KEDAR NATH GOENKA Vs. BHAGWAT PRASAD KUMAR

JUDGEMENT

(1.) This is an appeal from the decision of the Subordinate Judge of Monghyr in a suit to enforce a mortgage. The essential facts may be very shortly stated. The mortgagees suit is on a mortgage executed on 5 October 1917, for a sum of Rs. 6,291. It has been dismissed on the ground that the mortgage debt has been satisfied by the sale by the mortgagors to the mortgagee plaintiffs of the equity of redemption of the mortgage deed. The mortgage in question came about in the following way: On 4 October 1909, defendants 1, 2 and 3 executed a mortgage bond to the plaintiffs for Rs. 19,000 odd. On 5 October 1917 calculation was made as to the amount which remained due on this bond in respect of principal and interest and the sum so found was Rs. 38,000 odd. A new transaction was entered into. The mortgagors borrowed from the mortgagees another Rs. 5,300 odd and then executed in favour of the mortgagees two documents one of them a simple mortgage bond (the mortgage bond now sued upon) for Rs. 6,291 and seven properties were mortgaged by that" deed. As to two of these properties the mortgagees were given an anomalous usufructuary mortgage for Rs. 37,000 odd. The debt on these mortgages continued swelling up, and, on 24 October 1928, the total dues by the defendants to the plaintiffs amounted to Rs. 49,500 odd. Therefore the mortgagees and the defendants entered into a deed of sale and the defendants conveyed properties 1 and 2 out of the seven properties, the subject of the original mortgage, to the mortgagees for and in respect of the said sum of Rs. 49,500 odd and the mortgage debt was put an end to. In the sale deed the following expression occurs: after reciting that the consideration price for the conveyance of the properties 1 and 2 was to be Rs. 49,500. the deed continued thus: Keeping intact the effects of the mortgage created under the mortgage (simple) and sudbharna (usufructuary) mortgage bonds aforesaid; (and we) put the said purchaser in possession of the vended property in our place, admitted him to be the absolute owner, and set off the whole and entire consideration in respect of the dues of the said purchaser under both (his) said bonds.

(2.) The reference to the keeping intact of the effects of the mortgage has been relied upon by the plaintiffs in this case, and it is argued on their behalf that it was intended that, not with standing the deed of sale and the apparent extinction of the mortgage debt, the mortgagees should remain in possession of the full rights under their mortgage bond. In other words, the argument amounts to the contention that by virtue of the sale deed the mortgagees became not only mortgagees again but further, proprietors by virtue of the conveyance. This would be an entirely anomalous situation for which I am sure there is no precedent. The words as to keeping alive the mortgage bond are merely an assertion of the same rights that are conferred by reason of Section 101, T.P. Act, and they are intended merely to preserve to the mortgagee a shield against the claims of persons setting up a subsequent charge upon the same properly. They have no reference in their proper construction either in the deed or in the Act to the maintenance of any mortgage rights by the mortgagee against the mortgagor. Properties 1 and 2, which were the subject of the sale deed, consisted of a three annas odd share in mauza Sikandarpur which was the property mortgaged. After the execution of the sale deed the plaintiffs registered themselves as proprietors of the property conveyed.

(3.) They subsequently found out the position of the defendants second party. These are persons who had obtained a money decree against defendant 3. Defendant 3, who is one of the mortgagors, had a one anna odd share in the said properties and the plaintiffs found that they were in a position of doubt as to whether those defendants second party, (who in execution of their money decree had attached that one anna odd share of defendant 3), had any right to do so and they took up the position in their plaint that they had not received that which they had bargained to receive under the sale deed and therefore the sale deed had no effect upon the rights under the mortgage deed sued upon and they therefore purported to sue defendants 1, 2 and 3 impleading the defendants second party and claiming a mortgage decree for sale of the said properties. The defendants second party, as I have said, having attached this one anna odd share of defendant 3, put it up for sale on 6 August 1928, before the date of the sale deed in question and bought it in and got delivery of possession. The case on behalf of the plaintiffs is put, I think, in two alternative ways. First of all, it is contended that under the sale deed the rights of the plaintiffs were preserved as mortgagees not with standing that they also became proprietors under the sale deed. This contention I have already dealt with. Secondly, it is said that owing to the failure of the defendants first party to deliver the property contracted to be delivered, that is to say, the three annas share and being only in a position to deliver a two annas share in Shikandarpur, there has been a total failure of consideration.