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citation codes
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  • Rules 2 and 3 of Order XXXIV of the Civil Procedure Code correspond to the old sections 86 and 87 of the Transfer of Property Act, Rules 4 and 5 to sections 88 and 89 and Rules 7 and 8 sections 92
  • Order XXXIV, rules 4 and 5 of the Civil Procedure Code, which repealed sections 88 and 89 of the Transfer of Property Act.
  • section 89 of the Transfer of Property Act corresponding to Order XXXIV, rule 5 of Act V of 1908
  • provisions of the Transfer of Property Act and the Civil Procedure Code,
  • sections 86 to 89, 92 and 93 of the Transfer of Property Act
  • Transfer of Property Act and the Civil Procedure Code
  • section 92 of the unamended Transfer of Property Act
  • sections 83 and 89 of the Transfer of Property Act,
  • TRANSFER OF PROPERTY ACT
  • SECTION 83 TRANSFER OF PROPERTY ACT
  • SECTION 60 TRANSFER OF PROPERTY ACT
  • section 11 of the Code of Civil Procedure
  • CIVIL PROCEDURE CODE
  • section 11 of the Code.
  • Rule 5 of Order XXXIV
  • Order XXXIV, rule 8,
  • Order XXXIV, rule 5,
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
  • Rules 2 and 3 of Order XXXIV of the Civil Procedure Code correspond to the old sections 86 and 87 of the Transfer of Property Act, Rules 4 and 5 to sections 88 and 89 and Rules 7 and 8 sections 92
  • Order XXXIV, rules 4 and 5 of the Civil Procedure Code, which repealed sections 88 and 89 of the Transfer of Property Act.
  • section 89 of the Transfer of Property Act corresponding to Order XXXIV, rule 5 of Act V of 1908
  • provisions of the Transfer of Property Act and the Civil Procedure Code,
  • sections 86 to 89, 92 and 93 of the Transfer of Property Act
  • Transfer of Property Act and the Civil Procedure Code
  • section 92 of the unamended Transfer of Property Act
  • sections 83 and 89 of the Transfer of Property Act,
  • TRANSFER OF PROPERTY ACT
  • SECTION 83 TRANSFER OF PROPERTY ACT
  • SECTION 60 TRANSFER OF PROPERTY ACT
  • section 11 of the Code of Civil Procedure
  • CIVIL PROCEDURE CODE
  • section 11 of the Code.
  • Rule 5 of Order XXXIV
  • Order XXXIV, rule 8,
  • Order XXXIV, rule 5,
Smart Summary

Factual and Procedural Background

The original dispute concerns a suit for redemption of a mortgage. The suit property had been mortgaged usufructuarily to the defendant on 29 August 1904, and the mortgage included a personal covenant to pay. The defendant (usufructuary mortgagee) sued on 2 August 1912 (Original Suit No. 430 of 1912) and obtained a preliminary decree for sale on 14 October 1913 and a final decree on 25 February 1914; no action was taken by him to execute the final decree. While that suit was pending (pendente lite), on 2 September 1912 the same mortgagor mortgaged the property to the plaintiff's father. The plaintiff later sued in Original Suit No. 289 of 1918, obtained a decree for sale in 1918, bought the property at Court auction, and then brought the present suit to redeem the mortgage in favour of the defendant.

The defendant contended that, because the plaintiff's mortgage was pendente lite, the plaintiff had no higher rights than the mortgagor; because the mortgagor failed to redeem under the decree of 1913, the mortgagor — and therefore the plaintiff — is barred by res judicata from redeeming. Both the trial Court and the lower Appellate Court held the suit barred by res judicata. In second appeal Devadoss, J., held that the suit was not barred. The defendant (successful below) filed a Letters Patent appeal against Devadoss, J.'s judgment. The appeal was argued before this Bench by counsel for both parties.

Legal Issues Presented

  1. When a mortgagor has failed within the time fixed in a preliminary decree for sale to pay the amount due and a final decree for sale is obtained, does a subsequent suit for redemption by the mortgagor lie, or is the mortgagor's cause of action barred by res judicata?
  2. Whether the Full Bench decision in Vedapuratti v. Vallabha Valiya Raja (and its articulation of merger/res judicata) remains binding and applicable after the procedural changes effected by the Civil Procedure Code (specifically the replacement of sections of the Transfer of Property Act by Order XXXIV of the Code), or whether those procedural changes remove the basis for applying the Full Bench rule.

Arguments of the Parties

Plaintiff's Arguments (as presented in the opinion)

  • The plaintiff (argued by Mr. C.S. Venkatachariar) contended that the present case differs from the Full Bench decision (Vedapuratti v. Vallabha Valiya Raja) in two important respects: (a) the first suit was a suit by the mortgagee for sale (not a mortgagor's suit for redemption); and (b) changes in the law (the repeal of certain provisions of the Transfer of Property Act and their re-enactment under Order XXXIV of the Civil Procedure Code) mean the Full Bench principles are no longer applicable.
  • The plaintiff argued that under the new procedure (Order XXXIV rules) the preliminary decree is not executable and the relationship of mortgagor and mortgagee continues after the final decree, so that a fresh suit for redemption should be maintainable.

Defendant's Arguments (as presented in the opinion)

  • The defendant contended that the plaintiff's mortgage (being pendente lite) confers no higher rights than those of the mortgagor, and since the mortgagor failed to redeem under the preliminary decree, the mortgagor's (and hence the plaintiff's) right to redeem was merged in the decree and is barred by res judicata.
  • The defendant relied on the Full Bench decision in Vedapuratti v. Vallabha Valiya Raja (and related principles) to show that the right to redeem is a matter in issue in a mortgage suit for sale and is therefore merged in and concluded by the decree in that suit.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Vedapuratti v. Vallabha Valiya Raja (Full Bench) Held that when a decree for redemption (or a decree containing conditional redemption) is passed and not executed, the right to redeem becomes merged in the decree and a subsequent suit for redemption is not maintainable (res judicata). Regarded as the most important and binding authority for the proposition that the right to redeem is a matter in issue in the mortgage suit and is res judicata; the Court follows and applies this decision to hold the present suit barred.
Mallikarjunadu Setti v. Lingamurti Pantula (and related) Majority view that orders absolute are proceedings in execution and that the preliminary decree is the decree to be executed. Referenced to explain the historical procedural position and the nature of preliminary versus final decrees under the old regime.
Ramunni v. Brahma Dattan One of the cases that seemed to favour the view that payment after order absolute was qua mortgagor (i.e., right to redeem remained). The Court stated such views must be held erroneous in light of Privy Council authority (Het Ram v. Shadi Ram).
Bibijan Bibi v. Sachi Bewah Another decision seeming to favour post-order-absolute redemption qua mortgagor. Cited as an example of authority the Court considers inconsistent with Privy Council guidance and therefore incorrect on that point.
Misri Lal v. Mitthu Lal Similar to the above group of cases on post-order-absolute payment/redemption. Noted but treated as erroneous on the question of the nature of post-order-absolute payment.
Het Ram v. Shadi Ram (Privy Council) Interpreted section 83 of the Transfer of Property Act to mean that on an order absolute being made the security and the defendant's right to redeem are extinguished and substituted by the right to a sale conferred by the decree. Used as authoritative support for the proposition that after an order absolute the right to redeem is extinguished (and payments thereafter are those of a judgment-debtor, not a mortgagor).
Adipuranam Pillai v. Gopalasami Mudali Considered the question whether the Court in execution could restore the property to the mortgagor upon payment by the mortgagor; inclined to answer in the affirmative. Cited as indicating that, although payment after an order absolute is qua judgment-debtor, the Court may in execution restore possession — but the Privy Council dictum still supports extinguishment of redemption rights.
Periandi v. Angappa Earlier Madras decision (now said to be inconsistent with Full Bench). Stated to be overruled by the Full Bench insofar as inconsistent with Vedapuratti.
Gan Savant Bal Savant v. Narayan Dhond Savant Referenced in relation to Bombay doctrine of constructive foreclosure by res judicata. Mentioned as part of the canvass of earlier conflicting authorities; used to show the diversity of views across High Courts.
Maloji v. Sagaji Case where second suit (by mortgagee for sale) followed the res judicata principle, holding mortgage merged in and could not be separated from the redemption decree. Referred to support application of res judicata where the first suit affected the mortgage right.
David Hay v. Razi-ud-din (Allahabad) Applied res judicata principle in similar contexts. Noted as another decision following the res judicata approach.
Bapuji Ramchandra v. Guja Malu (Bombay) Applied res judicata in earlier Bombay decisions (later overruled). Mentioned as part of the historical landscape; its previous view was altered by later Full Bench in Bombay (Ramji v. Pandharinath).
Ramji v. Pandharinath (Bombay Full Bench) Took the view that a second suit for redemption would lie (thus contrary to Vedapuratti). Noted as representing the altered Bombay view; the present Court declined to follow it and treated Vedapuratti as correct law for this Bench.
Ranga Ayyangar v. Namyana / Narayana Chariar Where the first decree (obtained before the Transfer of Property Act) resulted in holding the second suit for redemption barred by res judicata. Cited as an instance where the High Court applied res judicata to a prior mortgagee's suit for sale; Court distinguishes some reasoning but regards the outcome as consistent with Vedapuratti.
Rama v. Bagchand (Bombay) Later Bombay view that a subsequent suit for redemption was not barred. Noted as reflecting the Bombay view contrary to Vedapuratti; the present Court did not find it persuasive.
Shah Mehdi Hasan v. Ismail Hasan A case under the present Civil Procedure Code adopting the Bombay view that the suit was not barred. Noted as adopting the contrary view; Court did not follow it.
Shiam Sunder Lal v. Hir Narayan (Allahabad) Adopted the view that a second suit for redemption would lie. Mentioned as part of conflicting authority from another Province; not followed here.
Gokuldoss v. Kriparam (Privy Council, 1873) First suit by mortgagee for sale where the decree gave no legal opportunity to redeem; Privy Council held a subsequent suit for redemption lay in those circumstances. Distinguished by the Court as turning on construction of an unusual prior decree and so not favorable to defendant's position in the present case.
Hari Ravji Chiplunkar v. Shapurji Mormusji Shet (Privy Council) Did not decide whether the mortgagor could fall back on the original mortgage instead of suing for redemption on the decree. Stated to be of no assistance to support the respondent's (plaintiff's) case, because the question was left undecided.
Mahabir Pershad Singh v. Macnaghten (Privy Council) Where mortgagee got decree for sale and mortgagor sued; second suit held barred by res judicata. Referred to as not directly to the point here but consistent with the res judicata approach.
Sri Raja Panama Rao v. Sri Vira Pratapa H.V. Ramachandra Razu (Privy Council) Decree on a simple mortgage did not suggest foreclosure and was interpreted as not extinguishing redemption. Explained in Vedapuratti and the present Court considered it not helpful to the plaintiff.
Faiyaz Husain Khan v. Prag Narain (Privy Council) First decree was for sale with order absolute; plaintiff became auction-purchaser; second suit by auction-purchaser on a second mortgage to redeem was refused — defendant could not resist plaintiff's claim to possession. Used to show that these Privy Council cases do not run counter to the general principles in Vedapuratti.
Sukhi v. Ghulam Safdar Khan (Privy Council) Privy Council held that under altered wording of TP Act and CPC the mortgage was not extinguished vis-à-vis a non-party puisne mortgagee and could be used as a shield. Distinguished: the Court said the decision does not support the broader claim that a mortgagee's decree does not merge the mortgage vis-à-vis parties to the suit; it only allows non-decided rights to be agitated.
Ameenammal v. Meenakshi Reference for the proposition that after a decree in a mortgage suit the parties and their legal representatives cannot maintain any separate suit arising out of the mortgage. Cited to support the "merger into decree" principle and as a test whether the decree provides for every relief obtainable under the mortgage.
Abdul Shaker Sahib v. Abdul Rahiman Sahib Authority about inherent powers of the Court and preliminary decrees for specific performance (analogous to power to extend time in preliminary decrees). Mentioned in the context of possible judicial powers to extend time for redemption under preliminary decrees even if not expressly provided in Order XXXIV, rule 5.

Court's Reasoning and Analysis

The Court's analysis proceeds in two closely related strands: (A) examination of the Full Bench authority (Vedapuratti v. Vallabha Valiya Raja) and the legal principles it embodies; and (B) consideration whether procedural changes under the Civil Procedure Code (Order XXXIV) have deprived those principles of force.

A. Treatment of the Full Bench authority and prior law

  • The Full Bench in Vedapuratti had to decide whether a second suit for redemption is maintainable where an earlier decree for redemption had been passed but not executed (no order absolute for sale obtained). The Full Bench held the right to redeem had become merged in the decree and was therefore res judicata.
  • The Court recalled the operation of the old provisions of the Transfer of Property Act (sections 86–93 as described): under the pre-1908 regime a decree for sale or redemption was conditional and an order absolute could, when obtained, extinguish the mortgagor's right to redeem by statute.
  • The Privy Council's interpretation in Het Ram v. Shadi Ram was pivotal: on an order absolute being made "the security as well as the defendant's right to redeem are both extinguished" and replaced by the right to a sale under the decree. The Court relied on that dictum to reject authorities that supposedly allowed redemption qua mortgagor after order absolute.
  • The Full Bench's essential reasoning was that the right to redeem was "vitally in issue" in the mortgage suit for sale — so vitally that proceedings in that suit might cause permanent loss of the right — and therefore that right was merged in the decree and barred from subsequent litigation by res judicata.

B. Effect of procedural change (Order XXXIV) and present application

  • The Court mapped the old Transfer of Property Act sections to Order XXXIV rules (Rules 2–3 corresponding to old sections 86–87; Rules 4–5 to sections 88–89; Rules 7–8 to sections 92–93) and observed that while the explicit statutory clause extinguishing the security and the right to redeem no longer appears verbatim in Rule 5, that omission is procedural rather than substantive.
  • The Court reasoned that under the new scheme the final decree (rather than the preliminary decree) is the executable decree; consequently, the effect formerly achieved by statutory extinguishment on order absolute is now achieved by the operation of the final decree. Thus, the contingency that could extinguish the right to redeem remains, and the right to redeem continues to be a matter in issue in the mortgage suit for sale.
  • The Court rejected the plaintiff's contention that the change in executability transforms the mortgagor's rights so as to allow a fresh suit: it would be irrational to hold that a final decree revives a right that previously expired under the preliminary decree. The Court emphasized that a mortgagor should not gain a more favourable position by his own neglect (i.e., by failing to obtain a final decree under the preliminary decree's terms).
  • The Court acknowledged a narrow factual concern: where a mortgagee is in possession, obtains a final decree for sale (thereby ending mortgagor's right to redeem) but then declines to proceed to sale, the mortgagor lacks a power to compel sale. The Court noted this is an awkward or harsh consequence but concluded it does not require altering the res judicata principle; it suggested courts might reconsider whether time for redemption under a preliminary decree could be extended in some circumstances, but declined to treat the procedural change as removing the merger/res judicata effect.
  • Privy Council and other authorities that on analysis did not contradict the Full Bench principle were treated as supportive or neutral; those that suggested contrary results were either distinguished on their facts or considered wrongly decided on the point at issue.

C. Conclusion of the Bench (Wallace, J.)

Applying the Full Bench decision and the analysis above, Wallace, J., concluded that the plaintiff's mortgage (being pendente lite) gave no higher rights than the mortgagor, that the right to redeem between mortgagor and mortgagee had been merged in the decree of the prior mortgage suit, and that res judicata barred the present redemption suit. Wallace, J., would reverse Devadoss, J.'s judgment and restore the decree of the lower Appellate Court with costs to the defendant.

D. Separate but concurring analysis (Madhavan Nayar, J.)

Madhavan Nayar, J., likewise applied the principle of Vedapuratti v. Vallabha Valiya Raja. He emphasized that a properly framed preliminary decree contains a conditional direction enabling the mortgagor to pay within the period fixed and thereby obtain a final decree; since the mortgagor failed to obtain that final decree, the right to redeem — having become merged in the decree — cannot be re-opened in a later suit. He rejected the plaintiff's reliance on the procedural change effected by Order XXXIV and on the omission of statutory words that previously spoke of extinguishment, holding that the change of procedure does not affect the res judicata result. He therefore would set aside the decision of the learned Judge (Devadoss, J.) and dismiss the plaintiff's suit with costs.

Holding and Implications

Holding: The Letters Patent Appeal is allowed; the judgment of Devadoss, J., is set aside, and the prior decision of the lower Appellate Court (holding the plaintiff's suit barred by res judicata) is restored. The plaintiff's suit for redemption is dismissed and costs are awarded to the defendant throughout.

Implications

  • Direct effect: The plaintiff (an auction-purchaser who held a pendente lite mortgage) is not permitted to maintain a separate suit for redemption because the right to redeem between the original mortgagor and mortgagee was merged in the earlier mortgage decree and is barred by the doctrine of res judicata.
  • Legal principle reaffirmed: The Court reaffirmed the Full Bench principle in Vedapuratti v. Vallabha Valiya Raja that, where a decree in a mortgage suit adjudicates the right to redeem (whether framed as a preliminary or final decree under the present procedure), that right is a matter in issue in the suit and will be merged in the decree and barred by res judicata as between parties to the suit.
  • Procedural change not dispositive: The Court held that the procedural reforms effected by Order XXXIV of the Civil Procedure Code (creating preliminary and final decrees) do not remove the merger/res judicata consequence; although the mechanics differ, the substantive result remains that the right to redeem can be concluded by proceedings in the original mortgage suit.
  • No new broad precedent created: The judgment applies established authorities (in particular Vedapuratti) to the facts; it does not purport to create a novel rule that departs from the core Full Bench principle, though the Court observed potential judicial avenues (inherent powers or ancillary suits) for addressing particular hardships caused by a mortgagee's delay in bringing a property to sale.

    Thirukona Ellarayyan v. Nakonda Nagaswami Ayyar

    Wallace, J.:— The original suit in this case was a suit for redemption of a mortgage. The suit property was mortgaged usufructuarily to the defendant on 29th August 1904. In the mortgage was also a personal covenant to pay. The defendant sued on 2nd August 1912 in Original Suit No. 430 of 1912 and got a preliminary decree for sale on 14th October 1913 and a final decree on 25th February 1914. No action was taken by him under the final decree. On 2nd September 1912 pendente lite the same mortgagor mortgaged the property to the plaintiff's father. The plaintiff sued in Original Suit No. 289 of 1918 and got a decree for sale in 1918, brought the property to sale and bought it in Court-auction. He now sues to redeem the mortgage. The plaintiff was not a party to the suit of 1912, but the defendant contends that, as his mortgage was pendente lite and the plaintiff, therefore, has no higher eights than his mortgagor, and as the mortgagor did not choose to redeem under the decree of 1913, the mortgagor and therefore the plaintiff is barred by res judicata from redeeming. Both the trial Court and the lower Appellate Court held that the suit was barred by res judicata. In second appeal Devadoss, J., has held that it is not, and against this judgment this Letters Patent appeal is filed. It has been ably argued at length before us by Mr. C.S Venkatachariar for the plaintiff and Mr. T.L Venkatarama Ayyar for the defendant.

    The real question at issue may be shortly stated, but cannot be as shortly answered. It is, when a mortgagor has failed within the time fixed in the preliminary mortgage decree for sale to pay up the amount due under the decree and a final decree for sale has been obtained, does a suit for redemption by him lie or is his cause of action barred by res judicata? There is a long series of decisions, some taking one view and some the other, passed before and under the provisions of the Transfer of Property Act; but there is no direct decision under the present Civil Procedure Code after the repeal of sections 86 to 89, 92 and 93 of the Transfer of Property Act and their re-birth in other form under Order XXXIV of the Civil Procedure Code. The most important case in this Court is the Full Bench decision in Vedapuratti v. Vallabha Valiya Raja, passed under the old provisions of the Transfer of Property Act and the Civil Procedure Code, and, if the principles of that decision have not been reversed by the Privy Council and are still applicable in spite of the changes in the law, that decision is binding on this Bench. Otherwise, the matter is res integra.

    The case with which the Full Bench had to deal was based on a usufructuary mortgage of 1858. There had been a suit and a decree for redemption, the decree being passed under section 92 of the unamended Transfer of Property Act containing a provision for sale of the mortgaged property, if the mortgage amount was not paid, but containing no foreclosure clause. The decree was not executed and the decree amount was not paid, but no order absolute for sale under section 93 was obtained by the mortgagee. A second suit for redemption was then filed and the Full Bench was called on to decide whether in these circumstances the second suit was maintainable. It was held by all the five Judges that, whether or not the relationship of mortgagor and mortgagee subsisted, because of the fact that no order absolute under section 93 had been obtained, and the property, therefore, had not been sold, the cause of action, namely, the right to redeem, had become merged in the decree, and was, therefore, res judicata and no second suit for redemption would lie. We are not pointed to any subsequent decision of the Privy Council which has controverted that decision, and so far as it goes, therefore, it is binding on us. Mr. Venkatachari, however, contends that, even accepting that position, the present case differs from the Full Bench case in two vital particulars which will take it out of the purview of that decision. These differences are, first, that the first suit here on which the decree for sale was obtained was not a suit by the mortgagor for redemption but by the mortgagee for sale, and secondly, that the changes in the law since the Full Bench case render its principles no longer applicable. These two points may be dealt with together as they are intimately connected.

    It is essential to recall the terms of the Transfer of Property Act under which that decision was passed. Under section 88 of that Act, in the event of the plaintiff mortgagee's success in a suit for sale the decree is, first, to take an account and declare the amount due, and secondly, to order that, if the mortgagor pays the amount into Court within the time fixed, he shall be put in possession of the property, and thirdly, to declare that, if the amount is not so paid, the property shall be sold. Section 89 provided that, if the mortgagor pays the amount within the time fixed, he shall get possession, and that, if payment is not so made, the mortgagee shall apply for an order absolute for sale and obtain it and thereupon the mortgagor's right to redeem and the security shall both be extinguished. A decree in a foreclosure suit sections 86 and 87 followed similar lines, and, in default of payment by the mortgagor, the plaintiff was entitled to obtain an order absolute declaring that the mortgagor is absolutely debarred from all right to redeem, and on the passing of such an order the mortgage debt is deemed to be discharged. A decree for redemption under sections 92 and 93 also followed similar lines, and the result of non-payment was that the defendant-mortgagee may apply for an order absolute that the mortgagor is absolutely debarred from all right to redeem, or that the property be sold and on the passing of such order the right to redeem and the security were extinguished. In this Court it was held by the majority of the Full Bench in Mallikarjunadu, Setti v. Lingamurti Pantula, &c., that such orders absolute are not decrees but proceedings in execution. The decree to be executed was what is now styled the preliminary decree, and in such a decree in a suit for sale or redemption the decree, inter alia, directed payment of the money by the mortgagor and delivery thereon of the property by the mortgagee.

    Now, Mr. Venkatachari's first point is this:—

    When the decree for sale was under section 89 and not under section 93 it was open to the mortgagor even after the order absolute for sale to execute that decree so far as it was executable by him and to pay up the mortgage amount, in fact up to the time when the property was actually sold; and he deduces therefrom that the right to redeem was not put an end to by an order absolute for sale under section 89. This has, no doubt, been held in several cases, but it is essential to note that, after the order absolute, payment was open to the mortgagor not qua mortgagor under the provisions of the Transfer of Property Act, but qua judgment-debtor under the mortgage decree under the provisions of the Civil Procedure Code, which permit a judgment-debtor whose property is being sold in execution of a decree to pay up the decree amount at any time before the actual sale, even under certain circumstances after the sale itself. It is true that some of these decisions, for example Ramunni v. Brahma Dattan, Bibijan Bibi v. Sachi Bewah and Misri Lal v. Mitthu Lal seem to favour the view that such payment after the order absolute is made by the mortgagor qua mortgagor in the exercise of the right to redeem, that is, that the right to redeem was still open after the passing of the order absolute for sale. But such a view must be held to have been erroneous since the Privy Council has definitely laid down in Het Ram v. Shadi Ram what the proper interpretation of section 83 of the Transfer of Property Act is. The language does not admit of doubt. Their Lordships say:—

    “The construction which their Lordships put on the language so used is that on the making of an order absolute the security as well as the defendant's right to redeem are both extinguished, and that for the right of the mortgagee under his security there is substituted the right to a sale conferred by the decree.”

    This brings section 89 into line with the clearer wording of section 93 on this point. Therefore any payment made by the mortgagor after the passing of the order absolute for sale is not a payment qua mortgagor in the exercise of the right to redeem, but a payment by a judgment-debtor to avert the sale, in the exercise of a right given him qua judgment-debtor, springing from and dependent on the execution of the decree by the mortgagee. Whether on such payment the Court could in execution restore the property to the mortgagor on the ground that the decree implied that the mortgagee could not have payment except on the condition of restoring the property is an open question which Adipuranam Pillai v. Gopalasami Mudali is inclined to answer in the affirmative. In any case it is quite clear from the Privy Council dictum that under the old procedure both the security and the right to redeem were extinguished by the passing of the order absolute for sale and that the security, so far at least as the parties to the suit were concerned, was absorbed into the decree and had no further existence outside it.

    It follows, therefore, that the opportunity to redeem, given to the mortgagor under the old decree for sale, just as under the old decree for foreclosure or redemption, might be lost for ever if the mortgagee obtained an order absolute under section 87, 89 or 93. When under the decree or in execution of it the opportunity to redeem might in a certain contingency be lost for ever, it is difficult, almost impossible, to say that the right to redeem was not a matter in issue in the suit. It would not, of course, be lost unless the conditions which entailed its lose were fulfilled, but it was certainly a matter in issue; it was so vitally in issue that proceedings in the suit might result in its being lost for ever. This is the sum and substance of the Full Bench decision.

    Now all these sections of the Transfer of Property Act are gone and it is to be decided whether their disappearance involves the disappearance of the ground on which the former decision was based. Rules 2 and 3 of Order XXXIV of the Civil Procedure Code correspond to the old sections 86 and 87 of the Transfer of Property Act, Rules 4 and 5 to sections 88 and 89 and Rules 7 and 8 sections 92 and 93; but the clause under section 39 relating to the extinguishment of the security and the right to redeem has disappeared, and does not appear in Rule 5, though similar clauses are retained in rules 3 and 8. I think, however, it is clear that it does not appear in rule, because it is not necessary. Under the old procedure the preliminary decree which allowed redemption remained the executable decree, and, therefore the right to redeem was not extinguished automatically by the order absolute itself. So it was necessary to enact that on the passing of the order absolute it should disappear. Now the right to redeem embodied in the preliminary decree simply does not appear in the final decree which is now the executable decree. Therefore it disappears when the final decree is passed just as before it disappeared when the order absolute was passed. What was previously effected by direct statutory provision is now effected by procedure. But the contingency abovenoted still remains, namely, that when certain proceedings are taken in the suit after the preliminary decree for sale, the right to redeem is extinguished. In my view, therefore, the right to redeem is still vitally a matter in issue in the mortgage suit for sale. There is no essential change in the law which necessitates any inference that the principles, laid down in the Full Bench case will not still apply. The final decree in its own terms makes it clear that the right to redeem is no longer enforceable under it, for it makes no provision for redemption. It cannot be that the adjudication on the right to redeem which was in issue in the suit and present in the preliminary decree somehow vanishes out of the suit upon the passing of the final decree. Before the final decree was passed, the mortgagor could not file a fresh suit for redemption, because a suit is still pending in which the relief he seeks for is given by the preliminary decree. He cannot by his own neglect attain a better position. I say “a better position,” because obviously if he can in such circumstances file a fresh suit for redemption, he can choose his own time to redeem and is not bound to redeem within the time fixed by the preliminary decree. It seems to me an irrational contention that says in effect that the passing of a final decree resuscitates a right—the right to file a fresh suit for redemption—which expired on the passing of the preliminary decree. The effect no doubt is to enable the mortgagee to force redemption on the mortgagor and to convert his decree for sale into one for foreclosure, but that again is no new factor introduced by the new procedure.

    The only case in which any feature of novelty arises, is when a mortgagee is in possession and has obtained a final decree for sale, which has put an end to the mortgagor's right to redeem, and will not proceed further to bring the property to sale. This is the case now before us and Mr. Venkatachari strongly urges that it puts the mortgagor in an unfair position, since he has under the final decree no power to compel the mortgagee to bring the property to sale. He urges that under the old procedure, where the executable decree was executable by the mortgagor as well as by the mortgagee, the mortgagor could pay up the decree amount at any time, until the property was actually sold. But in 3 practice I see no real innovation. Under the old procedure, the mortgagor could pay up (a) within the time fixed in the decree, then he paid as mortgagor, (b) when the decree was being executed then he paid qua judgment-debtor. He could not, qua mortgagor, have the time fixed in the decree extended (see Vallabha Valiya Rajah v. Vedapuratti, Adipuranam Pillai v. Gopalasami Mudali. Therefore any payment after the time fixed could only be in execution, after the passing of the order absolute when the right to redeem was gone, and he paid only qua judgment-debtor. Such right was then equally as now, dormant unless and until the mortgagee took proceedings in execution. Thus the former right of paying up after the time fixed in the decree is the same and no other than the present right of paying up after the final decree, viz., the right, qua judgment-debtor, to pay up which right is in both cases contingent on the mortgagee proceeding to bring the property to sale, and was not at any time exercisable independently of that contingency. There is no new hardship here, though there is no doubt some hardship, or at least some undue partiality by the law in favour of the mortgagee, who is in possession and elects to be content with having destroyed by a final decree his mortgagor's right to redeem and refuses to bring the property to sale under the final decree.

    It may be that, in view of this, Courts may be open to reconsider the position that the time granted for redemption in the preliminary decree for sale cannot be extended before the final decree (or order absolute) is passed. It is true that Rule 5 of Order XXXIV does not contain a provision similar to that in rules III and IV allowing the Court to extend the time for payment; but it is a power which may well be within the inherent powers of the Court, as in the case of preliminary decrees for specific performance (see Abdul Shaker Sahib v. Abdul Rahiman Sahib or it may be that a suit may be on the decree to compel the mortgagee to bring the property to sale, in view of the fact that a mortgagee, who delays to bring the property to sale, is frustrating the fundamental principle of the mortgage contract, and of the right to redeem as defined in section 60 of the Transfer of Property Act both now merged in the final decree, that his ultimate claim is not to the property but to his money and to the recovery of that money by sale of the mortgaged property. However that may be, I am clear that the new procedure neither affects nor requires any change whatever from the old position, laid down in the Full Bench Case, that the right to redeem was in issue in the mortgage suit for sale and is therefore res judicata when a decree in that suit was obtained. It may be noted incidentally that two of the learned Judges in the Full Bench Case were of opinion (vide their judgments in the Full Bench Case, 25 Mad., 244) that the order absolute for sale was a decree, in fact a final decree, and yet that view did not dissuade them from holding that the second suit for redemption did not lie, even though in their view the first suit had only reached to the stage of a preliminary decree, since no order absolute had been obtained. In the Full Bench case, the right to redeem had not been extinguished by any order absolute, and therefore subsisted. Nevertheless the Full Bench were unanimous that the right to redeem was merged in the decree and was res judicata. My conclusion on this part of the case, therefore, is that to follow the Full Bench ruling even under the new procedure will inflict no new hardship on the mortgagor.

    I shall notice very briefly a few of the cases cited before us, dealing first with High Court cases and then with the Privy Council cases. The greater number are suits in which the first suit was for redemption and the second suit also for redemption, and either the decree in the first suit did not provide for foreclosure of the right to redeem, or, if it did, neither party had taken any steps to foreclose. Such decisions in Madras, prior to the Full Bench case, must be held to have been overruled, so far as they are inconsistent therewith, for example, Periandi v. Angappa, which was, however, not under the Transfer of Property Act, Vallabha Vallya Rajah v. Vedapuratti and Ramunni v. Brahma Dattan which rejected the then Bombay doctrine of constructive foreclosure by res judicata [see Gan Savant Bal Savant v. Narayan Dhond Savant] even when the decree in the first suit did not provide for foreclosure. The case Maloji v. Sagaji, though there the second suit was not for redemption but by a mortgagee for sale, also followed the res judicata principle, holding that the mortgage was merged in and could not be separated from the redemption decree obtained in the first suit. The Allahabad Court followed suit in David Hay v. Razi-ud-din and so did Bombay in Bapuji Ramchandra v. Guja Malu which, however, must be taken to have been overruled by the Full Bench of Bombay in Ramji v. Pandharinath which has altered the previous view in Bombay. The Full Bench case in Vedapuratti v. Vallabha Valiya Raja already mentioned is also a case in which both suits were for redemption. To come to cases in which the first suit was, as in the present case, a suit for sale and an order absolute for sale had been obtained but no further action had been taken, this High Court in Ranga Ayyangar v. Namyana Chariar where the first decree was obtained in 1872 prior to the passing of the Transfer of Property Act, held that the second suit for redemption was barred. In Rama v. Bagchand the later Bombay view prevailed that the suit was not barred by res judicata. No previous case in India is discussed in that judgment and only one English case is cited. Shah Mehdi Hasan v. Ismail Hasan a case under the present Civil Procedure Code adopted the Bombay view that the suit was not barred. An earlier Allahabad case reported in Shiam Sunder Lal v. Hir Narayan) takes the same view. So far as this Court goes then, the general principle of res judicata has been applied to the case where the first suit was a suit for sale.

    Coming now to the Privy Council cases, the earliest is one of 1873, Gokuldoss v. Kriparam. The first suit was by the mortgagee for sale. The decree in that case was a curious one which did not provide any opportunity to the mortgagor to come in and redeem, and in execution of which the mortgagee somehow got into possession. It was held that the mortgagor had never had his legal opportunity of redeeming and, therefore, a suit for redemption lay in the circumstances of the case. That is no authority in favour of the respondent. In Hari Ravji Chiplunkar v. Shapurji Mormusji Shet, the question whether the mortgagor could, instead of suing for redemption on a decree for redemption, fall back on the original mortgage and claim to redeem it was not decided. In Mahabir Pershad Singh v. Macnaghten where the mortgagee had got a decree for sale and the mortgagor sued to have the sale set aside and certain set-offs allowed, it was held that the second suit was barred by res judicata. The case is not much to the point here. In Sri Raja Panama Rao v. Sri Vira Pratapa H.V Ramachandra Razu, the decree passed on a simple mortgage did not suggest foreclosure or necessarily anything more than an usufructuary mortgage. The case is explained at page 335 of the Full Bench case in Vedapuratti v. Vallabha Valiya Raja. It again is no authority in favour of the respondent. In Faiyaz Husain Khan v. Prag Narain the first decree was in favour of the mortgagee for sale, and he had also got an order absolute for sale and the plaintiff had in execution become the auction purchaser. The second suit was by the auction-purchaser (defendant) in a suit on a second mortgage to redeem, the plaintiff's purchase being subsequent to the defendant's. It was held that the defendant could not resist the plaintiff's claim to possession. Incidentally it was laid down that an auction-purchaser on foot of a second mortgage could have and ought to have redeemed before the sale under the first mortgage decree was confirmed and that his subsequent application to redeem was properly refused. There is nothing in any of these cases which runs counter to the general principles laid down in Vedapuratti v. Vallabha Valiya Raja. In Sukhi v. Ghulam Safdar Khan a prior mortgagee had obtained a decree for sale without joining a puisne mortgagee and the latter sued, and it was argued that the prior mortgagee could not use his mortgage as a shield, because the mortgage was merged in the decree for sale and was, therefore, extinguished. The Privy Council held that under the altered wording of the Transfer of Property Act and the Civil Procedure Code the mortgage was not extinguished and could be held up as a shield. I do not consider that this ruling is authority for the proposition that, when a mortgagee has obtained a decree for sale, the mortgage as between himself and his mortgagor and all parties to the suit is not merged in the decree in the suit. The decision merely declares that by the decree the security is not extinguished so far as to prevent the agitation of rights under it, which were not decided by the decree. It does not touch the question of agitating afresh rights already concluded by the decree.

    The plaintiff's mortgage in the present case is pendente lite and his rights are, therefore, no higher than the rights of the mortgagor, and, as I have already said, the rights of redemption as between the mortgagor and the mortgagee have been once for all merged in the decree in the suit for sale. The principle involved is that in all suits on mortgage which are successful the mortgage, so far as parties to the suit are concerned, is merged in the decree and the mortgagor's rights are only exercisable under the decree and do not exist any longer outside the decree. The right to redeem, therefore, can be exercised only as provided under the decree and not outside the decree. It follows then that, after a decree in a mortgage suit, whatever the form of that decree, whether for foreclosure, sale or redemption, the parties to the mortgage and to the suit and their legal representatives or assignees cannot maintain in future any separate suit or any claim arising out of the mortgage [see Ameenammal v. Meenakshi]. The proper test, I think, is, “Does the decree provide for every relief obtainable by the parties under the mortgage and leave none unprovided for?” It appears to me that it does. It may be noted that the form of final decree, Form 10-A of Schedule I-D, is the same in a suit for sale as in a suit for redemption, in the case of a simple or usufructuary mortgage when payment has not been made, and that sub-clause (3) in Order XXXIV, rule 8, does not apply to sub-clause (4). In the case of a final decree for redemption under a simple or usufructuary mortgage it cannot be doubted that the right to redeem ceases with the passing of the decree. Why should it be deemed otherwise in the case of a final decree of exactly the same wording in a suit for sale?

    The learned Judge from whose judgment this appeal is preferred has distinguished the case of Ranga Ayyangar v. Narayana Chariar by saying that, if the Judges there had been dealing with a decree unexecutable by a mortgagor, the decision would have been different. I do not think it follows. Under a preliminary decree it is as open to the mortgagor as to the mortgagee to obtain the final decree, and the fact that the former's neglect results in a final decree which is not executable by him cannot resuscitate the right to redeem which is gone. When the learned Judge holds that the right of the mortgagor to redeem property has not been taken away upon the passing of the final decree for sale, I must, for reasons I have already given, with respect differ from him. The learned Judge relies mainly on Ramji v. Pandharinath which lays down that the right to redeem is not a matter in issue in a suit for sale. I have already given my opinion that, if the right to redeem can be foreclosed, as it can, in such a suit, it is very difficult to hold that it is not a matter in issue in the suit. I must, for reasons given above, hold that the learned Judge's decree should be reversed. I would reverse it and restore the decree of the lower Appellate Court with costs to the defendant throughout.

    Madhavan Nayar, J.:— The defendant-appellant as usufructuary mortgagee with a personal covenant to pay sued in O.S No. 430 of 1912 for the sale of the suit properties. A preliminary decree was passed in his favour on the 14th of October 1913, in which time was fixed for payment till the 14th of November 1914. A final decree was passed on the 25th of February 1914. While this suit was pending, the mortgagor gave another mortgage of these properties to the plaintiff's father. In O.S No. 289 of 1918 the plaintiff-respondent obtained a decree for sale without making the defendant a party to the suit and purchased the property himself. He then instituted the present suit for the redemption of the mortgage in favour of the defendant.

    The question for decision is whether the decree in O.S No. 430 of 1912 operates as res judicata in the plaintiff-respondent's suit for redemption. Devadoss, J. reversing the concurrent judgments of the lower Courts, rejected the plea of res judicata and remanded the suit for disposal. This decision is the subject matter of the Letters Patent Appeal.

    In my opinion, this case must be decided by applying the principle of the decision in Vedapuratti v. Vallabha Valiya Raja. In that case a Full Bench of this Court held that, where a suit for redemption had been instituted and a decree for redemption had been passed therein but not executed, a subsequent suit is not maintainable for the redemption of the same mortgage. It is no doubt true that in the present case the decree in the prior suit was one for the sale of the properties and not for redemption; but if we have regard to the real nature of the decree for sale passed under sections 83 and 89 of the Transfer of Property Act, it will be found that this difference does not really make the decision inapplicable. It is not denied that the decree in O.S No. 430 of 1912 gave the mortgagor who was the defendant in that suit a right to obtain possession of the suit property by paying the decree amount within the time fixed by the Court. In Vedapuratti v. Vallabha Valiya Raja Sir Bashyam Ayyangar, J., states thus:

    “Whether the decree be in a suit for foreclosure or in a suit for sale or in a suit for redemption, there is in each a conditional decree for redemption in favour of the mortgagor, the condition being the payment by the mortgagor of the amount decreed on or before the day fixed.”… “Decrees for specific performance, decrees respecting rights of casements and similar decrees are often made conditional, but they are none the less ‘final judgments’ having the force of res judicata.”

    The learned Chief Justice said:

    “The Legislature has laid down what is the ‘matter in issue’ in a redemption suit. In order to succeed the mortgagor has to show that he is entitled to a decree ordering that if he pays off the mortgage debt in pursuance of the order of the Court, the mortgagee shall retransfer the property and if necessary put him in possession. The matter in issue is aye or no—is the mortgagor entitled to the decree which, if he succeeds, the Court is required by section 92 to make?”

    The same matter is in issue in a mortgagee's suit for sale. The form of the decree shows that it contains a conditional decree for redemption. The right to redeem having been thus once adjudicated, the decision in which it was so done must operate as res judicata in a subsequent suit for redemption. It is true that even after the order absolute for sale under section 89, it is open to the mortgagor to pay up the mortgage amount and thus avert the sale [see Adipuranam Pillai v. Gopalasami Mudali] but this does not mean that the right to redeem still survives. The payment is made by the mortgagor not under the Transfer of Property Act but in the capacity of a judgment-debtor under the provisions of the Code of Civil Procedure. The substantial right involved in the suit, viz., the right to redemption being thus merged in the decree, though the decree is one for sale, the same right cannot again be put in issue in another suit. Applying the principle of the decision in Vedapuratti v. Vallabha Valiya Raja. it was held by Sadasiva Ayyar and Napier, JJ., in Ranga Ayyangar v. Narayana Chariar, that a subsequent suit instituted by the mortgagor for redemption of the mortgage was barred by res judicata by the decision in a prior suit for sale instituted by the mortgagee in which a decree had been passed containing a direction in favour of the mortgagor who was a defendant therein for recovery of possession of the property and which decree was not executed by either party.

    The learned vakil for the respondent argues that the decision in Vedapuratti v. Vallabha Valiya Raja is inapplicable to the present case, also because of the alteration in the law regarding the nature of the decree to be passed in mortgage suits for sale of properties introduced by Order XXXIV, rules 4 and 5 of the Civil Procedure Code, which repealed sections 88 and 89 of the Transfer of Property Act. By the repeal of the old sections of the Transfer of Property Act there are now two decrees in all mortgage suits—the preliminary decree and the final decree. The preliminary decree can not be executed, the executable decree being the final one. It is argued by Mr. Venkatachariar that, since under the Code of 1908 the preliminary decree is now inexecutable, all that is stated in Vedapuratti v. Vallabha Valiya Raja with reference to the operative character of such decrees become inapplicable to cases arising under the present Code. He also argues that since by the omission in Order XXXIV, rule 5, of the words “and thereupon the defendant's rights to redeem and the security shall both be extinguished” which occurred at the end of the old section 89, the relationship of the mortgagor and the mortgagee still subsists in spite of the final decree, it is open to the mortgagor to institute a second suit for redemption.

    In my view, the non-executability of the decree and the alleged continuance of the relationship of the mortgagor and the mortgagee even after the passing of the final decree do not affect the application of the principle of the decision in Vedapuratti v. Vallabha Valiya Raja to the facts of the present case. The question that we have to decide is purely one of res judicata. A properly framed preliminary decree contains a direction enabling the mortgagor-defendant to pay the money declared to be due on the mortgage to the mortgage within the prescribed period in which event the mortgagee shall deliver the property to the mortgagor. By paying the amount prescribed in the preliminary decree it is open to the mortgagor to obtain a final decree. Since he did not do so in the present case, the right of redemption which has become merged in the decree cannot be re-opened again in a subsequent suit. It may be observed that the learned Chief Justice in Vedapuratti v. Vallabha Valiya Raja did not rest his judgment on the executability of the decree for he had on the same day delivered judgment in Mallikarjunadu Setti…(Counter-Petitioner) v. Lingamurti Pantulu…(Petitioner) .*, etc.], in which he held that an order passed upon an application made under section 89 of the Transfer of Property Act corresponding to Order XXXIV, rule 5 of Act V of 1908 was not an order made in execution proceedings. Sir Bashyam Ayyangar also bases his judgment on principles of res judicata embodied in section 11 of the Code of Civil Procedure though as a supplemental ground the learned Judge states that the second suit is barred by the provisions of section 244 also inasmuch as the applications under sections 89 and 93 were applications in execution. As regards the continuance of the relationship of the mortgagor and the mortgagee, it cannot be said, as has already been pointed out, that the payment which the mortgagor-defendant is entitled to make to avert the sale is made by him as a mortgagor; he pays only in the capacity of a judgment-debtor under the provisions of the Code of Civil Procedure. Whether on making such payment he is entitled to be put in possession of the property is a doubtful question which it is not necessary to decide in this case though the case in Adipuranam Pillai v. Gopalasami Mudali decides that he is so entitled.

    In the course of his arguments, Mr. Venkatachariar referred particularly to three decisions, namely, Hari Ravji Chiplunkar v. Shapurji Mormasji Shet, Sri Raja Papamma Rao v. Sri Vira Pratapa H.V Ramachandra Razu, and Gokuldoss v. Kriparam in support of his contention that the second suit for redemption would lie. The first two cases have been explained by Sir Bashyam Ayyangar, J., in Vedapuratti v. Vallabha Valiya Raja. In Hari Ravji Chiplunkar v. Shapurji Hormasji Shet, their Lordships of the Privy Council, though they cite the decision in Periandi v. Angappa do not express any opinion on the question whether the plaintiff could fall back upon the original mortgage and the case therefore does not afford any help in answering the question whether a subsequent suit on the same mortgage is barred by section 11 of the Code. The decision in Sri Raja Papamma Rao v. Sri Vira Pratapa H.V Ramachandra Razu really depended on the construction of the prior decree passed on the mortgage which contained the condition that

    “if the debt is not discharged according to the instalments, you should recover the same by means of the mortgaged property, the crops of our cultivation and out other property and from our person according to your wish.”

    The learned Judges held that the prior decree in effect put the mortgagee in the position of the usufructuary mortgagee and therefore the mortgage could be redeemed by a fresh suit. The decision in Gokuldoss v. Kriparam is also based, on the construction of the prior decree passed in the case under which the mortgage got into possession. It was held that as that decree did not extinguish the mortgagor's right of redemption, a suit by him for that purpose was not barred.

    The decision in Ramji v. Pandharinath took the view that a second suit for redemption would lie. Mr. Justice Devadoss has in effect followed that decision. The view of our own High Court in Vedapuratti v. Vallabha Valiya Raja is different from that of the Bombay High Court. Mr. Venkatachariar has not been able to persuade me that the decision in Vedapuratti v. Vallabha Valiya Raja does not lay down the correct law, I do not think it is necessary to discuss the various other decisions referred to by him in the course of the argument, as they do not in my view directly bear on the question under consideration. In my opinion, the plaintiff's suit is barred by the operation of the doctrine of res judicata. I would therefore set aside the decision of the learned Judge and dismiss the plaintiff's suit with costs throughout.

    K.R

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