MIRZA EWAZ ALI BEG Vs. BABU GENDAN LAL

JUDGEMENT

(1.) THE question at issue is how much money a subsequent mortgagee, Ewaz Ali Beg, plaintiff, should pay to a prior mortgagee, Gendan Lal, successor-in-interest of Dwarka Prasad. THE suit for sale was brought by Ewaz Ali Beg, and Gendan Lal was made a party (defendant) as prior mortgagee. THE circumstances of the prior mortgage have to be narrated:--THE prior mortgage was made in favour of Dwarka Prasad on 23 August, 1903, and he obtained a preliminary decree for sale on 3 March, 1916, and a final decree on 13 January, 1917. THE plaintiff was no party to these proceedings. In process subsequent to the final decree Gendan Lal himself purchased the property on 31 October, 1917. and obtained possession on 31 January, 1918. THE lower Appellate Court has allowed Gendau Lal an amount made up of the principal amount of his bond with simple interest at six per cent, per annum from the date of the bond to 31 January, 1918. the date of his taking possession of the property. What is alleged on behalf of the plaintiff is that he should be made liable to pay only the amount of the final decree of 13th January, 1917, because that decree cancelled the mortgage and substituted in its place the right to sell. This argument is based on cases occurring prior to the passing of the present Civil P. C. which contains in Order XXXIV, rules relating to mortgage suits. Prior to that enactment in 1908 the law was contained in Secs.88 and 89 of the Transfer of Property Act. THEir Lordships of the Privy Council relying on the wording of Section 89 that on the passing of an order absolute for sale the defendant's rights to redeem and the security shall both be extinguished, held that a decree made under Section 89 of the Transfer of Property Act of 1884 for the sale of mortgaged property had the effect of substituting the right of sale thereby conferred upon the mortgagee for his rights under the mortgage and the mortgage rights were extinguished [Het Ram V/s. Shadi Ram 45 I.A. 798 : 45 I.A. 130 : 5 P.L.W. 88 : 16 A.L.J. 607 : 35 M.L.J. 1 : 24 M.L.T. 92 : 28 C.L.J. 188 :(1918) M.W.N. 518 : 20 Bom. L.R. 798 : 22 C.W.N. 1033 : 40 A. 407 : 9 L.W. 550 : 12 Bur. L.T. 73 (P.C.)]. This Court had held the same opinion, and the appeal from the decision of this Court was dismissed. This rule was followed in the case of Matru Mal V/s. Durga Kunwar 55 Ind. Cas. 969 : 18 A.L.J. 396 : (1920) M.W.N. 338 : 38 M.L.J. 419 : 11 L.W. 529 : 2 U.P.L.R. (P.C.) 75 : 22 Bom. L.R. 553 : 32 C.L.J. 121 : 42 A 364 : 47 I.A. 71 : 27 M.L.T. 319 : 25 C.W.N. 397 (P.C.) in which case also a decree of this Court was upheld. Subsequent, however, to the Civil Procedure Code rules relating to mortgage suits, the view of this Court on the subject has been changed. In Phulmani Chaudhrain V/s. Nageshar Prasad 9 Ind. Cas. 670 : 33 A. 370 : 8 A.L.J. 155 a Bench of two Judges held that a subsequent mortgagee is not entitled to redeem the prior mortgage by simply paying the price for which the mortgaged property may have been purchased at an auction-sale held in execution of a decree obtained by a prior mortgagee, but such subsequent mortgagee must, if he wishes to redeem, pay to the prior mortgagee the full amount due on the prior mortgage [Phulmani Chaudhrain V/s. Nageshar Prasad 9 Ind. Cas. 670 : 33 A. 370 : 8 A.L.J, 155.] This rule was followed in a later Bench case, Bohra Phul Chand V/s. Roshan Lal 36 Ind. Cas. 703 : 14 A. L. J. 337. THE words of Section 89 of the Transfer of Property Act on which the decision of their Lordships of the Privy Council in Het Ram's case 45 I.A. 798 : 45 I.A. 130 : 5 P.L.W. 88 : 16 A.L.J. 607 : 35 M.L.J. 1 : 24 M.L.T. 92 : 28 C.L.J. 188 :(1918) M.W.N. 518 : 20 Bom. L.R. 798 : 22 C.W.N. 1033 : 40 A. 407 : 9 L.W. 550 : 12 Bur. L.T. 73 (P.C.) was based have not been re-enacted in Order XXXIV, Rule 5. I am, therefore, of opinion that the lower Appellate Court was correct in calculating the interest up to 31 January, 1918, and not directing that the amount payable by the plaintiff should be equal to the amount of the final decree of 13 January, 1917. I dismiss this appeal with costs.