Bookmark
PDF
Share
CaseIQ

Joti Lal Sah And Others v. Sheodhayan Prashad Sah And Others

Patna High Court

Mar 23, 1936

Judgment

Subsequent
References

CaseIQ

Smart Summary (Beta)

Judgment Summary — Rowland, J. (with Agarwala, J. concurring)

Factual and Procedural Background

The plaintiff instituted three analogous suits seeking (1) a declaration of his right of redemption of properties subject to usufructuary mortgages in favour of predecessors of the principal defendants and (2) alternatively, an accounting and a fixed time for deposit of the amount required for redemption. The Munsif dismissed the suits on the ground of res judicata. On appeal the Subordinate Judge dismissed the appeals on the ground that they were not maintainable at the instance of the plaintiffs. During the pendency of the litigation the whole equity of redemption vested, by virtue of a partition, in Parmeshar Prashad Sah who was impleaded as defendant 8; his application to be transferred as an appellant (i.e., substitution) and to be allowed to maintain the appeals was rejected. The plaintiffs argued in the second appeal that the suits ought to have been tried on the merits.

Legal Issues Presented

Whether the suits were barred by the doctrine of res judicata given prior redemption suits in 1914 that had fixed amounts and given periods of grace.
Whether the plaintiff was required to proceed by way of application under Section 47 CPC rather than by instituting a fresh suit.
Whether the appeals were maintainable by the plaintiffs after the devolution of the equity of redemption to Parmeshar Prashad Sah, and whether Parmeshar should have been allowed to be substituted as appellant under Order 22, Rule 10 CPC.
Whether the dismissal of the suits because minor defendants were struck off for want of prosecution was fatal to the plaintiffs' claims if those minors had no interest in the mortgage property.

Arguments of the Parties

Plaintiff's (Appellant's) Arguments

The plaintiff sought declaration of a continuing right of redemption, asserting that mortgage money had been satisfied by usufruct and, in the alternative, sought an account and a fixed time for depositing the amount necessary for redemption.
The plaintiff contended the suits should be tried on merits in the second appeal (i.e., that second appeals should not have been dismissed without trial on the merits).
The plaintiff argued that the minor defendants who had been struck off for want of prosecution had no interest in the mortgage property and hence were not necessary parties, so the suits should not have failed for that reason.

Respondents' (Defendants') Arguments

Res judicata: respondents contended that prior suits (Nos. 335 and 354 of 1914) between predecessors in interest resulted in decrees fixing the amounts for redemption and giving a period of grace, and that, in default of payment within that time, the right of redemption had been extinguished.
Procedural route: respondents suggested the plaintiff should have proceeded by way of application under Section 47 of the Civil Procedure Code rather than by instituting fresh suits.
Maintainability after devolution: respondents objected to the appeals being maintained by the plaintiffs on the ground that the plaintiffs had parted with their interest in the property (by the partition) and hence the appeals were not maintainable at their instance.

Position of Parmeshar Prashad Sah / Successor-in-Interest

By compromise in a partition suit, the mortgage properties were assigned to Parmeshar (compromise effected 25 July 1931; decree dated 15 September 1931). Parmeshar sought to be transferred as appellant and to maintain the appeals; that application had been rejected below.
The opinion notes the legal consequence that a plaintiff may continue litigation even after devolution of interest, or alternatively the successor-in-interest may be substituted under Order 22, Rule 10 CPC (the text states Parmeshar may make a fresh application under O.22 R.10 to the Munsif).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Section 60, Transfer of Property Act	Declares the mortgagor's right to tender mortgage money and redeem, "provided that the right ... has not been extinguished by act of the parties or by decree of a Court."	Used to support the conclusion that the mortgagors' right of redemption subsists because no decree was passed extinguishing the right.
Order 34, Civil Procedure Code (R.5 and R.8)	Preserves the mortgagor's right of redemption in a suit for sale until actual confirmation of sale (R.5) and in a suit for redemption until mortgagee obtains a final decree debarring redemption (R.8).	Cited to show procedural protections preserving the right to redeem and to note that no final decree debarring redemption had been applied for or passed.
25 Mad 300 (Madras High Court)	Supports view that Section 47 application may be appropriate, but distinguishes cases where foreclosure or sale in default of redemption was directed (so not applicable where no such direction existed).	Observed that this Madras decision does not apply to the facts before the court because it concerned cases with foreclosure/sale directions; therefore it does not control the present disputes.
24 All 44 (Full Bench, Allahabad High Court)	Held that issues decided in a prior redemption suit are res judicata only as to matters actually decided; a subsequent suit can raise fresh issues (e.g., account since prior decree) which are not res judicata.	Adopted as a correct view: the Court relied on this Full Bench authority to hold that the present suits were not wholly barred by res judicata because fresh issues (accounts since the earlier decree) remained to be tried.
22 WR 172 (Calcutta decision)	Explained that the substantial cause of action in a subsequent suit may be the state of accounts arising since the earlier suit's date, constituting a fresh cause of action.	Quoted to support the proposition that account matters arising after the prior decree form a new cause of action and are not covered by res judicata.
43 Bom 334 (Full Bench, Bombay High Court)	Held a second redemption suit is bound by the previous decree as to accounts up to that decree date, but the second suit must ascertain amount due at date of second suit and give consequential relief.	Cited to corroborate the view that earlier decrees bind only as to matters up to their date; the Court relied on this approach in ordering remand for accounts on the merits.
47 All 250 (Privy Council; Lord Atkinson)	Distinguished the res adjudicata "res" in an earlier suit from later claims (e.g., accounts since an earlier date); indicates that matters decided cannot be re-opened but subsequent rights or accounts are different res.	Quoted to reinforce the conclusion that what was decided in the earlier suit did not preclude adjudication of accounts and rights arising after the earlier decree.
S. 2, Act 8 of 1859	Referenced in the Calcutta decision quoted to define "substantial cause of action" for purposes of res judicata analysis.	Used as part of the explanatory quotation showing that a fresh state of accounts since the prior decree constitutes a fresh cause of action.
20 CLJ 107	Holds that a plaintiff who has instituted litigation may prosecute it to its conclusion notwithstanding devolution of his interest; alternatively the successor may be substituted under Order 22, Rule 10.	Applied to reject the respondents' objection that the appeals were not maintainable because the plaintiffs had parted with their interest; supported the court's view that suits may continue in the name of the original plaintiff for the benefit of the successor.

Court's Reasoning and Analysis

The Court proceeded in two principal strands of analysis: (A) res judicata and the subsistence of the right of redemption; and (B) maintainability and substitution following devolution of interest.

A. Res judicata and right of redemption

The Court examined the prior redemption suits (Nos. 335 and 354 of 1914) which had resulted in decrees fixing amounts and granting a period of grace. The respondents argued that failure to pay within that period extinguished the mortgagors' right to redeem.
The Court observed that Section 60, Transfer of Property Act, protects the mortgagor's right to tender the mortgage money and redeem unless that right has been extinguished by the parties' act or by a court decree. The earlier decrees did not include any order expressly extinguishing the right of redemption.
The Court referred to Order 34 CPC (R.5 and R.8) which preserves redemption rights in suits for sale or in redemption suits until confirmation of sale or until a final decree debarring redemption is obtained; the Court noted that no such final decree had been applied for or passed here.
Drawing on the Full Bench decisions of Allahabad and Bombay, and on the Calcutta and Privy Council authorities, the Court emphasized that matters adjudicated in the earlier suits (accounts up to the earlier date, interest, etc.) are res judicata only to the extent actually decided, but that fresh matters (notably the state of accounts and rights arising since the earlier decree) constitute a distinct issue not previously litigated and therefore not barred by res judicata.
Accordingly, the Court concluded that the Munsif erred in dismissing the entire suits as barred by res judicata; instead, the mortgagors retained a subsisting right to redeem and the Court below should have proceeded to work out the accounts and adjudicate the then-existing rights.

B. Maintainability after devolution of interest and necessary parties

The Munsif had also dismissed the suits because minor defendants had been struck out for want of prosecution. The plaintiffs asserted those minors had no interest and were not necessary parties; the Court noted that if minors had no interest the suits need not fail, but the defendant could raise an issue as to whether the minors were necessary parties.
As to the objection that the appeals were not maintainable because the plaintiffs had parted with their interest (the equity of redemption having been assigned to Parmeshar by compromise/decree in a partition suit), the Court relied on the principle (cited in 20 CLJ 107) that a plaintiff may continue litigation after devolution of interest for the benefit of the successor; alternatively the successor may be substituted under Order 22, Rule 10 CPC.
The Court observed that Order 22, Rule 10 gives the court discretion to allow substitution but that leave should not be unreasonably refused. The Court declined to make a substitution order on appeal but left open Parmeshar's right to apply afresh to the Munsif under O.22 R.10.

Holding and Implications

Holding: The Court set aside the decisions of both Courts below and ordered that the suits be remitted to the Munsif for disposal on the merits. The Court held that the Munsif erred in dismissing the suits in their entirety on the ground of res judicata and that the plaintiffs' appeals were not necessarily incompetent merely because they had parted with their interest in the property.

Consequences and immediate implications:

The suits will be re-tried on the merits by the Munsif, with the Court bound to respect the earlier 1914 decrees as to matters that were actually decided in those decrees (i.e., accounts up to the earlier decree date), but to determine afresh the account and rights arising since that date.
Parmeshar Prashad Sah is at liberty to make a fresh application for substitution under Order 22, Rule 10 CPC to the Munsif; the appellate Court did not itself substitute him but left the matter to the trial court's discretion.
Costs: the costs of the appeal and the second appeal were ordered to be borne by the defendants; costs of the first Court shall abide the result.
No broader precedent was stated to be created by this opinion beyond the application of cited authorities; the decision primarily sets aside the dismissals below and remits the suits for merits adjudication.

Disposition: Suits remanded.

Judge: Rowland, J. (Agarwala, J. concurred). R.W/R.K. (notations in original opinion).

Show all summary ...

Rowland, J.:— These three second appeals arise out of three analogous suits in which the plaintiff claimed a declaration of his right of redemption of properties covered by usufructuary mortgages in favour of the predecessors of the principal defendants. The plaintiff alleged that the mortgage money had been satisfied by the usufruct of the properties and claimed in the alternative that an account be taken and the plaintiff given a fixed time for depositing the amount. The suits were dismissed by the Munsif as being barred by the principle of res judicata and the appeals were dismissed by the Subordinate Judge on the ground that they were not maintainable at the instance of the plaintiffs. During the pendency of the litigation the whole equity of redemption in the mortgage properties had become vested by virtue of a partition in Parmeshar Prashad Sah who had been impleaded as a defendant in the suits. His application to be transferred as an appellant, and to be allowed to maintain the appeals, was rejected. In second appeal it is contended that the suits should have been tried on merits.

2. I take first the question of res judicata. The predecessors in interest of the plaintiffs brought suits 335 and 354 of 1914 for redemption of these very mortgages on similar allegations. The suits ended in decrees fixing the amount which was to be paid by the plaintiffs to redeem the mortgages and giving a period of grace for payment. It is contended for the respondents that payment not having been made within the stated time the right of redemption is extinguished. Section 60 of the Transfer of Property Act, declares the right of a mortgagor to tender the mortgage money and redeem the mortgage “provided that the right conferred by the section has not been extinguished by act of the parties or by decree of a Court.” The decision in the previous suits affirmed the mortgagor's right of redemption and did not couple with this declaration any order directing the right of redemption to be extinguished in default of payment. O. 34 of the CPC, preserved the right of redemption even in a suit for sale until the actual confirmation of the sale (R. 5); and in a suit for redemption until the mortgagee has applied for and obtained a final decree debarring the mortgagor from his right to redeem (R. 8). Whether such a final decree can at all be passed in connection with an usufructuary mortgage I need not examine here. It is sufficient to say that no such final decree has been applied for or passed. Therefore the mortgage subsists and the equity of redemption is still alive.

3. It was then suggested for the respondent that the plaintiff should have come by way of application under Section 47 of the CPC, and not by a fresh suit. The contention receives some support from the decision of the Madras High Court in 25 Mad 300(1), but that decision expressly distinguishes the cases in which there had been a direction for foreclosure or sale in default of redemption from cases in which there has been no such direction; so that this Madras decision has no application to the facts before us even if it be accepted to be good law. A different and in my opinion more correct view of the law was taken by the Full Bench of the Allahabad High Court in 24 All 44(2). Knox, A.C.J, observed:

It is true that where a Court has once adjudicated upon a mortgagor's right to redeem, so many of the issues as bore upon that, and were heard and determined, become res judicata and cannot be re-opened, but unless there has been a determination that the mortgagor has no right to redeem, there would still remain one other issue in a subsequent suit which would not be res judicata, and which would have to be heard and determined. In a second suit for redemption there would always be the question to be tried whether the plaintiff has or has not a right to redeem reserved to him by law until the mortgagee has applied for an order for sale. This issue would naturally not have been, and could not have been, in issue in the former suit;

and Aikman, J., in the course of his judgment cites the following passage from the Calcutta decision in 22 WR 172(3):

It seems to us plain that the principal cause of suit is the relation which subsists between the parties as mortgagor and mortgagee, and the consequent right on the part of the mortgagor at all reasonable times to ask for an account from the mortgagee …. Now the former suit effected an adjustment of accounts up to the date of 18th April, 1868. The substantial cause of action within the meaning of S. 2, Act 8 of 1859 in the present suit, that which the plaintiff desires to have heard and determined, is the state of accounts which has arisen since 18th April, 1868—obviously and entirely a fresh cause of action. The matter which the Court is asked in this suit to hear and determine, is a matter which has arisen and come into being since the matter of the last suit was heard and determined.

4. To the same effect was the decision of the Full Bench of the Bombay High Court in 43 Bom 334(4), Scott, C.J, observed:

A second redemption suit must recognize the binding effect of the previous redemption decree nisi in so far as it settles the accounts up to the date of that decree, and the duty of the Court in the second suit would be limited to the ascertainment of the amount due at the date of the second suit or decree and to give such consequential relief as the law permits.

5. This view and these observations are more consistent than the Madras view with what was said by Lord Atkinson in delivering the judgment of the Privy Council in 47 All 250(5) which (though the subject matter of that litigation may not be entirely on all fours with the present suits) is nevertheless pertinent:

One asks oneself what was the res that was adjudicated upon, either on 25th November, 1903, or in the appellate Court on 3rd July, 1906? The things in dispute in the first case were: (1). the right of the plaintiffs to recover immediate possession of the land in suit; (2) the amount of dower and (3) the rate of interest. The two latter matters have been decided in that suit and cannot be re-opened. The suit out of which this appeal arises only asks for an adjudication as to the account since 1903. The right to get immediate possession of land at the date when a suit to recover it is, in fact, instituted, is a wholly different thing, a wholly different res from the right to recover it at some future time, and possibly under wholly altered circumstances.

6. I have no doubt that the Munsif was in error in dismissing the entire suit as barred by res judicata. He should have held that the mortgagors had a subsisting right to redeem after having the state of account as between them and the mortgagees worked out by the Court. In dealing with the account the Court would of course be bound to respect the decision in the 1914 litigation on any questions in the present litigation which were identical with questions previously decided.

7. I now turn to the question of maintainability. The Munsif had given another reason for dismissing the entire suits, namely, that they had been dismissed against the minor defendants for want of prosecution. It was the plaintiff's case that these minor defendants had no interest in the mortgage property and were not necessary parties. If that was so the suit need not fail because of their being struck off. But the defendant would be entitled if so advised to raise an issue whether these minor defendants in fact had an interest and were necessary parties in whose absence the suit could not be decreed. This alleged defect is not referred to in the judgment of the Subordinate Judge which proceeds on another ground. At the time of the institution of the present suits there was pending a partition suit in the Court of the Subordinate Judge, First Court, Chapra, affecting properties of the family of the plaintiff. By a compromise in that suit the mortgage properties of the present litigation were assigned to Parmeshar Prasad Sah who was impleaded in these suits as defendant 8. The compromise agreement was effected on 25th July, 1931. The present suits were dismissed on 14th August, 1931. The decree passed on compromise in the partition suit was dated 15th September, 1931, and the appeals by the plaintiffs were presented on 19th September, 1931. The respondents' objection to the appeals was that they were not maintainable at the instance of the plaintiffs because the plaintiffs had parted with their interest in the property. This does not appear to be a correct view of the law. The true position is as explained in 20 CLJ 107(6), that the plaintiff who has instituted a litigation may prosecute it to its conclusion notwithstanding a devolution of his interest in the property. The litigation will continue in his name for the benefit of his successor. In the alternative the Code of Civil Procedure, O. 22, R. 10 provides that by leave of the Court the successor in interest may get himself substituted as plaintiff. This is a provision against the danger that the original plaintiff being no longer interested in the proceedings may not vigorously prosecute them or may even collude with the adversary.

8. In such a case the successor-in-interest who has not got himself substituted is bound by the decision and has no remedy. No doubt O. 22, R. 10 gives the Court a discretion in allowing or refusing such an application by the successor-in-interest, but leave should not be unreasonably refused. It is not necessary for this Court to pass any order regarding Parmeshar's application under O. 22, R. 10. The order that I propose is that the decisions of both the Courts below be set aside and the suits remitted to the Munsif for disposal on the merits.

9. It will be open to Parmeshar to make a fresh application under O. 22, R. 10 to the Munsif. The costs of the appeal and second appeal will be borne by the defendants. The costs of the first Court will abide the result.

10. Agarwala, J.:— I agree.

R.W/R.K

11. Suits remanded.