SOLI PESTONJI MAJOO Vs. GANGADHAR KHOMKA

JUDGEMENT

(1.) The appellant is the executor of the estate of Pestonji Sorabji Majoo deceased, hereinafter referred to as the 'mortgagor'. During his lifetime the mortgagor was the owner of one-third share in premises No. 50, Chittaranjan Avenue, Calcutta. On November 21, 1938, the mortgagor executed a deed of mortgage in respect of his one-third share in favour of Shew Balak Pandey for Rs. 7,500/- On December 3, 1945 he executed another deed of mortgage in respect of his one-third share in favour of one Sudhinder Nath Mitter for Rs. 8,350/-. On May 6, 1947, he executed the third deed of mortgage in respect of his one-third share of the premises in favour of the respondent Gangadhar Khemka for Rs. 12,000/- carrying interest at the rate of 12 per cent per annum with monthly rests. On January 13, 1948 Shew Balak Pandey filed a suit on his mortgage, being Suit No. 135 of 1948, impleading the puisne mortgage as parties to the suit. On December 12, 1949, a preliminary mortgage decree in Form 9 of Appendix 'D' in the First Schedule to the Code of Civil Procedure was passed in the said suit. Since the mortgagor did not pay, a final decree was passed on December 4, 1952 in the suit. The decree directed that the mortgaged property should be sold. It contained a further direction for the disbursement of the sale proceeds and it was stated that if any balance was left after payment of the amounts due to Pandey and Mitter, "that shall be applied in payment of the amount payable to the defendant Ganga Dhar Khemka under the aforesaid preliminary decree and in payment of any amount which may be adjudged due to the said defendant Ganga Dhar Khemka for such costs of the suit." On July 4, 1954, the mortgagor, without having the property put to sale paid off the decretal dues of Pandey. On August 5, 1955, the respondent filed the suit out of which this appeal arises, being Suit No. 2218 of 1955 jointly against the appellant and his mother Mrs. Majoo for a mortgage decree in Form 5-A. The appellant and Mrs. Majoo filed a joint written statement. The suit ultimately came for hearing before Law, J., on June 2,1958. Several issues were raised in the suit and Law, J., decreed the suit and passed a preliminary decree in Form 5-A of Appendix 'D' in the First Schedule to the Code of Civil Procedure and declared that a sum of Rs. 41,172/6/- was due to the respondent on June 2, 1958. The appellant and Mrs. Majoo took the matter in appeal before the Division Bench consisting of Bachawat and Das Gupta, JJ., who partially allowed the appeal and varied the decree by reducing the amount declared due in the decree dated July 10, 1958 from Rs. 41,172/6/- to Rs. 38, 207/.

(2.) This appeal is brought, by special leave, from the judgment of the Division Bench of the Calcutta High Court dated January 17, 1962.

(3.) The first question presented for determination in this appeal is whether a puisne mortgagee in respect of whose mortgage a decree has already been made in a prior mortgagee's suit to which he is made a party, is entitled to institute a separate suit in respect of his mortgage and ask for a decree in Form 5-A when the claim of the prior mortgagee made in the prior mortgagee's suit has been satisfied by payments made by the mortgagor-defendant and as a result thereof no sale takes place in the suit. It was argued on behalf of the appellant that the respondent was not entitled to file the suit because of the preliminary decree passed in Suit No. 135 of 1948 in which he as a puisne mortgagee was made a party-defendant an the only course open to him as such puisne mortgagee was to apply for a final decree for sale and thereby realise his dues from the surplus sale proceeds of the mortgaged property. It was submitted that the appellant (respondent ) was not entitled in the circumstances to bring a fresh suit on his mortgage. We are unable to accept this argument. Clause (5) of the decree in Form 9 clearly states that "if the defendant No. 2 (puisne mortgagee) pays into Court to the credit of the suit the amount adjudged due to the plaintiff (prior mortgagee) but the defendant No. 1 (mortgagor) makes default in the payment of the said amount, then the defendant No. 2 (puisne mortgagee) shall be at liberty to apply to the Court to keep the plaintiffs (prior mortgagee's) mortgage alive for his benefit and to apply for a final decree." In other words, if the puisne mortgagee redeems the prior mortgage then he can step into the shoes of the prior mortgagee and apply for final decree. The puisue mortgagee cannot apply for the sale unless be pays off the prior mortgage. It is manifest that the puisne mortgagee is added as a defendant in a suit of this description only with the purpose of redeeming the prior mortgage, if he wished and proving his mortgage and having the accounts taken. Such account of the puisne mortgagee is taken because if there are any surplus sale proceeds after meeting the prior mortgagee plaintiff's claim, he can participate in such surplus sale proceeds as may be available for the satisfaction of puisne claim of the puisne mortgagee. Essentially therefore the rights of puisne mortgagee-defendant in a prior mortgagee's suit are, first, the right to redeem the prior mortgage, and, secondly, the right to participate in the surplus sale proceeds. This view is borne out by decision of the Madras High Court in Vedavyasa Ayyar vs. The Madura Hindu Sabha Nidhi Co. Ltd., ILR 42 Mad 90 in which it was held that the rights o the subsequent mortgagees are contingent on the property being brought to sale for non-payment of the sum due to the plaintiff mortgagee and a decree drawn up in Form of Appendix D of the Code of Civil Procedure cannot be read as a decree directing the mortgagor to redeem each of the puisne encumbrances within the time limited for redeeming the first mortgagee. It was accordingly held that the puisne mortgagee was not entitled to execute the decree for the amount due to him when no sale was held for the realisation of the amount due to the prior mortgagee and the remedy of the puisne mortgage was a suit for sale and Section 47, Civil Procedure Code was no bar to the suit. The same view has been taken in Shiv Kumar Prosad vs. The Trustees for the Improvement of Calcutta, (1947) 51 Cal WN 798 in which Chakravartti, J. observed at page 802 as follows: