- Bookmark
- Share
- CaseIQ
Ram Din v. Bhup Singh And Others
Summary of Opinion — Appeal concerning surplus collections after redemption
Factual and Procedural Background
The plaintiffs (respondents in the appeal) originally brought a suit for redemption of a usufructuary mortgage in the Munsif's Court of Shahjahanpur and obtained a decree, being put in possession of the mortgaged property on 13 March 1906. Subsequently they instituted a second suit in the Court of the Subordinate Judge to recover Rs. 5,000 as surplus collections alleged to have been received by the mortgagee since 1874, on the ground that the mortgage debt had been discharged by the usufruct of the property.
The subordinate judge dismissed the subsequent suit on the ground that it was barred by section 43 of the Code of Civil Procedure. On appeal the learned District Judge held that the subsequent suit was not barred and remanded it for decision on the merits under section 562 of the Code of Civil Procedure. The defendant (appellant in this appeal) challenged the District Judge's remand order to this Court.
By the judgment under summary, the Court (Aikman, J., and Karamat Husain, J., separately delivering reasons) allowed the appeal, set aside the District Judge's remand order under section 562, restored the decree of the court of first instance (i.e., dismissal of the surplus suit), and awarded costs to the appellant including higher-scale fees.
Legal Issues Presented
- Whether a suit by a mortgagor to recover surplus collections received by a mortgagee after the mortgage debt has been satisfied constitutes a separate cause of action distinct from a suit for redemption, or whether it forms part of the single cause of action in a redemption suit.
- Whether the provisions of section 43 of the Code of Civil Procedure bar a subsequent suit for surplus collections when a redemption suit has already been instituted and decided.
- How Article 105 of the Second Schedule of the Limitation Act (three-year limitation for recovery of surplus after mortgagor re-enters the property) should be construed in relation to section 43 of the Code of Civil Procedure.
- Whether section 13 of the Code of Civil Procedure applies to bar the subsequent suit (as discussed in one precedent), and if not, whether section 43 suffices to bar the suit.
Arguments of the Parties
Appellant's Arguments (defendant)
- The cause of action for surplus collections is not separate from the cause of action for redemption; a mortgagor has a single cause of action against a mortgagee in possession and must include all claims arising out of that cause of action in the redemption suit.
- Accordingly, the subsequent suit for surplus collections is barred by section 43 of the Code of Civil Procedure.
Respondents' Arguments (plaintiffs)
- The respondents relied upon Article 105 of the Second Schedule of the Limitation Act, which prescribes a three-year period to recover surplus collections from the date when the mortgagor re-enters the mortgaged property; they argued that this indicates a separate cause of action and a separate suit is maintainable.
Lower Courts' Reasoning (as reported)
- The Court of the Subordinate Judge dismissed the subsequent suit holding it barred by section 43, Code of Civil Procedure.
- The District Judge (on appeal) concluded that the cause of action for surplus arose after the redemption suit and was distinct; relying on Article 105 of the Limitation Act, he held section 43 did not bar the subsequent suit and remanded the matter under section 562, Code of Civil Procedure for decision on merits.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Vinayak v. Dattaraya | Redemption suits aim at complete adjustment of rights; properly framed decrees cover matters up to the time when they are carried into effect. | The opinion (Aikman, J.) cites Jenkins, C.J.'s remark to support the view that a mortgagor was entitled and bound to claim an account of surplus in the redemption suit, so a later suit was barred. |
| Rukmin Bai v. Venkatesh | In that case a subsequent suit of the mortgagee was held to be barred under section 13 or section 43 (as observed in the opinion). | The Court referenced this decision as being in favour of the appellant, treating it as authority that subsequent suits of this character may be barred. |
| Satyabadi Behari v. Harabati (also referenced as Satayabadi Behari v. Haravati) | Placed by the opinion among authorities relevant to whether subsequent suits are barred and to historical procedural distinctions (including reference to suits under Regulation 1 of 1798 in contrast with Transfer of Property Act schemes). | The opinion treats this case as supportive of the appellant's position and refers to it when distinguishing historical regimes from the modern Transfer of Property Act scheme. |
| Kashi Pershad v. Bajrang Pershad | Cited as a decision in favour of the appellant (i.e., supporting the bar on subsequent suits). | The opinion lists this case among those supporting the conclusion that a later suit like the present should be barred. |
| Balaji v. Tamanganda | Affirmed that a mortgagor's claim when instituting a redemption suit includes both possession and surplus; section 7 CPC requires the whole claim arising from same cause of action to be included. | The opinion quotes and relies on this authority to hold that the claim for surplus should have been included in the redemption suit and hence is part of the single cause of action. |
| Kishori Lal Roy v. Skarat Chunder Muzumdar (quoted with approval in Lalessor v. Janki Bibi) | Principle that a plaintiff may enforce a claim for possession and for mesne profits either in one suit or two, but policy encourages disposing of the whole claim in one suit when reasonable. | The opinion invokes this reasoning to distinguish mesne profits claims (where separate suits may be permitted) from surplus collections in a redemption suit, and to support the single-cause-of-action approach for redemption-related surplus. |
| Mon Mohan v. The Secretary of State for India | Deals with suits for mesne profits (not directly with surplus in a redemption context). | The Court observed this authority (and Ramdayal v. Madan Mohan Lal) have no bearing on the present matter concerning surplus profits in a redemption suit. |
| Ramdayal v. Madan Mohan Lal | Deals with mesne profits suits. | The Court stated it has no bearing on the present case of surplus collections following a redemption suit. |
| Maksud Ali v. Nargis Dye | Referenced in the opinion but indicated as not relevant to surplus-profit suits. | The Court expressly observed that this case has nothing to do with a suit for surplus profits brought after a suit for redemption. |
| Amanat Bibi v. Imiai Husain | Referenced but indicated as not relevant to the present issue. | The opinion states this case likewise has nothing to do with a post-redemption suit for surplus profits. |
| Baboo Gour Kishen Singh v. Sahay Fukeer Chand | Held that a suit for redemption does not debar the mortgagor from subsequently suing the mortgagee in possession for mesne profits payable between date of suit and execution of decree for redemption. | The Court cited this case to distinguish mesne profits claims from surplus collections claims, indicating article 105 and historical regimes contemplate different situations than a redemption executed by decree. |
| Lalessor v. Janki Bibi | Quoted approvingly in relation to the policy allowing plaintiff to pursue possession and mesne profits in one or two suits. | The opinion uses the approval to reinforce the distinction between mesne profits and surplus in redemption suits and to support the principal holding that surplus claims arising from a redemption cause of action should be raised in the redemption suit. |
Court's Reasoning and Analysis
The Court's reasoning is presented through the separate but concordant opinions of Aikman, J. and Karamat Husain, J. Their analyses concentrate on whether the subsequent suit for surplus collections is a distinct cause of action or forms part of the original cause of action in the redemption suit, and whether procedural bars (section 43, CPC) or limitation provisions (Article 105, Limitation Act) permit the later suit.
Aikman, J. — primary points of analysis
- Aikman, J. rejects the District Judge's view that at the date of institution of the redemption suit the plaintiffs' whole claim was limited to possession only. He considers that the mortgagor had another remedy in the redemption suit: to have accounts taken and to obtain a decree for any surplus received by the mortgagee after discharge of the mortgage debt.
- He relies on the principle stated in Vinayak v. Dattaraya that a redemption suit aims at a complete adjustment of rights and the decree should provide for matters up to the time when it is carried into effect.
- Aikman, J. notes precedents (Rukmin Bai v. Venkatesh; Satyabadi Behari v. Harabati; Kashi Pershad v. Bajrang Pershad) are in favour of the appellant's position that a subsequent suit of this nature is barred; he observes counsel has not cited any case holding a suit like the present to be maintainable.
- Although section 13 of the Code of Civil Procedure is in some precedents used to bar suits, Aikman, J. accepts section 13 will not apply here because the previous court was not competent to try the present suit; nonetheless he holds that section 43 suffices to bar the present suit.
- Regarding Article 105 of the Limitation Act (which provides a time from the date the mortgagor re-enters the mortgaged property), Aikman, J. holds that it must not be construed to conflict with section 43 CPC and should be deemed to refer to cases where the mortgagor regains possession otherwise than by a redemption suit.
- On this basis Aikman, J. would allow the appeal (i.e., set aside remand and restore the trial court decree).
Karamat Husain, J. — primary points of analysis
- He sets out the factual chronology: redemption suit instituted (No. 591 of 1904), plaintiffs did not claim surplus collections in that suit nor obtain permission to bring a separate suit; plaintiffs obtained possession in execution of the decree on 13 March 1906 and thereafter (1 May 1906) instituted the present suit for excess profits.
- The subordinate judge dismissed that subsequent suit under section 43 CPC; the District Judge remanded holding the cause of action for surplus arose subsequently and was distinct.
- Karamat Husain agrees with the appellant's contention: the cause of action for surplus profits in a redemption suit is not separate from the cause of action for recovery of possession in a redemption suit; a mortgagor has a single comprehensive cause of action and must include claims for surplus collections in the redemption suit.
- He emphasizes the comprehensive character of redemption suits and the obligation to ensure decrees cover all rights; he refers to section 92 of the Transfer of Property Act (requiring account) and to section 7 of the Code of Civil Procedure (every suit to include the whole of the claim arising out of the same cause of action) to show that an account and claim for surplus form an essential part of the mortgagor's claim in redemption.
- He notes distinctions between a mortgagee in possession and a trespasser: mesne profits claims in ejectment suits are distinct (section 44 CPC) while surplus-collection claims in a redemption suit are synchronous with the right to claim possession and therefore are not properly treated as accruing later.
- He distinguishes authorities on mesne profits (Mon Mohan; Ramdayal) and certain other cases (Maksud Ali; Amanat Bibi) as not bearing on a surplus-in-redemption situation. He also interprets Article 105 as referring to cases where the mortgagor re-enters other than by decree for redemption, citing Baboo Gour Kishen Singh as dealing with mesne profits in a distinct context.
- On these grounds Karamat Husain would allow the appeal and set aside the remand.
Holding and Implications
APPEAL ALLOWED
The Court ordered that the District Judge's order remanding the case under section 562, Code of Civil Procedure, be set aside and the decree of the court of first instance (which had dismissed the subsequent suit as barred by section 43) be restored. The appellant (defendant) was awarded costs here and in the court below, and the costs of this Court were to include fees on the higher scale.
Implications: The direct effect on the parties is the dismissal of the plaintiffs' subsequent suit for surplus collections (i.e., restoration of the original dismissal) and an award of costs in favour of the appellant. The Court's reasoning emphasizes that claims for surplus collections that arise out of the same cause of action as a redemption suit ought to be included in that redemption suit; accordingly section 43 CPC can bar a later suit of this character. The opinion also states that Article 105 of the Limitation Act should not be construed so as to conflict with section 43 and is to be understood as applying where the mortgagor re-enters otherwise than by virtue of a redemption decree.
The opinion does not record an express statement that it is laying down a new general precedent beyond the application of the cited principles to the facts; it confines itself to the resolution of the appeal and the direct relief ordered.
Aikman, J.:— This is an appeal from an order of the learned District Judge of Shahjahanpur, remanding a case under the provisions of section 562 of the Code of Civil Procedure. The plaintiffs, who are respondents here, brought a suit against the appellant in the Munsifs Court, for redemption of a usufructuary mortgage. They obtained a decree and were put in possession of the mortgaged property, on 13th March, 1906. They subsequently brought the suit, out of which this appeal arises, to recover from the appellant Rs. 5,000, on account of surplus collections alleged to have been received since 1874, when the mortgage debt was discharged by the usufruct of the property. The suit was filed in the Court of the Subordinate Judge. It was dismissed by him on the ground that it was barred by the provisions of section 43, Code of Civil Procedure. On appeal by the plaintiffs, the learned District Judge held that the suit was not barred, and remanded it for decision on the merits. It is against that order of remand that the defendant has preferred this appeal.
2. In my opinion, the appeal must be allowed. The learned District Judge has written a careful judgment, but I cannot agree with the conclusion at which he has arrived. He says “The cause of action, on the 17th December, 1904, the date of the institution of the case in the Munsifs Court, was the retention of the property. The whole claim which the plaintiff was entitled to make then on that cause of action was to say “give me possession of the property.” This is a view which I cannot accept.
3. The plaintiff had another remedy which he was not only entitled to sue for, but bound to sue for in the previous suit, and that was to have an account taken, and a decree passed for any surplus received by the mortgagee, after discharge of the mortgage debt. As remarked by Jenkins, C.J in Vinayak v. Dattaraya(1), a redemption suit has for its purpose the complete adjustment of the rights of the parties, and the decree, when properly framed, provides for matters even up to the time when it is ultimately carried into effect.”
4. The decision in Rukmin Bai v. Venkatesh(2), Satyabadi Behari v. Harabati(3), and Kashi Pershad v. Bajrang Pershad(4), are also in favour of the appellant, and we have not been referred to any case in which a suit like the present has been held to be maintainable. In the case of Rukminbai v. Venkatesh, the subsequent suit of the mortgagee was held to be barred either under section 13 or section 43 of the Code of Civil Procedure Section 13 will not apply to this case, as the court which tried the previous suit was not a court competent to try the present suit. But the provisions of section 43 are sufficient to bar this suit.
5. The learned District Judge in support of the conclusion to which he came relies on Article 105 of the second schedule of the Limitation Act, which prescribes a period of limitation for a suit by a mortgagor after the mortgage has been satisfied, to recover surplus collections received by the mortgagee and gives as the time from which the period begins to run the date “when the mortgagor re-enters on the mortgaged property.” In my opinion, this article must not be construed so as to conflict with the provisions of section 43, Code of Civil Procedure, and must be deemed to refer to cases in which the mortgagor has got possession of the mortgaged property otherwise than by means of a suit for redemption. For the above reasons, I would allow the appeal with costs.
Karamat Husain, J.:— The facts which led up to this appeal are, that a suit for redemption (No. 591 of 1904) was brought in the Court of the Munsif of Shahjahanpur. The plaintiffs in that suit did not claim any surplus collections, made by the mortgagee in possession nor did they obtain any permission to bring a separate suit for such collections. They got possession of the property in execution of the decree for redemption, on the 13th March, 1906, without any payment as it was found that the mortgage debt had been satisfied from the profits of the mortgaged property before 1280 Fasli.
6. On the 1st of May, 1906, the plaintiffs brought a suit for the recovery of the excess profits, realized by the defendant, after the satisfaction of the mortgage money, and before redemption. One of the pleas in defence was that section 43 Civil Procedure Code barred the suit. The court of first instance, accepting the plea, dismissed the suit. On appeal by the plaintiffs, the learned District Judge set aside the decree of the first court—and remanded the case under section 562, Civil Procedure Code. The lower appellate court came to the conclusion that section 43 Civil Procedure Code did not bar the suit, and that the cause of action for the surplus arose subsequently to that of redemption and was a distinct cause of action. The defendant has appealed to this Court. It is argued on his behalf that the cause of action for surplus profits in a redemption suit is not separate from the cause of action for the recovery of the possession of the property mortgaged and that the mortgagor in such a suit has only one single cause of action against the mortgagee in possession. This contention, I am of opinion, is perfectly sound. The comprehensive character of suits relating to mortgages and the obligation incumbent on litigants to see that the decree in them covers all rights, is well known, (Vinayak v. Dattaraya), and a mortgagor in a redemption suit has not only to claim possession where the mortgagee has it, but he has also to claim surplus collections, if any. His cause of action in a redemption suit is a single cause of action, and demand for the excess collections, if any, forms an essential part of his whole claim in respect of that cause of action and hence if the plaintiff in a redemption suit succeeds, the court has to pass a decree, ordering that an account shall be taken (section 92 of the Transfer of Property Act). Regarding the principle already stated, the learned Judges in the case of Balaji v. Tamanganda, remark:— “In this case, the plaintiff, who claims under the mortgagor, sues to recover over-payments, on account of a mortgage which has been redeemed. We are of opinion that the claim which arose out of the cause of action when the suit for redemption was filed, was, that the plaintiff the mortgagor, was entitled, first, to recover possession of the mortgaged property on the ground that the mortgage had been satisfied out of the rents and profits received by the mortgagees, and secondly, to get back any sum over-paid, and that therefore, the first suit should have claimed both possession and the surplus, as required by section 7 of the Code of Civil Procedure which provides, that “every suit shall include the whole of the claim arising out of the same cause of action”. The proper decree would have been to order payment of the surplus, on the ground that the mortgagees were trustees of the mortgagor and that the money in their hands belonged to them.
7. There in fact may be suits for redemption in which a demand for a surplus directly flowing from a settlement of accounts may be co-extensive with the whole claim of a mortgagor in respect of his cause of action to redeem. The right to claim the surplus profits is synchronous with the right to claim possession of the mortgaged property and to hold that the cause of action for claiming excess collections accrues when the mortgaged debt has been satisfied, is inconsistent with the principles on which the law of redemption is based.
8. The question, of accounts in a redemption suit must not be mixed up with the question of mesne profits in a suit for the recovery of immoveable property against a trespasser, for the position of a mortgagee in possession is very different from that of a trespasser. The possession of the mortgagee before redemption is possession for the mortgagor, and he becomes a trustee for the mortgagor after he has been paid.” (Ashurner on Equity, p. 258). He has therefore to deliver possession of the mortgaged property, and to account for his gross receipts from the mortgaged property” (section 76 T.P.A). The possession of a trespasser is of an adverse nature and section 44, Civil Procedure Code shows that the cause of action for mesne profits is distinct from that for the recovery of immoveable property. In India “the policy of the law has been to allow a plaintiff to enforce a claim for possession of land, and for mesne profits either in one suit or two, as he might think proper, but at the same time to induce him if there is no reason to the contrary, to dispose of his whole claim in one suit only”. (Kishori Lal Roy v. Skarat Chunder Muzumdar quoted with approval in Lalessor v. Janki Bibi. Such being the distiction between a claim for surplus collections in a redemption suit, and a claim for mesne profits in a suit in ejectment, the cases of Mon Mohan v. The Secretary of State for India, and of Ramdayal v. Madan Mohan Lal, which deal with suits for mesne profits have no bearing upon the case before me. Maksud Ali v. Nargis Dye(5), Amanat Bibi v. Imiai Husain(6), have also nothing to do with a suit for surplus profits brought after a suit for redemption.
9. It is contended on behalf of the respondent that article 105 of the Indian Limitation Act (No. 15 of 1877) provides three years limitation for the recovery of surplus collections, received by the mortgagee from the date when the mortgagor re-enters on the mortgaged property, and that this indicates that there can be a separate suit for excess collections. The article, in my opinion, contemplates a case other than that of redemption. When a mortgagor takes possession of the mortgaged property, not in execution of a decree for redemption but in some other way then article 105 applies. In Baboo Gour Kishen Singh v. Sahay Fukeer Chand(7), it was ruled that a suit for redemption does not debar the mortgagor from afterwards suing the mortgagee in possession for mesne profits, payable between the date of suit and the execution of the decree for redemption. In that case, the mortgagee, as has been observed by the learned Judges in Satayabadi Behari v. Haravati(8), had sued under Regulation 1 of 1798, while the scheme of the Transfer of Property Act is quite different. For the reasons given above, I would allow the appeal.
10. By The Court:— The order of the Court is that the appeal be allowed. The order of the learned District Judge, remanding the case under section 562, Code of Civil Procedure, is set aside, and the decree of the court of first instanee is restored. The appellant will have his costs here and in the court below and the costs of this Court will include fees on the higher scale.
S.C.CAppeal aecreea.
Alert