JASODHA KUMAR DEY Vs. KALI KUMAR DEY

JUDGEMENT

(1.) In this appeal the only question canvassed is whether the plaintiff mortgagee is entitled to sue for the entire mortgage-debt. The facts are that the defendant-appellant mortgaged five properties with the plaintiff in Falgun 1327. In Chaitra following the defendant sold one of the mortgaged properties to the plaintiff for Rs. 200 and the plaintiff on the same day conveyed a piece of land belonging to him to the defendant for the sum of Rs. 200. The present suit is brought by the plaintiff for recovery of the entire mortgage debt from the remaining properties. The defendants contend that the plaintiff is not entitled to sue for the entire mortgage-debt but is bound to allow proportionate reduction by the amount of the debt chargeable on the land which he has purchased from the defendant. Both the Courts below have overruled this objection.

(2.) Now the principle of law which should govern a case like the present is firmly established by innumerable authorities. It is not necessary to refer to all of them except to the leading cases on the point. The point was carefully considered in the Full Bench decision of the Allahabad High Court in the case of Bisheswar Dayal V/s. Ram Swarup [1900] 22 All. 284, which followed the Full Bench decision of the Bombay High Court in Lakhmidas Ramdas v. Jhumnadas Shankar Lal [1898] 22 Bom. 304. In that case the mortgagee had purchased one of the mortgaged properties in an auction sale in execution of a decree. It was contended there on behalf of the mortgagor that the mortgagee should not throw the entire burden of the mortgage debt upon the remaining property but was bound to allow proportionate reduction from the mortgage debt. It was held that if the mortgagee purchased the equity of redemption he must allow proportionate reduction of the value of the property purchased by him; but where the circumstances under which the purchase was made show that it was purchased free from all encumbrances, the plaintiff can enforce his entire security against the remaining property. The Court further held that it was not necessary to say in that case whether the same result would ensue if the purchase by the mortgagee was made under a private contract with the mortgagor and not at auction. In Mutty Lal Pal V/s. Nanda Lal Neogy [1908] 8 C.L.J. 92, the learned Chief Justice observed that no reason existed for making any distinction between the purchase at an auction sale and the purchase at a private sale. This question and the allied questions were fully discussed in Mir Eusuff Ali V/s. Panchanan Chatterji [1911] 6 I.C. 842. The following principles seem to have been laid down in that case on a consideration of all the authorities on the subject : (1) that there is no distinction on principle between a private sale and an execution sale; (2) the real distinction as to the application of the law exists between a purchase of the equity of redemption and a purchase of the entire interest in the property; (3) if the circumstances show that the purchase by the mortgagee was purchase of the entire interest free from all encumbrances, the mortgage debt will not be extinguished to the extent of the original charge borne by the property purchased. At p. 805 (of 15 C.W.N.) Mookerjee, J. Jays down the law in these words: It is firmly settled doctrine that as between the original parties the release of a part of the premises does not affect the lien of the mortgagee upon the residue which is bound for the whole debt.

(3.) As that learned Judge was of opinion in the case before him that it was clear from the conveyance executed by the mortgagor in favour of the mortgagee that the property purchased was the entire interest in it and not merely the equity of redemption, the mortgagee was allowed to claim the entire debt from the rest of the properties. As the point has been fully discussed in that case it is not necessary to refer to all the authorities on the subject; but reference may be made to a case which went to the Judicial Committee where this point was also raised and discussed. In Bhora Thakur Das V/s. Collector of Aligarh [1906] 28 All. 593 the point was directly raised. There a property was mortgaged under the first mortgage and that property along with another was mortgaged under the second mortgage. The mortgagee brought a suit on the first mortgage and purchased the first property. He claimed the entire debt from the other property and it was contended by the mortgagor that he could not claim the entire debt from the second property; but his mortgage debt was extinguished in proportion to the value of the property purchased by him under the first mortgage. It was held that the mortgagee was entitled to claim the entire debt from the second property. The case was taken on appeal to the Privy Council and the decision of the Judicial Committee is reported under the same name in Bohra Thahurdas V/s. Collector of Aligarh [1910] 32 All. 612. This question was raised before the Privy Council but was not pressed. But their Lordships observed at p. 617: In the present case the appellant seeks to redeem agrana (the, second property) upon payment of a proportionate share of the Rs. 5,000; their contention being that as Nund Kishore purchased one of the properties on which the mortgage debt was secured it was pro tanto satisfied and agrana was only liable for the share legitimately chargeable on it. As "Kachaura" (the first property) was sold and purchased by Nund Kishore in execution and part satisfaction of the decree obtained on the prior mortgage of 1886, the Court in India properly overruled the appellants contention which has not been pressed before this Board.