Cause Of Action For Redemption Suit Is Successive, Second Suit By Mortgagor Not Barred By Default Dismissal Of First Suit : Supreme Court

The Supreme Court has held that a second suit by a mortagor for redemption of mortgage is not barred merely because the first suit was dismissed for default, unless the right to redemption of mortgage has been extinguished.

A bench comprising Justices Sudhanshu Dhulia and JB Pardiwala held that Order IX Rule 9 of the Code of Civil Procedure (which bars second suit on the same cause of action if the first suit is dismissed for default) cannot debar a mortgagor from filing a second suit for redemption of mortgage so long as that right exists. The bench noted in this regard that the cause of action in a redemption suit is a recurring one.

"Unless the equity of redemption is so extinguished, a second suit for redemption by the mortgagor, if filed within the period of limitation, is not therefore barred.

It follows, therefore, that if the right of redemption is not extinguished, the provision like Order IX Rule 9 of the CPC will not debar the mortgagor from filing a second suit because as in a partition suit, the cause of action in a redemption suit is a recurring one. The cause of action in each successive action, until the right of redemption is extinguished or a suit for redemption is time barred, is a different one", stated the judgment authored by Justice Pardiwala.

In this case, the plaintiffs had filed a suit seeking decree of eviction from a shop. However, the suit came to be dismissed for default. Thereafter, they filed a suit seeking to take back the property after redeeming the mortgage. The plaintiffs also sought for amendment of the plaint, which was not allowed by the trial court. The High Court also rejected the revision petition filed by the plaintiffs against the trial court's order, following which the matter reached the Supreme Court.

The first suit was filed on the premise that the Defendant as a tenant was in arrears of rent and had unlawfully inducted sub-tenants in the tenanted premises. Later in point of time, the present suit came to be filed with the prayer that the Plaintiffs be permitted to redeem the mortgage and take back the possession of the suit property. 

The amendment to the plaint was sought to include certain averments relating to creation of mortgage deed. The Defendant opposed the amendment by invoking Order IX Rule 9 of the CPC to submit that the present suit by itself is not maintainable.

The Court noted that the plaintiffs are pleading a two-fold case- First, as regards the tenant-landlord relationship and secondly, the case of redemption of mortgage.  The Court referred to precedents which state that a party is entitled to take alternative and inconsistent pleas in support of its case.

As regards the applicability of Order IX Rule 9 CPC, the Court held that it is applicable only to a subsequent suit filed on the same cause of action.

"It was not the intention of the Legislature to bar the subsequent suits between the parties and the same was evident by the qualifying words, “same cause of action”. Therefore, everything depends upon the cause of action and in case the subsequent cause of action arose from a totally different bunch of facts, such suit cannot be axed by taking shelter to the provision of Order IX Rule 9 of CPC", the Court held.

Also, the right to redeem, is a right conferred upon the mortgagor by an enactment(Section 60 of the Transfer of Property Act), of which he can only be deprived by means and in manner indicated for that purpose and strictly complied with.

CPC dealt with the procedure relating to all suits. There was a special law which dealt with the rights of mortgagors and mortgagees and that substantive law was to be found in the Transfer of Property Act. That substantive law provided only two ways in which the right of redemption can be extinguished and they were: (i) by act of the parties, or (ii) by decree of the court. The right of redemption is an incident of a subsisting mortgage and it subsists so long as the mortgage itself subsists. Hence, the Court held that the CPC provision cannot bar the substantive right to redeem mortgage.

Case Title : Ganesh Prasad vs Rajeshwar Prasad and others

Citation : 2023 LiveLaw (SC) 189

Transfer of Property Act 1882- Section 60 - Right to redemption of mortgage- Unless the equity of redemption is so extinguished, a second suit for redemption by the mortgagor, if filed within the period of limitation, is not therefore barred -Para 61, 62

Code of Civil Procedure 1908 - Order IX Rule 9 -If the right of redemption is not extinguished, the provision like Order IX Rule 9 of the CPC will not debar the mortgagor from filing a second suit because as in a partition suit, the cause of action in a redemption suit is a recurring one. The cause of action in each successive action, until the right of redemption is extinguished or a suit for redemption is time barred, is a different one- Para 61, 62

Code of Civil Procedure 1908 - Order IX Rule 9 -t was not the intention of the Legislature to bar the subsequent suits between the parties and the same was evident by the qualifying words, “same cause of action”. Therefore, everything depends upon the cause of action and in case the subsequent cause of action arose from a totally different bunch of facts, such suit cannot be axed by taking shelter to the provision of Order IX Rule 9 of CPC - Para 52

Pleadings - A entitled to take alternative pleas in support of its case- plaintiff is entitled to plead even inconsistent pleas while seeking alternative reliefs - Para 41, 42

Code of Civil Procedure - Order VI Rule 17- Inconsistent and contradictory allegations in negation to the admitted position of facts or mutually destructive allegations of facts should not be allowed to be incorporated by means of amendment to the pleadings - Para 38

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