SARAT CHANDRA ROY CHOWDHRY Vs. MMNAHAPIET

JUDGEMENT

(1.) This is a suit filed by a first mortgagee against his mortgagor and also against the second mortgagee. The second mortgagee's security consists of a second mortgage on the Calcutta property subject to the plaintiffs first mortgage, and also what is said to be a first mortgage on certain property in the mofussil, and he asks for a decree in his favour for the amount of his claim and for a direction that, in the event of the Calcutta property proving insufficient to pay the first mortgage and also his own, the mofussil property may be sold by this Court. It has become necessary to consider this position because of the Civil Procedure Code of 1908. There was a recognised practice on the Original Side of this Court which, as stated by Mr. Justice Sale in Kissory Mohun Roy V/s. Kally Churn Ghose (1894) I.L.R. 22 Calc. 1001, was to treat the preliminary decree as being in favour not only of the first mortgagee, but also in favour of the second mortgagee, one of the defendants. A further extension of this principle appears in the report of an application in the same suit (1897) I.L.R. 24 Calc. 190 also under the name of In the matter of Kissory Mohan Roy V/s. Kali Charan Ghose (1896) 1 C.W.N. 106, where Mr. Justice Sale allowed a second mortgagee, who was a defendant, under the liberty retained to him by the preliminary decree, to come in and obtain an order for sale of the property outside Calcutta, which was subject only to the second mortgage, not to the first. This practice of treating the suit as one for the benefit of the second mortgagee is based on, or at any rate is in accordance with, the English practice as it appears from the case of Platt V/s. Mendel (1884) 27 Ch. D. 246. It will be observed that this procedure being based upon the old practice of the Original Side, does not profess to be in agreement with the terms of the Transfer of Property Act. In Mackintosh V/s. Watkins (1904) 1 C.L.J. 31, Brett and Mookerjee JJ., sitting on the Appellate Side and dealing with a mortgage of Darjeeling property, held, that under the Transfer of Property Act, the proper procedure was different, and they held in effect that the second mortgagee was merely made a party to the suit in order that he might have an opportunity of redeeming if he wished, and in order that he might receive his mortgage money, or part of it, out of the surplus sale-proceeds after satisfaction of the first mortgage, but that the decree was not really a decree in his favour, and that he could not insist upon a sale nor get a personal decree in his favour if the first mortgagee was satisfied by the mortgagor before or by means of the sale.

(2.) This deals only with the simple case of a first and second mortgagee: the matter here is complicated by the fact that part of the security of the second mortgagee and that which he wishes to have sold is outside the jurisdiction. In my view, the effect of the incorporation of these sections of the Transfer of Property Act as Order XXXIV of the Civil Procedure Code is to put an end to any independent practice on this side of the Court based on the old procedure, and that the Original Side of the Court should now follow the provisions of the Transfer of Property Act which have been imported into the Civil Procedure Code as Order XXXIV, and with them are imported the Forms 4 to 11 of Appendix D in the first Schedule which are part of the Act. Referring to Form No. 7, it will be observed that it provides for an account to be taken of what is due to the plaintiff and describes that amount as Rs. X. It then provides for an account of what is due to the first defendant and describes that sum as Rs. Y, and it then provides what is to happen on payment or non-payment of Rs. X, and it provides that if there is a surplus on sale, that is to go in discharge of the sum referred to as Rs. Y. There is no trace of any provision to enable the first defendant, the second mortgagee, that is the person entitled to Rs. Y, to proceed by way of sale or to get any relief at all if the other defendant, i.e., the mortgagor, satisfies the first mortgagee's claim referred to as Rs. X.

(3.) In my view, therefore, under the Code, the second mortgagee is, there simply for the purpose as indicated by Brett and Mukerjee JJ. of receiving any surplus sale-proceeds or of redeeming, and that he cannot stake any independent action and treat the decree as in other respects in his favour. It follows, therefore, that if he has, as he has here, a claim to other property as well, that matter can only be dealt with by a separate suit, and of course he will be able to bring that suit notwithstanding he is a party to this one. There is one matter that I might mention in favour of this view, and that is that there might very well be a prior or a subsequent mortgagee or an assignee of that other property which is also included in the second mortgagee's security. Such persons would not be proper parties in a suit by the first mortgagee. In fact, if the first mortgagee made them parties, I take it they would be entitled to be dismissed from the suit, and on the other hand it is clear that the property, the subject of the second mortgage, could not be sold except in their presence, and after decree had been made with respect to their interests. There is no doubt the decision of Mr. Justice Sale, to which I have referred, which says that such a sale can take place under a decree of the Original Side of this Court, but the ratio decidendi there was that the old practice and not the Transfer of Property Act was to be followed.