the mortgaged property on 9th April 1936 and got a final decree for sale of the mortgaged property on 13th March 1937. In execution of this final decree the plaintiff purchased the property in that suit on 6th November 1937. During the pendency of this suit of the second mortgagee, the first mortgagee also filed a suit for recovery of the mortgage amount by sale of the mortgaged property on 17th September 1936, that is to say, after the institution of the suit by the second mortgagee. The first mortgagee obtained a final decree on 30th November 1939 and in execution of this final decree, the property was purchased by the auction purchaser on 15th January 1943, and it was the case of the plaintiff auction purchaser that the sale in his favour prevailed over that of the defendant, in view of the principle of Lis Pendens, as his suit had been brought five months before the institution of the suit by the first mortgagee. This contention was not accepted by the learned Judges of the Orrisa High Court and they observed:
'The sale in pursuance of a decree on a mortgage seems to be nothing else but a logical result of a transfer which had taken place at the time of the mortgage itself.'
The learned Judges referred to the contrary view expressed by the Full Bench decision reported in : AIR1931All466 Ram Sanehi Lal v. Janki Prasad and observed
'In the majority decisions of the Full bench of the Allahabad High Court : AIR1931All466 a distinction was made between interest of the mortgagee and that of the mortgagor and it was pointed out that so far as the mortgagee's interest was concerned the transfer took place at the time of the execution oft mortgage deed whereas the mortgagor's interest was transferred at the time of the sale and consequently the rule of Lis Pendens would apply in respect of the latter transfer. But this point has been fully met in the dissenting judgment of Mukherji, J. And in the two Madras decisions noted above. Agreeing with their views H would hold that the doctrine of Lis Pendens does not not apply to the present case.'
The learned Judges held that the right to bring the mortgaged property to sale w as only a logical result of the transfer of the right conferred by the document of mortgage and if in pursuance of this right the property was brought to sale, it could not be said that any fresh right was being created by the auction sale which was held in execution of the decree for sale obtained by the first mortgagee. It seems to me that the attention of the learned Judges of the Orissa High Court was not drawn to a decision of the Privy Council reported in 24 Ind App 170, Moti Lal v. Karrab-Ul-Din, to which I shall presently come; but before I leave this decision. I would also refer to what the learned Judges themselves stated at a later stage of their judgment. In that case the second mortgage, as I have already stated, was usufructuary in nature and yet the right to bring the property to sale was claimed in the suit not because such right had come to the mortgagee under the mortgagee deed, but because the usufructuary mortgagee had been dispossessed and therefore it was held that such a dispossessed usufructuary mortgagee had the right either to sue for possession as usufructuary mortgagee or else to sue for sale of the property like a simple mortgagee after giving up his usufructuary right (Paragraph 8 of the judgment).
(16) Mr. Paranjape also referred to a case reported in : AIR1945Mad91 . Natesa Chettiar v. Subbunarayana where also it was held:
'The transfer to which the provisions of section 52 can properly be applied is the creation of the mortgage itself, not the subsequent sale in the enforcement of the mortgage.'
In that case the plaintiff might be described as a subsequent mortgagee and the defendants as the prior mortgagees. The defendants obtained a decree on 10th April 1934, and brought the mortgagor's property to sale on 24th October 1934. To the suit which had been filed by the defendants, the subsequent mortgagee (plaintiff) was not made a party. During the pendency of the suit filed by the prior mortgagees, the plaintiff also filed a suit on 12th October 1933 and got a decree for sale of the mortgaged property on 25th July 1934. He himself purchased the property on 6th March 1936. In his suit also he did not implead the prior mortgagees. Plaintiff contended that the auction sale in favour of the prior mortgagees which had been held on 25th October 1934 during the pendency of his suit was hit by the bar of Lis Pendens. This contention was not accepted by the learned Judges in that case. They observed:
'It does not, in our opinion, necessarily follow that plaintiff's title, as subsequent purchaser in his own suit, must prevail over defendant's title as purchasers in theirs. It is only if the doctrine of lis pendens can be successfully applied to this case that plaintiff can claim that the decree binds the defendants, who were not in fact parties to his suit. Plaintiff in contending that the doctrine of Lis Pendens can be extended to the present case relies on a Full Bench ruling of the Allahabad High Court : AIR1931All466 . In Madras, however, the extension of the doctrine to cover the case of an involuntary alienation in execution of a mortgagee decree has been refused, see 63 Mad LR 394: AIR 1932 Mad 566, Chinnaswami Padayachi v. Dharmalinga Padayachi. The transfer to which the provisions of section 52, T. P. Act, can properly be applied is the creation of the mortgage itself, not the subsequent sale in the enforcement of the mortgage. It may be that, as argued for the plaintiff, the enunciation of this legal principle in 63 Mad LJ 394: AIR 1932 Mad 566 was obiter dictum, but with respect, we do not consider the principle any the less sound on that account and we prefer to follow it rather than the contrary view as expressed in Allahabad.' In this case also the Privy Council decision which I have referred to above and to which I shall presently come was not brought to the notice of the learned Judges. In 63 Mad LR 394: AIR 1932 Mad 566, it was held that the sale in pursuance of a mortgagee decree, the mortgage having been executed before the institution of the suit, was not affected by the doctrine of Lis Pendens.
(17) Mr. Paranjape also called my attention to a case reported in AIR 1945 Nag 86. Gendmal Amolakchand v. Laxman Tanba. In that case it was held:
'Mortgagees pursuing their remedies on mortgages previously executed are not affected by any doctrine of lis pendens arising from suits subsequently instituted, but instituted prior to the sale, and the sale in execution of a mortgage decree is to be regarded as a legal action by mortgagee in enforcement of his pre-existing rights (which are unaffected by res judicata) rather than as an involuntary sale by the mortgagor, and that the mortgagee who purchases will be affected by the doctrine if he himself is impleaded in the lis'.
In this case the learned Judges referred to the Privy Council decision reported in 24 Ind App 170 and observed:
'A contention set up by Moti that he was not bound by the decree obtained by Masih was ridiculed by their Lordships of the Privy Council who said that if that were the law it was difficult to see in what cases a pending suit would be any protection.'
The learned Judges have also qualified their view by stating that it is only when the suits are subsequently instituted that there will not be any bar of lis pendens.
(18) In 24 Ind App 170, their Lordships of the Privy Council held:
'where the defendant in an ejectment action had bought the village in question at a sale in execution of a decree obtained by the mortgagees against the mortgagors thereof, it appeared that prior to his purchase the plaintiff's vendor had sued to establish against the parties to that decree his title to the village, and had subsequently obtained a decree in his favour. It was held that the defendant brought pendente lite, and was bound by the decree so obtained. That result could not be avoided by showing that the mortgagee decree-holder had attached the village prior to the suit by the plaintiff's vendor.'
In this case the mortgage had been effected by one Asghar in favour of Agha, the mortgagee, in the year 1870. After the execution of the mortgage the original mortgagor gifted his right title and interest to two persons, Yusuf and Nasim. In 1879 one Sahib-un-nissa, a creditor of mortgagor , obtained a decree for money against Agha and Yusuf. In execution of this decree Hakim Muhammad Masih purchased the right and interest of the judgment-debtor who was described in the sale certificate as Asghar. Masih was the predecessor in-title of the plaintiff before the Privy Council. On 20th March 1883, the mortgagee Agha obtained a decree against Yusuf and Nasim, the donees from Asghar, on the mortgage effected by them and on 28th July 1884 Masih instituted a suit against the heirs of Agha, who was by that time dead, and against Yusuf and Nasim for a decree for declaring his title to the suit property. Masih got a decree on 4th November 1885. The heirs of Agha the original mortgagee, had in the meanwhile filed execution proceedings in respect of the mortgage decree. on 22nd October 1884, the mortgaged property w as put up for sale and was purchased by the defendant Moti. It was the contention of the defendant Moti that the right, title and interest which he purchased in the auction sale on 22nd October 1884 were not affected by the decree obtained by Masih and in considering this contention Their Lordships observed:
'it may be as well here to dispose of a very extraordinary contention set up for the defendant. He bought whatever interest belonged to the heirs of Agha, who were mortgagees, and to Yusuf and Nasim, who were mortgagors. But three months before he brought, Masih had instituted his suit against those very persons to establish his title against them, and it was established by the decree of November 1885. Is it possible for the defendant (Moti) to allege that, as against Masih or his heirs, the heirs of Agha or Yusuf or Nasim had any interest to convey to him? The District Judge holds that the defendant is free from the decree because he was to party to the suit, and because the transfer to him was made prior to the decree. If that were the law, it is difficult to see in what cases a pending suit would be any protection'.
It seems to me that the view that was expressed in the Orissa case referred to above was not accepted by Their Lordships of the Privy Council in 24 Ind App 170. In the case before their Lordships if the mortgage had been effected long before the right, title and interest in Sahib-un-nissa's suit were purchased by Masih and his right to bring the property to sale had been reserved to the mortgagee as held by the learned Judges of the Orissa High Court, then it is difficult to see how Their Lordships stated that there was a bar of lis pendens to the auction sale held in execution of the decree in favour of Moti.
(19) The case of the Privy Council has been considered by the learned Judges of the Allahabad High Court in the Full Bench decision reported in : AIR1931All466 . The view of the Full Bench was expressed as under: 'Where a sale in execution of a decree obtained on foot of a puisne mortgage takes place during the pendency of the suit on the prior mortgage, it is affected by the rule of lis pendens so as to make the purchaser's right subject to the result of the prior mortgage suit'.
This view has been followed in subsequent decision of that Court reported in : AIR1958All24 , Hakim Mohammad v. Shahab Collector Bahadur where the facts were almost similar to the facts which obtain in the present case. It was held:
'Although section 52 T. P. Act does not apply in terms to sale held in execution of a decree, the principle of Lis Pendens applies to such Court sales also.' In that case on Z mortgaged the property in dispute first to M in 1926 and thereafter to one Kin 1928. A purchased the mortgage rights from the second mortgagee in 1932; but when M filed his suit, A was not impleaded in that suit. After the final decree was passed in that suit, the judgment-debtors applied for amendment of the decree under the provisions of the Agriculturists Relief Act and got the decree appropriately amended. Thereafter A, the transferee from the second mortgagee, brought his suit in 1940. He also did not implead the first mortgagee M. A obtained a decree and in execution purchased the property himself. In the meanwhile a default was committed in the instalments granted in the decree passed in favour of M. M accordingly put the decree in execution, impleading A the transferee pendente lite. It was held that the auction sale in favour of A was affected by the doctrine of lis pendens. It was also held that A could not claim a right to redeem on the basis of his purchase because that right came to an end when a final decree was passed in the prior mortgage suit against the original mortgagor.
(20) With respect, I follow the decisions of the Allahabad High Court and the decision reported in 24 Ind App 170 (PC) and hold that the auction sale held in favour of Vasudev Phadke was hit by the bar of Lis Pendens, inasmuch as the suit by Babagouda, the son of the first mortgagee, had already been filed and a final decree for sale of the mortgaged property passed in that suit. It is not disputed that for the purpose of S. 52 of the Transfer of Property Act, that suit was still pending. Besides, I do not see how the authorities relied upon by Mr. Paranjape help him when the defendants claim under an auction sale held in execution of the decree passed on the first mortgage.
(21) If the auction sale in favour of Vasudev Phadke does not affect the rights of the decree-holder in the first suit, then the question arises; What is the position of this auction purchaser? In Parmeshari Din v. Ram Charan it has been held by the Privy Council 'When a person takes property in suit from the defendant pendente lite and the suit results in a decree for the plaintiff, such person must be treated as the representative in interest of the defendant, and as such he is bound by the result of the decree and the decree can be executed against him although he was not a party to it. If he has not obtained possession of the property from the defendant, the latter would be required to deliver it to the plaintiff. The circumstance that he got possession of the property from the defendant in pursuance of the transfer, which was invalid as against the plaintiff, cannot detract from his rights under the decree.' It is further observed 'A transferee pendente lite from one of the parties to a suit is a representative of the judgment-debtor for the purposes of S. 47 of the Code of Civil Procedure'. There cannot therefore be any doubt that by his purchase Vasudev Phadke became a representative of the original-debtor Girgouda and it was for this reason that, as I have already stated, he was rightly impleaded in the darkhast proceedings, being darkhast No. 312 of 1935, that had been started in the year 1935.
(22) Assuming for the sake of argument that there is no bar of lis pendens to the auction purchase held in favour of Vasudev Phadke, there cannot be any doubt that he acquired under the auction purchase the equity of redemption which entitled him to redeem the mortgage in favour of the first mortgagee. There is no reason why it could not be said that the equity of redemption which vested in Girgouda in the first instance, devolved, by reason of the auction sale held in the year 1934, upon the auction purchaser Vasudev Phadke. If that were so, under Order XXII, Rule 10 of the Code of Civil Procedure, this would be a case of devolution of interest and the person on whom the interest devolved, could be property described as a representative of the person whose interest had devolved upon him. Whether therefore, there was any bar of Lis Pendens or not to the auction sale of the year 1934, Vasudev Phadkar was properly impleaded as a representative of the judgment-debtor in the darkhast of 1935. If Vasudev Phadke, as he himself admitted, acquired the mortgagor's interest by reason of the auction sale, then there is no reason why he could not be held to be a representative of the original judgment-debtor. If that were so, then during the pendency of the darkhast proceedings to which he was made a party, he could not have alienated the property, as he purported to do, in favour of the plaintiff in November 1936. That alienation, would be hit by the rule of Lis Pendens. If that transfer could be ignored by the darkhastdar, then it must mean that the mortgagor's right to redeem was put to auction sale in the year 1939 and was purchased by Nemu Tatya, the predecessor-in-title of the present plaintiff.
(23) Mr. Paranjape argued that if the auction sale in favour of Vasudev Phadke was to be regarded as a nullity because of the bar of lis pendens in view of section 52 and the principle underlying that section, then the interest that Vasudev Phadke purported to acquire was the interest of Yogabai, the second mortgagee. In support of his contention Mr. Paranjape relied upon ILR 8 Cal 530, Gopal Sahoo v. Ganga Pershad Sahoo. I confess I have not been able to understand the argument of Mr. Paranjape in this regard. I do not think that any sale can be regarded to be a nullity because of the bar of lis pendens, whether the sale is voluntary, or involuntary, as in the present case. The sale will not be allowed to affect the rights of the decree-holder who has filed his suit earlier in respect of the property which has subsequently been the subject-matter of the transfer. In order to consider what is the totality of interest that passed to the auction purchaser, we must for a while keep aside the principle of lis pendens. If, by reference to the auction sale proceedings only, it could be held that what passed to the auction purchaser was the entirety of interest that had vested in the mortgagee and also in the mortgagor, then it must only mean that the second mortgage was extinguished. In fact, it was fully satisfied and that what survived was the right of redemption in regard to the first mortgage. It is because of the rule of Lis Pendens the auction purchaser is held to be a representative of the original mortgagor. But that has nothing to do with what right, title and interest passed to the auction purchaser in the auction sale held in execution of the decree in favour of the second mortgagee.
(24) Mr. Shrikhande raised certain other points; but as I have accepted the first point so far considered, it is not necessary for me to consider the other points raised by him in appeal.
(25) Accordingly, I must hold that the plaintiff had not in her the right of redemption at the time when she filed the suit for redemption and that what had been purchased by the auction purchaser, Nemu Tatya, in the year 1939 was the entire interest in regard to the suit property, including the right of redemption in respect of the first mortgage. I therefore, allow the appeal, set aside the decree of the courts below and dismiss the suit with costs throughout.
(26) Appeal allowed.