JERUP TEJA AND CO Vs. PEERBHOY ADAMJI PEERBHOY

JUDGEMENT

(1.) One Peerbhoy Adamji Peerbhoy is entitled to a one-sixth share in certain property. The plaintiffs in this suit are the fourth mortgagees of that one-sixth share. They filed this suit against the mortgagor, and the first, second, third and fifth mortgagees praying (I) that the first defendant might be ordered to pay them the mortgage money with interest; (2) that it might be declared that the third defendant, the second mortgagee, was bound to accept from the plaintiffs the amount of interest in arrears; (3) that the third defendant might be restrained from proceeding further with the sale of the said share, and for further and other relief.

(2.) The necessity of the suit arose from the fact that the third defendant advertised the mortgaged property for sale subject to the interest of the first mortgagee. The plaintiffs moved for an interim injunction restraining the third defendant from proceeding with the sale, but the lower Court refused to grant the injunction, and the plaintiffs have appealed to this Court against that order.

(3.) Two questions arise (1) whether the conditions exist which enable the second mortgagee to exercise his power of sale, and (2) whether, assuming those conditions do exist, the Court, on the application of the fourth mortgagee, would stay the sale on the interest due to the second mortgagee being paid. The provisions of the Transfer of Property Act apply to this case, and with regard to the first question, the answer depends entirely upon what the parties had contracted to do subject to the provisions of the Transfer of Property Act. The second mortgage was created by the first defendant on the 6th of May 1920 and the date of repayment of the mortgage money is the 6th day of May 1921. There is a covenant to pay interest by equal quarterly payments by the sixth day of each and every quarter, interest remaining unpaid and in arrears being added to the prinoipal carrying interest at the same rate. Then there is a covenant by the mortgagee to reconvey on the prinoipal and interest being repaid on the due date, but if there was default in such repayment, the mortgagee was not bound thereafter to accept payment of the mortgage debt or to reconvey the mortgaged premises unless three months notice had been given, provided that if at any time during the continuance of the security any damage would happen to the mortgaged premises by fire, tempest or otherwise to impair the security, or if the mortgagor had become or should be adjudicated insolvent, then the moneys for the time being due and owing on the security of the mortgage should at the option of the mortgagee become payable as if the due date had then elapsed. Then it was further agreed that it should be lawful to the mortgagee to sell the mortgaged premises under the power of sale contained in the mortgage which was deemed to be a power to Bell or concur in selling the said mortgaged premises in default of payment of the mortgage debt without the intervention of the Court within the meaning of Section 09 of the Transfer of Property Act. Provided that the power of sale should not be exercised by the mortgagee unless default had been made in payment of the principal sum or any part thereof on the day appointed for the payment thereof and for the space of three calender months next after the notice in writing required by Clause (1) of Section 69 of the Transfer of Property Act or unless and until interest amounting at least to Rs 500 should be in arrears and remain unpaid for three months after becoming due.