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Brahmandam Venkata Lakshmi Narayana Row Vs. Allamaneni Venkayya and ors. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in49Ind.Cas.466
AppellantBrahmandam Venkata Lakshmi Narayana Row
RespondentAllamaneni Venkayya and ors.
Cases ReferredHet Ram v. Shadi Ram
Excerpt:
mortgage - prior and puisne encumbrances--suit by first mortgagee impleading puisne mortgagee--decree for sale and for payment of surplus proceeds to person entitled--puisne mortgagee, right of to institute suit on his mortgage--civil procedure code (act v of 1908), sections 11, 47--res judicata--transfer of property act (iv of 1882, sections 85, 88, 89. - - sale-deeds were accordingly executed to him by the mortgagors and one decree was satisfied in full and the other in part by him. 264 is also to the same effect, though there is an observation there that this suit would be barred if he was in a position to have his claim satisfied from the surplus proceeds. but that was a case where a person had two mortgages himself on the same property and failed to mention the 2nd when suing on..........which are a little complicated. the question arises in these circumstances. plaintiff's father, as puisne mortgagee, was made a party to each of the two suits of the prior mortgagees, 17th and 18th defendants, brought to enforce their mortgages by sale of the hypotheca. he did not appear and raise any pleas; decrees were passed in both' suits in the usual form under section 88, transfer of property act which was then in force, and naturally the decrees made no mention of the puisne mortgagee's right to redeem ; as to the surplus sale-proceeds, if any, the order was that they were to be paid to defendant or other persons entitled to them.' orders absolute were subsequently obtained but before any sale in court-auction took place, the mortgaged properties were sold by private arrangement.....
Judgment:

1. As the Subordinate Judge has dismissed the plaintiff's suit on the preliminary ground that it is barred by Section 11 and by Section '47 of the Civil Procedure Code, it is not necessary to state all the facts of the case which are a little complicated. The question arises in these circumstances. Plaintiff's father, as puisne mortgagee, was made a party to each of the two suits of the prior mortgagees, 17th and 18th defendants, brought to enforce their mortgages by sale of the hypotheca. He did not appear and raise any pleas; decrees were passed in both' suits in the usual form under Section 88, Transfer of Property Act which was then in force, and naturally the decrees made no mention of the puisne mortgagee's right to redeem ; as to the surplus sale-proceeds, if any, the order was that they were to be paid to defendant or other persons entitled to them.' Orders absolute were subsequently obtained but before any sale in Court-auction took place, the mortgaged properties were sold by private arrangement to the 14th defendant who was to pay the sale-proceeds to the decree-holders. Sale-deeds were accordingly executed to him by the mortgagors and one decree was satisfied in full and the other in part by him. The question for our decision is, whether, in the above circumstances, this suit by the. plaintiff as the puisne mortgagee to enforce his mortgage by sale of the property mortgaged subject to the prior mortgagee's claim is barred either by Section 11 or by Section 47, Civil Procedure Code.

2. As stated above, the Subordinate Judge has answered the question in the affirmative, but. we are unable to support his view. The objection based on Section -47, Civil Procedure Code, may be considered first. For that section to apply, the question raised in the second suit should relate to the execution, discharge or satisfaction of the previous/decree. The relief claimed must be such as could be obtained by execution proceedings. That depends on the terms of the decree. The question is really concluded by the ruling of the Privy Council in Gopi Narain Khauna v. Bansidhar 9 C.W.N. 577: 15 M.L.J. 191 where their Lordships-held that where the decree did not provide for the working out of the rights of the puisne incumbrancer without additions to it which the executing Court had no power to make, a new decree was necessary for the purpose and Section 244 (now Section 47) of the old Civil Procedure Code would not bar the second suit. It is impossible to hold in the present case that' on the terms of the decree here, plaintiff could have got the relief, he now seeks by execution. The question whether ha has lost his right by not getting a proper decree is irrelevant, in considering the applicability of Section 47.

3. It has been held that even when a puisne mortgagee is expressly given by the decree a right to redeem and a right to share in the surplus sale-proceeds, he is not barred from bringing a fresh suit for sale against the mortgagor, on the ground that in execution of a prior mortgagee's decree, when it is in the form given in Appendix D (1st Schedule, Form 7), he is not entitled to insist on being redeemed himself or to get the property sold for his debt See Sarat Chandra Roy v. Nahapiet 8 Ind. Cas. 1142, Mackintosh v. Waticins 1 C.L.J. 31; Saruripgar Begam. v. Baroda Kant Hitter 5 Ind. Cas. 539. The ruling in Debendra Nath Sen v. Mirza. Abdul Samed 1 Ind. Cas. 264 is also to the same effect, though there is an observation there that this suit would be barred if he was in a position to have his claim satisfied from the surplus proceeds. That must be understood as applying only to a case where the puisne mortgagee is given by the decree, itself the right to apply for sale of the property.

4. The first three Calcutta cases above cited were recently considered and followed by a Bench of this Court in Vedavyasa Ayyar v. Hjadura Hindu Sabha Nidhi Co. Ltd. 49 Ind. Cas. 36 : 24 M.L.T. 473 which was a case where the decree gave the puisne mortgagee the right to redeem and also a right to share in the sale-proceeds: and the property was sold in Court-auction but the sale was set aside under Order XXI, Rule 89, Civil Procedure Code. The learned Judges held that the 2nd suit was not barred either by Section 47 or by Section 11. We agree with this ruling and hold that Section 47 is no bar to the present suit, the circumstances here being more favourable to the 2nd mortgagee than in that case on the point under consideration.

5. The next question is as to the applicability of Section 11, Civil Procedure Code. To apply that section the matter in issue in the 2nd suit must have been in issue,. and been decided in the previous suit. It ii not suggested that there has been any express 'decision against the right the plaintiff now claims. But it is argued that Section 11 read with Explanation IV raises a bar. That Explanation says, so far as it is relevant here, that any matter that might and ought to have been a ground of defence should be deemed to have been in issue; and, therefore, if the decree involved a decision on if, that decision will be res judicata in the same manner as an express decision on an issue. The question then is, to what extent the decree in the prior mortgage suit can be taken to have decided by implication the rights of the 2nd mortgagee.

6. The Subordinate Judge observes that the 2nd mortgagee 'could have and ought to have proved his mortgage and obtained a decree for redemption and failing that he could not institute a second - suit ignoring the previous litigation.' No doubt the Sub-Judge is right when he says that if he wished to exercise his right of redemption, he should have appeared and claimed it in the previous suit. The ruling of the Privy Council in Sri Gopal v. Pirthi Singh 24 Bom.L.R. 827 : 6 C.W.N. 889 referred to by the Sub-Judge has decided that point. But the mistake made by the. Sub-Judge is that he overlooks the fact that the present suit is not one for redeeming the prior mortgage; plaintiff is seeking now to sell the property subject to the prior mortgage: that is not a right he could have put forward against the prior mortgagee. That a puisne mortgagee can now sue for sale of the equity of redemption without joining the prior mortgagee as a. party and without offering to redeem him is made clear by the Explanation to Order XXXIV, Rule 1, Civil Procedure Code. The same view was held, in Madras even before. See Gangadhara v. Sivarnma 9 Ind. Jur. 146; Srinivasa Rao Saheb v. Yamunabhai Ammal 16 M.L.J. 50 and Ranga Aiyangar v. Narayana Charidr 82 Ind. Cas. 30 : 89 M. 896.

7. That being so, the fact that the previous decision might have barred him from asserting again his right of redemption against the prior mortgagee under Section 11, Civil Procedure Code, does not affect his right to have the equity of redemption said as against his mortgagor.

8. No doubt if he had appeared on the previous occasion he might have claimed to share in the surplus sale-proceeds also, but his right to it has not been negatived by the previous decrees for the provision in them is that these surplus sale-proceeds are to be paid to any person who is entitled to them. This leaves the matter open apparently to be decided in another suit.

9. As stated before, it was decided in Vedavyasa Ayyar v. Madura Hindu Sabha Nidhi Co., Ltd. 49 Ind. Cas. 36 that even where the puisne mortgaged has a right under the decree to share in the sale-proceeds, his right to sue is not barred as the former right is different in many respects from the latter right. This conclusion was arrived at after considering the case in Govinda Taragan v. Veeran 12 Ind. Cas. 432 : (1911) 2 M.W.N. 323 which was also cited to us. Though, we accepted that ruling in Vedatyasa Ayyar v. Madura Hindu Sabha Nidhi Co. Ltd. (1918) M.W.N. 898 in this case we need not go so far for in the present decree there is no definite provision as to who should be paid these excess proceeds. It cannot be said that the puisne mortgagee was bound to get an order in his favour to share in the sale-proceeds when he was made a party. No rule of law has been pointed out to us that compels him to do that. He may elect to bring his own suit for his money.

10. The Subordinate Judge relied also on the ruling in Nattu Krishnama Chariar v. Annangara Chariar 2 M.L.T. 330 in support of his view that the second suit was barred. But that was a case where a person had two mortgages himself on the same property and failed to mention the 2nd when suing on the first. He was held barred from suing again on the 2nd. The decision is, therefore, clearly distinguishable from the present case, which is one of a prior and a different puisne mortgagee. In any case we consider the authority of that decision has been much shaken by the ruling of the Full Bench in Subramania Aiyar v. Balasubramania Aiyar 30 Ind. Cas. 317, though it has not been expressly overruled. We see no distinction between the holder of two mortgages suing on the 2nd reserving the 1st and vice versa. If the non-reservation is to make the difference between the 30 Madras case and the Full Bench case, it must be a difference based on the Section 43 of the old Civil Procedure Code or Order XI, Rule 2 of the present Code. That difference does not seem to be valid, for the Full Bench have held that the two mortgages are two different causes of action and have answered the query of their Lordships of the Privy Council in Sri Gopal v. Pirthi Singh 4 Bom.L.R. 827 in the affirmative. We are not prepared, with all respect to the learned Judges, to follow the view in the Nattu Krishnama Chariar's case 2 M.L.T. 330.

11. Our attention was also drawn to the 6th proposition laid down by Srinivasa Aiyangar, J., in Chinnu Pillai v. Venkatasamy Chettiar 34 Ind. Cas. 507 : 19 M.L.T. 217 that 'if the first mortgagee sues first making the 2nd mortgagee a party as he ought to, there cannot be a trial of a further action,' With all respect to the learned Judge this is clearly an obiter dictum and it has, in our opinion, been stated somewhat too broadly. The question must depend on the findings and the decree in the first suit and on the execution proceedings. We are unable to adopt the proposition as stated without qualification.

12. We must, therefore, hold that Section 11, Civil Procedure Code, is also no bar to the present suit.

13. Two further arguments of Mr. Rarnadas for the respondents remain to be noticed. He drew our attention to the observation of their lordships in Het Ram v. Shadi Ram 35 M.L.J. 1and to Section 89 of the Transfer of Property Act, and contended that on the order absolute being passed the right to redeem was extinguished as well as the security and there was thereafter nothing for the plaintiff to get sold. This argument is the result of confusion between the equity of redemption which, is an interest in land and is by itself immoveable property and the right to redeem which is only a right attached to the equity of redemption. The former is not affected by an order absolute and can only be extinguished by a sale in Court-auction confirmed subsequently of the whole property. The second argument was that the security of the second mortgagee was also extinguished by the order absolute. Neither the section nor the observation of their Lordships, referred to the security of the second mortgagee; they clearly refer to the security sought to be enforced in suit; that is that of the first mortgagee in this case. If the property is sold by Court free of encumbrances the second mortgagee's security will cease to have effect on that property, but that effect is not produced by a private sale by the mortgagor as in the present case.

14. We must, therefore, hold that the decree of the Subordinate Judge cannot be supported on the ground taken by him and we must reverse it, but as he has not disposed of 'all the questions raised in appeal we must remand the appeal to him for fresh disposal. The costs of this second appeal will be costs in the cause and will be disposed of by the Subordinate Judge.


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