1. The plaintiff's suit is for a declaration that the decree passed in O.S. No. 2 of 1910 is not binding on him so far as the plaint property is concerned and for an injunction restraining the defendants from interfering with his possession and for incidental reliefs. The District Munsif passed a decree in plaintiff's favour. The Subordinate Judge on appeal held that the decree in O.S. No. 2 of 1910 was binding upon the plaintiff and dismissed his suit. The plaintiff has preferred this second appeal.
2. The suit property was originally karnam service inam. It was enfranchised in favour of the plaintiff's paternal uncle and the title deed, Ex.D, was issued on 16th October, 1905. Defendants 1 and 2 had mortgaged the suit property with other property to the father of defendants 6 and 7 on 26th July, 1897. Defendants 6 and 7 brought O.S. No. 2 of 1910 on the mortgage and obtained a decree. They now have brought the property to sale. To O.S. No. 2 of 1910 the plaintiff's uncle and the plaintiff, who was then a minor, were made defendants on the ground that they were in possession of the property as lessees. The plaintiff's uncle is dead and the plaintiff has brought the present suit for the reliefs above-mentioned. The learned Subordinate Judge has considered the question whether defendants 1 and 2 had title to the property and whether that title was in any way affected by the enfranchisement. His view is opposed to the decision of the Privy Council in Venkata Jagannadha v. Veerabhadrayya ILR (1921) Mad 643 : 41 MLJ 1 (PC). It is well settled that the effect of enfranchisement of karnam service inam is doing away with the right or title to the property acquired before the date of enfranchisement. The effect ' of issuing an inam title deed after enfranchisement in favour of a person is tantamount to Government resuming the inam and regranting it to the person in whose favour the title-deed is issued. When the Government resumes a service inam all the interests of persons who have acquired title prior to the date of enfranchisement cease to have any effect, and the person in whose name the title deed is made out after enfranchisement gets it free of the interest which other persons had in the property before the date of enfranchisement. It is therefore unnecessary in this case to consider whether defendants 1 and 2 had any interest in the property and whether such interest was subsisting after the date of the enfranchisement. The only question that needs consideration in this case is, is the plaintiff's suit barred by res judicata by reason of the decision in O.S. No. 2 of 1910. In that suit there was no adjudication on the title of plaintiff and his paternal uncle. The paternal uncle remained ex pante and the guardian of the plaintiff did not adduce any evidence. They were made parties on the ground that they were in possession as lessees. The question of their title was not specifically raised. The Subordinate Judge held that it was necessary for the plaintiff and his uncle to have repudiated the character of lessees and to have asserted their own right and as they did not do so the present suit is barred by res judicata. The question is whether this case comes within Expn. IV of Section 11 of the Code of Civil Procedure. Is the title of the plaintiff or his uncle a matter which might and ought to have been made a ground of defence or attack in the former suit. If it was not a matter which might and ought to have been made a ground of defence or attack in the former suit, then the plaintiff's suit would not be barred.
3. The view of the Allahabad High Court is that in a mortgage suit the paramount title of a third party who claims adversely to the mortgagor and mortgagee cannot be adjudicated upon. In Gobardhan v. Munna Lal I L R (1918) A 584 , Banerjee and Abdul Raoof, JJ., observed at page 588:
We must take it as settled law that in a suit brought by a mortgagee to enforce his mortgage a person claiming a title paramount to the mortgagor and the mortgagee is not a necessary party, and the question of the paramount title cannot be litigated in such a suit.
4. The same view was held in a recent case by the Patna High Court in Keshobati Kumari v., Satya Niranjan Chakraberty Roe (1918) 47 I C 179 and Coutts, JJ, observed at page 187:
It is well settled that in mortgage suits the paramount title of parties other than the mortgagor or his representative-in-interest cannot be gone into.
5. This is an extreme view. There is nothing in the Civil Procedure Code which prevents the Court from adjudicating in a proper case upon the' title of a person claiming adversely to the mortgagor and the mortgagee. It cannot therefore be said that the Court acts without jurisdiction if it decides upon the title paramount of a third person who is made a party to a mortgage suit. This is the view of Sadasiva Aiyar, J., in Oblampalli Ramalakshmanna (1914) M W N 623 and a similar view was held by Krishnaswami Aiyar, J., in In re Krishnaswami Pathan (1910) 9 M L T 173. In Radha Kunwar v. Reoti Singh I L R (1916) A 488 : 31 M L J 571 (PC) the Lord Chancellor in delivering the judgment of their Lordships of the Privy Council observed with reference to certain persons who set up adverse claims to the mortgage property and who had been made parties to the mortgage suit.
Their Lordships think that this joinder of these parties was irregular, and that it could only tend to confusion.
6. It is clear therefore that, where the title could be conveniently tried the Court has jurisdiction to adjudicate upon the title paramount in a mortgage suit.
7. The leading case on this point is Jaggeswar Dutt v. Bhuban Mohan Mitra I L R (1906) C 425. In that case Mookerjee, J., after an exhaustive examination of English, American and Indian authorities held that persons claiming adversely to both the mortgagor and mortgagee were not necessary parties. He observed at page 433:
It is not (competent for the mortgagee to make as party defendant one who claims adversely to the title of the mortgagor and mortgagee. He is a stranger to the mortgagee, has no connection with the mortgage; and as his adverse claim of title cannot in any way be affected by the mortgage suit, in which he has no interest, he cannot be made a party for the purpose of litigating such claim of title. This view appears to us to be well founded on principle and is not only sustained by a fair and reasonable interpretation of the language of Section 85 of the Transfer of Property Act, but is, as will presently be shown, supported by a considerable body of authorities.
8. The plaintiff therefore cannot very consistently make such a stranger who has no privity with him a party to his suit to enforce the security.
9. The case in Srimanta Seal v. Bindubasini Dasi (1922) 38 C L J 183 to which Mookerjee, J. was a party is strongly relied upon by Mr. Lakshmanna for his contention that the plaintiff's suit is barred by res judicataIn that case the plaintiff sued for confirmation of possession upon declaration of title and for an injunction to restrain the execution of the decree. The suit property was an occupancy holding which belonged to a family of Kundus. In execction of a money decree their right, title and interest was sold on 15th December, 1909. The purchaser obtained delivery of possession on 30th January following. On 16th February the purchaser assigned the holding to the plaintiff. On 7th July, 1909, the Kundus had executed in favour of the defendants a mortgage of the holding. The mortgagees instituted a suit to enforce their security and made the plaintiff a party to their suit. The suit was decreed on 27th February 1914 and the preliminary decree was made absolute on 29th September 1915. On 14th August 1918 the plaintiff commenced the present suit on the ground that the mortgage was inoperative because the holding was non-transferable, that the decree passed thereon was equally inoperative and that he had acquired a title independent of the mortgage under a settlement from the superior landlord taken on the 1st September 1910. The Lower Courts dismissed his suit. The High Court held that his suit was barred by a previous suit. Mookerjee, J., observed at page 185:
Here, the plaintiff was a defendant in the mortgage suit. He had a two-fold character. As purchaser of the equity of redemption, he was properly before the Court; as settlement-holder from the superior landlord, he could set up a defence that the mortgage could not be enforced against the property in his hands. He did not take that defence, and the result was that a decree was made for sale of the mortgaged property in his presence. The decree is operative against him and he will be bound by the result of the sale in execution. In the present litigation, he seeks to avoid the decree and to make it inoperative, though it was passed in his presence and is obligatory upon him. Clearly such a course is not permissible....
10. In that case the plaintiff contended that the mortgage itself was inoperative. He should have set up that defence in the mortgage suit itself to which he was a party. Where a person who is not a party to the mortgage but is added as a defendant to a mortgage suit sets up the plea that the mortgage is inoperative he is bound to prove it and if he does not and if a mortgage decree is passed, it must be held that his plea is found against. The case would be different where a third person claims the property as his independently of the mortgagor and mortgagee. It is unnecessary in his case to contend that the mortgage is inoperative for the mortgagor had no title to the property and any transaction by him with regard to the property would not in any way affect the real owner. This case is distinguishable from the present inasmuch as the plaintiff herein relies upon a title independently of the mortgagor and the mortgagee and does not merely contend that the mortgage is inoperative. The cases in Hare Krishna Bhowmik v. Robert Watson and Co. (1901) 8 C W N 365 Nafar Chandra Kundu v. Ratnamala Debi (1910) 13 C L J 85 and Bhaja Chowdhury v. Chunni Lal Marwari (1906) 5 C L J 95 do not help the respondents.
11. In Hare Krishna Bhowmik v. Robert Watson and Co. (1901) 8 C W N 365 Maclean, C.J., and Banerjee, J., held that the Court had jurisdiction to try at the instance of the assignee of the equity of redemption the issue Whether the mortgage was invalid as against him. In Nafar Chandra Kundu v. Ratnamala Debi (1910) 13 C L J 85 Mookerjee and Teunon, JJ., held that
The general rule that a question of paramount title cannot be properly investigated in a mortgage suit is subject to exceptions.
12. In Bhaja Chowdhury v. Chuni Lal Marwari (1906) 5 C L J 95 Mookerjee, J, observed:
The question is not one of jurisdiction, but rather of the form of the litigation and the scope of its enquiry; in other words to use the language of Mr. Justice Gray in Hefner v. N.W. Mutual Life Insurance Co. (1887) 123 U S 747 the question whether this issue should be determined in the present suit to enforce the mortgage or in a separate action was a question of multifariousness or of convenience, affecting the discretion only and not the jurisdiction of the Court.
13. Nilakant Banerji v. Suresh Chandra Mullick I L R (1885) C 414 is distinguishable from the present case. In that case one Khogendra applied to be made a party to a mortgage suit. He set up a paramount title to the mortgage property. He was dismissed from the suit with costs. In a subsequent suit Khogendra's representative set up a right to redeem the mortgage. Their Lordships observed at page 422:
If Khogendra had accepted the position of a person who was entitled to redeem, then, so far from his claims not being conveniently tried in that suit, he was (apart from the doctrine of Us pendens) a necessary party to that suit, and his claims could not be conveniently Or properly tried in any other suit but, not accepting that position, his claims were tried in that suit so far as concerned the question whether or no he was entitled to redeem, and it was held on his own showing that he was not entitled to redeem, and on that ground he was dismissed.
14. His title to redeem having been found against, he is not entitled in a subsequent suit to set up the right to redeem the mortgage in Narayanan Nambudripat v. Venkatachela Aiyar (1917) M W N 417 it was held that it would not be irregular in a suit for redemption for the mortgagor to join as defendants persons who claim the property adversely to himself.
15. I think from the above cases the following propositions may be deduced:
1. A person claiming adversely to the mortgagor and mortgagee is not a necessary party to a mortgage suit. If he is made a party he can get himself dismissed from the suit.
2. If the mortgagee makes a person defendant who has not derived title from the mortgagor on the ground that he is in possession of the mortgage property, such person is not a necessary party and need not defend his title to the property.
3. In a redemption suit by the mortgagor a person in possession of the mortgage property can be made a party as it would be convenient to adjudicate on his title in that suit for redemption which is really one for possession.
4. Any person interested in the redemption of a mortgage is a necessary party to the mortgage suit.
5. The Court has jurisdiction to adjudicate on the paramount title of a person claiming adversely to the mortgagor and the mortgagee if such person is made a defendant to the suit.
6. The Court is not bound to adjudicate on the title paramount of a third person if it considers it inconvenient or unnecessary to do so; in other words the Court has a discretion in the matter.
16. Under Order 34, Rule 1, all persons having an interest in the mortgage-security or in the right of redemption shall be joined as parties to any suit relating to the mortgage. In Section 85 of the Transfer of Property Act the clause is 'persons having an interest in the property comprised in the mortgage.' The change in the wording is advisedly made. Only the persons who are interested in the mortgage security or in the right of redemption should be joined as parties. The person who claims a paramount title to the mortgage property need not be made a party. The change in the wording was evidently made to set at rest the conflicting views of the different High Courts on the point. When it is a matter of discretion with the Court to adjudicate or not upon the paramount title of a third person, can it be said that the matter is one which comes within Explanation IV of Section 11? Explanation IV refers to any matter which might and ought to have been made a ground of defence or attack in the forme? suit. The word 'and' makes the meaning clear. Where it is entirely in the discretion of the Court to allow the paramount title of a third person to be gone into or not, it cannot be said that it is a matter which might and ought to have been made a ground of defence or attack in the former suit. Expl. IV to Section 11, Civil Procedure Code, does not apply to the case as the plaintiff's title to the suit property need raot have been made a ground of defence or attack in the former suit. I hold that the plaintiff's suit is not barred by res judicata by reason of the decision in O.S. No. 2 of 1910.
17. In the result the sec6nd appeal is allowed and the decree of the Subordinate Judge is set aside and that of the District Munsif restored with costs here and in the Court below.