NARAIN SINGH Vs. BACHAN SINGH

JUDGEMENT

(1.) THE facts giving rise to this second appeal are as follows: On 1-6-1895 one Saida mortgaged the land in suit to Bhana, pre-decessor-in-interest of the plaintiffs, for Rs. 3700 by a registered deed. About ten years later, on 31-5-1905, Allah Ditta and Kalu sons of Saida, who had died by that time, sold the land to Lehna Singh father of Narain Singn and Hargopal Singn, defendants 1 and 2, for Rs. 3000 also by a registered deed, according to the terms of which a sum of Rs. 1300 was paid in cash and Rs. 1700 remained with the vendee for payment to the previous mortgagee. Whether Lehna Singn was unable or unwilling to pay this amount, it is at any rate certain that he did not do so, and he allowed the land to remain in possession of the mortgagees, and so matters remained until after the passing of the Punjab Restitution of Mortgaged Lands Act, 4 of 1938, when, taking advantage of this Act the sons of Lehna Singh applied to the Special Collector who on 21-8-1945 passed an order under the Act extinguishing the mortgage and granting possession to the sons of Lehna Singh without payment. The suit was instituted in October 1945 by the successors-in-interest of Bhana, the original mortgagee, for a declaration that the mortgage of 1895 could not be extinguished without the payment of Rs. 1700 together with an injunction restraining defendants 1 and 2 from obtaining possession of the land from the plaintiffs, or in the alternative for the recovery of Rs. 1700. Defendants 3 to 6 were impleaded as the successors-in-interest of the original mortgagor who were alleged to have transferred their right to recover Rs. 1700 to the plaintiffs by a document executed on 1-9-1945. The suit was contested by the sons of Lehna Singh who raised the preliminary legal objection that the suit could not be entertained by the Civil Court under Section 12 of Act 4 of 1938 so far as it related to the relief of declaration and injunction. This objection was upheld by the trial Court which, however, held that it could try the suit by the plaintiffs for the recovery of Rs. 1700, on the basis of the transfer of their rights to the plaintiffs by defendants 3 to 6. Regarding this claim the issues framed were:

(2.) THEIR appeal originally came up in October 1948 before Teja Singh J. who seems to have been somewhat doubtful whether the decisions relied on by the learned Additional District Judge did not run counter to the decision of their Lordships of the Privy Council, and therefore was of the opinion that the matter should be referred to a Division Bench.

(3.) THE doubts expressed by the learned Single Judge as to whether the decisions of Courts in this country were not opposed to the decision of the Privy Council certainly appear to have been well founded. Briefly the facts in-- 'izzat-un-Nissa Begam v. Pertab Singh', (31 AH 583 P. C.)were as follows: In a suit instituted in 1887 the plaintiff, Mst. Intizam Begam obtained a decree for the sale of nine villages mortgaged with her as security for a loan of Rs. 30,000, this decree being affirmed by the Allahabad High Court on 25-2-1889. Thereafter the sale of the villages was ordered, it being stated in the proclamation that the property was to be sold subject to two prior mortgages for Rs. 10000 and Rs. 20000 respectively. At the auction sale the decree-holder herself bought eight of the villages for Rs. 64000 the other villages being sold to another purchaser, on 20-4-1894. The position as regards the two mortgages subject to which the sale took place was that the first mortgage, which was of 13 villages including the villages then in suit, had not yet been enforced, but in respect of the second mortgage, which included one of the villages mortgaged with Mt. Intizam Begam, a decree had been obtained by the mortgagees on 9-6-1892, the mortgagees being the same persons in both cases. However, the mortgage decree of 1892 was set aside by the High Court on 15-1-1895, and the order of the High Court was affirmed by the Privy Council in 1898. A suit was also brought to enforce the first mortgage but this was dismissed by the trial Court on the strength of the decision of the High Court regarding the second mortgage, and the decree of the trial Court was affirmed by the High Court in May 1899. Mt. Intizam Begam died in 1897 and her successors-in-interest were Izzat--un-Nissa begam and another, and as a result of the failure of the suits based on the two mortgages subject to which the sale in favour of Mt. Intizam Begam had taken place they became unencumbered owners of the property which she had bought. However, in 1901 Partab Singh and others instituted a suit against the representatives of Mt. Intizam Begam alleging that the real purchase money of the property sold at 'the auction was the amount paid by the purchaser plus the amount due on the prior mortgages, and that since the property had been exonerated in respect of the prior mortgages, the sums due on the footing thereof, amounting to more than Rs. 1,60,000, were now due to the plaintiffs as unpaid vendors. They accordingly claimed this sum and also claimed a lien on the villages for the amount due and their sale in the event of non-payment. The suit was dismissed by the trial Court and the appeal to the High Court appears, in the words of Lord macnaghten, who delivered the judgment of their Lordships of the Privy Council, to have perplexed the two learned Judges before whom it came and there was a disagreement between them, the third Judge to whom the appeal was then referred agreeing with the learned Chief justice that the plaintiffs' suit should be decreed. The nature of the plaintiffs' claim, however, appears to have presented no difficulty whatsoever to their Lordships, whose views have been expressed with the utmost clarity by Lord Macnaghten in the following passage: "with the utmost respect to the learned Judges of the High Court, their Lordships are unable to discover any difficulty in the case. It seems to depend on a very simple rule. On the sale of property subject to encumbrances the vendor gets the price of his interest, whatever it may be, whether the price be settled by private bargain or determined by public competition, together with an indemnity against the encumbrances affecting the land. The contract of indemnity may be express or implied. If the purchaser covenants with the vendor to pay the encumbrances, it is still nothing more than a contract of indemnity. The purchaser takes the property subject to the burthen attached to it. If the encumbrances turn out to be invalid, the vendor has nothing to complain of. He has got what he bargained for. His indemnity is complete. He cannot pick up the burthen of which the land is relieved and seize it as his own property. The notion that after the completion of the purchase the purchaser is in some way a trustee for the vendor of the amount by which the existence, or supposed existence, of encumbrances has led to a diminution of the price, and liable, therefore, to account to the vendor for anything that remains of that amount after the encumbrances are satisfied or disposed of, is without foundation. After the purchase is completed, the vendor has no claim to participate in any benefit which the purchaser may derive from his purchase. It would be pedantry to refer at length to authorities. But their Lordships, under the circumstances may perhaps be excused for mentioning -- 'tweddel v. Tweddel', (1787-2 Br C C 151); -- 'butler v. Butler', (1800-5 Ves Jun 534) and -- 'waring v. Ward', (1802-7 ves Jun 332 ).