KARAM SING SOBTI Vs. SHUKLA BEDI

JUDGEMENT

(1.) TWO properties described as 4-A and 4-B, Hailey Road, New Delhi, are comprised in a mortgage executed by the owner, Shri Som Parkash Bedi, in favour of first respondent Shrimati Skukla Bedi who subsequently on 3rd of August, 1957, obtained a decree for Rs. 21,460/- with interest on the footing of this mortgage. During the pendency of the execution proceedings of this mortgage-decree the appellant, Karam Singh Sobti, purchased 4-A Hailey Road, which is described at cottage. No. 2, for Rs. 20,000/- from Som Parkash Bedi. In execution of the mortgage-decree obtained by Shrimati Shukla Bedi both 4-A and 4-B were put up for auction. The appellant prayed on the basis of the equitable doctrine of marshalling that property 4-B should first be sold in execution of the mortgage-decree and property 4-A should be called upon to contribute only in the event of short-fall. The executing Court holding that Karam Singh Sobti had purchased the property pendente lite rejected the prayer and directed the sale of both the properties as a composite unit.

(2.) AGGRIEVED by this order Karam Singh Sobti has come in appeal to this Court. The doctrine of marshalling, embodied in section 56 of the Transfer of Property act, applies in the case of securities, including mortgages, to prevent one claimant arbitrarily depriving another of his only security. Thus if a person having two estates mortgages both to A, and then only one to B, B may, as against the mortgagor, compel the payment of the first mortgage out of the estate on which he had no charge. As stated in Halsbury's Laws of England, Third Edition, Volume 27, at page 398

(3.) MR. Chopra for the respondent has contended that there has been some complication in selling the properties described as 4-A and 4-B, Hailey Road, separately as the Land Development Authority has insisted on treating them as a composite unit to be sold not piecemeal but jointly. No proof has been adduced of the unwillingness of the Authority to permit separate sales of these units though an assertion to this effect was made in the application of the decree-holder made on 14th of December, 1959. In my opinion, the doctrine of marshalling should be made applicable in the present instance and especially when the appellant himself in the affidavit filed in this Court had made a categorical assertion that he is prepared to make a bid for Rs. 40,000/- for the house described as 4-B, Hailey road. I would leave it open to the trial Court to direct the auctioneer to start the bid of property 4-B with the initial bid of Rs. 40,000/- of the appellant. If there is any objection to the ale of property 4-B the matter can be appropriately dealt with by the executing Court directing the sale of properties 4-A and 4-B as one unit is set aside. There will be no order to costs of this appeal. Appeal allowed.