AKBAR J.—Ibrahim v. Hong Kong and Shanghai Bank.
1934Present: Garvin S.P.J. and Akbar J.
IBRAHIM v. HONG KONG AND SHANGHAI BANK.
40—D. C. (Inty.) Colombo, 47,760.
Registration—Seizure of property on a mandate of sequestration—Mortgage hyowner subsequent to seizure—Prior registration of mortgage—Seizurevoid as against the mortgage—Seizure does not create an interest inland within the meaning of section 6 (1) of Ordinance No. 21 of 1927-Seizure is an instrument affecting land within the meaning of the Regis-tration of Documents Ordinance, No. 23 of 192 7.
A notice of seizure issued by the Fiscal on a mandate of sequestrationwas registered after a mortgage effected by the owner, which was subs-quent in date to the seizure but prior in registration.
Held, the notice of seizure on a mandate of sequestration was aninstrument affecting land within the meaning of section 6 of the Regis-tration of Documents Ordinance, No. 23 of 1927, and was void asagainst the mortgage.
Held, further, that such a notice of seizure did not create an interestin land within the meaning of section 6 (1) of the Mortgage Ordinance.No. 21 of 1927.
^^PPEAL from a judgment of the District Judge of Colombo.
H. V. Perera (with him Nadarajah), for plaintiff, appellant.
Keuneman (with him Choksy), for defendant, respondent.
November 28, 1934. Akbar J.—
The plaintiff-appellant in this case sued one Thiagarajah in D. C.Colombo, No. 35,982, and issued a mandate of sequestration seizing theproperty in dispute in this case on December 21, 1929, but this seizureunfortunately for him was not registered till January 11, 1930. OnFebruary 19, 1930, he obtained judgment and on writ issued on June 11,1930, this property was seized and sold on September 19, 1930. Plaintiffobtained his Fiscal’s transfer on December 17, 1930. During this timeThiagarajah mortgaged this property to the defendant on December 24,1929, and the mortgage was registered on January 3, 1930. The defend-ant instituted a mortgage action on this bond on January 16, 1930,the Its pendens being registered on January 18, 1930. He obtained a
AKBAR J.—Ibrahim v. Hong Kong and Shanghai Bank.
mortgage decree on the same day, viz., January 18, 1930, and the decreewas registered also on the same day. The property was sold and boughtby the defendant on conveyance D 5 dated February 21, 1931, andregistered on February 25, 1931. A number of issues was framed but byagreement of parties the trial Judge delivered his order on the 5th issue,viz., whether plaintiff’s fiscal transfer was null and void as against theconveyance dated February 21, 1931, in defendant’s favour under hismortgage decree and whether plaintiff was bound by the mortgage actionand decree and sale.
The appeal is from the order of the District Judge in which he heldagainst the plaintiff. It will thus be seen that there is no dispute asregards the facts and that the appeal is purely on questions of law relatingto the correct interpretation of certain sections of the Mortgage Ordinance,No. 21 of 1927, and the Registration of Documents Ordinance, No. 23of 1927. The only question that appears to me to arise in this appealis whether the plaintiff is bound by the decree in the mortgage action.He was admittedly not made a party to the mortgage action and hewill therefore be bound by the mortgage decree if he was not a necessaryparty to the hypothecary action within the meaning of these words insection 6 of Ordinance No. 21 of 1927. In the first place had the plaintiff“ an interest in the mortgaged property ” within the meaning of section6 (1) of that Ordinance. He obtained a mandate of sequestration onDecember 21, 1929, three days prior to the mortgage bond in favourof plaintiff. The notice of seizure issued by the fiscal on this mandateof sequestration was registered on January 11, 1930, eight days after theregistration of defendant’s mortgage bond. Now a notice of seizurecannot be said to create an interest in land. It is a notice prohibitingthe owner of the property from transferring, alienating, or charging theproperty and all other persons from receiving the same by purchase,gift or otherwise, (see form No. 50, schedule, Civil Procedure Code). Inother words, it is a notice prohibiting the creation of any new interestin the land. A notice of seizure issued by the fiscal on a mandate ofsequestration is in my opinion “ an instrument affecting land ” withinthe meaning of sections 6, 7, and 8 of Ordinance No. 23 of 1927, for tworeasons. In the first place, such a notice would appear to fall withinthe words “ orders of any authority …. which purport oroperate to limit or extinguish any right, whether past, present, or futureto, in, or over any land ” in section 8 (b). In the second place by section657 of the Civil Procedure Code all sequestrations are to be made in themanner provided for the seizure of property preliminary to sale thereofin execution of a decree for money, and therefore the notice of seizureissued by the fiscal may be regarded as a notice issued under section 237of the Civil Procedure Code and thus as coming within section 8 (b) ofOrdinance No. 23 of 1927. But this does not help the plaintiff, fordefendant’s mortgage though later in date was registered prior to theregistration of the sequestration (the two dates being January 3, 1930,and January 11, 1930), and therefore the mortgage will have preferenceover the sequestration.
Although such a notice may be an instrument affecting land withinchapter III. of Ordinance No. 23 of 1927, it does not in my opinion,
Ratemahatmaya of Walapane v. Jeganathan.53
as I have already said, create an interest in the land seized within themeaning of section 6 (1) of Ordinance No. 21 of 1927. Dalton J.in Chettiar v. Coonghe' was of the same opinion (vide the Privy Councilcase, Moti Lai v. Karaabuldin and others’) and my view finds supportin section 6 (2) (a) for every person having an interest in landmust have duly registered “the- instrument, if any, under whichhe derives title ” at the time the plaint in the hypothecary action isfiled before he can be regarded as a necessary party. A person issuinga mandate of sequestration cannot be said to derive any title toany land from the notice of seizure issued by the fiscal. Further,under section 6 (2) (b) the person having the interest in the land musthave registered an address for service at the time when the plaint in thehypothecary action is filed, before he can be regarded as a necessaryparty to the hypothecary action. In the form given in the schedule tochapter II. of the Ordinance, such a person has to give particulars of theinstrument under which he derives title, viz., the number and date ofthe deed under which he derives such title, the name of the attestingnotary and the volume and folio where the deed is registered. Thesedetails are inappropriate to a notice of seizure issued by the fiscal. Forall these reasons the plaintiff in my opinion was not a necessary partyto the hypothecary action brought by the defendant against Thiaga-rajah and is therefore bound by that action. The result may appearto be very unfortunate for the plaintiff but the blame is entirely hisor his agent’s in delaying to register his sequestration which was effectedon December 21, 1929, till January 11, 1930.
The appeal fails and will be dismissed with costs.
Garvin S.P.J.—I agree.
IBRAHIM v. HONG KONG AND SHANGHAI BANK