ORDER [EN[ENTITY]I[ENTITY]Y], [EN[ENTITY]I[ENTITY]Y].
1. [ENTITY]his revision under [SECTION] of the [ACT] is filed against the order of the learned senior Civil [EN[ENTITY]I[ENTITY]Y]udge, Rajole in [CASE NUMBER] in [CASE NUMBER] in [CASE NUMBER].
2. [ENTITY]he relevant facts may be briefly stated as under.
3. Respondents 2, 3 and 4 borrowed certain amounts from the 1st respondent. [ENTITY]hey deposited the title deeds in respect of the property in R.S. No. 42/1 of [ENTITY]attimanda village admeasuring 35 cents towards security and thereby created equitable mortgage in favour of the 1st respondent. Since the amount was not paid, the 1st respondent filed [CASE NUMBER] against respondents 2, 3 and 4. After the contest, the suit was decreed and a preliminary decree was passed for sale of the mortgage property granting time for redemption. Since respondents 2, 3 and 4 failed to pay the amount within the time granted for redemption, steps were taken by the 1st respondent by filing [CASE NUMBER] to bring the property to sale in accordance with the preliminary decree.
4. At that stage, the petitioner herein filed [CASE NUMBER] under [SECTION] [ACT] claiming that the property in question was conveyed to him through registered sale deed dated 9-1-1991. Since he was not made a party to the suit as required under [SECTION], [SECTION] [ACT], the decree is not binding on him and the sale cannot be proceeded with. [ENTITY]his objection was turned down by the executing Court through its order dated 22-9-2000. [ENTITY]he unsuccessful petitioner in [CASE NUMBER] challenges the order of the executing Court in this revision.
5. Sri [EN[ENTITY]I[ENTITY]Y], learned Counsel for the petitioner, submits that the requirement under [SECTION], [SECTION] [ACT] to implead a person interested in the property is mandatory and any lapse in that behalf would render the decree not binding upon the person so omitted. [EN[ENTITY]I[ENTITY]Y]e submits that the procedure relating to filing of the suits for redemption of mortgages was earlier provided for under [SECTION] of the [ENTITY]ransfer of Property Act. [SECTION] was repealed and the corresponding provision was incorporated under [SECTION], [SECTION] [ACT]. [ENTITY]he requirement to implead the persons having interest in the property, under [SECTION] was subject to the mortgagee having knowledge about the same as was evident from the proviso contained in it; since such a proviso does not find place in [SECTION], [SECTION] [ACT], it should be presumed that the Legislature intended that irrespective of the fact whether the mortgagee had the knowledge about the persons having an interest in the mortgaged property, they must be impleaded. In that view of the matter, the learned Counsel submits that omission to implead the petitioner herein in the mortgage suit was fatal to the decree, at least insofar as the petitioner is concerned. [EN[ENTITY]I[ENTITY]Y]e relied upon several judgments of various [EN[ENTITY]I[ENTITY]Y]igh Courts as well as the Supreme Court in support of his contention.
6. Sri [EN[ENTITY]I[ENTITY]Y], learned Counsel for the 1st respondent, on the other hand, submits that the petitioner and respondents 2 to 4 have colluded in bringing about the sale in question to defeat the right of the 1st respondent to redeem the mortgage; that the 1st respondent had no knowledge about the sale said to have taken in favour of the petitioner. [EN[ENTITY]I[ENTITY]Y]e submits that the substantive right of a mortgagee is provided under the relevant provisions of the [ENTITY]ransfer of Property Act and the procedure stipulated under [SECTION], [SECTION] cannot be permitted to defeat the substantive rights. [EN[ENTITY]I[ENTITY]Y]e further submits that a combined reading of the provisions of [SECTION], [SECTION] and [SECTION], [SECTION] would enable the 1st respondent as well as the Court to proceed against the property. It is also his contention that in a mortgage transaction the proceedings and auction in the Court are more against the property which is the subject-matter of mortgage and the persons claiming interest, that too, with a clandestine design, cannot be permitted to defeat the mortgage as such.
7. [ENTITY]he basic facts in this matter are not in dispute. [ENTITY]he deposit of title deeds of the property in question with the 1st respondent and creation of equitable mortgage in favour of the 1st respondent are borne out by record. Similarly, the sale in favour of the petitioner of the very property is a matter of record. Admittedly, the petitioner was not impleaded as a defendant in the suit. [ENTITY]he mutual rights and obligations of the mortgagor or mortgagee are provided for in various provisions of the [ENTITY]ransfer of Properly Act. Inasmuch the right of the 1st respondent to seek redemption of the mortgage is not in dispute, it is not necessary to refer to the various provisions.
8. It cannot be disputed that what the petitioner has purchased from the respondents 3 and 4 is equity of redemption and that sale by itself cannot have any adverse effect on the mortgage in favour of the 1st respondent. [EN[ENTITY]I[ENTITY]Y]owever, what is to be examined is the effect of the decree obtained by the 1st respondent vis-a-vis the petitioner herein, who was admittedly not a party to the suit. [SECTION], [SECTION] [ACT] reads as under:
"[SECTION], [SECTION]: Parties to suits for foreclosure, sale and redemption. - 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"
Before the enactment of the [ACT], the procedure being followed in suits relating to mortgages was provided in the [ENTITY]ransfer of Property Act itself. [SECTION] was as under:
"85. Subject to the provisions of the [ACT], [SECTION], all persons having an interest in the property comprised in a mortgage must be joined as parties to any suit under this chapter relating to such mortgage: Provided that the plaintiff has notice of such interest."
9. In view of certain controversy as to the interpretation of [SECTION], the Legislature thought it fit for a provision in the form of [SECTION], [SECTION]. [EN[ENTITY]I[ENTITY]Y]aving so enacted, it repealed [SECTION] of the [ENTITY]ransfer of Property Act. [ENTITY]he omission of the [SECTION], in its form or in its substance in [SECTION], [SECTION] [ACT], is not without significance. In a way it places a heavier burden on the party instituting the suit relating to mortgage to ensure that no party which has interest in the property is omitted. [ENTITY]he plea that he had no notice of such interest, which was available under [SECTION], is no longer available. [ENTITY]he legislative intent is not at all in doubt. [ENTITY]he objects and reasons in enacting [SECTION], [SECTION] read as under:
"(1) [ENTITY]he [SECTION] of the [ENTITY]ransfer of Property Act, 1882, has given rise to certain doubts which the Committee have sought to remove by substituting for it the words now added with a view to making clear that a person not a party is not bound by a decree ( [PRECEDENT]). [ENTITY]he explanation has been inserted in order or remove doubts which have arisen from the conflict of authorities on the point". [CASE NUMBER]).
[SECTION]. [ENTITY]he learned Counsel for the petitioner submits that non-compliance with [SECTION], [SECTION] [ACT] would render the decree unenforceable against the petitioner. [ENTITY]he contention of the learned Counsel for respondent No. 1 on the other hand is that the omission is not so fatal and at any rate inasmuch as the petitioner had come before the Court and did not dispute the existence of the mortgage, it is open to him to pay the decretal amount and redeem the mortgage itself.
11. [ENTITY]o deal with the respective contentions, it is necessary to refer to certain decided cases on this aspect.
12. In [PRECEDENT], the effect of non-impleading of a subsequent purchaser in a mortgage suit was considered and it was held as under:
"[ENTITY]he effect of a decree obtained by a prior mortgagee in a suit to which the owners of the equity of redemption were not parties had to be considered in various cases in this Court. It has been laid down that the general rule that no person should be affected prejudicially by proceedings to which he is not a party is applicable to mortgage suits also."
13. For this proposition, reliance was placed upon the judgment of the Privy Council in [PRECEDENT], which is to the following effect:
"Persons who have taken transfers of property subject to a mortgage cannot be bound by proceedings in a subsequent suit between the prior mortgagee and the mortgagor to which they were never made parties."
14. In [PRECEDENT], the matter arose under the following circumstances.
15. [ENTITY]he mortgage debt became due in 1909. [ENTITY]he 1st defendant purchased part of the mortgage property in a Court auction in another suit in [EN[ENTITY]I[ENTITY]Y]uly, 1918. [ENTITY]he possession was delivered to him through Court in February, 1919. In [EN[ENTITY]I[ENTITY]Y]uly, 1919, mortgage suit was brought against the original mortgagor. 1st defendant who was purchaser of part of the mortgage property was not impleaded. [ENTITY]he mortgage suit was decreed in November, 1919. [ENTITY]he decree-holder in that suit himself purchased the property in April, 1996 in Court auction. [EN[ENTITY]I[ENTITY]Y]is possession was resisted by the 1st defendant on the basis of his purchase of the very property in another suit. In November, 1929, the mortgagee filed the suit for delivery' of possession. Dealing with the consequences of non- impleading of a transferee subsequent to the mortgagee, the Division Bench of the Madras [EN[ENTITY]I[ENTITY]Y]igh Court held as under:
"A mortgagee who takes a mortgage of property naturally expects that he will be able to work out his mortgage according to the circumstances existing at the time of the mortgage. It is reasonable on his part to suppose that he would not be adversely affected by transactions behind his back effected after his mortgage. [ENTITY]hat a sale of the equity of redemption made by the mortgagor after his mortgage and behind his back should throw obstacles in the way of his working out his security is an inequitable to him as that the purchaser of the equity of redemption should be affected by proceedings taken behind his back. In this case both the circumstances have happened. We have to see that each party is not adversely affected by the transaction or the proceeding of the other. In these circumstances a new situation arises which is not perhaps the fault of either party. [ENTITY]he mortgagee had to bring a suit impleading the purchaser of the equity of redemption. Such a suit has two purposes. From his own point of view he wishes to cure the defect of his former proceedings which have turned out to be imperfect. From this point of view of the purchaser of the equity of redemption the mortgagee is in fairness bound to give him an opportunity to redeem the mortgage. From this double point of view such a suit has to be brought. [ENTITY]hat such a suit lies is now established by the authorities already referred to. [ENTITY]he question that now arises is when does the cause of action for such a suit arise? [ENTITY]he best way of discussing such a question would be by dissociating the mortgagee and the purchaser in execution sale.
16. In Bipra Charan v. [EN[ENTITY]I[ENTITY]Y] Dasi, AIR 1953 Cal. 683, a Division Bench of the Calcutta [EN[ENTITY]I[ENTITY]Y]igh Court framed the question which arose in that case as under:
"4. [ENTITY]he sole question which has been canvassed in this appeal is a question of law viz., where in the case of a simple mortgage the mortgagee brings a suit on his mortgage but omits to implead a subsequent transferee in possession of a part of the mortgaged property and obtains a decree and in execution of the decree purchases the mortgaged property but fails to get possession of the part transferred, is he entitled to recover by suit possession of the said part from the transferee."
17. [EN[ENTITY]I[ENTITY]Y]aving framed the said question and discussed the matter at length with reference to the decided English and Indian casts, the Bench answered the question as under:
"if the owner of the equity of redemption either in whole or in part is not made a party to the mortgage suit a decree for foreclosure or sale would leave unaffected the rights of the excluded party including his right to remain in possession. [ENTITY]he same view is expressed by Dr. [EN[ENTITY]I[ENTITY]Y] in his Law of Mortgage, 5th Edn. Vol. 1 p.656. [ENTITY]he view already expressed by me does not militate against the observations contained in the said treatise but received support from the same."
18. So stating the law with reference to the facts of that case it was held as under:
"34. In the present case the plaintiffs failed to implead in their suit defendant 1, [EN[ENTITY]I[ENTITY]Y], though she was in possession as lessee from the owner of the mortgage property. [ENTITY]he decree obtained by the plaintiffs and their auction-purchase did not therefore affect [EN[ENTITY]I[ENTITY]Y]'s right to redeem or right to remain in possession. At the date of the present suit the plaintiffs right to enforce his mortgage was barred. [ENTITY]he plaintiffs cannot therefore compel defendant 1 to redeem his mortgage. [ENTITY]he suit instituted by the plaintiffs was therefore rightly dismissed by the Courts below and by Mr. [EN[ENTITY]I[ENTITY]Y] [EN[ENTITY]I[ENTITY]Y]".
19. [ENTITY]he same question fell for consideration before the Supreme Court in [PRECEDENT], . Briefly stated, the facts in that case were that three brothers A, B, C mortgaged a property with one D on 1-9-1918. In that very year, subsequent to the mortgage, partition was effected wherein provision was made for maintenance of their step-mother E.E and her two daughters filed two separate suits bearing O.S. [SECTION]0 of 1919-1920 and another claiming maintenance. [ENTITY]he suits were decreed in 1921. In execution of that decree, the properties of the brothers including those mortgaged were sold in a Court auction and were purchased by one of the plaintiffs F on 2-8-1928. All the three mortgagors i.e., A, B and C were adjudicated insolvents in various proceedings between 1923 and 1926. Mortgagee D died in 1933 and his legal representatives filed mortgage suit OS 8 of 1933-34 on the basis of a mortgage deed of 1918. Since the mortgagors were adjudicated insolvent, their properties were in the hands of official receiver. [ENTITY]hey impleaded the official receiver, subsequent, purchasers and F referred to above. After severe contest, the suit was ultimately decreed on 26-9-1935 with a preliminary decree and fixing time for payment and in default for sale of properties. In execution of the decree, the properties were sold in Court auction and were purchased by one G and possession was delivered through Court in 1937. G sold that property through his agent in 1938 in favour of one [EN[ENTITY]I[ENTITY]Y] who was the plaintiff in the suit which gave rise to the appeal before the Supreme Court.
20. Where [EN[ENTITY]I[ENTITY]Y] attempted to take possession, he was obstructed one Mr. [ENTITY] claiming title under a sale in 1932 by Mr. [EN[ENTITY]I[ENTITY]Y] claiming through F referred to above. [ENTITY]he suit filed by [EN[ENTITY]I[ENTITY]Y] was decreed in 1940. 'I' filed an appeal in the [EN[ENTITY]I[ENTITY]Y]igh Court and the matter was compromised in favour of [EN[ENTITY]I[ENTITY]Y]. When [EN[ENTITY]I[ENTITY]Y] started construction, a new challenge was made to the title by one [ENTITY] claiming to be the L.R. of the purchaser of the property through one of the brothers on 30-1-1920. [ENTITY]hereupon [EN[ENTITY]I[ENTITY]Y] filed the suit against [ENTITY]. [ENTITY]he defence before the trial Court was that inasmuch as [EN[ENTITY]I[ENTITY]Y] claimed the title on the basis of a decree in mortgage and inasmuch as the predecessors-in-title of [ENTITY] were not parties as required under [SECTION], [SECTION], the rights of [ENTITY] were not affected. [ENTITY]he trial Court took the view that inasmuch as the sale by the three brothers in the year 1920 in favour of the predecessors-in-title of [ENTITY] was barred by lis pendence in view of the maintenance suit filed by E and her daughters, the sale by the three brothers was hit by [SECTION] of the [ENTITY]ransfer of Property Act and it did not convey title of [ENTITY]. and decreed the suit. [ENTITY]he [EN[ENTITY]I[ENTITY]Y]igh Court reversed the decree of the trial Court. In appeal, the Supreme Court framed the issue as under:
"NO[ENTITY]WI[ENTITY][EN[ENTITY]I[ENTITY]Y]S[ENTITY]ANDING the tangle of legal proceedings extending over 30 years, which forms the background of the present litigation, the single and sole question that arises for decision in this suit is whether the sale deed dated 30-1-1920 under which the appellants claim is subject to the result of the sale dated 2-8-1928 in execution of the decree in OS No. [SECTION]0 of 1919-20 by reason of the rule of lis pendence enacted in [SECTION] of the [ENTITY]ransfer of Property Act. If it is, it is not in dispute that it becomes avoided by the purchase by [EN[ENTITY]I[ENTITY]Y] on 2-8-1928. If it is not, it is equally indisputable that the appellants as purchasers of the equity of redemption from [EN[ENTITY]I[ENTITY]Y] have a right to redeem the mortgage dated 1-9-1918, and not having been impleaded in [CASE NUMBER] are not bound either by the decree passed therein or by the sale in execution thereof."
21. On the question so fanned, the Supreme Court answered that, the sale dated 30-1-1920 was not hit by lis pendence. As a proposition of law, as to the effect of sale of property in pursuance of mortgage decree, without notice to the person in whom the equity of redemption vests prior to the sale, in was observed as under:
"It has been held by the Privy Council in [ENTITY]ala Chand Banerjee v. [EN[ENTITY]I[ENTITY]Y]anannath Marwari (1) that when in execution of a mortgage decree properties are sold without notice to the Official Receiver in whom the equity of redemption had vested prior to the sale. Such sale not be binding on him."
22. A glance at the authorities referred to above would indicate that the decree in a mortgage suit is not binding on a person who has interest in the mortgage property either by way of a sale subsequent to the mortgage or otherwise but not made party to the suit. Failure to implead the interested person may not by itself defeat the right of the mortgagee but the decree cannot be enforced against a person who has interest in that property but not impleaded in the suit. [ENTITY]he remedy was also indicated in the decided cases. It is to the effect that it is open to the mortgagee to institute fresh suit against the person having interest in the equity of redemption.
23. Sri [EN[ENTITY]I[ENTITY]Y], learned Counsel for respondent No. 1 had drawn my attention to a Full Bench judgment of this Court in [PRECEDENT], . In that case, a Full Bench of this Court after reviewing the case law on the subject held that the right of redepmtion is indivisible. On facts it was held that if only one or some out of the several mortgagees instituted a mortgage suit, the same is not competent in view of the indivisibility of the mortgage. [ENTITY]he learned Counsel contends that what is contained in [SECTION], [SECTION] [ACT] is only a procedure and it cannot be permitted to defeat the substantive rights provided for in the [ENTITY]ransfer of Property Act. [EN[ENTITY]I[ENTITY]Y]e further submits that a reading of [SECTION], [SECTION] together with [SECTION], [SECTION] and [SECTION] would enable the Court to adjudicate the matter even in the absence of one of the persons said to be having interest in the equity of redemption. In support of his contention, he relied upon the following passage of the judgment wherein after extracting [SECTION], [SECTION] and [SECTION], [SECTION], it was observed as under:
"[ENTITY]his rule provides against the dismissal of the suit on the ground of non-joinder or mis-joinder of parties in case where it is possible for the Court to determine the rights and interests of the parties actually before it notwithstanding the defect in the suit as instituted. [ENTITY]he effect of the rule is but salutary within the field of its operation. It is a rule of procedure which cannot afford to defy or defeat the rule of substantive law. [ENTITY]hus the Court has undoubted power to deal with the matter in controversy in relation to the rights and interests of the parities actually before it, whenever it is possible under law, even though some other persons were also interested in the controversy by reason of right in the subject-matter of controversy are not made parties to the suit".
24. [EN[ENTITY]I[ENTITY]Y]owever, a note of caution was added in the very next sentence when it said "that is not to say that this power can extend to rights which are not severable i.e., which under the substantive law, are so inseparably intermixed as to constitute a single indivisible right which cannot be adjudicated upon nor any affective decree can be granted in relation thereto in the absence of all the parties or persons interested therein." [ENTITY]he discussion in this regard was summed up in para 14 as under:
"[ENTITY]hat being the mandate of law and also the essence of contract, it is obvious the claims as brought in the instant cases, offend against the basic rule relating to the indivisibility of the mortgage. [ENTITY]his defect being one of substance and not of mere procedure, it cannot be cured by resort to [SECTION], [SECTION] [ACT] judged thus, it is clear that all the heirs of the deceased mortgagee must have been made parties to the action within the period of limitation. As they were not impleaded within time. [ENTITY]he non-joinder is fatal to the claim as no effective decree can be passed in the absence of the other mortgagees. [ENTITY]his in short is the position in law in the light of the provisions of the [ENTITY]ransfer of Property Act, the [ACT] and the [ACT]."
25. It is not uncommon that certain provisions which appear on the face of it to be procedural would contain provisions which are as important as the substantive right itself. What is procedure from the point of view of a plaintiff may turn out to be a substantive right itself in favour of the defendant. It is too difficult to contain the procedural and substantive rights in their respective watertight compartment.
26. [ENTITY]he other contention of the learned Counsel for the 1st respondent is that no prejudice as such is caused to the petitioner herein on account of his not being impleaded in the suit was since he has come before the Court, the matter can be adjudicated on the basis of the material available on record. But, it is too difficult to accept such a contention. [ENTITY]he requirement under [SECTION], [SECTION] is a safeguard for the various persons having interest in the property. [ENTITY]hat safeguard cannot be ignored nor its non-compliance be condoned. In this context, it is apt to refer to the judgment of the Supreme Court in Institute of Chartered Accountants of India v. L.[ENTITY]. Ratna, . Dealing with the similar contention, the Supreme Court held as under:
"(17) It is then urged by learned Counsel for the appellant that the provision of an appeal under [SECTION] of the Act is a complete safeguard against any insufficiency in the original proceeding before the Council, and it is not mandatory that the member should be heard by the Council before it proceeds to record its finding. [SECTION] of the Act entitles a member to prefer an appeal to the [EN[ENTITY]I[ENTITY]Y]igh Court against an order of the Council imposing a penalty under [SECTION] of the Act. It is pointed out that no limitation has been imposed on the scope of the appeal, and that an appellant is entitled to urge before the [EN[ENTITY]I[ENTITY]Y]igh Court every ground which was available to him before the Council. Any insufficiency, it is said, can be cured by resort to such appeal. Learned Counsel apparently has in mind the view taken in some cases that an appeal provides an adequate remedy for a defect in procedure during the original proceeding. Some of those cases-as mentioned in Sri [EN[ENTITY]I[ENTITY]Y]'s erudite and classic work on "Administrative Law" 5th Edn. But as that learned author observes (at p 487). "in principle there ought to be an observance of natural justice equally at both stages", and if natural justice is violated at the first stage, the right of appeal is not so much a true right of appeal as a corrected initial hearing: instead of fair trial followed by appeal, the procedure is reduced to unfair trial followed by fair trial. And he makes reference to the observations of [EN[ENTITY]I[ENTITY]Y], [EN[ENTITY]I[ENTITY]Y]., in [PRECEDENT]. [ENTITY]reating with another aspect of the point, that learned [EN[ENTITY]I[ENTITY]Y]udge said: If one accepts the contention that a defect of natural justice in the trial body can be cured by the presence of natural justice in the appellate body, this has the result of depriving the member of his right of appeal from the expelling body. If the rules and law combine to give the member the right to a fair trial and the right of appeal, why should he be told that he ought to be satisfied with the an unjust trial and a fair appeal? Even if the appeal is treated as a hearing de novo, the member is being stripped of his right to appeal to another body from the effective decision to expel him. I cannot think that natural justice is satisfied by a process whereby an unfair trial, though not resulting in a valid expulsion, will nevertheless have the effect of depriving the member of his right of appeal when a valid decision to expel him is subsequently made. Such a deprivation would be powerful result to be achieved by what in law is a mere nullity; and it is no mere triviality that might be justified on the ground that natural justice does not mean perfect justice. As a general rule, at all events, I hold that a failure of natural justice in the trial body cannot be cured by a sufficiency of natural justice in an appellate body. [ENTITY]he view taken by [EN[ENTITY]I[ENTITY]Y], [EN[ENTITY]I[ENTITY]Y]. was followed by the Ontario [EN[ENTITY]I[ENTITY]Y]igh Court in Canada in Re Cardinal and Board of Commissioners of Police of City of Cornwall. [ENTITY]he Supreme Court of [EN[ENTITY]I[ENTITY]Y] was similarly inclined in [PRECEDENT], and so was the Court of Appeal of [EN[ENTITY]I[ENTITY]Y] in Reid v. Rowley".
27. A consideration of the facts of the case and the decided cases referred to above leads to the conclusion that a decree in a mortgage suit does not bind a person having interest in the equity of redemption if he was not a party to the suit and the mortgagee will have the remedy of instituting a fresh suit against a person so omitted if the cause of action is within the limitation and that the defect on account of non-compliance of [SECTION], [SECTION] which crept into the decree cannot be cured on account of the person so omitted coming to the Court at a later stage.
28. In that view of the matter, the order of the Court below in [CASE NUMBER] in [CASE NUMBER] in [CASE NUMBER] is set aside the civil revision petition is allowed. It is made clear that it shall be open to the 1st respondent to institute fresh suit against the petitioner herein in accordance with law. [ENTITY]here shall be no order as to costs.