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Online LibraryChas. A. Stevens & BrosThe Indian decisions (New series) : being a re-print of all the decisions of the Privy Council on appeals from India and of the various high courts and other superior courts in India reported both in the official and non-official reports from 1875 (Volume 7) → online text (page 49 of 155)
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Property Act, which appears to me distinctly to contemplate sales in
enforcement of puisne mortgages subject to prior incumbrances. A prior
mortgagee who had no such defences to raise would naturally not appear
to contest the suit of the mense of puisne incumbrancer, for unless such
suit assails the genuineness, validity or amount due upon the prior mortgage,
he has no reason to defend the suit, for whatever decree may be passed
upon a mesne or puisne incumbrancer's suit [500] as to the sale of the
property, such sale could not affect the interests of the prior mortgagee.

These considerations seem to me to furnish ample explanation of the
expediency which induced the Legislature to make the provisions contained
in s. 85 of the Transfer of Property Act as a rule of procedure guiding the
array of parties in such mortgage suits. But there is nothing in that
section, as I understand it, to render it necessary that at the choice and
at the suit of any one of several mortgagees of the same property, all the
mortgages are to be called into account, the prior mortgages are to be
paid off, the puisne mortgages are also bo be liquidated, and the suit is to
be proceeded with, much in the same manner as a suit for the adminis-
tration of an estate or the winding up of a company.

This leads me to the consideration of the second aspect of this dis-
cussion, viz., whether either the Transfer of Property Act or the Code of
Civil Procedure furnishes any rules as to the adjudication of diputes in
mortgage suits in the manner which must necessarily be required by an
argument which maintains that as a condition precedent to the enforce-
ment of a mesne or puisne incumbrance all the subsisting mortgages
must be brought into account and liquidated before a sale can take place to
satisfy the mesne or puisne incumbrancer who seeks to enforce his security
when it falls due without waiting for the terms upon which other incum-
brancers, whether prior or puisne to him, advanced money to the mort-
gagor and the periods when such mortgages would become redeemable.
Even assuming, for the sake of argument, that a mesne mortgagee is
bound to pay off prior mortgages, the question remains how he is to force
two or more incumbrancers, puisne to his mortgage, to redeem each other
or to enforce their respective securities against each other in a suit not
instituted by any one of them and in which they are all arrayed on one
and the same side as defendants.

It is equally difficult to conceive how in such a suit decrees for
redemption or sale could be made as between co-defendants inter se,
[501] or, if such decretal orders are inserted in the decree granted to the

317



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JULY 25.

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13 A. 432

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13 All. 502



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[Yol.



1891
JULY 25.

FULL
BENCH,

13 A. 432

CF.B).



plaintiff, how suoh decretal orders are to be enforced by one co-defendant
against another who, so far SB the plaintiff is concerned, are his judg-
ment-debtors, and as such, liable to the execution of his decree, subject of
course to such conditions as have been imposed upon the right decreed to
him. And it is needless to say that such conditions can never be such as
to leave the decree-holder at the mercy of any or all of the judgment-
debtors as to the enforcement of the right decreed. In my opinion this
view is not ooposed to any principle laid down by the Lords of the Privy
Council in Umes Ghander Sircar v. Zahur Fatimd (1), which deals with
the especial pleadings and facts of that particular case, and does not seem
to proceed upon any special provision of the Transfer of Property Act.

Perhaps the best way to deal with this point is to take an illustra-
tion and conceive the kind of pleas which may possibly be raised in such a
suit, with reference to the hypothesis upon which the argument I am now
considering proceeds. The illustration which I take is the following :

A, the owner of certain immoveable property, hypothecates it., that
is, executes simple mortgages first in favour of B, then successively in
favor of 0, D, E, F, G, and H. That these successive mortgages are all
valid cannot be denied, unless it is held (which as I have already stated
cannot be held) that after the execution of one mortgage the mortgagee
can no longer-deal with his rights of ownership iu the mortgaged property
by executing a second or other subsequent mortgage. This being so, let
me conceive that C, the second mortgagee, seeks to enforce his security
by bringing the mortgaged property to sale, that is to say, such rights and
interests as were mortgaged to him by A subject to the prior incumbrance
of B.

[502] Now in such a suit the provisions of s. 85 of the Transfer of
Property Act would require that the array of parties should be the
following:

C, (2nd mortgagee) ... ... ... plaintiff.

v.

A, mortgagor ... ... ... defendant 1.

B, 1st mortgagee ... ... ... ,, 2.

D, 3rd ... ... ... 3.

E, 4th ... ... ... 4.

F, 5th ... ... ... 5.

G, 6th ,, ... ... ... ,,

H,7th

Now, in dealing with a suit such as this, the respective rights of
various mortgagees as declared in s. 75 of the Transfer of Property Act
must be kept in view, also the provisions of s. 85 of that Act as to the
array of parties ; and upon the hypothesis of the argument, which I regard
as unsound, I will conceive defences which may be raised in such a suit
rendering it impossible to be decided under any rules of procedure recogaised
by our Code (Act XIV of 1882), notwithstanding its amendments. Lat ma
then conceive the following defences :

(1) A, the mortgagor, either denies that he ever executed the mortgage in
favour of C, or pleads that the mortgage has been partly or wholly paid off.

(2) B, the first mortgagee, pleads that the mortgage in favour of C,
was illegal and invalid, because in his deed there was a covenant against
subsequent alienation by A, the mortgagor, and A the mortgagor had
therefore no authority to execute the second mortgage in favour of C, the

(1) 18 C. 164,
318



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13 All. 504



plaintiff, whilst A, mortgagor, defendant No. 1, denies that lie ever exe-
cuted a mortgage in favour of B, defendant No. 2, or that that mortgage
should in any manner be taken into account.

(3) D, the 3rd mortgagee, defendant No. 3, pleada that not only
the mortgage in favour of C, the plaintiff, but also the mortgage [503]
in favour of B, the first mortgagee, defendant No. ] , were fraudulent and
collusive and without consideration, that therefore he is not to be regarded
as the 3rd mortgagee but as the first mortgagee, thus entitled to defeat
not only the claim of the plaintiff C, but also to defeat the pretensions of

B, who claims to be the first incumbrancer of the property.

(4) The defence of E is that though the mortgage executed by A, the
mortgagor defendant No. 1, in favour of the plaintiff was valid, the
mortgage in favour of B, defendant No. 2, who claims to be the mortgagee,
was never executed, is not genuine and no money therefore is due upon it,
and that his (B's) fourth mortgage was therefore free of any incum-
brance such as B, defendant No. 2, asserts.

(5) The plea of F is that all the mortgages executed by A, the
mortgagor in favour of B, defendant No. 1, C the plaintiff, D the third
mortgagee, defendant No. 3, E, the fourth mortgagee, defendant No. 4,
were genuine and valid, but that all these persons through fraud, misrepre-
sentation or gross neglect induced him (F) to advance money .on the
security of the mortgaged property, and they should therefore be
postponed to his (F's) mortgage security for purposes of satisfying his
demand under the rule contained in s. 78 of the Transfer of Property Act.

(6) The plea of G, the sixth mortgagee, defendant No. 6, is that the
mortgage in favour of the plaintiff C is genuine and valid, but that the
mortgages in favour of B, defendant No. 2, D, defendant No. 3, E, defend-
ant No. 4, and F, defendant No. 5, were not valid and no consideration
passed upon them, and therelore his (G's) rights are not subject to any
of the incumbrances claimed by the abovementioned defendants Nos. 2,
3, 4 and 5.

(7) The plea of H, defendant No. 7, is that, although the plaintiff's
mortgage is genuine and valid, yet he cannot enforce his security other-
wise than subject to his (H's) mortgage, because in taking the mortgage

C, the plaintiff, joined with B, D, E, F and G, in inducing him (H) to
believe that the property was free of all [505] incumbrance and it was
upon such guarantee that he (H) advanced the money.

Such may be the pleas in a suit such as the one which I have con-
ceived as an illustration. I do not wish to complicate the illustration
further by saying that, if the pleas of these various defendants also raised
questions as to the amount due and paid upon each successive mortgage,
the rights of each mortgagee, who being defendant in the cause seeks
priority over another, would require a separate issue for determination,
which issue, according to the hypothesis with which I am now dealing,
could not arise as between the plaintiff on the one hand and the defendant
on the other, but would arise between on or more defendants inter se.

Similarly, there may be pleas other than those that I have con-
ceived in the illustration, in which the defendants quarrel inter se as to
the right which each possesses under his mortgage, and, by the mathe-
matical rule of permutations and combinations a suit of this character might
give rise to many more issues as between defendants inter se as to their
respective rights not only as to priorities and amounts of their lien, but
also as to their rights to enforce the redemption of prior mortgages, and
also as to enforcement of securities against the puisne incumbrancers.

319



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JULY 25.

FULL
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(F.B.).



13 All. 505



INDIAN DECISIONS, NEW SERIES



[Vol.



1891 It would almost be a waste of time to illustrate how such other issues

JULY 25. might arise between mortgagees who are all co-defendants and between

whom issue sarise such as those which I hswe already indicated. That

FULL such issues which are disputes between co-mortgagees inter se do not concern

BENCH. tne plaintiff C, so long as he enforces his security according to the covenants

contained therein and subject of course, to the priorities which may be

13 A. 432 asserted against him, is obvious ; for all that he wants is to enforce a valid

(F.B.). contract for recovery of his money by bringing to sale the rights and
interests which were mortgaged to him by the mortgagor A, of course sub-
ject to such incumbrances as may be proved against him.

So long as the plaintiff's rights are resisted by any one of the
defendants, who, in a suit such as I have contemplated in the illustration,
should be arrayed in point of parties, (as s. 85 of the [505] Transfer of
Property Act requires) the issue would be one between the plaintiff on
the one hand and the defendant or defendants on the other. But the
moment issues are raised between the defendants inter se, as to priorities
of mortgages, as to fraud or collusion, as to the amounts due upon each
mortgage, such issues, if they can ba so called, are issues for dealing with
which the rules as contained in our Code of Givil Procedure are inadequate
for purposes of ajudication. Points in dispute between defendants can-
not prpperly be called " issues " within the meaning of s. 146 of the Code ;
nor do the rules of evidence as understood in our law, entitle co-defendants
inter se to cross-examine each other's witnesses, for the right is limited to
parties arrayed on opposite sides of a litigation (vide s. 137 and s. 138 of
the Evidence Act), and if this is so, it is difficult to see how any issues,
which arise between two or more mortgagees as to their conflicting claims
in a suit in which all of them are arrayed as defendants, can be brought
to trial. If they could be brought to trial, it follows that they could be
comoromised between the contending co-defendants without the consent
of the plaintiff.

It would be. nothing other than an unnecessary expenditure of time
to explain that in our own Code of Givil Procedure in common with other
systems of adjective law which go to the remedy ad litis ordinationem, it
is only in very few exceptional cases, that, a Us, by which word I under-
stand a dispute, is to be adjudicated upon in any manner other than by
disposing of it as a dispute between two and only two parties. In other
words, a triangular litigation is unknown to our Code of Civil Procedure
except where a special provision is made.

If this is so, where is the authority to justify the view, that a suit
such as I have contemplated in the illustration can ever be adjudicated
upon, as one and the same suit, in one and the same litigation, in which
the interests, and pleas of the co-defendants are opposed to each other inter
se, as distinguished from pleas raised by them jointly or severally against the
remedy which the plaintiff C seeks to enforce upon his mortgage security ?
Further, where is the authority in ourBritish Indian Law that, even if such
an adjudioa-[506]tion could be made upon disputes between defendants inter
se, such an adjudication would be binding upon them either within the rule
of res judicata as enunciated in s. 13 of the Code of Civil Procedure, or,
within the meaning of s. 40 or 41 of the Indian Evidence Act (I of 1872) ?
One thing is certain, that so far as the efficacy of judgments or adjudica-
tions is concerned as binding upon the parties within the meaning of the
rule of res judicata as understood not only in the English Law but also
in the British Indian Law, it is necessary that the parties who are so
held bound must be arrayed on opposite sides in a suit or proceeding

320



VII]



MATA DIN KASODHAN V. KAZIM HUSAIN



13 All. 507



framed between those parties. It is equally certain, that where such is
not the case, the rule does not apply, and the adjudications are not
binding in the sense of preventing the re-agitating of the same points in a
subsequent litigation. That is to say, in the illustration conceived and
the pleas therein represented, as arising between mortgagees inter se, who
are co-defendants asserting rights of priority over each other, charges
of fraud and collusion against each other, each asserting that the
amount claimed by one co-mortgagee is more than is due to him,
all these disputants being arrayed on one and the same side in the suit of
C, as defendants, no adjudication upon such disputes can ever pass in res
judicatam. For reasons for this view I need only refer to my Judgment in
the imperfectly reported case of Sital Prasad v. Bansidhar (I) which had
the concurrence of the late Mr. Justice Brodhurst.

And if that ruling is right, what is the use of making such adjudica-
tions between co-defendants as are not binding upon them ? The only
result would be to delay the remedies to which the plaintiff G, in my illus-
tration would be entitled, without any binding adjudication upon the
disputes between the defendants, the other mortgagees, inter se

The Legislature, no doubt, might have provided remedies for such
necessary results of procedure, if it so intended, by a special legislation.
But it is clear to my mind that it would be inexpedient to do so, and that
in framing s. 85 of the Transfer of Property Act [507] the Legislature did
not intend either to disturb the well-recognised principles of the rule of
res judicata, or to render suits for enforcement of a simple mortgage,
suiis in which not only the mortgage sought to be enforced is to be
brought into question by those who are parties defendants to the cause,
but also all other mortgages are to be brought into account for purposes of
liquidation, and disputes arising among the defendants mortgagees inter se
are also to be adjudicated upon.

If such had been the intention of the Legislature (an intention which
juristic reason would render extremely inexpedient) s. 85 of the Transfer
of Property Act would not be the only section in that enactment. For I
should have expected a larger number of sections making exceptions to
the rule of res judicata, and a larger number of sections providing the
procedure whereby a triangular dispute is to be adjudicated upon in a
case in which a mortgagee, suing to enforce only his security by bringing
the mortgaged property to sale, is met by pleas which, sofar as his right is
concerned, may of course be dealt with as between him and the defendants,
but which so far as they raise disputes between co-defendants mortgagees
inter se t cannot be disposed of in a binding adjudication between them.and
which pleas, so far as the plaintiff is concerned, do not interest him at all ;
for priorities of lien or other disputes as to amount or otherwise between
the defendants mortgagees cannot affect him so long as his security is
enforced.

I have dwelt upon this aspect of the case at such length because it
shows that s. 85 of the Transfer of Property Act must be read exactly as
it stands, and that no notions outside that section are to be imported
into it for any view which justifies the argument with which I am dealing,
and also to indicate the view that questions of mere procedure which
form part of adjective law ad litis ordinationem must not be confounded
with the rules of substantive law ad litis decisionem. I have also dwelt
upon this matter in order to show that if the distinctions which are pointed

(1) 2 A.W.N. (1882) 168.

321
A VII 41



1891

JULY 25.

FULL
BENCH.

13 A. 432

(F.B.).



13 All. 508 INDIAN DECISIONS, NEW SERIES [Yol.

1891 out are not kept in view, the rules contained in our Code of Civil Procedure

JULY 25. Act XIV of 1882), which is a consolidatory enactment, as shown in the

preamble, [508J are as powerless as any rules of procedure contained in the

FULL Transfer of Property Act (IV of 1882) to enable adjudication of disputes

BENCH, between co-defendants, where issues are raised between them in a suit by

the olaintiff C, the second mortgagee, in the suit which I have takeu as

13 A. 432 an illustration.

(F.B.). It is, therefore, in my opinion certain that, whilst the provisions of

s. 85 of the Transfer of Property Act require that all persons interested
in the mortgaged property should be made parties to any litigation In
respect of any mortgage sought to be enforced, the entire scope of that
section is limited to the object that the genuineness, validity and
. enforcibility of the particular mortgage sued upon should not be called into
question in a subsequent litigation ; for the simple reason that all those
parties would be parties defendants to the very suit in which, in the case
of a simple mortgage, the plaintiff C, as in my illustration, would be
seeking to enforce his security by sale, and any pleas raised against the
remedy which he claims would in that very suit be decided once and for
all as between him and the defendants, so as to convoy to the curchasar
who purchases in an auction sale in enforcement of the plaintiff's security a
title unhampered by any objections which could be raised by any one of
the parties to the suit.

To carry the effect of the section any further, is no legislate probably
upon grounds which are neither contemplated by the Legislature nor
amenable to any such practical effect as our rules of Civil Procedure
recognise. In cases where there is a large number of mortgagees holding
securities upon one and the same property under various terms as to the
conditions of the mortgages, including the periods when such mortgages
would become redeemable, it would be leaving all the mortgagees to the
mercy of any one of such mortgagees if it were to be held that the effect
of s. 85 of the Transfer of Property Act is that at the suit and choice of
any one of the puisne or mesne mortgagees the property to be brought
to sale must be cleared of all incumbrances so as to give a title to the
purchaser at such sale free of all incumbrances.

[S09] I think I have said enough to show that in the present case
s. 85 of the Transfer of Property Act required that the plaintiff Mata Din
Kasodhan, in seeking to enforce his security under the simple mortgage
of the 6th August, 1885, should also have impleaded the puisne mortgagee
Mata Prasad, whose simple mortgage-deed is dated the 21st August,
1885, in order to enable him to exercise the right of redemption conferred
upon him by s. 75 of the Transfer of Property Act to save the property
from sale in enforcement of the plaintiff's security. Mata Prasad, how-
ever, was not impleaded in the suit as defendant in the cause, *and this
undoubtedly was a defect in the array of parties in such a suit if the
plaintiff Mata Din Kasodban had notice of Mata Prasads' puisne incum-
brance within the meaning of s. 85 of the Transfer of Property Act. There
is, however, no allegation in the defence to the effect that the plaintiff
Mafea Din Kasodhan had any such notice, and naturally there is no
trace of any plea in defence objecting to the suit upon the ground of
want or defect of parties. Not only was such a plea not raised in the
Court of first instance, but was not raised in the lower appellate
Court. If it had been so raised, it could easily have been remedied by the
addition of the name of Mata Prasad (the plaintiff in the connected suit)
under s. 32 of the Code of Civil Procedure as a defendant to the suit, and

322



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MATA DIN KASODHAN V. KAZIM HUSAIN



13 All. 511



the defect would have been remedied. Ib was, however, nob so remedied,
and the suit went to trial resulting in a partial decree of the claim, which
decree has been upheld by the lower appellate Court. Under these condi-
tions, the question is whether the suit should be absolutely defeated ?

This question is simply a question of procedure and practice, and I
think I am within the authorities not only of the Courts of Justice in
India, but also of the practice of the Courts in England in saying, that
such objections if not taken at the earliest stage in the Court; of first in-
stance and are foregone there, cannot be taken for the first time in a Court
of appeal, much less in a Court of second appeal such as this Court. This
indeed is the effect of s. 34 of the Code of Civil Procedure (Act XIV of
1882) which if for no reason other than the faot that it is a later statute
should govern [510] s. 85 of the Transfer of Property Act (IV of 1882),
both sections being in pari materia. And if this is so, the defect of parties
caused by the absence of Mata Prasad will not defeat the action altogther.
Indeed, so far as Mata Prasad himself is concerned.he can have no reason
to complain, for, according to the ruling of my brethren Straight and Tyrrell
in Namdar Chaudhri v. Karam Raji (1) his right of redemption, &c.,
cannot be affected by the decree in the suit, and further, considering that
his connected suit was tried by both the lower Courts along with the
suit of the plaintiff Mata Din Kasodhan, he (Mata Prasad) had ample
opportunity of applying under s. 32 of the Code of Civil Procedure to ba
added as a defendant to this suit, of which opportunity he never took
advantage. Under these circumstances I do not think either that the
defendant Hari Prasad, who never took the plea in the Court of first
instance, nor in the lower appellate Court, should at this stage be allowed
to raise the plea for the first time, not so much on his own behalf as oc
behalf of his antagonist, Mata Prasad, plaintiff in the connected suit. I
would therefore reject the plea and deal with the suit with reference to the
rights of the parties as they already have been arrayed as parties to the
suit.

This leads me to the consideration of tha third and perhaps the
most important point in the case, namely, the legal effect of the purchase
from Kazim Husain and Nadir Husain made by the defendant Hari
Prasad under the sale-deed of the 20th September 1886. That such a
sale and purchase cannot mean the enforcement of the defendant Hari
Prasad's securities is obvious : because, as I explained in the case of
Kishen Lai v. Ganga Ram (2), a simple mortgagee could not without
intervention of the Court bring the property to sale by his own private
act, and it follows a fortiori that be could not by privately purchasing
the property himself achieve the same results. His purchase therefore
is nothing other than a purchase which, though valid so far as the
mortgagor is concerned, can haye no effect in defeating the right of the



Online LibraryChas. A. Stevens & BrosThe Indian decisions (New series) : being a re-print of all the decisions of the Privy Council on appeals from India and of the various high courts and other superior courts in India reported both in the official and non-official reports from 1875 (Volume 7) → online text (page 49 of 155)