GOVINDAN ASARI Vs. NAGAYAN CHETTIAR

JUDGEMENT

(1.) The question which arises in this second appeal is as to the effect upon a submortgagee of a decree to which he was not a party declaring that a sale to the mortgagor by the guardian of a minor is not binding upon the minor. The sale was effected under Ex. 4 on 20 March 1902 to one Suppayya Maniyagaran. In 1908 the vendee usufructuarily mortgaged the property to one Ramasami Asari and in 1911 the latter submortgaged it to defendant 1. Upon the submortgage O.S. No. 634 of 1914 was filed impleading the mortgagor and the mortgagee and a decree was obtained on 12 December 1914. The decree-holder brought the property to sale in 1922 and bought it himself. Meanwhile the minor, on attaining majority, had sued in O.S. No. 657 of 1915 to set aside the alienation. He made parties to the suit the mortgagor and the mortgagee but not the submortgagee. He obtained a decree in 1917 which directed that the sale should hold good if the defendants paid to the decree-holder a sum of Rs. 260, which was the part of the sale price found not binding upon him. If they failed to do this he might pay them the balance of Rs. 490, the whole price being Rs. 750, and take the property. The latter course was followed and the decree-holder given delivery. In 1919 he sold the property to the plaintiff, who has now sued defendant 1 and his representatives for a declaration of his right to possession and for an injunction restraining them from entering upon the property. The question therefore is whether by force of the decree in O. S. No. 857 such a declaration and injunction may be given notwithstanding that the submortgagee was not a party to the suit.

(2.) It is unquestionable, as a general proposition, that where a person possesses an interest, acquired before the suit, in an estate, which interest is not represented by any of the parties to the suit, the decision will not be res judicata against him. Thus a vendee from a party will not be bound. The same principle has been applied to the case of a lessee in Mussan Haji V/s. Thavara Keran A.I.R. 1921 Mad. 708. The position of a mortgagee is more closely comparable than either of these to that of a submortgagee. It was held in Bonomalee Nag V/s. Kaylash Chandra [1879] 4 Cal. 692 following an earlier case in Dooma V/s. Joona [1809] 12 W.R. 362 that a simple mortgagee was not bound by the decision in a suit regarding a right of way over the property. This case again was followed in Soshi Bushan V/s. Gogan Chander [1895] 22 Cal. 364. The learned Judges in that case refer to the general rule that a judgment inter partes binds only the parties and persons deriving title from thorn subsequent to the date of the judgment. They recognize that exceptions exist to the rule based either upon grounds of justice and expediency or upon express legislation, the cases of a Hindu widow or a shebait being referred to as instances where the party must be held to represent the estate completely. But the same does not apply to the proprietor of an estate after he has mortgaged it: The mortgagee can always be ascertained; very often his interest in the estate may be much greater than that left in the mortgagor; and sometimes, as in the present case, where, after decree, it was no part of the mortgagor's interest to protect the incumbrance, the interests of the two are not identical.

(3.) Other cases dealing with the same point are Ramachandra Dhando V/s. Malkapa [1916] 40 Bom. 679 and Ghanshyam Das V/s. Raghu Singh A.I.R. 1931 Pat. 64. Is there any reason to suppose that a submortgagee's interest should form an exception to this rule? The learned Subordinate Judge who heard the first appeal has relied on the authority of a case in Rarichan V/s. Elambilakad A.I.R. 1923 Mad. 440 for holding that a submortgagee will be bound. The circumstances of that case which was decided by Ramesam, J., were very exceptional and the question in its general form did not arise. So far from holding, as the learned Subordinate Judge thinks, that a submortgage is bound by the decree between his submortgagee and the stranger, the learned Judge has expressly stated that the findings in the suit do not bind the submortgagee, and therefore the decision proceeded upon other considerations. There is I think very little difference between the position of a submortgagee and that of a transferee of the original mortgage: see Halsbury, Vol. 21, part 6, paras. 336 to 338, where the legal incidents of such an interest are set out. It seems clear to me that if a mortgagee is not bound by impleading his mortgagor, similarly the mortgagee of a mortgagee,. i.e., a submortgagee, is not bound by impleading his submortgagor. As has been remarked by the Bench in Sashi Bushan V/s. Gogan Chandar [1895] 22 Cal. 364 it may very well be that the interest of the submortgagee in the estate may be much greater than that left either in the mortgagor or in the mortgagee; nor need it always happen that the interests of the two latter are identical with those of the former.