Seth Ghasiram Seth Dalchand Palliwal v. Mt. Kundanbai

1. This judgment will govern S.A No. 114/36 and S.A No. 115/36, as well as this appeal (S.A No. 565 of 1935). They all arise out of the same suit. The plaintiff is respondent 1 in all three appeals. On 30th April 1895 she obtained a decree for maintenance in Civil Suit No. 26 of 1894 against her husband's brother Shaligram. The decree, so far as it is now relevant, was in these terms:

That defendant pay to plaintiff Rs. 250 a month or Rs. 3000 annually for maintenance and also pay her Rs. 24,000 for arrears. The decretal amount shall be a charge on the ancestral estate in the defendant's possession…..

2. After this the plaintiff's maintenance again fell into arrears, so she attempted to obtain them by executing this decree. But she failed because the Court of the Judicial Commissioner held that the decree in so far as it related to future maintenance was only declaratory and so could not be executed. She was therefore driven to filing fresh suits as arrears accrued from time to time. This suit is one of them. The original defendants were four. Of them Shrinarayan and Mt. Savitribai were the legal representatives of the original judgment-debtor Shaligram. They were defendants 1 and 2 respectively. The first was a son of Shaligram and the second the widow of another son. The other two defendants, 3 and 4, are mortgagees of one of the family fields. The plaintiff asked that in the event of the amount claimed not being paid, this field together with two houses in the possession of defendants 1 and 2 be sold because, according to her, this property was part of the ancestral family property and so was subject to the charge which she had obtained in the decree of 1895. So far the suit was simple and straight, forward, but complications set in when defendants 3 and 4 insisted upon the joinder of a large number of other defendants. These other defendants were purchasers from time to time of portions of the family property which had been charged by the decree of 1895 after it had been passed. Defendants 3 and 4 stated that the properties in the possession of these others were also subject to the charge and therefore their presence was necessary in order to enable the equities to be adjusted. They protested against the attempt to saddle the whole burden of the claim upon the field in their possession and upon the two houses in possession of defendants 1 and 2. One of the questions in appeal is whether they (defendants 3 and 4) have the right to demand this. They (defendants 3 and 4) succeeded in having a large number of defendants joined in the first Court (16 of them bringing the total number of defendants up to 20), and in the end, after the plaintiff had been made to amend her plaint a decree was passed in her favour against the ancestral properties in the hands of defendants 1 to 8, 15 and 19.

3. All these newly added defendants, with the exception of the fifth, thereupon appealed and succeeded in persuading the lower Appellate Court to dismiss the claim against them and to have the properties of Jhadtallai, Chowkdi, Dolaria and Patnari, in which they were interested, released from the decree. The plaintiff was content with this position and did not appeal; nor did defendants 3 and 5. But defendant 4 has appealed and has raised these questions all over again. His appeal is S.A No. 565 of 1935. In the first Court another question was also raised. Defendants 3 and 4 claimed that they should be given the right of marshalling. In this they failed, so they appealed to the lower Appellate Court and failed there also. Defendant 4 has now appealed here against that decision and his appeal is S.A No. 115/36. But his learned counsel, seeing that the contention was a hopeless one, abandoned it after a short discussion and told us that we need not trouble to write a formal judgment. That appeal will therefore be dismissed with costs. The third appeal before us is by defendant 2 Mt. Savitribai. She had asked in the lower Court to have the amount of maintenance payable by her under the previous decisions (fixed eventually at Rs. 200 a month though the original decree was for Rs. 250) reduced because of altered circumstances. She failed in both the lower Courts and has filed a second appeal here. Her appeal is S.A No. 114/36. Turning now to defendant 4's other appeal (S.A No. 565/35, the one in which this judgment is being written), one of the questions raised was whether a defendant can compel a plaintiff to seek a decree against persons against whom she does not want to proceed. This question was raised before us as well but after a short preliminary discussion it was given up by the learned counsel for respondents 4 to 10 to this appeal, that is to say by the transferees who were subsequently joined at the instance of defendant 4. That leaves us with a number of difficult questions of law, the first of which relates to the question of notice. The contention of these transferees is that they cannot be bound by any charge upon the properties which they have purchased unless it can be shown that they had notice of the charge at the date of the purchase. It will be necessary to decide the question of onus, but before we do so we will have to determine the legal category into which the charge in question here falls.

4. It was argued on the one side that it comes under Section 100 of the Transfer of Property Act, and alternatively under S. 39. We do not think it falls under either. S. 39 does not deal with charges but with a right which falls short of a charge. The charge does not arise until it is fixed by a decree or by agreement or by operation of law: see, 22 All 326, (1900) 22 All 326 , 1900 AWN 97 24 All 160 (1901) 24 All 160 , 1901 AWN 207 at p. 163, 28 All 655, (1906) 28 All 655 , 1906 AWN 165 , 3 ALJ 551 2 Bom 494, (1878) 2 Bom 494 12 Bom LR 1075 (1911) 12 Bom LR 1075 , 8 IC 1057 at p. 1078, 33 MLJ 601, (1918) 5 AIR Mad 668 , 42 IC 975 , 33 MLJ 601 53 MLJ 176, (1927) 14 AIR Mad 1092 , 102 IC 101 , 53 MLJ 176 5 Luck 172 (1929) 16 AIR Oudh 316 , 117 IC 405 , 5 Luck 172 , 6 OWN 493 and 27 Cal 194. (1900) 27 Cal 194 But apart from authority the differences between Ss. 39 and 100 make this obvious. As regards S. 100, in our opinion that cannot apply either, though there is authority to the contrary. It is limited to charges created, “by act of parties or by operation of law.” A charge which is created by a decree is not created by act of parties, and we do not think that it can be said to have been created by operation of law.

5. B.B Mitra thinks otherwise and relies on 35 Cal 837 (1908) 35 Cal 837 , 7 CLJ 192 , 12 CWN 849 and 28 All 655 (1906) 28 All 655 , 1906 AWN 165 , 3 ALJ 551 at p. 612 of Edn. 9 of his book on the Transfer of Property Act. We do not think that either of these rulings goes to that length. In both those cases the question for decision was whether a decree which creates a charge requires registration. That, the learned Judges said, depends upon whether a charge creates an interest in immovable property. They compared Sections 58 and 59 of the Transfer of Property Act, with S. 100 and came to the conclusion that the Transfer of Property Act recognizes a difference between a charge and a mortgage, and held that the difference lies in the fact that a charge does not create an interest in the property whereas a mortgage does. The learned Judges do not go on to hold that S. 100 is exhaustive of all charges and that one created by a decree falls within its ambit. We do not think that these decisions are authority for the proposition that charges created by decrees are ones which arise by operation of law.

6. We gather that Sir Dinshaw Mulla takes the same view as B.B Mitra for he states at p. 546 of Edn. 2 of his Transfer of Property Act: “Charges are created or arise in two ways and both are included in this Section.” It is true he does not say that there is no other way and that he does not quote the case of a charge created by a decree as one of the illustrations of charges which arise by operation of law, but we gather that he considered that S. 100 was exhaustive of all charges. In any case that is the contention of the learned counsel for the purchasers-defendants. He argues that if a charge of this kind does not fall under S. 100, then it cannot be a charge at all so far as India is concerned, because the Act is exhaustive of all matters with which it deals. We are unable to agree because it appears from the Preamble that the Act is one to “define and amend certain parts of the law relating to the transfer of property by act of parties.” It is clear then that the Act does not purport to be exhaustive but only to deal with certain specific matters, and also that primarily it was enacted to deal with transfers by act of parties. Of course it does touch here and there on certain allied matters, but in view of the very cursory manner in which they are dealt with as compared to the more exhaustive treatment accorded to private transfers of property, and in view of the Preamble, we are unable to regard the Act as exhaustive when it deals with these allied topics which are foreign to its main purpose. It was argued that the omission was accidental and that in any event the principle underlying S. 100 would have to be applied to charges created by decrees even if the Section itself did not apply. We are by no means certain that the omission was accidental. Decrees stand on a somewhat different footing and are governed by rules of their own, so it may well be that the intention of the Legislature was to leave decrees out of the Section.

7. The difference which the intervention of a decree makes is this: not only are the immediate parties to a decree bound by it but so also are all who claim through or under them and date their title from after the decree or the institution of the suit as the case may be, that is to say, not only are the parties bound but also their privies. One effect of this is that the question of notice does not ordinarily arise. This has recently been decided in ILR (1938) Nag 431.11 But that does not solve the whole problem nor does that decision cover a case of this kind. The facts of that case have not been given fully in the I.L.R Report and unless the facts are studied closely the decision will appear to travel wider than was intended. The language of the judgment applies fully to the facts which arose there, but unless modifications not necessary for the decision of that case and which of course were not under consideration there are introduced for the purposes of this case, a wrong conclusion will result.

8. The facts are to be found in 19 NLJ 254 (1936) 19 NLJ 254 , 169 IC 169 where the decision of Niyogi, J. which was confirmed on appeal is reported. They were as follows: Mainabai, the plaintiff, had obtained a decree against her husband which directed him to pay her sum of Rs. 8 a month for her maintenance from the date of the institution of the suit onwards. At the same time a charge was created on the property described in the decree. This decree was dated 11th September 1928. After this, on 4th January 1929, the husband mortgaged the charged property to a third party who took without notice of the charge. A suit was instituted on the mortgage in due course and a decree was passed against the husband and the mortgagee was placed in possession. The mortgagee thereupon sued the husband and Mainabai for a declaration that Mainabai's charge decree did not bind him. He failed, the Appellate Court holding that he was a privy of the husband and so was bound by the decree. The decision was based on the ground that the previous judgment in the maintenance case created an estoppel by record. So far there is no substantial difference between that case and this, but when we turn to the judgment of Niyogi, J. we find this important sentence:

It would be preposterous if the Civil Courts are hampered in the execution of the decrees passed by them by such alienations as that in the present case.

9. Therefore Mainabai's decree in that case was not merely declaratory. We are not able to gather its actual terms from the judgment but it seems clear that it must have contained a direction that in the event of the money not being paid, it was to be recovered from the charged property. That is to say the decree was executable. Now of course if a Court orders a defendant to pay the plaintiff a certain sum of money on a specified date and directs that if it is not paid, property which it specifies is to be sold, those orders must be carried out and the judgment-debtor cannot evade them by transferring the property so charged to another, however innocent that other may be. The doctrine of estoppel by record applies. The doctrine of is pendens may also apply in some cases, though not necessarily always. But whether is pendens applies or not, the doctrine of estoppel by record does.

10. This latter doctrine is a wide one which is to be found in the Indian law under different heads. In so far as the narrow facts of that case are concerned, the particular branch applicable there is, in our opinion, to be found in O. 22, R. 10 of the CPC. It is true there is a difference of opinion on this point: some decisions have doubted whether the rule applies to execution proceedings, others hold that it does because R. 10 has not been excluded from the scope of execution by R. 12, whereas Rr. 3, 4 and 8 have. But it is not necessary to decide that here, though we are inclined, as at present advised, to the latter view. But, whether the rule applies in terms or not, it has never been doubted that an estoppel does arise in such a case and that the transferee from the judgment-debtor after decree is bound to carry out its orders in the same way and to the same extent as the judgment-debtor himself. It is not necessary for the decree-holder to sue the transferee all over again. But when the decree is merely declaratory and does not direct the doing of a particular thing, that is to say when it is not executable, then an important difference arises, and the transferee, though bound by the decision in the sense that it is res judicata, is not necessarily bound to the same extent and in the same way as the judgment-debtor: pleas are available to him which would not be available to his transferor. We think there is a wide difference between a decree which orders a person to do a particular thing and one which merely declares a certain state of facts to exist.

11. The doctrine of estoppel by record, as it obtains in England, is set out in Vol. 13 of Halsbury's Laws of England (Hailsham Edition). At p. 402 the learned authors point out that of the several matters included by Lord Coke under this bead, all are now obsolete except “that which appears on the records of the Courts of law.” As to these they state that the judgment must be a final one and they divide judgments of this kind into two categories, those in rem and those in personam, or as they prefer to put it, inter partes. The judgment we are considering in the present case, namely, the one which created the charge, was not a judgment in rem but was one inter partes. We have therefore to see how far this doctrine of estoppel by record extends in the case of a judgment inter partes. This is considered at pp. 408 and 409:

The most usual manner in which questions of estoppel have arisen on judgments inter partes has been where the defendant in an action raised a defence of res judicata, which he could do where former proceedings for the same cause of action by the same plaintiff had resulted in the defendant's favour, by pleading the former judgment by way of estoppel……

But, provided a matter in issue is determined with certainty by the judgment, an estoppel may arise where a plea of res judicata could never be established; as where the same cause of action has never been put in suit.

12. The learned authors then continue to define the limitations of the wider position:

A party is precluded from contending the contrary of any precise point which, having been once distinctly put in issue, has been solemnly found against him. Though the objects of the first and second actions are different, the finding on a matter which came directly (not collaterally or incidentally) in issue in the first action is conclusive in a second action between the same parties and their privies.

13. It will be seen then that the term res judicata is used in different senses in England and in India. What the English lawyers call res judicata, namely the rule which prevents a party from suing again on the same cause of action is dealt with in India by O. 2, R. 2(2), whereas what we term res judicata here is dealt with in England under that branch of the law of estoppel by record which relates to judgments inter partes. But though the classification is different, the content and form are essentially the same, and the consequences which follow are the same. There may be a few minor differences, but if they exist they do not affect the essence of the rule. That being so, we are bound in India to look to our own rules as set forth in the Code of Civil Procedure.

14. But before doing so we stress that the limitations of the doctrine are as strict in England as they are here. On these points there is no difference between the two laws. It is not any and every expression of opinion in a judgment which gives rise to the estoppel, nor can the actual decision be carried further than the circumstances warrant. In England the decision must be a final one: the matter must have been distinctly put in issue; and then only the precise point which was so put in issue and solemnly found against a party is deemed to have been finally decided for the purposes of this rule; and this is so in India as well under S. 11. Then at p. 412 of Vol. 13 of Halsbury's Laws of England, from which we have been quoting above, it is stated:

The doctrine applies to all matters which existed at the time of the giving of the judgment, and which the party had an opportunity of bringing before the Court. But if there be matter subsequent which could not be brought before the Court at the time, the party is not estopped from raising it.

15. The relevance of these references in the present case is this. The position of the subsequent transferee for value without notice was not and could not have been a matter in issue in the former suit which resulted in the charge decree upon which the plaintiff here founds. It is matter sub-sequent which could not have been brought before the Court at the time. Therefore in all cases where the decree is merely declaratory and cannot be executed, all that the transferee (who is a privy of the defendant in the former suit), is estopped from questioning is the fact of charge and the property to which it relates. He is not estopped from putting in issue here the consequences of that charge because that was never in issue before and could not have been put in issue. It was not matter which, to quote the provisions of Expln. 4 to Section 11 of the CPC, “might and ought to have been made a ground of attack or defence in the former suit.” This rule of “might and ought” obtains in England also but of course it cannot be applied there any more than here to matters which could not have been placed in issue because they were not then in existence. See Vol. 13 of Halsbury's Laws of England (Hailsham Edition), p. 413.

16. We stress again that the position is different when the decree is one which can be executed. Then different questions arise and a different set of rules, still under the general head of estoppel by record but under a different branch of it, come into play, namely those which state that in execution the orders of the Court cannot be challenged but must be obeyed and the directions in those orders faithfully carried out. If however, the plaintiff does not trouble to ask for and obtain, or having asked for is unfortunate enough not to get, an executable decree, then he cannot ask to have rules which govern execution proceedings and are special to them applied to another branch of the law to which they do not belong. That explains the difference between ILR (1938) Nag 43 (1938) 25 AIR Nag 129 , 172 IC 949 , ILR (1938) Nag 481 and this case. But it is necessary to refer to another set of cases because the learned Judges in 5 Luck 172 (1929) 16 AIR Oudh 316 , 117 IC 405 , 5 Luck 172 , 6 OWN 493 stated as a general proposition that

…. there is a consensus of opinion in all High Courts in this country that where the right is charged on a specific immovable property either by decree or contract the subsequent transferee though for valuable consideration and without notice takes it subject to that charge.

17. Niyogi, J. repeated these observations in 19 NLJ 254 (1936) 19 NLJ 254 , 169 IC 169 (the case which was under appeal in (1938) Nag 431 (1938) 25 AIR Nag 129 , 172 IC 949 , ILR (1938) Nag 481). With the utmost respect, not only do we think that the rule is too widely stated but we are unable to agree that there is any such general consensus of opinion. In the first place, dealing with 5 Luck 172 (1929) 16 AIR Oudh 316 , 117 IC 405 , 5 Luck 172 , 6 OWN 493 itself, the decision is not based on the Indian decisions referred to in the judgment or on Indian law but upon certain principles of English law which the learned Judges hold are of general application and obtain in. India as well. They quote passages from Ashburner on Equity and from Halsbury's Laws of England and also a passage from Kay, J.'s judgment in (1891) 1 QBD 230 (1891) 1 QBD 230 , 60 LJ QB 227 , 64 LT 9 , 39 WR 280 at p. 238 and then state:

Under the English law, therefore, the execution creditor buys subject to the liabilities created by the judgment-debtor prior to the sale. That being so, the question of notice is wholly immaterial.

18. We have no doubt about that but what we feel, with respect, has been overlooked is that an execution creditor is not a purchaser and it is for that reason that the English Courts have held him bound. The English rule arises out of a complex and technical situation into which we need not enter as the complexities have no application to India but the underlying principles upon which the English Courts proceed can be gathered from the following passages in the Lord Chancellor's judgment in (1856) 25 LJ Ch 299. (1856) 25 LJ Ch 299 , 6 De G M&G 507 , 2 Jur (NS) 121 , 4 WR 275 First of all he explains at p. 303 that in England certain judgments create a lien over the properties to which they relate because of 1 and 2 Vict., C. 110. At page 305 he states:

Now what did the Legislature mean to do by that enactment? In the first place, they meant to make the judgment directly operate as a charge.

19. Then he continues at page 306:

The effect is that they, (that is to say the persons we call decree-holders in India), have the same rights as they would have been entitled to in case the person had, by writing under his hand, agreed to charge the same.

20. We recognize that this is not authority for the proposition that a decree which creates a charge is on the same footing as a charge made by act of parties because the charge with which the learned Lord Chancellor was dealing was one created by statute and not by judgment, but at the same time it is not authority for the converse proposition. It is necessary however to understand the English position because otherwise it becomes impossible to apply the English authorities aright. Having made this clear, we now proceed to other passages in the Lord Chancellor's judgment which deal directly with the matter which we are discussing. He was considering the position of the person who under a judgment (what we in India call a decree) passed subsequently to the one which under the law created the charge purchases the charged property. The Lord Chancellor refers to him as the judgment creditor and says:

The question is, whether they (judgment creditors) “are…. purchasers…. Is a judgment creditor a person who has purchased any part of the lands, or any rent, profit, or commodity in or out of the same? Now, independently of any authority, I confess, I should have thought it was hardly arguable that a person who recovers a judgment is a purchaser. What judgment makes him a purchaser for valuable consideration? As was put by Knight Bruce L.J, in the course of the argument, suppose a judgment is recovered against a person in an action for assault, is he a purchaser of any land of the person who has assaulted him, for valuable consideration? Clearly not. He may be a purchaser, though he has a judgment, but he is not a purchaser by virtue of his judgment; it is something altogether foreign to the nature of a purchaser… The person who recovers a judgment may, indeed, eventually get at the land, because under the Statute of Westminster, he may take the land in execution, and therefore he is said to have, even independently of the last statute, a lien on the land; but it is not by virtue of any purchase but by virtue of the right which the law gives him.

21. Again at page 304 he says:

One cannot call a judgment creditor a purchaser, nor has such creditor any right to the land; he has neither jus in re nor jus ad rem…

22. Then he quotes Lord Elden in (1806) 11 Ves 609. Ex parte Knott, (1806) 11 Ves 609 , 8 RR 254

A mere judgment creditor, though he deals originally for a lien, does not get an estate originally in the land. He has neither jus in re nor jus ad rem,…. if he remains a mere judgment creditor, the Court says he does not deal upon the faith of the land, in this sense, that he does not contract for an interest in the land, and therefore is entitled only as a judgment creditor to an eligit, and he cannot tack.

23. Then he states his conclusion:

He “(the judgment creditor)” is to be in the same predicament as if his debtor, in respect of any property over which he had absolute power of disposition, had executed a charge in the favour, and so given him an equitable right.

24. We will refer only to one more English case. In (1844) 13 LJ Ch 288 (1844) 13 LJ Ch 288 Wigram V.C said at page 291:

Where the legal estate gets into the hands of a purchaser, for value, without notice of an equitable claim, that entirely supersedes the equitable claim; but it is clear, that, in the case of a trust, a judgment sued out will not have that effect. Newlands v. Paynter was the case of furniture in a house in which a man and his wile lived. There had been a private agreement that it should be the wife's separate property. There was no trustee to protect the property. It was merely an agreement between the husband and wife. A judgment creditor took; the furniture in execution, upon which a bill was filed by the wife, and Lord Cottenham protected that property, and decided that the judgment creditor could not take it. That is a case showing as strongly as possible that, as against a judgment at law, this Court will protect equitable interests. If a mere judgment creditor, as distinguishable from a party acquiring property by conveyance without notice, could take it, there would very shortly be an end of the value of all trusts, and the creditors of a party might take the property of the cestui que trust.

25. It is we think clear from these quotations that the reason why the judgment creditor is bound by the charge, notice or no notice, is because he is not a purchaser and it is only the purchaser for value without notice who can claim exemption. With the utmost respect we feel that the English law has been misunderstood in 5 Luck 172 (1929) 16 AIR Oudh 316 , 117 IC 405 , 5 Luck 172 , 6 OWN 493 and that the judgment which is founded on the assumption given at page 178, namely that those observations apply not only to judgment creditors but also to purchasers, travels wider than the English authorities warrant. Turning now to the Indian decisions upon which the learned Lucknow Judges and Niyogi, J. relied. The earliest decision quoted is 27 Cal 194. (1900) 27 Cal 194 It appears from the recital of facts given on page 195, or so we gather from a passage which we shall quote, that the decree which created the charge was one which was executable and that the plaintiff was seeking to enforce the charge in execution and not by a separate suit. The passage to which we refer runs as follows:

On appeal the Subordinate Judge…. also held that the decree obtained by the defendant being one for a declaration and fixing of monthly allowance, it would be executed whenever the amount might fall into arrears during her lifetime.

26. The judgment and report are both short and this is all that is said about the nature of the decree. If this was its nature, then, as we have already explained, we agree that the transferee would be bound. The learned Judges also considered that the transferee had, or looking to the circumstances must be deemed to have had, notice of the charge, so the question before us here did not arise. Then came 28 All 655. (1906) 28 All 655 , 1906 AWN 165 , 3 ALJ 551 That decision proceeded on the assumptions (to be found at page 659) that a charge decree falls under Section 100 of the Transfer of Property Act: that Section (the learned Judge—there was only one — was dealing with the Section as it stood before the amendment) did not exempt the bona fide purchaser for value without notice (he reached this conclusion by comparing S. 100 with S. 40), and that charges by act of parties require registration and that registration amounts to notice.

27. We have already stated that we do not agree that charge decrees can be said to fall under S. 100, and as to the second reason we do not think that was ever the law and we consider that S. 100 was amended in order to make it clear that the opposite view, which had also been taken, was the right view. The reasoning of the learned Judge (there was only one) was general and applied to all charges whether created by act of parties or by operation of law. As to the third argument advanced, with the utmost respect we are unable to see what relevance it had to the question at issue. But it is to be observed that the learned Judge also stated that:

I do not mean to say that there are no cases in which it would not be right and proper to apply the doctrine that a mere equitable claim will not be enforced against bona fide transferees for value without notice.

28. Again with respect we are unable to follow the reason upon which this qualification is grounded. If in the learned Judge's view S. 100 did not permit the transferee to raise such a plea, surely it must have applied in all cases and the Courts could not have been left with a discretion to apply or to omit the rule as they pleased. As regards 47 All 90 (1925) 12 AIR All 60 , 92 IC 348 , 47 All 90 , 22 ALJ 887 the decree creating the charge had been registered and the learned Judges held that considering that together with other facts which had been examined in the Court below, the transferee must “be held to have had notice of the plaintiff's charge.” That being so, again, the question did not arise but the learned Judges went on to say:

This really concludes the case. But we may say that we are not disposed to differ from Sir Henry Richard's view in 28 All 655. (1906) 28 All 655 , 1906 AWN 165 , 3 ALJ 551

29. They did not give the question any independent examination, nor did they say why they were disposed to agree with the earlier decision. Another point of differentiation is that the charge decree there was an executable one and the question arose in a claim suit under O. 21, R. 63, because in execution of the charge decree the Court had exempted the subsequent purchaser for value without notice. Had that case been before us, we would have reached the same conclusion but not along the lines in 28 All 655. (1906) 28 All 655 , 1906 AWN 165 , 3 ALJ 551 In 37 Bom 621 (1913) 37 Bom 621 , 21 IC 54 , 15 Bom LR 809 the question also arose in execution and the learned Judges merely followed 27 Cal 194 (1900) 27 Cal 194 without assigning any reasons of their own. 27 Bom LR 434 (1925) 12 AIR Bom 343 , 87 IC 951 , 27 Bom LR 434 did the same thing. As regards 36 MLJ 618 (1919) 6 AIR Mad 528 , 51 IC 963 , 36 MLJ 618 the charge there was created by a document, that is to say, by act of parties, and not by a decree, and even at that one Judge considered that the document was a mortgage while the other thought it only created a charge. It was also held that the transferee had notice anyway. So the case has no possible application to the present one.

30. That leaves 39 CWN 725 (1995) 39 CWN 725 which Niyogi, J. has quoted. But there the learned Judges merely followed 27 Cal 194 (1900) 27 Cal 194 thinking, without analyzing them, that the decisions in India on this point were all uniform. The distinction which we have drawn between executable decrees and those which are merely declaratory and incapable of execution was not considered. It will be seen then when the decisions are analyzed that most of them do not apply, and that of the two decisions which decide the point the one in 28 All 655 (1906) 28 All 655 , 1906 AWN 165 , 3 ALJ 551 does so on a ground which we hardly think would be accepted as good law at the present day. The other, 39 CWN 725, (1995) 39 CWN 725 merely follows 27 Cal 194 (1900) 27 Cal 194 which in our opinion relates to a different set of facts. Apart from those two rulings the only other decision which at all touches the point at issue is the obiter in 47 All 490 (1925) 12 AIR All 339 , 87 IC 294 , 47 All 490 , 23 ALJ 254 where the learned Judges without giving any reasons state that they are not disposed to differ from the earlier Allahabad ruling. On this point we agree with the critioizm which that learned author, Sir Dinshaw Mulla, has levelled against these cases in his Transfer of Property Act, Edn. 2, page 550. Turning now to the decree which forms the foundation of these proceedings the plaintiff in S.A No. 565/35, Mt. Kundanbai, attempted, when arrears of maintenance had again accrued, to execute her charge decree but the Court of the Judicial Commissioner held that the decree was merely declaratory and was incapable of execution. The learned Additional Judicial Commissioner therefore quashed the execution proceedings and held they must be looked upon as a mere nullity. Mt. Kundanbai has in consequence been obliged to file a succession of fresh suits as arrears arose. That decision is res judicata and binds the parties as such. So it must be accepted in this case that Mt. Kundanbai's charge decree was merely declaratory and was incapable of execution. It did not order the judgment-debtor, so far as the charge was concerned, to do any particular thing. We now have to determine what the effect of that decree is on property in the hands of a subsequent purchaser for value without notice. Applying the principles about estoppel by record to which we have referred and bearing in mind that the estoppel is restricted to the precise point put in issue and decided, or at the outside to a point which might and ought to have been raised, we can only conclude that the decree declared that the property was charged in the hands of the judgment-debtor in that suit and nothing more.

31. If that was all it declared, and we hold it to be so, then the ordinary law governing charges must obtain; and under that law the bona fide purchaser for value with, out notice takes free of the charge: the reason being that the legal estate prevails over a mere equity except when the legal owner takes with notice. “Even against a judgment at law the Court will protect equitable interests.” (1844) 13 LJ Ch 288 (1844) 13 LJ Ch 288 at p. 291. This was not seriously contested and so all we need do in addition to referring to S. 100, which we think illustrates the general principle, is to refer to the following books: Story's Equity, Edn. 3, pp. 36, 154 and 167 to 169: Hanbury's Modern Equity, Edn. 2, pp. 29, 43 and 53: Halsbury's Laws of England (Hailsham Edition) Vol. 13, p. 92. To quote the striking and picturesque language of Hanbury:

All equitable interests have this principle in common, that they fasten on the consciences of certain persons to whom the legal estate belongs. But they meet their Waterloo when the legal estate gets into the hands of one who has given value for the legal estate, and has no notice of their existence.

32. This bona fide purchaser is the bogey who frightens away all equitable interests alike.

33. The next question we have to consider is where the burden of proving notice, or the absence of it, lies. In our opinion, it lies on the purchaser. To quote Hanbury again, page 43:

The defence of a bona fide purchaser for value is an affirmative defence. In order to establish it a purchaser must show, in the words of Fry, J. in (1881) 18 Ch D 93 In re Morgan, (1881) 18 Ch D 93 , 50 LJ Ch 834 , 45 LT 183 at p. 102, that he took all reasonable care and made inquiry and that having taken care and made inquiry, he receives no notice of the trust which affected the property.

34. This is also the Indian law and was so held by one of us in 1939 NLJ 129 (1939) 26 AIR Nag 132 , 185 IC 33 , 1939 NLJ 129 at p. 133. We quote the following passage:

That brings me to the question of notice. There is not much difficulty there. Whether the matter falls squarely within S. 100 or whether it comes under a more general rule of law, the burden is on the transferee to establish that he is a bona fide transferee for value without notice. This has been settled by their Lordships of the Privy Council in 13 Pat 242 (1934) 21 AIR PC 68 , 147 IC 1134 , 61 IA 115 , 13 Pat 242 (PC) at p. 251 where they quoted a passage from an earlier ruling of the Board in 9 MIA 303 (1861-63) 9 MIA 303 , 1 Sar 857 , 1 Suther 480 (PC) at p. 326… As one who owns property subject to a charge can, in general, convey no title higher or more free than his own, it lies always on a succeeding owner to make out a case to defeat such prior charge.

35. To these rulings we may add 42 CWN 1090 (1938) 42 CWN 1090 at p. 1092 and a decision of the Privy Council in 61 IA 115. (1934) 21 AIR PC 68 , 147 IC 1134 , 61 IA 115 , 13 Pat 242 (PC) A contrary view was taken in 15 NLJ 141 (1932) 15 NLJ 141 , 142 IC 376 at pp. 144 and 145. Grille A.J.C, was of opinion that the amendment to Section 100 of the Transfer of Property Act, settled the controversy on the question of notice which existed between the different High Courts and considered that the proviso throws the burden on the person seeking to enforce the charge. We are with respect unable to agree for the reasons we have given and overrule that decision. That, in our opinion, settles the question except for this. It was contended that a decree in itself operates as notice. We do not think it does. This was decided in 12 Bom 217, (1888) 12 Bom 217 where the learned Judges quoting from Sugden on Vendors and Purchasers stated:

Decrees are not notice to a purchaser, but the lis pendens is not terminated where the decree does not put an end to the suit.

36. That is also our view. When the decree provides for the payment of future maintenance and makes provision expressly or impliedly for its own execution, then it does not put an end to the suit and consequently whether the matter be placed on the ground of lis pendens or on that of estoppel by record (the two do not necessarily overlap) the result is the same. But when the decree is merely declaratory and inexecutable, the suit qua suit is at an end and then in our opinion these rules do not apply and the decree qua decree does not operate as notice. That brings us to the individual cases of the various purchasers. The appeal we are considering is a second appeal and the question of notice is one of fact. Therefore if there is positive evidence on record on which the finding of the lower Appellate Court can be based we cannot interfere. In so far as respondent 4 is concerned, his purchase was under Ex. 6 D-1. Not only does the deed not refer to any prior charge but the recitals expressly state that there is none and the purchaser Ghasiram who has entered the box as 6 D.W 1 swears that he made inquiries and sent his agent to search the registration files, but in spite of that he got no inkling of the charge. He has been believed by both the lower Courts. Therefore the lower Appellate Court was right in releasing his property, 16 annas in Mouza Jhadtallai, from the decree.

37. We turn next to respondents 5 and 6. They are concerned with Mouza Doloria. They claim through a chain of transfers which commenced with a mortgage by the Court of Wards which had taken over the estate, dated 5th January 1901. The deed is Ex. 7 D-7, and Ex. 7 D-8 is the Commissioner's sanction. The mortgagee sued on the mortgage and obtained a decree for sale. Ex. 7-D-3 is the judgment. The property was sold in execution and purchased by Pannalal and Jayaram. Ex. 7 D-4 is the sale certificate and Ex. 7 D-5 is the receipt given by them acknowledging receipt of possession. These two then sold the property to Raja Laxminarayan by Ex. 7 D-6 and he in his turn sold to these two respondents. 7 D.W 1 is an agent of the original mortgagees, one of whom is defendant 7 in this case. He swears that he made due inquiries about encumbrances from the then Manager of the Court of Wards and says that he was not told anything about a charge. He swears that his master purchased without knowledge or notice of any charge. The property was purchased at the auction for Rs. 19,150 as Ex. 7 D-4 shows, so it is clear that a substantial price was paid for it. This witness has also been believed, so this item, that is to say, 16 annas of Mouza Doloria, excluding the cultivating rights in the sir (see Ex. 7 D-7), was also rightly released.

38. The case of respondents 7, 8 and 9 is different. They are concerned with Mouza Chowkdi. In their case there is no evidence one way or the other; therefore as the burden of proof is on them, the property in their possession must be held to be subject to the charge. That leaves outstanding the case of respondent 10. He is interested in Mouza Patnari. He has entered the box as 15 D.W 1 and has been believed. He swears that he purchased without notice and that he paid the full price of the village. This village was also rightly released. We do not know whether there were any other purchasers: at any rate none of them has appeared and so we are not called upon to consider their cases, if any. We say this because owing to some mistake Mr. Sen was shown as representing respondent 11 as well as respondents 4-10. He informs us that is a mistake, so the only purchasers whose cases have been placed before us are the respondents 4-10. We now have left S.A 114/36. The appellant there is defendant 2, Mt. Savitribai, a successor by inheritance of the judgment-debtor Shaligram against whom the original charge decree was passed. She is one of the persons who now represents the family and states that owing to altered circumstances the maintenance payable should be reduced. The plaintiff objects and states that cannot be done in this suit. She states that so long as her decree stands she is entitled to the sum mentioned in it. If the family want a reduction they must sue for that relief and obtain modification of the decree in a suit of their own. They also state that this matter is res judicata it having been so decided by the Judicial Commissioner's Court in a previous suit between the same parties. A copy of that judgment was filed as Ex. P-32. Savitribai's learned counsel replies that the plea of res judicata is not a pure plea of law and that as it was not pleaded or raised in the lower Courts it cannot be agitated here. We find that the plea of res judicata was taken in respect of certain other matters but curiously enough not on this point though the first Court's judgment in the previous case was cited in issue 3. That issue is wide and would have covered this plea if it had been taken. It runs:

Whether any decisions in the said…. Civil Suit Ho. 4 of 1921 (this is the suit in question though the decision was given in appeal)…. operates as res judicata in this suit and against which of the defendants?

39. However it is clear that the point was not argued in either of the lower Courts, so we think it right not to allow the objection to be taken now. But though the plea of res judicata was not raised, the point which is said to have been decided was taken clearly enough in the plaintiff's reply, dated 6th August 1930 para. 3, and even if the judgment of the Judicial Commissioner's Court is not used as res judicata, it can be used as a precedent on a question of law. In any case we have ourselves recently considered the matter at length in 1939 NLJ 409 (1939) 26 AIR Nag 249 , 185 IC 580 , 1939 NLJ 409 and have reached the same conclusion. As both sides relied on this decision, it is necessary to set out the passages in the judgment which relate to variation of decrees. We were dealing there with a written agreement for maintenance and came to the conclusion that such agreements could be varied without the necessity of instituting a suit for that purpose. But when analyzing the various rulings we pointed out that the rule was different when the rate of maintenance was fixed in a decree. This is what we said:

The decisions deal mainly with decrees and would appear to indicate a different rule, namely that unless a decree provides on the face of it machinery for its own alteration, variation can only be obtained by a separate suit properly framed for the purpose.

40. With that opinion we still agree and nothing was shown us to the contrary. This appeal (S.A No. 114/36) therefore fails and is dismissed with costs. The result then is as follows. S.A No. 114/36 fails and is dismissed with costs. S.A No. 115/36 also fails and is likewise dismissed with costs. S.A No. 565/35 succeeds partially. As against respondents 4, 5, 6 and 10 (Ghasiram, Thakurlal, Nanbelal and Jagannathsingh) it fails and is dismissed. These respondents will be paid their costs by the appellant Ghasiram. As against respondents 7, 8 and 9 (Champalal, Gangabishan and Sheonarayan) the appeal succeeds. But as the plaintiff asked for no relief against them in the beginning and as the plaintiff did not appeal against their exclusion from the decree, and as the appellant though insisting on their joinder does not want the question of contribution to be decided in this suit, we think it right that the costs of this appeal and of these three respondents in the lower Courts should be borne as incurred. These respondents will consequently be added to the decree and also the village in which they are interested, and the plaintiff's claim will be decreed as against them and their village as well. The same will be done as regards respondent 11 (Hazarilal). The order as to costs in his case will also be the same.

41. We desire to add that in our view the regrettable tangle which has occurred here is due to what we feel is the mistaken view taken by the late Judicial Commissioner's Court about the decree which created the charge. But that is beyond our power to remedy. The decision binds the parties. It is necessary however for us to state that as a matter of law we do not endorse that opinion in case our decision should be interpreted as authority to the contrary. We also desire to state that it is our opinion that provision should be made in India for the compulsory registration of such decrees as in England. When the decree is declaratory it is unfair that the decree-holder should be deprived of the protection which he receives from the law which now states that registration is to operate as notice. On the other hand, when the decree is executable it is in the last degree unjust to the bona fide purchaser for value without notice who is then bound by the charge as a privy. If all decrees affecting immovable property were to be made compulsorily registrable, these difficulties and injustices would disappear. A person who purchased without searching the registers would then have no one but himself to blame.

D.S/R.K

42. Order accordingly.