Iqbal Ahmad, C.J.
1. This is an appeal by Muima Lal plaintiff under Section 10, Letters Patent, against the judgment of a learned Judge of this Court and arises out of a suit for sale on a mortgage, dated 13th February 1925, executed by Bharat Singh, defendant l, in favour of Dwarka Das, father of Munna Lal. The main contest in the suit was between the plaintiff and one of the defendants named Chunni Lal, who is a respondent to the present appeal. The Courts below held that the plaintiff had priority as against a mortgage held by Chunni Lal, but the learned Judge of this Court came to the contrary conclusion. The facts are not in controversy and are as follows: On 27th May 1912, Lal Singh, father of Bharat Singh, executed a deed of simple mortgage in favour of Dwarka Das, father of the plaintiff. This mortgage will hereafter be referred to as the mortgage of 1912. In the year 1920 there was some payment by the mortgagor in respect of part of principal or interest 'as such' due on the mortgage of 1912, and the payment so made gave fresh start to the period of limitation for enforcement of the mortgage of 1912. Lal Singh died some time between the years 1920 and 1922 leaving three sons, Bharat Singh, Ran Singh and Ranjit Singh. It is common ground, that Lal Singh and his three sons constituted a joint Hindu family and, as such, on the death of Lal Singh, his three sons became owners, by right of survivorship, of the property mortgaged under the deed of 1912. On 22nd April 1922, Bharat Singh, as karta of the joint family consisting of himself and of his two brothers, executed a deed of simple mortgage in favour of Bansi Lal, father of Chunni Lal, defendant-respondent. This mortgage will hereafter be referred to as the mortgage of 1922. The properties mortgaged under the mortgage deeds of 1912 and 1922 were identical. In May 1924, Dwarka Das put the mortgage of 1912 into suit and obtained a preliminary decree for sale against Bharat Singh and his brothers in August 1924, Bansi Lal, the mortgagee under the mortgage of 1922, was no party to the suit or to the decree.
2. Some time between 1922 and 1925 there was separation between Bharat Singh and his brothers and each of the three brothers, on partition got one-third of the mortgaged property. On 13th February 1925, the mortgage deed in suit (hereinafter called the 1925 mortgage) was executed by Bharat Singh in favour of Dwarka Das. The amount secured by this mortgage was one-third of the amount due under the decree for sale obtained by Dwarka Das on the basis of the mortgage of 1912, and the property covered by the mortgage of 1912, which, on partition, was allotted to Bharat Singh. Two separate mortgage deeds with respect to two-thirds of the decretal amount were also executed by the two brothers of Bharat Singh in favour of Dwarka Das and thus the decree of 1924 was satisfied. We are, however, not concerned, in the present appeal, with the two mortgages executed by the two brothers of Bharat Singh. In the 1925 mortgage it was expressly recited that that mortgage was being executed in lieu of one-third of the amount due on the decree passed on the basis of the prior mortgage of 1912 and that the mortgagor had not redeemed, nor had the mortgagee released, the security under the mortgage of 1912, and that the prior security created by the mortgage of 1912 was kept intact for the benefit of the mortgagee.
3. The suit giving rise to the present appeal was filed by Munna Lal in 1937 and he maintained that, inasmuch as the amount secured by the 1925 mortgage went to satisfy the mortgage of 1912, he was entitled to priority with respect to the amount due on the 1925 mortgage as against Chunni Lal, the mortgagee under the deed of 1922. The position so taken by Munna Lal was controverted by Chunni Lal and, as stated at the inception of this judgment, the Courts below accepted the contention of the plaintiff, but the learned Judge of this Court held otherwise. Prior to the amendment introduced in the Transfer of Property Act by the Amending Act 20 of 1929, the doctrine of subrogation was imperfectly expressed in Section 74 of the Act. Section 74 ran as follows:
Any second or other subsequent mortgagee may, at any time after the amount due on the next prior mortgage has become payable, tender such amount to the next prior mortgagee, and such mortgagee is bound to accept such tender and to give a receipt for such amount, and (subject to the provisions of the law for the time being in force regulating the registration of documents) the subsequent mortgagee shall, on obtaining such receipt, acquire, in respect of the property, all the rights and powers of the mortgagee, as such, to whom he has made such tender.
4. Further provision was made by Section 95 of the Act, as it stood before the amendment, for the creation of a charge in favour of a co-mortgagor who redeemed a mortgage over the share of each of the other co-mortgagors in the mortgaged property. By the Amending Act 20 of 1929, Sections 74 and 75 were repealed and provision as to 'subrogation' was made by Section 92 which was inserted in the Act by the Amending Act. Section 92 runs as follows:
Any of the persons referred to in Section 91 (other than the mortgagor) and any co-mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee.
The right conferred by this section is called the right of subrogation, and a person acquiring the same is said to be subrogated to the rights of the mortgagee whose mortgage he redeems.
A person who has advanced to a mortgagor money with which the mortgage has been redeemed shall be subrogated to the rights of the mortgagee whose mortgage has been redeemed, if the mortgagor has by a registered instrument agreed that such persons shall be so subrogated.
Nothing in this section shall be deemed to confer a right of subrogation on any person unless the mortgage in respect of which the right is claimed has been redeemed in full.
5. As pointed out by Sulaiman C.J. in Alam Ali v. Beni Charan Section 74 of the Act, was very restricted in its scope, 'but their Lordships of the Privy Council applied a much wider equity in several cases and upheld rights of subrogation' even in eases that did not literally come within the purview of Section 74. The learned Chief Justice observed that
On the authorities, therefore, it must be taken to be established that the principle of subrogation was of more general application and had to be applied when equities bad to be adjusted between rival mortgagees in the order of their priority.
Even before the amendment, it was generally agreed that a puisne mortgagee, who redeemed i.e., paid off a prior mortgage or discharged a decree obtained on a prior mortgage, was subrogated to the position of the prior mortgagee. There was, however, divergence of judicial opinion on the question as to whether the right to enforce priority under the first mortgage redeemed by the puisne mortgagee did clothe him with a new right which accrued to him upon redemption or payment of the decree, or he was to be considered merely as an assignee of the prior mortgage or the decree obtained on the prior mortgage and thus could enforce the priority under the prior mortgage only within 12 years of the amount secured by the prior mortgage becoming due. All the important eases on the point have been noticed by Sulaiman C. J. in Alam Ali v. Beni Charan , and, it must be conceded that then the weight of authority was in favour of the view that the priority under the mortgage redeemed by the puisne. mortgagee could be enforced only so long as a suit on the prior mortgage was not barred by time. It was, however, held in some cases that the puisne mortgagee acquired a fresh charge on the date when he redeemed the prior mortgage and could accordingly sue within 12 years of the date of the payment to enforce his right of priority under the prior mortgage. After an exhaustive survey of the authorities, Sulaiman C. J., made the following observations in Alam Ali v. Beni Charan :
There can be no doubt that a subsequent mortgagee paying off the prior mortgage acquired all the rights and powers of the mortgagee under Section 74. Under that section the rights and powers become vested in him. There is no assignment of the mortgage or the mortgage decree to him, but it is the vesting of the rights and powers of the mortgagee by operation of law. It is noteworthy that the Legislature had used two words, 'rights' and 'powers,' which were distinct in meaning. 'Bights' of course meant substantive rights to recover his money, a right of priority over subsequent incumbrancers and transferees-rights in praesenti, if the mortgage is not extinguished, or in the case of a mortgage decree, if the decree has not become barred by time. 'Powers' obviously meant the powers to enforce those rights by adopting the proper procedure recognized by law. The powers then possessed by the prior mortgagee are, in the case of a mere mortgagee, to file a suit for sale within the period of limitation....
After making these observations, Sulaiman C.J. concluded that:
Where a subsequent mortgagee redeemed a prior mortgage, he under Section 74 acquired only the rights and powers of the mortgagee and was entitled to bring a suit on the basis of the mortgage within 12 years of the (prior) mortgage. He acquired no fresh charge.
6. He, however, held that where a suit had already been brought on the prior mortgage and had ripened into a mortgage decree and that decree was paid off by a subsequent mortgagee, the subsequent mortgagee acquired a fresh charge and could enforce the right of subrogation acquired by him within 12 years of the payment of the decree. Now, as I read Section 92,I, with all respect, find it impossible to differentiate between the redemption, i.e., the payment of a prior mortgage by a subsequent mortgagee and the discharge of a decree obtained on the prior mortgage by such a mortgagee. The right of subrogation acquired by the subsequent mortgagee in either case is, in my judgment, identical and, as such, the period of limitation for the enforcement of that right must be identical. It is manifest that the right of subrogation conferred by Section 92 on the persons referred to in that section is larger than the right of subrogation that was allowed by Section 74 of the Act. Indeed, Sulaiman C. J., lent the weight of his authority to this view in Alam Ali v. Beni Charan . He observed that:
It seems to me that the right of subrogation conferred by the new Section 92 is in no way narrower but really wider in scope than that conferred by the old Section 74, especially as more emphatic words are now used.
7. Prior to the amendment introduced in the Act in 1929, a co-mortgagor, who redeemed a mortgage, was given a charge on the share of the other mortgagors by Section 95 of the Act, as it stood before the amendment, and it was generally agreed that a co-mortgagor, on redeeming a mortgage, acquired a fresh charge on the share of the other mortgagors and could enforce such charge within 12 years of the date of the redemption of the mortgage. Section 95 was, however, amended and the right of subrogation allowed by Section 92 to persons mentioned in Section 91 as Well as to a co-mortgagor, on redeeming property subject to a mortgage was put on the same footing. This is put beyond doubt by Para. 1 of Section 92 by which the persons referred to in Section 91 and a co-mortgagor are given, as regards redemption, foreclosure or sale of the property subject to the mortgage, the same rights as the mortgagee whose mortgage is redeemed. It is not and cannot be disputed that a co-mortgagor, on redeeming a mortgage, acquires a fresh charge against the other mortgagors and can enforce such charge within 12 years of the date of redemption. That being so, any of the persons referred to in Section 91, who redeems a mortgage, must be held to acquire a fresh charge on the date of redemption, and thus the period for the enforcement of that charge must run from the date that charge is created and not from the date on which the money due under the prior mortgage became payable. In this view of the matter, there is no escape from the conclusion that the cases, which laid down that a subsequent mortgagee, who redeemed a prior mortgage, was to be deemed to be an assignee of the prior mortgage and could enforce the right of subrogation only before the expiry of the period of limitation with respect to the prior mortgage, are no longer good law.
8. In arriving at this conclusion I have not overlooked the words 'the same rights as the mortgagee whose mortgage be redeems' that find a place in Para. 1 of Section 92. On redemption of a prior mortgage, the debt due to the prior mortgagee is discharged and extinguished and there can, therefore, be no question of an assignment of that debt in favour of the person discharging the same. The mortgaged property is, however, a security for the debt and, in my judgment, all that is enacted by Section 92 is that the security held by the prior mortgagee does, on redemption, vest in the person redeeming the mortgage. This conclusion applies with equal force to the discharge of a decree obtained on a prior mortgage. The security., so acquired by the person redeeming the prior mortgage or discharging the decree on Such mortgage is, however, with respect to the advance made by him for the redemption of the prior mortgage or for the discharge of the decree on such mortgage, and not with respect to the debt due to the prior mortgagee that was paid or the decretal amount that was discharged, in other words, the person redeeming the prior mortgage or paying the decree on such mortgage acquires the security held by the prior mortgagee or the decree-holder with respect to the debt advanced by him which was utilized for the redemption of the prior mortgage or for the payment of the decree based on such mortgage and limitation for the enforcement of the prior security will, therefore, begin to run from the date of redemption or payment of the decree. Any other view would, to my mind, lead to startling results. If a person redeeming a prior mortgage is tied down to the period of limitation with respect to that mortgage, it would follow that every simple mortgage will have to be put into suit either by the mortgagee himself or by the person redeeming that mortgage within 12 years of the date of the accrual of the cause of action on that mortgage. This would put an end to renewal of mortgages and, for all practical purposes, to redemption of prior mortgages by subsequent mortgagees. I cannot persuade myself to believe that such could be the intention of the Legislature.
9. Now coming to the facts of the present case, we find that the mortgage-deed in suit was executed in lieu of the amount due on the basis of the decree passed on the mortgage of 1912. In short, by the amount advanced under the mortgage-deed in suit the mortgage of 1912 was discharged. In the mortgage-deed in suit there was a clear stipulation to the effect that the mortgagee will retain the security under the mortgage of 1912. The case does, therefore, fall within the purview of para. 3 of Section 92 and the plaintiff is, as such, entitled to realize the debt due to him by enforcing the security created by the mortgage of 1912, and the period of limitation for enforcement of that security must be 12 years from the date of the accrual of the cause of action for recovery of the amount secured by the mortgage-deed in suit. It would be noted in this connexion that the right of subrogation given to the person referred to in para. 3 of Section 92 is also identical with the rights given to the persons mentioned in para. 1 of that Section. It would further be noted in this connexion that it has been held by a Full Bench' of this Court in Hira Singh v. Jai Singh that Section 92 has retrospective effect and, therefore, the present litigation must be decided by reference to the provisions of that section. It is admitted that the present suit was filed, before the expiry of the period of limitation with respect to the mortgage in suit and was, therefore, within time.
10. In arriving at this conclusion, I have not overlooked the fact that the mortgagee of 1922 was not a party to the decree passed on the basis of the mortgage of 1912. A mortgagor can, by paying part of the principal or interest 'as such' due on a mortgage, give a fresh start to the period of limitation with respect to that mortgage. This he can do even without the consent, and behind the back, of a subsequent mortgagee. That being so, I can discover no reason as to why a mortgagor is not at liberty to renew a prior mortgage without the consent or approval of a subsequent mortgagee. A person, who takes a subsequent mortgage, must be deemed to have done so with the knowledge that his mortgage is subject to the prior mortgage and that the period of limitation with respect to that mortgage can be extended by payments contemplated by Section 20, Limitation Act, and that it is equally open to the mortgagor to renew that mortgage and thus keep intact in favour of the mortgagee the security created by the prior mortgage. The case before us is, in substance, a case of the renewal of the mortgage of 1912 and the security created by the mortgage of 1922 must, therefore, be subject to the security created by the mortgage-deed in suit. Even in Alam Ali v. Beni Charan it was pointed out that on the renewal of a prior mortgage the mortgagee under that mortgage retained the right of priority and the security created by the prior mortgage. For the reasons given above, I would allow this appeal set aside the judgment of the learned Judge of this Court and restore the decree of the lower appellate Court with costs in all Courts.
11. This is an appeal under the Letters Patent against a judgment of a learned Single Judge of this Court in a second appeal which arose out of a suit for the sale of mortgaged property on the basis of a deed executed by Bharat Singh, defendant 1, on 13th February 1925, in favour of Dwarka Das (or Dwarka Parshad), the father of Munna Lal, the plaintiff.
12. The property in suit had previously been mortgaged by Lal Singh, Bharat Singh's father, to Dwarka Das on 27th May 1912 and by Bharat Singh himself to Bansi Lal, the father of Chunni Lal, defendant 5, on 22nd April 1922. In executing the second deed of mortgage, Bharat Singh acted on behalf of himself and his two brothers, Ran Singh and Ranjit Singh, who constituted with him a joint Hindu family. On 19th May 1924 Dwarka Das instituted a suit for sale on the basis of his mortgage and on 24th August 1924 he obtained a preliminary decree against the three brothers. The parties then came to terms and it was agreed that the three brothers, who by that time had separated and become tenants in common, should each execute a mortgage in favour of Dwarka Das of his share of the property to secure the payment of his share of the amount payable under the decree. In pursuance of this agreement Bharat Singh executed the deed which was the basis of the suit. The deed recited that the mortgage was being created to secure a previous charge on the property from which it had not been freed either by mortgagor or mortgagee and there was a clear compliance with the provisions of para. 3 of Section 92, T.P. Act.
13. The question which has arisen is whether the mortgage of 1912 has in the circumstances priority over the mortgage of 1922. The lower Courts decided this question in favour of the plaintiff who claimed priority. The learned Single Judge of this Court held that the plaintiff would have had priority on general principles of equity, although the provisions of Section 92, T.P. Act, did not apply, if his right to claim relief under the deed of 1912 had not been barred by limitation, but as the right was barred the property must be sold subject to the mortgage of 1922. It is advisable first to consider whether the provisions of Section 92 of the Act, are intended to apply to mortgagees who renew their mortgages. Before the amendments to the Act in 1929, a stranger who advanced money to a mortgagor to enable him to redeem a mortgage and a mortgagee who renewed his mortgage were treated in the same way in that each could equally use the prior mortgage as a shield against a puisne mortgagee. At that time the provisions of the Act for the creation of charges in favour of those who redeemed for the benefit of others as well as for themselves were incomplete and it is evident that Section 92 was introduced in an attempt to supply the deficiencies. It seems unlikely that the Legislature would have intended to provide for one and not for the other of these two classes who had previously been in the same position. A renewal of a mortgage may be regarded as a transaction comprising two parts, namely, an advance by the mortgagee to the mortgagor and a payment back by the mortgagor to the mortgagee to redeem the mortgage. I would hold that the Legislature so regarded it and that the provisions of Section 92 do apply to the renewal of a mortgage.
14. It is necessary next to consider what those provisions mean. Before the amendments in the Act in 1929, a co-mortgagor who redeemed a mortgage was generally supposed to be entitled to reimbursement by the other mortgagors. He had a charge upon their property and could enforce it within a period of 12 years from the date of his payment. A puisne mortgagee who redeemed a prior mortgage was usually considered to be in all respects in the position of the prior mortgagee so that his period of limitation for enforcing his rights under the prior mortgage began at the date when the amount secured by the prior mortgage: was to be paid. The 'same rule was applied in some cases to those who had made advances to mortgagors for the redemption or renewal of prior mortgages but this was done mainly on the authority in Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527 and it may be doubted whether their Lordships of the Privy Council intended definitely to decide whether the period of limitation began from the date when payment on the previous mortgage was due or on the date when the mortgage was redeemed since in that case both dates were more than twelve years before the date of the institution of the suit and the question did not arise. That, however, was the law as widely understood when Section 92 was enacted and there can be no doubt that the Legislature meant to vary it because all these classes of people are now in the same position. The question is whether the intention was to assimilate the rights of co-mortgagors to those of mortgagees or those of mortgagees to those Of co-mortgagors.
15. In support of the first alternative a reference may be made to the words of the section itself which are that the person redeeming shall have the same rights as the mortgagee whose mortgage he redeems. It is evident, however, that the words cannot' be too literally construed because a mortgagee after redemption has no rights at all. The words may mean that the person redeeming shall have the same rights as the mortgagee would have had if he had not been redeemed and the subsequent use of the term 'subrogation' may lend some support to this view because it was in that sense that the term was generally used before the section was enacted but it does not seem to me that this line of argument is conclusive. The use of the term, may be one of the circumstances to be considered in determining the intention of the Legislature, but where the Legislature has first granted a right and then given that right a name, to deduce the nature of the right from the name alone would be to argue in a circle or to make an assumption not necessarily justifiable that the Legislature was using the name in exactly the same sense in which it had been used before. The term 'subrogation' in Section 92 is a label, not a definition. The term 'mortgage' itself is not used in the Act in the sense in which it was originally understood in England.
16. The main argument in support of the second alternative is that the first would lead to results which the Legislature can scarcely be deemed to have intended. This aspect of the matter has been emphasised by Sulaiman C. J. in his judgment in Alam Ali v. Beni Charan where the previous rulings are fully discussed. It appears that the object of Section 92 is to enable any person interested in the property to save it from sale without depriving him of his security against others similarly interested and similarly liable for the sum paid at the time of its payment. If we adopt the first alternative we shall largely destroy this object. Suits are seldom instituted till towards the end of the period of limitation, and it will nearly always happen that the period of limitation will expire soon after the institution of the suit. Anybody who pays the amount due at that stage will lose his security and once the law is understood in that sense it will be seldom that the property is not put to sale. The same position will come into existence before the institution of a suit if a question of redemption arises towards the end of the period of limitation as, in the case of a co-mortgagor, it usually will. The person interested must either refrain from redeeming or after redeeming, himself institute the suit which his redemption is intended to prevent. In very many cases the rights which Section 92 is intended to confer will not be conferred at all and all concerned will be helplessly bound to allow things to drift on to a sale. A co-mortgagor will be in a much better position under Section 82 and the Legislature can hardly have intended that a person who voluntarily meets his obligations should be deferred to one who must be compelled to meet them by the action of a Court of law. Under the first alternative which I have propounded a co-mortgagor will nearly always be in a worse position than he would have been before the law was amended, and I find it difficult to believe that that was the intention of the Legislature. It is unnecessary to labour the point. The matter has been fully explained in the judgment of Sulaiman C. J. to which I have already referred.
17. It has been suggested, on the other hand, that the Legislature could not have contemplated the inequity of allowing the extension of limitation against a puisne mortgagee by the action of others without his knowledge or consent. In my judgment very little, if any, hardship can be caused in this way to a puisne mortgagee. He takes his mortgage subject to the prior charge and has an interest only in the equity of redemption, that is, in that interest in the property which remained to the mortgagor after the prior charge was created. No redemption or renewal will reduce his security. It is true that his security will be enlarged if the prior charge is allowed to lapse through the laches of the prior mortgagee but what exception can he have of such laches if the prior mortgage is redeemed before the period of limitation for its enforcement has elapsed and why should he gain any advantage when there has in fact been no laches and the prior mortgagee has instituted his suit within limitation? He may in some measure be prejudiced by the payment of the full decretal amount to the prior mortgagee in a suit in which he has not been impleaded within limitation but why should a co-mortgagor or another puisne mortgagee suffer for the laches of the plaintiff in this matter, at least if he become aware of the suit (as may often happen) only when it is too late to bring to the notice of the Court that a puisne mortgagee has not been impleaded? A prior mortgagee has a right to receive his money and although those who are interested in the equity of redemption may not be under an obligation to pay him personally out of other funds, they are at least under an obligation to discharge his debt upto the value of their interest in the property mortgaged. It is difficult to believe that the Legislature meant that in many, and probably in most, cases none of those interested should be able to meet his obligation without being compelled to do so by process of law. The provisions of Section 69, Contract Act, show that it is not always necessarily inequitable to extend in effect a period of limitation as against another. Our attention has been drawn to the fact that it is now settled that a mortgagor cannot extend limitation against a puisne mortgagee by an acknowledgment alone, and it must be admitted that the equities are somewhat complicated but we are to decide the question before us not on general principles but on the meaning we impute to Section 92 and on the whole I am inclined to the view that the Legislature intended to simplify the law and to give to the persons mentioned in Section 91 and to co-mortgagors the security of the mortgaged property for the enforcement of their rights under Section 69, Contract Act.
18. However that may be, I do not think that we should depart from the rule laid down in Alam Ali v. Beni Charan when it is no more than doubtful whether that case was rightly decided. The principle of stare decisis may be regarded in one of its aspects as a rule of self-imposed estoppel, that is, a rule that the Judges will not vary a decision on the faith of which others may have changed their legal position. Many mortgages may have been redeemed or renewed after judgment was pronounced in that case and it might lead to unfairness if we were now to say ourselves that it did not lay down the correct law. It does not seem possible on the terms of Section 92 to distinguish between cases in which a puisne mortgagee is impleaded and those in which he is not impleaded. I would allow the appeal, set aside the judgment of the single Judge of this Court and restore that of the lower appellate Court. I would allow the appellants their costs in this Court against Chunni Lal.
19. I agree with my brother Sinha that this appeal should be dismissed and that the decree passed by the learned single Judge should be upheld. There can be no doubt that it is difficult to reconcile the various decisions of the Courts in India bearing on the question which arises for consideration in this case. The conflict can only be set at rest by a decision of their Lordships of the Privy Council or by the Legislature. Mr. Pathak laid great stress On the judgment of Sir Shah Sulaiman in the case in Alam Ali v. Beni Charan . My brother Sinha has dealt with that judgment in detail. It may also be pointed out that case can be distinguished from the one before us because there the second mortgagee had been impleaded in the suit brought on the first mortgage, whereas in the case before us the second mortgagee, i.e. the mortgagee of 1922, was not impleaded in the suit brought on the basis of the first mortgage, i.e., the mortgage of 1912. The question that had been referred to the Full Bench in that case (quoted at p. 604 of the Report) Alam Ali v. Beni Charan emphasised that aspect of the matter. I consider it sufficient to observe that I entirely agree if I may say so with great, respect with the judgment of Das J. in Sibanand Misra v. Jagmohan Lall ('22) 9 A.I.R. 1922 Pat. 499 and with the opinion of Pollock and Puranik JJ., with which Bose J. agreed so far as it related to. points (1) and (2) that had been referred to the Full Bench in Radakishan v. Hazarilal ('44) 31 A.I.R. 1944 Nag. 163.
20. The contention of the plaintiff-appellant, who brought the suit giving rise to this appeal in the year 1987 to enforce his mortgage of the year 1925, is that although he is seeking to enforce the 1925 mortgage, he is entitled to priority as against the 1922 mortgagee because the 1925 mortgage satisfied a part of the decree which had been passed on foot of the 1912 mortgage. He bases this claim on the rule of subrogation. What is the rule of subrogation? So far as it is relevant for our present purpose, it can be stated thus whether we refer to Section 92, T.P. Act, or to the old equitable doctrine of an intention to keep the prior mortgage alive. A third mortgagee, paying off money due to a first mortgagee, has the same rights as the first mortgagee, whose mortgage he redeems as against a second mortgagee. It appears to me that, if the contention of the plaintiff-appellant is accepted, he will be granted not only the rights which the 1912 mortgagee had, but something much more, for the 1912 mortgagee could enforce that mortgage only within 12 years from the date on which the money became payable under that deed, whereas the present plaintiff-appellant will be allowed the right to enforce the rights available under the 1912 mortgage within 12 years from the date on which the money under the 1925 mortgage became payable. I find it difficult to agree with a decision which leads to such a result. The learned single Judge held that the plaintiff could not claim the right of subrogation under Section 92, T.P. Act. He pointed out that the plaintiff did not come within para. 1 of that section. He further held that he did not come strictly within the language of para. 3 of the section, for he could not be said to have ' advanced ' to the mortgagor 'money with which the mortgage has been redeemed.' He held, however, that the plaintiff could claim the right of subrogation on the basis of the equitable doctrine. It is open to doubt whether, after the decision of their Lordships of the Privy Council in Manmohan Das v. Janki Prasad which affirmed the judgment of this Court reported in Beharji Maharaj v. Manmohan Das , it can be held that a right of subrogation outside the four corners of Section 92, T.P. Act, exists in those parts of India in which that Act is in force. It appears to me, however, that whichever of the two grounds mentioned above is taken to be the basis of the plaintiffs claim, he cannot be allowed any higher rights than those which were available under the 1912 mortgage. The argument that, if the contention of the plaintiff, appellant is not accepted, he is likely to be a loser because of the competition with the 1922 mortgagee, is not, in my opinion, an argument to which weight should be given. He was under no obligation to take the mortgage of 1925 and I do not see why he should be held entitled to appeal to sympathy.
21. In my judgment, the plaintiff appellant cannot claim any benefit under Sections 19 and 20, Limitation Act, on the ground of any acknowledgment or payment. So far as the argument based on acknowledgment is concerned, the matter has, in my opinion, been put beyond doubt by the judgment of their Lordships of the Privy Council in Bank of Upper India Ltd. v. R.H. Skinner ('42) 29 A.I.R. 1942 P.C. 67. The distinction sought to be made by Mr. Pathak, on the ground that the mortgagors in that case had executed a deed of sale and not a deed of mortgage and had thus parted with all their interest before giving the acknowledgment, is not, in my opinion, permissible. The fact remains as has been pointed out by the Nagpur High Court in the judgment of the Full Bench in Radakishan v. Hazarilal ('44) 31 A.I.R. 1944 Nag. 163, that their Lordships adopted the reasoning of Mookerjee J. in Surjiram Marwari v. Barhamdeo Prasad ('05) 1 C.L.J. 337 and the dictum of Lord Westbury in Bolding v. Lane (1863) 1 De G.J. & S. 122. There is also the decision of this Court in Ram Sarup v. Bhagwati Prasad to which also Sir Shah Sulaiman was a party. The same principle must, in my opinion, be applied to the case of payments made by the mortgagor behind the back of a person to whom he has, before-making the payments, granted rights in the equity of redemption either by sale or by mortgage.
22. The facts have been given by Allsop J. There are two points to be decided in this appeal. (1) Was Dwarka Das a person who had advanced money to a mortgagor with which a mortgage had been redeemed? (2) What are the rights of such a person? If money is to be taken to mean only coins or banknotes it must be held that no money was advanced but this would exclude advances by cheque or any transfers from one bank account to another and similar transactions and I can see no reason to draw any distinction. The fact that the mortgagee whose mortgage has been redeemed is the person who has made the advance and not another appears to me to make no difference and a renewal of an earlier mortgage has been held to be within the scope of the rule of subrogation: vide Alam Ali v. Beni Charan at the bottom of p. 606. In my opinion therefore Dwarka Das was a person to whom Section 92, T.P. Act, applied.
23. Passing now to the second point, it becomes necessary to compare the Transfer of Property Act of 1882 with the present Act. Under Section 74 of the former Act a mortgagee tendering the amount due 'on the next prior mortgage' on obtaining a receipt acquired 'in respect of the property all the rights and powers of the mortgagee, as such, to whom he had made the tender.'
24. Under Section 92 of the present Act any of the persons referred to in Section 91 (other than the mortgagor) and any co-mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee and, under the third paragraph of that section, a person who had advanced money with which a mortgage had been redeemed was put in the same class. Obviously there are important differences between the two Acts. Under the earlier Act, a co-mortgagor and a person lending money for the redemption of a mortgage were not in the same class as a mortgagee and the mortgagee could only redeem the next prior mortgage.
25. The mortgagee on payment to the next prior mortgagee acquired the rights and powers of the prior mortgagee as such 'with respect to the property.' The rights obtained under Section 92 of the present Act are 'as regards redemption, foreclosure or sale.' The co-mortgagor was in a class by himself holding a charge under Section 95 of the earlier Act and the person who, made an advance with which a mortgage was redeemed was in a third class or perhaps, I should say, in no class at all. The position of a mortgagee to whom Section 74 of the earlier Act applied has been explained by their Lordships of the Privy Council in Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527. He may be considered as an assignee of the secured debt and he could sue the mortgagor accordingly impleading a subsequent mortgagee over whom he claimed priority.
26. The co-mortgagor was in a position which was similar, in two respects at any rate, namely, that the mortgagor had not repaid the mortgagee and that he himself had acted independently of the mortgagor so that there was no contract between him and the mortgagor. The person who has advanced money to the mortgagor is, however, in a very different position as the mortgagor has redeemed his mortgagee so that it is difficult to see what the mortgagee had left to assign and there is a contract between the lender and the borrower as to how and when the loan shall be repaid. The lender may have advanced the money on a promissory note accompanied by a registered instrument several' years before the mortgage redeemed by the mortgagor became time-barred so that if the lender was to be regarded as assignee of the mortgage he would have one period of limitation while as holder of the promissory note he would have another.
27. On the other hand the terms of repayment might be such that the lender could not sue for his money at all during the period of limitation which Would apply if he was regarded as an assignee and either the lender could not realize the debt from the mortgaged property or he could compel the borrower to repay the money before he had to under the terms of the contract. If one holds that the person who has advanced money has during the period within which Tie can recover it the same rights as regards redemption, foreclosure or sale which the mortgagee whose mortgage has been paid off had, no such difficulty will arise. The position of the person who has lent money with which a mortgage has been redeemed appears to me so different from that of a mortgagee or co-mortgagor that it is more like that of a mortgagee who has bought the equity of redemption. If a mortgagee who is owed Rs. 1000 buys the equity of redemption for Rs. 1000 he might be regarded as having lent Rs. 1000 to the mortgagor who uses it to redeem the mortgage and repays it when he sells the property for Rs. 2000, though he describes the transaction as a sale of the equity of redemption for Rs. 1000.
28. Under Section 101, the mortgagee vendee does not prevent a merger merely for the period of limitation of the mortgage. If the extension of the period of priority beyond the limitation of the mortgage without the consent of the puisne mortgagee is inequitable this is a case where the statute has allowed it. As I have said Section 92 of the present T.P. Act, differs in more than one point from Section 74 of the Act of 1882 and particularly because it applies to various classes who were distinguished in the earlier Act and because the rights are no longer 'in respect of the property' but 'as regards redemption, foreclosure or sale.'
29. One cannot take it for granted therefore that the rights of lender who comes within the third paragraph of Section 92 of the present Act are those of a next puisne mortgagee under Section 74 of the earlier Act, as explained by their Lordships of the Privy Council in Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527 and there is no decision of their Lordships on the effect of the alterations made by Section 92 of the present Act. There is, however, as has been pointed out by my brother Allsop, the decision of this Court in Alam Ali v. Beni Charan . I therefore agree with Allsop J. that the appeal should be allowed, the decision of the single Judge of this Court should be set aside and that of the lower appellate Court should be restored.
30. This is an appeal arising Out of a suit brought in 1937 on the basis of a mortgage, dated 13th February 1925. The facts very briefly are these. One Lal Singh was the owner of the property in dispute. In 1912 he granted a mortgage of this property to one Dwarka Prasad, father of the present plaintiff, Munna Lal. On 22nd April 1922, Bharat Singh, the son of Lal Singh, who had evidently died by this time, on behalf of himself and his brothers, Ran Singh and Ranjit Singh, granted a mortgage in favour of a man named Bansi Lal, father of Chunni Lal, defendant 5. Bansi died, shortly after. The mortgage of 1912 was put in suit in 1924 and ended in a decree. To this suit Chunni Lal was not a 1 party. It appears that there was a partition amongst the brothers and for one-third of the decretal amount Bharat Singh executed the mortgage in suit, Ran and Ranjit executed mortgages for the remaining two-thirds. We are not concerned with them. The only question which awaits consideration before us is whether the plaintiff, who bases his claim on the mortgage of 1925, has priority over the mortgagee of 1922. The learned Additional Munsif and the learned Civil Judge of Sharanpur held that the plaintiff was subrogated to the rights under the mortgage of 1912 and could, therefore, claim priority over the mortgagee of 1922. A learned Judge of this Court held otherwise. While he passed a decree on the basis of the mortgage, he held that it was subject to the mortgage of 22nd April 1922.
31. The case law which has grown round this subject is bewildering, but certain principles can be deduced from the decisions of their Lordships of the Privy Council and also from certain leading decisions of the different High Courts in India. There has been an amendment of the relevant provisions of the Transfer of Property Act, the effect of which will also have to be considered. But the decisions prior to the amendment will also serve as a good guide for arriving at a decision on this vexed question. Legal subrogation bad, before the amendment of 1929, no place on the statute book. It was only the principle of conventional subrogation or, in other words, such benefits as equity extends to a person who steps into the shoes of the prior mortgagee, which was applied to this country. Section 74, T.P. Act, (Act 4 of 1882) which embodied the principle of subrogation did not use the word 'subrogation', but merely enunciated the principle on which it was founded. It was in these terms:
Any second or subsequent mortgagee may, at any time after the amount due on the next prior mortgage has become payable,...and the subsequent mortgagee shall...acquire, in respect of the property, all the rights and powers of the mortgagee, as such, to whom he has made such tender.
32. The important words are: (a) after the amount due on the next prior mortgage has become payable, (b) in respect of the property, and (c) all the rights and powers...as, such. To my mind, the expressions italicised furnish a clue to the law as it was prior to the amendment of 1929. We have to see whether the rule of subrogation, as now enshrined in the statute, has made any real departure in spirit, from the law as it stood prior to the amendment. Prior to the Amending Act, (Act 20 of 1929) subrogation was reached by the combined effect of Sections 74 and 75, T.P. Act. Section 47, Transfer of Property Amending Act, introduced subrogation for the first time by the addition of the new Section 92 which is founded wholly on Section 74 and partly on Section 75. Section 92 gives a right of subrogation to those persons, who find a place in Section 91, barring, of course, a co-mortgagor who does not figure in Section 91, but who comes for special mention only in Section 92. Section 91 says that:
Besides the mortgagor, any of the following persons may redeem, or institute a suit for redemption of the mortgaged property, namely:
(a) any person (other than the mortgagee of the interest sought to be redeemed) who has any interest in, or charge upon, the property mortgaged or in or upon the right to redeem the same.
(b) any surety for the payment of the mortgage-debt or any part thereof, or
(c) any creditor of the mortgagor who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property.
33. The present is a case which does not come within Section 91 and the plaintiff cannot take his stand on any legal right of subrogation. He can only appeal to the principle of conventional subrogation, i.e., he can avail himself of only such concessions as equity makes in his favour. I have emphasised this point only for the purpose of bringing it out clearly that the change in the law has not improved the lot of the plaintiff in this case. If he had come strictly within Section 92, T.P. Act, he might have, with some show of reason, said that he is not strictly bound by the limitations imposed upon his rights by the law as it stood prior to the amendment. He could have said that the Legislature has stepped in for the recognition of his claim and if there was anything which affects or cuts down his rights it must be rejected. That is not the case. If he does not come strictly within Section 91 or Section 92, he must be bound 'by these limitations.
34. That renewal does in some cases mean conventional subrogation, is as a result of certain judicial pronouncements, well established, for instance, Gopal Chander v. Herembo ('89) 16 Cal. 523. This principle was affirmed' in the case in Dinobundhu v. Jogmaya ('02) 29 Cal. 154. The case of legal subrogation can ordinarily arise in four ways: (a) a puisne mortgagee redeeming a prior mortgagee, (b) a co-mortgagor redeeming the mortgage, (C) the mortgagor's surety redeeming the mortgage, and (d) a purchaser of the equity of redemption redeeming the mortgage. The present case does not answer anyone of the above tests and the plaintiff can only fall back upon such rights as have received judicial recognition not so much as a matter of law as on considerations based on equity. The next question is what is the intention of the mortgagee when he accepts a renewal? Whatever conflict might, at one time, have existed as a result of the contradictory decisions in Toulmin v. Steere (1817) 3 Mer. 210 on the one side, and Adams v. Angell (1876) 5 Ch. D. 634 and Tenision v. Sweeny (1844) 1 Jo. & Lat. 710 p. 717 on the other, was set at rest by Gokaldas Gopaldas v. Puranmal Premsukhdas ('84) 10 Cal. 1035 and the subsequent pronouncements of their Lordships that it is all a question of intention and a man must be presumed to have an intention to do something which is in his favour. It is to his advantage to keep the old mortgage alive and he must be credited with that intention. What was once left in the region of speculation now finds statutory recognition by Section 101, T.P. Act, which expressly says that
Any mortgagee of, or person having a charge upon, immovable property, or any transferee from such mortgagee or charge-holder, may...without thereby causing the mortgage or charge to be merged as between himself and any subsequent mortgagee of, or person having a subsequent charge upon, the same property...
35. The case before us does not come even within the meaning of this section. The present plaintiff did not purchase or acquire the rights in the property of the mortgagor as owner. What he did was that he put the first mortgage in suit, obtained a decree and accepted another mortgage to discharge that decree. He is, in effect, nothing more than the holder of a mortgage in renewal of the first mortgage. When he accepted his second mortgage, he made it a condition that his rights under the old mortgage were to remain intact. To quote the very words of the mortgage as translated in English,
As regards the payment of the decree of the Court of the Subordinate Judge of Saharanpur, No. 70 of 1924, I, the mortgagor, acknowledge the same. I mortgage the property which was already hypothecated under the mortgage on the basis of which the decree has been passed. I, the executant have not secured a release of the mortgagee's right to retain possession nor has he waived that right. This mortgage is being made with all the rights under the first mortgage intact.
There is a clear intention here of retaining the rights under the first mortgage. The question, however, is whether the plaintiff in 1925 secured a fresh lease of life for the mortgage of 1912 or merely acquired, in the words of a very high authority, Pomeroy p. 5183, 2nd Edn., 'an additional remedy' with all the pre-existing restrictions of the law of limitation. In other words, could the mortgage of 1912 be kept alive for another 12 years even for the purposes of subrogation? Allied to this question is another question which will have to be considered along with this. The renewal in 1925 was not a renewal of the mortgage. There was another step intervening between the mortgage of 1912 and the mortgage of 1925 and that was the decree passedoon on the basis of the earlier mortgage. What part that decree has to play in keeping alive the mortgage of 1912 is also a matter for consideration. The latest case of this Court, Alam Ali v. Beni Charan , is the case directly in point. It has reviewed almost the entire case law and has held that the existence of a decree puts a different complexion on the matter, to quote the words, of Sir Shah Sulaiman, who delivered the judgment of the majority:
If a puisne mortgagee paid off a prior mortgage before any suit had been brought on the mortgage, the right of the mortgagee which he could acquire was obviously the right under the mortgage to enforce the charge and claim priority, and the power he acquired was to bring a suit on the basis of it within 12 years of the mortgage under Article 132, Limitation Act. But where the mortgage had already been sued upon and had merged in a mortgage decree, which might happen well after the expiry of 12 years from the original mortgage, the payment of the mortgage decree if it conferred nothing upon the puisne mortgagee but a right to bring a suit on the basis of the previous mortgage, would give him no right or power at all. It would give him not only much less than what the mortgagee had at the time of payment, but indeed absolutely nothing.
36. In arriving at his conclusion that the existence Of a decree will make a material difference, his Lordship considered the difference between the language of Section 74 and Section 92, T.P. Act, and held that the absence from Section 92 of the word 'power' shows an intention on the part of the Legislature to free the person redeeming from the pre-existing fetters of the law of limitation and gave him a fresh start:
There can be no doubt that a subsequent mortgagee paying off the prior mortgage acquired all the rights and powers of the mortgagee under Section 74. Under that section the rights and powers become vested in him. There is no assignment of the mortgage or the mortgage decree to him but it is vesting of the rights and powers of the mortgagee by operation of law. It is noteworthy that the Legislature had used two words 'rights' and 'powers' which were distinct in meaning. 'Bights' of course meant substantive rights to recover his money, a right of priority over subsequent incumbrancers and transferees-rights in presenti, if the mortgage is not extinguished, or in the case of a mortgage decree, if the decree has not become barred by time. 'Power' obviously meant the power to enforce these rights by adopting the proper procedure recognised by law. The powers then possessed by the prior mortgagee, are, in the case of a mere mortgagee, to file a suit for sale within the period of limitation by enforcing the charge, and in the case of a holder of a mortgage decree, to file an application for execution of the decree and realise his decretal money.
37. What, therefore, falls to be considered is whether the learned Judge was right in holding that the absence of the word 'power' from Section 92 and the existence of a decree mean a material improvement in the position of the person who redeems the prior mortgage by accepting a renewal. Before addressing myself to the authorities on this question I would, at the very outset, like to say what exactly is the meaning of subrogation and what precisely are the rights flowing from it.
The principle of subrogation is that one person is put exactly into the position of another for the purpose of enabling him to enforce rights against a third party which that other person has become disentitled from enforcing : Hanbury on Equity, Modern, p. 630.
38. It was held in Cracknall v. Janson (1879) 11 Ch. D. 1 that
He steps into the shoes of the prior encumbrancer at the point where he is standing and takes over his rights and remedies, whatever they may be, at the moment the lien is discharged. He is an equitable transferee even without a transfer being executed.
39. The important words are 'at the point where he is standing.' Is the learned Judge right in holding that a decree gives a fresh lease of life? To hold that he obtains a fresh lease of life, that is to say, the period of limitation even for the purposes of subrogation is enlarged is to place him at some place different from where his predecessor stood or, in case of a renewal, where he himself stood. This will not be subrogation, whatever else it may be.
40. Along with this shall arise another question as to whether it was open to the mortgagor to make an acknowledgement at a time when the rights of the puisne mortgagee had come into being in 1922. The earliest Privy Council case directly bearing on this point is the case in Shankar Sarup v. Mejo Mal ('01) 23 All. 313. The facts briefly were these. On 4th May 1883, one Ismail Khan made a mortgage in favour of Sarup brothers. On 30th June 1883 he made another mortgage in favour of Phul Chand. On 3rd November 1883 he made a third mortgage in favour of Sarup brothers for a sum of Rs. 20,000 out of which Rs. 15,500 were appropriated towards the discharge of the mortgage of 4th May 1883. In 1885 Sarup brothers obtained a decree for the amount of the debt due on the bond of November 1883. Phul Chand also brought a suit on the basis of his bond. The Subordinate Judge on the 7th February 1888 passed an order holding that Phul Chand was entitled to be paid in preference to the appellants on the ground that Sarup brothers had brought a suit only on the basis of the mortgage of 3rd November 1883, and not on the basis of the earlier bond and it was on this basis that the decree had been passed in their suit. On 4th February 1891, Sarup brothers brought a suit claiming, in effect, priority over the bond in favour of Phul Chand on the ground that though the suit was brought on the basis of their later bond they were entitled to claim priority in as much as the later bond was, in effect, a renewal of the earlier bond of 4th May 1883. Their Lordships of the Privy Council gave effect to this plea by holding:
If the bond of November 1883, be considered on its own terms, there is no room for the suggestion that it superseded the bond of May so as to impair the effect of that bond as a subsisting hypothecation. The argument of the respondents was rather that the appellants by their suing on the bond of November and not on the bond of May had relinquished their rights under the bond of May. No such inference can legitimately be drawn. The appellants did not need to sue on the bond of May in order to obtain sale for the whole of their debt, that being comprised in the bond of November. But in suing on the bond of November, they did nothing to imply, or to lead others to believe that they abandoned what, apart from abandonment, was a subsisting hypothecation and in point of fact Lala Phul Chand in the suit on his own bond expressly recognised the bond of May as a subsisting and prior hypothecation.
This case is, no doubt, an authority for the proposition that, in accepting a renewal, there should be no inference adverse to the mortgagee that he intended to abandon his rights based on the first mortgage. But the other important point is that all the proceedings with respect to all the mortgages were taken within twelve years of May 1883. There was, therefore, no question of limitation and this case is only authority for the proposition that where a mortgagee accepts a renewal, he does not mean to forgo the benefits arising out of the first mortgage.
41. The principle of the above case was affirmed by their Lordships in the later case in Gopi Narain Khanna v. Bansidhar ('05) 27 All. 325. The facts briefly were these. On 20th July 1889, Chaudhri Fateh Chand executed a mortgage by conditional sale in favour of Bansi Dhar and Kunj Behari Lal for Rs. 7101, and mortgaged mauzas Patara and Bhatpura. On 22nd October 1889, Fateh Chand executed another mortgage by conditional sale in favour of one Anant Ram and Bansi Dhar for Rs. 10,000. This mortgage comprised Patara and eight other villages but not Bhatpura. On 1st October 1891, Anant Ram sold his moiety of this mortgage to Gaya Prasad. The situation, therefore, as regards Patara was that Bansi Dhar and Kunj Behari Lal were first mortgagees and Bansi Dhar and Gaya Prasad were second mortgagees. On 17th September 1893, a suit for foreclosure on the first mortgage was instituted. On 27th September 1893, the second mortgage was put in suit. On 22nd December 1894, decrees were passed in both the suits. By the decree in the first suit it was ordered that on the defendant paying to the plaintiff or into Court on 22nd April 1895, the sum of Rs. 14,211-7-9 with future interest the plaintiff should deliver up to the defendants all documents in his possession relating to the mortgaged property. But if such payment was not made on 22nd April 1895, the defendant shall be absolutely debarred of all right to redeem the mortgaged property. The decree in the second suit was also mutatis mutandis the same. The money due on the first mortgage was not paid and on the 3rd January 1896 when the enlarged time was about to expire, Gaya Prasad paid into Court the sum of Rs,. 15,093 and that sum was taken out by the mortgagees. On 3rd August 1897, Gaya Prasad applied for a decree for absolute foreclosure. The Subordinate Judge was of opinion that as Gaya Prasad paid up the amount due under the decree and complied with the order, that decree no longer remained capable of execution. He held that Gaya Prasad had become the representative of the prior mortgagee under Section 74, T.P. Act, and was entitled to bring a suit for foreclosure. On 3rd February 1898, Gaya Prasad commenced an action for foreclosure. The main defence was that the suit was barred by Section 244 the present Section 47 Civil P.C. The Subordinate Judge repelled the defence and passed a decree in favour of Gaya Prasad. On appeal the High Court at Allahabad held that the claim was barred by Section 244, Civil P.C. This judgment of the High Court is reported in Bansidhar v. Gayaprasad ('02) 24 All. 179. Their Lordships held that the suit was not barred by Section 244. The observations of their Lordships will bear repetition:
And their Lordships think that on payment by Gaya Prasad of the sum into Court before the expiry of the enlarged time, and acceptance of that sum by the plaintiffs, the decree was spent and became discharged and satisfied. There was therefore nothing left to be done in the execution department. It is true, that Gaya Prasad, having made that payment (as he had the right to do) acquired under Section 74, T.P. Act, all the rights and powers of the mortgagees as such. But this would not have the effect of reviving or giving vitality to a decree which by the terms of it had become discharged.
42. The above helps the plaintiff only in so far as it disagreed with the view of the High Court at Allahabad that the existence of a mortgage decree barred the suit. But beyond saying this there are certain dicta in the case which are definitely against him. Their Lordships make it clear that 'the decree was spent and became discharged and satisfied,' and they also make it clear that although
Gaya Prasad...acquired under Section 74, T.P. Act, all the rights and powers of the mortgagees as such...this would not have the effect of reviving or giving vitality to a decree which by the terms of it had become discharged.
43. The mortgage decree in the suit of 1924 was discharged. Could the plaintiff by merely accepting a fresh mortgage by way of renewal of the earlier mortgage of 1912 give 'vitality' to that decree? In my opinion, there can be no doubt that unless there are some other reasons in favour of the contrary view, the decree spent itself once it was discharged and from that decree no further sustenance could be derived by,the plaintiff. The next case in order of time is the case in Het Ram v. Shadi Ram ('18) 5 A.I.R. 1918 P.C. 34. On 25th February 1880, a mortgage was made to Lachman Das. On 15th October 1881, another mortgage was made to Shadi Ram. Lachmandas brought a suit for sale, but did not make Shadi Ram a party and obtained a decree for sale in 1892 and an order absolute in 1895, but did not proceed further. Shadi Ram brought a suit for sale in 1910. Het Ram who had succeeded not only to the rights of the mortgagors, but to the rights, if any, of Lachman Das, claimed that the sale could only be subject to the latter's mortgage. The Subordinate Judge accepted this contention, but the High Court held that Lachman Das's mortgage merged in the decree, and therefore expunged the trial Judge's direction that the land should now be sold subject to such mortgage. The Privy Council affirmed this view. Although it was a case not under the Civil Procedure Code but under Section 89, T.P. Act, the observations of their Lordships are helpful. Say they:
But the suit was brought only against the remaining mortgagor, and the second mortgagee was not made a party. This decree neither Lachman Das nor his successor in title took any steps to execute, and under Article 179 of Schedule 2, Limitation Act, 1877, it ceased to be operative when three years had elapsed from the date of the decree becoming absolute. It had thus become wholly ineffective long before the present suit was commenced.
It is therefore clear from the above that if the mortgage in suit had not been obtained by the plaintiff and if he had taken no further steps after obtaining the decree, no relief would have been available to him. Instead of putting the decree in execution, he secured its discharge by means of the mortgage in suit. Whatever rights may be available to him under the mortgage, the decree has ceased to have any effect In the case before their Lordships, the decree was allowed to be barred by time, in the case before us the decree has been satisfied. The result in both cases is the same. With the disappearance of the decree the only right which still exists with the plaintiffs is the right which flows from the mortgage.
44. To the question of the effect of a decree, I shall advert a little later as I wish to discuss the Privy Council authorities bearing only on the question of limitation as distinct from the effect which such a decree has on this point. To my mind the case in Gopi Narain Khanna v. Bansidhar ('05) 27 All. 323 is a complete answer to all argument which could be advanced in favour of the theory of a fresh lease of life. But if there could be any doubt it must be deemed to have been set at rest by their Lordships of the Privy Council in Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527. The facts briefly were these. On 20th November 1874, a zarpeshgi lease was granted by the mortgagor for a sum of Rs. 12,000. The money under this deed was repayable at the end of Jeth 1294 Fasli, i.e., September 1887. This zarpeshgi lease was redeemed on 15th July 1888 with the money borrowed under a mortgage of 17th February 1888. The assignees of the last mortgage brought a suit to enforce it on 22nd September 1900 and claimed priority in respect of the zarpeshgi against certain intermediate mortgagees who were impleaded in the suit. Their Lordships rejected this claim on the ground that.as the Rs. 12,000 were under the zarpeshgi deed of 20th November 1874, repayable in Jeth 1294 Fasli (September 1887), and this suit was not brought until 22nd September 1900 the claim of the plaintiff to priority is barred by Article 132 of Schedule 2, Limitation Act, 1877.
45. It is true that in this case the mortgage of 1874 never ripened into a decree, nevertheless their Lordships rejected the claim of the person redeeming for priority on the ground of limitation. In the Full Bench case in Alam Ali v. Beni Charan , already noticed, Sulaiman C.J. has dismissed this case on the ground that the claim was more than 12 years both from 1874 and 1887 and 15th July 1888 the date of its redemption. It is no doubt so, but it is reading something in the judgment of the Privy Council which is not only not there but which is in the teeth of what is there. The language used by their Lordships was clear and emphatic. When they say
But as the Rs. 12,000 were under the zarpeshgi deed of 20th November 1874 repayable in Jeth 1294 Fasli (1887 A.D.) and this suit was not brought until 22nd September 1900 the claim of the plaintiff to priority is barred by Article 132 of Schedule 2, Limitation Act, 1877,
their Lordships were considering the question of limitation not with reference to the date of renewal but to the date on which the first mortgage was repayable. Where the effect of a decision of their Lordships is clear, it is not for us to whittle down that effect by introducing into it something wholly inconsistent with its meaning and purpose. It is open to the plaintiff to contend, on the strength of Surjiram Marwari v. Barhamdeo Prasad ('05) 23 ALL. 313, that renewal has clothed him with the right of the prior mortgagee and, on the strength of the case in Gopi Narain Khanna v. Bansidhar ('05) 27 All. 325, that the existence of decree is no bar to the suit. But it is also open to the subsequent mortgagee to say in reply that the mortgage of 1925, which is the basis of the present suit, could not have the effect of giving vitality to a decree which had been discharged and satisfied and that the material date for the purposes of limitation is the date on which the money on the mortgage of 1912 became due and not when the second mortgage in favour of the plaintiff and the third in the chain of mortgages was executed in 1925. The first case is definitely in favour of the plaintiff, the second is partly in his favour and partly in favour of the subsequent mortgagees, the third goes the whole length with the defendant's case and it furnishes an effective reply to all the observations which Sulaiman C.J. made in Alam Ali v. Beni Charan .
46. The above are a few of the Privy Council cases strictly relevant to the question at issue. I shall have to refer to a few more of the decisions of the Judicial Committee and shall thereafter discuss some of the leading cases of the High Courts in India. It is impossible to lay under contribution all the Judicial pronouncements of all the High Courts in India and it will be extremely difficult, if not impossible to draw any consistent principle from those authorities. Jagmohan Das v. Jugal Kishore was a case which had gone in appeal to their Lordships of the Privy Council from the Chief Court of Lucknow. Stuart C.J. and Nanavatty J. had held that if in a suit based on a prior mortgage, the subsequent mortgagee, who had redeemed prior mortgage was impleaded as a party he could 'put forward his claim under the prior deeds.' The next case is the case in Janaki Nath v. Pramathd Nath . Their Lordships drew a distinction between redeeming a mortgage and redeeming the mortgaged property. At p. 559 they observed as below:
This contention, however, loses sight of the distinction between the redemption of a mortgage and the redemption of the property mortgaged. In their Lordships' opinion it is clear that the words in the section 'mortgage has been redeemed' refer merely to the payment off of the mortgage money and not to an extinction of the mortgagees' rights over the mortgaged property. If such rights had become extinguished there would be none to which the person advancing the money could be subrogated. Paragraph 4 moreover seems to contemplate that a mortgage may be redeemed in part, and this clearly shows that by redemption is meant no more than payment of the mortgage money.
47. This case was considered by their Lordships in a very recent case, Manmohan Das v. Janki Prasad . The above quotation only means that there is no extinction of the mortgagees rights over the mortgage property. There is a passage in the later case which might be construed to mean that their Lordships are of opinion that Section 92 is exhaustive of the right of subrogation. Say they:
The law of subrogation in India is contained in Section 92, T.P. Act. This section is new and was inserted by Section 47 of Act 20 of 1929. By Section 39 of the amending Act, Sections 74 and 75, T.P. Act, which contained only in an imperfect form the law of subrogation were repealed. The new section deals with the rights of subrogation of two different classes of persons.
48. A strict application of the rule enunciated above will put the plaintiff vis a vis the puisne mortgage immediately out of Court.
49. This brings a review of the authorities of the Judicial Committee almost up to date. I propose now to address myself to a few of the more important cases of the different High Courts and I shall start with the authorities of this Court. I need not pause to consider the case in Bansidhar v. Gayaprasad ('02) 24 All. 179 as this case went to the Privy Council and their Lordships disagreed with the view in Gopi Narain Khanna v. Bansidhar ('05) 27 All. 323. In Abdul Qayyum v. Sadar-ud-din Ahmad Khan ('05) 27 All. 403 Sir Wiliam Burkitt and Sir Robert Aikman held that:
A usufructuary mortgagee who satisfies a decree for sale on a prior mortgage affecting the property mortgaged to him is entitled to retain possession until the amount so paid as well as the amount due in respect of his own mortgage has been realized.
In other words, this is a case where the mortgagee who satisfied the decree is if he has already obtained possession entitled to hold up his mortgage as a shield. Shib Lal v. Munni Lal ('22) 9 A.I.R. 1922 All. 153 is the next important case. In 1886 certain persons mortgaged their property to one Shadi Lal. In 1906 they mortgaged the same property to Shib Lal. Shadi Lal brought a suit upon his mortgage and obtained a decree for sale against the mortgagors and the second mortgagee on 17th January 1912. The decree was not discharged by the mortgagors and therefore on 24th January 1914, that is, before the decree had become time-barred, the plaintiff, i.e., Shib Lal discharged it. After the discharge the mortgagors sold a part of the property to one Mohan Lal. Panna Lal brought a suit, for pre-emption and obtained a decree. He paid off the second mortgage of Shib Lal. The plaintiff sued for recovery of the decretal amount paid by him. The learned Subordinate Judge was of opinion that the plaintiff stepped into the shoes of the first mortgagee Shadi Lal but could not recover his money after the lapse of twelve years from the date that the money became due on that mortgage. On appeal the Judge affirmed this view. The High Court held:
(a) In our opinion the right of the plaintiff to recover the amount claimed by him accrued to him only on the date on which he made the payment.
(b) By such payment and by relieving the defendants mortgagors and their property of the liability which existed on them, he by virtue of the provisions of Section 69, Contract Act, acquired a right to be reimbursed the money which he had paid for the benefit of the mortgagors and for the protection of their property.
(c) We fail to see how the present plaintiff can be said to be seeking to extend the period of limitation available to the first mortgagee. He is entitled to bring his suit within the period of limitation which would govern the claim to recover money paid by him for the defendants or to enforce a charge which he has acquired on the property of the defendants.
(d) This charge he acquires not when the prior mortgage was made nor when that prior mortgage could be enforced but on the date on which he pays off the amount of the prior mortgage. The right also to be reimbursed accrues to him on the date on which he pays off the amount of the decree and relieves the mortgagors of the obligation which under the decree exists on them.
50. With great respect, I think even the equitable principle underlying Section 69, Contract Act, has, strictly speaking, no application to the plaintiff. It is true he is not a 'stranger' within the meaning in Butler v. Rice (1910) 2 Ch. 277 an authority not recognized in this country nor a 'volunteer' as was the case in Ramtuhul Singh v. Biseswav Lal ('74) 2 I.A. 131, explained in Pheku Ram v. Ganga Prasad and affirmed by their Lordships in Manmohan Das v. Janki Prasad but the section says 'who therefore pays'--whom did the plaintiff pay? He only obtained a fresh security for what he had himself paid long ago. The case, however, goes the whole length with the plaintiff, although it differs from the present in one very important particular, in the case before us he was no party to the suit of 1924. Besides, there is no reference to the case in Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527. I may also mention that in a later case this Court did not appear to have shared this view: Aziz Ahmad Khan v. Chote Lal . The latter case no doubt went to the Privy Council and the decision was set aside, but it was on a different point, Faqir Chand v. Aziz Ahmad Khan . Mohammad Abbas Ali Khan v. Chhotey Lal is authority for the proposition that:
(a) Where a mortgage debt, for the payment of which a sale has been ordered, is satisfied by a third party who obtains a security for the advance made by him, such security is not extinguished by Section 89, T.P. Act, and the encumbrance in respect of which the sale was ordered enures for the benefit of the party making the payment.
(b) An owner of a property who is in the right of the first mortgagee and of the original mortgagor as acquired by a sale under the first mortgage, is entitled at the suit of the subsequent mortgagee who is not bound by the sale of the decree on which he has proceeded, to set up the first mortgage as a shield.
51. In so far as the learned Judges held that the security was not extinguished, they differed from Chhagan Lal v. Muhammmad Husain Khan ('19) 6 A.I.R. 1919 All. 105 and said something inconsistent with the dictum of the Privy Council in Het Ram v. Shadi Ram ('18) 5 A.I.R. 1918 P.C. 34. But it is not necessary to quarrel with the proposition, inasmuch as those were cases under Section 89, T.P. Act, whereas the present is a case under Order 84, Rule 5, Civil P.C. and their Lordships of the Privy Council have themselves emphasised this distinction in the well-known case in Mt. Sukhi v. Ghulam Safdar Khan ('22) 9 A.I.R. 1922 P.C. 11, Jagannath Prasad v. Chhatur Kunwar ('23) 10 A.I.R. 1923 All. 171 may also be referred to in passing only. It simply follows the cases in Chhagan Lal v. Muhammmad Husain Khan ('19) 6 A.I.R. 1919 All. 105 and Het Ram v. Shadi Ram ('18) 5 A.I.R. 1918 P.C. 34. The only other important case is the Full Bench case in Ram Sanehi Lal v. Janki Prasad . The facts are complicated and it is not necessary to refer to them at length. For the purposes of this case, it is enough to say that the subsequent mortgagee brought a suit first without impleading the prior mortgagee, but, before the sale, the prior mortgage had been put in suit and a final decree followed. Between the dates of the preliminary and final decrees passed on the basis of the first mortgage, the property was purchased by a man named Janki Prasad, but he did not take possession. At the auction-sale held in execution of the decree based on the prior mortgage, the mortgagees themselves were declared purchasers. On 20th November 1925, they obtained delivery of possession. Janki Prasad, that is the representative-in-interest of the subsequent mortgagee, then brought a suit for possession. Their Lordships held:
If the purchaser in execution of the prior mortgagee's decree is not in possession and is suing as plaintiff the purchaser in execution of the subsequent mortgagee's decree,
(a) He can enforce his remedy, if limitation on the prior mortgage has not yet run out, but
(b) He cannot recover the mortgage money, if limitation has run out.
52. In the course of their judgment, the learned Judges held that the mortgagee in possession is entitled to set up his prior mortgage as a shield. The case in Anpurna Kunwar v. Ram Padarath is a case very much in point and I should have, in fact, noticed it earlier than the case in Ram Sanehi Lal v. Janki Prasad . The facts of the case were these: On 15th March 1898 a mortgage was made in favour of Ram Padarath of certain villages to pay off some other earlier mortgages. On 1st November 1898, a second mortgage of the same property was made to Bagu Inder Sen Singh. On 4th May 1900, the mortgagor executed a usufructuary mortgage in favour of Ram Padarath for a sum of Rs. 17,712 due on the mortgage of 15th March 1898 and other items, amounting in all to Rs. 22,500 giving possession of Mauzas Rajdharpur and Konda. Under this mortgage, he was entitled to sue in case of dispossession and was also entitled to proceed against the property hypothecated under the bond of 15th March 1898. Ram Padarath was dispossessed of Mauza Konda on 24th February 1911. On 9th December 1922 Ram Padarath brought a suit for possession. The suit was decreed by the subordinate Judge on the finding that the mortgage of 1898 had merged in the mortgage of 1900 and the plaintiff acquired a fresh period of limitation from 1900. Pullan J. delivering the judgment of the Bench consisting of himself and Dalai J. observed as follows:
(a) The deed of May 1900 although executed to satisfy the mortgage of 1898 is of an entirely different nature. Under the simple mortgage the mortgagee had a right to sue for the principal after three years, under the usufructuary mortgage he could sue at once if he failed to get possession, or a claim was brought for exproprietary rights, but otherwise he could only sue on being dispossessed. That was an entirely new burden on the property of which the puisne mortgagee had no notice, and we are not prepared to find that she should be bound by an agreement altering the period of limitation allowed for a suit on the prior mortgage.
(b) In Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527 their Lordships held that when a suit was brought on a simple mortgage of 1888 seeking to make certain property covered by that mortgage and by a zarpeshgi deed of 1877 set up by the plaintiffs liable for the decretal amount, the right of priority on the zarpeshgi deed was barred by limitation, as the suit should have been brought within 12 years of the date when the money due became payable.
(c) It may be that the simple mortgage of 1898 was kept alive by the mortgage of 1900, but it was not given a second birth, and if the plaintiffs retained a right to sue on the simple mortgage of March 1898 at all, they did so only in accordance with the rule applicable to that bond and their suit became time-barred in March 1913.
53. This is a clear authority against the contention now urged by the appellants. The Full Bench case in Tota Ram v. Ram Lal need not detain us inasmuch as the case in Mohamad Ibrahim Husain Khan v. Ambika Parshed Singh ('12) 39 Cal. 527 was not noticed. Indeed, no question of limitation was directly raised. We now come to the case in Bansidhar v. Shiv Singh . The facts briefly were these: On 20th March 1906, a mortgage was made in favour of Lachmi Narain and others by hypothecating shares in villages Nahil, Sanbhalpur and Nawadia. This mortgage was put in suit and a decree was obtained in 1916. On 6th May 1919 the mortgagors executed another mortgage in favour of the plaintiff for Rs. 7000 hypothecating Nahil and Sanbhalpur only. On 1st March 1920, there was another mortgage in favour of a man named Lachman Prasad. On 12th March 1921 the mortgagors executed a second mortgage in favour of the plaintiff for Rs. 22,000 hypothecating Nihil and Sanbhalpur only and another village. Money was left in the hands of the plaintiff for payment of the prior mortgage decree of 1916. It turned out that the 1921 mortgage was void with regard to the village Nahil. The plaintiff discharged the decree of 1916 on 9th September and 14th September 1921. The plaintiffs brought a suit in 1927 for recovery of the money with which they discharged the decree of 1916 and claimed priority over the mortgagee of 1st March 1920. The learned Judges refused to follow the case in Shib Lal v. Munni Lal ('22) 9 A.I.R. 1922 All. 153 but followed the case in Anpurna Kunwar v. Ram Padarath and also a case of the Madras High Court, Kotappa v. Raghavayya . It is also significant that the judgment of the Court was delivered by Sulaiman C. J. Say their Lordships:
(a) The learned advocate for the appellants relied very strongly on the case in Shib Lal v. Munni Lal ('22) 9 A.I.R. 1922 All. 153. That case, no doubt, supports his contention. It has, however, been dissented from by the Madras High Court in Kotappa v. Raghavayya .
(b) They, however, thought if he were found in possession he may be entitled to use the discharge of the previous mortgage as a shield for the purpose of defence only and not as a weapon of attack.
(c) The case in Ram Sanehi Lal v. Janki Prasad established that if the purchaser in execution of a prior mortgagee's decree is not in possession and is suing as plaintiff against the purchaser in execution of a subsequent mortgagee's decree then he can enforce his remedy if limitation on the prior mortgage has not yet run out but he cannot recover the mortgage money if limitation has run out. The majority of the Judges were clearly of opinion that when a person is suing as a plaintiff to enforce a simple mortgage he cannot get a decree for money if the period of limitation prescribed for a suit on that mortgage has already expired.
(d) Even if we were to assume that the ruling in Shib Lal v. Munni Lal ('22) 9 A.I.R. 1922 All. 153 was not by implication overruled by this Full Bench, we must point out that the principle laid down therein is contrary to another ruling of this Court, namely, Anpurna Kunwar v. Ram Padarath where another Bench held that the period of limitation prescribed for a suit brought against a puisne mortgagee was not extended either by execution of an intermediate usufructuary mortgage or by receipt of the mortgaged villages by the mortgagee.
(e) The Bench relied for authority on Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527. This last mentioned Privy Council case was not brought to the notice of the Division Bench in Shib Lal v. Munni Lal ('22) 9 A.I.R. 1922 All. 153 on the ground that the decision of their Lordships in Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527 is very much in point.
54. Speaking of the case in Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527 Sulaiman C.J. after stating the facts quoted the following observations of their Lordships of the Privy Council:
But as Rs. 12,000 were, under the zarpeshgi deed of 20th November 1874, re-payable in Jeth 1294-Fasli (September 1887) and this suit was not brought until 22nd September 1900, the claim of the plaintiff to priority is barred by Article 132 of Schedule 2, Limitation Act, 1887.
He summed up his own conclusions in these terms:
(a) Mt. Alfan's representatives were, therefore, not allowed to claim priority on account of their having paid off the amount due under the zarpeshgi lease although the lease was prior in point of time to the mortgages of the contesting defendants, and the ground on which the claim was disallowed was that the period of limitation prescribed for the enforcement of the claim under the zarpeshgi lease had. expired. The mere fact that Mt. Alfan paid off the lease in July 1888, did not entitle her representatives to recover the amount.
(b) It is possible that even 12 years had expired from the date of the payment when the suit was brought as it is stated on page 550 that possession was delivered on 15th July 1888, but their Lordships did not base the dismissal on this ground but based it on the ground that the claim on the zarpeshgi deed itself had become time-barred under Article 132, Limitation Act.
55. The learned Judge makes an appreciative - reference to the case in Sibanand Misra v. Jagmohan Lall ('22) 9 A.I.R. 1922 Pat. 499, a case which I shall notice later. Chronologically the Case in Alam Ali v. Beni Charan will come immediately after this, but, before I deal with it, I might refer very briefly to another case of this Court, reported in Piarey Lal v. Dina Nath . The only passage which is germane to the point in controversy is as follows:
Section 92 uses language which appears to postulate an existing and not a mortgage which has merged in a decree.
56. Much can be said in favour of this view, but the point is covered by the Privy Council case in Gopi Narain Khanna v. Bansidhar ('05) 27 All. 325 already referred to. We now come to the last case and the leading case on this point, namely, Alam Ali v. Beni Charan . In the first place, Ganga Nath J. disagreed with the view of the majority. In the second place, I find, besides other things, various dicta in this case which run counter to what Sulaiman C. J. had himself said in Bansidhar v. Shiv Singh , e.g. : (a) The case in Ram Sanehi Lal v. Janki Prasad did not receive at his hands full consideration such as it had received in the earlier case in Bansidhar v. Shiv Singh . (b) He dismissed the case in Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527 on the ground that more than 12 years had expired both from the date of the zarpeshgi lease and also from the date of its payment. (c) The Madras case in Kotappa v. Raghavayya and the Patna case in Sibanand Misra v. Jagmohan Lall ('22) 9 A.I.R. 1922 Pat. 499 to which he had made an appreciative reference in Bansidhar v. Shiv Singh , he refused to follow. Indeed, it will not be wrong to say that he went back on almost everything that he had said in Bansidhar v. Shiv Singh and, if I may say so with the utmost respect, without assigning any valid reason. The only reason which he does assign is contained in the portion of his judgment already quoted, in which he drew a distinction between 'right' and 'powers,' and
if a puisne mortgagee paid off a prior mortgage before any suit had been brought on the mortgage, the right of the mortgagee which he could acquire was obviously the right under the mortgage to enforce the charge and claim priority, and the power he acquired was to bring a suit on the basis of it within 12 years of the mortgage under Article 132, Limitation Act. But where the mortgage had already been sued upon and had merged in a mortgage decree, which might happen well after the expiry of 12 years from the original mortgage, the payment of the mortgage decree, if it conferred nothing upon the puisne mortgagee but a right to bring a suit on the basis of the previous mortgage, would give him no right or power at all. It would give him not only much less than what the mortgagee had at the time of payment, but indeed absolutely nothing.
57. After the exhaustive review of the authorities of the Privy Council and also of this Court it is not necessary to notice even the leading cases of the other High Courts. I shall therefore content myself with referring to one or two authorities of each Court. I do not propose to notice any case of the Bombay and Lahore High Courts as no case directly in point was cited at the Bar nor could I myself come across one.
58. In Raj Kumari Debi v. Mukunda Lal Bandopadhya ('21) 8 A.I.R. 1921 Cal. 166 it was held that a suit by a redeeming co-mortgagor for contribution, instituted beyond the period within which the original mortgagee could institute his suit on the mortgage, had it not been redeemed, was barred. This is an obviously wrong decision and it is not surprising if this was dissented from and overruled in the Full Bench case in Umar All v. Asmat Ali . We now come to the Madras High Court. I propose to notice only two of the more recent authorities directly bearing on the question. The first is the case in Kotappa v. Raghavayya . This case goes the whole length with the subsequent mortgagee. Its facts are briefly these : Plaintiffs 1 to 3 were the owners of the property and plaintiffs & and 5 were their lessees. The property had been mortgaged by them usufructuarily to defendant on 19th September 1901. Among other defences, one was that redemption was not permissible unless an additional amount which the mortgagee had paid to save the property from sale in execution of the hypothecation decree of 1903 was also paid. Say their Lordships:
(a) 'It is admitted that a suit by the first mortgagee to recover the amount of his mortgage in 1920 would be barred by limitation. Defendant 1 has the right to enforce the security by virtue of subrogation. As the prior mortgagee's suit to enforce the security is barred by limitation the present defendant l's right, viewing it as a claim to enforce the security by virtue of subrogation, is also barred by time.
(b) A subsequent mortgagee has the right to pay off the prior mortgagee. By making such payment he acquires in respect of the property all the rights and powers of the mortgagee whom he has paid off. One of such rights is this power to enforce his charge against the property subject to the law of Limitation. If, therefore, at the time when the subsequent mortgagee seeks to enforce,the security by virtue of subrogation, a suit by the first mortgagee is barred by time, the subsequent mortgagee's right is also barred. This principle was laid down in the decision in Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527. If this decision is applied to the present case then defendant 1's right to recover the amount by enforcing the charge must be held to be barred because the first mortgage was in 1897 and the present suit was instituted in 1920.
(c) But it is argued that the decision is inapplicable because the first mortgage in this case had ripened into a decree when the payment was made by the second mortgagee, and that from this follows the consequence that he gets a charge over the property which can be enforced within the usual period of limitation for the enforcement of charge, the period of limitation being calculated from the time when the, payment was made. The argument seems to be that, after the decree, a new charge comes into existence and that the puisne mortgagee subrogates himself into the position of the decree-holder and obtains this charge over the property on the date when he paid off the amount on the prior mortgage.
(d) The decision in Gopi Narain Khanna v. Bansidhar ('05) 27 All. 325, though it is not directly relevant as it does not deal with the question of limitation, gives us considerable help in answering both aspects of the question above mentioned. Briefly stated, in that case the second mortgagee, who had paid off the first mortgagee, the amount due to him after a decree on the first mortgage, instituted a suit to enforce the charge which he had acquired by virtue of his payment. The Privy Council held that he was entitled to establish by a suit his right to enforce the charge under the first mortgage, even though it had by that time become merged in a decree.
(e) The fact that a decree has been passed and the mortgage has become merged in a decree does not, therefore, make any difference. The obtaining of a decree does not put an end to the charge on the property; after the passing of the decree, the charge attaches itself to the decree and the puisne mortgagee by making the payment gets entitled by virtue of Section 74, Transfer of Property Act, to enforce that charge.
(f) If so, there is no justification for the conclusion that the period of limitation should be calculated from the date of payment as if a new charge had come into existence by such payment.
59. As against this there is a later case, Muthu Chettiar v. Muthuswami Aiyangar . It deals with the question of acknowledgment and I shall deal with it when I come to that point only if necessary. There is, however, a single Judge case, Krishna Aiyar v. Subba Reddiar ('39) 26 A.I.R. 1939 Mad. 678.
It seems to me that the balance of authority is in favour of the view taken by the Bench which decided Kotappa v. Raghavayya and I may be permitted to say with all respect that that is the view which commends itself to me as based on logic. It is not the law that limitation can never affect a plea used in defence.
60. If defence can be affected by limitation, much more shall a suit be. The Patna High Court has decided a number of such eases and a few of them which I propose to notice are: (1) Sibanand Misra v. Jagmohan Lall ('22) 9 A.I.R. 1922 Pat. 499. This is the. leading case of that Court and has been followed in a number of cases in Calcutta, Madras, Nagpur and Oudh, the Courts which have substantially contributed to the case law on this question and also by Sulaiman C. J., in Bansidhar v. Shiv Singh . The facts briefly are these : On 13th December 1904, the defendants made a mortgage in favour of Mt. Chandra Badan Koer. The due date of payment was 29th May 1905. Thereafter, the defendants executed three successive mortgages in favour of the plaintiffs to cover the properties mortgaged to Mt. Chandra Badan Koer. On 28th August 1916, the plaintiffs sued on their mortgages and got a preliminary decree and on 11th May 1917, a final decree. Mt. Chandra Badan Koer sued on her mortgage and obtained a preliminary decree on 2nd September 1916, and a final decree on 2nd March 1917. In execution of their decree, the plaintiffs put up to sale the properties mortgaged and themselves purchased on 3rd January 1918. The defendants then applied under Order 21, Rule 90, for setting aside the sale. Mt. Chandra Badan Koer started her execution on 16th November 1917, and on 17th April 1918, the plaintiffs as puisne mortgagees and for their own protection paid off Mt. Chandra Badan Koer whose execution proceedings thereupon came to an end. On the 4th January i919, the plaintiff's brought a suit to enforce Mt. Chandra Badan Koer's security as against the defendants or in the alternative, for a personal decree as against them. They based their claim on the discharge of the liability due to Mt. Chandra Badan Koer. Das J. delivering the judgment of the Court, held that the plaintiffs were entitled to enforce the claim as having stepped into the shoes of Mt. Chandra Badan Kuer, but held that the claim was time barred. He was of opinion that the article applicable was Article 132, Limitation Act, but he rejected the plaintiffs contention, based upon the case in Shib Lal v. Munni Lal ('22) 9 A.I.R. 1922 All. 153, that a fresh charge was created as a result of paying off the decree and another 12 years became available to the plaintiffs in consequence. Said his Lordship:
(a) This argument receives considerable support from the decision of Banerji J., in Shib Lal v. Munni Lal ('22) 9 A.I.R. 1922 All. 153, but with all respect, I am unable to agree with the view expressed by that learned Judge in the case cited. The argument of Banerji J., is this : That a puisne mortgagee in paying off the prior mortgage is entitled under Section 69, Contract Act, to be reimbursed by the mortgagor the money, which he pays to the prior mortgagee. He also acquires a charge on the property which he relieves of liability on general principles and under Section 74, T.P. Act.
(b) Speaking with all respect, I quite agree with the view that the right to be reimbursed accrues to the person paying off the debt on the date on which he pays it off, but I wholly deny that a second mortgagee paying off a prior mortgagee 'acquires' a charge on the property or that he acquires it on the date on which he pays off the prior mortgagee. The charge, in my view, was already there, all that he acquires is a right to enforce the charge and to a cession in his favour of the securities held by the prior mortgagee. Section 74, T.P. Act, to which Banerji J. refers does not provide that, on paying off a prior mortgagee the subsequent mortgagee acquires a charge on the property : but it does provide that he acquires 'all the rights and powers of the prior mortgagee as such'.
(c) It is one thing to say that a person acquires a charge on the property, it is quite another thing to say that he acquires the rights and powers of the prior mortgagee, one of which is to enforce the charge already existing subject to the law of limitation.
(d) In my opinion, the right to reimbursement stands on one footing, right to enforce a security by virtue of subrogation stands on another footing. The right to reimbursement arises on a contract, expressed or implied, to reimburse, and the party who claims the right enforces it in his own right, and not in the right of another.
61. Speaking with respect, I think this is the correct view of the law. That this view finds support from no less eminent an authority than' Pomeroy is equally clear. Says that learned author:
As has been pointed out, subrogation is, in most cases, rather an additional remedy than an additional right, and may exist concurrently with, and as a further security, to the right to a simple action for reimbursement, and the fact that a party entitled to reimbursement and also to subrogation is entitled to two distinct remedies, seems often to be overlooked, to the confusion of both doctrines, (Pomeroy's Equity Jurisprudence, 5th Vol., page 5183).
(2) The next case is Babu Lal Ray v. Bindhyachal Rai ('43) 30 A.I.R. 1943 Pat. 305. Chatterji J. delivering the judgment of the Bench consisting of himself and Meredith J. held that there is no difference between the meaning of Section 74, T.P. Act, of the old Act and Section 92 of the present Act. He appears to have agreed that the decree gave a fresh cause of action, but he distinctly says speaking in Alam Ali v. Beni Charan : 'However, I do not consider it necessary to express any final opinion in this point at present.' It is, therefore, not necessary to deal with this case any further. (3) The other case is Singheshwar Singh v. Medni Prasad ('40) 27 A.I.R. 1940 Pat. 65. The question of limitation did not arise and it need not detain us. (4) Sheo Saran Singh v. Amla Co-operative Credit Society ('45) 32 A.I.R. 1945 Pat. 192 is the last case. The facts were complicated. The point in issue did not arise in that case, but their Lordships agreed with what Das J. had held in Sibanand Misra v. Jagmohan Lall ('22) 9 A.I.R. 1922 Pat. 499 that
Subrogation is, as a rule, an additional remedy, the subrogee being regarded as an assignee in equity of the security as still subsisting, although, in law, it has been extinguished, and to sue on it as one of the means open to him to recover the money which is due to him.
62. Once it is held that the subrogee is merely an assignee the observations of their Lordships of the Privy Council made so far back as the year Prannath Roy v. Rookea Begum (1859) 7 M.I.A. 323 will apply in full force : 'A 'cause of action' is not prolonged by mere transfer of the title.' If this is true, the stepping into his own shoes by the plaintiff or, in other words, the renewal of the security in 1925, though it will allow him to retain all his rights under the first mortgage, will not prolong the period of limitation and he is not entitled to claim for himself another and a fresh start to limitation. The Chief Court at Lucknow has recently decided a few cases on this question, but the one which I propose to notice is the case in Kanhaiya Lal v. Gulab Singh ('33) 20 A.I.R. 1933 Oudh 9 because it is strictly relevant. In this case, one of the mortgages had culminated in a decree. Rejecting a plea of limitation their Lordships say:
It was also contended by the plaintiffs that the claim on the basis of the mortgage Ex. F-2 was barred by limitation. This contention in our opinion has no substance. Baijnath is a defendant in the case and is setting up the mortgage in question not as a weapon of attack but only as a shield in defence of his possession of the property. There is no limitation against a defence.
63. The Nagpur High Court has, in the Full Bench case in Radakishan v. Hazarilal ('44) 31 A.I.R. 1944 Nag. 163, reviewed almost the entire law up to date and held that:
(a) Before the amendment of 1929 subrogation eo nomine was not mentioned in the Transfer of Property Act, but certain limited rights of subrogation were conferred by Sections 74 and 75 on a subsequent mortgagee who had paid off the amount due on the next prior mortgage. It will therefore be seen that the provisions of the Transfer of Property Act do not apply to the case where a person takes a second mortgage in renewal of an earlier mortgage and seeks to use that earlier mortgage as a shield against a mesne incumbrancer, nor did they apply to the facts in Mahomed Ibrahim Husain Khan v. Ambika Pershad Singh ('12) 39 Cal. 527, which was decided on principles of equity. The provisions of Section 101 have also no application because there has been no merger of rights.
(b) The plaintiff cannot rely on a previous mortgage if that mortgage has become barred by limitation.
64. They also rejected the argument based on acknowledgment on the ground that it was not a valid acknowledgment following the Privy Council case in Bank of Upper India Ltd. v. R.H. Skinner ('42) 29 A.I.R. 1942 P.C. 67. This finishes the review of the authorities up-to-date. The principal considerations which weighed with Sir Shah Sulaiman in Alam Ali v. Beni Charan were as said above the existence of a decree and the absence from Section 92 of the word 'powers.' I shall deal with the latter question first. There are different classes of legal rights and one class consists of those which are termed 'powers.' As Sir John Salmond has said in his Jurisprudence, 8th Edn., by Manning at page 248:
Yet another class of legal rights consists of those which are termed powers. Examples of such are the following the right to make a will, or to alienate property, the power of sale vested in a mortgagee, a landlord's right of re-entry, the right to marry one's deceased wife's sister, that power of obtaining in one's favour the judgment of a Court of law, which is called a right of action, the right to rescind a contract for fraud, a power of appointment, the right of issuing execution on a judgment, the various powers vested in Judges and other officials for the due fulfilment of their functions. All these are legal rights they are legally recognized interests-they are advantages conferred by the law-but they are rights of a different species from the two classes which we have already considered.
65. Just as right and duty are correlative terms, (Salmond, page 240):
Rights and duties are necessarily correlative.... There can be no right without a corresponding duty, or duty without a corresponding right, any more than there can be a husband without a wife, or a father without a child.
66. So are right, liberty and power species of the same genus:
Of rights in this sense there are at least three distinct kinds, sufficiently important to call for separate classification and discussion. These are (1) Rights (in the strict sense), (2) Liberties, and (3) Powers. (Salmond, page 246).
and are complementary to one another. Eight and power, are therefore, synonymous expressions, for instance, one may have a right of residence and one may be out of possession owing to the wrongful act of a trespasser. One will require the assistance of the Court for the enforcement of that right. The right to go to the Court and seek its aid is the right of enforcing the right of residence. It may be described as a power to go to the Court. It may also be described as liberty to seek the assistance of the Court to compell the trespasser to carry out his' duty and surrender possession to the rightful owner. But it is in the ultimate analysis the right of residence from which flow other rights assuming protean shapes and described in myriad ways the right or power or liberty or capacity to enforce the recognition of that right. It is, therefore, clear that there is no particular significance attaching to this feature. It might be that the Legislature thought that it was no use retaining a redundant expression. Every right carries with it the right to enforce that right. Indeed, on the line of argument adopted by Sir Shah Sulaiman, it is open to the subsequent mortgagee to say that the person redeeming the prior mortgage has a right of subrogation but has no right to enforce it because the power to enforce that right has been taken away by the Legislature. I do not necessarily mean to say that I subscribe to this line of argument but I have said this to emphasise that its absence does not necessarily mean anything.
67. On a consideration of all the facts, I have come to the conclusion that the absence of the word ' power ' from Section 92 does not affect the legal position. If this is so, the main plank in the judgment of Sir Shah Sulaiman disappears. We have next to consider the effect of the existence of a decree. The case in Sibanand Misra v. Jagmohan Lall ('22) 9 A.I.R. 1922 Pat. 499 in which Das J. delivered the leading-judgment and the case in Kotappa v. Raghavayya furnish complete answer to this question. I do not propose to base my decision on the earlier cases in Chhagan Lal v. Muhammmad Husain Khan ('19) 6 A.I.R. 1919 All. 105 or Het Ram v. Shadi Ram ('18) 5 A.I.R. 1918 P.C. 34 or the case in Jagannath Prasad v. Chhatur Kunwar ('23) 10 A.I.R. 1923 All. 171. They may be open to the criticism that, in all those cases, the decrees were passed under Section 89, T.P. Act, which had the effect of destroying the security. Although if what their Lordships say in Janaki Nath v. Pramathd Nath is true, as indeed it must be held to be so, that the redemption is of a mortgage and not of a mortgaged property, it will make no real distinction whether the security subsists or disappears. Apart from the fact that Sulaiman C. J. had sitting with Collister J. himself held otherwise in Bansidhar v. Shiv Singh I do not think any argument on the basis of a decree is permissible after the case in Gopi Narain Khanna v. Bansidhar ('05) 27 All. 325. I feel that the full implications of that case are not realised. Their Lordships clearly say at page 332:
(a) On payment by Gay a Prasad of the sum into Court before the expiry of the enlarged time, and acceptance of that sum by the plaintiffs, the decree was spent and became discharged and satisfied.
(b) It is true that Gaya Prasad, having made that payment (as he had the right to do) acquired under Section 74, T.P. Act, all the rights and powers of the mortgagees as such.
68. The decree was discharged, but the effect of the discharge was the subrogation by Gaya Prasad to the rights under the previous mortgage. In the present case, the plaintiff's money discharged the decree and he become subrogated to the rights under the mortgage of 1912. Indeed, we are not left to speculate. The terms of his mortgage themselves say that the rights under the previous mortgage subsist, which means that the previous mortgage, notwithstanding the payment is, for certain purposes, a subsisting mortgage. The same rights cannot simultaneously flow from two transactions from the mortgage of 1912 and the mortgage of 1925. And as it is necessary for the plaintiff to go back to the mortgage of 1912 to claim priority, he cannot treat, as the basis of his claim, both the mortgages of 1912 and also that of 1925 at one and the same time. It is this principle which forms the basis of the decision of Das J. in Sibanand Misra v. Jagmohan Lall ('22) 9 A.I.R. 1922 Pat. 499 that the charge already exists and subrogation means only the transfer of that charge from one to another.
69. The subsequent mortgagee can meet the plaintiff's case by yet another argument. The case in Ram Sanehi Lal v. Janki Prasad , the Privy Council case in Jagmohan Das v. Jugal Kishore and a few cases of other High Courts are authority for the proposition that the prior mortgagee, if he has allowed the limitation on the prior mortgage to run out, has only a right of defence. He can use the redemption of the first mortgage only as a shield. In the present case, what the plaintiff proposes to do is not to use it as a shield but as a sword. In the Full Bench case in Ajudhia Prasad v. Chandan Lal Sir Shah Sulaiman himself at pages 700 and 701 emphasised the distinction between a sword and a shield. The facts of that case are, I must confess, entirely different, but the ratio of certain observations, which I shall presently quote, will be helpful. The learned Judges were considering the question of the rights of a minor who was a party to the contract to claim certain equities. The contract was void, but their Lordships extended to him certain equities if he went to Court as a defendant and not as a plaintiff:
Surely when the defendant is being sued and sets up the plea of minority, he is not using his minority as a sword, but is merely using it as a shield. I am unable to agree that because such a defence would deprive a creditor of his money the defendant infant is using his minority as a sword.
70. In other words, what is not permissible to a party in certain cases if he seeks the assistance of the Court as a plaintiff, is permissible to him if he is dragged as a defendant. The plaintiff, in this case, obtained his first mortgage in 1912, his decree in 1924 and a second mortgage in 1925 and he is claiming his rights, today, flowing not from his second mortgage, but from his first mortgage. He has not been dragged into Court, but is dragging into Court some one else against whom he seeks the enforcement of a certain claim. If the analogy is correct, he is not entitled to the equitable rights of priority although he may be entitled to them if he had been sued by the subsequent mortgagee. We now come to the last question in the case the effect of the acknowledgment by the mortgagor on the mortgage of 1925. In Ram Sarup v. Bhagwati Prasad , which so far as this Court is concerned is the leading case on this point, it was distinctly held that:
Where there is an acknowledgment by a mortgagor of his liability under the first mortgage, that acknowledgment can only bind a mortgagee who derived his title subsequent to the acknowledgment, but it cannot bind a mortgagee who derived his title prior to the acknowledgment.
71. There were earlier conflicting authorities of this Court, for instance, Raushan Lal v. Kanahiya Lal ('18) 5 A.I.R. 1918 All. 61 and Arbindakeb Rai v. Jageshar Rai ('19) 6 A.I.R. 1919 All. 242. All these cases were based upon an interpretation of the well-known case in Bolding v. Lane (1863) 1 De G.J. & S. 122 and Lewin v. Wilson (1886) 11 A.C. 639. So far as this country was concerned, the judgment of Sir Aushutosh Mukerji, in the leading case in Surjiram Marwari v. Barhamdeo Prasad ('05) 1 C.L.J. 337 at pages 343 and 348 was the foundation of the entire case law. It is true that there are some authorities of some other High Courts running along different lines, but the final seal of approval was set on this case by their Lordships of the Judicial Committee in Bank of Upper India Ltd. v. R.H. Skinner ('42) 29 A.I.R. 1942 P.C. 67. An attempt was sometimes made to draw a line of distinction between an acknowledgment made by a person who had parted with all his rights, for instance, a vendor, and a person who still retains some rights for instance, a mortgagee. It will serve no useful purpose to enter into a detailed discussion of the authorities on this question after the recent authoritative pronouncement by the Judicial Committee. Lastly an appeal has been made to us on the ground that if the person redeeming does not get the right of priority over the subsequent mortgagee, it will be compelling the prior mortgagee to bring a suit and sell the property and thus precipitate matters. As was said in the Full Bench case in Radakishan v. Hazarilal ('44) 31 A.I.R. 1944 Nag. 163 at p. 172 that
It is perhaps desirable that the mortgage claims should be enforced within the statutory period and it is possible for the mortgagee to see that his rights under the earlier mortgage if he relies on it, are not allowed to lapse.
There is yet another answer to this plea, while it is true that it might, in some cases, mean' an encroachment upon the rights of the prior mortgagee and might also have the effect of precipitating matters, a renewal does cut down the rights of the subsequent mortgagee. Indeed, it is not difficult to contemplate a picture where successive renewals may reduce the security of the subsequent mortgagee almost to a vanishing point. I am, therefore, of opinion that the plaintiff is not entitled to priority over the subsequent mortgagee and the view taken by the learned Judge is right.
72. The appeal is allowed, the judgment of the learned Judge of this Court is set aside, and the decree of the lower appellate Court is restored with costs throughout.