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Issues Involved:
1. Jurisdiction of the Subordinate Judge. 2. Application of Res Judicata. 3. Priority of Mortgage Claims. 4. Validity of Interest Rate Reduction Agreement. 5. Accounting for Profits Received by Defendants. Detailed Analysis: Jurisdiction of the Subordinate Judge: The first issue raised by defendants Nos. 5 to 7 questioned the jurisdiction of the Subordinate Judge to entertain the suit. The case was initially filed in the Court of the second Subordinate Judge of Shahabad and later transferred to the District Judge's Court, which subsequently transferred it to the first Subordinate Judge. Defendants argued that the District Judge lacked the authority to re-transfer the case once it had been withdrawn to his own file. The Court held that the District Judge had inherent power, apart from Section 25 of the Code of Civil Procedure, to transfer the case back to the Subordinate Judge, especially for the benefit of the litigants and the speedy determination of the matter. The Court also found that the defendants had waived their right to object by not raising the jurisdictional issue earlier in the proceedings. Therefore, the first ground of objection was overruled. Application of Res Judicata: The second issue concerned whether the decisions in the previous suits of 1894 operated as res judicata. Defendants Nos. 5 to 7 argued that the plaintiffs were precluded from enforcing their mortgage against the properties purchased by the decree-holder mortgagees in the suits of 1894. Conversely, the plaintiffs contended that the previous decisions prevented defendants from setting up their mortgages, effectively placing the plaintiffs in a position as if the mortgages of 1884 and 1887 had never been created. The Court concluded that the decisions in the suits of 1894, which dismissed the claims against the mortgagee of 1886, operated as res judicata. Consequently, defendants Nos. 5 to 8 could not rely on their mortgages of 1884 and 1887 against the plaintiffs, who represented the mortgagee of 1886. Therefore, the plaintiffs were entitled to enforce their security against the properties in the hands of defendants Nos. 5 to 8. Priority of Mortgage Claims: The third issue was whether defendants Nos. 5 to 7 were entitled to priority over the mortgage of 1886 for the sum of Rs. 1,952, part of the consideration for their mortgage of 1887. The Court found that the claim for priority should have been set up in the litigation of 1894 and was now barred by the principle of constructive res judicata. Additionally, the Court held that the doctrine of subrogation did not apply because the defendants were not compelled to make the payment to protect an interest of their own, nor was there any agreement for subrogation. Furthermore, partial payment of interest did not entitle them to subrogation. Thus, the third ground for appeal was overruled. Validity of Interest Rate Reduction Agreement: The fourth issue involved the validity of an agreement made on 18th June 1889, where the plaintiffs allegedly agreed to reduce the interest rate to 6% per annum. The plaintiffs argued that the compromise was inoperative as it was not registered under Section 17 of the Registration Act. The Court agreed, stating that a petition of compromise relating to properties outside the scope of the suit required registration to be effective. Therefore, the fourth ground for appeal was also overruled. Accounting for Profits Received by Defendants: The plaintiffs contended that defendants Nos. 5 to 7 should account for the profits received from the mortgaged properties after their purchase at the execution sale and that they were not entitled to interest at the contract rate after the dates of their respective decrees. The Court found these contentions to be well-founded, referring to the case of Ganga Das Bhattar v. Jogendra Nath Mitra and the decision of the Judicial Committee in Kedar Lal Marwari v. Bishen Pershad. However, given the Court's decision that defendants Nos. 5 to 7 could not rely on their mortgages of 1884 and 1887, this point did not require further detailed consideration. Conclusion: - Appeal No. 540 of 1904 by defendants Nos. 5 to 7 was dismissed. - Appeal No. 566 of 1904 by the plaintiffs was allowed, modifying the decree of the Subordinate Judge to exclude references to the prior mortgage charge of defendants Nos. 5 to 8. - The cross-objection by defendants Nos. 9 to 12 was allowed, entitling them to their costs in the Court below. - Costs in the appeals were awarded accordingly, and a single, self-contained decree was ordered to be drawn up to avoid future difficulties.
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