A VENKATASAMI CHETTIAR Vs. SANKARANARAYANA CHETTIAR

JUDGEMENT

(1.) This second appeal has been placed before a Bench because of a contention by the appellant's Advocate that the Bench decisions in Muthukumarasami Pillai V/s. Muthuswami Thevan (1926) 52 M.L.J. 148 and Jagannadha Rao V/s. Basavayya throw doubt on the observations in Venkata Reddy V/s. Kunjappa Goundan (1923) I.L.R. 47 Mad. 551 : 46 M.L.J. 391 on which the two lower Courts have relied.

(2.) The suit was really a controversy between two rival purchasers of the same mortgaged property. The plaintiff, was the purchaser in execution of a decree passed on a prior mortgage which I will call Mortgage No. 1 whilst the first defendant was the purchaser in execution of a decree passed on a puisne mortgage which I will call mortgage No. 2. No. 2 mortgagee brought his suit first and obtained a decree in 1922. Afterwards No. 1 mortgagee brought her suit and obtained her decree in 1924. To No. 2 mortgage suit No. 1 mortgagee was not made a party. To No. 1 mortgage suit No. 2 mortgagee was not made a party. The plaintiff in the suit was the, purchaser in execution of No. 1 mortgage decree. It is conceded that the purchase price paid by the plaintiff was more than sufficient to pay off the No. 1 mortgage debt. The plaintiff attempted to get delivery of possession but was obstructed by the purchaser in No. 2 mortgage and failed to get possession through the Court. The plaintiff then filed the present suit on No. 1 mortgage for a sale of the mortgaged property giving an opportunity to the purchaser under No. 2 mortgage to redeem it. Both Courts found that the plaintiff was entitled to bring the suit and gave a decree accordingly. In both Courts the decision in Venkat Reddy V/s. Kunjappa Goundan (1923) I.L.R. 47 Mad 551 : 46 M.L.J. 391 was relied upon as showing that such a suit as this is maintainable. It is conceded here very fairly by Mr. T.M. Krishnaswami Aiyar on behelf of the appellant that he is unable to distinguish the facts of this case from those in Venkat Reddy V/s. Kunjappa Goundan (1923) I.L.R. 47 Mad 551 : 46 M.L.J. 391 and that, if that decision is correct, this appeal must fail, This admission simplifies matters very much and we have now only to see how far, if at all, that decision has been approved of or followed or whether doubts have been thrown upon it by other decisions. I propose, in deciding this question, to consider only decisions of this High Court, Mr. T.M. Krishnaswami Aiyar's contention is that the plaintiff is not entitle to file his suit on No. 1 mortgage because such a suit cannot lie unless the Court-auction sale in No. 2 mortgage suit has been set aside and that, as a period of 30 days alone is allowed for the setting aside of a Court-auction-sale and the Court-auction-sale not having been set aside within that period, this suit is not maintainable. In support of this contention he refers to Muthukumarasami Pillai V/s. Muthuswami Thevan (1926) I.L.R. 50 Mad. 639 : 52 M.L.J. 148. There a decree-holder got the properties of some one other than the judgment-debtor sold in execution of his decree, purchased them himself and entered up satisfaction. More than thirty days after the sale, he found out his mistake and applied for further execution by setting aside the sale and it was held that the application for further execution was unsustainable as the sale though of a stranger's property was not void and as the prayer for setting it aside under Order 21, Rule 91, which was necessary preliminary for further execution could not be granted being barred by Art. 166 of the Limitation Act. In this case the principle of caveat emptor was applied it being pointed out that a Court sale carries no guarantee that the property is the property of the judgment-debtor and that the auction-purchaser takes the risk and bears the loss if it is subsequently discovered not to be the property of the judgment-debtor and that there is no warrant for the proposition that a sale by the court of property which subsequently turns out not to belong to the judgment-debtor is void. The sale not being void was voidable and could only be avoided by steps being taken under Order 21, Rule 91, within the period provided, namely, 30 days, to get the sale set aside and until the sale is set aside, the auction- purchaser cannot apply to execute the decree. One passage amongst others in that judgment relied upon by the appellant here reads in p. 644 as follows: In the present case we are concerned with the processual law which obviously prohibits execution being taken out for a satisfied decree unless the proceedings which resulted in the record of satisfaction are set aside and the same law says that such proceedings can only be set aside by an application within 30 days of the sale.

(3.) From this it is argued that, the No. 1 mortgage debt having been fully satisfied, the plaintiff cannot sue on that satisfied mortgage and that he has first of all to get that satisfaction set aside by getting the sale set aside which he has not done. Another case is Jagannadha Rao V/s. Basavayya . There a decree-holder who had obtained a mortgage-decree brought to sale some only of the mortgaged items in execution of his decree and purchased them in court-auction. As the price fetched was enough to satisfy the decree, satisfaction was entered. After the sale was confirmed when he went to take possession of the property purchased he was obstructed by a stranger and his petition to remove obstruction was dismissed. Thereupon he filed a petition to set aside the satisfaction that had been entered up and to bring to sale other items included in the decree. Following Muthukwmaraswami Pillai v. Muthuswami Thevan (1926) I.L.R. 50 Mad. 639 : 52 M.L.J. 148 it was held that he was not entitled to execute the decree without having the Court sale set aside and that, not having done that within the period of limitation provided by Art. 166 of the Limitation Act, his petition was not maintainable. In neither of these cases it must be observed was it a case between rival purchasers of the same mortgaged property but merely the ordinary case of property, after its purchase in Court auction being claimed by another person a complete stranger not in pursuance of a mortgage decree at all but on some entirely different ground such as ownership. In my view, this is an important distinction to be borne in mind here as showing that there is really no conflict between the two before mentioned decisions and that in Venkat Reddy V/s. Kunjappa Goundan (1923) I.L.R. 47 Mad 551 : 46 M.L.J. 391. In the latter case no question arose as to the application of Order 21, Rule 91, Civil Procedure Code the question there being whether an auction-purchaser in execution of a mortgage decree in a suit for sale on a mortgage to which the purchaser of a portion of the mortgaged property in execution of a money decree against one of the mortgagors was not joined as a party is entitled to institute a subsequent suit for sale against the latter, the mortgagor and the mortgagee, whether or not the mortgagee had, at the time of the previous suit, notice of the interest of the latter purchaser who had not been joined as a party and Kumaraswami Sastri and Waller, JJ. were of the opinion that it was open to the purchaser as the assignee in law of the rights of the original mortgagee by virtue of his purchase in Court sale to institute a second suit as against persons who were not parties to the prior suit and that it followed that he had got the same rights as the original mortgagee would have had if he had filed a suit and the defendant could not be in a better position than he would have been if he had been made a party to the original mortgage decree in execution of which the property was sold. It was not even finally suggested in argument that the plaintiff's claim stood to be defeated by any rule of caveat emptor. It is true that the judgment at page 563 is with respect to the learned Judges who pronounced it not happily worded. Indeed it would appear to proceed on somewhat inconsistent reasoning. But that it definitely lays down the law upon this point admits of no doubt whatever and, as far as we have been able to discover, this decision has not really been doubted in subsequent decisions to which we were referred. A very recent decision of Ramesam and Stone, JJ. in Sambasiva V/s. Subramania (1934) 1934 M.W.N. 1233 has been brought to our notice in which the decision in Venkat Reddy V/s. Kunjappa Goundan (1923) I.L.R. 47 Mad 551 : 46 M.L.J. 391 was noticed. In the judgment of Stone, J. that case is referred to as follows: We must not be understood as saying that upon decree the cause of action upon the mortgage has gone. Under the Transfer of Property Act as it stood before its amendment by the Civil P. C. this would have occurred but it is now decided that the mortgage is not wholly merged in the decree. It can at least be used as a shield Sukhi V/s. Gulam Safdar Khan (1921) 48 I.A. 465 : I.L.R. 43 All. 469 at 475 : 42 M.L.J. 391. It may indeed be sued on despite the decree according to the decision in Venkat Reddy V/s. Kunjappa Goundan (1923) I.L.R. 47 Mad 551 : 46 M.L.J. 391 as to which we express no opinion though we observe it purports to follow Sukhi V/s. Gulam Safdar Khan (1921) 48 I.A. 465 : I.L.R. 43 All. 469 at 475 : 42 M.L.J. 391 wherein the Judicial Committee use very guarded language in expressing the extent to which the mortgage remains available after decree. We proceed on the view that a mortgagee circumstanced as here might according to Venkat Reddy V/s. Kunjappa Goundon (1923) I.L.R. 47 Mad 551 : 46 M.L.J. 391 sue on the mortgage (which in most cases would give him the fullest remedy) or he might proceed on the cause of action derived from his title as auction-purchaser.