Birbal vs Net Ram (Dead) through LRs.

Satish Kumar Mittal, J.—This is plaintiffs Regular Second Appeal against the judgment and decree dated 22.11.1983 passed by Additional

District Judge, Hissar, whereby suit of the plaintiff for recovery of Rs. 4,000/- and in alternative suit for possession by way of specific performance

has been dismissed.

The plaintiff-appellant filed the aforesaid suit by alleging that on 28.4.1977, the defendant-respondent entered into an agreement with the plaintiff

to mortgage his land measuring 16 Kanals for Rs. 4,000/-. On the very same day, he received the mortgage money of Rs. 4,000/- and delivered

possession of the mortgaged land to the plaintiff. According to the terms of the said agreement, the defendant was to get the agreement registered

by 1.5.1978 and in case, the defendant failed to get the mortgage deed registered in time, the plaintiff was entitled to get the mortgage deed

registered through the Court. It was further agreed that in case, the mortgage money is paid back to the mortgagee before 1.5.1978, then the

agreement shall be treated as cancelled.

The defendant contested the suit stating that he never entered into the alleged agreement with the plaintiff and he also denied receipt of the

mortgage money from the plaintiff. He took the plea that in case any such document is proved to have been executed, the same was obtained by

fraud and misrepresentation. He also took the plea of limitation and resjudicata.

On the pleadings of the parties, the following issues were framed:

Whether the defendant entered into an agreement to mortgage with possession of the suit land in favour of the plaintiff on 28.4.77 and received

Rs. 4000/- from the plaintiff as mortgage money? OPP

Whether the plaintiff has always been ready and willing to perform his part of the contract? OPP

Whether the defendant has failed to get the mortgage deed executed and registered as per agreement? OPP

Whether the plaintiff is estopped from filing the suit? OPP

Whether the suit is barred by the principle of resjudicata? OPD

Whether the suit is time barred? OPD

Whether the suit is not maintainable in the present form? OPD

Relief.

After considering the evidence led by the parties, the trial court decided issues No. 1 to 3 in favour of the plaintiff and against the defendant

while observing as under:

...I am of the view that from the testimonies of petition writer Gopi Chand PW1 and attesting witnesses PW2 and PW4 Birbal, it has been

sufficiently proved that agreement Ex.P1 was executed by the defendant in favour of the plaintiff. A perusal of agreement Ex.P1 goes to show that

the defendant Net Ram after receiving mortgage money of Rs. 4,000/- agreed to execute the mortgage deed in favour of the plaintiff on or before

1.4.1978. This fact has also been fully proved from the testimonies of the plaintiff PW4 Birbal and PW5 Ram Ratan. A perusal of Ex.P2 copy of

the application filed by the plaintiff in the office of Sub Registrar goes to show that the plaintiff Birbal went to the office of Sub Registrar on

1.5.1978 to get the mortgage deed registered according to the terms of the agreement Ex.P1. I am of the view that from the copy of Ex.P1 and

testimonies of plaintiff PW3, it has been sufficiently proved that the plaintiff has always been ready and willing to perform his part of contract. I am

also of the view that the defendant has failed to get the mortgage deed executed and registered as per terms of the agreement as he failed to turn

up in the office of Sub Registrar on 1.5.1878.

On issue No. 5 regarding the suit being barred by the principle of res-judicata, the defendant placed reliance upon copy of the judgment dated

2.11.1978. Ex.D1, passed in civil suit No. 338 dated 19.10.1977, titled Birbal v. Net Ram. The said suit was filed by the present plaintiff Birbal

for permanent injunction claiming that the defendant is interfering in his possession over the suit land, which was delivered to him in pursuance of

the aforesaid agreement of mortgage. The trial court rejected the plea of res-judicata while holding that in the previous suit, the issues were

different and the matter in issue in the instant case, directly or substantially are not the same. The issue regarding recovery of Rs. 4,000/- was held

to be barred by limitation, as according to the trial court, for the said relief, the suit should have been filed within three years from the date when the

loan was advanced. However, it was found that the suit for specific performance is within limitation. In view of these findings, the alternative suit for

specific performance of the agreement of mortgage was decreed.

The defendant filed appeal against the said judgment and decree. The first appellate court dismissed the suit of the plaintiff in toto, while

reversing the findings on issues No. 5 and 6 and it has been held that the instant suit is barred by the principle of res-judicata as well as limitation.

In view of this, the findings of the trial court on issue No. 1 has been set aside and regarding finding recorded on issues No. 2 and 3, it has been

held that the same have become redundant. Hence, this appeal.

I have heard the arguments of learned Counsel for the parties and have gone through the impugned judgment of the first appellate court.

In this appeal, counsel for the appellant has raised the following two substantial questions of law:

i) Whether the previous judgment dated 2.11.1978 (Ex.D1) passed in the suit between the present parties, vide which suit for injunction filed by

the plaintiff was dismissed on the ground that he was not found in possession, will operate as resjudicata in the instant suit filed by the plaintiff for

recovery of the mortgaged amount and in alternative, for specific performance of the mortgage agreement dated 28.4.1977?

ii) Whether the cause of action for the plaintiff for filing the instant suit for recovery of the mortgaged amount or suit for specific performance of the

mortgaged agreement would have arisen on 1.5.1978 or it should have been taken from the date when the mortgage amount of Rs. 4,000/- was

paid?

In this case, the plaintiff has proved the execution of the agreement to mortgage dated 28.4.1977, Ex.P1, as well as receipt of Rs. 4,000/- by

the defendant. According to the agreement Ex.P1, the defendant, after receipt of the mortgage money of Rs. 4,000/- agreed to execute mortgaged

deed in favour of the plaintiff on or before 1.5.1978. Both the Courts below have also recorded a concurrent finding that as per the agreement, the

mortgage deed was to be executed on 1.5.1978, on which date, he plaintiff went to the office of Sub Registrar to get the mortgage deed registered

in his favour according to the terms of the agreement. It has also been found by the Courts below that the plaintiff was ready and, willing to

perform his part of the contract, but the defendant did not turn up in the office of Registrar. It is also undisputed that on 19.10.1977, the plaintiff

filed a suit for permanent injunction, when the defendant was interfering into his possession over the suit land, which was delivered to the plaintiff at

the time of execution of the aforesaid agreement.

I have perused copy of the said judgment, which has been proved by the defendant as Ex.D1. The defendant contested the said suit stating

that the plaintiff was not in possession of the suit land and that the land was neither mortgaged nor he agreed to mortgage the same. He denied

receipt of the amount of Rs. 4,000/-, but pleaded that the plaintiff got the agreement executed from the defendant by fraud and mis-representation.

In the aforesaid earlier suit, only the issue regarding possession was framed. There was no issue regarding execution of the agreement to mortgage

and receipt of mortgage money and execution of the agreement was not specifically denied, rather it was pleaded by the defendant that the said

agreement was obtained by fraud. The said suit was dismissed only on the ground that in the revenue record, possession of the plaintiff is not

reflected and from the agreement to mortgage, his possession can not be inferred, so, the suit was dismissed while holding that the plaintiff was not

found in possession of the suit land.

The first appellate court has observed that in the previous suit, the matter directly and substantially in issue was the execution of the agreement

dated 28.4.1977 and handing over possession in pursuance of the agreement and receipt of Rs. 4,000/- by the defendant. Therefore, decision of

said suit will operate as res judicata. It has been further observed that even if the plea regarding specific performance was not taken in the previous

suit, still decision in the said will be barred by the principle of res judicata in view of the Explanation IV to Section 11 C.P.C. It has been further

held that the instant suit will also be barred under Order 2 Rule 2 C.P.C.

In my opinion, the first appellate Court has taken a wrong view in this regard. As per the agreement Ex.PI, the plaintiff could not have filed the

instant suit prior to 1.5.1978, the date on which the mortgage deed was agreed to be registered. Therefore, on the day, when the suit for injunction

was filed i.e. on 19.10.1977, neither the suit for recovery of the amount nor suit for specific performance of the agreement could have been filed.

In this view of the matter, the question of barring the instant suit under Order Rule 2 C.P.C. does not arise. As far as res judicata is concerned, the

earlier suit was simply a suit for injunction on the basis of possession. In that suit, there was no issue regarding execution of the mortgage

agreement dated 28.4.1977 nor any finding was recorded that no such agreement was executed and the mortgage amount of Rs. 4,000/- was not

received on that date. In Gram Panchayat of Village Naulakha v. Ujagar Singh and Ors. (2001)127 P.L.R. 287 the Hon''ble Apex Court has held

as under:

We may also add one other important reason which frequently arises u/s 11 C.P.C. The earlier suit by the respondent against the Panchayat

was only a suit for injunction and not one on title. No question of title was gone into nor decided. The said decision cannot, therefore, be binding

on the question of title. See in this connection, Sajjadanashin Sayed Md. B.E.Edr. (D) By Lrs. Vs. Musa Dadabhai Ummer and Others, , where

this Court, on a detailed consideration of law in India and elsewhere held that even if, in an earlier suit for injunction, there is an incidental finding on

title, the same will not be binding in a latter suit or proceeding where title is directly in question, unless it is established that it was ''necessary'' in the

earlier suit to decide the question of title for granting or refusing injunction and that the relief for injunction was found or based on the finding on

title. Even the mere framing of an issue on title may not be sufficient as pointed out in that case.

Therefore, in my opinion, in the earlier suit and in the instant suit, the issues are entirely different and it cannot be taken that the issues in the earlier

suit were directly and substantially the same. Explanation IV to Section 11 C.P.C. is not applicable to the facts and circumstances of this case.

Thus, in my opinion, the finding on issue No. 5 recorded by the first appellate Court is liable to be reversed. This issue is therefore, decided in

favour of the plaintiff and against the defendant.

The second question of law is with regard to limitation. Both the Courts below have held that the plaintiff could file the suit for recovery and in

the alternative suit for specific performance within a period of three years from the date of agreement to mortgage deed 28.4.1997 and from the

said date, the suit is barred by limitation. In this regard also, both the Courts below have taken a wrong view. As per the agreement, which has

been proved as Ex.P1, mortgage money of Rs. 4,000/- was taken on 28.4.1977 itself, on which date possession of the suit land was also

delivered and the mortgage deed was to be registered by 1.5.1978. There was a stipulation in the agreement Ex.P1 that in case, the defendant,

failed to get the mortgage deed registered in time, the plaintiff shall be entitled to get the mortgage deed registered through the Court. There was

also a condition that in case, the amount is paid prior to the said date, then mortgage agreement will be treated as cancelled. It has been found by

both the Courts below that the plaintiff was always ready and willing to perform his part of the agreement. On the other hand, the defendant denied

receipt of the amount, but it has been proved by the plaintiff that the said amount was received by the defendant under agreement Ex.P1 and the

same was neither returned not the mortgage deed was got registered by 12.5.1978, as agreed between the parties. Therefore, in my opinion, the

cause of action to file the suit arose to the plaintiff on 1.5.1978 and from the said date, the suit filed by the plaintiff is within limitation. Hence, the

finding recorded by the first appellate Court on issue No. 6 is also reversed and this issue is decided in favour of the plaintiff.

In view of the aforesaid, this Regular Second Appeal is allowed. The judgment and decree dated 22.11.1983 passed by the first appellate

Court is set aside and suit of the plaintiff for recovery of Rs. 4,000/- the mortgage amount, is decreed with costs. The plaintiff is also held entitled

to interest at the rate of 6% per annum from the date of filing of the suit till its realization.