1. This appeal arises out of a suit upon a mortgage. The mortgagors defendants did not appear. The defendant No. 5, who had purchased one of the properties mortgaged (property No. 3) at a sale held in execution of a rent decree, filed his written statement on the 10th August 1908, in which he pleaded inter alia that the property purchased by him could not be made liable under the plaintiff's mortgage and stated that he came to know of the mortgage only when he received summons in the present suit and at once filed a petition under Section 167, Bengal Tenancy Act, to the Collector for annulling the incumbrance, and that the 24th August, 1908, had been fixed for the disposal thereof.
2. The Court of first instance held that the plaintiff's mortgage could not bind the property purchased by the defendant No. 5 and dismissed the suit as against him and passed the usual mortgage decree against the other defendants with respect to the remaining properties.
3. On appeal by the plaintiffs, the learned Subordinate Judge held that it is settled law that a purchaser of property in execution of a rent decree has priority over a purchaser under a mortgage decree and ordered that the mortgaged property No. 3 be sold subject to the first charge of defendant No. 5 and allowed the plaintiff 6 months' time to redeem the charge of the defendant No. 5, and further ordered that upon plaintiff's redeeming the said charge, the mortgaged property will be sold free from the defendant's charge.
4. The defendant No. 5 has appealed to this Court and it has been contended on his behalf, first, that as he is the landlord of the holding and purchased it at a sale held in execution of his rent decree, he got the property free of all incumbrances, that he was not bound to implead any person holding a mortgage on the property in the rent suit, that such person can have no right to redeem him and that whatever right such person had under the mortgage passed by the sale it could not be enforced against him.
5. Secondly, it was contended, upon the authority of the case of Gopinath Mohapatra v. Kashinath Beg 13 C.W.N. 412 : 9 C.L.J. 234 : 1 Ind. Cas. 35, that the plaintiff not having paid off the rent decree, the defendant No. 5, the purchaser at the sale held in execution of the rent decree, took the property free of incumbrances. It was also contended that under Section 73 of the Transfer of Property Act, the plaintiff's remedy was to enforce his mortgage against the surplus purchase money, if any, under the sale held in execution of the rent decree.
6. Lastly, it was contended that even if the defendant No. 5 was bound to annul the incumbrance, he has in fact done so, and he has applied to this Court to be allowed to file certified copies of the order sheet of the Collector and the notice under Section 167 of the Bengal Tenancy Act, which he had filed before the lower appellate Court but which it is stated were returned by mistake to his pleader after the disposal of the case. I am of opinion that the first contention has no force. It is true the landlord is not bound to make the mortgagee of the holding a party to the rent suit. But Section 159 of the Bengal Tenancy Act provides that when a holding is sold in execution of a decree for arrears of a rent due in respect thereof, the purchaser shall take it subject to 'protected interest,' but with power to annul the interest defined as 'incumbrances' in Section 161 of the Act. A 'lien' created by the tenant on his holding is an incumbrance as defined in Section 161 of the Act, and Section 166 provides that an occupancy holding shall be sold with power to avoid all incumbrances and that the purchaser at such a sale may, in the manner provided in Section 167 and not otherwise, annul any incumbrance.
7. The purchaser of a holding at a sale held in execution of a rent decree must, therefore, annul any mortgage created by the tenant as provided by Section 167, Bengal Tenancy Act, and the mortgage is not ipso facto annulled, by the sale as contended for on behalf of the appellant. It was held in the case of Beni Prosad Sinha v. Rewat Lal 24 C. 746 (hat a sale purporting to be under Section 161 and the following sections of the Bengal Tenancy Act does not ipso facto cancel incumbrances. Notice must be given under Section 167 according to the procedure laid down in that section. Section 167 prescribed the procedure for annulling incumbrances. The application to the Collector must be made within one year of the date of the sale or the date on which he first had notice of the incumbrance whichever is later. If, therefore the purchaser does not take the necessary steps to get the incumbrance annulled within the period limited, the incumbrance stands and can be enforced against the purchaser. A landlord who purchased the holding is in no better position than any other purchaser, and I think, therefore, that if the defendant No. 5 did not take the necessary steps within the time prescribed to annul the incumbrance, the mortgage can be enforced against him.
8. As regards the second contention, it appears that different views have been taken as to the respective rights of the purchaser at the sale held in execution of a rent decree and the mortgagee of the holding. In the case reported in Gopinath Mohapatra v. Kanhinath Beg 13 C.W.N. 412 : 9 C.L.J. 234 : 1 Ind. Cas. 35 it was held that the mortgagee could either sell subject to the arrears of rent or pay off the rent decree and purchase the mortgaged property free of incumbrances and that the mortgagee not having done either, the purchaser at the sale in execution of the rent decree took the property free of incumbrances and was entitled to possession. On the other hand, in the case of Radhay Koer v. Ajodhya Dass 7 C.L.J. 262 where the usufructuary mortgagee of a holding, who had been dispossessed by the purchaser at a sale for arrears of rent, sued for possession and the latter pending the suit applied to the Collector to serve notice under Section 167, Bengal Tenancy Act, it was held that there can be no possible controversy that till the notice under Section 167 of the Bengal Tenancy Act has been properly served upon the incumbrancer, the incumbrance subsists. The facts of the latter case are similar to those of the present and I think the ruling in that case governs the present case.
9. As regards the argument founded on Section 73 of the Transfer of Property Act, it may be pointed out, as was done in the case of Beni Prosad Sinha v. Rewat Lal 24 C. 746, that Section 73 of the Transfer of Property Act only gives a right to the mortgagee over the residue of the sale proceeds and refers to cases where the law otherwise provided that the effect of the sale is to nullify a mortgage; it is not intended in any way to enlarge the interest of the purchaser at a sale for arrears of revenue or rent. The second ground, therefore, also fails.
10. With regard to the last ground, it appears that the present suit was instituted on the 20th May 1908. The application under Section 167, it appears from the copy of the order-sheet, was filed before the Collector on the 28th July 1908, and after notice to the plaintiff to show cause why the incumbrance should not be annulled and after hearing him, the Collector, on the 5th December 1908, ordered notice under Section 167 to be issued as prayed for and it is stated in the copy of the notice that it was served on the plaintiff on the 25th December 1908, and that the case was disposed of on the 4th January 1909.
11. The present suit was decided in the Court of first instance on the 20th November 1908, before the proceedings under Section 167 terminated, and as already stated the defendant No. 5 filed certified copies of the notice and order-sheet in the appellate Court. The learned Subordinate Judge refers to the 'copies of proceedings under Section 167' in his judgment but they were not admitted and were returned to the appellant.
12. It is urged on behalf of the appellant that if as a matter of fact he became aware of the incumbrance only within a year of his making the application to the Collector under Section 167, and if the notice under Section 167 was served, then the mortgage of the plaintiff was annulled. It is further urged that the proceedings before the Collector were not ex parte and the order-sheet and the endorsement on the notice show that the notice was served upon the plaintiff and that the same are conclusive and it is not open to the Civil Court to go into the question whether the incumbrance was annulled in accordance with the provisions of Section 167. I do not think, however, that this contention is a valid one. The proceedings before the Collector may be and often are ex parte, and are summary proceedings, and are not binding upon the Civil Courts and it is undoubtedly open to the Civil Courts to go into the said question.
13. It is, however, contended that the proceedings in the present case not having been ex parte they are prima facie evidence and that at any rate the appellant ought to have been allowed an opportunity to prove the facts and the appellant prays that the case might be sent down for findings after taking evidence on the questions as to whether the application was within time and whether the notice was properly served. It is contended that the copies of proceedings are not new evidence in the case, they Hiving been actually filed before the Subordinate Judge and referred to by him in his judgment and reference is made to certain authorities to show that the appellate Court has the power to take notice of events which have happened during the pendency of the appeal when by so doing it can shorten litigation and best attain the ends of justice by preserving the rights of both parties, and that such events when not appearing on the record may be proved by extrinsic evidence.
14. On the other hand, the learned Vakil for the respondents strenuously contends that the appellant ought not to be allowed the opportunity asked for because he did not adduce any evidence in the Court of first instance to show that he became aware of the incumbrance only within a year of his making the application under Section 167, although there was a statement to that effect in his written statement, nor ask the lower appellate Court to take evidence on the point or for proving the notice or the service thereof: further that the case should be tried upon the state of affairs as they stood on the date of institution of the suit and the case of Radhay Koer v. Ajodhya Das 7 C.L.J. 262 is relied on in support of the contention. In that case, the facts of which were similar to those of the present, it was held that in a case of this description the plaintiff must succeed on the title as it stood on the date of the institution of the suit and I am bound by the said decision.
15. Besides it was laid down in that case that it is obligatory on the purchaser to show that the notice under Section 167 had been served in the manner prescribed and that the entries in the order-sheet are not prima facie evidence against the encumbrancer that the notice was served. It is true that in that case the proceedings before the Collector were ex parte. In the present case, the Collector gave notice to the plaintiff and heard him and then ordered notice to be issued. The endorsement on the copy of the notice shows that it was served. But it ought to have been proved in the present case that the application under Section 167 was made within one year of the date when the defendant No. 5 became aware of the encumbrance as the sale took place more than one year before the application was made. Further, it was necessary to prove the notice and to prove that the notice was served and served in the manner prescribed by law. That was not done in the present case nor did the appellant ask the lower appellate Court to be allowed to adduce evidence on the said points. Under the circumstances, it cannot be said that there was any error or defect of procedure in the trial of the case. I am, therefore, constrained to refuse the application. The appeal is accordingly dismissed with costs. But as pointed out in Radhay Koer's case 7 C.L.J. 262 cited above, this decree will not prevent the defendant No. 5 from instituting a suit for such relief as he may be entitled to upon the allegation that subsequent to the institution of the present suit, the title of the plaintiff had been extinguished in the manner recognized by law.
16. The respondent No. 4, who has been unnecessarily made a party to the appeal, will get his costs of this appeal separately.