Baiju Lal Marwari and Others vs Thakur Prasad Marwari and Others

Chatterji, J.—The material facts of this case may be briefly stated as follows: By three deeds of mortgage executed in 1909 and 1910 the defendants third party hypothecated their entire interest in the two estates, namely Mahal Ghat Lachhmipur and Mahal Kuraba mentioned in Schedule A of the plaint to the second group of the defendants first party who may be called the Mahton defendants. Subsequently these Mahton defendants assigned their 8 annas interest in the mortgages to the first group of the defendants first party who may be called the Marwari defendants. The present plaintiffs in execution of a money decree against the defendants third party attached certain shares in the said two estates on 26th March 1917 and purchased the same on 9th September 1918 and obtained delivery of possession on 16th November 1919. In the meantime, on, 1st February 1918, the defendants first party brought two mortgage suits on the aforesaid mortgage deeds against the defendants third party and obtained decrees on 18th December 1918. In execution of these decrees they purchased the mortgaged properties on 28th May 1923 and obtained delivery of possession on 21st and 23rd December 1923. The plaintiffs being thus dispossessed filed an application under Order 21, Rule 100, Civil P.C., before the Subordinate Judge of Godda, but meanwhile the settlement operations in Santal Parganas having been notified, the application was ultimately transferred to the settlement Court for disposal by order of this Court in view of the special provisions of law in the Santal Parganas. Eventually the application was dismissed by the order of the Divisional Commissioner dated 4th August 1927. The plaintiffs thereupon instituted the present suit on 30th July 1930 claiming among other reliefs possession of the disputed properties upon redemption of the mortgages on the ground that they as attaching decree-holders were necessary parties to the mortgage suits and not having been made parties, their rights were not affected by the mortgage decrees and sale. The defendants second party were impleaded as they got themselves recorded in the settlement proceedings as co-sharers with the defendants first party.

It may be mentioned here that the defendants third party by virtue of a compromise with the defendants first party got the lands specified in Schedule B of the plaint which appertain to Mahal Ghat Kuraba, and these lands were recorded during the settlement proceedings as their raiyati lands. The plaintiffs sought a declaration that such record was illegal and the defendants third party could not acquire any raiyati right in those lands. The plaintiffs'' claim with regard to these lands, though negatived by the Court below, has not been pressed in this appeal and no further reference to it will be necessary. The main contest in the suit was by the defendants first party whose defence inter alia was that the plaintiffs were not necessary parties to the mortgage suits, that the mortgage decrees and the sale held in execution thereof are binding on them, that their purchase during the pendency of the mortgage suits is affected by lis pendens, that they have no right to maintain this suit and that the suit is barred by limitation. The learned Subordinate Judge has given effect to all these defences and dismissed the suit. Hence this appeal by the plaintiffs.

The most important point for consideration in this appeal is whether the plaintiff as attaching decree-holders were necessary parties to the mortgage suits under Order 34, Rule 1, Civil P.C. The learned advocate, Mr. L.K. Jha appearing for them, contends, in the first place, that an attachment followed by an order for sale creates a charge on the attached properties and therefore an attaching decree-holder is a necessary party to a mortgage suit and, in the second place, that under the specific provision of Clause 91(f), T.P. Act, as it stood before the amendment of 1929 an attaching decree-holder had the right to redeem and therefore he had an interest in the right of redemption within the meaning of Order 34, Rule 1, Civil P.C. The nature and effect of an attachment will have to be determined with reference to the provisions of the Civil Procedure Code. The mode of effecting attachment of immovable property is prescribed in Order 21, Rule 54 of that Code as follows:

Where the property is immovable, the attachment shall be made by an order prohibiting the judgment-debtor from transferring or charging the property in any way, and all persons from taking any benefit from such transfer or charge.

The effect of an attachment, as laid down in Section 64 of the Code, is that

any private transfer or delivery of the property attached or of any interest therein and any payment to the judgment-debtor of any debt, dividend or other moneys contrary to such attachment, shall be void as against all claims enforceable under the attachment.

It is reasonably plain that an attachment merely prevents private alienations; it does not affect court sales. If this is so, it follows as a necessary corollary that an attachment does not create any charge upon the attached property otherwise a court sale would be affected by such charge. Take, for instance, a case where two decree-holders have attached the same property in execution of their respective money decrees but for some reason or other the decree-holder whose attachment is later succeeds in selling the property, the other decree-holder whose attachment is prior cannot again bring the property to sale and if he does so the sale will be quite ineffective. This is a self-evident proposition, and if any authority is needed, a reference may be made to the decisions of this Court in Harnadan Marwari v. Pran Nath Roy AIR (1921) Pat. 409 and Ganga Ram Gulraj Ram Vs. Muktiram Marwari and Others, The contention that an attachment creates a charge is also inconsistent with the provisions of Section 73 and Order 21, Relu 57, Civil P.C. Section 73 which relates to rateable distribution lays down that:

Where assets are held by a Court and more persons than one have, before the receipt of such assets, made application to the Court for the execution of decrees for the payment of money passed against the same judgment-debtor and have not obtained satisfaction thereof, the assets, after deducting the costs of realization, shall be rateably distributed among all such persons.

Under this Section the proceeds of a sale brought about by an attaching decree-holder are made proportionately available to another decree-holder who may have just put in his application for execution immediately before the sale and had no time to take out attachment. What then becomes of the charge supposed to be created by the attachment? Again Order 21, Rule 57 lays down that:

Upon every order dismissing an execution case in which there is an attachment, the attachment shall cease unless the Court otherwise directs.

The result would have been quite otherwise if the attachment really created a charge. Their Lordships of the Judicial Committee in Moti Lal v. Karrab-Ul-Din (1898) 25 Cal. 179 and Raghunath Das v. Sundar Das Khetri AIR (1914) P.C. 129 have held that attachment merely prevents private alienation but does not confer any title. This is also the view adopted by the High Courts of Calcutta, Madras, Bombay and Lahore: see Frederick Peacock v. Madan Gopal (1902) 29 Cal. 428, C.L. Kiernander Vs. Benimadhab Khettri, , Manickam Chettiar v. Income Tax Officer Madura A.I.R (1938). Mad. 360, Jitmand Ramanand v. Ramchand Nandram (1905) 29 Bom. 405 and Ram Bhaj Datta v. Ram Das AIR (1923) Lah. 261. Mr. L.K. Jha in support of his contention that an attachment followed by an order for sale creates a charge on the attached property relies on the decisions of the Judicial Committee in Suraj Bunsi Kore v. Sheo Pershad Singh (1880) 5 Cal. 148, Madho Prashad v. Mehrban Singh (1891) 18 Cal. 157 and AIR 1933 134 (Privy Council) . In Suraj Bunsi Kore v. Sheo Pershad Singh (1880) 5 Cal. 148 the question before their Lordships was whether when the undivided interest of a member of a joint Hindu family governed by the Mitakshara School was attached and ordered to be sold in execution of a money decree against him and he died before the property was actually sold, his interest passed by the sale to the auction-purchases or by survivorship to the surviving coparceners. Their Lordships held that the effect of the execution sale was to transfer the judgment-debtor''s undivided share to the purchasers, the execution proceedings having at the time of the judgment-debtor''s, death gone so far as to constitute in favour of the execution creditor a valid charge thereon which could not be defeated by the judgment-debtor''s death before the actual sale. The effect of the sale had to be considered with reference to the peculiar constitution of a joint Mitakshara family. Under the Mitakshara law so long as the family is joint no member has any defined share nor can he alienate his own undivided interest for payment of his personal debt. He has however a right to obtain partition of his share which he can enforce at any time.

As a rule of equity, justice and good conscience it has been held from the earliest times that a creditor who has obtained a decree for money against a member of a joint Mitakshara family may realize his decree by attachment and sale of his judgment-debtor''s undivided interest in the family properties during his lifetime, and the auction-purchaser as the representative-in-interest of the judgment-debtor can enforce the right to obtain partition which primarily belonged to the latter. Where however the judgment-debtor dies before the decree is executed, his interest passes by survivorship to the surviving coparceners and is not available for the satisfaction of the decree. To determine the limits within which the rights of the judgment creditor can be enforced against an undivided share of the judgment-debtor the judicial decisions have laid down that the judgment-debtor''s undivided share is made available if it has been attached in execution during his lifetime, so that if he dies after the attachment his undivided share will not pass by survivorship to the surviving coparceners but will be liable to be sold under the attachment. To this extent their Lordships in deciding Suraj Bunsi Kore v. Sheo Pershad Singh (1880) 5 Cal. 148 held that the attachment created a charge on the judgment-debtor''s undivided share. Of course in that case there was not only an attachment but an order for sale before the death of the judgment-debtor, and great stress is laid upon this fact by Mr. Jha because, as he points out, in the present case the order for sale was passed on 30th January 1917, that is prior to the institution of the mortgage suits. To my mind their Lordships in Suraj Bunsi Kore v. Sheo Pershad Singh (1880) 5 Cal. 148 referred to the order for sale simply to emphasize the fact that the execution proceeding had passed through all the necessary stages preceding the sale when the judgment-debtor died.

The real determining factor however was the attachment because by virtue of an attachment the decree-holder acquires a right to have the attached property kept in custodia legis for the satisfaction of his judgment-debt. Thus Suraj Bunsi Kore v. Sheo Pershad Singh (1880) 5 Cal. 148 is no authority for the broad proposition that attachment creates a charge on the attached property. With reference to this case Mr. Mayne in his Treatise on Hindu Law, Edn. 9, at p. 450, observes as follows:

In speaking of an attachment as constituting a ''charge'' in favour of the judgment-creditor, their Lordships were obviously using the term ''charge'' in a general and not in a strictly legal sense.

In the case in Madho Prashad v. Mehrban Singh (1891) 18 Cal. 157 the facts were quite different. There a suit was brought by the surviving coparcener to set aside a sale of joint family property effected by a deceased coparcener without his consent and without any justifying necessity. Their Lordships held, affirming the lower Court''s decision, that the sale was invalid under the Mitakshara law and on the death of the alienating coparcener his undivided interest passed by survivorship to the plaintiff. In the course of their judgment their Lordships referred to the decision in Suraj Bunsi Kore v. Sheo Pershad Singh (1880) 5 Cal. 148 which was relied upon by the appellant there in support of his contention that he (the purchaser) was at least entitled to an equitable charge on his deceased vendor''s share for the consideration paid by him. As regards the next case in AIR 1933 134 (Privy Council) , no doubt, their Lordships referred to the decision in Suraj Bunsi Kore v. Sheo Pershad Singh (1880) 5 Cal. 148 and made certain observations which may perhaps be construed to have shaken the authority of the decisions in Moti Lal v. Karrab-Ul-Din (1898) 25 Cal. 179 and Raghunath Das v. Sundar Das Khetri A.I.R (1914) P.C. 129, but their Lordships in view of the facts of the particular case before them expressly said that it was irrelevant to consider whether attachment created a lien or charge or conferred title. The decision in Moti Lal v. Karrab-Ul-Din (1898) 25 Cal. 179 and Raghunath Das v. Sundar Das Khetri A.I.R (1914) P.C. 129 definitely lay down that an attachment merely prevents private alienation but does not confer any title, and so long as these decisions stand the courts in India are bound to follow them. Thus, none of the decisions of the Judicial Committee cited by Mr. Jha really supports his contention. He also refers to Sir Rashbehary Ghose''s Mortgage, Edn. 5, at p. 146, where the following passage occurs:

It does not fall within the scope of the present lecture to discuss the subject at length; and I will only content myself with the remark that though an attachment does not confer any title but only prevents alienation, it cannot be said that it creates no kind of charge; though there are certain expressions in some reported cases which if detached from the context might lend support to the notion that an attachment does not operate as a charge on the property.

The charge contemplated here cannot, in my opinion, be said to be a legal charge which would operate with all its legal consequences in all cases. At best it amounts to an equitable charge which serves the equities in favour of the attaching creditor according to the necessities of the case, the whole object of the attachment being to make the attached property available for the satisfaction of the decree. Upon the foregoing considerations I am not prepared to hold that an attachment creates any title in or charge upon the attached property: by charge I mean legal charge.

Mr. Jha''s next contention is based on old Section 91, Clause (f), T.P. Act. That Section which was in force at the time of institution of the mortgage suits in question stood as follows:

Besides the mortgagor, any of the following persons may redeem, or institute a suit for redemption of, the mortgaged property; (a) any person (other than the mortgagee of the interest sought to be redeemed) having any interest in or charge upon the property; (b) any person having any interest in or charge upon, the right to redeem the property; (c) any surety for the payment of the mortgage debt or any part thereof; (d) the guardian of the property of a minor mortgagor on behalf of such minor; (e) the committee or other legal curator of a lunatic or idiot mortgagor on behalf of such lunatic or idiot; (f) the judgment-creditor of the mortgagor when he has obtained execution by attachment of the mortgagor''s interest in the property; (g) a creditor of the mortgagor who has, in a suit for the administration of his estate, obtained a decree for sale of the mortgaged property.

The present Section 91 after the amendment of 1929 stands as follows:

Besides the mortgagor, any of the following persons may redeem, or institute a suit for redemption of, the mortgaged property, namely (a) any person (other than the mortgagee of the interest sought to be redeemed) who has any interest in, or charge upon, the property mortgaged or in or upon the right to redeem the same; (b) any surety for the payment of the mortgage debt or any part thereof or (c) any creditor of the mortgagor who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property.

Here it will be necessary to refer to the provisions of Order 34, Rule 1 which are as follows:

Subject to the provisions of this Code, all persons having an interest either in the mortgage-security or in the right of redemption shall be joined as parties to any suit relating to the mortgage.

Under the express provision of the old Section 91, Clause (f), an attaching decree-holder would be entitled to redeem or institute a suit for redemption. But, still the question remains whether such right would amount to an interest in the right of redemption within the meaning of Order 34, Rule 1, Civil P.C. Apparently it may look as if a person who is entitled to redeem has an interest in the right of redemption. But upon a comparison of Clauses (b) and (f) of the old Section 91 it will appear that the Legislature recognized a distinction which puts an attaching decree-holder in a different position from a person having an interest in the right of redemption, otherwise the separate provision in Clause (f) for the attaching decree-holder, if really he could come under Clause (b) as a person having an interest in the right of redemption, would be quite redundant. Section 91 enumerates the class of persons entitled to redeem and amongst them those who have an interest in, or charge upon, the property or the right of redemption are put under Clauses (a) and (b) of the old Act which correspond to Clause (a) of the new Act. Such persons only, in my opinion, come under the purview of Order 34, Rule 1, Civil P.C. Looking to the plain phraseology of the different clauses of the old Section 91, T.P. Act, it is rather difficult to hold that an attaching creditor coming under Clause (f) has the same interest as a person coming under Clause (b) of that Section. A fortiori an attaching decree-holder does not fall within the class of persons contemplated by Order 34, Rule 1, Civil P.C. I am supported in this view by the decision of the Calcutta High Court in C.L. Kiernander Vs. Benimadhab Khettri, and of the Madras High Court in Chamiyappa Tharagan v. Rama Ayyar AIR (1921) Mad. 30. A contrary view appears to have been taken by the Allahabad High Court in Ghulam Husain v. Dina Nath (1901) 23 All. 467 and in Lakhpat Rai v. Fakhr-Ud-Din A.I.R (1917) All. 110. The case in Ghulam Husain v. Dina Nath (1901) 23 All. 467 was decided entirely on equitable consideration as will appear from the following passage from the judgment of Aikman J. at page 471:

The defendants-respondents in their suit upon their mortgage transgressed the provisions of Section 85, T.P. Act, by not impleading a person of whose interest in the mortgaged property they had notice, namely the attaching creditor. He not being a party, and the mortgagor confessing, the case was rushed through, and a decree for possession passed in favour of the respondents. Had the respondents complied with the provisions of the law, and had the usual period been fixed within which redemption might be effected, it cannot be doubted that the plaintiff-appellant here who bought the judgment-debtor''s interest in the property six days after the date of the respondents'' decree, would have availed himself of the right to redeem. In my opinion it would be inequitable to hold that he had been deprived of that right by the illegal action taken by the respondents.

In the other case, Lakhpat Rai v. Fakhr-Ud-Din A.I.R (1917) All. 110, the decision proceeded on the ground that the right to redeem which was conferred on the persons mentioned in the old Section 91, T.P. Act, seemed to be the same right to redeem in all cases, the same right which the mortgagor himself had, without considering the further question whether all the persons mentioned in the Section were persons having an interest in the property comprised in the mortgage within the meaning of Section 85, T.P. Act, (now Order 34, Rule 1, Civil P.C), that Section being applicable to the facts of that case. It was practically assumed in that case that an attaching decree-holder, by virtue of the right conferred on him by the old Section 91, Clause (f), T.P. Act, was a necessary party to a mortgage suit. Prom this view I express may respectful dissent. In the present case the plaintiffs, in my opinion, were not necessary parties to the mortgage suits in question.

There is a still greater difficulty in the way of the plaintiffs. Whatever rights they might have as attaching decree-holders their attachment and with it those rights came to an end when they became the purchasers of the attached properties on 9th September 1918. After their purchase, they could no longer exercise their right of redemption as attaching decree-holders. It was however open to them, as purchasers to exercise that right. Their purchase was made during the pendency of the mortgage suits, and the sale proclamation (Ex. G-1) shows that the sale was held subject to the encumbrances of the defendants first party. The mortgaged properties were, as already stated, sold in execution of the mortgage decree on 28th May 1923. The plaintiffs had thus sufficient opportunity to redeem the mortgages. The present suit has been brought by them in their capacity of purchasers, their rights as attaching decree-holders having already vanished. It is now futile for them to claim the right of redemption which has long been extinguished by the mortgage sale. In this view the plaintiffs'' claim is entirely untenable.

Coming then to the question of lis pendens, the crucial point of time is the date of the institution of the mortgage suits. If, as the plaintiffs contend, they by virtue of their attachment had a charge on the attached properties and were consequently necessary parties to the mortgage suits, I do not see how lis pendens applies. No doubt the plaintiffs'' purchase was during the pendency of the mortgage suits but if they had pre-existing rights quite independent of their rights as purchasers, those rights could not be affected by the result of the suit to which they were not parties. Dr. D.N. Mitter, on behalf of the respondents, relying on the decision of the Judicial Committee in AIR 1937 260 (Privy Council) contends that the plaintiffs'' purchase was affected by lis pendens even though they might have a charge in their favour created by the attachment. I am afraid the case cited does not support this contention at all. In that case both the attachment and sale were subsequent to the preliminary mortgage decree and were therefore held to be subject to lis pendens. The point taken by Dr. Mitter is that lis in a mortgage suit continues until the mortgaged properties are sold. This is undoubtedly so, but a person acquiring an interest in the mortgaged properties subsequent to the preliminary decree cannot be heard to say that he should have been impleaded in the mortgage suit. However, I have held that the attachment did not create any charge and whatever rights it might have created came to an end when the plaintiffs purchased the properties. In this view their purchase was obviously affected by lis pendens. They purchased the right, title and interest of their judgment-debtors who were parties to the mortgage suits and as their representatives-in-interest would be certainly bound by the decrees passed in those suits.

The last question is that of limitation. Dr. Mitter contends that the suit is barred by limitation by the one year rule prescribed by Article 11-A as well as Article 12, Limitation Act. As regards the latter Article, the contention is that the plaintiffs ought to have prayed for setting aside the sale within one year. But this aspect of the case does not arise. The plaintiffs'' case is that they are not bound by the sale at all and in that case they were not required to set it aside and therefore no question of limitation would arise. On the other hand, if the plaintiffs are bound by the sale, their case must fail on the merits. As regards Article 11-A, Limitation Act, the question turns on whether the present suit is one brought under the provisions of Order 21, Rule 103, Civil P.C. That Rule runs thus:

Any party not being a judgment-debtor against whom an order is made under Rule 98, Rule 99 or Rule 101 may institute a suit to establish the right which he claims to the present possession of the property; but subject to the result of such suit (if any), the order shall be conclusive.

Mr. Jha contends that the present suit does not come within this Rule because it is really a suit for redemption and not for establishment of the right to the present possession of the property. This contention, though it may at first sight appear to have some force, is quite fallacious. The order (Ex. 5) passed in the proceeding under Rule 100 shows that there the plaintiffs claimed possession on exactly the same grounds as in the present suit with the only difference that in the present suit there is a prayer for redemption which was not and could not be made in the previous proceeding. The right which was asserted there and is also claimed here is based on the fact that the plaintiffs, not being parties to the mortgage decree and sale, are not bound by the same and therefore they, as auction-purchasers being in rightful possession of the disputed properties, could not be dispossessed therefrom by the defendants first party.

The mere fact that in the present suit the plaintiffs seek to recover possession upon redemption can be no ground for holding that they do not claim the right to the present possession of the disputed properties. In fact possession is the substantial relief claimed. In my opinion, the present suit is one under Order 21, Rule 103, Civil P.C., and not having been brought within one year, it is barred by limitation. In the result, I would dismiss the appeal with costs.

Mohamad Noor J.

I entirely agree.