Daso Polai vs Narayana Patro and Others

Madhavan Nair, J.—The plaintiff is the appellant. The appeal arises out of a suit instituted by the plaintiff for Rs. 21,000 due on a registered

mortgage bond, dated 1st August, 1913. The sum secured by the mortgage was Rs. 5,000 and the debt was repayable in 7 years. The mortgagors

are defendants 1 to 4.

The circumstances relating to the suit are these. In O.S. No. 59 of 1919 on the file of the Court of the Subordinate Judge of Berhampore one

Bennu Nahko, the late father of defendants 5 and 6 and the grandfather of defendants 7 and 8, obtained a money decree against the plaintiff''s

mortgagors, defendants 1 to 4, on 18th October, 1919. In E.P. No. 150 of 1919 the decree-holder asked for attachment and sale of the suit

property. In Ex. A, the schedule attached to this Execution Petition, the decree-holder gave a list of five encumbrances said to be existing on the

property. There is a note at the end of Ex. A which runs as follows:

These properties ought to be sold after issue of sale proclamation subject to the mortgage deed, dated 1st August, 1913 and executed in favour of

Daso Pollayi (the present plaintiff) for Rs. 3,000 - this is admittedly a mistake for Rs. 5,000. Except as regards item No. 2 specified in the

certificate of the Registrar, that is the mortgage deed for Rs. 3,000, the remaining items Nos. 3, 4, 5 and 6 were executed fraudulently and without

any consideration whatever.

A similar note appears at the end of the bidders'' list also - see Ex. A-1. The sale of the property was fixed for 12th July, 1920, on which date

the plaintiff put in a claim petition, E.A. No. 81 of 1920 (Ex. II), in which he stated that the suit mortgage bond of 1913 had been fully discharged

by means of a registered sale deed, Ex. I, dated 10th September, 1919, for Rs. 8,000 under which he became the absolute owner of the property

and that he has been in possession and enjoyment of the same ever since the sale - see paragraph 3 of Ex. II. This claim petition was dismissed on

12th July, 1920, because it was filed too late. On the same day, the property was purchased by Bennu Nahko, the decree-holder in O.S. No. 59

of 1919. Ex. III is the sale certificate issued to him. The plaintiff did not institute a suit to establish his right to the property within a year from the

date of the order, and so the order made against him became conclusive under Order 21, Rule 63, Civil Procedure Code. In 1923 Bennu Nahko,

the decree-holder-purchaser of the suit property, filed O.S. No. 131 of 1923 in the Berhampore District Munsif''s Court for recovery of mesne

profits of the lands purchased by him in Court auction. In this suit the plaintiff was the 10th defendant and he resisted it on the ground that some of

the lands purchased by Bennu Nahko were his property by virtue of the sale deed Ex. I. The learned District Munsif held that inasmuch as the

plaintiff''s claim based on the sale was dismissed and he did not bring a suit within a year to set aside the order, he lost his right wider the sale deed

and was debarred from claiming'' the property any longer - Ex. IV. This finding was upheld on appeal by the learned Subordinate Judge - Ex. V.

Having lost his rights under the sale deed by his own default, the plaintiff instituted the present suit on 14th, October, 1926, to recover the money

due under the mortgage bond, dated 1st August, 1913.

The plaintiff''s argument is twofold. He argues first that the dismissal of his claim petition does not affect the suit mortgage and that, since the

property was purchased by the decreeholder himself subject to the mortgage, what he purchased was only the equity of redemption and that

therefore the contesting defendants are estopped from questioning the plaintiff''s right as mortgagee under the suit mortgage. Next, he argues that,

since as a result of the claim petition his sale deed became ineffectual and inoperative, the Court should hold that the original mortgage to which the

property was subject revived as a matter of law and that in equity he is entitled to sue on the same. The defendants argue (1) that, though the

property was sold subject to the mortgage, the Court did not as a matter of fact decide whether the mortgage subsisted or not, and that therefore

the Court-purchaser of the properties and those who, claim under him are not estopped from questioning its validity; and (2) that in law and also,

as will appear from the contentions of the plaintiff himself, the suit mortgage became merged in and completely extinguished by the sale deed, Ex. I,

which was valid when it was made and that therefore the plaintiff cannot invoke any equity at all in support of his contention that the suit mortgage

should be enforced. The learned District Judge overruled the contentions of the plaintiff and dismissed the suit.

Dealing with the first contention of the plaintiff, it does not appear in the present case that the Court made an order that the property should be

sold subject to the suit mortgage. Under Order 21, Rule 62, Civil Procedure Code, ""Where the Court is satisfied that the property is subject to a

mortgage or charge in favour of some person not in possession and thinks fit to continue the attachment, it may do so, subject to such mortgage or

charge"". There is nothing on the record to show that the executing Court decided whether the suit mortgage subsisted or not and ordered

attachment and sale subject to the mortgage as required under this provision. Under Order 21, Rule 66, ""Where any property is ordered to be

sold by public auction in execution of a decree, the Court shall cause a proclamation of the intended sale to be made and the proclamation shall

contain amongst other things the encumbrances to which the property is liable. ""The Code makes a clear distinction between a case where the

property is sold subject to a mortgage asunder Order 21, Rule 62 and a case in which the notice of an alleged encumbrance is given in the

proclamation of sale as under Order 21, Rule 66. In the former case, the Court is satisfied of the existence of the mortgage and sells only the

judgment-debtor''s equity of redemption and the purchaser has to redeem the mortgage. In the latter case, the purchaser buys the property with

notice of the mortgage subject to such risks as the notice might involve; in other words, the executing Court does not decide whether the mortgage

subsists or not and the purchaser is not precluded from questioning the validity of the mortgage. In our opinion, the present case falls within the

latter class and we are confirmed in this opinion by a comparison of the proclamation of sale with Form No. 56 given in the Civil Rules of Practice.

We think that by the note appearing in the sale proclamation the decree-holder intended to give notice of the suit mortgage which he thought was

prima facie valid and he gave also notice of other encumbrances which in his view were invalid. He is therefore, not precluded from questioning the

validity of the suit mortgage. The so-called admissions of the decree-holder to the effect that the property has been sold subject to the suit

mortgage, which are merely statements in the proclamation of sale and the bidders'' list, cannot be made a ground for saying that the purchaser is

liable under the mortgage unless it is proved by the plaintiff that the mortgage continued to exist in spite of the sale.

The next argument of the learned Advocate-General is that the sale deed proving unavailing as a result of the order passed in claim proceedings,

the mortgagee-purchaser (the plaintiff) may in equity be allowed to fall back on his mortgage. This argument cannot be accepted for two reasons.

In the first place, the facts of the case show that the plaintiff should not be allowed to invoke equity on his side and secondly, that the sale deed in

spite of the order under Order 21, Rule 61, which became conclusive under Rule 63, does not become ineffective for all purposes in law.

Ever since the sale in question the plaintiff has always been relying on the sale deed in support of his claim to the property. In his claim petition

under Order 21, Rule 58 (Ex. II) he stated with reference to the sale that he purchased the property under a registered sale deed, that it is

supported by consideration and has been effected in partial discharge of the debt due to him under the registered mortgage bond, dated 1st

August, 1913 (that is the suit bond) for Rs. 5,000 (see para. 3). Thus his case has been that the mortgage is discharged and that it has been

supplanted by the sale. In the present suit also his attitude is the same. This is made clear in para. 4 of the plaint. If the plaintiff had pleaded in the

suit adopting the previous averments of the defendants that the sale was fraudulent and without consideration and if that plea had been accepted it

might be possible to find that the sale was a nullity which could not extinguish the mortgage. But he has always preferred to rest his case on the sale

calling it a valid one. There is no case of estoppel here as in Chhiddu v. Sheo Mangal Singh ILR (1916) 39 All. 186. In that case the contesting

defendants maintained that the two mortgage deeds, which were executed after the suit mortgage, were not binding on them, and then their

Lordships observed that it does not appear to them ""to be consistent with equity or good conscience"" that they having successfully maintained that

the two deeds were not binding should now claim the benefit of the transactions. The present claim of the plaintiff is in the teeth of his case in the

claim petition as well as in the plaint. In our opinion the plaintiff cannot also plead that the order under Order 21, Rule 61, Civil Procedure Code,

when it became conclusive under Rule 63, operated as an order in rem and so rendered void the sale deed upon which the plaintiff had based his

claim when he moved the Court under Order 21, Rule 58. The order precluded the plaintiff from proceeding upon the same cause of action against

the attaching decree-holder or against the auction-purchaser whose title proceeded from the same attachment and sale, but otherwise it does not

affect the validity of the sale deed; in other words, the mortgage is not revived by operation of this order. In this connection we may refer to the

decisions in Raja of Ramnad v. Subramaniam Chettiar ILR (1928) 52 Mad. 465 and Chhiddu v. Sheo Mangal Singh ILR (1928) 52 Mad. 465

relied on by the learned Advocate-General in support of his contention. In both these cases the subsequent transactions. - the settlement deed in

Raja of Ramnad v. Subramaniam Chettiar ILR (1928) 52 Mad. 465 and the two mortgage deeds in Chhiddu v. Sheo Mangal Singh ILR (1916)

39 All. 186 - executed after the suit morrgages were found invalid and not binding on the parties executing them and then the Courts held that the

plaintiffs were in equity entitled to fall back upon the prior mortgages. The same cannot be said with reference to the present case. The sale deed

was a valid one when it was executed and in spite of the conclusiveness of the order under Order 21, Rule 63, as we have already pointed above,

it has not become absolutely void. There is therefore no reason why the plaintiff should be allowed to fall back upon the previous mortgage. In our

opinion the suit mortgage which formed the consideration for the sale deed was extinguished when the sale was effected. u/s 101 of the Transfer of

Property Act, where the owner of a charge or other encumbrance on Immovable property is or becomes absolutely entitled to that property the

charge or the encumbrance shall be extinguished unless he declares by express words or necessary implication that it shall continue to subsist or

such continuance would be for his benefit. The effect of the execution of the sale deed must therefore be taken to be the extinguishment of the suit

mortgage unless there is an express of implied intention to keep the encumbrance alive. No such intention has been pleaded in this case, nor can it

be found on the facts. We must therefore hold rejecting the arguments of the appellant that the suit mortgage in this case cannot be enforced

inasmuch as it has become extinguished by the-sale of the property in favour of the plaintiff for which it formed the consideration. We have already

shown that the sale deed has not been rendered void in the way contended for by the appellant. While rib doubt there is good authority for Courts

in equity allowing a party when one remedy has failed to take whatever other remedy lies ready to hand, Courts can hardly go so far as to allow a

party to revive a dead remedy merely because that best suits his convenience. Before the plaintiff can invoke equity in his favour he must show that

there is a remedy available to him on which he can rely. This is precisely what he has been unable to do in this case.

For the above reasons we must hold that the appeal fails. It is dismissed with costs.