1. This second appeal is against the appellate judgment of the Subordinate Judge of Cuttack-Balasore reversing the judgment of the Munsif of Balasore and dismissing the plaintiff's suit for recovery of possession of about 1.27 1/3 acres of land in village Raghunathpur, in Bhadrak Sub-division of Balasore District.
2. One Sheikh Hadu was the original owner of about 2.19 acres of raiyati laud in the village. On 18th October 1924, he executed a simple mortgage of the said property in favour of defendant 1. On 17th September 1936, defendant 1 instituted a mortgage suit (O. S. No. 418 of 1936) on the foot of the said mortgage impleading Sheik Halim the son of Sheik Hadu the having died in the meanwhile) and in due course obtained a final decree on 30th November 1939. The property was sold on 15th January 1943 and purchased by the mortgagee himself (defendant 1) who obtained delivery of possession through Court on 10th June 1943. He then sold the property to defendants 2 and 3 on 27th June 1943. Their claim to the property is thus based on the sale in execution of the mortgage decree in O. S. No. 418 of 1996, delivery of possession through Court and the subsequent private sale by the mortgagee auction purchaser (defendant l) in their favour.
3. The plaintiff's claim to the property is based on a puisne mortgage executed in his favour by Sheik Halim, son of Sheik Hadu on 9th June 1927. The property covered by the puisne mortgage was only one-half of the property covered by the first mortgage of 1924. But the puisne mortgage was a usufructuary mortgage and the mortgagee (the plaintiff) obtained possession of the plots soon after the execution of the mortgage. Subsequently, however, be was dispossessed and then instead of bringing a suit for possession as usufructuary mortgagee he brought a suit for sale on 9th April 1936 (O.S. No. 130 of 1936) without impleading the first mortgagee (defendant 1) as a party. In due course he obtained a final decree and purchased the property in execution of the decree on 6th November 1937 and obtained delivery of possession on 16th January 1939. When defendant 1 brought the property to sale in execution of his mortgage decree, the plaintiff objected under Order 21, RULE 58, Civil P. C., but his objection was overruled and hence the necessity for the present suit. The plaintiff further stated that he continued in possession since 16th January 1938 and that defendant 1 did not dispossess him by virtue of the delivery of possession obtained by him on 10th June 1943. He, therefore, prayed for confirmation of possession or in the alternative for recovery of possession Bat the lower appellate Court reversing the finding of the trial Court held that the plaintiff was actually dispossessed by defendant 1 on 10th June 1943. This finding being a finding on facts is thus concluded. The present suit of the plaintiff is, therefore, in essence a suit for recovery of possession. In the defendant's mortgage suit the plaintiff was not made a party and similarly in the plaintiff's mortgage suit also defendant 1 was not made a party. In this judgment defendant 1 will be referred to as the first mortgagee and the plaintiff as the puisne mortgagee.
4. The main point in controversy is about the right to possession as between auction purchasers at sales of prior and puisne mortgagees who have not made each other a party regarding which there is a sharp conflict of judicial decisions and a bewildering array of case laws. Before entering into a discussion of this point, I may give below the relevant dates of the two mortgages.
First mortgage, simple in nature, in favour of defendant 1.
Date of institutionof the suit (O. S. NO. 413 of 1936)
17- 9 -36
Sale in execution of the final decree
15- 1 -43
Deliveryof possession in favour of themortgagee auction-purchaser
10- 6 -43
Second mortgage in favour of the plaintiffusufructuary in nature and relating to onlyone-half of the property covered by the firstmortgage.
Date of mortgage
9 - 6 -27
Date of institution of the suit (O. S. No.130 of 1936)
9 - 4 -36
13- 8 -37
Purchased by the mortgagee auction purchaser (plaintiff)
Dalivery of possession
15- 1 -38
5. The first point to consider is whether the principle of lis pendens would apply to the sale dated 6th November 1937 in favour of the puisne mortgagee. It is true that the puisne mortgagee's suit was brought five months before institution of the suit by the first mortgagee. But the court-sale in execution of the decree in the former suit took place while the suit of the first mortgagee was pending. It is now well-settled that the principle of lis pendens would apply to involuntary transfers also though Section 62, T. P. Act, in terms may not apply to such transfers. But the further question for consideration is whether a sale in execution of a mortgage decree will be hit by the doctrine of lis pendens if the mortgage had taken place long before institution of the suit even though the sale might have taken place during the pendency of that suit. On this question also there is a conflict of decisions but there is sufficient authority for the view that a right acquired before the commencement of a suit is not affected by the rule of lis pendens even though the remedy for the enforcement of that right may be sought during the pendency of the suit Mitra J. in Har Pershad Lal v. Dalmardan Singh, 32 Cal, 891 : (1 C. l. J. 37i) took this view while discussing the effect of sales in execution of mortgage decrees and this view was followed in Chinnaswami Padayachi v. Darmalinga Padayachi, A. I. R. (19) 1932 Mad, 666 : (66 Mad. 115) ; Suramma Nayuraly v. Surayya, A. I. R. (21) 1934 Mad. 585 : (152 I. C. 612) ; Natesa Chettiar v. Subbunarayyana Ayyar, A.I.R. (32) 1945 Mad 91 : (I. L. R. (1945) Mad. 578) and Gendmal Amolakchand v. Laxman Tanba, A.I.R. (32) 1945 Nag. 86 : (I. L. R. (1944) Nag 852). I am aware of the contrary view taken by the majority of the Judges in the Full Bench decision of the Allahabad High Court reported iS Ram Sanehi Lal v. Janki Prasad, A. I. R. (18) 1931 ALL. 466 (53 ALL 1023 (FB)) though Mukherji J. took a contrary view in a dissentient judgment. There is also a recent single Judge decision of the Calcutta High Court reported in Muhammad Juman Mia v. Akali Mudiani, A. I. R. (30) 1943 Cal. 577 : (210 I. C. 67) in support of the opposite view. But with respect I am inclined to agree with the former view taken in Har Pershad Lal v. Dalmardan Singh, 32 Cal. 891: (1 C.L. J. 371) and reiterated in subsequent decisions mentioned above. The rights between a mortgagor and mortgagee are determined at the time of the execution of the mortgage and the subsequent suit which the mortgagee may bring to enforce the mortgage and the consequent sale of the property seem to be in the nature of remedies accruing from the original right. As pointed by Venkatasubba Rao J. in Suramma v. Surayya, A. I. R. (21) 1931 Mad. 586 : (152 I. C. 612) 'if a certain right remains unaffected the legal remedy to enforce that right must also continue'. The sale in pursuance of a decree on a mortgage seems to be nothing else but a logical result of a transfer which had taken place at the time of the mortgage itself. In the majority decisions of the Full Bench of the Allahabad High Court, Ramsanehi Lal v. Janki Prasad, A. I. R. (18) 1931 ALL. 466 : (53 ALL, 1023 (F. b)), a distinction was made between the interest of the mortgagee and that of the mortgagor and it was pointed out that so far as the mortgagee's interest was concerned the transfer took place at the time of the execution of the mortgage deed whereas the mortgagor's interest was transferred at the time of the sale and consequently the rule of lis pendens would apply in respect of the latter transfer. But this point has been fully met in the dissentient judgment of Mukherji J. and in the two Madras decisions noted above. Agreeing with their views I would hold that the doctrine of lis pendens does not apply to the present case.
6. But apart from the question of lis pendens, the rights of the two mortgagee auction purchasers may depend on either priority of sale or priority of the mortgages. There are a series of decisions, Venkatanarasamma v. Ramiah, 2 Mad. 108; Ramanadhan Chetti v. Alkonda Pillai, 18 Mad. 500 : (5 M. L. J. 197); Kutti Chettiar v. Subramania Chettiar, 32 Mad 485 : (4 I. C. 1077); Chinnaswami Padayachi v. Darmalinga, Padayachi, A. I. R. (19) 1932 Mad. 666: (56 Mad. 116) ; Nanack Chana v. Teluck Dye Koer, 5 Cal. 265 : (4 C. L. R. 368); Dirgopal Lal v. Bolakee, 5 Cal. 269; Nagendran v. Lakshmi, A. I. R. (20) 1933 Mad. 583 : (66 Mad. 846 (F. B.)); Ram Kinkar v. Hareram Hazra, A. I. R. (20) 1933 Cal. 181 : (145 I. C. 575) and Mohd. Jumanmia v. Akali Mudhani, A. I. R. (30) 1943 cal. 577 : (210 I. C. 67) in which it was held that the right to possession was determined by the priority of sale. Nagendran v. Lakshmi, A.I.R. (20) 1933 Mad. 683 : (56 Mad. 846 (F.B )) is a Full Bench decision and there is an interesting discussion there about the rights of the two mortgagee auction purchasers and also a full review of the case law on the subject. On the other hand, there is another line of oases in which it was held that the right to possession was determined according to the priority of mortgages: see Bunwari Jha v. Bamjee Thakur, 7 C. W. N. 11, Gangadas Bhattar v. Jogendra Noth, 11 C. W. N. 403 : (5 C. I. J. 315); Har Pershad v. Dal Mardan Singh, 32 Cal. 891 : (1 C. L. J. 371); Gangadhar Dhanjishet v. Lakshman Mahadeb, 125 I. C. 905 : (A. I. R. (17) 1930 Bom. 221) and Prag Das v. Beni Prasad Jaggu Lal, 171 I. C. 75 : (A. I. R. (24) 1937 ALL 556) (though not very similar on facts to the present case). It is not easy to reconcile these conflicting decisions nor do I think it necessary for the purpose of this case to enter into an elaborate discussion about the relative merits of the two Opposite views.
7. But there are certain points on which all are agreed. If a first mortgagee brings a suit for sale on the basis of his mortgago without impleading the puisne mortgagee and purchases the properly, the rights of the puisne mortgagee are unaffected by purchase: Mt. Sukhi v. Ghulam Safdar Khan, A.I.R. (9) 1922 P. C. 11 : (43 ALL. 469). The controversy however appears to be as to what are those rights Are they the rights which he had on the date of the institution of the suit by the first mortgagee or else are they the rights which he acquired after that date but prior to the sale in execution of the decree by the first mortgagee Though the question is not of easy solution I am inclined to take the view that the right of the puisne mortgagee which is unaffected by the auction sale of the first mortgagee is determined by the date of the institution of the suit by the first mortgagee and not by the date of sale. The first mortgagee's suit is not wholly void because the mortgagor whom he impleaded as a party had still some interest is the equity of redemption on the date of the institution of the suit. In the present case this is unarguable because on 17th September 1936 the puisne mortgagee's light was in respect of only one-half of the property covered by the first mortgage and the equity of redemption of the remaining half still continued with the mortgagor who was made a party Doubtless the decree obtained by the first mortgagee was imperfect in the sense that all persons interested in the equity of redemption were not impleaded by him as parties. In such circumstances the duty of the Court seems to be to allow the puisne mortgagee an opportunity of occupying the position which he would have occupied if he had been made a party to the first mortgagee a suit. The Privy Council in Mt. Sukhi v. Ghulam Safdar Khan, A. I. R. (9) 1922 P. C. 11 : (43 ALL. 469) observed that the aforesaid view was the correct principle in cases of this type Similarly in Gangadas v. Jogendra, 11 C. W. N. 403 at p. 410 : (5 C. L. J. 315) it was observed :
'The party who has been improperly excluded from a mortgage suit is entitled to claim that be should not be placed in a worse position than what he would have occupied if he had been made a party to the original suit.'
In an old Full Bench decision of the Madras High Court reported in Multa Veetil v. Achuthan Nair, 9 I. C. 513 : (21 M. L. J. 213); it was pointed out that the purchaser in such a suit does not acquire the rights of the mortgagor as on the date of the first mortgage but only those that subsist in him at the date of the suit. In Ganga Prasad v. Mt. Ganeshi Kuer, A. I. R. (31) 1944 Pat. 119: (22 pat. 761), Manohar Lall J. has fully reviewed the entire case law especially of the Patna and Calcutta High Courts regarding the rights of a puisne mortgagee who was not made a party in the first mortgagee's suit. Relying on certain well-known passages on Jones on Mortgage and Dr. Ghose's famous book on the Law of Mortgages in India, the learned Judge observed :
'If the person who has been left oat in the mortgage action was in possession or entitled to possession on that date as the representative of the equity of redemption or was the person in whom the equity of redemption lay in full or in part then the sale in his absence is not binding on him and he cannot be forced to redeem. He may if he likes institute a suit for possession only.'
'With respect t would agree with this view.
8. Applying these decisions to the facts of the present case, the question is whether the puisne morgue was in possession or at any rate was entitled to possession on the date of the institution of the suit (7th September 1936) by the first mortgagee. It is true that the puisne mortgagee was a usefruotuary mortgagee and as such entitled to possession also But it was his own cage that he was dispossessed by the mortgagor and then he instituted his suit (O. S. No. 130 of 1936) on 9th April 1936 for sale of the mortgaged proparty and not for recovery of possession. A usufructuary mortgagee who has been dispossessed has the right either to sue for possession as us fructuary mortgagee or else to sue for sale of the property like a simple mortgagee after giving up his usufructuary right. Thus when he has elected to sue as a simple mortgagee he lost his right to possess on qua, usufructuary mortgagee on 9th April 1936. Therefore, on 17th September 1936, his right was only the right to redeem and he had neither possession nor was he entitled to possession. It is only this right of his that was unaffected by the sale and auction purchase in execution of the first mortgagee's decree. His present suit for possession must, therefore, fail.
9. The whole question may be looked at from another angle. The finding of the appellate Court is that the first mortgagee auction purchaser actually dispossessed the second mortgagee and is at present in possession or the lands. The puisne mortgagee's suit is in essence a suit for eviction and he cannot succeed unless he can show that his title is superior to that of the first mortgagee. It is true that the pursue mortgagee is also an auction-purchaser at a sale in execution of his mortgage decree. But as the first mortgagee was not a party to the same his title is defective. Similarly the first mortgagee's title also is defective inasmuch as the second mortgagee was not nude a party in his suit. Thus as between two parties who have each got defective title to the property there seems to be absolutely no reason as to why the Court should dispossess a party who is already in possession. The defendant's right to possession is derived from the purchase following an action upon his mortgage which was brought in time and which was not a nullity though imperfect. In the Full Bench decision of the Allahabad High Court Ram Sanehi v. Janki Prasad, A. I. R. (18) 1931 ALL. 466: (53 ALL 1033 F.B.) in answering question 2 (a) (on facts which are similar to the present case) it was observed that the second mortgagee-plaintiff must redeem the prior mortgage. In Mulla's Transfer of Property Act, Edn. 8 at p 594, the learned author observes :
'If neither mortgage is usufructuary each auction-purchaser is equally entitled to possession and he who secures possession is entitled to keep it until redeemed, and if both are willing to redeem the auction-purchaser from the prior mortgagee has the prior right to redeem.'
In the present case as already pointed out though the puisne mortgage was usufructuary mortgage, the mortgagee after being dispossessed elected to sue as a simple mortgagee and hence the aforesaid observation would apply with full force. As between the two auction purchasers the priority of the right to redeem would vest in the defendant because his was the prior mortgage.
10. Though this is a suit for recovery of possession only and neither party had offered to redeem the other mortgage, we consider that inasmuch as all the parties having subsisting interest in the property are before us and with a view to avoid multiplicity of litigation it is desirable in the interests of justice that both the parties should be given an opportunity to redeem subject of course to the prior right of the first mortgage auction-purchaser. The plaintiff and defendant 3 are, therefore, called upon to file statements before this Court on 20th March 1950 as to whether they are willing to redeem each other. If both are willing to redeem, the aforesaid rule of priority would be applied and appropriate orders passed. Issue the aforesaid notice to the parties through their lawyers and put up on 20th March 1950.
11. I agree.