The bench comprising Justices Hemant Gupta and AS Bopanna observed that equity of redemption as a right is subsidiary to the right of ownership.
The present appeal is filed by the aggrieved plaintiff against the judgement of the High Court of Judicature Bombay where the suit for redemption of mortgage land was dismissed, setting aside the judgment of the First Appellate Court and restoring that of the Trial Court. The facts which led to the instant appeal are as follows: the defendant 1 and 2 mortgaged a land in favour of defendant 3 to secure a sum of Rs 700. The defendants sold the mortgaged property to the plaintiff by a registered sale deed for consideration of Rs 1000. The original mortgagee filed a Regular Civil Suit for recovery of mortgage amount of Rs.700/- along with the interest accrued against the original mortgagors. 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 defendants agreed to pay the mortgage amount. Since defendants failed to pay the said amount, it 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 Trial Court though dismissed the suit and held that the plaintiff had purchased the property and not the equity of redemption. In appeal, the First Appellate Court held that the revenue record shows that the plaintiff was in possession of the suit land after the sale deed was executed in his favour. It was further held that since the plaintiff had purchased the 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. The High Court set aside the decree of foreclosure.
Learned counsel for the appellant relied 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 also provisions of Order XXXIV Rule 1 of the Code of Civil Procedure. It is also argued that the plaintiff was in possession, which is apparent from the revenue record and the possession was taken from the plaintiff in the execution of the decree for foreclosure. Since the plaintiff was in possession, the plaintiff was not only a proper but a necessary party as the defendant lost the title in the suit property on the date of filing of the suit. The learned counsel for the respondent relied upon a judgment Allokam Peddabbayya & Anr. v. Allahabad Bank & Ors. [(2017) 8 SCC 272] passed by the court, to contend that a purchaser from a mortgagor has no better right than the mortgagor himself.
The bench was of the view that the plaintiff rightly claimed he was required to be impeded as a necessary party since the mortgagee, original mortgagor and the appellant are all from the same village and the factum of sale is deemed to be in the notice of the mortgagee. Therefore, non-impleadment of the appellant renders the decree for foreclosure as void.
The court held that the equity of redemption is a right which is subsidiary to the right of ownership. Such right is not over and above the right of ownership purchased by the plaintiff. who has stepped into the shoes of the mortgagor, after the purchase from the mortgagor but before filing a suit for foreclosure is entitled to redeem the property in terms of Section 60 of the Act.
The court observed that the decree of foreclosure passed in the suit filed by the mortgagee will not extinguish the right of the mortgagor to redeem land in view of the fact that he was not impleaded as a party in the suit though he has purchased part of the mortgaged property by virtue of registered sale deed. The judgement of the high court was set aside and appellant is given three months’ time to deposit the mortgage amount and when deposited, he shall be entitled to seek restoration of possession.
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NARAYAN DEORAO JAVLE (DECEASED) THROUGH LRS. Vs KRISHNA & ORS (CIVIL APPEAL NO. 4726 OF 2021)