1. There are two questions for determination in this second appeal, first, whether the provisions of Sections 278--283 of the Code are applicable to the case, and, secondly, whether the failure of plaintiff to make first defendant, the puisne mortgagee, a party to his Suit No. 18 of 1883 is fatal to his present suit.
2. The facts are as follows: In July 1879 plaintiff advanced Rs. 3,000 to one Koyotti to enable him to pay off the kanom and value of improvements which, by the decree in Original Suit No. 124 of 1875, he had been ordered to pay to the tenants in possession. As security Koyotti, executed in favour of the plaintiff a mortgage deed of the land, agreeing to pay interest at 12 per cent, until he put plaintiff in possession. Although Koyotti, in execution of his decree in Original Suit No. 124 of 1875, obtained possession early in 1880, he failed to put plaintiff in possession and mortgaged the lands with possession to first defendant and others. In 1883 plaintiff instituted a suit against Koyotti for the recovery of the Rs. 3,000 with interest from Koyotti personally and by sale of the property in the schedule. He obtained a decree and attached the properties. Thereupon the defendant No. 1 and the other subsequent encumbrancers advanced their claim to hold the land, alleging that they had enabled Koyotti to pay off the amount of the decree in Original Suit No. 124 of 1875 and that they had made improvements.
3. The Subordinate Judge allowed their claim for improvements, but refused to reserve their mortgage right on the ground that the plaintiff's mortgage being prior in date must prevail. The property was then put up for sale and purchased by plaintiff, who now sues for possession.
4. The case relied on by the Subordinate Judge Deefholts v. Peters I.L.R. 14 Cal. 631 is not in point. There a decree had been obtained under Sections 86-881 of the Transfer of Property Act and the Court held that proceedings by way of claim under Section 278 only applied in cases of money decrees where the property of the judgment-debtor had been attached. But Original Suit No. 18 of 1883 was a suit brought by plaintiff under Section 68 of the Transfer of Property Act to recover the money due to him by Koyotti who had failed to deliver the property to him. He obtained a decree for money recoverable either from Koyotti or by sale of the property in schedule. Koyotti having failed to satisfy the decree, plaintiff' attached the. land and a proclamation of sale was issued. Thereupon defendant No. 1 preferred a claim on the ground that the property was not liable to attachment, as he held it on mortgage. His claim was, after due inquiry, rejected under Section 2812, and that order not having boon questioned in a regular suit, defendant No. 1 is now estopped from setting up the same claim in the present suit Velayuthan v. Lakshmana I.L.R. 8 Mad. 506.
3. With reference to the second question, we do not think the case of Venkata v. Kannam I.L.R. 5 Mad. 184 is an authority for holding that because defendant No. 1 was not a party to Original Suit No. 13 of 1883, plaintiff's suit must be dismissed. As he was no party to the decree obtained by the plaintiff, he is not bound by it. But all that he can ask as puisne mortgagee is that he shall be allowed an opportunity of redeeming--Radha Pershad Misser v. Monchur Das I.L.R. 6 Cal. 317; Naru v. Gulabsing I.L.R. 4 Bom. 83 and Badhabai v. Shamrav Vinayah I.L.R. 8 Bom. 168. The first defendant's later-created right was subject to the right of the plaintiff, the prior mortgagee. The plaintiff had a right to maintain a suit for the sale of the land to satisfy his mortgage, but having notice of the first defendant's possession as mortgagee, ought to have made him a party to the suit. It was competent to Koyotti to deal with the interest remaining in him after the mortgage to plaintiff, and the result of the transfer to first defendant was that first defendant acquired as against plaintiff the rights of the mortgagor; in other words, the right of redemption. As defendant No. 1 was no party to plaintiff's suit for sale, he would have been entitled to be afforded an opportunity to redeem had not his right been barred by his having taken no steps to set aside the order passed on his claim petition.
4. The decree of the Subordinate Judge must be reversed and the appeal remanded for the decision of the appeal on its merits. The appellant is entitled to his costs in this Court, and the costs in the lower Appellate Court will abide and follow the result.
Section 87: If payment is made of such amount and of such
Procedure in case of subsequent coats as arc mentioned in Section ninety-four, the
payment of amount due. defendant shall (if necessary) be put into possession of the
If such payment is not so made, the plaintiff may apply to the Court for an order
that the defendant and all persons claiming through or under
Order obsolute for him be debarred absolutely of all right to redeem the mortgaged
foreclosure. property, and the Court shall then pass such order, and may,
if necessary, deliver possession of the property to the plaintiff.
Provided that the Court may, upon the good cause shown, and upon such terms, if any,
as it thinks fit, from time to time postpone the day appointed
Power to enlarge time. for such payment.
On the passing of an order under the second paragraph of this section the debt secured
by the mortgage shall be deemed to be discharged.
In the Code of Civil Procedure, Schedule IV, No. 129, for the words 'Final decree,' the
words 'Decree absolute' shall be substituted.
Section 88: In a suit for sale, if the plaintiff succeeds, the Court shall pass a decree to the
effect mentioned in the first and second paragraphs of section
Decree for sale. eighty-six, and also ordering that, in default of the defendant
paying as therein mentioned, the mortgaged proporty or a sufficient
part thereof be sold, and that the proceeds of the sale aftor defraying thereout the
expanses of the sale) be paid into Court and applied in payment of what is so found duo to
plaintiff, and that the balance, if any, be paid to the defendant or other persons entitled to
receive the same.
In a suit for foreclosure,if the plaintiff succeeds and the mortgage is not a mortgage by
conditional sale the Court may, at the instance of the plaintiff,
Power to decree sale in a or of any person interested either in the mortgage money or in
foreclosure-suit. the right of redemption, if it thinks fit, pass alike decree in
lieu of a decree for foreclosure on such terms as it thinks fit,
including, if it thinks fit, the deposit in Court of a reasonable sum, fixed by the Court, to
meet the expenses of sale and to secure the performance of the terms.