1. This is an appeal from a judgment and decree of Buckland, J., dated 18th May 1933. The suit was brought by Pradyumna Kumar Mullick to recover from the defendant Kumar Dinendra Mullick and from the defendant Kumar Gopendra Mullick to the extent to which assets of his deceased father Kumar Ganendro Mullick might come into his hands a sum of Rupees 2,67,471-13-3 upon a covenant contained in an instrument described as a deed of mortgage dated 27th June 1924, which was executed in favour of the plaintiff by the defendant Kumar Dinendra Mallick and by the said Kumar Ganendro Mullick. There was also a claim for further interest for accounts if necessary and for payment of such sum as might be found due. The main point for determination at the trial of the suit in the Court below was whether it was in law competent to the plaintiff to bring a suit on the basis of the covenants in the deed of 27th June 1924 having regard to certain events and legal proceedings which had occurred prior to the institution of this suit. This history of the relations between the parties and the facts and circumstances upon which the plaintiff relied are briefly but clearly and sufficiently set forth in the opening paragraphs of the judgment under appeal and it is not necessary that we should recapitulate them. At the trial three points were taken on behalf of the defendants which the learned Judge summarized thus:
Three points have been taken on behalf of the defendants. Firstly, it is urged that the suit is barred by limitation, for the suit being now a suit for a simple money decree upon a bond, the suit would be barred unless instituted within six years from the date of the instrument unless grounds are established extending the period of limitation. It is further contended that the matter is res judicata by virtue of the application made in the mortgage suit for a personal decree, and lastly, that the suit is barred by Section 47, Civil P.C., which requires that all questions arising between the parties to the suit in which a decree was passed or their representatives and relating to execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit.
2. The learned Judge held that the plea of limitation must fail and that decision has not been challenged in this appeal. Nothing further therefore need be said upon that point. As regards the other two points the learned Judge said that the question of res judicata is not altogether easy to divorce from matters to be considered in relation to the point taken under Section 47, Civil P.C., and he pointed out that authorities had been cited before him in the latter connexion in order to establish the proposition that any subsequent agreement between the parties relating to the subject matter of the decree is incapable of enforcement by a separate suit but must be treated as an adjustment of the decree itself and so dealt with in accordance with the provisions of Section 47, Civil P.C. Upon a careful review of the case as presented before him the learned Judge came to the conclusion that under the covenants contained in the document of 27th June 1924 the plaintiff had acquired fresh rights in addition to those he had obtained under the assignment to him of the original decree and he took the view that the personal covenants contained in that document were distinct and separate and altogether independent of the personal covenant contained in the earlier mortgage upon which it was sought to obtain a personal decree in the former proceedings in the year 1931, and that therefore the plaintiff was entitled to succeed in the suit.
3. Mr. S.N. Banerjee on behalf of the defendants-appellants has argued before us that what really happened at the time of the assignment of the original decree by the Roy mortgagees to the present plaintiff was that the plaintiff amalgamated the sum originally due to the Roys from the Mullicks as mortgagors with the additional sum advanced by the plaintiff to the Mullicks and that the plaintiff in effect treated the whole sum as a consolidated liability due from the mortgagors to him and accordingly the sum paid to the plaintiff on 23rd August 1925 was taken by him in reduction of the combined debts with the result that when the plaintiff on 4th December 1931 instituted the proceedings which eventuated in the order of dismissal made by my brother Lort-Williams on 7th January 1932, the plaintiff was in essence and for all practical purposes taking execution proceedings in respect of the entirety of the defendants then outstanding liabilities to the plaintiff and the plaintiff by making that application in the matter of the original mortgage and upon the basis of an account made out upon the footing of both the original and the additional obligations had once and for all and irrevocably exercised the option given to him under the relevant provisions in the deed of 27th June 1924.
4. Mr. Bannerjee accordingly argued that the arrangement entered into between the parties whereby the present plaintiff for all purposes stepped into the shoes of the original mortgagees, the Roys, must be treated as being in the nature of an 'adjustment' of the decree made in the mortgage suit and of such a kind that it clearly fell within the purview of the provisions of Order 21, Rule 2 and so attracted the operation of S 47, Civil P. C, which would have the effect of preventing the plaintiff from enforcing his rights against the mortgagors, the Mullicks, otherwise than by execution proceedings in the original suit. Thus the plaintiff would be debarred from instituting any fresh suit and so the present suit ought to have been dismissed. The plaintiff had put himself out of Court as regards a suit, said Mr. Bannerjee, by having definitely elected to treat the whole arrangement between him and the Mullicks as one fit to be effectuated in execution proceedings and that even as regards payment of the additional sum of Rs. 21,923 that must be regarded as having been treated by the plaintiff as being enforceable under the original decree. In any event the whole matter must be looked at as being governed by the principles of res judicata seeing that in the proceedings before Lort-Williams, J., the plaintiff was actually placing reliance upon the material covenants in the deed of 27th June 3 924, at any rate for the purpose of saving limitation, moreover seeing that the amount then claimed by the plaintiff had been arrived at upon the basis of a principal sum made up of the original balance plus the additional advances together with interest calculated not at the rate stipulated for in the original mortgage but at the higher rate agreed upon by the mortgagors as part of the consideration for the plaintiff's forbearance and his consent not to seek to enforce his rights until after the lapse of one year from 1st June 1924. It is true that the points taken by the plaintiff as to the operative effect of the fresh covenants in the deed of 27th June 1924 were not pressed before Lort-Williams, J., or even in the Court of appeal but they had been reiterated in the memorandum of appeal wherein a complaint was made that they ought to have been taken into consideration by the learned Judge on the hearing of the plaintiff's application for a personal decree against the mortgagors. Furthermore although these points were not urged in the Court of appeal they were nevertheless once more put forward in support of the application which the plaintiff subsequently made for leave to appeal to His Majesty in Council.
5. Mr. Bannerjee further argued that had he so chosen the plaintiff might at the outset have brought a suit such as the one with which we are now concerned or else treat the fresh advances as part of the original loan and the additional securities as if they were part of the original securities and that as he had chosen to adopt the latter course it must be taken that all his rights had, to all intents and purposes, become absorbed in his rights under the original decree. It follows from the line of argument that no fresh suit would lie for the recovery of the sum of Rupees 3,87,411-5-6. The covenants in the deed of 27th June 1924, as regards this sum, fixed no time for payment; save in so far as it postponed payment for a period of one year and they merely provided for the enhanced rate of interest and so it was argued that thus far, at any rate, the matter fell within the ambit of Section 47, Civil P.C. As regards the additional sum of Rs. 21,923 it was conceded that was payable by virtue of a covenant not contained in the subject-matter of the original decree, but it was contended on behalf of the appellants that an option was conferred upon the plaintiff to treat it as if it had, in fact, been part of that decree and the plaintiff rightly or wrongly had elected so to treat it. It was in pursuance of these arguments that Mr. Bannerjee invited us to come to the conclusion that the position between the parties must be dealt with as one within the contemplation and sphere of the provisions of Order 21, Rule 2 and that the arrangement made by the assignment and deed of additional security in 1924, must be recognised and given effect to as an 'adjustment' within the meaning of that rule. In this connexion Mr. Banerjee cited the case of Sri Prokash Singh v. Allahabad Bank Ltd., 1929 PC 19 with the object of showing that there need not be any particular form of application on the part of a decree-holder for the purpose of certifying such an adjustment to the Court and getting the Court to record the same, and that there is no time limit for such proceedings. All that is required under the Rule is that the Court should be informed of any arrangement come to by the parties which is relied upon as an adjustment and that the Court should make that adjustment a matter of record: see also Jalim Chand Patwari v. Yusuf Ali Chaudhuri 1925 Cal 1012 per Suhrawardy and Cuming, JJ. The arrangement between the Mullicks and the present plaintiff was in fact brought to the notice of the Court through the medium of the petition filed by the puisne mortgagees on 16th July 1924 when they asked for an order for the sale of some of the mortgaged properties, and again by the notice of motion and the affidavits put in on both sides in connexion therewith in the proceedings before Lort-Williams, J., on the application of Pradyumna for a personal decree against the mortgagors. In the affidavits used by the defendants in these proceedings no objection was taken to the statement of facts relied upon by the plaintiff.
6. It is to be observed that the present suit was brought to enforce the covenants to pay, contained in the deed of additional security of 27th June 1924, after giving credit for the sums realised in the sales by the Registrar and by private sales of the additional properties. Mr. Pugh on behalf of the plaintiff respondent says that as on the same day the 27th June 1924 the Roys assigned by a separate deed to Pradyumna their decree,, their security and the benefit of the original mortgage, the plaintiff acquired two separate and distinct sets of rights that is to say his rights in the Roys' mortgage suit transferred to him and his rights under the deed of additional security. In the deed of additional security there were provisions to the effect that the decree in the suit was to be altered and varied by the inclusion thereunder of (1) The sum of one lac paid to the Roys in satisfaction of their decree. That could no longer be claimed in the mortgage suit. (2) The sum of Rs. 21, 923. (3) A sum of Rs. 6,000 for costs, agreed to be subject to increase or refund. (4) A higher rate of interest. (5) A condition that the mortgage should not be enforced for a year.
7. Mr. Pugh however argued that all these provisions except perhaps the last, were inoperative, impossible and indeed illegal and even the last was probably also inoperative as regards the suit because the former decree could not be altered or varied save within very narrow limits, see Section 152, Civil P. C, and Order 28, Rule 11, English Rules of Procedure. In support of this contention Mr. Pugh referred to Ainsworth v. Wilding (1896) I Ch 673. In order to carry out the projected scheme and give effect to the variation enumerated above there would have to be an amendment of the decree and there would be required a fresh account taken and a new report by the Registrar, a new time to redeem and a new final decree for the sale of the properties not included in the original mortgage. Mr. Pugh argued that this was an impossible position and so the case fell within the provisions of Section 57, Contract Act, and the impossible terms should be disregarded; the rest of the agreement including the covenant to pay being still binding.
8. The real position said Mr. Pugh was that as under the assignment of the mortgage the plaintiff could get a sale by the Registrar of the original properties and then proceed under Order 34, Rule 6, as the plaintiff in fact did in respect of the amount fixed by the Registrar less the proceeds of the Registrar's sale and less the sum of one lac already paid under the deed of additional security, there was a definite covenant to pay a sum of Rs. 3,87,411-5-6 which included the Rs. 1,00,000, the further sums of Rs. 21,923 and Rs. 6,000 and the higher rate of interest. It was accordingly contended for the respondent that the provisions in the deed of 27th June 1924 were cumulative and not alternative. In answer to the appellants contention that the arrangement between the parties was in the nature of an adjustment. Mr. Pugh argued that an agreement to be an adjustment within Order 21, Rule 2, must be one which extinguishes the decree either in whole or in part and cannot include anything in the nature of a mere executory contract the effect of which is to substitute one decree for another. In Bakshi Ram v. Lala Desraj, 1931 Lah 608, Sir Shadi Lal held that a compromise which contains some stipulations that have not been carried out but are to be carried out in future, does not amount to an adjustment within the meaning of Order 21, Rule 2, following the decisions in Lodd Govindoss v. Ramadoss Vishnudoss, 1916 Mad 604 and Azizur Rahaman v. Aliraja Choudhari, 1928 Gal 527; see also Venkata Lingama v. Venkatadri Rao, 1927 Mad 911 and Ahmed Rahman v. A.L.A.R. Chettiar Firm, 1928 Rang 194. Mr. Pugh's argument came to this: that a decree may be dealt with by payment, i.e., satisfaction or by adjustment, i.e., by accepting something other than payment in discharge or by any other agreement which gets rid of the decree and constitutes an entirely new agreement which is enforceable like any other agreement by means of a suit. Mr. Pugh conceded that an agreement to accept payment by instalments or even to pay more than the amount of the decree is not illegal, but insisted that it is not an adjustment which can be recorded and even if it were, a Court executing the decree should pay no attention to it: see Fateh Muhammad v. Gopal Das (1885) 7 All 424. Such an arrangement remains to be enforced by a separate suit for damages.
9. Mr. Pugh then proceeded to argue that in any event the arrangement made between the parties had never been properly certified to the Court by the plaintiff or recorded by the Court and so as there was no adjustment and no record of it, Section 47, Civil P. C, could have no application at all. As regards the question of res judicata Mr. Pugh said that Section 11, Civil P.C., did not apply. It is of course clear law that the provisions of Section 11 are not exclusive. This has been laid down repeatedly by their Lordships of the Judicial Committee and we need only refer to the recent case of Mg. Sein Done v. Ma Pan Nyun, 1932 PC 161, per Lord Russell of Killowen at pp. 254 and 255. Mr. Pugh argued however that in spite of that being the law there could be no question of res judicata in the present case because although in the proceedings before Lort-Williams, J., matters arising out of the deed of additional security were put forward in the petition, they were in fact not relied upon and in any case were not adjudicated upon, because the only point decided by Lort-Williams, J., was the question of whether the application for the personal decree was within time or not and in any case the inclusion of such matters within an application which was made in the original suit was unjustifiable in law and so must be disregarded.
10. Mr. pugh was however at a loss to explain how it came about that the same points were again put forward in the Memorandum of Appeal filed in the appeal from the order of Lort-Williams, J., and yet once again in the application made on 19th July 1932 for leave to appeal to His Majesty in Council. The utmost Mr. Pugh could urge was that there was merely an error in procedure and nothing more than a futile attempt to enforce in execution proceedings a claim which properly could only be enforced by suit and therefore a decision rejecting that impossible application could in no sense give rise to a plea of res judicata in a suit based on a different cause of action. Mr. Pugh emphasised his contention that what we are concerned with are two different causes of action entailing two different and distinct remedies.
11. There is no doubt a great deal to be said for the arguments put forward on behalf of the respondents and it may well be a matter of doubt whether it can rightfully be said in this case that there was an adjustment between the parties within the meaning of Order 21, Rule 2. It must be borne in mind however that it has been held on several occasions that parties by agreement can arrange their own procedure and give jurisdiction to the Court to adopt that procedure and where the parties have agreed that money due shall be realised by execution, the Court has jurisdiction to proceed by way of execution: see Hridoy Mohan Sanyal v. Khagendra Nath Sanyal, 1929 Cal 637, where B.B. Ghose, J., referred to and followed the decisions in Pisani v. Attorney General for Gibralter (1874) 5 CP 516, Sadasiva Pillai v. Ramalinga Pillai (1876) 2 IA 219, Thakoor Dyal Singh v. Sarju Perahad Misser (1893) 20 Cal 22 and Mohamed Sulaiman v, Jhukki Lal (1889) 11 All 228, and it would seem that where a decree is altered by agreement of the parties with respect to the mode of payment, the Court executing the decree is bound to give effect to the compromise and a decree-holder is entitled to proceed on the terms of the compromise which was executable as a decree; see Ganga Bishun Marwari v. Raghunath Prosad, 1930 Pat 615, where a large number of authorities were considered and reviewed. Having regard to the authorities relied upon by Mr. Pugh however it seems to me more than a little doubtful whether the arrangement between the Mullicks and the plaintiff can rightfully be regarded as an adjustment within the meaning of Order 21, Rule 2. The arrangement as Mr. Pugh pointed out involved important and substantial variations of and additions to the matters comprised within the compass of the original decree in the mortgage suit, in that there were the further advances-the higher rate of interest, and the provision of additional security.
12. If the arrangement could properly be regarded as an adjustment I have no doubt that it was sufficiently certified to the Court and became recorded by the Court in the course of the proceedings instituted by the puisne mortgagee on 16th July 1924, and/or the proceedings by the plaintiff in connexion with the notice of motion dated 4th December 1931 and the order of Lort-Williams, J., reciting the affidavits used in those proceedings: of. Eusuffizeman Sarkar v. Sanchia Lal, 1916 Cal 451 and Pandurang Balkissen v. Jagya Bhau, 1921 Bom 411. I think it is correct to say that in order to constitute an adjustment which can be recorded under Order 21, Rule 2 it is indeed necessary that the arrangement between the parties should extinguish the decree either wholly or in part. In the present instance it may perhaps be said that in effect the original mortgage decree was in part satisfied by the giving of the additional securities. No doubt if there had been a proper adjustment then the provisions of Section 47, Civil P.C., would have come into operation and the plaintiff would have been limited as regards his remedies to proceedings in execution. It can scarcely be said I think that the application for the personal decree made in the original suit was in the nature of execution proceedings for if the application had not been barred by limitation a decree might have been made by Lort-Williams, J., which itself would be enforced by further execution proceedings if the defendants had not complied with the orders thereby made. In the peculiar circumstances of this case however it might be possible to say that the application for 'the personal decree was in the nature of proceedings in execution or at any rate a step in the nature of such proceedings so as to be covered by the provisions of Section 47.
13. In that event it would seem clear that the plaintiff had not only made his final election as regards the mode of enforcing his rights but having done so and founded his claim upon provisions of the deed of 27th June 1924 and accounts based upon those provisions, the matter had definitely become one of res judicata in that he had relied on the covenants in the deed of 27th June 1924 as evidenced by para. 12 of his Memorandum of Appeal and para. 12 of the application for leave to appeal to His Majesty in Council. However whether or not the arrangement between the parties was of a nature to permit of it being properly described in law as an adjustment under Order 21, Rule 2, it seems clear enough that all parties treated it as such an adjustment and the plaintiff manifestly acted upon the assumption and took proceedings upon the footing that it was in reality of such a kind that he could enforce it in proceedings of a summary character analogous to proceedings in execution and he does seem to have Sought to avail himself of the provisions in the deed of 27th June 1924, which prescribed that the mortgagee should be at liberty to include the said properties described in the schedule thereto (the additional securities) within the order for sale contained in and ordered by the said decrees
as if the last mentioned properties had been comprised and included in the said (original) indenture of mortgage of 13th February 1920 without having to institute a fresh suit on the footing of these presents and also to include the amounts due and owing on these presents for the time being as having been included in the said part recited indenture of 13th February 1920 and in the said decrees.
14. Mr. Bannerjee argued, as I have previously stated, that the conduct of the plaintiff amounted to a final conclusive and irrevocable election as regards the possible remedies open to him. Mr. Pugh objected, and no doubt rightly, to the idea of any assistance being afforded to the defendants based on a doctrine of election exercised by the plaintiff, but I think the matter assumes rather a different aspect if in place of election' one substitutes estoppel' as a ground for saying that the plaintiff by his earlier proceedings exhausted his remedies as against the defendants. In Pisani v. Attorney General for Gibralter (1874) 5 CP 516 a number of instances were given where jurisdiction had by consent been exercised in a manner which was a deviation from the cursus curiae and it was held that this could be done unless there was an attempt to give the Court jurisdiction which it did not possess or something occurred which was such a violent strain upon its procedure that it put it entirely out of its course. I do not think that what was originally done by the plaintiff in the present case was of such a revolutionary or violent nature as to put the Court 'entirely out of its course,' but I would prefer to rest our decision in this appeal upon principles analogous to those which were applied by their Lordships of the Judicial Committee of the Privy Council in Sadasiva Pillai v. Ramalinga Pillai (1876) 2 IA 219 where their Lordships treated the matter as one which fell under a section equivalent to Section 47, Civil P. C, but added that even if it did not, they thought that upon the ordinary principles of estoppel the respondent could not be heard to say that the question was not one within that section: see per Sir James Colville, Sadasiva Pillai v. Ramalinga Pillai (1876) 2 IA 219 at p. 233.
15. It seems to me upon a consideration of all the facts and circumstances of the present case that the plaintiff cannot now be heard to say that he had any remedy available to him as against the mortgagors other than that which he himself selected and upon which he took his stand not only before Lort-Williams, J., but with more or less seriousness both in the appeal and in the application for leave to proceed to His Majesty in Council. That view of the matter applies at any rate, to the main part of the plaintiff's case, that is to say, to so much of it as was directed to the recovery of the balance of the original mortgage money and interest thereon at the rate of 9 per cent stipulated for in the original mortgage deed of 13th February 1920. As regards the additional sums advanced and the extra 2 per cent interest dealt with by the deed of additional security of 27th June 1924 these items must be taken to have been covered pro tanto by the value or rather the amounts received in respect of the additional properties. There is no material before us to show what sum if any is still owing solely by reason of the terms of the deed of 27th June, but whatever it may have been, credit as against that would in any event have to be given for the sum of Rs. 87,500 realised by the sale of the properties described in the schedule to the deed of 27th June 1924. Even as regards the additional advances and the extra interest however I am disposed to hold that the plaintiff by his own acts in the law has precluded himself from reagitating the matter by means of a fresh suit. There is a further point of some substance though of a formal kind, which constitutes such a defect as disentitles the plaintiff to succeed in the present suit. As the suit is constituted it is in the form which is ordinarily described as a mortgage suit, but the relief sought by the plaintiff is merely an order for payment of money and the taking of accounts. Moreover the plaintiff is claiming on the basis of the document of 27th June 1924 which in paras. 8 and 9 of the plaint is described as a mortgage deed though no evidence was given to show that the deed of 27th June 1924 had ever been registered as a mortgage. Leaving this on one side however I hold that the plaintiff by his, conduct and by matters of record, was estopped from instituting the present proceedings and therefore I think that this appeal should be allowed with costs both here and the Court below.
16. A comparison of the petition of 10th December 1931, filed in the mortgage Suit No. 2350 of 1921, and the account annexed thereto with the plaint filed in the present Suit No. 337 of 1932, and the account annexed thereto, shows that the sums claimed in the two proceedings are practically identical. The slight difference in the totals is accounted for by the fact that in the first account, there was an error of omission of a payment of Rs. 5,000 made on 13th January 1928, and consequent errors in the subsequent calculation of interest, and by the facts that in the second account an extra sum of Rs. 5,280 has been claimed for interest for a further period of 78 days from 4th December 1931 to 19th February 1932 (namely, the period from the date of the notice of motion for a personal decree, to the date when the present suit was filed), and lastly by the fact that the costs, amounting to Rs. 1,445 of the unsuccessful application for a personal decree have been added.
17. The petition and the account thereto annexed were based, not only upon the original mortgage decree, but also upon the terms of the subsequent indenture dated 27th June 1924 though the attention of the Court was not drawn to this document, nor was any particular argument directed thereto. But the total sum claimed was arrived at by including the sum of Rs. 1,00,000 paid prior to the assignment of the decree, the fur. there advance of Rs. 21,923 and the increased rate of interest, and by giving credit for the proceeds of sale of the further security, all of which incidents arose out of, and by reason of the indenture, and not upon the original mortgage decree. If there can be any doubt upon this point, it should be resolved by the fact that one of the grounds of appeal, and of the petition for leave to appeal to the Privy Council was that the Court had failed to take into consideration the covenants contained in this indenture. Therefore, it seems clear that the plaintiff had always treated and regarded, and, for the purpose of the petition, continued to regard, the indenture and the covenants therein contained, as an adjustment of the decree, and asked the Court so to regard them, and to decide the matter accordingly.
18. It was doubtless for these reasons that the plaintiff decided to file his petition asking for a personal decree in the mortgage suit. In my opinion, his decision was correct. The question was one arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, within the meaning of Section 47, Civil P. C, and could not be the subject of a separate suit. His petition was rejected and the matter cannot now be reagitated. Therefore, the present suit is incompetent and the decree must be set aside. And even if it were arguable that the matters covered by the indenture could not properly have been agitated upon the application for a personal decree in the mortgage suit, and that the Court had no jurisdiction to entertain them, there is no material before this Court to show that anything is due to the plaintiff solely in respect of the covenants contained in the indenture. On the contrary, if those matters are to be excluded which arose by reason of the assignment of the mortgage decree and which were admittedly a proper subject, for, and covered by the application in the mortgage suit, the result of the account seems to be that the plaintiff has received payment in full in 'respect of those matters which were solely the subject-matter of the indenture. For all these reasons, this appeal must be allowed with costs both here and below.