Karnataka High Court
Kalaiah @ Kalegowda vs Lingamma on 20 September, 1990
Equivalent citations: ILR1991KAR1213, 1990(3)KARLJ571
Author: B.P. Singh
Bench: B.P. Singh
JUDGMENT B.P. Singh, J.
1. This second appeal has been preferred by the plaintiffs, whose suit for redemption of mortgage has been dismissed by the Munsiff, Malavalli, in O.S.147/1974. The learned Principal Civil Judge, Mandya, has affirmed the dismissal of the suit by dismissing the Regular Appeal No. 178/1976 preferred by the appellants.
2. The facts of the case are not in dispute:-
On 20th July 1953 the defendants-3 and 4 executed a registered mortgage deed in favour of defendant No. 1 for a sum of Rs. 1,000/-. Defendant No. 1 was put in possession of the suit lands. It was said that defendants-3 and 4 had executed the mortgage deed for raising funds for performing the marriage of defendant No. 2 and consequently, defendant No. 2 was also bound by the mortgage. The period of mortgage was five years and therefore the amount became payable on the 20th of July 1958. Subsequently on 4-4-1963 the plaintiffs claim to have acquired the equity of redemption because defendant No. 2 sold 30 guntas out of Sy.No.153/2 to the plaintiff for a sum of Rs. 2,000/-. Defendant No. 2 received a sum of Rs. 1,450/- in cash and left the balance of Rs. 550/- with the plaintiff to pay to defendant No. 1, the mortgagee, and to redeem the mortgage. The plaintiffs offered the full amount of the mortgage to defendant No. 1, but defendant No. 1 refused to redeem the mortgage. Consequently, a suit was filed by the plaintiffs, and defendant No. 2 against defendants 1, 3 and 4 for the redemption of the mortgage and for possession of the mortgaged property. That suit was numbered as O.S.1698/1963. Ultimately, by a Judgment and decree dated 23-8-1968 a decree for redemption was granted, but the Court did not grant a decree for possession. In substance, the suit was partly decreed. However, the decree drawn up wrongly showed that the suit had been dismissed.
3. The Judgment in O.S.1698/1963 discloses that the plaintiffs were required to pay the mortgage amount within 3 years. It is not in dispute that the plaintiffs did not pay the mortgage amount within the period specified in the decree, and it is also admitted that no final decree was ultimately passed. Thereafter, the instant suit was filed by plaintiffs on 19-4-1973 for redemption of the same mortgage, dated 20th July 1953, and for delivery of possession of the mortgaged property. The case of the plaintiffs was that the mortgage was still subsisting and that the plaintiffs had deposited a sum of Rs. 1,000/-. It was further averred that the plaintiffs had come to know, that there was no partition between defendants-2 to 4 and therefore the integrity of the mortgage was subsisting. The plaintiffs were therefore entitled to redeem the entire mortgage.
4. Defendant No. 1, who contested the suit did not deny the fact that the mortgage deed was executed on 20th July 1953 and that possession was given to him pursuant to that mortgage. He, however, claimed that the plaintiffs had no right to redeem the mortgage because the plaintiffs did not act in terms of the decree passed in O.S.1698/1963. Since no steps were taken for passing of the final decree, defendant No. 1 became the absolute owner of the mortgaged lands. He further claimed to have spent Rs. 3,000/- to Rs. 4,000/- on improvements. It was further submitted that the second suit was barred by res judicata as also barred by time.
5. The trial Court held that since the plaintiffs had not complied with the terms of the preliminary decree passed in the earlier redemption suit being O.S.1698/1963, a second suit was barred by res judicata. It further held that the suit was barred by limitation.
6. In appeal, the learned Civil Judge, Mandya, held that the suit was not barred by limitation nor was it barred by res judicata. He held that in view of the provisions of Section 47 C.P.C., such a second suit was not maintainable for redemption of the mortgage, when a preliminary decree had been passed in an earlier suit. The learned Civil Judge was of the view that an earlier decree having been passed, the plaintiffs only right was to move the Court under Section 47 of C.P.C. since all questions arising between the parties to the suit in which the decree was passed, or their representatives, relating to the execution, discharge or satisfaction of the decree could be determined by the Court executing the decree and not by a separate suit.
The reasoning of the learned Civil Judge is clearly erroneous. In the earlier suit, no final decree had been passed. It is well settled that matters arising after and out of the preliminary decree, but before the final decree, are not matters relating to the execution, discharge or satisfaction of any decree. It has also been held that an order for making absolute a decree nisi for sale, foreclosure, or redemption of the mortgage is not covered by Section 47. It is obvious that before passing of a final decree, Section 47 will not come into operation. It is a different question whether having obtained a preliminary decree in an earlier suit, the plaintiffs can still file another suit for redemption of the same mortgage. I must, therefore, hold that the appellate Court erred in law in holding that Section 47 operated as a bar to the filing of a fresh suit. It must be held that the second suit was a redemption suit and not an application to enforce the old decree and therefore Section 47 could not bar such a suit.
7. The question as to whether such a second suit is barred by principles of res judicata is a different question altogether. The learned Counsel appearing on behalf of the appellants strongly contended that having regard to the clear language of Section 60 of the Transfer of Property Act, it must be held that a second suit for redemption of mortgage is not barred unless the proviso to Section 60 operates to extinguish the right of redemption.
8. Section 60 of the Transfer of Property Act provides that at any time after the principal money has become due the mortgagor has a right on payment of mortgage money to redeem the mortgage and claim delivery of possession of the mortgaged property if the mortgagee is in possession thereof, provided that the right conferred by the Section "has not been extinguished by the act of the parties or by decree of a Court."
9. In the instant case, it is not the case of the defendants that the right to redeem the mortgage has been extinguished by the act of the parties. The case of the defendants is that by reason of passing of an earlier preliminary decree in a redemption suit for redemption of the same mortgage, a second suit to redeem the same mortgage is not maintainable and is barred by the principle of res judicata.
10. Section 60 incorporates a rule of justice, equity and good conscience and gives statutory recognition to the right of redemption, which cannot be fettered by any condition which impedes or prevents redemption. If it does so, such a condition must be declared void as a clog on redemption. The proviso however provides for the exceptions to the rule, and therefore before a mortgagee can contend that the right to redeem the mortgage has been extinguished he must establish that it has been extinguished by the act of the parties or by decree of a Court. In the instant case, we are concerned with the extinguishment of the right by a decree of a Court.
11. In RAGHUNATH SINGH v. HANSRAJ KUNWAR, 61 Indian Appeals 362 the facts were that the mortgagor instituted a redemption suit in the year 1892 which was decreed in the following terms:
"It is ordered and decreed that the plaintiff is entitled to a decree for possession by redemption of mortgage in the following terms, viz., that he should pay Rs. 4,208-6-0 by November 15, 1896, that if he will pay the said sum he will get all the costs, except the pleader's fee, incurred by him in this Court, and that in case of default his case will stand dismissed and the costs incurred by the defendants will be charged against him."
After the passing of the decree, no payment of the mortgage money was made and the mortgagee continued in possession. The mortgagor again filed a redemption suit on March 5, 1924. The redemption suit was decreed and appeals there from were also dismissed. It was held that the right of the plaintiff to sue for redemption, notwithstanding his failure to redeem under the decree of the previous suit, cannot be questioned. Three submissions were urged before the Privy Council, namely, (1) that the suit was in reality an application to enforce the old decree and that such a suit could not be maintained and the execution of the old decree was barred by limitation, (2) that the decision in the former suit operated as res judicata, (3) that no payment having been made under the old decree, the former suit stood dismissed on November 15, 1896, with the result that the mortgagor's right to redeem became extinguished under Section 60 of the Transfer of Property Act, 1882. All these submissions were rejected. Rejecting the first submission it was held that if a second suit for redemption was properly maintainable, then the present suit was a redemption suit and not an application to enforce the old decree. The second point was also rejected by their Lordships holding that the issues decided in the former suit were (i) whether the mortgagors were then entitled to redeem; and (ii) the amount then to be paid if redemption then took place. The issue in the second suit were: (i) whether the right to redeem now exists and (ii) the amount now to be paid if redemption now takes place. Their Lordships therefore found no ground for saying that the old decree operated by way of res judicata so as to prevent the Courts from trying the present suit.
On the third submission urged before them, their Lordships noticed that the preliminary decree passed in the earlier suit only provided that in case of default by the plaintiff in payment, his case will stand dismissed. For some unexplained reason the old decree departed from the Form required by the Act, which provided for passing of decree in different terms, namely, that if payment was not made, the defendant may apply to the Court for an order that the plaintiff and all persons claiming through or under him be debarred absolutely of all right to redeem; and that if he so applies that Court shall pass an order that the plaintiff and all persons claiming through or under him be absolutely debarred of all right to redeem the mortgaged property. The Section further enacted that on the passing of any order under that Section (Section 93 of the Transfer of Property Act as it then stood) the plaintiff's right to redeem and the security shall as regards the property affected by the order, both he extinguished. The Privy Council rejected the contention urged before it that the decree providing that in cases of default by the plaintiff's, "his case will stand dismissed", should be construed as meaning that the plaintiff was to be debarred of all right to redeem, and that the old decree accordingly was an order of a Court extinguishing the right to redeem within the meaning of proviso to Section 60. It was then observed:
"Their Lordships are of opinion that unless constrained by authority they ought not so to hold. The right to redeem is a right conferred upon the mortgagor by enactment, of which he can only be deprived by means arid in manner enacted for that purpose, and strictly complied with. In the present case the only basis for the claim that the right to redeem has been extinguished is Section 60, but in their Lordships' view the old decree cannot properly be construed as doing that which it does not purport to do namely, as extinguishing the right to redeem."
Their Lordships referred to authorities, which supported the view taken.
12. The decision of the Privy Council in Raghunath Singh's case was referred to with approval in SUBBA RAO v. RAJU, AIR 1950 Federal Court 1. After referring to the authorities the learned Chief Justice speaking for the Court observed:
"(12) In our opinion, the view of the Madras High Court is correct. We prefer the view taken by the Bombay High Court on this point. The right of redemption is an incident of a subsisting mortgage and it subsists so long as the mortgage itself subsists As held by the Privy Council in Raghunath Singh's case, 61 I.A. 362: [(AIR 21) 1934 PC 205] the right of redemption can be extinguished as provided in Section GO, T.P. Act, and when it is alleged to have been extinguished by a decree, the decree should run strictly in accordance with the form prescribed for the purpose. Unless the equity of redemption is so extinguished, a second suit for redemption by the mortgagor, if filed within the period of limitation, is not therefore barred. The Board expressly held that if the appellants failed to establish that the old decree extinguished the right to redeem, there was no ground for saying that the old decree operated as res judicata and the Courts were prevented from trying the second suit under Section 11 Civil P.C. They therefore held that the right to redeem was not extinguished by the procedural provisions contained in the Civil Procedure Code."
These authorities clearly support the contention of the plaintiffs-appellants that unless the order of the Court in clear words extinguishes the right of redemption, it cannot be held that the right of redemption, stands extinguished. The mere fact that a preliminary decree had been passed earlier and in terms thereof payment was not made, is no justification for the contention that another suit for redemption of the mortgage cannot be filed. The contention may be valid if a decree is passed by a Court in terms of Order 34 Rule 3(2) of C.P.C., which corresponds to Section 93 of the Transfer of Property Act referred to by the Privy Council in Raghunath Singh's case. Admittedly in the earlier preliminary decree there is no order extinguishing the right of redemption by debarring the plaintiffs from right to redeem the mortgaged property. Obviously therefore, the right to redeem the mortgage was not extinguished and the plaintiffs were therefore entitled to file another suit for redemption of the mortgage. In view of the decisions of the Privy Council as well as the Federal Court, it must be held that in the absence of a clear indication in the decree passed in an earlier suit for redemption debarring the mortgagors from all right to redeem the mortgaged property, the right to redeem the mortgage subsists and a second suit to redeem the mortgage is maintainable. It is neither barred by Section 47 C.P.C. nor is it barred by the principle of res judicata. This view also finds support in the Judgment of the Bombay High Court in YASIN DADU v. KASIM BABALAL, .
13. In view of my finding above, it must be held that the Courts below erred in law in dismissing the redemption suit filed by the plaintiffs. The question still arises as to what is the nature of the decree that should be passed in this suit. I have noticed earlier that in the earlier suit though redemption was decreed, right to claim delivery of possession was negatived. No appeal had been preferred against that part of the decree and therefore, that attained finality even though the right to redeem the mortgage subsisted. In the instant suit as well the plaintiffs have claimed possession of the mortgaged property, in my view, that cannot be granted in view of the fact that the same relief was refused in the earlier suit. Since the plaintiffs claim to be the purchasers from defendant No. 2, they can seek delivery of possession only if they bring a suit for partition and claim a separate share. I should not be understood to have expressed any concluded opinion on the question as to whether the plaintiffs have a right to claim partition or to claim separate share. If they have any such right, they may seek their remedy in accordance with law.
14. In the instant suit therefore a decree must be passed only permitting the plaintiffs to redeem the mortgage. But no decree can be passed for delivery of possession of the suit properties.
15. In the result, this appeal is allowed to the extent that the plaintiffs suit for redemption of mortgage is decreed. A preliminary decree shall be drawn up accordingly. The plaintiffs are granted three months time to deposit the mortgage amount. If they fail to do so, they and their successors in interest shall be debarred from any right to redeem the mortgage. The suit so far as it relates to delivery of possession is dismissed. There will be no order as to costs.