Ameenammal vs Meenakshi

Sadasiva Aiyar, J.—The plaintiff is the appellant. (Both plaintiff and defendant are women). The facts out of which this suit has arisen may be

shortly stated thus. The plaintiff was the simple mortgagee of certain lands under a bond of 1899 executed by third persons to her predecessors-in-

title. She hypothecated that hypothecation right and other properties to the defendant in 1908 for Rs. 200 The hypothecated hypothecation right

became barred in 1911, owing to a suit not having been brought against the third persons either by the plaintiff (the mortgagee under it) or by the

defendant (who obtained transfer of that mortgage from plaintiff by way of security). Then the defendant brought a suit in 1915 against the plaintiff

on her (defendant''s) own mortgage of 1903 for recovery of the amount due to her. The defendant in that suit, (namely, the present plaintiff)

pleaded that the present defendant (plaintiff in that suit) having by her default failed to sue for and recover from the third persons the money due

under the bond of 1899 left with the defendant as security, she (the defendant) was liable to account to the plaintiff for much more than the amount

sued for, on the bond of 1908 and that, therefore, the suit ought to be dismissed. That plea of the defendant in that suit (the present plaintiff) was

accounted therein. It was found that more money was due to the present plaintiff by reason of the defendant''s accountability for her default than

was claimable by the defendant under the bond of 1908 fend the defendants former suit was accordingly dismissed. The plaintiff brought the

present suit to recover the difference between the amount alleged by her to be due to her as damages, caused by the defendant''s default and the

amount due to the defendant under the mortgage of 1908. Several defences were raised in this suit. One of the contentions put forward by the

defendant before us, namely, that the plaintiff has no cause of action and no right to claim damages for the defendant''s default in suing the third

persons (mortgagors of 1�99) cannot be accepted, as the plaintiff''s right to claim such damages was established in the former suit and is,

therefore, res judicata.

The only defences which need be considered are: (1) that the suit Is barred by limitation; and (2) that the suit is barred by res judicata, by

reason of the decision in Original Suit No. 226 of 1915, that is, the suit brought by the present defendant against the present plaintiff for recovery

of her mortgage amount and sale of the mortgaged properties. The District Munsif decided the question of res judicata in favour of the plaintiff but

decided the question of limitation against the plaintiff and dismissed her suit.

As regards the question of res judicata the District Munsif''s reasoning was that the causes of action in the two suits were different and,

therefore, there was no res judicata. The lower Appellate Court did not go into the question of res judicata but decided the suit solely on the

question of limitation holding that either Article 65, or Article 115 of the Limitation Act (three years period) applied and that Article 116, relied on

by the plaintiff and providing a period of six years, did not apply. I do not think it necessary to go into the question of limitation, as I am satisfied

that the District Munsif is wrong in high decision on the point of res judicata and the plaintiff''s suit must fail on the decision against her on that point.

The first suit was brought on the transaction of mortgage between the two parties entered into in 1908. The present suit was also based on that

same transaction, namely, on the alleged obligation of the defendant created by law under the same transaction. The cases in Mahabir Pershad

Singh v. Macnaghten 16 C. 682 (P.C.) Vinayak v. Dattatraya 26 B. 661 , Ruhhminibai v. Venkatesh 81 B. 527 ., Satyabadi Behara v. Haribnti

34 C. 223 , clearly establish, in my opinion, that where a transaction of mortgage has become fully ripened, so that the rights and liabilities of the

parties can be dealt with, by the Court before which the suit is brought in respect of that transition, whether the suit; is for foreclosure by the

mortgagee or for sale by the mortgagee, or, in the alternative, for foreclosure or sale by the mortgagee or for redemption by the mortgagor, all

questions (including even claims for rent due on transactions inseparably connected with the mortgage) relating to the taking of accounts between

the mortgagor and the mortgagee ought to be decided in one and the same and in the very first suit, and no second suit can be brought by either

party, for any claim arising out of that same transaction of mortgage. I shall only quote a few sentences from two of these decision. In Vinayak v.

Dattatraya 26 B. 661 , it is said: Now, the question is one which arises directly out of the mortgage transaction, which was the subject matter of

the litigation in the former suit. But the decree in a suit for redemption must be such as to enable the Court to do complete justice, and, as far as it

is possible, the Court endeavours to make a complete decree that shall embrace the whole subject and determine upon the rights of all the parties

interested in the estate. So in this case the claim on which we are now asked to adjudicate is one that could and ought to have been advanced in

the former suit. Without a determination on it, there was not a complete adjustment of the rights of the parties. Where a given matter becomes the

subject of litigation in, and of ad-judiction by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward

their whole case, and will not (except under special circumstances) permit the same parties to open the fame subject of litigation in respect of

matter which might have teen brought forward as part of the subject in contest, but which was not brought forward only because they have from

negligence, inadvertence or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points

upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly

belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time. The

comprehensive character of suits relating to mortgages and the obligation incumbent on litigants to the that the decree in them over all their rights his

been repeatedly recognised by the Courts.

Mr. L.A. Govindaraghava Aiyar attempted to distinguish this and some other cares on the ground that the -first suit in those cases was a suit far?

redemption and not for sale and that there was a distinction between those two classes of suits, because Order XXXIV, Rule 9, of the CPC gives

the mortgagor the right to recover moneys due by the mortgagee on taking of accounts as between the mortgagor and the mortgagee, only in a suit

for redemption, I am unable to accept this distinction as based on any intelligible principle. The fact that Order XXXIV, Rule 9, expressly gives the

plaintiff in a redemption suit the right to recover money due by the mortgagee, doss not at all imply that if the mortgagor happens to be a defendant

in a suit for foreclosure or for sale or either in the alternative) he could not and ought not to claim the moneys due to him by the mortgagee plaintiff

and the Court is not entitled to give him such a decree. On the other hand, in the case in Satyabadi Behara v. Harabati 34 C. 223 , the decision

says at page 266: ""The provisions of the Transfer of Property Act, which we have already analysed, plainly indicate, that in a redemption suit, the

whole of the accounts between the mortgagor and the mortgagee must be taken. As was observed by Mr. Justice Pontifex in Doolee Chand v.

Omda khanum 6 C. 377 the essence of foreclosure and redemption suits is, that in such suits, each party is entitled enforce his rights; a plaintiff

claiming foreclosure is bound, upon the accounts being taker, if the balance is against him, to pay that balance; unless this were.

So there would be a multiplicity of suits; to avoid this, it is necessary under a decree for foreclosure or redemption, that the accounts between

the parties should be settled and discharged; if the balance is against any party, he must pay it."" This is a well established principle of jurisprudents

on which Order XXXIV, Rule 9 is based and it is not confined to cases where the mortgagor sues as plaintiff for redemption, but it applies to all

suits in which accounts as between the mortgagor and the mortgagee have to be taken once for all. I do not think it necessary to go in detail into

the questions of legal set-off and equitable set-off elaborately argued on both sides No doubt, in a case of strict legal set-off the defendant is not

bound to put forward his counter claim and a separate suit by him, will not be barred. But if he did put forward such a counter-claim by way of

legal setoff and if the whole of that counter-claim, was within the competence of the Court to decide, be cannot afterwards sue for any portion of

that claim, if he did not get a decree for that portion in the first suit, in which he put forward that counter-claim, The cases in which the counter-

claim is beyond the competence of the Court in the first suit, for example, where the first suit was brought in ""a Small Cause Court which could not

exercise jurisdiction over the counter-claim, are irrelevant in the consideration of the point in dispute. As regards an equitable set-off, it arises out

of the same transaction in most cases and it not only might but ought to be made the basis of a counter-claim in the first suit itself. The argument

based on the language of Order VIII, Rule 6(2), that because it is stated that the written statement pleading a legal set off shall have the same effect

as the plaint in a cross-suit, therefore, the Legislature impliedly said, that the Court in which an equitable set off is pleaded cannot give the same

effect to that claim, as if it was a plaint in a cross-suit is based on a fallacy similar to that which I have already referred to, when considering the

argument based on the language of Order XXXIV, Rule 9. These statutory provisions are based on general principles and the express recognition

of those general principles in particular statutory provisions dealing with the particular cases cannot be treated as a direction to the Court to discard

those principles in other cases. Then, so he argument was based on a meticulous examination of the language of Section 11, Civil Procedure Code.

As I am clear that the counter-claim in the former suit is a cross-suit, not only allowed by the law, but required by the law to be prosecuted as a

counter-claim by the defendant at the risk of her being debarred from setting it up afterwards, there is nothing in this contention. Even if Section 11

did not strictly apply, the principle of ret judicata is one based upon much wider considerations of general jurisprudence than are covered by

Section 11 and the authorities, which I have already referred to, clearly indicate that those principle, even if Section 11 did not strictly apply,

prohibit the second suit in cases like the present. I should not, however, be under stood as doubting that Section 11 itself even constructed strictly,

applies to this case. In the result, I dismiss the second appeal with costs.

Spencer, J.

I agree that this ""suit is barred by res judicata. In Mahabir Pershad Singh v. Macnaghten 16 C. 682 (P.C.) , there was a suit by the mortgagees

and when that suit was brought, the mortgagees owed some amounts to the mortgagors for rent, which the mortgagees did not pay. When the

mortgagees got a decree for the amount, and after the mortgaged property had been sold, the mortgagors brought a suit to have the sale set aside

by getting the rents which had accrued in their favour get-off against the amount due under the mortgage. Their Lordships of the Privy Council

observed that the proper occasion for enforcing this equity of setoff would have been in defence of the mortgage suit, and, therefore, the plea was

one which ought to have been made a ground of defence in the former suit, between the same parties, and the plaintiffs who were appealing were

debarred from putting forward their claim in a separate auk Now in the case before us, it appears that in the prior suit, Original Suit No. 223 of

1915 on the file of the Additional District Munsif''a Court of Sivaganga, the present plaintiff was there found entitled to at least Rs. 1,072 against

the amount of Rs. 634, found to be due to the present defendant, who was plaintiff is that suit and consequently the suit was dismissed. So this is a

stronger case than that in Mahabir Pershad Singh Macnaghten 16 C. 682 (P.C.) , because not only might this plea have been raised in the former

suit, but it actually was raided and the suit was dismissed in consequence. Under Order XX, Rule 19, of the Civil Procedure Code, the decree. In

that suit might have stated what amount was due to the plaintiff and what amount was due to the defendant and either party might have been

allowed to recover what was due to each. In that suit, the present plaintiff was content to have the suit dismissed; she apparently, waived her claim

to the balance that was due to her and she cannot row sustain the present separate suit for a relief which she might have got in the former suit. I

agree that the second appeal should be dismissed with costs.