Judgment :- 1. The plaint property in this sit originally belonged to one Ouseph Uthuppu. He executed three hypothecation bonds in respect of it, one in favour of Skaria on 5.8.1091, another in favour of Markose on 5..9.1091, and the third in favour of one Avira Kuruvilla in 1093. Subsequently he sold the property to Skaria in 1098, and by the sale Skaria's hypothecation bond was discharged and Skaria was also directed to discharge the second hypothecation bond, i.e., the one in favour of Markose. After taking the sale deed Skaria mortgaged the property to the plaintiff by Ext. C dated 28.11.1098. Avira Kuruvilla then filed a suit in the Muvattupuzha Munsiff's Court as O.S. 69 of 1101 and obtained a decree for recovery of the hypothecation amount due to him. In that suit the plaintiff was the fourth defendant and he was impleaded as a subsequent encumbrancer or a puisne mortgagee, and he did not appear therein and put forward any contention Ext. II is copy of the decree in O. S. 69 of 1101 of the Muvattupuzha Munsiff's Court. When the decree-holder in Ext. II suit executed his decree, plaintiff contended in execution that he was a prior encumbrancer and that the decree was also a nullity in as much as Skaria, under whom he was holding the property, had not been made a party to the suit. On this contention being repelled by the execution court, plaintiff brought the suit, which has given rise to this second appeal, praying for declaration of his title to the plaint property. He alleged that he had a prior charge over the property, that Ext. II decree was not binding on him and was a nullity in as much as Skaria had not been impleaded in O. S. No. 69 of 1101, that the decree in the said suit was vitiated by fraud and other irregularities, and that he had been prevented by fraud from setting up his contentions in that suit. The court below held that the plaintiff was bound by the decree in O. S. No. 69 of 1101 and that he could not claim any priority of title against defendants 1 and 2 who were claiming under the decree in that suit. Defendants 1 and 2 are in possession of the plaint property under the execution sale in O.S. 69 of 1101.
Defendants 1 and 2 are in possession of the plaint property under the execution sale in O.S. 69 of 1101. They contended that the plaintiff was bound by the decree in that suit and that he was barred by the decree therein from claiming priority. The courts below upheld their contentions and dismissed the suit with costs. The plaintiff has hence filed this second appeal. 2. The allegation that the decree in O. S. 69 of 1101 of the Muvattupuzha Munsiff's Court was vitiated by fraud was not repeated in this Court. But it was contended on behalf of the appellant that since Skaria, who had mortgaged the property to him, was not impleaded in O. S. 69 of 1101 the plaintiff is not barred by the decree in that suit from putting forward his case of priority. This contention overlooks the fact that the plaintiff himself was a defendant in O. S. 69 of 1101 and that he had an opportunity in that suit to put forward the contention that he had a priority over the plaintiff in O. S. 69 of 1101 and was holding the property under Skaria. In an almost similar case, Kutti Nadar v. Voyan, 29 Travancore Law Journal 683, it was observed: "In a suit by a puisne mortgagee, a prior mortgagee is not a necessary party. The latter's claim is therefore one which is paramount to and outside the controversy of the suit filed by the puisne encumbrancer. The property can be sold free of the prior encumbrancer only with the consent of the prior encumbrancer. It therefore follows that unless the puisne mortgagee has sought in his suit to impugn and displace the title of the prior mortgagee and postpone it to his own, he cannot successfully maintain the plea of constructive res judicata. The above principle was laid down by the Privy Council in Rada Kishun v. Khurshed Hoosein (47 Cal. 662). It follows as a corollary to the above rule that where the prior mortgagee's right is impeached or sought to be postponed in any way the prior mortgagee must set up his rights, as otherwise he will be barred. There may be a third kind of case where a person who is impleaded as a puisne mortgagee may be entitled to the rights of a prior mortgagee as well. The present case falls under the above category.
There may be a third kind of case where a person who is impleaded as a puisne mortgagee may be entitled to the rights of a prior mortgagee as well. The present case falls under the above category. The 4th defendant is a puisne encumbrancer and was impleaded as such. But he is a prior encumbrancer also. The question arises whether he was not under an obligation to set up his priority in the suit. I think that he was. When a person having a prior mortgage, is impleaded only as a subsequent mortgagee, his priority is impliedly negatived and it is therefore necessary for him to set up by way of defence his priority. If he fails to do so, he cannot be allowed to urge his priority later. I am fortified in the above view by the decisions in Kishen Dyal Gir V. Mahomed Amirul Hossain (26 I. C. 673) and Hankar Rai v. Kamta Proshad Sahu (A. I. R. 1916 Cal. 808). In 26 I. C. 673 it was held that a puisne mortgagee, who as also a prior mortgagee if made defendant as a puisne mortgagee, is bound to appear and set up both his prior and puisne mortgage. Where however he is only a prior mortgagee, and is sought to be kept on the record as defendant, simply because the authenticity of his mortgage is not admitted, it is not at all necessary for him to appear and defend his rights under his prior mortgage. Thus the test in all such cases is to see whether the defendant was impleaded as a puisne mortgagee and therefore a necessary party. If he was, he is bound to set up his prior mortgage as well as his subsequent mortgage. 1916 Cal. 808 followed 26 I. C. 673". Following the principle of the above decision, I hold that the plaintiff is barred by the decree in O. S. 69 of 1101 from contending that he has got a priority over defendants 1 and 2. It may be that the decree in O. S. 69 of 1101 will not bind Skaria as he was not a party to that suit. But the plaintiff was a party to that suit and is certainly bound by the decree in it.
It may be that the decree in O. S. 69 of 1101 will not bind Skaria as he was not a party to that suit. But the plaintiff was a party to that suit and is certainly bound by the decree in it. If he had any priority he should have set up the same in O. S. 69 of 1101 wherein he was impleaded only as a subsequent encumbrancer. The Indian decisions relied upon by the appellant's counsel have no application to a case of this kind. The decree of the courts below are, therefore, confirmed and this Second Appeal is dismissed with costs. Dismissed.