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Court Opinion Summary — Redemption of Mortgage (Appeal)

Factual and Procedural Background

In 1913 three brothers — Sarat Chandra Chatterji, Hem Chandra Chatterji and Gauri Prasad Chatterji — mortgaged a 3 annas 2 pies 8 karant share in Mahal Chanda Khudawan to Defendant No. 1. In 1915 two of the brothers (Surat Chandra and Hem Chandra) sold 2 annas out of their 2 annas 1 pie 12 karant share; the plaintiffs' purchase amounted to a 5 pies share. In 1919 Defendant No. 1 brought a suit on the mortgage joining the three brothers but did not implead the plaintiffs, obtaining an ex parte decree on 24 March 1920 and a final decree for sale on 17 July 1920. In 1921 the mortgage share was sold to Defendant No. 2 (with Defendant No. 3 interested); possession was delivered in March 1921, and on 2 July 1921 Defendants 2 and 3 sold the share to Defendants 4 and 5.

The second suit (the present suit) was a suit for redemption of the whole mortgage. The sole contested point was whether the plaintiffs were entitled to redeem the entire mortgage or only the 5 pies share they had purchased. The Subordinate Judge held that plaintiffs could redeem the entire mortgage (subject to safeguarding other owners' redemption rights) and relied on Yadalli Beg v. Tukaram. The District Judge upheld that finding but deleted an additional direction added by the Subordinate Judge after signing the judgment. This appeal followed.

Legal Issues Presented

  1. Whether the plaintiffs, who hold a 5 pies share acquired from mortgagors who were later sued on the mortgage without impleading the plaintiffs, have a right to redeem the entire mortgage or only the portion equal to their purchased share.
  2. Whether a judgment or direction added by the Subordinate Judge after signing the judgment could be retained or must be deleted (i.e., the effect of post-signature alteration of judgment and the applicability of review or correction under the Code of Civil Procedure).

Arguments of the Parties

Appellants' Arguments (as urged before this Court)

  • The lower Courts were wrong to allow the plaintiffs to redeem the entire mortgage; plaintiffs should be restricted to redeeming only their 5 pies share.
  • Reliance was placed upon Azimut Ali Khan v. Jowahir Singh and a judgment of Mr. Justice Das in Sheonarain Sahu v. Ram Nirekhan Ojha to support the proposition that, after sale in execution, the auction-purchaser steps into the shoes of both mortgagee and mortgagor and that the mortgage is split; consequently a mortgagor owning only part of the equity of redemption can redeem only that part.

Respondents / Defendants' Position (as presented in the opinion)

  • Defendants 4 and 5 contested the suit on the ground that plaintiffs could not redeem more than the 5 pies share purchased by them.
  • The opinion also records concern that allowing plaintiffs to redeem the entire mortgage might be harsh on Defendants 4 and 5 because they had paid more for the property at subsequent sale than the mortgage debt amounted to.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Yadalli Beg v. Tukaram The Privy Council held that a person who purchased part of mortgaged property and was not impleaded in a mortgage suit could, subject to safeguarding equal redemption rights of others, redeem the entire mortgage unless the mortgage had been extinguished in whole or in part or the purchaser's conduct estopped him from asserting that right. It observed it was not the law that one of several mortgagors cannot redeem more than his own share if others do not object. The Court treated this Privy Council decision as binding and followed it: plaintiffs are entitled to redeem the entire mortgage subject to protection of other co-owners' rights.
Azimut Ali Khan v. Jowahir Singh Establishes that a mortgagee can insist his security, so long as it is entire, shall not be split up and should be redeemed in toto, except where the mortgagee himself has split his security by acquiring a portion of the mortgaged estate. The Court explained that this case does not establish that where the mortgage has been split up a mortgagor cannot redeem more than his share. The Court rejected the appellant's reliance on this precedent as determinative against the plaintiffs, emphasizing that the auction-purchaser did not acquire the whole equity of redemption because the plaintiffs were not impleaded in the mortgage suit.
Sheonarain Sahu v. Ram Nirekhan Ojha (judgment of Mr. Justice Das) Referenced by appellants as authority that should guide the Court toward limiting redemption to the purchaser's share (as argued by appellants). The Court noted the appellants relied on this judgment, but the opinion follows the Privy Council decision in Yadalli Beg v. Tukaram instead; the appellants' contention based on this judgment was not accepted as overriding the binding authority.

Court's Reasoning and Analysis

The Court analysed the issue by first considering the authorities relied upon by the appellants and then applying the binding decision of the Privy Council in Yadalli Beg v. Tukaram.

On the appellants' reliance on Azimut Ali Khan v. Jowahir Singh, the Court observed that Azimut Ali Khan establishes the mortgagee's right to insist on redemption of an undivided security in toto, except when the mortgagee himself has split the security by acquiring a portion. However, the Court emphasised that Azimut Ali Khan does not establish the converse proposition — that a mortgagor, where the mortgage has been split up, cannot redeem more than his share. The Court further stated that an auction purchaser, by purchase in execution, steps into the rights of the mortgagee (i.e., the mortgagee's rights were assigned) but does not necessarily acquire the whole equity of redemption when certain persons (here, the plaintiffs) were not impleaded in the mortgage suit.

The Court reasoned that if the plaintiffs had been impleaded in the mortgage suit, even though they only held a 5 pies share, they would have been entitled to redeem the entire mortgage by paying the whole mortgage debt. To allow the mortgagee (or his purchaser) to obtain a better position by intentionally omitting co-owners from a suit would be inconsistent with the law.

The Court considered Yadalli Beg v. Tukaram dispositive. That Privy Council decision involved a mortgagor who conveyed a part of mortgaged land to purchasers who were not made parties to the mortgage suit; the Privy Council held that the purchasers could redeem the whole mortgage, subject to safeguarding others' equal right to redeem, unless the mortgage had been extinguished or the purchasers were estopped. The present Court treated Yadalli Beg as binding and directed that its authority govern the outcome.

Addressing practical consequences and equitable concerns, the Court rejected the argument that allowing full redemption would be inequitable simply because Defendants 4 and 5 had paid more at purchase than the mortgage debt. The Court held that the nature of the prior decree (foreclosure versus sale) did not alter the legal position established by the authorities cited.

On the procedural point about the Subordinate Judge adding words to his judgment after signature (a direction about calculating and setting off usufruct towards mortgage dues), the District Judge deleted that amendment as material and unauthorized without review. The higher Court allowed the respondents' cross-objection: it concluded the omission by the Subordinate Judge was accidental and that Section 152 CPC (power to correct accidental omissions) could be invoked; the trial court was directed to give appropriate accounting directions and otherwise deal with the matter consistent with the substantive directions given in the opinion. The Court also noted an unexplained surplus realized at sale (realization Rs. 5,101 against decretal debt Rs. 4,179) and left consideration of that matter to the Subordinate Judge.

Holding and Implications

Core Ruling: The appeal is DISMISSED. The plaintiffs have the right to redeem the entire mortgage subject to safeguarding the equal redemption rights of any other persons who have an equity of redemption.

Direct consequences and procedural directions (as ordered in the opinion):

  • The case is to be remitted through the lower appellate Court to the trial Court to ascertain the amount due on the mortgage with interest.
  • The plaintiffs must deposit the ascertained mortgage amount in Court within three months of ascertainment; failure to deposit will result in dismissal of their suit.
  • On such deposit a final decree for redemption will be passed, but possession will not be delivered to the plaintiffs until after the expiry of one week from the date of that decree.
  • If Defendants 4 and 5 consent within that week that their proportion of the total mortgage money due in respect of their 1 anna 2 pies (and odd share) be repaid, and also pay up costs decreed against them and their proportion of other costs (or consent that such sums be paid to plaintiffs out of the total mortgage money), possession of their share will not be delivered to the plaintiffs.
  • If at any time within that week or afterwards the owners of the two annas share (other than the plaintiffs) pay to the plaintiffs their respective portions of the total mortgage money and of the charge under Section 95 (other than amounts recovered as costs from Defendants 4 and 5), those owners' respective shares shall be delivered to them, and the plaintiffs shall either not come into possession of them or shall forthwith make over possession, as appropriate.
  • On the procedural issue of the Subordinate Judge's post-signature addition: the Court allowed the respondents' cross-objection, held that Section 152 CPC could be invoked to correct the accidental omission, and directed the trial Court to give appropriate directions for accounts and other necessary steps. The cross-objection was allowed with costs.

No broader novel legal principle was announced beyond applying the binding Privy Council authority; the decision implements that authority and provides specific directions to protect the rights of co-owners and to complete accounting and deposit procedures necessary for redemption.

Disposition: Appeal dismissed; cross-objection allowed with costs; remand to lower Courts for ascertainment of amounts and implementation of the directions set out above.

    Promotha Nath Mitter v. Ram Kishun Singh

    Adami, J.:— This appeal arises out of a suit in which the plaintiffs sought to redeem a mortgage. In 1913 three brothers, Sarat Chandra Chatterji, Hem Chandra Chatterji and Gauri Prasad Chatterji mortgaged a 3 annas 2 pies 8 karant share in Mahal Chanda Khudawan to Defendant No. 1. In 1915, Surat Chandra and Hem Chandra Chatterji sold 2 annas out of their 2 annas 1 pie 12 karant share to Plaintiff No. 1, to the other plaintiffs and to the pro forma defendants. The plaintiffs' share in the purchase was a 5 pies share. In 1919 Defendant No. 1 brought a suit on her mortgage joining all the three brothers, but she did not implead the plaintiffs. She obtained an ex-parte decree on the 24th March 1920, and a final decree for the sale of the property on the 17th July 1920. In 1921 the entire share was sold to Defendant No. 2, Defendant No. 3 being interested. In March 1921, possession was delivered and on the 2nd July 1921, the Defendants 2 and 3 sold the entire share to Defendants 4 and 5.

    2. The suit out of which this second appeal arises is a suit for redemption of the whole mortgage. The only point which arose in the suit was whether the plaintiffs have the right to redeem the entire mortgage or only the right to redeem to the extent of their 5 pies share. Defendants 4 and 5 contested the suit on the ground that plaintiffs could not redeem more than the share purchased by them that is to say the 5 pies share.

    3. The learned Subordinate Judge held that the plaintiffs had the right to redeem the entire mortgage subject to the safeguarding of the right to redeem which other owners of the equity of redemption still had. He relied on the case of Yadalli Beg v. Tukaram(1).

    4. On appeal the learned District Judge upheld the finding of the Subordinate Judge and dismissed the appeal. He held that a direction added by the Subordinate Judge to his judgment after he had signed it to the effect that, after delivery of possession the usufruct enjoined by the defendants would be calculated and set off towards the dues of debts from the plaintiffs, must be deleted since the Subordinate Judge had no power to add such a direction after he had signed the judgment.

    5. It was strenuously urged before this Court that the lower Courts were wrong in allowing the plaintiffs to redeem the entire mortgage. Mr. Sushil Madhab Mullick relied on the case of Azimut Ali Khan v. Jowahir Singh(2) and on a judgment of Mr. Justice Das in Sheonarain Sahu v. Ram Nirekhan Ojha(3). He argued that the latter case should guide this Court and that the plaintiffs should not he allowed to redeem more than their share. His argument is that by the sale in execution of the mortgage decree the vendors of Defendants 4 and 5 obtained both the rights of the mortgagor and the mortgagee, and by their purchase the mortgage was split up, and having been split up, a mortgagor owning a part of the equity of redemption could only redeem such part as he owned.

    6. Now the case of Azimut Ali Khan v. Jowahir Singh shows that the mortgagee has a right to insist that his security so long as it is entire, shall not be split up, and that he should be redeemed in tpto, except when the mortgagee has himself split up his security by acquiring a portion of the mortgaged estate. That case does not lay down that, where a mortgage has been split up, a mortgagor cannot redeem more than his share in the equity of redemption. What it does lay down is that the mortgagee in such case cannot prevent a mortgagor from redeeming his share only instead of the entire mortgage. Many cases have been cited before us in support of the proposition put forward by the appellants. It is urged that by the auction sale the auction-purchaser stepped into the shoes of the mortgagees and acquired both the right of the mortgagee and the equity of redemption. I am not inclined to uphold the contention in a case like the present one. By the auction purchase the rights of the mortgagee were assigned to the auction-purchaser; he did not purchase the whole of the equity of redemption because the plaintiffs had not been impleaded in the suit on the mortgage. If the plaintiffs had been impleaded in that suit though they had only a 5 pies share, they would have been entitled to redeem the entire mortgage by paying the entire mortgage debt. To agree with the learned advocate for the appellants would be equivalent to stating that though by law the mortgagee is bound to join every mortgagor as a party defendant to his mortgage suit, he can, by refraining from so joining any of the several mortgagors, put that mortgagor who is omitted from the list of defendants in a worse position than he would have been had he been impleaded.

    7. I have no doubt in my mind that the lower Courts were perfectly right in finding that they were bound by the decision in Yadalli Beg v. Tukaram. In that case the owner of 16 fields in Berar mortgaged them to the applicant in 1896. The mortgagor conveyed one of the fields to the respondents in 1899 but the mortgagee brought a suit to enforce the mortgage against the mortgagor alone without making the respondents parties, and obtained a decree by consent. The respondents thereafter brought a suit for redemption, and the question arose whether they were entitled to redeem the whole of the mortgaged property or only the field conveyed to them subject to the mortgage over the whole. It was held by their Lordships of the Privy Council that, subject to the safeguarding of the equal title to redeem of any other person who had a right of redemption, the respondents were entitled to redeem the entire mortgage, unless something had happened to extinguish the mortgage in whole or in part, or unless the conduct of the respondents had estopped them from asserting what would normally have been their rights. Their Lordships observed that it was not the law in India, any more than in England, that one of several mortgagors cannot redeem more than his own share unless the owners of the other shares accept or make no objection, subject to the safeguarding of the rights which those owners might possess. That decision of the Privy Council is binding, and the decision in this suit must follow it.

    8. It is contended that to allow the plaintiffs to redeem the whole of the mortgage will be harsh on the Defendants 4 and 5, since, at their subsequent sale, they paid considerably more for the property than the mortgage debt amounted to. I do not think that the fact that, in the case I have cited above, the suit was a suit for fore closure, whereas in the present case the suit was for sale, makes any difference in the case. I must hold that the lower Courts were quite right in the decision to which they came and that the plaintiffs have a right to redeem the whole of the entire mortgage subject of course to the right of any others, who have an equity of redemption to exercise that right.

    9. In my opinion the appeal should be dismissed with costs; and, in order to safeguard the interests of all the co-owners of the right of redemption, the case should be sent through the lower appellate Court to the trial Court in order that the amount due upon the mortgage with interest may be ascertained, and an order may be passed directing the plaintiff to deposit that amount in Court within three months of its ascertainment. If the plaintiffs fail to deposit the amount their suit will have to be dismissed. On such deposit being made a final decree for redemption will be passed, but possession will not be delivered to the plaintiffs until after the expiry of one week from the date of such decree. If Defendants 4 and 5 consent within that week that their proportion of the total mortgage money due in respect of their 1 anna 2 pies and odd share be repaid, and also pay up the costs of the suit and appeals decreed against them and their proportion of any other costs which would be a charge under. S. 95, or consent that the same be paid to plaintiffs out of the total mortgage money, possession of the share of those defendants will not be delivered to plaintiffs.

    10. If at any time within that week or afterwards the owners of the two annas share, other than the plaintiffs, pay to the plaintiffs their respective portion of the total mortgage money, and of the charge under S. 95 (other than the amount recovered as cost from Defendants 4 and 5), their respective shares shall be delivered to them, and the plaintiffs shall either not come into possession of them or shall forthwith make over possession of them, as the case may be.

    11. After delivery of judgment and its signature by the learned Subordinate Judge, the following words were added by the Subordinate Judge:

    After the delivery of possession the usufruct enjoyed by the defendants would be calculated and set off towards the dues of debts from plaintiffs.

    12. The learned District Judge held that, the alteration being material and no petition for review having been filed, the Subordinate Judge had no power to after or amend his judgment in this way, and he therefore directed the cancellation of the amendment. There is a cross-objection by the respondents against this order of the District Judge and I think this cross-objection must succeed. The omission by the Subordinate Judge was an accidental one; for such direction was clearly necessary and Section 152 of the CPC could be invoked. It will be open to the trial Court to give appropriate directions for accounts of the nature referred to above, and also in other respects as may be necessitated by the directions above given and by the action in respect of them of the various co-owners. I note that, though the mortgage decretal debt was Rs. 4,179, the sum realized at the sale was Rs. 5,101 and the decree-holder received a payment order for the entire sum of Rs. 5,101. It is not clear why the surplus proceeds were paid to him. The learned Subordinate Judge will doubtless consider this. The cross-objection is allowed with costs.

    Macpherson, J.:— I agree.

    13. Appeal dismissed.

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    Comments

    Promotha Nath Mitter v. Ram Kishun Singh
    (Aug 12, 1926)