Syed Mahomed Ibrahim Hossein Khan and Another vs Ambika Persad Singh and others

John Edge, JJ. 1. This is an appeal by the plaintiffs against the decree of the High Court of Judicature at Fort William in Bengal, dated March 3, 1905, which varied the decree of the Subordinate fudge of Patna of July 9, 1902. 2. The suit was brought on September 22, 1900, in the Court of the Subordinate Judge on a simple mortgage of February 17, 1888, to recover Rs. 12,000 as principal, Rs. 23,150 as interest to the date of suit, and future interest until realization. That mortgage as will later appear, was executed in favour of Mussammat Alfan, whose heirs assigned it to the plaintiffs on June 16, 1891. The plaintiffs also claimed to have it declared that the properties covered by the mortgage of February 17, 1888, and by a zarpeshgi deed of November 20, 1874, were liable for the entire decretal amount; that certain of the defendants should be directed to pay the decretal amount to the plaintiffs within a time to be fixed by the Court, and that in default of payment the decretal amount should be realized by the sale by auction of the mortgaged properties included in the mortgage of February 17, 1888, and the zarpeshgi deed of November 20, 1874. Various issues wore raised by the defendants, and much more or less conflicting evidence was recorded, but the facts so far as they are material in the view taken by their Lordships may be briefly stated. 3. On November 20, 1874, Kanda Kumar Singh on his own behalf, and as the husband and agent of his wife, Mussammat Lalpeari Dasi, executed a zarpeshgi deed in favour of Girwar Singh for the sum of Rs. 12,000, which was acknowledged to have been received from Girwar Singh, and by that deed mortgaged and hypothecated as security for the zarpeshgi Rs. 12,000 certain properties which included the entire 16 annas of the milkiat and the malguzari right of mouzah Ghowspur-Dopahra, No. 364, 2 annas out of 16 annas of mouzah Ghowspur-Dopahra, No. 362, and 5 annas 4 pies out of 16 annas of mouzah Fatehpur-Lawaech. With the properties which are named above this appeal is alone concerned. By that deed Girwar Singh was entitled to hold possession of the properties hypothecated until the amount of the zarpeshgi Rs. 12,000 was repaid to him, and it was by the deed amongst other things agreed that Girwar Singh should pay certain expenses and the Government revenue, should keep out of the usufruct Rs. 900 every year as interest on the zarpeshgi Rs. 12,000 and should pay Rs. 501 13 annas 6 pies on account of the rent every year by regular instalments to Nanda Kumar Singh and Lalpeari Dasi, and that all the increase in the produce in consequence of proper cultivation should be enjoyed and appropriated by Girwar Singh. It was also by the deed agreed that when Nanda Kumar Singh and Lalpeari Dasi should repay to the ticcadar, Girwar Singh, the zarpeshgi Rs. 12,000 in one lump sum at the end of Jeth 1294 Fasli (September, 1887) the ticca transaction should be cancelled and Nanda Kumar Singh and Lalpeari Dasi should bring the leased properties into their direct possession, but in the case of the nonpayment of the zarpeshgi Rs. 12,000 at the end of Jeth 1294 Fasli, the ticca transaction should stand good with all its conditions until the payment of the zarpeshgi. Girwar Singh was put in possession under the deed. 4. On December 15, 1879, Nanda Kumar Singh being then dead, his son and heir Kishan Kumar Singh executed in favour of Mussammat Jagattarini Debi a simple mortgage of the 2 annas share in No. 362 Ghowspur-Dopahra. On May 3, 1890, Dwarkanath Roy, who was the son and heir of Mussammat Jagattarini, then dead, brought a suit for sale on the mortgage of December 15, 1879, and made the mortgagor and the puisne mortgagees, including the heirs of Mussammat Alfan, who was then dead, defendants to his suit. Their Lordships, concurring with the High Court, find as a fact that the summonses and notices in that suit were duly served upon the heirs of Mussammat Alfan. The heirs of Mussammat Alfan did not appear, and did not defend that suit. On November 20, 1890, Dwarkanath Roy obtained in his suit a decree for sale, and under that decree the 2 annas share in No. 362 Ghowspur-Dopahra was sold. 5. On December 31, 1880, Kishan Kumar Singh and his mother Lalpeari Dasi executed a simple mortgage in favour of Raghunath Singh and Ganpat Singh of, amongst other properties, the 2 annas share in No. 362 Ghowspur-Dopahra and the 16 annas share in No. 364 Ghowspur-Dopahra. On December 20, 1883, Kishan Kumar Singh and Lalpeari Dasi executed in favour of Raghunath Singh and Jagarnath Singh a simple mortgage of, amongst other properties, the 2 annas share in No. 362 Ghowspur-Dopahra and the 16 annas share in No. 364 Ghowspur-Dopahra. On July 15, 1890, two suits for sales were brought, one on the mortgage of December 31, 1880, and the other on the mortgage of December 20, 1883. Their Lordships, concurring with the High Court, find as a fact that the heirs of Mussammat Alfan were duly made defendants to these suits. The heirs of Mussammat Alfan did not defend either of these suits. Decrees for sale were made in these suits. 6. On January 7, 1888, Kishan Kumar Singh executed in favour of Gajadhur Mahto a simple mortgage of the 5 annas 4 pies share in Fatehpur-Lawaech. On September 6, 1888, Gajadhur Mahto brought a suit for sale on his mortgage of January 7, 1888, against Kishan Kumar Singh, but did not make Mussammat Allan a defendant. Gajadhur Mahto obtained a decree for sale; under that decree the 5 annas 4 pies share in Fatehpur-Lawaech was sold on December 16, 1889, to Lalji Mahto. The sale was confirmed on March 22, 1890, and shortly afterwards Lalji Mahto was put in possession. Lalji Mahto died since this suit was brought. 7. In February, 1888, Kishan Kumar Singh borrowed Rs. 12,000 at interest of Rule 1 and 4 annas per mensem from Mussammat Alfan. Their Lordships find as a fact that the Rs. 12,000 was borrowed by Kishan Kumar Singh and was lent by Mussammat Alfan for the express purpose of paying off the zarpeshgi debt of Rs. 12,000 as security for which the property mentioned in the zarpeshgi deed of November 20, 1874, was mortgaged and hypothecated by that deed. In consideration of that loan of Rs. 12,000 Kishan Kumar Singh executed on February 17, 1888, in favour of Mussammat Alfan a simple mortgage of the properties included in the zarpeshgi deed of November 20, 1874. The principal sum of Rs. 12,000 was under that mortgage repayable in two years. The money lent by Mussammat Alfan was in accordance with the agreement between her and Kishan Kumar Singh applied in discharging the zarpeshgi debt of Rs. 12,000, and on July 15, 1888, the then holders of the zarpeshgi deed of November 20, 1874, quitted possession and gave up the zarpeshgi deed, which was delivered to Mussammat Alfan. Mussammat Alfan died on December 10, 1889, and on June 16, 1891, her heirs assigned the mortgage of February 17, 1888, to the plaintiffs, who are the appellants here. On that assignment such rights as Mussammat Alfan had acquired and were then existing passed to the plaintiffs. 8. On September 22, 1900, the plaintiffs in whom was then vested Mussammat Alfan''s right as mortgagee under the mortgage of February 17, 1888, filed their plaint in this suit, making then, or by subsequent amendment of their plaint, the representatives of Kishan Kumar Singh, who was then dead, and others who were interested in the mortgage properties, or in some of them, defendants. The titles of the defendants, other than the representatives of Kishan Kumar Singh, arose under the mortgages which were made subsequently to November 20, 1874, and prior to February 17, 1888. 9. The Subordinate Judge decreed the suit for sale with costs, giving the defendant No. 1 a right to redeem the mortgage so far as it affected the properties other than No. 362 Ghowspur-Dopahra, No. 864 Ghowspur-Dopahra, and Fatehpur-Lawaech by payment within ninety days of the decretal amount with costs. The defendants Nos. 8 to 13 were given a right to redeem the mortgage, so far as it affected No. 364 Ghowspur-Dopahra, by payment within ninety days of Rs. 4000 with proportionate costs; the defendant No. 15 was given a right to redeem the mortgage, so far as it affected No. 362 Ghowspur-Dopahra, on payment of Rs. 4000 with proportionate costs; and any of the defendants Nos. 5, 6, and 14 were given a right to redeem the mortgage, so far as it affected Fatehpur-Lawaech, on payment within ninety days of Rs. 4000 with proportionate costs. The High Court on appeal dismissed the suit with costs so far as it applied to Nos. 364 and 862 Ghowspur-Dopahra and Fatehpur-Lawaech. 10. The High Court held that the plaintiffs'' suit, so far as it applied to No. 364 Ghowspur-Dopahra and No. 362 Ghowspur-Dopahra, was barred by Section 13, explanation II., of the Code of Civil Procedure by reason of the heirs of Mussammat Alfan not having set up in the suits of May 3, 1890, and July 15, 1890, "their title as prior mortgagees on the basis of the zarpeshgi 1874, the ground of relief in the present action." Mussammat Alfan''s mortgage of February 17, 1888, was not prior to the mortgages of December 15, 1879, December 30, 1880, and December 20, 1883, but the plaintiffs, appellants here, claimed priority as the Rs. 12,000 which Mussammat Alfan had lent in 1888 wore applied to discharge the debt secured by the zarpeshgi deed of 1871. The heirs of Mussammat Alfan were persons having an interest in the properties comprised in the mortgages of December 15, 1879, December 31, 1880, and December 20, 1883, and consequently were under Section 85 of the Transfer of Property Act, 1882, necessary parties to the suits for sale on those mortgages and were made defendants to those suits, and not having set up in those suits such rights as they had under the mortgage of February 17, 1888, and the zarpeshgi deed of 1874, Section 13, explanation II., of the Code of the Civil Procedure applied, and the claims of the plaintiffs appellants as against No. 364 Ghowspur-Dopahra and No. 362 Ghowspur-Dopahra and those of the defendants who are alone concerned with those mouzahs are barred. The High Court rightly dismissed the suit with costs so far as it related to No. 364 Ghowspur-Dopahra and No. 362 Ghowspur-Dopahra. 11. It remains to be considered whether the plaintiffs had, and could have enforced in this suit, any and what rights against the 5 annas 4 pies share in Fatehpur-Lawaech, and against Gajadhur Mahto and Lalji Mahto, defendants 5 and 6, or either of them. It is not quite obvious on what grounds the High Court dismissed the suit so far as it related to the 5 annas 4 pies share in Fatehpur-ljawaech, and to the defendants Gajadhur Mahto and Lalji Mahto. 12. Gadjadhur Mahto did not make Mussammat Alfan a defendant to the suit for sale which he brought on September 6, 1888, on his mortgage of January 7, 1888. That suit was brought to obtain a decree for sale of the 5 annas 4 pies share in Fatehpur-Lawaech which had been mortgaged on January 7, 1888, to Gajadhur Mahto, and subsequently on February 17, 1888, to Mussammat Alfan, and had been mortgaged and hypothecated to Girwar Singh by the deed of November 20, 1874, as security for the zarpeshgi debt of Rs. 12,000. Under the deed of November 20, 1874, the Rs. 12,000 was not repayable to Girwar Singh until Jeth 1294 Fasli (September, 1887), and consequently the twelve years allowed by Article 182 of the Second Schedule of the Indian Limitation Act, 1877, within which a suit to enforce payment of that debt was allowed, had not expired when Gajadhur Mahto brought his suit. It has been contended that as Mussammat Alfan when she lent her Rs. 12,000 to Kishan Kumar Singh in February, 1888, to pay off the zarpeshgi debt of Rs. 12,000 did not obtain a formal assignment in writing of the zarpeshgi deed of November 20, 1874, and as the zarpeshgi debt of Rs. 12,000 was discharged by payment to the representatives of Girwar Singh on July 15, 1888, and they quitted possession, Mussammat Alfan did not in equity obtain the benefit of the charge which Girwar Singh had under the zarpeshgi deed of November 20, 1874. It is true that so far as the zarpeshgi deed of November 20, 1874, operated as a lease of the mortgaged properties it came to an end on the payment of the zarpeshgi debt of Rs. 1,2000, to the representatives of Girwar Singh on July 15, 1888, but their Lordships have found as a fact that the Rs. 12,000 were lent by Mussammat Alfan and were borrowed by Kishan Kumar Singh for the express purpose of paying off the zarpeshgi debt of Rs. 12,000 which was secured by the deed of November 20, 1874; that the Rs. 12,000 lent by Mussammat Alfan were in accordance with the agreement between Mussammat Alfan and Kishan Kumar Singh applied in paying off the zarpeshgi debt; that on payment of that debt the zarpeshgi deed of November 20, 1874, was handed over to Mussammat Alfan and that Mussammat Alfan when she lent her Rs. 12,000 intended to keep alive for her benefit and protection the charge which had been created by the zarpeshgi deed of November 20, 1874. It has been held by this Board, in Mohesh Lal v. Bawan Das L.R. 10 Ind. Ap. 62, that whether a mortgage paid off is extinguished or kept alive depends upon the intention of the parties. It has also been held by this Board, in Gokuldoss v. Rambux Seockand L.R. 11 Ind. Ap. 126, that the ordinary rule is that a man having a right to act in either of two ways shall be assumed to have acted according to his interests. In the last-mentioned case it was held by this Board that the purchaser of an equity of redemption in immovable property situated in India, who, having notice of a second mortgage, paid, off a first mortgage upon the property without an assignment of the first mortgage to him, must be assumed, according to the rule of justice, equity, and good conscience, to have intended to keep the first mortgage alive, and consequently was entitled to stand in the place of the first mortgagee and to retain possession against the second mortgagee until repayment. In that case this Board was pressed to apply the doctrine of Toulmin v. Steere 3 Mer. 210, but this Board observed that: "In India the art of conveyancing has been and is of a very simple character. Their Lordships cannot find that a formal transfer of a mortgage is ever made, or an intention to keep it alive ever formally expressed. To apply to such a practice the doctrine of Toulmin v. Steere Mer. 210 seems to them likely, not to promote justice and equity, but to lead to confusion, to multiplication of documents, to useless technicalities, to expense) and to litigation." And their Lordships in that case held that the obvious question to ask, in the interests of justice, equity, and good conscience, is, what was the intention of the party paying off the charge? What this Board said in 1884 as to the art of conveyancing in India, and the practice in such cases, is true as to the art of conveyancing and the practice in such cases at the present day. The law on these points applied in the judgments of this Board in Mohesh Lal v. Bawan Das L.R. 10 Ind. Ap. 62 and Gokuldoss v. Rambax Seochand L.R. 11 Ind. Ap. 126 was subsequently applied by this Board in Dinobundhu Shaw Chowdhry v. Jogmaya Dasi L.R. 29 Ind. Ap. 9 Applying the rule of justice, equity, and good conscience their Lordships in this appeal hold that the charge created by the zarpeshgi deed of November 20, 1874, was kept alive for the benefit of Mussammat Alfan. Nothing to bar a claim in respect of that charge, so far as the 5 annas 4 pies share in Fatehpur-Lawaech was concerned, had occurred when Gajadhur Mahto brought his suit on September 6, 1888. 13. As their Lordships have said, Gajadhur Mahto did not make Mussammat Alfan a defendant to his suit of September 6, 1888. Under Section 85 of the Transfer of Property Act, 1882, Mussammat Alfan was a necessary party to that suit. It is not alleged that Gajadhur Mahto when he brought his suit had not notice that Mussammat Alfan was a person having an interest in the property comprised in the mortgage upon which he was suing. If Gajadhur Mahto had taken the ordinary precaution of inspecting the register of the district in which Fatehpur-Lawaech is situate, before he took his mortgage of January 7, 1888, he would have found that the 5 annas 4 pies share in Fatehpur-Lawaech had been charged by the zarpeshgi deed of November 20, 1874. It is to be presumed that Gajadhur Mahto took the ordinary precautions before parting with, his money which a prudent intending mortgagee would take. If Gajadhur Mahto had before bringing his suit of September 16, 1888, and in order to ascertain who would be under Section 85 of the Transfer of Property Act, 1882, the necessary parties to his suit, taken the ordinary precaution of searching that register, he would also have found that the 5 annas 4 pies share in Fatehpur-Lawaech was included in Mussammat Alfan''s mortgage of February 17, 1888. It has been contended that Section 85 of the Transfer of Property Act, 1882, did not apply to the suit which Gajadhur Mahto brought, the contention being that that section does not apply to a suit for sale of an equity of redemption and that a puisne mortgagee is not a person "having an interest in the property comprised in a mortgage" of a first or any prior mortgagee who brings a suit for sale on his prior mortgage. That contention, if correct, would, as it appears to their Lordships, lead to the conclusion that neither a prior nor a subsequent mortgagee need be made a defendant to a suit for sale by a mortgagee of the specific lands included in his mortgage. The fact is that in suits for sale in India to which other mortgagees are not made parties, what a puisne mortgagee seeks to sell by means of a decree for sale is not the equity of redemption so described, but the actual property, lands or houses, mortgaged. It is not obvious why a puisne mortgagee who desires to sell a mere equity of redemption, and not the actual property, lands or houses, described in his mortgage as the property mortgaged to him, should not dispose of his interests by private contract by an assignment of his mortgage to a purchaser, instead of by bringing a suit for sale of the property, land or houses, mortgaged, unless he hopes by concealing what his real interests are to obtain a larger price from an unwary purchaser at an auction sale under a decree for sale than he could otherwise expect to obtain. 14. Gajadhur Mahto, in his suit for sale, sought for and obtained a decree for sale of the specific 5 annas 4 pies share in mouzah Fatehpur Lawaech which had been mortgaged by the zarpeshgi deed of November 20, 1874, and Mussammat Alfan''s mortgage of February 17, 1888, and under his decree for sale that 5 annas 4 pies share was sold, and it was sold free of all charges and incumbrances so far as the decree or any documents relating to the decree would shew. Had Section 85 of the Transfer of Property Act, 1882, been complied with by making Mussammat Alfan a party to the suit, the decree for sale in Gajadhur Mahto''s suit would have dealt with the rights and claims of Mussammat Alfan in relation to the charge under the zarpeshgi deed of November 20, 1874, and her mortgage of February 17, 1888, if put forward by her in the suit, and Gajadhur Mahto would have been allowed to redeem the charge of 1874 by payment of Rs. 12,000, and Mussammat Alfan would in her turn have been allowed to redeem Gajadhur Mahto''s mortgage. If Mussammat Alfan had been made a defendant to Gajadhur Mahto''s suit and had neglected to put forward her claims, those claims would have been barred under Section 13 of the Code of Civil Procedure. In either event all intending purchasers at a sale under the decree would have known what rights were to have been sold, and in either event the necessity for the bringing this present suit, so far as the 5 annas 4 pies share in Fatehpur-Lawaech is concerned, would not have arisen. 15. As Mussammat Alfan was not made a defendant to Gajadhur Mahto''s suit, her rights were not affected by the decree in that suit, and Section 13 of the Code of Civil Procedure did not bar this suit of the plaintiff so far as the 5 annas 4 pies share in Fatehpur-Lawaech and the defendants Gajadhur Mahto and Lalji Mahto were concerned. But as the Rs. 12,000 were under the zarpeshgi deed of November 20, 1874, repayable in Jeth 1294 Fasli (September, 1887) and this suit was not brought until September 22, 1900, the claim of the plaintiffs to priority is barred by Article 132 of the Second Schedule of the Indian Limitation Act, 1877, and all that they are entitled to so far as the 5 annas 4 pies share in Fatehpur-Lawaech is concerned is a decree entitling them to redeem the mortgage of January 7, 1888, on payment to the legal representatives of Lalji Mahto of the amount of the principal and interest in respect of which the 5 annas 4 pies share in Fatehpur-Lawaech was sold to him under the decree for sale in Gajadhur Mahto''s suit of September 6, 1888. 16. Their Lordships will humbly advise His Majesty that the decree of the High Court so far as it operated as a dismissal of the plaintiffs'' suit for sale of the 5 annas and 4. pies share in Fatehpur-Lawaech, and dismissed with costs in the High Court and in the Court of the Subordinate Judge the plaintiffs'' suit as against Gajadhur Mahto and Lalji Mahto, should be varied by decreeing that the plaintiffs, appellants here, by payment to the legal representatives of Lalji Mahto, or into the High Court to their credit, within ninety days from the riling of His Majesty''s order in the High Court, of the amount of principal and interest in respect of which the 5 annas 4 pies share in Fatehpur-Lawaech was sold to Lalji Mahto under the decree of Gajadhur, Mahto in the suit of September (5, 1888, may redeem the mortgage of January 7, 1888, and may bring the 5 annas 4 pies share to sale for the balance then remaining due of the amount of principal and interest decreed by the Subordinate Judge in this suit : by decreeing that the plaintiffs shall have their proportionate costs of the suit in the Court of the Subordinate Judge and the appeal to the High Court in respect of their claim against the 5 annas 4 pies share in Fatehpur-Lawaech and the defendants Gajadhur Mahto and Lalji Mahto, the amount of such costs to be ascertained by the High Court, and any costs paid by the appellants to Gajadhur Mahto and. Lalji Mahto or his legal representatives or any of them shall be repaid to the plaintiffs; and that in all other respects the decree of the High Court be affirmed, but that there shall be no costs of this appeal.