Holding

A suit for enforcement of an equitable mortgage is not barred by Order II Rule 2 of the CPC, and the appellant failed to establish any novation; therefore the decree in favour of the bank stands.

Summary

The appellant, S. Nazeer Ahmed, had borrowed Rs.1,10,000 from State Bank of Mysore for a bus, securing the loan by hypothecating the bus and equitably mortgaging two immovable properties. The bank first obtained a money decree, but could not sell the hypothecated bus and later sued for enforcement of the equitable mortgage. The appellant claimed the second suit was barred by Order II Rule 2 of the CPC, that a tripartite arrangement with a third party had discharged his liability, and that the mortgage was invalid. The trial court held the suit was not barred but dismissed it on limitation and mortgage validity; the High Court reversed, finding a valid mortgage and granting a decree, while ignoring the appellant’s lack of cross‑objections. The Supreme Court held that a suit for enforcement of a mortgage is exempt from the bar of Order II Rule 2 by virtue of Order XXXIV Rule 14 (and 15), that the appellant failed to prove any novation or tripartite agreement, and that a memorandum of cross‑objections was not required to challenge the trial court’s finding. Consequently, the appeal was dismissed and the High Court decree affirmed.

Issues considered

Whether the suit for enforcement of an equitable mortgage is barred by Order II Rule 2 of the CPC.
Whether the appellant was discharged from liability by a purported tripartite arrangement/novation.
Whether the respondent bank needed to file a memorandum of cross‑objections under Order XLI Rule 22 to challenge the trial court’s finding.
Whether Order XLI Rule 33 could be invoked to grant a decree in favour of the bank.

Legislation cited

Code of Civil Procedure, 1908s. Order II Rule 2, s. Order XLI Rule 22, s. Order XLI Rule 33, s. Order XXXIV Rule 14, s. Order XXXIV Rule 15
Transfer of Property Act, 1882

Subjects

equitable mortgageOrder II Rule 2res judicatalimitationcross‑objectionsOrder XLI Rule 33tripartite arrangementnovationmortgage enforcementCPCbar of suitcause of action

Judgment

I
~

S. NAZEERAHMED A
v.
STATE BANK OF MYSORE AND ORS.

JANUARY 12, 2007

(H.K. SEMA AND P.K. BALASUBRAMANYAN, JJ.] B

Code of Civil Procedure, 1908-0.2 R.2; 0.41 R.22 & R.33-Lender
Bank filed a money suit for recovery of loan given for buying bus-Its
second suit on the basis of mortgage debt is not barred by 0.2. R.2 as the
cause of action in suits are different-Bar of 0.2 R.2 operates on reliefs c
based on the same cause of action-Besides 0. 34 R.14 specifically lays
down that mortgage is not barred by 0.2 R.2.

The Respondent-Bank had advanced loan to appellant for buying a bus.
Bank obtained a money decree. When Bank filed execution petition,
appellant raised a defence that he had transferred bus to 'F' in agreement
D
with the Bank. Bank then filed another suit on the basis of mortgage
of his properties by the deposit of title deeds. Various defences were
raised by appellant like bar of 0.11 R.2 and limitation. Trial Court held
that suit was not hit by O.U R. 2 of CPC but dismissed the suit as
time barred. It also held that there was no creation of a valid equitable E
mortgage. Bank filed appeal in the High Court. High Court held that a
valid and enforceable equitable mortgage was created. The suit was held
to be in time and not hit by 0.11 R. 2. It purported to invoke Order XLI
Rule 33 of the Code to grant the Bank a decree against the appellant
though it refused a decree to the Bank against the guarantor. It did not
.~ F
disturb the finding of the trial court on the tripartite arrangement set up
by the appellant based on the alleged transfer of the vehicle. Hence the
present appeal.

Dismissing the appeal, the Court
G
HELD: 1. The High Court, was clearly in error in holding that the
appellant not having filed a memorandum of cross-objections in terms of
Order XLI Rule 22 of the Code of Civil Procedure, 1908, could not
challenge the finding of the trial court that the suit was not barred by
Order II Rule 2 of the Code. The respondent in an appeal is entitled to H
843
844 SUPREME COURT REPORTS [2007J I S.C.R.

A support the decree of the trial court even by challenging any of the findings
that might have been rendered by the trial court against himself. For
supporting the decree passed by the trial court, it is not necessary for a
respondent in the appeal, to file a memorandum of cross-objections
challenging a particular finding that is rendered by the trial court
against him when the ultimate decree itself is in his favour. A
B memorandum of cross-objections is needed only if the respondent claims
any reliefwhich had been negatived to him by the trial court and in addition
to what has already been given by the decree under challenge.
[Para 7] [848-F-H, 849-AJ

c of the2.Code
The High Court has misconceived the object of Order XLI Rule 33
and has erred in invoking it for the purpose of granting the
plaintiff Bank a decree. Order XLI Rule 33 enables the appellate court to
pass any decree that ought to have been passed by the trial court or grant
any further decree as the case may require and the power could be
exercised notwithstanding that the appeal was only against a part of the
D decree and could even be exercised in favour of the respondents, though the
respondents might not have filed any appeal or objection against what has
been decreed. In the case on hand therefore there was no occasion for
applying Order XLI Rule33 of the Code. If the view of the High Court was
that the suit was barred by Order II Rule 2 of the Code, it is difficult to
see h'ow it could have resorted to Order XLI Rule 33 of the Code to grant
E a decree to the plaintiff in such a suit. In that case, a decree bas to be
declined. That part of the reasoning of the High Court is therefore
unsustainable. [Para 8] [849-B, D, F-GJ

3.1 The plea of the appellant was that the present suit is hit by Order
F II Rule 2 of the Code in view of the fact that the plaintiffomitted to claim -...,
· relief based on the mortgage, in the earlier suit. Obviously, the burden to
establish this plea was on the appellant. The appellant has not even cared
to produce the plaint in the earlier suit to show what exactly was the cause
of action put in suit by the Bank in that suit. The Bank had earlier sued
for recovery of the loan with interest thereon as a money suit. No relief
G was claimed for recovery of the money on the foot of the equitable mortgage.
In that suit, the Bank appears to have attempted in execution, to bring the
mortgaged properties to sale. The appellant had objected that the suit not
being on the mortgage, the mortgaged properties could not be sold in
execution without an attachment. That objection was upheld. The Bank was
H therefore suing in enforcement of the mortgage by deposit of title deeds by
S. NAZEERAHMED v. STATE BANK OF MYSORE AND ORS. 845

the appellant. [Para 9) [849-H, 850-A-D) A
Gurbux Singh v. Bhooralal, (1964) 7 S.C.R. 831 and Mis Bengal
Waterproof Limited v. Mis Bombay Waterproof Manufacturing Co. & Anr.,
[1996) Supp. 8 SCR 695, relied on.

3.2 In respect of a suit in enforcement of a mortgage, the bar B
under Order II Rule 2 has been kept out by Order XXXIV Rule 14 of the
Code. Rule 14 has been enacted for _the protection of the mortgagor.
In the context of Rule 14 of Order 34 of the Code, it is difficult to
uphold a plea based on Order II Rule 2. If the appellant wanted to show
that the cause of action were identical in the two suits, it was necessary
for the appellant to have marked in evidence the earlier plaint and make
c
out that there was a relinquishment ofa relief by the plaintiff, without the
leave of the court. Even then, the effect of Rule 14 will remain to be
considered. (Paras 10, 11) (850-E, 851-B-C)

3.3 That apart, the cause of action for recovery of money based on D
a medium term loan transaction simpliciter or in enforcement of
the hypothecation of the bus available in the present case, is a cause of
action different from the cause of action arising out of an equitable
mortgage, though the ultimate relief that the plaintiff Bank is entitled to
is the recovery of the term loan that was granted to the appellant.
[Para 12) (851-D]
E

Payana Reena Saminatha & Anr. v. Pana Lana Palaniappa XLI
Indian Appeals 142; Mohammad Khalil Khan & Ors. v. Mahbub Ali Mian
& Ors. AIR. (1949) Privy Council 78; Sidramappa v. Rajashetty & Ors.,
(1970) 3 SCR. 319; Deva Ram & Anr. v. Ishwar Chand & Anr., [1995) F
Supp. 4 SCR. 369 and State of Maharashtra & Anr. v. Mis National
Construction Company, Bombay and Anr., (1996) 1 SCR 293, relied on.

3.4 Applying the test so laid down, it is not possible to come to the
conclusion that the suit to enforce the equitable mortgage is hit by Order
II Rule 2 of the Code in view of the earlier suit for recovery of the mid term G
loan, especially in the context of Order XXXIV Rule 14 of the Code. The
two causes of action are different, though they might have been parts of the
same transaction. Even otherwise, Order XXXIV rule 14 read with rule
15 removes the bar if any that may be attracted by virtue of Order II Rule
2 of the Code. (Para 14) [853-E-F) H
846 SUPREME COURT REPORTS [2007) 1 S.C.R.

A Pyu Municipality v. U Tun Nyein, AIR (1933) Rangoon 158, referred
to.

4. Then the question is whether the appellant has established that
there was a tripartite arrangement by which the bus was made over by him
to one 'F' and 'F' undertook to the Bank to discharge the liability under
B the mid term loa~. In support of his case, the appellant had only produced
Exhibits Dl to D4 which only indicate an attempt to bring about an
arrangement of that nature. But they do not show that there was any such
concluded arrangement and there was a taking over of the liability by 'F'as
agreed to by the Bank. The fact that the Bank has paid the insurance
c premium for the bus in question, would not advance the case of the appellant
since the Bank, as the hypothecatee of the bus was entitled to and in fact,
as a prudent mortgagee, was bound to, protect the security and the
insurance of the vehicle effected in that behalf. There is no evidence to show
that there was a tripartite agreement on the basis of which the appella.nt
could disclaim liability based on it. The appellant has not even examined
D
'F' in support of the plea of the tripartite arrangement and the taking over
of the liability of the appellant, by him. In this situation, there is no reason
to uphold the plea of the appellant that the liability has been transferred to
'F' at the instance of the Bank and that the appellant was no more liable
for the plaint amount. (Para 15] [853-G-H, 854-A-B, D-F]
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 175 Of2007.

From the final Judgment and Order dated 24.11.2003 of the High Court
ofKamataka at Bangalore in R.F.A. No. 55/2000
F
G.V. Chandrashekar and P.P. Singh, Advs. for the Appellant.

R. Sundaravardhan, R.N. Keshwani, Ramlal Roy and C.G. Sivakumkaran,
for the Respondents.

G The Judgment of the Court was delivered by

P.K. BALASUBRAMANYAN, J. 1. Leave granted.
.
2. Defendant No. 1, the appellant, borrowed a sum ofRs. l, l 0,000/- from
H the plaintiff Bank for the purchase of a bus. He secured repayment of that
S. NAZEER AHMED 1•. STATE BANK OF MYSORE AND ORS. (BALASUBRAMANYAN, J.] 847

loan by hypothecating the bus and further by equitably mortgaging two A
1
items of immovable properties. The Bank first filed O.S. No. 131 of 1984 for
recovery of the money due. The said suit was decreed. The Bank, in
execution, sought to proceed against the hypothecated bus. The bus could
not be traced and the money could not be recovered. The Bank tried to
proceed against the mortgaged properties in execution. The appellant
resisted by pointing out that there was no decree on the mortgage and the
B
bank could, if at all, only attach the properties and could not sell it
straightaway. That objection was upheld. The Bank thereupon instituted
the present suit, O.S. No. 35 of 1993, for enforcement of the equitable
mortgage. The appellant resisted the suit by pleading that the suit was
barred by Order II Rule 2 of the Code of Civil Procedure, that the transaction c
of loan stood satisfied by a tripartite arrangement and transfer of the vehicle
to one Fernandes, that there was no valid equitable mortgage created and
no amount could be recovered from him based on it and that the suit was
barred by limitation.
D
3. The trial court held that the suit was not hit by Order II Rule 2 of
the Code. It also held that the appellant has not proved that the loan
transaction has come to an end by the claim being satisfied. But, it
dismissed the suit holding that the suit was barred by limitation. It also held
that there was no creation of a valid equitable mortgage since the memorandum
in that behalf was not registered. The Bank filed an appeal in the High Court. E
The High Court held that the memorandum did not require registration and
that a valid and enforceable equitable mortgage was created. The suit was
held to be in time. It held that the suit was hit by Order II Rule 2 of the
Code. But, since the appellant had not challenged the finding of the trial
court that the suit was not hit by Order II Rule 2 of the Code by filing a F
memorandum of cross objections, the plea in that behalf could not be and
need not be upheld. It purported to invoke Order XLI Rule 33 of the Code
to grant the Bank a decree against the appellant though it refused a decree
to the Bank against the guarantor. It did not disturb the fmding of the trial
court on the tripartite arrangement set up by the appellant based on the
G
alleged transfer of the vehicle.

4. Being aggrieved by the decree, the appellant approached this Court
.. with the Petition for Special Leave to Appeal. This Court while issuing
notice, confined the appeal to two questions. They were:
H
848 SUPREME COURT REPORTS [2007] I S.C.R.

A (1) Why the second suit would not be hit by Order 2 Rule 2, C.P.C.?;
\
and

(2) In view of the finding arrived at vide para 19 of the judgment
(Annexure P-2), why defendant No. l should not have been held
to have been discharged from the liability?
B
5. We do not think it necessary to broaden the scope of challenge in
this appeal in the light of the findings entered and in the circumstances of
the case. We are therefore inclined only to examine the two questions posed
by this Court at the stage of issuing notice in the Petition for Special Leave
C to Appeal.

6. We will first consider whether the suit is barred by Order II Rule 2
of the Code. Whereas the trial court held that the suit on the equitable
mortgage filed by the Bank was not barred by Order II Rule 2 of the Code
especially in the context of Order XXXIV Rules 14 and 15 of the Code, the
D
High Court was inclined to the view that the suit was barred, though it did
not accede to the prayer of the appellant to dismiss the suit as being hit by
Order II Rule 2 of the Code. The High Court seems to have been of the view
that since the Bank in the prior suit omitted to sue on the equitable mortgage
without the leave of the court, the present suit was barred. But it proceeded
E to rely on Order XLI Rule 33 of the Code and ended up by granting the Bank
a decree against the appellant. It is not very clear to us why Order XLI Rule
33 of the Code or the principle embodied therein has to be invoked in the
case, since the plaintiff Bank had filed an appeal against the decree
dismissing its suit and was claiming the relief claimed in the suit.
F
7. The High Court, in our view, was clearly in error in holding that the
appellant not having filed a memorandum of cross-objections in terms of
Order XLI Rule 22 of the Code, could not challenge the finding of the trial
court that the suit was not barred by Order II Rule 2 of the Code. The
respondent in an appeal is entitled to support the decree of the trial court
G even by challenging any of the findings that might have been rendered by
the trial court against himself. For supporting the decree passed by the trial
court, it is not necessary for a respondent in the appeal, to file a memorandum
of cross-objections challenging a particular finding that is rendered by the ..
trial court against him when the ultimate decree itself is in his favour. A
H memorandum of cross-objections is needed only if the respondent claims
S. NAZEER AHMED r. STATE BANK OF MYSORE AND ORS. LBALASUBRAMANYAN, J. ] 849

any relief which had been negatived to him by the trial court and in addition A
to what he has already been given by the decree under challenge. We have
therefore no hesitation in accepting the submission of the learned counsel
for the appellant that the High Court was in error in proceeding on the basis
that the appellant not having filed a memorandum of cross-objections, was
not entitled to canvass the correctness of the finding on the bar of Order
II Rule 2 rendered by the trial court. B

8. We also see considerable force in the submission of learned counsel
for the appellants that the High Court has misconceived the object of Order
XLI Rule 33 of the Code and has erred in invoking it for the purpose of
granting the plaintiff Bank a decree. This is a case where the suit filed by C
the plaintiff Bank had been dismissed by the trial court. The plaintiff Bank
had come up in appeal. It was entitled to challenge all the findings rendered
against it by the trial court and seek a decree as prayed for in the plaint,
from the appellate court. Once it is found entitled to a decree on the basis
of the reasoning of the appellate court, the suit could be decreed by
reversing the appropriate findings of the trial court on which the dismissal D
of the suit was based. For this, no recourse to Order XLI Rule 33 is
necessary. Order XLI Rule 33 enables the appellate court to pass any decree
that ought to have been passed by the trial court or grant any further decree
as the case may require and the power could be exercised notwithstanding
that the appeal was only against a part of the decree and could even be
exercised in favour of the respondents, though the respondents might not
E
have filed any appeal or objection against what has been decreed. There
is no need to have recourse to Order XLI Rule 33 of the Code, in a case
where the suit of the plaintiff has been dismissed and the plaintiff has come
up in appeal claiming a decree as prayed for by him in the suit. Then, it
will be a question of entertaining the appeal considering the relevant F
questions and granting the plaintiff the relief he had sought for ifhe is found
entitled to it. In the case on hand therefore there was no occasion for
applying Order XLI Rule 33 of the Code. If the view of the High Court was
that the suit was barred by Order II Rule 2 of the Code, it is difficult to see
how it could have resorted to Order XLI Rule 33 of the Code to grant a
decree to the plaintiff in such a suit. In that case, a decree has to be G
declined. That part of the reasoning of the High Court is therefore

- unsustainable.

9. Now, we come to the merit of the contention of the appellant that
the present suit is hit by Order II Rule 2 of the Code in view of the fact that H
850 SUPREME COURT REPORTS (2007] 1 S.C.R.

A the plaintiff omitted to claim relief based on the mortgage, in the earlier suit
O.S. No. 131 of 1984. Obviously, the burden to establish this plea was on
the appellant. The appellant has not even cared to produce the plaint in the
earlier suit to show what exactly was the cause of action put in suit by the
Bank in that suit. That the production of pleadings is a must is clear from
the decisions of this Court in Gurbux Singh v. Bhooralal, (1964] 7 S.C.R.
B 831] and Mis Bengal Waterproof Limited v. Mis Bombay Waterproof
Manufacturing Co. & Anr., (1996] Supp. 8 S.C.R. 695. From the present
plaint, especially paragraphs 10 to 12 thereof, it is seen that the Bank had
earlier sued for recovery of the loan with interest thereon as a money suit.
No relief was claimed for recovery of the money on the foot of the equitable
C mortgage. In that suit, the Bank appears to have attempted in execution, to
bring the mortgaged properties to sale. The appellant had objected that the
suit not being on the mortgage, the mortgaged properties could n9t be sold
in execution without an attachment. That objection was upheld. The Bank
was therefore suing in enforcement of the mortgage by deposit of title deeds
D by the appellant.

10. From this, it is not possible to say that the present claim of the
plaintiff Bank has arisen out of the same cause of action that was put
forward in O.S. No. 131 of 1984. What Order II Rule 2 insists upon is the
inclusion of the whole of the claim which the plaintiff is entitled to make in
E respect of the cause of action put in suit. We must notice at this stage that
in respect of a suit in enforcement of a mortgage, the bar under Order II Rule
2 has been kept out by Order XXXIV Rule 14 of the Code. Rule 15 of Order
XXXIV makes the rules of Order XXXIV applicable to a mortgage by deposit
of title deeds. We may quote Order XXXIV Rule 14 hereunder:
F ~
"Suit for sale necessary for bringing mortgaged property to sale -
(I) Where a mortgage 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,
G 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 (4 of 1882), has not been
H extended."
S. NAZEERAHMED 1•. STATE BANK OF MYSORE AND ORS. (BALASUBRAMANYAN, J.) 851

11. It is clear from sub-rule ( 1) of Rule 14 of Order XXXIV of the Code A
that notwithstanding anything contained in Order II Rule 2 of the Code, a
suit for sale in enforc~ment of the mortgage can be filed by the plaintiff Bank
and in fact that is the only remedy available to the Bank to enforce the
mortgage since it would not be entitled to bring the mortgaged property to
sale without instituting such a suit. Be it noted, that Rule 14 has been
enacted for the protection of the mortgagor. In the context of Rule 14 of
B
Order 34 of the Code, it is difficult to uphold a plea based on Order II Rule
2. If the appellant wanted to show that the causes of action were identical
in the two suits, it was necessary for the appellant to have marked in
evidence the earlier plaint and make out that there was a relinquishment of
a relief by the plaintiff, without the leave of the court. Even then, the effect c
of Rule 14 will remain to be considered.

12. That apart, the cause of action for recovery of money based on a
me_dium term loan transaction simpliciter or in enforcement of the
hypothecation of the bus available in the present case, is a cause of action
different from the cause of action arising out of an equitable mortgage,
D
though the ultimate relief that the plaintiff Bank is entitled to is the recovery
of the term loan that was granted to the appellant. On the scope of Order
II Rule 2, the Privy Council in Payana Reena Saminatha & Anr. v. Pana
Lana Palaniappa [XLI Indian Appeals 142] has held that Order II Rule 2
is directed to securing an exhaustion of the relief in respect of a cause of E
action and not to the inclusion in one and the same action of different
causes of action, even though they may arise from the same transactions.
In Mohammad Khalil Khan & Ors. v. Mahbub Ali Mian & Ors., A.LR.
(1949) Privy Council 78 (75 Indian Appeals 121), the Privy Council has
summarised the principle thus: F
"The principles laid down in the cases thus far discussed may be
thus summarised:

(1) The correct test in cases falling under 0.2, R.2, is "whether the
claim in the new suit is in fact founded upon a cause of action G
distinct from that which was the foundation for the former suit."
Moonshee Buzloor Ruheem v. Shumsunnissa Begum, (1867-11
M.I.A. 551 : 2 Sar. 259 P.C.) (supra)
> ·~
(2) The cause of action means every fact which will be necessary H
r..
852 SUPREME COURT REPORTS [2007] l S.C.R.

A for the plaintiff to prove if traversed in order to support his right
\
to the judgment. Readv. Brown, [1889-22] Q.B.D. 128 : 58 L.J.Q.B.
120) (supra)

(3) If the evidence to support the two claims is different, then the
causes of action are also different. Brundsden v. Humphr~, (1884-
B 14 Q.B.D. 141 : 53 L.J.Q.B. 476) (supra)

(4) The causes of action in the two suits may be considered to
be the same if in substance they are identical. Brundsden v.
Humphrey, [1884-14] Q.B.D. 141 : 53 L.J.Q.B. 476 (supra)
c
(5) The causes of action has no relation whatever to the defence
that may be set up by the defendant nor does it depend upon the
character of the relief prayed for by the plaintiff. It refers ...... to
the media upon which the plaintiff asks the Court to arrive at a
conclusion in his favour. Muss. Chandkour v. Partab Singh, 15
D
I.A. 156 : 16 Cal. 98 P.C. (supra). This observation was made by
Lord Watson in a case under S. 43 of the Act of 1882 (corresponding
to 0.2 R.2), where plaintiff made various claims in the same suit."

13. A Constitution Bench ofthis Court has explained the scope of the
E plea based on Order II Rule 2 of the Code in Gurbux Singh v. Bhooralal
(supra). It will be useful to quote from the Head note of that decision:

"Held: (i) A plea under Order 2 rule 2 of the Code based on the
existence of a former pleading cannot be entertained when the
pleading on which it rests has not been produced. It is for this
F
reason that a plea of a bar under 0.2 r.2 of the Code can be
established only if the defendant files in evidence the pleadings in
the previous suit and thereby proves to the court the identity of
the cause of action in the two suits. In other words a plea under
0.2 r.2 of the Code cannot be made out except on proof of the plaint
G in the previous suit the filing of which is said to create the bar.
Without placing before the court the plaint in which those facts
were alleged, the defendant cannot invite the court to speculate or
infer by a process of deduction what those facts might be with
reference to the reliefs which were then claimed. On the facts of
H this case it has to be held that the plea of a bar under 0.2 r.2 of
S. NAZEERAHMED 1•. STATE BANK OF MYSORE AND ORS. [BALASUBRAMANYAN, J. ] 853

the Code should not have been entertained at all by the trial court A
because the pleadings in civil suit No. 28 of 1950 were not filed by
the appellant in support of this plea.

(ii) In order that a plea of a bar under 0. 2. r. 2(3) of the Code should
succeed the defendant who raises the plea must make out (i) that
the second suit was in respect of the same cause of action as that
B
on which the previous suit was based; (ii) that in respect of that
cause of action the plaintiff was entitled to more than one relief (iii)
that being thus entitled to more than one relief the plaintiff, without
leave obtained from the Court omitted to sue for the relief for which
the second suit had been filed. c
It is not necessary to multiply authorities except to notice that the decisions
in Sidramappa v. Rajashetty & Ors., [1970] 3 S.C.R. 319, Deva Ram & Anr.
v. Jshwar Chand &Anr., [1995] Supp. 4 S.C.R. 369 and State ofMaharashtra
& Anr. v. Mis National Construction Company, Bombay and Anr., [1996]
D
1 S.C.R. 293 have reiterated and re-emphasized this principle.

14. Applying the test so laid down, it is not possible to come to the
conclusion that the suit to enforce the equitable mortgage is hit by Order
II Rule 2 of the Code in view of the earlier suit for recovery of the mid term
loan, especially in the context of Order XXXIV Rule 14 of the Code. The E
two causes of action are different, though they might have been parts of the
same transaction. Even otherwise, Order XXXIV rule 14 read with rule 15
removes the bar if any that may be attracted by virtue of Order II Rule 2 of
the Code. The decision of the Rangoon High Court in Pyu Municipality

..- .
v. U. Tun Nyein, AIR (1933) Rangoon 158 relied on by learned counsel for F
the appellant does not enable him to successfully canvass for the position
that the present suit was barred by Order II Rule 2 of the Code, as the said
decision itself has pointed out the effect of Order XXXIV Rule 14 and in the
light of what we have stated above.

(,
15. Then the question is whether the appellant has established that G
there was a tripartite arrangement come to, by which the bus was made over
by him to one Fernandes and Fernandes undertook to the Bank to discharge
the liability under the mid term loan. In support of his case, the appellant
hrtd rinly produced Exhibits Dl to D4 which only indicate an attempt to bring
about an arrangement of that nature. But they do not show that there was If.
854 SUPREME COURT REPORTS [2007] I S.C.R.

A any such concluded arrangement and there was a taking over of the liability
by Fernandes as agreed to by the Bank. The fact that the Bank has paid
the insurance premium for the bus in question, would not advance the case
of the appellant since the Bank, as the hypothecatee of the bus was entitled
to and in fact, as a prudent mortgagee, was bound to, protect the security
and the insurance of the vehicle effected in that behalf cannot be taken as
B a circumstance in support of the plea put forward by the appellant. The trial
court, after considering the evidence, rightly noticed that the burden was on
the appellant to show that he had handed over the possession of the vehicle
to one Fernandes on the intervention of the Bank and on the basis of a
tripartite arrangement or taking over of liability by Fernandes and that the
c liability of the appellant had come to an end thereby. Learned counsel for
the Bank rightly submitted that no novation was proved so as to enable the
appellant to riggle out of the liability under the loan transaction. The High
Court has not interfered with the reasoning and conclusion of the trial court
on this aspect and has in fact proceeded to grant the plaintiff Bank a decree
for the suit amount based on the equitable mortgage. We were taken
D
through Exhibits D 1 to D4 and even a fresh document attempted to be
marked in this Court along with its counter affidavit by the Bank. On going
through the said documents, the other evidence and the reasoning adopted
by the trial court, we are satisfied that there is no evidence to show that
there was a tripartite agreement on the basis of which the appellant could
E disclaim liability based on it. It is seen that the appellant has not even
examined Fernandes in support of the plea of the tripartite arrangement and
the taking over of the liability of the appellant, by him. In this situation, we
see no reason to uphold the plea of the appellant that the liability has been
transferred to Fernandes at the instance of the Bank and that the appellant
F was no more liable for the plaint· amount.

16. Thus, on a consideration of all the relevant aspects, we are satisfied
-
that the High Court was ·correct in granting the Bank a decree in the suit.
There is therefore no reason to interfere with that decree. We therefore
confirm the judgment and decree of the High Court and dismiss this appeal
G with costs.·

D.G. Appeal dismissed.