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Kowtha Sooryanarayana Rao Vs. Sarup Chand Rajaji - Court Judgment

LegalCrystal Citation
Subject Property; Civil
CourtChennai
Decided On
Reported inAIR1948Mad105; (1947)1MLJ373
AppellantKowtha Sooryanarayana Rao
RespondentSarup Chand Rajaji
Cases ReferredMulla Veetil Seethi v. Achuthan Nair
Excerpt:
- - 83 of 1915 were next referred to and it was distinctly provided that the vendee should retain the benefit of the first mortgage as against the subsequent mortgagee. 845 that the mortgagee's claim was satisfied by the sale deed of 6-2-1922 and that when this satisfaction was annulled by the setting aside of pyda's sale on 2-5-1931 a fresh cause of action arose on the mortgage and that the present suit which is within 12 years of such setting aside is therefore within time. it would be noticed that defendant 1 who is raising the question of limitation here had nothing whatever to do with the providing of the satisfaction which is said to have been subsequently annulled, the claim of the plaintiff being that the mortgage of 1908 was satisfied by the sale deed executed by pyda on.....govindarajachari, j.1. the facts of this case are somewhat complicated. on 24-3-1908, one kidambi narasimhacharyulu executed for himself and as guardian of his then minor sons who are defendants 2 and 3 in the present suit a deed of simple mortgage for rs. 9500 in favour of one chaturvedula suryanarayana mostly for the discharge of antecedent debts which he had incurred. the mortgage was to be repaid in 12 annual instalments and it was provided that if default was committed in respect of the first, second and third instalments consecutively the entire amount of principal and interest should then become payable. a receiver appointed in o.s. no. 83 of 1915 on the file of the subordinate judge's court, bezwada gave three mortgages over the same properties in favour of defendant 1 in the.....
Judgment:

Govindarajachari, J.

1. The facts of this case are somewhat complicated. On 24-3-1908, one Kidambi Narasimhacharyulu executed for himself and as guardian of his then minor sons who are defendants 2 and 3 in the present suit a deed of simple mortgage for Rs. 9500 in favour of one Chaturvedula Suryanarayana mostly for the discharge of antecedent debts which he had incurred. The mortgage was to be repaid in 12 annual instalments and it was provided that if default was committed in respect of the first, second and third instalments consecutively the entire amount of principal and interest should then become payable. A receiver appointed in O.S. No. 83 of 1915 on the file of the Subordinate Judge's Court, Bezwada gave three mortgages over the same properties in favour of defendant 1 in the present suit in the year 1918. In 1919 the equity of redemption of the Kidambis in those properties as also their interest in certain other properties were brought to sale in execution of a money decree against them in O.S. No. 69 of 1912 on the file of the District Court of Kistna and were purchased by Pyda China Bama. krishnayya, defendant 4 in the present suit and one Addanki Lakshmanacharyulu who subsequently conveyed his interest to Pyda. The mortgagors having defaulted in the payment of the first three instalments due ufider the mortgage of 1908 Chaturvedula Sooryanarayana filed O.S. No. 32 of 1921 on the file of the Subordinate Judge's Court, Bezwada, to recover the entire amount of principal and interest due under it, the defendants to that suit being the Kidambis and Pyda. Though the suit was filed on 23-3-1921, the present defendant 1 who had, as already stated, obtained three mortgages over the same properties in 1918 was for some unknown reason, not made a party to it. On 6-2-1922, Pyda executed a sale deed whereby he conveyed his equity of redemption in the hypotheca to Chaturvedula Sooryanarayana for a stated consideration of Rs. 36,000 which represented the amount claimed in O.S. No. 32 of 1921, costs and subsequent interest. The sale deed stated that the vendor roceived the sale amount by way of payment of the mortgage debt. It then recited that 'both of us have filed razinama in the Court.' The mortgages granted to the present defendant 1 by the receiver in O.S. No. 83 of 1915 were next referred to and it was distinctly provided that the vendee should retain the benefit of the first mortgage as against the subsequent mortgagee. On 8-2-1922, O.S. No. 32 of 1921 was dismissed. There is some obscurity as to what exactly happened at the time of its dismissal. Neither party in the present litigation is able to produce a certified copy either of the judgment or of the decree and the only material that is available is an extract from the suits register. It is stated therein that the suit was dismissed 'as per adjustment reported in I.A. No. 113 of 1922.'

2. The present defendant 1 filed O.S. No. 3 of 1930 in the Court of the Subordinate Judge of Masulipatam on foot of his three mortgages of 1918 impleading amongst others Pyda, the Kidambis and Chaturvedula Venkata Subra-maniam the son of Sooryanarayana who had died in 1929. Chaturvedula Venkata Subra-manyam was defendant 6. By the time, O.S. No. 3 of 1930 came on for hearing Pyda's sale . was held to be one brought about in furtherance of a scheme to defraud the creditors of the Kidambis in a contest which arose between Pyda and an unsecured creditor of the Kidambis. In the judgment in O.S. No. 3 of 1930, Ex. P-7, it is mentioned that it was stated on behalf of the plaintiff therein, i.e., the present defendant 1 that Pyda's sale had been set aside since the institution of the suit. Defendant 6 would appear to have put forward the sale in his father's favour by Pyda on 6-2-1922, but in view evidently of the fact that Pyda's sale was itself declared to be invalid, no attempt was made on behalf of defendant 6 to prove the sale he was relying on. The priority of defendant 6's mortgage having been conceded by the plaintiff's pleader, the decree passed in O.S. No. 3 of 1930 provided that the hypothecated properties should be sold 'subject to the prior mortgage of defendant 6 dated 24-3-1908.' The sale proclamation in O.S. No. 3 of 1930 also stated that the hypotheca was; being sold subject to the mortgage of 1908; but a remark was added that it was executed fraudulently and without consideration.' The plain-tiff-decree-holder in O.S. No. 3 of 1930 himself purchased the hypotheca in court auction and the sale certificate issued in his favour again mentioned that the sale was subject to the mortgage of 24-3-1908. He applied for possession under Order 21, Rule 95, Civil P.C., notwithstanding that the property was in the possession of tenants and delivery is said to have been given to him on 13-5-1935. It is not suggested that the tenants were turned out of possession but in view of the later proceedings, it is unnecessary to consider the validity or effect of this' delivery which is said to have been given to him. Mean-while, Chaturvedula Venkatasubramanyam was adjudicated insolvent in I.P. No. 24 of 1934 and the Official Receiver in whom the insolvent's estate was vested and who was not made a party to the application of the auction purchaser (present defendant 1) in O.S. No. 3 of 1930 under Order 21, Rule 95 succeeded in obtaining possession of the lands in Fasli 1344 (1934-35). This led to certain petitions filed by the present defendant 1 in I.P. No. 24 of 1934 whereby he prayed that the property purchased by him should be excluded from the schedule of assets of the insolvent and that the Official Receiver should be directed not to sell the property or deal with it in any way. These proceedings culminated in the judgment of the High Court in C.M.A. Nos. 30 and 530 of 1938 wherein it was held that the Official Receiver could sell the right of the insolvent in the mortgage of 1908, but that he could not resist the application for delivery made by the present defendant 1. Defendant 1 accordingly obtained possession of the properties in Fasli 1345 (1935 36). The Official Receiver sold the insolvent's right in that mortgage to the present plaintiff on 8-1-1942. The shares of the insolvent's two sons were also sold by them to the plaintiff on 21-9-1942. In the present suit which was filed on 3-3-1943 on foot of the mortgage bond dated 24-3-1908 the plaintiff prays for a mortgage decree for Rs. 12,000 to which amount he restricted his claim notwithstanding that according to him an amount of nearly Rs. 80,000 would be due under the terms of the mortgage. Defendants 2 and 3 are the Kidambis and defendant 4 is Pyda. The contesting defendant is the first. The lower Court decreed the suit as prayed for and in this appeal which has been filed by defendant 1, two points are pressed on his behalf.

3. It is first contended that the present suit is barred by limitation as it is laid 35 years after the execution of the mortgage and there are no such acknowledgments of liability or payments by the mortgagor as would attract the operation of Section 19 or Section 20(1), Limitation Act. On behalf of the plaintiff-respondent it is argued that the matter can be viewed in any one of three different ways and that whichever way it is viewed the suit would be in time. It is stated relying on the principle underlying Mt. Ranee Surno Moyee v. Shooshee Mokhee Burmonia (1967) 12 M.I.A. 244 Huro Pershaud Roy v. Gopaldas Dutt (1983) 9 Cal. 255 and Muthuveerappa Chetti v. Adaikappa Chetty (1920) 43 Mad. 845 that the mortgagee's claim was satisfied by the sale deed of 6-2-1922 and that when this satisfaction was annulled by the setting aside of Pyda's sale on 2-5-1931 a fresh cause of action arose on the mortgage and that the present suit which is within 12 years of such setting aside is therefore within time. These decisions were concerned with a very peculiar type of cases where a debtor provides satisfaction which is subsequently annulled at his instance and it is consequently held that a fresh cause of action in the nature of the original cause of action arises on such annulment, the original cause of action being one which could not be sued upon so long as the satisfaction stood. It would be noticed that defendant 1 who is raising the question of limitation here had nothing whatever to do with the providing of the satisfaction which is said to have been subsequently annulled, the claim of the plaintiff being that the mortgage of 1908 was satisfied by the sale deed executed by Pyda on 6-2-1922. Further Pyda's sale was set aside in a proceeding to which neither the predecessors-in-title of the plaintiff nor defendant 1 were parties. Moreover even if Pyda's sale stood, the plaintiff could sue and has to sue defendant 1 in order to work out the extinguishment of the puisne mortgages held by the latter. We consider that these distinguishing features of the present case render the decisions cited by the respondent altogether inapplicable.

4. It is then argued for the respondent relying on the decisions in Ramasubba Aiyar v. Arunaehalam Chettiar A.I.R. 1946 Mad. 423 and Batey Krishna v. Pargoiam Das that the decree in O.S. No. 3 of 1930 which directed the hypotheca to be sold subject to the mortgage of 1903 and which is dated 1st day of September 1931 is the starting point of limitation. This argument again we are unable to accept. The former of the two decisions quoted was concerned with a judgment and decree of the High Court which, while giving 'possession of certain properties to one party expressly declared in favour of the other party who was being dispossessed a charge for the amount which he had paid for the discharge of certain mortgages on those properties. In the latter case, the facts of which are fully set out in Ramasubba Aiyar v. Arunaehalam Chettiar A.I.R. 1946 Mad. 423 the prior claim of a person who discharged two mortgages of 1909 and 1915 was recognised in a suit for foreclosure brought by a subsequent mortgagee and a charge was declared in the former's favour and presumably incorporated in the foreclosure decree. We see much difference between those cases and the present one. There is here no declaration of a right which came into existence on 1-9-1931. The decree is in the usual form of a mortgage decree passed in a suit by a puisne mortgagee against the prior mortgagee and the mortgagor and it does no more than recognise the fact of a prior mortgage created in 1908. We are altogether unable to construe it as creating a new right in favour of the plaintiff's predeces-sors-in-title or as affording a fresh cause of action.

5. Reliance has next been placed by the respondent on a decision in A.I.R. 1941 Mad. 7398 and Section 20 (2), Limitation Act, and it is argued that the mortgagee who went into possession of the mortgaged properties under the sale deed dated 6-2-1922 and retained such possession till about 1934 must, in view of the setting aside of Pyda's sale in 1931, be deemed to have been in possession of the properties as mortgagee. This line of reasoning found favour with the lower Court and in our opinion rightly. The relevant facts are not in dispute. Chaturvedula Suryanarayana took possession of the mortgaged properties on 6-2-1922 and the sale deed executed by Pyda in his favour recites it. He continued to be in possession till his death in 1929 when the properties passed into the hands of his son who retained possession till December 1931 when the receiver in a partition suit between him and his sons (O.S. No. 65 of 1931) took possession of all their properties including the suit properties and continued to be in possession till about the middle of 1934. The Official Receiver in the insolvency of Venkatasubramaniam appears to have taken possession of the suit properties in Pasli 1344 (1934-35) and continued to be in such possession for part of Fasli 1345 till defendant 1 went into possession. Between 1922 and 1934 therefore the mortgagees were in possession and the Official Receiver in the insolvency of one of them was in possession for another year. If the mortgagees can be held to be in possession qua mortgagees between 1922 and 1934, Section 20 (2), Limitation Act, would clearly apply and the present suit would be in time. Mr. Tiruvenkafcachari does not dispute the principle laid down in Doraisami v. Periakaruppan A.I.R. 1941 Mad. 475 nor are the facts as to possession which we have just set out in dispute. He argues however that in order to invoke the principle in Doraisami v. Periakaruppan A.I.R. 1941 Mad. 475 it must first be decided whether Pyda's. sale was invalid with the consequence that the sale by Pyda to Chaturvedula Suryanarayana on 6-2 1922 would also be invalid and that the lower Court went wrong in assuming that Pyda's sale was invalid without adjudicating on it as between the present parties, the declaration as to the invalidity of Pyda's sale given in 1931 as between him and the creditors of the Kidambis being as adjudication which is not binding on the present parties. No doubt the learned Subordinate Judge did not go into the question whether Pyda's sala was invalid or not. But a remittal of the case to the lower Court for an investigation of this question is unnecessary as in our opinion, the judgment of the High Court in C.M. As. Nos. 30 and 530 of 1938 dealt with this matter and constitutes an adjudication binding on the plantiff and defendant 1. Defendant 1 was the petitioner and the Official Receiver in the insolvency of Chaturvedula Subramaniam was the respondent in the petitions which resulted in those civil miscellaneous appeals. The pleadings in those petitions are not available but it appears from Ex. D. 2, the order of the District Judge of West Godavari therein that defendant 1 filed in support of his case the judgment and decree in C.S. No. 18 of 1928 wherein Pyda's sale was declared to be invalid and it is clear therefore that defendant 1 was asserting the invalidity of Pyda's sale while the Official Receiver was seeking to resist defendant is claim to be put in possession of the properties on the ground that Chaturvedula Venkatasubramaniam and his sons were the owners of the property and that in the right of Venkatasubramaniam he was entitled to retain possession as owner. It was pointed out on behalf of defendant 1 that Chaturvedula Suryanarayana's son and grandsons were no entitled to be in possession as owners having regard to the invalidity of Pyda's sale. The judgment of the High Court refers in more than one place to the invalidity of that sale and consequently of the sale of 1922 by Pyda to Chatur-vedula Suryanarayana and proceeds to state that defendant 1 was entitled to obtain possession of the properties, and that the Official Receiver, could claim only the interest of a mortgagee. If because of this decision it must be taken as btween the present parties that Pyda's sale wag invalid and consequently that no title passed to Suryanarayana under the sale deed dated 6-2-1922 it is not denied that the possession of Chaturvedula must be deemed to be possession in their capacity as mortgagees, and that the receipt of rents is tantamount to payment within the meaning of Section 20 (2), Limitation Act with the result that the present suit which is filed within 12 years of such possession must be held to be within time.

6. The second contention raised on behalf of the appellant is that the present suit based on the mortgage of 1908 is barred under Order 23, Rule 1, Sub-rule (3), Civil P.C. having regard to the dismissal of O.S. No. 32 of 1921. That suit, it is argued, was dismissed following upon the mere withdrawal of the plaintiff and it is claimed that O.S. No. 32 of 1921 and the present suit are in respect of the same subject-matter within the meaning of Order 23, Rule 1 (iii) because they are both based on the mortgage of 1908 and the plaintiff in the present suit is the representative-in-interest of the plaintiff in the previous suit. It is recognised that defendant 1 who is in the position of a puisne mortgagee under his mortgages of 1918 was not a party to O.S. No. 32 of 1921, but it is said that this makes no difference. The argument is that since the owner of the equity of redemption is a necessary party to a mortgagee's suit for sale and since defendant 1 is the present owner of the equity of redemption and in that right the representative-in-interest of the Kidambis who were defendants to O.S. No. 32 of 1921 the subject-matter of the two suits is the same and the parties are substantially the same notwithstanding that defendant 1 was not a defendant in O.S. No. 32 of 1921 and notwithstanding that he is a puisne mortgagee also. The Kidambis also are parties to the present suit, but admittedly they have now no right of any kind. On behalf of the respondent, it is answered that the dismissal of O.S. No. 32 of 1921 was not a dismissal following upon the mere withdrawal of the plaintiff from the suit, but that it was really a case where it was reported to the Court that the suit was adjusted and that the defendant satisfied the plaintiff in respect of the whole of the subject-matter of the suit and the Court consequently ordered the adjustment or satisfaction to be recorded and proceeded to pass a decree in accordance therewith as contemplated by Order 23, Rule 3, Civil P.C. In the alternative it is argued that even if Order 23, Rule 3 does not apply and the dismissal of the suit is held to have followed a mere withdrawal of the plaintiff, the two suits cannot be regarded as relating to the same subject-matter as the presence of defendant 1 the puisne mortgagee in the later suit and his absence in the earlier would make a material difference in their nature.

7. Dealing first with the controversy as to what happened in the suit, of 1921 it will be recalled that Pyda who was defendant 4 in O.S. No. 32 of 1921 and who, it was then assumed, was entitled to the equity of redemption executed a sale deed conveying the same, in satisfaction of the suit-claim, subsequent interest and costs, that it was expressly recited in that deed that the plaintiff and Pyda 'filed razinama in the Court' and that two days thereafter the suit itself was dismissed 'as per adjustment reported in I.A. No. 113 of 1922.' What exactly the prayer in I.A. No. 113 of 1922 was, neither party is in a position to say; but we may not be wrong in assuming that it must have related to the adjustment of the suit-claim by the execution of the sale deed. It seems to us in all the circumstances that it is quite likely and probable that the adjustment or satisfaction was reported to the Court and that the parties invited the Court to dismiss the suit as there was nothing further to be done in view of its adjustment or satisfaction. The mere fact that the decree is one of dismissal does not mean that there was a mere withdrawal of the plaintiff from the suit as contemplated by Order 23, Rule 1 as there can quite conceivably be a dismissal of a suit even where the suit is adjusted or the claim is satisfied and the adjustment or satisfaction is merely recorded without however any need to pass a decree in terms thereof as there may remain nothing further for either party to do. It is for defendant 1 who is invoking the bar of Order 23, Rule 1 (iii) to make out satisfactorily that the case falls under that provision. It seems to us that he has failed to do so and notwithstanding that there is no document now available showing that the adjustment or compromise was recorded by the Court it is only reasonable to assume that it must have been so recorded in view of the various circumstances to which we have already alluded.

8. We also accept the alternative argument of the respondent. The question therein involved has been fully argued before us by both the learned Counsel. The complications that arise by reason of the failure to imp lead in a mortgage suit the puisne mortgagee or the owner of the equity of redemption in a portion of the hypotheca have been the subject of consideration in a series of cases. There is an elaborate discussion in several of them as to the rights and remedies of the person who has been so omitted as also of the person who has failed to implead all the necessary parties in his suit. Whatever might have been the oscillations of judicial opinion in the other High Courts, this High Court has been consistently holding since Mulla Veetil Seethi v. Achuthan Nair : (1911)21MLJ213 if not even earlier, that the rights of a second mortgagee or of a purchaser of the equity of redemption who is left out of a mortgage suit filed by a first mortgee remain altogether unaffected by such suit and by the sale in execution of the decree therein. The consequences of this position, which may be regarded as fundamental, have been worked out in the several decisions to which we shall now proceed to refer to the extent that they bear on the question with which we are directly concerned in the present case, namely, whether the second suit by the first mortgagee impleading the second mortgagee and the owner of the equity of redemption is so identical in its nature with the first suit to which the owner of the equity of redemption alone is a party to come within the mischief of 6. 23, Rule 1 (iii), Civil P.C.

9. In Mulla Veetil Seethi v. Achuthan Nair : (1911)21MLJ213 a first mortgagee purchased the mortgaged property in execution of a decree on his mortgage, but as the second mortgagee with possession was not a party to the mortgage suit the first mortgagee had, after his purchase, to file a suit for possession against the second mortgagee claiming in the alternative the recovery of the mortgage money and the following reference was made to a Pull Bench:

Whether a first mortgagee who has purchased the mortgaged property in execution of a decree on his mortgage and sues for possession or in the alternative, for the recovery of his money is entitled to a decree for possession subject to redemption by a puisne mortgagee with possession who was not a party to the suit by the first mortgagee?

The Full Bench answered the question in the negative. It was contended on behalf of the first mortgagee that the second mortgagea was only entitled to redeem the first mortgagee and that he could not resist the first mortgagee purchaser's suit for possession. This was refuted and it was held that the second mortgagee's rights (whatever they were) at the date of his mortgage-whether to possession (if his mortgage be one with possession and the previous mortgage without it) or to sale or foreclosure under Section 67, T.P. Act, remain altogether unaffected by the first mortgagee's suit to which the former was no party. He has also the right to redeem the prior mortgage which is preserved in law in spite of the purchase by the prior mortgagee of the equity of redemption. But it is pointed out that redemption is a right which the puisne mortgagee may seek to enforce and not a liability which he may be competed to discharge. After an elaborate examination of the principles of law of mortgages and the provisions of the Transfer of Property Act and on a full review of the decided cases the Pull Bench laid down certain propositions, the second of which runs as follows:

The purchaser of the equity of redemption after the first mortgage and theesecond mortgagee both stand on the same footing with reference to their respective rights against the first mortgagee when they have not been impleaded in the suit instituted by him on his-mortgage.

This decision is important as laying down the broad principle that the rights of the second mortgagee or the purchaser of the equity of redemption are left altogether unimpaired by a. suit filed by the first mortgagee without impleading them and if their rights are unaffected by proceedings to which they are not parties, it stands to reason that the rights of the first mortgagee against them should remain equally unaffected notwithstanding his defective suit against certain others. Further, it is stated in the' order of reference to the Full Bench that 'it is not contended that the plaintiffs (the first mort-gagees) are not entitled to file a fresh suit for sale against the puisne mortgagee.' The next; case of importance is Chinnu Pillai v. Venkatasami Chettiar A.I.R. 1917 Mad. 751 which is in many respects similar to Mulla Veetil Seethi v. Achuthan Nair : (1911)21MLJ213 . There too, a prior mortgagee sued for sale on his mortgage without making the puisne mortgagee a party and obtained a decree. In execution of that decree the property was brought to sale, and was purchased by a stranger. The puisne mortgagee filed a suit for sale on his mortgage subject to the prior mortgage making the purchaser a party to his suit. It was held that he could maintain such a suit. The contention on behalf of the persons resisting the suit was that the puisne mortgagee had first to redeem the prior mortgage and then only bring the mortgaged property to sale but this was rejected and it was decided that the puisne mortgagee was under no such obligation and that the right of a puisne mortgagee to sue for sale subject to the prior mortgage is in no way impaired by the prior mortgagee's suit to which the puisne mortgagee was not a party. In the; course of an elaborate consideration of the several complicated positions that arise in such cases, Srinivasa Ayyangar J. observes that 'where the first mortgagee had omitted to, make the second mortgagee a party and proceeded to sale, the purchaser whether himself or another can bring a fresh, suit for sale making the second mortgagee a party.'

10. Venkat Reddi v. Kunjappa Goundan A.I.R. 1924 Mad. 650 was a case where a purchaser of a portion of the hypothec was left out of a mortgage suit. A stranger who purchased in execution of the mortgage decree filed a suit for sale against the mortgagor, the mortgagee and the purchaser who had been left out in the previous suit. It was first contended on behalf of the person last named relying on Hetram v. Sbadiram A.I.R. 1918 P.C. 34 that the mortgage had been extinguished by the decree and sale in execution. But it was pointed out that while that was undoubtedly the position under Sections 85 to 90, T.P. Act, those Sections had been repealed and replaced by the provisions of Order 34, Civil P.C. of 1908, under which there is no such extinguishment of the right to redeem or of the security on the passing of an order absolute for sale and that' the mortgage is kept alive for all purposes as regards persons having an interest but not made parties to the mortgage suit.' The later decision of the Privy Council in Mt. Sukhi v. Ghulam Sabdar Khan A.I.R. 1922 P.C. 11 distinguishing Hetram v. Sbadiram A.I.R. 1918 P.C. 34 was particularly referred to. The next argument in resistance of the suit was that there could be no second suit on the same mortgage. This contention was dealt with in the following paragraph which we would fully set out:

It is difficult to see how a second suit against a person not impleaded in the previous suit would be barred under any of the provisions of the Civil Procedure Code. It is no doubt true that the first mortgagee who had notice of a puisne encumbrance could have impleaded that puisne encumbrancer in the suit on the first mortgage but the failure to do so would not necessarily bar the second suit against the puisne encumbrancer unless there is anything in the Code barring such a suit. The cause of action is not the same as in the previous suit nor would the points to be decided necessarily be the same.

Though the case itself was one in which there was a failure to implead the purchaser of the equity of redemption in a portion of the hypotheca, no distinction was made between the case where such a purchaser was left out of a mortgage suit and the case where a puisne mortgagee was so left out. In fact in the paragraph just quoted it is the latter case that is directly considered.

11. The decision in Sambasiva Aiyar v. Subramamania Pillai : AIR1936Mad70 may also be usefully referred to. In this case the first mortgagee (S.A.) failed to implead in a suit for sale the purchasers of two items of the hypo theca (S.P. and others). The puisne mortgagee was however a party. S.A. himself purchased the mortgaged properties in execution of his mortgage decree. He failed to obtain possession of the properties which had been purchased by S.P. and others prior to the mortgage suit. S.A. therefore filed a suit against S.P. and others for delivery of possession of those properties and alternatively for the payment of the amount and failing which for the sale of the two properties. The Court held that S.A. filled two capacities, viz., qua mortgagee and qua purchaser of the items mortgaged to him. It was further held that

if S.A. filed the suit against S.P. and others on foot of the original mortgage in his capacity as mortgagee, he could sue for the whole of the mortgage amount in pleading besides the mortgagor the purchasers of the equity of redemption in the mortgaged properties, viz. S. P. and others in which case S. P. arid others would have to redeem the whole of the mortgage debt though they purchased only a few of the items mortgaged, but the cause of action for such a suit would date from the date of the mortgage.

What is of interest to us in the present case is that the Bench which decided Sambasiva Aiyar v. Subramamania Pillai : AIR1936Mad70 had no difficulty whatever in upholding the right of s. A', to sue a second time on foot of his mortgage notwithstanding that the mortgagors and puisne mortgagee were parties to the earlier suit also.

12. In view of these decisions, it seems to us that the present suit which is filed not only against the owner of the equity of redemption but also against the puisne mortgagee is essentially different in its nature from O.S. No. 32 of 1921 which was filed against the owner of the equity of redemption alone. The object of the' present suit is to obtain a decree which would be binding on the puisne mortgagee whereas no such decree could be obtained in the prior suit as the puisne mortgagee was not a party to it. The fact that the equity of redemption has to be and is represented in the present suit does not, in our opinion, alter the real nature of the suit whose main purpose is to give an opportunity to the puisne mortgagee to pay off the first mortgage or if no such payment is made to work out the extinguishment of his mortgage. The principle which is fundamental, viz., that no-person who is not impleaded in a suit can have his rights in any way lessened or reduced has been applied in Mulla Veetil Seethi v. Achuthan Nair : (1911)21MLJ213 and the later decisions to some of which we have already made reference, as much in cases where the owner of the equity of redemption is left out as where the puisne mortgagee is left curt and it seems to us that the necessary corollary and consequence of this principle is that if the rights of parties who were not impleaded remain unimpaired, the rights of the persons who failed to implead them should remain unimpaired too.

13. Order 23, Rule 1(iii) does not expressly provide that the bar which it imposes applies only as between the parties to the prior suit, but that is its obvious intendment.

14. We are therefore of the opinion that the present suit is not barred under Order 23, Rule 1(iii), even if it should be held that the manner of disposal of O.S. No. 32 pf 1921 brings it under Order 23, Rule 1 and not under Order 23, Rule 3. The appellant having failed on both his points, the appeal is dismissed with costs.


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