1. This is an appeal on behalf of the third and fourth defendants in an action to enforce a mortgage security. The first defendant executed the bond in favour of the plaintiff on the 25th September, 1904, for a sum of Rs. 5,500, and got it registered on the 12th November following. The date fixed for repayment was the 11th December 1905. On the 27th June, 1906, the plaintiff commenced this action against the mortgagor and his son and two other persons who had purchased the property at a sale in execution of a money decree against the mortgagor on the 8th June 1906. The claim was resisted by these purchasers, substantially on the ground that the bond represented a fictitious transaction and had been executed solely with a view to place the properties out of the reach of the creditors of the mortgagor. The Subordinate Judge overruled this contention and made a decree in favour of the plaintiff. The two purchaser-defendants have now appealed to this Court, and on their behalf the decision of the Subordinate Judge has been assailed on two grounds, namely, first, that as the plaintiff is a Sub-mortgagee he is not entitled to maintain the suit as framed, and secondly, that upon the evidence it is conclusively proved that the alleged mortgage represents a fictitious transaction.
2. In support of the first of these grounds, our attention has been invited to the mortgage-deed, which shows, on the face of it, that the property given by way of security, was held by the mortgagor under usufructuary mortgage from the proprietors. It has been argued that the position of the plaintiff, therefore, is that of a Sub-mortgagee, and, as such he is not entitled to maintain an action on his security. In support of this proposition, reliance has been placed upon the cases of Ganga Prasad v. Chunni Lal 18 A. 113 and Ram Jatan Rai v. Ramhit Singh 27 A. 511; A.W.N. (1905) 76; 2 A.L.J. 434. These decisions, however, do not support in any way the contention of the appellants. They deal with the question of the right of a Sub-mortgagee to bring to sale the properties comprised in the superior mortgage. The question raised before us is of an entirely different description. But we may observe that the two cases mentioned hare been subsequently overruled by a Full Bench in Ram Shankar Lal v. Ganesh Parshad 29 A. 385 (F.B.); 4 A.L.J. 273; A.W.N. (1907) 97; 2 M.L.T. 248 in which it was ruled that a sub-mortgagee of mortgagee rights in immovable property, is entitled to a decree for sale of the mortgagee rights of his mortgagor. This is in accord with the principle recognised by the Madras High Court in Muthu Vijia Raghunatha v. Venkata Chellam 20 M. 35 by the Bombay High Court in Narayan v. Vithalmaval Ganoji 15 B. 692 and Padgaya v. Baji Babaji 20 B. 549 and by this Court in Bansi Lal v. Durga Prasad 9 C.L.J. 429; 2 Ind. Cas. 645. It is not necessary to examine whether it is open to a Sub-mortgagee to frame his suit in such a way as to enable him to foreclose not merely his mortgagor but also the superior mortgagor; but it is indisputable that it is not obligatory upon him to frame his action in this way. As pointed out by this Court in Jajneswar Dutt v. Bhuban Mohan Mitra 33 C.425; 3 C.L.J. 205 the object of a mortgage suit is to cut off the equity of redemption and to bar the rights of the mortgagor and of those claiming under him; the only proper parties to such a suit are the mortgagor and the mortgagee and those who have acquired interest under them subsequent to the mortgage. It is manifest, therefore, that the original mortgagor need not be joined in an action for foreclosure between the mortgagee and his derivative or sub-mortgagee. In the case before us, the plaintiff seeks to enforce his own security and to bar the equity of redemption of his alleged mortgagor, The mortgagor of that mortgagor is manifestly in no way interested in the controversy between the parties to this litigation and cannot consequently be drawn into it. The first ground taken on behalf of the appellants as to the frame of the suit entirely fails.
3. The second ground on which the decision of the Subordinate Judge is attacked relates to the merits of the case. [Their Lordships then considered the evidence on the record, and, at the request of the parties, took additional evidence to elucidate points not fully cleared up in the Court below. After reviewing the whole evidence the judgment proceeded].
4. Upon the whole evidence now on the record, a considerable portion of which has been adduced before us, we are satisfied that the mortgage does not represent a real transaction. The second ground taken on behalf of the appellants must consequently be sustained.
5. The result, therefore, is that this appeal must be allowed, the decree of the Subordinate Judge discharged, and the suit dismissed with costs both here and in the Court below, payable by the plaintiff to the third and fourth defendants.