UMED SINGH Vs. BABU RAM

JUDGEMENT

(1.) This is a defendant's appeal arising out o? a suit for sale brought on the basis of a second mortgage-deed dated 15 January 1917, executed in favour of the plaintiff by the original mortgagor. Previous to this there had been a prior mortgage of 13 June 1911, executed by the same mortgagor to the predecessor-in-title of the defendant-appellant under which the same two villages were successively mortgaged. In 1918 the mortgagor sold one of the mortgaged villages to the present defendant-appellant for Rs. 6,500 out of which Rs. 6,105 were left for payment to the first mortgagee and only Rs. 395 for parctis discharge of the second mortgage. The defendant made these payments on two dates in December 1918 a June, 1919. Owing to the delay in the payment, additional interest had accrued under the first mortgage with the result that instead of Rs. 6,105 which were due under it on the date of the sale, a sum of Rs. 6,219 became due which was duly paid by the vendee. Having paid an extra amount to the first mortgagee, the vendee did not pay the whole of Rs. 395 to the second mortgagee, but deducted a sum of Rs. 114 from it and paid only the balance. The vendee obtained possession of the property under a sale-deed and having satisfied the prior mortgage-debt did not take any steps to bring a suit for sale as a representative of the prior mortgagee into whose shoes he had stepped.

(2.) When a suit was brought by the present plaintiff, the second mortgagee, the vendee pleaded that he was entitled to priority by virtue of the discharge of the first mortgage and he claimed the whole sum of Rs. 6,21.9 which he had paid to the prior mortgagee and also claimed interest on the same at the contractual rate. He also pleaded that he was entitled to deduct Ha. 114 out of the amount left in his hands for payment of the second mortgage. The ultimate decree which has been passed by the lower appellate Court is to give of the defendant the sum of Rs. 6,219 minus Rs. 114 with interest on this balance at the contractual rate entered in the first mortgage-deed. The plaintiff has submitted to this decree, but the defendant has appealed. On his behalf it is urged that he was entitled to be sub-rogated to the rights of the prior mortgagee in full and must get the amount of the interest which had accrued between the date of the sale-deed and the date of the payment to the prior mortgagee together with interest.

(3.) The first question which arises for consideration is whether a purchaser from the mortgagor is entitled to be subrogated to the rights of the prior mortgagee whom he redeems. Under the old Transfer of Property Act, Section 74, in terms, applied to a subsequent mortgagee only and not to a subsequent purchaser. But in several eases their Lordships of the Privy Council extended the principle underlying that section to a purchaser of the equity of redemption where the intention appeared to he to keep alive the security. Drastic amendments have been made in the new Transfer of Property Act, and the Amending Act 20 of 1929, has introduced very materisl changes in several sections. Both Secs.91 and 92 have been amended. Under Section 92, any of the persons referred to in Section 91 other than the mortgagor, and any co-mortgagor on redeeming property subject to a mortgage has, so far as regards sale, etc, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee. Section 91 allows a right of redemption to various classes of persons besides the mortgagor and among these classes of persons are persons who have any interest in, or charge upon, the property mortgaged or in, or upon, the right to redeem the same, but Section 59(A) provides that in the chapter in which Secs.91 and 92 occur, mortgagors and mortgagees shall be deemed to include references to persons deriving title from them, respectively. Taking Section 59(A) literally it would follow that transferees, whether purchasers or subsequent mortgagees who derive title from mortgagors would be included in the word "mortgagor" unless it is otherwise expressly provided. But the context of Section 91 indicates that all transferees including purchasers, subsequent mortgagees, lessees, etc., would come within the class of persons who have any interest in, or charge upon, the property mortgaged or in, or upon, the right to redeem the-same and would, therefore, not be included in the word mortgagor" which occurs earlier in the section. On this interpretation we would have to give a narrow meaning to the word "mortgagor" in this-section so as to include the person who made the mortgage and his legal heirs and not include transferees from him. Giving this meaning to the word "mortgagor, " it would follow that under Section 92 all transferees from the mortgagor, whether they be purchasers or subsequent mortgagees or lessees, would have the right of subrogation when they redeem a prior mortgage, as against a puisne mortgagee.