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Kundan Lal and anr. Vs. Babu Jagat Ram - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported inAIR1924All927; 75Ind.Cas.108
AppellantKundan Lal and anr.
RespondentBabu Jagat Ram
Excerpt:
mortgage - prior and subsequent mortgages--prior mortgagee falling to set up mortgage in suit on puisne mortgage, whether can enforce it against mortgagor--res judicata, what operates as. - - he failed to set up his mortgage of 1905 possibly thinking it unnecessary to do so as that mortgage had already merged in a decree for sale. the learned district judge holds that kundan lal's failure to set up his mortgage decree in the suit brought by lachhman singh precludes him from enforcing that mortgage against the respondent jagat ram. in any case he is entitled only to what is left after the prior mortgage is satisfied......his mortgage which was of december 1913. to that suit kundan lal was made a party in respect of a prior mortgage of january 1913 which he held on the property. he failed to set up his mortgage of 1905 possibly thinking it unnecessary to do so as that mortgage had already merged in a decree for sale. the learned district judge holds that kundan lal's failure to set up his mortgage decree in the suit brought by lachhman singh precludes him from enforcing that mortgage against the respondent jagat ram. the ruling on which he relies, and there are other rulings to the same effect, lays down that if a prior mortgagee abstains from setting up his prior mortgage in a suit by the puisne mortgagee he cannot afterwards set up that mortgage against the puisne mortgagee or against the.....
Judgment:

Daniels, J.

1. This is an appeal in execution proceedings. The appellant, Kundun Lal, held a mortgage of the year 1905 upon the same property. He brought a suit on this mortgage and obtained a decree for sale in 1917. He now seeks to put that decree in execution and the Court below, overruling the Trial Court, has held that he is precluded from doing so. The appellant, Kundun Lal, subsequently obtained a simple money decree against Rani Chandra, the owner of the property. In execut on of this decree he got the property proclaimed for sale subject to his mortgage decree of 1917 which was duly notified. The property was brought to sale and was purchased by the respondent; Babu Jagat Ram, on the 20th of January 1920. Between the date of the plaintiff's decree and the date of the purchase of Jagat Ram a puisne mortgagee, named Lachhman Singh, had brought a suit for sale of the property on the basis of his mortgage which was of December 1913. To that suit Kundan Lal was made a party in respect of a prior mortgage of January 1913 which he held on the property. He failed to set up his mortgage of 1905 possibly thinking it unnecessary to do so as that mortgage had already merged in a decree for sale. The learned District Judge holds that Kundan Lal's failure to set up his mortgage decree in the suit brought by Lachhman Singh precludes him from enforcing that mortgage against the respondent Jagat Ram. The ruling on which he relies, and there are other rulings to the same effect, lays down that if a prior mortgagee abstains from setting up his prior mortgage in a suit by the puisne mortgagee he cannot afterwards set up that mortgage against the puisne mortgagee or against the auction-purchaser under a decree obtained on the puisne mortgage. There is no authority for applying the same rule to the case of a mortgagor. In this case the puisne mortgagee has apparently not attempted to execute his decree and certainly no sale has taken place under it. Kundan Lal, on the contrary, not only holds a decree for sale on the mortgage but Jagat Ram when he bought the property was fully aware of the existence of the prior charge and bought the property subject to it. There is no ground either of principle or authority on which the decree-holder can be debarred from executing his decree under the circumstances. The position of the puisne mortgagee and of the mortgagor with reference to a prior mortgagee is not analogous. To the puisne mortgagee the existence of a prior mortgage is of vital importance. He may lose his security altogether if the prior mortagage is enforced. In any case he is entitled only to what is left after the prior mortgage is satisfied. If, therefore, the prior mortgagee is impleaded in a suit by the puisne mortgagee without his priority being recognised he is bound to set up his prior charge as a ground of defence under Explanation 4, Section 11, Civil Procedure Code to the suit. Otherwise, the mortgagee will obtain a decree entitling him to bring the entire property to sale and not merely the equity of redemption. But to the mortgagor the question of priority as between encumbrances all of which he is bound to pay Is largely immaterial. His position is thus radically different from that of the puisne mortgagee who is only liable to satisfy charges having priority to his own.

2. It appears also, although the learned District Judge has not taken notice of the fact, that the question was really res judicata against the respondent. Jagat Ram's objection in which he maintained that the decree-holder had now no right to take out execution of the decree was filed on the 5th of January 1921. The decree-holder filed an answer to it, and the matter was decided by the learned Munsif on the 7th of May 1921 by an order declaring that the objection had no force and dismissed it. An appeal was filed against that decision to the District Judge but was withdrawn on the 25th of August 1921, when the District Judge passed an order:--'The appeal having been withdrawn is dismissed.' The Munsif's order, therefore, became final. No doubt it has been found by the District Judge that the ground on which the Munsif dismissed the objection was erroneous, the ground being, that the property now sought to be sold was different from that contained in Lachhman Singh's decree. It is, however, the issue decided and not the reason for the decision which constitutes res judicata, and the question at issue was whether the decree-holder was by reason of not pleading his mortgage in the former suit precluded from executing his decree. After the Munsif's decision Jagat Ram put in an application that there was some confusion between the khewa numbers of the old and new Settlements and asked that the khewat numbers of the recent Settlement might be exempted from sale. It is on the basis of this application that the orders now in appeal have been passed. For the reasons already given, the appeal is allowed, the decree of the Court below set aside, and the decree of the Trial Court dismissing the objection is restored with costs in all Courts.


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