Case: Mangru Mahto &amp; Ors Vs. Shri Thakur Taraknathji Tarakeshwar Math &amp; Ors

1. One Harbans Narain Singh was the proprietor of villages Seha and Dhobaha and other villages. He created several incumbrances over these villages including a mortgage dated February 10, 1886 in favour of Basanti Bibi, two mortgages dated September 9, 1907 and February 5, 1910, in favour of Harprasad Das and a Mortgage dated August 2, 1911 in favour of defendant No. 1 Ramanandan Lal. On June 23, 1915, Harbans Narain sold the villages to Mahabir Missir redeemed the mortgages in favour of Basanti Bibi and Harprasad Das and became subrogated to their rights. Ramanandan Lal instituted a suit to enforce his mortgage, obtained a final decree for sale, put the decree into execution, at the execution sale purchased villages Seha and Dhobaha and obtained possession of the villages in 1919 and 1920. In 1924, Mahabir instituted suit No. 17 of 1924 to enforce his mortgage lien praying for ratable contribution of his dues in respect of villages Seha and Dhobaha from Ramanandan Lal and obtained a final decree on August 22, 1931, Mahabir died leaving his son Kashinath put the decree in suit No. 17 of 1924 into execution. On July 13, 1934, Ramanandan Lal paid the decretal dues in respect of village Seha. On November 4, 1935, village Dhobaha was sold in execution of the decree in suit No. 17 of 1924 and was purchased by Kashinath. In June, 1934, Ramanandan Lal through his constituted attorney, Munshi Sheobaran Lal granted five leases in respect of the suit lands in the village to defendants 2 to 7. At the time when the leases were created Ramanandan Lal was the mortgagor in possession of the suit lands over which Kashinath had a mortgage lien. One of the questions in issue in these appeals is whether the leases were binding on Kashinath2. It appears that Kashinath obtained a money decree against Ramatahal Pandey, husband of defendant No. 3 and execution of the money decree attached the suit lands. Defendants 2 to 7 filed claim petitions objection to the attachment under O. 21, R. 58, C. P. C. The claim petitions were allowed and the lands were released from attachment by orders of the executing court dated November 20, 1942 and February 26, 1944. The executing court found that the leases were genuine. Kashinath did not file any suit under O. 21, R. 63, C. P. C. One of the questions in these appeals is whether the orders passed in the claim proceedings under O. 21, R. 58 precluded Kashinath from setting up his claim in the present suit3. On June 11, 1946, Kashinath instituted the suit out of which these appeals arise against Ramanandan Lal and the lessees for recovery of possession of the suit lands and mesne profits alleging that the leases were collusive transactions and were otherwise not binding on him. The defendants contested the suit. In the meantime, in other proceedings, it was declared that Mahabir was a benamidar for Shri Thakur Taraknathji and the deity was the real owner of the villages. In view of this adjudication, Kashinath lost all interest in the present suit. By order dated August 25, 1952, the deity was added as a co-plaintiff in the suit4. The subordinate judge, Arrah, held that the leases were genuine, were granted by Ramanandan Lal in due course of management and were binding on the plaintiffs. On this finding, he dismissed the suit. The deity preferred an appeal to the High Court of Patna. The High Court allowed the appeal and decreed the suit. It held that the leases were sham transactions, were made in contravention of S. 65-A of the Transfer of Property Act and were not binding upon the plaintiff. Before the High Court, it was contended on behalf of the defendants that the plaintiffs were precluded from challenging the leases in view of the orders passed against Kashinath in the proceedings under O. 21, R. 58, C. P. C., but the High Court rejected this contention. Defendants Nos. 2, 6 and 7 and the widow of defendant No. 5 have filed C. A. No. 988 of 1964 and defendants 1 and 4 have filed C. A. No. 989 of 1964 under certificates granted by the High Court.

Court's reasoning:
We think that this contention should be rejected. In view of the orders passed against Kashinath in the claim proceedings and his failure to institute suits under O. 21, R. 63, C. P. C., Kashinath was precluded from claiming that he had the right to attach the suit lands execution of his money decree, but he was not precluded from claiming that he had the right to sell the lands in execution of his mortgage decree. Rules 58 to 62 of Order 21, C. P. C., provide for a summary investigation of the claims and objections to the attachment of any property attached in execution of a decreeA claim proceeding under R. 58 is not a suit or a proceeding analogous to a suit. An order in the claim proceeding does not operate as res judicata. It is because of Rule 63 that the order becomes conclusive. The effect of R 63 is that unless a suit is brought as provided by the rule, the party against whom the order in the claim proceeding is made or any person claiming through him cannot re-agitate in any other suit or proceeding against the other party or any person claiming through him the question whether the property was or was not liable to attachment and sale in execution of the decree out of which the claim proceeding arose, but the bar of Rule 63 extends no furtherBut we cannot agree with those observations. The order in the summary proceeding under R. 58 does not operate as res judicata. The reason why the garnishee could not re-agitate his objections was that in view of R. 63 he was precluded from asserting that the decree-holder was entitled to attach and sell the particular debt on the footing that it was due to the judgment-debtorThe observation that the party dissatisfied with the order made under S. 278 of theCode of Civil Procedure, 1882, could have appealed from the order, seems to have been made per incuriam. It seems that no appeal lay from such an order. The reason why Lalji Lal was precluded from contending that the property was liable to be attached and sold in execution of the decree obtained by him was that in the absence of a suit under S. 283 of C. P. C. of 1882, he and Sarju Prasad claiming title under him, could not subsequently contend that the property was liable to be sold in execution of the decree. In the two cases discussed above, the adverse orders in the claim proceeding became conclusive on the question whether the property was liable to attachment and sale in execution of the particular decree then sought to be executed. Equally, in the absence of any suit under O. 21, R. 63, C. P. C., the adverse orders passed against Kashinath conclusively decided that the suit lands were not liable to be sold in execution of the money decree obtained by him against Ramtahal Pandey. But those orders were not conclusive on the question whether the lands were liable to be sold in execution of the mortgage decree obtained by Kashinath against Ramanandan LalThis novel argument is ingenious but unsound. An auction-purchaser at a sale held in execution of a mortgage decree buys not only the interest of the mortgagor but also the interest of the mortgagee. If the lease does not bind the mortgagee, it does not equally bind the auction-purchaserIn the present case, the lessees allowed the suit lands to be sold in execution of the mortgage decree and they have now lost the right of redemption. They cannot resist the claim of the auction-purchaser for recovery of possession of the lands12. If a mortgagor in possession of the mortgaged property executes a lease of the property in the ordinary course of management as the agent or bailiff of the mortgagee during the pendency of a suit by the mortgagee to enforce the mortgage, a question may arise whether such a lease is in the eye of the law a lease granted by the mortgagee through his agent and therefore binding on him. But in the present case, that question does not arise as the leases were not granted by the mortgagor in the ordinary course of management as the bailiff or agent of the mortgagee13. The High Court held that the leases were steam transactions. We do not think it necessary to decide this question. Even assuming that the leases were not sham transactions they were not binding on Kashinath and the deity. The High Court rightly decreed the suit