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Nandan Sahu and anr. Vs. Fateh Bahadur Singh and ors. - Court Judgment

LegalCrystal Citation
Subject Property
CourtAllahabad
Decided On
Reported inAIR1940All104
AppellantNandan Sahu and anr.
RespondentFateh Bahadur Singh and ors.
Excerpt:
.....the date of the sale, and this was subject only to any possible right that a coparcener of the mortgagor might have had to bring a suit for a declaration on the ground of want of legal necessity. the sale proceeds satisfied the prior mortgage and left a considerable amount as surplus. so far as defendants second set are concerned, the plaintiffs have clearly no right of suit against them......khoriya and chaukonia. in both these mortgage deeds the time fixed for payment was one year.2. the prior mortgagees instituted suit no. 329 of 1932 on foot of their mortgage of 6th september 1909 and impleaded as defendants the mortgagor, fateh bahadur singh, as well as the puisne mortgagees, namely the plaintiffs-appellants. the suit was decreed by the trial court on 4th april 1923 and the decision was affirmed by this court on 11th january 1927. in the meantime, the puisne mortgagees had also put their mortgage in suit in 1923 and the number of their suit was 325 of 1923. this suit was decreed on 7th april 1924 and a final decree for sale was passed on 24th february 1925. this decree was executed by the puisne mortgagees decree-holders that is, the plaintiffs of the present suit, and.....
Judgment:

Verma, J.

1. The suit which had given rise to this appeal was filed by the appellants, along with three other persons, who have been impleaded as pro forma respondents to this appeal, against two sets of defendants, praying primarily for a money decree for Rs. 13,848 against defendant first party, Fateh Bahadur Singh, and alternatively, if the Court did not deem it fit to decree the suit against defendant first party, for a decree for the recovery of that amount against defendants second party. The Court below has dismissed the suit against both sets of defendants. Fateh Bahadur Singh, defendant first party, executed a deed of simple mortgage on 6th September 1909 in favour of the defendants second: party, or their predecessors-in-title, hypothecating shares in two villages, Karaili and Semra, in lieu of an advance of Rs. 399. About two years later, on 26th May 1911, Fateh Bahadur executed another deed of simple mortgage in favour of plaintiffs 1 and 2 and Ram Dihal Sahu, father of plaintiffs 3 and 4, and Kalap Nath Sahu, father of plaintiff 5, in lieu of an advance of Rs. 1700 and hypothecated shares in the, two villages which he had already mortgaged to the defendants second party and shares in two other villages, namely Khoriya and Chaukonia. In both these mortgage deeds the time fixed for payment was one year.

2. The prior mortgagees instituted Suit No. 329 of 1932 on foot of their mortgage of 6th September 1909 and impleaded as defendants the mortgagor, Fateh Bahadur Singh, as well as the puisne mortgagees, namely the plaintiffs-appellants. The suit was decreed by the trial Court on 4th April 1923 and the decision was affirmed by this Court on 11th January 1927. In the meantime, the puisne mortgagees had also put their mortgage in suit in 1923 and the number of their suit was 325 of 1923. This suit was decreed on 7th April 1924 and a final decree for sale was passed on 24th February 1925. This decree was executed by the puisne mortgagees decree-holders that is, the plaintiffs of the present suit, and the property mortgaged was put up for sale and was purchased by the mortgagees, decree-holders, themselves on 29th June 1927. It may be mentioned that the final decree in their favour was for the recovery of a sum of Rs. 33,476-14-0 and the property was purchased by them in satisfaction either of the entire decretal amount or of the major portion of it. In para. 5 of the plaint of the suit out of which this appeal arises it is stated that the plaintiffs 'entered into possession' of the property 'by means of delivery of possession on 28th December 1928.' In the meantime, the mortgagor's adopted son, Jogendra Singh, had filed a suit for a declaration that the mortgage deed executed by his father, Fateh Bahadur Singh, on 26th May 1911 and the decree passed on foot of it, as well as the auction sale held in execution of that decree, were not binding on him on the ground that there was no legal necessity for the mortgage. This suit was dismissed by the trial Court on 16th April 1928 and Jogendra Singh filed First Appeal No. 252 of 1928 in this Court. The prior mortgagees, who had obtained a decree on foot of their mortgage in Suit No. 329 of 1922, put their decree into execution about this time and the property, which the present plaintiffs had purchased on 29th June 1927 in execution of their own decree passed on foot of the puisne mortgage, was advertised for sale. In order to avert this sale, the present plaintiffs paid a sum of Rs. 10,025-10-0 to the prior mortgagees on 23rd September 1929 and thus freed the property from the charge of the prior encumbrance. On 12th April 1932 this Court allowed the appeal of Jogendra Singh in part and gave him a decree for a declaration

that the decree dated 7th April 1924 is valid for recovery of Rs. 1700 and simple interest thereon at the rate of Rs. 18 per cent, per annum calculated up to 7th October 1924, the date fixed for payment by that decree and pendente lite interest, as directed in the aforesaid decree, up to the date of realization.

3. It was further declared that:

The final decree which was subsequently passed is also valid for the amount calculated in the manner stated above and capable of execution by sale of the mortgaged property for satisfaction of that amount.

4. It was also decreed that:

The aforesaid decrees are invalid as regards interest in excess of the amount which will be arrived at on calculation in the manner already referred to,

and that

the auction sale held during the pendency of this is affected by the rule of lis pendens and cannot stand.

5. The result was that the present plaintiffs were declared to be entitled to a smaller sum under their puisne mortgage dated 26th May 1911 than the amount for which they had obtained a decree in Suit No. 325 of 1923, and their auction purchase of 29th June 1927 became ineffectual. It may be mentioned here that they have not yet executed their decree for the amount to which they are entitled under the decision of this Court. In October 1932, they filed the suit out of which this appeal has arisen for the reliefs mentioned above. The suit was contested by both sets of defendants. The argument put forward on behalf of the plaintiffs in the Court below, as stated in its judgment, was that the plaintiffs were entitled to a decree under the provisions of Section 69, Contract Act. The Court below has repelled this contention and has dismissed the suit on the ground that the mortgagor, Fateh Bahadur Singh, was not a person 'bound by law to pay' the money due to the prior mortgagees within the meaning of Section 69, Contract Act, its view being that 'the liability that is spoken of in Section 69 relates to the person and not to any property.' The Court below based its decision on the further ground that on 29th June 1927, when the plaintiffs purchased the property in execution of their mortgage decree, the mortgagor's interests came to an end. It also relied on the fact that

any remedy for a personal decree under the prior mortgage had become barred by the time that the present plaintiffs paid the sum of Rs. 10,025-10-0 to the prior mortgagees on 23rd September 1929.

6. Learned counsel appearing for the plaintiff-appellants has challenged the correctness of the view of the Court below that Section 69, Contract Act is restricted to a personal liability and has relied on Mothooranath Chuttopadhya v. Kristo Kumar Ghose (1879) 4 Cal 369 where it was observed that the Section

was intended to include the cases not only; of personal liability, but all liabilities to payments for which owners of lands are indirectly liable, those liabilities being imposed upon the land held by them.

7. He has also cited a number of other cases in which the above decision has been followed. It seems to us that the view expressed in the case mentioned above is well founded and that the contention of the learned Counsel on that point is correct. But that does not dispose of the case. On 23rd September 1929, when the plaintiffs paid the money due to the prior mortgagees, for the recovery of which they have brought this suit, the position was this. They had executed the decree obtained by them in Suit No. 325 of 1923 and, at the auction sale held in those proceedings, had purchased the property themselves. The mortgagor's interest had been extinguished by that sale and purchase, and the ownership of the property had come to be vested in the present plaintiffs. Thus, the property which the prior mortgagees wanted to sell in execution of their decree belonged at that time to the present plaintiffs. It seems to us that in these circumstances it cannot be said that the mortgagor was 'bound by law to pay' the amount which was recoverable by sale of the property in execution of the decree of the prior mortgagees.

8. A large number and variety of cases have been cited by learned Counsel appearing on both sides. It seems to us however that the true view was expressed in the judgment of the Calcutta High Court in Manindra Chandra Nandy v. Jamahir Kumari (1905) 32 Cal 643. That was a case in which the holder of a patni taluq had mortgaged it and the mortgagee had subsequently brought a suit for sale, and in execution of the decree obtained by him, had brought the property to sale and had purchased it himself. In the meantime, the rent due to the zamindar had fallen into arrears and the zamindar had obtained a rent decree and in execution thereof had advertised the patni for sale. The mortgagee, to save the property, paid in the amount of the decree and afterwards sued the mortgagor for the recovery of the amount so paid by him. It was held that the mortgagee was not entitled to the decree prayed for as he was under a legal liability to pay the rent due upon the property at the time of his purchase, as the purchase was subject to the liability of discharging the rent that was then due upon the property, and that Sec. 69, Contract Act, was not applicable. At p. 645 of the report it was observed that at first sight it might, no doubt, appear that the contention that the plaintiff was entitled to maintain the suit under the provisions of Section 69, Contract Act, was well founded:

But, looking into the matter more closely, it would seem that the Section contemplates a case where the person, who makes the payment, is under no legal liability to make it, and he pays the money for another person, who is bound in law to pay. In that case, the former is entitled to call upon the latter to make good the amount that he has paid.

9. It seems to us that a person who purchases property subject to a charge is alone liable to pay it and he is not therefore entitled under Section 69, Contract Act, to recover the amount paid by him from the person who might originally have been liable in respect thereof, either alone or along with the person who has made the payment. Reference may be made to the cases in Rang Lal Sahu v. Kali Shankar (1924) 11 AIR Pat 235 and Mangalathammal v. Narayanswami (1907) 30 Mad 461. The principle of the decision in Habibul Rahman v. Sheonandan Singh (1928) 15 AIR Pat 552, is also the same. The fact that subsequently, as the result of the suit brought by Jogendra Singh, the auction sale of 29th June 1927 has been held to be ineffective and the present plaintiffs have been declared to be mortgagees in respect of the principal amount lent by them together with interest at a reduced rate, cannot affect the question. The plaintiffs acquired by their purchase of 29th June 1927 a good title to the property from the date of the sale, and this was subject only to any possible right that a coparcener of the mortgagor might have had to bring a suit for a declaration on the ground of want of legal necessity. In our opinion, it cannot in these circumstances be said that on 23rd September 1929, Fateh Bahadur Singh, defendant first set, was 'bound by law to pay' the decretal amount of the prior mortgagees.

10. Learned counsel appearing for the plaintiff-appellants has relied on the case in Karan Singh v. Ishtiaq Husain (1921) 8 AIR All 312 and has argued that in justice and equity the plaintiffs are entitled to be reimbursed the money which they paid to prior mortgagees. Now, the facts of that case are very different from the facts of the case before us. There a prior mortgagee had obtained a decree without impleading the puisne mortgagee and had the property sold. The sale proceeds satisfied the prior mortgage and left a considerable amount as surplus. The puisne mortgagee, who also had obtained a decree for sale on his mortgage without impleading the prior mortgagee, applied for payment out of that surplus, but on objection having been taken to such payment by the mortgagors the application was rejected. The puisne mortgagee then proceeded to execute his decree and, in order to avert the impending sale, the person who had purchased the property in execution of the prior mortgagee's decree paid up the decree of the puisne mortgagee, and then brought a suit to recover the amount from the mortgagors. It was held that upon the sale under the prior mortgage the security of the puisne mortgagee was transferred to the surplus sale proceeds and he was entitled to be paid out of that surplus and that the mortgagors acted improperly and contrary to their rights in objecting to such payment and the Court was wrong in rejecting the application of the puisne mortgagee. It was further pointed out that the purchase made by the plaintiff of that suit in execution of the decree of the prior mortgagee was not, as it could not be, subject to the puisne mortgage, and it was held that he was entitled to be reimbursed the money which he paid in discharge of the subsequent mortgages 'for which the defendants were primarily liable.' It seems to us that this case can be of no assistance to the appellants.

11. As already stated, the suit is one for a money decree. The payment made by the appellants and their co-plaintiffs to the prior mortgagees was in respect of a mortgage decree which could be executed only against the property and was thus payment of a sum of money which was recoverable from the property alone. When the plaintiffs made the payment, they had themselves become the owners of that property, and the mortgagor, Fateh Bahadur Singh, defendants first set in this action, had ceased to have any interest in it. There is a mortgage decree standing in favour of the plaintiffs. All that has happened is that the rate of interest has been reduced. No authority has been cited in support of the proposition that a money decree can be passed in these circumstances. We are unable to hold that the plaintiffs are in justice and equity entitled to a money decree against defendant first set. So far as defendants second set are concerned, the plaintiffs have clearly no right of suit against them.

12. Some emphasis has been laid in the course of argument by the learned Counsel for the appellants on the fact that it has been found by the Court below in their favour that the puisne mortgagees, at the time of the execution of their mortgage on 26th May 1911, were not aware of the existence of the prior mortgage. But this to our mind is an irrelevant consideration. On the date on which they made the payment of the sum of Rs. 10,025-10-0 namely on 23rd September 1929, they were fully aware of the existence of the prior mortgage. In fact, they had been impleaded as defendants in the suit of the prior mortgagees. They made the payment with their eyes open and with a full knowledge of the facts. They knew that Jogendra Singh had filed an appeal in the High Court and that it was pending. We consider that the question whether the puisne mortgagees were or were not aware of the existence of the prior mortgage on 26th May 1911 is not material for the purposes of this case. For the reasons given above we hold that the suit was rightly dismissed and that the appeal is without force. Accordingly we dismiss it with costs.

13. It has been represented on behalf of defendants second set, respondents, that separate costs of this appeal should be allowed to them. In our opinion this is not a case in which separate costs should be allowed to defendants second set. No cause of action was alleged in the plaint against them, and although the Court below allowed them separate costs, the decree does not show any pleader's fee for defendants second set, and the total costs awarded to them amounts to the sum of Rs. 4. The position of defendants second set was quite clear from the very beginning, and they need not have incurred any separate costs in this Court.


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