Norender Narain Singh. vs Dwarka Lal Mundur and Others.

Montague E. Smith, J. 1. This is an appeal in a suit brought by the heirs of Rajah Tek Narain Singh against certain parties, who may be described as the family of Dass, forming one set of Defendants, and persons called Mundur, who formed another set, the latter being purchasers of the property in question from the Dasses. The suit was brought for possession and for registration of names, (as stated in the plaint,) "with respect to 3 annas 7 gundas 3 cowries 1 krant out of 5 annas 3 gundas 1 cowrie 1 krant, of mouzah Dooram Mudeh-poora ''usli'' with ''dakhili'' pergunnah Nesingpore Koora, the property referred to in the deed of conditional sale, after deducting 1 anna 15 gundas 2 cowries, the right and interest of Sri Narain Dass, Bachee Lal Dass, Rajah Ram Dass, Muhtab Dass, alias Laljee Dass, and Chunehal Kishore Dass, purchased by your petitioner''s ancestor, and the right and interest of Shanker Batti purchased at auction on the 10th of January, 1868, subsequent to acquiring the deed of conditional purchase, at an execution sale by your Petitioner." The conclusion of the plaint is: "Since the principal and interest of the mortgage was neither deposited nor paid by the vendors pursuant to the terms of the mortgage bond, the foreclosure in accordance with the Regulation XVII. of 1806, was formally effected in the Judge''s Court at Bhaugulpore, by a proceeding dated the 23rd of June, 1867, and the period of one year fixed by the above law expired on the 27th February, 1868, and within that period the amount entered in the bond and interest were not paid, and the conditional sale aforesaid became absolute on the 27th of February, 1868, corresponding with the 19th Fal-goon 1275 F.S., and the cause of action for possession and mesne profit arose from the same date." 2. The action, therefore, is brought after proceedings for foreclosure had been taken upon the deed of conditional sale referred to in the plaint, and to give effect to those proceedings. This deed is dated the 30th of November, 1858; it is from numerous members of the family of Dass, in all 19; the deed states that they had " sold and transferred all and every the 5 annas 3 gundas 1 cowrie 1 krant of the entire 16 annas original with dependencies in mouzah Dorum Mudehpoora" in lieu of Rs. 5000, which had been advanced by Rajah Teh Narain Singh. The further statement is, " We have received the consideration money in full in one lump sum in cash from the said vendee, and brought the same into our . possession and enjoyment. We execute this deed of conditional sale for two years in lieu of the said consideration, and delivering it to the vendee hereby declare and give in writing that the said vendee shall enter into possession and occupancy of the property sold by right of purchase as proprietor. We promise that in the space of two years from the date of this deed of sale we shall pay the consideration money in question in cash in one lump sum to the vendee aforesaid, and take this deed of sale back. . In case we do not repay the consideration in question the vendee shall, after the expiration of the time, be at liberty to foreclose and complete the sale under the provisions of Regulation XVII. of 1806, A.D., and enter into possession and occupancy of the property sold, and to have his own name registered in the Government Records in the column of proprietor." 3. It seems that the Rajah did not take possession, and no interest appears to have been paid or demanded until proceedings were taken after the Rajah''s death by the present Plaintiffs to foreclose the property, under the 8th section of Regulation XVII. of 1806. 4. The first question which arises (being the question upon which the High Court have decided the case in favour of the Defendants) is whether the directions in that section have been fulfilled. The High Court held that there was no sufficient proof of notification made to the Defendants of the petition of the Plaintiffs claiming foreclosure, and, that being the question, it will be right to look at the terms of the 8th clause. The enactment is, "Whenever the receiver or holder of a deed of mortgage and conditional sale, such as is described in the preamble and preceding sections of this regulation, may be desirous of foreclosing the mortgage, and rendering the sale conclusive on the expiration of the stipulated period, or at any time subsequent before the sum lent is repaid, he shall (after demanding payment from the borrower or his representative) apply for that purpose by a written petition, to be presented by himself or by one of the authorized vakeels of the Court to the Judge of the zillah or city in which the mortgaged land or other property may be situated. The Judge, on receiving such written application, shall cause the mortgagor or his legal representative to be furnished as soon as possible with a copy of it, and shall at the same time notify to him by a perwannah, under his seal and official signature, that if he shall not redeem the property mortgaged in the manner provided for by the foregoing section within one year from the date of the notification, the mortgage will be finally foreclosed, and the conditional sale will become conclusive." 5. The condition of foreclosure required by that section is that the mortgagor should be furnished with a copy of the petition, and should have a notification from the Judge, in order that he may within a year from the time of such notice redeem the property; and in an action of this kind, which is brought to recover possession as upon a foreclosure, it is essential for the Plaintiff to satisfy the Court that this condition has been complied with. 6. It has been contended on the part of the Appellant that it is within the province of the Judge of the zillah Court to determine whether the notice has been duly served or not, and, although it has not been urged, or only very faintly urged, that his finding would be conclusive on the point, it has been strongly insisted that a finding of the Judge, recorded by him in the proceedings upon the foreclosure petition, would, at the least, be prima facie evidence of the fact of service. 7. The general nature of the proceedings under the above Regulation was succinctly stated in a judgment of this Committee, in which it was pointed out that the functions of the Judge under Section 8 are purely ministerial: Forbes v. Ameeroonissa Begum 10 Moore''s Ind. Ap. Ca. 350. 8. Their Lordships, considering that the duties of the zillah Judge in the matter of a foreclosure are of a ministerial nature, considering the vast importance to mortgagors of the notification, and the consequences which follow, if they do not redeem within the prescribed time, are of opinion that the service of it should be established by evidence in a suit like the present, which is brought, in fact, to enforce the foreclosure. The proceedings of the Judge are ex parte, and even if the Judge examined the nazir or person who served the notice, it would be unsatisfactory that the estate of the mortgagor should depend upon his opinion. The argument indeed was not pressed that it would be conclusive, but it would be going far to say that it is of such authority as to be prima facie evidence, which should shift the onus of proof upon such an important point, and relieve the mortgagee from giving affirmative proof of the due performance of a condition necessary to be established before the foreclosure can attach upon the estate. 9. In the present instance, however, the case shews that the Judge had no proof, properly so called, of the service. It is plain from the manner in which the entry of the service is made, that nothing more occurred than this, that the nazir having received the per-wannah, made a return, as it is called, on the back of it stating what he had done with it. The substance of the return is stated in the proceedings of the Judge. After recording that "notices and copies of the petition for foreclosure of mortgage addressed to the opposite party, dated the 27th of February, 1866, A.D., were delivered to the nazir under a perwannah to serve on the opposite party," it goes on, thereupon the nazir submitted a return on the back of the perwannah to the effect, that he could not meet the opposite party, and that he stuck up a copy of the notice and of the petition to the houses of each of the opposite party, along with two receipts in the Hindu character severally dated 13th and 14th Cheyt 1273 F.S., written by Bunsi Chowki Bar and Bochal Chamar ''Poneas,'' inhabitants of mouzah Khoksisyam, pergunnah Nesing-fore Koora, which were annexed on the record." Then it goes on, " To-day the record of the case was brought up, and on a reference to the return submitted by the nazir it appeared that the notice had been duly served." Therefore we have on the face of this document what the Judge considered to be proof of the notice, namely, the return of the nazir, which is a mere statement of that officer, without apparently any verification upon oath, or any examination of the nazir by the Judge. 10. Upon the trial no proof whatever was given by the Plaintiffs of the service of the notification. They appear to have relied on the recorded return of the nazir. But it was contended that the want of proof is immaterial, in consequence of certain admissions contained in two petitions filed on the part of the mortgagors, the Basses. One is a petition signed by five, and the other by six. They were originally nineteen in number, and the remainder do not appear to have petitioned or to have made any admission. The first petition refers in this way, and in this way only, to the service: " The applicants caused a notice under Regulation XVII. of 1806 to be issued on the 27th February, 1866, clandestinely served without the knowledge and information of your Petitioners. Now your Petitioners having come to the knowledge of the case from some out-of-the-way sources, offer objections on the following grounds." This petition appears to have been presented a short time only before the end of the year of grace, and contains no admission of the time, or sufficiency of the service. Their Lordships, therefore, consider that it does not amount to an admission that the notice had been properly served upon them at the time at which the mortgagee alleges it to have been, or that they had knowledge of it at a time which would have justified the foreclosure. 11. The other petition no doubt does contain an admission. There is this statement in it; "The petitioners have under a deed of conditional sale, dated the 9th Aughan, 1266, F.S., for Rs. 5000, had notice under Regulation XVII. of 1806, in respect of 5 annas 3 gundas 1 cowrie 1 krant of mouzah Dorum Mundeh-poora, pergunnah Nesingpore Koora, zillah Bhagulpore, issued to us. Therefore we beg to submit our objections." , It is true they do not in terms admit the time at which they had notice, but with regard to those petitioners a Judge would not be wrong in holding that there was an admission by them of due service. But this petition is the petition of six only out of the nineteen mortgagors. 12. The importance of requiring proof of the service of the notice and not trusting to a bare statement that notice had been duly served is enhanced by the consideration that it has been held by a decision of the Full Bench of the High Court of Bengal that the year during which the mortgagor may redeem his property runs, not from the date of the perwannah or the issuing of it by the Judge, but from the time of service: Mohesh Chunder Sein v. Mussamut Tarinee 10 Suth. W.R.F.D. 27. This decision overruled some cases in the late Sudder Courts, in which it had been held that the year was to run from the date of the notification. Their Lordships are quite , prepared to adopt the decision of the High Court. It is obvious that if the year is to run from the date of the perwannah, the negligence of the nazir, or other circumstances, may prevent its service for a considerable time after its date, and so the mortgagor would lose the benefit of the full time which it was intended by the Regulation to give him. 13. The necessity of proving service of the notice has recently been decided by two Courts in India, one a Division Court of the High. Court of Bengal, and another a Division Court of the North-Western Provinces. In both it has been held that the service should be proved in the action which is brought to enforce the foreclosure: Syud Eusuf Ali Khan v. Mussumat Azumtoonissa Suth. W.R. (1864) 49. The case in the North-Western Provinces is in the third High Court Reports of that Province, p. 325. 14. What their Lordships have held with regard to the service of the notice would be sufficient to dispose of the case against the Appellants, but for the fact, to which allusion has already been made, of the admission by some of the Defendants that they had received the notice. This opens the question whether the foreclosure is complete as against all or any of the mortgagors. The High Court has held that the omission to serve any one of the mortgagors would be fatal to the validity of the foreclosure. Their Lordships think that in the circumstances of this case service upon those only of the mortgagors, whose petition admitted service, would be insufficient to warrant the foreclosure of the whole property or of any of it. 15. This is a mortgage for one entire sum, and the property, although held in certain shares, was mortgaged as a whole to the extent of five annas and a fraction, and was redeemable only upon payment of the entire sum. Each and every one of the mortgagors was interested in the payment of that money and the redemption of the estate, and each and every one of them had a right by payment of the money to redeem the estate, seeking his contribution from the others. The equity of redemption of those who were not summoned, and who had no notice that the mortgagee was demanding his money, cannot be foreclosed because those who have been served have omitted to redeem. It is impossible for the mortgagee to obtain a foreclosure of the whole of the estate upon a service on some only of the mortgagors. Then with respect to the mortgagors who have admitted notice, it is to be observed that it was not sought to foreclose the individual shares of each as against each, but to foreclose the whole estate, as upon one mortgage, one debt, and one entire right against all. 16. Further, the Mundurs, the Defendants of the second class, purchased some share of some of the Basses before the foreclosure proceedings took place. It appears that in February, 1861, two or three years after the conditional sale, and before the notice of foreclosure, two gundas and two cowries was sold to the Mundurs. It is said that they did not take possession, but they had become by this purchase the owners of the equity of redemption of the purchased shares, and notice of foreclosure ought to have been served upon them. Mr. Doyne has argued that a purchaser who has not taken possession need not be served. Their Lordships, however, think that that argument cannot be sustained. The mortgagee, when he seeks to foreclose, must discover and serve the persons who are the then owners of the estate. 17. A question of this sort came before this tribunal in the case of Mohun Lall Sookool v. Goluck Chunder Dutt 10 Moore''s Ind. Ap. Ca. 14. Their Lordships say upon it, "It is quite clear upon the authorities, that if the sale had taken place before the notice of foreclosure was filed, that notice, to be effectual, must have been served on the purchaser, and in the circumstances above stated their Lordships conceive that it ought to have been served upon the decree holder. Yet there is no evidence of any attempt to serve it upon any one except the widow and heiress of the original mortgagor." 18. There are subsequent cases in India which shew that the view taken by their Lordships has been followed in practice. 19. Without saying that there may not be cases of mortgages of separate shares, in which, by proceedings properly framed, foreclosure may take place in respect of some of such shares only, their Lordships think the proceedings in this case are not such as will sustain the present action as against any of the Defendants. 20. What their Lordships have said is enough to dispose of this case, but they think it right to advert to the main question which arose upon the merits, whether this conditional sale was intended between the parties to be really operative as a bona fide instrument. 21. It seems that Rajah Tek Narain, was a patron of a family of the Dasses. They were involved in debt, and he probably advanced money to them from time to time. But with regard to this particular instrument there is strong evidence, arising from the history of the case and from facts which are beyond dispute, for presuming that it was not intended to be acted upon by Rajah . Teh Narain, The deed is dated the 30th of November, 1858. In its terras it provides for immediate possession. A question, indeed, was raised whether that was so. It was said that the construction was at the least doubtful, and that it was not intended that the Rajah should have possession until the two years mentioned in the deed for the payment of the money had elapsed. However this may be, possession was not taken. No provision is made in the deed for payment of interest, and none was demanded. The two years given by the deed for the payment of the money expired no the 30th of November, 1860. The petition to foreclose was not, filed until the 2nd of January, 1866, and up to this date it is plain that the Rajah had not entered into possession, had received no interest, nor apparently had asked for any. He obtained what is called the order of foreclosure on the 14th of September, 1867. The note of the Judge that the foreclosure was "sanctioned" cannot indeed be properly regarded in the light of an order. He takes certain proceedings, and makes a record of them, but he can give no judgment in any way binding on the parties. However, the proceedings in his Court were complete on the 24th of September, 1867. Again no action is taken; possession is left where it was, no interest apparently is demanded, and this suit is not brought until the 1st of October, 1872, nearly fourteen years after the mortgage, and five years after the foreclosure proceedings came to an end. 22. Then the property is dealt with by the Rajah himself in a manner which seems quite inconsistent with his having a deed of conditional sale which was intended to be acted upon. In 1861 a lease was granted by the Dasses to the Rajah (in the name of his servant Bijoz Dass) of six annas and certain fractions of annas of the same mouzah. Those annas must have included the whole of the shares which had been mortgaged--it appears to have included more; it is an ordinary lease, and part of the rent was to be deducted on account of a former zurpeshgi. Again in 1867, after the Rajah''s death, his sons obtained decrees against the Basses, and the right and interest of the Dasses in this estate were notified for sale under those decrees. It appears that just before the days when the sale was to take place the Basses sold their shares to the Mundurs, who alone appear here as Respondents, obtained a large sum of money from them, and paid over that money in discharge of the judgment debt. Those circumstances are not referred to to shew that the conditional sale did not exist, but they are inconsistent with its existence as a document which was intended to be acted upon. Throughout the above transaction there is no trace that it was referred to, or that any notice was given of it, or that anybody knew anything of it. Again, the Rajah, after the conditional sale, as admitted in the plaint, purchased some of the shares of the Basses which had been mortgaged. They are sales as if the Basses had the absolute ownership. The deeds in no way refer to the mortgage, nor was any provision made respecting the mortgage debt. 23. It is not necessary for their Lordships to go further into these transactions. They have adverted to them because they were desirous of expressing the opinion they entertain of the extreme doubt, to say the least, which rests upon the bona fides of the conditional sale. They do not desire to impute fraud to either the Rajah or the Basses. The Rajah had probably taken this deed from them to act upon it in case he should think it right, but did not think it right to do so; and having kept it for so long a time without acting upon it, there is strong evidence in this and in the other circumstances of the case which have been adverted to, leading to the conclusion that it is not a bond fide conveyance as against bond fide purchasers, which the Defendants, the Mundurs, are. 24. On the whole case, therefore, their Lordships will humbly advise Her Majesty to affirm the judgment of the Court below, and to dismiss this appeal with costs.