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Charan Singh and ors. Vs. Ganeshi Lal - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtAllahabad
Decided On
Reported inAIR1926All352; 94Ind.Cas.1048
AppellantCharan Singh and ors.
RespondentGaneshi Lal
Excerpt:
.....to satisfy the claim of mangal sen at the date of the sale in may 1914, had been left with sher singh, and he having failed to pay off mangal sen then, as he was bound to do, the plaintiffs, his representatives, could not seek contribution in respect of the large sum which, by reason of sher singh's default, had become due to mangal sen when he sued later to enforce the mortgage. it is said that sher singh, when he satisfied the mortgage decree, was paying not his own money, but the money of bijai indar, which had been left with him to discharge the mortgage. the defendant by raising these pleas is clearly claiming for himself the benefit of a contract to which he was no party. 17. the law on the subject is well established, and we need only refer to the decision of their..........of the plaintiffs, for the sum of rupees 33,000. in the conveyance from bijai indar singh to sher singh occurs the following passage:the property sold is declared to be free from all kinds of claims, hypothecation liens and encumbrances, in that the entire amount due to lala mangal sen and that due to shrimati ram dei, wife of b. sheo prasad, vakil and shrimati ram dei, wife of bhola nath, i.e., entire amount due under both the documents have bean left in deposit with the vendee for payment.2. a sum of rs. 17,300 was left with the vendee for payment of the mortgage of mangal sen of the 8th november 1906. rs. 6,500 were left to satisfy the decrees of kishen singh and of hazari lal and gulzari lal in respect of which an order had been made that the property of bijai indar singh.....
Judgment:

Lindsay, J.

1. One Bijai Indar Singh was the owner of a share in mauza Kheria Gurdeo and a share in mauza Mirpur in the Aligrah District. On the 8th of November, 1906 he mortgaged these shares to one Menagal San as security for the sum of Rs. 8,000. From 1906 onwards he appears to have been in difficulties, and on the 19th of March 1912 one Kishen Singh had obtained a decree against him on a mortgage which decree was under execution in 1914. On the 19th of May 1914 Bijai Indar Singh sold the property Kheria Gurdeo to Shar Singh, the father of the plaintiffs, for the sum of rupees 33,000. In the conveyance from Bijai Indar Singh to Sher Singh occurs the following passage:

The property sold is declared to be free from all kinds of claims, hypothecation liens and encumbrances, in that the entire amount due to Lala Mangal Sen and that due to Shrimati Ram Dei, wife of B. Sheo Prasad, vakil and Shrimati Ram Dei, wife of Bhola Nath, i.e., entire amount due under both the documents have bean left in deposit with the vendee for payment.

2. A sum of Rs. 17,300 was left with the vendee for payment of the mortgage of Mangal Sen of the 8th November 1906. Rs. 6,500 were left to satisfy the decrees of Kishen Singh and of Hazari Lal and Gulzari Lal in respect of which an order had been made that the property of Bijai Indar Singh should be sold on the 20th of May 1914, that is, the day succeeding the date of the sale-deed.

3. It is said that there was another decree obtained by Hazari Lal alone for which no provision was made in this document. But be that as it may, the sale did in fact take place en the 21st of May 1914 and one Bhola Nath bought the share in Kheria Gurdeo for Rs. 1,450. On the 19th of June Sher Singh deposited a sufficient sum of money to have the sale set aside. That deposit was objected to and Sher Singh subsequently withdrew the money deposited by him for reasons which seemed good to him. On the 14th of November 1914 the sale to Bhola Nath was confirmed. On the 16th of April 1915 Bhola Nath conveyed mauza Kheria Gurdeo to Sher Singh for the sum of Rs. 2,500.

4. We now turn to mauza Mirpur. It will be remembered that this also was subject to the mortgage of Mangal Sen, and the share in this mauza was also sold in execution of the decree of Kishen Singh. On the 18th of June 1913 Kishen Singh, the decree-holder, had filed an affidavit in which he stated that the property was subject to certain encumbrances and the second encumbrance set out by him was the mortgage executed by Bijai Indar Singh in favour of Mangal Sen for Rs. 8,000 registered on the 10th of November 1906. It is therefore evident that any bidder at the auction sale would be well aware that he was bidding for property which was at all events possibly encumbered by that mortgage.

5. On the 20th of July 1914, mauza Mirpur was sold to Ganeshi Lal. He gave for it the sum of Rs. 2,900. The alleged value of the property, free of encumbrances, has been stated to be Rs. 70,000 and there is evidence to show that the net annual profits were at least Rs. 1,800. And later when, on the 20th of August 1921, this very property was put up to auction in execution of the decree of Jaideo and others, heirs of Mangal Sen, Roshan Singh purchased it for Rupees 45,000, subject to an encumbrance of Rs. 16,000, and deposited the whole of the purchase money, Subsequently an application was made by Ganeshi Lal, the defendant in this case, that the sale should be set aside, and it was in fact so set aside; but on the question of value it would appear that Roshan Singh was willing to pay a price in excess of Rs. 60,000 for this share in mauza Mirpur. Notwithstanding the engagement which Sher Singh had entered into by the document of the 19th of May 1914, he did not pay the Rupees 17,300 to Mangal Sen and Mangal Sen instituted a suit for sale which was decreed on the 14th of September 1918. Ganeshi Lal was impleaded in this suit as Defendant No. 4 and raised the defence that Sher Singh, who was joined as defendant No, 3 was liable to satisfy the plaintiff's debts, as he had purchased Kharia Gurdeo from the mortgagor and had by the terms of his purchase undertaken to discharge the mortgage held by Mangal Sen. Ganeshi Lal claimed therefore that in the event of a decree being passed the decretal debt should in the first instance be satisfied, as far as possible, by sale of kheria Gurdeo and that Mirpur, purchased by him (Ganeshi), should not be brought to sale unless it transpired that the entire debt could not be discharged by sale of Kheria Gurdeo, The Subordinate Judge on the issue raised by this pleading held that there was no equity in favour of Ganeshi Lal and that as all the defendants were subsequent purchasers of the mortgaged property, the mortgagee was entitled to sell as he chose.

6. Mangal Sen having obtained a decree took out execution and in the execution proceedings Ganeshi Lal again raised the plea which he had advanced by way of defence to the suit. That plea was rejected by the execution Court and Ganeshi Lal then brought a suit (No. III of 1921) against the representatives of Sher Singh (Charan Singh and others) asking for a declaration that the share be in M. Kheria Gurdao was liable to do sold before any recourse could be had to M. Mirpur. That suit failed (see the judgment at pp. 77-79 of our record) the Subordinate Judge holding (to quote his own words, as follows:

It is true that defendants 1st, (i.e., the representatives of Sher Singh) undertook to pay the decree of Kishen Singh, but they say that the existence of Hazari Lal's decree was concealed from them and so they had refused to satisfy the decree. Anyhow that is a matter between Bijai Indar Singh and the defendants 1st set, and plaintiff has no right to make equity on that score. His clear remedy is to satisfy the decree of the defendant 2nd set (i.e., the representatives of Mangal Sen) and then to sue for contribution.

7. On the 20th August 1921 both these properties, Kheria Gurdeo and Mirpur, were sold in execution of Mangal Sen's decree, and on the 19th of September 1921 Sher Singh, in order to save M. Kheria Gurdeo, satisfied the decree by payment of Rs. 31,939. The effect of this payment was to set aside the sale which had taken place in execution and to free M. Mirpur from any claim under Mangal Sen's decree. It is in respect of that payment that the heirs of Sher Singh have brought this suit for contribution, the basis of their claim being that both properties stood proportionately liable to answer for the principal money and interest due under Mangal Sen's mortgage of the 8th of November 1906. This case was founded on the provisions of Section 82 of the Transfer of Property Act.

8. It was further pleaded that the question of the liability of M. Mirpur to contribute was res judicata between the parties in view of the decisions: (1) in the suit brought by Mangal Sen (Suit No. 146 of 1918); (2) in the execution proceedings which followed on that suit; (3) in the declaratory suit (No. III of 1921) already referred to. The defendant resisted the claim by pleading that the plaintiffs had no right to claim contribution by reason of the terms of the sale deed, executed in favour of Sher Singh on the 19th of May 1914, whereby the latter was bound to satisfy the claim of Mangal Sen on his mortgage-a sum of Rs. 17,300 having been left with him for that purpose. It was also denied that the question of the liability of M. Mirpur to contribute to the mortgage-debt was res judicata.

9. And, lastly, it was contended that when Bhola Nath purchased Kheria Gurdeo, on the 21st May 1914, in execution of decree, he did so as banamidar for Sher Singh, and that, consequently, the subsequent transfer of this property by the sale deed, executed on the 16th of April 1915, by Bhola Nath in favour of Sher Singh, conferred no fresh title upon the latter.

10. The suit was dismissed in the Court below. The Subordinate Judge held that the sale deed of the 19th May 1914, was binding upon the plaintiffs and that they had no right to claim contribution because upon the terms of that deed Sher Singh was under an obligation to discharge the debt due on, Mangal Sen's mortgage and that this subsequent payment of Rs. 31,939 in satisfaction of Mangal Sen's decree, was nothing more than the discharge of that obligation. A sum of Rs. 17,300, sufficient to satisfy the claim of Mangal Sen at the date of the sale in May 1914, had been left with Sher Singh, and he having failed to pay off Mangal Sen then, as he was bound to do, the plaintiffs, his representatives, could not seek contribution in respect of the large sum which, by reason of Sher Singh's default, had become due to Mangal Sen when he sued later to enforce the mortgage.

11. The Subordinate Judge further held that Bhola Nath, when he purchased Kheria Gurdeo on the 21st May 1914, was a benamidar for Sher Singh, and the subsequent sale by Bhola Nath to Sher Singh, on the 18th April 1915, gave Shar Singh no new title. And he also decided that the question of the liability of M. Mirpur to contribute to the mortgage debt for which Mangal San obtained his decree was not res judicata.

12. These findings are attacked here in appeal and it is contended that on the facts, as established, the defendant had in law no answer to the plaintiff claim.

13. The law which declares the liability of several properties mortgaged to secure one debt is contained in the first clause of Section 82 of the Transfer of Property Act. It is there laid down that in the absence of a contract to the contrary, the several properties mortgaged are liable to contribute rateably to the debt secured by the mortgage, after deducting from the value of each property the amount of any other incumbrance to which it is subject at the date of the mortgage. It follows, therefore, that unless there was a contract to the contrary, the two items of property with which we are concerned were liable to contribute rateably to the mortgage debt in favour of Mangal Sen.

14. It has been judicially held that the expression a contract to the contrary' in Section 82 means a contract between the mortgagor and mortgagee: see the decision in Ramabhadrachar v. Srinivasa, Ayyangar [1900] 24 Mad 85; and if that is a correct statement of the law, it follows that in the present case Section 82 is left to its full operation, for it is not pretended that there ever war any contract between Bijai Indar, the mortgagor, and Mangal Son, his mortgagee, that the two properties were to be liable in any other manner than that contemplated by the section; and neither Sher Singh nor Ganeshi Lal, as purchasers subsequent to the mortgage, could, as against Mangal Sen set up a case that the properties were not rateably liable to contribute to his debt. Prima facie, therefore, Ganeshi Lal is not entitled in this suit to maintain that the property purchased by Sher Singh was liable to the full extent of its value to be taken in satisfaction of Mangal Sen's decree.

15. But the plea put forward by Ganeshi Lal was that by virtue of the term of his purchase from Bijai Indar, Sher Singh was liable to satisfy the entire mortgage debt of Mangal Sen out of that portion of the purchase, money which was left with him for the purpose and that if he had done what he was legally obliged to do the result would have been that M. Mirpur would have stood free of the mortgage and could not afterwards have been sold in execution of Mangal Sen's decree. And so it has been argued before us that the plaintiffs have no right to enforce contribution. It is said that Sher Singh, when he satisfied the mortgage decree, was paying not his own money, but the money of Bijai Indar, which had been left with him to discharge the mortgage. The defendant by raising these pleas is clearly claiming for himself the benefit of a contract to which he was no party. The obligation to pay off the mortgage arose out of the agreement for sale entered into between Bijai Indar and Sher Singh. That was a personal obligation which Bijai Indar as vendor might enforce against his purchaser, but it cannot be pleaded or enforced by Ganeshi Lal who was a stranger to the contract. Ganeshi Lal bought the share in Mirpur subject to the mortgage in favour of Mangal Sen and he cannot escape liability by pleading the terms of the sale deed executed in favour of Sher Singh.

16. It has been argued before us that Ganeshi Lal has, as a representative of Bijai Indar, become entitled to the benefit of the contract; but that is not so. He did, no doubt, by his purchase in execution acquire the right, title and interest of Bijai Indar in the share of M. Mirpur, which was sold, but he could not thereby acquire the benefit of any personal covenant in favour of Bijai Indar arising out of the sale in favour of Sher Singh. The sale gave rise to no covenant attaching to the land of M. Mirpur which could pass upon a sale of that property.

17. The law on the subject is well established, and we need only refer to the decision of their Lordships of the Privy Council in the case of Jamna Das v. Ram Autar [1911] 34 All 63 which affirmed the judgment of this Court: Jamna v. Ram [1909] 31 All 352. That was a case in which a mortgagee brought an action to enforce against a purchaser of the mortgaged property an undertaking which he had entered into with his vendor. It was held that the mortgagee had no right to avail himself of the undertaking. Ha was no party to the sale and the purchaser entered into no contract with him.

18. The same is the case here. When Sher Singh, in May 1914, entered into a contract with Bijai Indar for the sale of Kheria Gurdeo, he certainly did not make any contract with Ganeshi Lal who at that time was a complete stranger to the property. Nor, as has already been said, did he create any obligation the benefit of which could pass or has passed to Ganeshi Lal. Dr. Agarwala, in the course of his argument on behalf of the respondent, has put forward a contention based upon the language of Section 55, Sub-section (5), Clause (b) of the Transfer of Property Act. He claims that the sale of the 19th May 1914, was a sale of Kheria Gurdeo free from incumbrance and that consequently the sum of Rs. 17,300, left with Sher Singh for redemption of Mangal Sen's mortgage was a portion of the purchase money which really belonged to the vendor Bijai Indar. And he argues that when, later on, Sher Singh was paying off the mortgage-decree he was doing so with Bijai Indar's money and cannot be heard to say that the money was his own so as to entitle him to claim contribution against Ganeshi Lal.

19. In the first place we cannot accept this view of the sale of the 19th May 1914. The property was not being sold free of incumbrance as a reference to the language of the sale deed will clearly show. What was stated was that the property was subject to certain mortgages and that money sufficient to satisfy those mortgages was being left with the purchaser. It is true that there are words declaring that the property sold is 'free from all kinds of claims, hypothecation liens and incumbrances' inasmuch as money was being left with the purchaser to discharge the incumbrances named, but it is quite clear that at the time the property passed under this deed it was incumbered. That fact was expressly mentioned, and so the sale was in reality a sale of property subject to incumbrances. The same view was taken of a similar transaction in the case of Jamna Das v. Ram Outer Pande AIR 1916 All 232.

20. Section 55, Sub-section (5), Clause (b) has therefore, no application to this transaction.

21. In the next place even if we were to assume that it had the case of the respondent is not advanced in any way. He cannot be heard to say that the money paid by Sher Singh to satisfy the mortgage-decree was purchase money belonging to Bijai Indar; to allow him to say so would be allowing him to take advantage of a term of a contract to which he was no party. Sher Singh paid the money into Court and it is no concern of Ganeshi Lal whose the money was. If it was Bijai Indar's money, he can be left to make whatever claim he chooses. The learned Subordinate Judge in coming to his decision relied upon the case of Muhammad Abbas v. Muhammad Hamid [1911] 9 ALJ 499. That was a case in which two properties, X and Y, were subject to various mortgages. Of these X was sold to the plaintiffs with whom was left sufficient money to discharge all the incumbrances that existed on X and Y. Subsequently by arrangement between these plaintiffs and their vendors, the latter, by taking some money from the plaintiffs, agreed to pay off some of the incumbrances, the plaintiffs being liable to pay off the others. After this the Y property was sold to the defendants free of incumbrances' in spite of the fact that neither the vendors nor the plaintiffs had paid off the incumbrances under the arrangement just mentioned. The mortgagee brought a suit for sale and having obtained a decree proclaimed portion of X and Y for sale. In order to prevent a sale the plaintiffs paid up the decree and sued the defendants (the words of property Y) for contribution. It was held that the suit could not succeed and that the defendants were entitled to hold the property free from liability to contribute to the mortgage debts. This decision appears to have proceeded upon the consideration that the vendors had sold property Y to the defendants free of incumbrances and that after the date of the sale to the plaintiffs it was not the intention 'of any of the parties concerned' that the shares in the two villages should contribute rateably to the mortgage debts, The facts of the case were peculiar and are very different from those we have to consider here. The defendant's vendors had by the arrangement referred to above made themselves liable to discharge some of the incumbrances and without doing so had sold property Y to the defendants as being free from incumbrance. In the case now before us Bijai Indar, the vendor, did not assume any liability for the mortgage debt due to Mangal Sen; that liability was left upon the purchaser Sher Singh. And again there was no sale to Ganeshi Lal free of incumbrance. On the contrary, it is clearly established that he bought Mirpur with knowledge of Mangal Sen's mortgage upon it; in fact he bought and knew that he was buying only the equity of redemption for which he paid a sum of Rs. 2,900 only which was nothing like the value of the property free from incumbrance. The case is altogether different from the one just referred to and it is not possible for Ganeshi Lal to claim here the equity which was raised on behalf of the defendants in the other case.

22. We are satisfied that the judgment of the Court below on this part of the case is erroneous and that the defendant Ganeshi Lal had no answer to the claim for contribution on any of the grounds just referred to. The case was correctly put by the Subordinate Judge who decided the declaratory suit (No. III of 1921) between the present parties. Ganeshi Lal had no right to claim any equity based upon the contract entered in to between Sher Singh and Bijai Indar on the 19th May 1914.

23. Next as regards the question of res judicata. Here again we must differ from the judgment of the lower Court. The decision in the declaratory suit we have just mentioned (No. III of 1921) is a bar to the defence raised in this suit by Ganeshi Lal. In that suit, Ganeshi Lal as plaintiff asked for a declaration of his right to throw the entire mortgage debt upon M. Kheria Gurdeo and to hold M. Mirpur free of all claim under Mangal Sen's mortgage which could be satisfied by the sale of Kheria Gurdeo. The Subordinate Judge held that he had no such right and that all he was entitled to was a claim to contribution in case he satisfied the mortgage decree. That settled matters between Ganeshi Lal and the present plaintiffs and the question could not be agitated again in the present suit.

24. There remains only the finding of the Court below to the effect that when Bhola Nath purchased Kheria Gurdeo at auction on the 21st May 1914 he purchased benami for Sher Singh and that the sale purporting to have been made by Bhola Nath in favour of Sher Singh on the 16th April 1915 gave no new title to Sher Singh. In view of our decision on the other questions recorded above it is not necessary for us to give our opinion on this matter. We have dealt with the case as if Sher Singh's only title to this property arose out of the sale deed obtained by him on the 19th May 1914 as alleged by the defendant.

25. We think it proper, however, to observe that were we called upon to decide this question we should not be able to accept the finding of the Court below. (The judgment then discussed the evidence and held that Bholanath was not a benamidar for Sher Singh and proceeded.) For these reasons we are of opinion that the right of the plaintiffs to claim contribution is established and that their appeal must prevail.

26. The only question left to be determined is the amount to which the plaintiffs are entitled by way of contribution. To enable us to decide this question it is necessary to remit an issue to the Court below as follows:

Having regard to the respective values of the properties in Mouza Kheria Gurdeo and Mouza Mirpur on the 8th November 1906, when the mortgage to Mangal Sen was made, to what sum are the plaintiffs entitled by way of contribution in respect of the payment of Rs. 81,939 made by Sher Singh on the 19th September 1921.

27. The parties will produce any evidence they think proper before the Subordinate Judge, who will return his finding within two months from the receipt of this order, and on receipt of the findings ten days will be allowed for filing objections.


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