1. This is a first appeal from the order of the additional Civil Judge of Moradabad, dated 30th July 1937. The relevant facts which have given rise to this appeal are as follows : On 22nd August 1927, a mortgage by way of conditional sale was made by defendants 1 and 2 in favour of the plaintiff and defendant 3 for a period of five years. The mortgagees were however not put in possession of the property mortgaged. On 1st June 1933, the mortgagees brought a suit on foot of this document alleging that the transaction was one of an absolute sale with a condition of re-purchase and that they were really the owners of the property entered in the document. They therefore claimed proprietary possession of the property in that suit and also asked for mesne profits from 1st July 1930 to 30th Juno 1933, and for damages for the materials of one of the houses covered by the deed which materials were said to have been taken away by the mortgagors. In the alternative, they prayed that if the document was considered by the Court to be a mortgage by way of conditional sale, they should be given a decree for foreclosure together with mesne profits and damages. It may be noted that the mortgagees did not ask for a decree for possession as mortgagees. The trial Court of the Munsif held that the transaction was one of mortgage by conditional sale and accordingly he passed a decree for foreclosure. He also decreed mesne profits for the zamindari property as well as the house property covered by the deed of mortgage and damages for the materials of the house. The operative portion of the judgment was in these terms:
The plaintiffs' suit for foreclosure of the property detailed at the foot of the plaint is hereby decreed under Order 34, Rule 2, Civil P.C., on the following conditions:
(1) Defendants 1 and 2 shall pay to the plaintiffs a sum of Rs. 1880, Rs. 1500 was the principal and (Rs. 1500 was the amount of mesne profits for the zamindari property) within six months from today and defendant 1. alone shall pay Rs. 418-8-0 to the plaintiffs within the aforesaid period. (This sum was the amount of mesne profits in respect of the house property.)....
(4) If the defendants pay up the amount as decreed above to the plaintiffs within six months tins property in suit shall be redeemed and defendants 1 and 2 shall be entitled to take possession thereof. Otherwise, the mortgage shall be foreclosed and the plaintiffs declared to be the full owners thereof.
(5) The plaintiffs in case of foreclosure would get Rs. 56 from defendant 1 alone as cost of materials,
(6) The plaintiffs will get their costs in any
2. The decree was passed on 29th May 1934. Against this decision, the defendant-mortgagors filed an appeal but their appeal was dismissed on 32nd March 1935, and a further period of one month was given to the mortgagors to pay the balance due under the decree to the mortgagee-decree-holders. It may be noted that on 29th November 1934, the date on which the period of grace expired, the mortgagors deposited the principal sum of Rs. 1500 and this was subsequently taken away by the mortgagees. After the further period of grace allowed by the Appellate Court had expired, the plaintiffs applied for a final decree for foreclosure in lieu of the balance that was then due to them, and while that application for final decree was pending the mortgagors made an application asking for instalments under the Agriculturists' Belief Act. On 19th August 1935, the Court passed an order on both the applications. It granted the mortgagors four yearly instalments and directed that in default in payment of two of them the decree for foreclosure would be made final. The first instalment was payable in 1935 and the last in 1939. It does not appear that any of the four instalments has been paid.
4. After the above order granting instalments to the mortgagors had been made, one of the mortgagees brought a suit on 19th November 1935, claiming mesne profits for the years 1341 Pasli to 1341 Fasli corresponding to 1st June 1933 to 31st October 1935. This suit was resisted by the mortgagors and was dismissed by the trial Court of the Munsif on the ground that it was barred by Order 2, Rule 2, Civil P.C. The plaintiff then appealed to the Additional Civil Judge who reversed the decision of the trial Court and remanded the case for disposal of the issues which had been left undecided by the Munsif. The present appeal has been directed against the order of remand. The grounds on which the lower Appellate Court granted a decree for mesne profits claimed by the plaintiff are stated in the judgment to be as follows:
The mesne profits in the present suit are claimed on the same ground on which they were claimed in the previous suit with this difference only that while in the previous suit they were claimed for the years 1338 to 1340 Fasli the years involved in this suit are 1341 onwards. The matter is res judicata between the parties, and defendants 1 and 2 cannot escape their legal liability to pay mesne profits to the plaintiff and defendant 3 so long as they arc in possession of the property of which the possession should have been delivered by them to the plaintiffs and defendant 3, according to the terms of the sale or mortgage-deed dated 22nd August 1927.... The fact that the defendants have made a part payment of Rupees 1800 towards the preliminary foreclosure decree does not confer on them a right to continue to remain in possession of the property and does not extinguish their liability for mesne profits.
5. I consider that the decision of the lower Appellate Court is erroneous. The decree in the previous suit awarding mesne profits up to the date of that suit could not possibly be res judicata upon the question of mesne profits for the subsequent period because the causes of action for the two suits were quite different. It may well be that mesne profits were claimable up to the date of the suit and they were not claimable after the date of the suit. The claim of the plaintiff for mesne profits after the date of the first suit is not maintainable even though possession of the mortgaged property has remained with defendants 1 and 2 and for the following reasons:
6. When the previous suit for foreclosure and mesne profits was brought by the mortgagees they were entitled to two distinct reliefs. They could have sued for mortgagee's possession and mesne profits (either past mesne profits only or both past and future mesne profits up to the date they were put in mortgagee possession: vide Order 20, Rule 12, Civil P.C. In such a case their right to have the property foreclosed later on and the mortgagors' right to redeem it would have remained intact and they could have subsequently sued for foreclosure within the time allowed by law. Instead however of suing both for mortgagee possession and mesne profits they sued only for mesne profits. The cause of action for a claim for mortgagee possession was the same as that for the claim for mesne profits, see Mewa Koer v. Benarsi Prasad (1895) 17 All. 533, and under the provisions of Order 2, Rule 2, Civil P.C., both the claims should have been put together into Court. The effect of plaintiffs suing for mesne profits alone without suing for mortgagee possession was that their right to sue subsequently for mortgagee possession became barred under the provisions of Order 2, Rule 2, Civil P.C. When a plaintiff who is entitled to sue both for mesne profits and possession sues only for mesne profits and does not sue for possession he cannot subsequently sue for possession. And when the plaintiff's right to sue for mortgagee possession became barred, it is obvious that they became disentitled to sue for mesne profits also : see Ganeshi Lal v. Bansidhar : AIR1933All84 , Sheo Ratan Misra v. Ram Dhani (1906) 9 O.C. 322 and Kareem Baksh v. Jattu Ram (1910) 8 I.C. 224.
7. The other relief for which the mortgagees could have asked was a decree for foreclosure, that is a decree declaring that if the mortgagors did not pay the mortgage money due within a time to be fixed by the Court, their right to redeem would be barred and the plaintiffs instead of being mortgagees would become full owners of the property. If the plaintiffs wanted also to be put in mortgagee possession of the mortgaged property until such time as the mortgage was redeemed or the right of the mortgagors to redeem was barred, they could and they should have joined in their suit for foreclosure a claim for such possession. The cause of action for a claim for foreclosure is no doubt different from that for a claim for mortgagee possession, but the Proviso to Order 2, Rule 4, Civil P.C., specifically provides for the joinder of these two claims. The plaintiffs did not however ask for mortgagee possession in their suit for foreclosure. They sued for foreclosure and past mesne profits only. The result was that when on the basis of the mortgage deed they obtained a decree for foreclosure, the mortgage became merged in the decree and ceased to exist.
8. Now on the passing of a preliminary decree for foreclosure on the basis of a mortgage the relations between the parties are governed not by the terms of the mortgage deed which has ceased to exist, but by the terms of the decree into which the mortgage becomes merged. The plaintiffs mortgagees could not after the passing of the decree therefore sue for possession on the basis of the mortgage deed and they were entitled to mortgagee possession only under the terms of that deed. The preliminary decree for foreclosure did not provide that the mortgagees could be entitled to take mortgagee possession of the mortgaged property. In fact, under the terms of the decree the mortgagees, if they were not in possession at the time the decree was passed, could not obtain possession until such time as the decree became final and the right of the mortgagors to redeem was barred. Order 34, Rule 3, Clause (2) specifically provides that
if the mortgagee is not in possession of the mortgaged property the Court shall order the defendant to put the plaintiff in possession of the property.
9. It may be observed that the possession which the plaintiff gets on the decree being made final is not possession as mortgagee but possession as full owner. When the mortgage ceased to exist, the mortgages could not obviously sue for mortgagee possession on the basis of the defunct mortgage. And if they could not sue to recover possession, it is obvious that they cannot sue for mesne profits. A claim for mesne profits presupposes that the person in possession has no legal right to possession, while the person seeking mesne profits has a right to possession. The contention that in spite of the preliminary decree being passed on foot of a mortgage, the mortgage subsists and the parties continue to be governed by the terms of the mortgage deed is untenable.
10. The parties cannot be governed at the same time both by the terms of the mortgage deed as well as by those of the preliminary decree passed on foot of the mortgage. The relation of mortgagor and mortgagee no doubt subsists until the decree for foreclosure is made final but the mortgage becomes merged in the preliminary decree and the parties are thenceforth governed by the terms of the decree only. If the contention of learned Counsel for the respondents be assumed to be correct then the payment of the principal sum of Rs. 1500 by the mortgagors on 29th November 1934, extinguished the mortgage for the mortgage did not carry any interest. And even in that ease a suit for possession and mesne profits on the mortgage which had been paid off would not be maintainable.
11. As regards the effect of the payment of Rs. 1500 by the mortgagors, the law is clear that the decree for foreclosure is to be made final in lieu of the balance that is left due after giving credit for any payments made by the mortgagors : vide Order 34, Rule 3, Clause (2), Civil P.C. As has been already observed above, the relations between the parties were governed by the preliminary decree and not by the terms of the mortgage deed. The payment of Rs. 1500 therefore would not affect the right of the plaintiffs mortgagees to have the decree made final in lieu of the balance left due to them. The payment would however undoubtedly affect the claim for mesne profits if such a claim were maintainable and mesne profits were recoverable.
12. It may be observed that in spite of their omission to claim mortgagee possession along with their relief for foreclosure the plaintiffs were not altogether without a remedy. After the date of the preliminary decree for foreclosure when the defendants mortgagors asked for extension of time and for instalments it was open to the plaintiffs mortgagees to ask the Court to put the defendants upon terms, as provided by the provisions of Order 34, Rule 2, Clause (2), Civil P.C. The Court could then have, as a condition precedent to giving extension of time, asked the defendants mortgagors either to put the plaintiffs in mortgagee possession of the property until such time as the mortgage was redeemed or it could have asked them to pay the usufruct of the property or damages by way of interest to the mortgagees until expiry of the extended period. In the result, I hold that the claim of the plaintiffs for mesne profits is barred. I therefore accept this appeal, set aside the decree of the Court below and restore that of the trial Court of the Munsif. The defendant-appellant will have his costs of all the Courts from the plaintiffs-respondents. Leave to file Letters Patent appeal is granted.