Skip to content


K. Jagannatha Kone Vs. Ramachandra Naidu and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1936Mad589; 165Ind.Cas.453
AppellantK. Jagannatha Kone
RespondentRamachandra Naidu and ors.
Cases ReferredSubramanian Chettiar v. Raja of Ramnad
Excerpt:
- - he failed to do so......in the trial court, by a deed dated 4th september 1912, the plaintiff's brother purchased the suit property for a sum of rs. 4,650. a sum of rs. 700 was retained in deposit with him. the conditions subject to which rs. 700 was retained is thus stated in the sale deed : 'rs. 700 retained in deposit with you on condition that if in the suit, o.s. no. 75 of 1911 on the file of the additional district munsif of madura in which no. 1 of us, the defendant, has given the present sale properties and some other properties as security for mesne profits in favour of the plaintiff ramanuja nayudu, we succeed, we shall get the sum, and if the plaintiff succeeds, the amount shall be given to him.' possession of the suit properties appears to have been given to the plaintiff's brother and at a.....
Judgment:

Venkataramana Rao, J.

1. The suit out of which this second appeal arises has been filed to impeach the validity of a Court sale in execution of a decree for mesne profits in O.S. No. 75 of 1911 on the file of the Additional District Munsif's Court of Madura. O.S. No. 75 of 1911 was filed by six plaintiffs, defendant 5 in this case being plaintiff 6 in that case, for recovery of possession of certain lands from defendants 1 and 2 therein. During the pendency of the suit an application for the appointment of a receiver was made being I. A. No. 235 of 1911 to manage the suit properties or to direct the said defendants to furnish security in the sum of Rs. 700, the probable amount of mesne profits and costs. By an order dated 20th March 1911 it was directed that defendant 1 in the said suit should give security for Rs. 700 within three weeks from the date of the order or in default a receiver should be appointed. In pursuance of the said order the said defendant 1 executed a security bond dated 17th July 1911 in and by which he gave the said property and some other property as security for Rs. 700. He also covenanted that he will not in any way alienate the properties except with the orders of Court. The security bond was in favour of the Court of the Additional District Munsif at Madura. On 6th December 1.911 there was a decree for possession and mesne profits. The said decree was confirmed in appeal by the District Court on 31st March 1913.

2. There was a second appeal to the High Court which was withdrawn on 1st November 1915. Subsequent to the date of the decree in the trial Court, by a deed dated 4th September 1912, the plaintiff's brother purchased the suit property for a sum of Rs. 4,650. A sum of Rs. 700 was retained in deposit with him. The conditions subject to which Rs. 700 was retained is thus stated in the sale deed : 'Rs. 700 retained in deposit with you on condition that if in the suit, O.S. No. 75 of 1911 on the file of the Additional District Munsif of Madura in which No. 1 of us, the defendant, has given the present sale properties and some other properties as security for mesne profits in favour of the plaintiff Ramanuja Nayudu, we succeed, we shall get the sum, and if the plaintiff succeeds, the amount shall be given to him.' Possession of the suit properties appears to have been given to the plaintiff's brother and at a subsequent partition between the plaintiff and his brother the plaintiff obtained this property and aver since the date of sale the plaintiff's family and after that the plaintiff has been in possession thereof. Subsequent to the withdrawal of the second appeal in the High Court defendant 5 who was plaintiff 6 in O.S. No 75 of 1911 obtained an assignment of the decree from his co-plaintiffs and sought to execute the decree both for possession and mesne profits.

3. The said mesne profits were ascertained in I. A. No 128 of 1924 in the sum of Rs. 2,028 and Rs. 36 for costs and on 2nd August 1924 a decree was passed for the said sum. Defendant 5 put in an execution application for the recovery of the entire sum by sale of the suit property and in execution thereof purchased the same on 23rd November 1925 and the said sale was confirmed on 4th January 1926, when he proceeded to obtain delivery of possession he was obstructed by the plaintiff and the plaintiff then put in a petition to set aside the execution sale on the ground that no notice was issued to him and that the sale was for an amount far in excess of the amount for which the suit property was given as security. The said petition was directed to be treated as a suit and it was consequently registered and tried as a suit. The learned District Munsif who tried the suit gave a decree in favour of the plaintiff but the learned Subordinate Judge reversed his decision holding inter alia that the sale was valid and no notice was necessary as the plaintiff must be deemed to have been precluded by the doctrine of lis pendens from contesting the Court sale and also that the sale for the entire amount of the mesne profits was valid. It is against this decision that the second appeal is filed. The first point argued by Mr. Rajah Iyer is that the sale having been held without notice to the plaintiff must be deemed to be invalid as the property subsequent to the execution of the security bond was alienated in favour of the plaintiff's brother and on the date of the sale it vested in the plaintiff. It has now been definitely settled by the Privy Council in Raj Raghubar Singh v. Jai Indra Bahadur Singh 1919 42 All 158 that a security bond similar to the one in the present suit given in favour of the Court does not constitute a mortgage within the meaning of the Transfer of Property Act so as to attract the procedure laid down in that Act and the consequent necessity of a suit to enforce it.

4. In that case the security bond was given by a third party in favour of the Court. They construed the document as giving only a charge upon the property and held that the property can be brought to sale by an application made in the suit after giving notice to the sureties. They point out that Section 47 would not apply as the bond was not given by the judgment-debtor. In Subramanian Chettiar v. Raja of Ramnad 1918 41 Mad 327 it has been laid down that if the bond is given by the judgment-debtor it can be enforced in. execution by sale of the property as the matter would be covered by Section 47 being one relating to the execution, discharge or satisfaction of the decree. If the matter was confined only between the judgment-debtor or his surety and the decree-holder, no difficulty arises in the application of the principle laid down in the above cases. But the question is, if the property has been alienated subsequent to the giving of the security bond, can such a procedure be still continued and if so, is a notice to the alienee obligatory before bringing the property to sale In some of the cases decided subsequent to the decision in Raj Raghubar Singh v. Jai Indra Bahadur Singh 1919 42 All 158 a view has been taken that if the property is alienated by the surety subsequent to. his giving the bond in favour of the Court the procedure cannot be adopted and a suit under Section 67, T.P. Act would be necessary. In Jayappa Lokappa v. Shivan Gouda Dhyaman Gouda 1928 52 Bom 72, Martin, C.J., observes:

Supposing the surety had assigned his equity of redemption to the third parties, then the mortgage security could only be enforced in a separate suit.

citing Guru Shantappa v. Gurava 1926 50 Bom 339, where Macleod, C.J., purported to follow Amir v. Mahadev Prasad 1917 39 All 225. In Amir v. Mahadev Prasad 1917 39 All 225 it was held that a suit under Section 67, T.P. Act would be necessary to enforce the charge created by a security bond. Richards, C.J., gave the reason as follows:

I may point Out the great inconvenience of holding that the section allowed a summary sale of hypothecated property. The persons interested in the property (who might be numerous), would be no parties to the proceedings nor would any portion of redemption be allowed. In fact, the sale of the property in this way would be inconsistent with many of the provisions of the Transfer of Property Act and of the Code itself relating to the enforcement of mortgages. It was, no doubt, held in Janaki Kuar v Sarup Rani (1895) 17 All 99 that the property might be sold having regard to the provisions of Section 253, Civil P.C. of 1882. In the new Code the word 'personally' has been introduced. The introduction of this word, I think, got rid of any possible ambiguity there might have been under the old section, and I, therefore, think that we are not required to follow a decision which was given under the old section.

5. It will be noticed that the Privy Council expressly overruled this view and approved the decision in Janaki Kuar v Sarup Rani (1895) 17 All 99 wherein their Lordships Edge, C.J., and Benerji, J., observe:

Section 99, T.P. Act has in our opinion no application to the enforcement by a process of the Court of a security bond given to the Court for the performance of its decree.

6. Therefore if the procedure laid down for a suit on a mortgage or a charge is inapplicable, if the matter rests between the decree-holder and judgment debtor or the decree-holder and surety, I do not see how an alienation subsequent to the execution of a security bond could attract it and force the decree-holder to file a suit. As pointed out by the Privy Council, when a bond is given to the Court, there is no relation of mortgagor and mortgagee constituted because there is no person to whom the security is given which is an essential requisite for a mortgage or a charge as defined in the Transfer of Property Act. Hence the procedure was held to be inapplicable and the contention that a suit to enforce the charge is necessary was repelled. I am therefore of opinion that the view taken in some of the above cases that a suit is necessary is not sound and that the property can be proceeded with in execution in spite of the alienation. The next question, is if the property is alienated after the security bond is given, can the proceedings to enforce the charge be taken without notice to the alienee In Sadasiva v Ramalinga (1874) 2 IA 219 where a security bond was given for the payment of mesne profits subsequent to suit pending the disposal of an appeal from a decree therein, their Lordships of the Privy Council explained the scope and effect of such a bond thus:

They are addressed to the civil Court; they contain an obligation to pay subsequent mesne profits for the years which they respectively cover and point even more plainly to the ascertainment of the amount of such profits when the decree should come to be executed, and to their realization, if not then paid, by the Court. The effect then of each document seems to be an undertaking on the part of the person executing it; and that not by a mere written agreement between the parties, but by an act of the Court that in consideration of his being allowed to remain in possession pending the appeal he will, if the appeal goes against him, account in that suit, and before that Court, for the mesne profits of the year in question,

and again at p. 402 they point out:

They are proceedings in Court importing a certain liability to be enforced in the suit against the defendant to that suit.

7. Muttuswami Ayyar, J., explained the nature of the obligation undertaken by a surety in Thirumalai v. Ramayyar (1890) 13 Mad 1thus:

The obligation which the surety undertakes is an obligation to fulfill the decree which may be passed against the defendant or appellant in the original suit or in appeal, and the obligation is contracted before the Court and is as much a matter of record as the decree undertaken to be fulfilled. There is no apparent reason for directing the successful party to obtain a fresh decree against the surety whilst the very obligation is to fulfil the decree against the defendant or appellant.

8. Thus the property is made the subject matter of litigation and is brought within the jurisdiction of the Court and it follows that one who purchases the same should be bound by the judgment or decree thereafter rendered. In order to constitute lis pendens the following essentials are necessary : (1) There must be a pen. ding judicial proceeding : (2) The Court must have jurisdiction over the person and the property; (3) The property must be specifically described and must be necessarily affected by the termination of the proceedings. All these elements are here present. There was litigation about the mesne profits. The property specified in the security bond was brought under the control of the Court by virtue of the order of the Court directing the security to be given and by the execution of the security bond in pursuance thereof in its favour and the said property would be necessarily affected by the termination of the proceedings as it is liable to be sold by the Court as soon as the liability is declared and the amount of mesne profits ascertained. As stated by Rulum Chand in his work on Res Judicata at p. 723:

The primary object for which the suit is brought is not material, provided the Court has jurisdiction of the property for secondary purposes.

9. He instances suits for alimony and maintenance under the English law where a prayer is made for granting alimony and maintenance out of a particular property analogous to suits for maintenance under Hindu law. So far as suits for maintenance are concerned, when a charge is declared by a decree for maintenance it has been held that the rule of lis pendens applies even from the date of plaint at any rate from the date of the decree. A similar rule has been applied to cases where in suits for decree for money ultimately a decree is passed for payment of the money and also a charge is created as security for the said payment by the decree : vide Aravamudhu v. Abiramavalli 1934 Mad 353. It is not necessary that at the time when the suit was instituted, a charge should have been claimed on the property. It is enough if at any subsequent stage of the litigation the property is brought under the control and jurisdiction of the Court, so that from that time it will be property directly and specifically in question in the suit : vide K.Y. Chettiar Firm v. Jamila Bibi 1930 7 Rang 734. Therefore once the property is brought under the control of the Court so that it is rendered available for any liability to be declared or determined by it and subject to its further orders and directions the rule of lis pendens operates and the main purpose of the rule is to keep the subject-matter of the litigation within the power of the Court until the judgment or decree shall be entered; otherwise by successive alienations its judgment or decree could be rendered abortive by making it impossible for the Court to execute its judgment or decree.

Hence the general proposition that one who purchases of either party to the suit the subject-matter of the litigation after the Court has acquired jurisdiction is bound by the judgment or decree, whether he purchased for a valuable consideration or not, and without any express or implied notice.

10. In this connection it is necessary to refer to the Calcutta eases relied on by Mr. Rajah Ayyar. In Rajendra Chandra Sarkar v. Bipin Chandra Shaha 1934 60 Cal 1298, it has been held that where a judgment-debtor dies after the execution of the security bond the Official Assignee will be a necessary party, otherwise the equity of redemption would not be represented in the execution proceedings. It follows Kalachand Banerjee v. Jagannath Marvar 1927 54 Cal 595, where it was held that a suit for foreclosure cannot be brought or continued without the Official Receiver being a party when the mortgaged property vested in him. The case of the Official Assignee is different. The doctrine of lis pendens is not applied to a case of an involuntary assignment such as insolvency. The rule is thus stated by Bhashyam Ayyangar, J., in Punithavelu Mudaliar v. Bhashyam Iyengar (1902) 25 Mad 406:

The principle of the decision in Wood v. Surr (1854) 19 Beav 551 is that the Official Assignee being one appointed in invitum and not a voluntary purchaser as in the case of a transfer by act of parties or by an 'involuntary sale' in execution of a decree, the doctrine of lis pendens cannot affect him and the party seeking to bind him (the Official Assignee) by the result of the suit, pending which the interest of its subject matter has devolved on him by operation of law, ought to take proceedings to join him as a party to the suit (under Section 372, Civil P.C.) and obtain the decree against him.

11. It seems to me therefore that the doctrine of lis pendens would apply to the present case. Further in this case the plaintiff had notice of the security bond. He could have intervened and made himself a party to the litigation under Order 22, Rule 10, [vide Payaz Hussain Khan v. Prag Narain (1907) 29 All 339. Prima facie therefore the decree-holder was entitled to ignore the alienation in his favour and the sale without notice to him will be valid. But it will have to be considered what is the exact effect of the doctrine of lis pendens on alienations pendente lite? The effect of the rule is that it does not operate to annul the conveyance but only renders it subservient to the rights of the parties to the action as determined by the judgment or decree (vide Hukum Chand's Res Judicata, p. 685, Story on Equity Jurisprudence, Edn. 3, Section 406). Therefore the sale in favour of the plaintiff's brother passes all the interest of the vendor in the property subject to the rights as declared by the judgment and decree in O.S. No. 75 of 1911. Therefore the question is, what is the right declared by the decree The decree-holder can enforce the security bond only to the extent of the amount secured thereunder by the sale of the property and other properties specified therein. The amount secured was only a sum of Rs. 700 and in my opinion the decree must be deemed to have charged the property only to the extent of the said sum. The view of the lower Court that the decree-holder can enforce the security bond for the entire amount of mesne profits, namely the sum of Rs. 2,308, is wrong. The plaintiffs in the said suit were content to have the security only for a sum of Rs. 700. It was subject to that liability that the property was sold to the plaintiff's brother under the sale deed dated 4th September 1912. The fact that in the application asking for a security the sum of Rs. 700 was mentioned as the probable amount will not enlarge the obligation actually secured under the security bond. The decree-holder was therefore not entitled to enforce the security for more than Rs. 700.

12. The lower Court relied on Subramanian Chettiar v. Raja of Ramnad 1918 41 Mad 327 for the position that even though the execution was taken for a larger amount the order for sale must be deemed to be final as the judgment-debtor was served with notice and did not object to the same. But in that case there was no alienation subsequent to the security bond. The only person interested in defending the matter was the judgment-debtor. The judgment-debtor here had ceased to have any interest in the property by reason of the alienation and it was not to his interest to object to the sale of the property. Therefore in my opinion in so far as defendant 5 sought to execute the decree for more than Rs. 700, the proceedings must be held to be without jurisdiction in the absence of the plaintiff and cannot be held to be binding on him. The sale in favour of defendant 5 will therefore have to be set aside. The plaintiff has offered to pay the amount secured under the security bond. It was his duty to have paid the amount into Court on or about 2nd August 1924 when the Court declared the amount due. He failed to do so. I would therefore set aside the sale subject to the plaintiff depositing into Court within three months from this date the said sum of Rs. 700 with interest at 6 per cent per annum from 2nd August 1924 up to date of payment. Else the suit will stand dismissed. I direct each party to bear his own costs in the second' appeal and in the lower Court throughout. Leave refused.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //