Ramu Aiyar vs A.L. Palaniappa Chetty and Others

Arnold White, C.J.—The question which we have to decide in this appeal is whether it is open to the appellant to impeach the validity of the

mortgage on which the suit is brought. The question arises in this way. The suit is by the mortgagee. The first defendant is the mortgagor.

Defendants Nos. 23 and 24 held a money decree against the mortgagor and they attached the mortgaged property. The mortgagee put in a claim

u/s 278 of the Civil Procedure Code. The mortgagor was not a party to these proceedings. On the hearing of that claim the mortgage was attached

by defendants Nos. 23 and 24 on two grounds. It was attacked on the ground that it was invalid because the provisions of Section 257-A of the

Code had not been complied with and on the ground that it was a sham. Notwithstanding that the mortgage was impeached on the grounds I have

stated, the claim of the mortgagee was upheld. Defendants Nos. 23 find 24 became the purchasers at the Court sale held under the order made in

the proceedings u/s 278; they afterwards assigned their rights to the twenty-fifth defendant who is the appellant before us. Now the present suit is a

suit by the mortgagee and he seeks to recover the money due to him from the mortgagor by sale of the mortgaged property. The twenty-fifth

defendant seeks to impeach the validity of the mortgage. One of the issues raised in the suit was whether the mortgage was bad because the

provisions of Section 257-A of the Code had not been complied with. The Court of First Instance held it was. The matter came before this Court

on appeal and with regard to the question this Court took a different view from that of the Court of First Instance and held that Section 283 barred

the right of defendants Nos. 23, 24 and 25 to raise the question of the validity of the mortgage with reference to the provisions of Section 257-A,

because they failed to bring a suit within one year from the order made in the claim proceedings. They held against the twenty-third and twenty-

fourth defendants on the contention which they raided that they were entitled on the ground of minority to escape the operation of this provision of

the law of limitation.

Now it is conceded by Mr. Anantakrishna Ayyar who argued this appeal on behalf of the appellant that the grounds of the decision of this

Court, to which I have just referred, are equally applicable to the question which we have to consider here, that is to say, the question whether the

appellant is entitled to impeach the mortgage with reference to the provisions of Section 257-A, and on the ground that it is a sham. The parties

against Whom the order referred to in Section 283 of the CPC was made were the judgment-creditors of the mortgagor (defendants Nos. 23 and

24) and the twenty-fifth defendant derived his title by assignment from them. The contention on behalf of the appellant was that although the order

was made against the parties from whom the twenty-fifth defendant de rived his title inasmuch as these parties were the purchasers at Court-

auction, the appellant had become relieved -of the disability imposed by the provisions of Section 283 of the CPC and clothes himself with all the

rights of the judgment-debtor. One of these rights was the right to say ""As I was not a party to the claim proceedings I am not bound thereby

Now that is the argument which is advanced by the appellant and it seems to me it cannot be supported on principle or by authority. The policy

of the section is clear. It is stated in the case to which Mr, Ramchandra Ayyar referred, i.e., Sardhari Lal v. Ambika Pershad (1888) ILR 15 Cal.

(P.C.), that the object to be secured was speedy settlement of questions of title raised in execution. As regards the policy of the section I fail

to sea that the circumstances of this case give the appellant any special claim for consideration. It may be that the auction purchaser is the

representative of the judgment-debtor and not the decree-holder, but that is a proposition which can only be accepted subject to certain limitations

I need only refer to the decisions in Sandhu Taraganar v. Hussain Sahib ILR (1905) Mad. 87 and Krishna Satapasti v. Sarasvatula Sambasiva

Row ILR (1908) Mad. 177. The proposition, as it seems to me even if we accept it, can have no application to a case where the parties against

whom the order was made under the claim proceedings are the identical parties who claim to have the benefit of standing in the shoes of the

judgment debtor, They are none the less the parties against whom the order was made because they have the right to say (assuming they have the

right) we stand in the shoes of the judgment-debtor.

Coming to the decision of the Full Bench in Krishnasanti Naidu v. Somasundaram Chettiar ILR (1907) Mad. 335., what was held there (so far

as is material to the question we have to consider) was that a judgment debtor who is not in fact a party to the claim proceedings does not in the

eye of law become such by reason solely of his being the judgment-debtor. That does not help the appellant.

We were also referred to the decision in Vadapalli Narasimham v. Dronam Raju Seetharama Murthy ILR (1908) Mad. 163 There, following

the principle of the decision of the Full Bench, it was held that a claim u/s 281 was not conclusive against, or in favour of, the judgment-debtor u/s

283 of the Code unless he was a party to the proceedings in which the order was passed. The other case Guiuva v. Subbarayudu ILR (1890)

Mad. 366 certainly does not help the appellant because, as it seems to me, it does not carry him be far as the decision of the Full Bench. Then with

regard to the other two cases Mahomed Mira Ravnther v. Savvasi Vijaya Raghunidha Gopalar (1900) ILR 23 Mad. 227 (P.C.) and Mahabir

''Pershad Singh v. Macnaghten (1889) ILR 16 Cal. 682. (P.C.), I think neither of these authorities supports the proposition which Mr. Ananta-

krishna Ayyar has asked us to accept. So much for the first point,

The second point is this it is said that, assuming that the appellant is estopped because the defendants Nos. 23 and 24 arc estopped, the order

on the claim petition is not an adjudication as regards the question of the validity of the mortgage. It is argued, that the order in the claim

proceedings merely determines the question of physical possession and does not determine, and was never intended by the legislature to

determine, any question of title. Now if we turn to Section 283 of the CPC we find the words ""The party against whom an order u/s 280, 281 or

282 of the CPC is passed 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."" Surely that means the order with reference to the right to claim the property in dispute and not the order with

reference to the fact as to whether A or B was in physical possession at the time the order was made. If we turn to the order made by the learned

Judge in the claim proceedings it becomes clear that on one side the title under the mortgage was asserted and on the other aide the title under the

mortgage was denied on the ground that the mortgage was fraudulent. And the learned Judge holds, I quote his language, ""I must hold, therefore,

that exhibit 0 has been executed for consideration notwithstanding that the date of exhibit C compared with the dates referred to by counter-

petitioners'' vakil in connection with their suit against Chocka-linga Pillai seems to show that exhibit 0 was executed in that connection, In holding

that exhibit C is a genuine document I also consider the evidence relating to possession which I am going to refer to."" The learned Judge

adjudicates upon this very question in his order, although it is true that the actual words of his final order are '' That however does not interfere with

the finding to which I now come, that Palaniappa Chetti is in possession of the property mortgaged to him by exhibit C: I think that must be taken

as an adjudication upon the question as to whether he wan in possession, as the party entitled to possession, that is to say, in possession by reason

of the mortgage which he sot up as the basis of his claim. I think, therefore, the points which have been taken by the appellant fail.

As regards the merits Mr. Anantakrishna Ayyar did, not think it necessary to contest the findings of the lower Court.

The result would be that the appeal is dismissed with costs. Ayling, J.--I agree.