The interpretation of Rule 1 of Order 34, Code of Civil Procedure, and the determination of the necessary parties to a mortgage suit, as well as the principles for awarding interest and costs in mortgage cases.

Mudholkar, J—This is a second appeal by the mortgagees of a house which formerly belonged to Respondent 2, Akaji. After the house was mortgaged by Akaji, it was sold by the Municipal Committee, Nagpur, in execution of a money decree obtained by it against Akaji. The auction sale was held on 18-12-1942 and the purchaser thereat was one Rangoba. Certain objections were raised by Akaji's son to the confirmation of the sale and so it was not till 10-1-1944 that the date (sale?) was confirmed. Before the sale was confirmed, Defendants 1 and 3 (mortgagees) brought a suit for enforcement of their mortgage against Akaji. They did not, however, make Rangoba a party to the suit. Eventually they obtained a decree for foreclosure on the foot of their mortgage against Akaji. On the failure of Akaji to redeem the mortgage, the Appellants obtained a final decree for foreclosure and eventually got possession of the house. There after, Rangoba transferred his interest to Respondent 1 Doraa. Doma then brought a suit out of which this second appeal arises for redemption of the mortgage. The suit has been decreed by the Courts below - and according to the Appellants wrongly decreed.

2. The main contention of the Appellants is that Rangoba had no interest in the property on the date of the mortgage suit because the sale in his favour had not been confirmed. Therefore, according to them, it was not necessary under Order 34, Rule 1, Code of Civil Procedure to make him a party to the mortgage suit and since it was not necessary to make Rangoba a party to the suit the decree obtained by them against Akaji was binding on Rangoba and, therefore, binding on Respondent 1 also. Alternatively, they say that at the most Rangoba can be said to have had, on the date of suit, only an inchoate interest in the property by virtue of his purchase of the execution sale and that a person having such an interest does not fall within the terms of Order 34, Rule 1 of the Code. Reliance is placed by the learned Counsel for the Appellants on the decisions in - Nanjundepa v. Hemapa(A) and - Amardas v. Jailalsao, 1936 AIR(Nag) 209 (B).

3. The first mentioned case does apparently support the contention of the learned Counsel but it must be borne in mind that there also it was held that a purchaser in execution sale has till the date of the confirmation of the sale an inchoate interest in the property. An 'inchoate interest' is an equitable interest and as has been pointed out in a later Bombay case, - Dagdu v. Panchamsingh(C), a person having such an interest is also entitled to be protected. The other case relied on is - Amardas v. Jailalsao (B). In that case it was held that an auction-purchaser is not a necessary party to a mortgage suit. That decision is clearly not applicable to a case of this kind. In my judgment the words 'all persons having an interest either in the mortgage-security or in the right of redemption' used in Rule 1 of Order 34 are wide enough to include a person having an equitable interest. In this view Rangoba was a necessary party to the mortgage suit and as he was not made a party to the suit he was not bound by the decree passed therein. It follows, therefore, that Respondent 1, who is a transferee from Rangoba, was entitled to bring a suit for redemption.

4. The next contention is that the lower Court has wrongly awarded interest at 4 p.c. p.a. from the date of suit till the date of redemption instead of at the contract rate. In my opinion the ordinary rule is that interest from the date of suit to the date of redemption should be awarded at the contract rate and not at a different rate unless there are circumstances which justify doing so.

5. Finally, it is contended that the Appellants have been wrongly deprived of their costs of the mortgage suit. This contention is sound and must prevail. The Appellants are entitled to their costs of the mortgage suit and these costs must be added to the amount due upon the mortgage.

6. In this view I modif