Mt. Anrajo Kuer vs Ramdayal Singh and Another

Meredith, J.—This second appeal is by defendant 1, and arises out of a suit under Order 21, Rule 63, Civil P.C. The appellant on 14th January 1934, obtained a money decree upon a handnote against defendant 2 in the present suit. On 17th March 1936, she started execution proceedings, praying for attachment and sale of certain property of her judgment-debtor. On 27th March 1936, notice under Order 21, Rule 22, Civil P.C., was served on the judgment-debtor. Shortly afterwards, on 8th April 1936, the judgment-debtor executed and registered a usufructuary mortgage deed in favour of the plaintiff-respondent in respect of the same property which was the subject of the execution proceedings.

Between 8th May 1936, and 3rd June 1936, the properties were attached. On the latter date, the plaintiff-respondent filed a claim case under Order 21, Rule 58, Civil P.C., relying upon the usufructuary mortgage to which I have just referred. Execution however proceeded, and on 23rd September 1936, the property was sold and purchased by the decree-holder herself. On 28th September 1936, the claim case was rejected, the Court holding that the claimant had not been in possession under the alleged mortgage, which was not genuine. On 4th December 1936, the sale was confirmed, and on 2nd February 1937, delivery of possession was made to the auction purchaser under Order 21, Rule 95, Civil P.C. Thereafter, on 25th September 1937, the present suit was filed, the plaintiff praying for a declaration that the sale in the execution proceedings was not binding upon him. No prayer was made for recovery of possession the plaintiff contending that the delivery of possession had been ineffective as against him.

The trial Court held that the mortgage transaction was a sham one, and dismissed the suit. In first appeal, however, the learned Subordinate Judge held that the mortgage was genuine, and the plaintiff had obtained possession thereunder. In that view he gave the plaintiff a declaration that the execution sale did not affect his rights under the mortgage.

Mr. Section M. Mullick for the appellant does not now challenge the finding that the usufructuary mortgage was genuine and for consideration. Indeed, he could not do so in second appeal. He has however argued that the suit should have been dismissed as not being maintainable under Order 21, Rule 63, Civil P.C. His argument is that what was sold in execution of the money decree was merely the right, title and interest of the judgment-debtor, that is to say, the equity of redemption. The interest of the mortgage was not at all affected by the attachment or sale. Therefore, the mortgagee was not entitled to make an application under Order 21, Rule 58, which had no application at all to the case. Having no right to apply under Order 21, Rule 58, he had no subsequent right to sue under Order 21, Rule 63, and no such suit was maintainable by him. The order in the claim case was wholly void, as the Court was not entitled to entertain an application under Rule 58 in the circumstances of the case.

In my view, Mr. Mullick''s argument is not correct. He relies upon two oases of this Court, Biswanath Patra Vs. Lingaraj Patra, and a Pull Bench case Sunder Prasad Singh Vs. Deodhari Singh and Others, , for the proposition that Order 21, Rule 58 and Order 21, Rule 63 have no application as between the decree-holder executing a money decree and a mortgagee in possession. In both those cases however it appears that there was no challenge to the rights of the mortgagee. The sale was assumed to be only of the equity of redemption, and not of the property itself. The rights of the mortgagee under his mortgage had apparently not been challenged by the decree-holder, and it was for this reason that it was held that no application under Order 21, Rule 58 would be maintainable. What the Pull Bench case actually decided was that in such circumstances an abortive application under Order 21, Rule 58 would not bar a subsequent application by the mortgagee under Order 21, Rule 100 if dispossessed. In my view, these two cases have no application to a case like the present where the rights of the mortgagee under the mortgage were challenged by the decree-holder. There can be no doubt that in the present case the mortgagee had every justification for fearing that the sale might prejudice his interests. Under Order 21, Rule 66, Civil P.C., incumbrances are to be specified in the sale proclamation. In the present ease, the incumbrance was not specified in the sale proclamation, and the claim case was decided after the sale proclamation had been drawn up. Moreover, the delivery of possession when it took place was, as I have noticed, under Order 21, Rule 95, Civil P.C., not under Order 21, Rule 96. It was quite evident that the decree-holder in execution was endeavouring to go behind the mortgage, and obtain actual possession of the property. That seems to have been her attitude all along. That was still her attitude during the trial'' of the present suit. That was her attitude upon the claim case. She did not resist the claim on the ground that she was not selling the mortgagee''s interest, and that the claim case was not maintainable. On the contrary, she fought it on the merits, and challenged the existence of any genuine mortgage. This was clearly a case where the rights of the mortgagee were in issue.

The cases upon which Mr. Mullick has relied have been considered and explained by a Division Bench of this Court in Mahtha Raghubir Prasad Vs. Ramnath Singh and Others, . and therein the view taken regarding the Full Bench decision was that which I have just put forward. Manohar Lall, J. said: "As I understand the decision of the Full Bench it only decides that the decision of this Court in Biswanath Patra Vs. Lingaraj Patra, , was correct. That case expressly referred, like the case in the Full Bench, to a usufructuary mortgagee. Further in the Full Bench case (as will be seen at p. ILR Pat.) Sunder Prasad Singh Vs. Deodhari Singh and Others, the rights of the mortgagee were not in jeopardy as is clear from the following sentence: "In this case the mortgagee was merely claiming in respect of his mortgage rights which were not threatened and the judgment-debtor could merely claim in respect of the right to put up for sale the equity of redemption: that is to say, they were not fighting about the same property at all." That case was a case of a simple mortgagee, but it appears to me that what applies in the case of a simple mortgagee must all the more apply in the case of a usufructuary mortgagee. If the right of the former is one which can be successfully put forward in an application under Order 21, Rule 58, (and Order 21, Rule 62 clearly contemplates that this is so), then the greater right of a usufructuary mortgagee must a fortiori be one in regard to which a claim can be put forward under the rule.

In Radhey Kishan Lal Vs. Rameshwar Prasad, a learned Judge of this Court, Kulwant Sahay, J. took this view. He held that it is open to a mortgagee in possession to apply under Order 21, Rule 58 for removal of an attachment of a mortgaged property under execution of a money decree against the mortgagor, though, he observed, if it can be inferred that the intention of the decree-holder was not to attach the property itself but the equity of redemption, the attachment may be allowed to continue upon the equity of redemption. That is a case of a learned Judge sitting singly, but with respect, I think, the arguments upon which the decision is founded are sound and directly applicable to the present case.

The distinction between attachment of the equity of redemption and attachment of the property itself is a clear one and well recognized. In such circumstances, upon general principles, where the property itself has been attached I can see no reason why the mortgagee in possession should not be entitled to object to the attachment under Order 21, Rule 58, and to contend either that the order of attachment should be cancelled, or at least that it should continue only as an attachment of the equity of redemption. This view has been taken by the Calcutta High Court in Maharaj Bahadur Singh Vs. Nosharan Bibi and Others, . In that case it was held that when property in the possession of a usufructuary mortgagee is attached in execution of a money decree, if it can be inferred that the decree-holder''s intention was not to attach the property itself but the equity of redemption, the attachment may be allowed to continue upon the equity of redemption and it need not be released notwithstanding, that the usufructuary mortgagee applies for removal of the attachment. But otherwise, upon such application by the usufructuary mortgagee the attachment of the mortgaged property at the instance of the decree-holder must be released.

The application under Order 21, Rule 58 was, in my opinion, maintainable. The claim was decided against the claimant upon the merits. In Order 21, Rule 63 it is provided that "where a claim or an objection is preferred, the party against whom an order is made may institute a suit to establish the right which he claims to the property in dispute, but, subject to the result of such suit, if any, the order shall be conclusive." Therefore, the decision in the claim case would have been conclusive against the validity of the mortgage in the absence of a suit under Order 21, Rule 63. The suit under that rule was the proper and indeed the only remedy.

The matter may be looked at from another aspect. As I have said, when the claim case was preferred, the decree-holder did not take the position that it was not maintainable. On the contrary, she challenged the mortgage, and invited a decision upon the merits. Having done so, she is, in my judgment, now estopped from taking the opposite position and asserting that the suit, which naturally arises out of the decision on the merits which she herself invited, is not maintainable.

Before I leave this point, I should notice that in the year 1937 Order 21, Rule 58 was amended by this High Court. The claim case with which we are at present concerned was however brought and decided before that amendment came into force. I have therefore considered the question upon the wording of Rule 58 as it stood prior to 1937. It is unnecessary in the present case to consider the effect of the amendment.

Mr. Mullick''s first contention, in my view, dearly fails. He has however further argued that the suit is, in any event, barred under the provisions of Section 42, Specific Relief Act. He points out that before the suit was filed possession had been delivered under Order 21, Rule 95. That, he says, must be taken to have dispossessed the plaintiff. The plaintiff was, therefore, not entitled to sue for a mere declaration without also asking for recovery of possession. There is a short answer to this contention. The suit under Order 21, Rule 63 is a special suit under a special procedure provided by statute and is, therefore, not subject to the general provisions contained in Section 42, Specific Relief Act. So long as the suit is strictly in accordance with the provisions of Rule 63, as the present suit is, it cannot be said that it is barred by any provision of the general law. This view has been adopted in a number of oases. In Kristnam Sooraya v. Pathma Bee 2006.29 Mad. 151 (F.B.) a Pull Bench held that the special right conferred by Section 283, Civil P.C., (corresponding to Order 21, Rule 63) on a claimant whose claim is rejected, to sue for a declaration of his title in so far as it is affected by the order passed against him, is not controlled by the proviso to Section 42, Specific Relief Act, and the plaintiff in such a suit is not bound to ask for any further relief to which he may be entitled. A Division Bench of this Court in Bhagwan Lal Vs. Rajendra Prasad Sahi and Others, has taken a similar view, holding that a mortgagee whose claim under Order 21, Rule 58 has been rejected is entitled to bring a declaratory suit under Order 21, Rule 63, which is a special remedy granted in special circumstances, and the proviso to Section 42, Specific Relief Act, does not govern the suit. In Yellamaraju Venkatasubba Rao Vs. Goteti Vigneswaradu (dead) and Others, a Division Bench of the Madras High Court laid down that dispossession of a claimant, after the right to set aside the order on the claim petition has accrued, cannot be held to be a part of his cause of action for a suit under Order 21, Rule 63 so as to attract the provisions of Order 2, Rule 2, Civil P.C., and bar the institution of a subsequent suit for possession. An unsuccessful claimant under Rule 58 may sue under Rule 63 to establish the right which he claims to the property attached without praying for recovery of possession even when he is out of possession, and is able to sue for that relief, Section 42, Specific Relief Act, not being applicable to such a case.

I must not be taken as necessarily agreeing that the plaintiff was out of possession in the present case. His case was that he was in possession despite the order of delivery of possession. There appears to be no clear finding by the Court below upon this point, but merely a finding that he had been in possession under his mortgage. In view of the legal position, however, it appears to me that no remand is necessary for any finding upon that point. The decree given by the Court below was one which could properly be given even without any such finding.

In my view, the appeal cannot succeed, as both the arguments put forward by Mr. Mullick must be rejected. I would, therefore, dismiss this appeal with costs.

Shearer, J.

I agree.