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C.L. Kiernander Vs. Benimadhab Khettri - Court Judgment

LegalCrystal Citation
Subject Property
Decided On
Reported inAIR1931Cal763
AppellantC.L. Kiernander
RespondentBenimadhab Khettri
Cases ReferredAshutosh Nanda v. Gadadhar Das Second Appeal No.
- mukerji, j. 1. one asokenath mitra was the owner of considerable properties, in respect of which he had executed various mortgages in favour of a large number of persons. premises no. 10/2, elgin road, is one of such properties. that property lies outside the local jurisdiction of the original side of this court, being situate in the district of 24-parganas. on 22nd december 1921, one nalinimohan das gupta, the assignee of one of the mortgages, being a mortgage executed on 25th june 1920, instituted a suit to enforce the said mortgage, asking for a decree for sale. premises no. 10/2, elgin road, was one of the properties covered by the said mortgage. ' the claim at the date of the suit was rs. 5,970-4-0 of which rs. 5,000 was the amount of principal, and the balance the interest due.2. he.....

Mukerji, J.

1. One Asokenath Mitra was the owner of considerable properties, in respect of which he had executed various mortgages in favour of a large number of persons. Premises No. 10/2, Elgin Road, is one of such properties. That property lies outside the local jurisdiction of the Original Side of this Court, being situate in the district of 24-Parganas. On 22nd December 1921, one Nalinimohan Das Gupta, the assignee of one of the mortgages, being a mortgage executed on 25th June 1920, instituted a suit to enforce the said mortgage, asking for a decree for sale. Premises No. 10/2, Elgin Road, was one of the properties covered by the said mortgage. ' The claim at the date of the suit was Rs. 5,970-4-0 of which Rs. 5,000 was the amount of principal, and the balance the interest due.

2. He impleaded in that suit nine other persons, besides the mortgagor Asoke, who were puisne mortgagees in respect of one or other of the properties covered by the mortgage of 25th June 1920. On 6th March 1922 the plaintiff 1 in the present suit, who held a prior mortgage from Asoke for a sum of Rupees 38,000, as also a large number of other persons, who held other mortgages from Asoke, came in and were made parties to the suit instituted by Nalinimohan Das Gupta, and a consent decree was passed. The earliest of these mortgages was dated 1917, and the total amount, for which provision was made in this consent decree, was about five lakhs of rupees. In pursuance of the said decree, premises No. 10/2, Elgin Road, were put up to sale by the Registrar and was purchased by the two plaintiffs on 16th May 1924, for a price of Rs. 70,000. On 29th July 1924, the plaintiffs gave notice to defendant 1 in this suit, who was occupying the premises, to attorn to them and pay them rent or to vacate. Defendant 1, in a letter of 6th August 1924, claimed title to the premises and asserted that he was in possession in his own right and that he was not bound by the decree in the mortgage suit or the sale thereunder. On 30th August 1924, the plaintiffs relying on the said letter as having caused them resistance or obstruction asked the Judge sitting on the Original Side for an order under Order 21, Rule 97, Civil P.C., giving them possession of the property purchased by them. They obtained an order against the defendant 1, which was eventully modified on appeal. The Court of appeal, on 6th March 1925, ordered that the plaintiff's application as against defendant 1 should be dismissed and all that the plaintiffs should get was

a plain order expressed to be without prejudice to any claim of defendant 1 directing the issues of a warrant in Form No. 43 of Appendix E to the Code with a supplemental direction that it be sent to the Court of 24-Parganas with a copy of the sale-certificate and with a certificate that possession had not been obtained within the jurisdiction of this Court.

3. On the aforesaid order being transmitted to the Court of 24-Parganas, a writ for delivery of possession was issued. On 27th June 1925 the plaintiffs applied to the District Judge of 24-Par-ganas asking that the naib nazir of the Court might be deputed to deliver possession with the assistance of the police as resistance was apprehended; and this prayer was granted. On 2nd July 1925 defendant 1 put in a petition alleging that he was the owner of the premises and in possession and praying for withdrawal of the writ. On this, proceedings under Order 21, Rule 97, Civil P.C., were founded, and they ended on 30th November 1925, in an order of the District Judge dismissing the plaintiffs application. The plaintiffs then instituted the present suit for declaration of title, and recovery of khas possession with mesne profits.

4. The contesting defendant in the suit is defendant 1. His case was as follows: He had been let into possession of the premises by Asoke since February 1915, under a verbal lease for 20 years with liberty to spend money on improvements, alterations and repairs. On 23rd August 1921, he instituted a suit against Asoke for recovery of amounts lent to him or spent for repairs, being Suit No. 262 of 1921. He obtained attachment before judgment in connexion with his suit on 8th September 1921, and the said attachment was effected on 9th September 1921, i.e., before the date on which Nalini's suit had been instituted. Ha obtained a decree for about Rs. 20,000 in his suit on 14th February 1922, on a compromise with Asoke. On 20th February 1922, he applied for execution of his decree and made an application for rateable distribution in Execution Case No. 110 of 1921, which was ponding against Asoke. Awoke having failed to pay up in accordance with the terms of the compromise, he put up the property, premises No. 10/2, Elgin Road, to sale, and purchased it himself on 12th December 1922 for Rs. 2,000 free from all incumbrances and this sale was confirmed on 31st January 1923. The substance of his defence was that he was a necessary party to the mortgage suit of Nalini; that the consent decree obtained in that suit was fraudulent, collusive, irregular and without jurisdiction and therefore was not binding on him; that he has a right of redemption, which he should be permitted to enforce; and that in any event the plaintiffs ought not to be permitted to have khas possession.

5. The Subordinate Judge, in substance, overruled all the contentions raised in defence and decreed the suit declaring the plaintiff's title and awarding him khas possession with mesne profits on the basis of the rent that was payable by defendant 1, that is to say, at the rate of Rs. 275 a month with effect from 1st September 1924 the date of expiry of the notice to vacate, till recovery of possession. Defendant 1 has appealed.

6. The first question, that arises for consideration, is whether the appellant was a necessary party to Nalini's mortgage suit. The appellant claims to have been an attaching creditor at the date of that suit. To establish that he was an attaching creditor at that date he has produced Ex. H, the writ of attachment dated 8th September 1921 and the peon's return of service, Ex. F, showing how the writ was served on the next day. He has also examined two witnesses, D. W. 3, Khan Mahmud Khan, and D. W. 4, Matilal Dhupi. The evidence thus adduced shows that the attachment that was issued, was a conditional attachment under Order 38, Rule 5, Civil P.C., and not the attachment contemplated by Rule 6 of that order. This however in my judgment, makes no difference where as here, it is not suggested that the attachment has subsequently been withdrawn or has fallen through, As regards the mode, in which the attachment was made, it may be premised that it was to be made as laid down in Order 38, Rule 7, Civil P. C, in the manner provided for the attachment of property in execution of a decree, that is to say, in accordance with Order 21, Rule 54, Civil P.C. The evidence, that has been adduced, falls short of proving that there was service of the order in the court-house or in the office of the Collector of the District. The former is necessary in any case and the latter only when the property to be attached is revenue paying of which however there is no evidence. Now the decision of the Judicial Committee in Muthiah Chetti v. Palaniappa Chetti A.I.R. 1928 P.C. 139 has emphasized the position that

no property can be declared to be attached unless first the order for attachment has been issued, and secondly in execution of that order the other things prescribed by the rules in the Code have been done.

7. In the present case however there is ]no positive evidence that the attachment was not effected in accordance with law and no such contention appears to have been definitely put forward in the Court below on behalf of the plaintiffs. In my opinion, it would not therefore be right to ignore the presumption that attaches to official acts as regards their regularity. I hold therefore that there was a valid attachment, duly effected, and I propose to deal with the case on the footing that the appellant, at the date of Nalini's suit, was an attaching creditor in respect of the property in suit. The attachment however created no charge or lien and did not confer any title on the appellant. Under the law, it created no interest in appellant's favour in the equity of redemption. Neither Clause (b), nor Clause (f), Section 91, T. P. Act (as it stood before the amendments of 1930) would help the appellants in this respect. The position therefore in the words of Order 84, Rule 1 of the Code, is that the appellant had no interest either in the mortgage security or in the right of redemption at the date of Nalini's suit, and, consequently, he was not a necessary party. Whatever interest he may have acquired ha did subsequently to that date.

8. The next question, that arises, is whether the appellant was bound by the decree and sale in Nalini's suit. To establish the contention that he is not, several arguments have been advanced. It has been contended, in the first place, that as the property was situated outside the local jurisdiction of the original side of this Court, Nalini's mortgage suit, though instituted with leave under Clause 12, Letters Patent, was not one, a decree passed in which can come within the scope of Section 52, T. P. Act. Reference in that connexion has been made to the observations of James, L. J., in the case of Anundo Moyee Dossse v. Dhonendra Chunder Mookerjee [1871] 14 M.I.A. 101, which are in the following words:

If was a decree for sale, and a decree for sale made in the Supreme Court at Calcutta had no effect in rem, as it had no effect whatever over the property in the mofussil. The decree for sale was merely a decree, in substance, that the parties to the suit should concur in conveying and selling the property to a purchaser and no such decree for sale could have any operation whatever upon the title of persons in the mofussil, who are not parties to the suit.

9. Relying on these observations, it has been argued -and here I quote the words of the appellant's learned advocate as much as possible-that the order for sale, made in the decree of Nalini's mortgage suit in respect of this property, was made in the exercise of the equity jurisdiction of the Court, and that, as equity acts in personam, the decree for sale should be regarded as a decree directing the parties to the suit to concur in conveying and selling the property to a purchaser, and that it was not a decree in rem or a decree in which any right to the property was determined, and consequently the doctrine of lis pen-dens does not apply. To avoid confusion it may be stated here that the case referred to above was one, in which the facts were entirely different: the sale, at which the plaintiffs bad purchased, was in pursuance of a decree for sale on a mortgage and their Lordships found that

before the mortgage was made, which is the foundation of the plaintiff's title, the property in question was actually attached under a decree of the Court, and under a sale in pursuance of that original decree and of that execution the title of the defendants accrued,

and their Lordships held that

the title of the defendants * * * is paramount and superior to the title under the mortgage,

10. The decision has not been cited before us for any such proposition that there can be no lis pendens in the case of a decree for sale, but only in support of the limited contention that, when a decree for sale in a mortgage suit is passed on the original side of this Court in res-pact of property, which lies outside its local jurisdiction, such a decree does not attract the operation of the doctrine of lis pendens. Now, it would appear, from an examination of the facts, as given in the reports: see also the facts of this case stated in the judgment of Ghose, J., in the case of Gobind Chunder Roy v. (Guru Churn Kurmokar [1887] 15 Cal. 94, that a decree for sale was passed by the Supreme Court at Calcutta upon a mortgage deed, by which certain properties in the mufassil were mortgaged, that it was contended on behalf of the plaintiffs be-ore the Judicial Committee that the suit, in which it was passed, was a suit for foreclosure of a mortgage and, though thy decree, that was passed, was one for sale, it bound the defendants in exactly the same manner, as if they were parties to the foreclosure suit, Their Lordships overruled this contention and made the observations aforesaid, upon which the appellant has relied. The observations have reference to the particular decree, that was then passed, the entire property lying outside the jurisdiction of the Court, and the decree being merely a decree, which in substance directed the parties to concur in conveying that property to a purchaser. The jurisdiction that was exorcised by the Supreme Court in that case was the jurisdiction, which the Court of equity (now the Chancery Division of the High Court) in England exercises in respect of certain suits relating to immovable property, which is situate abroad, when the relief given by it may be enforced through the Personal obedience of the defendant, that is to say, in cases where the person or personal property of the defendant is within its jurisdiction. Though Sections 16 and 17, Civil P.C., do not apply to the High Courts in the exorcise of their original civil jurisdiction, their jurisdiction is now determined by their respective charters. Under Section 12, Letters Patent, in the case of a suit for land, of which a part is within its jurisdiction, the High Court acquires jurisdiction over the entire suit, provided that its leave is first obtained. The wording of Clause 12, Letters Patent applicable to the case would be;

The said High Court stall be empowered to determine suits of every description, if in the case of suits for land, such land shall be situated either wholly, or in case the leave of the Court shall have been first obtained in part within its local limits. ' See Bachoo Har-biocmdas v. Nagindra Bhagwandas [1914] 23 I.C. 912. also Harendra Lal Roy Chowdhuri v. Haridasi Debi A.I.R. 1914 P.C. 67.

11. When once the High Court acquires jurisdiction to determine the suit, the decrees, that it passes, is in no way different from decree passed by the mufassil Court. It is true that a decree for sale is not a decree in rem, but it would be a fallacy to conclude from it that the decree is not passed in a suit, in which a right to immovable property is directly and specifically in question, as required by Section 52, T. P. Act. It is con-ceded that a decree for sale made by a Court in the mufassil gives rise to lis pendens; it is inconceivable why a decree for sale made on the original side of this Court should have a different effect. The observations of their Lordships in the aforesaid Privy Council decision do not, in our opinion, apply to a case of this nature, which was tried with jurisdiction under leave obtained, as required by Clause 12, Letters Patent. The view we take, regarding the jurisdiction of the High Court on the original side to decree sale in respect of mortgaged properties, which are partly within the original jurisdiction of the Court and partly without, is supported by a number of cases, to some of which we shall now refer. In the case of Srinath Roy v. Gadadhur Das [1897] 24 Cal. 348, which was the case of an equitable mortgage by deposit of title-deeds in respect of properties, some of which were situate outside the original jurisdiction of the High Court, Jenkins, J. as ha then was, passed a decree for sale in respect of ail properties, leave having bean obtained to institute such a suit under Section 12, Letters Patent. In the case of Sarat Chandra Roy Chowdhry v. M. M. Naphapiet [1910] 37 Cal. 907, Pugh, J., held that the Court could sell property outside the original jurisdiction, provided some part of the property mortgaged was within jurisdiction and leave had been obtained under Section 12, Letters Patent. The learned Judge pointed out that, ever since the charters, parsons, who had lent money on mufassil property, had frequently declined to do so unless and until a certain portion of Calcutta property was included in the mortgage so as to give the original side jurisdiction over the mufassil property.

And no doubt at the ' present time ' said the learned Judge there are enormous sums in the aggregate lent out on the faith of what is considered settled law

12. In Matigara Coal Co., Ld. v. Shragers Ld. [1911] 38 Cal. 824 a similar view ' was taken by Harington, J., and liberty was given to apply for the sale of the mortgaged properties outside the jurisdiction. In Krishna Kishore De v. Amarnath Kshettry [1920] 47 Cal. 770, the last two decisions have been approved of by Mookerjee and Fletcher, JJ., With regard to the case in Anundo Moyee Dossee v. Dhonendra Chunder Mookerjee therefore it appears to us that the case cannot govern cases after the charter, which has introduced Clause 12. In the second place it has been contended that the decree should not bind the appellant and that for several reasons. It cannot and indeed it has not been said that a consent decree does not fall within the rule of lis pen-dens, but it has been urged that this particular consent decree should not attract the rule, inasmuch as : (1) it was not in accordance with Rules 4 and 5, Order 34, Civil P.C., and went far beyond the scope of the suit; (2) it was passed in a form, which imposed a greater burden on the premises in question than the mortgages themselves would warrant; (3) the compromise it gave effect to was collusive and fraudulent; and (i) it was passed in ignorance of the fact that the property had been under attachment effected at the instance of the appellant.

13. Examining the terms of the decree and the compromise it purported to embody, it would appear that the parties that were-added whether there was a formal order adding them as parties to the suit or not does not matter, because all of them were parties to the settlement--were fourteen in number, of whom thirteen were prior mortgagees and one was a puisne mortgagee, who had been left out in the plaint originally framed. One mortgage decree in favour of all the mortgagees and in respect of all the outstanding mortgages was passed. There was an order on the Registrar to sell all the properties free from all incumbrances in favour of all the parties, original as well as added, except that as regards three of the properties, of which the property in suit was one, it was provided that they could be sold by private treaties, but not below certain setup prices and not within certain fixed periods, within which Asoke's wife might exercise a right of pre-emption. It: was provided that out of the sale proceeds Rs. 20,000 was to be set apart for the. protection of purchasers of those properties over which Asoke's grandmother, Fulkumari, had a charge for maintenance. It was further provided that the sale proceeds were to be applied to payment of the mortgages in certain order of priority and liberty was reserved to the mortgagees to apply for a personal decree if the sale proceeds be not sufficient to pay in full their respective claims and costs. Order 23 of the Code applies to mortgage suits, and there is no reason to suppose that, though not in. the form prescribed for mortgage decrees for sale the decree, that was passed, was in pursuance of a compromise, that was either illegal or contrary to public policy or was not a decree enforcible in law. As regards the argument that the decree was in excess of the suit or embraced within its scope matters foreign to it, it should be remembered that, when by consent of the added parties they were so added the scope of the suit was enlarged so as to embrace within its scope the rights of all the prior and puisne mortgagees and the amended constitution of the suit would amply justify the nature of the decree, that was passed. Couch, C. J.. in the case of Kailas Chandra Ghose v. Fulchand Jaharri [1871] 8 B.L.R. 474 observed:

I can find no authority, which goes to the extent of saying that, because he (the purchaser) does not think fit to become a party to the suit he is to be bound by any order whatever that may be made. It seems to me that he ought only to be bound by proceedings which from the nature of the suit, and the relief: prayed he might expect would take place.

14. In the case of Bharat Ramanuj Das Mahanta v. Srinath Chandra Sahoo A.I.R. 1922 Cal. 358 Mookerjee, J., was inclined to take the view that having regard to the statutory provision contained in Section 52, T. P. Act, the view of Couch, C. J., cannot be taken to be entirely correct, today, but on this point, I do not express any opinion. Even taking the aforesaid observations of Couch, C. J., to be good law, we have to see how far the enlargement of the scope of the suit, as indicated above, has affected the application of the doctrine of lis pendens. Premises No. 10/2, Elgin Road, was comprised in the mortgage of Nalini, the plaintiff in the suit and it may be stated further that it was also comprised within the mortgage of defendant 14 in that suit:. viz., the plaintiff 1 in the present suit. In the suit, as originally laid a sale of the premises was contemplated and a relief in that shape was asked for. The decree, that was eventually passed, may well be regarded as a combination of several decrees in favour of the different mortgagees, determining the order in which they wore to be paid and incorporating orders which the Court would be amply justified in making under Section 57, T. P. Act. Regarded in that light whatever matter foreign to the suit as originally laid, may have come to be incorporated in the decree cannot affect the lis which lasted till the sale of the particular property, at which the plaintiffs made their purchase. As regards the contention that a greater burden was imposed on the property than the mortgages themselves would warrant the contention is based on this position that mortgagees, in whose deeds this pro-party was not included, would have a share in its sale proceeds. Whether the scheme as to priority contained in the compromise and the decree based on it entails such a position I shall not trouble to inquire because in my opinion this consideration is foreign to the question of lis pendens so far as the title of the plaintiffs under the sale is concerned and may only affect the appellant's right to the sale proceeds which is not the question before us.

15. On the question that the compromise was collusive or fraudulent there is no indication that it was so. It was a bona fide compromise for payment of the mortgages many of which have been proved in the present suit as genuine and for consideration. There is not a particle of evidence indicating that Nalini's suit or the mortgage of plaintiff 1 who was defendant 14 in that suit, was anything but a real transaction. The proceedings in that suit indicate that some days before the terms of settlement were filed in Court, all the parties had a conference as to how a settlement of their just rights might be reached. The mortgagor himself was in a hurry to settle matters as prices were going down, and the mortgagees consented to give him time in order that he might, if possible, save some properties by having them purchased by his wife. There is no evidence that any of the mortgagees, far less that the plaintiffs in this suit, were aware that the appellant had obtained a decree for money or that the property was under attachment at his instance. I am unable to hold that there was any fraud or collusion in the matter of the compromise or of the decree that was passed on its basis.

16. It is true that the mortgagor Asoke must have known of the attachment and of the decree, that the appellant had obtained, and possibly also of his application for execution (the attachment having been effected on 9th September 1921, the appellant's suit decreed on 14th February 1922, his application for execution filed on 20th February 1922, and the compromise and the consent decree in Nalini's suit passed on 6th March 1922). But the omission on the part of Asoke to bring those facts into the proceedings relating to the consent decree cannot, in my judgment, be held to have been actuated by fraud. Whatever interest the appellant might have acquired in the right of redemption, having been acquired by him subsequent to the institution of Nalini's suit, a disclosure of those facts by Asoke would not have stood in the way of the consent decree being passed, as it was passed on 6th March 1922. Thirdly, it was suggested at one stage of the arguments that the appellant's purchase having been made at an execution sale the rule of lis pendens does not apply to him. In view however of the authorities that are against this contention, it was eventually abandoned.

17. It will be convenient now to refer to another argument advanced on behalf of the appellant, by which he has sought to repel the plaintiff's claim in the present suit. It has been contended on his behalf that the questions arising in this suit are barred by res judicata by reason of the order of the District Judge passed on 30th November 1925. This contention, in my opinion, cannot be supported, because that order was passed in a proceeding under Order 21, Rule 97, Civil P.C., and all that was decided therein was that the learned District Judge was not prepared to hold that the appellant's claim to possession on his own account was not made in good faith. That was the exact scope of the order. No question of title was or could be decided in those proceedings. It has been urged with great ingenuity that, if it be now held that the appellant was bound by the mortgage decree, he should be regarded as having been a representative of the judgment-debtor, Asoke, in the mortgage suit and so the decision of the learned District Judge should be taken as having been made under Section 47, Civil P.C., so as to bar the present suit. The contention however ingenious, is not sound.

18. The next question that falls for determination is the question of the appellant's right; to redeem. From 20th February 1922, the date when the appellant made an application for execution in respect of his own decree and also applied for rateable distribution, he, having already attached the property before judgment, fulfilled the requirements of Clause (f), Section 91, and so had the right to redeem. This right continued in him till he himself purchased the property in execution of his own decree on 12th December 1922. By the attachment, an attaching creditor does not obtain any lien or a charge on the attached property and therefore a fortiori he cannot hand on any such charge to the purchaser at the auction : Shananda Chandra Pal v. Sri Nath Ray Choudury [1912] 17 I.C. 432, nor can he retain in himself the right to redeem by purchasing the property himself at such auction : Chamiyappa Tharagan v. Rama Ayyar A.I.R. 1921 Mad. 30 and I entirely agree with the reasons given by Wallis, C. J., in support of this view. The decision in the case of Lakhpat Rai v. Fakhruddin [1917] 39 All. 536, which purported to give a purchaser, in execution of a money decree, of property, in respect of which there was an attachment before judgment, a right to redeem on the footing of his coming within Section 91, Clause (f), T. P. Act, has already been dissented from in this Court in Ashutosh Nanda v. Gadadhar Das Second Appeal No. 2531 of 1927 decided on 20th February 1930, and, if I may say so without meaning any disrespect, that decision does not purport to pay sufficient regard to the wording of that clause.

19. It remains only to consider the contention, that has been urged on behalf of the appellant to resist the plaintiffs' claim for khas possession. In the Court below the appellant appears to have rested his right to redeem on a verbal lease or agreement to lease for 20 years granted to him or made in his favour by the mortgagor, Asoke, in or about February 1915, but the Court below has held that such lease or agreement was not established. The conclusion of the Subordinate Judge on this point has not been attempted to be challenged before us. What however has been contended is that, taking the appellant as a tenant at will, he should not be ejected upon such equitable considerations as may arise from the fact that he had spent large sums of money for extension, improvements and repairs done on the pre-raises. The estimate that he gives of such expenses, in his evidence, is at variance with the plaint of Suit No. 262 of 1921; but whatever that may be, he having already obtained a decree for his duos and purchased the premises in execution thereof, no question of the character contended for arises. It has also been urged that the appellant is entitled to a fresh notice to quit, because on 29th July 1921, the date, which the notice given by the plaintiffs bears, the sale certificate had not issued in their favour. There is no evidence that the sale itself had not been confirmed before that data, and if it was, as we are told on behalf of the respondents that it was the plaintiffs' title related back under the law to the date of his purchase.

20. The appeal, in my opinion, fails and must be dismissed with costs.

Mitter, J.

21. I agree.

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