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TMI Blog1907 (4) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed or who are sought to be bound by the decree in the present litigation, may be divided into three groups. The first four defendants are the mortgagors; the next four are some encumbrancers, who have enforced their securities as against the mortgagors; and the third set of four defendants are other encumbrancers similarly situated. 2. The transactions, by which these two sets of defendants claim to have acquired an interest in the properties included in the mortgage, which is the foundation of the title of the plaintiffs, appear to be as follows. On the 15th December 1884, the first four defendants executed a mortgage in favour of defendants Nos. 5 to 8 in respect of a share of Mehal Raipur Chur. On the 31st May, 1894, the mortgagees sued to enforce their security, and joined as parties defendants, not only their mortgagors, but also the predecessor in interest of the present plaintiffs, namely, the mortgagee of 1886. On the 21st March 1895, the mortgagees obtained a decree as against their mortgagors, but their claim was dismissed as against the mortgagee of 1886. Subsequently, they executed this decree and became purchasers of the property comprised in their securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Subordinate Judge has made the usual mortgage decree in favour of the plaintiffs for ₹ 9,121, and has directed that, if decretal money is not paid within three months, the mortgaged property Mehal Raipur Chur is to be sold subject to the prior mortgage charge of defendants Nos. 5 to 8 and subject to the charge of the remaining decretal money of defendants Nos. 9 to 12, so that the purchaser at the auction sale will have to pay up the mortgage lien of defendants Nos. 5 to 8 and the balance of the judgment debt due to defendants Nos. 9 to 12. Against this decree, objection has been taken by all the parties interested. Defendants Nos. 5 to 7 have preferred Appeal No. 540 of 1904. The plaintiffs have preferred Appeal No. 566 of 1904 and a memorandum of cross-objection has been presented on behalf of defendants Nos. 9 to 12. 5. On behalf of defendants Nos. 5 to 7 the judgment of the lower Court has been assailed substantially on four grounds, namely first, that the Subordinate Judge had no jurisdiction to hear the case; secondly, that the decrees obtained by these defendants on the basis of their mortgages of 1884 and 1887 operate as res judicata, so that the plain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it may be presumed that he acted in exercise of the powers conferred upon him by Section 25 of the Code of Civil Procedure. On the 24th June following, the suit was dismissed by the District Judge for want of prosecution. The plaintiffs appealed to this Court, and on the 25th February 1904, a Division Bench allowed the appeal and sent back the case to the District Judge for rehearing. After the records had been remitted to the District Judge, the case remained pending in his Court from the 7th June to the 25th June 1904. On the latter date, the District Judge transferred the case to the first Subordinate Judge as he himself was about to proceed on leave. On the 28th June, the case was received by the Subordinate Judge, and the trial lasted from the 28th July to the 18th August 1904. No objection was taken by either party to the effect that the Subordinate Judge had no jurisdiction to try the case. It is now contended, however, that the Subordinate Judge had no jurisdiction, and, as the question is one of jurisdiction, we have allowed the appellants to take it, although it had not been suggested at any earlier stage of the proceedings. The ground upon which the objection is founded, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge held that Section 25 has no application to a case remanded under Section 562. The cases of Sakharam v. Gangaram 13 B. 654, Amir Begam v. Prahlad Das 24 A. 304 and Nandan Prasad v. W.C. Kenney 24 A. 356, also support the view that, where a District Judge has once exercised the powers conferred by Section 25 of the Civil Procedure Code and transferred a case to his own Court from that of the Subordinate Judge, he cannot afterwards retransfer such case. 9. In these cases, however, the Court was not invited to consider whether, apart from the provisions of Section 25 of the Civil Procedure Code, the District Court may not have authority to make an order of the description now in question before us. In our opinion, there is considerable force in the contention of the learned vakil for the plaintiffs-respondents that as under Section 9 of Act XII of 1887, the District Judge has administrative control over all the Civil Courts within the local limits of his jurisdiction, it ought to be held that the District Judge has inherent power to transfer a case from his own Court to that of the Subordinate Judge, specially when, as in the present instance, the order was made for the ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down by their Lordships of the Judicial Committee in the case of Syud Tuffuzzool Hossein Khan v. Rughoonath Pershad 14 Moo. I.A. 40, 51; 7 B.L.R. 186, to proceed to recall and cancel an invalid order is not simply permitted to, but is the duty of a Judge, who should always be vigilant not to allow the act of the Court itself to do wrong to the suitor; see also Hiralal Mukerji v. Premavwyee Debt 2 C.L.J. 306, 309, where the application of this principle is explained. We are unable to appreciate why this principle should not be applied to the case before us. If the District Judge, who has transferred a case to his Court, discovers that the very object, with which the case was transferred, is likely to fail by reason of unforeseen circumstances, it would be unreasonable to hold that it is not competent to him to withdraw the order and restore the case to the Court of the Subordinate Judge. 12. But it is not necessary to rest our decision on this ground alone, because the second and third branches of the contention of the plaintiffs-respondents appear to us to be unanswerable. It was contended by the learned vakil for the respondents that, assuming that the District Judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion brought before it, and that no consent can confer upon a Court that jurisdiction, which it never possessed. This distinction between an absolute want of jurisdiction and an irregular assumption of jurisdiction has, sometimes, been overlooked. 14. But the foundation of the distinction is fully explained in the Order of Reference to a Full Bench in the cases of Sukh Lal Sheikh v. Tara Chand Ta 33 C. 68; 2 C.L.J. 241 and Khosh Mahomed Sirkar v. Nazir Mahomed 33 C. 352; 3 C.L.J. 259. In the first of these cases, it was pointed out that jurisdiction may be defined to be the power of a Court to hear and determine a cause, to adjudicate or exercise any judicial power in relation to it, Rhode Island v. Massachussetts (1838) 12 Peters U.S. 657. Such jurisdiction naturally divides itself into three broad heads, namely, with reference to (l) the subject matter, (2) the parties, (3) the particular question which calls for decision, Black on Judgments, Section 215. 15. A. Court cannot adjudicate upon a subject-matter, which does not fall within its province as defined or limited by law; this jurisdiction may be regarded to be essential, for jurisdiction over the subject- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proper stage of the proceedings; Harkness v. Hyde (1878) 98 U.S. 476, Jolland v. Sprague (1838) 12 Peters U.S. 300, Rhode Island v. Massachussetts (1838) 12 Peters U.S. 657. 17. To put the matter from another point of view, it is only when a Judge or Court has no jurisdiction over the subject-matter of the proceeding or action in which an order is made or a judgment rendered, that such order or judgment is wholly void, and that the maxim applies that the consent cannot give jurisdiction; in all other cases, this objection to the exercise of the jurisdiction may be waived, and is waived when not taken at the time the exercise of the jurisdiction is first claimed, Hobart v. Frost (1856.) 5 Duer N.Y. 672; Black on Judgments, Section 217. 18. On this ground, we must hold, as regards the second branch of the contention of the respondents, that the defendants have waived their right to take exception to the power of the Subordinate Judge to try the cause under authority of an order of transfer made by the District Judge. As regards the third branch of the contention of the respondents, namely, that the objection is entirely devoid of all substance, it is manifest fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Khan 31 C. 95, to determine the question of res judicata, it is essential to ascertain what were the rights in dispute between the parties and what were alleged between them, and this must be done, not merely from the decree, but also from the pleadings and judgment. 20. Now, it appears that defendants Nos. 5 to 8 commenced suit No. 22 of 1884 to enforce their mortgage of the 15th December 1884, and they instituted suit No. 21 of 1894 to enforce their security of the 5th May 1887. In each of these suits they joined as parties defendants, not merely their mortgagors, who are now defendants Nos. 1 to 4, but also defendant No. 14, who is the mortgagee of 1886 and is the predecessor in title of the present plaintiffs. It will be observed that in the suit to enforce the security of 1884, the mortgagee of 1886 was a necessary party, and an examination of the plaint in that case shows that he was brought on the record as a puisne encumbrancer interested in the mortgaged premises. He filed a written statement in which he challenged the validity of the plaintiff's mortgage and alleged that it was fraudulent and without consideration. He further pleaded that the plaintiff had n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which was, whether the bond in suit was genuine and bona fide, and another was, whether the plaintiffs had any cause of action against the mortgagee of 1886. There was no issue raised as to whether the bond of 1887, if genuine, was, in respect of a portion of the consideration money, entitled to priority over the bond of 1886. The Subordinate Judge found upon the evidence that there was nothing to show whether the alleged mortgagee of 1886 was really interested in the property in suit. He also hold that there was no reliable evidence to prove the claim against them. In this view of the matter, he dismissed the suit against the mortgagee of 1886, but made a decree against the mortgagors on confession of judgment. The decree directed the sale of the properties included in the mortgage so far as the mortgagors were concerned. The mortgagees subsequently executed this decree and purchased the property at the execution sale. Upon these facts, the learned vakil for defendants Nos. 5 to 7, the mortgagees of 1884 and 1887, contends that the present plaintiffs, whose predecessor, the mortgagee of 1886, was a party defendant to the suits of 1894, are precluded by the doctrine of res judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuineness of their security as against the mortgagee of 1886. In the same manner, so far as the security of 1884 was concerned, although the mortgagee of 1886 was a proper and necessary party, the suit to enforce the claim was unsuccessful by reason of the failure of the mortgagees of 1884 to establish the genuineness of the security as against the mortgagee of 1886. Under these circumstances, it is impossible to hold that merely because the mortgagee of 1886 failed to establish his security in the suits of 1894, such failure in any way precludes him or his representative from now relying on his title under the mortgage. 23. The decrees of dismissal, which were made in the suits of 1894, were decrees, which were based on the finding that the mortgages of 1884 and 1887 were not proved to be genuine and for consideration as against the mortgagee of 1886. That finding, therefore, clearly operates as res judicata in favour of the mortgagee of 1886. The decrees, which were made, were in accordance with and based on this finding, see Peary Mohun Mukerjee, v. Ambica Chura Bandopadliya 24 C. 900. 24. On the other hand, the finding that there was no evidence to show that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Shrewsbury (1843) 3 Hare 62. 26. No materials have been placed before us to show that the decisions in the suit, to which we have referred, was given under circumstances, which could possibly make it operate as res judicata between co-defendants. We must, consequently, hold that the decisions is the suits of 1894, brought by defendants Nos. 5 to 8 to enforce their mortgages of 1884 and 1887, operate as res judicata, and as those suits were dismissed, rightly or wrongly, against the mortgagee of 1886, the defendants Nos. 5 to 8 are not entitled to rely upon those mortgages as against the plaintiffs, who now represent the mortgagee of 1886. The true test to be applied to a case of this description is, are the defendants Nos. 5 to 8 entitled, after their defeat in the litigations of 1894, to enforce their mortgages of 1884 and 1887 against the mortgagee of 1886? If they are not, and if their remedy was by way of an appeal against the adverse decisions of 1894, they are obviously precluded from falling back upon their mortgages of 1884 and 1887. The effect of their purchase in execution of their own decrees has been to give them a title against their mortgagors alone, and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Puranmal Premsukhdas L.R. 21 L.A. 126; 10 C. 1035, Gopal Chunder Sreemany v. Herembo Chunder Haldar 16 C. 523 and Lomba Gomaji v. Vishuanath Amrit Tilvankar 18 B. 86. 28. It is argued, on the other hand, by the learned vakil for the plaintiffs-respondents that there are two objections to the right claimed by the defendants, each of which is fatal to their contention. It is pointed out, in the first place, that the decision of this question is barred by the principle of constructive res judicata, and it is contended, in the second place, that upon the admitted facts, the principle of subrogation has no possible application. In our opinion, the argument advanced on behalf of the appellants is not well founded, and their contention must be overruled. It is manifest that this claim for priority might and ought to have been set up in the litigation of 1894 in which the mortgage of 1887 was enforced. (Jones on Mortgages, Sections 1439-41 and 1589A, 6th edition, Vol. II, pages 397 and 526). Indeed, as we have already pointed out the mortgagees did set out in their plaint circumstances sufficient to form the foundation of the claim now advanced. It was not, however, pressed, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment under an agreement with the debtor or creditor that he should receive and hold an assignment of the debt as security, or he must stand in such a relation to the mortgaged premises that his interest cannot otherwise be adequately protected. The foundation of the rule was elaborately examined in a recent case, Wilkins v. Gibson (1901) 113 Georgia 31; 88 S.E. 374., in which Mr. Justice Cobb stated the rule to be that a Subrogation will arise only in those cases, where the party claiming it advanced the money to pay a debt which, in the event of default by the debtor, he would be bound to pay, or where he had some interest to protect, or where he advanced the money under an agreement, express or implied, made either with the debtor or creditor that he would be subrogated to the rights and remedies of the creditor. This distinction between the position of a person, who pays off a mortgage to protect an interest of his own and the position of another, who claims subrogation by agreement, is well marked, and is said to have been borrowed from the Civil Law, which recognised two kinds of subrogation, namely, legal subrogation which took place of right and without any agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditor, satisfies the lien of a prior creditor, or for the benefit of a purchaser, who extinguishes the encumbrances upon his estate, or of a co-obligor or surety, who discharges the debt, or of an heir, who pays the debts of the succession, Shin v. Budd (1862) 14 N.J. Eq. 234. Any one, who is under no legal obligation or liability to pay the debt, is a stranger, and, if he pays the debt, he is a mere volunteer, Arnold v. Green (1889) 116 N.Y. 566. To the same effect are the decisions in Crippen v. Chappel (1886) 35 Kansas 495; 57 Am. Rep. 187), Hough v. AEtna Life Insurance Company (1870) 57 III. 318; 11 Am. Rep. 18 and Watson Wilcox (1876) 39 Wis. 643; 20 Am. Rep. 63. The learned vakil for the respondents placed reliance upon passages from Sheldon on Subrogation, Sections 240-243, which fully bear out his contention, and the position is further strengthened by the expositions contained in Jones on Mortgages, Section 874 (6th Edition, Vol. I, page 918), and Harris on Subrogation, Sections 792-797. If these doctrines, which appear to us to be based on principles of justice, equity and good conscience, are applied to the case before us, it becomes manifest that the claim put forw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Subrogation, Section 29. To use the language in Hollingworth v. Floyd (1807) 2 Harris Gill (Maryland) 91 It would not subserve the ends of justice to consider the assignment of an entire debt to surety as affected by operation of law, when he had paid but a part of it and still owned a balance to the creditor, and the Court would not countenance such an anomaly as a pro tanto assignment, the effect of which would only be to give distinct interests in the same debt to both creditor and surety. This view is in no way inconsistent with that taken by the learned Judges of the High Court in Lomba Gomaji v. Vishvanath Amrit Tilvankar 18 B. 86. On the grounds, therefore, that the position of defendants Nos. 5 to 7 did not entitle them to claim the benefit of the principle of subrogation, and that partial payment was not sufficient to entitle them to succeed to the rights of the prior encumbrancer by subrogation, we must overrule the third ground upon which the decision of the Subordinate Judge is sought to be assailed. 30. The fourth ground, upon which the decision of the Subordinate Judge is challenged on behalf of defendants Nos. 5 to 7 is that the plaintiffs are entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 M. 553, Birbhadra Rath v. Kalpataru Panda I.C.L.J. 388 and Patha Muthammal v. Esup Rowther 29 M. 365. In our opinion, the contention advanced on behalf of the plaintiffs-respondents is well founded and must prevail. The point is really concluded by the decision of their Lordships of the Judicial Committee in Pranal Anni v. Lakshmi Anni (1899) L.R. 28 I.A. 1001; 22 M. 508, the true effect of which was explained in Birbhadra Bath v. Kalpataru Panda I.C.L.J. 388. After a careful examination of all the authorities on the subject, we adopt the view put forward in that cast. A petition of compromise, in so far it relates to properties in suit, does not require registration under Section 17 of the Registration Act, and the decree, in so far as it gives effect to the settlement touching such properties, operates as res judicata. If it gives effect, however, to the settlement touching properties extraneous to the litigation, the decree is, to that extent, clearly without jurisdiction and is inoperative. In relation to these extraneous properties, the parties must fall back upon the petition itself, which cannot, without registration, effectively declare or create title to immovable proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would seem to be well-founded, and it is sufficient to refer to the case of Ganga Das Bhattar v. Jogendra Nath Mitra 5 C.L.J. 315, which is entirely in accord with the decision of their Lordships of the Judicial Committee in Kedar Lal Marwari v. Bishen Pershad (1903) L.R. 31 I.A. 57; 31 C. 332, It is not necessary, however, to deal with this point in detail because, as we have already held, defendants Nos. 5 to 7 are not entitled to rely upon their mortgages of 1884 and 1887 as against the mortgage of 1886, which the plaintiffs seek to enforce. The plaintiffs are entitled to enforce their security precisely in the same manner as if the mortgages of 1884 and 1887 had never been created. 33. The only point taken on behalf of defendants Nos. 9 to 12 raises the question, whether they are not entitled to their costs in the Court of first instance as well as in this Court. It is manifest that the case of the plaintiffs as against them has entirely failed and the learned vakil for the plaintiffs has not seriously resisted the claim for costs put forward on behalf of defendants Nos. 9 to 12. 34. The result, therefore, is that appeal No. 540 of 1904 preferred by defendants ..... X X X X Extracts X X X X X X X X Extracts X X X X
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