Bharat Ramanuj Das Mahanta v. Srinath, Chandra Sahoo
1921-04-14
body1921
DigiLaw.ai
JUDGMENT Mookerjee, J. - This is an appeal by the plaintiff in a suit to enforce a mortgage Security, executed in his favour on the 14th September, 1906, by the first defendant, Raja Balabhadra Singh Deb, in respect of what is known as the Raipur zamindari. Besides the mortgagor, 85 other persons were made parties to the suit in the Court below, on the allegation that they were subsequent encumbrancers. They filed twelve separate written statements and raised numerous questions which were embodied in fourteen issues. We are now concerned with only one set of defendants, namely, 8 to 19 who have been described in these proceedings as the Rathis and the Dutts. They set up a mortgage for Rs. 75,000 executed by the first defendant in their favour on the 28th January, 1908. They contended that the security held by them though subsequent in point of time, had priority, over the mortgage in suit, by the application of the doctrines of subrogation and lis pendens. The Subordinate Judge held that these defendants were entitled to the benefit of the rule of lis pendens but that the principle of subrogation was of no avail. In this view, the Subordinate Judge has granted the plaintiff a mortgage decree, subject to the mortgage in favour of the Rathi and the Dutt defendants to the extent of Rs. 71,000 only. On the present appeal, the plaintiff has contended that the rule of lis pendens is of no assistance to the defendants, who have not only controverted this argument but have also assailed the opinion expressed by the Subordinate Judge as to the inapplicability of the principle of subrogation. To elucidate the question in controversy, it is necessary to explain the circumstances which led up to the mortgage set up by the Rathi and the Dutt defendants. 2. The raipur zamindari, which is the subject-matter of both the mortgages, originally belonged to one Haribar Singh whose name appears in the following 'genealogical table; it is alleged to have been an impartible Raj governed by the rule of primogeniture according to the custom of the country and the usage of the family: Harihar Singh, died 1849 Indra Singh died 1855. Lal Singh Mohar Singh. First wife, Balabhadra Singh. Ujjalkumari died 1867. Second wife, Nilkumari, died 1905. Rasik. Radhasyam.
Lal Singh Mohar Singh. First wife, Balabhadra Singh. Ujjalkumari died 1867. Second wife, Nilkumari, died 1905. Rasik. Radhasyam. Harihar Singh died in 1849, leaving three sons, Indra Singh, Lall Singh and Mohar Singh, Indra Singh, as the eldest, succeeded to the Raj, while his brothers received maintenance. Indra Singh died in 1855, leaving him surviving his two widows and two brothers. The first widow Ujjalkumari died in 1867 and the second widow in 1905 after the death of both Lal Singh and Mohar Singh. On the 12th January, 1906, shortly after the death of Nilkumari, Balabhadra Singh instituted a suit (Suit No. 10 of 1906) for declaration of his title to the Raipur zamindary and for recovery of possession thereof from various persons including the Rathis and the Dutts, who, be alleged, were wrongfully in occupation under titles created by Nilkumari. The Rathis and the Dutts resisted the claims on the allegation that they had acquired an indefeasible title, first by purchase at a sale held on the 20th January, 1891, in execution of a decree on a mortgage granted on the 22nd April, 1885, to one Tarachand Pal by Nilkumari and Mohar Singh, and then again by a purchase on the 20th January, 1892, in execution of a prior mortgage taken by one Kshetranath Mahapatra from the same mortgagors. The order sheet in that suit which has been received in evidence in this litigation, makes it abundantly clear that the suit was contentious and was actively prosecuted by both sides during many months. When the issues had been framed, the suit was, after the usual adjournments, set down for trial on the 13th January, 1908 on that date on the application of both parties, time was allowed to them till the 17th January, to compromise. On the date so fixed, it was recorded that the case had not been compromised and the trial commenced. The hearing proceeded from day to day till the 23rd January, when the case was adjourned in view of a "talk of compromise." Ultimately on the 28th January, 1908, a solenama (petition of compromise) was filed on behalf of the plaintiff Balabhadra Singh and the Rathi and the Dutt defendants, as also an added defendant Brajalal Dutt. The Court accepted the petition of compromise, but, could not forthwith make a decree on the basis thereof, as there were other defendants who had not compromised.
The Court accepted the petition of compromise, but, could not forthwith make a decree on the basis thereof, as there were other defendants who had not compromised. The case was accordingly directed to proceed against the remaining defendants. On the 30th January, a solenama was filed on behalf of the plaintiff and another defendant and was accepted. The trial proceeded as against the other defendants who utilized, as appears from the order of the 14th February, 1908, the documents previously filed by the Rathi and the Dutt defendants. The proceedings were much prolonged and the hearing did not conclude till the 6th March, 1908, when judgment was reserved. On the 31st March, 1908 judgment was delivered and the suit was decreed, "partly in terms of solenama and partly on contest." The decree thus made gave effect to the compromise embodied in the petition presented on behalf of the plaintiff and the Rathi and the Dutt defendants on the 28th January, 1908. The decree recites the terms of the compromise which now require examination. 3. The purport of the compromise was that the Rathi and the Dutt defendants relinquished in favour of the plaintiff whatever interest they had acquired in the Raipur zamindary, for a consideration of Rs. 71,000 which was secured by a mortgage on the zamindary, as the plaintiff was unable to pay the amount in cash. The petition of compromise recites that this mortgage bond had been executed on the same date to secure a sum of Rs 75,000, made up of the aforesaid sum of Rs. 71,000 and an additional cash payment of Rs. 4,000. There is no room for controversy that the compromise and the mortgage constituted one entire and indivisible transaction and that when the decree of the Court, made on the 31st March, 1908, gave effect to the compromise it validated the whole contract between the parties inclusive of the mortgage. To take any other view would be to sacrifice substance to form and to disintegrate vital elements of the transaction which could not, in the contemplation of the parties, have ever been regarded as other than inseparable in character.
To take any other view would be to sacrifice substance to form and to disintegrate vital elements of the transaction which could not, in the contemplation of the parties, have ever been regarded as other than inseparable in character. The question thus emerges for consideration, whether the mortgage in suit, executed on the 14th September, 1906, after the institution on the 12th January, 1906, of Suit No. 10 of 1906, for determination of the title to the hypothecated property, is affected, by virtue of the rule of lis pendens, by the consent decree in the title suit dated the 31st March, 1908, which incorporated and gave effect to the mortgage of the 28th January, 1908. The Subordinate Judge has answered this question against the plaintiff and we have now to consider whether his conclusion is well founded on principle. 4. The rule of lis pendens is enunciated in section 52 of the Transfer of Property Act in the following terms: During the active prosecution, in any Court having authority in British India, or established beyond the limits of British India by the Governor-General-in-Council, of a contentious suit or proceeding in which any right to immovable property is directly and specifically in question the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding, so as to affect the rights of any other party thereto under any decree or order which may he made therein, except under the authority of the Court and on such terms as it may impose. 5. The decision of the Judicial Committee in Faiyaz Husain v. Prag Narayan (1907) 29 All. 339 = 34 I.A. 102= 4 A.L.J. 344 = 9 Bom. L.R. 656 = 11 C.W.N. 561 = 17 M.L.J. 263 (P.C) shows that in order to determine whether a suit is contentious within the meaning of this section, we have to consider whether it is contentious in its origin and nature. The expression "contentious suit" must then be held to be used ha contradistinction to a collusive suit in which there is no contest, a suit of the nature described by Lord Brougham in Bandon v. Beecher (1835) 3 Cl. and F. 479 = 9 Bligh 532. A sentence is a judicial determination of a cause agitated between real parties, upon which a real interest has been settled.
and F. 479 = 9 Bligh 532. A sentence is a judicial determination of a cause agitated between real parties, upon which a real interest has been settled. In order to make a sentence, there must be a real interest, a real argument, a real prosecution, a real defence, a real decision. Of all these qualities, not one takes place in the case of a fraudulent and collusive suit; there is no Judge, but a person invested with the ensigns of a Judicial Office is misemployed in listening to a fictitious cause proposed to him, there is no party litigating, there is no party defendant no real interest brought into question 6. If a suit is not collusive, it cannot be maintained that, though originally contentious it ceases to be contentious, because it is compromised by the act of the parties. This view is supported by the decision of a Full Bench of the Madras High Court in Annamali v. Malayandi (1906) 29 Mad. 426 = 16 M.L.J. 372 (F.B.), where it was ruled that the doctrine of lis pendens as embodied in section 52 of the Transfer of Property Act applies to transfers effected during the pendency of a contentious suit or proceeding, even when such suit or proceeding is subsequently compromised, and a decree is passed in pursuance of such compromise not tainted by fraud or collusion. This view was followed in the case of Matilal v. Preonath (1908) 13 C.W.N. 226 = 3 I.C. 696 = 9 C.L.J. 96 where Doss, J., quoted with approval the following observation of Chancellor Searls of the Supreme Court of California in Partridge v. Shephard (1886) 71 Cal. 470 = 12 Pacific 480. We know "of no good reason why a judgment entered by consent of parties, in a cause in which the Court has jurisdiction of the subject matter and of the parties, is less efficacious than if entered after a trial of the suit. It may be impeached like any other judicial record by evidence of a want of jurisdiction in the Court rendering it, by showing collusion between the parties or by proof of fraud on the part of the party offering the record".
It may be impeached like any other judicial record by evidence of a want of jurisdiction in the Court rendering it, by showing collusion between the parties or by proof of fraud on the part of the party offering the record". The same position was affirmed in the case of Tinoodhan v. Troilakhya (1912) 17 C.W.N. 413 = 18 I.C. 177, and had been recognised in the earlier decisions in Naduroonissa v. Aghur Ali (1867) 7 W.R. 103, Raikissen v. Radha Madhub (1874) 21 W.R. 349, and Manohar v. Harihar (1879) 3 Shome 23. A similar opinion was expressed by Jenkins, C.J., in Krishnappa v. Shivappa (1907) 31 Bom. 393 = 9 Bom. L.R 530. As was pointed out by Subrahmania Ayyar, J., in Annamali v. Malayandi (1906) 29 Mad. 426 = 16 M.L.J. 372 (F.B.), the generality of the words "under any decree or order made therein" in section 52 of the Transfer of Property Act, upon their face, lend no support to the argument that a consent decree does not fall within its scope. It is well known that a judgment by consent or default is as effective as an estoppel between the parties as a judgment whereby the Court exercises its mind on a contested case, see In re South American and Mexican Co. (1895) 1 Ch. 37 = 12 R. 1 = 71 L.T. 59, The Bell-cairn (1885) 10 P.D. 161 = 34 W.R. 55 = 5 L.T. 686, Nicholas v. Asphar (1896) 24 Cal. 216, Rajlakshmi v. Katyayani (1910) 38 Cal. 639 = 12 I.C. 464, and this is so, even though, as pointed out in Wentuorth v. Bullen (1829) 9 B. & C. 840 = 9 L.J. K.B. 33 = 33 R.R. 353, and in Huddersfield Banking Co, v. Lister (1895) 3 Ch. 273 = 64 L.J. Ch. 523 = 72 L.T. 703 the consent order is in essence only the order of the Court carrying out an agreement between the parties. The essence of the matter is that a decree is none-the-lees a decree as defined by the Code of Civil Procedure, because it is based on a compromise, and the legal effects of the decree contemplated by Order 23, Rule 3, Civil Procedure Code, do not differ from the legal effects of a decree where the suit has been fought to the end.
When the Court makes a decree by consent, it performs not a ministerial but a judicial function, the Court must be satisfied that the agreement or compromise is lawful, and although the Court must record the entire agreement or compromise, it can pass a decree in accordance therewith only in so far as it relates to the suit. Consequently, the fact that a decree is given in accordance with terms which have been come to, between the parties does not prevent the decree from being the formal expression by the Court of an adjudication on a right claimed or a defence set up, conclusively determining the rights of the parties with regard to all or any of the matters in controversy in the suit, within the meaning of the definition contained in Section 2 (2), Civil Procedure Code. Section 96 (3), on the other hand, makes it clear that a decree passed with the consent of parties is a decree within the meaning of the Code. It may also be maintained that unless a compromise is collusive, the very fact that there is a compromise shows that the suit was in its origin and nature contentious, otherwise there would be nothing to compromise. In our opinion, a consent decree falls within the scope of the rule of lis pendens enunciated in section 52 of the Transfer of Property Act. A similar view was adopted in the case of Landon v. Morris (1882) 2 L.J. Ch. 35 = 5 Sim. 247 where Shadwell, V.C. held that a decree taken pro-confesso was binding on a purchaser who had entered into a contract after the filing of the Bill, and this was subsequently approved by Lord Brougham, L.C. See also Windham v. Windham (1667) 2 Freeman 120 = 2 Eq. Cas. Abr. 280 = 22 E.R. 1103. A similar rule has been recognised and frequently applied in the Courts of the United States, not as based on peculiarities of statutory provisions but as founded on well-established principles of public policy, namely, that the plaintiff would be liable to be defeated by the defendant's alienation before the consent judgment or decree and would be driven to commence his proceedings de-novo, subject again to be defeated by the same course of proceeding.
On this ground it has been repeatedly ruled that one acquiring interest pendente lite in a proceeding which Is lis pendens is bound by the decree without regard to its form, or whether it is erroneous, and it is immaterial that the relief granted in the suit is the result of agreement or compromise, except where it is the result of fraud or collusion between the parties: Norris v. lie (1894) 152 111 190 = 43 Am. St. Rep. 233; Mcllwrath v. Howllander (1880) 73 Missouri 105 = 39 Am. Sep. 484, Partridge v. Shephard (1886) 71 Cal. 470 = 2 Pacific 480, Turner v. Babb (1875) 60 Missouri 342. 7. Reliance has finally been placed on behalf of the appellant upon the rule enunciated in the following terms by Sir Richard Couch, C.J., in Kailask v. Phulchand (1871) 8 B.L.R. 474 = 2 W.R Sup. 523, as to the liability of a purchaser pendente lite: With regard to the question of lis pendens, the doctrine appears to be this, that the alience is bound by the proceeding in the suit after the alienation and before he becomes a party. Then the question is, by what proceedings in the suit is he bound ? Is he bound by the proceedings which arise from the nature of the suit and from the case set up, and the relief prayed in the Bill, or is the to be bound by any order which the Court may be induced by the parties to make in the course of the suit ? I can find no authority which goes to the extent of saying that, because he does not think fit to become a party to the suit, he is to be bound by any order whatever that may be made. It seems to me that he ought only to be bound by proceedings which from the nature of the suit, and the relief prayed, he might expect would take place and if there had been no notice in this case, it might have been necessary for us to determine what is the precise effect of lis pendens. But this need not now be determined. Practically, there is no substantial difference between lis pendens and having notice of the suit. He would be equally bound by them, and not more by one than by the other. 8.
But this need not now be determined. Practically, there is no substantial difference between lis pendens and having notice of the suit. He would be equally bound by them, and not more by one than by the other. 8. These observations were quoted with approval by Pontifex, J., in Kasumaunnissa v. Nilratan (1881) 8 Cal.79 = 9 C.L.R. 173 = 10 C.L.R. 113 and by Banerjee, J., in Kisori Mohan v. Mahamed Muzaffar (1800) 18 Cal. 188 which, it may be noted, was decided on another ground on appeal to the Judicial Committee Mahamed Muzaffar v. Kisori (1895) 22 Cal. 909 = 22 I.A. 129 = 6 Sar. 583 (P.C.) with regard to the rule enunciated by Couch, C. J., in Kailash v. Phutchand (1871) 8 B.L.R. 474 = 2 W.R Sup. 523, two points must not be overlooked. In the first place, the case was decided long before the transfer of Property Act was placed on the Statute Book, and would be opposed to well recognised principle of construction of statutes to attempt to engraft on section 52 qualifications or restrictions not justified by its language but discoverable from preexisting judicial pronouncements. Such an attempt would be open to emphatic condemnation: see the judgment of Lord Herschell in Bank of England v. Vagliano Bros. (1891) App. Cas. 107 = 64 L.T. 353 and the judgment of the Full Bench of this Court in Uttamchandra v. Raj Krishna (1919) 47 Cal. 377 = 31 C.L.J. 98 = 55 I.C. 157 = 24 C.W.N. 229. In the second place, as has been frequently pointed out, for example in Annamali v. Malayandi (1906) 29 Mad. 426 = 16 M.L.J. 372 (F.B.) and Tinoodhan v. Troslakhya (1912) 17 C.W.N. 413 = 18 I.C. 177 the rule laid down by Couch, C.J., is not in accord with the earlier decision of this Court in Nadirunnessa v. Aghur Ali (1867) 7 W.R. 103 and indeed a different rule was subsequently laid down by Couch, C.J., himself in the case of Raikissen v. Radha Madhub (1874) 21 W.R. 349, where the doctrine of lis pendens was applied to a purchase pending a suit which terminated in a consent decree. 9. But if notwithstanding the comprehensive terms of section 52 of the Transfer of Property Act, we adopt the restricted rule enunciated by Sir.
9. But if notwithstanding the comprehensive terms of section 52 of the Transfer of Property Act, we adopt the restricted rule enunciated by Sir. Richard Couch in Kailash v. Phulchand (1871) 8 B.L.R. 474 = 2 W.R Sup. 523 and embark upon an enquiry as to whether the decree made by consent was such as the plaintiff night from the nature of the suit and the relief prayed for therein, expect, would take place, the result is of no avail to him. The decree which was actually made on compromise was in essence, a decree which might, even after contest, have been made in favour of the plaintiff in that suit (now the first defendant in this litigation). He sought to recover the Raipur zamindary on the allegation that the Rathis and the Dutts were in occupation under a title inoperative against him because created by a limited owner, as Nilkumari was with or without the concurrence of a future possible claimant in the position of Mohar Singh. A suit of this description may well be regarded as a case of excessive alienation by a limited owner, and may terminate in a decree for possession in favour of the ultimate owner, subject to recoupment, partial or entire, of the advances made by the creditor. Instances of such decrees may be found in the decisions of the Judicial Committee in Samsul v. Sebakram (1874) 2 I.A. 7 = 3 Sar. 405 = 3 Suther 43 (P.C.), Deputy Commissioner of Kheri v. Khan jan Singh (1907) 29 All. 331 = 84 I.A. 72 = 10 O.C. 117 (P.C.) and Bhagabat Dayal v. Debt Dayal (1908) 35 Cal. 420 = 35 I.A. 48 = 7 C.L.J. 335 (P.C.). The substance of the matter is that the compromise decree was of the same type as the conditional decree such as may be and is often made in suits by reversioners, where the alienation by an owner is set aside on equitable terms. We are of opinion, consequently that even according to the test formulated by Bit Richard Couch, the plaintiff must be held bound by the doctrine of lis pendens. 10.
We are of opinion, consequently that even according to the test formulated by Bit Richard Couch, the plaintiff must be held bound by the doctrine of lis pendens. 10. If, then, there is no escape from the conclusion that the plaintiff is bound by the rule of lis pendens enunciated in section 52 of the Transfer of Property Act, the mortgage created in his favour by the first defendant on the 14th September 1906, after the latter had instituted the suit for establishment of title on the 12th January, 1906, must be deemed to have been affected by the consent decree made therein. That decree gave effect to the mortgage of the 28th January, 1908, which was a component part of decree, even though not made enforceable thereby. This is clear from the decisions of the Judicial Committee in Pranal Anni v. Lakshmi Anni (1899) 22 Mad. 508 = 26 I.A. (sic) 7 Sar. 516 (P.C.) and Hemantakumari v. Midnapore Zamindary Co. AIR 1919 P.C. 79 = 47 Cal. 485 = 46 I.A. 240 (P.C.). Indeed, to validate the mortgage in favour of the plaintiff, quite as much as the mortgage in favour of the Rathis and the Dutts, it was essential that the title of the mortgagor should be established, and that result was accomplished only by the consent decree of the 31st March, 1908, which affirmed the agreement of the 28th January, 1908 inclusive of the mortgage comprised therein as an integral component element As between the plaintiff and his mortgagor (the first defendant) the principle of estoppel may apply and the after-acquired title of the mortgagor may be made to enure to the mortgagee but the case is otherwise as between the first defendant and the Rathis and the Dutts mortgagees. The case of a mortgage given back by the purchaser to the vendor of an estate stands upon a footing of its own. While it is true that where money is loaned or some thing equivalent done, upon the security of a mortgage in lee with general warranty, the mortgagor cannot set up an after-acquired estate against the unsatisfied mortgagee it is equally true that where the transaction is simply a purchase, with such mortgage back to secure payment of the purchase money, the rule does not apply.
We are consequently of opinion that the Subordinate Judge has correctly held that the mortgage in suit must be postponed to the mortgage in favour of the Rathis and the Dutts. The plaintiff, it is satisfactory to find, cannot make a real grievance of this conclusion; for, as the Subordinate Judge has observed, there is overwhelming evidence that the compromise was brought about by the plaintiff himself; it was be who was the virtual plaintiff in the other suit in the cloak of Balabhadra and employed his own men and money actively to prosecute the suit. The compromise which he thus brought about included the mortgage with its express recital that the charge thereunder would have priority over all other charges. The plaintiff cannot now very well complain when it transpires that this is precisely the result of the application of the rule of lis pendens. 11. In view of our decision upon the question of lis pendens, it is unnecessary to express an opinion upon the question of the applicability of the principle of subrogation, which has not received adequate consideration, from the Subordinate Judge. We may add that if it were necessary to determine the question of subrogation, a fuller investigation of the relevant facts than what is contained in the judgment of the Lower Court would be essential. 12. The result is that the decree of the Subordinate Judge is affirmed and this appeal dismissed with costs. The cross-objections cannot be seriously maintained and are dismissed without costs. Buckland, J. 13. I agree.