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Madras High Court
M. Doraiswami Aiyangar And Bros. vs P. Varadarajulu Naidu And Ors. on 7 October, 1927
Equivalent citations: AIR 1928 Mad 2
Author: V Rao


Venkatasubba Rao, J.

1. This is an application made by the plaintiff for permission to amend his plaint. The amendment proposed affects defendant 3, who opposes the application. The question I have to decide is: can the proposed amendment be allowed? I shall refer to such allegations in the plaint as are relevant to the present purpose. The suit is brought to enforce an equitable mortgage created by defendant 1, by his depositing certain title-deeds. There were dealings between the plaintiff’s firm and in the course of those dealings the latter executed promissory notes in favour of the former. About the month of December 1925, there was a sum of little over Rs. 12,000 due to the plaintiffs and it is alleged that defendant 1 then deposited with them title-deeds of properties mentioned in Schedules B, C and D to the plaint with a view to create an equitable mortgage over them. Although the deeds were deposited by defendant 1, it is alleged that he represented that he was making the deposit both on his own behalf and on behalf of defendant 3, who was described as his adoptive mother. The properties mentioned in Schedule B stood in the name of defendant 3, and the plaint alleges that defendant 1 represented at the time that he was duly authorized by defendant 3, to deposit the title-deeds of those properties. There is a further allegation in the plaint that defendant 3, is bound in respect of the last-mentioned properties for the additional reason that she allowed defendant 1 to be in possession of the title-deeds relating to them and is therefore estopped from disputing the plaintiff’s right thereto.

2. The first point to note is, that the plaintiffs seek to enforce the mortgage both against defendants 1 and 3. Although in this respect the plaint is lacking in clearness, there can be no reasonable doubt, on a reading of the whole plaint, that this is what is intended. In para. 9 it is stated that defendant 1 agreed that when called upon he and defendant 3 would execute a deed of mortgage in due form and get it registered. It is then alleged that the plaintiffs got prepared a draft deed of mortgage, but that neither did defendant 1 nor defendant 3 execute it in spite of demands. Then again the first prayer in the plaint is that a mortgage decree may be passed against both defendants 1 and 3. The suit must be, therefore, regarded as one to enforce a mortgage against both defendants 1 and 3 alike.

3. Defendant 3 has filed a written statement denying: (a) that defendant 1 is her adopted son,; (b) that she authorized the mortgage; (c) that she empowered defendant 1, to make the deposit of the title-deeds of the properties in Schedule B; or (d) that she is estopped by her conduct from questioning the plaintiff’s right to the last-mentioned properties.

4. On these pleadings issues were raised on the 19th day of July and the Judge’s summons for the amendment in question was taken out on the 19th August. The plaintiffs seek to amend the plaint by alleging that, as a matter of fact, the properties in Schedule B belong to defendant 1 by whom they were acquired benami in the name of defendant 3; in other words, the plaintiffs desire to raise the question of ownership in regard to these properties. Defendant 3’s objection is that her paramount title cannot be litigated in the plaintiff’s mortgage suit and that as the object of the amendment is to obtain a decision on this adverse right, the same ought not to be allowed.

5. The question I have to decide is, therefore, one of law; can the title of a person claiming adverse to the mortgagor and the mortgagee be adjudicated on in a mortgage suit?

6. In Bhuban Mohan v. Co-operative Hindusthan Bank Ltd. A.I.R. 1925 Cal. 973, which was a suit on a mortgage, those that were impleaded as defendants were the mortgagors as well as a lady by name Susila, the wife of one of them. She was made a defendant on the ground that she was the benamidar in respect of the premises mortgaged, the true owner being her husband. The point was raised whether she was a proper party and whether her adverse claim could be investigated in the mortgage suit. The Court held that she was not only a proper party, but in the circumstances, it was desirable that there should be an adjudication in regard to her title in the suit itself. Sanderson, C.J., expresses the opinion that the question is one of misjoinder and inconvenience and not one of jurisdiction and that at the most the joinder is an irregularity. Rankin, J., who discusses the point at some length points out that the mortgage suits with reference to multifariousness do not stand on a footing different from other classes of suits and holds that there is nothing to prevent a question of this kind being litigated in the mortgage action itself. The learned Judge traces the history of the English and Indian procedure and shows that the course objected to is not opposed to the present law on the point as contained in Order 1, Rule 3, Civil P.C.

7. The same question in a somewhat different form arose in Zahir Baza v. Madhusudan [1918] 4 Pat. L.W. 417. The property was mortgaged inter alia by the mother of defendant 2. She died before the suit and defendant 2 was impleaded as a party as being one of her heirs who inherited the property. He pleaded that he was entitled to the mortgage property by reason of a deed of gift executed in his favour by his mother long prior to the mortgage-deed. An issue was raised in regard to his title based upon the gift, and the trial Court decided the same against defendant 2 and in the appeal to the High Court it was urged at a late stage that it was improper to raise an issue as regards title in such a suit and that an ordinary mortgage decree should have been passed without determining the question of ownership. This contention was overruled. Sir Dawson-Miller, C.J., observed that to grant a decree without deciding the matter raised would be to encourage fresh litigation. Jwala-prasad, J., points out that, although the general principle is that questions relating to titles paramount should as far possible be excluded from the trial of a mortgage suit, this was not an absolute or inflexible rule to be applied without regard to circumstances. The learned Judge adds:

Where the leaving of such an issue undetermined would lead to inconvenience or hardship, it is proper that it should be tried in a mortgage suit.

8. In O. Ramlakshmanna, In re [1914] M.W.N. 623 Sadasiva Aiyar, J., holds that there is no prohibition in the Code against impleading as a defendant in a mortgage suit a party who sets up a paramount or adverse title.

9. Jageshwar Dutt v. Bhuban Mohan Mitra [1906] 33 Cal. 425, is generally treated as the leading case on the point. The main judgment is that of Mukerjee, J., who himself points out in a later case that the rule against joinder which he adopted in the earlier one is not inflexible: see Gokul Chandra Roy v. Rameshwari Choudhurani [1911] 14 C.L.J. 103.

10. The observation of the Judicial Committee in Radha Kunwar v. Reoti Singh A.I.R. 1916 P.C. 18 does not militate against the view that has been taken in the decisions I have cited. In that case a person who set up an adverse claim was made a party to a mortgage suit and in the course of the judgment there is an obiter dictum, that such joinder is irregular and tends to confusion. Generally, it is undoubtedly so; but the question remains, are there circumstances in which such a joinder is proper or even desirable?

11. I may also refer to Ramanna v. Venkatanarayana A.I.R. 1927 Mad. 301, where Devadoss, J., while dealing with a question of res judicata notices some of the rulings on the point.

12. What is the result of the authorities? To a mortgage suit a person claiming an adverse or paramount title is not ordinarily a necessary or proper party; this rule is not absolute or inflexible, for, in certain circumstances, it may not only be proper but even desirable to implead him as a party. Is Order 34, Rule 1, Civil P.C., inconsistent with this conclusion? It says:

Subject to the provisions of this Code 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.

13. As Rankin, J., points out in Bhuban Mohan v. Co-operative Hindusthan Bank Ltd. A.I.R. 1925 Cal. 973 to which I have already referred the object of this rule is to define the scope of a mortgage suit as such, that is of a mortgage suit pure and simple; but this rule is not directed to the question whether any cause of action may or may not be joined to a claim on a mortgage; and, if it may be joined, in what circumstances.

14. Let me now examine the facts of this case to ascertain whether it will be convenient or desirable to raise an issue regarding the title of defendant 3. Both the defendants 1 and 3 distinctly allege that the property belongs not to the former but to the latter. The form in which the question generally arises is, is the party setting up an adverse or paramount title a necessary or proper party? It is important to note that in the present case the question does not arise ‘in that form. Defendant 3 has been made a party on grounds which are independent of adverse or paramount title. The form in which this question, therefore, arises is, whether he being already on the record as a necessary party, the issue relating to title should be permitted to be raised or not. There is an issue raised in the case, namely, did defendant 3 authorize the mortgage? There is a further issue to the effect: was her conduct such as to have misled the plaintiff into believing that defendant 1 was the owner? In deciding these questions as questions of fact, the Court, while weighing the evidence, will, in all probability, be obliged to treat the fact of defendant 3 being or not being the owner, as an important element, rendering the case of either party either probable or improbable. Why should then this question be left over to be decided in another suit? The mere opinion of the Court as such will not be binding upon defendant 3, but if the issue is raised and tried the Court’s decision will be binding. It is certainly not desirable that the Court should express an opinion in this case which may happen to be opposed to its decision in the next. The question of ownership as a question of fact is bound up with the other questions that necessarily arise in the case and it seems to me that this is a strong reason for holding that the issue should be tried and decided in this action itself.

15. Moreover, defendant 3 is already before the Court in another character. Supposing the Court holds that she authorized the mortgage or by reason of the rule of estoppel, she is bound by the mortgage and passes a mortgage decree against her, of what practical use is this decree to the plaintiff, if it turns out that she is not the owner? Supposing again the Court holds that defendant 3 is not bound by the mortgage on the grounds taken and the question of her title is left open, is not the result very unsatisfactory seeing that at the sale a proper price will not be obtained and the purchaser himself may get no title? There is another important consideration: ‘whether defendant 3 having been rightly made a party she is bound to assert her title in this case at the risk of the question becoming res judicata is a matter of some doubt. Ramanna v. Venkatanarayana A.I.R. 1927 Mad. 301 already referred to and the Letters Patent Appeal therefrom No. 4 of 1927, in Venkatanarayana v. Ramanna Reported in A.I.R. 1927 Mad. 945.

16. Having regard to these various circumstances, I am clearly of the opinion that the issue must be raised and tried in this case. As the point was not originally taken in the plaint, I direct, while allowing the amendment, that the applicant shall pay defendant 3 her costs which I fix at Rs. 150. Defendant 3’s vakil, says that he intends to raise a point of jurisdiction if the amendment is allowed. He will have liberty to file a fresh written statement and he may take this point. Plaint shall be amended within one week, defendants 1, 3 and 4 shall file their further written statements within two weeks, and the case shall be posted for further issues one week thereafter.

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