SHRIPAD LAXMAN NAKADI Vs. KASHIBAI DINKAR JOG

JUDGEMENT

(1.) THE only question in this appeal is whether the holder of a mortgage decree is entitled to have his decree satisfied by the sale of an accession made to the mortgaged property after the passing of the decree. It arises in this way. In 1887 one Mahadeo Vithoba Nakadi, along with his brother Venkoba as his surety, mortgaged his shop, Municipal Survey No. 915 in Belgaum, to one Umabai, and on October 28, 1910, an award decree was passed, which declared that Rs. 2,700 were due to Umabai and provided that the amount should be paid by annual instalments of Rs. 150, and that in default of payment of two consecutive instalments the mortgagee should recover the amount due to her by sale of the shop and also from the person and property of the mortgagor's son Laxman,-the original mortgagor having died in the meantime. THE mortgaged shop was destroyed by fire in 1921 and another shop building was constructed in its place. Umabai having died, her heirs presented a darkhast in 1934 to recover the arrears of the instalments which were still in time, by sale of the new shop building. Laxman's sons were also impleaded in the darkhast and they contended that the new shop had been constructed by them and that Laxman had no interest in it. But that contention was disallowed and is not now pressed. THE main ground on which Laxman registered the darkhast was that the shop which was built after the award decree was passed was not the property mortgaged and as the mortgage had become merged in the decree, the new shop could not be treated as an accession to the mortgaged property, to which the mortgagee became entitled for the purpose of the security under Section 70 of the Transfer of Property Act, 1882, THE executing Court upheld the contention and ordered the sale of only the mortgaged site below the newly constructed shop. In appeal the learned District Judge took a different view and ordered the sale of the shop building also, and Laxman has now appealed against that order.

(2.) SECTION 70 of the Transfer of Property Act provides that if, after the date of a mortgage, any accession is made to the mortgaged property, the mortgagee, in the absence of a contract to the contrary, shall, for the purposes of the security, be entitled to such accession. Illustration (b) to that section says: A mortgages a certain plot of building land to B and afterwards erects a house on the plot. For the purposes of his security B is entitled to the house as well as the plot.

(3.) BY parity of reasoning this may be held to apply even to cases arising under Section 70 of the Transfer of Property Act. But in Haradhan Chakerverty v. Hargobind Dutta, the second case relied upon by the executing Court, it was held that where a mukarraridar mortgaged his mukarrari right and the mortgagee obtained a decree on the mortgage for sale of the mortgaged property, the decree-holder was not entitled in execution of the decree to sell the brahmottar right in the property which had been acquired by the mortgagor subsequent to the passing of the decree. Two reasons were given for that decision. It was held that the mortgage security as well as the mortgagor's right to redeem were both extinguished after the mortgage decree was passed and that the executing Court had to sell the property specified in the decree to be sold for the satisfaction of the decree obtained by the mortgagee and that the decree directed the sale of the mortgaged property, which at that time was admittedly the mukarrari right of the mortgagor. In support of the first proposition the ruling of the Privy Council in Het Ram v. Shadi Lal (1918) L. R. 45 I. A. 130 : 20 Bom. L. R. 798 was relied upon. Het Ram's case was followed by the Board in Matru Mal v. Durga Kunwar (1919) L. . 47 I. A. 71 S. C. 22 Bom. L. R. 553. In both those cases it was held that the decree passed under Section 89 of the Transfer of Property Act for the sale of the mortgaged property has the effect of substituting the right of sale thereby conferred upon the mortgagee for his rights under the mortgage, and the latter rights are extinguished. In both the cases the decrees which had to be considered had been passed under Section 89 of the Transfer of Property Act. There is no doubt that in foreclosure suits the final decree extinguishes the equity of redemption, while in decrees for sale the repealed Sections 89 and 93 of the Transfer of Property Act expressly provided that on the making of the order for sale the right to redemption and the security would both be extinguished. It was upon these words in those sections that the two decisions of the Privy Council were based. Owing to some difference of opinion in the different High Courts regarding the effect to be given to those words, the provision for the extinction of the right of redemption and the mortgage security on the passing of the final decree for sale was omitted in the corresponding Rules 5 and 8 of Order XXXIV of the Civil Procedure Code, 1908. This omission was emphasized by the Privy Council in Sukhi. v. Ghulam Safdar (1921) L. R. 48 I. A. 465 : S. C. 24 Bom. L. R. 590, and it was held that the effect of the omission was that the law remained the same as it was before the passing of the Transfer of Property Act, so that by the passing of a mere decree on the mortgage, neither the right nor the mortgage security became extinguished. It may be noted that this decision of the Privy Council was given on April 19, 1921, and does not appear to have been reported when the two cases relied upon by the executing Court were decided. It must, therefore, be held that the award decree had not the effect of extinguishing the mortgage security and in spite of that decree the mortgagee has continued to be a mortgagee and is, therefore, entitled to the benefit of Section 70 of the Transfer of Property Act.