By executing a simple mortgage dated the 31st March, 1882, Jagarnath Jha, Prem Narain Jha and Rahini Dutt Jha who were the owners of 3 anna 4 gunda pokhta share of Mouza Kodria, Tappeh Khunezadpore, Pergunnah Merwa Kellan, bearing Towji No. 1788 in the Collectorate of Mozufferpore, borrowed from the present Plaintiff, Ramjee Thakur, the sum of Rs. 2,500 hypothecating a one anna share of the Mouza. The debt was repayable by the 22nd May, 1883. On the 16th July, 1887, Prem Narain Jha and Rahini Dutt Jha, two of the mortgagors, executed in favour of one Parmeshri Dutt Jha a simple mortgage for Rs. 6,665 hypothecating, amongst other properties, 2 anna 2 gunda 2 cowri 2 krant pokhta share of the Mouza already mortgaged to the present Plaintiff. In the bond the property was described as bearing Towji No. 4152. On the same day, another simple mortgage for Rs. 3,335 was executed in favour of the same Parmeshri Dutt Jha by which 1 anna 1 gunda 1 kara 1 kranti share of the same Mouza along with other properties was hypothecated. The executants of this last bond were two of the adult sons of Jagarnath Jha who had already executed the bond in favour of the present Plaintiff along with his co-owners. It appears that Jagarnath had died in the meantime leaving him surviving two adult sons and other infant sons. Parmeshri Dutt Jha had thus a mortgage of the entire 3 anna 4 gunda pokhta share on two different mortgages of the same date covering the sum of Rs. 10,000.
Parmeshri Dutt died, and his heirs and survivors, the Defendants first party, instituted on the 20th July, 1889 two suits on the two mortgages executed on the 16th July, 1887 and obtained decrees on the 16th September, 1889. The present Plaintiff who had a prior mortgage of a share of the property was not made a Defendant in these suits. In execution of these mortgage-decrees, the mortgaged shares were sold in separate lots on the 15th August, 1890 and were purchased by the decree-holders themselves. Subsequently they obtained certificates of sale and were formally put in possession on the 2nd December, 1890. They then got their names registered under Act VII (B.C) of 1876 in the Collectorate with respect to the entire estate No. 4152.
In the meantime and on the 17th March, 1890, the present Plaintiff instituted a suit on the mortgage in his favour but he did not make the heirs and survivors of Parmeshri Dutt parties to the suit. He obtained an ex parte decree on the 23rd April, 1890, and on the 14th June an order was made on his application in the execution proceedings that were going on at the instance of the puisne mortgagees, the Defendants first party, that his mortgage right would be declared at the sale to be held at their instance. It appears that his right as prior mortgagee and the fact of his having got a decree were actually clared at the sale held on the it August 1890. On the 4th February, 1891 the present Plaintiff applied ??? the sale of the mortgaged property. The sale actually took place on the 16 December, 1891 and he was himself ??? purchaser. He got a certificate of ??? on the 20th February, 1892 and was ??? in formal possession on the 9th March that year. Subsequently, he applied ??? registration of his name in the Collect rate but his name was registered ??? with respect to a 1 anna 6 gunda 2 karnt 2 krant share of estate No. 4152.
The Plaintiff says that what was mort gaged and sold to him was a 1 anna pokhta share out of the 3 anna 4 gunda patti of Mouza Kodria bearing the ??? Towji No. 1788 of which the present number is 4152, that the 1 anna pokhta share corresponds with 5 annas kham share, that he is in actual possession of the same, that he is entitled to have his name registered with respect to such 5 annas kham share and to have his possession confirmed. He instituted the present suit on the 16th January, 1891, the heirs and survivors of Parmeshri Dutt, the puisne mortgagee, having been named as Defendants first party and two of the mortgagors and the heirs and survivors of the third Defendant second party. The Defendants second party who had lost all interests in the subject-matter of the suit did not contest it.
The Defendants first party denied that the Plaintiff was entitled to and was actually in possession of 5 annas kham share and said that the mortgage to the Plaintiff was fraudulent and collusive and that the share actually mortgaged, if the mortgage was a bonâ fide one, was only 1 anna kham share. They further pleaded that the suit was barred by limitation and, as fraud, was not maintainable.
The Subordinate Judge who tried the case gave the Plaintiff a decree deciding all the issues raised in the case against the Defendants. The decree runs thus:—
“That this suit be decreed with costs, that the Plaintiff's possession over the property claimed be confirmed and that the Plaintiff do recover costs.”
The Defendants first party have appealed and the contentions raised by them in the first Court have been reiterated before us.
There is nothing in the record to prove that the mortgage in favour of the Plaintiff was collusive or fraudulent, but it is argued that, though the mortgage might not be collusive or fraudulent, the whole of the consideration covered by it was never paid. The contention of the earned vakil for the Appellants refer to the consideration in so far as it covered the previous debt of Rs. 1,000 due by the mortgagor to the Plaintiff. A faint attempt was also made to throw doubt ??? to the payment of the sum of Rs. 1,400 said to have been paid to satisfy a decree against the mortgagors, ??? the 31st August, 1881, in favour one Orchi Koer. The evidence as to ??? matters is one-sided. The Plaintiff ears to the payment and Milan Thakur, ??? of the attesting witnesses to the ??? corroborates him. It does not ??? appear that the decree of Orchi ??? was executed at any time after the ??? all ??? payment by the Plaintiff. We do ??? think that there are sufficient reasons for holding that the entire consideration-money was not paid. On the other hand, the fact that the Defendants allowed the Plaintiff to take possession of the property and quietly submitted to his name being registered to the extent of a 1 anna 6 gunda 1 cowri 1 kraut share would go to show that they never intended to contest the validity of the mortgage or the passing of the entire consideration-money.
What, then, was the share mortgaged to the Plaintiff? Was it a one anna kham share or a one anna pokhta share of Mouza Kodria, estate No. 1788? We agree with the Subordinate Judge that it was a one anna pokhta share corresponding to a 5 annas kham share. The original or parent estate of which the mortgagors had a share of or 3 annas 4 gundas bore No. 1788 in the Collector's register of estates. The partition took place in or about the year 1868, and by it, the mortgagors got 228 acres 3 rods 28 poles of land, the Government revenue being assessed at Rs. 63. In the mortgage dated the 31st March, 1882, as well as in the plaint in the suit instituted on it and the decree dated the 23rd April, 1890, the property, as we have seen, is described as a one anna share out of the proprietary interest of the mortgagors in Mouza Kodria bearing Towji No. 1788, so that it would seem that the property mortgaged was a one anna pokhta share. The Defendant Bunwari Jha has deposed that the value of the 3 anna 4 gunda share at the date of the bond executed in favour of Parmeshri Dutt Jha was Rs. 15,000 or Rs. 20,000. One anna or one-sixteenth of Rs. 20,000 would be only Rs. 1,250, and it is not likely that the Plaintiff advanced Rs. 2,500 on mortgage of a property worth only half of the money advanced. We think, therefore, that it was a pokhta and not a kham share.
The subsequent conduct of the parties leaves no room for doubt that it was not a kham share. In the inventory which was filed on the 4th February, 1891 for sale in execution of the mortgage decree obtained by the Plaintiff, the property was described as having an area of 228 acres 3 rods and 28 poles with a sudder jama of Rs. 63-3-2 and the area of 1 anna 6 gundas 2 cowri or a third share was given as 96 acres 1 rod 9 poles bearing a Government revenue of Rs. 21-1-1 of which the approximate value was given to be Rs. 2,500. In the further description given, the right, title and interest of the judgment-debtor was described to be 5 anna 6 gunda 2 kara 2 krant kham, the pokhta of which is 1 anna with the area of the land and with the Government revenue and approximate value given as above. The Defendants first party in the present case put in a petition of objection on the 16th March, 1891 in which they asked that the property might be exempted from sale as they had already purchased the same. But it appears from the 1st paragraph of the petition of objection that they fully understood that what was advertised for sale was a one anna share out of 3 annas 4 gundas share of Mouza Kodria and not a one anna kham share only. It appears that, on the 4th April, 1891, this petition was disallowed and the property was directed to be sold. The present Defendants first party took no further steps, and on the 16th December, 1891 the mortgaged property was sold with the description given in the inventory, that is, 1 anna share in Mouza Kodria, Tappeh Khunezadpore, Pergunnah ??? Kellan, Towji number whereof was ??? and the recent Towji number 4152, the area, sudder jama and the other parti culars being exactly what was given in the inventory. A mistake, however, was made in the certificate of sale as the property was therein described as a one-third share consisting of a 1 anna 6 gunda 2 cowri 2 krant kham share. It should be noted that the Plaintiff was entitled to bring to sale only a one anna pokhta or a 5 annas kham share, the quantity of land and the Government revenue being reduced proportionately. The Plaintiff, after his purchase, got possession on the 9th March, 1892, the officer of the Court delivering possession under sec. 319, C.C.P, according to the description given in the sale certificate. That all parties understood that what was sold was a one anna pokhta share is evident from the fact that the Defendants first party did not object to possession being delivered and from the further fact that they quietly allowed the Plaintiff to have his name registered with respect to a 1 anna 6 gunda 2 cowri 2 krant share, whereas, if their contentions were right, the Plaintiff could get his name registered only to the extent of a 1 anna kham share. Shortly afterwards, the Plaintiff granted a ticca pattah of the property purchased by him to the Tetna factory describing the property to be 1 anna pokhta out of 3 annas 4 gundas pokhta, and it has been found by the lower Court that the factory people have been in possession under the ticca of a 1 anna pokhta share or 5 annas kham. The ticca pattah and the kabuliyat which was executed in favour of the Plaintiff are dated the 17th November, 1894, the lease being for, nine years running from 1302 to 1310. It appears that the registration decree made by the Collector under Act VII (B.C) of 1876 caused some difficulty in the ticcadar's realizing rent from the raiyats and the Plaintiff had then to apply for amendment of the sale certificate and the certificate was actually amended by an order dated the 24th July, 1897. By this amendment the extent of the share became 5 annas 6 gundas 2 cowri 2 krant kham instead of one anna 6 gundas 2 cowri 2 krant kham. But there was still a mistake as the share purchased was only 5 an a as kham and not 5 annas 6 gundas 2 cowri 2 krant. The Plaintiff again went to the Collector with the certificate of sale as amended but obtained no relief, and the necessary corrections were not made in the register of estates. The Plaintiff has been paying since his purshase a revenue of about Rs. 20 per mnum, which would correspond to anna anna pokhta share. The Defendants irst party, on the other hand, seem to lave been paying revenue as if they were owners in possession of only 11 anna ham share. In a proceeding under Chap, X of the Bengal Tenancy Act, the extent of the Plaintiff's interest was given to be 5 annas of estate No. 4152 ??? was the number given to the anna 4 gunda share after partition, ??? Defendants first party, on the other ham were recorded as having 11 annas. It does not seem that these Defendants ever raised any objection to the entries made by the settlement officer. Whatever doubt there might be from the important description given in the mortgage and the decree based thereon is removed by what appears to have been the subsequent conduct of the parties. It seems to us that it is too late for the Defendants first party to contend now that what was mortgaged to the Plaintiff was only a one anna kham share.
The Subordinate Judge has held—and we agree with him—that the Plaintiff has been in possession of a share of one anna pokhta or 5 annas kham. We have already referred to the proceedings under Chap. X of the Bengal Tenancy Act, the fact of the Plaintiff's paying revenue to the extent of the share which he has been always claiming and the possession by the Tetna factory. The Plaintiff has deposed to the fact of his realizing rent of a five anna kham share from the tenants and the payment of Rs. 20 as revenue and Rs. 12-13 as road-cess per annum. He has been corroborated by Bhagwan Lal, the tehsildar of the Tetna factory, and Mahabir Lal, the patwari. The collection papers from 1302 to 1306 have also been produced and duly proved. The Defendants first party, on the other hand, have examined a few tenants but the Subordinate Judge has, and we think rightly, believed them. The Defendant Bunwari Jha no doubt said that he paid revenue and cesses according to the share claimed by him and his co-proprietors but he could not produce either the challans of revenue or his account books showing payments. The explanation he gives as to his silence in the proceedings under Chap, X of the Bengal Tenancy Act and of the Plaintiff's admitted possession of more than a one-anna kham share without any objection on his part is frivolous. It also appears that the Plaintiff paid the costs of the survey and settlement proceedings according to his share of five annas kham and the Defendants paid the balance, that is, 11 annas. These facts have little room for doubting that the Plaintiff did obtain possession of one anna pokhta or five anna kham share and was in possession of such share at the date of the institution of the suit.
There is one other question of fact raised in this case with reference to the argument addressed to the lower Court as well as to us that the decree obtained by the Plaintiff was bad, having regard to the provisions of sec. 85 of the Transfer of Property Act. That section says:—“All persons having an interest in the property comprised in a mortgage must be joined as parties to any suit under this chapter relating to such mortgage: provided that the Plaintiff has notice of such interest.” The contention is that the Plaintiff had notice of the existence of the mortgage in favour of Parmeshri Dutt and that inasmuch as the Defendants first party, the heirs and survivors of Parmeshri Dutt, were not made parties to the suit instituted by the Plaintiff on his mortgage, the decree obtained by him is void. There are two branches of this argument, as to notice, namely, that the Plaintiff had actual knowledge and that even if he had no actual knowledge, he had constructive notice. The Plaintiff denies that he had actual knowledge. The Defendant, Bunwari Jha, says that the Plaintiff knew of the mortgage in favour of Parmeshri Dutt and he says that the Plaintiff was present when a certain payment was made to one Bolaki out of the money advanced by Parmeshri Dutt on the mortgage in his favour. Bunwari is supported in his evidence by his witnesses Kamal Jha and Bhikari Lal. But it is curious that the Plaintiff was not cross-examined as regards his presence at the time when Bolaki is said to have been paid. There is no reason to suppose that the Plaintiff intentionally omitted to make the heirs and survivors of Parmeshri Dutt parties to the suit and, on the whole, we prefer to rely upon the Plaintiff's evidence than on the evidence of Bunwari, Kamal Jha and Bhikari Lal. The lower Court has declined to believe the story narrated by Bunwari, and we see no reason to differ from it in its estimate of the evidence.
Next, as to constructive notice, the argument of the learned vakil for the Appellants is based on the fact that the mortgages in favour of Parmeshri Dutt were by means of registered deeds. The argument assumes that registration should always be regarded as notice. The High Court at Bombay adopting the American law (see Story's Eq. Jurisprudence, 12th Ed., 403) has held that registration amounts to constructive notice [Lahshman v. Dasrat, Dundaya v. Chenbasapa, Chintaman v. Dareppa, Narayan v. Bapu]. The Allahabad High Court has also taken the same view [Churaman v. Balli]. On the other hand, a different statement of the law appears in the Second English Edition of Story's Equity Jurisprudence, paras. 401 and 402. It is there said “How far the registration of a conveyance in countries where such registration is authorized and required by law shall operate as constructive notice to subsequent purchasers, by mere presumption of law, independent of any actual notice, has been much discussed. It is not doubted that a prior conveyance duly registered operates to give full effect to the legal and equitable estate conveyed thereby, against subsequent conveyances of the same legal and equitable estate. But the question becomes important as to other collateral effects, such as defeating the right of tacking of mortgages, etc., etc. The doctrine seems at length to be settled that the mere registration of a conveyance shall not be deemed constructive notice to subsequent purchasers, but that actual notice must be brought home to the party, amounting to fraud.” The Madras High Court in Shan Maun Mull v. Madras Building Company following the English rule and the earlier decisions of that Court in Damodara v. Soma Sundara and Madras Building Company v. Rowlandson, has held that registration is not notice, and this Court in Inder Dawan Pershad v. Gobind Loll Choivdhry approved of the Madras cases and dissented from the view taken by the Bombay and the Allahabad High Courts. Referring to the definition of “notice” in sec. 3 of the Transfer of Property Act, this Court said:—“We cannot say that search in the Registration Office is one which in law an intending mortgagee is bound to make, and that his abstention from such inquiry amounts to gross negligence within the meaning of the definition.” The same view was taken in Preo Nath Chattopadhya v. Ashutosh Ghose. The decision in Inder Dawan Pershad v. Gobind Lull Chowdhry is, however, expressly limited to a case of marshalling of securities under sec. 81 of the Transfer of Property Act. In Preo Nath Chattopadhya v. Ashutosh Ghose there was a competition between rival claimants for the purchase of the same property under two different agreements executed by the same vendor and it could not be said that it was either gross negligence or wilful abstention that no such search had been made into the registers kept under the Indian Registration Act.
In Janki Pershad v. Kishen Dat it has been held by a Full Bench of the Allahabad High Court that for the purposes of sec. 85 of the Transfer of Property Act, a mortgagee will be deemed to have notice of a subsequent registered incumbrance affecting the property mortgaged to him, as it is the duty of a prior mortgagee, before suing, to make a search as a reasonably prudent man in the Registrar's office to find out who should be made parties to his suit. It is not easy to see why a first mortgagee must inquire before he sues and why his not inquiring should be considered as either gross negligence or wilful abstention. The same question was raised under very similar circumstances in Jadu Nath Ghosh v. Radha Raman Mukerjee, and Harington, J., following the Calcutta cases held that the mere fact of the registration of a subsequent mortgage was no notice of its existence to a prior mortgagee. In the present case, as in the case before Harington, J., it can hardly be said that the Plaintiff was guilty of either gross negligence or wilful abstention in not causing a search into the registers with a view only to ascertain who had subsequent to the mortgage to him acquired a right to redeem.
We are not, however, prepared to accept the argument of the learned vakil for the Respondent that in no case is registration itself notice. Whether it is or is not depends, we think, upon the facts and circumstances of each case—upon the degree of care and caution which an ordinary prudent man would necessarily take for the protection of his own interest by search into the registers kept under the Registration Act. We, therefore, come to the conclusion that the decree which the Plaintiff obtained on the 23rd April, 1890 is valid and binds the security.
Upon these findings, the question arises what, if any, is the relief the Plaintiff is entitled to. We have seen that the Sub-Judge has given a decree declaring the Plaintiff's title to and confirming his possession of 1 anna pokhta or 5 annas kham share. The learned vakil for the Appellants has contended that, as the Plaintiff did not make his clients parties to the suit on the mortgage in his favour and as on the date of the sale in execution of the mortgage-decree, that is, the 16th December, 1891, the mortgagor's equity of redemption had already passed, all that the Plaintiff could and did acquire by his purchase was only his own mortgage interest and nothing more. The Plaintiff it has been argued, can have no right to possession and cannot have his possession confirmed. Reliance has been placed on Gopee Bundhoo Santra v. Kaleepudo Banerjee, Nanack Chand v. Tiluckdye Koer(14), Dir Gopal v. Bolakee(15), Badha Pershad v. Monohur Das(16), Jugul Kissore v. Kartic Chunder(17), as authorities to show that, when there is a contest between the purchasers of the same property on decrees based on successive mortgages, the right to possession depends on the priority of purchase and not the priority of mortgage if the puisne mortgagee or the purchaser under the puisne mortgage be not made a party in the suit on the prior mortgage. The case of Gopee Bundhoo v. Kaleepudo Banerjee rather supports the Plaintiff's case. The facts of the other cases relied on materially differ from the facts of this case. In those cases the Plaintiff asked for delivery of possession by ejecting the Defendants, the purchasers on decrees on puisne mortgages notwithstanding that such purchases had taken place before the institution of the suits on the mortgages in favour of the Plaintiffs. The Court in those cases declined, having regard to the frame of the suits, to allow their conversion into suits of the nature of redemption. It was held that it was necessary in those cases that the Plaintiff should take proper proceedings to enforce their mortgages and could not enforce them in suits for possession by ejecting the Defendants. In this case the Plaintiff is in possession and has asked not for ejectment of the Defendants but for confirmation of his possession and title. He brought his mortgage suit without notice of the existence of the puisne mortgage in favour of the Defendants first party and that at a time when the equity of redemption and the right to possession existed in the mortgagors. We have seen that the decree which he obtained binds the security. He as purchaser under his own mortgage-decree has acquired the property and the equity of redemption in the mortgagors and it existed at the date of the mortgage together with his own lien. The equity of redemption which the mortgagors had was still in them at the date of the suit. No doubt, persons interested who acquired rights between the date of the mortgage and the date of the institution of the suit and who were not made parties by the Plaintiff on account of his want of knowledge of the existence of their interest would not be affected by the decree and the sale thereunder and would not be entitled to reopen the proceedings but they were necessary parties in the sense that it was to the interest of the Plaintiff that the proceedings should not be liable to be reopened at the instance of such parties. Their rights of redemption should be preserved if they were not made parties and the Plaintiff would then he exposed to fresh suits for redemption (see Fisher on Mortgages, 4th Ed., pp. 812 and 817). The right of a puisne mortgagee or the assignee of the equity of redemption before the institution of a mortgage suit appears to be nothing more than a right to redeem the mortgage [Jatha Naik v. Venktapa(18)]. Whether he can resist the purchaser at a sale under the Transfer of Property Act on the prior mortgage in the latter's attempt to take possession is a question which does not arise in this case. It seems to us that a purchaser under the prior mortgage may always shield his possession and protect his interest by setting up such prior mortgage and it will not be proper to allow him to be dispossessed simply on the ground that a third party has the right to redeem. It will be for the puisne mortgagee or a purchaser under his decree or an assignee of the equity of redemption to apply for redemption on the usual terms. He cannot ask a suit for confirmation of possession to be dismissed by reason merely of his not having been made a party in the suit on the prior mortgage.
In the view we take no question of limitation arises. Art. 132 of the second schedule of the Limitation Act cannot apply and we follow the principle laid down in Aman Ali v. Azgar Ali(19) and Lutchmiput Singh v. The Land Mortgage Bank of India, Ld.(20).
We think that under the circumstances of this case the Appellants are only entitled to the same relief which they could have obtained if they had been made parties to the suit by the Plaintiff on his mortgage, namely, the right of redeeming the property on the usual terms and that the Plaintiff's title and possession should be declared and confirmed subject to such right of redemption. The decree of the lower Court will therefore, be varied by declaring the Plaintiff's title subject to the right of the first party Defendants to redeem, an account being taken on the footing of the mortgage security. The income which the Plaintiff derived during the period of his possession would nearly cover the interest on the mortgage. The Plaintiff would, therefore, be entitled to the principal and interest at the rate stipulated for in the mortgage up to the date of delivery of possession to him, namely, 9th March, 1892, and the Defendants first party will be entitled to redeem on payment to the Plaintiff of this sum within 6 months from the arrival of the record in the lower Court.
We make no order as to costs in this Court.
S.C.S
Decree modified.