JAGGESWAR DUTT Vs. BHUBAN MOHAN MITRA

JUDGEMENT

(1.) The facts which have given rise to the litigation out of which this appeal arises, so far as it is necessary to state them, lie in a narrow compass and do not admit of any substantial doubt or dispute. On the 27 March 1893, the first defendant to the suit, Mathura Nath Mazumdar, executed a mortgage in favour of the plaintiff in respect of seven properties The interest, which the mortgagor purported to convey to the mortgagee in properties 1, 2 and 4, was that of a permanent lessee under the second defendant, Krishna Chandra Grhose, who had granted leases in his favour on the 31 January and 29 February 1888. After the grant of these leases by the second defendant in favour of the first defendant, and before the execution of the mortgage by the second defendant in favour of the plaintiff, in 1891, some creditors of the second defendant had caused these properties to be sold in execution of decrees which they held against him, and at these sales the first and the fourth properties had been purchased by defendants 3 to 8 to the present litigation, and the second property had been purchased by the defendants 3 to 6. These purchaser defendants, who have been described in these proceedings as the Dutts, subsequently, in 1900, sued the first and second defendants upon the allegation that the leases executed by the latter in favour of the former in 1888 were fraudulent and collusive transactions, and obtained decrees for recovery of possession. The plaintiff was not a party to these suits and is in no way bound by any decision between his mortgagor and the Dutts. He now sues to enforce his mortgage and also for a declaration that the leases of 1888 executed by the second defendant in favour of the first defendant were genuine transactions, and consequently that the Dutt defendants, by their purchase, in 1891, of the right, title and interest of the second defendant, did not acquire any interest in the properties covered by the mortgage. The suit was resisted in the Court below upon various grounds of law as well as of fact; but it is sufficient to state for the purposes of this appeal that the Dutt defendant. contended that the suit had not been properly framed, inasmuch as adverse claimants in their position could not be rightly made parties to the mortgage suit for the purpose of litigating their titles. This contention was negatived by the learned Subordinate Judge, and he overruled their objections that they ought to be dismissed from the suit. Evidence was then taken and the case heard on the merits. The learned Subordinate Judge held that the leases of 1888 included in the mortgage, which the plaintiff seeks to enforce, represented genuine transactions and that the Dutt defendants have acquired no title to the mortgaged premises by their purchase of 1891, which, according to the Court below, was collusive and fraudulent. The learned Judge in this view of the matter has made the usual decree for sale in favour of the plaintiff, and he has attached to it a declaration that the properties 1, 2 and 4 belonged to the mortgagor and not to the Dutts. The Dutts have appealed to this Court, and on their behalf the decree of the learned Subordinate Judge has been challenged on various grounds, of which it is necessary to mention only the following, namely, what the suit has not been properly framed, that the Dutts are not proper parties to the suit, and that as. they claimed under a title adverse to that of both the mortgagor and the mortgagee, their title cannot be litigated in these proceedings. This contention is well founded and must prevail.

(2.) In support of his argument the learned Vakil for the appellants has contended that the only proper parties to a suit for sale on the basis of a mortgage are the mortgagor and mortgagee and those who have acquired any interest from them subsequently to the mortgage and that an adverse claimant, who is a stranger to the mortgage and the estate is not a proper party to such a suit. Reliance has been placed upon passages from Bobbins on Mortgages, Vol. 2, page 1028, Fisher on Mortgages, Section 988, and Jones on Mortgages, Secs.1440 and 1589. Reference was also made to the cases of Nilakant Banerji V/s. Suresh Chandra Mullick (1885) I.L.R. 12 Calc. 414, Grish Chunder V/s. Jura Moni (1900) 5 C.W.N. 83. Rep. 349, Surjiram V/s. Barhamdeo (1905) 1 C.L.J. 337 and Mon Mohini Ghose V/s. Parvati Nath Ghose. It was contended, on the other hand, by the learned Vakil for the plaintiff respondent, that there is no inflexible rule of law that a question of paramount title cannot be litigated in a mortgage suit, that it is a matter of convenience whether such a question should be raised and discussed, and that the objection of the appellants ought not to be allowed to prevail, because the inconvenience, if any, has already been undergone in the course of the trial, which has resulted in a finding adverse to them. This position is sought to be supported by reference to the oases of Sure Krishna V/s. Robert Watson & Co. (1905) I.L.R. 32 Calc. 746, Provident Loan Trust Co. V/s. Marks (1898) 59 Kansas 230, 68 Am. St. Converse V/s. Michigan (1891) 45 Fed. Rep. 18, Other V/s. Pratt (1845) 3 Howrad 333, 407, Mavrich V/s. Grier (1867) 93 Am.Dec. 373 and Francis V/s. Harrison (1889) 43 Ch D.183. It is also suggested that the Dutts are precluded by the doctrine of estoppel from setting up their paramount title, and reference is made in this connection to the decision of the Judicial Committee in Mahomed Mozuffer Hossein V/s. Kishori Mohun Roy (1895) I.L.R. 22 Calc. 909 : L.R. 22 I.A. 129. The question raised is one of great importance and by no means free from difficulty. On a careful consideration, however, of the elaborate arguments addressed to us by the learned Vakils on both sides, we have arrived at the conclusion that the appellants are entitled to succeed.

(3.) Section 85 of the Transfer of Property Act provides that "subject to the provisions of the Civil P. C., Section 437, all persons having an interest in the property comprised in a mortgage must be joined as parties to any suit under this chapter relating to such mortgage, provided that the plaintiff has notice of such interest." It is clear, therefore, that the only persons who are proper parties to a suit to enforce a mortgage are persons having an interest in the property comprised in the mortgage. But what is the precise meaning of the words "property comprised in a mortgage?" Is the word "property" used in this section to indicate the actual physical object, or does it merely denote the rights in such object, which form the subject-matter of the transaction. In our opinion, the latter is the construction which ought to be placed upon the term, We are unable to adopt the view of the majority of the learned Judges of the Allahabad High Court, who decided the case of Mataain Kasodhan v. Kuzim Husain (1891) I.L.R. 13 All. 432 in their view that the term "property" means an actual physical object and does not include mere rights relating to physical objects. That view is inconsistent with the decision of the Court in Surji Ram Marwari V/s. Barhamdeo Persad (1905) 1 C.L.J. 337, and, if adopted, would lead to startling results. To take one concrete illustration, the Government may be owner of a particular parcel of land, A may be the zamindar of that parcel under the Government, B a patnidar under A and C a darpatnidar under B. C executes a mortgage of his darpatni interest in favour of X. If X sues to enforce his security, is the Government or A or B a proper or necessary party to the litigation? If the term "property" in Section 85 means the physical object, each of them would be a necessary party. But it is difficult to conceive upon what principle and with what object in view, any of these persons, who have no interest in the mortgage transaction, should be dragged into the litigation. We must hold that the property comprised in a mortgage is the interest which the mortgagor is competent to transfer by way of mortgage at the date of the transaction. In this view of the matter, the estate or interest in the land which is drawn within the operation of the suit, which will be affected and bound by the decree, is the estate created and passing by the mortgage, or estates or interests subsequently acquired by the mortgagor and enuring by way of estoppel to the benefit of the mortgagee. Not only the mortgagor, therefore, but all persons deriving title from him subsequent to the mortgage and bound thereby as holders of different fragments of the equity of redemption, are necessary and proper parties to a suit to enforce the mortgage. For precisely the same reason, a prior incumbrancer, who is in no way interested in the puisne mortgage and against whom no relief is claimed is not a necessary party to a suit so framed. As explained in the case of Surji Ram Narwari V/s. Baramdeo Persad (1905) 1 C.L.J. 337, the subject-matter of the litigation in such a suit is the interest of the mortgagor minus the interest of the first mortgagee, if any, and no decree made in such an action can possibly affect the rights of persons, who claim under a prior title. The interpretation, which we put upon Section 85, leads necessarily to the conclusion that the proper scope of a mortgage suit is to cut off the equity of redemption and to bar the rights of the mortgagor and. those claiming under him; the only proper parties to such a suit are the mortgagor and the mortgagee and those who have acquired interests under them subsequent to the mortgage. It is not competent for the mortgagee to make as party defendant, one who claims adversely to the title of the mortgagor and mortgagee. He is a stranger to the mortgagee, has no connection with the mortgage, and as his adverse claim of title cannot in any way be affected by the mortgage suit, in which he has no interest, he can not be made a party for the purpose of litigating such claim of title. This view appears to us to be well founded on principle and is not only sustained by a fair and reasonable interpretation of the language of Section 85 of the Transfer of Property Act, but is, as will presently be shown, supported by a considerable body of authorities.