Krishna Kishore De v. Amahnath Kshettry

The Judgment of the Court was as follows:—

Mookeejee, J.:— This is an appeal by the Plaintiff in a suit to declare the in validity of the decree in a mortgage suit in so far as such decree affects land situated beyond the local limits of the Ordinary Original Civil Jurisdiction of this Court, on the ground that leave under cl. 12 could not have been granted and the decree was consequently to that extent made without jurisdiction. The question raised is of first impression, and the facts material for its determination are not in controversy.

On the 30th August 1907, certain persons who may be called the Mookerjees and their trustee, one Bhattacharya, (represented by Defendants Nos. 4-9 in the present litigation), executed a simple mortgage in favour of Banerjee, (Defendant No. 3), to secure the repayment of a loan of Rs. 25,000, which was charged upon a share of Lots Santoshpur and Mandalika, Patni Mahals in Sub-District Howrah within the District of Hoogly. On the 13th. December 1907, Banerjee executed a mortgage in favour of the Khettrys (represented by Defendants Nos. 1 and 2) to secure a loan of Rs. 20,000. The properties conveyed and assured by this mortgage included a share of two parcels of land in the town of Calcutta as also the interest of Banerjee as mortgagee under the document of the 30th August 1907. On the 23rd September 1911, the Patni Taluk Mandalika was released and absolutely discharged from the mortgage of the 30th August 1907, upon payment of Rs. 10,000 by the original mortgagors and with the concurrence of all the parties interested. On the 25th November 1912 the Khettrys instituted a suit (No. 1083 of 1912) on the Original Side of this Court to enforce their security of the 13th December 1907 against Banerjee, the Mookerjees and Bhattacharya. It is necessary to observe that the suit was brought by the Khettrys not only against their mortgagor Banerjee, but also against the mortgagors of Banerjee under the transaction of the 30th August 1907. The reason for this was that the Khettrys sought, not merely to enforce their security against their mortgagor Banerjee and to cut off his equity of redemption under the mortgage of the 13th December 1907, but also to enforce the mortgage held by Banerjee against the Mookerjees and Bhattacharya under the deed of the 30th August 1907; this relief they claimed under their derivative title from Banerjee who had granted a mortgage of his interest as mortgagee. The suit was thus in essence a composite suit wherein two distinct reliefs were claimed by the Khettrys, namely, first, to enforce a right of sale of Calcutta properties under the mortgage of the 13th December 1907, and, secondly, to enforce a right of sale or mofussil properties under the mortgage of the 30th August 1907. The Khettrys, accordingly, prayed for and obtained leave under cl. 12 of the Letters Patent on the assumption that the clause was applicable. The suit was decreed ex parte on the 2nd September 1911, and the preliminary decree then passed was made absolute on the 21th August 1917. Meanwhile, the Plaintiff be had purchased the right, title and interest of the Mookerjees and Bhattacharya at an execution sale on the 20th June 1916, and on the 29th July 1918 he instituted the present suit to impeach the validity of the decree in the suit of the Khettry in so far as it affected land beyond the local limits of the Ordinary Original Civil Jurisdiction of this Court. Mr. Justice Greaves has held that the Court was competent to grant leave under cl. 12 and that the decree was consequently made with jurisdiction.

It is now well-settled by decisions in all the Indian High Courts that a sub-mortgagee is entitled to bring a suit against his mortgagor and to realise the dues on his mortgage by sale or foreclosure [Ramsankar Lal v. Ganesh Prosad , Muthu v. Venkata (2), Narayan v. Ganoji (3) and Bansi Lal v. Durga Prosad ]. It is also open to a sub-mortgagee, but by no means obligatory on him, to frame his suit in such a way as not only to enforce his rights under his own mortgage, but to enforce the original mortgage against the mortgagor of his mortgagor [Zaki Hasan v. Deo Nath ]. A sub-mortgagee may thus be content to cut off the equity of redemption of his mortgagor, or he may at his choice, by a suit properly framed, cut off the equity of redemption not merely of his mortgagor but also of the mortgagor of his mortgagor. This he is able to accomplish by reason of his derivative title. Where a mortgagee transfers his interest by way of a mortgage, his mortgagee, that is, the sub-mortgagee takes it subject to the original mortgagor's right to redeem; consequently, the sub-mortgagee who holds a fragment of the interest of the mortgagee may achieve what the mortgagee might have obtained, namely, to cut off the equity of redemption of the original mortgagor. The form of the decree to be made in such a suit, where two-fold relief is claimed by the sub-mortgageo against his mortgagor and the mortgagor of that mortgagor is set out in Seton on Judgments (1912), p. 2009 (Derivative Mortgagee v. Mortgagee and Mortgagor) and the Code of Civil Procedure, Appendix D, Form, 9 No. difficulty arises in a suit of this description when the properties included in the original mortgage as also the additional properties, if any, comprised in the mortgage by the mortgagee are situated within the same jurisdiction. Where, however, as here, the properties comprised in the original mortgage are situated in the mofussil and the additional property included in the security granted by the mortgagee is situated in the town of Calcutta, an important question of some nicety arises. The original contract of mortgage plainly contemplates a suit in the mofussil Court for its enforcement. Is the mortgagee, by the grant of a sub-mortgage along with a mortgage of property in the town of Calcutta, entitled to have the forum altered in relation to the enforcement of the original mortgage? We are clearly of opinion that the answer should be in the negative. As between the mortgagee and the sub-mortgagee, a suit to enforce the security may fittingly be instituted on the Original Side of this Court; this is in conformity with the intention of the parties as indicated by the inclusion of the Calcutta property in the mortgage. If, however, the sub-mortgagee is not content with relief against his mortgagor alone and claims to have a remedy against the mortgagor of his mortgagor, the situation becomes entirely changed. As he can claim this relief only by virtue of title derived from his own mortgagor in respect of the mofussil property, he can do neither more nor less than what his mortgagor could have done towards the original mortgagor. The original mortgagor, as we have seen, could have been sued by his mortgagee in respect of liabilities arising out of the mortgage transaction, only in the mofussil Court. The mortgagee, by granting a mortgage to a third person of his interest as mortgagee and by including in that document a property in Calcutta cannot be permitted to prejudice the position of his mortgagor and to render him liable to be sued in a Court never contemplated by the parties at the time of the mortgage contract. We are of opinion that this view is consistent with a plain reading of cl. 12 of the Letters Patent which, so far as it is material for our present purpose, provides as follows:—

“The said High Court of Judicature at Port William in Bengal, in the exercise of its Ordinary Original Civil Jurisdiction, shall be empowered to receive, try and determine suits of every description, if in the case of suits for land or other immoveable property, such land or property shall be situated, or, in all other cases, if cause of action shall have arisen either wholly, or in case the leave of the Court shall have been first obtained, in part, within the local limits of the Ordinary Original Jurisdiction of the said High Court.”

In the case before us, the Khettrys, as derivative mortgagees from Banerjee, could enforce the security of the 30th August 1907, against the Mookerjees and Bhattacharya, just as Banerjee himself might have done, in the mofussil Court. The Khettrys might also, as the mortgagees of Banerjee, have sued him alone on the Original Side of this Court and barred his equity of redemption. But the Khettrys plainly could not be allowed, by the inclusion of two claims in one suit against two sets of persons in respect of properties situated, as regards one set in the mofussil alone, make the composite suit against both sets of Defendants maintainable on the Original Side of this Court. The decisions in Matigara Coal Co. v. Shragers, Ltd. and Sarat Ch. v. Ndhapiet (7) are of no avail to the Khettrys; they merely show that where some of the mortgaged properties included in the mortgage deed are within and some without the local limits of the Ordinary Original Civil Jurisdiction of the Court, the Court has jurisdiction to grant leave to sue and to entertain a suit on the mortgage in respect of all the properties including those situated beyond the local limits. This principal might be of assistance to the Khettrys in a suit by them against Banerjee alone on the mortgage of the 13th December 1907 which included properties in the town of Calcutta as also mortgagee interest in property in the mofussil. But there is no foundation for the argument that the suit as framed could properly be treated as one to enforce a cause of action which had arisen partly within the local limits of the Ordinary Original Civil Jurisdiction; the contention is fallacious, as the causes of action under the mortgage of the 30th August, 1907 and 13th December 1907 were distinct and affected different sets of individuals, of whom one set held properties situated entirely in the mofussil. We do not think it would be right to strain the language of the cl. 12 of the Letters Patent with a view to cover a case of this description. There is thus no escape from the conclusion that the Court was not competent to grant leave under that clause, and the decree, in so far as it affects properties in the mofussil, must be deemed to have been made without jurisdiction [of the judgment of Lord Moulton in Haredra Lal v. Haridasi (8)].

As a last resort, it was faintly argued on behalf of the Respondents that the objection as to jurisdiction might and should have been raised in the original suit, and as it was not so raised, the rule of constructive res judicata should be applied, in other words, that the parties should be placed in the same position as if the point had been raised, contested and determined in favour of the Khettrys. There is obviously no foundation for this contention. It is an elementary principle that where a Court has no jurisdiction over the subject-matter of the action in which an order is made, such order is wholly void, for jurisdiction cannot be conferred by consent of parties, and no waiver or acquiescence on their part can make up for the lack or defect of jurisdiction. If any authority were needed to support this proposition, reference might be made to the recent decisions in Rajlakshmi v. Katyaini , Gurdeo v. Ghandrika and Ranjit v. Ramadoor where the earlier cases will be found reviewed. But if the decision of the Court is void for want of jurisdiction over the subject-matter, it cannot operate as res judicata; in order that a judgment may be conclusive between the parties, the essential pre-requisite is that it should be the judgment of a Court of competent jurisdiction within the meaning of sec. 11 of the Civil Procedure Code. In this case, as already stated, the question of jurisdiction was neither raised nor decided; the position might have been different if the question had been raised and decided, for where a Court judicially considers and adjudicates the question of its jurisdiction and decides that the facts exist which are necessary to give it jurisdiction over the case, the decision is conclusive till it is set aside in an appropriate proceeding. But where there has been no such adjudication the decree remains a decree without jurisdiction and cannot operate as res judicata.

The result is that this appeal is allowed and the preliminary decree in Suit No. 1083 of 1912 passed on the 2nd September 1914, the decree absolute made on the 24th August 1917 and all subsequent orders made on the basis thereof must be set aside. The consequence will be that Suit No. 1083 of 1912 will stand revived at the stage when leave under cl. 12 was granted. The Khettrys as Plaintiffs in that suit will be at liberty to amend then plaint if they so desire and in such manner as they may be advised; if the suit is limited as a suit to enforce the mortgage of the 13th December 1907 against Banerjee, it will be tried on the merits. The Appellant is entitled to his costs both here and in the Court below including the costs of the order made on the 7th August 1918.

Fletcher, J.:— I agree.

Mr. H.C Ghose, Solicitor for the Appellant.

Mr. J.K Dutt, Solicitor for the Respondents.

M.N.K