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Case Number

Second Appeal No. 477 of 1943

Judges

Hon'ble Mr. Justice Ram Labhaya
Hon'ble Mr. Chief Justice Sir R. F. Lodge
Hon'ble Mr. Chief Justice T. V. Thadani

Acts

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

This is a second appeal from the judgment and decree of the Subordinate Judge, Sylhet (Cachar), dated 27-1-42, affirming the trial court's judgment which had decreed the plaintiff's suit for a declaration that a deed of lease (tahutnama) dated 9th Magh, 1941 B.S., executed in favour of Surjyat Kumar Dhar by Basanta Kumar Dhar, was not binding on the plaintiff Girish Chandra Ghose.

The material facts set out in the opinion are:

Basanta Kumar Dhar (defendant 1) borrowed Rs. 1,500 from the plaintiff Girish Chandra Ghose on 3rd Bhadra 1334 B.S., on three mortgage bonds of Rs. 500 each.
Girish Chandra Ghose (the mortgagee) brought a suit for sale of the mortgaged property to recover Rs. 3,300 due on the mortgage bonds, obtained a decree for sale, and purchased the mortgaged property in execution of his decree for Rs. 2,935, obtaining delivery of possession through the Court.
Shortly afterwards Basanta Kumar Dhar (the mortgagor) obtained, according to Surjyat Kumar Dhar (defendant 2), a settlement/lease (tahutnama) in favour of Surjyat Kumar Dhar covering certain land; on that basis Surjyat Kumar brought three rent suits which were withdrawn and dismissed.
The plaintiff then sued Basanta Kumar Dhar and Surjyat Kumar Dhar, alleging that the tahutnama in favour of defendant 2 was fraudulent and collusive and was not binding on the plaintiff. Defendant 1 did not contest. Defendant 2 said the tahutnama was a bona fide lease granted in the ordinary course of management and binding on the plaintiff.
The trial court decreed a declaration that the lease (Ex. G) was not binding on the plaintiff. The lower appellate court largely agreed but held the lease was voidable, not void.
An application for withdrawal of the appeal to the Calcutta High Court (purportedly by the plaintiff) was granted but later set aside when it was shown the application had not been made by the plaintiff; the appeal was then heard on the merits. On establishment of the Assam High Court the appeal was transferred to that Court.

Legal Issues Presented

Is the suit maintainable in its present form?
Is the suit brought under Section 42 of the S.R. Act? (as framed in the trial court issues)
Is the tahutnama (lease) in question binding on the plaintiff?
Is the tahutnama a false and collusive document created by defendant 1 with intent to defeat his creditors?
What relief, if any, is the plaintiff entitled to?
Whether a mortgagee purchaser who obtained a decree for sale without impleading a lessee can thereafter sue the lessee in a subsequent suit for a mere declaration that the lease is not binding upon him without giving the lessee an opportunity to redeem the property (i.e., whether such a declaratory suit is competent)?

Arguments of the Parties

Appellant's Arguments (Mr. Ghose for the appellant)

The suit as brought (a suit for declaration that the lease was not binding) was incompetent; the plaintiff-mortgagee should have brought a suit for sale and possession of the mortgaged property, particularly because the appellant (a lessee from the mortgagor) was not made a party to the prior suit for sale.
A lessee from a mortgagor lawfully in possession is entitled to sue for redemption under Section 91 of the Transfer of Property Act and Order 34, Rule 1, CPC, and therefore was a necessary party to the suit for sale. Because the lessee was not impleaded, the plaintiff's later suit framed to deprive him of his right to redeem was inappropriate.
The plaintiff-mortgagee had, after filing the appeal, transferred the property by registered sale-deed back to the mortgagor; having lost his dual character as mortgagee and purchaser, he contended the plaintiff was not entitled to any decree.
Additionally, counsel sought to rely upon an admission by the plaintiff during argument that he had effected that transfer and asked the Court to take notice of that event.

Respondent's Arguments (Mr. Sen for the respondent / arguments as reported)

Defendant/respondent contended the tahutnama was a bona fide lease and binding on the plaintiff, created in the ordinary course of management and giving the best rent, thereby binding the mortgagee.
Regarding the post-filing transfer of the property by the plaintiff, Mr. Sen contended that the transfer may be hit by Section 52 (lis pendens) of the Transfer of Property Act, and therefore the transfer need not be treated as effective for the purposes of the appeal; he also contended it was unnecessary for the Court to decide that point given the competency issue.
During the trial the trial court (and lower appellate court) also considered whether the lease was collusive, and at trial found collusion between defendant 1 and defendant 2 to defeat creditors; respondent relied upon those factual findings before the lower courts.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Bijoy Gopal Mukerjee v. Krishna Malushi Deli, 34 Cal 329 : 34 I.A. 87 (P.C.)	Where a transaction between A and B is not binding upon C, C need not bring a suit for a declaration that the transaction is not binding; C may affirm or treat the transaction as nullity without court intervention.	The Court borrowed the Privy Council language to observe that a mortgagee may ignore or affirm a lease granted by the mortgagor; however, before suing the lessee for possession the mortgagee must give the lessee an opportunity to redeem by a suit for sale to which the lessee is a party.
Radha Pershad v. Monohur Das, 6 Cal. 317 : 7 CLR 293	Held that a covenant in a mortgage bond did not render a subsequent lease invalid; subsequent sale under decree did not put an end to the lease; a plaintiff cannot convert the nature of his claim and must afford the lessee an opportunity to redeem.	The Court treated this decision as authority that where a mortgagee has failed to implead a lessee in a suit for sale, a subsequent suit by the mortgagee that deprives the lessee of his right to redeem must be a suit for sale (so as to afford opportunity to redeem), not merely a declaratory suit.
Kamakshya Narain Singh v. Ramzan Ali, 23 Pat 648 : A.I.R. 1945 Pat 106	Held that a lessee from the mortgagor, though his lease may not be valid against the mortgagee, is nevertheless a person interested in the mortgaged property within the meaning of Section 91 (and O.34 R.1 CPC) and is entitled to sue for redemption; purchase of the property by the mortgagee in execution does not extinguish the lessee's right if the lessee was not a party.	The Court relied on this Patna decision to support the proposition that the lessee's right to redeem survives a decree for sale obtained without impleading him, and that a subsequent suit by the mortgagee cannot take away that right by means of a mere declaratory suit.
Mt. Nand Kuer v. Kunj Bihari Lal, 8 Pat. L.T. 229 : A.I.R. 1927 Pat. 411	Illustration of a mortgagee who obtained a decree without impleading a mokarraridar, purchased in execution, and then, being unable to get possession, brought a suit for possession after giving opportunity to redeem.	Referred to as precedent showing the appropriate procedure: a purchaser-mortgagee who wants possession after purchase should give opportunity to redeem (by suit for sale) before bringing suit for possession.
Balmukund v. Moti Lal, 20 Cal. W.N. 350 : A.I.R. 1916 Cal. 870	Observed that leases at least entitle the lessee to redeem.	Used to support the proposition that lessees have a right to redeem which must be respected in subsequent proceedings by a mortgagee purchaser.
Moidunni Haji v. Madhavan Nair, A.I.R. 1933 Mad. 876 : 148 I.C. 1115	Case where suit was for sale against mortgagor and others including lessees, not a suit for declaration that leases were not binding upon the mortgagee purchaser.	Referred to illustrate that proper proceedings against lessees are suits for sale (or suits including lessees), not mere declaratory suits.
Kunj Behari v. Keshav Lal, 28 Bom. 567 : 6 Bom. L.R. 475; Waman Rao v. Rustomji, 21 Bom. 701; Lake Nath v. Keshab Ram, 13 Cal. 147; Satischandra v. Satyacharan, 14 Cal. W.N. 676 : 5 I.C. 531	Decisions allowing, in certain circumstances, suits for declaration without possession or consequential reliefs.	The Court noted these decisions but held they were not authoritative for the particular factual situation before it because none involved a mortgagee purchaser suing a lessee who had acquired a lease from the mortgagor lawfully in possession during the mortgage.
Abdul Rahman v. Sarat Ali, 22 C.L.J. 412 : A.I.R. 1916 Cal. 710	Held that a Court may, to shorten litigation or do complete justice, take notice of events happening since institution of the proceedings and afford relief on the basis of altered conditions.	The Court acknowledged this principle when counsel asked the Court to take notice of the plaintiff's post-filing transfer; but observed that the transfer might be hit by Section 52 (lis pendens) and that it was unnecessary to decide that point for disposing of the competency issue.

Court's Reasoning and Analysis

The Court's reasoning proceeds in sequential steps based on factual findings and legal principles as stated in the opinion:

Trial-court findings:
- On Issue 1 the trial court held Section 53 of the Transfer of Property Act had no application and the suit was maintainable in its form.
- On Issue 2 the trial court held the plaintiff could bring a suit for a declaration as prayed without seeking further relief.
- On Issue 3 the trial court held that creation of the lease rendered the mortgage security hopelessly insufficient and that the lease was not binding on the plaintiff.
- On Issue 4 the trial court found the lease was not made in the ordinary course of management, reserved rent was inadequate, and that the lease was created in collusion with intent to defraud, defeat and delay creditors.
- Result: a declaration that the lease (Ex. G) was not binding on the plaintiff.
Lower appellate court largely agreed with the trial court's conclusions of fact, but held the lease was not void but voidable.
Legal question for the High Court: whether a mortgagee purchaser who obtained a decree for sale without impleading the lessee can thereafter sue the lessee in a mere declaratory suit that the lease is not binding — or whether such a remedy is incompetent because it deprives the lessee of his right to redeem without giving him an opportunity to redeem.
The Court examined statutory provisions and authorities:
- Section 65-A (sub-s. (1) and sub-s. (2)) of the Transfer of Property Act was considered: sub-s. (1) gives a mortgagor in possession power to make leases binding on the mortgagee subject to sub-s. (2); if sub-s. (2) is contravened the lease will not be binding on the mortgagee. But if a lease is not binding on the mortgagee, it is unnecessary for the mortgagee to obtain a court declaration that it is not binding, citing Bijoy Gopal Mukerjee (P.C.).
- The Court emphasised that although a mortgagee may ignore or affirm such a lease, before he can successfully sue a lessee for possession he must give the lessee an opportunity to redeem the property; that opportunity can only be provided by a suit for sale in which the lessee is a party.
- The Court relied on Radha Pershad v. Monohur Das and the Patna decision Kamakshya Narain Singh v. Ramzan Ali to support the proposition that a lessee from a mortgagor lawfully in possession is a person interested in redeeming the property under Section 91 of the Transfer of Property Act and Order 34 Rule 1 CPC, and that if he has not been impleaded his right to redeem survives a decree for sale obtained without impleading him.
Distinguishing other cases:
- The Court reviewed some Calcutta and Bombay decisions allowing declaratory suits in certain circumstances (Kunj Behari, Waman Rao, Lake Nath, Satischandra) and held they were not authorities for the facts here because none involved a mortgagee purchaser suing a bona fide lessee who acquired a lease from the mortgagor lawfully in possession during the mortgage.
On the post-filing transfer issue:
- Counsel for appellant argued the plaintiff's transfer of the property back to the mortgagor during the pendency of appeal defeated his claim; counsel for respondent argued the transfer may be hit by Section 52 (lis pendens).
- The Court stated it was unnecessary to decide the effect of that transfer in view of its conclusion on competency of the plaintiff's declaratory suit.
Conclusions drawn:
- A lessee from a mortgagor lawfully in possession is a person interested in redemption under Section 91 and is a necessary party in a suit for sale (O.34 R.1 CPC).
- Where the lessee has not been impleaded in a suit for sale, his right to redeem is unaffected by the decree for sale.
- A subsequent suit by the mortgagee purchaser against the lessee in the form of a mere declaration that the lease is not binding is not competent; the mortgagee purchaser must bring a suit for sale (or a suit framed so as to afford the lessee an opportunity to redeem) if the effect of the claim is to deprive the lessee of his right to redeem.
Dissenting—or rather concurring—note by Ram Labhaya, J.:
- He agreed with allowing the appeal and dismissing the suit but added that a mortgagee purchaser's remedy is not strictly limited to a suit for sale; a suit for a declaration of his right to sell to recover mortgage money can also be instituted, because such a declaratory suit gives the lessee an opportunity to redeem. He noted Radha Pershad supports this narrower declaratory remedy in substance.
- Nevertheless, on facts, the present suit sought a declaration that the lease was wholly void (a different relief) and that framing of the suit was such that it would alter the nature of the claim; therefore the suit failed.

Holding and Implications

Holding:

The appeal is allowed with costs throughout; the plaintiff's suit is dismissed.

Implications and consequences as set out by the Court:

Direct effect on the parties: The declaration sought by the plaintiff that the lease was not binding is not a competent form of suit in the circumstances; the plaintiff's suit is therefore dismissed and the lower courts' decrees to that effect are set aside on the competency ground identified by the High Court. Costs were awarded to the appellant throughout.
Legal implication (as applied here): Where a mortgagee purchaser obtained a decree for sale without impleading a lessee of the mortgaged property, the lessee's right to redeem remains. A subsequent action by the mortgagee purchaser that has the effect of depriving the lessee of his right to redeem must be framed so as to afford the lessee an opportunity to redeem — commonly by a suit for sale — and a mere declaratory suit that effectively takes away the lessee's redemption right is not competent.
No new broad precedent was fashioned beyond applying and synthesising existing authorities (Radha Pershad, Bijoy Gopal Mukerjee, Patna decisions, and others). The Court adopted and applied existing principles about the lessee's redemption rights, the character of suits that can affect those rights, and the interplay of Section 65-A and Section 91 of the Transfer of Property Act with Order 34, Rule 1 CPC.

Note: This summary is strictly based on the contents of the provided opinion and does not add or infer facts beyond what is stated therein.

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Surjya Kumar Dhar Applt. v. Girish Chandra Ghose & Another Resps.

Thadani, A.C.J:— This is a second appeal from the judgment & decree of the learned Subordinate Judge, Sylhet (??? Cachar), dated 27-1-42, by which be affirmed the judgment & decree of the trial Ct. which had decreed the pltf.'s suit for a declaration that a deed of lease (tahumama) dated the 9th of Magh, 1941 B.S executed in favour of one Surjyat Kumar Dhar by one Basanta Kumar Dhar, was not binding upon the pltf., Girish Chandra Ghose.

2. The facts material to the appeal are these. Basanta Kumar Dhar, deft, in the suit, had borrowed a sum of Rs. 1500 from the pltf., Girish Chandra Ghose, on the 3rd of Bhadra. 1334 B.S on 3 mge bonds of Rs. 500 each. In due curse, he brought a suit for sale of the mortgaged property to recover a sum of Rs. 3300 due to him on the mtge. bonds & obtained a decree for sale & ultimately purchased the mortgaged property for Rs. 2935 in execution of his mtge decree & obtained delivery of possession through Ct. Shortly afterwards he bought 3 rent suits on the strength of his purchase against Surjya Kumar Dhar who in those suite alleged that he had obtained a settlement of 21 hals and 6 kears of land from Basanta Kumar Dhar (the mtgor.) by a tahutnama, dated the 9th of Magh 1341 B.S The suits were withdrawn by he pltf. & were accordingly dismissed. The pltf. then brought the present suit against Btsanta Kumar Dhar and Surja Kumar Dhar as defts. & 2 respectively contending that the tahutnama executed by ??? in favour of deft. 2 was fraudulent & collusive created to defeat the pltf's claim on the three urges & as such, it was not binding upon him deft, 1 the mtgor., did not contest the suit Deft. 2 contended that the tahutnnma was a bond fide lease granted to him by deft 1 in he ordinary course of management of the properties serving the best rent & was therefore bending in the pltf. Upon the pleadings, the trial Ct. famed the following is ???

1. Is the suit maintainable in its present form?

2. Is the suit had under Section 42 of the S.R Act?

3. Is the tahutnama in question bind ??? the pltf.?

4. Is it at ??? & collusive document ??? by the deft. 1 with intent to defeat & ??? his creditors?

5. What relief, if any, is the pltf. entitled to?

3. On the first issue, the trial Ct. held that Section 53 of the Transfer of Property Act, had mo application & that the suit was maintainable in the form in which it was brought.

4. On the second issue, the trial Ct. held that the pltf. was ??? to bring a suit for a declaration as prayed for, without seeking further relief. On the third issue, it held that the mtge. security was rendered “hopelessly” insufficient by the creation of a lease in farour of deft. 2 & was therefore, not binding on the pltf. It also took the view that the lease in question was not made in the ordinary course of management of the property & that the best rent was ???. On the fourth issue, the trial Ct. came to the conclusion that the lease in question was created by deft, 1 in collusion with deft. 2, a nephew of his, with a view to defraud, defeat & delay his creditors. In the result, it passed & decree in favour of the pltf. for a declaration that the lease, Ex. G, was not binding on the pltf.

5. The lower appellate Ct. in the main agreed with the conclusions of the trial Ct. & ??? med its judgment & decree, but held that the lease in question was not a void but a voidable lase.

6. Against the decision of the lower appellate Ct. the present second appeal was preferred to the Calcutta H.C & it appears that during the pendency of the appeal before that Ct. an appln. purporting to be an appln. made by the pltf., was made for the withdrawal of the suit. The appln. was granted by Das, J. Shortty afterwards, it was brought to the notice of Das, J. that the appln. for the withdrawal of the suit was non made by the pltf. & he issued a Rule calling upon the parties to show cause why the order pissed by him should not be jet aside & the appeal heard on merits. The Rule was made absolute by Das, J. on 24-7-1947. In 1948, on the establishment of the Assam H.C, the appeal was transferred to this Ct.

7. Mr. Ghose for the applt. has contended that the suit ad brought by the pltf. mtgee., namely, for a declaration to the effect that the lease executed in favour of deft. 2 by deft. 1 was not binding upon him was incompetent. His ??? is that the present suit should have been one for sale & possession of the mortgaged property having regard to the fact that the applt., admittedly a lessee of the mtgor., was not made a party to the suit for sale of the mortgaged pro party. We think there is considerable force is this contention. A lessee from a mtgor. who is lawfully in possession of the mortgaged property, is a person entitled to sue for redemption within the meaning of Section 91 of the Transfer of Property Act. Order 34, R. 1 of the CPC lays down:

“Subject to be provisions of the Code, all person having an interest either in the mtge security or in the right of redemption, shall be joined ??? parties to any suit relating to the mtge.

8. Mr. Ghose rightly contended that as the applt. was not joined as a party in the pltf's suit for sale of the mortared property his right ??? the property remains unaffected & that the pltf. ??? no bring a suit against him framed in such a manner as to ??? him of the right to redeem the property as undoubtedly the suit, as framed, would have that effect.

9. The question therefore, for our consideration is whether a mtgee. who has instituted a suit for sale of the mortgaged property & obtained a Page: 103decree without mailing the lessee a party to the suit for sale, can sue he lessee ??? subsequent suit for a mere ??? that the lease is not binding upon him, without giving him an opportunity to redeem the property? Nether Section 65(A) not Section 66 of the Transfer of Property Act, refers to the right of a mtgee. to bring a suit. All that S. 65A says is that:

“subject to the provisions of sub-s. (2), a mtgor. while lawfully in possession of the ??? property, shall have power to make leases thereof which shall be binding on the mtgee”.

10. It might be conceded that where a mtgor. while lawfully in possession of the mortgaged property, acts in contravention of the provisions of sub-s. (2) of Section 65-A of the Transfer of Property Act, the lease so created by the mtgor. will not be binding upon the mtgee. But if a lease is not binding upon the mtgee. it is wholly unnecessary for him to bring a suit for a declaration that it is not binding upon him be can other affirm the lease or ignore it. Their Lordships of the P.C in Bijoy Gopal Mukerjee v. Krishna Malushi Deli, 34 Cal 329 : (34 I.A 87 P.C 1) have laid down the principle that where a transaction between A & B is not binding upon C, it is not necessary for C to bring a suit for a declaration to the effect that the transaction is not binding upon him. In the P.C case, a reversioner sued on the death of a Hindu widow for possession of be property of her husband of which she was in possession as a Hindu widow & of which she had granted & lease for a term extending beyond he own life. It was held that the widow's alienation was not absolutely void but was prima facie voidable at the election of the reversionary heir, who may affirm it or treat it as a nullity without the intervention of any Ct. there being nothing to set aside or cancel as a condition precedent to his right of action.

11. Borrowing the language of their Lordships of the P.C we think a mtgee. may affirm or treat a lease granted by his mtgor. in favour of a lessee, as a nullity, there being nothing to set aside or cancel as a condition precedent to his right of action A mrgee's right of action in the present case arose out of his being kept our of possession by the lessee by virtue of the lease A not by virtue of the existence of the lease which the mtgee. may ignore intervention of any Ct. But before be can successfully sue a lessee for possession, he must give him an opportunity to redeem the property which he can only do in a suit for sale, to which the lessee is a party.

12. Mr. Ghose has relied upon a decision of the Calcutta H.C in Radha Pershad v. Monohur Das, 6 Cal. 317 : (7 CLR 293), in which a suit was brought by one Monohur Das against Kadha Persbad Miceer, to set aside a zurpeshgi lease of a certain village which had been mortgaged to the pltf. by one Syerl Haq, & to recover his possession of the property under mtge. Garth, C.J delivering Judgment of the D.B observed:

“It is clear that the covenant entered into by the mtgor. in the mtge-bond of 1867 did not render invalid the surpeshgi lease which was subsequently granted. We have held in other cases that such a covenant only creates a personal liability as between the mtger & the mtgee Then it is also clear, that the subsequent sale under the decree of 1873 did not put an end so the zurpeshgi lease or ??? the interests of the Zurpeshgidar. The pltf. has, therefore, no right, to sue for has possession of the property as against the zurpeshgidar. His only course would be to bring a suit, against the zurpashgidar to have his right ??? to sell the property to satisfy his mtge-debt, ??? as to give the zureshgidar an opportunity of redeeming. This suit is one of a totally different character. The pltf. has all along contended that he is entitled to khas possession, & that the surpeshgi lease 73 void, & we should be entirely changing the nature of his claim if we were to ??? him to say & try it on the other basis. The judgment of the lower Ct. roust, therefore, be reversed & the pltf's suit, dismissed with costs in both Cts.

13. We wish to ??? that in the case to which we have just referred, the pltf. brought a suit for possession & alleged that the ??? lease was void in the case before us, the suit is not one for possession but for declaration & though the pltf. had ??? that the lease was void & the trial Ct. had accepted that contention, the appellate Ct. ??? it & held that the lease was merely ??? & not void. We think the ??? of the Calcutta H.C reported in Ratha Pershad v. Monohur Das, 6 Cal 317 : (7 C.L.R 293) is authority for the proposition that where a mtgee. has failed to implead the lessee of the mortgaged property in a suit brought by him for sale of be ??? property, any subsequent sum brought against the lease by the ??? chaser which has the effect of depriving the lessee of his right to ??? the ??? property in pursuance of his lease created by the mtgor in lawful possession of the property under mtge cad only be one for sale or ??? his right to sell the property, thereby affording an opportunity to the lessee to redeem the property.

14. In ??? Kamakshya Narain Singh v. Ramzan Ali*, 23 Pat 648 : (A.I.R (32) 1945 Pat 106), it was held

“a lessee from the mtgor. though big lease may not be valid & binding against the mtgee. is still a person having an interest in the ??? property within the meaning of Section 91 of the Transfer of Property Act because his lease is certainly good as against the mtgor. He is, therefore, entitled in sue for redemption & is ??? a necessary party under O. 34, R. 1 of the CPC, to a suit oo the mtge. His right of redemption is not lost by reason of the purchase of the mortgaged property by the mtgee in execution of a mtge decree obtained by the latter in a suit to which the former was not a party.”

15. The position of the lessee vis-a-vis the mtgee, in the case before us is precisely the position which the learned Judges of the Patna H.C, were called upon to consider in the case to which we referred.

16. The Patna case is instructive from another point of view, in that the suit brought was one for recovery of khash possession or, in the alternative for sale of the village for recovery of the proportionate mtge money chargeable on it. The trial Ct. in the Patna case, while dismissing the pltf's. prayer for khash possession, had allowed his alternative prayer for sale of the property he Question. The learned Judges of the Patna H.C Page: 104affirmed the judgment & decree of the trial Ct., & referred to the case of Mt. Nand Kuer v. Kunj Bihari Lal, 8 Pat. L.T 229 : (A.I.R (14) 1927 Pat. 411) where

“a mtgee obtained a mtge decree without impleading a mokatraridar of the mortgaged property in the suit & purchased the property in execution of the decree, & being unable to gat possession, brought it suit for possession against the mokarraridar after giving him an opportunity to redeem.”

17. In Balmukund v. Moti Lal, 20 Cal. W.N 350 : (A.I.R (3) 1916 Cal. 870), Sir Lawrence Jenkins, C.J, with whom Holmwood, J., agreed, observed:

“It has not been, nor could it be maintained that the leases did not at least entitle the lessee to redeem.”

18. In Moidunni Haji v. Madhavan Nair, A.I.R (20) 1933 Mad. 876 : (148 I.C 1115) the suit brought was one for sale against a mtgor. & other persons including the lessees, & not for a declaration that the leases were not binding upon the mtgee. purchaser.

19. An analysis of the cases to which we have referred in this judgment leads to the following conclusions: (1) A lessee from a mtgor. lawfully in possession of the property under mtge is a person interested in redeeming the mortgaged property within the meaning of Section 91 of the Transfer of Property Act; & O. 34, R. 1 of the CPC, (2) Where in a suit for sale of the mortgaged property, the lessee who is interested in redeeming the mortgaged property within the meaning of Section 91 of the Transfer of Property Act & O. 34, R. 1 of the CPC, has not been impleaded, his right to redeem is unaffected by the decree for sale of the mortgaged property. (3) A subsequent suit filed by a mtgee. purchaser against the lessee of the mortgaged property, for a mere declaration, is not competent. The suit must be one for sale, so as to afford an opportunity to the lessee to redeem the mortgaged property.

20. The learned Advocate for the resp. has relied upon certain decisions of the Bombay & Calcutta H. Cts. in support of his contention that a suit for a declaration, without possession or either consequential reliefs, is competent Under certain Circumstances, & has referred us to Kunj Behari v. Keshav Lal, 28 Bom. 567 : (6 Bom. L.R 475), Waman Rao v. Rustomji, 21 Bom 701, Lake Nath v. Keshab Ram, 13 Cal. 147 & Satischandra v. Satyacharan, 14 Cal. W.N 676 : (5 I.C 531). In none of these cases, however, the pltf. was a mtgee. purchaser, nor was the suit by a mtgee. purchaser against a lessee who had acquired a lease from the mtgor. lawfully in possession of the mortgaged property during the pendency of the mtga. These cases are, therefore, no authority for the facts which have given rise to the present appeal.

21. Before we conclude our judgment, it is necessary to refer to a point raised by Mr. Ghose on the strength of which he contends that the suit is liable to be dismissed. It appears that subsequent to the filing of this appeal in the Calcutta H.C, the pltf. mtgee. transferred the property by a registered sale-deed to the mtgor. Mr. Ghose has argued that the pltf. mtgee. having lost his dual rights of a mtgee. & a mtgor. acquired upon the purchase of the mtged property by this transfer, is not entitled to any decree. Mr. Sen for the respa. has, however, contended that this transfer during the pendency of the appeal in the Calcutta H.C is hit by Section 52 of the Transfer of Property Act. In the view we have taken of the competency of the pltf's suit as brought, we think it is unnecessary to deal with this aspect of the case.

22. Mr. Ghose has further argued that this Ct. can take notice of the admission of the pltf. mtgee. during the course of the arguments that he has effected a transfer of the property in favour of the mtgor. He hag referred us to a case reported in Abdul Rahman v. Sarat Ali, 22 C.L.J 412 : (A.I.R (3) 1916 Cal 710), in which it has been held that:

“the Ct. may, in order to shorten litigation or to do complete justice between the parties, take notice of events which have happened since the institution of the proceeding & afford relief to the parties on the basis of the altered conditions.”

23. But as we have observed, the transfer may conceivably be hit by the doctrine of ‘lis pendens’ as embodied in Section 52 of the Transfer of Property Act.

24. For reasons stated in our judgment, the appeal is allowed with costs throughout. The pltf's suit will stand dismissed.

Ram Labhaya, J.:— I have had the advantage of reading the judgment of the learned Chief Justice (Acg.) I agree that the appeal be allowed & the suit dismissed with coats. I would add, with great respect, that the only remedy of a mtgee. who purchases the property at an auction sale in execution of a mtge. decree, against the lessee of the mtged property not impleaded in the suit is not a suit for sale. A suit for declaration that he is entitled to bring the property to sale for the recovery of the mtge money can also be instituted by him. This is what was held in Radha Pershad v. Monohur Das, 6 Cal. 317 : (7 C.L.R 293). It was laid down in that case that the covenant entered in the mtge bond against transfer did not render the lease invalid. It was also laid down that the subsequent sale under the decree would not put an end to the zurpeshgi lease or affect the interests of zurpeshgidar. The pltf. the auction purchaser could, therefore, bring a suit to have his right declared to sell the property to satisfy his mtge debt. He certainly may bring a suit for sale direct. But his remedy is not limited to a suit for sale. If he institutes a suit for a declaration of his right to sell the property for recovery of his mtge money, he does give the lessee an opportunity to redeem. This was the view taken in the Calcutta case & with this I am in respectful agreement.

25. The suit in this case was for a declaration that the lease was wholly void. It was a colorable transaction & the property never vested in the ostensible lessee. This plea has not prevailed in the lower appellate Ct. The learned, J. in appeal Page: 105came to the conclusion that the lease offended against the provisions of Section 65-A of the Transfer of Property Act therefore, it was not such a bona fide transaction that a mtgee. may be bound by it. On that basis he affirmed the ending of the Ct. below which was to the effect that the lease in question was created by deft. 1 in consultation with deft. 2, his brother's son, merely to delay & defeat his creditors.

26. The necessary implication of the finding arrived at by the learned Suborbinate, J. is that be lease as between the lessor & the lessee was binding but as the ??? reserved was ??? low the provisions of Section 65-A of the Transfer of Property Act, were contravened. He did not go to the length of holding that the lease in question was merely a paper transaction under which the lessee got no rights. In these circumstances, a declaration that the lease was wholly void could not be ??? to the pltf.

27. The question now is whether in the suit as ??? a declaration that pltf. can sue of the mtge. property may be granted. Though the pltf's. suit is for a declaration of title is based on the ground that the lease was a sham ???. It would be alter the nature of this suit if a declaration is given to the pltf. that the lease, through binding between the lessor & the lessee, does not afreet his right to bring a suit for sale of the property for recovery of his mtge. money by reason of the fact that the lessee was not made a party to has previous suit for sale of the property. The suit, therefore as laid, must fail.

28. During the pendency of the appeal in this Ct., the pltf. transferred ait his right to his original mtgor. It had been urged that this development in the cade may be taken notice of by the Ct. The learned counsel for the applt. pointed out but the Ct. has the discretion to do so. While it is ??? that in order ??? a Ct. may take in to ??? events happening after the ??? of the suit it surely is nor bound to dose & may ??? the case on the facts existing on the date of he ??? of the suit. In the ??? case before us the conclusion ??? at is that the decantation ??? perceivable ??? he granted in the ???. In the ??? it is not necessary to consider the effect of events which ??? after the institution of the suit.

29. Appeal allowed.

Surjya Kumar Dhar Applt. v. Girish Chandra Ghose & Another Resps.

Structured Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments (Mr. Ghose for the appellant)

Respondent's Arguments (Mr. Sen for the respondent / arguments as reported)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Surjya Kumar Dhar Applt. v. Girish Chandra Ghose & Another Resps.

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