1. The plaintiff mortgagee sued for sale and the defence of certain defendants was that the mortgage could not have operation against Yusufpur property, 864 sihams out of 1728 of which had been purchased by them. The mortgage was executed on 13th April 1920, but prior to that the mortgagor had entered into an agreement with the defendants-appellants to sell the Yusufpur property. This agreement was registered on 8th April 1920. Subsequently the defendants-appellants brought a suit for specific performance on 19th April 1920, and obtained a decree in accordance with which a sale deed was executed in their favour.
2. The trial Court exempted the property of the defendants-appellants on the ground that the plaintiff had notice of the previous contract for sale. In appeal the learned Subordinate Judge did not consider the question of notice but held that a prospective vendor, even after an agreement to sell the property could transfer it. This opinion on a point of law is obviously wrong, having regard to the provisions of Section 27(b) of the Special Relief Act. It is there laid down that specific performance of a contract may be enforced against any other person claiming under either party to the contract by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith arid without notice of the original contract. The question of notice is, therefore, of importance. If the plaintiff had notice of the previous contract he cannot enforce his mortgage as against the property so contracted to be sold previously. Having regard to the circumstances of the case we are satisfied that the plaintiff had notice. The agreement to sell was registered. When the plaintiff took the mortgage it was his duty to search the book of registration and discover the prior charge on the property. We have bean referred to the Privy Council ruling reported in Tilakdhari Lal v. Khedan Lal A.I.R. 1921 P.C. 112 in support of the contention that registration was not a notice. What their Lordships held was that the question would depend upon the circumstances of every case. A mortgagee is liable to pay all the prior incumbrances, so it would he his duty to search the registers of the Registration Department and discover what the prior charges were. If the plaintiff had performed the duty of a prudent man he would have discovered the existence of the agreement of 8th of April 1920. The agreement was made on 8th of April. The mortgage was executed on the 13th and the suit for specific performance was brought on the 19th of April. The proximity of all these dates indicates that the plaintiff had knowledge of the previous contract.
3. We are, therefore, of opinion that the property purchased by the defendants-appellants should be exempted from the burden of the mortgage. We direct accordingly and order the decree of the lower Court to be amended so as to exempt 864 sihams out of 1728 sihams of the Yusufpur property from the burden of the mortgage. The appellant shall receive costs of all the Courts including fees in this Court on the higher scale.
4. The trial Court shall be informed of the deficiency of Court-fee paid by the plaintiff in the Court and the Presiding Officer there shall take proper steps for the recovery of the amount.