THIRUKONDA ELLARAYAN Vs. NAKONDA RANGASWAMI AIYAR

JUDGEMENT

(1.) The original suit in this case was a suit for redemption of a mortgage. The suit property was mortgaged usufructuarily to the defendant on 29 August, 1904. In the mortgage was also a personal covenant to pay. The defendant sued on 2nd August, 1912 in O.S. No. 430 of 1912 and got a preliminary decree for sale on 14 October, 1913 and a final decree on 25th February, 1914. No action was taken by him under the final decree. On 2nd September, 1912, pnedente lite the same mortgagor mortgaged the property to the plaintiff's father. The plaintiff sued in O.S. No. 289 of 1918 and got a decree for sale in 1918, brought the property to sale and bought it in Court auction. He now sues to redeem the mortgage. The plaintiff was not a party to the suit of 1912, but the defendant contends that, as his mortgage was pendente Iite and the plaintiff, therefore, has no higher rights than his mortgagor, and as the mortgagor did not choose to redeem under the decree of 1913, the mortgagor and therefore the plaintiff is barred by res judicata from redeeming. Both the Trial Court and the Lower Appellate Court held that the suit was barred by res judicata. In second appeal Devadoss, J., has held that it is not, and against this judgment this Letters Patent Appeal is filed. It has been ably argued at length before us by Mr. C.S. Venkatachariar for the plaintiff and Mr. T.L. Venkatrama Aiyar for the defendant.

(2.) The real question at issue may be shortly stated, but cannot be as shortly answered. It is, when a mortgagor has failed within the time fixed in the preliminary mortgage decree for sale to pay up the amount due under the decree, and a final decree for sale has been obtained, does a suit for redemption by him lie or is his cause of action barred by res judicata? There is a long series of decisions, some taking one view and some the other, passed before and under the provisions of the Transfer of Property Act, but there is no direct decision under the present Civil Procedure Code after the repeal of Secs.86 to 89, 92 and 93 of the Transfer of Property Act and their re-birth in other forms under Order 34 of the Civil Procedure Code. The most important case in this Court is the Full Bench decision in Vedapnrathi V/s. Vallabha Valiya Rajah (1901) ILR 25 M 300 : 12 MLJ 128, passed under the old provisions of the Transfer of Property Act and the Civil Procedure Code, and, if the principles of that decision have not been reversed by the Privy Council and arc still applicable in spite of the changes in the law, that decision is binding on this Bench. Otherwise, the matter is res integra.

(3.) The case with which the Full Bench had to deal was based on a usufructuary mortgage of 1858. There had been a suit and a decree for redemption, the decree being passed under Section 92 of unamended Transfer of Property Act containing a provision for sale of the mortgaged property, if the mortgage amount was not paid, but containing no foreclosure clause. The decree was not executed and the decree amount was not paid but no order absolute for sale under Section 93 was obtained by the mortgagee. A second suit for redemption was then filed and the Full Bench was called on to decide whether in these circumstances the second suit was maintainable. It was held by all five Judges that, whether or not the relationship of mortgagor and mortgagee subsisted, because of the fact that no order absolute under Sec. 93 had been obtained, and the property, therefore, had not been sold, the cause of action, namely the right to redeem, had become merged in the decree, and was, therefore, res judicata and no second suit for redemption would lie. We are not pointed to any subsequent decision of the Privy Council which has controverted that decision, and so far as it goes, therefore, it is binding on us. Mr. Venkata-chariar, however, contends that, even accepting that position, the preesnt case differs from the Full Bench case in two vital particulars which will take it out of the purview of that decision. These differences are, first, that the first suit here on which the decree for sale was obtained was not a suit by the mortgagor for redemption but by the mortgagee for sale, and secondly, that the changes in the law since the Full Bench case render its principles no longer applicable. These two points may be dealt with together as they are intimately connected.