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Sirdar Singh and ors. Vs. Ratan Lal - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported inAIR1914All348; 24Ind.Cas.612
AppellantSirdar Singh and ors.
RespondentRatan Lal
Cases ReferredKhairajmal v. Daim
Excerpt:
.....procedure code (act v of 1908), order xxxiv, rule 14 - joint family property mortgaged by father--mortgage--redemption--mortgagee purchasing equity of redemption in execution of simple money--decree obtained for mortgage debt--right of sons of mortgagor to redeem. - - it was held that it was a well established principle that a purchase by a mortgagee of the equity of redemption in execution of a simple money decree, constitutes him a trustee for the mortgagor and that he does not, unless there is a release of the equity of redemption on other circumstance which in law barred the right of redemption, acquire an irredeemable title. their lordships are reported to have said at page 316 of the report that they 'throw no doubt on the principle, which has been acted on in many oases in..........it himself. about 20 years after, the purchasers of the equity of redemption sued to redeem the mortgage property treating the sale to the mortgagee as a nullity. they failed to implead some of the necessary parties. it was held that the suit must fail for want of proper parties and that the sale to the mortgagee was not void but voidable and could not after the lapse of twenty years be impeached. the facts of the case of kishan lal v. umrao singh 30 a. 146 at p. 149 : a.w.n. (1908) 49 : 5 a.l.j. 121. were as follows : one umrao singh gave a mortgage to one kishen lal. the latter brought a suit on foot of his mortgage, but abandoned his security and asked, for a simple money decree which was granted. the decree-holder then assigned the decree to another person whose name was also.....
Judgment:

Rapique, J.

1. This case has been referred to a Bench of two Judges, as when it came up before a learned Judge of this Court it was stated that whatever his decision may be an appeal would be preferred under the Letters Patent.

2. The question raised in the appeal is, whether the sons who formed a joint Hindu family with their father, can sue to redeem property belonging to the joint family, which has been sold and purchased by the mortgagee at Court sale in a decree obtained against the father in a suit on the mortgage bond given by the father, when the security of the property was released and a simple money decree asked for and granted. The facts which led to the present appeal and the point under discussion are as follows : The plaintiffs-appellants and their father, Nandan Singh, were members of a joint undivided Hindu family. On the 28th September 1893 Nandan Singh alone executed a deed of simple mortgage in favour of one Ratan Lal in lieu of Rs. 99 in respect of some of the joint family property. Ratan Lal brought a suit on foot of his mortgage against Nandan Singh only. He did not implead the sons of the latter and releasing the security of the property asked for a simple money decree which was passed in his favour on September 13, 1898. In execution of his decree Ratan Lal attached the mortgaged property as also some other property of the joint family on November 7, 1898. Both the attached properties were sold on August 22, 1899. Ratan Lal bought the mortgaged property and the other property was purchased by a stranger at the Court sale. On September 26, 1899, the sale in favour of Ratan Lal was confirmed. On the 21st of August 1911 the plaintiffs-appellants, the sons of Nandan Singh, instituted the suit which has given rise to the present appeal in the Court of the Subordinate Judge of Bareilly for redemption of the mortgage of September 28, 1893. They based their claim on the allegations that they and their father were members of a joint undivided Hindu family, that the property sought to be redeemed was joint family property, that they were no parties to the decree of September 13,. 1898, and that the sale to Ratan Lal was voidable in view of Section 99 of Act IV of 1882. They further stated that they had asked Ratan Lal several times out of Court to allow redemption and render an account of the property since his possession as a purchaser but he had declined to accede to their request. The cause of action accrued to the plaintiffs on August 1, 1911,. the date of the last refusal of Ratan Lal and, therefore, they sued for redemption of the mortgage of September 28, 1893, on the payment of Rs. 158 or whatever sum the Court found due and for mesne profits on a rendition of accounts by Ratan Lal since his possession over the property. Ratan Lal resisted the claim on various pleas. He said that there was no subsisting mortgage capable of redemption, that the sale in his favour was valid, that it could not be impeached after confirmation, that Section 99 of Act IV of 1882 was inapplicable, that there was a prior mortgage in favour of a third party which should also be paid off and that a much larger sum than that offered by the plaintiffs was due on the mortgage of September 28, 1893. The learned Subordinate Judge found against the plaintiffs on the ground that their father being the karta of the family executed the mortgage of September 28, 1893, in his representative capacity and the decree of Ratan Lal was passed against him in that capacity and as he, Nandan Singh, had not objected to sale and allowed it to be confirmed he must be taken to have waived his rights. The plaintiffs have come up in second appeal to this Court. They contend that the learned Additional Judge did not appreciate the real issue in the case and misapplied the law of waiver or estoppel.

3. The fact that the mortgage was given by Nandan Singh or that the decree was passed against him in his capacity as karta of the family does not affect the merits of the present case, nor does his silence in the execution proceedings of 1899 amount to a waiver or estop his sons from bringing the present suit for redemption. The real issue in the case is not the status of Nandan Singh or the effect of his silence in the execu(SIC) proceedings of 1899, but whether a mortgagee can, by obtaining a money decree for a mortgage debt and purchasing the equity of redemption in execution of that decree, relieve himself of his obligations as mortgagee and deprive the mortgagor of his right to redeem. It is argued for the plaintiffs-appellants that the mortgagee cannot do so in view of the provisions of Section 99 of Act IV of 1882. In support of his contention the learned Counsel for the plaintiffs-appellants relies on the following cases : Mayan Pathuti v. Pakuran 22 M. 347 : 9 M.L.J. 98., Martand Balkrishna Bhat v. Dhondo Damodar Kulkarni 22 B. 624., Pancham Lal Chowdhury v. Kishun Pershad Misser 6 Ind. Cas. 47 : 14 C.W.N. 579 at p. 583 : 12 C.L.J. 574, Khiarajmal v. Daim 32 C. 296 : 9 C.W.N. 201 : 2 A.L.J. 71 : 1 C.L.J. 584 : 7 Bom.L.R. 1 : 32 I.A. 23 (P.C.).

4. In the Madras case the facts were that a mortgagee in execution of a simple money decree against the mortgagors sold the mortgaged property subject to his mortgage and purchased it himself. The mortgagors brought a regular suit to have the sale set aside on the ground that it was in contravention of the provisions of Section 99 of Act. IV of 1882. The defence of the mortgagee was that a regular suit for the cancellation of the sale was not maintainable as the question whether the sale was liable to be set aside or not was one relating to the execution, discharge or satisfaction of the decree and should have been raised and could only be raised and decided in the execution proceedings. The learned Judges of the Madras High Court accepted the plea in defence and held that the suit of the mortgagors was not maintainable. But they further held that in spite of the confirmation of the sale and the fact that a suit to set it aside did not lie, the mortgagors were not precluded from suing to redeem the mortgaged property on payment of the amount given credit for by the mortgagee in respect of the sale. In the Bombay case three' persons viz. Shankarji, his son and grandson-formed a joint undivided Hindu family. Shankarji executed a usufructuary mortgage in favour of one Hamir Mul in respect of some of the joint family property. After the death of the mortgagor Hamirmul in execution of a simple money decree for a debt other than the mortgage debt, sold the mortgaged property and purchased it benami in the name of his dependents. The grandson of Shankarji sued to redeem the mortgaged property on the ground that the sale was benami for Hamirmul and contravened the law laid down by Section 99 of Act IV' of 1882. The claim was resisted on the ground that no objection had been taken to the sale and, therefore, the sale was valid. The plea in defence was disallowed and it was held that the mortgagee could not by such sale and purchase free himself from the liability to be redeemed. The learned Chief Justice who decided the case referred to the proposition of law laid down in the case of Bhuggobutty Dossee v. Shamachuran Bose 10, (Sic) . The proposition was that 'a mortgagee is not entitled by means of a money-decree obtained on a collateral security, such as a bond or covenant, to obtain a sale of the equity of redemption separately, because by so doing he would deprive the mortgagor of the privilege which, upon the principle of considering the estate as a pledge, a Court of Equity always accords to a mortgagor, namely, a fair allowance of time to enable him to discharge the debt and recover the estate. This privilege is an equitable incident of the contract of mortgage, and it would be inequitable to permit the mortgagee to evade it : to do that circuitously which he could not do directly.' 'That is the principle', the learned Chief Justice went on to say, 'which, in an extended form, is enacted as law in Section 99 of the Transfer of Property Act.' It should be observed here that the learned Chief Justice of the Bombay High Court referred to the principle of equity in support of his decision as the sale objected to had taken place before the passing of Act IV of 1882.

5. In the case of Pancham Lal Chowdhury v. Kishun Pershad Misser 6 Ind. Cas. 47 : 14 C.W.N. 579 at p. 583 : 12 C.L.J. 574 the facts were that a mortgagee obtained a simple money decree on the basis of a hand-note. In execution of that decree he sold the mortgaged property subject to the mortgage and himself purchased it. He obtained mutation of names in his favour and no objection was taken on behalf of the mortgagor. The sons of the mortgagor sued for redemption of the mortgage. The claim was resisted on the ground that their father had waived his rights by acquiescence in the sale and that they could not ask for redemption without having the, sale first set aside. It was held that it was a well established principle that a purchase by a mortgagee of the equity of redemption in execution of a simple money decree, constitutes him a trustee for the mortgagor and that he does not, unless there is a release of the equity of redemption on other circumstance which in law barred the right of redemption, acquire an irredeemable title. It was further held that the mortgagor was under no necessity to have the sale set aside before he could sue for redemption. He could sue for redemption within the period of limitation allowed by law. The plea of waiver was also disallowed.

6. The facts of Khairajmul v. Daim 32 C. 296 : 9 C.W.N. 201 : 2 A.L.J. 71 : 1 C.L.J. 584 : 7 Bom.L.R. 1 : 32 I.A. 23 (P.C.). were complicated and it would serve no useful purpose to recite them in detail here. It is sufficient to refer to the principle approved of by their Lordships, which bears directly on the point under discussion. Their Lordships are reported to have said at page 316 of the report that they 'throw no doubt on the principle, which has been acted on in many oases in India, that a mortgagee cannot, by obtaining a money decree for the mortgage debt, and taking the equity of redemption in execution, relieve himself of his obligations as a mortgagee, or deprive the mortgagor of his right to redeem, on accounts taken, and with the other safe guards usual in a suit on the mortgage.' It will be observed that their Lordships have stated the principle in a less general and more guarded language than that expressed in the Calcutta and Bombay cases and limit its scope to the case of a mortgagee who obtains a simple money decree in respect of his mortgage debt and in execution of that decree sells and purchases the equity of redemption. The provisions of Section 99 wont farther than the principle approved of by their Lordships. The law as enacted in the Transfer of Property Act has bean altered and brought into consonance with the principle enunciated by their Lordships in Daim's case (4), vide Order XXXIV, Rule 14 of the Code of Civil Procedure. In the present case, however, the mortgaged property was sold and purchased by the mortgagee in execution of a simple money decree obtained for the mortgage debt. The alteration in the law does not, therefore, affect the issue between the parties to this case. It is clear from the authorities just discussed that the appellants can redeem the property purchased by Ratan Lal in execution of the simple money decree for the mortgage debt.

7. But the respondent argues that the law under which the appellants claim redemption viz., Section 99 of Act IV of 1882 or, to be more accurate, Order XXXIV, Rule 14, is inapplicable to the present case for three reasons : First, the sale of joint family property held against a Hindu, father can be avoided by the sons to the extent of their share, only if they were no parties to the decree and the debt for which the decree was passed, was such that under the Hindu Law they were not bound to pay it. In support of this reason the case of Debi Singh v. Jia Ram 25 A. 214 (F.B.) : A.W.N. (1903) 21. is referred to Secondly, a sale of the mortgaged property, once confirmed though in favour of a mortgagee and held in execution of a simple money decree obtained for the mortgage debt, cannot be subsequently questioned and set aside at the instance of the mortgagor or his sons. And thirdly, that the failure of the mortgagor to object to the sale before its confirmation amounts to a waiver of the benefit given by the law and he or any other member of the joint family is estopped from challenging the sale. In support of the last two reasons the following cases are relied upon : Tara Chand v. Imdad Husain 18 A. 325 : A.W.N. (1896) 94 : Parmanand v. Daulat Ram 24 A. 519 : A.W.N. (1902) 162. Banh Bal v. Manni Lal 27 A. 459 : A.W.N. (1905) 42 : 2 A : L.J. 121. Muhammad Abdul Rashid Khan v. Dilsukh Rai 27 A. 517 : 2 A.L.J. 210 : A.W.N. (1905) 80. Kishan Lal v. Umrao Singh 30 A. 146 at p. 149 : A.W.N. (1908) 49 : 5 A.L.J. 121. I shall discuss the throe objections urged on be half of the respondent in their order.

8. The rule of Hindu Law alleged by the respondent that the sons in a joint Hindu family can avoid a decree passed against their father, only on the grounds that they were no parties to the decree and that the debt for which the decree was passed was such that they were not under the Hindu Law bound to discharge it, has no application to the present case. In the present case the sons are not seeking to evade the payment of their father's debt. They are offering to discharge the mortgage, that is, to pay the debt contracted by their father. They want to avail themselves of the provisions of a law that gives them the right to redeem under certain circumstances in spite of the sale of the joint family property in execution of a decree against the father. The first objection of the respondent has, therefore, no force.

9. The first case in support of the second objection is that of Tara Chand v. Imdad Husain 18 A. 325 : A.W.N. (1896) 94. In that case one Imdad Husain mortgaged with possession his zemindari property and his share in a house to one Dwarka Das. The latter then leased the mortgaged lands to Muhammad Hussain who fell into arrears with his rent. Dwarka Das obtained a decree for arrears of rent and in execution of his decree had the share of the house mortgaged sold. One Tara Chand purchased the said share in the house and then sued in a Civil Court for partition of the share purchased by him. Muhammad Husain resisted the suit on the ground that the sale of the share of the house in suit was in contravention of Section 99 of Act IV of 1882. It was held that Muhammad Husain could not dispute the validity of the sale in the civil suit brought by the purchaser for partition. In the ease of Parmanand v. Daulat Ram 24 A. 519 : A.W.N. (1902) 162. the purchase by the mortgagee was under a decree obtained under Section 67 of Act IV of 1882. It was held that a sale under such a decree did not offend the law enacted in Section 9 of Act IV of 1882. In the case of Banh Bal v. Manni Lal 27 A. 459 : A.W.N. (1905) 42 : 2 A : L.J. 121. a mortgagee obtained a simple money decree in respect of a debt other than the mortgage debt. He then transferred the decree to a third party. The latter in execution of the decree sought to sell the equity of redemption of the mortgagor who objected on the basis of the provisions of Section 99 of Act IV of 1882. The objection was disallowed on the ground that Section 99 of Act IV of 1882 did not preculde a third party from bringing to sale the equity of redemption of the mortgagor. The facts of the case of Muhammad Abdul Rashid Khan v. Dilsukh Rai 27 A. 517 : 2 A.L.J. 210 : A.W.N. (1905) 80. were somewhat complicated and need not be reproduced here in detail. The main facts were that one Ram Bux executed a mortgage in respect of certain property in 1863 in favour of one Debi Das. Subsequent to the mortgage Ram Bux sold his equity of redemption to third parties. After, the sale of the equity of redemption Debi Dass in execution of a decree for costs and mesne profits brought the equity of redemption in the hands of the purchasers to sale and bought it himself. About 20 years after, the purchasers of the equity of redemption sued to redeem the mortgage property treating the sale to the mortgagee as a nullity. They failed to implead some of the necessary parties. It was held that the suit must fail for want of proper parties and that the sale to the mortgagee was not void but voidable and could not after the lapse of twenty years be impeached. The facts of the case of Kishan Lal v. Umrao Singh 30 A. 146 at p. 149 : A.W.N. (1908) 49 : 5 A.L.J. 121. were as follows : One Umrao Singh gave a mortgage to one Kishen Lal. The latter brought a suit on foot of his mortgage, but abandoned his security and asked, for a simple money decree which was granted. The decree-holder then assigned the decree to another person whose name was also Kishen Lal. The assignee in execution of the decree sold and purchased the mortgaged property. The mortgagor applied under Section 311 of the Code of Civil Procedure (old) to have the sale set aside, but was unsuccessful and the sale was confirmed. About three years after the mortgagor again applied to have the sale set aside on the ground that it was held in contravention of Section 99 of Act IV of 1882. His application was rejected by the first Court but allowed by the Judge. On appeal to this Court the order of the first Court was restored. It was held that the sale objected to had taken place and had been confirmed to the knowledge of the mortgagor and he could not, after the lapse of three years from confirmation, question it and defeat the title of the purchaser on the ground that the Court executing the decree ought not to have allowed the sale in violation of Section 99 of Act IV of 1882. The only case that bears on the point is that of Muhammad, Abdul Rashid Khan v. Dilsukh Rai 27 A. 517 : 2 A.L.J. 210 : A.W.N. (1905) 80. In that case a suit for redemption was brought after a sale in violation of Section 99 of Act IV of 1882 had taken place and had been confirmed. The claim in that case was disallowed for three main reasons as would appear on a perusal of the report of the case. The reasons were that the sale objected to had taken place prior to the passing of the Transfer of Property Act, that the disqualification of the mortgagee to purchase the equity of redemption was limited to a case where he became the purchaser in execution of a simple money decree obtained for the mortgage debt and that proper parties had not been impleaded. Now in the present case none of these reasons hold good. The sale in the present case took place long after the passing of the Transfer of Property Act and it was held in execution of a decree obtained for the mortgage debt. There is no question as to the omission of any necessary parties. The case of Muhammad Abdul Rashid Khan v. Dilsukh Rai 27 A. 517 : 2 A.L.J. 210 : A.W.N. (1905) 80. is not, therefore, of any assistance to the respondent. The case reported as Parmanand v. Daulat Ram 24 A. 519 : A.W.N. (1902) 162. is not in point at all. In that case the sale took place in execution of a decree obtained under Section 67 of Act IV of 1882.

10. The other three cases viz., Tara Chand v. Imdad Husain 18 A. 325 : A.W.N. (1896) 94., Banh Bal v. Manni Lal 27 A. 459 : A.W.N. (1905) 42 : 2 A : L.J. 121. and Kishan Lal v. Umrao Singh 30 A. 146 at p. 149 : A.W.N. (1908) 49 : 5 A.L.J. 121., are distinguishable on the ground that the sale in those cases was not in favour of the mortgagee but of a third party. The law as enacted in Section 99 of Act IV of 1882 does not preclude a third party, a person other than the mortgagee, whether an assignee of the decree from the mortgagee or a complete stranger, from purchasing the equity of redemption in execution of a money decree obtained by the mortgagee for the mortgage or any other debt. In the case of Muthu v. Karuppan 17 M.L.J. 163 : 2 M.L.T. 181 : 30 M. 313. it was laid down that a sale in contravention of Section 99 of Act IV of 1882 is not void but voidable, only and where the mortgagee himself becomes the purchaser, he cannot by such purchase free himself from his liability to be redeemed. But this equity does not arise against a stranger auction purchaser.' Moreover, the three cases in question did not lay down that a mortgagee could not sue to redeem alter a sale in contravention of Section 99 of Act IV of 1882 had been confirmed. On the other hand there is distinct authority for the proposition that he need not seek to have the sale set aside and can sue for redemption,' vide Mayan Pathuti v. Pakuran 22 M. 347 : 9 M.L.J. 98. and Pancham Lal Chowdhury v. Kishan Pershad Misser 6 Ind. Cas. 47 : 14 C.W.N. 579 at p. 583 : 12 C.L.J. 574. The second objection for the respondent, therefore, fails.

11. The third objection is based on the silence of Nandan Singh, his failure to object to the sale. It is said that as he did not choose to object to the sale he must be taken to have waived the right given to him by the law and if he waived his right to object to the sale on the ground of Section 99 of Act IV of 1882, his sons, the plaintiffs-appellants cannot avail themselves now of the benefit of that section. The passage reported in Kishan Lal v. Umrao Singh is relied upon in support of this contention. The passage is as follows : 'What we have to decide is whether the order for sale having been passed to the knowledge of the judgment-debtor and having been allowed by him to become final, he can now at this late stage have the sale set aside and the purchaser divested of his title on the ground that the Court ought not to have ordered the property to be sold. In our opinion the decision of the Court of first instance on this question is right.' The first Court disallowed the application of the mortgagors on the ground that it was made too late. I do not think that this passage is an authority for the proposition that the silence of Nandan Singh in the execution proceedings amounts to a waiver of the benefit given by Section 99 of Act IV of 1882 to a mortgagor or that if it were, it would bind and estop (sic) sons from availing themselves of that benefit. Moreover the silence or laches of a mortgagor may defeat his objection to sale and yet not deprive him of his right to sue for redemption. I would again refer to the case of Pancham Lal Chowdhury v. Kishun Pershad Misser 6 Ind. Cas. 47 : 14 C.W.N. 579 at p. 583 : 12 C.L.J. 574 where the point was [raised and decided against the mortgagee-purchaser. In that case the mortgagor had, not kept silent but had accepted the validity of the execution proceedings against the mortgaged property. In disposing of the plea of acquiescence the learned Judge referred to a remark made by their Lordships of the Privy Council in the case of Khairajmal v. Daim, 32 C. 296 : 9 C.W.N. 201 : 2 A.L.J. 71 : 1 C.L.J. 584 : 7 Bom.L.R. 1 : 32 I. A. 23 (P.C.). The remark was that neither exclusive possession by the mortgagee for any length of time short of the statutory period of 60 years, nor any acquiescence by the mortgagor not amounting to a release of the equity of redemption will be a bar or defence to a suit for redemption if the parties are otherwise entitled to redeem.' The third objection for the respondent, therefore, fails also.

12. I would, therefore, allow the appeal and set aside the decree of the lower Appellate Court. But as that Court disposed of the appeal on a preliminary point and did not decide the other points raised in the appeal before it, I would remand the case to that Court for disposal according to law.

Piggott, J.

13. I concern.

14 BY the Court.--The order of the Court is that this appeal is allowed, the order of the lower Appellate Court is set aside and the appeal is remanded to it for disposal according to law. Costs, including in this Court fees on the higher scale, will Abide the event.


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