H V LOW AND CO Vs. HAZARIMULL BABU

JUDGEMENT

(1.) These three appeals arise out of three suits brought on different mortgages by the same plaintiff. In the suits out of which Appeals Nos. 3 and 4 arise, the defendants were the same. In the suit which has given rise to Appeal No. 19, the principal defendants were the co-sharers of the principal defendants in the other two suits who owned an eight-anna share of the mortgaged property. The appellants before us are Messrs. H.V. Low &. Co., Ltd., who were added as defendant No. 3 in the suits from which Appeals Nos. 3 and 4 arise and who were the defendant No. 8 in the suit which has given rise to Appeal No. 19. The suits were decreed by the Subordinate Judge against all the defendants. The mortgage in Appeal No. 3 is dated the 3 April 1917. In Appeal No. 4, the mortgage is dated the 23 September 1913 and in Appeal No. 19, it is dated the 10 of January 1917. The appellants before us are the lessees of two mouzahs called Simsa and Barkola and they obtained a mining lease from the mortgagors in Appeals Nos. 3 and 4 on the 10 February 1919 with regard to a moiety share of those two mouzahs. They also obtained a similar lease from the mortgagors in Appeal No. 19 on the 25 August 1919. There is no question that the appellants are bound by the several mortgages and that the property in their hands is liable to be sold in execution of the mortgage-decrees along with the other properties mortgaged at the instance of the mortgagee. These defendants in the Court below made an application in each case praying that the two movzahs of which they had taken leases should be put up to sale last of all. In answer to their petitions, the mortgagors contended that these two mouzahs should be put up to sale first as the whole of the mortgage-debt would then be paid off out of the purchase- money of these two mouzahs; they were the most valuable part of their property and something would remain in excess after satisfy-in? the mortgages. The mortgagors also said that, if these two properties were sold first, it would be unnecessary to proceed with the sale of their other properties. The mortgagee was indifferent as to what direction the Court might make with regard to the order in which the mortgaged properties were to be put up to sale. In all the cases, the Subordinate Judge made an order to the effect that these two properties Simsa and Barkola should be put up to sale first as he considered that that was the most equitable order having regard to the fact that the defendant Company--the appellants before us--had taken their mining leases with full knowledge of the indebtedness of the mortgagors and on favourable terms and further that the agents of the Company who negotiated the transaction undertook to pay off the several mortgages.

(2.) In each of these suits there was another set of defendants who were the sons of the mortgagors and they pleaded that they were not bound by the leases granted by their fathers as the leases were not granted for the benefit of the joint Mitakshara family of which they were all members. This question the learned Subordinate Judge has left open, and it seems to me that it was unnecessary to decide that question which was an issue between defendant and defendant wholly unconnected with the main issues which arose in the mortgage suits.

(3.) The defendant Company have appealed against the decrees passed by the learned Subordinate Judge and they attack the particular portion of the decree in each case in which the order in which the mortgaged properties should be sold is stated, that is to say, they object to the order that Mouzahs Simsa and Barkola should be put up to sale first in satisfaction of the mortgage-decree. Their contention, in the first place, is that the other properties which are not the subject of the lease to them should be sold first and that, if the mortgages are not satisfied out of the sale-proceeds, then the property leased to them should be sold; secondly, they urged that, if that contention of theirs be not accepted, the order with regard to the sale of the two properties Simsa and Barkola first should be expunged and the mortgagee should be allowed to proceed to execute his mortgages against any property he chooses. It is said on behalf of the appellants that the law as enacted in Section 56 of the Transfer of Property Act, namely, where two properties are subject to a common charge and one of the properties is sold the buyer is, as against the seller, in the absence of a contract to the contrary, entitled to have the charge satisfied out of the other property so far as such property will extend, should be applied to the present cases. It is next said that, if that provision is not applicable, then the general principle of marshalling of securities as laid down in Section 81 of the Transfer of Property Act should be applied as a rule of equity.