MOTI LAL DAGA Vs. SUSIL KUMAR MUKHERJEE

JUDGEMENT

(1.) A question has been referred to me by the learned Master which arose on the solving of the final decrees in two similiar mortgage suits. The circumstances were as follows. Property comprised in a mortgage was subsequently mortgaged together with other properties to a second mortgagee. The prior mortgagee sued on his mortgage and made the subsequent mortgagee a party to his suit. A preliminary decree was made and the property, the subject- matter of the original mortgage, was sold and was insufficient to satisfy the prior mortgagee's claim. The question arises on the drawing up of the final decree whether in this decree the second mortgagee is entitled to an order for sale of the remaining property in satisfaction of his mortgage. I have had the benefit of hearing arguments from counsel for the mortgagor and the second mortgagee. For the second mortgagee reliance is placed on the case of Kishory Mohan Roy V/s. Kally Churn Ghosh (1895) 22 Cal 100, where Sale, J., held that it had.been the practice on the original side of this Court for a long series of years and certainly since the decision of Pontifex, J., in 1879 in the case of Auhindro Bhoosan Chatterjee V/s. Chunno Lal Johurry (1879) 5 Cal 101, that where no issue is raised as between the defendants and no question of priority arises, on proof of the subsequent mortgages to make a decree directing an account on the footing of each of the mortgages and fixing one period of redemption for all the defendants.

(2.) That practice the learned Judge said in 1894 is now too well settled to be disturbed. In Kissory Mohun Roy V/s. Kally Churn Ghosh (1897) 24 Cal 190, the same learned Judge three years later made a similar order in favour of a third mortgagee and held that the remaining properties which were outside the jurisdiction might be sold at the instance of the defendant. In Pugh, J., in Sarat Chandra Roy Choudhury V/s. Nahapiet (1910) 37 Cal 907, held that this practice on the original side was based on and in conformity with the English practice but that it did not conform to the provisions of the Transfer of Property Act, which had been incorporated into Order 34, Civil P. C. He held that since 1908 the original side practice was bound to conform to the practice in the mofussil and on the appellate side, where the view had always been held that the subsequent mortgagees were only made parties to the suit in order that they might have an opportunity to redeem and to receive their mortgage money out of the surplus sale proceeds after satisfaction of the first mortgage. That judgment, if I may say so with respect, is clear and well reasoned and the learned Judge on p. 911 of the report calls attention to the difficulty that might arise if there were a prior or a subsequent mortgagee or assignee of the property excluded from the plaintiff's but included in the second mortgagee's mortgage. Such a person would not be a proper party to the plaintiff's suit, yet the property could not be sold except in his presence and after decree had been made with respect to his interests.

(3.) It is noteworthy that in that case the first mortgagee's security was Calcutta property, whereas the second mortgagee had a mortgage over the Calcutta property and also over properties in the mofussil and the learned Judge held that the second mortgagee was only entitled to be paid out of the balance of any sale proceeds of the Calcutta property and could not in any event proceed in that suit against the mofussil property. This decision was obviously opposed to the decision of Sale, J., in Kissory Mohun Roy V/s. Kally Churn Ghosh (1897) 24 Cal 190, but Pugh, J., based his decision not on this ground but on the wider ground that the provisions of Section 85, T. P. Act, had been incorporated in the Code and that the procedure on the original side of this Court which had hitherto prevailed had now become obsolete. The practice referred to and approved by Sale, J., had the obvious advantage of entitling all matters between the mortgagor and the various mortgagees to be adjusted in a single suit, but it also had the obvious disadvantage which was noted by Pugh, J., and to which I have already referred, viz., that there is no provision to safeguard the rights of other encumbrances of the property mortgaged to the second mortgagee.