RAM SARUP Vs. RAM LAL

JUDGEMENT

(1.) These appeals arise out of two suits brought by a subsequent mortgagee for the recovery of the money due on two simple mortgages. The claims were resisted by a person who had purchased the mortgaged property in execution of a simple money decree due by the mortgagor. That person also held certain prior mortgages on the same property. He asserted that the plaintiff was not entitled to sue for the recovery of the money due on the subsequent incumbrance until he had paid the money due on the prior mortgages. The first court decreed the claim without requiring the plaintiff to pay the money due on the prior mortgages. The view taken by it was that the prior mortgages had ceased to subsist and that the defendant could not set up those mortgages as a shield against the claim brought by the subsequent mortgagee. The lower appellate court, however, held otherwise and granted a decree to the plaintiff subject to his redeeming the prior mortgages set up by the defendant respondent.

(2.) It is urged on behalf of the plaintiff appellant that the prior mortgages had ceased to be subsisting, because no step had been taken to enforce them within the period allowed by law. The mortgagee, however, had purchased the mortgaged property in execution of a simple money decree due by the mortgagor, and it was not open to him to sue for the recovery of the money due on his prior mortgages after the rights of the mortgagor had merged in him. Section 101 of the Transfer of Property Act lays down that where the owner of a charge or other incumbrance on immovable property is or becomes absolutely entitled to that property, the charge or incumbrance shall be extinguished unless he declares by express words or necessary implication that it shall continue to subsist, or such continuance would be for his benefit.

(3.) The ordinary rule, as laid down by their Lordships of the Privy Council in Gokaldas Gopaldas V/s. Puranmal Premsukhdas (1884) I.L.R. 10 Calc. 1035 at 1046, is that if a man is entitled to act in either of two ways, he shall be assumed to have acted according to his interest, and the presumption, therefore, is that the mortgagee intended to keep his prior incumbrances subsisting, in order that he might be able to use them to protect himself against any subsequent incumbrancer. That being so, the defendant respondent could set up these prior mortgages as a shield against the claims brought by the subsequent mortgagee.