KRISHNA KISHORE DE Vs. AMAR NATH KHETTRY

JUDGEMENT

(1.) This is an appeal by the plaintiff in a suit to declare the invalidity of the decree in a mortgage suit, in so far as such decree affects land situated beyond the local limits of the ordinary original civil jurisdiction of this Court, on the ground that leave under clause 12 could not have been granted and the decree was consequently to that extent made without jurisdiction. The question raised is of first impression, and the facts material for its determination are not in controversy.

(2.) On the 30th August 1907 certain persons who may be called the Mookerjees and their trustee, one Bhattacharyya (represented by defendants Nos. 4--9 in the present litigation), executed a simple mortgage in favour of Banerjee (defendant No. (3) to secure the repayment of a loan of Rs. 25,000 which was charged upon a share of lots Santoshpore and Mandalika, Patni Mahals in sub-district Howrah within the district of Hughli. On the 13th December 1907 Banerjee executed a mortgage in favour of the Khettrys (represented by defendants Nos. 1 and 2) to secure a loan of Rs. 20,000. The properties conveyed and assumed by this mortgage included a share of two parcels of land in the town of Calcutta as also the interest of Banerjee as mortgagee under the document of the 30th August 1907. On the 23rd September 1911 the Patni Taluk Mandalika was released and absolutely discharged from the mortgage of the 30th August 1907 upon payment of Rs. 10,000 by the original mortgagors and with the concurrence of all the parties interested, On the 25th November 1912 the Khettrys instituted a suit (No. 1083 of 1912) on the original side of this Court to enforce their security of the 13th December 1907 against Banerjee, the Mookerjees and Bhattacharyya, It is necessary to observe that the suit was brought by the Khettrys, not only against their mortgagor Banerjee, but also against the mortgagors of Banerjee under the transaction of the 30th August 1907. The reason for this was that the Khettrys sought, not merely to enforce their security against their mortgagor Banerjee and to out off his equity of redemption under the mortgage of the 13th December 1907, but also to enforce the mortgage held by Banerjee ? against the Mookerjees and Bhattacharyya under the deed of the 30th August 1907; this relief they claimed under their derivative title from Banerjee who had granted a mortgage of his interest as mortgagee. The suit was thus in essence a, composite suit wherein two distinct reliefs were claimed by the Khettrys, namely, first, to enforce a right of sale of Calcutta properties under the mortgage of the 13th December, 1907, and, secondly, to enforce a right of sale of Mufassil properties under the mortgage of the 30th August 1907. The Khettrys, accordingly, prayed for and obtained leave under clause 12 of the Letters Patent on the assumption that the clause was applicable. The suit was decreed ex parte on the 2nd September 1914 and the preliminary decree then passed was made absolute on the 24th August 1917. Meanwhile, the plaintiff De had purchased the right, title and interest of the Mookerjees and Bhattacharyya at an execution sale on the 20th June 1916, and on the 29th July 1918 he instituted the present, suit to impeach the validity of the decree in the suit of the Khettrys in so far as it affected land beyond the local limits of the ordinary original civil jurisdiction of this Court Mr. Justice Greaves has held that the Court was competent to grant leave under clause 12 and that the decree was consequently made with jurisdiction.

(3.) It is now well settled by decisions in all the Indian High Courts that a sub-mortgagee is entitled to bring a suit against his mortgagor and to realise the dues on his mortgage by sale or foreclosure: Ram Shankar Lal v. Ganesh Parhsad 29 A. 385 : 4 A.L.J. 273 : A.W.N. (1907) 97 : 2 M.L.T. 248, Muthuoijia v. Venkatachallam Chetti 20 M. 36 : 6 M.L.J. 235 : 7 Ind. Dec. (N.S.) 25, Narayan v. Ganoji 15 B. 692 : 8 Ind. Dec. (N.S.) 468, Bansi Lal v. Durga Prasad 2 Ind. Cas. 645 : 9 C.L.J. 429. It is also open to a sub-morgagee, but by no means obligatory on him, to frame his suit in such a way as not only to enforce his rights under his own mortgage, but to enforce the original mortgage against the mortgagor of his mortgagor: Zaki Hasan v. Deo Nath Sahai 4 Ind. Cas. 433 : 10 C.L.J. 470. A sub-mortgagee may thus be content to out off the equity of redemption of his mortgagor or he may at his choice, by a suit properly framed, out off the equity of redemption not merely of his mortgagor but also of the mortgagor of his mortgagor. This he is able to accomplish by reason of his derivative title. Where a mortgagee transfers his interest by way of mortgage, his mortgagee, that is, the sub- mortgagee, takes it subject to the original mortgagor s right to redeem; consequently, the sub-mortgagee who holds a fragment of the interest of the mortgagee may achieve what the mortgagee might have obtained, namely, to cut off the equity of redemption of the original mortgagor. The form of the decree to be made in such a suit, where twofold relief is claimed by the sub-mortgagee against his mortgagor and the mortgagor of that mortgagor, is set out in Seton on Judgments (1912) p. 2009 (Derivative Mortgagee v. Mortgagee and Mortgagor) and the Code of Civil Procedure, Appendix D, Form 9. No difficulty arises in a suit of this description when the properties included in the original mortgage as also the additional properties, if any, comprised in the mortgage by the mortgagee are situated within the same jurisdictions. Where," however, as here, the properties comprised in the original mortgage are situated in the Mufassil and the additional property included in the security granted by the mortgagee is situated in the town of Calcutta, an important question of some nicety arises The original contract of mortgage plainly contemplates a suit in the Mufassil Court for its enforcement. Is the mortgagee, by the grant of a sub-mortgage along with a mortgage of property in the town of Calcutta, entitled to have the forum altered in relation to the enforcement of the original mortgage? We are clearly of opinion that the answer should be in the negative. As between the mortgagee and the sub mortgagee, a suit to enforce the security may fittingly be instituted on the original side of this Court; this is in conformity with the intention of the parties as indicated by the inclusion of the Calcutta property in the mortgage. If, however, the sub mortgagee is not content with relief against his mortgagor alone and claims to have a remedy against the mortgagor of his mortgagor, the situation becomes entirely changed. As he can claim this relief only by virtue of title derived from his own mortgagor in respect of the Mufassil property, he can do neither more nor less than what his mortgagor could have done towards the original mortgagor. The original mortgager, as we have seen, could have been sued by his mortgagee in respect of liabilities arising out of the mortgage transaction only in the Mufassil Court. The mortgagee, by granting a mortgage to a third person, of his interest as mortgagee and by including in that document a property in Calcutta cannot be permitted to prejudice the position of his mortgagor and to render him liable to be sued in a Court never contemplated by the parties at the time of the mortgage contract. We are of opinion that this view is consistent with a plain reading of clause 12 of the Letters Patent which, so far as it is material for our present purpose, provides as follows: The said High Court of Judicature at Fort William in Bengal in the exercise of its ordinary original civil jurisdiction shall be empowered to receive, try and determine suits of every description, if, in the case of suits for land or other immoveable property, such land or property shall be situated, or, in all other cases, if cause of action shall have arisen either wholly, or, in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court.