CHINNU PILLAI Vs. VENKATASAMY CHETTIAR

JUDGEMENT

(1.) In a recent case my brother Spencer, J., and I had occasion to consider a question analogous to that which arises for determination here. All the decisions were cited before us, and having regard to their conflicting nature it is not surprising that we had very great difficulty in coming to a conclusion. No judgments were delivered, as the parties came to terms. But during the course of a careful and lengthy examination of the cases, I came to the conclusion that Venkataqiri v. Sadagopachariar (1911) 22 M.L.J. 129, was in conflict with the Full Bench decision in Mulla Vittil Seethee v. Achuthan Nair , and that if the former case was wrongly decided, then Venkatanarasammah v. Ramiah (1879) I.L.R. 2 M. 108 could not stand either. My brother in the Judgment, which he is about to read and which I have had the advantage of perusing has exhaustively reviewed the cases; and I assent entirely both to his conclusions and the reasoning by which they are reached. Speaking for myself, I think the matter is made plain when two fundamental principles, which I will endeavour to formulate in my own words, are grasped. The first is, that what passes to a mortgagee is a right to sell the mortgagor s interest as it stood at the date of his mortgage, subject only to this, that in his suit he must make all subsequent mortgagees parties if he wishes the sale to be free of their encumbrances. The other principle is, that of any number of mortgagees, the later can always redeem, the earlier, but cannot be compelled to do so, and the earlier cannot redeem the later except by consent. Apply these principles to the present case and what is the result? The plaintiffs have a right to sell their mortgagor s interest as it stood at the date of their mortgage. At the date of their mortgage, it was subject to the two prior encumbrances; therefore they can only sell subject to those encumbrances. The fact that there had been a previous sale by a prior encumbrancer does not affect their rights, as they were not made parties to that suit. In that suit the 2nd mortgagee could have sold the property as it stood at the date of his second mortgage i.e., subject only to the 1st mortgage, but he did not comply with the condition that in order to effect this he must join subsequent encumbrancers, The result is, as I have said, that the 3rd mortgagee can sell the property subject to the prior mortgages. The prior encumbrancers cannot redeem the later; the later can, but need not redeem the earlier. It follows that the decree made in this case was right and the appeal must be dismissed.

(2.) The necessary result of our decision is to dissent from Venhatagiri v. Sadagopachariar (1911) 22 M.L.J. 129 and Venkatanarasammah v. Ramiah (1879) I.L.R. 2 M. 108 and I have considerable difficulty in distinguishing Ramayya Chettiar v. Parthasarathy Naicker (1900) I.L.R. 24 M. 171 from those cases. In my opinion all these cases are inconsistent with the principles embodied in the Full Bench Judgment in Mulla Vitiil Seethee v. Achuthan Nair and as I am bound by the Full Bench Judgment, to which I respectfully give my complete concurrence, I am unable to treat them as authorities binding upon me. Srinivasa Aiyangar, J.

(3.) This is an appeal by the 2nd defendant. There were three simple mortgages on certain premises. The plaintiffs is the 3rd. The 2nd mortgagee sued for sale on his mortgage, obtained a decree and sold the properties; the 2nd defendant is the purchaser at the court sale. After his purchase he has redeemed the 1st mortgage. To the suit of the 2nd mortgagee the plaintiffs were not made parties. The 2nd defendant s position is therefore that-of an assignee of the first two mortgages and of the equity of redemption subject to the charge of the plaintiffs. The plaintiffs now sue for sale subject to the two prior mortgages and the question is whether they are entitled to that relief. The 2nd defendant says that the plaintiffs cannot get a decree for sale subject to the two prior mortgages, but must first redeem them and then bring the properties to sale, unless the 2nd defendant redeems him as the ultimate owner of the equity of redemption; while the plaintiffs insist that they are not bound to redeem, as they are not affected by the previous decree, but are entitled to bring the properties to sale subject to the prior mortgages. The actual decree passed is one for sale free of all encumbrances, unless the 2nd defendant redeemed the plaintiffs. The learned pleader for the appellants says, that if we decide that the plaintiffs are entitled to a decree for sale subject to the previous mortgages, he is content to leave the decree as it is, The learned pleader for the appellants raised a further point in appeal which was not raised in the first court me that he is in a position to prove that the plaintiffs mortgage was granted when the suit of the 2nd mortgagee was pending, and they were affected by lis pendens. As this point if allowed would necessitate a fresh plea and investigation on facts, we have declined to hear him on this point. The only question therefore for determination is, whether a puisne mortgagee who is not made a party to a suit for sale by a prior encumbrancer, is entitled to insist on a decree for sale subject to the previous mortgage. The rights and liabilities of a puisne encumbrancer not made a party to a suit for sale by the senior encumbrancer were elaborately discussed and all the cases were reviewed by a Full Bench of this Court and the conclusions arrived at were formulated in the shape of four propositions at the end of the judgment, Mulla Vittil Seethee v. Achuthan Nair (1911) 20 M.L.J. 213. If those propositions are correct the answer to the question in this case must be in the affirmative. The learned pleader for the appellants however contends that those propositions are really obiter and therefore not binding on us ; that they were so treated in Venkatagiri v. Sadagopachariar (1911) 22 M.L.J. 129, that the present case is in all fours with Venkataramana Iyer v. Gompertz (1908) I.L.R. 31 M. 425 which is referred to and not dissented from in the Full Bench case. I may say at once that; I do not consider that the propositions of law deduced by the Full Bench from a review of the previous authorities are merely dicta; they are the principles on which the actual decision in the case depended and are binding on us. Further as I think (if I may say so without presumption) that those propositions correctly lay down the law, I do not think it necessary to discuss the authorities cited therein. The decision in Rangayya Chettiar v. Partharasathi Naicher (1896) I.L.R. 20 M. 120 which is approved of in the Full Bench case and followed in Venkataramana Aiyar v. Gompertz (1911) 22 M.L.J. 129 on another point, is on all fours-with the present case and is conclusive against the appellants.