VENKATRAO Vs. GANPAT

JUDGEMENT

(1.) KINKHEDE , A.J.C. 1. This second appeal raises' two questions: whether the plaintiff can fall back on the earlier mortgage of 11-4-1904 after having failed in his suit based upon a later mortgage dated 27-2-1912 on the ground that it was not duly attested; and (2) whether the decision in the former suit that he cannot fall back on the prior mortgage operates as res judicata in the present suit.

(2.) THE first Court held that the plaintiff was not entitled to fall back as there was a complete substitution of the old mortgage by a new one. It did not decide the question of res judicata. The plaintiff appealed to the District Judge who held that not only was there a substitution of the old contract by a new one and therefore plaintiff could not fall back upon the earlier mortgage, but that the finding in the previous suit operated as res judicata and barred the present suit. The correctness of the decision on both these paints is challenged before me by the plaintiff. I will deal with these paints one after the other.

(3.) THE effect of that decision was to declare that the new mortgage dated 27th February 1912 which was substituted by act of parties for the earlier mortgages dated 11 April 1904 was no substitution at all in the eye of the law. The 61d security' therefore was not wiped out of existence even though the parties attempted to wipe it out, and in fact believed that it had been wiped out. If the newly substituted contract required for its validity proper attestation, and such attestation, was not secured, there was no valid substitution of the old security by the new one. The relation between the parties therefore continued to be governed by the terms of the earlier mortgage and could not be said to have been governed by the later mortgage. The case is well within the principle of the Privy Council decision in Chandi Lal v. Sheoraj Singh 9 All. 178. Section 62 of the Contract Act also supports this view. A case in Dhirajsingh v. Rajaram [1910] 6 N.L.R. 164 is also in point. There a lease of land described as absolute occupancy land was really occupancy and the mortgage in lieu of which that lease was given was held to have been revived. I am of opinion that by reason of the later security having" proved to be invalid there was and could be no substitution of the earlier security, and consequently plaintiff could fall back upon his earlier mortgage, provided his rights were not in any way barred by res judicata or by limitation. That they were not so barred by limitation is found by the lower appellate Court and that finding is not questioned by me.