Gaya Prasad v. Mst. Bhagan Bibi — 1944 DIGILAW 142 (ALL)

JUDGMENT Ghulam Hasan and Madeley, JJ. - This appeal arises out of an order passed by the Special Judge, first grade in proceedings under the U.P. Encumbered Estates Act. 2. The facts leading to the appeal may be shortly stated. One Rashid un-nisa mortgaged to Shiam Manohar a 20 biswas share in village Bojhbar on the 26th July, 1919, for Rs. 600. Shiam Manohar brought a suit on the 9th August, 1928, to enforce his mortgage and obtained a preliminary decree on the 20th November, 1928, against the heirs of the original mortgagor. This decree was made final on the 16th October, 1930. The property was put to sale in execution of this decree and was purchased by Kunj Behari Lal on the 26th June, 1933, The sale was confirmed on the 28th July, 1933, and the purchaser got formal possession on the 3rd January, 1936. His mutation application was rejected by the Revenue Courts as he did not get possession. Kunj Behari Lal is dead and his widow Bhagan Bibi is the Respondent in the case. Gaya Prasad, who represented the joint Hindu family, obtained a simple money decree against the heirs of Mst. Rashid un nisa for Rs. 296 10 on the 3rd September, 1925 On the 7th July, 1928, he applied for execution of this decree and had the property attached on the 25th July, 1928. The property was put to sale and was purchased by Gaya Prasad on the 20th January, 1930. He obtained formal possession in April, 1930. 3. It may be mentioned that Gaya Prasad was not made a party in the mortgage suit at any stage of the proceedings. Gaya Prasad along with other members of the family, who are now Appellants before us, filed an application u/s 4 of the U.P. Encumbered Estates Act and showed village Bojhbar as their property. Kunj Behari Lal filed a claim u/s 11 to the effect that the Appellants had no right to this property and that he was the owner thereof. His case was that Gaya Prasad who was only an attaching creditor was not a necessary party to the mortgage suit and whatever rights he possessed were lost on the sale which took place on the 26th June, 1933, in favour of Kunj Behari Lal. 4. His case was that Gaya Prasad who was only an attaching creditor was not a necessary party to the mortgage suit and whatever rights he possessed were lost on the sale which took place on the 26th June, 1933, in favour of Kunj Behari Lal. 4. The learned Special Judge allowed the objection and declared that the property in question was not liable to be sold or mortgaged in satisfaction of the Appellant's debt. Against this decision the present appeal has been filed by the Appellants. 5. Having heard lengthy arguments for parties in the appeal, we are of opinion that there is no force in this appeal which must accordingly be dismissed. 6. The question that arises for determination before us is whether the Appellants are bound by the auction sale of the property in the mortgaged suit or whether the sale is not binding upon them as they had not been made parties to the suit. 7. Order XXXIV Rule 1 of the CPC which lays down the procedure governing suits relating to mortgages of immoveable property says "all persons having an interest either in the mortgage security or in the right of redemption shall be joined as parties to any suit relating to the mortgage." The question is whether the attaching creditor in execution of a simple money decree or the purchaser who had purchased the property in execution of such a decree can be deemed to be a person having an interest either in the mortgage security or in the right of redemption. 8. For facility of reference it is necessary to reproduce Section 91 as it stood before and after the Amendment Act XX of 1929. 91. 8. For facility of reference it is necessary to reproduce Section 91 as it stood before and after the Amendment Act XX of 1929. 91. Besides the mortgagor any of the following persons may redeem, or institute a suit for redemption of the mortgaged property:-- (a) Any person (other than the mortgagee of the interest sought to be redeemed) having any interest in, or charge upon the property; (b) any person having any interest in, or charge upon, the right to redeem the property; (c) any surely for the payment of the mortgage-debt or any part thereof; (d) the guardian of the property of a minor mortgagor on behalf of such minor; (e) the committee or other legal curator of a lunatice or idiot mortgagor on behalf of such lunatic or idiot; (f) the judgment-creditor of the mortgagor, when he has obtained execution by attachment of the mortgagor's interest in the property; (g) a creditor of the mortgagor who has in a suit for the administration of his estate, obtained a decree for sale of the mortgaged property. 91. Besides the mortgagor, any of the following persons may redeem, or institute a suit for redemption of the mortgaged property, namely:-- (a) any person (other-than the mortgagee of the interest sought to be redeemed) who has any interest in, or charge upon, the property mortgaged or in or upon the right to redeem the same; (b) any surety for the payment of the mortgage debt or any part thereof; or (c) any creditor of the mortgagor who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property. 9. It is not denied that under Clause (f) of Section 91 before the amendment the Appellants as attaching creditors were entitled to redeem the property. The question, however, is, does Clause (f) of Section 91 confer any interest in the mortgage security or in the right of redemption within the meaning of Order XXXIV Rule 1 of the Code of Civil Procedure? We think not. Clauses (a) and (b) of the old section which have been combined in Clause (a) of the amended section clearly contemplate the case of persons who have either an interest in the property itself or in the right to redeem the property. We think not. Clauses (a) and (b) of the old section which have been combined in Clause (a) of the amended section clearly contemplate the case of persons who have either an interest in the property itself or in the right to redeem the property. They also include the case of persons who have either a charge upon the property or a charge upon the right to redeem the property. Comparing Clauses (a) and (b) with Clause (f) it seems clear to us that the Legislature has made a distinction between the clauses of persons contemplated in Clauses (a) and (b) and the attaching creditor mentioned in Clause (1), If this view be right, then it follows that an attaching creditor has neither an interest in the property nor the right to redeem the property. It follows equally clearly the he has neither a charge upon the property nor the charge upon the right to redeem the property, Referring to Rule 1 of Order XXIV, it seems obvious that the words "all persons having an interest in the mortgage security" contemplate persons who exercise the rights of ownership in some form or another--using ownership in the widest sense of the term--in the mortgage security. The second class of persons contemplated in Rule 1 are persons who have an interest in the right of redemption and these must relate to Clause (b) of the old section Clauses (a) and (b) of the old section would appear to exhaust the class of persons mentioned in Rule 1 of Order XXXIV. Other classes of persons mentioned in Clauses (c) to (g), although they were entitled to redeem were not necessarily entitled to be made parties to a suit for redemption under Order XXIV Rule 1 of the Code of Civil Procedure. 10. A comparison of the language employed in Clauses (a) and (b) with the language of Clause (f) at once brings into bold relief the distinction that while in the first two clauses the word 'charge' is specifically used, it is conspicuous by its absence in Clause (f). This in itself should be sufficient to suggest that an attaching creditor was not intended by the Legislature to have any charge on the property or in the right to redeem the property. 11. This in itself should be sufficient to suggest that an attaching creditor was not intended by the Legislature to have any charge on the property or in the right to redeem the property. 11. We hold, therefore, that the attaching creditors having no interest in the mortgage security or in the right of redemption on the 9th August, 1928, which was the date of the suit, were not a necessary party to that suit. 12. It is urged on behalf of the Appellants that when the property was purchased by the attaching creditors, they acquired such an interest in the right of redemption as to render it imperative that they should be impleaded as a party before the final decree was passed. If the attaching creditors had no interest in the right of redemption at the date of the suit, the purchase made by them cannot be taken to have enlarged their right or conferred a new right upon them. The attachment which is relied upon as creating a charge in favour of the attaching creditors came to an end when the purchase was made and assuming, but not admitting, for the purposes of the argument that the attachment created any charge, that charge could not be held to subsist or continue after the purchase. 13. The judicial decisions which have been cited before us teem to us to be preponderatingly in support of the Respondent's contention that the Appellants are bound by the purchase in execution of the mortgage decree and the Appellants who were not necessary parties to the mortgage suit but possessed a right to redeem lost that right by their failure to exercise it before the decree was made absolute and the property was sold to the auction purchaser in the mortgage decrees. We propose to refer to those cases at some length. 14. In Kora Mal and Another Vs. Raghubir Lonia and Others it was held by a bench of the Allahabad High Court that an attaching creditor has no right to be made a party in a mortgage suit because his attachment creates no lien or title, but simply prevents alienation of the property attached in accordance with the provisions of Section 64. 15. In Alliance Bank of Simla Ltd. Vs. 15. In Alliance Bank of Simla Ltd. Vs. F.B. Powel, AIR 1938 All 651 Mulla J. held that an attaching decree holder has no interest in, or charge on, the immovable property attached, and hence when a mortgaged property is attached in execution of a money decree against the judgment-debtor, the attaching decree-holder in not a necessary party within the meaning of Order XXXIV Rule 1 of the CPC to a suit by the mortgagee. Reliance has been placed on behalf of the Appellants also upon this case. It appears that the attaching creditor had originally attached in execution of his simple money decree the mortgagor's interest in the mortgaged property. The mortgagee without impleading the attaching creditor obtain d a preliminary decree and a final decree. The simple money decree holder who has the attaching creditor subsequently put the mortgaged property to sale and purchased it himself. This purchase was made after the mortgage decree had been made final. The simple money decree-holder purchaser transferred his rights to a third person. The mortgagee decree holder applied for execution of the mortgagee decree and impleaded the transferee of the decree holder purchaser as his representative. The transferee objected and the objection was allowed by the lower Court. Mulla J. held on appeal that the transferee had been property impleaded as a representative of the judgment debtor whose right, title and interest had been purchased at first by the decree-holder purchaser and subsequently transferred by him to the transferee. Upon the question whether the attaching creditor should have been made a party under Order XXXIV Rule 1 to the mortgage suit the learned Judge relying on C.L. Kiernander v. Benimadhab Khettri (1931) 58 Cal. 598 and Subramania Chettiar v. Sinnammal (1930) 53 Mad. 881 and the previous decision in Kora Mal's case held that he was not a necessary party. He also held that the attaching creditor was a proper party to the execution proceedings and his tansferee must also be deemed to be the proper party to the proceedings. Accordingly he allowed the appeal and directed that the transferee should be impleaded in the execution proceedings. 16. Coming to Calcutta, the first case is Shananda Chandra Pal v. Sri Nath Ray Choudhury (1913) 17 Cal W.N. 871. Accordingly he allowed the appeal and directed that the transferee should be impleaded in the execution proceedings. 16. Coming to Calcutta, the first case is Shananda Chandra Pal v. Sri Nath Ray Choudhury (1913) 17 Cal W.N. 871. It was held therein that although an attaching creditor is entitled to redeem a mortgage u/s 91 of the Transfer of Property Act, he has no interest in the mortgaged property. It was further held that a purchaser at the sale in which the attachment culminated has no right to redeem the purchaser at the mortgage sale, or to resist his getting possesion of the property. In arriving at this conclusion the learned Judges followed the case of Frederick Peacock v. Madan Gopal (1902) 29 Cal 428 decided by the Full Bench of the Calcutta High Court and the decision of the Judicial Committee in Moti Lal v. Karrabuldin (1898) 25 Cal 179 : 24 I.A. 170 which were interpreted as showing that the attachment only prevents alienation but does not confer any title. 17. In C.L. Kiernander v. Benimadhab Khattri (1931) 58 Cal. 598 it was held following Shananda Chandra Pal's case that by the attachment, an attaching creditor does not obtain any lien or a charge on the attached property and, therefore, a fortiori he cannot hand on any charge to he purchaser at the auction, nor can he retain in himself the right to redeem by purchasing the property himself at such auction. 18. In Veyindramuthu Pillai v. Maya Nadan (1920) 43 Mad 696 it was held that where lands were attached in execution of a money decree, and afterwards a suit for sale on a mortgage of the same lands was filed, but the attaching creditor was not made a party thereto, the purchaser of the lands in execution of the money decree is not entitled to retain possession of them as against a subsequent purchaser in execution of the mortgage decree. One of the learned Judges constituting the Bench, Sheshagiri Ayyar J., repelled the argument that Section 91(f) of the Transfer of Properly Act was intended to give interest in the property to the attaching creditor. He observed that Order XXXIV Rule 1 of the CPC refers to the substantive right mentioned in Section 91 of the Transfer of Property Act and cannot and does not enlarge that right. 19. He observed that Order XXXIV Rule 1 of the CPC refers to the substantive right mentioned in Section 91 of the Transfer of Property Act and cannot and does not enlarge that right. 19. In Chamiyappa Tharagan v. Rama Ayyar (1921) 44 Mad. 232, it was held that a Court sale of the judgment debtor's interest in attached property puts an end to the attachment and incidentally to the attaching creditor's right of redemption u/s 91 of the Transfer of Property Act. It makes no difference that the Court sale was in execution of a mortgage decree and that the attaching creditor was not a party to the suit on the mortgage. 20. In Subramania Chettiar v. Sinnammal (1930) 53 Mad. 881 it was held that an attaching decree-holder has no interest in, or charge on, the immoveable property attached and as such is not a necessary party with in the meaning of Order XXXIV, Rule 1, Code of Civil Procedure, to a suit by a mortgagee. Hence if under the decree in the mortgage suit to which he is not a party, the property is sold before he redeems it, he loses the right to redeem which was given to him by Section 91(f), of the Transfer of Property Act (since repealed). Anantakrishna Ayyar J., who delivered the leading judgment with which the two other Judges agreed, observed, upon a contrast of the language of Section 91(a) and (b) of the Transfer of Property Act read along with Order XXXIV Rule 1 of the Code of Civil Procedure, that the cases contemplated by Section 91(a) and (b) exhaust the class of cases contemplated in Order XXXIV Rule 1. He also observed:-- "The Legislature evidently saw the impropriety of retaining Clause (f) of Section 91 after the Privy Council made it clear that an attachment as such does not create any title to, or interest in or charge on, the properties attached in favour of the sttaching decree-holder, and has accordingly omitted Clauses (f) and (g) from the section in the Transfer of Property Act, 1929." 21. In Annamalai Chettiar and Others Vs. In Annamalai Chettiar and Others Vs. Srinivasaraghava Aiyengar and Others, AIR 1938 Mad 293 , it was held that though an attaching creditor as such is not a necessary party to a suit on a mortgage and an order striking his name out in so far as he purports to assert a paramount claim and raises questions of priority is also correct, yet by virtue of the statutory right of redemption conferred u/s 91(f) of the Transfer of Property Act, he will be proper party to the suit and it is not open to a Court to strike out the name of a party as an unnecessary party if he is otherwise a proper party to the suit. Even apart from Section 91, an attaching creditor may in certain cases be permitted to intervene and be made a proper party to the suit for the purpose of safeguarding his rights, ie., to see that the interest of his judgment-debtor which might be sold under the mortgage decree to be passed is correctly determined. But if the attaching creditor proceeds to sell the property in execution of his decree, the Court sale releases the property altogether from attachment and with it the right of redemption which the statute confers on him and such rights as be can allege as an attaching creditor also go with it and he is no longer a necessary party. Because what the Court auction-purchaser requires is only the right, title and interest of the judgment-debtor and not the right of the attaching creditor; thereafter he can only agitate such rights as the judgment-debtor has. The fact that the attaching creditor himself becomes the purchaser is immaterial. 22. Because what the Court auction-purchaser requires is only the right, title and interest of the judgment-debtor and not the right of the attaching creditor; thereafter he can only agitate such rights as the judgment-debtor has. The fact that the attaching creditor himself becomes the purchaser is immaterial. 22. In Mahant Amardas v. Jailalsao AIR 1936 Nag 209, it was held by a Bench that where a decree-holder attaches the property of the judgment debtor which is already mortgaged, the attaching decree holder does not acquire any interest in or charge on the mortgaged property which he attaches, and as such he is not a necessary party to a suit on the mortgage by the mortgagee Although it is open to the attaching creditor to come into the mortgage suit and claim redemption before the Court sale puts an end to his attachment and to his character of attaching creditor, he is not entitled to disturb the title acquired by any person under the mortgage decree on the ground that he has not been impleaded in the mortgage suit. 23. In AIR 1942 36 (Nagpur) , it was held that an attachment creates no new title. The decision of a single Judge in AIR 1933 333 (Nagpur) , cannot be accepted in view of the later Beach decisions of the Nagpur High Court referred to above. As a matter of fact this case was referred to in the case of Mahant Amardas and the view expressed therein was not considered sound. 24. There is a well considered judgment of a Bench of the Patna High Court reported In Baiju Lal Marwari v. Thakur Prasad Marwari (1939) 18 Pat 155. The headnote sufficiently brings out the point involved in the case. In March, 1917, certain creditors of the mortgagor attached certain shares in the mortgaged property in execution of their money decree, and purchased the same in execution on the 9th September, 1918. In the meantime, on the 1st February, 1918, the mortgagees brought the mortgage suits without impleading the attaching decree- holders as Defendants. The mortgagees obtained decrees on the 18th December, 1918, and having purchased the properties in execution on the 28th May, 1923, obtained delivery of possession in December, 1923. In the meantime, on the 1st February, 1918, the mortgagees brought the mortgage suits without impleading the attaching decree- holders as Defendants. The mortgagees obtained decrees on the 18th December, 1918, and having purchased the properties in execution on the 28th May, 1923, obtained delivery of possession in December, 1923. The attaching decree holders, who had already purchased the mortgaged property, being thus dispossessed by the mortgagee-purchasers filed an application under Order XXI, Rule 100, Code of Civil Procedure, 1908. The application was dismissed on the 4th August, 1927, and on the 30th July, 1930, the attaching decree-holders filed the suit claiming, among other reliefs, possession of the mortgaged property upon redemption of the mortgages on the ground that they as attaching decree-holders were necessary parties to the mortgage suits, and not having been made parties their rights were not affected by the mortgage decrees and sale. It was held-- (i) that the attaching decree-holders were not necessary parties to the mortgage suits, and (ii) that whatever rights the Plaintiffs had as attaching decree-holders came to an end after they became purchasers in September, 1918. 25. It was also held that an attaching creditor coming under Clause (f) of Section 91 of the Transfer of Property Act, 1882, as it stood before the amending Act of 1929, does not stand in the same position as a person coming within Clause (b) of that section. A fortiori an attaching decree-holder does not fall within the class of persons contemplated by Order XXXIV, Rule 1, Code of Civil Procedure. It was also held that an attachment does not create any title in or charge upon the attached property. 26. It has been strenuously argued on behalf of the Appellants that an attachment gives to the attaching decree-holder an interest which may be called charge upon the property attached. This right, learned Counsel urges, puts him in a position analogous to that of the subsequent mortgagee and as such he becomes a necessary party to a suit under Order XXXIV Rule 1 of the Code of Civil Procedure. Great reliance has been placed on a decision of their Lordships of the Judicial Committee in Gummidelli Anantapadmanabhaswami v. Official Receiver of Secunderabad (1933) 60 I.A. 167. This decision requires a careful consideration. Great reliance has been placed on a decision of their Lordships of the Judicial Committee in Gummidelli Anantapadmanabhaswami v. Official Receiver of Secunderabad (1933) 60 I.A. 167. This decision requires a careful consideration. The District Court at Secunderabad had adjudicated certain persons insolvents under the Provincial Insolvency Act, 1907 which applied to it under certain Acts and orders. The insolvents had obtained a preliminary decree for partition from the Madras High Court declaring certain properties and business assets to belong to them exclusively and directing certain payments to be made to them by the Defendants to the suit. This preliminary decree in the Madras suit was attached in the Madras High Court by certain other persons who had obtained a decree from the Bombay High Court and had got the execution proceedings transferred to the Madras High Court. The Defendants in the Madras suit applied for the final decree to be made in the case. The High Court made a final decree for partition upon the condition that the Defendants should pay into Court the money due to the Bombay decree-holders under the Bombay decree in respect of which the attachment had been made. It was after this order that the Plaintiffs were declared insolvents by the Court at Secunderabad and an official receiver was appointed. The decree-holders of Bombay took out execution of the decree attached by them. The proceedings were opposed by the Defendants in the partition suit and the official receiver. It was held by their Lordships that the District Court at Secunderabad was a foreign Court and therefore the adjudication operated in British India only under the private international law and, having regard to Section 64 of the Code of Civil Procedure, did not affect the rights of the attaching creditor. In other words, the attachment was held to prevail over the declaration of the insolvency made by the Insolvency Court. Their Lordships in the concluding portion of their judgment observed:-- "This test renders it irrelevant to consider whether the attachment created a lien or charge or conferred title, and the cases relating to British Indian bankruptcies relied on by the learned Judges of the Appellate Court have no bearing on the present question". 27. Their Lordships then went on to express their opinion in regard to certain decisions. They continued:-- "In Kristnasawmy Mudaliar v. Official Assignee of Madras (1903) 26 Mad. 27. Their Lordships then went on to express their opinion in regard to certain decisions. They continued:-- "In Kristnasawmy Mudaliar v. Official Assignee of Madras (1903) 26 Mad. 673 the Court appears to have ignored the opinion expressed by this Board in Suraj Bunsi Koer v. Sheo Proshad Singh (1879) 6 I.A. 88 which was cited to them, and to have taken a dictum in the judgment of Board in Moti Lal v. Karrabuldin (1898) 25 Cal 179 : 24 I.A. 170 from its context and used it for a purpose which it did not have in view. In Frederick Peacock v. Madan Gopal (1902) 29 Cal 428 the case of Suraj Bunsi Koer was not referred to, and the dictum from Moti Lal's case was similarly employed. Their Lordships desire to reserve, their opinion as to the soundness of the Madras and Calcutta decisions. The decision of this Board in Raghunath Das v. Sundar Das Khetri (1974) 41 I.A. 251 was also referred to but that decision proceeded on an admission by counsel, the point was not argued and the case of Suraj Bunsi was not referred to " 28. Learned Counsel for the Appellants argues that the decisions reported in Kristnasawmy Mudaliar v. Official Assignee of Madras (1903) 26 Mad. 673 and Frederick Peacock v. Madan Gopal (1902) 29 Cal 428 which held that an attachment prevents alienation and does not create a charge or title, have been disapproved by their Lordships of the Privy Council impliedly, if not expressly, and emphasis is laid upon Suraj Bunsi Koer's case as laying down the proposition that the attachment creates a charge on the judgment debtors' undivided share in a joint family, a decision which was ignored in the Madras and Calcutta decisions as held by their Lordships of the Privy Council. Suraj Bunsi Koer's case has been fully dealt with and explained by the Patna High Court in Baiju Lal Marwari's case. That was a case of a joint Hindu family. The undivided interest of a member of a joint Hindu family governed by Mitakshara School was attached and ordered to be sold in the execution of a money decree against him. The co-parcener died before the property was actually sold. That was a case of a joint Hindu family. The undivided interest of a member of a joint Hindu family governed by Mitakshara School was attached and ordered to be sold in the execution of a money decree against him. The co-parcener died before the property was actually sold. Their Lordships of the Privy Council held that the effect of the execution sale was to transfer the judgment debtor's undivided share to the purchaser, the execution proceedings having at the time of the judgment-debtor's death gone so far as to constitute in favour of the execution creditor a valid charge thereon which could not be defeated by the judgment-debtor's death before the actual sale. Their Lordships used the term "charge" with reference to the facts of that particular case. Their Lordships were not dealing with the competing claims of an attaching creditor purchasing property in execution of a simple money decree as against an auction purchaser who had purchased the property in execution of his mortgage decree. Apart from this, their Lordships in Gumidelli Anantapadmanabha swami v. Official Receiver of Secunderabad (1933) 60 I.A. 167 did not express their opinion as to the soundness of the Madras and Calcutta decisions and expressly reserved it. Their Lordships further considered it irrelevant for the purposes of that case whether the attachment created a lien or charge or conferred title. This case, therefore, does not help the Appellants. 29. The weight of authority being against the Appellant's contention, we are constrained to hold that the view taken by the lower Court was correct. 30. This appeal, therefore, fails and is dismissed with costs.