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  • R.K.Das
  • G.G.Das
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  • Hon'ble Mr. Justice Bira Kishore Ray
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  • R.K.Das
  • G.G.Das
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  • Hon'ble Mr. Justice Bira Kishore Ray
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Smart Summary

Legal Opinion Summary — Narasimham, J.

Factual and Procedural Background

This second appeal challenges the appellate judgment of the Subordinate Judge of Cuttack-Balasore, which reversed the Munsif of Balasore's judgment and dismissed the plaintiff's suit for recovery of possession of about 1.27⅓ acres in village Eaghunathpur (Balasore District).

The relevant chain of transactions and proceedings as stated in the opinion:

  • Original owner: Sheikh Hadu — owner of about 2.19 acres. On 18 October 1924 he executed a simple mortgage in favour of defendant 1 (the first mortgagee).
  • Defendant 1 instituted a mortgage suit (O.S. No. 418 of 1936) on 17 September 1936 and eventually obtained a final decree on 30 November 1939. The property was sold in execution on 16 January 1943, purchased by defendant 1, and delivery of possession was obtained through Court on 10 June 1943. Defendant 1 subsequently sold the property privately to defendants 2 and 3 on 27 June 1943.
  • The plaintiff is a puisne (second) mortgagee. He had a usufructuary mortgage executed on 9 June 1927 over one-half of the property covered by the 1924 mortgage. The plaintiff alleged he obtained possession soon after that mortgage but was subsequently dispossessed by the mortgagor.
  • Instead of suing for possession as a usufructuary mortgagee, the plaintiff brought a suit for sale (O.S. No. 130 of 1936) on 9 April 1936 without impleading defendant 1. He obtained a final decree and purchased at the sale on 6 November 1937, obtaining delivery of possession on 15 January 1938. When defendant 1 later proceeded with execution sale, the plaintiff objected under Order 21, Rule 58 CPC; his objection was overruled, prompting the present suit.
  • The lower appellate Court found that the plaintiff was in fact dispossessed by defendant 1 on 10 June 1943, a finding treated in this opinion as a concluded finding of fact.

Legal Issues Presented

  1. Whether the doctrine of lis pendens (and the effect of Section 52, Transfer of Property Act, as discussed) applies to a sale in execution of a mortgage decree where the underlying mortgage pre-dated the institution of a subsequently-pending suit (i.e., does a right acquired before commencement of a suit remain unaffected by sale in execution undertaken during the pendency of another suit?).
  2. Between two auction-purchasers — one under a prior (first) mortgage and the other under a puisne (second) mortgage — who were not impleaded in each other's suits, whether the right to possession is determined by priority of sale (date of sale) or by priority of the mortgages (date of mortgage), and relatedly what rights the puisne mortgagee retains when he was not made a party to the prior mortgagee's suit.
  3. Whether a puisne mortgagee who was dispossessed and subsequently elected to sue for sale (rather than for possession as a usufructuary mortgagee) thereby lost his right to possession as usufructuary mortgagee as of the date he instituted the suit for sale.

Arguments of the Parties

Plaintiff (Puisne Mortgagee)

  • Claimed under a usufructuary puisne mortgage dated 9 June 1927 over one-half of the property.
  • Alleged that he had obtained possession soon after the puisne mortgage but was dispossessed by the mortgagor.
  • Instituted suit for sale (O.S. No. 130 of 1936) on 9 April 1936 and later purchased at the execution sale (6 November 1937) and obtained delivery of possession (15 January 1938).
  • Objected to defendant 1's sale in execution under Order 21, Rule 58 CPC; his objection was overruled; he seeks confirmation of possession or alternatively recovery of possession.

Defendant 1 and Defendants 2 & 3

  • Defendant 1's rights derive from the earlier simple mortgage of 18 October 1924, a mortgage suit instituted 17 September 1936 (O.S. No. 418/1936), final decree (30 November 1939), sale (16 January 1943) and delivery of possession through Court (10 June 1943); defendant 1 then privately sold to defendants 2 and 3 on 27 June 1943.
  • Defendants' claim to possession is therefore founded on the prior mortgage, the decree and the execution sale and possession given by the Court.
  • The appellate Court found that the plaintiff had been actually dispossessed by defendant 1 on 10 June 1943.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Har Pershad Lal v. Dalmardan Singh, 32 Cal. 891 (1 C.L.J. 371) Supports the view that rights acquired before commencement of a suit are not affected by lis pendens (applies to sales in execution of mortgage decrees where mortgage pre-dated suit). The Court agreed with and followed this view as authoritative on lis pendens in the present context.
Chinnaswami Padayachi v. Darmalinga Padayachi, A.I.R. 1932 Mad. 866 (56 Mad. 115) Followed the view that rights acquired before suit commencement are unaffected by lis pendens. Cited as supporting authority for refusing to apply lis pendens to the present sale.
Suramma Nayuraly v. Surayya, A.I.R. 1934 Mad. 685 (162 I.C. 612) Supports the proposition that legal remedies to enforce pre-existing rights (including sale in execution) flow from the original right and are not defeated by pendency of suits. Cited in support of the view that lis pendens does not defeat rights acquired prior to suit.
Natesa Chettiar v. Subbunarayyana Ayyar, A.I.R. 1945 Mad. 91 (I.L.R. 1945 Mad. 578) Another authority cited for the same view on lis pendens and sales in execution. Adduced as supporting precedent for the Court's position on lis pendens.
Gendmal Amolakchand v. Laxman Tanba, A.I.R. 1945 Nag. 86 (I.L.R. 1944 Nag. 852) Supports view that rights acquired before suit commencement are not caught by lis pendens. Relied on as part of the line of authorities favouring non-application of lis pendens here.
Ram Sanehi Lal v. Janki Prasad, A.I.R. 1931 All. 466 (53 All. 1023) (Full Bench) Full Bench majority takes contrary view: distinguishes mortgagee's and mortgagor's interests and holds lis pendens applies to transfers that occur during pendency (majority view). The Court noted this contrary Full Bench authority but preferred the other line of decisions and the dissenting view in that case.
Muhammad Juman Mia v. Akali Mudiani, A.I.R. 1943 Cal. 577 (210 I.C. 67) A single-Judge Calcutta decision supporting the opposite view on lis pendens (i.e., that lis pendens may affect such sales). The Court observed this decision as supporting the opposite position but did not follow it.
Venkatanarasamma v. Ramiah, 2 Mad. 103 One of a series holding that the right to possession between competing auction-purchasers is determined by priority of sale. Cited as part of the authorities that adopt priority-of-sale approach; the Court acknowledged this line but did not attempt to reconcile all conflicts.
Ramanadhan Chetti v. Alkonda Pillai, 18 Mad. 600 (5 M.L.J. 197) Authority for the principle that priority of sale determines right to possession. Noted among cases endorsing priority-of-sale rule.
Kutii Chettiar v. Subramania Chettiar, 32 Mad. 485 (1 I.C. 1077) Another decision holding priority of sale is determinative of possession rights. Included in the list of cases favouring priority of sale.
Nanack Chand v. Teluck Dye Koer, 5 Cal. 265 (4 C.L.R. 358) Held that priority of sale fixes the right to possession between auction purchasers. Cited as one of the decisions supporting priority-of-sale rule.
Dirgopal Lal v. Bolakee, 5 Cal. 269 Included in the decisions holding priority of sale determines possession rights. Referenced among the priority-of-sale authorities.
Nagendran v. Lakshmi, A.I.R. 1933 Mad. 683 (56 Mad. 846) (Full Bench) Full Bench decision supporting priority of sale; contains a thorough review of case law on competing auction purchasers. Noted as a significant Full Bench authority for the priority-of-sale approach.
Ram Kinkar Hazra v. Hareram Hazra, A.I.R. 1933 Cal. 181 (145 I.C. 576) Another Calcutta decision aligning with priority-of-sale principle. Included in the set of cases cited for priority of sale.
Mohd. Jumanmia v. Akali Mudhani, A.I.R. 1943 Cal. 577 (210 I.C. 67) Cited both as part of the priority-of-sale group and earlier as a contrary view on lis pendens (appearing in different contexts in the opinion). Noted among decisions illustrating conflict in the authorities; the Court did not adopt it for its final ruling on lis pendens.
Bunwari Jha v. Ramjee Thakur, 7 C.W.N. 11 One of the authorities holding that priority of mortgages (date of mortgage) determines right to possession. Recognised by the Court as representing the alternate line of authority.
Gangadas Bhattar v. Jogendra Nath, 11 C.W.N. 403 (5 C.L.J. 315) Held that priority of mortgage controls rights; also cited for the proposition that a party improperly excluded from a mortgage suit should not be put in a worse position. Cited for the quoted principle that the excluded party must not be placed in a worse position than if he had been made a party to the original suit.
Gangadhar Dhanjishet v. Lakshman Mahadab, 125 I.C. 905 (A.I.R. 1930 Bom. 221) Authority for priority-of-mortgage rule. Noted as part of the line of cases favouring priority of mortgages.
Prag Das v. Beni Prasad Jaggu Lal, 171 I.C. 75 (A.I.R. 1937 All. 606) Another decision aligned with priority-of-mortgage approach (though facts differ). Cited as a supporting case for the mortgage-priority line.
Mt. Sukhi v. Ghulam Safdar Khan, A.I.R. 1922 P.C. 11 (43 All. 469) Holds that if a first mortgagee sues for sale without impleading the puisne mortgagee and purchases, the puisne mortgagee's rights are not affected by that purchase. Relied upon by the Court as authority that the puisne mortgagee should not be placed in a worse position and that his rights as of the relevant date must be protected.
Multa Veetil v. Achuthan Nair, 9 I.C. 513 (21 M.L.J. 213) Holds that a purchaser in such a suit acquires only those rights which subsist in the mortgagor at the date of the suit, not rights as on the date of the mortgage. Cited to show that purchasers acquire rights subsisting at the date of the suit, supporting the Court's focus on the position as of the date of institution of the first mortgagee's suit.
Ganga Prasad Singh v. Musammat Ganeshi Kuer, A.I.R. 1944 Pat. 119 (22 Pat. 761) Reviewed relevant case law and held that where a person left out of a mortgage action was in possession or entitled to possession on the date of the suit, the sale in his absence is not binding and he may sue for possession. Cited approvingly for the proposition that an excluded party who had possession or entitlement on the date of suit is not bound by sale in his absence.
Mulla, Transfer of Property Act (8th Edn.), p. 594 (textbook) Textual statement: where neither mortgage is usufructuary, each auction-purchaser is equally entitled to possession and he who secures it is entitled to keep it until redeemed; if both redeem, purchaser from prior mortgage has prior right to redeem. Quoted by the Court and applied to the facts (mutatis mutandis) because the puisne mortgagee had elected to sue as a simple mortgagee after dispossession; Court used the rule to determine priority of right to redeem.
Sam Sanehi (Ramsanehi) v. Janki Prasad, A.I.R. 1931 All. 466 (53 All. 1023 F.B.) Full Bench discussed competing titles and, on comparable facts, observed that the second mortgagee-plaintiff must redeem the prior mortgage. Referred to as a Full Bench decision relevant to the question of redemption between competing auction purchasers; Court invoked its reasoning on redemption priority.

Court's Reasoning and Analysis

The Court proceeded through a structured analysis addressing first the doctrine of lis pendens and then the competing principles governing rights between auction-purchasers of prior and puisne mortgagees.

  1. Lis Pendens:

    The Court acknowledged that lis pendens applies to involuntary transfers as well, even if Section 52 of the Transfer of Property Act (referred to in the opinion as the V.P. Act) may not in terms apply to such transfers. The pivotal question was whether a sale in execution of a mortgage decree is caught by lis pendens where the mortgage itself pre-dated the institution of the subsequently-pending suit, even though the sale occurred during the pendency of that suit.

    After reviewing conflicting authorities, the Court expressed preference for the line of decisions (e.g., Har Pershad Lal and allied Madras decisions) holding that a right acquired before commencement of a suit is not affected by lis pendens. The Court reasoned that rights between mortgagor and mortgagee are determined at the time of the mortgage; enforcement steps (including a sale under a decree) are remedies flowing from that original right and should not be treated as creating a new right susceptible to lis pendens. Accordingly, the Court held that the doctrine of lis pendens did not apply to the present factual constellation.

  2. Priority of Sale vs. Priority of Mortgage (rights of competing auction-purchasers):

    The Court recognised two conflicting lines of authority: (a) cases holding that priority of sale governs possession between competing auction purchasers; and (b) cases holding that priority of the mortgages governs. The Court declined to reconcile all conflicting decisions in the abstract because it considered such an extended discussion unnecessary for deciding the present case.

    However, the Court distilled a consensus point from the authorities: where a first mortgagee sues for sale without impleading a puisne mortgagee, the puisne mortgagee's rights are not extinguished by the first mortgagee's purchase — but the precise nature of the puisne mortgagee's preserved rights is to be measured by his position as of the date the first mortgagee instituted his suit.

    The Court relied on Mt. Sukhi v. Ghulam Safdar Khan and other authorities for the principle that a party improperly excluded from a mortgage suit should not be placed in a worse position than he would have occupied had he been made a party.

  3. Application to the facts — the plaintiff's entitlement to possession:

    The decisive factual/legal application was that the plaintiff, though originally a usufructuary mortgagee (thus ordinarily entitled to possession), had been dispossessed by the mortgagor and elected to sue for sale (O.S. No. 130 of 1936) on 9 April 1936 rather than for recovery of possession. By choosing to sue for sale, the plaintiff effectively gave up his claim to possession as usufructuary mortgagee and, as of the date the first mortgagee's suit was instituted (17 September 1936), the plaintiff's remaining right was a right to redeem — he neither had possession nor was he entitled to possession on that date.

    Because the puisne mortgagee's protected right (the one unaffected by the first mortgagee's auction purchase) is the right existing as of the date of institution of the first mortgagee's suit, and because that right was limited to redemption, the plaintiff's present suit for recovery of possession could not succeed. The Court therefore concluded that the plaintiff's suit for possession "must... fail."

  4. Secondary, pragmatic disposition — redemption opportunity:

    The Court further considered the pragmatic situation: both sides held defective titles (each auction-purchaser's title being defective because the other mortgagee was not impleaded in the respective suits). The Court saw no reason to displace a party actually in possession. Applying the general principle (including the passage from Mulla cited in the opinion) that the purchaser who secures possession may retain it until redeemed, the Court held that the prior mortgage auction-purchaser (the defendant) has the prior right to redeem.

    In the interests of justice and to avoid multiplicity of litigation, the Court directed that all parties be given the opportunity to declare whether they are willing to redeem. The plaintiff and defendants 2 & 3 were called upon to file statements before the Court on 20 March 1950 indicating willingness to redeem; the Court directed issuance of notice to the parties and listed the matter for 20 March 1950.

Holding and Implications

Holding:

The Court held that (a) the doctrine of lis pendens does not apply to the particular sale in the present case; and (b) the plaintiff's suit for recovery of possession "must... fail" because at the date of institution of the first mortgagee's suit the plaintiff no longer had possession or an entitlement to possession, his remaining right being limited to redemption.

Immediate procedural consequence:

  • The Court called upon the plaintiff and defendants 2 & 3 to file statements by 20 March 1950 indicating whether they are willing to redeem each other; notice to be issued through their lawyers and the matter to be placed before the Court on 20 March 1950.

Implications:

The decision resolves the parties' dispute on the present facts by (i) declining to apply lis pendens to the sale in question, (ii) characterising the puisne mortgagee's surviving right (in the circumstances) as a right to redeem rather than to reclaim possession, and (iii) directing that the prior auction purchaser has the prior right to redemption. The Court expressly refrained from settling the broader conflict of authorities between the priority-of-sale and priority-of-mortgage lines, treating that wider reconciliation as unnecessary for deciding this appeal. Consequently, beyond the application to these facts (and the stated preference for the line of decisions treating rights acquired before suit commencement as unaffected by lis pendens), the Court did not purport to lay down a new general precedent resolving all conflicting authorities.

Order: The Court made the procedural order described above; Das, J. agreed; formal order accordingly.

Show full summary ...

    Sheikh Bikala v. Sheik Ali

    Narasimham, J.:— This second appeal is against the appellate judgment of the Subordinate Judge of Cuttack-Balasore reversing the judgment of the Munsif of Balasore and dismissing the plaintiff's suit for recovery of possession of about 1.27⅓ acres of land in village Eaghunathpur, in Bhadrak Sub-division of Balasore District.

    2. One Sheikh Hadu was the original owner of about 2.19 acres of raiyati land in the village. On 18th October 1924, he executed a simple mortgage of the said property in favour of defendant 1. On 17th September 1936, defendant 1 instituted a mortgage suit (O.S No. 418 of 1936) on the foot of the said mortgage impleading Sheik Halim the son of Sheik Hadu (he having died in the meanwhile) and in due course obtained a final decree on 30th November 1939. The property was sold on 16th January 1943 and purchased by the mortgagee himself (defendant 1) who obtained delivery of possession through Court on 10th June 1943. He then soli the property to defendants 2 and 3 on 27th June 1943. Their claim to the property is thus based on the said in execution of the mortgage decree in O.S No. 418 of 1936, delivery of possession through Court and the subsequent private sale by the mortgagee auction-purchaser (defendant 1) in their favour. The plaintiff's claim to the property is based on a puisne mortgage executed in his favour by Sheik Halim, son of Sheik Hadu on 9th June 1927. The property covered by the puisne mortgage was only one-half of the property covered by the first mortgage of 1924, But the puisne mortgage was a usufructuary mortgage and the mortgagee (the plaintiff) obtained possession of the plots soon after the execution of the mortgage. Subsequently, however, he was dispossessed and then instead of bringing a suit for possession as usufructuary mortgagee he brought a suit for sale on 9th April 1936 (O.S No. 130 of 1936) without impleading the first mortgagee (defendant 1) as a party. In due course he obtained a final decree and purchased the property in execution of the decree on 6th November 1937 and obtained delivery of possession on 15th January 1933. When defendant 1 brought the property to sale in execution of his mortgage decree, the plaintiff objected under O. 21, R. 58 of the CPC, but his objection was overruled and hence the necessity for the present suit. The plaintiff further stated that he continued in possession since 16th January 1938 and that defendant 1 did not dispossess him by virtue of the delivery of possession obtained by him on 10th June 1943. He, therefore, prayed for confirmation of possession or in the alternative for recovery of possession. But the lower appellate Court reversing the finding of the trial Court held that the plaintiff was actually dispossessed by defendant 1 on 10th June 1943. This finding being a finding on facts is thus concluded. The present suit of the plaintiff is, therefore, in essence a suit for recovery of possession. In the defendant's mortgage suit the plaintiff was not made a party and similarly in the plaintiff's mortgage suit also defendant 1 was not made a party. In this judgment defendant 1 will be referred to as the first mortgagee and the plaintiff as the puisne mortgagee.

    3. The main point in controversy is about the right to possession as between auction purchasers at sales of prior and puisne mortgagees who have not made each other a party regarding which there is a sharp conflict of judicial decisions and a bewildering array of case laws. Before entering into a discussion of this point, I may give below the relevant dates of the two mortgages.

    First mortgage, simple in nature, in favour of defendant 1.

    Date of mortgage … … 18-10-24 Date of institution of the suit (O.S NO. 418 of 1936) … … 17-9-36 Preliminary decree … … 17-12-36 Final decree …… … 30-11-39 Sale in execution of the final decree … 16-1-43 Delivery of possession in favour of the mortgagee auction-purchaser … 10-6-43

    Second mortgage in favour of the plaintiff usufructuary in nature and relating to only one-half of the property covered by the first mortgage.

    Date of mortgage … … 9-6-27 Date of institution of the suit (O.S No. 130 of 1936) … … … 9-4-36 Preliminary decree … … 17-11-36 Final decree … … … 13-3-37 Purchased by the mortgagee auction purchaser (plaintiff) … … … 6-11-37 Delivery of possession … … 15-1-38

    4. The first point to consider is whether the principle of lis pendens would apply to the sale dated 6th November 1937 in favour of the puisne mortgagee. It is true that the puisne mortgagee's suit was brought five months before institution of the suit by the first in mortgagee. But the court-sale in execution of the decree in the former suit took place while the suit of the first mortgagee was pending. It is now well-settle that the principle of lis pendens would apply to involuntary transfers also though Section 52 of the V.P Act, in terms may not apply to such transfers. But the further question for consideration is whether a sale in execution of a mortgage decree will be hit by the doctrine of lis pendens if the mortgage had taken place long before institution of the suit even though the sale might have taken place during the pendency of that suit. On this question also there is a conflict of decisions but there is sufficient authority for the view that a right acquired before the Commencement of a suit is not affected by the rule of lis pendens even though the remedy for the enforcement of that right may be sought during the pendency of the suit Mitra J. in Har Pershad Lal v. Dalmardan Singh, 32 Cal. 891 : (1 C.L.J 371) took this view while discussing the effect of sales in execution of mortgage decrees and this view was followed in Chinnaswami Padayachi v. Darmalinga Padayachi, A.I.R(19) 1932 Mad. 866 : (66 Mad. 115); Suramma Nayuraly v. Surayya, A.I.R(21) 1934 Mad. 685 : (162 I.C 612); Natesa Chettiar v. Subbunarayyana Ayyar, A.I.R(32) 1945 Mad 91 : (I.L.R (1945) Mad. 578) and Gendmal Amolakchand v. Laxman Tanba, A.I.R(32) 1945 Nag. 86 : (I.L.R (1944) Nag. 852). I am aware of the contrary view taken by the majority of the Judges in the Full Bench decision of the Allahabad High Court reported in Ram Sanehi Lal v. Janki Prasad, A.I.R(18) 1931 All. 466 : (53 All. 1023 (FB)) though Makherji J. took a contrary view in a dissentient judgment. There is also a recent single Judge decision of the Calcutta High Court reported in Muhammad Juman Mia v. Akali Mudiani, A.I.R(30) 1943 Cal. 577 : (210 I.C 67) in support of the opposite view. But with respect I am inclined to agree with the former view taken in Har Pershad Lal v. Dalmardan Singh, 32 Cal. 831 : (1 C.L.J 371) and reiterated in subsequent decisions mentioned above. The rights between a mortgagor and mortgagee are determined at the time of the execution of the mortgage and the subsequent suit which the mortgagee may bring to enforce the mortgage and the consequent sale of the property seem to be in the nature of remedies accruing from the original right. As pointed by Venkatasubba Rao J. in Suramma v. Surayya, A.I.R(21) 1934 Mad. 585 : (152 I.C 612) “if a certain right remains unaffected the legal remedy to enforce that right must also continue”. The sale in pursuance of a decree on a mortgage seems to be nothing else but a logical result of a transfer which had taken place at the time of the mortgage itself. In the majority decisions of the Full Bench of the Allahabad High Court, Ramsanehi Lal v. Janki Prasad, A.I.R(18) 1931 All. 466 : (53 All. 1023 (F.B)), a distinction was made between the interest of the mortgagee and that of the mortgagor and it was pointed out that so far as the mortgagee's interest was concerned the transfer took place at the time of the execution of the mortgage deed whereas the mortgagor's interest was transferred at the time of the sale and consequently the rule of lis pendens would apply in respect of the latter transfer. But this point has been fully met in the dissentient judgment of Mukherji J. and in the two Madras decisions noted above. Agreeing with their views I would hold that the doctrine of lis pendens does not apply to the present case.

    5. But apart from the question of lis pendens, the rights of the two mortgagee auction-purchasers may depend on either priority of sale or priority of the mortgages. There are a series of decisions, Venkatanarasamma v. Ramiah, 2 Mad. 103; Ramanadhan Chetti v. Alkonda Pillai, 18 Mad. 600 : (5 M.L.J 197); Kutii Chettiar v. Subramania Chettiar, 32 Mad. 485 : (1 I.C 1077); Chinnaswami Padayachi v. Darmalinga Padayachi, A.I.R(19) 1932 Mad. 666 : (56 Mad. 115); Nanack Chand v. Teluck Dye Koer, 5 Cal. 265 : (4 C.L.R 358); Dirgopal Lal v. Bolakee, 5 Cal. 269; Nagendran v. Lakshmi, A.I.R(20) 1933 Mad. 683 : (56 Mad. 846 (F.B)); Ram Kinkar Hazra… v. Hareram Hazra…., A.I.R(20) 1933 Cal. 181 : (145 I.C 576) and Mohd. Jumanmia v. Akali Mudhani, A.I.R(30) 1943 Cal. 577 : (210 I.C 67) in which it was held that the right to possession was determined by the priority of sale. Nagendran v. Lakshmi, A.I.R(20) 1933 Mad. 583 : (56 Mad. 846 (F.B)) is a Full Bench decision and there is an interesting discussion there about the rights of the two mortgagee auction purchasers and also a full review of the case law on the subject. On the other hand, there is another line of cases in which it was held that the right to possession was determined according to the priority of mortgages: see Bunwari Jha v. Ramjee Thakur, 7 C.W.N 11, Gangadas Bhattar v. Jogendra Nath, 11 C.W.N 403 : (5 C.L.J 315); Har Pershad v. Dal Mardan Singh, 32 Cal. 891 : (1 C.L.J 371); Gangadhar Dhanjishet v. Lakshman Mahadab, 125 I.C 905 : (A.I.R(17) 1930 Bom. 221) and Prag Das v. Beni Prasad Jaggu Lal, 171 I.C 75 : (A.I.R(24) 1937 All. 606) (though not very similar on facts to the present ease). It is not easy to reconcile these conflicting decisions nor do I think it necessary for the purpose of this case to enter into an elaborate discussion about the relative merits of the two opposite views.

    6. But there are certain points on which all are agreed. If a first mortgagee brings a suit for sale on the basis of his mortgage without impleading the puisne mortgagee and purchases the property, the rights of the puisne mortgagee are unaffected by purchase: Mt. Sukhi v. Ghulam Safdar Khan, A.I.R(9) 1922 P.C 11 : (43 ALL. 469). The controversy however appears to be as to what are those rights? Are they the rights which he had on the date of the institution of the suit by the first mortgagee or else are they the rights which he acquired after that date but prior to the sale in execution of the decree by the first mortgagee? Though the question is not of easy solution I am inclined to take the view that the right of the puisne mortgagee which is unaffected by the auction sale of the first mortgagee is determined by the date of the institution of the suit by the first mortgagee and not by the date of sale. The first mortgagee's suit is not wholly void because the mortgagor whom he impleaded as a party had still some interest in the equity of redemption on the date of the institution of the suit. In the present case this is unarguable because on 17th September 1936 the puisne mortgagee's right was in respect of only one-half of the property covered by the first mortgage and the equity of redemption of the remaining half still continued with the mortgagor who was made a party. Doubtless the decree obtained by the first mortgagee was imperfect in the sense that all persons interested in the equity of redemption were not impleaded by him as parties. In such circumstances the duty of the Court seems to be to allow the puisne mortgagee an opportunity of occupying the position which he would have occupied if he had been made a party to the first mortgagee's suit. The Privy Council in Mt. Sukhi v. Ghulam Safdar Khan, A.I.R(9) 1922 P.C 11 : (43 All. 469) observed that the aforesaid view was the correct principle in cases of this type. Similarly in Gangadas v. Jogendra, 11 C.W.N 403 at p. 410 : (5 C.L.J 315) it was observed:

    “The party who has been improperly excluded from a mortgage suit is entitled to claim that he should not be placed in a worse position than what he would have occupied if he had been made a party to the original suit.”

    7. In an old Full Bench decision of the Madras High Court reported in Multa Veetil v. Achuthan Nair, 9 I.C 513 : (21 M.L.J 213); it was pointed out that the purchaser in such a suit does not acquire the rights of the mortgagor as on the date of the first mortgage but only those that subsist in him at the date of the suit. In Ganga Prasad Singh v. Musammat Ganeshi Kuer*, A.I.R(31) 1944 Pat. 119 : (22 Pat. 761), Manohar Lall J. has fully reviewed the entire case law especially of the Patna and Calcutta High Courts regarding the rights of a puisne mortgagee who was not made a party in the first mortgagee's suit. Belying on certain well-known passages on Jones on Mortgage and Dr. Ghose's famous book on the Law of Mortgages in India, the learned Judge observed:

    “If the person who has been left out in the mortgage-action was in possession or entitled to possession on that date as the representative of the equity of redemption or was the person in whom the equity of redemption lay in full or in part then the sale in his absence is not binding on him and he cannot be forced to redeem. He may if he likes institute a suit for pas-session only.”

    8. With respect I would agree with this view.

    9. Applying these decisions to the facts of the present case, the question is whether the puisne mortgagee was in possession or at any rate was entitled to possession on the date of the institution of the suit (17th September 1936) by the first mortgagee. It is true that the puisne mortgagee was a usufructuary mortgagee and as such entitled to possession also. But it was his own case that he was dispossessed by the mortgagor and then he instituted his suit (O.S No. 130 of 1936) on 9th April 1936 for sale of the mortgaged property and not for recovery of possession. A usufructuary mortgagee who has been dispossesed has the right either to sue for possession as usufructuary mortgagee or else to sue for sale of the property like a simple mortgagee after giving up his usufructuary right. Thus, when he has ejected to sue as a simple mortgagee he lost his right to possession qua usufructuary mortgagee on 9th April 1936. Therefore, on nth September 1936, his right was only the right to redeem and he had neither possession nor was he entitled to possession. It is only this right of his that was unaffected by the sale and auction-purchase in execution of the first mortgagee's decree. His present suit for possession must, therefore, fail.

    10. The whole question may be looked at from another angle. The finding of the appellate Court is that the first mortgagee auction purchaser actually dispossessed the second mortgagee and is at present in possession of the lands. The puisne mortgagee's suit is in essence a suit for eviction and he cannot succeed unless he can show that his title is superior to that of the first mortgagee. It is true that the puisne mortgagee is also an auction-purchaser at a sale in execution of his mortgage decree. But as the first mortgagee was not a party to the same his title is defective. Similarly, the first mortgagee's title also is defective inasmuch as the second mortgagee was not made a party in his suit. Thus as between two parties who have each got defective title to the property there seems to be absolutely no reason as to why the Court should dispossess a party who is already in possession. The defendants' right to possession is derived from the purchase following an action upon his mortgage which was brought in time and which was not a nullity though imperfect. In the Full Bench decision of the Allahabad High Court Sam Sanehi v. Janki Prasad, A.I.R(18) 1931 All. 466 : (53 All 1023 F.B) in answering question 2(a) (on facts which are similar to the present case) it was observed that the second mortgagee-plaintiff must redeem the prior mortgage. In Mulla's Transfer of Property Act, Edn. 8, at p. 594, the learned author observes:

    “If neither mortgage is usufructuary each auction-purchaser is equally entitled to possession and he who secures possession is entitled to keep it until redeemed, and if both are willing to redeem the auction-purchaser from the prior mortgagee has the prior right to redeem.”

    11. In the present case as already pointed out though the puisne mortgage was usufructuary mortgage, the mortgagee after being dispossessed elected to sue as a simple mortgagee and hence the afore, said observation would apply with full force. As between the two auction-purchasers the priority of the right to redeem would vest in the defendant because his was the prior mortgage. Though this is a suit for recovery of possession only and neither party had offered to redeem the other mortgage, we consider that inasmuch as all the parties having subsisting interest in the property are before us and with a view to avoid multiplicity of litigation it is desirable in the interests of justice that both the parties should be given an opportunity to redeem subject of course to the prior right of the first mortgage auction-purchaser. The plain, tiff and defendant 3 are, therefore, called upon to file statements before this Court on 20th March, 1950 as to whether they are willing to redeem each other. If both are willing to redeem, the aforesaid rule of priority would be applied and appropriate orders passed. Issue the aforesaid notice to the parties through their lawyers and put up on 20th March 1950.

    Das, J.:— I agree.

    D.H

    12. Order accordingly.

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