KAMALAPATI BANERJEE Vs. BEJOY LAL ROY CHOWDHURY

JUDGEMENT

(1.) The events which led to the litigation out of which the present appeal arises lie in a narrow compass and do not admit of any doubt or dispute. On the 27 November 1887, one Ashutosh Banerjee executed a mortgage by way of conditional sale in favour of Harendra Krishna Mukherjee. The principal was stated in the deed to be Rs. 7,000 and was to carry interest at the rate of 12 per cent, per annum. The due date was specified to be the 12 April 1894. The mortgagor died on the 20 March 1892 and the mortgagee died towards the end of December 1895. On the 23 June 1905 two of the four sons of the mortgagee transferred their interest in the mortgage debt to one Bejoy Lal Chowdhury and on the 13 August 1905 the assignee along with the other two sons commenced the present action against the two sons of the mortgagor for foreclosure and possession of the mortgaged premises. Subsequently, on objection taken by the defendants as to the genuineness of the assignment of the mortgage, the assignors who had been originally joined as pro forma defendants were transferred to the category of plaintiffs on the 6 December 1906. The suit, therefore, as now constituted may be treated as one by all the sons of the mortgagee and the person who claims to be the assignee from two of them. The claim was resisted by the defendants substantially on three grounds, namely, first that on the 7 November 1897, one of the properties included in the security was purchased at an execution sale by one Ram Chandra Chackerbutty who ought to be made a party defendant under Section 85 of the Transfer of Property Act; secondly, that although Rs. 7, 00 was stated to be the consideration money for the mortgage, yet as a matter of fact only Rs. 4,500 was advanced at the time and thirdly, that various payments were made from time to time towards the satisfaction of the debt by means of which it was alleged the entire mortgage had been wiped out. In the Court of first instance, the Subordinate Judge held that the first objection was not sustainable as the alleged purchaser was not shown to be beneficially interested in the property. Upon the second point he held in favour of the plaintiff. Upon the third point he found that the defendants had in part established their defence and he gave them credit for various payments proved to have been made from 1887 to 1902 for which no credit had been allowed in the plaint. These payments, the Subordinate Judge found, were made to the mortgagee and after his death to his representatives, out of the collection of two of the properties included in the mortgage security, which, it was subsequently arranged by the parties, should be regularly received by the mortgagee towards the satisfaction of the debt. The Subordinate Judge, however, overruled the contention of the defendants that a sum of Rs. 3,000 had been paid by their father to the mortgagee on the 23 August 1891. In this view of the matter, he made a decree in favour of the plaintiffs for a sum of nearly Rs. 14,000 and directed that upon failure on the part of the defendants to pay this sum within 6 months, they be absolutely debarred to redeem the mortgage and the plaintiff be placed in possession of the properties. The first defendant alone has appealed against this decree, and on his behalf the decision of the Subordinate Judge has been challenged substantially on four grounds, namely, first, that the suit as framed was defective and was not maintainable in view of the provisions of Section 85 of the Transfer of Property Act, secondly, that upon the evidence it ought to have been held that only Rs. 4,500 out of the principal sum named in the deed had been actually advanced; thirdly, that the defendants were entitled to credit for the payment of Rs. 3,000 which was proved by the evidence to have been made on the 25 August 1891 and, fourthly, that a sum of Rs. 100 which had been advanced to one of the sons of the mortgagee should not have been included in the mortgage-decree. On behalf of the respondents, the validity of each of these objections has been challenged, and it has been urged in addition, first, that the Court below should have allowed interest on the Government revenue paid by the mortgagees for the protection of the mortgaged premises from the date of each payment, secondly, that interest ought to have been allowed upon the costs incurred by the mortgagee for the defence of the mortgaged properties in a previous litigation from the date when the costs were incurred and were made payable by the mortgagor by agreement of parties on the 27 July 1897, and thirdly, that the interest on Rs. 100 which had been rightly added to the mortgage- decree, should have been calculated from the date of actual payment that is from 1896, and fourthly, that interest ought to have been allowed on the aggregate sum. decreed from the date fixed for re-payment in the decree and not merely upon the principal sum found to have been advanced.

(2.) In support of the first contention of the appellant, our attention has been invited to the fact that the objection as to defect of parties was taken at the earliest possible stage of the suit, namely, in the written statement of the defendants. Oar attention has also been called to portions of the evidence to show that one of the properties included in the mortgage was sold at an execution sale on the 7 November 1897 and was purchased by a man named Ram Chunder Chackerbutty. Under these circumstances it has been argued on the authority of the decision of the High Court of Allahabad in Ghulam Kadir Khan V/s. Mustakim Khan 18 A. 109 that the frame of the suit is defective and it ought to be dismissed. In answer to this argument it has been contended on behalf of the plaintiffs-respondents that the purchase by Ram Chunder was not for his own benefit and that he nominally acquired, the property really for the benefit of the mortgagors. The evidence discloses that Ram Chander was an officer of the Mukerjee family of Janai where the mortgagor resided, that he had no relations in Janai, that he never took the sale certificate in respect of the property purchased nor did he obtain delivery of possession. The mortgagors have continued in occupation of the property in spite of the sale and apparently have paid Ram Chunder a considerable portion, if not the whole of the purchase-money. It further appears that Ram Chunder died some years ago and that his sons have had no concern with the property. Under these circumstances the view taken by the Subordinate Judge that Ram Chunder is not proved to have had such interest in the property as would make his representatives necessary parties under Section 85 of the Transfer of Property Act is reasonable. It may be added that if Ram Chunder purchased the property so far back as the 7 November 1897 and up to the present time has not taken possession of the property, his right if any would shortly be extinguished by limitation. It may also be pointed out that the extreme view taken in the case of Ghulani Kadir V/s. Mustakim Khan 18 A. 109 has not been adopted in this Court. It has been ruled here Jamuna Parshad V/s. Ganga Pershad Singh 19 C. 401; Rammoy Hazra V/s. Preni Chand Naslcar 5 C.W.N. 423 that the only effect of the failure of the plaintiff to bring on the record a person who has an interest in a payment of the equity of redemption is to leave his rights untouched, with the consequence that if the plaintiff obtains a decree for foreclosure, he may subsequently find himself liable to be redeemed by the person who had been left out from the litigation. It is further obvious that, under such circumstances, the proper course would be to bring on the record the party who has been left out, for as is pointed out by Bowen, L. J., in Van Gelder V/s. Sowerby 44 Ch. D. 374. "It is of the essence of modern procedure to take care that an action shall not be defeated by the non-joinder of right parties and if the Judge sees that a mortgagee's presence is necessary for the purpose of doing justice, he, ought not to allow the action to be defeated, but order him to be made a defendant". "When a party in interest is not made a party to the suit, the decree is not generally for this reason wholly void. It is effectual as against these persons interested in the equity who are made parties. The effect of the decree is to vest the estate in the purchaser subject to redemption by the owner of the equity or other persons interested in it who were not made parties to the proceeding, if for any reason a party-in- interest is not male a party, his interest maybe foreclosed in a subsequent action. In the case before us the conduct of the defendant was not entirely free from blame. When he took the objection in the written statement, his position was that Ram Chunder Chackerbutty, the recorded purchaser, ought to be made a party. In the course of the evidence, however, it transpired that Ram Chunder had died some years before the suit and that he had left an heir whose residence was not known. Under these circumstances the mortgagee can hardly be expected to bring the representative of Ram Chunder on record. There is manifestly no substance in the first objection and it must consequently be overruled.

(3.) The second ground raises the question of the precise amount of the principal sum advanced under the mortgage. The deed itself recites that the principal sum advanced was Rs. 7,000 and the endorsement made by the Registering Officer which under Section 60 of the Registration Act is admissible in evidence in proof that the facts mentioned therein have actually occurred, shows that the mortgagor admitted before the Sub-Registrar that he had received the entire consideration-money as stated in the deed. Under these circumstances, the onus lies heavily upon the representatives of the mortgagor to show that only Rs. 5,400 was advanced. The evidence they have produced for this purpose is not trustworthy and is of an inconclusive character. The depositions of Kristodhan and Peary Mohun merely indicate that at the assembly in which the document was executed the whole of the consideration-money was not paid and that the mortgagor received from the mortgagee a sum of Rs. 5,400 only. It is common ground, however, that the whole of the money was not paid on that occasion. The case for the mortgagee is that part of the money had been advanced before the execution of the document as the mortgagor was in urgent need of money, and the mortgagee did not hesitate to trust him as they were on terms of intimacy and friendship. Some stress was laid on behalf of the appellant upon the circumstance that two of the currency notes mentioned in the mortgage-deed as part of the consideration are proved to have been withdrawn from circulation and cancelled by the Currency Office on the 24 of November 1887, that is, three days before the execution of the mortgage. It is extremely improbable, however, that serial number of currency notes would be entered in 1 a mortgage-deed unless they were really paid or at least unless the mortgagee knew that they were at the time in circulation. The circumstance upon which stress is laid is perfectly consistent with the case of the plaintiffs. If, as they alleged, part of the consideration was paid to the mortgagor before the execution of the deed, the currency notes. in question might well have been received by the mortgagor, paid by him to his creditors and cashed by the latter at the Currency Office. This theory is strongly corroborated upon a close examination of the evidence. The mortgage-deed shows upon the face of it that although it was not executed till the 27 November and registered till the 29 the stamp paper on which it was engrossed was purchased by the mortgagor on the 23 of November. This indicates that on or before that date negotiations for the mortgage must have been concluded. This is also borne out by the evidence of Rai Charan, one of the officers of the mortgagee who deposes that the mortgagor took Rs. 1,200 four or five days before the execution of the deed on which occasion he received only Rs. 5,800 This fits in exactly with the other circumstances which, in our opinion, do not throw any suspicion upon the case for the plaintiff that the whole of Rs. 7,000 mentioned in the deed was actually advanced. On the other hand, the suggestion made on the side of the defence that the mortgagor executed a deed for Rs. 7,000 took Rs. 4,500 only and said that he would take the balance as occasion might require seems to be a very improbable story. We have further the fact that although the mortgagor lived for over four years after the execution of the mortgage, he never demanded the alleged balance of Rs. 2,500 from the mortgagee, certainly, he did not make any attempt to recover the amount by suit or in the alternative, to have the mortgage deed rectified. Upon an examination of the evidence on this part of the case, we are satisfied that the Subordinate Judge was right in his conclusion that the whole of the principal sum of Rs. 7,000 was paid to the mortgagor. The second ground taken on behalf of the appellant must, therefore, be overruled.