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    Ghulam Husain v. Dina Nath

    Banerji, J.:— This appeal arises in a suit which was brought under the following circumstances:—One Madho the Rao got a decree for money against Kalli on the 7th December, 1894. He applied for execution of that decree on the 15th August, 1895, and the property now in suit was attached as the property of Kalli. As the said property was ancestral the execution of the decree was, on the 22nd November, 1895, transferred to the Collector under section 320 of the Code of Civil Procedure. As that section presupposes the passing of an order for sale of the attached property, it must be presumed that an order for the sale of the property had been made. On the 20th July, 1896, the property was sold by auction and the plaintiff appellant purchased it. On the 25th January, 1895, however, Kalli had mortgaged the said property by a deed of conditional sale to the respondents. On the 29th June, 1896, the mortgagees brought a suit for foreclosure and made Kalli alone defendant to the suit. Madho Rao was not joined as a party. Lt has been found that the respondents had notice of the fact that Madho Rao had caused the property to be attached. On the 14th July, 1896, that is, six days before the date fixed for the sale of the property in execution of Madho Rao's decree, Kalli appeared in Court, confessed judgment, admitted his liability for the amount of the mortgage, alleged that he had not the means to pay it; and prayed that a decree might be passed in favour of the mortgagees for possession of the property. The Court, instead of making a decree in compliance with the provisions of section 86 of the Transfer of Property Act, passed a decree in the terms of Kalli's application for possession of the property. When the plaintiff after his purchase attempted to take possession of the property, he was resisted by the respondents, and that led to the institution of the present suit, in which he seeks to recover possession by virtue of his purchase. He alleged in his plaint that the decree in the foreclosure suit, and the proceedings which led to it, were fraudulent and collusive and of no effect against him. The Court of first instance was of opinion that the intention of the mortgagor and the mortgagees in the foreclosure suit “was to deceive the purchaser of the attached property sold in execution of Madho Rao's decree, and to make him unable to redeem the property.” It granted a decree to the plaintiff for possession conditional on his redeeming the respondents' mortgage. On appeal by the defendants respondents the lower appellate Court reversed the decree of the Court of first instance and dismissed the suit. It held that the plaintiff had failed to prove that the proceedings in the foreclosure suit were fraudulent and collusive, and it was of opinion that at the date of the plaintiff's purchase Kalli's title to the property had become extinct, and that consequently the plaintiff acquired no interest in the property which afforded him a right to bring the present suit. The correctness of this decision has been challenged in this second appeal. The learned vakil for the respondents has conceded that Madho Rao, as the attaching creditor of the mortgaged property, had a right, under clause (f) section 91 of the Transfer of Property Act, to redeem the mortgage, and was therefore a necessary party to the respondent's suit, and that the decree for foreclosure could not affect his right of redemption. But it was contended that the plaintiff auction purchaser did not acquire the right which existed in Madho Rao, and that consequently the decree which was granted to him by the Court of first instance was erroneous. It cannot be denied that had the decree for foreclosure obtained by the respondents been passed in compliance with the provisions of the Transfer of Property Act, and had a date been fixed in it for payment of the mortgage amount as required by section 86 of that Act, and had the property been purchased by the present plaintiff before that date, he could have prevented foreclosure by redeeming the property Can the fact of the decree being framed in violation of the law deprive him of that right? It is true that the mortgagor could have waived the requirements of the Transfer of Property Act so far as he himself was concerned, but those requirements are provided for the benefit, not only of the mortgagor, but of all persons entitled under section 91 to redeem the mortgaged property, and the mortgagor could not, in proceedings to which such persons were not parties, destroy, their right of redemption. It is urged that as it has been found that the decree was not collusively and fraudulently obtained it had the effect of extinguishing Kalli's right, and that therefore at the date of the plaintiffs purchase no rights were in existence which could pass to the plaintiff. This raises the question, whether or not the purchaser acquired by his purchase the rights which existed in the judgment-debtor at the date of the attachment. Having regard to the provisions of section 276 of the Code of Civil Procedure, it is clear that no private alienation made by the judgment-debtor after the attachment of the property could be valid. That section, it is true, does not apply to a transfer by operation of law; but, in my opinion, such a transfer would be equally invalid, although not under section 276. Further, it was held by their Lordships of the Privy Council in the well-known case of Suraj Bunsi Koer v. Sheo Persad Singh , that an attachment and order for sale of the undivided interest of a co-parcener in a joint Hindu family creates in favour of the attaching creditor a charge which cannot be defeated on the judgment-debtor's death before sale, by the application of the principle of survivorship, and that the attaching creditor is entitled to have that interest sold in execution. It appears to me that the principle of this decision is not confined to the particular case of attachment and order for sale of the undivided interest of a member of a joint Hindu family, but is equally applicable to any kind of interest attached and ordered to be sold in execution, so that every attaching creditor who has obtained an order for sale has thereby acquired a charge or lien on the property attached. The benefit of the charge so acquired inures in favour of the person who purchases the property sold for the discharge and satisfaction of the charge. That this is so in the case of an ordinary mortgage is beyond doubt, and no reason has been suggested why the same rule should not be applied to the case of a charge of this description, although it would apply to all other charges. Madho Rao could not be deprived by the foreclosure decree obtained behind his back of the charge which the attachment and order for sale obtained by him created in his favour, so that the foreclosure decree was subject to that charge. The benefit which Madho Rao could take by virtue of the charge passed to the purchaser in execution of his decree. I agree with the observation of Turner, C.J, in Ponnappa Pillai v. Pappuvayyangar , where he says that “where a Court orders a sale in execution of a money decree, it professes to sell whatever interest in the property would, under any circumstances, be available to the creditor at the date of the attachment.” The same conclusion is supported by the principle of the ruling in Anand Chandra Pal v. Panchilal Sarma . Therefore the plaintiff in this case acquired by his purchase the right which Kalli had to redeem the respondents' mortgage on the date on which the property was attached, and that right still subsists in the plaintiff. In this view the decree for redemption passed in favour of the plaintiff by the Court of first instance was a right decree. I would allow the appeal, set aside the decree of the lower appellate Court, and restore the decree of the court of first instance with this variation that I would, extend the time for the payment of the mortgage money to the lat of December, 1901. The appellant will have his costs in this Court and the lower appellate Court. I may mention that the late learned-Chief Justice who heard this case prepared a judgment in which he arrived at the same conclusion as that mentioned above, and that it was in consequence of his lamented death that the judgment was not delivered.

    Aikman, J.:— I am also of opinion that this appeal should be allowed. The case is not free from difficulty, and I prefer to base my decision on the following short ground. The defendants respondents in their suit upon their mortgage transgressed to the provisions of section 85 of the Transfer of Property Act by not impleading a person of whose interest in the mortgaged property they had notice, namely, the attaching creditor. He not being a party, and that mortgagor confessing, the case was rushed through, and a decree for possession passed in favour of the respondents. Had the respondents complied with the provisions of the law, and had the usual period been fixed within which redemption might be effected, it cannot be doubted that the plaintiff appellant here who bought the judgment-debtor's interest in the property six days after the date of the respondents' decree, would have availed himself of the right to redeem. In my opinion it would be inequitable to hold that he had been deprived of that right by the illegal action taken by the respondents. I concur in the order proposed.

    Appeal decreed.

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    Ghulam Husain v. Dina Nath
    (Jul 4, 1901)