Citation Codes

Equivalent Citations

citation codes

Case Number

Second Appeal No. 1859 of 1923.

Attorney(S)

Mr. B. Somayya for the Appellant.
Mr. G. Lakshmanna for the Respondent.

Judges

Devadoss, J.

Acts

Sect. 85 of the Transfer of Property Act the clause
Sect. 85 of the Transfer of Property Act,

See more information ...

Smart Summary

Concise Analytical Summary of the Opinion

Factual and Procedural Background

The plaintiff instituted a suit seeking a declaration that the decree in O.S. No. 2 of 1910 was not binding on him with respect to the plaint property, an injunction restraining the defendants from interfering with his possession, and incidental reliefs.

Procedurally, the District Munsif originally passed a decree in favour of the plaintiff. On appeal the Subordinate Judge held that the decree in O.S. No. 2 of 1910 was binding on the plaintiff and dismissed his suit. The plaintiff preferred the present Second Appeal.

Material facts relevant to title and prior proceedings (as stated in the opinion):

The suit property was originally a karnam service inam and was enfranchised in favour of the plaintiff's paternal uncle; an inam title deed (Ex. D) was issued on 16 October 1905.
Defendants 1 and 2 had mortgaged the suit property (with other property) to the father of defendants 6 and 7 on 26 July 1897. Defendants 6 and 7 brought O.S. No. 2 of 1910 on the mortgage and obtained a decree and proceeded to sale.
In O.S. No. 2 of 1910 the plaintiff's uncle and the plaintiff (then a minor) were made defendants on the ground that they were in possession as lessees. The uncle remained ex parte and the guardian of the plaintiff did not give evidence in that suit.
The plaintiff's present suit followed the death of his paternal uncle and seeks relief on the ground that O.S. No. 2 of 1910 is not binding on him with respect to the plaint property.

Legal Issues Presented

Whether the plaintiff's suit is barred by res judicata by reason of the decision in O.S. No. 2 of 1910.
Whether the title of the plaintiff or his paternal uncle was a matter which "might and ought to have been made a ground of defence or attack" in the former suit (i.e., whether Expln. 4 to Section 11 of the Civil Procedure Code applies).
Relatedly, whether a court in a mortgage suit can adjudicate the paramount (third-party) title when such a person is made a party — i.e., the scope of the court's jurisdiction and discretion to try paramount title in mortgage litigation.

Arguments of the Parties

Respondent's Argument (as presented in the opinion)

It was contended (relied upon by Mr. Lakshmanna) that the plaintiff's suit is barred by res judicata because the plaintiff and his uncle were parties to O.S. No. 2 of 1910 and, by not repudiating their character as lessees and asserting their title in that suit, they should be bound by the decision. The case of Srimanta v. Bindubasini Dasi was strongly relied upon in support of this contention.

Appellant's Argument (as presented in the opinion)

The plaintiff relied upon a title independent of the mortgagor and the mortgagee — specifically a title arising from enfranchisement and the subsequent inam title deed — and contended that the question of his paramount title was not adjudicated in the mortgage suit. Thus, he argued, his present suit was not barred by res judicata.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Venkata Jagannadha v. Veerabhadrayya	Relevant to effect of enfranchisement of karnam service inam (Privy Council view referred to).	The Subordinate Judge's view was opposed to the Privy Council decision in this case; the opinion restates the settled principle that enfranchisement extinguishes prior interests.
Gobardhan v. Munna Lal	Established view that in a mortgagee's suit a person claiming paramount title is not a necessary party and paramount title cannot be litigated in such a suit.	Quoted to reflect an extreme view held by a High Court; the opinion assesses and contrasts this view with other authorities and its own conclusion.
Keshobati Kumari v. Satya Niranjan Chakraberty	Patna High Court statement: "in mortgage suits the paramount title of parties other than the mortgagor or his representative-in-interest cannot be gone to."	Referenced as reflecting the same restrictive view on adjudicating paramount title in mortgage suits, which the opinion calls "an extreme view" and examines against other authorities.
Obalampalli Ramalakshmanna (as cited)	Authority expressing that courts may in proper cases adjudicate the title of a person claiming adversely in a mortgage suit.	Cited to support the proposition that there is jurisdiction to decide paramount title in an appropriate case.
In re Krishnaswami Pathan (as cited)	Similar view to Obalampalli — that paramount title may be adjudicated where appropriate.	Used to show that some judges have held the court may try paramount title in a mortgage suit.
Radha Kunwar v. Reoti Singh	Joinder of parties claiming adverse title in a mortgage suit may be irregular and tend to confusion (Privy Council observation).	Quoted to show that although joinder may be irregular, the court nonetheless recognised limits and potential confusion from joining such third parties.
Jaggeswar Dutt v. Bhuban Mohan Mitra	Leading case holding persons claiming adversely to mortgagor and mortgagee are not necessary parties and a mortgagee cannot make such a stranger a party to litigate that adverse title.	Relied upon as authoritative support for the proposition that such third parties are not necessary and that their inclusion is not mandated; used in forming the court's synthesis of principles.
Srimanta v. Bindubasini Dasi	Held that a person who was a defendant in a mortgage suit and failed to set up a defence (that the mortgage was inoperative) was bound by the decree and could not later avoid it.	Relied upon by the respondent (Mr. Lakshmanna) to argue res judicata; the court distinguished this case on the facts because the plaintiff in the present case relied upon a title independent of the mortgagor and mortgagee.
Hare Krishna Bhowmik v. Robert Watson & Co.	Held that a Court had jurisdiction to try, at the instance of the assignee of the equity of redemption, the issue whether the mortgage was invalid as against him.	Referred to as supporting the proposition that issues of validity of a mortgage vis-à-vis certain parties may be tried in a mortgage-related suit.
Nafar Chandra Kundu v. Ramamala Devi	Held that the general rule barring trial of paramount title in mortgage suits is subject to exceptions.	Used to show that the doctrine barring consideration of paramount title is not absolute.
Bhaja Chowdhury v. Chuni Lal Marwari	Observation that the question whether an issue of paramount title should be tried in the mortgage suit or separately is one of convenience and discretion (not jurisdiction).	Adopted to support the Court's view that adjudication of paramount title is discretionary and not a jurisdictional bar.
Hefner v. N. W. Mutual Life Insurance Co. (cited)	Authority referenced for the proposition about form of litigation and convenience versus jurisdiction.	Quoted indirectly to illustrate the nature of the inquiry as one of convenience/multifariousness rather than jurisdiction.
Nilakant Banerji v. Suresh Chandra Mullick	Discussed circumstances where a person who had accepted a position (e.g., entitled to redeem) could be a necessary party, depending on how he presented himself.	Distinguished on facts and used to explain when a claimant may be bound by conduct in earlier proceedings.
Narayana Nambudripad v. Venkatachela Aiyar	Held that it would not be irregular in a suit for redemption for the mortgagor to join as defendants persons who claim the property adversely.	Used to illustrate the court's discretion regarding joinder and the adjudication of third-party claims in certain mortgage-related proceedings.

Court's Reasoning and Analysis

The court's analysis proceeds in the following steps (as presented in the opinion):

The court first states the accepted legal effect of enfranchisement of a karnam service inam: enfranchisement does away with rights or titles acquired before the date of enfranchisement, and an inam title deed granted after enfranchisement is tantamount to the Government resuming the inam and regranting it free of prior interests. On that basis the court considers it unnecessary to decide whether defendants 1 and 2 had any subsisting interest after enfranchisement.
The court identifies the single operative question: whether the plaintiff's present suit is barred by res judicata because of the decree in O.S. No. 2 of 1910. It frames the specific legal test: whether the title of the plaintiff or his uncle was a matter which "might and ought to have been made a ground of defence or attack in the former suit" (i.e., Expln. 4 to Section 11 of the Civil Procedure Code).
The court surveys authorities on whether paramount title of a third party can be litigated in a mortgage suit. It notes that some High Court decisions state a strict rule that paramount title cannot be adjudicated in a mortgage suit. The court characterises that as an "extreme view" and holds there is nothing in the Civil Procedure Code that prevents adjudication of a third party's title in a proper case.
The court reviews authorities (including Radha Kunwar, Jaggeswar Dutt, and others) and extracts a set of propositions (summarised below). Key points from that synthesis include:
- Persons claiming adversely to mortgagor and mortgagee are not necessary parties to a mortgage suit and may be dismissed if made parties.
- If a person is made a defendant on the ground of possession as a lessee and has not derived title from the mortgagor, that person need not defend title in the mortgage suit.
- The court has jurisdiction to adjudicate paramount title if the third party is made a defendant, but the court may decline to do so on grounds of inconvenience or discretion.
The court focuses on Expln. 4 to Section 11 CPC, which bars raising in a subsequent suit matters which "might and ought to have been made" grounds of attack or defence in the earlier suit. The court emphasises the conjunctive nature of "might and ought" (the text says "and" makes the meaning clear).
Reasoning from the discretionary nature of trying paramount title, the court concludes that where it is discretionary for a court to decide paramount title in a mortgage suit, that matter cannot be said to be one which "might and ought" to have been made a ground of defence or attack in the earlier suit. Thus, Expln. 4 to Section 11 does not apply to bar the present suit.
Applying these principles to the facts, because the question of the plaintiff's title did not have to be raised in O.S. No. 2 of 1910 (it was not necessarily or obligatorily triable in that mortgage suit), the present suit is not barred by res judicata.

Holding and Implications

Holding: The Second Appeal is allowed; the decree of the Subordinate Judge is set aside and the decree of the District Munsif is restored, with costs.

Immediate Consequences for the Parties

The plaintiff's original decree in the District Munsif is restored; the dismissal by the Subordinate Judge is set aside.
The plaintiff is not held to be barred by res judicata from litigating his claim to the plaint property in the present suit.
Costs were awarded in favour of the plaintiff both in the Court below and in the present appeal (the opinion states "with costs here and in the Court below").

Broader Legal Implications (as articulated by the Court)

The court explicitly extracted and recorded several propositions (derived from the case law it reviewed). These propositions, stated in the opinion, are:

A person claiming adversely to the mortgagor and mortgagee is not a necessary party to a mortgage suit; if made a party he can get himself dismissed from the suit.
If the mortgagee makes a person defendant who has not derived title from the mortgagor on the ground that he is in possession of the mortgaged property, such person is not a necessary party and need not defend his title to the property.
In a redemption suit by the mortgagor a person in possession of the mortgaged property can be made a party when it is convenient to adjudicate on his title, because that suit is essentially one for possession.
Any person interested in the redemption of a mortgage is a necessary party to the mortgage suit.
The Court has jurisdiction to adjudicate on the paramount title of a person claiming adversely to the mortgagor and mortgagee if such person is made a defendant to the suit.
The Court is not bound to adjudicate on the paramount title of a third person if it considers it inconvenient or unnecessary to do so; in other words the Court has a discretion in the matter.

The opinion therefore determines that Expln. 4 to Section 11 CPC (the res judicata provision) does not apply where the earlier court had discretion as to whether to decide a third party's paramount title; accordingly, a later suit by a third party claiming an independent title is not automatically barred by the earlier mortgage decree.

Reported conclusion in the opinion: C. K. Appeal allowed.

Show full summary ...

Yennamani Ramanna v. Masunuri Venkatanarayana

The plaintiff's suit is for a declaration that the decree passed in O. S. No. 2 of 1910 is not binding on him so far as the plaint property is concerned and for an injunction restraining the defendants from interfering with his possession and for incidental reliefs. The District Munsif passed a decree in plaintiff's favour. The Subordinate Judge on Appeal held that the decree in O. S. No. 2 of 1910 was binding upon the plaintiff and dismissed his suit. The plaintiff has preferred this Second Appeal.

The suit property was originally karnam service inam. It was enfranchised in favour of the plaintiff's paternal uncle and the title deed Ex. D was issued on the 16th October, 1905. Defendants 1 and 2 had mortgaged the suit property with other property to the father of defendants 6 and 7 on 26th July, 1897, Defendants 6 and 7 brought O. S. No. 2 of 1910 on the mortgage and obtained a decree. They now have brought the property to sale. To O. S. No. 2 of 1910 the plaintiff's uncle and the plaintiff who was then a minor were made defendants on the ground that they were in possession of the property as lessees. The plaintiff's uncle is dead and the plaintiff has brought the present suit for the reliefs above mentioned. The learned Subordinate Judge has considered the question whether defendants 1 and 2 had title to the property and whether that title was in any way affected by the enfranchisement. His view is opposed to the decision of the Privy Council in Venkata Jagannadha v. Veerabhadrayya(1). It is well settled that the effect of enfranchisement of karnam service inam is doing away with the right or title to the property acquired before the date of enfranchisement. The effect of issuing an inam title deed after enfranchisement in favour of a person is tantamount to Government resuming the inam and regranting it to the person in whose favour the title deed is issued. When the Government resumes a service inam all the interests of persons who have acquired title prior to the date of enfranchisement cease to have any effect and the person in whose name the title deed is made out after enfranchisement gets it free of the interests which other persons had in the property before the date of enfranchisement. It is therefore unnecessary in this case to consider whether defendants 1 and 2 had any interest in the property and whether such interest was subsisting after the date of the enfranchisement. The only question that needs consideration in this case is, is the plaintiff's suit barred by res judicata by reason of the decision in O. S. No. 2 of 1910. In that suit there was no adjudication on the title of plaintiff and his paternal uncle. The paternal uncle remained ex parte and the guardian of the plaintiff did not adduce any evidence. They were made parties on the ground that they were in possession as lessees. The question of their title was not specifically raised. The Subordinate Judge held that it was necessary for the plaintiff and his uncle to have repudiated the character of lessees and to have asserted their own right and as they did not do so the present suit is barred by res judicata. The question is whether this case comes within Expl. 4 of Sect. 11 of the Code of Civil Procedure. Is the title of the plaintiff or his uncle a matter which might and ought to have been made a ground of defence or attack in the former suit? If it was not a matter which might and ought to have been made a ground of defence or attack in the former suit, then the plaintiff's suit would not be barred.

The view of the Allahabad High Court is that in a mortgage suit the paramount title of a third party who claims adversely to the mortgagor and mortgagee cannot be adjudicated upon. In Gobardhan v. Munna Lal, Banerjee and Abdul Raoof, JJ., observed at p. 588:

“We must take it as settled law that in a suit brought by a mortgagee to enforce his mortgage a person claiming a title paramount to the mortgagor and the mortgagee is not a necessary party, and the question of the paramount title cannot be litigated in such a suit.”

The same view was held in a recent case by the Patna High Court in Keshobati Kumari v. Satya Niranjan Chakraberty(2) Roe and Coutts, JJ., observed at p. 187.

“It is well settled that in mortgage suits the paramount title of parties other that the mortgagor or his representative-in-interest cannot be gone to.”

This is an extreme view. There is nothing in the Civil Procedure Code which prevents the Court from adjudicating in a proper case upon the title of a person claiming adversely to the mortgagor and the mortgagee. It cannot therefore be said that the Court acts without jurisdiction if it decides upon the title paramount of a third person who is made a party to a mortgage suit. This is the view of Sadasiva Aiyar, J., in Obalampalli Rama lakshmanna and a similar view was held by Krishnaswami Aiyar, J., in In re Krishnaswami Pathan. In Radha Kunwar v. Reoti Singh(3) the Lord Chancellor in delivering the judgment of their Lordships of the Privy Council observed with reference to certain persons who set up adverse claims to the mortgage property and who had been made parties to the mortgage suit:

“Their Lordships think that this joinder of these parties was irregular and that it could only tend to confusion.”

It is clear therefore, that, where the title could be conveniently tried the Court has jurisdiction to adjudicate upon the title paramount in a mortgage suit.

The leading case on this point is Jaggeswar Dutt v. Bhuban Mohan Mitra(4). In that case Mookerjee, J., after an exhaustive examination of English, American and Indian authorities held that persons claiming adversely to both the mortgagor and mortgagee were not necessary parties. He observed at p. 433:

“It is not competent for the mortgagee to make as party defendant, one who claims adversely to the title of the mortgagor and mortgagee. He is a stranger to the mortgagee, has no connection with the mortgage, and as his adverse claim of title cannot in anyway be affected by the mortgage suit, in which he has no interest he cannot be made a party for the purpose of litigating such claim of title. This view appears to us to be well founded on principle and is not only sustained by a fair and reasonable interpretation of the language of Sect. 85 of the Transfer of Property Act, but is as will presently be shown, supported by a considerable body of authorities. The plaintiff therefore cannot very consistently make such a stranger who has no privity with him, a party to his suit to enforce the security.”

The case in Srimanta v. Bindubasini Dasi(5) to which Mookerjee, J., was a party is strongly relied upon by Mr. Lakshmanna for his contention that the plaintiff's suit is barred by res judicata. In that case the plaintiff sued for confirmation of possession upon declaration of title and for an injunction to restrain the execution of the decree. The suit property was an occupancy holding which belonged to a family of Kundus. In execution of a money decree their right title and interest was sold on 15th December, 1909. The purchaser obtained delivery of possession on 30th January following. On 16th February, the purchaser assigned the holding to the plaintiff. On 7th July, 1909 the Kundus had executed in favour of the defendants a mortgage of the holding. The mortgagees instituted a suit to enforce their security and made the plaintiff a party to their suit. The suit was decreed on 27th February, 1914 and the preliminary decree was made absolute on 29th September, 1915. On 14th August, 1918 the plaintiff commenced the present suit on the ground that the mortgage was inoperative because the holding was nontransferable that the decree passed thereon was equally inoperative and that he had acquired a title independent of the mortgage under a settlement from the superior landlord taken on the 1st September, 1910. The lower Courts dismissed his suit. The High Court held that his suit was barred by a previous suit. Mookerjee, J., observed at p. 185:

“Here the plaintiff was a defendant in the mortgage suit. He had a two-fold character. As purchaser of the equity of redemption, he was properly before the Court; as settlement-holder from the superior landlord, he could set up a defence that the mortgage could not be enforced against the property in his hands. He did not take that defence, and the result was that a decree was made for sale of the mortgaged property in his presence. The decree is operative against him and he will be bound by the result of the sale in execution. In the present litigation, he seeks to avoid, the decree and to make it inoperative, though it was passed in his presence and is obligatory upon him. Clearly such a course is not permissible . . .”

In that case the plaintiff contended that the mortgage itself was inoperative. He should have set up that defence in the mortgage suit itself to which he was a party. Where a person who is not a party to the mortgage but is added as a defendant to a mortgage suit sets up the plea that the mortgage is inoperative he is bound to prove it and if he does not and if a mortgage decree is passed, it must be held that his plea is found against. The case would be different where a third person claims the property as his independently of the mortgagor and mortgagee. It is unnecessary in his case to contend that the mortgage is inoperative for the mortgagor had no title to the property and any transaction by him with regard to the property would not in any way affect the real owner. This case is distinguishable from the present inasmuch as the plaintiff herein relies upon a title independently of the mortgagor and the mortgagee and does not merely contend that the mortgage is inoperative. The cases in Hare Krishna Bhoumik v. Robert Watson & Co., Nafar Chandra Kundu v. Ramamala Debi and Bhaja Chowdhury v. Chuni Lal Marwari do not help the respondent. In Hare Krishna Bhowmik v. Robert Watson & Co. Maclean, C.J, and Banerjee, J., held that the Court had jurisdiction to try at the instance of the assignee of the equity of redemption the issue whether the mortgage was invalid as against him. In Nafar Chandra Kundu v. Ramamala Devi Mookerjee and Teunon, JJ., held that:

“The general rule that a question of paramount title cannot be properly investigated in a mortgage suit is subject to exceptions.”

In Bhaja Chodhury v. Chuni Lal Marwari Mookerjee, J., observed:

“The question is not one of jurisdiction but rather of the form of the litigation and the scope of its enquiry; in other words to use the language of Mr. Justice Gray in Hefner v. N. W. Mutual Life Insurance Co. the question whether this issue should be determined in the present suit to enforce the mortgage or in a separate action was a question of multifariousness or of convenience affecting the discretion only and not the jurisdiction of the Court.”

Nilakant Banerji v. Suresh Chandra Mullick is distinguishable from the present case. In that case one Khogendra applied to be made a party to a mortgage suit. He set up a paramount title to the mortgage property. He was dismissed from the suit with costs. In a subsequent suit Khogendra's representatives set up a right to redeem the mortgage. Their Lordships observed at p. 422:

“If Khogendra had accepted the position of a person who was entitled to redeem, then, so far from his claims not being conveniently tried in that suit he was (apart from the doctrine of lis pendens) a necessary party to that suit, and his claims could not be conveniently or properly tried in any other suit; but, not accepting that position, his claims were tried in that suit so far as concerned the question whether or no he w as entitled to redeem and it was held on his own showing that he was not entitled to redeem, and on that ground he was dismissed.”

His title to redeem having been found against he is not entitled in a subsequent suit to set up the right to redeem the mortgage. In Narayana Nambudripad v. Venkatachela Aiyar it was held that it would not be irregular in a suit for redemption for the mortgagor to join as defendants persons who claim the property adversely to himself.

I think from the above cases the following propositions may be deduced:—

1. A person claiming adversely to the mortgagor and mortgagee is not a necessary party to a mortgage suit. If he is made a party he can get himself dismissed from the suit.

2. If the mortgagee makes a person defendant who has not derived title from the mortgagor on the ground that he is in possession of the mortgaged property, such person is not a necessary party and need not defend his title to the property.

3. In a redemption suit by the mortgagor a person in possession of the mortgaged property can be made a party as it would be convenient to adjudicate on his title in that suit for redemption which is really one for possession.

4. Any person interested in the redemption of a mortgage is a necessary party to the mortgage suit.

5. The Court has jurisdiction to adjudicate on the paramount title of a person claiming adversely to the mortgagor and the mortgagee if such person is made a defendant to the suit.

6. The Court is not bound to adjudicate on the title paramount of a third person if it considers it inconvenient or unnecessary to do so; in other words the Court has a discretion in the matter.

Under O. 34, R. 1 all persons having an interest in the mortgage-security or in the right of redemption shall be joined as parties to any suit relating to the mortgage. In Sect. 85 of the Transfer of Property Act the clause is “persons having an interest in the property comprised in the mortgage.” The change in the wording is advisedly made. Only the persona who are interested in the mortgage security or in the right of redemption should be joined as parties. The person who claims a paramount title to the mortgage property need not be made a party. The change in the wording was evidently made to set at rest the conflicting views of the different High Courts on the point. When it is a matter of discretion with the Court to adjudicate or not upon the paramount title of a third person, can it be said that the matter is one which comes within Expl. 4 of Sect. 118. Expl. 4 refers to any matter which might and ought to have been made a ground of defence or attack in the former suit. The word “and” makes the meaning clear. Where it is entirely in the discretion of the Court to allow the paramount title of a third person to be gone into or not it cannot be said that it is a matter which might and ought to have been made a ground of defence or attack in the former suit. Expl. 4 to Sect. 11 Civil Procedure Code does not apply to the case as the plaintiff's title to the suit property need not have been made a ground of defence or attack in the former suit. I hold that the plaintiff's suit is not barred by res judicata by reason of the decision in O. S. No. 2 of 1910.

In the result the Second Appeal is allowed and the decree of the Subordinate Judge is set aside and that of the District Munsif restored with costs here and in the Court below.

C. K.Appeal allowed.

Yennamani Ramanna v. Masunuri Venkatanarayana

Concise Analytical Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Respondent's Argument (as presented in the opinion)

Appellant's Argument (as presented in the opinion)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Immediate Consequences for the Parties

Broader Legal Implications (as articulated by the Court)

Yennamani Ramanna v. Masunuri Venkatanarayana

Comments