PONNAMBALA CHETTI Vs. MUTHUSAMI PILLAI

JUDGEMENT

(1.) The facts of this case, so far as they are necessary for the disposal of this appeal, are as follows:

(2.) The 1st and 2nd defendants mortgaged the suit properties first to the 3rd defendant and then to the assignor of the present plaintiff. The 3rd defendant brought a suit in Original Suit: No. 41 of 1887 against the mortgagors without making the puisne mortgagee a party; in execution of that decree, he brought the property to sale and bought it. The plaintiff then brought a suit against the 3rd defendant claiming to redeem.

(3.) The 5th and 6th issues in the suit were as to the amount that the plaintiff should pay to the 3rd defendant in redemption. The District Judge on appeal called for findings on those issues as the parties conceded that they were necessary and the Subordinate Judge, on the authority of the case in Thennappa Chettiar v. Marimuthu Nadan 31 M. 258 : 18 M.L.J. 344 : 4 M.L.T. 293 decided that the account should be taken on the footing that the prior mortgage of the 3rd defendant was still in existence, and calculated the amount due accordingly. Against that basis, the plaintiff did not appeal but confined himself to objecting to the rate of interest allowed and the calculation of the profits accrued to the 3rd defendant since his possession under the sale. He renews those objections here in second appeal, but in addition seek to take other grounds. The first additional ground is that the Court should have given him a decree for redemption without ascertaining the amount due. We decline to allow him to raise this contention as the 5th and 6th issues were sent down for a finding with his concurrence. The other additional ground 13 that the decision in Thenappa Chettiar v. Marimuthu Nadan 31 M. 258; 18 M.L.J. 344 : 4 M.L.T. 293 is wrong and all that he can be called on to pay is the amount found due under the decree obtained by the 3rd defendant in his suit with subsequent interest at the decree rate, and he urges that there is a decision of the Privy Council to that effect since the date when he filed his grounds of appeal in the lower Appellate Court. We have allowed him to raise it. It has now to be seen whether his contention is correct. The decision referred to is reported Mahomed Ibrahim Hussain Khan v. Ambika Pershad Singh 39 C. 527 : 11 M.L.T. 265 : (1912) 1 M.W.N. 367 : 9 A.L.J. 332 : 14 Bom. L.R. 280 : 16 C.W.N. 505 15 C.L.J. 411 : 22 M.L.J. 468 : 14 Ind. Cas. 496 (P.C. ). The passages relied on are on pages 558 and 559. The Board lay down that the puisne mortgagee is entitled to redeem the prior mortgage on payment of the principal and interest in respect of which the property was sold to him under the decree for sale. The Privy Council do not say that the amount decreed is to be paid. There is no argument on this point; the head-note does not treat these words as a decision to this effect, and lastly the Privy Council do not purport to be overruling their prior decision on this point reported as Times Chander Sircar v. Zahur Fatima 18 C. 164; 17 I.A. 201. This case was most carefully considered by this Court in the case above referred to Thenappa Chettiar v. Marimuthu Nadan 31 M. 258 : 18 M.L.J. 344; 4 M.L.T. 293 and the following passage is extracted from it in the judgment of this Court: "The plaintiff comes to take away from the prior mortgagee the benefit of her decree. It would be unjust if he could use the decree to cut down her interest while he deprives her of the whole advantage of it. * * * If she is still a mortgagee, she should be allowed such benefit as the mortgage gives her." On this passage, this Court held that there was no room for the contention that the puisne mortgagee ought to be allowed to choose whether to adopt or disregard the account directed by the decree. "We are of a like opinion that the question is precluded by the authority of the Privy Council and the principle on which it proceeds is clearly enunciated. The prior mortgagee has lost the right arising out of his decree and purchase in execution sale by reason of his failure to make the puisne mortgagee a party as required by Section 85 of the Transfer of Property Act. He is reverted to his position as a mortgagee and is now liable to lose the property by being redeemed. He is, therefore, sufficiently penalised and the puisne mortgages cannot treat him as a mortgagee for one purpose and a decree-holder for another. There is nothing in the later judgment of the Privy Council which is inconsistent with the reasoning of their Lordships in this case, and we are bound by it. That objection, therefore, fails. As to the two grounds taken in appeal, both in the lower Appellate Court and before us, we agree with the lower Appellate Court in its construction of the 3rd defendant s mortgage as to the evidence of the compound interest and we are also of opinion that if the provision is penal, it is not in excess of what would constitute reasonable compensation. The result is, that this second appeal is dismissed with costs.