Maniyam Siddama Naicken vs Nanjappa Goundan and Others

Madhavan Nair, J.—The first defendant is the appellant. This second appeal arises out of a suit instituted by the plaintiff for the recovery of

Rs. 1,933-8-0 for balance of principal and interest alleged to be due on a mortgage, dated 12th October, 1914, executed by the first defendant in

favour of one Subba Naicken deceased, for Rs. 1,500, repayable in one year with interest at 15 per cent, per annum and in default with interest at

18 per cent, per annum. Subba Naicken and the second defendant were brothers. The two brothers became divided and each of them was

allotted a moiety of the mortgage amount then due. On the death of Subba Naicken in 1922 there was a partition between his two sons,

Ramaswami and Govindaswami, at which Subba Naicken''s share of the mortgage debt was allotted to Govindaswami.

On the 21st March, 1926 Govindaswami assigned his rights to the plaintiff who instituted the present suit for the recovery of the amount claimed

in the plaint. The second defendant, the brother of Subba Naicken, died in the course of the suit and his son and heir, fifth defendant, was

impleaded as his legal representative. Defendants 3 and 4 are alienees of portions of the mortgaged property.

The first defendant contended that the claim of the plaintiff was barred by res judicata by reason of the decision in O.S. No. 899 of 1925. It is

not necessary to refer to the other contentions of the parties for the purposes of this second appeal. The first Court upheld the contention of the

first defendant and dismissed the plaintiff''s suit. On appeal the learned District Judge held that the suit was not barred by res judicata and gave the

plaintiff a decree for the sum found due.

To appreciate the contention of the first defendant-appellant, it is necessary to refer in some detail to the decision in O.S. No. 899 of 1925.

That suit was instituted by the present second defendant as the plaintiff. The present first defendant - the mortgagor - was the first defendant in that

suit also. Ramaswami and Govindaswami, the sons of Subba Naicken who was dead by that time, were defendants 2 and 3 respectively, while the

present defendants 3 and 4 were the 4th and 5th defendants. The suit was for the recovery of the present second defendant''s half share of the

mortgage money to which he had become entitled under the partition deed. It was alleged in the plaint that Ramaswami and Govindaswami had

received their half share. The first defendant''s plea was that he had discharged the whole of the mortgage debt by payment to Ramaswami and

Govindaswami. Neither of them appears to have contested the suit. The second issue in the suit, that is the issue with which we are concerned, was

''whether the suit bond was fully discharged''. The finding on this issue was as follows : ""So, I hold that the mortgage bond has not been discharged

so far as the plaintiff is concerned and give a decree to the plaintiff as prayed for in the plaint"". In paragraph 4 of Ex. IX the judgment, the learned

District Munsif said,

I am of opinion that defendants 2 and 3 have been paid their share of the mortgage money under the bond, but payment to defendants 2 and 3

does not absolve the first defendant from his liability to the plaintiff. It is admitted by the first defendant that defendants 2 and 3 have not paid any

money to the plaintiff. Payment to one of the co-heirs of a deceased mortgagee does not bind the other co-heirs.

In the previous paragraph the District Munsif observed that the evidence of discharge (pleaded by the first defendant-mortgagor) was not in

itself very strong, ""but the fact that Defendants 2 and 3 have allowed the suit to proceed ex parte lends support to the first defendant''s contention"".

It cannot be disputed that in the previous suit O.S. No. 899 of 1925 the lower Court found that defendants 2 and 3 - the sons of Subba

Naicken - were paid their half share of the mortgage money due under the bond. The plaintiff in the present suit is the assignee of Govindaswami,

to whom was allotted under the partition Subba Naicken''s half share of the mortgage money. The first defendant''s contention is that this finding

that defendants 2 and 3 have been paid the amount due to them under the bond, is res judicata in the present suit, that plaintiff Govindaswami being

his assignor, is bound by that finding, and that therefore the present suit should be dismissed. It will be observed that the present first defendant and

Govindaswami were co-defendants in the previous suit. The question for determination is whether the adjudication inter se between the co-

defendants that Govindaswami has been paid the mortgage amount due to him from the first defendant, will bind them so as to constitute that

decision res judicata in the present suit where the same point is raised for decision a second time. If that decision will bind Govindaswami - and.

that it will bind him is the contention of the first defendant - then the plaintiff''s suit must inevitably fail. It has been held by the Privy Council in

Maungsein Done v. Ma Pan Nyun (1932) L.R. 59 IndAp 247 : ILR 10 Rang. 322 : 63 M.L.J. 64 (P.C.) after referring to their Lordships''

decision in Munni Bibi v.. Tirloki Nath (1931) L.R. 58 I.A. 158 : ILR 53 All. 103 : 61 M.L.J. 196 (P.C.) that a decision would, operate as res

judicata: between co-defendants provided : (1) that there was a conflict of interest between them, (2) that it was necessary to decide the conflict in

order to give the plaintiff the relief which he claimed and (3) that the question between the co-defendants was finally settled. Referring to these tests

the learned District Judge said,

it is not at all clear how a decision as between the mortgagor and Subba Naicken''s sons was at all necessary to give the plaintiff in O.S. No. 899

of 1925 the relief that he asked for.

In his opinion the previous decision did not satisfy the second of the tests laid down above and he therefore came to the conclusion that the suit

is not barred by res judicata. In deciding the question of res judicata the only question for me to determine is whether the decision as to whether

Subba Naicken''s share was paid off was necessary for deciding the plaintiff''s claim in the previous suit.

In the previous suit the plaintiff therein, that is the present second defendant, asked for his half share of the mortgage money. In determining this

point the question is asked with a certain amount of plausibility, ""why is it necessary to decide whether Subba Naicken''s share has been paid off?

Whether Subba Naicken has been paid his share of the mortgage money or not, the plaintiff would be entitled to get his share which is a half of the

mortgage amount, and even if the former had been paid the full amount, if he had not paid the plaintiff his share still the plaintiff would get a decree

for his claim. The payment to Subba Naicken of his share has nothing to do with the question whether the plaintiff is entitled to get a decree for his

share. How can it then be said that the decision that defendants 2 and 3 were paid the share due to their father, was necessary for determining the

question whether the plaintiff is entitled to get a decree for his share?"" This is the line of reasoning adopted in support of the learned Judge''s

conclusion. It is argued by the appellant that this reasoning cannot be applied in a case where a co-mortgage seeks to realise his claim against the

mortgaged property in a suit to which he makes the mortgagor and the other co-mortgagee parties. In such a case it is argued that relief cannot be

given to the plaintiff unless the necessary accounts are taken, in which case it will be found that so much has been already paid and so much

remains due for payment or nothing at all is due from the mortgagor to any of the mortgagees and that therefore to give relief to the plaintiff co-

mortgagee it will have to be found whether the defendant co-mortgagee has been paid or not. It is said that the two questions are necessarily

interdependent and the one cannot be decided without deciding the other. In support of his contention the appellants'' learned Counsel relied on a

decision of this Court in Atchmma v. Subbarayadu (1903) 15 M.L.J. 496. In that case it was held that one of two co-mortgagees can sue for

recovery of his share of the mortgage money claiming to be severally entitled thereto impleading his co-mortgagee as defendant if he should be

unwilling to join him as plaintiff. It was also held that the decree in such cases should direct that the money realised by sale of the properties should

be paid to the two mortgagees in due proportion to the sums due to them. The latter proposition of law strongly supports the appellant. If this is the

proper form of the decree that should be passed in such a case, it is clear that in the suit by the co-mortgagee it is the duty of the Court to decide

what amount is due to the defendant-co-mortgagee also, so that the decree may provide for payments being made to both of them. If so, it is

necessary to decide what amount is due to the co-mortgagee-defendant under the mortgage in determining the amount due to the plaintiff and

decreeing his claim. This case has been followed in Arunachalam Chetty v. Ramaswami Aiyar (1928) 30 L.W. 723 and Seth Bansiram Jashamal

through his authorised Agent and Managing Partner, Lilaram Vs. Gunnia Naga Aiyar and Others, both of which were suits by a co-mortgagee

against the mortgagor and the other mortgagees. Mr. Krishnaswami Aiyar on behalf of the respondent contends that the dictum in Atchamma v.

Subbarayadu (1903) 15 M.L.J. 496 that

the decree should direct that the money realised by the sale of the properties should be paid to the two mortgagees

is not good law having regard to the decision in 24 CWN 297 (Privy Council) in which their Lordships of the Privy Council observed as follows:

Where a mortgage is made by one mortgagor to two mortgagees as tenants-in-common, the right of either mortgagee who desires to realise the

mortgaged property and obtain payment of the debt, if the consent of the co-mortgagee cannot be obtained, is to add the co-mortgagee as a

defendant to the suit and to ask for the proper mortgage decree, which would provide for all the necessary accounts and payments, excepting that

there could be no judgment for a sum of money entered as between the mortgagee defendant and the mortgagor.

It is pointed out that the last observation ""excepting that there could be no judgment, etc."" shows clearly that it will be wrong to direct in the

decree what amount is due to the co-mortgagee if no judgment can be passed adjudicating his claim. This is no doubt a point of some interest, but

I think both the cases proceed upon the principle that in deciding the claim of the plaintiff in a suit like O.S. No. 899 of 1925 it is necessary to

adjudicate on the claim of the defendant co-mortgagee also. The extract quoted above says that the proper mortgage decree in such a case ""would

provide for all the necessary accounts and payments"". This is also the principle of the decision in Atchamma v. Subbarayadu (1903) 15 M.L.J.

Whether a decree can be given to the co-mortgagee for the amount found due to him is a question with which I am not concerned in the

present case. Both these cases are referred to by Devadoss, J. in Arunachalam Chetty v. Ramaswamy Aiyar (1928) 30 L.W. 723 and Seth

Bansiram Jashamal v. Gunnia Naga Aiyar (1930) 59 M.L.J. 982. What should be done in a case where money is found due to the defendant co-

mortgagee is thus explained by Ramesam, J., in Seth Bansiram Jashamal v. Gunnia Naga Aiyar (1930) 59 M.L.J. 982:

If the whole of the mortgaged property realised more than the amount due on the document to all the mortgagees the plaintiff will be simply paid his

amount and the rest of it will be held by the Court and will not be paid to the other co-mortgagees until they pay their court-fees.... After the trial of

the case and the final decree is passed, the Court will make a provision directing the defendants-mortgagees to pay their court-fees within a certain

time and if they do not pay their court-fees the amount will be paid to the mortgagor after taking security. In such a case no mortgagee will allow

his money to go back to the mortgagor''s hands owing to non-payment of court-fees, so that ultimately the Government will get the whole court-fee

due upon the whole of the mortgage money. The suit then becomes somewhat analogous to a partition action....

Why the Judicial Committee says no judgment should be entered as between the mortgagee-defendant and the mortgagor, is no doubt due to

the reason that the co-mortgagee, though his claim has been adjudicated upon as a necessary incident in determining the plaintiff''s claim, has not

asked for a decree in his favour and may also be due to the fact that if a decree is given in his favour straightaway he will be getting a decree

without paying the proper court-fee. However that may be, in this case we are not concerned in deciding the question whether a decree could be

passed in favour of the co-mortgagee in a case like O.S. No. 899 of 1925. What we are concerned with is only the question whether it is

necessary to adjudicate upon the claim of the co-mortgagee defendant in determining the amount due to the co-mortgagee plaintiff in a suit to

which both the co-mortgagee and the mortgagor are parties. Having regard to the principle of the decisions in Atchamma v. Subbarayadu (1903)

15 M.L.J. 496 and 24 CWN 297 (Privy Council) .

I think this question will have to be answered in the affirmative.

For the above reasons I would hold that the claim of the plaintiff in the present suit is barred by res judicata by reason of the decision in O.S.

No. 899 of 1925 and his suit should be dismissed. It is gratifying to find that the conclusion which I have reached on the question of law accords

well with the equities in the case, for if Subba Naicken''s share of the mortgage money had already been paid to Govindaswami, then the assignee

of that share can have no claim for that amount and his suit should be rightly dismissed, as it has been done by the District Munsif. In the result, I

set aside the decree of the lower Court and restore that of the District Munsif with costs here and in the lower Court below.