Shanmugam Chettiar and Another vs V.R.P.L.M.P.L. Palaniappa Chettiar and Others

Ramamurti, J.—Both these appeals arise out of proceedings taken for the execution of a mortgage decree in Original Suit No. 91 of 1938 on the file of the Sub-Court, Madurai. The contesting Respondent represent the interests of the original mortgagee one Muthia Chettiar. This Muthia Chettiar advanced a large sum of Rupees thirty six thousand on a mortgage on 9th January 1926, obtained a preliminary decree on 18th December 1943 for Rs. 37,525-11-9 and a final decree on 22nd November 1944 [containing a modification, excluding the interest of one Vairavan Chettiar (second Defendant), from the operation of the decree in item 6. The said Muthia Chettiar, and after his lifetime, his legal representatives have been taking various proceedings for the realization of the large amount due under the mortgage decree and at every stage the mortgagors and their legal representatives have been raising all kinds of objections, putting every conceivable obstacle in the realization of the decree amount. The learned Subordinate Judge has observed that by April 1958 the decree amount due was in the region of Rupees sixty-three thousand and not even a pie had been realized by way of execution of the decree. This is clear typical case of the proverbial thorny path of execution which the decree-holder has to pursue before realizing the fruits of his decree. We are happy to note that all the frivolous thoroughly useless and untenable objections raised by the judgment-debtors were rightly rejected by the trial Court; we are, at the same time, astonished at the vehemence and persistency of learned Counsel for the Appellants in pressing before us the same frivolous objections which we have no hesitation in holding as wholly devoid of substance from the point of view of either justice, law or equity. As the appeals substantially raise same questions of fact and law arising out of the execution of the decree in Original Suit No. 91 of 1938, we propose to dispose of them together.

The facts of the case leading up to the present dispute are as follows. The following tree sets out the relationship between the members of the family of the mortgagors.

On 14th September 1921 Vairavan Chettiar (second Defendant, son of Thothan Chettiar) executed a mortgage for himself and on behalf of his son the third Defendant in respect of items 1 to 5 more fully described in the deed of mortgage in favor of firm N.M. Rayaloo Iyer and Co. The later filed a suit Original Suit No. 114 of 1925 on the file of the Sub-Court, Madurai and obtained a mortgage decree. Later on, N.M. Rayaloo Iyer and Co., filed an another suit Original Suit No. 75 of 1943 on the file of the Sub-Court, Madurai for a declaration that the mortgage deed, dated 14th September 1921 was executed by Vairavan Chettiar not only on his own behalf but on behalf of his father Thothan Chettiar as well as his uncle Muthuvadugan Chettiar on the ground that they were members of a joint family and that the mortgage was executed by Vairavan Chettiar for purposes binding on the joint family.

In the meanwhile, on 9th January 1926, Thothan Chettiar and his brother Muthuvadugan Chettiar had executed for Rs. 36,000 in favor of Muthia Chettiar in respect of six items thus creating a second mortgage over items 1 to 5 covered by the deed of mortgage, dated 14th September 1921 aforesaid and a first mortgage in respect of the sixth item. As Muthia Chettiar (first Plaintiff in Original Suit No. 91 of 1938) aforesaid was a subsequent mortgagee, he was imp leaded as the third Defendant in the suit Original Suit No. 75 of 1934. The trial Court decreed the suit (Original Suit No. 75 of 1934) subsequently as prayed for. Two appeals were preferred there from, Appeal Suit Nos. 213 and 346 of 1940, by the mortgagors as well as by Muthia Chettiar aforesaid and were disposed of by a common judgment by his Court, dated 4th August 1943 which is reported in Muthiah Chettiar Vs. N.M. Rayalu Ayyar, Nagaswami Ayyar and Co. and Others, . It is not necessary to refer in great detail to the proceedings in Original Suit No. 75 of 1934 and the appeals there from. As Muthiah Chettiar was imp leaded as a subsequent mortgagee, the trial Court in Original Suit No. 75 of 1934, as per the provisions of the Code of Civil Procedure, ascertained the amount due to him under his mortgage, dated 9th January 1926. But at the time when the appeals came up for disposal before this Court, Muthia Chettiar had filed his own suit Original Suit No. 91 of 1938 on his mortgage and it was pending. (The preliminary decree itself was passed on 18th December 1943). In view of this, all the parties expressly agreed that the amount due to Muthia Chettiar need not be determined in Original Suit No. 75 of 1934 and that it might finally be determined in Original Suit No. 91 of 1938. The agreement reached between the parties leaving this question for final determination in Original Suit No. 91 of 1938 as referred to in the judgment of this Court is as follows:

As it appears that the third Defendant (Muthia Chettiar, the Plaintiff in Original Suit No. 91 of 1938) has instituted a separate suit for sale on his mortgage which includes an additional item of property and as the parties have agreed that the amount properly payable to him after scaling down the debt may be determined in that suit, portions of the decree of the lower Court declaring the amount payable to him and providing for its recovery will be deleted. The decree of the Court below will be modified as indicated above.

Clause 4 of the decree passed by this Court in Appeal Suit Nos. 213 and 346 of 1940 provides that if the amount decreed to the Plaintiff in Original Suit No. 75 of 1934 is not paid, the money realized by the sale of the hypothec should first be applied for payment to the Plaintiff (decree-holders in Original Suit No. 75 of 1934) and the balance if any shall be paid to the legal representatives of the first Defendant or other persons entitled to receive the same. Clause 5 of the decree also provides that the parties are at liberty to apply to the lower Court from time to time as they may have occasion and on such application, the lower Court may give appropriate directions as it thinks fit. N.M. Rayaloo and Co., the decree-holders in Original Suit No. 75 of 1934 executed their mortgage decree and item 1 of the hypothec was sold and purchased by them for a sum of Rs. 24,000 on 16th January 1956. After the full satisfaction of the prior mortgage decree there remained in Court to the credit of Original Suit No. 75 of 1934, a surplus of Rs. 19,595-8-10. The controversy in both the appeals now relates to the right of the Plaintiffs in Original Suit No. 91 of 1933 to the surplus of Rs. 19,595-8-10 aforesaid, the main ground of the mortgagee in the instant case (puisne second mortgagee) being that when the hypothec was sold in execution of the decree obtained by a prior mortgagee, the second mortgagees rights will be transferred over such surplus sale proceeds.

In order to appreciate the scope of the objections of jurisdiction and limitation raised by the judgment-debtors, a few more facts will have to be stated. As observed earlier, the final decree in Original Suit No. 91 of 1938 was passed on 22nd November 1944. On 24th January 1947, the decree-holder filed Execution Petition No. 90 of 1947 in Original Suit No. 91 of 1938 for the sale of whole of item 6 and on 20th February 1948, the Sub-Court passed an order that one half share of item 6 alone was liable to be sold. Thereupon, the decree-holder preferred an Appeal Against Order No. 391 of 1948 to this Court. In the meanwhile, on 23rd September 1948, the trial Court passed an order dismissing Execution Petition No. 90 of 1947 for the non-payment of sale batta by the decree-holder. Appeal Against Order No. 391 of 1948 was disposed of by this Court on 26th February 1953 holding that three-fourth share in item C could be sold in execution of the decree in Original Suit No. 91 of 1938. On 14th October 1955 Plaintiffs 2 and 3 filed Execution Petition No. 349 of 1955 for the sale of items 1, 2, 5 and 6. While the execution petition was pending, on 16th January 1956 (as mentioned earlier) the first item was sold by the prior mortgagee leaving a surplus of Rs. 19,595-8-10 in Original Suit No. 75 of 1934. Thereupon the Plaintiffs in Original Suit No. 91 of 1938 filed an application, Execution Application No. 282 of 1956 in Original Suit No. 75 of 1934 for payment to them of the surplus sale proceeds aforesaid. But the learned Subordinate Judge dismissed this petition on 27th July 1956 on the ground that the proper procedure for the Plaintiffs should be to apply in their own suit Original Suit No. 91 of 1938. Thereupon on the same date on 27th July 1956 the Plaintiffs filed Execution Application No. 645 of 1956 to send for and transfer the said surplus which was lying to the credit of Original Suit No. 75 of 1934 to the credit of the suit in Original Suit No. 91 of 1938. On 6th October 1956 the Subordinate Judge passed an order sending for the said sum to the credit of Original Suit No. 91 of 1938. Execution Petition No. 349 of 1955 which, as mentioned earlier, was filed for the sale of items 1, 2, 5 and 6, came up for final disposal, the judgment-debtors raised an objection that Execution Petition No. 349 of 1955 was barred by limitation. But the plea was overruled and execution was directed to proceed further. Civil Miscellaneous Appeal No. 131 of 1958 has been preferred against the order of the learned Subordinate Judge holding that the Execution Petition No. 349 of 1955 is in time. On 8th March 1957 the Plaintiffs filed Execution Application No. 184 of 1957 in Execution Petition No. 349 of 1955 for payment of the surplus sale proceeds. The judgment-debtors raised a plea of limitation and the learned Subordinate Judge overruling the objection ordered payment out of the surplus amount to the decree-holders. Civil Miscellaneous Appeal No. 204 of 1958 has been preferred against the said order.

In both the appeals Mr. K.S. Ramabhadra Iyer, learned Counsel for the Appellants urged the following points: (i) As a result of and after the judgment and decree of the High Court in Muthiah Chettiar Vs. N.M. Rayalu Ayyar, Nagaswami Ayyar and Co. and Others, the Plaintiffs in Original Suit No. 91 of 1938 are not entitled to claim any mortgage right over items 1 to 5. They must be deemed to have given up their mortgage right and agreed to rank as simple creditors. In other words, according to learned Counsel, the changes and modifications introduced in the decree of the High Court show that Muthia Chettiar, the mortgagee, of his own accord and for reasons best to known to himself has deprived himself of his right as a second mortgagee over items 1 to 5 of the hypothec and therefore has no lien or charge of any sort over the surplus sale proceeds of item 1. (ii) The decree-holders should follow the procedure prescribed in Order XXI, Rule 52 of the CPC read with Form 21, Appendix C, and without a process of attachment in the manner authorized by the said rules, the decree-holder is not entitled to payment out; the doctrine of substituted security has no application to the instant case, (iii) The order of the Sub-Court in Execution Application No. 282 of 1956 passed in Original Suit No. 75 of 1934 declining to pass an order for payment to the decree-holders operates as res judicata. (iv) Execution Petition No. 349 of 1955 was barred by limitation on the ground that it was tiled more than three years after the dismissal of Execution Petition No. 90 of 1947 on 23rd September 1948. (v) In any event, the application for payment out which is made on 8th March 1957 is barred by limitation u/s 48, CPC as it was filed more than 12 years after the final decree, dated 22nd November 1944.

We heard arguments on all these points even though some of them were not raised in the trial Court.

Taking the first point, we must at the outset mention that this argument proceeds upon a thorough misapprehension as to what happened on the earlier occasion. On facts, there is not the slightest foundation for the theory that the decree-holder abandoned his rights as a second mortgagee over items 1 to 5 of the hypothec. It is true that after the amendment of 1929 under Order XXXIV, Rule 4, Sub-clause (4), CPC read with Form No. 9. in Appendix D, a suit filed by a prior mortgagee is not merely a suit enforcing his own mortgage but it is in substance a suit for determining the rights and obligations of all parties. The suit is comprehensive enough for the Court to determine The amount due to the second mortgagee and also for the payment of the amount due to him out of the surplus sale proceeds in the event of a sale in execution. But the parties by consent, as in this case, may very well agree that the right of the second mortgagee need not be decided in the suit for sale by the first mortgagee. The position is a fortiori especially when the parties agree that the right of the second mortgagee to the amount due to him would be determined in the suit which he himself has filed. The mortgagors who were parties to the judgment in the High Court which expressly preserved the rights of the second mortgagee are not entitled to raise any objection. In any event, the preliminary decree in Original Suit No. 91 of 1938 was passed on 18th December 1943, four months after the judgment of the High Court on 4th August 1943. Obviously it was the duty of the judgment-debtors to have objected to the passing of the preliminary decree even assuming that the judgment in Appeal Suit Nos. 213 and 346 of 1940 had any such effect as contended for by the Appellants. In other words, the preliminary decree in Original Suit No. 91 of 1938, dated 18th December 1943 clearly hinds the mortgagors and entitled the mortgagee to sell the hypothec, items I to 6 as mortgagee-decree-holder, for the realization of the decree amount. In the face of such a preliminary decree, it is futile for the mortgagors to raise any such objection. Learned Counsel in the course of the arguments frequently used expressions waiver, abandonment and election which really have no application whatsoever to the facts of the instant case. It passes our comprehension how the decree-holder could be deemed to have abandoned or waived his rights, when the judgment expressly and by consent of parties preserves and declares that the second mortgagee''s rights should be worked out in his own suit Original Suit No. 91 of 1938. There is therefore no substance in the first point.

We are equally of the opinion that there is no substance in the second point raised by learned Counsel that the decree-holder should follow the procedure prescribed by Order XXI, Rule 52, Code of Civil Procedure. A bare perusal of that rule would show that it has no application to a decree-holder who is executing a mortgage decree. Learned Counsel invited our attention to In re Bai Motibai AIR 1942 Bom. 53, Surajmul Agarwala v. Ramachandra AIR 1961 Cal. 570, AIR 1937 391 (Nagpur) and Natesa Pillai Vs. Govindasami Pathan and Another, . We find that those cases have no bearing on the instant case as they deal with the procedure to be adopted by simple money decree-holders while executing the decree in respect of funds or sale proceeds in Court. As observed earlier, the position of a mortgagee-deeree-holder is entirely different and it is impossible to lit in to the scheme of Order XXI, Rule 52, Code of Civil Procedure, the procedure for executing a mortgage decree. Confronted with this important distinguishing feature, learned Counsel contended that once the property had been sold in execution of a prior mortgage decree, the right of a puisne mortgagee as such became reduced to that of a simple money decree-holder, that he had no charge or priority over the surplus sale proceeds and that therefore he was bound to follow the procedure under Order XXI, Rule 52, Code of Civil Procedure. In other words, he contended that the doctrine of substituted security has no application to the instant case. We confess that we are entirely at a loss to understand this line of argument, as it is opposed to well settled principles of mortgage law.

The rule of law that, where a property subject to a mortgage or charge undergoes transformation, the mortgage or charge attaches to the form it takes after the transformation is well settled by judicial authority. The principle of this rule is also embodied in Section 73 of the Transfer of Property Act. The surplus sale proceeds left after a prior mortgagee''s sale represent the puisne mortgagee''s security in the new form and the latter has undoubted right to follow or trace them as against the claims of the mortgagor or his simple creditors. This doctrine of substituted security is so wide in its application that the mortgagee has been held entitled to follow the sale proceeds into the hands of any person even third parties who might have withdrawn the same in derogation of the rights of the mortgagee. In Barhamdeo Prasad v. Tara Chand 1913 ILR Cal. 654 the Privy Council confirming the judgment of the Calcutta High Court in Berhamdeo Pershad v. Tara chand ILR 1905 Cal. 92 had to consider this question. In that case, a mortgagee held two mortgages the first and the third while some other held a second mortgage over the same property. The mortgagee obtained a decree on his first mortgage and in execution of it, the mortgaged property was sold. After satisfying the first mortgage, the sale proceeds remained in Court. The first mortgagee brought a suit on his third mortgage and obtained a decree; he withdrew the sale proceeds of the former sale without notice to the second mortgagee. The second mortgagee brought a suit against the first mortgagee for the surplus sale proceeds and it was held that the surplus sale proceeds (after satisfying the first mortgage) represented the security of the second mortgagee and that he was entitled to the same. In Venkatarama Iyer v. Esumsa Rowthen ILR 1909 Mad. 429 it was held that if the property mortgaged was sold through no fault of the mortgagee, the mortgagee was entitled to a charge on the property which had taken the place of the mortgaged property, that is, the sale proceeds. The same view was taken in the Bench decision of the Calcutta High Court in Dhirendra Nath De Vs. Naresh Chandra Ray and Others, in which it was held that if the mortgaged property got converted into cash, that cash would be available to the mortgagee as his security. In that case, at the time when the suit was brought for enforcing the charge, the property itself existed but during the pendency of the suit, the compensation payable by the State took the place of the property. It was held that even though there was no prayer for a charge being declared for the compensation money, as such a prayer could not be made when the suit was brought, the Court was bound to take notice of the subsequent events and grant a charge on the compensation money under the doctrine of substituted security. The principle of the decision in Barhamdeo Prasad v. Tara Chand ILR 1913 Cal. 654 has been applied by the Lahore High Court in AIR 1928 593 (Lahore) by the Court exercising its inherent jurisdiction u/s 151, Code of Civil Procedure. In that case, in execution of a decree obtained by a prior mortgagee, the property was sold and there remained a surplus in Court. The second mortgagee had filed a suit and applied for the attachment of the said surplus. But no note was made in the Court''s register about this attachment. In the meanwhile, the prior mortgagee brought another suit against the mortgagor to recover certain unsecured debts and obtained a decree; the surplus sale-proceeds aforesaid were paid over to him in satisfaction of that decree. Later on, the second mortgagee obtained a decree and u/s 151, Code of Civil Procedure, the Court directed the first mortgagee to refund the money so that it might be paid over to the second mortgagee. The same view was taken by Ramachandra Iyer J. (as he then was) in Vaithiyam Nanjappa Vs. D. Ramanatha Chetti and Others, . The learned Judge has stated the law thus:

When property in execution of a mortgage decree is sold in Court auction, unless there is anything in the order for sale, the property is freed from the mortgage as soon as it is sold. The security attaches itself to the proceeds. Therefore, this surplus amount in Court, after paying the decree-holder one installment of his decree debt, would still be subject to the security of the mortgagee decree-holder which cannot be paid over either to the judgment-debtor or to his other creditors.

The surplus sale proceeds in a Court auction cannot become the property of the mortgagor till all the mortgages are paid off. The same view was taken by the Allahabad High Court in Karan Singh v. Ishtiaq Husain ILR 1920 ALL. 268, 271. In that case, the first mortgagee obtained a decree and the property was sold in execution. After payment to him, considerable surplus remained in Court and the same was withdrawn by the mortgagor. A puisne mortgagee filed a suit on his mortgage and recovered the amount from the Court auction-purchaser. In a suit by the Court auction-purchaser, against the mortgagor it was held that the mortgagor who withdrew the surplus was bound to refund the same. This case again illustrates the wide and liberal manner in which the Court apply the equitable doctrine of substituted security. The learned Judges stated the law in these terms:

In the present case, upon there being a surplus after the sale in satisfaction of the decree on the prior mortgage, the security of the subsequent mortgagees was transferred to the surplus sale proceeds, and they were entitled to be paid out of the amount of the surplus. The mortgagors in resisting their prayer for such payment and in withdrawing the money from Court acted improperly and contrary to their rights.

In XXVII Halsbury''s Laws of England (Simonds third edition), page 309, Section 579, the law is stated in these terms:

A sale under a power of sale destroys the equity of redemption in the mortgaged property. Consequently the sale defeats the rights of all subsequent encumbrances, whose remedy then is only against the proceeds of sale. The sale constitutes the mortgagee exercising the power of sale a trustee of the surplus proceeds, if any, after satisfying his own charge, first for the subsequent encumbrances, and ultimately for the mortgagor.

On this aspect of the case, it only remains to refer to the decision of the Pull Bench in Nabbobai v. Hassan Gani AIR 1954 MP 181 because that decision bears a close similarity to the instant case in the application of the doctrine of substituted security. In that case, before the final decree was passed the compensation money paid under the Zamindari Abolition Act took the place of the mortgaged property. But the final decree was however passed as against the original property. It was held that the directions in the preliminary decree pertaining to the mortgaged property could properly be regarded as pertaining to the substituted security and the Court executing the decree could secure the realization of the sum by application of the compensation money standing as substituted security. The Full Bench held that the Court had ample jurisdiction u/s 47, CPC to order payment in execution. The learned Judges applied the principle underlying the decision of the Privy Council in Rai Baijnath Goenka v. Maharaja Sir Rameshwar Prasad Singh ILR 1922 PAT. 378 to which reference will be made a little later. We have therefore no hesitation in holding that the decree-holder in Original Suit No. 91 of 1938 is entitled to proceed against the surplus sale proceeds under the doctrine of substituted security.

We shall next consider the plea of res judicata urged by learned Counsel for the Appellants. Learned Counsel contended that when the decree-holders applied for payment out of the surplus sale proceeds in Execution Application No. 282 of 1956 in Original Suit No. 75 of 1934 the Sub-Court dismissed the application and the decree-holders were therefore precluded from making any claim to the funds in Court. There is no substance in this point. A bare perusal of the order of the Subordinate Judge in Execution Application No. 2S2 of 1956 shows that there was no decision on the merits but that the Subordinate Judge merely held that the proper procedure for the decree-holders would be to apply in their mortgage suit Original Suit No. 91 of 1938 and not in Original Suit No. 75 of 1934. In fact, as mentioned earlier on the same date, i.e., on 27th July 1956 the decree-holders filed the present application Execution Application No. 645 of 1956 in Original Suit No. 91 of 1938 to send for the surplus sale proceeds from Original Suit No. 75 of 1934 to the credit of Original Suit No. 91 of 1938. When the Court without adjudicating upon the rights of the parties expressly directs the party concerned to resort to some other proceeding we are wholly unable to see how any question of res judicata would arise at all.

It only remains to deal with the plea of limitation. It may be noticed at the outset that once it is held that a decree-holder is entitled to seek to his aid the doctrine of substituted security, there is not the slightest foundation for any plea or limitation. The final decree was passed on 22nd November 1944. Execution Petition No. 90 of 1947 was filed on 24th January 1947 for the sale of entire item 6. But the Sub-Court held by its order, dated 20th February 1948 that only a moiety of item 6 could be sold. Thereafter, the decree-holders preferred an appeal to this Court in Civil Miscellaneous Appeal No. 391 of 1948 and on 26th February 1955, this Court held that three-fourth share in item 6 was liable to be sold. The appeal preferred to this Court with regard to the exact share in item 6, which the decree-holders were entitled to sell in execution, is undoubtedly a step in aid of execution and the order passed by this Court on 26th February 1953 will therefore furnish a fresh starting point of limitation under Article 182, Clause (5) of the Limitation Act. This aspect of the matter is covered by a direct decision of the Privy Council in Annamalai v. Valliammai ILR 1946 MAD. 142 . In that case, the decree-holder filed an execution petition on 14th December 1934 and obtained an order of attachment of certain moneys in the hands of certain garnishees. On objections raised by the judgment-debtor, the attachment was raised by an order of Court, dated 22nd October 1936. The decree-holder preferred an appeal to the High Court against this order and the same was dismissed on 27th September 1938. Thereafter, the decree-holder filed an application on 25th November 1939 to execute the decree. It was held that the prior execution petition was finally disposed of only as a result of the High Court''s order, dated 27th September 1938 and that it would furnish a fresh starting point of limitation under Article 182(5) of the Limitation Act, It was also held that the appeal to the High Court would also constitute a step in aid of execution. Sir John Beaumont delivering the judgment of the Privy Council observed as follows at page 152:

Under Section 107 of the CPC an Appeal Court has the same powers, and is required to perform, as nearly as may be, the same duties as are conferred and imposed by the Code on Courts of original jurisdiction. Where an application for execution is dismissed by the lower Court, the Appeal Court is the proper, and indeed, the only Court which can then execute the decree. No doubt in practice a High Court does not itself generally execute the decrees of lower Courts; normally it remands the case to the lower Court with directions to execute according to law on the basis of the High Court''s decision; but in a proper case the High Court would no doubt execute the decree or order itself. In their Lordships'' view there can be no doubt that the High Court of Madras was the Court whose duty it was to execute the decree of 3rd November 1934 in the manner asked for in Execution Petition No. 418 of 1934, if such manner were legal, after the attachment had been raised by the lower Court. The Appellant, therefore, has brought himself within Clause 5 of Article 182, and his Petition No. 72 of 1940 being presented within three years of the order of the High Court finally disposing of the Execution Petition No. 418 of 1934 is in time.

Further an application for sale of some other property of the judgment-debtor will save time for a subsequently application for proceeding against the other properties of the judgment-debtor and the order passed in the prior execution application would clearly furnish a fresh starting point of limitation. Looked at from any point of view, we have no doubt whatsoever that the order of this Court, dated 26th February 1953 would furnish a fresh starting point of limitation. Within three years thereafter that is on 14th October 1955 the decree-holders filed Execution Petition No. 349 of 1955 for the sale of items 1, 2, 5 and 6 and this is undoubtedly in time. But learned Counsel for the Appellants contends that as the relief that was sought was only for the sale of item 1 and as the present application Execution Application No. 184 of 1957 which was filed on 8th March 1957 asked for the payment out of the surplus sale proceeds of item 1, such application Execution Application No. 184 of 1957 should be regarded as a fresh application and it haying been filed more than 12 years from 22nd November 1944 (the date of the final decree), the application is barred by limitation u/s 48, Code of Civil Procedure. In other words, he contends that the relief in Execution Petition No. 349 of 1955 for the sale of item 1 and the relief in Execution Application No. 184 of 1957 for the payment out of the surplus sale proceeds are entirely different relief''s and one cannot be connected with the other to get over the bar of limitation u/s 48, Code of Civil Procedure. We are wholly unable to accept this argument. At the time when the decree-holders applied for the sale of item 1, the petition was quite in order as item 1 then existed. As a result of the sale and the subsequent events, the right of the mortgagee-decree-holders got transferred to the surplus sale proceeds in Court, and they are only working out the consequential right in Execution Application No. 184 of 1957. From our discussion on the doctrine of substituted security, it would be clear that there is really no need for the decree-holders even to file, the application, Execution Application No. 184 of 1957 for payment out of the sale proceeds. That relief could well have been obtained by them even in Execution Petition No. 349 of 1955. All that the decree-holders had to do was only to send for the sale proceeds from Original Suit No. 74 of 1934 to the file of Original Suit No. 91 of 1938 which they did by filing Execution Application No. 649 of 1956 in Execution Petition No. 349 of 1955.

Learned Counsel next contended that Execution Application No. 184 of 1957 should be regarded as amending Execution Petition No. 349 of 1955 with regard to the relief''s prayed for therein and that an amendment should not be allowed when the decree became incapable of execution by the expiry of twelve years u/s 48, CPC . In the first place, it must be noticed that no question of amendment of the relief''s is involved in the instant case. Under the doctrine of substituted security, the decree-holder becomes, by operation of law, entitled to proceed against the substituted security, and this right can be worked out by the decree-holder straightaway in execution. This principle was applied by the Full Bench in Nabbobai v. Hasan Gani AIR 1954 MP. 181 following the decision of the Privy Council in Rai Baijnath Goenka v. Maharaja Sir Rameswar Prasad Singh I.L.R.1922 Pat. 378. In the case before the Privy Council the Respondents owned in the ijmali share fourteen annas undivided and one Dam out of sixteen annas of the village Lohara and shares in villages Padmaot and other villages. The revenue due in respect of ijmali share was in arrears in 1901 and the ijmali shares was sold by auction held on 9th-September 1901 by the Collector and was purchased by one Baijnath Goenka who obtained possession of the same. Even at that time proceedings for partition of the entire Mahal (ijmali) were pending and at the time of the Revenue auction in 1901 they were incomplete. In 1902 the Respondent''s before the Privy Council filed a suit to set aside the Revenue auction sale and for recovery of possession of their undivided share. The trial Court on 30th June 1904 decreed the suit for possession setting aside the Revenue sale. In the meanwhile, the partition proceedings were completed and the purchaser in the Revenue auction (Baijnath) was allotted and given possession of the property different from that which he had obtained in the auction. There was an appeal to the High Court of Patna which set aside the judgment of the trial Court. On further appeal to the Privy Council, the judgment of the trial Court was restored with the result that the Revenue sale was set aside. The title of the purchaser (in the Revenue auction) Baijnath therefore came to an end. In the execution of this decree the Plaintiffs (the Respondents before the Privy Council) applied for possession of the property which actually fell to the share of Baijnath in the Collector''s partition. Objection was raised that the decree as it stood was not executable against that property which was allotted at the partition proceedings and that it was necessary for the Plaintiffs to file a separate suit for obtaining that relief. The Patna High Court repelled that contention and that view was affirmed by the Privy Council. Their Lordships held that in execution proceedings the executing Court had undoubted power u/s 47, CPC to put the decree-holders in possession of the substituted shares and that no separate suit was necessary. We are clearly of the opinion that the rationale of the decision of the Privy Council directly applies to the instant case. Further, Courts have undoubted and ample jurisdiction in appropriate cases and for the ends of justice, to take note of subsequent events and grant the relief which the parties may be entitled to, having regard to the turn of subsequent events. This jurisdiction can be exercised either in the stage of the passing of the decree or in execution by issuing appropriate directions u/s 47, Code of Civil Procedure. In this regard, there is no difference in the jurisdiction of the Court whether it is a suit or whether it is in execution under the provisions of Section 47, Code of Civil Procedure.

In this view no question of amendment of an execution petition after the expiry of twelve years specified u/s 48, CPC at all arises in the instant case. Execution Application No. 184 of 1957, filed on 8th March 1957 is not a fresh application nor is it an application for an amendment of the prior execution petition. This application is only an auxiliary application of the previous petition Execution Petition No. 349 of 1955 which is pending. In view of the prior history and the attendant circumstances and proceedings in the case, we are clearly of the opinion that the later application for payment out is merely for working out the consequential reliefs flowing upon the sale of the property in the meanwhile. In a recent bench judgment of this Court reported in Nachiappa Chettiar v. Ramaswami Pillai (1963) 2 M.L.J. 180 this Court had to consider the amplitude of the power of the Court in allowing amendments in pending execution petitions. Following the liberal criteria indicated in recent judgments of the Supreme Court in the matter of the jurisdiction of the Court to permit amendments, it was held that amendments of pleadings or enlargement of relief''s in execution necessary for the purpose of determining the real question in controversy between the parties should be permitted and not refused. It is however unnecessary to pursue the matter further as we think there is no question of amendment involved in the instant case so as to attract the bar of time limit specified in Section 48, Code of Civil Procedure.

For all the reasons mentioned above, both the appeals are dismissed with costs, in both the appeals.