CANGAYAM VENKATARAMANA IYER Vs. HENRY JAMES COLLY GOMPERTZ

JUDGEMENT

(1.) The principal question in this appeal may be shaped as follows: Can the second of the two sucesssive mortgagees, both of whom hold simple mortgages, insist, in a suit to which the prior mortgagee is a party, on obtaining from the Court a decree for sale subject to the prior mortgage?

(2.) It is unnecessary, in considering the question, to decide whether or not the prior mortgagee can make him a party simply to enable the Court to determine what is due to him. In this case the plaintiff has not stated that this was the only purpose for which the prior mortgagee was made a party; he has in fact offered, as an alternative to his first prayer, to accept a decree for redemption of the prior mortgage. It is, of course, the case that the plaintiff could not here avoid making the prior mortgagee a party, for as purchaser in the sale on his mortgage he unites in himself the interests of the mortgagor and mortgagee in the property. That, however, does note affect the question. All the interested parties being before the Court it is the duty of the Court, if it can do so, to make a decree which shall deal finally with the questions between them and shall preclude the necessity of further litigation for the enforcement of any right arising out of the mortgage or mortgages in question in the suit. This is the obvious intent of Section 85 of the Transfer of Property Act, and is clearly a desirable and proper intent. It may be that there will be found cases in which the Court will be unable finally to close the matter without doing injustice to the prior or puisne mortgagee (see remarks in Ghose on Mortgages, 3 edition at p. 738); but those cases must be treated as exceptional and will, no doubt, having regard to the fact that the second mortgagee before advancing his money, knows of his existence and the nature of the burden on the property which must be removed before he can be paid, be very few in comparison with those in which justice can best be done by requiring redemption by the second mortgagee, or directing a sale free of all encumbrances.

(3.) Moreover, it is the right of the prior mortgagee to require the second mortgagee to redeem him or submit to a sale of whatever interest he holds in the property - see Section 75 of the Transfer of Property Act - and the decree must give effect to this right, unless by doing so it unnecessarily deprives the second mortgagee of any right of his own.