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Smart Summary

Factual and Procedural Background

This matter was placed before the Court as a First Appeal from order but, by the Bench's view on admission, it was converted into a Civil Revision.

The underlying facts as stated in the opinion are: Zafar Husain was the owner of the disputed properties. He executed a first simple mortgage on 9 June 1926 in favour of Nawab Muzammiluallah Khan for Rs. 26,000, and a second simple mortgage on 20 April 1928 in favour of Kishan Lal. After Zafar Husain's death he was succeeded by his mother Smt. Meharunnissa, his widow Srimati Faruqi Begam and a sister Smt. Batul Fatma. The applicant in the revision is the husband of Smt. Batul Fatma.

On 11 January 1932 the applicant purchased the rights under the second simple mortgage from Kishan Lal. A suit (Suit No. 136 of 1932) was filed by the first mortgagee to recover the mortgage debt by sale of the mortgaged properties; the applicant (a subsequent mortgagee at that time) was not impleaded. A preliminary decree was passed on 27 May 1933 and made final on 4 August 1934. After the Agriculturists Relief Act came into force, the judgment-debtors applied under Sections 4 and 5 for amendment, and the decree was amended on 3 February 1937 to make it payable by instalments.

The applicant brought his own suit to enforce his second mortgage on 19 April 1940 (Suit No. 25 of 1940), likewise without impleading the prior mortgagee. That suit was decreed; the applicant executed the decree and purchased the mortgaged properties in execution on 6 November 1943 and obtained possession as the auction-purchaser.

Upon default in instalment payments under the amended decree of the prior mortgagee, an execution application was filed on 31 May 1948. The prior mortgagee impleaded the applicant in the execution on the ground that the applicant was a transferee pendente lite. The applicant objected in execution, arguing (1) the execution application was time-barred, and (2) he could not be bound because he had not been a party to the prior mortgagee's suit. The executing Court rejected these objections but held the decree-holder was entitled to Rs. 26,751-6-0 and dismissed the remainder of the applicant's objections.

The applicant filed the present revision challenging the executing Court's decision.

Legal Issues Presented

  1. Whether the applicant, who was not a party to the prior mortgagee's suit and who purchased the property in execution of his own decree, could contend that the execution application was time-barred because the amendment to the prior decree (making it payable by instalments) was not binding on him.
  2. Whether a subsequent mortgagee (the applicant) who had a right to redeem the first mortgage was entitled to claim that the prior mortgagee's decree could not be enforced against him because he was not impleaded in the prior mortgagee's suit, and that enforcement could only occur by a separate suit against him.
  3. Whether a purchaser in execution of his own decree (the applicant) made during the pendency of a prior mortgage suit is protected from the rule of lis pendens such that the prior mortgagee cannot enforce his claim against the purchaser unless the claim was within time at the date the purchaser ought to have been impleaded.

Arguments of the Parties

Applicant's Arguments

  • The applicant contended he was not a party to the prior mortgagee's decree and therefore was not bound by the 1937 amendment; without that amendment the original decree (dated 4 August 1934) was time-barred after twelve years, making the execution application filed on 21 May 1948 barred by limitation.
  • As a second mortgagee with a right to redeem the first mortgage, the applicant argued the prior mortgagee should have impleaded him in the prior mortgagee's suit; because the prior mortgagee failed to do so, that decree could not be enforced against the applicant and the prior mortgagee should have pursued a regular suit against him to enforce its rights.
  • The applicant maintained he was entitled to enforce his own second mortgage without impleading the prior mortgagee; his decree and his purchase in execution on 6 November 1943 were valid, and the prior mortgagee's claim could be enforced against him only if it remained within the period of limitation at the time the prior mortgagee sought to implead him — which, he argued, was not the case.

Opposite Parties' (Decree-holder's) Arguments

  • It was conceded that when the prior mortgagee's suit was filed the second mortgagee had a right to redeem and that the applicant in his own suit was not obliged to implead the prior mortgagee.
  • The decree-holder's primary contention was that the applicant was a purchaser pendente lite and therefore subject to the doctrine of lis pendens; that doctrine, it was argued, negated each of the applicant's contentions and allowed enforcement of the prior mortgagee's decree against the applicant and the properties in his possession.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ram Sanehi Lal v. Janki Prasad, 1931 All LJ 729; AIR 1931 All 466 (Full Bench) That a sale in execution of a decree obtained on the basis of a puisne (subsequent) mortgage, when made during the pendency of a prior mortgage suit, is affected by the rule of lis pendens and is subject to the result of the prior mortgagee's suit. The Court treated this Full Bench decision as binding and applied it to hold that the applicant's purchase (6 November 1943) took place during the lis of the prior mortgagee's suit and therefore was subject to the prior decree; accordingly the applicant was a transferee pendente lite and bound by the prior decree.
Bellamy v. Sabine, (1857) 1 De G & J 566 (per Turner, L.J.) Articulates the foundation of the doctrine of lis pendens: that alienations pendente lite cannot be allowed to prevail because permitting them would render litigation liable to continual defeat and require plaintiffs to recommence proceedings repeatedly. The Court relied on this principle to reject the applicant's contention that the prior mortgagee must recommence proceedings against him; the doctrine prevents the applicant from insisting on fresh proceedings and permits enforcement of the prior decree against a purchaser pendente lite.

Court's Reasoning and Analysis

The Court's analysis proceeded by applying the doctrine of lis pendens to the facts as established in the record and by treating relevant authorities as binding. Key steps in the reasoning were:

  1. Identification of the lis: The Court observed that a lis in a mortgage suit begins with the institution of the suit and continues until the decree is satisfied. Here the prior mortgagee's suit was instituted in 1932 and the decree had not been satisfied when the applicant purchased in 1943, so the purchase occurred during the continuance of the lis.
  2. Applicability to execution sales: Although Section 92 of the Transfer of Property Act does not in terms apply to sales in execution of a decree, the Court noted the established principle that the doctrine of lis pendens applies to such Court sales as well. The opinion relied on prior authority to support this extension of the rule to execution sales.
  3. Binding precedent: The Court cited the Full Bench decision in Ram Sanehi Lal v. Janki Prasad, which answered affirmatively that an execution sale by a subsequent mortgagee during the pendency of a prior mortgage suit is affected by lis pendens. The Full Bench's view was treated as binding and determinative.
  4. Consequences for the applicant: Given that the applicant's purchase occurred pendente lite, the Court concluded the applicant was a transferee pendente lite and therefore must be treated as representative of the mortgagor who was a party to the prior suit. Accordingly, the prior mortgagee could enforce its decree against the applicant in the same manner as against the mortgagor.
  5. Effect of amendment and limitation: Because the applicant purchased after the decree had been amended in 1937 to provide for instalments, the Court held the amendment was binding on the applicant even though he was not a party to it. Therefore the applicant could not treat the execution application as time-barred by ignoring the amendment when computing limitation.
  6. Right to require fresh proceedings: Relying on the rationale in Bellamy v. Sabine, the Court rejected the applicant's contention that the prior mortgagee had to start fresh proceedings against him; the doctrine's purpose is to avoid forcing plaintiffs to recommence and be repeatedly defeated by alienations during pendency.
  7. Status of the applicant's second mortgage and right of redemption: The Court explained that the applicant's second mortgage terminated when the decree obtained on its basis was satisfied by the sale in execution. After the sale and satisfaction the applicant's status was that of purchaser, and he no longer retained a subsisting right to redeem the prior mortgage.
  8. Conclusion on objections: On this combined reasoning, the Court treated the doctrine of lis pendens as an effective answer to all three contentions raised by the applicant and found the executing Court's view to be correct.

Holding and Implications

Holding:

REVISION DISMISSED. (The Court dismissed the applicant's revision application and ordered costs against him.)

Direct implications for the parties:

  • The applicant, having purchased the property in execution of his own decree on 6 November 1943 during the pendency of the prior mortgagee's suit, is a transferee pendente lite and is bound by the prior mortgagee's decree, including the amendment made on 3 February 1937.
  • The prior mortgagee may enforce its amended decree against the applicant and the properties in his possession in the same manner as it could against the original mortgagor who was a party to the suit.
  • The applicant's second mortgage terminated upon satisfaction of the decree obtained on its basis (through the sale in execution), and he no longer retains a right to redeem the prior mortgage on the basis of that second mortgage.
  • The executing Court's determination that the decree-holder was entitled to Rs. 26,751-6-0 (as declared in execution) stands, and the applicant's objections were otherwise rejected.

Broader implications and precedent-setting:

The opinion applies established principles and binding Full Bench authority on lis pendens to the facts; it does not purport to create new legal principle beyond applying those precedents. No new legal rule was announced—the Court followed and applied existing doctrine (including Ram Sanehi Lal v. Janki Prasad and the foundational reasoning in Bellamy v. Sabine).

    Hakim Mohammad Illayas Khan v. Sahab Collector Bahadur

    Srivastava, J.:— This case was filed as a First Appeal from order, but as the Bench before which it was put up for admission was of the view that it could be entertained only as an application in revision it has been converted into a Civil Revision.

    2. One Zafar Husain was the owner of the properties in dispute. On 9th June 1926 he made a simple mortgage in respect of the properties in favour of Nawab Muzammiluallah Khan for a consideration of Rs. 26,000. On 20th April, 1928 he made a second simple mortgage of the properties in favour of one Kishan Lal. Zafar Husain died after making these mortgages and was succeeded by his mother Smt. Meharunnissa his widow Srimati Faruqi Begam and a sister Smt. Batul Fatma. The applicant before us is the-husband of Smt. Batul Fatma. On 11th January, 1932 the applicant purchased the mortgage rights in respect of the second simple mortgage of Zafar Husain from the mortgagee Kishan Lal. A suit (Suit No. 136 of 1932) was then filed on behalf of the first mortgagee for the recovery of the mortgage debt by the sale of the mortgaged properties. The applicant who was a subsequent mortgagee of the properties at the time of the suit was, however, not impleaded in that suit as a party. A preliminary decree was passed in the suit on 27th May, 1933 and was made final on 4th August 1934. On the coming into force of the Agriculturists Relief Act, an application was made by the judgment debtors under Sections 4 and 5 of the Act for the amendment of the decree and the decree was amended on 3rd February 1937. The decree was made payable by instalments.

    3. The applicant who was the second mortgagee filed a suit on the basis of his own mortgage on 19th April, 1940 and sought to realise the amount due to him by the sale of the mortgaged properties. This suit was registered as Suit No. 25 of 1940. He too did not implead the prior mortgagee in his suit as a party. The suit was decreed. He got the decree executed and himself purchased the mortgaged properties in execution of the decree on 6th November 1943 and succeeded in getting possession of the property as auction-purchaser. A default having been made in the payment of instalments of the decree of the prior mortgagee it was put in execution on the 31st of May 1948. In this application for execution the prior mortgagee impleaded the applicant also as a party on the ground that he was a transferee pendente lite.

    4. The applicant filed an objection in the executing Court in which besides questioning the correctness of the amount claimed he raised two other contentions. He urged in the first place that the application was time-barred. His second contention was that the execution could not proceed against him as he was no party to the decree which was being sought to be executed. If the prior mortgagee wanted to enforce his claim against him he ought to have impleaded him in his suit. The mortgage of the prior mortgagee could be enforced against him only by a regular suit.

    5. Both these objections were rejected by the executing Court but it held that the decree-holder was entitled to Rs. 26,751-6-0 only the sale of the properties (sic). It, therefore, declared the amount due as Rs. 26,751-6-0, but dismissed the rest of the applicant's objection.

    6. The applicant has come up in revision. His learned counsel has pressed three contentions on his behalf:

    “(1) That the applicant was no party to the decree sought to be executed against him. The decree had been amended and made payable in instalments in his absence. He was, therefore, not bound by the amendment. But for the amendment, the decree which had been originally rassed on 4th August 1946 was barred on account of the expiry of twelve years. The application for execution which was filed on 21st May 1948 was, therefore, barred by time.

    (2) He was a second mortgagee of the properties and had a right to redeem the first mortgage. The first mortgagee was, therefore, bound to implead him as a party in his own Suit. He had omitted to do so. The decree obtained by him could not, therefore, be enforced against the applicant and the applicant could not be deprived of his right to redeem. It was not open to the decree-holder to implead the applicant in execution proceedings of the decree and to enforce the decree against him by doing so.

    (3) The applicant being a second mortgagee could file a suit to enforce his own mortgage without) impleading the prior mortgagee. The decree which he had obtained on the basis of the second mortgage was therefore a valid decree and when he had purchased the properties in execution of the decree, the purchase was a valid one. The claim of the prior mortgagee could be enforced against him only if it was within time. On the date on which the prior mortgagee had impleaded the applicant in his execution application the period of limitation for the suit on the basis of the prior mortgage had expired. It was therefore not open to the prior mortgagee to enforce his mortgage against the defendant or the properties in his possession.’

    7. On behalf of the opposite parties decree-holders it is not disputed that when the suit to enforce the prior mortgage was filed, the second mortgagee should have a right to redeem. It is also conceded that in his own suit the second mortgagee (the applicant) was not bound to implead the prior mortgagee. The decree on the basis of the second mortgage and the sale in execution of the decree must, however, be held to have been made subject to the claims of the prior mortgagee. The simple answer, it is urged, to all the three contentions put forward on behalf of the applicant is that he is a purchaser pendente lite, and the doctrine of lis pendens is enough to negative all the three of his contentions.

    8. He had purchased the properties in execution of his own decree on 6th November 1943 during the pendency of the lis in respect of the prior mortgage. He cannot therefore escape being bound by the decree obtained in that suit. As a purchaser of the properties he is the representative of the mortgagor and as the mortgagor was a party to the suit on the basis of the prior mortgage the applicant too must be deemed to have been a party to the suit. The decree is therefore enforceable against him and the properties in his possession in the same way in which it would have been enforceable against the mortgagor. If the execution application is within time against the mortgagor, it is not open to the applicant to say that it is not within time against him on the ground that he is not bound by the amendment of the decree. As a second mortgagee, the applicant had certainly a right to redeem the first mortgage. The second mortgage of the applicant, however, came-to an end when the decree he had obtained on its basis got satisfied by the sale held in execution of it. After that sale the applicant remained only the purchaser of the mortgaged property and his position was no better than that of the mortgagor. The mortgagor lost his right to redeem the first mortgage as soon as the final decree on the basis of that mortgage was passed. The applicant cannot therefore claim to have retained that right.

    9. It cannot be disputed that the lis in a mortgage suit begins from the date on which the suit is instituted and continued till the decree is satisfied. The suit on the basis of the prior mortgage in the present case was instituted in 1932 and the decree has not yet been satisfied. When the applicant purchased the mortgaged properties on 6th November 1943, therefore, he must be held to have purchased them during the continuance of the lis of the prior mortgagee's suit.

    10. It is true that Section 92 of the Transfer of Property Act does not apply in terms to sales held in execution of a decree and the applicant has purchased the properties in execution of his own decree. But it is well settled that the principle of lis pendens applies to such Court sales also. In the case of Ram Sanehi Lal v. Janki Prasad. 1931 All LJ 729 : (AIR 1931 All 466) (FB) (A) one of the questions referred to the Fill Bench was: Where the sale in execution of a decree obtained on foot of a puisne mortgage takes places during the pendency of the suit on the prior mortgage, whether the sale in the subsequent mortgagee's suit is affected by the rule of lis pendens so as to make the purchaser's right subject to the result of the prior mortgagee's suit.

    11. The answer which the Full Bench gave to the question was in the affirmative. The Full Bench consisted of five learned Judges of this Hon'ble Court and the view they took is binding on us and must be followed with respect. The sale in favour of the applicant having been made during the pendency of the prior mortgagee's suit must therefore be held to be affected by the doctrine of lis pendens.

    12. The applicant must therefore be held to have purchased the properties subject to the decree obtained by the prior mortgagee in the suit filed to enforce his own mortgage and the applicant being a transferee pendente lite the prior mortgagee could enforce his decree against him in the same way in which as he could enforce it against the mortgagor who was a party to the suit. It is therefore, not open to the applicant to say that the decree obtained on the basis of the prior mortgage cannot be enforced against him in execution and the properties in his possession cannot be sold in execution of that decree. He purchased the property after the decree had been amended in 1937.

    13. The amendment is therefore binding upon him even though he was no party to it and if the application for execution is in time keeping the terms of the amended decree in view, the applicant cannot contend that it is time barred and that limitation should be counted after ignoring the amendment.

    14. It also does not appear to be open to the applicant to contend that the prior mortgagee Should file a fresh suit against him and that he could enforce his claim against him only if it was in time on the date on which he ought to implead the applicant in the execution of the decree. The basis of the doctrine of lis pendens as explained in the leading case of Bellamy v. Sabine. (1857) 1 De G & 1566 (B), in the words of Turner, L.J is,

    “It is as I think a doctrine common to courts both of law and equity, and rests, as I apprehend, upon this foundation that it would plainly be impossible that any action or suit could be brought to a successful termination, if the alienations pendente lite were permitted to prevail. The plaintiff would be liable in every case to be defeated by the defendant's alienating before a judgment or decree, and would be driven to commence his proceedings de novo, subject again to be defeated by the same course of proceeding.”

    15. In view of this, therefore, the applicant having purchased the property pendente lite cannot require the decree-holder to recommence his proceedings against him and cannot say that the decree can be enforced against him only if the claim is within time on the date on which he is sought to be impleaded.

    16. As a second mortgagee the applicant had certainly a right to redeem the prior mortgage. But his second mortgage is no longer subsisting. It has come to an end because the decree obtained on its basis stands fully satisfied. The applicant cannot, therefore, claim a subsisting right to redeem the prior mortgage on the ground of his being a second mortgagee, and on that account complain that he has been deprived of was right to redeem. He cannot claim a right to redeem on the basis of his purchase because that right came to an end when a final decree was passed in the prior mortgage suit against the original mortgagor.

    17. It therefore, appears to us that the doctrine of lis pendens constitutes an effective answer to all the three contentions put forward on behalf of the applicant, and none of the contentions can therefore be accepted. The view taken by the executing court in respect of the applicant's objection thus appears to be correct, and the application in revision must therefore fail. It is accordingly dismissed with costs.

    H.G.P

    18. Revision dismissed.

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    Hakim Mohammad Illayas Khan v. Sahab Collector Bahadur
    (Mar 14, 1957)