CHULLIKANA SHAMBATTA Vs. CHERAKOODLU NARAYANA BHATTA

JUDGEMENT

(1.) This appeal raises an interesting & intricate question of law relating to subrogation. The case was ably argued on both sides & the problem raised is bare of authority. The right of defts. 8, 9 & 11 who are the appellants, to subrogation in, respect of two earlier mortgages, was denied by the lower Court & hence this appeal.

(2.) On 20-5-1910 one Krishna Bhatta & his two sons Venkatesa Bhatta & Govinda Bhatta borrowed a sum of Rs. 10,000, & created a usufructuary mortgage as security on the properties described in the deed of mortgage Ex. D. 3. This mortgage was in favour of Madanna Bhatta & Subbanna Bhatta. On 10-4-1926 Govinda Bhatta for himself & on behalf of his minor son Ganapathi Bhatta & Vishnu Bhatta, the younger brother of Govinda Bhatta, Krishna Bhatta and Venkatesa Bhatta having died meanwhile, borrowed a sum of Rs. 4000 from one Atchuta Bhatta and created a simple mortgage for the amount under Ex. D. 11. The family of Krishna Bhatta & his sons was undivided & at the time of Ex. D. 11, Govinda Bhatta & Vishnu Bhatta & Govinda Bhatta'g minor son, were the sole surviving members of the coparcenary. On 10-6-1930 under Ex. P. 1 a third mortgage was created on the properties in favour of the pltf. for Rs. 5,000 borrowed on that date & this document was executed, by Govinda Bhatta for himself & on behalf of his minor son & Vishnu Bhatta also for himself & on behalf of his minor son. In 1931, there was a partition of the family properties between Govinda Bhatta's branch & Vishnu Bhatta's branch whereunder in consideration of Govinda Bhatta's branch discharging the family debts, it was allotted a larger share in the family properties while Vishnu Bhatta's branch obtained a smaller share. This partition arrangement Is evidenced by Ex. P. 13 dated 29-8-1931. It contains a covenant between the two branches 'inter se' by which Govinda Bhatta & his branch undertook to free the property allotted to Vishnu Bhatta & his branch from all debts & also a maintenance claim. The relevant clause in the deed is in these terms:

(3.) The pltf., the third mortgagee under Ex. P. 1 instituted the present suit out of which this appeal arises for enforcing his rights under the mortgage & impleaded as parties to the suit, Govinda Bhatta & his sons & also defts. 8, 9 & 11, the first two being the mortgagees under Exs. D. 2 & D. 10 & the third a sub-mortgagee under the first two. These mortgagee defts. claim in their written statement that by virtue of the covenants contained in Exs. D. 2 & D. 10 they were entitled to be subrogated to the rights of the first & second mortgagees. This right was negatived by the learned subordinate Judge, who tried the case, on the ground that the covenant in the partition deed Ex. P. 13 put the appellants out of Court & he applied the principle that where there is a personal covenant to pay, the right of subrogation does not exist.