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Maha Mangal Rai v. Kishun Kandu

Allahabad High Court
Jan 10, 1927
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Case Summary — Defendants' Appeal in Suit for Redemption of Mortgage

Factual and Procedural Background

The suit was for redemption of a mortgage. Plaintiffs alleged that Charan and Nath (their predecessors-in-title) had executed an unregistered deed of mortgage in or about 1904 in favour of Maha Mangal Rai (Defendant No. 1) for Rs. 200, the property being an occupancy holding. The plaintiffs further alleged that, previously, they had instituted an ejectment suit in the revenue Court which was dismissed on the finding that the defendants were in possession as mortgagees. Because the defendants refused to accept mortgage-money and to deliver possession, the plaintiffs brought the present suit for redemption.

The defendants denied the mortgage, asserted they were original tenants (not mortgagees), and pleaded that the earlier ejectment decision operated as res judicata. The trial Court found that the plaintiffs failed to prove the defendants were in possession as mortgagees and dismissed the plaintiffs' suit.

Of the four plaintiffs, only Kishun Kandu appealed to the lower appellate Court, stating in his memorandum that he was appealing under Order 41, Rule 4 of the Civil P.C. on behalf of all plaintiffs. The lower appellate Court reversed the trial Court, found the defendants were in possession as mortgagees under an unregistered mortgage effected about twenty years before the suit, held that although the unregistered mortgage was invalid it did not render defendants' possession adverse or the suit barred by limitation, and decreed redemption and possession to the plaintiffs on payment of Rs. 200. The defendants (appellants before the present court) challenged that appellate decree on three grounds.

Legal Issues Presented

  1. Whether an appeal brought by only one of several plaintiffs, where the memorandum states the appeal is under Order 41, Rule 4 Civil P.C. on behalf of all plaintiffs, is incompetent or bars the appellate Court from reversing or varying the decree in favour of all plaintiffs who did not join the appeal.
  2. Whether the mortgage (an unregistered deed over an occupancy holding) being invalid under Section 59 of the Transfer of Property Act prevents the defendants from being regarded as mortgagees in possession and whether the plaintiffs' suit for redemption is barred by Article 142 of the Limitation Act.
  3. Whether the lower appellate Court was wrong to treat the defendants' possession as permissive (licensee) rather than adverse when no such case (permissive possession) was specifically pleaded by the plaintiffs in the plaint or in the trial Court.

Arguments of the Parties

Appellants' Arguments (as presented by learned Counsel for the appellants)

  • First, the appeal was incompetent because only one of the four plaintiffs (Kishun Kandu) appealed and did not make the other three plaintiffs parties to the appeal; therefore the lower appellate Court lacked jurisdiction to set aside the trial Court's decree in favour of all plaintiffs.
  • Second, the alleged mortgage was invalid because (a) the property was an occupancy holding (transfer prohibited by law), and (b) the mortgage instrument was unregistered contrary to Section 59 of the Transfer of Property Act; accordingly, defendants' possession could not be held to be as mortgagees, and the plaintiffs' suit was barred by Article 142 of the Limitation Act because plaintiffs discontinued possession from 1904.
  • Third, the lower appellate Court wrongly assumed the defendants' possession was permissive (licensee) rather than adverse, because no permissive-possession case was set up by the plaintiffs in the plaint or during trial.

Plaintiffs' (and trial) Case as Appearing in the Opinion

  • Plaintiffs alleged an unregistered mortgage was executed circa 1904 by their predecessors in favour of Defendant No. 1 for Rs. 200 and that defendants were in possession as mortgagees; plaintiffs claimed they had previously lost an ejectment suit on the finding that defendants were mortgagees and therefore sought redemption because defendants refused to accept mortgage-money and deliver possession.

Defendants' Case (as described in the opinion)

  • Defendants denied the existence of the mortgage and asserted they were original tenants in possession, not mortgagees.
  • Defendants contended that the earlier ejectment suit decision operated as res judicata in their favour.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ambika Prasad v. Jhinak Singh, A.I.R. 1923 All. 211 Illustrates that an appeal may abate if co-plaintiffs (or their legal representatives) are not brought on record (in that pre-emption context). The court distinguished that case as dealing with abatement where legal representatives of a deceased co-plaintiff were not brought on record; held it was not applicable to the present question under Order 41, Rule 4.
Wajid Ali Khan v. Puran Singh, A.I.R. 1925 All. 108 Represents an adverse view by two learned Judges to the Ambika Prasad decision (conflicting judicial opinion on whether omission causes abatement). The court noted the conflict and the reference of that question to a two-Judge Bench in another matter, but held neither case governed the present issue under Rule 4.
Balaram Pal v. Kanysha Majhi, [1919] 53 I.C. 548 Reported observation (Calcutta High Court) that an appellant cannot proceed on behalf of other plaintiffs without making them parties under Order 41, Rule 4. The court treated the Calcutta observation as distinguishable and disagreed with the broad proposition, concluding Rule 4 does not require that non-appealing co-plaintiffs be parties to the appeal where the decree proceeded on a ground common to all.
Varada Pillai v. Jeevarathnammal, [1920] 43 Mad. 244 Authority for admissibility of recitals in an unregistered mortgage deed to explain the nature and character of possession. The court relied on this authority to admit recitals of the unregistered mortgage deed as evidence explaining defendants' possession as mortgagees.
N. Appimma v. S. Venkatasami, A.I.R. 1924 Mad. 292 Holds that continuation in possession as mortgagees for more than 12 years can give prescription to the limited interest of a usufructuary mortgagee. The court invoked this view to conclude that, although mortgage of an occupancy holding is void, the defendants by continuous possession for over 12 years acquired a prescriptive title to the mortgagee's limited right (usufructuary mortgagee).

Court's Reasoning and Analysis

The court analyzed each principal ground raised by the appellants and explained why the lower appellate Court's decision was correct.

  1. On the competency of the appeal under Order 41, Rule 4, Civil P.C.: the court held that the sole statutory condition for operation of Rule 4 is that the decree appealed from proceeded on a ground common to all the plaintiffs (or defendants). The rule does not expressly require that all plaintiffs or defendants in whose favour the appellate Court may reverse or vary the decree must be parties to the appeal. To import such a requirement would be to read words into the rule which are not there. The court distinguished earlier authorities (Ambika Prasad and the Calcutta observation in Balaram Pal) as addressing different questions (abatement and bringing legal representatives on record) and rejected the broad proposition that an appeal by one co-plaintiff with joint title is intrinsically incompetent.
  2. On the effect of the mortgage's invalidity and limitation: the court accepted the lower appellate Court's factual findings (binding in second appeal) that plaintiffs had title and prior possession, and that defendants entered into possession by reason of an unregistered mortgage deed executed about 20 years before the suit. While such a mortgage over an occupancy holding is invalid under Section 59 of the Transfer of Property Act, the court held:
    • Recitals in the unregistered mortgage deed were admissible to explain the character of defendants' possession (citing Varada Pillai v. Jeevarathnammal).
    • Because the unregistered deed was in defendants' possession and they did not produce it, secondary evidence of its contents was admissible under Section 65 of the Indian Evidence Act.
    • On that evidence the appellate Court found defendants entered into possession as mortgagees (usufructuary mortgagees) and not as trespassers, and by continued possession for more than 12 years they acquired a prescriptive title to the limited mortgagee interest (citing N. Appimma v. S. Venkatasami).
    Consequently, the court concluded that Article 142 of the Limitation Act did not apply; instead, the limitation period applicable to redemption of a usufructuary mortgage is governed by Article 148 of the Limitation Act.
  3. On whether the appellate Court made out a new case by treating possession as permissive: the court found that the plaintiffs' allegation that defendants entered into possession as mortgagees necessarily implied the defendants' possession was permissive (i.e., not adverse). Therefore the lower appellate Court did not introduce a new case not pleaded at trial; it simply drew the logical consequence of the pleaded facts. The court rejected the contention that permissive possession was a new case not set up by plaintiffs.

Because the second appellate court's factual findings were binding, and the legal inferences drawn (admissibility of recitals, use of secondary evidence, prescription of a mortgagee's limited right, proper applicable article of limitation) supported the appellate decree, the court affirmed that decree.

Holding and Implications

Holding: The present appeal is dismissed and the decree of the lower appellate Court is affirmed. More precisely, the court held that the lower appellate Court was correct in reversing the trial Court and in decreeing redemption and possession in favour of all the plaintiffs on payment of Rs. 200 to the defendants; accordingly, the appeal is dismissed with costs.

Implications:

  • Direct effect on the parties: the decree passed by the lower appellate Court stands — plaintiffs are entitled to a decree for redemption and possession on payment of Rs. 200 to the defendants; the appeal by the defendants is dismissed with costs.
  • Procedural/legal implication drawn by the court: an appellate Court may, under Order 41, Rule 4, Civil P.C., reverse or vary a decree in favour of all plaintiffs (or defendants) even though only some of them have appealed, provided the decree appealed from proceeded on a ground common to all plaintiffs or defendants — the rule does not require that non-appealing co-plaintiffs be made parties to the appeal.
  • The opinion explains that although a mortgage of an occupancy holding is void for want of registration (Section 59, Transfer of Property Act), recitals in an unregistered deed can be admissible to explain possession and that continuous possession as a usufructuary mortgagee for more than 12 years can give rise to prescription of the mortgagee's limited right (governed by the applicable article of limitation — Article 148), but the opinion does not purport to lay down any broader new legal principle beyond the application of existing authorities to the facts of the case.

The opinion does not discuss broader doctrinal changes or purport to establish a new precedent beyond its application to the facts before the Court.

End of summary based exclusively on the provided opinion.

Show all summary ...

1. This is a defendants' appeal and arises out of a suit for redemption of a mortgage. The plaintiffs' case was that the mortgage sought to be redeemed was effected by means of an unregistered deed of mortgage executed 19 years prior to the institution of the suit, that is, in or about the year 1904, by Charan and Nath, the predecessors-in-title of the plaintiffs, in favour of Maha Mangal, Rai, Defendant No. 1, for a sum of Rs. 200 and that the property mortgaged was an occupancy holding. It was further alleged in the plaint that though the relation between the parties to the suit was that of mortgagor and mortgagee, the plaintiffs had on a former occasion, because of a wrong advice given to them, brought a suit for ejectment of the defendants from the holding in dispute in the revenue Court, but that suit was dismissed on the finding that the defendants were in possession as mortgagees. The plaintiffs alleged that as the defendants refused to take mortgage-money and to deliver possession of the holding in dispute the plaintiffs were compelled to bring the suit for redemption.

2. The defence to the suit was a denial of the mortgage and an assertion by the defendants that they were the original tenants of the holding in dispute and were not in possession as mortgagees. The defendants further urged that the decision in the ejectment suit filed by the plaintiffs in the revenue Court operated as res judicata in the present suit. The trial Court held that the plaintiffs had failed to prove that the defendants were in possession as mortgagees, and on that finding dismissed the plaintiffs' suit.

3. Out of the four plaintiffs only one, namely Kishun Kandu, filed an appeal against the decree of the trial Court in the lower appellate Court. But it was noted in the memorandum of appeal filed by him that he was preferring the appeal under Order 41, Rule 4 of the Civil P.C. on behalf of all the plaintiffs.

4. The lower appellate Court disagreed with the trial Court and held that the defendants were in possession as mortgagees and that the mortgage in favour of the defendants was made about twenty years prior to the institution of the suit. It further held, that the mortgage being unregistered was unenforceable and invalid, but notwithstanding the invalidity of that mortgage, the defendants' possession was not adverse and the suit was not barred by limitation, and that the plaintiffs were entitled in any case to a decree for redemption of the mortgage and for possession of the holding in dispute on payment of the sum of Rs. 200 alleged by the plaintiffs to be the amount of the mortgage money.

5. On these findings the lower appellate Court set aside the decree of the trial Court and passed a decree for possession of the holding in dispute in favour of all the plaintiffs on payment of Rs. 200 to the defendants.

6. The decree of the lower appellate Court has been assailed before me by the learned Counsel for the appellants on three grounds. Firstly, it is argued that as only one of the plaintiffs, namely Kishun Kandu, appealed against the decree of the trial Court, and did not make the remaining three plaintiffs parties to the appeal, the appeal itself was incompetent and the lower appellate Court had no jurisdiction to set aside the decree of the trial Court. Secondly, it is argued by the learned Counsel for the appellants that the alleged mortgage being invalid, because the property mortgaged was an occupancy holding, the transfer of which is prohibited by law, and because the mortgage was effected by an unregistered instrument which could not be done in view of the provisions of Section 59 of the Transfer of Property Act, the possession of the defendants could not be held to be in the capacity of mortgagees, and as the plaintiffs discontinued to be in possession of the holding from 1904, the suit was barred by Article 142 of the Limitation Act. Thirdly, it is argued that the lower appellate Court was wrong in proceeding on the assumption that the possession of the defendants was as licensees or was permissive and not adverse, inasmuch as no such case was set up by the plaintiff a either in the plaint or in the trial Court.

7. In support of the first point argued by the learned Counsel for the appellants reliance has been placed by him on the cases of Ambika Prasad v. Jhinak Singh A.I.R. 1923 All. 211, Wajid Ali Khan v. Puran Singh A.I.R. 1925 All. 108, and Balaram Pal v. Kanysha Majhi [1919] 53 I.C. 548. In the case of Ambika Prasad v. Jhinak Singh A.I.R. 1923 All. 211 only one of three plaintiffs in a pre-emption suit filed an appeal professing to do so not only on his own behalf but also on behalf of his co-plaintiffs who were not made parties to the appeal. One of those co-plaintiffs died during the pendency of the appeal and his heirs were not brought upon the record and the appeal was heard and allowed by the High Court in ignorance of the fast that one of the co-plaintiffs was dead. When the successful plaintiffs wanted to take possession of the property pre-empted in execution of the decree of the High Court, it was contended by the vendee that the decree of the High Court was a nullity and was incapable of execution. This Court upheld the objection of the vendee and held that the appeal pending in the High Court had, because of the omission to bring upon the record the legal representatives of the deceased plaintiff, abated as a whole and the decree passed by the High Court was a nullity and incapable of execution.

8. The decision in the case of Ambika Prasad v. Jhinak Singh A.I.R. 1923 All. 211 has not been approved by two learned Judges of this Court in the case of Wajid Ali Khan v. Puran Singh A.I.R. 1925 All. 108, and because of this conflict of judicial opinion in this Court I have already referred Execution First Appeal No. 414 of 1926 for decision to a Bench of two Judges, but that case has not yet been decided. In any case, neither the case of Ambika Prasad v. Jhinak Singh A.I.R. 1923 All. 211 nor that of Wajid Ali Khan v. Puran Singh A.I.R. 1925 All. 108, noted above, has any application to the present case. The question that formed the subject-matter of consideration in those cases was, as to whether the omission of the appellants to bring upon the record the legal representatives of one of several plaintiffs in a suit for pre-emption during the pendency of an appeal against the decree in that suit, has or has not the effect of causing an abatement of the appeal as a whole. That question does not arise in the present case. The question that arises for consideration in the present case is as to whether, when the decree appealed from proceeds on any ground common to all the plaintiffs or all the defendants, and when only some and not all the plaintiffs or defendants have appealed against the decree of the trial Court, the power vested in an appellate Court by Order 41, Rule 4, Civil P.C., to reverse or vary the decree appealed from in favour of all the plaintiffs or all the defendants, is restricted to cases in which the plaintiffs or defendants who have not appealed are made parties to the appeal, or that power can be exercised by the appellate Court even if the plaintiffs or defendants who have not appealed are not made parties to the appeal.

9. In the case of Balaram Pal v. Kanysha Majhi [1919] 53 I.C. 548. cited by the learned Counsel for the appellants, two learned Judges of the Calcutta High Court are reported to have observed that we think that when a plaintiff prefers an appeal in which other plaintiffs are interested, that section (Order 41, Rule 4, Civil P.C.) does not authorize him to proceed with the appeal without making other plaintiffs parties to the appeal.

10. The Calcutta case is distinguishable from the present case, inasmuch as in that case the question for consideration was, whether or not the failure of one of several appellants who claimed a joint title to a certain land to bring upon the record the legal representatives of one of the deceased appellants resulted in an abatement of the appeal as a whole. This is not the question that arises for consideration in the present case. But if the learned Judges meant to lay down that an appellate' Court can only exercise the powers vested in it by Order 41, Rule 4, Civil P.C., if all the plaintiffs or defendants in whose favour it reverses or varies the decree are parties to the appeal, I, with all respect, am unable to agree with them. The only condition laid down by the Legislature in order to bring into operation the provisions of Rule 4 of Order 41, Civil P.C., is that the decree appealed from should have proceeded on any ground common to all the plaintiffs or to all the defendants. It is not provided by that rule that the plaintiffs (SIC)r defendants in whose favour the decree is reversed or varied by the appellate Court should be made parties to the appeal, and, therefore, to hold that an appellate Court cannot reverse or vary the decree appealed from in favour of such plaintiffs or defendants who have not appealed, when the decree appealed from proceeds on any ground common to all the plaintiffs or defendants, will be to read into the rule words, which are not there.

11. I may also with ail respect point out that the learned Judges of the Calcutta High Court have not assigned any reason in support of the opinion expressed by them. The observation of the learned Judges pressed to its logical consequence comes to this, that it is not open to one of several plaintiffs jointly entitled to maintain a suit to appeal against the decree of the trial Court without making the other plaintiffs parties to the appeal; that is, in other words, an appeal by one of several co-plaintiffs having a joint title is incompetent. I am unable to accept such a broad proposition of law. Every party to a suit has a right to appeal against a decree by which be is aggrieved, and the mere omission of other parties to the suit, who are equally aggrieved, not to join hands with him in preferring an appeal cannot debar an appellate Court to grant such relief to the party who has appealed to which he is found entitled. Ordinarily on an appeal by one of several plaintiffs or defendants the appellate Court can only reverse or vary the decree of the trial Court in favour of the party appealing, but exceptions to this rule are provided for by Rr. 4 and 33 of Order 41, Civil P.C. A comparison of those rules shows that the powers given to an appellate Court by Rule 33 of Order 41, Civil P.C., can only be exercised by that Court in favour of "all or any of the respondents or parties." But no such qualification is to be found in Rule 4 This leads to the inference that the Legislature deliberately empowered an appellate Court in cases contemplated by Rule 4 to reverse or vary the decree in favour of all the plaintiffs or defendants even though some of them may not be parties to the appeal. For these reasons. I am of opinion' that there is no substance in the first ground urged by the learned Counsel for the appellants.

12. There is no substance either in the other two points urged by the learned Counsel for the appellants. On the findings of the lower appellate Court, which findings are binding on me in second appeal, it is abundantly clear that the plaintiffs-respondents had, before the mortgage alleged by them, a title to the holding in dispute and were in possession of the same. The defendants entered into possession of that holding because of the unregistered mortgage-deed executed by the plaintiff. The mortgage not having been effected by a registered deed as required by Section 59 of the Transfer of Property Act was invalid, but nevertheless the recitals in the unregistered mortgage deed were admissible in evidence for the purpose of explaining the nature and character of the possession of the defendants over the holding in dispute: vide Varada Pillai v. Jeevarathnammal [1920] 43 Mad. 244. The unregistered mortgage-deed being in possession of the defendants, and they not having produced the same, secondary evidence of its contents could be given in view of the provisions of Section 65 of the Indian Evidence Act. On the basis of such evidence the lower appellate Court has found as a fact, that the plaintiffs mortgaged the holding in dispute to the defendants about 20 years prior to the institution of the suit, and, therefore, it admits of no doubt, that the defendants entered into possession of the holding in dispute as mortgagees and not as trespassers. A mortgage of an occupancy holding is no doubt not permitted by law, but by entering into possession as mortgagees of the holding in dispute, and by continuing in such possession for more than 12 years, the defendants could only prescribe a title for the limited interest of a usufructuary mortgagee. This was the view taken in the case of N. Appimma v. S. Venkatasami A.I.R. 1924 Mad. 292. If the plaintiffs had brought a suit for possession of the holding in dispute against the defendants within 12 years from the date of the execution of the mortgage the plaintiffs could have claimed an unconditional decree for possession on the ground that the mortgage being of an occupancy holding was void in law. In that case the defendant could not have set up the mortgage as a bar to the plaintiffs' claim, but by continuing in possession for more than 12 years as mortgagees, the defendants have prescribed a title to the mortgagee right and it is this acquisition of the prescriptive title that has vested in the defendants the rights of a mortgagee. The defendants never took possession of the holding claiming an absolute title to the same and obviously, therefore, the plaintiffs' title to the holding in dispute has not been extinguished. It is, as if it were, that by the continuance of the defendants' possession for more than 12 years as usufructuary mortgagees, there came into existence a legally operative mortgage which the plaintiffs must redeem as a condition precedent to a decree for possession of the holding in dispute. This is what has been held by the lower appellate Court.

13. Dr. Agarwala has argued that a person can prescribe a title to something which is permitted by law but not with respect to something which is prohibited by law, and he maintains that the mortgage of an occupancy holding being prohibited by law, the defendants could not prescribe a title to mortgagee rights. I cannot agree with the contention of the learned Counsel for the appellants. If a trespasser, by taking unlawful possession of certain property, can prescribe a title as against the true owner by adverse possession for more than 12 years, I find it difficult to follow why a usufructuary mortgagee of a property, the mortgage of which is not permitted by law, cannot prescribe the limited interest of a usufructuary mortgagee in the property mortgaged to him.

14. In my judgment, Article 142 of the Limitation Act has no application to the present case. A suit for redemption of a usufructuary mortgage is, no doubt, in substance, a suit for possession of immovable property, but the period of limitation for such a suit is that provided for by Article 148 of the Limitation Act, and it is that article that governs the present case. The allegation of the plaintiffs, that the defendants entered into possession of the holding in dispute as mortgagees, necessarily leads to the conclusions that the defendants' possession was permissive and, therefore, the lower appellate Court was right in assuming that the defendants' possession was permissive and not adverse, and in doing so that Court has not made out a new case for the plaintiffs which was not set up by them in the trial Court.

15. For the reasons given above, the decree of the lower "appellate Court is perfectly correct and I dismiss the appeal with costs.