Patna High Court
Kedarnath Lal And Anr. vs Sheonarain Ram And Ors. on 17 April, 1957
Equivalent citations: AIR1957PAT408
JUDGMENT Kanhaiya Singh, J.
1. These appeals, Nos. 1447 and 1561 to 1570, all of 1950, and Nos. 1422 and 1423, both of 1951, thirteen in number, have consolidated and heard together, as they involve common questions of law and fact, and this judgment will govern them all. It will be more convenient to deal first with the first eleven appeals.
Appeals Nos. 1447 and 1561 to 1570 of 1950.
2. These are plaintiffs' Second Appeals arising out of suits in ejectment. The plaintiffs and defendants Nos. 1 to 3 are common in all these suits Defendants Nos. 1 to 3 are the former owners of the suit lands and the other defendants are different persons who either claim to be purchasers at an-auction sale in execution of a money decree against defendants Nos. 1 to 3, or claim to have taken settlement of different portions of the suit lands from defendants Nos. 1 to 3 and from the said auction purchasers. The plaintiffs are the purchasers from, the mortgagee purchasers of the suit lands, and the main point at issue is whether they have acquired a better title than that of the defendants to entitle them to a decree for possession by evicting the defendants. The facts, no longer in controversy so far as they are necessary for the determination of these appeals, are briefly as follows. The suits relate to lands comprised in survey plots No. 3384 measuring 3 kathas 4 dhure and No. 3385 measuring 8 kathas appertaining, respectively, to khatas Nos. 175 and. 174 situate in mauza Buxar. One Lakshmi Narain was the previous owner of these lands. He died leaving him surviving three sons of his daughter, namely, Ramnarain Ram (defendant No. 1), Sheonarain Ram (defendant No. 2), and Gopal Ram who inherited these properties. In 1930 Ramnarain and Sheonarain instituted a partition suit, being Partition. Suit No. 8 of 1930, against Gopal. A preliminary decree was passed on 15th April, 1931, followed by a final decree on 10th September, 1932. There was a dispute about shares, and by this decree Gopal got one-half share and Ramnarain and Sheonarain together the remaining half in the properties inherited by them from Lakshmi Narain. At the time of partition by metes and bounds, the two plots in suit were allotted exclusively to Ramnarain and Sheonarain, who between them held half share each.
3. On 27-4-31, that is, before the final decree in the aforesaid partition suit, Ramnarain executed a, mortgage in fa'vour of the Buxar Trading Co-operative Society (hereinafter referred to as the Society) hypothecating his half share in as many as 27 plots including the two disputed plots to secure the repayment of the loan taken by him from the said Society. About two years later, on 20-4-33 the Society de-mortgaged these two plots and exempted them from security by a registered deed of release of date. Thus, the suit lands were rid of the encumbrance.
4. On 20-9-32, that is, before the said release Sheonarain instituted a partition suit, being No. 34 of 1932, against Ramnarain in which a preliminary decree was passed in May, 1933, that is to say, after the release. In this partition suit the disputed plots were divided half and half between them, Ramnarain getting the southern half of plot No. 3384 and the northern half of plot No. 3385, and Sheonarain getting the remaining half. It may be noted that no final decree has been passed as yet, but this is of little consequence.
5. Devendra Nath Lal, defendant No. 4 in Title Suit No. 201 of 1944 giving rise to Second Appeal No. 1447 of 1950, obtained settlement of 3 kathas out of plot No. 3384 from Sheonarain by virtue of a registered patta dated 10-6-33. He further held a money decree against Ramnarain and Sheonarain and, in execution of this decree being Execution case No. 365 of 1934, purchased at auction sale on 13-8-34 the remaining portion of plot No. 3384 and also No. 3385 and one more plot No. 1286 with which we are not concerned, and obtained delivery of possession on 22-2-35. He settled 3 kathas 13 dhurs out of these lands with his wife, defendant No. 5, and this lady constructed a house on it. It will be observed that if the release of the suit plots from mortgage security was legally'valid, Devendra had acquired a good title tolthese lands before the Society purchased them at the auction sale.
6. On 26-4-34, that is to say, before Devendra had purchased portions of the suit lands at the auction sale, but after the said settlement of 3 kathas out of plot No. 3384, the Society, on Ramnarain's failure to pay off the mortgage debt, made an application to the Registrar of the Co-operative Societies for award against Ramnarain and his surety. The Registrar first passed a money decree on 16-8-34. Later on, this decree was set aside and a preliminary mortgage decree was passed against Ramnarain alone on 20-9-34. The final mortgage award was passed on 28-5-35. It is noteworthy that despite the said release the mortgage award directed the sale of the entire mortgage properties including the disputed plots. The Society levied execution on 9-7-35, being Execution Case No. 803 of 1935, for recovery -of the mortgage money by sale of the mortgaged properties, that is, half of 27 plots in security including the disputed two plots and purchased them at an auction sale on 7-2-38 and obtained delivery of possession through Court on 26-7-37.
7. One Dwarika Nath Gupta had obtained a money decree against the Society. In execution of the decree in Execution Case No. 590 of 1939 two disputed plots and another Plot No. 1286 were attached and advertised for sale. The Buxar Central Co-operative Bank purchased these attached properties on 8-2-40 and obtained delivery of possession through Court on 5-7-41.
8. On 28-3-43, both the Society and the Central Co-operative Bank, Buxar, went into liquidation, and one Mr. Wahab was appointed liquidator. He sold the right, title and interest of both the Society and the Bank in the said 27 plots including the two disputed plots to Kedarnath Lal plaintiff 1, by virtue of a registered sale deed dated 20-3-43 (Ext. 1) which was taken benami in the name of Dhanesar Pandey, plaintiff 2. This is how the plaintiffs claim title to the suit lands.
9. It appears that after the release of the disputed properties from the mortgage security, Ramnarain and Sheonarain and, after his purchase at the auction Sale, Devendra, made various settlements in respect of portions of the disputed plots in favour of different persons, who figure as defendants in these suits, by registered pattas as detailed below :
PATTAS EXECUTED BY RAMNARAIN Date.
Area k. dh. dhk.
Plot.
Settlee Title Suit (all of 1944) Second Appeal (all of 1950)
1.
9-10-33 1-10-7 3384.
Girjadatt Pathak.
209. 1565.
2. 14-11-33 1- 2-0 3385.
Dipan Ram.
208. 1566.
3. 8- 2-34 2-11-0 3384.
Jagarnath.
205. 1569.
4. 20- 3-34 1-10-0 3384.
Sita Kuer.
207. 1597.
5. 21- 6-34 1- 0-0 3384.
Sita Kuer.
207. 1567.
PATTAS EXECUTED BY SHEONARAIN Date.
Area k. dh dhk.
Plot.
Settlee Title suit (all of 1944) Second Appeal (all of 1950)
1. 10- 6-33 3- 0-0 3384.
Devendra Nath.
201. 1447.
2. 20-10-35 1- 0-0 3385.
Mantorni.
199. 1561.
3. 9-12-35 3- 5-0 3385.
Gauri Sankar.
203. 1582.
4. 18- 1-38 0-10-0 3385.
Chhedi Ram.
200. 1564.
PATTAS EXECUTED BY DEVENDRA NATH
1. 26- 9-35 1-10-0 3385.
Dipan Ram and Puja Sonar.
208. 1569.
2. 22- 1.36 1- 0-0 3385.
Gangajali.
202. 1563.
3. 27- 3-38 0-16-0 3385.
Rukminia.
206. 1568.
4. 21- 2-37 0-16-0 3385.
Ramdasi.
204. 1570.
5. 18- 4-39 1-14-0 3385.
Gauri Shankar.
203. 1562.
It will be seen that two leases constitute the subject-matter of Second Appeal Nos. 1562, 1566 and 1567 each. All these leases, barring three dated 27-3-36, 21-2-37 and 18-4-39 executed by Devendra, respectively, in favour of Rukminia. Ramdasi and Gauri Shankar, were executed before the purchase at auction by the Society on 7-2-36.
10. It appears, and after the concurrent findings of the Courts below there is now no dispute, that notwithstanding the processes taken out by the Society and the Central Co-operative Bank for delivery of possession, they had not-succeeded in taking physical possession of the disputed lands, and when after their purchase the plaintiffs wanted to take possession, they were opposed by the defendants. Then the plaintiffs commenced this action on 20-10-44. They sought a declaration of their title and recovery of possession by evicting the defendants and removing the structures thereon and also mesne profits. Their case, in short, was that the release of the disputed plots from mortgage security was void and inoperative and not binding upon the Society, that the mortgage award and the auction sale were binding upon the defendants and that the defendant had not acquired any valid title to the suit lands.
11. Ramnarain, defendant 1, died issueless during the pendency of the suit. His brother, Sheonarain (defendant 2), and Sheonarain's son, Ganesh (defendants), did not contest the suits, Devendra and the settlees alone resisted these suits. Their defence was that by virtue of the release the disputed plots did not form part of the mortgage security and that the subsequent sale in execution of the mortgage award did not affect their title. Devendra further pleaded that he had acquired the suit plots prior to the mortgage sale and that the mortgage award and the sale were not binding upon him. There was also a plea of estoppel and acquiescence.
12. The findings of the trial Court are as follows. Ramnarain and Sheonarain were separate from each other and the mortgage bond executed by Ramuarain in favour of the Society was not binding upon Sheonarain, and the right, title and interest of Sheonarain in these plots were, therefore, free from encumbrance. The deed of release executed by the Society in favour of Ramnarain in respect of the disputed plots was legal, valid and operative and binding upon the Society. The Society, therefore had not acquired by the auction purchase any title to the disputed plots, and Devendra had acquired a good title by virtue of the auction purchase in execution of his money decree. The leases in favour of the defendants, except the one dated 10-6-33 (Ext. 4) executed by Sheonarain in favour of Devendra, were invalid by reason of contravention of the provisions of Section 107 of the Transfer of Property Act. The defendants were in possession of the disputed lands, though under an invalid title, and since the plaintiffs had not acquired good title by virtue of the purchase, they were not entitled to evict the defendants and obtain khas possession. The suits were accordingly dismissed with costs.
13. The learned Subordinate Judge on appeal confirmed all these findings of the learned Munsif and dismissed the appeals with costs.
14. Before dealing with the contentions raised in these appeals, I would point out that on the concurrent findings of the Courts below that Ramnarain and Sheonarain were separate, the mortgage bond executed by Ramnarain in favour of the Society and the subsequent award and the auction sale did not affect the right, title and interest of Sheonarain in the disputed plots, and consequently the plaintiffs had not acquired any valid title to the share of Sheonarain in the suit lands. It follows that the settlements made by Sheonarain could not be impeached by the plaintiffs and were legally unassailable. The settlements made by Sheonarain form the subject-matter of Second Appeals Nos. 1447, 1561, 1562 and 1564. Mr. P. R. Das appearing for the appellant frankly conceded that there was no' merit in these appeals and they must be dismissed. It was, however, pointed out that Second Appeal No. 1447 relates to more than 3 kathas out of plot No. 3384 which was settled with Devendra by Sheonarain, and, therefore, though the suit was not maintainable with respect to 3 kathas, the plaintiffs were entitled to recover the area in possession of Devendra in excess of 3 kathas. I shall advert later to the question of excess area.
15. It was contended by Mr. P.R. Das that the deed of release dated 20-4-33 (Exhibit Z (1)) executed by the Society in favour of the mortgagor Ramnarain was void, because the stipulated consideration was not paid. The question that falls for consideration is whether the operation of the release depended upon the payment of consideration. It will be necessity to consider the terms of the deed. The relevant portion of the deed of release runs as follows :
"I, the executant, am the member and sarpunch of the Trading Co-operative Society, Chawk, Buxar and Ram Narain Ram, son of Tirbeni Ram, deceased, resident of Buxar, is also one of the members. Ram Narain Ram has borrowed some money from the said society in respect of which he had executed a registered mortgage bond, dated 27-4-31 in favour of the said society. The property, entered in the said mortgage bond, has been made liable and mortgaged in lieu of the above debt. 'A petition was filed on behalf of the said Ram Narain Ram in the meeting of the members in the presence of all the members of the society for releasing some land from the said mortgage in order to repay the debt of Rs. 500 forming part of the debt due by the said Ram Narain Ram to the said co-operative society which was put up before all the members and accepted by them.' It was decided by the society that I, the executant, as sarpanch and 'representative' of the society should execute a deed of release (on behalf of the society) in respect of some land specified below, out of the properties, covered by the said mortgage bond, for which I Was empowered. I, the executant, of my own accord and free will, in a sound state of my body and mind, having understood the transaction, without coercion and pressure of any sort according to the 'resolution' No. 4 of the said society, dated 4-4-33 do solemnly declare on behalf of the Trading Co-operative Society, Chawk, Buxar, that I have relinquished and released the properties, specified below, from the debt due by the said Ram Narain Ram, to the Said society, entered in the said mortgage bond, in favour of Ram. Narain Ram, son of Tribeni Ram, deceased, resident of Buxar, pargana Bhojpur, thana Buxar, district Shahabad, by caste Jaiswar, by occupation a zamindar and mahajah. The said property shall not be made liable for any debt of the said society nor shall any incumbrance be recovered from the said property. The said property shall come in possession of Ram Narain Ram. The said Ram Narain Ram shall have right to sell the property or keep the same in whatever way he likes. The said society neither has nor shall have any objection thereto.' I have, therefore, written these few words by way of 'deed of release', so that it may be of use when required. Dated 20-4-33."
I have underlined (here in ' ') the important portions of the deed, to which attention was drawn. Taking the deed as a whole, the release was not at all conditioned by payment of consideration. It is no doubt true that one of the grounds for release, as stated by Ramnarain in his petition, was repayment of the debt of Rs. 500. The purpose and the object of the release was no doubt liquidation of the debt of the Society to the extent of Rs. 500, but it was certainly not a condition precedent to the release. In fact, the Society did not impose any such condition. The operative portions of the deed show unmistakably that the release was unqualified and unconditional. It has been specifically laid down without any reservation that the plots released, namely, plots Nos. 3384 and 3385, shall not be liable for any debt of the Society, nor shall any encumbrance be recovered from the said property. After Ramnarain was delivered possession and was given absolute right "to sell the property or keep the same in whatever ways he likes," the Society has unreservedly stipulated that it will have no objection to whatever action is taken by Ramnarain in respect of the said property. Another important thing to notice is that no date was fixed for payment of any consideration, nor was the operation of the release suspended until a certain future event occurred, namely, the payment of consideration. The intention of Ramnarain may have been to repay the loan of the Society to the tune of Rs. 500 by raising loan on the strength of these two plots. But this was certainly not a condition imposed by the Society itself. The terms of the deed of release clearly show that it was an absolute release in praesenti putting the mortgagor in possession of these plots and giving him unfettered right to dispose of the same in whatever way he liked. My concluded opinion is that the release was unilateral, unconditional and without consideration, and it was not contingent upon payment of any consideration. Every mortgagee has an undoubted right to release certain items of the mortgaged property from the mortgage claim unilaterally even without the consent o£ the mortgagor and without consideration, and law authorises him to do so. Section 63 of the Contract Act empowers a promisee to dispense with or remit performance of a promise. It lays down as follows :
"Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit."
16. Strictly speaking, a release or remission envisaged in Section 63 of the Contract Act is not agreement between two persons. It is unilateral act of the promisee discharging at his will and pleasure the obligation of another. As observed by their Lordships of the Judicial Committee in the case of Chunna Mal-Ram Nath v. Mool Chand-Ram Bhagat, I, L. R. 9 Lah 510: (A. I. R. 1928 P. C. 99) (A), under this section the performance, in whole or in part, of a contract may be effectually dispensed with by the promisee, without either an" agreement by the promisor, or consideration for the "dispensation. The contention put forward on behalf of the appellants is that this case falls under Section 02 and Section 39 of the Contract Act and the Society was entitled to sue on the original mortgage in consequence of the failure of the mortgagor to pay the consideration for the release. None of these sections has any application to the present case. Section 62 provides as follows, "If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed."
This section deals with novation of contract. It comes into operation when a new contract is substituted for the contract in existence. Though for a release under Section 63 no consideration is at an necessary, for novation under Section 62 consideration is necessary, ordinarily the consideration mutually being the discharge of the old contract. The instant case is not a case of substitution of a new contract for an old contract. It is a pure case of remission as provided in Section 63. Similarly, the provisions of Section 39 also are not attracted. This section enacts as follows:
"When a party to a contract has refused to perform, or disabled himself from performing, his promise in its"entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance".
The wordings of this section are perfectly clear. It presupposes that the contract is subsisting, and there is some thing to be performed under it. In other words, it applies to cases of what are called 'executory' contracts and not 'executed' contracts. The option given by this section to the promisee to keep the contract alive clearly implies that this section can have application only when there is still something to be performed under the contract. As pointed out above, the deed of release was unconditional and was a completed act. There is no question of payment of any consideration and there was nothing left to be performed by either party under the deed of release. The mortgagee had no option to rescind it or repudiate the release. It was binding upon him. Therefore, it cannot be reasonably contended that, the mortgagee could fall back upon the original mortgage bond in disregard of the said release. Several cases were referred to in this connection, namely, Dip Narain Singh v. Nageshar Prasad: I. L. R. 52 All. 338: : (A I R 1930 All 1) (FB),(B), Sultan Ahmad v. Maksad Hussain I. L. R. 22 Pat 306: (A I R 1944 Pat 3) (c), Jadu Nath Poddar v. Rup Lal Poddar, 4 Cal. L. J. 22 (D), Bank of.Bihar Ltd., Chapra v. Muhammad Ismail A. I. R. 1938 Pat 380, (E), Babulal Marwari v. Tulsi Singh A. I. R. 1940 Pat. 121 (F) and Manohur Koyal v. Thakur Das Naskar I.L.R. 15 Cal. 319 (G). I do not propose to deal with these cases, because in none of them the question of release of a portion of the mortgaged property by the mortgager was pointedly raised. I would refer only to two of them which may have some resemblance or some bearing on this question, namely, A. I. R. 1938 Pat. 380 (E), and 4 Cal. L. J., 22 (D). In the former case, there was no doubt a deed of release, but as found in that case, it was for a consideration, which is not the position here. In the latter case, their Lordships of the Calcutta High Court laid down that title to land cannot pass by admission, that is to say, by deed of relinquishment, when the statute requires a deed. In the present case, there is no question of creation of a fresh title. The title was already with the mortgagor, and the release did not purport to confer upon him any title. It is not a case of conveyance of land. The mortgagee suo motu relinquished a portion of his claim under the mortgage; in other words, he released a portion of the mortgaged property from the mortgage-claim, but in essence the effect of the release was the partial extinguishment of the mortgagee's right under the mortgage bond and not to confer a title upon the mortgagor which he did not possess.
17. Another contention put forward on behalf of the appellants was that the release was invalid, since it was made after the mortgage money had become due. The mortgage bond was executed on 27-4-31 (exhibit 19) to secure a repayment of Rs. 3000/- although the actual amount advanced was only Rs; 1890/-. By the resolution of the Society the mortgagor had been authorised to take loan up to the extent of Rs. 3000/-. The mortgage money was payable in instalments. The deed of release was executed on 20-4-33. By this date, the mortgagor was in default in respect of three instalments. According to the terms of the mortgage bond the entire amount fell due on the failure of the mortgagor to pay any one of the instalments on the date fixed. This contention is equally without substance. As observed above, the relinquishment of a portion of the mortgaged property from the mortgage claim is entirely at the sweet will and pleasure of the mortgagee. The mortgagor has no right to claim such a release. The whole thing is really an act of grace on the part of the mortgagee, and if the mortgagee out of his bounty frees a portion of the mortgaged property from the charge, this will have the effect and force, notwithstanding the fact that the mortgage money has become due. When in fact it is a case of liberality on his part, there is no limitation on his power as to the time when this act of grace will be exercised. The mortgagee may in his discretion release the mortgaged property or a portion of it at any time he likes, either before or after the mortgage money has become due. He can release a portion of the mortgaged property even after the suit has been instituted. I have not come across any case, and no ruling has been cited at the Bar, to show that the release cannot be made after the mortgage money had become due. It is true that if the release was an outcome of a bargain between the parties constituting a contract and was contingent upon payment of certain consideration, then failure on the part of the mortgagor to comply with the terms of the contract, namely, to pay the stipulated amount of consideration, will restore the parties to the position they occupied before the date of release, and the mortgagee can put an end to this contract and fall back upon the original contract of mortgage. But, this is entirely different from saying that no release can be effected after the default had taken place and the mortgage money had become due for payment. The right which the mortgagee may have in case of a conditional release, as stated above, is a right which is independent of the question when the release was effected, whether before or after the due date for repayment. In my opinion, when the relinquishment is unilateral and comes under Section 63 of the Contract Act, as held above, it is not rendered invalid and inoperative, because it was [effected after the payment of the mortgage money [had become due. This contention therefore, is untenable.
18. I must hold, therefore, that the deed of release is legal, valid and operative and is binding upon the mortgagees.
19. It was next contended by Mr. P. R, Das that all the leases created after 28-4-34 when the application for mortgage award (Ext. 17) by the Society was made were affected by the rule of lis pendens. It would further appear that Devendra Math purchased the right, title and interest of Ramnarain in the disputed plots at an auction sale held in execution of the money decree on 13-8-34, that is to say, after the application for mortgage award was made. The contention put forward by Mr. P. R. Das is that the doctrine of lis pendens operated to defeat the right of Devendra Nath also. Section 52 of the Transfer of Property Act which embodies this principle provides as Follows :
"During the pendency in any Court having authority in the Provinces, or established beyond the limits of the Provinces by the Central Government, of any suit or proceeding which is not collusive and in which any right to immoveable property is directed 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 be made therein, except under the authority of the Court and on such terms as it may impose,"
In short, this section prohibits alienation, or any transaction in respect of immoveable property forming the subject-matter of any suit or proceeding. In order to bring into operation the rule of lis pendens, the following requirements must be fulfilled; (1) there should be a suit or proceeding pending between the parties; (2) the suit or proceeding should be bona fide and not collusive; (3) it must relate to any right to immoveable property; (4) the involvement of any right to immoveable property is not enough, but that right should be directly and specifically in question; (5) the other party, that is to say, the party other than the one making the transfer during the pendency of the suit, must have some right under the decree in the suit; and (6) the alienation or transaction is calculated to prejudice the right of that party under any decree or order which may be made in the suit. It will be observed that one of the essential ingredients of the doctrine of lis pendens is that any right to immovable property is directly and specifically in question. Now, the question is: Can the disputed lands, namely, plots Nos. 3384 and 3385, be said to be directly and specifically in question in the proceeding initiated by the Society for recovery of the mortgage money by sale of the mortgaged property? If the release by the Society of these two plots from the mortgage claim is valid and operative in law, as found above, these plots were not the subject-matter of the suit at all, much less any right to them was directly and specifically in question. It is true that the mortgage bond which was produced before the Registrar of the Co-operative Society, who eventually passed the award, and also the application for award contained these plots. The inclusion of the plots which had not been hypothecated or, for the matter of that, the inclusion of wrong plots will not ipso facto render the whole suit or proceeding contentious in respect of wrong plots also. The mortgagee, namely, the Society, knew that these plots no longer formed part of the mortgage security, and if it deliberately or inadvertently included them in the subject-matter of the litigation, it can be reasonably said that any right to those wrong plots was also in question in the suit or proceeding. It is not a question of form, and a mere mention of certain lands in the plaint, though having regard to the scope of the suit they were outside the dispute between the parties, will not attract the operation of Section 52 of the Transfer of Property Act. It is really a question of substance of the litigation, and if the property transferred is not actually in litigation, even though the plaint prima facie included those plots, this section will not apply. If it were not so, the rule of lis pendens will be used by the party whose interest it seeks to protect as, a weapon for causing detriment to the other party. This will result in misuse of the rule and open avenu for fraud. What will be the consequence of the application of the abstract principle of this rule to the present case ? During the pendency of the certificate proceedings for mortgage award, the mortgagor, acting on the strength of the release, created lease; in respect of portions of the disputed property and further in execution of the money decree obtained by Devendra Nath, his right, title and interest were sold at auction subsequent to the application for award. Prima facie, there have been during the pendency of the litigation transfers, voluntary or involuntary, of the mortgaged property, and if the letter of the rule as embodied in section 52 were to prevail, they should not ordinarily bind the mortgagee to affect his rights under the mortgage decree. But, who is really responsible for this situation ? The hard fact is that the mortgagee Society itself discharged these two plots from the obligation of the mortgage claim with absolute power to the mortgagor to deal with them in whatever way he liked. Now, if the transfers made by virtue of his release, whether before or after the application for the mortgage award, the mortgagee by including the self-same plots in that application, either fraudulently or inadvertently, cannot, in law or equity, turn round and invoke to its aid the doctrine of us pendens to avoid all these transfers. To put such a construction on the rule is tantamount to according legal recognition to fraudulent acts of the parties. It will enable a party to defeat the object of law and turn a beneficent measure into instrument of fraud. Over-insistence on the letter of law in disregard of the spirit will work prej'udice to the parties. The legislature was fully cognizant of such a contingency and, while enacting Section 52, made it clear that it is not the form but the substance that matters. For the application of the rule of lis pendens, not only some right to immoveable property should be involved in the litigation, but also that right should be "directly and specifically in question." It is obligatory on the Court to determine in every case whether, having regard to the nature of the litigation and the facts proved or admitted by the parties, a particular piece of immoveable property can be regarded as being actually in dispute. To interpret] otherwise will be to ignore the important qualification of the rule of lis pendens, namely, the right to immoveable property is raised not incidentally or collaterally, but directly and specifically. In my considered judgment, by virtue of the release, the disputed plots were free from encumbrance and no longer formed part of the mortgage security, and consequently they were not in controversy at all in the proceedings for the mortgage award to the knowledge of both mortgager and mortgagee. The inclusion of these plots also in the application for award does not alter the position, because despite this inclusion they were not in litigation actually. Hence, the rule of lis pendens did not apply, and the transfers in question were not invalid on that ground.
20. Then, there is a further consideration. It cannot be gainsaid that the rule of lis pendens will come into operation only when the application that was made on 26-4-34 was an application for mortgage award and not an application for a simple money decree. In a simple suit for money, the doctrine of lis pendens has no application as in such a suit no right to immoveable property is involved at all. This rule affects only the subsequent transfer of immoveable property which is actually in litigation. The contention of Mr. Tarktshwar Nath on behalf of the respondents is that the Registrar of the Co-operative Societies first passed a money decree on 16-8-34, that thereafter this money decree was set aside and a preliminary mortgage award was made on 20-9-34 which was made final on 28-5-35. His submission is that up to 16-8-34 when the money award was made, the application of date 26-4-34 did not operate as lis pendens as it was an application not for a mortgage decree but for a money decree. Learned counsel for the appellants conceded that the award made on 16-8-34 was a money award. His contention, however, is that it was passed by mistake. The argument advanced by him is that what the Registrar did subsequently was not to pass an award different from the award in contemplation but to correct the mistake that was made in passing a money award. His argument does not seem to be well-founded. It appears that the Society first proceeded against both Ramnarain and his surety and the money award was also against both. Subsequently, the mortgage award was passed against Ramnarain alone. It appears that the Society was under a misconception that both the mortgagor and his surety could not be jointly proceeded against for obtaining a mortgage award and hence it subsequently expunged his name and proceeded against Ramnarain alone for a mortgage award. Its view was no doubt erroneous, and the impleading of the surety as a party would not have rendered the mortgage decree against Ramnarain invalid. Be that as it may, it does not appear to be a case of mistake in passing a money award; it was done with the full knowledge of the Society. It appears that when the Society realised that the money award might not be effective in recovering the dues, it amended the application and prayed to the Registrar for a mortgage award against Ramnarain alone. Accordingly, the Registrar passed in due course a preliminary mortgage award on 20-9-34 and a final mortgage award on 28-5-35. In my opinion, the contention of Mr. Tarkeshwar Nath is correct. The proceeding before the Registrar up to 16-8-34, when the money award was passed was a simple proceeding for recovery of money and not for a mortgage award. Now what is the consequence of the proceeding being a proceeding for money up to 16-8-34? The consequence is that all rights and interests acquired by the defendants prior to 16-8-34, whether by lease or purchase, will not be affected by lis pendens. If this be the correct position, then, in strictness, none of the transfers involved in these appeals come within the mischief of this rule. Second Appeals Nos. 1447, 1561, 1562 and 1564 which relate to the leases made by Sheonarain present no difficulty as it is now admitted that the plaintiffs had not acquired his interest. Of the leases made by Ramnarain, those which form the subject-matter of Second Appeals Nos. 1565, 1566 and 1569 and one of the two leases involved in Second- Appeal No. 1567, namely, the lease of date 20-3-34, are, in any view of the matter, outside the operation of this fule, as they were created before 26-4-34 when the application was presented to the Registrar. There is left only one lease created by Ramnarain, namely, the lease in favour of Sita Kuer dated 21-6-34. This lease, it will be seen, was created before 16-8-34, that is to say, before the original application for recovery of money was amended and was treated as an application to enforce the mortgage security. It is, therefore, not hit by this rule. The remaining Second Appeals Nos. 1563, 1566, 1568 and 1570 and also partly Second Appeal No. 1562 concern the leases made by Devendra. These leases were made on 26-9-1935, 22-1-1936, 27-3.1936, 21-2-1937 and 18-4-1939, that is to say, after the mortgage award. Since the lessees derive title from Devendra, the question whether or not these leases are affected by the doctrine of lis pendens obviously depends upon the validity otherwise of the title of Devendra, the lessor. The latter acquired the interest of both Sheonarain and Ramnarain before the money award was passed, that is, before 16-8-1934. He obtained from Sheonarain settlement of 3 kathas out of plot No. 3384 on 10-6-1933 and purchased at auction the right, title and interest of Ramnarain in the disputed plots on 13-8-1934. Therefore, these leases also do not come within the purview of this rule because on the date on which Devendra acquired the disputed plots no application for enforcement of the mortgage was pending. It follows that in none of these appeals this rule applies.
21. With respect to the leases made fey Devendra, there is a further fact. In his suit for recovery of money against Ramnarain and Sheonarain he obtained from the Court attachment of the disputed two plots before Judgment three days before the application for award was made. The attachment was effected on 23-4-1934 and the application for award was made on 26-4-1934. In due course Devendra obtained a decree and, in execution of the decree, purchased these two plots on 13-8-1934 and obtained delivery of possession through Court on 22-2-1935. The final mortgage award against Ramnarain was passed on 28-5-1935. The Co-operative Society commenced the execution proceeding on 9-7-1935, that is, after delivery of possession to Devendra. The question is what is the effect of the attachment before judgment. The disputed plots had been released by the Co-operative Society from mortgage and the release, as found above is valid and binding on the Society; The effect of the release undoubtedly was to free the disputed plots from mortgage and therefore the attachment obtained by Devendra was valid and binding on the judgment-debtor. Now, if subsequent to the attachment the Co-operative Society with or without the knowledge of the judgment-debt or proceeded against these two plots also in the proceedings for mortgage award, whether mala fide or bona fide, the interest of the attaching decree-holder who was no party to that proceeding cannot be affected and the auction sale pursuant to the attachment is not hit by the rule of lis pendens. Under Section 64, Civil P. C., all private alienations of property after attachment are void as against all claims enforceable under the attachment. If after this release voluntary transfers by the judgment-debtors could not affect the interest of Devendra, the attaching decree-holder, it is difficult to conceive how the inaction of the judgment-debtors in allowing a mortgage award to be passed and the properties in suit to be sold in execution thereof could bring about the same result and affect the title of Devendra who had already got the attached properties (i. e. the suit plots) sold before the mortgage award was passed. In my opinion, the mortgage award and the sale did not affect the interest of attaching decree-holder auction-purchaser. The rule of lis pendens does not apply to any interest acquired prior to the institution of the suit. Therefore, the auction sale in favour of Devendra is outside the operation of this rule.
22. Thus, in any view of the matter, the rule of lis pendens has no application in the present appeals.
23. It was next contended by learned counsel for the appellants that the defence was not available to the respondents by reason of the provisions of Section 47, Civil P. C. His contention is that when neither the mortgagor nor the transferees from him contested the application for award, or raised any objection to the sale ability of the properties in the execution proceedings, the mortgage award as well as the auction sale is binding on the mortgagor and his transferees and cannot be impugned collaterally either by a suit or by way of defence, as Section 47, Civil P. C., operates as a bar.
24. Before I discuss this point, it may be as well here to dispose of the contention set up for the respondents. The submission of Mr. Tarkeshwar Nath is that the mortgage award and the auction sale in execution of the same are null and void for want of jurisdiction; He- urged that prior to the amendment of the Co-operative Societies Act, 1912, by the Bihar and Orissa Co-operative Societies Act, 1935 (Act 6 of 1935), the Registrar of the Co-operative Societies was not empowered to make an award having the effect of a mortgage decree. Sub-section (5) of Section 48 of Bihar and Orissa Act, (6 of 1935), provides as follows:
"In the case of a dispute involving property which is given as collateral security, it shall be competent to the person deciding such dispute to issue a mortgage award which shall have the same force as a mortgage decree of a competent Civil Court".
This sub-section purports to invest the Registrar of the Co-operative Societies with the power to issue a mortgage award, and it is further provided that the Registrar's award in enforcement of a mortgage will have the effect of a mortgage decree. The award in question was made on 28-5-35, and the present Act came into force on 29-5-35, that is, one day after the passing of the impugned mortgage award. This award was obviously passed under the previous law, the Co-operative Societies Act, 1912 (Act 2 of 1912), The old Act did not contain any provision similar to Sub-section (5) of Section 48 of the new Act. The entire contention of Mr. Tarkeshwar Nath is founded upon Sub-section (5) of Section 48 of the new Act. He pointed out that the absence of a similar provision in the previous Act showed clearly that prior to the enforcement of Bihar and Orissa Act 6 of 1935, the Registrar of the Co-operative Societies possessed no power to pass a mortgage award: consequently, the award in question was void, being ultra vires of the Registrar. Mr. P.R. Das, on the other hand, argued that even under the previous Act the Registrar had similar powers to pass a mortgage award and that the effect of the provision embodied in Sub-section (5) of Section 48 of the new Act was not to enlarge the powers of the Registrar which were already there, but to make explicit what was implicit in the previous law. His argument is founded upon Rule 12 of the Rules framed by the State Government under Section 43 of the Cooperative Societies Act, 1912, which runs as follows:
"12. (1) In the case of a dispute touching the business of the society between members or past members of the society or persons claiming through a member or past member or between a member or past member or persons so claiming and the Committee or any officer, a reference in writing shall be made by any party to the Registrar.
(2) The Registrar shall have power on receipt of such reference, either to decide the dispute himself or to refer it for decision to an arbitrator appointed by him or to several arbitrators of whom one may be appointed by him and one by each of the parties to the dispute.
(3) The Registrar or the arbitrator or arbitrators shall have power to administer oaths, to require the attendance of all parties concerned and of witnesses t and to require the production of all books and documents relating to the matter of the dispute by the' same means and in the same manner as is provided in the case of a Civil Court under the Code of Civil Procedure, 1908.
(4) After hearing the parties to the dispute and examining such witnesses and documentary evidence as may be produced, the Registrar or arbitrator or arbitrators shall give a decision or award in writing.
(5) Such decision or award shall, on application to the Civil Court having local jurisdiction, be enforceable as a decree of such court."
The submission of Mr. P. R. Das is that this rule confers wide powers on the Registrar to decide the dispute referred to him as he thought proper and there is absolutely no limitation upon his power. In my opinion, his contention is well founded and must prevail. By Sub-rule (2) of Rule 12 the Registrar has been given power to decide the dispute himself or to refer it for decision to an arbitrator appointed in the manner laid down therein. Sub-rule (4) confers upon him power to give a decision in writing, and Sub-rule (5) lays down that the decision so given shall be enforceable as a decree of the Civil Court. The power given to the Registrar under this rule to decide the dispute and to give a decision after hearing the parties is comprehensive enough to include power to issue a mortgage award. The rule does not circumscribe his power in any manner, and no limitation has been placed as to the nature of the dispute, over which he will have jurisdiction. Generally, he has jurisdiction over all the disputes of the nature specified in Sub-rule (1). When such a dispute is referred to him; he has complete power to dispose of that dispute whether it concerns the recovery of money on a simple bond or mortgage bond. The contention of Mr. Tarkeshwar Nath cannot be accepted without importing into the rule words limiting the power of the Registrar, for which there is no warrant on the plain wording of the rule. The argument of Mr. Das is re-enforced by the fact that mortgage decrees used to be passed even under the previous law. The forms of the mortgage decree to be passed by the arbitrator had been prescribed. Mr, Tarkeshwar Nath relied upon a decision of the Calcutta High Court in Satish Chandra Nag v. Silchar Co-operative Town Bank Ltd., AIR 1942 Gal 290 (H). In the case, the rules made by the local Government under the provisions of Section 43 (1) of Act 2 of 1912, were not before their Lordships, and the judgment is not based on the construction of Rule 12 aforesaid. This ruling, therefore, has no binding force. Another case referred to by him was the ease of Mt. Moti Kuer v. S. M. Usman, AIR 1949 Fat 304 (I). In this case the question was no doubt mentioned but was, not considered. It was left open. The only other case on the point is of Laxman Madhoji v. Dhamori Co-operative Credit Society, AIR 1933 Nag 211 (J). This was relied upon by Mr. P. R. Das. In this case a mortgage award had been passed. My opinion is that even under the previous law the Registrar had full powers to pass a mortgage award, and the mortgage award in question cannot be challenged as nulity on that ground,
25. In this connection, the alternative argument advanced by Mr. P. R. Das is that in any event Section 4 of Bihar and Orissa Act 6 of 1935 saves this award. Sub-section (1) of Section 4 provides that all the societies shall be deemed to be registered under the new Act, and their by-laws shall so far as they are not inconsistent with the express provisions of this Act, continue in force until altered or rescinded. Sub-section (2) is important and provides as follows :
"All appointments, rules and orders made, notifications and notices issued, all transactions entered into and suits and other proceedings instituted under the said Acts, shall be deemed, so far as may be, to have been respectively made, issued entered into and instituted under this Act."
It has been urged that the word 'orders' in Sub-section (2) includes orders passing a mortgage award and that the effect of this sub-section is to validate all such orders and awards. I am unable to accept this argument. It is manifest that the word 'orders' in this sub-section means valid orders--orders passed in conformity with the provisions of the previous laws. It does not include orders which were void for want of jurisdiction or illegal being in violation of the provisions of the previous laws. If the Registrar possessed no powers under the previous laws to pass mortgage awards and if in spite of absence of such powers a mortgage award was passed by him, the award was obviously null and void as being without jurisdiction. This saving clause does not purport to accord legislative sanction to such void orders. If it was the intention of the legislature, it must have mentioned it in clear terms. It will be observed that while suits and other proceedings instituted under the previous Acts which may have to be continued after the enforcement of these Acts have been specifically saved, there is no reference to orders which contravened the previous laws. The object of Sub-section (2), on its plain meaning is, in my opinion, not to ratify orders which infringed the provisions of the previous laws, but to save orders which, though valid under the old laws, were inconsistent with the provisions of the amended law, that is, the provisions of Bihar and Orissa Act 6 of 1935. In my opinion, this contention has no force and must be overruled.
26. Coming to the question of bar afforded by Section 47 of the Code of Civil Procedure, I think this contention is based upon misconception of the real position of the parties. By virtue of the release the disputed properties did not form part of the mortgage security at all. Accordingly, these two plots were really not the subject-matter of dispute in the proceedings taken by the society for enforcement of the mortgage. The effect of the mortgage award and the sale in execution of it was that the mortgage decree was passed and the sale was held in respect of properties not in mortgage. Prior to the mortgage decree Devendra Nath had already purchased the disputed plots at an auction sale. The consequence of this purchase was that on the date of the mortgage award and on the date of the auction sale the properties did not belong to the mortgagor, namely, the certificate-debtor. The defendants cannot, therefore, be regarded as representatives of the certificate-debtor. They have not acquired these properties from Ramnarain qua mortgagor, nor did these properties devolve upon them through the mortgagor. They are setting up a claim which is independent of the mortgage and the mortgage sale. Now, Section 47, Civil P. C., provides that all questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit. The defendants were not parties to the suit, and, as stated above, they cannot be regarded as representatives of the certificate-debtor. Further, the defence set up by them does not relate to execution, discharge or satisfaction of the decree. They are attacking the decree itself and also the sale held in execution of that decree. Their defence, in essence, is that the entire mortgage award was without jurisdiction, because although the disputed properties did not form part of the mortgage and did not belong to the mortgagor by reason of the transfer to the defendants prior to the mortgage award, they were not impleaded as parties to the proceedings and were not afforded opportunity for being heard. Their defence, therefore, goes to the very root of the decree and the sale. They do not seek the setting aside of the sale and the decree. Their case is that they are not bound by them as they were not/parties and were not heard in the proceedings. As observed by the Privy Council in the case of Moti Lal v. Karrabuldin, I. L. R. 25 Cal. 17,9 (K). ''between setting aside a sale and holding that the plaintiff's rights are not affected by it, there is a wide difference". The contention raised on behalf of the appellants might have been proper had the defendants been regarded as representatives of the certificate-debtor. It is now settled by authorities that a judgment-debtor or his legal representatives cannot raise objection either to the validity of the decree or to its executability either on the ground that the judgment-debtor could not execute the mortgage deed which formed the basis of the decree or on the ground that the interest of the judgment-debtor in the properties did not subsist at the time of the sale. All these questions must be agitated under Section 47 or under Order XX rule 90 or rule 91 of the Code of Civil Procedure. This case is entirely different. Here, the defendants assert that the decree, the auction sale and delivery of possession are not binding on them because (i) they were not parties to those proceedings and (ii) they are not legal representatives of the mortgagor judgment-debtor. Consequently, this case did not fall within the scope of Section 47. On behalf of the appellants reliance was placed on the cases of Central1 Co-operative Bank Ltd., Barh v. Dasrath Pandey, A. I. R. 1940 Pat. 406 (L) and Bepin Krishna Ghose v. Byomkesh Deb, I. L. R. 51 Cal. 1033': (A. I. R. 1925 Cal. 395 (2) (M). If these cases are considered in the light of what has been stated above, they are distinguishable. Not a single case has been cited which is on all fours with the present case. The Privy Council case referred to above rather supports the view I have expressed above. I hold that Section 47 does not operate as a bar to the present Case.
27. It was next contended that the mortgage decree could not be challenged collaterally. This contention is equally fallacious. The properties of a third person cannot be taken away without impleading him as a party and giving him an opportunity to be heard, and if a person in execution of a decree acquires the properties not belonging to the judgment-debtor but to a third person, it is not at all imperative for the latter to seek the setting aside, of the decree so long as he is not disturbed in his possession, and it is open to him to raise a defence In a suit for possession that the decree was not binding upon him and did not affect his properties as it was without jurisdiction. In my opinion this contention has no force.
28. Another argument put forward by learned counsel for the appellants was that the defendants were mere trespassers because the deed of leases had not been executed in accordance with the provisions of Section 107 of the Transfer of Property Act. The leases are no doubt invalid as the registered instruments have not been signed by both the lessor, and the lessee, and it is not shown that they come within the exception provided in Section 107 of the Transfer of Property Act in respect of agricultural leases. Nevertheless, they are in possession and they are entitled in law to maintain this possession against the whole world except the rightful owner of the properties. As held above, the plaintiffs-appellants had no title to the disputed lands, and therefore they are not entitled to possession, invalidity of the leases notwithstanding.
29. Then, there remains the question of the alleged possession of the defendants of land in excess o£ the areas settled with them. No such specific question was raised either in the trial Court or in the appellate Court. It is purely a question of fact and cannot be allowed in a Second Appeal. Apart from that, there is no positive evidence to establish the extent and the location of the lands in possession of the defendants in excess of the areas settled with them. It is said that the commissioner found that the defendants were in possession of some excess area. No map has been placed before us, assuming that they are in possession of some excess area, there is nothing to show that that area formed part of the disputed lands or the lands adjoining them. It might be that the defendants are in possession of some lands which adjoin the disputed plots. Unless the the entire area is measured and a map is prepared showing the areas settled with them, the areas in their possession and the excess area, it is very difficult to give a finding on" the question raised here. It will be seen that apart from the technical difficulty there is no evidence to substantiate the case sought to be made on behalf o£ the appellants, I would, therefore, overrule this contention.
30. It follows that in all these appeals, there is no merit and they must be dismissed.
SECOND APPEALS Nos. 1422 and 1423 of 1951.
31. Two suits were instituted -- one by Kedarnath Lal, one of the plaintiffs in the present suits, and the other by Udho Lall, for recovery of rent for 1335 to 1357 fasli in respect of the same land comprised in Survey plot No. 3385 against the same person, namely, Ram Chhabi Lall, which were numbered as Rent suits 312 of 1950 and 119 of 1950 respectively. In these suits there was a competition between Kedarnath Lal and Udho Lall as to who was the landlord of the rent claimed land, the former basing his claim on the strength of the purchase from the Society and the latter on the strength of usufructuary mortgage by Sheonarain Ram. Kedarnath Lal impleaded Udho Lall as defendant second parly in his rent suit and vice versa. Both the suits were heard together by the the learned Munsif. He held that Kedarnath Lal was the landlord of the disputed land and not Udho Lall. He accordingly decreed Rent suit No. 312 of 1950 and dismissed Rent suit No. 119 of 1950. The learned Subordinate Judge, on appeal, reversed the finding of the learned Munsif and held that Udho Lall was the landlord and was entitled to recover rent in respect of the suit land from the tenant, Ram Chhabi Lall, and further that Kedarnath Lal had no right to realise the same. On these findings, he allowed both the appeals and set aside the judgment and decrees of the learned Munsif and dismissed Rent suit No. 312 of 1950 brought by Kedernath Lal and decreed Rent suit No. 119 of 1950 instituted by Udho Lall. Kedarnath Lal has come up in Second Appeal against the judgments and decrees of the learned Subordinate Judge in the aforesaid appeals.
32. I have held above that Kedernath Lal had no title to the disputed lands. Further admittedly, he has no title to the lands which belonged to Sheonarain Ram. It is common ground that the rent claimed lands in both the rent suits belonged to Sheonarain Ram. The latter had given them in usufructuary mortgage to Udho Lall. Hence, on his own showing, Kedarnath Lal is not entitled to recover rent from Chhabi Lall. It follows that these two appeals also are equally meritless and must be dismissed.
33. In the result, it is ordered that all the thirteen appeals be dismissed with costs.
Rai, J.
34. I agree.