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The Gorakhpur Bank Limited Vs. Karamat Ali and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Judge
Reported in(1922)ILR44All488
AppellantThe Gorakhpur Bank Limited
RespondentKaramat Ali and anr.
Excerpt:
mortgage - contribution--liability of auction purchaser of part of mortgaged property. - - dillon on behalf of the bank that the defendants 3 and 4, being auction purchasers of the one anna share of the gorakhpur bank, were liable to the bank to make good the amount which the bank had to pay in excess of its share of liability. dillon has failed to draw our attention to any authority in which it has been held that a claim like the present could be brought against the auction purchaser. 355, but that was not a case like the present and the circumstances of that case are wholly distinguishable from those of this case......3 and 4. the mortgaged property was sold in execution of a simple money decree, and a one anna share was purchased by one kali charan, who was the predecessor in title of the defendants 1 and 2. another one anna share was purchased by sarju prasad, and the third one anna share was purchased by wazir ali, the defendant no. 5. sarju prasad mortgaged the one anna share purchased by him to the gorakhpur bank. the bank obtained a decree upon that mortgage and caused the one anna share to be sold by auction, and it became the purchaser of that share. the defendants 3 and 4, the mortgagees under the mortgage of 1888, brought a suit on the basis of that mortgage against the defendants 1 and 2, the gorakhpur bank and wazir ali, the defendant no. 5, and obtained a decree for sale. in the.....
Judgment:

Grimwood Mears, C.J. and Pramada Charan Banerji, J.

1. The facts of this case are these. On the 15th of June, 1888, one Hasnu mortgaged a three anna share to the defendants 3 and 4. The mortgaged property was sold in execution of a simple money decree, and a one anna share was purchased by one Kali Charan, who was the predecessor in title of the defendants 1 and 2. Another one anna share Was purchased by Sarju Prasad, and the third one anna share was purchased by Wazir Ali, the defendant No. 5. Sarju Prasad mortgaged the one anna share purchased by him to the Gorakhpur Bank. The Bank obtained a decree upon that mortgage and caused the one anna share to be sold by auction, and it became the purchaser of that share. The defendants 3 and 4, the mortgagees under the mortgage of 1888, brought a suit on the basis of that mortgage against the defendants 1 and 2, the Gorakhpur Bank and Wazir Ali, the defendant No. 5, and obtained a decree for sale. In the suit in which that decree was passed a compromise was entered into between the mortgagees and the defendants Nos. 1 and 2, by which the latter agreed to pay to the mortgagees Rs. 1,333-5-4 and the mortgagees undertook to release from liability the one anna share purchased by their father, Kali Charan, The aforesaid amount appears to have been paid to the decree-holders and a sum of Rs. 14,200 was the balance outstanding under the decree. The decree-holders caused the one anna share of Wazir Ali to be sold by auction, and this sale realized Rs. 4,200. They then put up to sale the one anna share purchased by the Gorakhpur Bank, and this sale realized Rs. 10,000, which fully discharged the decree. After this auction sale the present suit was instituted by the Gorakhpur Bank against) the defendants 1 and 2, the defendants 3 and 4 and Wazir Ali, the fifth defendant. The Bank's contention was that the one anna share, of which it was the purchaser, was liable for one-third of the mortgage debt, that it had contributed more than its rateable share, and that the Bank was, therefore, entitled to be recouped the amount which the sale of its property had fetched in excess of its share of liability, and on this ground the Bank claimed Rs. 4,822-3-7 and interest. The court below dismissed the claim as against the defendants 1 and 2; it also dismissed the claim against Wazir Ali; but it made a decree against the defendants Nos. 3 and 4, the decree-holders, on the ground that under the compromise between them and the heirs of Kali Charan they had under taken to compensate the heirs of Kali Charan for any amount which they might have to pay on account of the decree in addition to the amount which they had undertaken to pay. The decree-holders, the defendants nos. 3 and 4, have preferred this appeal, and it is contended on their behalf that if the claim could be maintained against; any one, it could be maintained against defendants 1 and 2 and the decree of the court below as against them (defendants 3 and 4) was an erroneous decree. We may mention that the Gorakhpur Bank did not prefer any appeal against that part of the decree of the court below which dismissed the claim against Wazir Ali and against the defendants 1 and 2. In our opinion the decree of the court below as regards Wazir Ali is correct. No doubt the one anna share which Wazir Ali purchased was rateably liable for one-third of the mortgage debt; but Wazir Ali surrendered that share and it was sold by auction. Therefore no claim for contribution could be brought forward against him. He was not in possession of any part of the mortgaged property after the auction sale of his one anna share, and no claim could be advanced against him as no personal liability was incurred by him. The only persons against whom the Gorakhpur Bank, which undoubtedly had contributed more than its rateable share of liability, could maintain its claim, were the defendants 1 and 2, whose share in the mortgaged property has not yet been sold, but the court below exempted those defendants from the claim on the ground that the decree-holders, defendants 3 and 4, had undertaken by the compromise to pay up any amount for which the defendants 1 and 2 might be liable. This part of the judgment of the learned Subordinate Judge is, in our opinion, erroneous. There was no privity of contract between the plaintiff (i. e. the Gorakhpur Bank) and the decree-holders, defendants 3 and 4, and, therefore, by virtue of the compromise the Gorakhpur Batik could have no claim as against the defendants Nos. 3 and 4. The right of the Gorakhpur Bank to obtain contribution from the defendants 1 and 2 could not be deemed to attach to the decree-holders, defendants 3 and 4, by reason of their agreement with the defendants 1 and 2 to release their one anna share from liability for the mortgage. It was, however, contended by Mr. Dillon on behalf of the Bank that the defendants 3 and 4, being auction purchasers of the one anna share of the Gorakhpur Bank, were liable to the Bank to make good the amount which the Bank had to pay in excess of its share of liability. In our opinion the position of the defendants 3 and 4 was that of auction purchasers of the one anna share of the Gorakhpur Bank. As such auction purchasers, they could not be held liable to contribute towards the mortgage money. An auction purchaser in execution of a decree obtained upon a mortgage purchases the rights of the mortgagor and the mortgagee at the date on which the mortgage was made and any subsequent equities or liabilities which arose in respect of the mortgaged property could not attach to him inasmuch as he acquired the property free from any such liabilities or equities. Mr. Dillon has failed to draw our attention to any authority in which it has been held that a claim like the present could be brought against the auction purchaser. He referred to the case of Shanto Chandar Mukerji v. Nain Sukh (1901) I.L.R. 23 All. 355, but that was not a case like the present and the circumstances of that case are wholly distinguishable from those of this case. The case which is applicable to the appeal before us is that of Hari Raj Singh v. Ahmad-ud-din Khan (1897) I.L.R. 19 All. 545. In that case it was held that a suit for contribution could be brought only against the holder of the portion of the mortgaged property which had remained unsold. In this view the decree of the court below cannot be supported, and this appeal must prevail. We accordingly allow the appeal, set aside the decree of the lower court and dismiss the suit with costs.


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