According to the plaint, the plaintiff had advanced a loan of Rs. 5 lakhs with interest at 7 % per annum with monthly rests to defendant No. 1, and in order to secure the repayment of this loan, the plaintiff had obtained from the said defendant a mortgage of land situated in Lyallpur, particulars of which have been set out in para. 2 of the plaint. As collateral security for this loan, the second defendant had executed a letter of guarantee in favour of the plaintiff on the same day (14-2-1963) guaranteeing the repayment of the said loan, whilst the first defendant had executed a promissory note in favour of the plaintiff on 22-3-1962 for the loan amount. The loan had to be repaid by 20th February 1964. But as it was not being repaid, the defendants Nos. 3 to 9 had executed further letters of guarantee in the plaintiff's favour guaranteeing the repayment of the loan with interest.
When the extended period of the loan expired, the plaintiff called upon the defendants to repay its loan with interest, but, as they failed so to do, in the events that happened, it filed a suit against them on 29th October 1964 for the recovery of the amount due to it. The amount due as on 30-9- 1964 was Rs. 54,44,140.76 and the plaintiff has claimed the recovery of this amount with costs and interest jointly and severally from the defendants. It is material to observe here that the plaintiff has prayed not only for the recovery of the said amount but for the sale of the property which had been mortgaged in its favour, and in case the sale proceeds of the mortgaged property were found to be insufficient to pay its claim, it sought liberty to recover the balance jointly and severally from the defendants.
2. The defendants Nos. 1 to 6 and 8 and 9 have filed a joint written statement, and raised a preliminary objection in para. 1 which states as follows :- "(1) It is not a suit for the recovery parol debt. In fact it is a suit for foreclosure of the mortgage dated 20-2-1963 and/or for the sale of the mortgaged property secured under the said deed and the sale is not possible unless the plaintiff obtains a decree for the claim arising under the mortgage nor the bank shall be entitled to bring the mortgaged property. To sell otherwise than by instituting a suit for sale in enforce--ment of the mortgage. This suit as framed, therefore, is bad in law and is liable to be dismissed."
They have further pleaded that this Court had no territorial jurisdiction because the mortgaged property was situated in Lyallpur and the mortgage deed had also been executed in Lyallpur. They have also pleaded that the mortgage was defective and unenforceable in law and advanced various other objections which it is not necessary to consider. As to defendant No. 7 1 have to observe here that he was sued only on the basis of the letter of guarantee dated the 20th February 1964 signed by him but as he had died on 7-11-1965, his legal heirs were duly brought on record as defendants 7-A to 7-N. Defendants Nos. 7-A to 7-G and 7-M and 7-N have filed a joint written statement in which they have pleaded that the defendant No. 7 (deceased) did not know English and that he had signed in Urdu a document written in English, the contents of which had been misrepresented to him, by one Muhammad Alam and Ghulam Hyder, and the defendants thought that the document thus signed was the letter of guarantee on the basis of which the said deceased defendant had been sued. They have, therefore, disclaimed liability as his heirs.
Defendants Nos. 7-H to 7-I are minors. The Nazir of this Court was appointed their guardian and has filed a written statement in which he has denied the allegation that the 7th defendant deceased has signed the letter of guarantee dated the 20th February 1964.
3. It is material to observe here that by his order dated the 16th September 1968 Nana, J. Had ordered that this case should be treated as a short cause matter, and in pursuance of this order the case came up for hearing before him on 4-11-1966.
On that day Mr. Sirajur Rehman, learned counsel for defendants Nos. 7-A to 7-G moved an adjournment application, as he wanted to examine witnesses. But as no witnesses had been summoned, Nana, J. Refused the request for an adjournment. The order of Nana, J., dated the 4th November 1968 further states :-.
"Mr. Masood Hussain for defendants 1 to 6 also states that no evidence has been summoned and he does not propose to examine any. He wishes to argue entirely on the legal aspect, and in the context of which he has made an application proposing certain issues for determination between the parties Nana, J. Then framed the following legal issues :- "(1) Whether from the statements made in the plaint the suit is barred under Order XXXIV, rules 4, 14 and 15, C. P. C. And the plaint liable to be rejected under Order VI1, rule 11, C. P. C. And
(2) Whether the plaintiffs in this suit, as framed can obtain a personal decree against the defendants, without specifically relinquishing the security arising under the mortgage and if so to what effect ?"
And then stated :- Mr. Masood Hussain states that he drops the objections of the territorial jurisdiction of this Court to the maintainability of the suit . . . . ."
The case was then adjourned at the plaintiff's request for arguments on the above-mentioned legal issues and it came up before Nana, J. On the 28th of November 1968. As the defendants and their learned counsel were absent on 28th November 1968, Nana, J. Heard the arguments of learned counsel for the plaintiff and passed a preliminary decree as prayed by the plaintiff.
4. The same day, learned counsel for defendants 1 to 6 and 8 and 9 filed an application under Order IX, ruld 13, C. P. C. To set aside the preliminary decree that had been passed against them and this application was allowed by my learned brother Ghulam Rasool Shaikh, J. On 1-9-1969. It is material to observe that in setting aside the ex parte decree my learned brother observed as follows :- "Ex parte decree is set aside. Let the suit be fixed for the same purpose as before the ex parte decree. Date in office"
5. Before examining arguments in the main suit I shall consider the application being Application No. 1434 of 1969 of Mr. Masood Hussain for amendment of issues. I may observe here that this application was filed on 23-9-1969 and is one of several such applications filed by Mr. Masood Hussain. Six issues have been proposed by the defendants in this application and I may refer here only to two of the proposed issues, as the other issues are argumentative and are only an elaboration of these framed on the Court on 4th November 1968. The first of these additional issues raises the contention, that, as the mortgaged property is situated in Lyallpur, this Court has no territorial jurisdiction, but as I have pointed out in para. 4, Mr. Masood Hussain had expressly dropped the objection of territorial jurisdiction before Nana, J. On 4th November 1968. The other issue raises the contention that the deed of mortgage on which the suit is based is defective. In this connection Mr. Masood Hussain submitted that the mortgage was invalid because it pertained to agricultural land and had been effected without the sanction of the Collector which was necessary under the relevant law. In further support of this application he wanted to file documents to show that the mortgage was invalid on this ground, and learned counsel informed me that he had filed an application for permission to file these documents. As that application had not been placed for hearing, he made an oral request that he should be allowed to argue this application as the production of these documents was essential to the issue raised by him about the validity of the mortgage. An issue can be framed only on the basis of the allegations made by the parties in their pleadings. I have therefore examined the written statement filed by Mr. Masood Hussain and nowhere does it state that the mortgage was invalid because it had been executed without the Collector's sanction ; therefore the application for amendment of issues is barred on the short ground that the issue proposed does not arise out of the pleadings. Secondly, on 4th November 1968 Mr. Masood Hussain had stated before Nana, J. That he did not wish to examine any evidence and he had further expressly admitted that the mortgage was properly executed. The issue now sought to be raised about the invalidity of the mortgage is inconsistent with the position taken by the defendants on 4th November 1968, and in view of the order of my learned brother Ghulam Rasool Shaikh, J., dated the 1 September 1968, this objection cannot be entertained. As I have pointed out, in setting aside the ex parte decree against the defendants, my learned brother had observed that the suit was to be fixed for the same purpose as before the ex parte decree. The position before the ex parte decree was that Mr. Masood Hussain had dropped all other objections and had agreed that the suit should be argued only on the two legal issues framed by Nana, J. On 4th November 1968, therefore not only can learned counsel not re-open evidence by means of an application for amendment of issues, but as the order of Ghulam Rasool Shaikh, J., dated the 1 September 1969 has become final, it means that the defendants can only be permitted to advance arguments on the issues which were heard by Nana, J. On 20th November 1968. In the result, the application for amendment of issues is without merit and is dismissed with costs, and I shall now examine the arguments advanced by learned counsel on the issues framed by Nana, J. On 4th November 1968.
6. As I have pointed out, the plaintiff has stated in the plaint that it had advanced a loan against the security of a promissory note and a mortgage and it seeks the sale of the mortgaged property, and if the sale proceeds of the mortgaged property are not sufficient to meet its claim, it seeks a decree for the balance from the defendants jointly and severally. Mr. Afzal Nabi argued on behalf of the plaintiff that the suit was under Order XXXIV. Rule 4, C. P. C. And that the decree sought was inst st terms of Form 5-A of Appendix D to the First Schedule of the Civil Procedure Code, 1908. He therefore prayed for a preliminary decree in terms of Form 5-A.
7. On the other hand, Mr. Masood Hussain submitted that the suit, as framed, was not maintainable and that it would lead to inequitable and unjust consequences if the claim was decreed. According to learned counsel, the plaintiff could only obtain a money decree in this suit, and if it wanted to sell the mortgaged property it bad to file a fresh suit for the sale of the mortgaged property under Order XXXIV, rule 4, C. P. C. This would, according to learned counsel, also be equitable as in a suit under Order XXXIV, rule 4, C. P. C. The Court only passes a preliminary decree, and this would entitle the defendants to have accounts taken. But I pointed out to Mr. Masood Hussain that the plaintiff also sought a preliminary decree for the sale of the mortgaged property, therefore if its claim was allowed, the defendants would have full opportunity of having accounts taken in view of the candid admission of Mr. Afzal Nabi in this respect. Mr. Masood Hussain then submitted that the sale of the mortgaged property could not be decreed because the suit was not a suit under Order XXXIV, rule 4, C. P. C. As the plaintiff has expressly prayed for the sale of the mortgaged property, and as the prayer clause in the plaint is in terms of Form 5-A of Appendix D of the First Schedule of the C. P. C. I invited learned counsel to show me how the suit was not a suit under Order XXXIV, rule 4, C. P. C.
Learned counsel could only refer me, in reply to the provisions of Order XXXIV, rule 14, C. P. C. And certain judgments which I shall presently consider.
8. Order XXXIV, rule 14, C. P. C reads as under :-- "14(1) Where a mortgagee has obtained a decree for the payment of money in satisfaction of a claim arising under the mortgage, he shall not be entitled to bring the mortgaged property to sale otherwise than by instituting a suit for sale in enforcement of the mortgage, and he may institute such suit notwithstanding anything contained in Order II, rule 2.
(2) Nothing in sub-rule (1) shall apply to any territories to which the Transfer of Property Act; 1882, has not been extended."
According to Mr. Masood Hussain, this rule prevented the plaintiff from obtaining a preliminary decree for the sale of the mortgaged property. I am not able to agree with this submission. On a plain reading of this rule it appears to me that its object is to prevent the mortgagee from selling the mortgaged property without surrendering his rights as a mortgagee. Thus, if a plaintiff, who has a mortgage of the defendants' property, obtains a money decree simpliciter against the defendant and then sells the mortgaged property in execution of his money decree, the result would be that whilst retaining his mortgage, he would be able to sell the mortgagor's equity of redemption, whereas if he had filed a suit for the sale of the mortgaged property, the mortgage would have been extinguished by the sale of the mortgaged property. Rule 14 has been enacted to prevent such an inequitable result. I am fortified in my opinion by a passage in Mulla's Commentary on the Code of Civil Procedure Code (12th Edition). At page 1125 in reference to rule 14 Mulla states :- "In such a case the rule provides that the mortgagee shall not be entitled to bring the mortgaged property to sale in execution of the decree : he can have the property sold only by instituting a regular suit for sale (a) and obtaining a decree for sale under rules 4 and 5. It is clear that where a mortgagee brings a regular suit for sale, and a decree is passed in such suit, what would be sold is the mortgaged property free from the mortgage ; while in the other case where the suit is not for sale, but on the mortgage debt only what would be sold is the mortgaged property subject to the mortgage, in other words, it is only the mortgagor's equity of redemption that would be sold. The present rule is for the protection of the mortgagor. It prevents mortgagees from suing their mortgagors on the mortgage debt as such and in the execution selling the bare equity of redemption thereby depriving the mortgagors of the right of redemption that would be given to them by the decree for sale."
As the plaintiff has asked for the sale of the mortgaged property in this suit, the mortgaged property will be sold "free from the mortgage", therefore the suit clearly falls under c Order XXXIV, C.
P. C. And I do not see how it is barred by) Order XXXIV, rule 14, C. P. C.
9. I shall now briefly examine the judgments cited by Mr. Masood Hussain in support of his submission. In National Bank of Pakistan v. Sattar and others (PLD 1962 Kar. 271), as in the instant case, the plaintiff was a bank, and as security for the advances it had given to the defendants it had obtained from them promissory notes as well as a mortgage of immovable property.
But unlike the instant case it had first filed two suits under Order XXXVII, C. P. C. Against them solely on the basis of the promissory notes. Thereafter, it had filed another suit on the mortgage. It had then obtained a decree in one of the suits on the promissory notes. After obtaining this decree it had continued to prosecute its second suit on the promissory notes and its mortgage suit.
Qadeeruddin Ahmed, J, as he then was, now the Chief Justice, was struck by the possibility that this would enable the plaintiff to recover the decretal amount twice and might be contrary to the provisions of Order II, rule 2, C. P. C., therefore although the defendants were ex parte he examined the question whether the plaintiff could file separate suits on the mortgage and on the promissory notes which had been given as security for the same advance. Order II, rule 2, in so far as it is relevant, prescribes that if a plaintiff is entitled to more than one relief in respect of the same cause of action he may sue for all or any of such reliefs, but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards be permitted to sue for any reliefs so omitted. As in its earlier suit the plaintiff had not sued for relief on its mortgage and had also not obtained the leave of the Court for not suing for such relief, Qadeeruddin Ahmed, J. Held that the plaintiff's mortgage suit was barred by Order II, rule 2, C. P. C. I am in respectful agreement with this judgment, but I do not see how it is relevant to the instant case. On the contrary, as in the judgment cited, the plaintiff's mortgage suit was dismissed because it had not included this relief in its earlier suit, it supports the contention of Mr. Afzal Nabi that he is entitled to sue defendant on the mortgage in this suit. Mr. Masood Hussain then referred me to Habib and others v. Daulat Ram (AIR 1947 Sind 12). The facts of that case were that the judgment-debtors had executed a mortgage of a house in favour of the appellants, and on the same day the mortgagees had leased back the same house to the judgment---debtors on a monthly rent of Rs. 200. As the mortgagors failed to pay rent to the mortgagees, the mortgagees filed a suit against them for the recovery of the arrears of rent due to them. After their claim was decreed, in execution proceedings against the mortgagor, they filed an application for the sale of the mortgaged property. But, as this application was dismissed, they filed an appeal in the Rajasthan High Court. The learned Judges of the Rajasthan High Court held that the agreement for the payment of rent was part and parcel of the mortgage, therefore they dismissed the appeal of the mortgagees and agreed with the view of the trial Court that the mortgagees could sell the mortgaged property only by filing a suit for the sale of that property under Order XXXIV, C. P. C. I am in respectful agreement with the principle laid down in this judgment that when a plaintiff seeks to enforce his rights as a mortgagee, he can do so only by expressly praying for an order for the sale of the mortgaged property, otherwise, as I have explained in para. 8 the consequences would be extremely inequitable and harsh. But as that is precisely what the plaintiff has done in the present suit. I cannot understand how the judgment can help the case of the defendants. Finally, learned counsel relied on a judgment of the Sind Chief Court in Topandas v. Tikamdas (AIR 1947 Sind 12). There a mortgagee had obtained a preliminary decree against the mortgagors under Order XXXIV, C. P. C. But thereafter he had slept over his rights and his application for a final decree was dismissed as time-barred He then filed a regular suit on the basis of the preliminary decree. But Davies, C. J. And Thadani, J. Held that the suit was barred. I am in respectful agreement with this view, but the judgment cited is totally irrelevant to the question under consideration because the plaintiff has expressly prayed in the plaint for the sale of the mortgaged property.
10. The only question which arises out of the judgments cited is whether the suit in the instant case is a suit under Order XXXIV, C. P. C. It is true that the heading of the plaint does not state so, and this is unfortunate, and the prayer clause might also have been worded differently. But the question whether it is a suit under Order XXXIV, C. P. C. Has to be decided not by examining the heading or examining microscopically the language of the prayer clause but by the substance of the plaint. I have no doubt that the suit is in essence a suit for the sale of the mortgaged property and, as such, it falls under Order XXXIV, rule 4, C. P. C. Mr. Masood Hussain's arguments are therefore without merit.
11. Mr. Sirajur Rahman and Mr. Syeduz Zaman appeared on behalf of the legal heirs of the 7th defendant, now deceased. As I have pointed out, the deceased had been sued only on the letter of guarantee signed by him. As defendants Nos. 7-H to 7-1 have denied the signature of the deceased on the letter of guarantee, Mr. Syeduz Zaman submitted that the plaintiff's claim could not be decreed against these defendants as the plaintiff had produced no evidence to show that the deceased had ever signed the letter of guarantee. The contention of Mr. Sirajur Rehman for defendants Nos. 7-A to 7-G and 7-M and 7-N was rather similar. These defendants have said that the deceased did not know English and even if he had signed the letter of guarantee he had signed it in Urdu, therefore learned counsel submitted that the plaintiff could only obtain a decree against these defendants by proving that the contents of the letter of guarantee bad been explained to the deceased before he signed the said letter of guarantee. Unfortunately, the arguments of both the learned counsel ignore the order of Nana, J., dated the 4th November 1968. As that order does not refer to these objections it means that these objections were either rejected or they were not advanced at all, and further although a preliminary decree was passed none of these defendants took any steps to set it aside. The order of Nana, J. Has thus become final. Additionally the order of Ghulam Rasool Shaikh, J., setting aside the ex parte decree against the defendants only permits them to argue on the issues which were heard by Nana, J. On 28th November 1968. Assuming therefore for the sake of argument that defendants 7-A to 7-G are entitled to the benefit of the restoration order, as the objections advanced by learned counsel do not arise out of those issues they cannot be entertained.
12. No other argument was advanced. The defendants have failed to show that the suit is barred by Order VII, rule 11, C. P. C. Or that a decree cannot be passed against them as prayed. Accordingly, I decide both issues in the plaintiff's favour and order that a preliminary decree be passed under Form 5-A of Appendix D to the First Schedule of the Civil Procedure Code. The defendants are given six months' time to pay the decretal amount and meanwhile accounts shall be taken.
A. E.Preliminary decree passed.