LexMANGRU MAHTO & ORS. versus SHRI THAKUR TARAKNATHJI TARAKESHWAR MATH & ORS.
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A B c E F G H MANGRU MAHTO & ORS. v. SHRI THAKUR TARAKNATRJI TARAKESHWAR MATH & ORS. March 8, 1967 [K. N. WANCHOO, R. S. BACHAWAT AND V. RAMASWAMI, JJ.j Code of Civil Procedure (Act 5 of 1908), 0.XXI, rr. 58 and 63- 0rder on claim petition against decree·holder-No suit filed for setting aside order-Res judicata, to what extent. Mortgage--Suit by n1ortgagee-Lessees of morigaged property !JOI parties-Property sold in execution of n1ortgage decree-Effect on le'isees' right of redemption. The owner of certain properties over which K had a mortgage grant- ed leases to certain persons. The lands were sold in execution of the mortgage decree of K, and were. purchased by K at the auction The lessees allowed the property to be sold and did not apply for being joined as parties. K obtained a money decree against one of the lessees and in execution attached the lands. The lesse"" filed claim peti- tions objecting to the attachment ooder 0.21 r. 28 C.P.C. The claim petitions were allowed and the executing court found that the leases were genuine. K did not file any suit under 0.21 r. 63 C.P.C. But later, K filed a suit against the mortgagor and the lessees for recovery of p<JMCS- sion of the lands alleging that the leases were collusive transactions and were otherwise not binding on him. The trial court dismissed the suit holding that leases were genuine, but the High Court decreed the suit holding that the leases were sham transactions and made in contravention of s. 65A of tile Transfer of Property Act. In appeal to this Court, the appellants contended that (i) as K did not file any suit under Order 21 r. 63 C.P.C. the adverse Orders passed against him in the proceedings under 0.21 r. 58 C.P.C. operated as res judicata and he was precluded from alleging that the leases were not binding on him; and (ii) the leases granted by the mortgagor were binding on K. HELD : In view of the orders passed against K in the claim pro- ceedings and his failure to institute suits under 0.21, r. 63 C.P.C., K was precluded from claiming that he had the right to attach the suit lands in 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. [128 E] ~ claim proceeding under 0.21 r. 58 C.P.C. is not a suit or a pro- ceeding analogous to a suit. An order in the claim proceeding does not operate as res judicata. It is because of 0.21 r. 63 that the order be- comes 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 cbiming through him the question whether the property was or was no• 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 further. [129 A-Cl Kandadai Naras;mhachariar v. Raghava Padayachi & Ors. I.L.R. 1946 !\fad. 79; approved. 126 SUP.IUIMB COURT RBPOB.TS [1967] 3 S.C.R Subbier v. Moideen Pltchai, A.I.R. 1923 Mad. 562, and Sar/u Prasad A Mlssir and Ors. v, Maktudan Chaudhuri & Ors, A.I.R. 1922 P.C. 341; referred to. (ii) The validity of the leases granted by the mortgagor was not affected by s. 65A of the Transfer of Property Act as the leases were granted before the enactment of s. 65A. [131 A-Bl The leases were not in the ordinary course of management of the B mortgagor as the agent or bailiff of the mortgagee and were not binding of the mortgagee. [132 A-BJ A lease granted by the mortgagor,. out of the ordinary course of management, though not binding on the martgagee, is binding as be· tween the mortgagor and the lessee. Such a lessee acquires an interest in the right of redemption and is entitled to redeem. If such a lease is created before the institution of a suit relating to the mortgage, the C lessee must be joined as a party to the suit under 0.34, r. I, C.P.C.; otherwise he will not be bound by the decree passed in the suit and will continue to retain his right of redemption. But in view of s. 52 of the Transfer of Property Act, if the mortgagor grants such a lease during the pendency of a suit for sale by the mortgagee, the lessee is bound by the result of the litigation. If the property is sold in execution of the decree passed in
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