1. This appeal is directed against a decree in a suit toenforce a mortgage security. To appreciate the questions raised herein, it isnecessary to examine the relevant facts as they appear on the record.

2. On the 1st June 1898 Krishna Chandra Mandal (the firstdefendant) and Dukhbhanjan Mandal (since deceased and now represented by hisinfant sons, the second and third defendants) executed the mortgage-bond insuit, in favour of Jogendra Narayan Roy and Mohendra Narayan Roy. The principalmoney secured was Rs. 4,999 which carried interest at 10 per cent per annumand was re-payable on the 12th April 1899. On the 12th April 1905 themortgagees commenced the present suit to enforce their security. They joinedfourteen persons as defendants. Of these the first three were one of theoriginal mortgagors and the two infant sons of the other mortgagor. Theremaining defendants were persons who, it was alleged, had acquired an interestin the equity of redemption by purchase, settlement, mortgage or otherwise andwere consequently necessary parties as entitled to redeem the plaintiffs. Onthe day that the suit was instituted, the plaintiffs applied for appointment ofguardian ad litem of the infants defendants, and proposed their mother as asuitable person. Notices were served upon the infants and the proposedguardian. The mother, however, did not enter appearance and signify herwillingness to act as guardian of her sons. Yet the Court proceeded, at theinstance of the plaintiffs, to appoint her guardian of the infants for thepurposes of the suit. There was no appearance on behalf of the infants at anystage of the suit, but some of the other defendants filed written statements.On the 15th December 1905 the Court proceeded to decree the suit ex parte asagainst defendants Nos. 1, 2, 3, 10, 11, 12, 13 on a compromise as againstdefendants Nos. 5, 6, 7, 9, 14, and apparently on contest as against defendantsNos. 4, 8. On the 25th June 1906 the mortgagees applied for an order absolute,whereupon notices were directed to issue upon the defendants. On the 25th July1906 the first defendant as also the mother of the second and third defendantsapplied to the Court to set aside the ex parte decree. They alleged that nosummons in the suit had ever been served upon them and that there weresubstantial defences to the claim, and they prayed that the decree might not bemade absolute till the matter had been investigated. This application was madeby a Pleader on the strength of a vakalatnama given by the mother of theinfants on the 24th July 1906 authorising him to take necessary steps to opposethe grant of the application for order absolute. On the 25th October 1906 theCourt dismissed the application to set aside the decree, and on the 13thNovember 1906 made the decree absolute. On the 17th January 1907 thepetitioners, who had unsuccessfully applied to set aside the decree, preferredan appeal to this Court against the order dismissing their application. On the8th January 1908 this Court heard the appeal and set aside the ex parte decreeas against the three petitioners and directed the suit to be re-heard in so faras they were concerned. As regards the infants appellants, this Court held thatthey were not parties to the suit, as no guardian had ever been appointed forthem in accordance with law, and they would consequently not be bound by thedecree. This Court was not apprised at the time that during the pendency of theappeal, the decree had been executed and the mortgaged properties sold. Infact, on the 4th February 1907, the lower Court proceeded, at the instance ofthe mortgagees-decree-holders to sell the properties; many of these werepurchased by the decree-holders themselves, some were purchased by thedefendants other than the mortgagors, a few were purchased by persons who wereneither plaintiffs nor defendants and were entire strangers to the proceedings.The sale was confirmed on the 8th April 1907, and on various dates betweenApril and November 1907 possession was delivered to the purchasers. On the 24thMarch 1908, that is shortly after the ex parte decree had been set aside bythis Court, the first three defendants applied to the Court below to set asidethe sale. Petition of objection was filed by two only of the purchasers, one ofwhom was a party to the suit (defendant No. 12). On the 31st July 1908 theSubordinate Judge dismissed the application, on the ground that third partieswere not affected by the cancellation of the decree. The suit, which by orderof this Court stood revived against the mortgagors, was then taken up forre-trial, and on the 16th December 1908 they filed their written statement. Onthe 3rd September 1909 the District Judge, who took up the case for disposal,overruled the defences on the merits and made his decree. This decree directsthe mortgagors to pay up the mortgagees within three months and on defaultentitles the latter to take the sale proceeds of the mortgaged propertiespurchased by third parties in satisfaction of their decree. A provision isadded that, should this prove insufficient, the mortgagees will have the rightto realise the balance by sale of the remaining mortgaged properties. Thedecree, it will be observed, does not specify what is meant by thirdparty,"--whether it includes only a person who is not a party to themortgage suit or includes all persons other than the plaintiffs-mortgagees. Themortgagors defendants have now appealed to this Court, and have contended thatthe decree as drawn up is not in accordance with rule 4 of Order XXXIV of theCode and that, in the events which have happened, all the mortgaged propertiesshould be directed to be sold afresh.

3. It is plain that the two infants defendants have not beenaffected in any way by the sale held on the 4th February 1907, because therewas at the time no valid and operative decree in force against them. They werenot properly parties to the mortgage suit. It was not competent to the Court toappoint their mother as guardian ad litem without her express consent. TheCourt acted contrary to what was the established rule on the subject. DhondibaLakshuman v. Kusa 6 B.H.C.R. 219, Babaji v. Maruti 11 B.H.C.R. 182, IsurChunder v. Nobo Kristo 7 C.L.R. 407, Narsingh Narain v. Jahi Mistry 13 Ind.Cas. 414 : 15 C.L.J. 3, Bal Krishan Lal v. Topeswar Singh :14 Ind. Cas. 845 [LQ/CalHC/1911/301] : 15 C.L.J. 446 : 17 C.W.N. 219, Dinabandhu Nandi v. MashudaKhatun 17 Ind. Cas. 263 [LQ/CalHC/1912/422] : 16 C.L.J. 318. The position, consequently, was thatthe infants were not properly before the Court, and are in no way bound by thedecree of the 15th December 1905. The sale held under these circumstances didnot pass the right, title and interest of the infants. Khairaj Mal v. Daim: 32 I.A. 23 : 32 C. 296 : 2 A.L.J. 71 : 1 C.L.J. 584 : 7Bom. L.R. 1 : 9 C.W.N. 201 (P.C.), Rashidunnessa v. Muhammad Ismail Khan: 3 Ind. Cas. 864 : 36 I.A. 168 : 10 C.L.J. 318 : 31 A. 572 :6 M.L.T. 279 : 13 C.W.N. 1182 : 6 A.L.J. 822 : 11 Bom. L.R. 1225 (P.C.), KishenChunder v. Ashoorun (1863) Marshall 647. It is consequently indisputable thatevery one of the purchasers at the execution sale held on the 4th February 1907has failed to acquire the right, title and interest of the infants defendantsin the mortgaged properties. Such purchasers may have imagined that the infantswere bound by the decree and may have paid the purchase-money on the assumptionthat they were acquiring the interest of all the mortgagors. But that clearlycannot affect the position of the infants, who are bound neither by the decreenor by the sale consequent thereon. It is thus necessary for the protection ofthe purchasers themselves that the properties should be re-sold on the footingof a fresh decree binding on the infants in the suit as re-constituted.

4. Apart from this question, the effect of the cancellationof the decree by this Court on the 8th January 1908, upon the sale held on the4th February 1907 requires examination. Two positions are clear andincontestable, namely, first, that the purchase made by the decree-holdersthemselves must be treated as cancelled, and secondly, that the purchase madeby persons who are not parties to the suit, must be treated as unaffected.Nawab Zain-ul-abdin Khan v. Mohammad Ashgar Ali Khan 15 I.A. 12 : 10 A. 166 : 5Sar. P.C.J. 129, Jan Ali v. Jan Ali 1 B.L.R. 56 : 10 W.R. (A.C.J.) 154, ChunderKant v. Bissessur 7 W.R. 312, Mukhoda v. Gopal Chunder 26 C. 734, Inderjeet v.Pootee Begum 19 W.R. 197, Shivlal v. Shambhu Prasad 29 B. 435 : 7 Bom. L.R. 585(F.B.), Janakdhari Lal v. Gossain Lal Bhaya : 1 Ind. Cas. 871 [LQ/CalHC/1909/130] : 37 C. 107 at p. 113 : 13 C.W.N. 710 : 11 C.L.J. 254, Dorasami Ayyar v.Annasami Ayyar 23 M. 306 : 10 M.L.J. 307. The question arises, however, as tothe position of a purchaser who is not a stranger to the suit but is adefendant therein. Is his position analogous to that of the plaintiff or of anabsolute stranger to the proceedings The answer to this question must dependupon the reasons for the rule that a stranger who purchases in execution of adecree is not affected by the subsequent cancellation or reversal of thedecree. Sir Barnes Peacock in Nawab Zain-ul-abdin v. Mohammad Ashgar Ali 15I.A. 12 : 10 A. 166 : 5 Sar. P.C.J. 129 refers to a passage from BaconsAbridgment, Tit. Error (M. 3), which runs as follows.--"if a man recoversdamages and hath execution by fieri facias and upon the fieri facias theSheriff sells to a stranger a term for years, and after the judgment isreversed, the party shall be restored only to the money for which the term wassold, and not to the term itself, because the Sheriff had sold it by thecommand of the writ of fieri facias". This statement of the law issupported by a long series of early cases: Anon. Dyer 363a : 73 E.R. 814,Luddington and Amners case Godb. 27 : 78 E.R. 17 : 2 Leon 92 : 74 E.R. 384 : 3Leon 89 : 74 E.R. 559, Beverleys case Gonls. 55 : 75 E.R. 991, Eyre v.Woodfine Cro. Elz. 278 : 78 E.R. 533, Anon. (1600) Moore 573 : 72 E.R. 767,Hoes case (1600) 5 Coke 90b : 77 E.R. 191, Mether Mannings case (1610) 8 Coke94b : 77 E.R. 618, Drurys case (1611) 8 Coke 141b : 77 E.R. 688, Goodyere v.Ince Cro. Jack. 246 : 79 E.R. 211, Doe d Emmett v. Thorn (1813) 1 M. & S.425 : 14 R.R. 485 : 105 E.R. 150. An examination of these cases shows thatprotection is afforded to the purchaser only when he is a stranger to the suit.This is clear when we examine the reasons assigned in support of the rule. Thusin Bennet v. Hamill (1806) 2 Sch. & Lcf. 506 Lord Redesdale justified therule on the principle that the stranger who purchases has a right to presumethat the Court has taken the steps necessary to investigate the rights of theparties and has on such investigation properly decreed a sale. To the sameeffect is the observation of Sugden, L.C., in Bowen v. Evans (1844) 1 J. &L. 178 : 6 Ir. Eq. 569 : 68 R.R. 242. The principle was affirmed by the Houseof Lords in Bowen v. Evans (1848) 2 H.L.C. 257 : 81 R.R. 136 : 9 E.R. 1090 andTommey v. White (1850) 3 H.L.C. 49 : 10 E.R. 19 : 88 R.R. 26 and by the SupremeCourt of the United States in Gray v. Brignardello 1 Wallace 627 : 68 U.S., 17Law. Ed. 692, Beauregard v. New Orleans (1855) 18 Howard 497 : 59 U.S., 15 Law.Ed. 469 and Grignon v. Astor (1844) 2 Howard 319 : 11 Law. Ed. 283. The reasonfor the rule is uniformly stated to be that the stranger purchaser cannot beexpected to go behind the judgment, to enquire into irregularities in the suit,and that it is sufficient for him to know that the Court had jurisdiction andexercised it and that the order on the faith of which he purchased was made anddid authorise the sale. To the same effect is the observation of the JudicialCommittee in Rawa Mahton v. Ram Kishen Singh 13 I.A. 106 : 14 C. 18 : 10 Ind.Jur. 428 : 4 Sar. P.C.J. 746 and Zain-ul-abdin v. Ashgar Ali 15 I.A. 12 : 10 A.166 : 5 Sar. P.C.J. 129. The reason for the rule obviously disappears when thepurchaser is himself a party to the suit and has notice, or at leastopportunity of knowledge, of all the proceedings therein. The case is clearlyone for the application of the maxim, cessante ratione legis, cessat ipsa, lex(when the reason of any particular law ceases, so does the law itself.) Thequestion has been raised in the Courts of the United States, and it has beenheld that a purchaser at a judicial sale, who is a party to the proceeding andin interest, is not a bona fide purchaser to the extent that will protect hispurchase in case of a reversal of the decree by authority of which it is made:Buchanan v. Clark (1853) 10 Grattan (Va.) 164. The condition of such apurchaser is unlike that of an absolute stranger to the proceedings who becomesa purchaser under the decree, such stranger is protected, but the sale fails onreversal of the decree as to the purchaser who is a party in interest or to theproceedings. There is only one solitary decision, Gossom v. Donaldson (1857) 18B. Mon. 230 : 68 Am., Dec. 723, where it was held that the protection affordedto strangers should also be extended to parties to the suit, including theplaintiff-decree-holder himself. This case stands alone, and the extreme viewtaken therein has been adversely criticised by text-writers. [Kleber onJudicial Sales, sections 201, 202 and 291, Baker v. Baker (1888) 87 Ky. 46].The decision in MacBride v. Longworth (1863) 14 Ohio. St. Rep. 349 : 84 Am.Deo. 383 is not contrary to this view, as that case turned upon a Statute whichafforded protection to all execution purchasers, whether strangers or partiesto the suit; in fact the view taken in Buchanan v. Clark (1853) 10 Grattan(Va.) 164 is identical with that taken in Hubbel v. Breadwell (1857) 8 Ohio.120 and Walpole v. Ink (1859) 9 Ohio. 143 (Rorer on Judicial Sales, sections132-134). It is obviously essential; however, that for the reversal of the salethe person whose property has been sold must be a party to the proceedings.Wither v. Little 56 Cali. 370, Little v. Superior Court 74 Cali. 219, Withersv. Jacks 79 Cali. 297 : 12 Am. St. Rep. 143 (Freeman on Executions, section347). The rule that a stranger purchaser is not affected by the reversal of thedecree is based, as the cases show, on grounds of public policy, though itoperates harshly upon the person whose property has been sold and who, it mayturn out in the end, was not liable at all to the plaintiff. We are not preparedto extend the scope of the rule and to apply it for the benefit of parties tothe suit in whose case the reason for the rule has no application. Consequentlyall the properties which have been purchased by parties to the suit must bere-sold, if necessary, in execution of the decree now to be made.

5. We may add that we do not feel pressed by the argumentthat the decree made by the Subordinate Judge is not in conformity with rule 4of Order XXXIV of the Code. That rule, no doubt, contemplates a sale of themortgaged properties, but the decree must be suitably modified in exceptionalcircumstances where a sale of the mortgaged properties may be impossible, forinstance where the mortgaged properties have been sold for arrears of revenue,for arrears of rent or as here, in execution of a decree; in such cases, wherethe property can no longer be reached, either in whole or in part, the Court iscompetent in the exercise of its inherent power, to give appropriate directionsfor the disposal of the fund which represents the property.

6. The result is that this appeal is allowed, the decree ofthe District Judge discharged, and the case remanded to him in order that thenecessary accounts may be taken and the final decree drawn up. An account willfirst be taken of the sum due to the plaintiffs upon the mortgage of the 1stJane 1898. An account will then be taken of the sums realised by the plaintiffsfrom the properties purchased by them on the 4th February 1907, and of which,it is said, they have taken possession. Both these accounts will be taken up tothe date of this judgment. The difference between these two sums will be takenand will be reduced by the sum realized by the sale of the mortgaged propertiesto strangers to the suit. A decree will be made in favour of the plaintiffs forthis reduced sum and the sum decreed will carry interest at six per cent perannum from this date. The judgment-debtors will be allowed to pay up the moneywithin three months from the date when the decree of the Court below is drawnup and signed. If the amount is not so paid, the mortgaged properties otherthan those sold to strangers on the 4th February 1907, will be sold by theCourt for the satisfaction of the decretal amount, after the usual orderabsolute has been made. Each party will pay his own costs of the suit up to thepresent stage. The costs of the inquiry in the Court below will be in thediscretion of that Court. The District Judge will be at liberty to take theaccounts himself or to transfer the case for disposal to the Subordinate Judge.

7. We do not at this stage consider the question ofrestitution by the defendants-purchasers to the mortgagors-defendants onaccount of their possession of the properties they had purchased on the 4thFebruary 1907. Such question may be determined on application to the Court bywhich the sale was held. Beni Madho Singh v. Pran Singh 14 Ind. Cas. 456 [LQ/CalHC/1911/528] : 15C.L.J. 187, Baghu Singh v. Shew Prasad Rai 17 Ind. Cas. 121 [LQ/CalHC/1912/320] : 16 C.L.J. 135.

8. Let the records be sent down at once.

.

Krishna Chandra Mandalvs. Jogendra Narain Roy(19.07.1914 - CALHC)