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Chandulal v. Bharat Singh
Factual and Procedural Background
This is a second appeal by the plaintiff. The plaintiff had earlier instituted a suit for redemption of a mortgage. A preliminary decree in that suit was passed on 14 February 1927, fixing 14 August 1927 as the date for payment. The plaintiff deposited the entire sum due under the preliminary decree on 8 August 1927 and applied for the preparation of a final decree. The final decree was prepared on 12 November 1927. Possession of the mortgaged property was delivered by the mortgagee only on 17 February 1929. The plaintiff then instituted the present suit claiming mesne profits for the period 8 August 1927 to 17 February 1929. The Courts below dismissed the suit on the ground that it was barred by Order 2, Rule 2 of the Civil Procedure Code (C.P.C.). The appeal before the court under review challenges that dismissal.
Legal Issues Presented
- Whether the plaintiff's suit for mesne profits is barred by Order 2, Rule 2, Civil P.C., because the relevant cause of action arose (or could have been claimed) in the earlier redemption suit.
- If not barred, from which date did a fresh cause of action for mesne profits accrue — from the date of deposit pursuant to the preliminary decree (8 August 1927) or from the date of the final decree (12 November 1927)?
- Whether, under the Civil Procedure Code (Act 5 of 1908, before the 1929 amendment) and the rules governing redemption (Order 34, Rules 7, 8 and 10), mesne profits that arise because a mortgagee refuses to deliver possession after a final decree constitute a fresh cause of action outside the scope of the redemption decree.
Arguments of the Parties
Plaintiff's Arguments
- The plaintiff (through learned counsel) contended that he was entitled to mesne profits from 8 August 1927 — the date when he deposited the amount fixed by the preliminary decree — and not from 12 November 1927 when the final decree was passed.
Other Parties' Arguments
The opinion does not contain a detailed account of the defendant's specific legal arguments; the Courts below relied principally on Order 2, Rule 2, C.P.C., and on certain precedents to hold the subsequent suit barred.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Goswami Gordhan Lalji Maharaj v. Bishambhar Nath (1927 All. 716) | Earlier authority relied on by the Courts below regarding the bar under Order 2, Rule 2. | The court notes that this case has been definitely overruled by the Full Bench decision in Ram Karan Singh v. Nakchhed Ahir (1931 All. 429) and therefore does not govern the present decision. |
| Ram Karan Singh v. Nakchhed Ahir (1931 All. 429) | Full Bench principle clarifying the object of Order 2, Rule 2: to prevent splitting of a single cause of action, not to compel joinder of all remedies arising from distinct causes of action. | The court applies this principle to hold that if the cause of action for the present suit arose after the final decree in the earlier suit, then Order 2, Rule 2 does not bar the subsequent proceeding. |
| Ram Din v. Bhup Singh (1908) 30 All. 225 | Held that a subsequent suit for mesne profits was barred by Order 2, Rule 2 where the mortgagor had alleged the mortgage was satisfied earlier and should have claimed surplus profits in the earlier suit. | The court refers to this case as an example where the cause of action existed earlier and therefore the later suit was barred; it is used to distinguish situations where the right to claim accrued before final decree from those where it accrues after refusal to deliver possession. |
| Kashi Parshad v. Bajrang Parshad (1908) 30 All. 36 | Rule that in a suit for redemption there ought to be a complete and final settlement of accounts up to the time of actual redemption or sale; a mortgagor who obtained a decree and paid cannot later sue for profits which ought to have been taken into account. | The court analyses the facts of Kashi Parshad and concludes that it does not assist the defendant in the present case (distinguishing the factual situation here, where possession was not delivered until after the final decree). |
| Satyabadi Behara v. Harabati (1907) 34 Cal. 223 | Example of a subsequent suit for mesne profits covering the period between date of tender and delivery of possession. | The court notes that the tender in that case was not a deposit pursuant to decree and that the report does not make clear whether delivery occurred before the final decree; accordingly the case does not help the defendant on the present facts. |
| Rukhmina Bai v. Venkatesh (1907) 31 Bom. 527 | Consideration of mesne profits from the date of deposit (under what was then Section 83, T.P. Act) to the date when the mortgagor recovered possession. | The court observes that the decision was under the earlier Transfer of Property Act framework and that the High Court's observations (that profits after a proper tender or deposit are accountable to the mortgagor) are agreeable, but the case does not directly control under the present C.P.C. regime governing final decrees. |
Court's Reasoning and Analysis
The court began by observing that the Courts below dismissed the plaintiff's mesne-profits suit as barred by Order 2, Rule 2, C.P.C., relying on several precedents. It rejected reliance on Goswami Gordhan Lalji Maharaj (1927 All. 716) because that decision had been overruled by the Full Bench decision in Ram Karan Singh v. Nakchhed Ahir (1931 All. 429), which clarified the purpose of Order 2, Rule 2: to prevent splitting a single cause of action, not to force the joinder in one suit of distinct causes of action that give rise to separate remedies.
The court then analysed the statutory scheme under the Civil Procedure Code (Act 5 of 1908, prior to the 1929 amendment), specifically the rules governing redemption suits (Order 34, Rules 7, 8 and 10). It set out the statutory sequence: under Order 34, Rule 7 a successful mortgagor is given a preliminary decree fixing the amount due (normally six months hence); if the amount is paid on or before the fixed date, the plaintiff applies under Order 34, Rule 8 for preparation of a final decree; on preparing the final decree the Court readjusts amounts under Order 34, Rule 10 and, if appropriate, directs re-transfer and orders delivery of possession.
From that statutory structure the court reasoned that the inquiry in a mortgage redemption suit normally addresses accounts and adjustments up to the time of the final decree, and that mesne profits that might accrue because a mortgagee refuses to deliver possession after the final decree fall outside the scope of the redemption decree's internal inquiry. The court emphasised that the contractual mortgagor–mortgagee relationship subsists until the final decree is passed and only then does the relationship shift into the domain of judgment; therefore amounts legitimately due up to the final decree should be included in that final decree. If, however, after a final decree directing delivery of possession the defendant remains in possession, the defendant becomes a trespasser and a fresh cause of action accrues to the plaintiff for mesne profits from the date of the final decree onward.
The court specifically addressed the plaintiff's contention that mesne profits ought to be calculated from 8 August 1927 (date of deposit pursuant to the preliminary decree). It rejected that view, holding that the plaintiff's relationship with the mortgagee continued until the final decree (12 November 1927) and any claim for mesne profits up to that date was barred by Order 2, Rule 2 because such a claim should have been included in the redemption proceedings up to the final decree. Consequently, the court held that a fresh cause of action for mesne profits arose only from 12 November 1927 (the date of the final decree) and continued until the defendant's wrongful retention of possession ceased on 17 February 1929.
The lower courts had assessed mesne profits from 8 August 1927 to 17 February 1929 at Rs. 266-5-6. Because the present court held entitlement only from 12 November 1927 to 17 February 1929, the parties agreed that after a proper deduction the sum due would be Rs. 220. No other points were argued before the court.
Holding and Implications
APPEAL ALLOWED — The plaintiff is entitled to mesne profits only from 12 November 1927 (date of the final decree) to 17 February 1929, and the plaintiff's suit is decreed for Rs. 220 with proportionate costs in all Courts.
Implications: The direct effect of the decision is to set aside the decrees of the Courts below and to decree the plaintiff's suit for Rs. 220 (with proportionate costs). The court's reasoning clarifies that, under the pre-1929 Civil Procedure Code framework applied in this case, a mortgagor's contractual relationship with the mortgagee persists until the final decree and that a distinct cause of action for mesne profits arises only if the mortgagee remains in possession after the final decree's direction to deliver possession. The opinion does not purport to lay down a novel general rule beyond its application to these facts.
1. This is a second appeal by the plaintiff whose suit was dismissed by the Courts below on the ground that it was barred by Order 2, Rule 2, Civil P.C. The facts may be briefly stated. It appears that the plaintiff brought a previous suit for redemption of a mortgage. A preliminary decree in the suit was passed on 14th February 1927, and the date fixed for payment was 14th August 1927. The plaintiff deposited the entire amount due under the preliminary decree on 8th August 1927, and then applied for the preparation of a final decree. The final decree itself was prepared on 12th November 1927, but possession was delivered by the mortgagee on 17th February 1929. The plaintiff then brought the present suit for recovery of mesne profits from 8th August 1927 to 17th February 1929. This suit, as we stated before, was dismissed by the Courts below on the ground that it was barred by Order 2, Rule 2, Civil P.C.
2. The Courts below have relied on three cases of this Court : Goswami Gordhan Lalji Maharaj v. Bishambhar Nath 1927 All. 716, Ram Din v. Bhup Singh (1908) 30 All. 225 and Kashi Parshad v. Bajrang Parshad (1908) 30 All. 36. So far as the case reported as Goswami Gordhan Lalji Maharaj v. Bishambhar Nath 1927 All. 716, is concerned, it is enough to say that that has been definitely overruled by the Full Bench case of Ram Karan Singh v. Nakchhed Ahir 1931 All. 429. It was pointed out therein that the object of Order 2, Rule 2 is the prevention of the splitting up of one cause of action and not to compel the plaintiff to seek all the remedies which he can claim against the same defendants on account of several causes of action in one and the same suit. It is therefore clear that if the plaintiff obtained a cause of action for the present suit after the final decree in the previous suit was passed, then there is nothing in Order 2, Rule 2, which disentitles him from bringing the present suit. We have got to decide this case on the Civil Procedure Code, Act 5 of 1908, before its amendment in 1929. Under Order 34, Rule 7, in a suit for redemption if the plaintiff succeeds, the Court shall pass a decree ordering that an account be taken of what will be due to the defendant for principal and interest on the mortgage and for his costs of the suit, if any, awarded to him on the day specified in the decree which ordinarily is six months from the date of the preliminary decree. This amount is fixed and the plaintiff is directed to pay the same. If the plaintiff pays this amount on or before the date fixed, then the plaintiff applies under Order 34, Rule 8 for the preparation of a final decree. The Court when preparing the final decree has got to readjust the amount finally under Order 34, Rule 10, and if any legitimate sums are due to either party, the Court makes proper orders and directs the defendant to re-transfer the mortgaged property to the plaintiff, and if necessary, orders the defendant to put the plaintiff in possession thereof.
3. It would therefore appear that there is no provision for taking into consideration any mesne profits that might become due to the plaintiff by the failure of the defendant mortgagee to deliver possession. Indeed that question would be outside the scope of the inquiry in a mortgage suit for redemption. Any amounts that may be payable to either of the parties before the passing of the final decree will of course, be taken into consideration, but it cannot be in the contemplation of the Court that the defendant mortgagee will not deliver possession of the mortgaged property to the plaintiff after the passing of the final decree. If therefore the defendant remains in possession of the property even after a decree of the Court directing him to deliver possession of the property to the plaintiff, then the defendant is a trespasser and a fresh cause of action accrues to the plaintiff.
4. It is contended by the learned Counsel for the plaintiff that he is entitled to mesne profits from 8th August 1927, the date when he deposited the amount fixed by the preliminary decree and not from 12th November 1927, when the final decree was passed. We are of opinion that the relationship of a mortgagor and mortgagee subsisted till the passing of the final decree. The suits continued up till the passing of the final decree and the contractual relationship between the parties passes from the domain of a, contract into the region of a judgment only after the final decree has been passed, and the rights of the parties have to be adjusted finally up till that date and any amount due to either party ought to be included at the time of the passing of the final decree and the plaintiff's claim for mesne profits up to that date will be barred under Order 2, Rule 2. We are therefore of the opinion that the plaintiff is entitled to mesne profits from 12th November 1927, and not from 8th August 1927
5. It now remains to consider certain cases which have been cited before us. In Kashi Parshad v. Bajrang Parshad (1908) 30 All. 36, Richards, J., held that in a suit for redemption there ought to be a complete and final settlement of all accounts between the mortgagor and the mortgagee right up to the time of actual redemption or sale, as the case may be. A mortgagor therefore who has obtained a decree for redemption and paid in what was found by the decree to be due from him cannot subsequently sue for profits realized by the mortgagee in possession which might and ought to have been taken into account at the time of passing the decree. It appears that a decree for redemption was obtained on 17th December 1902, but the amount for redemption was increased on appeal on 3rd February 1903. The plaintiff then paid what was due according to the latter decree and got possession sometime in the earlier part of 1903. He brought a suit to recover certain mesne profits for the period beginning from August 1902 to March 1903. The, claim embraced the amount due prior to the passing of the decree on 3rd February 1903, and it is obvious that this should have been claimed in the earlier suit. This case therefore does not in any way help the defendant. In Ram Din v. Bhup Singh (1908) 30 All. 225, the plaintiff brought a suit for redemption on the allegation that the mortgage was satisfied in 1874. The suit was decreed on 13th May 1906, without payment. The plaintiff then brought a suit for recovery of mesne profits from 1874. It does not appear from the reports as to up to what period exactly the claim was made, but it was held that the claim was barred by Order 2, Rule 2. It is clear that as in the earlier suit the mortgagor had alleged that the mortgage money had been paid by the usufruct in 1874, he should have claimed for surplus profits from 1874 in the suit itself and his subsequent suit was clearly barred. Their Lordships said that the right to claim the surplus profits is synchronous with the right to claim possession of the mortgaged property, and to hold that the cause of action for claiming excess collections accrues when the mortgage-debt has been satisfied is inconsistent with the principles on which the law of redemption is based. In Satyabadi Behara v. Harabati (1907) 34 Cal. 223, the subsequent suit for mesne profits was for the period between the date of the tender and the date of the delivery of possession to the mortgagor.
6. The date of the tender was not the date of deposit in pursuance of the decree, but the date when the mortgage money was tendered to the mortgagee outside the Court before an institution of the suit and it does not appear from the reports as to whether delivery of possession was made soon after the final decree or even before the final decree and that case, therefore, does not help the defendant. In Rukhmina Bai v. Venkatesh (1907) 31 Bom. 527, it appears that the subsequent suit for mesne profits was for the period from the date of the deposit to the date when the mortgagor recovered possession of the mortgaged property. The date of the deposit was the date mentioned in Section 83, T.P. Act, that is, prior to the institution of the suit for redemption. The earlier suit was decreed on 27th May 1903, and the plaintiffs obtained possession on 15th July 1903. The claim for mesne profits was from the date of the deposit under Section 83 to 15th July 1903, when the plaintiffs got possession of the property. It might therefore be said that the subsequent suit included a short period of about two months after the passing of the decree. The attention of the learned Judges of the High Court does not seem to have been directed to this, short period and they seem to have considered the right of the plaintiff to obtain mesne profits after the date of the deposit under Section 83 and in that connexion they observed that the profits derived by the mortgagee after a proper tender is made or after the amount due has been deposited in Court, are profits for which he is to account to the mortgagor in virtue of a liability tacked on, so to say, by the statute to the mortgage contract, and as such, a claim to them by the mortgagor is one arising from and connected with his right to redeem or recover possession of the property. With this observation we are in agreement. Moreover, the case was decided under the old Transfer of Property Act before the Civil Procedure Code of 1908.
7. Under the present Civil Procedure Code, the suit continues up till the preparation of the final decree and an analysis of the various provisions to which reference has been made in an earlier part of our judgment shows that a fresh cause of action accrues to the plaintiff when the defendant even after the direction contained in the final decree refuses to deliver possession, and we are therefore of the opinion that the plaintiff is entitled to mesne profits from 12th November 1927, to 17th February 1929, because during that period the possession of the defendant was that of a trespasser. The Courts below found that the mesne profits, from 8th August 1927, to 17th February 1929, amount to Rs. 266-5-6. As we are holding that the plaintiff is not entitled to mesne profits from 8th August 1927, but from 12th November 1927, a deduction has got to be made and parties are agreed before us, that after a proper deduction, the sum due to the plaintiff, would be Rs. 220. No other point has been argued before us.
8. The result is that we allow this appeal, set aside the decrees of the Courts below, and decree the plaintiff's suit for Rs. 220 with proportionate casts in all Courts.
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