TaxTMI 
TaxTMI 
2021 (8) TMI 1445
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....suring 1 acre 32 gunthas to the plaintiff vide registered sale deed for consideration of Rs.1000/-. Thus, the plaintiff stepped in the shoes of the mortgagor on account of the sale transaction. 3. The original mortgagee (defendant No. 3) filed a Regular Civil Suit No. 237 of 1965 for recovery of mortgage amount of Rs.700/- along with the interest accrued against the original mortgagors (defendant Nos. 1 and 2). The plaintiff was not impleaded as a party in the said suit, though the sale in his favour was before the filing of the suit. A preliminary decree was drawn based on a compromise whereby the defendant Nos. 1 and 2 agreed to pay the mortgage amount on or before 27.3.1967. Since defendant Nos. 1 and 2 failed to pay the said amount, the preliminary decree was converted into a final decree on 4.6.1969 which led to foreclosing the rights of the mortgagor to redeem the property. In execution of such decree, the mortgagee had taken possession from the plaintiff, the present appellant on 5.12.1980. It is thereafter the plaintiff filed Regular Civil Suit No. 7 of 1984 against the original mortgagors and the mortgagee seeking redemption of the mortgaged property. 4. The Trial Co....
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....he land before the institution of the suit, therefore, the mortgagee ought to have made him a party in view of the provisions of Sections 59A and 91 of the Act. Therefore, the decree of foreclosure was set aside by the High Court. 6. The High Court held that the suit of the plaintiff for redemption was not maintainable. A preliminary decree was passed in the suit filed by the mortgagee for foreclosure based on a compromise in which the original mortgagors were required to pay the amount by 27.3.1967. Since the amount was not paid, the final decree was drawn up on 4.11.1969. Such decree was not challenged and became final. Thus, Plaintiff cannot seek redemption of the mortgage. 7. Learned counsel for the appellant relies upon Sections 59A, 60 and 91 of the Act to contend that the plaintiff was required to be impleaded as a party in the suit for foreclosure as also the provisions of Order XXXIV Rule 1 of the Code of Civil Procedure, 1908 [For short, 'the Code']. Such provisions read as under: "59-A. References to mortgagors and mortgagees to include persons deriving title from them. -Unless otherwise expressly provided, references in this Chapter to mortgagors and mort....
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....bt or any part thereof; or (c) any creditor of the mortgagor who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property." Order XXXIV, Rule 1- 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. Explanation. - A puisne mortgagee may sue for foreclosure or for sale without making the prior mortgagee a party to the suit; and a prior mortgage need not be joined in a suit to redeem a subsequent mortgage 8. It is argued that the extinguishment of the right of redemption contemplated by Section 60 of the Act is by decree of the Court. Such decree means a valid decree and not a decree passed against the mortgagor who has lost the title in the part of the suit property after suit land was conveyed to the appellant on 18.5.1964. It is also argued that the plaintiff was in possession, which is apparent from the revenue record and the fact that the possession was taken from the plaintiff in the execution of ....
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....ssues arising in the present appeal are examined hereinafter. (i) Whether the plaintiff was a necessary party in a suit for foreclosure filed by the mortgagee after the purchase? 11. The plaintiff has purchased property vide registered sale deed on 18.5.1964, much before the filing of the suit for foreclosure in the year 1965. The possession of the plaintiff was recorded in the revenue record after the purchase of the property, but still, the mortgagee chose not to implead the subsequent purchaser. The original mortgagor who has mortgaged the property had no subsisting title, interest or right in the property conveyed, therefore, the factum of compromise between the mortgagor and the mortgagee is ineffective and not enforceable against the purchaser i.e., the plaintiff. Once the plaintiff has purchased property, the equity of redemption is part of the title and as an owner, he could seek redemption of the suit land. 12. The learned counsel for the mortgagee could not point out any provision of law that can prove that the subsequent purchaser has to give notice to the mortgagee signifying purchase of the property, by a mortgagor. The factum of purchase coupled with th....
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....34 Rule 1 CPC contending that they were willing to deposit the mortgage dues and that the decree in OS No. 68 of 1987 was not binding on them because they had not been impleaded as party in the same. In cross-examination, the plaintiffs acknowledged having been informed by their lawyer at the time of purchase, of the mortgage created by deposit of title deeds, by Defendants 3 and 4. xx xx xx 14. No challenge was laid out in OS No. 96 of 1999, either to the auction-sale or to set aside the sale certificate issued to Defendant 2. The reliance upon Order 34 Rule 1 CPC is completely misconceived as under Rule 8 the right to redemption survived only till confirmation of the sale and not thereafter. The suit was instituted only after issuance of the sale certificate and the question for redemption had become irrelevant." In view of the said fact, the judgment referred to by the learned counsel for the respondent is not applicable to the facts of the present case. 15. Still further, in terms of Section 91 of the Act, the plaintiff having stepped into the shoes of the mortgagor in respect of land purchased by him has a right to redeem the land mortgaged. In addition....
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......" 18. In a recent judgment of this Court reported as Jamila Begum (Dead) though Legal Representatives v. Shami Mohd. (Dead) through Legal Representatives & Anr. [(2019) 2 SCC 727] it was held that by virtue of purchase of the property, the purchaser has purchased the entire equity of redemption. This Court held as under: "Whether decree for redemption of mortgage is correct? 32. Section 60 of the Transfer of Property Act, 1882 provides that at any time after the money becomes due, the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage-money to require the mortgagee to deliver the mortgage deed and all documents relating to the mortgaged property, and where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor. In Shivdev Singh v. Sucha Singh [Shivdev Singh v. Sucha Singh, (2000) 4 SCC 326], it was held as under: (SCC p. 330, para 8) "8. ... The right of redemption recognised under the Transfer of Property Act is thus a statutory and legal right which cannot be extinguished by any agreement made at the time of mortgage as part of the mortgage transaction." 19. ....
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....e Court. There is no determination of the claim as is contemplated in terms of Order XXI Rule 97 or Rule 99 of the Code having force of decree. The declining of stay of execution will not operate as res judicata only because Section 11 Explanation VII of the Code is applicable to the execution as well. 23. Therefore, the findings recorded by the High Court that the appellant is bound by the decree passed in the suit for foreclosure is not tenable inter alia because the appellant was not impleaded as a party, though mandated under Section 91 of the Act and Order XXXIV Rule 1 of the Code. The mortgagee was aware of the transaction of purchase in view of the judgment of this Court in Dr. Govinddas as well as for the reason that the possession of the appellant was recorded in the revenue record. The subsequent conduct of mortgagee who has taken possession from the appellant also corroborates the fact that the mortgagee was aware of the factum of sale and possession of the appellant but still have chosen not to implead him as a necessary party. Still further, it is apparent from the pleadings itself that the original mortgagor had colluded with the mortgagee. Therefore, the right con....
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....peal against the said final decree was misconceived and the High Court was in error in allowing it and in passing the said order of remand directing the trial court to reopen the question of redemption and to allow the respondent to participate in proceedings to amend the said preliminary decree." 25. Thus, we find that the High Court has misread the judgment of this Court in Samarendra Nath Sinha. It is not a case of transfer from mortgage prior to the decree of foreclosure but a case of purchaser pending lis. 26. Another judgment referred to by the High Court is Mrutunjay Pani & Anr. v. Narmada Bala Sasmal & Anr. [12 AIR 1961 SC 1353]. It was an appeal filed by the mortgagee who claimed to have purchased the equity of redemption. The argument of the appellant was that the mortgagee has failed to pay rent which was the responsibility of the mortgagor in terms of the mortgage deed. For the default of payment of arrears of rent, the property was put to sale and was purchased by the mortgagee. Therefore, the remedy of the mortgagor is to seek setting aside of sale. It was held as under: "7. The legal position may be stated thus: (1) The governing principle is "once a m....