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Structured Summary of the Opinion

Factual and Procedural Background

The plaintiffs instituted a suit seeking a decree for sale of properties mortgaged by defendant 1 in favour of Srinath Maity on 14th Chaitra 1314 A.S. The plaintiffs are members of a Hindu joint family and asserted rights in several plots of land; the dispute concerned plots 6, 7 and 8. Defendant 1 (the mortgagor) resisted the suit and raised multiple defences, including satisfaction of the mortgage debt; those pleas were overruled by the Courts below and are not the subject of the present appeal.

Defendants 4 to 9, 11 and 12 pleaded that they claimed through Baidyanath Mondal, who purchased plots 6, 7 and 8 from defendant 1 and his brother by kabalas dated 10th Agrahayan and 14th Agrahayan 1316 B.S. The defendants alleged that after that purchase the plaintiffs recognized the transfer and raised an estoppel; they also pleaded limitation and argued the suit was time-barred (instituted more than twelve years after the date fixed for repayment of the mortgage money). The defendants additionally sought relief based on marshalling of securities.

During the suit, defendant No. 10 died on 10th August 1927. Two brothers of the deceased were substituted as his legal representatives, but the deceased's mother was not brought on the record. The defendants contended that the suit should be dismissed for non-joinder of a necessary party.

The trial Court rejected the contesting defendants' defences and passed a mortgage decree directing sale of the mortgaged properties in default of payment. On appeal the Additional District Judge modified the decree on the ground that the suit had abated so far as the mother of defendant 10 was concerned and reduced the mortgage debt recoverable by Rs. 65. Defendants 4 to 9, 11 and 12 appealed to the present Court, and the plaintiffs filed cross-objections against the reduction of the recoverable mortgage debt.

Legal Issues Presented

  1. Whether payments made by the mortgagor after the purchaser's acquisition (in 1316 B.S.) kept the mortgagee's remedy alive so as to avoid the suit being barred by limitation.
  2. Whether subsequent purchasers of portions of the mortgaged property (defendants 4–9, 11 and 12) were entitled to relief by way of marshalling, or otherwise to require sale of other mortgaged properties before the parcels they purchased.
  3. Whether the suit abated in its entirety for non-joinder of a necessary party (the mother of deceased defendant 10) despite substitution of two brothers of the deceased as legal representatives.
  4. Whether non-compliance with procedural provisions (notably O. 34, R. 1 of the CPC) was fatal to the mortgage suit, and whether O. 1, R. 9 applied to a mortgage suit.
  5. Whether the title of third parties (for example Chaitanya Charan Sow) or questions of paramount title could be decided in the present suit or must remain open for separate litigation.

Arguments of the Parties

Defendants-Appellants' Arguments

  • The purchasers (predecessors-in-interest) were bona fide transferees of a portion of the mortgaged property and therefore were protected; estoppel was asserted based on alleged recognition of the transfers by plaintiffs.
  • The suit was barred by limitation because it was instituted after the expiry of twelve years from the date fixed for payment; payments made after the purchaser's acquisition could not revive the mortgagor's title so as to extend limitation as against the purchasers.
  • A claim for marshalling was advanced: that, as subsequent purchasers of part only of the mortgaged properties, they were entitled to have other mortgaged properties sold first or otherwise to obtain equitable protection.
  • The suit had abated on account of non-joinder/non-representation of the complete interest of deceased defendant 10 (specifically, the mother of defendant 10 was not brought on record), and therefore the suit should fail.

Plaintiffs-Respondents' Arguments

  • The plaintiffs maintained their right to decree for sale of the mortgaged properties and that payments made by the mortgagor kept the mortgagee's remedy alive so that limitation did not bar the suit as against the purchasers.
  • Before this Court the plaintiffs also advanced (for the first time) that the mortgage bond contained a stipulation prohibiting alienation by the mortgagor, and therefore transfers to the purchasers were unauthorized and the purchasers were not necessary parties; however this point had not been considered below and was not decided by the Court.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Newbould v. Smith (1886) 33 Ch D 127; (referenced also at 1889 14 AC 423) Authority for the proposition that payment of interest by the mortgagor (who had assigned the mortgaged property) was insufficient to keep alive the mortgagee's claim against the assignee and mortgaged property. The Court noted the rule but declined to follow it for Indian cases of this character; it observed conflict between Newbould and Lewin v. Wilson and stated that Newbould has not been followed by this Court.
Lewin v. Wilson (1886) 11 AC 639 Conflicting authority to Newbould; relied upon in India by preference when appropriate. The Court preferred the reasoning in Lewin v. Wilson for the present context and noted that this Court gave it preference in Domi Lal v. Roshan Dobey (1907).
Domi Lal v. Roshan Dobey (1907) 33 Cal 1278 Indian decision indicating preference for Lewin v. Wilson on analogous limitation questions under local statutory provisions. The Court invoked Domi Lal to justify not following Newbould and to emphasise reliance on the Limitation Act provisions (Sections 19 and 20) rather than on English decisions based on different statutes.
Chinnery v. Evans (1864) 11 HLC 115 at p.135 Rule that where estates A, B and C are included in one mortgage, and the owner of A pays interest, the mortgagee's remedy against B and C is preserved. The Court applied this rule: because the mortgagor retained an interest in other portions (9 bighas 10 cottahs) after the sale of plots 6–8, payments by the mortgagor preserved the mortgagee's remedy as to remaining properties.
Surjiram Marwari v. Berhamdeo Persad (1905) 1 CLJ 337 Authority cited by appellants on limitation (involving prior English cases such as Bolding v. Lane). The Court held that this decision did not throw light on the point in the present case and did not support the appellants, given the factual differences (notably the mortgagor's retained interest and payments within twelve years).
Bolding v. Lane (1863) 1 Deg J & S. 122 Referenced in Surjiram Marwari's judgment and quoted via Lord Westbury on equitable considerations relating to mortgagors without interest. The Court noted it only as part of Surjiram Marwari; it did not treat Bolding v. Lane as controlling in the present facts.
Khirodamoyee v. Habib Shah, AIR 1925 Cal 152 Establishes that non-compliance with O. 34, R. 1 CPC is not fatal to a mortgage suit and that O. 1, R. 9 applies to mortgage suits. The Court relied upon this authority and related cases to hold non-compliance with O. 34, R. 1 was not fatal and O. 1, R. 9 governed the matter of representation/substitution in mortgage suits.
Girivar Narayan v. Mt. Makbunnessa (1916) 1 Pat LJ 468 Decision relied upon by appellants concerning non-joinder/non-representation. The Court rejected this Patna High Court decision to the extent it conflicted with this Court's precedents; also noted that Girivar Narayan related to non-joinder of the mortgagee as a plaintiff and was not applicable here in the same way.
Meenatchi Achi v. Anantha Narayana Ayyar (1903) 26 Mad 224 Authority supporting that failure to object to substitution/representation at the earliest opportunity precludes reopening the question later. The Court relied on this decision to hold that the defendants-appellants, having failed to object to substitution, could not reopen the non-representation/abatement issue.
Balabai v. Ganes Shanhar (1903) 27 Bom 162 Similar authority on the effect of substitution and preclusion to later object to representation. Used alongside Meenatchi Achi to support the Court's conclusion that the abatement/non-joinder point could not be raised after substitution when no timely objection was made.

Court's Reasoning and Analysis

The Court addressed the major questions sequentially and confined its reasoning to matters raised and decided in the courts below or presented for the appeal.

Limitation and payments after transfer: The defendants relied on Newbould v. Smith for the proposition that payments of interest by the mortgagor after assignment do not revive the mortgagee's claim against transferees. The Court observed the conflict between Newbould and Lewin v. Wilson, noted that this Court has not followed Newbould and preferred Lewin by reference to Domi Lal v. Roshan Dobey. More importantly, the Court emphasised that Indian courts must apply the Limitation Act and, where Sections 19 and 20 provide guidance, there is no justification for importing from English cases based on different statutory language. On the facts the mortgagor had retained an interest in 9 bighas 10 cottahs after the 1316 sale; payments made by the mortgagor in 1322, 1327, 1329 and 1332 were within twelve years of the suit and therefore kept the mortgagee's remedy alive in respect of the remaining mortgaged properties. The Court applied the rule in Chinnery v. Evans (that payment by the owner of A preserves the mortgagee's remedy as to B and C where all are included in one mortgage) to the present facts.

Non-joinder / abatement (death of defendant 10): The Court found that two brothers of the deceased were substituted in proper time under O. 22 Rrs. 4 and 5 CPC and that no timely objection was taken to that substitution by the appellants. The existence of a mother of defendant 10, disclosed later during witness examination, did not justify treating the suit as abated. The Court relied on its prior authorities (including Khirodamoyee v. Habib Shah) to hold that non-compliance with O. 34 R. 1 CPC is not fatal to a mortgage suit and that O. 1 R. 9 applies; it also invoked Meenatchi Achi and Balabai to hold that failure to object at the earliest opportunity precluded reopening the representation question. Consequently, abatement could not be asserted to defeat the suit as a whole.

Marshalling and subsequent purchasers: The Court declined to entertain the marshalling argument in favour of the subsequent purchasers in the present suit on the ground that Section 81 of the Transfer of Property Act contains specific provisions affecting the rights of subsequent purchasers. The Court found no equity in favour of the appellants that would entitle them to an order directing sale of other mortgaged properties first. The Court also left open the question of paramount title (for example the title of Chaitanya Charan Sow) and indicated that res judicata would not preclude the appellants from litigating title in subsequent proceedings.

Point first raised in this Court (prohibition of alienation in the mortgage bond): The plaintiffs' counsel urged that an express prohibition of alienation in the mortgage bond rendered the purchasers unnecessary parties and the transfers unauthorized. The Court noted that this argument had not been considered by the lower courts and declined to decide it in the second appeal, observing it was unnecessary in view of the other conclusions reached in favour of the plaintiffs.

Conclusion of reasoning: On the above bases the Court concluded that the appellants' contentions on limitation, abatement and marshalling must be overruled and that the plaintiffs were entitled to the decree sought in the trial Court.

Holding and Implications

Holding: The Court's final decision was:

APPEAL DISMISSED. The cross-objections preferred by the plaintiffs-respondents were allowed. The decree of the Court of Appeal insofar as it modified the trial Court's decrees (notably the reduction in the mortgage debt by Rs. 65 and the abatement finding) was set aside and the decree of the trial Court was restored. The plaintiffs-respondents were awarded their costs in this Court and the costs in the Court of Appeal; no separate order as to costs in the cross-objections was made.

Implications:

  • Direct effect on the parties: the plaintiffs obtain the full mortgage decree as originally passed by the trial Court and the direction for sale of the mortgaged properties in default of payment stands as restored; the defendants-appellants' pleas of limitation, marshalling and abatement failed.
  • The Court did not decide, and expressly left open, the separate question of paramount title (for example the title claimed by Chaitanya Charan Sow) and indicated that the appellants remain free to litigate title in future suits; res judicata will not operate to bar such litigation.
  • The opinion does not purport to establish any new general precedent beyond application of existing authorities and statutory provisions to the present facts; the Court emphasised reliance on the Limitation Act (Sections 19 & 20) and on the specific statutory framework (Section 81 of the Transfer of Property Act) rather than importing inconsistent principles from English cases founded on different statutes.

Result recorded in the opinion: "Appeal dismissed."

    Umesh Chandra Mondal v. Hemanga Chandra Maity .

    1. The plaintiffs in the suit out of which this appeal has arisen prayed for a decree for sale of properties mortgaged by defendant 1 in the suit. The mortgage was executed in favour of Srinath Maity on 14th Chaitra 1314 A.S and all the plaintiffs are interested in the same as members of a Hindu joint family. The properties mortgaged consisted of several plots of land, and we are only concerned with plots 6, 7 and 8 mentioned in the plaint. The plaintiffs' claim in suit was resisted by the defendants. The mortgagor, defendant 1, raised all possible defences available to him, including the satisfaction of the mortgage debt. It may be mentioned that all the pleas raised by defendant 1 have been overruled by the Courts below, and the appeal before us does not relate to the case sought to be made out by defendant 1. Defendants 4 to 9, 11 and 12, appellants in this Court, contested the suit as persons claiming through one Baidyanath Mondal, the purchaser of plots 6, 7 and 8 from defendant 1 and his brother Chaitanya Charan Sow, by two different kabalas executed on 10th Agrahayan and 14th Agrahayan 1316 B.S It was alleged that after the purchase by Baidyanath, there was recognition of the transfer by the plaintiffs, who were cosharer landlords in respect of the properties purchased from defendant 1 and his brother. A question of estoppel was raised by the defendants so far as this part of the case was concerned. The defendants pleaded limitation, and contended that the suit instituted after the expiry of twelve years from the date fixed for payment of the mortgage money was barred by time.

    2. A question of marshalling also appears to have been attempted to be raised by the defendants. The position sought to be taken up by them in this part of the case was this: that their predecessor-in-interest was a bona fide purchaser of a portion of the mortgaged properties without notice of the plaintiffs' mortgage, and they were therefore entitled to the benefit of the doctrine of marshalling, and that at any rate the properties 6, 7 and 8 of which they were purchasers should be sold, if necessary, after the other mortgaged properties had been sold. Another aspect of the case for defendants 4 to 9, 11 and 12 arising out of events that happened in the course of the suit, and during its pendency in the trial Court, requires notice.

    3. One of the defendants No. 10 died on 10th August 1927. The two brothers of that defendant already on the record were substituted in his place as the legal representatives of the deceased defendant; but the mother of defendant 10 was not brought on the record. On this state of facts it was sought to be made out that the suit should have been dismissed on the ground of non-joinder of necessary party.

    4. The trial Court totally negatived the defence of the contesting defendants in the suit, and passed a mortgage decree in favour of the plaintiffs in usual terms, directing the sale of the mortgaged properties in default of payment of the mortgage debt in terms of the decree. On appeal by defendants 4 to 9, 11 and 12 the learned Additional District Judge, modified the decision and decree passed by the trial Court on the ground that the suit had abated so far as the mother of the deceased defendant 10 was concerned, and reduced the amount of the mortgage debt recoverable by the plaintiffs in the suit by the amount of Rs. 65. Defendants 4 to 9, 11 and 12 have appealed to this Court, and cross-objections have been preferred by the plaintiffs in regard to the reduction of the mortgage debt recoverable by them by Rs. 65 as mentioned above. (The question of estoppel was held against the defendants on facts and the judgment proceeded). The plea of limitation raised by the defendants rested, as indicated above upon the fact that payments made towards the satisfaction of mortgage debt after the purchase of Baidyanath Mondal in 1316, could not be of any avail to the plaintiffs, seeing that the suit was instituted more than 12 years after the date fixed for repayment of the mortgage money. Reliance was placed on Newbould v. Smith . 1886 33 Ch D 127., in support of this position. That case no doubt is an authority for the proposition that payment of interest by the mortgagor who remained liable, ex contractu to pay the debt, though he had previously assigned the mortgaged property to a third person was in a suit to enforce the mortgage security, held to be insufficient to keep alive the mortgagee's claim against the assignee and the mortgaged property. The decision in Newbould v. Smith is in conflict with the view expressed on the subject by the Privy Council in Lewin v. Wilson . 1886 11 AC 639, and the correctness of the decision was questioned before the House of Lords [see Newbould v. Smith . 1889 14 AC 423 at pp. 426 and 428] but their Lordships did not express any opinion on the decision one way or the other. So far as this Court is concerned Newbould v. Smith has not been followed, and Lewin v. Wilson was given the preference in a suit for possession under Article 146, Sch. 2, Lim. Act, 1877, Domi Lal v. Roshan Dobey . 1907 33 Cal 1278. The Limitation Act has to be followed by Courts in India in considering the rules of limitation applicable to a case; and whereas in a case like the one before us, there is sufficient guidance given by the provisions contained in Sections 19 and 20 of the Lim. Act, there would be no justification;in our borrowing rules of limitation from decisions by Courts in England, based upon a statute altogether different in language from the statutory provisions contained in Sections 19 and 20 of the Lim. Act. Furthermore, in the case before us, the purchaser defendants were transferees from the mortgagor in respect of a portion only of the mortgaged property, consisting of several items; and in such a case, there can be no doubt that the rule laid down by the House of Lords in Chinnery v. Evans . 1864 11 HLC 115 at p. 135, namely, that where estates A, B and C are included in one mortgage, and the owner of A pays interest, the mortgagee's remedy against B and C is preserved, is the rule that must be applied.

    5. The mortgagor, in the case before us, had in him the title to 9 bighas 10 cottahs of land after the sale to Baidyanath Mondal, the predecessor-in-interest of defendants 4 to 9, 11 and 12 in 1316, of the plots 6, 7 and 8 out of the several items of the mortgaged properties; and as such there is no substance in the contention advanced by the defendants that payments by the mortgagor towards the satisfaction of the mortgage debt after 1316, could not keep the mortgagees right alive, so far as the enforcement of the mortgage security was concerned. It may be mentioned that the decision of this Court in the case of Surjiram Marwari v. Berhamdeo Persad . 1905 1 CLJ 337., which has been cited before us in support of the appellants' contention on the question of limitation does not appear to throw any light on the point arising for consideration in the present case, in view of the facts and circumstances mentioned above. In that case Mookerjee, J., based his views as expressed at pp. 344 to 346 on the decision in Bolding v. Lane . 1863 1 Deg J & S. 122 and quoted from Lord Westbury's judgment which contained amongst other things, observations like these: The mortgagor or his representatives who have no interest whatever in the lands, should not be enabled to charge the estate a new with any amount of arrears of interest against second and subsequent mortgagees, and that a departure from such a course would involve consequences inconsistent with natural justice. The learned Judge Mookerjee, J., also referred to Chinnery v. Evans in dealing with the facts of the particular case before him. It is difficult to make out how the decision in Surjiram Martvari's case or any of the observations made by Mookerjee, J., in that case could support the appellants' position so far as the question of limitation was concerned, in view of the fact that the mortgagor defendant 1, in the suit, had an interest left in him in a portion of the mortgaged properties, when payments were made by him towards the satisfaction of the mortgage debt in 1322, 1327, 1329 and 1332, well within 12 years before the institution of the suit out of which the appeal has arisen. The contentions raised on behalf of the appellants bearing upon the question of limitation must, in our judgment, be overruled.

    6. It has been urged on behalf of the appellants that the suit brought by the plaintiffs had abated as a whole, on the failure on the part of the plaintiffs to bring all the heirs of defendant 10 on the record within the time allowed by law. With reference to the question of abatement thus raised, mention has already been made of the fact that two of the brothers of that defendant 10 were substituted by the plaintiffs in proper time; no objection as to non-representation or want of complete representation of the interest of defendant 10, was raised when the other defendants had notice of the application for substitution made by the plaintiffs in the suit. The order for substitution was duly made by the trial Court, on 3rd September 1927. The fact that defendant 1 had a mother living, came out at that stage of the suit when witnesses were being examined by the defendants, after examination of the witnesses for the plaintiffs in Court. One of the witnesses for the defendants stated in his deposition that defendant 10 who had died, had his mother living at the time of his death. The point made by the defendants-appellants comes to this. There was no complete representation of the interest of defendant 10 in the suit after that defendant's demise. There was a fatal defect on account of non-joinder of a necessary party in the mortgage suit, and the suit must therefore fail. So far as non-joinder of parties is concerned, the suit could not be defeated in its entirety on that ground.

    7. It is well settled now, so far as this Court is concerned, that non-compliance with the provisions of O. 34, R. 1 of the CPC, was not fatal to a suit for enforcing a mortgage and that the provisions of O. 1, R. 9 were applicable to a mortgage suit: see Khirodamoyee v. Habib Shah . AIR 1925 Cal 152 and the cases referred to there. The decision of the Patna High Court in Girivar Narayan v. Mt. Makbunnessa . 1916 1 Pat LJ 468, on which reliance has been placed on behalf of the appellants cannot be accepted, in so far as it goes against the decisions of this Court, on the question under consideration. Furthermore, the case before the Patna High Court related to the non-joinder of the mortgagee as a plaintiff, in a mortgage suit, and cannot be accepted as laying down the rule that O. 1, R. 9 was controlled by O. 34, R. 1 of the CPC, even in the case of subsequent purchasers in the position of defendants-appellants before us. So far as non-representation of the Complete interest of defendant 10 was concerned, the question has to be decided on the basis of the facts of the case before us. The question of representation; of the interest of defendant 10 in the suit, could not be allowed to be raised after the legal representative of the deceased defendant had been substituted by the Court under O. 22, Rr. 4 and 5 of the CPC, on notice to all the parties concerned. Failure to object to the substitution of defendants 8 and 9 in the place of defendant 10 at the earliest opportunity precluded the defendants-appellants to reopen the question of representation of the interest of defendant 10 in the suit: see Meenatchi Achi v. Anantha Narayana Ayyar . 1903 26 Mad 224; and Balabai v. Ganes Shanhar . 1903 27 Bom 162.. The mere fact that there was a mother living at the time of the death of defendant 10 elicited during the examination of a witness in Court, long after the order for substitution of the legal representatives of that defendant had been made, would not, in our judgment, enable the defendants-appellants to succeed on the question of abatement of the mortgage suit as a whole; or for the matter of that in respect of the interest of defendant 10 with interest, if any, of the mother of defendant. In the above view of the case we have no hesitation in coming to the conclusion that no question of abatement in any shape, could arise in the case before us; and that the plaintiffs-were entitled to a decree for the entire amount due on the mortgage bond, on the basis of which the plaintiffs had instituted their suit.

    8. The question of marshalling attempted to be raised by the defendants-appellants, cannot properly be gone into in the case before us, where the rights of subsequent purchasers in the position of those defendants are concerned in view of the definite provisions contained in Section 81 of the Transfer of Property Act. So far as the point pressed before us that the Court should direct the sale of mortgaged properties, other than those conveyed to the defendants-appellants in the first instance, for the satisfaction of the mortgage debt was concerned, we need only observe that we are unable to find any such equity in favour of the appellants which might enable them to get a relief of that description. The question of paramount title as raised by the defendants-appellants, has been expressly left open by the Courts below. In our judgment the Courts below have, in accordance with the trend of judicial decisions, rightly—held that the title of Chaitanya Charan Sow, the brother of defendant 1, as pleaded by the contesting defendants, could not be decided in the present case; and as mentioned by the learned Additional District Judge in the Court of appeal below, the rule of res judicata will not operate against the appellants in any way, if they desire to agitate that question of title hereafter in any Court of justice.

    9. The learned advocate for the plaintiffs-respondents has urged before us, that according to a stipulation contained in the mortgage bond, on the basis of which the suit out of which the appeal has arisen, was instituted, the right of alienation in any form was expressly prohibited, so far as the mortgagor was concerned and as such the purchasers (defendants 4 to 12) were not necessary parties at all, that the mortgagees were entitled to a decree against the properties in the hands of the purchasers by virtue of unauthorized transfers. The point raised in this behalf was not considered in any form, by the Courts below; and we are not prepared to go into the matter in second appeal. Furthermore, it is not at all necessary for us, to decide the question raised for the first time before us in view of the conclusions we have arrived at in favour of the plaintiffs-respondents, on other points arising for determination in this appeal. In the result the appeal is dismissed and the cross-objections preferred by the plaintiffs-respondents are allowed. The decree of the Court of appeal below so far as it modified the decrees of the trial Court is set aside, and the decree of the trial Court is restored. The plaintiffs-respondents are entitled to their costs in this Court and the costs in the Court of appeal below. We make no separate order as to costs in the cross-objections.

    M.N

    10. Appeal dismissed.

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    Comments

    Umesh Chandra Mondal v. Hemanga Chandra Maity .
    (May 13, 1932)