B N LANG Vs. HEPTULLABHAI ISMAILJEE

JUDGEMENT

(1.) Two questions have been argued in this appeal, first, whether the plaintiff was the assignee by way of mortgage of the insolvent s decree, and, secondly, whether this suit, instituted without the leave of the Court, is barred as falling under the general prohibition of suits without such leave contained in Section 17 of the Presidency Towns Insolvency Act or whether it is saved by the proviso that the section shall not affect the power of any secured creditor to realise or otherwise deal with his security in the same manner as he would have been entitled to realise or deal with it if this section had not been passed.

(2.) On the first question there can be no doubt that the decision must be in the affirmative for the evidence is all one way and establishes the claim.

(3.) The Official Assignee, having executed a decree which had been assigned to the plaintiff by way of security, is in the position of a mortgagor who has sold the mortgaged property and is in possession of the sale proceeds. Until the claim of the mortgagee is satisfied, the insolvent or his Official Assignee has no right to the proceeds of the decree. It is argued that the saving proviso to Section 17 does not cover the present suit because the power of a secured creditor to realise his security does not include a suit for enforcement of his rights. We are unable to accept this view. A suit is one of the recognised methods of realisation of mortgage securities. The expression realise his security is quite an appropriate and well-recognised term to include all the remedies of the mortgagee. The following are examples of its use in practice in relation to mortgagees suits.