Ramcharitar Sao and Another vs Bawan Prasad Singh and Others

Meredith, J.—This appeal is by defendants, and arises out of a suit for redemption of a usufructuary mortgage (ijara). The plaintiffs-respondents and their ancestor Madho Prasad Singh owned the 16 annaa milkiat interest in Mouza Gangapore Pakri alias Barhibigha, Tauzi No. 12769, in the Patna District. On 22nd July 1925, they executed an ijara of the 16 annas in favour of the appellants Ramcharitar Sao and Ram Chander Sao for nine years, 1388 to 1841 Fasli (1926 to 1934), the mortgage being for a sum of Rs. 17,000 and there being the usual provision that the mortgagees would enjoy the usufruct in lieu of interest. The bond was executed, according to the plaintiffs, for payment of a sum of Rs. 13,000 to one Deo Narain Singh and Rs. 4000 to one Ram Narain Singh who had transferred to the plaintiffs his 3 annas share of the milkiat. The bond was duly registered, and the plaintiffs admitted before the Sub-Registrar the receipt of the Rs. 4000, but not of the Rs. 13,000 which was subsequently, admittedly paid to Deo Narain Singh and a receipt was taken.

The plaintiffs brought the suit on the allegation that in fact the Rs. 4000 was never paid. The defendants, therefore, enjoyed the possession of a proportionate share of the property to which they were not entitled, and the usufruct of this share amounted to a sum sufficient to discharge the entire mortgage and to leave a sum of Rs. 158 due ?to the plaintiffs, which they also claimed.

The defence was, first, that the whole consideration including the Rupees 4000 had been paid. Admittedly, Rs. 13,000 was paid to Deo Narain Singh on 27th August 1925, and the receipt (Ex. M) was taken. As for ?the Rs. 4000 that was brought to the registration office with a view to making the payment in the presence of the Sub-Registrar; the latter said he could not spare time for the money to be counted in his presence. It was, therefore, counted and made over in his verandah, and he subsequently endorsed the receipt written out by the plaintiffs upon the bond.

Secondly, the defendants contended that the suit was bad for non-joinder of necessary parties. It was admitted that on 26th November 1927, by the sale deed (Ex. G) 8 annas interest in the village, that is to say, an eight annas share of the equity of redemption, was transferred to certain persons under a sale deed (Ex. G). These persons were Dukhan, Gopal Das, Damri, Bandhu, Mangar, Manikchand and Lachhman. The plaintiffs filed ladavi deeds executed by Dukhan and Gopal Das, but Damri, Bandhu and Manikchand were still in possession of their interest, and Lachhman had transferred his to a third party who like these vendees was not impleaded. The mortgage being indivisible and incapable of redemption piecemeal, these persons were necessary parties.

The learned Subordinate Judge held that the plaintiffs'' case was true. The suit should not fail by reason of the defect of parties, and he, therefore, gave the plaintiffs a decree, directing, however, that a fresh account should be taken as the plaintiffs,'' account set out in the plaint was not correct.

Three questions have been argued before us first, the question whether the plaintiffs'' vendees were necessary parties; second, whether the Rs. 4000 was actually paid, and, third, whether it must be held upon the principles of res judicata that the Rs. 4000 had not been paid. The last question was raised in view of the fact that on the same day the ijara bond (Ex. A) was executed, a simple mortgage bond was also executed by the plaintiffs in favour of the defendants for a sum of Rs. 2000. On this bond the appellants brought a suit in the year 1932. That suit was dismissed on a finding that the Rs. 2000, the consideration of the simple mortgage bond, had not been paid, and in deciding that case the trial Court incidentally held that the sum of Rs. 4000 on the ijara had also not been paid. The judgment in that case was in 1934. An appeal was made to the District Judge and failed in 1935, and subsequently a second appeal was dismissed by the High Court.

I shall consider these three questions in turn. For the appellants reliance is placed on Girwar Narain Mahton v. Mt. Makbunessa AIR 1916 Pat. 310 in which it was held that 4 a mortgage being indivisible if all persons interested therein are not made parties the suit must fail having regard to the provisions of Order 34, Rule 1, Civil P.C., to which the provisions of Order 1, Rule 9 must be regarded as subordinate. This decision, however, was reviewed by a Bench of this Court in Sital Prasad Ray v. Asho Singh AIR 1922 Pat. 651. In that case the learned Judges held that Order 1, Rule 9 was not subordinate to Order 84, Rule 1, but that the effect of considering both together, so far as mortgages were concerned, was that,

all persons whose rights and interests may be adjudicated upon and determined in the suit ought to be added as parties but failure to add one or more such persons should not have the effect of defeating the suit if the Court, in their absence, can deal with the matters in controversy so far as regards the rights and interests of the parties actually before it. Whether the Court can do so or not must depend upon whether the presence of those not added is essential to enable the Court to adjudicate on the rights and interests of those actually before it. It is a fundamental rule of procedure that the Court cannot, by its decree affect the rights of those who are not parties to the suit. If, therefore, no decree can be passed without affecting the right of absent parties the suit cannot proceed in their absence and should be dismissed.

It will be apparent that two tests have been laid down as to whether the suit can proceed in the absence of certain proper parties: (1) can the rights of the parties on the record be fully determined in their absence, and (2) can that determination be made necessarily affecting the rights of those absent. In my opinion, whichever of these tests be applied to the present case the result is the same. The absentees are necessary parties, and not merely proper parties. The reason for this is that in the sale deed of 26th November 1927 (Ex. G) there was a clear provision that the 8 annas vendees were to redeem the ijara (as well as the simple mortgage) and the sum of Rs. 19,564 out of the consideration was left in their -custody for that purpose, that is to say, Rs. 17,000 for redemption of the ijara and Rs. 2564 for redemption of the simple mortgage with interest. Not only that, but the vendees executed a security bond (Ex. B) on the same date in respect of this to of Rs. 19,564 and also an, additional sum of Rs. 3000 and odd which was left in the vendees'' custody out of the consideration.

The effect of this is, in my opinion, to make the vendees necessary parties. What would the position be if they had been impleaded? We do not know what their attitude might have been; though it may be ?observed that one of the vendees Lachhman was examined by the appellants and he supported their case, stating that the whole Rs. 17,000 was left with them and there was a clear understanding that they were to pay Rs. 17,000 to redeem the ijara. It might well have been then, if these persons had been impleaded, that some of the mortgagors as parties would admit receipt of the full consideration.

In the circumstances, the character of the suit would have been largely changed, and the defendants, that is to say, the present appellants, would have been in a very much stronger position. Indeed, it is difficult to see how the suit for redemption could have succeeded without payment of the full Rs. 17,000, the mortgage being indivisible and incapable of redemption piecemeal; nor could the Court have allowed one part to be redeemed upon one basis and another part to be redeemed on a different basis. Thus, it is apparent that the position of the defendants may well have been prejudiced by the plaintiffs'' failure to implead these people. Let us apply the second test. It is quite true that the only question before the Court was, what are the rights and liabilities as between the mortgagors and the mortgagees. But the decision if the suit is decreed would put an end to the mortgage, and no further rights could remain in the plaintiffs'' vendees as against the mortgagees.

As I have said, we have no means of knowing what the case of these vendees might have been had they been impleaded. They might have admitted that the entire Rs. 17,000 was payable, but it is also conceivable, to take an extreme case, that they might have pleaded that the entire mortgage had been redeemed by them according to their contract and that nothing was due. Thus, it is conceivable that had they been parties they could have obtained a more favourable result than the plaintiffs have done, that is to say, it is possible that the position of the absentees vis-a-vis the mortgagees may have been prejudicially affected by the failure to implead them. They are left, as a result of the suit, if it succeeds with no remedy against the mortgagees.

It is no answer to say that for their right against the mortgagees is substituted a right against the plaintiffs. They were entitled as holders of part of the equity of redemption to a specific right against the mortgagees. That right has been taken away. A right against the plaintiffs is not the same right. The plaintiffs, for example, might be men of straw. The vendees might as a result of the suit be called on to pay a share of costs which they could have avoided had they been impleaded. Moreover, in any event they are driven to a second and unnecessary suit against the plaintiffs. Had they been parties to the redemption suit they would have been entitled to a decree for joint possession with the plaintiffs, whereas, as it is, possession of the 16 annas interest has gone to the plaintiffs.

The omission of the plaintiffs to implead these vendees must have been deliberate, and, in my opinion, they cannot be permitted to prejudice their position by omitting to implead them.

Mr. Sarju Prasad for the respondents has cited several rulings. He relies mainly on the decision of the Privy Council in Yadalli Beg v. Tukaram AIR 1921 P.C. 125. In that case it was certainly laid down that any one of the mortgagors may redeem the entire mortgage unless something has happened to extinguish it; but it was added that this must be subject to safeguarding the rights of any other persons also entitled to redeem and, moreover, the question of the necessity or otherwise of impleading those persons in the suit was not dealt with.

Next, reliance is placed on a decision of this Court in Ml. Waleyatunnissa Begam v. Mt. Chalakhi AIR 1931 Pat. 164. That, however, was a suit by the mortgagee, and the decision was based on the principle that it is sometimes possible for the mortgagee to split the mortgage by giving up part of his claim. But it is one thing to hold that a mortgage can be enforced in part in the absence of certain of the mortgagors, and quite another thing to hold that a mortgage can be redeemed in the absence of certain of the mortgagors. It is perhaps significant that the Transfer of Property Act in Section 60 provides that one mortgagor cannot redeem his own share, except only in the one limited case referred to in the proviso, where the mortgagee has purchased part of the interest of the mortgagor.

Reliance is also placed on Muhammad Yunus v. Champamani Bibi AIR 1939 Pat. 49, but that was also a suit by the mortgagee, and takes us no further than the case just previously referred to.

Lastly, reliance has been placed upon a decision of Sir Fazl Ali, sitting singly, in Narain Pandey v. Surajbhan Lal AIR 1937 Pat. 414. That case follows AIR 1922 Pat. 651. The decision, moreover, proceeded on the basis that in fact no defect of parties had been established, though no doubt there were observations on the point under consideration.

In my opinion, none of these cases help the respondents. I hold that the suit was bad for defect of necessary parties. No doubt, in ordinary circumstances it would be desirable to give the plaintiffs an opportunity under Order 1, Rule 10, Civil P.C., to implead the absentees; obviously there is no question of limitation. Having regard, however, to the finding of fact at which I am about to arrive on the question of payment, I consider that no useful purpose would be served by a remand. It would only promote unnecessary and undesirable litigation.

I turn now to the second question: was the Rs. 4000 paid? I would like to point out, in the first place, a thing not noticed by the learned Subordinate Judge, that the onus was on the plaintiffs to prove non-payment. The document (Ex. A) contained a recital that the Rs. 4000 had been paid before execution. That was admittedly not correct, and thereby the initial onus was no doubt discharged. But independently of that the plaintiffs, each one of them, endorsed in his own writing upon the bond receipt of Rs. 4000, in the presence of the Registrar and a witness. Having given a receipt, it would be for the plaintiffs to show that that receipt was not what it purported to be. The course adopted was, in fact, somewhat remarkable and, in my opinion, significant.

At the time of registration which was on 25th July "Received rupees four thousand only" was first endorsed on the bond, as is usual, by one of the plaintiffs, Bawan Prasad Singh. The Sub-Registrar thereafter proceeded to endorse the admission of execution, and he then noted the receipt of Rs. 4000 as part of the consideration money admitted by all the above eight executants. And next appears a separate endorsement for each one of the eight, including again Bawan Prasad Singh in which each has written separately with his own pen "Received rupees four thousand only," and then at the bottom of that there is the signature of the Sub-Registrar, Mathura Prasad, who could not be examined as he was dead at the time of the suit, and of a witness Jhagru Mahraj. There is thus a definite clear receipt in the hand-writing of each of the plaintiffs made in the presence of the Sub-Registrar and a witness. Clearly this places a strong onus on the plaintiffs to show that they did not in fact receive this money.

This question of onus is important, because the learned Subordinate Judge has found, and indeed it is quite clear, that practically all the oral evidence on both sides is unsatisfactory. The learned Subordinate Judge found none of the plaintiffs'' witnesses impressive and regarded their evidence with suspicion, with the exception of one who, he said, had not been shown to be connected with the plaintiffs; but he omitted to notice that this one was Jhagru Mahraj, the very person who had witnessed the receipt written out by the plaintiffs.

Though the oral evidence was not satisfactory, the documentary evidence taken into consideration with the circumstances leaves in my mind no doubt that the money was actually paid. Apart from what I have already noticed with regard to Ex. A, and to which I would add that if the endorsement of receipt of Rs. 4000 did not mean actual receipt but was only a formal matter, one would have expected a receipt for Rs. 17,000 to be written out, there are a number of other documents illustrating the plaintiffs'' subsequent conduct. First of all, there is Ex. O. On 16th March 1926, the appellants got their names recorded in Register D on the strength of this ijara. No objection was put forward by the plaintiffs. There was no assertion then that they had not received the Rs. 4000.

I have already mentioned that the sale-deed (Ex. G) contains a clear recital that the whole of Rs. 17,000 was due to the defendants and was left with the vendees for paying off ijara, and a security bond (Ex. B) was also executed. Oh 7th May 1928, Ex. H was executed by the plaintiffs upon receipt of the balance of Rs. 3000 odd of the consideration which had been left for subsequent payment. This document is a discharge of the security bond, and deprived the plaintiffs of the further use of that security. One would certainly expect that, if Rs. 4000 extra still remained with the defendants, the plaintiffs would have insisted on maintaining the security bond, or would certainly have made some reference to the fact in Ex. H. On the contrary, however, there is not only no reference, but the plaintiffs expressly recite that now not a single shell out of the consideration of the sale-deed remains due to them.

That was the conduct of the plaintiffs in the year 1928. What was their conduct in 1930? It so happened that in 1929 the present appellants brought a money suit against one of the plaintiffs, Bawan Prasad Singh. That suit was decreed on compromise on 20th January 1930: see decree Ex. D. In that compromise the plaintiff accepted liability for the entire amount due under the decree, and no reference whatever was made to a sum of Rs. 4000 remaining due to him in the defendants'' hands, upon which he could have claimed a set-off.

Now let us see what happened in the year 1931. In that year on 20th March a partition deed (Ex. I) was executed by the plaintiffs. Incidentally this mquza of Barhibigha was partitioned. There was no reference there also to the claim for Rs. 4000.

In this year also one of the plaintiffs'' vendees Lachhman sold his interest to a third person by the sale-deed, Ex. G(1), dated 22nd December 1931. Whatever may be said of the plaintiffs, they were not parties to this transaction, and there was no reason why any pretence should be kept up, yet there is a recital in the document that it was necessary for the vendees to pay the sum of Rs. 17,000 which was due on the ijara, and, therefore, Lachhman left with his vendee the proportionate share of that amount for payment on the ijara.

I have referred to the ladavi deeds executed by two of the vendees. These are Exs. 5 and 6 (a), the plaintiffs'' documents. It is pointed out that they contain recitals that Rs. 13,000 had to be paid on the ijara. That is true, but it must be remembered that these deeds were executed in the year 1936, that is to say, after the decision in the suit upon the simple mortgage bond, and yet even then the documents contain a clear recital that the sum of Rs. 19,564 had been left with the vendees for payment to the mortgagees. It is perfectly clear in view of all this that actually the entire amount of Rs. 17,000 was left with the vendees for payment upon the ijara. Had the plaintiffs'' case been true, there could have been no reason for this. The explanation put forward for the plaintiffs is that the deeds were all prepared with these recitals to make them agree with the ijara bond. Lachhman, one of the vendees, says that that is not the case. It was left because the vendees were directed by the plaintiffs to pay not Rs. 13,000, but Rs. 17,000 to the mortgagees. Apart from that, the plaintiffs'' attempted explanation appears to be ridiculous. Had they not received Rs. 4000, there was no reason whatever why they should have subsequently wanted to hush up the fact. On the contrary, they would be anxious to assert the fact from the beginning, and secure recitals in documents to support their story.

Upon the basis of all this evidence I have no doubt that the entire consideration was paid. The plaintiffs have really nothing to discharge the onus which, as I have said, was upon them. The evidence is all to the contrary. It is pointed out on behalf of the respondents that Rs. 4000 was payable to Gam Narain for paying off one Surajmal. In fact, however, Surajmal was never paid in cash and eventually, on 23rd April 1926, the plaintiffs executed a bond (Ex. 3) in his favour. This, it is argued, shows that the plaintiffs could not have received the money. There is, however, an alternative explanation which seems to me equally possible, namely, that the plaintiffs having received the money had spent it for some other purpose, and so had to find another means of satisfying Surajmal. What does seem to me significant is that, though Ex. 3 is a very long document containing full recitals about everything material, there is not one word to the effect that the plaintiffs were unable to pay as they had not received Rs. 4000 on the ijara which they had expected. It is merely stated that the plaintiffs find themselves unable to pay, which seems to me to suggest rather that they had spent the money.

It is quite true that it has been held that the Rs. 2000 on the simple mortgage was not paid, but the evidence with regard to payment of the two sums was quite different. It was the appellant''s case that the Rs. 4000 had actually been brought to the registration office, shown to the Sub-Registrar and counted near him, if not in his presence. The receipt had been taken in the presence of the Sub-Registrar, and he had attested it. There was none of these in the case of Rs. 2000, which was said to have been paid elsewhere in different circumstances.

In my view the tendency of some Courts in this country to come'' to findings slap in the face of the recitals in registered documents and admissions definitely made in writing, merely upon the basis of oral evidence of doubtful character, is to be deprecated. I hold that the consideration of Rs. 4000 was paid.

There remains the question of res judicata. Admittedly, no issue with regard to the payment of the Rs. 4000 was framed in the previous suit, nor apparently was any such question raised in the plaint. The pleadings have not been filed nor the memorandum of appeal. We have merely got the summary of the plaint in the judgment. According to that summary, the plaintiffs (the present appellants) never raised any question as to whether the Rs. 4000 had or had not been paid.

It is true that an opinion on the point was expressed in the previous case, but that; I think, was merely because the evidence regarding the Rs. 4000 was considered as being relevant to the determination of the question of the payment of the Rs. 2000. It was no doubt relevant evidence, but it was not, to quote the words of Section 11, Civil P.C., "directly and substantially in issue."

Though no such issue was framed, the trial Court perhaps expressed itself somewhat more definitely on this question than was necessary, but the appellate Court was more careful. The learned District Judge was careful to come to a definite finding only with regard to the question actually before him, namely, the payment of the Rs. 2000. He expressly decided only that point. No doubt, he made observations, upon the other point and even expressed an opinion, but we are not concerned with his observations, only with his finding, and there is, as I read his judgment, no definite finding upon the payment of the Rs. 4000 which could in any event become res judicata.

Even if he had come to a finding, I still do not think that it would amount to res judicata, because it was a question foreign to the suit and unnecessary for decision, and upon which the plaintiffs did not invite decision. If the trial Court decided it, it went unnecessarily out of its way to do so. It was not a question which was so connected with the question in issue that the decision upon one must necessarily determine the decision upon the other. As I have said, the story and evidence with regard to the payment of the two sums were entirely different, and the case with regard to the payment of the Rs. 2000 was undoubtedly much weaker than that with regard to the payment of the Rs. 4000. It would be perfectly possible to hold, without inconsistency, that the Rs. 2000 had not been paid, while the Rs. 4000 had. It is perfectly obvious, therefore, that the question with regard to the Rs. 4000 was not necessary for decision.

Mr. Sarju Prasad has cited a number of rulings on the question of res judicata, but in my opinion none of them helps him. The first is a Privy Council decision in AIR 1932 50 (Privy Council) , but what was laid down therein was merely that if both parties choose, without protest, to put in a question in issue and invite a. decision, that decision will be res judicata. That is certainly not the case here.

Next cited is another Privy Council case, Midnapur Zamindary Co. Ltd. v. Naresh Narayan Roy AIR 1924 P.C. 144, but there again the basis of the decision on the question of res judicata was that the party who subsequently argued that the decision of the issue in question was unnecessary, had previously expressly invited the Court to decide that question, by making it a ground of appeal.

Mr. Sarju Prasad has also cited a single Judge case, where the question has been discussed at considerable length, namely, Kotayya v. Subbaya AIR 1937 Mad. 114. There again, however, stress is laid on the fact that the decision operates as res judicata against the person who has himself invited the Court to decide the point. It would perhaps be more correct to describe it as estoppel by judgment.

The next case cited is Abdul Gani and Another Vs. Nabendra Kishore Roy and Others, . There it is pointed out that a matter may be directly in issue, though it is distinct from the subject-matter of the suit. That may be so, but it takes us no further in the present case.

Lastly, Mr. Sarju Prasad relies on a decision of this Court in Sakaldip Singh v. Imrit Barhi AIR 1930 Pat. 71. Therein the whole question is elaborately discussed by Chatterji J. and, if I may say so with respect, I entirely agree with his views, but I do not think they help the respondents. On the contrary, the case is definitely against Mr. Sarju Prasad''s contention. It is no doubt, laid down that if a question is decided which has been raised by the pleadings and if both parties have invoked the opinion of the Court, the decision would operate as res judicata. But the learned Judges are careful to add that a matter directly and substantially in issue cannot be said to have been heard and finally decided, unless the finding on the issue was necessary for the determination of the suit. I have already held that in the case before us no determination of that question was necessary for the decision of the previous suit.

To the same effect was a subsequent observation of his Lordship that judgment operates by estoppel as regards all the findings which are essential to sustain the judgment. Applying that test also, there is no res judicata in the present case. A useful test is prescribed as to whether a finding is necessary, namely, whether an appeal would lie on the point. Applying this test also, there is no res judicata in the present case. There could be no appeal on any finding with regard to this question which was quite extraneous to the suit and which was merely incidental.

Lastly, Section 11 provides that for there to be any res judicata the parties in both suits must be litigating under the same title. It is admitted by Mr. Sarju Prasad that in the two suits with which we are concerned the parties were litigating under entirely different titles under two different bonds.

In my view there is no question of res judicata in the present ease. Upon the finding which I have arrived at that the entire consideration of the bond was paid, the suit as framed by the plaintiffs could not succeed.

In the result, therefore, I would allow the appeal, and dismiss the suit with costs throughout.

Ray, J.

I agree.