Ganapa Rama Hegde v. Timmaya Narayan Hegde

Broomfield, J.:— The facts are stated in the judgments of the lower Courts. The question for decision in this second appeal reduced to its essentials may be stated in this way. A mortgages property to B and afterwards sells to C who tabes possession. B then sues on his mortgage not making C a party, brings the property to sale and purchases it himself. Failing to get possession from C, he sues to evict him subject to C's right to redeem him. At the time of B's suit against C a suit to recover the mortgage debt by sale of the property would be time-barred. Is B entitled to recover the property from C unless C is willing to redeem? The case is covered by the authority in 24 Bom. L.R 7411, where it was held on facts essentially similar that; the auction purchaser in the mortgagee's suit has no such right. Both the lower Courts have followed this case, as they were bound to do, and the argument before us has mainly consisted of a challenge to the authority of that case.

2. The facts in 24 Bom. L.R 741 are thus stated in the head-note. In execution of a money decree against a mortgagor his rights in the mortgaged property were purchased at a court sale by the defendant, who went into possession of the property in 1899. The mortgagee sued on the mortgage in 1905, without making the defendant a party to the suit, and obtained a decree. In execution of the mortgage decree the mortgagor's rights in the mortgage were again sold at a court auction and purchased by the mortgagee in 1912. The mortgagee sold her right to the plaintiff in 1917 and the plaintiff sued the defendant in 1918 to recover possession of the property. It was held that what was purchased by the auction purchaser in 1912 was only the mortgage rights of the mortgagee, Since the owner of the equity of redemption was not a party to the suit, that as the auction purchaser was not in possession he was bound to take proceedings to obtain the benefit of his purchase, and he could not get possession unless he had that right as a successor to the original mortgagee, and that as the mortgagee was barred from bringing a suit to obtain possession or have the property sold to realize the mortgage amount the plaintiff was equally barred. There was no discussion of any authorities except one Madras case. But we are informed by the learned advocate for the respondent, who himself appeared in 24 Bom. L.R 741, that he desired to refer to Bombay decisions but was asked to cite only authorities in which the question of limitation was involved.

3. Mr. Manerikar who appears for the appellants has cited a number of Bombay rulings, mostly old cases, e.g, 5 Bom. 82, 10 Bom. 883 10 Bom. 2244, 16 Bom. 4865, 20 Bom. 3906 and 38 Bom. 247, in which an auction purchaser in a mortgagee's suit was awarded possession of the property as against a puisne mortgagee or a purchaser of the equity of redemption, although the latter had not been a party to the mortgagee's suit. It is contended that these cases show a course of authority in Bombay contrary to 24 Bom. L.R 741. These authorities do no doubt deoide that the auction purchaser acquires the rights both of the mortgagor and the mortgagee, the totality of the rights being sometimes described as all the rights of the mortgagor as at the date of the mortgage. Therefore, the proposition laid down in 24 Bom. L.R 741 that in a case like the present a purchaser acquires the rights of the mortgagee only, may not be strictly correct. But in none of these cases does it appear that the Court based its decision on the fact that the auction purchaser represented the mortgagor rather than the mortgagee, or held that as representative of the mortgagor he was entitled to possession. On the other band, in some of the cases it is clear that the auction purchaser was held to be entitled to recover possession of the property because he represented the mortgagee. For instance in 20 Bom. 390 Ranade, J. said (p. 392):

“The authorities… are quite clear on the points (1) that the purchaser stands in the place of the prior mortgagee, and (2) that he has a right to recover possession, (3) that the subsequent mortgagee cannot compel him to redeem his own mortgage, but (4) has a right himself, in case he has not been made a party to the suit on the prior mortgage, to pay off the prior incumbrance if he desires to retain possession.”

4. If the purchaser's right to get possession is derived from the fact that he represents the mortgagee, these Bombay cases are not necessarily inconsistent with the view that if the mortgagee's right be time-barred as regards a person not made a party to his suit, the auction purchaser in the mortgagee's suit would have no remedy against that person either. In that connexion it is instructive to refer to 10 Bom. 88. In that case the auction purchaser in the mortgagee's suit being obstructed by the person in possession, a puisne mortgagee brought a suit to recover possession. The High Court in appeal, while affirming his right to recover possession, nevertheless converted the decree into a decree for foreclosure, which seems to show that it was considered that his right to get possession was due to the fact that he represented the mortgagee. If he was entitled to possession as representing the mortgagor there would obviously have been no necessity to convert the decree into one for foreclosure. It is very material to note that in none of the Bombay cases on which Mr. Manerikar relies was there any question of a bar of limitation arising. It is very far from clear therefore that there is really any conflict between these cases and 24 Bom. L.R 741.

5. Mr. Manerikar has strongly relied on a recent decision of the Madras High Court, 59 Mad. 3128, where the view has been taken that the auction purchaser has two capacities (1) qua-mortgagee and another qua-purchaser of the items mortgaged to him, and that in his latter character he gets a fresh cause of action from the date of his purchase or from the date of obstruction to his obtaining possession. But, it is difficult to see that any real support for this position is to be found in any of the Bombay cases. The Madras High Court itself formerly took a different view: A.I.R 1931 Mad. 5429. There are Calcutta cases which support both views, e.g, 42 C.W.N 72110, 42 C.W.N 106511. 60 Cal. 119312 and 62 Cal. 7513 are against the appellant, while 60 Cal. 94814, 32 Cal. 89115 and some other cases are in his favour. The Allahabad High Court so far as recent cases are concerned, is in agreement with the view taken in 24 Bom. L.R 741: see, 49 All. 92316, 53 All. 102317 and 56 All. 13418.

6. Much of the reasoning in 59 Mad. 312 is no doubt forcible and persuasive, but it must be admitted that it is to a considerable extent based on the ground of hardship, not a very sale ground, and, as pointed out by Sir Dinshah Mulla in his commentary on the Transfer of Property Act at p. 535, the view for which the appellant here contends is open to the objection that the right of redemption is a right and not a liability and it is not easy to see how a person holding such a right can be compelled to exercise it on pain of eviction. The point is by no means free from difficulty, but on the whole we think that Mr. Maneritar's argument does not show convincingly that 24 Bom. L.R 7411 was wrongly decided. We do not consider even that any case has been made for a reference to a Full Bench unless or until the propositions laid down in 59 Mad. 312 are accepted by other High Courts. We may point out that the plaintiff has only got himself to blame, because the sale-deed in favour of defendant 1 was registered and entered in the Record of Eights; therefore, there was nothing to prevent his being made a party to the suit on the mortgage. That is the only substantial point in the appeal. Mr. Manerikar has made a grievance of the fact that, whereas it was alleged in the plaint that the sale to defendant 1 was a bogus transaction, no issue was raised on the point. But the plaintiff of course could have insisted on the issue being raised, and even in the absence of a formal issue, if the parties really went to trial on that point and evidence was recorded, the Court would have been in a position to deal with it. In the absence both of an issue and of any evidence the lower Courts were clearly right in attaching no importance to this point. We therefore see no reason to interfere with the findings of the lower Courts and dismiss the appeal with costs.

7. Macklin, J.:— I agree. I am, with respect, somewhat doubtful of the soundness of the theoretical basis for the decision in 24 Bom. L.R 741, in so far as it suggests that a man cannot buy what has already been sold to somebody else. He can, and he often does; and in consequent litigation between him and the other purchaser what is contended against him is not that he did not buy the property but that his rights arising out of his purchase are either of no avail against the other purchaser or must be subject to the rights of the other purchaser. But it is very largely a question of words. Even if it may not be strictly correct to say that in circumstances such as these the Court purchaser buys only the mortgagee's rights—and such a statement I think is clearly contrary to the statements as to the nature of his purchase made in the earlier Bombay authorities—the fact remains that acquisition of the mortgagor's rights as from the date of the mortgage will not necessarily give the Court purchaser a right to possession. Even if we take it that he acquires an absolute estate in the property, as held in the earlier cases, that estate is made up of the rights of the mortgagee as well as of the mortgagor, and there is nothing to suggest that in the earlier cases right to possession, which the Court purchaser was held to have acquired, arose out of his acquisition the rights of the mortgagor rather than through the acquisition of the rights of the mortgagee. Indeed, as my learned brother has pointed out, there are instances among those authorities in which the Court has clearly relied for its decision upon the Court purchaser having acquired the rights of the mortgagee. What would have been the decision in those cases if a suit on the mortgage had been barred at the time of the purchaser's suit in ejectment cannot be said for certain, since in none of them did any question of limitation arise, and the nature of the Court purchaser's suit, whether in ejectment or whether on the mortgage, was not in question. But, as has been pointed out in one of these cases, at least 10 Bom. 88, the Court treated the Court purchaser's suit as if it were a suit for foreclosure and passed what amounted to a decree for foreclosure, a course which they could not have adopted if the foreclosure suit had been out of time.

8. Looking at the matter from a practical point of view, it does not seem that there is any conflict between the decision in 24 Bom. L.R 741 and the decisions in the earlier Bombay cases. We think therefore that we should be wrong in not following 24 Bom. L.R 741. As to the decisions of other High Courts, they have been referred to in the judgment of my learned brother, and I do not think it necessary for me to say anything about them.

9. It is enough that on the authority of our own High Court the plaintiff's suit is barred by limitation and was rightly dismissed.

10. Appeal dismissed.