MUHAMMAD HUSAIN KHAN Vs. CHHAGAN LAL; MAMRAJ

JUDGEMENT

(1.) This appeal arises out of a suit, brought to recover the amount alleged to be due upon foot of a mortgage, dated the 17th of May, 1904. Portion of the property comprised or alleged to have been comprised, in this mortgage, originally belonged to one Mamraj. On the 11th of July, 1893, Mamraj mortgaged a one- third share in a certain khata in favour of Chajju Khan. On the 29th of November, 1893, he made a mortgage in favour of the plaintiffs. Exactly what property was comprised in this second mortgage is not very clear. On the 21st of August, 1894, he made a third mortgage in favour of Amolak. We are again uncertain what was the exact property that was mortgaged in this last mentioned mortgage or whether it was the same as was mortgaged in one or other or both of the mortgages of 1893. The plaintiffs instituted a suit on foot of their mortgage of the 29th of November, 1893, and obtained a decree. They made Chajju Khan a party, and the decree directed that the plaintiffs should redeem Chajju s mortgage and that then they would be entitled to sell the property for the total amount due on foot of the two mortgages. The decree was made absolute, and certain payments were made on foot thereof. The property was never actually sold on foot of this decree. On the 17th of May, 1904, a fresh mortgage was made in favour of the plaintiffs. This is the mortgage upon which the present suit is based. The consideration for this mortgage was the amount that remained due on foot of the decree, namely, Rs. 156 (the decree of course included costs). A further sum of Rs. 94 also is alleged to have been advanced in cash. The property mortgaged was one-sixth of khewat No. 28 and a considerable amount, of other property. It is not clear whether the one-sixth mortgaged in this mortgage was identical with the one-third mortgaged by the first mortgage or whether it was identical with the property mortgaged in the second mortgage. In the meantime Amolak had brought a suit on foot of his mortgage of the 21st of August, 1894. He omitted to make the plaintiffs a party to his suit, perhaps not unnaturally because prima facie these two prior mortgages had been discharged. There had been a decree in the year 1898 to realize the amount due on both mortgages and the decree had been entered as satisfied. Amolak got a decree and purchased the whole or part of the property in his mortgage. The plaintiffs have now instituted the present suit. They claim as against the minor son of Amolak, that they are entitled to priority in respect of the two mortgages of 1893. In other words they seek to get a second decree for the sale of the same property for which a decree for sale was previously obtained. The court below has decided in favour of the plaintiffs. Reliance is placed on the decision in Kanhaya Lal v. Chhida Singh (1910) 7 A.L.J.,984, and the decision in Rahim-un-nissa v. Badri Das (1911) I.L.R., 33 All., 368, which followed the first mentioned decision. I must confess that I have very grave doubts as to the soundness of the decision in Kanhaya Lal v. Chhida Singh (1910) 7 A.L.J.,984 and its application to the present case. If the plaintiffs had sued on the basis of either of the mortgages of 1893, they would clearly have been defeated on the ground of res judicata. A suit was brought upon foot of one of these mortgages, and a decree was made to sell the property for the amount due on both, the decree-holder having redeemed the earlier. That decree has been certified as satisfied, and yet in truth the plaintiffs are suing a second time in respect of these two mortgages. They are not merely holding up the previous mortgages as a "shield," They come into court as plaintiffs asking that their mortgage of 1904 should be treated as if it was a mortgage of 1893. It seems to me that when a suit) is brought on foot of the mortgage and a decree is obtained, the mortgage- debt merges in the decree and the mortgage is satisfied. In the present case the court below has actually allowed the plaintiffs (that is the very persons who obtained the decree on foot of the mortgages of 1893), interest at the contractual rate stipulated for in these mortgages, that is to say, interest at 15% per annum compound interest; a rate of interest which under no circumstances could have been payable under the decree. Furthermore, payments had been made and there was only a small balance due on the decree, the amount of which, as Ihave already said, included costs. Had interest at 15% compound interest not been allowed to the plaintiffs, the probabilities are that the mortgaged property other than the share purchased by Amolak, would have been amply sufficient to satisfy any balance that was due on the decree. No doubt it has been held that where property is purchased at auction sale in execution of a decree upon a prior mortgage and the puisne incumbrancer has not been made a party to the suit, the purchaser is allowed to hold up the prior mortgage as a "shield" against the puisne incumbrancer, whose only right was to redeem the prior mortgage; but in such a case the purchaser at the auction sale acquires all the rights of the original mortgagee and all the rights that were left belonging to the mortgagor. All that he did not acquire was the right of the puisne incumbrancer to redeem, The purchaser in such a case is a defendant defending his possession, not a plaintiff suing on a mortgage. In the present case no one is attacking the plaintiffs. On the contrary, they are the attacking parties. It is not even certain that they have exhausted the other property comprised in the mortgage of 1904 before seeking to take that purchased by Amolak. I, of course, feel that if the facts of this case turn out to be identical with the facts in Kanhaya Lal v. Chhida Singh (1910) 7 A.L.J., 984, this Court ought either to follow that decision or refer the case to a larger Bench. Before making further orders in the appeal, I think certain issues ought to be referred: (1) What was the property mortgaged in each of the mortgages of the 11th of July, 1893; 29th of November, 1893; 31st of August, 1894, and the 17th of May, 1904? (2) Was the property situate in Khewat No. 28 now number (No. 27 old number), mortgaged in all or any, and if so, which of the above mentioned mortgages; and was it the same share that was mortgaged in each of these mortgages? (3) What was the original share of Mamraj in old No. 27, and what was his or his successors share in this khata after partition? (4) What is the proportionate value of the property mortgaged in each of the four mortgages? The values may be taken as of the present time. Rafiq, J.

(2.) I express no opinion for the present as to the question of law raised in the case. I, however, agree to the remitting of the issues to the lower appellate court for trial, upon the return of which I think the question of law can be more satisfactorily decided.

(3.) After return of the findings by the lower appellate court, the case was ultimately referred to a Bench of three Judges, consisting of Richards, C.J., Rafiq, J., and Lindsay, J.