GORTI BRAHMAYYA Vs. PERUMALLA SUBBARAYUDU

JUDGEMENT

(1.) The 6 defendant is the appellant. The 1 defendant was the owner of two items of property. The first item was mortgaged to one Moseh Afterwards the 1st defendant and his sons mortgaged the same item and the second item to the plaintiff under Ex. A dated 3 March 1915. The 1 defendant then became an insolvent and the Official Receiver brought these two items to sale. The 6th defendant purchased the first item subject to the prior mortgage of Moseh and the plaintiff purchased the second item. The Official Receiver has executed a sale-deed to the 6 defendant but no sale-deed has been executed to the plaintiff.

(2.) The suit out oi which this second appeal arises was instituted by the plaintiff to recover the sum of money due upon the mortgage executed by the 1st defendant in his favour. The contesting defendant is the 6 defendant. His main contention was that by the purchase of item No. 2 by the plaintiff his mortgage became extinguished both in law and in fact and that item No. 1 is not liable for plaintiff's mortgage. His plea was accepted by the first Court but in appeal the District Judge held that there was no valid sale of item No. 2 to the plaintiff. He also held that there was no estoppel against the plaintiff, one of the other pleas urged by the 6 defendant. In the result, the plaintiff was given a decree for sale. Item No. 2 was ordered to be sold first and for the balance item No. 1 was to be sold.

(3.) In second appeal by the 6 defendant Mr. Krishnaswami Ayyar does not argue, as was contended for in the first Court, that they the purchase of item No. 2 by the plaintiff his mortgage became totally extinguished; but he contends that there was a partial merger and that the principle in Bisheshur Dial V/s. Ram Sarup 22 A. 284 : A.W.N. (1900) 69 approved by this Court in Ponnambala Filial v. Annamalai Chettiar 55 Ind. Cas. 666 : 43 M. 372 : 38 M.L.J. 239 : (1920) M.W.N. 235 : 11 L.W. 429 (F.B.) should be applied to this case. In Bisheshur Dial V/s. Ram Sarup 22 A. 284 : A.W.N. (1900) 69 it was held that "when a mortgagee buys at auction the equity of redemption in a part of the mortgage property, such purchase has, in the absence of fraud, the effect of discharging and extinguishing that portion of the mortgage debt which was chargeable on the property purchased by him, that is to say, a portion of the debt which bears the same ratio to the whole amount of the debt as the value of the property purchased bears to the value of the whole property comprised in the mortgage," It appears to me that this is the proper principle applicable to the facts of this case, provided it is proved that there was a valid sale of item No. 2 in favour of the plaintiff. So the question to be considered is whether item No. 2 has been validly sold to the plaintiff. On this point the finding of the lower Court is against the appellant. This finding is attacked by the learned Counsel for the appellant.