(CHENNUBHOTLA) VENKATASUBBARAYUDU Vs. (DUVVURI) NAGAMMA

JUDGEMENT

(1.) The property in suit was twice mortgaged, first by the original owner, Chenna Peribhotlu, and again by Yegyanna the purchaser of the equity of redemption. The first mortgagee sued in O.S. No. 369 of 1897, making parties Peribhotlu and Yegyanna (with his sons), but not the puisne mortgagee, and obtained a decree. The puisne mortgagee sued in O. Section 184 of 1901, impleading Yegyanna and his sons, and obtained a decree on 15 November 1901. After this decree in 1.902, defendant 4 through whom the plaintiffs (now respondents) claim, purchased the property in Court sale under the prior mortgagee's decree. The property was again sold under the puisne mortgagee's decree and bought by defendant 3, who is the appellant before me. The question for decision is whether the title of the 4 or of the 3rd defendant is to prevail.

(2.) An answer in favour of each claimant may, if I construe them correctly, be derived from cases decided by Courts. Broadly stated the one view is that the auction-purchaser at the later sale, here defendant 3, would buy nothing because the saleable interest of the judgment- debtor had already passed to the earlier auction-purchaser; the other view is that the puisne mortgagee not having been made a party to the prior mortgagee's suit, his rights would not be in any way affected, and his auction-purchaser would secure a title subject to the first mortgage interest vested in the first purchaser. Examples of the former line of argument are Kutti chettiar V/s. Subramania Chettiar [1909] 32 Mad. 485 and Vekatagiri V/s. Satagopa Chariar [1912] 22 M.L.J. 129; of the latter. Mulla, Veetill Seethi V/s. Achuthan Nair [1913] 21 M.L.J. 213 and Chinnu Pillai V/s. Venkatasamy Chettiar [1917] 40 Mad. 77. In the first of these cases the puisne mortgagee sued first and sold first, and the view taken was that both the mortgagees have an equal right to sell the property, and once it is sold at the instance of one mortgagee there is no further saleable interest left in the judgment-debtor to be sold again. That, no doubt, is indisputable. The only question seems to be whether it necessarily settles the point. The next case in order of time is the Full Bench judgment in Mulla Veetil Seethi V/s. Achuthan Nair [1913] 21 M.L.J. 213. The question referred was whether a first mortgagee who has bought in execution of his decree can sue to eject a puisne mortgagee with possession. The judgment contains an elaborate review of the case law dealing with the rights of puisne mortgagees. It is urged that many of the observations made are obiter, but I do not think so; the learned Judges begin with the remark that there are conflicting decisions and that the source of the difficulty seems to lie mainly in arriving at a definite conception of the rights of the second mortgagee. What those rights are therefore had to be investigated. It was held that the subsequent mortgagee could not be affected by proceedings to which he was not a party, and if the rights of the puisne incumbrancer who was not made a party to the suit of the prior mortgagee are preserved in every respect, the right to sue for sale of the equity of redemption which existed previous to the suit by the first mortgagee must continue to remain after it. It would seem that if the right to sue for sale remains, the right to sell remains, and with it the ability to give the purchaser a good title. But it would, I dare say, be going too far to use the passage above cited as authority for the proposition that the second mortgagee may sell behind the back of the first auction-purchaser, though indeed the first sale was conducted behind his own back notwithstanding that he was a necessary party to the first mortgagee's suit. This Full Bench opinion was considered by Munro and Sankaran Nair JJ. in Venkatagiri V/s. Satagopachariar [1912] 22 M.L.J. 129, another case of two competing sales, They remark, what is no doubt true, that a different question was referred to the Full Bench, though it was apparently decided that a puisne mortgagee may sue the purchaser of the equity of redemption without redeeming the prior mortgage. Their own view is that the puisne mortgagee has a right to sell the property even after sale by the first mortgagee, but he can exercise that right only after redeeming the prior mortgage.

(3.) The rights of the two mortgagees in the matter of sale came up again for consideration by Coutts, Trotter, J. (as he then was) and K. Srinivasa Ayyangar J. in Chinnu Pillai v. Venkatasami Chettiar [1917] 40 Mad. 77. The several cases which 1 have alluded to are reviewed by the latter learned Judge. Referring in particular to the argument relied on in Venkatagiri V/s. Satagopa Chariar [1912] 22 M.L.J. 129 and the cases, that the judgment-debtor's interest having been sold there is nothing left for the puisne mortgagee to sell, he observes that: this ignores the fact that the first purchaser purchases it subject to the rights of the second mortgagee to sell.