VENKAMMA Vs. SHIVARAYA SHANBHAGA

JUDGEMENT

(1.) This is an appeal by the first defendant in O.S. No. 67 of 1939 against the decree of the District Judge of South Kanara confirming the judgment and decree of the Subordinate Judge. The second and third defendants in the suit together with three others had executed in 1921, a simple mortgage in favour of the ninth defendant. On 27 September, 1929, the ninth defendant assigned this mortgage to the first defendant in consideration of a sum of Rs. 2,500, but as the whole of the consideration was not paid, on the same day, namely, 27th September 1929, the first defendant sub-mortgaged the property to his assignor for the balance of consideration, a sum of Rs. 2,000. The first defendant filed a suit on the mortgage, O.S. No. 2 of 1932, in which he impleaded the mortgagors and some subsequent alienees. He did not, however, make the present ninth defendant,.the sub-mortgagee, a party, and he was added at the instance of the other defendants. An issue was framed, the seventh, in the terms "To what relief if any, is the eleventh defendant entitled?"? and in paragraph 7 of the judgment it is stated that the "eleventh defendant did not prove the sub-mortgage in his favour or the amount due under it. So no relief could be given to him in this suit." A preliminary decree Was passed and on 15 February, 1935, a final decree for sale. In neither decree is any mention made of the sub-mortgage. On 6 August, 1932, the ninth defendant assigned his mortgage to a certain Devamma who on 6 June, 1939, assigned it in her turn to the plaintiff in O.S. No. 67 of 1939. In the result, the Subordinate Judge gave a decree in favour of the plaintiff for recovery of the suit amount by the sale of the mortgage right under Ex. B as against the first defendant, and the learned District Judge confirmed this decree.

(2.) The main contention put forward for the appellant in the lower Courts and in this second- appeal is that the suit, O.S. No 67 of 1939, was barred by res judicata by reason of the decision in O.S. No. 2 of 1932. In so far as this contention means that the question of the validity of the sub-mortgage was directly in issue and was adjudicated upon, there can be no doubt that the contention must fail for the reasons given by the learned District Judge. As he stated, the ninth defendant was not made a party to O.S. No. 2 of 1932 by the plaintiff but was brought on record at the instance of the defendants. The first defendant in O.S. No. 67 of 1939 did not file a copy of the plaint in O.S. No. 2 of 1932, or a copy of the petition and affidavit in support of the petition to implead the sub-mortgagee as a party, or his. written statement if he filed one. It cannot therefore be known, as the District Judge points out, whether any relief in respect of the sub-mortgage was claimed in the suit or whether it was desired by any party that the rights of the sub-mortgagee should be adjudicated upon. In these circumstances, the District Judge was clearly right in his view that the observation made by the Judge who tried the suit that no relief could be given to the ninth defendant (the eleventh defendant in that suit) in the suit since he did not prove the sub-mortgage in his favour or the amount due under it was not an answer to the issue " to what relief, if any, is the eleventh defendant entitled?" to the effect that he was not entitled to any relief. No doubt the suggestion contained in the words used that the sub-mortgagee might enforce his remedy in another suit would not give the sub-mortgagee the right to do so if he was not otherwise entitled to seek his remedy in another suit. It is, however, argued by earned Counsel for the appellant that the suit, O.S. No. 67 of 1939, was in any case barred under Explanation IV to Section 11, Civil Procedure Code, since the ninth defendant might have and ought to have put forward and proved his sub-mortgage in O.S. No. 2 of 1932. On this point, in my opinion, the decision of the lower appellate Court was correct. Both the lower Courts have pointed out that a sub-mortgagee's remedy was either to ask for a decree for sale of the original mortgagor's interest in cases and in circumstances which would have entitled the original mortgagee on the date of the sub-mortgage to claim such relief or to bring his own sub-mortgagor's interest to sale; and both were of opinion that, although by reason of the decree in O.S. No. 2 of 1932 the sub-mortgagee's assignee was precluded from asking for the sale of the original mortgagor's interest, a remedy by way of the sale of his own sub-mortgagor's interest was still open to him.

(3.) This view, in my opinion, is correct, and although no case has been cited which is directly in point, it seems to me to be supported by authority. Jagannath V/s. Sheo Shanker (1930) I.L.R. 5 Luck. 369 was a case in which a sub-mortgagee, who was a party to a suit for redemption by a puisne mortgagee against the sub-mortgagee's mortgagor who was a prior mortgagee, did not prove his sub-mortgage. It was held that it was not incumbent on the sub- mortgagee to claim payment in the redemption suit, although by failing to do so he risked his security; and that it was open to him to bring a suit against his own mortgagor to recover the sum advanced under Section 68 of the Transfer of Property Act. In this case, no doubt the decision was that a suit on the personal covenant was maintainable, but I see no reason why if the property as in the present case has not been sold a suit should not be maintainable for the sale of the sub-mortgagee's mortgagor's interest. In Narayana Rao V/s. Venkiah (1918) M.W.N. 902, it was held that a suit filed by a puisne mortgagee who had already been a party to a suit by a prior mortgagee to enforce his mortgage was not barred for the reason that the suit by the puisne mortgagee was not a suit for redemption but a suit on a different cause of action, namely, for the sale of the equity of redemption. Pichai Sahib V/s. Meera Rowther was the converse case of a mortgagee who had been a party to but had raised no contentions in a suit by his sub-mortgagee for the sale of the hypothecated property, but later after a decree had been obtained by the sub-mortgagee but the property had not been sold, filed a suit to enforce his mortgage. It was held in this case also that the later suit was not barred because it was not on the same cause of action, and an observation was made by Madhavan Nair, J., which in my opinion might apply with equal force to the position of the sub-mortgagee in the present case. Madhavan Nair, J., pointed out that the result of a finding that the suit was not maintainable by the mortgagee would be that he would lose all his rights because the sub- mortgagee did not execute the decree in the present suit. In the present case, even if the sub- mortgagee had proved his mortgage and the amount due to him had been ascertained, he still would not be paid if the mortgagee failed to execute the decree and unless he has a right of suit he would lose the amount due to him because of the inactivity on the part of the mortgagee. This, as Madhavan Nair, J., has stated, cannot be right.