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Case Number

Second Appeal No. 307 of 1950

Advocates

B.G Thakor, for the appellant.
D.V Patel, for the respondent.

Judges

Mr. Dixit, J.

Acts

s. 7(ix) of the Court-fees Act.
rule 4 of Order XXXIV
Order XXXIV, rule 1

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Smart Summary

Structured Summary of the Opinion (Dixit, J.)

Factual and Procedural Background

This is a second appeal in execution concerning the executability and jurisdictional validity of a consent decree dated October 5, 1945. The decree arose from Suit No. 496 of 1942 filed by Raval Goculeshwar Maganlal in the Court of the Joint Civil Judge, Junior Division, Ahmedabad, to enforce a mortgage executed in his favour on May 6, 1932. The defendants in that suit included two persons (father and son) who are appellants in the present second appeal, and a third defendant (defendant No. 3), who is the respondent in this appeal.

Defendants Nos. 1 and 2 had, after the plaintiff's mortgage, executed three subsequent mortgages in favour of defendant No. 3 dated December 16, 1932; November 27, 1933; and May 17, 1938 securing sums of Rs. 1,300; Rs. 1,500; and Rs. 4,000 respectively. The plaintiff's mortgage secured Rs. 1,200 and was with possession; the plaintiff valued his claim in the plaint at Rs. 1,899 (referred to in relation to s. 7(ix) of the Court-fees Act).

The parties reached a compromise and the agreement was embodied in the consent decree. Relevant to this appeal, the decree required defendants Nos. 1 and 2 to pay defendant No. 3 a sum of Rs. 7,000 in respect of his mortgage claims, in the manner provided by the decree.

In 1948 defendant No. 3 filed darkhast No. 394 to execute the decree. The executing Court held that the decree was not executable and disposed of the darkhast with costs on the decree-holder. Defendant No. 3 appealed to the District Court, Ahmedabad; the learned Joint Judge allowed that appeal, reversed the executing Court's order, and directed the executing Court to proceed with the execution application. Defendants Nos. 1 and 2 have prosecuted the present second appeal against that appellate decision.

Legal Issues Presented

Whether the consent decree dated October 5, 1945, was passed without jurisdiction (so as to render it non-executable), in particular because the amounts secured by the subsequent mortgages in favour of defendant No. 3 aggregated to more than Rs. 5,000, the pecuniary limit of the trial Court.
Whether the relief claimed by the respondent in the execution application was extraneous to the suit and therefore not susceptible of enforcement in execution proceedings (i.e., whether the respondent's proper remedy, if any, was to file a separate suit rather than proceed by execution).

Arguments of the Parties

Appellants' Arguments (as presented by Mr. B. G. Thakor)

The consent decree was without jurisdiction because the three subsequent mortgages in favour of defendant No. 3 aggregated to an amount exceeding Rs. 5,000, which, it was contended, put the relevant claim outside the pecuniary jurisdiction of the Court that made the decree.
The relief claimed by the respondent in the execution application did not "relate to the suit" and was extraneous; hence the respondent should have filed a separate suit rather than seek relief by execution.

Respondent's Position (defendant No. 3 / decree-holder)

The trial Court had jurisdiction to pass the consent decree because the suit was properly instituted under the mortgage provisions and defendant No. 3 was a necessary party under Order XXXIV, rule 1, having an interest in the same mortgaged property.
The claim of defendant No. 3 related to the suit (the mortgaged property and the interests in it were identical), and therefore the decree-creditor's entitlement under the consent decree could be executed rather than requiring a separate suit.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Ganpatrao v. Shamrao (Nagpur High Court)	Holds that in a mortgage suit where a subsequent mortgagee is added as defendant and wants his rights investigated, valuation for jurisdiction is to be ad valorem on the amount due on the plaintiff's prior mortgage; the jurisdiction of the trial Court is not lost if amounts claimed on prior and subsequent mortgages together exceed the Court's pecuniary jurisdiction.	The court relied on this authority to reject the appellants' contention that the trial Court lost jurisdiction because the aggregate of subsequent mortgages exceeded Rs. 5,000; the precedent supports valuing jurisdiction by reference to the prior mortgage claim rather than the sum of all mortgages.
Shailendrakumar Palit v. Haricharan Sadhukhan (Calcutta case)	Authority relied upon by Ganpatrao; used to support the valuation/jurisdiction principle in mortgage suits involving subsequent mortgagees.	The court noted that Ganpatrao, which it followed, in turn relied on this Calcutta case; the Court treated these authorities together as supporting the proposition that jurisdiction is not lost by aggregation of prior and subsequent mortgage claims.
Bajirao v. Sakharam (judgment of Madgavkar, J.)	Interprets the expression "so far as it relates to the suit" as very wide; may include matters extraneous to the suit that were never directly in question in the suit itself.	The court invoked this passage to conclude that the respondent's claim (being asserted by a subsequent mortgagee on the same property and a necessary party) could be treated as relating to the suit and therefore could form the subject matter of an executable consent decree.

Court's Reasoning and Analysis

The court began by stating the well-settled principle governing executing Courts: an executing Court cannot question the validity, legality or correctness of a decree and must execute it except where it is shown that the Court which passed the decree had no inherent jurisdiction to do so. This framed the analysis: to succeed in attacking executability the appellants had to show absence of inherent jurisdiction in the trial Court.

The court examined the nature of the original suit and the statutory provisions governing mortgage suits. Under Order XXXIV, rule 1, all persons having an interest in the mortgage-security or the right of redemption must be joined as parties to a mortgage suit; accordingly defendant No. 3 (a subsequent mortgagee) was properly joined and had an interest in the property which the suit concerned.

The court then considered Order XXXIV, rule 4, which contemplates a final decree directing sale of the mortgaged property and payment of proceeds into Court for application in payment of the plaintiff's debt and then payment of any balance to defendants or other entitled persons. The court reasoned that a subsequent mortgagee is necessarily interested in the proceeds of sale and that it is therefore logical and necessary that his claims be considered in the mortgage suit where the same property is involved.

Addressing the appellants' jurisdictional challenge from the fact that the three mortgages in favour of defendant No. 3 aggregated to over Rs. 5,000, the court observed that jurisdiction must be determined by the allegations in the plaint. The plaintiff rightly instituted the suit in the Court in which it was filed and valued his claim at Rs. 1,899 — a claim acknowledged by the appellants to be within the trial Court's competence. Thus, even if the aggregate of all mortgages exceeded the pecuniary limit, that circumstance did not deprive the trial Court of jurisdiction over the plaintiff's claim, and at most could amount to an irregular exercise of jurisdiction but not to absence of jurisdiction.

The court reinforced this statutory reasoning with authority: it followed Ganpatrao v. Shamrao (and the Calcutta case relied upon there) which holds that valuation for jurisdiction in such mortgage suits is to be determined by reference to the amount due on the plaintiff's prior mortgage, and that the trial Court's jurisdiction is not lost merely because prior and subsequent mortgage claims taken together exceed its pecuniary limit.

On executability the court considered whether the respondent's claim was extraneous to the suit. Relying on Bajirao v. Sakharam, which characterized "so far as it relates to the suit" as a wide expression, and noting that the subsequent mortgagee was a necessary party and the mortgaged property was the same, the court held that the third defendant's claim did relate to the suit. Because the consent decree expressly provided that, in default by defendants Nos. 1 and 2, defendant No. 3 could recover the amount by sale of the property, that part of the consent decree was capable of execution.

Because both points advanced by the appellants (lack of jurisdiction and non-executability) were rejected on statutory grounds and by binding authority, the court affirmed the appellate decision below.

Holding and Implications

APPEAL DISMISSED.

Direct effect on the parties (as stated in the opinion):

The appellate decision (the District Court's allowance of defendant No. 3's appeal and direction to the executing Court to proceed) is affirmed.
The second appeal fails and is dismissed with costs.
The decree of October 5, 1945 (the consent decree) is confirmed and must be treated as executable in respect of the respondent's entitlements under the decree (including the provision that defendant No. 3 could recover by sale of the property in the event of non-payment by defendants Nos. 1 and 2).

Broader implications: The court applied existing statutory provisions and cited established authorities on valuation for jurisdiction in mortgage suits and on the breadth of the phrase "so far as it relates to the suit." The opinion does not purport to lay down a new precedent beyond applying those authorities to the facts; its effect is to reaffirm the principles that (1) jurisdiction in a mortgage suit is to be determined by the plaintiff's claim for valuation purposes where a subsequent mortgagee is joined, and (2) matters affecting necessary parties and the same mortgaged property may be treated as relating to the suit and hence be executable under a consent decree.

Decree confirmed.

J.G.R

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Nanalal Bhogilal Chokshi v. Ambalal Somnath

Dixit, J.:—

This is a second appeal in execution which raises an interesting question of jurisdiction.

The decree sought to be executed was passed on October 5, 1945. It was a decree by consent. The suit in which the decree was passed was suit No. 496 of 1942 filed by one Raval Goculeshwar Maganlal in the Court of the Joint Civil Judge, Junior Division, Ahmedabad. The suit was to enforce a mortgage executed in his favour on May 6, 1932, by two defendants, who are father and son, and who are appellants in the present appeal. In the suit was also another party as defendant No. 3, who is the respondent to the present appeal. Defendants Nos. 1 and 2 effected three mortgages, subsequent to the first mortgage, in favour of defendant No. 3 and those three mortgages are dated December 16, 1932, November 27, 1933, and May 17, 1938. The mortgage in favour of the plaintiff was one in order to secure a sum of Rs. 1,200 and the mortgages in favour of defendant No. 3 were respectively to secure Rs. 1,300, Rs. 1,500 and Rs. 4,000. The mortgage in favour of the plaintiff was one with possession.

In the suit in question the plaintiff and the defendants came to an agreement or compromise and the agreement was embodied in a decree. There are several parts of the decree which are set out in the appellate judgment. Nothing turns upon the terms of the decree, so that it is not necessary to refer to those terms in any detail in this place.

Briefly stated, the decree, so far as it is relevant to the present appeal, is to the effect that defendants Nos. 1 and 2 were to pay defendant No. 3 a sum of Rs. 7,000 in respect of his mortgage claims in the manner provided in the decree.

In the year 1948 defendant No. 3 filed darkhast No. 394 to execute the decree when he was met with the objection that the decree was not executable. This plea found favour with the executing Court and in the result that Court disposed of the darkhast with costs on the decree-holder. From the order made by the executing Court defendant No. 3 preferred an appeal in the District Court, Ahmedabad, and the learned Joint Judge allowed the appeal of defendant No. 3, reversed the order of the executing Court and directed that Court to proceed with the execution application in accordance with law. From the appellate decree defendants Nos. 1 and 2 have come up in second appeal.

Upon this appeal Mr. B.G Thakor for the appellants has taken up two points. In the first place, he contends that the consent decree passed on October 5, 1945, is one without jurisdiction, so that the executing Court cannot proceed to execute the decree. It is next contended that the relief which has been claimed by the respondent in the present darkhast did not relate to the suit, that it was extraneous to the suit and that the respondent's remedy, if any, was to file a separate suit and not to proceed by way of an execution application. Each of the two points, if correct, is sufficient to disentitle the respondent to the relief claimed by him. But I am not satisfied that either of the two contentions is well-founded.

Now, the principles as regards the powers of an executing Court are well settled. An executing Court cannot question the validity, legality or correctness of a decree. Its duty is to execute the decree except where it is shown that the Court passing a decree had no inherent jurisdiction to pass it. Bearing in mind these principles it is now necessary to turn to the circumstances in which the consent decree was passed. The suit filed by the original plaintiff was a suit to enforce a mortgage. To the suit he had joined not only the original mortgagors but also a subsequent mortgagee who is the present respondent. Under the provisions of O. XXXIV, r. 1, of the Code of Civil Procedure, all persons having an interest either in the mortgage-security or in the right of redemption shall be joined as parties to any suit relating to the mortgage. It cannot, therefore, be urged that defendant No. 3 should not have been joined as a party to the suit. The suit which the plaintiff filed was a suit to enforce the mortgage in his favour. The mortgage was executed in order to secure a sum of Rs. 1,200 and the plaintiff as the first mortgagee sought by his plaint to recover a sum of Rs. 1,899. This was the valuation which the plaintiff put in the plaint and it is not in dispute that this was the correct valuation, having regard to s. 7(ix) of the Court-fees Act. It is apparent, therefore, that the suit was properly instituted in the Court, in which it was instituted and Thakor for the appellants has not disputed that in such a suit the Court which made the decree would have jurisdiction to pass an appropriate decree. But he contends that inasmuch as the three mortgages in favour of the third defendant exceeded an amount of Rs. 5,000 which is the upward limit of the pecuniary jurisdiction of the Court which made the decree, the Court which passed the decree had no jurisdiction to pass it in favour of the third defendant because the amount awarded to the respondent was a sum of Rs. 7,000 and the amount due upon the three mortgages in favour of the respondent exceeded a sum of Rs. 5,000. A reference to rule 4 of Order XXXIV shows that a plaintiff suing upon a mortgage is entitled to apply for a final decree directing that the mortgaged property or a sufficient part thereof be sold, and the proceeds of the sale be paid into Court and applied in payment of his debt as indicated in that rule. The rule provides that after the plaintiff is so paid, the balance, if any, is to be paid to the defendant or other persons entitled to receive the same. In the face of this provision it is, I think, not open to the appellants to contend that the question of the mortgages in favour of the third defendant could not be gone into in the suit. A subsequent mortgagee is a necessary party under Order XXXIV, rule 1 and a subsequent mortgagee is interested in the amount realised at the sale of the property after a preliminary decree is passed. Now, the property which was the subject of mortgage in the plaintiff's favour was again the subject-matter of three mortgages in favour of the third defendant and I fail to see how it is possible to join a puisne mortgagee as a necessary party to the suit without mentioning his claims in the suit. You do not join a party as a necessary party to the suit unless he has some interest in the subject-matter of the suit. It is true that in this instance the amounts secured by the three mortgages aggregated to a sum exceeding Rs. 5,000 and it is this circumstance which has enabled the appellants to put forward the contention that the Court which passed the consent decree had no jurisdiction to make it. Now, this is a consent decree; but that surely will not avail the decree-holder if it is shown that the Court had no jurisdiction to pass it because consent of a party cannot confer jurisdiction upon a Court where no such jurisdiction exists in that Court.

The question to be decided, therefore, is whether the appellants are right in their contention that the original Court had no jurisdiction to pass this decree. For the reasons given above, it seems to me that the trial Court had jurisdiction to pass the decree for the reason that defendant No. 3 was a necessary party to the suit and that the three mortgages in his favour related to the same property. Question then is whether the circumstance of the three mortgages aggregating to a sum exceeding Rs. 5,000 would deprive the Court of its jurisdiction to pass the decree. It seems to me that this circumstance has nothing to do with that question. The question of jurisdiction has to be decided by reference to the allegations made in the plaint. Mr. Thakor for the appellants has conceded that the plaintiff had a right to file the suit in the Court in which it was filed and that the claim which the plaintiff put forward in the suit was a claim in respect of which the trial Court could grant a decree. Apart from authority, therefore, this contention must be rejected. At the most, it was an irregular exercise of jurisdiction. However, fortunately for the respondent, there is a direct authority in his favour. That is the decision of the Nagpur High Court reported in Ganpatrao v. Shamrao. It is enough to quote the head-note in that case which is as follows:—

“A mortgage suit in which a subsequent mortgagee who is added as a defendant wants his right to be investigated and decided, has to be valued for the purpose of jurisdiction ad valorem on the amount due on the plaintiff's prior mortgage, and jurisdiction of the trial Court is not lost if the amounts claimed on the prior and subsequent mortgages taken together exceed the pecuniary jurisdiction of the Court.

No Court-fees are payable on the claim under the subsequent mortgage.”

This case, in turn, relies upon the Calcutta case reported in Shailendrakumar Palit v. Haricharan Sadhukhan. It seems to me that both on the statutory provisions and on authority the contention urged in support of the appeal must, therefore, be rejected.

Mr. Thakor, however, argues that even if the Court had jurisdiction to pass the decree, the decree is not executable. The contention is based upon the assumption that the claim of the third defendant does not relate to the suit, the contention being that the proper remedy of the third defendant was to file a suit and not to proceed by way of execution. It seems to me that this contention must likewise fail. The expression “so far as it relates to the suit” has been judicially considered by Mr. Justice Madgavkar in the case of Bajirao v. Sakharam and it is there observed that it is a very wide expression and may include something which was extraneous to the suit and which was never in question in the suit itself. In the present case the facts are stronger. The property mortgaged is the same. The suit was by a prior mortgagee to enforce his mortgage. Under the law to such a suit a subsequent mortgagee is a necessary party and in this suit the Court was concerned with the investigation of the claim both of the plaintiff as well as of the third defendant. I fail to see, therefore, how it can be said that the claim of the third defendant did not relate to the suit. If it relates to the suit, it can then well form the subject-matter of the consent decree and when the consent decree provided that in the event of defendants Nos. 1 and 2 not paying the amount as directed by the decree the third defendant was entitled to recover the amount by sale of the property, it seems to me that it is not possible to successfully contend that this part of the decree was, therefore, not executable. In my opinion, therefore, this contention must equally fail.

As the two contentions urged in support of the appeal fail, the appellate decision will have to be affirmed. The result is that this appeal fails and the same will be dismissed with costs.

Decree confirmed.

J.G.R

Nanalal Bhogilal Chokshi v. Ambalal Somnath

Structured Summary of the Opinion (Dixit, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellants' Arguments (as presented by Mr. B. G. Thakor)

Respondent's Position (defendant No. 3 / decree-holder)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Nanalal Bhogilal Chokshi v. Ambalal Somnath

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