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Babu Lal Vs. Jalakia - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported inAIR1917All859; 37Ind.Cas.343
AppellantBabu Lal
RespondentJalakia
Cases ReferredHar Pershad Lal v. Dalmardan Singh
Excerpt:
.....with symbolical possession--actual possession by purchaser at second mortgagee's sale--conflict of titles--right of first mortgagee purchaser--suit for recovery of mortgage amount--nature of claim--position of parties--equities --relief--transfer of properly act (iv of 1882), sections 74, 75--civil procedure code (act v of 1908), order xxxiv, rules 11, 12--appeal, second--limitation, plea of, whether can be raised for first time in second appeal. - - the plaintiff was given formal possession on her auction-purchase, but found babu lal in actual possession and failed to dispossess him. a further point, which i do not think was clearly taken on behalf of the appellant, but which may have perhaps required consideration, is whether babu lal would be entitled to plead that the plaintiff's..........it is contended that the only remedy open to the present plaintiff would be by way of a second suit for sale on her mortgage and that such a suit would now be barred by limitation. it is further contended that the present suit as brought is in substance one for foreclosure on the mortgage of october 16th, 1893, and that this is also barred by limitation. a further point, which i do not think was clearly taken on behalf of the appellant, but which may have perhaps required consideration, is whether babu lal would be entitled to plead that the plaintiff's suit as brought on august 19th, 1910, was even then barred by limitation and what would be the effect of such a plea, if raised.10. the legal questions involved are of some complexity and have given rise to differences of opinion in.....
Judgment:

Piggott, J.

1. This second appeal arises out of the following facts:

On October 16th, 1893, Musammat Durga mortgaged a certain house to the predecessors-in-title of Musammat Jalakia, the present plaintiff-respondent.

Sometime in the year 1907, Musammat Durga again mortgaged the same house to the defendant-respondent Kedar Nath.

2. On August 19th, 1910, the plaintiff sued on her mortgage, without impleading Kedar Nath. She obtained a preliminary decree for sale on April 21st, 1911, the defendant mortgagor being allowed the usual period of six months in which to redeem. The decree was made absolute in due course, the house was brought to sale and purchased by the plaintiff herself on July 30th, 1912.

3. In the meantime Kedar Nath filed a suit on his mortgage, without impleading the prior mortgagee. The suit was filed on June 20th, 1911, and decreed on August 13th, 1911, only fifteen days being allowed to the mortgagor in which to redeem. The house was brought to sale under this decree on February 27th, 1912, (there seems to be a clerical error in the plaint as to the date of this sale) and was bought by the defendant-appellant, Babu Lal. The plaintiff was given formal possession on her auction-purchase, but found Babu Lal in actual possession and failed to dispossess him. Hence the present suit, brought against Babu Lal and Kedar Nath. The main relief claimed is that the defendants be ordered to pay to the plaintiff the sum of Rs. 627 due on the mortgage of 1893, with costs and future interest, and that in case of default the plaintiff may be put in possession of the disputed house, and all the rights of the defendants may be extinguished. There is an alternative prayer for any other relief which the Court may consider proper and it is more particularly suggested that the plaintiff might be given a decree for possession by redemption of Kedar Nath's mortgage.

4. The Court of first instance, the Munsif of Agra, dismissed the suit, but the District Judge of Agra, on appeal, has given the plaintiff a decree for the first relief sought, only awarding a slightly lesser amount than that claimed. Babu Lal, the auction-purchaser, has alone appealed, but Kedar Nath has appeared to support the appeal, and has further taken a verbal plea to the effect that he ought to be exempted from costs throughout.

5. The following further facts appear to be found by the lower Appellate Court. The plaintiff's allegation that she did not in fact know of the existence of Kedar Nath's mortgage when she filed her suit of August 19th, 1910, would seem to be accepted as true. Her decree was obtained after contest, and in the teeth of a plea that the mortgage of October 16th, 1893, had bean completely paid off. The decree in favour of Kedar Nath was a consent decree. The learned District Judge infers from this fact, from the circumstances under which the suit was instituted and from the narrow period allowed for redemption that the parties to this suit were acting in collusion, that they were both aware, not only of the existence of the plaintiff's mortgage, but of the suit brought and the preliminary decree obtained on the same and that they acted with the deliberate purpose of embarrasing the present plaintiff by bringing about a sale under the second mortgage before the sale on the first mortgage could be effected. He also finds that the auction-purchaser Babu Lal, if not a mere benamidar for Kedar Nath, was acting in collusion with him and had knowledge of the prior mortgage and of the litigation thereon.

6. These findings are not traversed in Babu Lal's petition of appeal to this Court.

7. The first point argued on his behalf was that due execution and attestation of the mortgage of October 16th, 1893, was not proved in the present case. The marginal witnesses are dead. The plaintiff produced a witness named Kallu Ram. He deposes that he was present when the deed was executed, that the executant put her mark on the deed in his presence and in that of the marginal witnesses and that the said marginal witnesses then signed the deed in his presence. It is contended that the lower Appellate Court could not legally accept Kallu Ram's evidence as proving execution and attestation because Kallu Ram is illiterate. There is no question as to the identity of the document, because it was read over to Kallu Ram and he purported to remember its terms. In my opinion an illiterate witness is just as much entitled to depose that the, to him, illegible black marks on the paper are the signatures of the marginal witnesses which they affixed in his presence as he is to depose that he recognized the mark on the paper which represents the execution of the deed by the illiterate mortgagor. We are precluded in second appeal from discussing the credibility of Kallu Ram's evidence. I hold that it is sufficient, if believed, to prove both execution and attestation according to law.

8. The next question to be considered is whether, on the facts found, the plaintiff is entitled to any, and if so to what, relief. The case for the appellant may fairly be stated thus:

9. The suit as brought is virtually one for foreclosure, and the plaintiff has no right to foreclose the auction-purchaser at the sale held under the second mortgage. A puisne mortgagee has not only the right to redeem the prior mortgage, he has also a right in law to bring the property to sale subject to the prior mortgage. If he had been impleaded, as he ought to have been, in the suit brought under the prior mortgage and had refused to exercise his right of redemption he would not have been foreclosed; the mortgaged property would have been put to sale, and he would have had the first claim on the surplus sale price, in the event of this exceeding the amount due to the prior mortgagee. From this it is contended that the only remedy open to the present plaintiff would be by way of a second suit for sale on her mortgage and that such a suit would now be barred by limitation. It is further contended that the present suit as brought is in substance one for foreclosure on the mortgage of October 16th, 1893, and that this is also barred by limitation. A further point, which I do not think was clearly taken on behalf of the appellant, but which may have perhaps required consideration, is whether Babu Lal would be entitled to plead that the plaintiff's suit as brought on August 19th, 1910, was even then barred by limitation and what would be the effect of such a plea, if raised.

10. The legal questions involved are of some complexity and have given rise to differences of opinion in various High Courts. Probably the best discussion of the entire question is to be found in the case of Mulla Veetil Seethi Kutti v. Korambath Paruthooli Achathan Nair 9 Ind. Cas. 513 : (1911) 1 M. W. N. 165 : 21 M. L.J. 213 : 9 M.L.T. 431. : but it is more immediately in point to, consider the published decisions of our own Court. The case most nearly in point is that of Ram Prasad v. Bhikari Das 26 A. 464 at p. 466 : A. W. N. (1904) 108. which applies and expounds the principles laid down in two older rulings, Hargu Lal Singh v. Gobind Rai 19 A. 541 : A.W.N. (1897) 154 : 9 Ind. Dec. (N.S.) 350. and Madan Lal v. Bhagwan Das 21 A. 235 : A.W. . (1890) 41 : 9 Ind. Dec. (N.S.) 859. I feel little doubt that whoever was responsible for the drafting of the plaint in the present suit had the decision in Ram Prasad v. Bhikari Das 26 A. 464 at p. 466 : A.W.N. (1904) 108. before him and was confident that he had brought the plaintiff's claim within the scope of the principles there laid down. It is true that the facts in the two cases are not quite the same, in that the defendant in Earn Prasad v. Bhikari Das 26 A. 464 at p. 466 : A.W.N. (1904) 108. had purchased at auction sale held in execution of a simple money-decree, and had done so before any suit was instituted on the original mortgage. It seems to me, however, that these differences of fact only tend to make the present plaintiff's case a stronger one; and I observe that the principles laid down in Ram Prasad v. Bhikari Das 26 A. 464 at p. 466 : A.W.N. (1904) 108. have been approved, and applied to a state of facts practically identical with those now before us, by a majority of the learned Judges who decided the case of Her Pershad Lal v. Dalmardan Singh 32 C. 91 : 9 C.W.N. 728 : 1 C. L.J. 371.

11. It seems clear to me, therefore, that the present suit is neither a suit for sale on the mortgage of October 16th, 1893, nor a suit to foreclose that mortgage: it is not a suit on that mortgage at all. It is a suit brought after that mortgage had been extinguished upon a different cause of action, namely, the plaintiff's failure to obtain actual possession of the properly purchased at the sale of July 30th, 1912. The plaintiff-respondent and the defendant-appellant Babu Lal both claim to have bought the very same property. Babu Lal's purchase was first in point of time; but he purchased at a sale held on a decree obtained by a puisne mortgagee in a suit in which the prior mortgagee was not impleaded. What was put up for sale and purchased by Babu Lal was the equity of redemption, subject to the rights of the prior mortgagee. Babu Lal has a clear right to redeem the mortgage; and this right is not affected by anything which took place in the course of or in consequence of the plaintiff's suit on her mortgage to which the puisne mortgagee was no party.

12. We are dealing with a case in which legal complications have arisen in consequence of an initial departure from the plain course prescribed by the law. The plaintiff was bound by law to implead the puisne mortgagee in the suit instituted on August 19th, 1910. The failure to do this has led to the present litigation; but the necessary parties are now before the Court, and the duty of the Court is simply to work out the equities between them. On the facts found, I hold that the appellant Babu Lal is entitled to nothing more than is given him by the decree of the Court below, namely, an opportunity of paying off the prior mortgage. If he declines this opportunity he certainly has no right to hold the property in suit clear of that encumbrance. There seems to me no valid basis for an order putting up the property to sale again: the right of sale possessed by each of the mortgagees has been exercised by them, and exhausted. All that remains to be determined is the question, of the respective rights and liabilities of the rival auction-purchasers.

13. In arriving at this conclusion I have disposed of the plea of limitation in the only form in which it has ever been taken by the appellant himself. The present suit is not brought oh the mortgage of October 16th, 1893, but upon a cause of action long subsequent, and is well within limitation in respect of the said cause of action. I have felt some little difficulty about a point which was suggested for the first time in the course of arguments before us; could Babu Lal be permitted to plead that the prior mortgagee's suit was barred by limitation on the date on which it was instituted, viz., on the 19th of August 1910? If Kedar Nath had been a defendant in that suit he could presumably have taken the point; there seems some plausibility about the suggestion that it is open to Babu Lal to do so.

14. One answer is, however, sufficiently obvious. The plea, if raised, would depend for its determination upon a question of fact, namely, the truth or otherwise of the plaintiff's assertion that there had been payments on account of interest for a number of years subsequently to the date of the mortgage. It would be contrary to sound principles to allow a defendant to raise for the first time in second appeal a plea, even one of limitation, which could not be determined without the taking of fresh evidence upon a question of fact not raised at all in the Courts below.

15. Apart from this, I incline to the opinion that Babu Lal, holding under a transfer effected while the suit instituted on August 19th, 1910, was pending, cannot be permitted to call in question the result of that suit so as to affect the rights acquired by the plaintiff as a result of that suit. A plea which might have been open to Kedar Nath, if there had been no transfer pendente lite, is not necessarily open to Babu Lal.

16. I would, therefore, dismiss this appeal with costs.

Lindsay, J.

17. I agree with my learned colleague in holding that this appeal should fail. I have nothing to add to what he has said regarding the question of proof of the plaintiff's mortgage but I desire to offer a few remarks with respect to the other question for decision, namely, the nature of the relief, if any, which can be granted to the plaintiff.

18. The case for the appellant is that she is entitled to no relief at all, the argument being that her only remedy was a second suit for sale on her mortgage, a remedy which she has now lost owing to the operation of the law of limitation.

19. On the facts the present case is in all respects similar to that of Har Pershad Lal v. Dalmardan Singh 32 C. 891 : 9 C.W.N. 728 : 1 C. L.J. 371., and I agree entirely with the opinion of Mitra, J., that in the circumstances there was no necessity for the plaintiff here to bring another suit for sale.

20. We are dealing here with a conflict of title between two parties and the question is, which of the two titles is to carry with it the right to possession and upon what terms should that right be awarded to the party entitled.

21. It seems clear to me that the rights of the parties are not to be determined solely upon a consideration of the rights which accrued to the first and second mortgagees under their respective mortgages. In each case there has been a decree on the mortgage followed by a sale of the property and in each case the parties have by virtue of their respective purchases obtained qualified titles to the property, the nature of which must be examined for the purpose of awarding possession. It is, I think, impossible to ignore the fact that these sales have taken place and to deal with the matter in issue as if they had not in fact occurred. The title of either party is immediately traceable to his purchase in execution and reference to the rights under the mortgages is only necessary for the purpose of ascertaining the equities existing between them; each has an imperfect title acquired by purchase and we have to determine which has the stronger equity in his favour. As for the title of the plaintiff it cannot, I think, be argued that she acquired nothing under her purchase. It will not, I imagine, be denied that had she joined the subsequent mortgagee as a defendant in her suit, she would by her purchase have acquired an absolute title to the property including the right to possession. To what extent then is her title defective by reason of her omission to implead the puisne mortgagee? Only to the extent that her title as owner is qualified by a right of redemption which was vested in the second mortgagee and which has now passed to the appellant as purchaser under the decree obtained on the second mortgage.

22. That is the only right which the second mortgagee could have enforced against her as prior incumbrancer, for the right of the subsequent mortgagee to bring the equity of redemption to sale to satisfy his claim is a right which is exercised against the mortgagor only. The right of the first mortgagee to have the property sold is in no way affected by the second mortgagee's right of sale. As between the first and second mortgagees (or their representatives), the only right of the latter is one of redemption.

23. As for the title of the auction-purchaser under the second mortgage, that too is circumscribed by the liability to redeem the earlier mortgage. The title could only become absolute by a discharge of the prior incumbrance.

24. It is true that this title was in point of time acquired prior to the title obtained by the first mortgagee under her purchase. It is also true that it has been laid down in a number of cases, beginning with Nanack Chand v. Teluckdye Koer 5 C. 265 : 5 Ind. Jur. 81 : 4 C. L.R. 358 : 2 Ind. Dec. (N.S.) 779. and Dirgopal Lal v. Bolakee 5 C. 269 : 5 Ind. Jur. 82 : 2 Ind. Dec. (N.S.) 782., that the title which is prior in point of time must prevail. But as was pointed out both by Brett, J., and Mitra, J., in Har Pershad Lal v. Dalmardan Singh 32 C. 891 : 9 C.W.N. 728 : 1 C. L.J. 371., those cases were pure cases in ejectment to which the provisions of Section 85 of the Transfer of Property Act did not apply. There were no prayers in those suits for redemption or for the re opening of the sales held under the first mortgages: the plaintiffs asked for possession and no more. It cannot, therefore, be held in the present case that the purchaser under the second mortgage has a superior title merely on the ground that he purchased first.

25. We have it then that the purchaser under the second mortgage has acquired the property subject to the first mortgage, and it is difficult to see on what ground of equity he can be permitted to say that he is now entitled to hold the property discharged from that liability, for that is in effect what is now claimed on his behalf. Is it not more proper to say that the title of the plaintiff in this case is the stronger one and that she is entitled to enforce it and to ask for possession, provided she gives the auction-purchaser under the second mortgage the opportunity to redeem, which the second mortgagee would have had if he had been joined as a defendant in the suit on the first mortgage

26. This way of dealing with the case, as remarked by Mitra, J., in the judgment above cited does full justice to the respective claims of the parties. The defendant, if he desires to continue in possession, is bound to satisfy the mortgage-debt which was imposed en the property before any right accrued in his favour, and the second mortgagee who is now represented by the auction-purchaser could not have had any greater benefit from a decree for sale made in his favour. I hold, therefore, that there was no need for the plaintiff to bring a second suit for sale and that no question of limitation arises as the qualified title, which the plaintiff is entitled to enforce upon the condition of allowing an opportunity to redeem to the purchaser under the second mortgage, only came into existence on the date of her purchase in execution. I would dismiss the appeal.

27. By The Court.---Order of the Court is that the appeal is dismissed with costs.


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