GULAM KHAJA MAHAMAD Vs. PANDHARINATH VAMAN

JUDGEMENT

(1.) This appeal arises out of a suit filed by the plaintiff to recover Rs. 3,000 on a mortgage bond of Rs. 1,500 passed to him by defendant No. 1 on August 16, 1930. By that mortgage bond defendant No. 1 had mortgaged survey No. 59 alone to the plaintiff, but prior to this mortgage defendant No. 1 had mortgaged survey Nos. 59, 71 and 171 to defendant No. 2 for Its. 4,000 on April 8,1930. In execution of a money decree obtained by a stranger all the three lands were sold subject to defendant No. 2's mortgage and were purchased by defendant No. 2 for Rs. 700 on May 12, 1933. Defendant No. 2 did not get immediate possession of the three lands, but after some proceedings he got possession of them on May 12, 1938. The plaintiff brought this suit on June 26, 1941.

(2.) The trial Court found that Rs. 3,000 were due to the plaintiff by defendant No. 1 under the mortgage, but he had also a right to redeem defendant No. 2's prior mortgage; and the trial Court further found that on that mortgage the total amount due on May 12, 1933, when defendant No. 2 purchased the mortgaged lands came to Rs. 6,480. The assessment of the three lands is Rs. 83-10-0 and the assessment of survey No. 59 alone is Rs. 34-8-0. Hence proportionately the liability under the mortgage of that land was found to be Rs. 2,272-8-0. Defendant No. 2 was not allowed any future interest from the date of the auction purchase as he was in possession. The trial Court, therefore, passed a decree declaring Rs. 3,000 to be due on the plaintiff's mortgage at the date of suit. Defendant No. 1 was ordered to pay to the plaintiff that amount with future interest and costs. The decretal amount was made payable by annual instalments of Rs. 500. In default, the plaintiff was allowed to recover the amount by the sale of survey No. 59 subject to defendant No. 2's mortgage charge of Rs. 2,272-8-0. A decree under Section 15B of the Dekkhan Agriculturists Relief Act was directed to be drawn up accordingly. Defendant No. 2 appealed to the District Court complaining that he should have been awarded future interest from the date of his auction purchase and the property should have been ordered to be sold subject not only to Rs. 2,272-8-0 but also to such future interest. The learned Assistant Judge who heard the appeal relied upon the ruling in Syed Ibrahim Sahib V/s. Arumugathayee (1912) I.L.R. 38 Mad. 18 and held that the prior mortgagee was not entitled to claim any interest on his mortgage from the date he took possession of the mortgaged property as its auction purchaser. He, therefore, confirmed the deciee of the trial Court and dismissed the appeal.

(3.) It is not disputed that although defendant No. 2 purchased the mortgaged property at the auction sale his rights under his mortgage remained alive as against the subsequent mortgagee. The relevant portion of Section 101 of the Transfer of perty Act provides: Any mortgagee of immoveable property may purchase the rights in the property of the mortgagor without thereby causing the mortgage or charge to be merged as between himself and any subsequent mortgagee of the same property; and no such subsequent mortgagee shall be entitled to foreclose or sell such property without redeeming the prior mortgage. The lower Courts were, therefore, right in ordering the sale of the mortgaged property for the recovery of the amount due to the subsequent mortgagee subject to the amount due to the prior mortgagee. Although the mortgage of defendant No. 2 may be extinguished as between himself and the mortgagor, defendant No. 1, yet so far as the subsequent mortgagee is concerned he can claim from him the amount due under his mortgage and allow the subsequent mortgagee to sell the property for his dues subject to the amount due on his prior mortgage. In Syed Ibrahim Sahib V/s. Arumugathayee, relied upon by the lower appellate Court, the mortgagor, after the creation of a puisne mortgage, sold the mortgaged property to the prior mortgagee with possession. It was held that the prior mortgage was kept alive as against the puisne encumbrancer, but the prior mortgagee was not entitled to claim interest on her mortgage amount after the date of her purchase against the puisne mortgagee. In that case the prior mortgage was with possession and the effect of her possession after her purchase of the mortgaged property was thus described (p. 33): What was enjoyed by her [the prior mortgagee] till then as compensation for the amount advanced on the usufructuary mortgage, she agreed subsequently to enjoy in consideration of the whole price fixed on Exhibit C. She cannot therefore claim any further compensation from that date for any portion of the price.