1. The plaintiff-respondent obtained a decree for sale on a mortgage against 21 defendants. The mortgage had been executed by the first defendant on behalf of himself and three other defendants, but defendants 13 and 14, who are the present appellants, were subsequent transferees of the mortgaged property. The trial Court decreed the suit, for sale of the mortgaged property, and directed that the parties should receive costs according to their success or failure. In the preliminary decree, defendants 13 and 14 were awarded costs amounting to Rs. 274-11-0 as against the plaintiff. Other defendants were also awarded costs in proportion to the amount of their success. Before the final decree was prepared the plaintiff-decree-holder made an application that the amount of costs awarded against him in favour of the defendants should be set off against the amount of his decree, and this the Court directed to be done. The final decree was prepared in accordance with these orders, and the plaintiff decree-holder is now executing it. The present appellants made an application to be allowed to execute their decree for costs amounting to Rs. 274-11-0 against the plaintiff decree holder. The executing Court has disallowed this on the ground that in the final mortgage-decree the amount of these costs has already been deducted from the sum decreed to the decree-holder, and has referred to the decision in Bhagwan Singh v. Ratan (1894) 16 All. 395. Against this order of the executing Court the present appeal has been made. The argument is to the following effect: Under Order 21, Rule 19, cross-claims maybe set off in proceedings in the execution of a decree 'under which two parties are entitled to recover sums of money from each other.' In the present case the plaintiff was not entitled by the decree to recover any sum from the appellants. On the contrary the appellants were entitled to recover Rupees 274-11-0 from the plaintiff, and there is-nothing, it is said, which can prevent them from executing the ,decree for that amount. The application to set off the amount due as costs from the plaintiff-decree holder to the appellants was made by the decree bolder himself, and the present appellants were not concerned with it. The result of that application was that the decree-holder, in consequence of a mistake of his own, has obtained a final decree for a less amount than he-might have done if he had not made this application, and had not caused the-Court to set off, against the total amount due to him under the preliminary decree, the amount that was due from him to the appellants on accounts of costs. It is true that an amount had been deducted from the sum payable to the decree-holder in the final decree, which is equivalent to the amount due to the appellants for their costs. But the fact remains, so the argument goes, that there is no sum which the decree-holder is entitled to recover from the appellants, and consequently he cannot be protected by the provisions of Rule 19 of Order 21.
2. It has been argued on behalf of the plaintiff-respondent that the appellants, as subsequent mortgagees of the mortgaged property, have rendered themselves liable under the decree to the decree-holder. I have been referred to the decisions in Bhagwan Singh v. Ratan (1894) 16 All. 395 and Sadik Husain Khan v. Hasim Ali Khan A.I.R. 1914 Oudh. 416, in which it has been held that Rule 19 will apply as between parties who are entitled to recover sums of money from each other even when one of the sums is recoverable by the sale of the hypothecated property and the other is recoverable personally. These cases however referred to claims as between a mortgagor and a mortgagee, and I have not been shown any case in which the provisions of the rule have been applied to claims arising between a mortgagee and subsequent mortgagees. It is clear enough that there may be a distinction between the two. When there are claims between a mortgagor and a mortgagee, the mortgagee may be said to have a claim against the mortgagor not only to have the mortgaged property, but also to recover any balance that may be due after the sale personally from the mortgagor. There can be no such claim against the subsequent mortgagees, of the property, who are under no personal liability whatever. It has been suggested that there is an indirect kind of liability because if they had paid the mortgage-debt and redeemed the mortgage, the property would have been relieved of a certain burden of interest to which it is now liable.
3. There was however no obligation on the appellants as puisne mortgagees to satisfy the mortgage debt and redeem the mortgage, and by failing to do so they did not incur a personal liability to the prior mortgagee. Finally it has been suggested that as the appellants received notice of the plaintiff's application for a final decree, which application contained a prayer that the amount awarded for costs to the various defendants should be set off and deducted from the total amount awarded to the plaintiff-decree-holder in the final decree, and as the appellants did not in reply to that notice make appearance in the Court and oppose the application, it must be held that there was an adjustment between the parties and that it was certified under Clause (2), Rule 2, Order 21. For the purposes of this particular matter no doubt the plaintiff was in the position of the judgment-debtor and the appellants were the decree-holders, and under Clause (2), Rule 2, it is open to the judgment-debtor, where there has been an adjustment, to apply to the Court to issue a notice to the decree-holder to show cause why such payment or adjustment should not be regarded as certified, and if after service of such notice the deoree-holder fails to show cause why the payment or the adjustment should not be regarded as certified, the Court shall report the same accordingly. The circumstances of this case: however, were as follows : Before the plaintiff had made an application for the preparation of the final decree the appellants had on 7th January 1931 made an application for execution of their decree for costs. On 18th February 1931 the plaintiff made an application that the decree could not be executed because he could adjust the amount against the amount awarded to him under the final decree and this was met on 14th March 1931 by the counter objection of the appellants that the decree could not be adjusted in this way because the amount due to them for costs was due to them personally, whereas the amount due to the mortgagee was not a personal claim against the appellants, and it is difficult to see how this objection of the appellants could have been met. There was no formal certification of the adjustment, and in fact there had been no adjustment. The notice that was received by the appellants was a notice of the plaintiff's application for a final decree, after deduction of the amount which had been allowed to the various defendants for costs. Mr. Malik has argued, and I think quite correctly, that it was not for the appellants to make the objection because the plaintiff had applied for a final decree in respect of a sum which was less than that which he might legally have claimed. Notice was not of an application for adjustment and if it had been framed as such, the appellants would have made exactly the same objection as they had already made when the plaintiff claimed that he could adjust the amount in answer to the appellant's application for execution. That objection would have been difficult to meet, and in fact has not been met, because it is based on the fact that the plaintiff has no personal claim against the appellants and that consequently Rule 19, Order 21, has no application. The plaintiff's remedy is to apply for an amendment of the decree. I therefore allow the appeal with costs, set aside the order of the Court below, and direct that the appellants' application for execution of their decree for costs be allowed.