Bhagwati, J. - (1.) The question that arises for our consideration in this appeal is whether prior to the enactment of S. 65-A, T. P. Act in 1939 a mortgagor in possession had the power to grant a permanent lease of the mortgaged property so as to bind the mortgagee.
(2.) One Raja Nilkanth Narian Singh was the owner of Gadi Sirampur and he executed on 1-8-1914 a simple mortgage of Gandi Sirampur in favour of the Chota Nagpur Banking Association Limited. In 1920 the Bank filed a suit against his son Wazir Narain Singh to enforce the mortgage security and obtained a mortgage decree on 29-11-1921. The Bank purchased as third share of Gadi Sirampur in execution of that decree on 28-10-1922. Proceedings were taken to set aside this sale. During the pendency of these proceedings it appears that on 5-11-1925, Wazir Narian Singh granted a permanent lease of four villages Nawadih, Koldih, Pandna and Chihutia by a registered Patta to one Hiraman Ram who was the Manager and Karta of his joint Hindu family. The permanent lease was taken by him in his own name and in the name of his son Chohan Ram. An agreement was subsequently arrived at between the Bank and Wazir Narain Singh that if Wazir Narain Singh paid to the Bank on or before 16-8-1926 the sum of Rs. 1,10,631-4-0 the sale would be set aside. Wazir Narain Singh executed on 14-8-1926 a mortgage of Gadi Sirampur in favour of the Manager of the Court of Wards in charge of the Plaintiff's estate during his minority to secure repayment of a sum of Rs. 1,47,000/- and out of the same satisfied the dues of the Bank and the sale in favour of the Bank was accordingly set aside.The Plaintiff through the Manager of the Court of Wards filed a suit on 4-2-1929 to enforce this mortgage and he impleaded as co-defendants in that suit Hiraman Ram as Defendant 20 and his father Dilo Ram as Defendant 19. A final decree for sale was passed on 18-9-1931, and the Plaintiff purchased Gadi Sirampur at the auction sale held in execution of this decree on 6-4-1935. Delivery of possession was obtained by the Plaintiff through the Court on 16-2-1936. Dilo Ram died after the mortgage decree but Hiraman Ram and his son Chohan Ram continued in actual possession of the disputed villages and the Plaintiff therefore filed on 16-11-1939 the suit, out of which this appeal arises, in the Court of the Additional Subordinate Judge of Hazaribagh against Hirman Ram and Chohan Ram, Defendants 1 and 2 for khas possession of these villages. The Plaintiff contended that he was subrogated to the position of the Bank, that the decree which had been passed in the mortgage suit was binding on the Defendants, that he was the auction purchaser in execution of that mortgage decree and that the Patta being subsequent to the Plaintiff's mortgage thus came to an end and he was entitled to recover khas possession from the Defendants Defendant 2 filed his written statement contesting the Plaintiff's claim. He deemed that the plaintiff was subrogated to the position of the Bank. He contended that the decree in the mortgage suit was not binding on him as he was not a party to that suit. He further contended that the patta could not be put an end to by the auction sale of the mortgaged property. Defendant 1 filed a separate written statement. He denied that he was the Manager and Karta of the joint Hindu family. He also contended that there was a partition amongst the members of the joint family within a year after their possession of the properties in suit and the properties had been allotted at that partition to Defendant 2.
(3.) The trial Court held that the Plaintiff was subrogated to the position of the Bank. It also held that Defendant 1 was the Manager and Karta of the joint family and that Defendant 2 was fully represented in the mortgage suit, that the decree in the mortgage suit was binding on the Defendants and that the Plaintiff was entitled to recover possession of the said properties and mesne profits from the Defendants. The Defendants appealed against this decree to the High Court of Judicature at Patna. The High Court negatived the contention in regard to constructive res judicata which was urged on behalf of the Plaintiff. It then considered the further contention that Wazir Narayan Singh had after creating the mortgage in favour of the Bank no power to grant the permanent lease in question to the Defendants. After considering all the authorities which were cited before it, it came to the conclusion that the question whether Wazir Narayan Singh had got such power or not had to be determined with reference to the provisions of S. 66, T. P. Act and the crucial test was whether the lease rendered the mortgage's security insufficient. In spite of the fact that there was no allegation in the Plaint that the Defendant's lease had the effect or rendering the security of the Bank insufficient, the High Court went into this question and on a calculation of some figures came to the conclusion that the lease of the disputed villages in favour of the Defendants did not in any way render the security of the bank insufficient. It therefore held that the lease was valid and was not affected by the Plaintiff's mortgage decree or by the execution sale under that decree and accordingly dismissed the Plaintiff's suit. The Plaintiff obtained leave to appeal to the Privy Council from this decision of the High Court and the appeal was admitted on 9-1-1946.;