Summary
A purchaser of part of mortgaged land before a foreclosure suit retained the right to redeem because he was omitted as a necessary party from collusive foreclosure proceedings. His ownership included the equity of redemption. Rejection of a stay of execution did not adjudicate his title and created no res judicata. He could redeem the purchased land by paying the entire mortgage debt. The Court restored the first appellate decree and allowed three months to deposit the mortgage amount, followed by expeditious restoration of possession.
Issues
- Whether a pre-suit purchaser omitted from a foreclosure suit remained entitled to redeem.
- Whether rejection of a stay of execution barred redemption as res judicata.
- Whether the purchaser could redeem his land by paying the entire mortgage amount.
Provisions considered
- Sections 59A, 60 and 91, Transfer of Property Act, 1882The purchaser derived the mortgagor’s statutory redemption right; a collusive foreclosure decree passed without him did not extinguish it. Redemption of the purchased portion required the entire mortgage amount. (¶¶ 7, 11, 15, 19, 23, 27, 28, 29, 30)
- Order XXXIV Rule 1, Code of Civil Procedure, 1908The pre-suit purchaser interested in redemption was a necessary party to foreclosure proceedings. (¶¶ 7, 15, 23)
- Section 11, Explanation VII; Order XXI Rules 101 and 103, Code of Civil Procedure, 1908Dismissal of an execution-stay application was distinguished from adjudication of a claim under the execution rules and did not operate as res judicata. (¶¶ 20, 21, 22)
Held
- A registered purchaser before foreclosure proceedings steps into the mortgagor’s shoes. Equity of redemption accompanies ownership and need not be separately purchased. The mortgagee, aware of the sale and possession, had to join him. (¶¶ 11, 12, 13, 15, 19, 23)
- The collusive foreclosure decree obtained against the original mortgagors behind the purchaser’s back was void and did not extinguish his redemption right. Decisions involving a purchaser during litigation or a completed auction sale did not govern these facts. (¶¶ 14, 23, 24, 25, 26, 27, 30)
- Refusal to stay execution determined no claim to title under Order XXI Rules 97 or 99 and had no force of a decree under Rules 101 and 103. Its dismissal therefore created no res judicata against redemption. (¶¶ 20, 21, 22)
- The purchaser could redeem the portion he owned by paying the entire mortgage amount, rather than a proportionate debt. He was given three months to deposit it and could then seek expeditious restoration of possession through the executing court. (¶¶ 28, 29, 31)
Result
Appeal allowed; first appellate decree restored. Mortgage amount to be deposited within three months, followed by expeditious delivery of possession.