V A SUBBA RAO Vs. PONNAMMAL NADATHI

JUDGEMENT

(1.) This second appeal arises out of a suit by appellant to redeem a mortgage executed by him in favour of the husband of the 1 defendant who died leaving the 1 defendant, his widow, and defendants 2 and 3, his minor daughters. The 1 defendant in 1909 and after her husband's death sub-mortgaged the property and the 4 defendant claims to be entitled to the amount due on the sub-mortgage. The contention of defendants 1 to 3 is that the sub- mortgage originally created by the 1 defendant was a nominal transaction. The District Munsif found that the sub-mortgage was a genuine transaction supported by consideration but the Subordinate Judge on appeal reversed the decree on this point. In 1917, the appellant filed O.P. No. 33 of 1917 and deposited in Court the amount due on the mortgage. It is not disputed that the amount deposited was the amount legally payable on the mortgage. He seems to have stated that there was a sub-mortgage and that the 4 defendant claimed under it. Notice was issued to defendants 1 to 3 and to the 4 defendant. Owing to the contention raised by 1 defendant that the sub-mortgage was nominal and that the 4th defendant was not entitled to any portion of the money deposited in Court, the money was not paid to anybody but remained in Court. It was after decree in the suit (O.S. No. 515 of 1917) ordered to be paid out by the District Munsif to the 4 defendant who drew this sum.

(2.) The first question is whether the deposit made under the provisions of Section 83 of the Transfer of Property Act in O.P. No. 33 of 1917 was a proper one. Section 83 of the Act enacts that a mortgagor may, at any time before a suit for redemption is barred, deposit in a Court having jurisdiction to the account of the mortgagee the amount remaining due on the mortgage. There can be little doubt that the word mortgagee includes the legal representatives and assigns of the mortgagee. It is argued that a sub-mortgagee is not an assign and that a deposit of the money as payable both to the legal representative and the sub-mortgagee is not a proper deposit. We are unable to uphold this contention. Fisher in his Law on Mortgage observes "Mortgages are frequently transferred by way of sub-mortgage. In that case the sub-mortgage is a compound mortgage consisting of a mortgage of a chose in action (viz., the original mortgage debt), and of the property which is security for the original mortgage debt." In cases of suits where there is a sub-mortgage, the decree has to direct an account of what is due on the original mortgage and of what is due on the submortgage and payment of what is due on the Sub-mortgage not exceeding the sum due on the original mortgage and the residue, if any, to the original mortgagee. Form No. 9, Appendix D to the Civil P. C. refers to suits by a sub-mortgagee against the original mortgagor and mortgagee and shows that an account has to be taken on the above footing. Ghose in his work on the Law of Mortgages in India observes "Debts secured by mortgage are also frequently assigned by way of security. Such transactions are known as sub-mortgages and may be evidenced merely by a deposit of title-deeds. The sub-mortgagee by virtue of the assignment is not only entitled to the usual remedies Against his own mortgagor but also against the original mortgagor." It is clear that a claim by a sub-mortgagee against the Original mortgagor cannot be met by a plea of want of privity as the sub-mortgage is only an assignment of the original1 Mortgagee's rights. Where the sub-mortgage is for an amount equal to or in excess Of the original mortgage debt it will operate ad a complete assignment, and if for any lesser sum, as an assignment pro tanto.

(3.) We have not been referred to any case where a deposit in Court under Section 83 of the Transfer of Property Act has been held to be bad owing to the assignee of the mortgage being stated as the person entitled to the money. Where a person having Justice of an assignment pays the money into Court and names only the original mortgagee who has parted with his rights as the person entitled to receive the sum deposited we do not see how he can, if the money is taken away, resist a suit by the assignee of the mortgage before such deposit. See Narayana Mudali V/s. Raghavammal , if. A sub-mortgagee will be a necessary party to a suit for redemption and we think that a deposit will not be bad merely because the petition states the persons-entitled on the original and sub-mortgagee and the Court issues Notice to them. The case will, of course, be different if the mortgagor alleges claims of persons not the legal representatives or assigns of the mortgagee for the purpose of seeing that the money is not drawn out to of supporting the case of persons with no title.