PARVATI AMMAL Vs. VENKATARAMA IYER

JUDGEMENT

(1.) One Saminatha Pillai was the head of a joint Hindu family of which defendants 2, 3 and the husband of the fifth defendant were members. He mortgaged some of the property, item (I) in the plaint, in 1902 to one Sella-thachi, and in 1904 assigned his half share in the plaint items to the first defendant, who is the wife of the second defendant. The son of Sellathachi sued on the mortgage, got a decree and brought the property to sale in execution. The sale was held. but before confirmation, the first defendant raised money from the plaintiff on a hypothecation bond, the plaintiff undertaking to pay up the sale amount and release the property. The plaintiff did so and the decree was thereby satisfied. In a partition suit by the third defendant in 1909, O.S. No. 41 of 1909 on the file of the Kumbakonam Subordinate Court, to which the first defendant, but not the plaintiff, was a party, that Court held that the assignment by Saminatha Pillai to the first defendant was a sham. The first defendant had therefore no interest in the property which she could transfer by mortgage to the plaintiff. The plaintiff, therefore, sued to recover her loan with interest by the sale of the mortgaged property or by a charge on item (I). The District Munsif held that the plaintiff was entitled to such a charge. The Subordinate Judge agreed with that, but interpreted the nature of the charge as a subrogation of the rights and remedies of the first mortgagee and held that, as the right of the first mortgagee to enforce the mortgage arose, on the terms of it, on 19.1.1903, a suit by the first mortgagee would at the date of the plaintiff's suit, have been barred and that therefore the plaintiff having no higher rights than that of the prior mortgagee, was likewise barred from enforcing the charge. He therefore dismissed the suit and the plaintiff has appealed.

(2.) That the plaintiff is, by her payment, subrogated to the rights and remedies of the prior mortgagee, as held by both the lower Courts, does not, to my mind, admit of doubt. As puisne mortgagee he was clearly interested in clearing the property of the prior mortgage. She is entitled to be subrogated to the charge which she has paid off. The point for decision is whether, when she paid it off, she is to be subrogated to it in its original form as a mortgage charge, or to it in the form into which it had developed, viz., the right to sell the property in discharge of the mortgage decree. I think the latter view is the correct one.

(3.) The essence of subrogation is that the party paying off a charge becomes in equity the assignee of that charge. It would seem to follow that he is subrogated to the charge in the form which it has assumed when his assignor in equity is (by a legai fiction) supposed to make the assignment. It is difficult to see how an assignment can have the effect of, so to speak, set-ting back the hands of the clock of evolution, and reviving a form out of which the charge has already developed, so that the charge assigned is not the charge as on the date of assignment, but some previous and outworn state thereof. It is still more difficult to adopt such a theory when the charge, out of which the charge at the date of assignment has developed, had already vanished, not by process of development, but by efflux of time. If the charge assigned is still a charge which has become unenforceable as a mortgage charge by efflux of. time, then naturally subrogation is time barred. But if it is a charge which has become unenforceable as a mortgage charge because it has developed into a decree charge, I cannot see why the party entitled to subrogation should be relegated to the unenforceable charge and denied the enforceable one. If the unenforceability of the mortgage charge as such is the test by which the right of subrogation is to be denied, it is difficult to see why a mortgage charge unenforceable at the date of assignment because it has passed into a decree, should nevertheless be held enforceable by a subrogee, while a similar charge unenforceable at the date of assignment because of efflux of time, is not enforceable by the subrogee. The logical result of such a theory would be that in all cases where a mortgage charge has ripened into a decree, and the property has been saved from Court sale to the mortgagors by the discharge of the decree debt by means of a fresh mortgage, there can be no subrogation and such a method of discharging a mortgage decree debt would no longer be feasible for the judgment-debtors.