Jagernath Singh And Others v. Musammat Mohra Kuvar

Jagernath Singh And Others v. Musammat Mohra Kuvar

(High Court Of Judicature At Patna)

| 22-12-1916

Edward Chamier, C.J.In 1904 the respondent brought a suit against the appellants and their father, since deceased, upon a simple mortgage executed by the father alone and in 1905 obtained a conditional decree for sale of the mortgaged property. In 1910 the decree was made absolute. In 1915 the respondent applied for sale of the mortgaged property and asked the Court to notify in the sale proclamation that the property was subject to a prior usufructuary mortgage held by him. The appellants objected (1) that as the decree absolute was passed more than three years after the conditional decree it was incapable of execution and (2) that the property could not be sold subject to the prior mortgage held by the respondent. The Courts below have overruled both objections

2. On the first objection it is sufficient to, say that no appeal was filed against the final decree and the Court executing the decree cannot go behind it. The decree must be taken to have been duly made.

3. The second objection raises a question which in one form or another has been the subject of several decisions. In the well-known case of Mata Din Kasodhan v. Kazim Husain 13 A. 432 ; 7 Ind. Dec. 276 a Full Bench of the, Allahabad High Court (Mahmud, J., dissenting) held that a puisne mortgagee is not entitled to bring mortgaged property to sale subject to a prior mortgage , but must make the prior mortgagee a party and redeem him before bringing, the property to sale. That ruling was followed and applied in many cases in Allahabad. The decision in Bhagwan Das v. Bhawani 26 A. 14 :(1903) A.W.N. 177 on which the appellants rely, that the holder of a simple mortgage is not entitled, to bring the mortgaged property to sale subject to his own prior and usufructuary, mortgage, was a necessary corollary of the decision of the Full Bench. To the same effect is the decision of Russell and Batty, JJ., in Keshavram Dulvaram v. Ranchhod Fakira 30 B. 156 ; 7 BomLR 811 where the decision of the Full Bench of the Allahabad High Court was cited, though other reasons also were given for the dismissal of the suit. The decision in Mata Din Kasodhan V. Kazim Husain. 13 A. 432 : 7 Ind. Dec. 276 never secured the approval of the legal profession and was the subject of adverse comment in other Courts. [See for example Kanti Ram v. Kutubuddin Mahomed 22 C. 33 : 11 Ind. Dec. 24 For practical purposes the decision was overruled by a Full Bench of six Judges in Ram Shankar Lal v. Ganesh Prasad 20 A. 385 ; 4 A.L.J. 273 : (1907) AWN 97 M.L.T. 248 and the Legislature has now by Order XXXIV, Rule 1, made it clear that a puisne mortgagee is not bound to make a prior mortgagee a party to his suit and is entitled to bring to sale mortgaged property without redeeming the prior mortgage. The Madras High Court took that view in several cases and in Radhakrishna Iyer v. Muthusawmy Sholagan 31 M. 530, 18 MLJ 564 they held that the holder of a simple mortgage is entitled to bring the property to sale subject to his own prior usufructuary mortgage. In cases to which Section 57 of the Transfer of Property Act applies the Court may order that the property shall be sold free of encumbrances for the discharge of which provision has been made, and under Order XXXIV, Rule 12, the Court may with the consent of a prior mortgagee order that the property shall be sold free from the prior mortgage giving the prior mortgagee the same interest in the proceeds of the sale as he had in the property sold. There is also authority for the proposition that a Court in India may, in cases not covered by those provisions, direct the discharge of a prior encumbrance out of the proceeds of the execution sale where the equities of the case require it. [See the case of Rengasami Nadan v. Subbaroya Iyen 30 M. 408 ; 17 MLJ 403 : 2 M.L.T. 346 It is now clear that a puisne mortgagee is entitled to bring the mortgaged property to sale subject to the prior mortgage of another person, and I see no reason why he should not bring it to sale subject to a prior mortgage held by himself, at all events where he is unable to sue upon the prior mortgage as is the case here. It has been held that a person holding two mortgages on the same property is not bound to put both mortgages in suit together. In practice he usually sues upon both mortgages, for he cannot bring the property to sale subject to a later mortgage than the one in suit, whether the later mortgage is held by himself or by any one else, and there is not generally much to be gained by bringing property to sale subject to a prior mortgage held by the decree-holder himself.

4. In my opinion the respondent in the present case was entitled to sue for sale of the property subject to her prior usufructuary mortgage. The next question is whether she is entitled to have the property sold subject to the prior mortgage, although she did not mention the prior mortgage in her plaint. If in a suit by a puisne mortgagee for sale of property mortgaged to him a prior mortgagee is impleaded and does not set up his mortgage and the property is sold at auction, without any notification of the prior mortgage, to a person who has no notice of the prior mortgage, the prior mortgagee is not entitled to set up his mortgage against the purchaser. [See Sri Gopal v. Pirthi Singh 24 A. 429 ; 4 BomLR 827 ; 6 C.W. 889 ; 29 I. A. 118 ; 8 P.C.T. 293, where it was held that a subsequent suit on his mortgage by the prior mortgagee was barred by Explanation II to Section 13 of the Code of Civil Procedure, 1882 (Explanation IV to Section 11 of the Code of 1908)]. It is contended that although those sections do not apply to the present case, the principle on which that decision rests applies to the case of a person suing on a puisne mortgage who does not mention in his pleadings a prior mortgage held by him but sets it up at a later stage of the suit, and it is argued that the Court has in the present case decided that there shall be a sale of the property free from encumbrances and has made a decree accordingly, and that that decision is binding on the parties in all subsequent proceedings in the suit. It has, no doubt, been laid down in several well known cases that a decision in a suit is upon general principles binding upon the parties in all subsequent proceedings in the same suit. [See Ram Kirpal v. Bup Kuari 6 A. 269 (P.C.J : 11 I.A. 37 : 4 Sar. P.C.J. 489 ; 3 Ind. Dec. 718, Beni Ram v. Nanhu Mal 7 A. 102 : 11 I.A. 181 : 4 Sar. P.C.J. 564 : 4 Ind. Dec. 138 (P.C) Mungul Pershad Dichit v. Grija Kant Lahiri 8 C. 51 : 11 C.L.R. 113 : 81 .A. 123 : 4 Sar. P.C.J. 849 : 4 Ind. Dec. 32 But it was impossible for the respondent to make any claim upon her prior mortgage in the present case, for it was an usufructuary mortgage. She might, no doubt, have petitioned it in the plaint and have asked for sale of the property subject to that mortgage or possibly that that mortgage should be discharged out of the proceeds of the sale as in Rengasami Nadan v. Subbaroya Iyen 30 M. 408 : 17 M.L.J. 403 : 2 M.L.T. 346 Ought she to have done so and if she ought to have, ought the Court to have refused to notify the mortgage at the sale The Court certainly did not decide that the property should be sold free of encumbrances. It was not even aware of the existence of the prior encumbrance. If the prior mortgage had been held by a person not a party to the suit, that person might have asked the Court to notify it at the sale and it would have been the duty of the Court to notify it under Order XXI, Rule 66(2)(c). The appellants must have been aware of the prior mortgage and cannot have been misled by the failure of the respondent to mention it in her plaint. Therefore, there is no case of estoppel against the respondent. As the Court did not decide that the property should be sold free of encumbrances and the respondent was not estopped from asking the Court to notify the prior mortgage, it appears to me that the respondent was entitled to have the prior mortgage notified for the information of bidders at the sale. Possibly the Court might have ordered that the prior mortgage should be discharged out of the proceeds of the sale but the Court was not asked to do that. The sale has in fact taken place subject to the prior mortgage. I would dismiss this appeal with costs.

Roe, J.

5. My only difficulty with regard to this suit has been that there was ground for suspicion that the plaintiff had deliberately omitted mention of her prior mortgage in the original suit. With the law as it stood then, there was a danger that she might be non-suited if the existence of the usufructuary mortgage was brought to light. But this difficulty vanishes on the consideration that had that been the fact it was open to the defendant to bring the existence of the usufructuary mortgage to the notice of the Court. There could be no doubt whatever in her mind as to its existence for the plaintiff was in actual possession of the land. If it was indeed the intention of the plaintiff to conceal from the Court the existence of this mortgage, the concealment was connived at by the defendants with the hope, no doubt, of securing a sale of the property free of the prior mortgage. Had the prior mortgagee been a third party the plaintiff, as the learned Chief Justice has shown, was not required to bring him upon the record or mention his mortgage. It follows that since she herself was the prior mortgagee, she was not required to bring herself upon the record in the capacity of a prior mortgagee nor to mention her own mortgage. She was entitled to put up for sale the equity of redemption upon which her advance had been made. If the defendants had brought the prior mortgage to the notice of the Court, it would have been open to the Court to make a decree in accordance with Section 57 of the Transfer of Property Act. It is too late now for a decree to be made under the terms of Section 57. The only course open to the Court in execution is to put up for sale the right, title and interest of the mortgagor as it stood at the date of the mortgage. That right, title and interest at the date of the mortgage was subject to the usufructuary mortgage. The result is that the sale of the mortgaged property will only pass the interest of the mortgagor subject to the prior mortgage.

Advocate List
Bench
  • HON'BLE JUSTICE Edward Chamier, C.J
  • HON'BLE JUSTICE Roe, J
Eq Citations
  • 39 IND. CAS. 76
  • AIR 1916 PAT 113
  • LQ/PatHC/1916/302
Head Note

A. Civil Procedure Code, 1908 — Or. XXXIV, R. 1 — Prior mortgage — Sale of mortgaged property subject to — Respondent-plaintiff, a puisne mortgagee, sold mortgaged property subject to prior usufructuary mortgage held by her — Held, respondent-plaintiff was entitled to sue for sale of property subject to prior mortgage — Respondent-plaintiff was entitled to have property sold subject to prior mortgage, although she did not mention prior mortgage in her plaint — Respondent-plaintiff was not required to bring herself upon record in capacity of prior mortgagee nor to mention her own mortgage — She was entitled to put up for sale equity of redemption upon which her advance had been made — If defendants had brought prior mortgage to notice of Court, it would have been open to Court to make decree in accordance with S. 57, T.P. Act — It is too late now for a decree to be made under terms of S. 57 — Only course open to Court in execution is to put up for sale right, title and interest of mortgagor as it stood at date of mortgage — That right, title and interest at date of mortgage was subject to usufructuary mortgage — Result is that sale of mortgaged property will only pass interest of mortgagor subject to prior mortgage — Transfer of Property Act, 1882, S. 57