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Radha Krishna Swami Vs. Parshottam Das and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAllahabad
Decided On
Case NumberS.C.A. No. 179 of 1945
Judge
Reported inAIR1953All296
ActsDebt Law; Uttar Pradesh Temporary Postponement of Execution of Decrees Act, 1937 - Sections 5 and 6; Transfer of Property Act, 1882 - Sections 67 and 92; Code of Civil Procedure (CPC) , 1908 - Order 34, Rule 1
AppellantRadha Krishna Swami
RespondentParshottam Das and ors.
Appellant AdvocateR.B. Lal and ;M.M. Lal, Advs.
Respondent AdvocateB.N. Khanna, Adv.
DispositionAppeal dismissed
Excerpt:
(i) civil - interpretation of statutes - when the language of the statute is such that following the literal meaning would result in an absurd act the court is free to interpret it differently. (ii) enforcement of mortgage by sub-mortgagee - section 5 of u. p. temporary postponement of execution of decrees act, 1937 and section 67 of transfer of property act, 1882 - sub-mortgagor is free to sell the property mortgaged by his mortgagor. (iii) right of prior mortgagee - section 92 of transfer of property act, 1882 - prior mortgagee purchases mortgaged property - can claim only his portion of mortgage. - - 23169 on account of his having satisfied the mortgage of 1921, that even if mahal lalta singh was liable to be sold in enforcement of the sub-mortgage of 1927, the sale should be subject.....desai, j.1. this is a second appeal from a decree of district judge of sitapur in a mortgage suit. har bux singh owned the entire mahal lalta singh in village bhilawan. in 1918, ho executed a mortgage ex. el, in favour of sheo dayal and sheo sagar for rs. 2300. in 1921, he executed another mortgage, ex. b17, in favour of mahant basudeo gir, defendant 2, for us. 16000. on 22/ 24-3-1922, he executed one more mortgage, ex. 3, in favour of sheo darshan singh, defendant l, and jagannath singh, defendant 5, for rs. 4000. this mortgage was for the entire mahal lalta singh. one raghubar singh owned zamindari property in village tikara. in 1920, he mortgaged it with sheo darshan singh and jagannath singh. thus sheo darshan singh and jagannatb singh were mortgagees of two different properties. the.....
Judgment:

Desai, J.

1. This is a second appeal from a decree of District Judge of Sitapur in a mortgage suit. Har Bux Singh owned the entire mahal Lalta Singh in village Bhilawan. In 1918, ho executed a mortgage EX. El, in favour of Sheo Dayal and Sheo Sagar for Rs. 2300. In 1921, he executed another mortgage, EX. B17, in favour of Mahant Basudeo Gir, defendant 2, for us. 16000. On 22/ 24-3-1922, he executed one more mortgage, EX. 3, in favour of Sheo Darshan Singh, defendant l, and Jagannath Singh, defendant 5, for Rs. 4000. This mortgage was for the entire mahal Lalta Singh. One Raghubar Singh owned zamindari property in village Tikara. In 1920, he mortgaged it with Sheo Darshan Singh and Jagannath Singh. Thus Sheo Darshan Singh and Jagannatb Singh were mortgagees of two different properties. The share of each was one-half in the mortgagee rights under each mortgage. Jagannath Singh has been paid off his dues and we have nothing to do with his share in the mortgagee right in this dispute. Sheo Darshan Singh, the other mortgagee, on 2-9-1927 executed a sub-mortgage, EX. l, in respect of his one-half shares in the two mortgagee rights in favour of the plaintiff Purshottam Dass for BS. 3300. On 17-8-1928 Har Bux Singh sold mahal Lalta Singh to Mahant Basudeo Gir for RS. 85000. Ex. 2 is the sale-deed. Har Bux Singh left with Basudeo Gir Rs. 4755 odd for the payment to Sheo Dayal and Sheo Sagar in discharge of his liability under the mortgage of 1918, Rs. 23169 odd in discharge of his liability to him under the mortgage of 1921, Rs. 4875 for payment to Sheo Darshan Singh and Jagannath Singh in discharge of his liability under the mortgage of 1922 and Rs. 1800 for payment to one more creditor of his. Thus he left Rs. 34600 with Basudeo Gir for payment to his creditors including Basudeo Gir himself and took cash of only Rs. 400. The liability of Har Bux Singh to Basudeo Gir under the mortgage of 1921 was automatically discharged when Rs. 23169 odd were left with Basudeo Gir. Basudeo Gir took some time to pay off the mortgage of 1918. He paid it off in instalments. He paid Rs. 135 on 13-12-1929, Rs. 1000 on 1-5-1931 and Rs. 4918 on 29-2-1932. Thus he paid in all RS. 6053 and obtained receipt EX. B2 on 29-2-1932. He had to pay more because interest had accumulated between 17-8-1928 and 29-2-1932.

2. The suit from which this appeal arises was instituted by Purshottam Das, the sub-mortgagee to recover the money due to him under the sub-mortgage of 1927. He sought a decree for sale of mahal Lalta Singh. He impleaded' as defendants to the suit not only his own mortgagor, Sheo Darshan Singh, but also Jagannath Singh, Jagannath Singh's successors-in-interest, and the sons of Har Bux Singh and Raghubar Singh who had died. Sheo Darshan Singh had been adjudged insolvent and the official receiver, who had the custody of his property, was also impleaded as defendant.

3. The suit was contested by Basudeo Gir, Sheo Darshan Singh and a son of Raghubar Singh. The main contest was by Basudeo Gir who alone filed this appeal and is now represented before us by Shri Radha Krishna Swami Asthapith Mandir in village Bajrakha. The contesting defendants did not dispute the facts mentioned above. Mahant Basudeo Gir pleaded that he and Shri Badha Krishna Ji are agriculturists, that he is subrogated to the rights of Sheo Dayal and Sheo Sagar under the mortgage of 1918 on account of his discharging that mortgage, that he has a charge or lien over mahal Lalta Singh for Rs. 23169 on account of his having satisfied the mortgage of 1921, that even if mahal Lalta Singh was liable to be sold in enforcement of the sub-mortgage of 1927, the sale should be subject to his rights on account of the subrogation and the charge, that the suit was barred by time and that the plaintiff was not entitled to interest and costs on account of his failure to comply with the provisions of Section 32, Agriculturists' Relief Act. Sheo Darshan Singh also pleaded that the plaintiff was not entitled to interest and costs on account of his non-compliance with the provisions of Section 32, Agriculturists' Relief Act.

4. The trial Court decided that as Mahant Basudeo Gir paid off the mortgages of 1918 and 1921 from the money left with him by his vendor, Har Bux Singh, for that very purpose he was not entitled to be subrogated to the rights of Sheo Dayal and Sheo Sagar and to have a lien over mahal Lalta Singh in respect of the sum of Rs. 23000 odd, and that the suit was barfed by time and consequently dismissed it.

5. The plaintiff went up in appeal before the District Judge. He decided that the suit was within time and agreed with the trial Court that Mahant Basudeo Gir was not entitled to subrogation and charge ; he, therefore, decreed the suit. The appellant Shri Radha Krishna Swami challenges the finding of the Courts below that it is not entitled to subrogation and charge and the finding of the learned District Judge that the suit was not barred by time. It also questions the right of the plaintiff, as sub-mortgagee, to sue for a decree for sale of mahal Lalta Singh and contends that since the plaintiff had failed to prove the mortgage of 1922 as against the heirs of Har Bux Singh, it could not be enforced by sale of mahal Lalta Singh.

6. I would deal with the question of limitation first. There is no dispute about the fact that the period of limitation is twelve years and is to be computed from 17-8-1928. That is the date of the sale EX. 2 by Har Bux Singh in favour of Mahant Basudeo Gir in which Har Bux Singh admitted the existence of his liability under the mortgage of 1922 by leaving some money in the hands of Basudeo Gir for discharge of it. There is thus an acknowledgment by Har Bux Singh of 17-8-1928 from which a fresh period of limitation started. The period ended on 17-8-1940 when the Temporary Postponement of Execution of Decrees Act, 1937 (Act 10 of 1937) was in force. The Act remained in force from 1-1-1938 to 31-12-1940. It is admitted that Har Bux Singh and Basudeo Gir were agriculturists and that the appellant is an agriculturist. It is stated in Section 5 of the Act that:

'In computing the period of limitation prescribed by the Indian Limitation Act, 1908 .... for (A) the institution of a suit in a civil Court against an agriculturist for money or for foreclosure or sale in enforcement of a mortgage, and (b) the execution of such decree as is referred to in Section 3 and not covered by Section 6 the period during which this Act shall remain in force shall be excluded,'

The plaintiff claimed that under this provision he was entitled to exclude the period 1-1-1938 to 31-12-1940 while computing the period of limitation for the suit. From 17-8-1828 to 31-12-1937 the period was 9 years 4 months and 14 days. If Section 5 of the Act applies and the period 1-1-1938 to 31-12-1940 is to be excluded the period of limitation would be counted again from 1-1-1941. From 1-1-1941 to 17-8-1943 the period was 2 years 7 months and 16 days. Therefore, the period from 17-8-1928 to 17-8-1943 was twelve years, if the period 1-1-1938 to 31-12-1940 was excluded. It was holiday on 17-8-1943 and consequently the suit, which was instituted on 18-8-1943, was just in time.

7. There were two arguments advanced before us in support of the view that Section 5 does not apply to the facts of the case. One is that Section 5 does not apply to a case which is covered by Section 6. The learned counsel for the appellant contended that the words 'and not covered by Section 6' in Section 5 govern not only part (b) but also part (a) of Section 5. There is no force in this contention. Grammatically the words can be read only with the words 'and (b) the execution of such decree as is referred to in Section 3' and not with the words 'for (a) the institution of a suit in enforcement of a mortgage.' The words 'as is referred to in Section 3 and not covered by Section 6' mean 'as is referred to in Section 3 and is not covered by Section 6.' The words 'not covered by Section 6' are a part of the clause beginning with the words 'as is referred to.' This clause applies only to part (b) and cannot apply to part (a); so the words 'not covered by Section 6' also cannot apply to part (a). Both Sections 3 and 6 deal with decrees, neither of them deals with a suit. Part (a) deals only with a suit and part (b) only with a decree. Consequently, the reference to Sections 3 and 6 can be read only in part (b) and cannot be read in part (a) where it would make no sense at all. In Pokhar Singh v. Mulaim Singh, 1945 oudh W.N. (H.C.) 80, Braund J. while interpreting the provision of Section 5 remarked that the exclusion applies to such decrees as are referred to in Section 3 provided they are not of the kind excepted by Section 6. Thus he read the words of part (b) and not of the other part (a). If the plaintiff had sued earlier and obtained a decree, its execution would not have been stayed under the provisions of the Act. Section 6 of the Act lays down that:

'Nothing in the Act applies to a mortgage-decree sought to be executed by sale of the mortgaged property in the hands of a subsequent transferee who has taken the transfer subject to the mortgage.'

Basudeo Gir took the transfer subject to the mortgage of 1922. So Section 6 would have saved the decree from being governed by Section 3 of the Act and it could have been executed even during the period 1-1-1938 to 31-12-1940. In Radha Kishan v. Umrai Singh : AIR1943All316 , a Full Bench of this Court held that execution of such a decree as is mentioned in Section 6 was not barred by anything contained in Section 3. So the argument of the learned counsel for the appellant was that if the execution of the decree itself could not have been stayed there was no sense in excluding the period of three years while computing the period of limitation for the suit. An argument similar to the one adopted here was adopted in the case of Pokhar Singh but was repelled. Braund J. observed at page 81 :

'It is argued, .... that it is absurd to suppose that the Temporary Postponement of Execution of Decrees Act, 1987, would give to decree-holder the benefit of a suspension of the period of limitation in a case in which the decree holder was not qualified to take advantage of Sub-section (1) of Section 3 and did not choose to try to take advantage of Sub-section (2) .... In my view . . . the language of Section 5 is quite plain, and even if it did produce a result such as I have suggested above, the learned Civil Judge is quite right in supposing that that fact affords no reason why the plain language of the statute should not be given effectto.'

The plain language of the section clearly says that the period of three years should be excluded while computing the period of limitation, and it must be given effect to whether it appeals to reason or not. It is a recognized manner of construction of statutes that when the language of the enactment is clear the Court is bound to give effect to it even though it is satisfied that the Legislature did not contemplate to give the actual result that the language implied. A statute will be construed contrary to its literal meaning when the literal construction would result in an absurdity or inconsistency, provided the words are capable of another construction which will carry out the manifest intention : See Bharat Singh v. Mt. Chadi A. I. R. 1947 ALL. 27 (F.B.) relying upon Ex parte Walton; In re Levy, (1881) 17 Ch. D. 746. Here neither are the words of Section 5 capable of another construction nor would the construction that I propose to put on them result in any absurdity. It cannot be said that it would be absurd for the Legislature to let the execution of a decree go on but to discourage creditors from suing during the pendency of the Act. It was stated in Lachhman Singh v. Lachhman Prasad, 1948 oudh W.N. 141, at p. 142 that:

'The provisions of Section 5 so far as they relate to the exclusion of time for institution of a suit were apparently in tended to encourage creditors to desist from filing suits, the fruits of which they could not be permitted to reap till after the enactment of the projected legislation.'

This does not mean that the Legislature intended to discourage the filing of only those suits, the decrees in which could not be executed. For certain reasons it was advised to discourage the filing of even those suits, the decrees m which could be executed. It is not for the Court to concern itself with the reason for this. Even if it be said that the Legislature did not intend to discourage the filing of those suits, the decrees in which could be executed, the language of Section 5 part (a) is quite clear and free from ambiguity and if the result of its literal interpretation is not quite in consonance with the intention of the Legislature, it is for the Legislature to remedy the defect in the language. In Behari Lal v. Ganga Prasad, 1945 oudh W.N. (H.C.) 91, a Full Bench of this Court laid down that:

'In construing the plain words of Section 5 the Court will not be justified in embarking upon a consideration of the question whether certain anomalies will not arise if the words of S. 5 are given their natural and plain meaning.'

8. The other argument is that Section 5, part (a) excludes the period of three years while computing limitation for the institution of a suit for sale 'in an enforcement of a mortgage,' and that the present suit was not one in an enforcement of a mortgage. It is to be noted that the plaintiff wants to enforce the mortgage of 1922 by putting mahal Lalta Singh to sale. That mortgage was not in his favour; it was in favour of Sheo Darshan Singh and Sheo Darshan Singh has made a sub-mortgage of his mortgagee rights to him. The argument of the appellant is that if the plaintiff were attempting to put the mortgagee rights of Sheo Darshan Singh to sale, that would be an enforcement of his sub-mortgage and that his putting mahal Lalta Singh to sale cannot be said to be enforcing his mortgage. As I would show presently a sub-mortgagee is free to proceed against the original mortgagor, i.e., the plaintiff is free to put mahal Lalta Singh to sale even though it was not directly mortgaged with him. When a sub-mortgagee sues the original mortgagor, he does so to enforce his own sub-mortgage. Really he enforces both the mortgages, the mortgage by the owner of the property and the sub-mortgage by the mortgagee. If the plaintiff was not a mortgagee from Sheo Darshan Singh he would have no right to proceed against mahal Lalta Singh. He derives the right to proceed against it from the sub-mortgage by Sheo Darshan Singh in his favour. When he sued to put mahal Lalta Singh to sale he did so to enforce his own sub-mortgage by enforcing the mortgage of 1922. His suit is clearly, therefore, a suit for sale in an enforcement of his sub-mortgage. The word mortgage in Section 5 includes a sub-mortgage because a sub-mortgage is nothing but a mortgage of mortgagee rights. What he can put to sale in an enforcement of his sub-mortgage has nothing to do with the question whether his suit is one for sale in an enforcement of a mortgage. He may seek to put to sale a wrong property in an enforcement of his sub-mortgage; nevertheless his suit would be a suit for sale in an enforcement of a mortgage. If he had no right to put mahal Lalta Singh to sale in enforcement of his sub-mortgage his suit would fail on that ground but while computing the period of limitation the period of three years will have to be excluded as laid down in Section 5. If a sub-mortgagee can sue the original mortgagor or for sale of the property mortgaged by him, it is undoubtedly a suit for sale in an enforcement of a mortgage.

9. Therefore, Section 5 applies and the suit was within time.

10. The mortgage deed EX. 3 was not proved against the heirs of Har Bux Singh. It was admitted by the appellant and Sheo Darshan Singh and consequently was used against them without proof. It was said on behalf of the appellant that when it was not proved against the heirs of Har Bux Singh it could not be enforced against them. The simple reply to this contention is that the heirs of Har Bux Singh are left with absolutely no interest in the property mortgaged under the deed because Har Bux Singh hid sold the property to Basudeo Gir in 1928. The mortgage is now to be enforced not against Har Bux Singh or his heirs but against the appellant on whose behalf it has been admitted. The heirs of Har Bux Singh were not, at all necessary parties; they were impleaded ex abundanti cautelct.

11. According to the terms of the sub-mortgage, Ex. 1, in default of repayment by Sheo Darshan Singh, the sub-mortgagee is to have the right to recover all his money by sale of 'the mortgaged property.' The property that was expressed in the deed to have been mortgaged was the mortgagee rights of Sheo Darshan Singh acquired under the mortgage deed of 1922. So it was contended on behalf of the appellant that the plaintiff, in an enforcement of the sub-mortgage, could only put to sale the mortgagee rights of Sheo Darshan Singh and not mahal Lalta Singh which had been mortgaged with him under the mortgage of 1922. It is true that the plaintiff can enforce only the sub-mortgage of 1927 but it does not follow that he cannot do so by enforcing the mortgage of 1922. On the contrary he can enforce his sub-mortgage only by enforcing the mortgage of 1922, that is, by proceeding against mahal Lalta Singh. Putting the mortgagee rights of Sheo Darshan Singh to sale means putting mahal Lalta Singh to sale. Sheo Darshan Singh had a right to put mahal Lalta Singh to sale in an enforcement of the mortgage of 1922 and when he mortgaged this right it meant that he gave the right to the plaintiff to do what he could do, that is to put mahal Lalta Singh to sale. In the very nature of things it was not possible for a smaller right to be carved out of the right to put mahal Lalta Singh to sale. It would make no sense to say that the plaintiff could only put to sale the right to put mahal Lalta Singh to sale. It was said on behalf of the appellant that it was a sub-mortgage by Sheo Darshan Singh and, not an assignment or transfer of his mortgagee rights and that consequently the plaintiff did not stand in the shoes of Sheo Darshan Singh and could not exercise the very right which he could. There undoubtedly is a distinction between a sub-mortgage which is nothing but a simple mortgage of a mortgage and an assignment or transfer of mortgagee rights. But it does not necessarily follow that there should be a distinction between every effect of a sub-mortgage and every effect of an assignment. A gift passes the same title as a sale but no body has any difficulty in distinguishing between a gift and a sale. Merely because they pass the same title to the transferee it cannot be said that there is no distinction between them. So merely because a sub-mortgage and an assignment of mortgagee rights would pass the same title to the transferee it cannot be said that a sub-mortgagee is being confused with an assignment.

12. It is stated in 'The Law of Mortgage in India' by Ghose, Volume I, page 283:

'Debts secured by mortgage are also frequently assigned by way of security. Such transactions arc known as sub-mortgages and may be evidenced merely by a deposit of the title-deeds. The sub-mortgagee, by virtue of the assignment, is not only entitled to the usual remedies against his own mortgagor but also against the original mortgagor.'

Fisher in his 'Law of Mortgage,' Edn. 6, p. 110, describes a sub-mortgage as:

'A compound mortgage consisting of a mortgage of a chose in action (viz. the original mortgage debt) and of the property which is the security for the original mortgage debt.'

Similarly Coote writes in his book on 'Mortgages' volume it, page 860:

'Where there is a sub-mortgage, the security will comprise: first, the personal covenant of the sub-mortgagor; secondly, the transfer of the original mortgage debt and, mortgaged property, subject to redemption, with the benefit of the power of sale, and other powers and remedial clauses contained in the original mortgage; thirdly, a power of sale enabling the sub-mortgagee to dispose of the original mortgage debt and security.'

On page 861 he writes that the sub-mortgage 'is in a position bearing a great resemblance to that of a surety.'

13. In view of this interpretation of sub-mortgage, there can be no doubt that a sub-mortgagee can proceed against the original mortgagor or the property mortgaged by him. There may be some restrictions on this, however, arising out of the state of accounts existing between the original borrower and the mortgagee or the sub-mortgagor but they are the only restrictions, and we are not concerned with them in this case.

14. Many authorities have laid down that a sub-mortgagee can proceed against the original mortgagor and the property mortgaged by him. It is stated by Coote on 'Mortgages' at page 912, that

'the mortgaged property would comprise the original mortgage debt and all rights incident thereto, including among such rights the (right ?) to enforce and exercise all securities, powers and remedies given by the mortgage, whether expressly mentioned or not ....... if the sub-mortgagor makes default, the sub-mortgagee by virtue of the statutory power of sale implied in his own security may sell the original debt thereby extinguishing the sub-mortgagor's right of redemption therein.'

'A sub-mortgagee may foreclose the original mortgagor', (page 1031) and similarly he may sue for sale of the property mortgaged by him. I have already referred to the statement in 'The Law of Mortgage in India' by Ghose that a sub-mortgagee is entitled to the usual remedies against the original mortgagor also. In Ram Shankar Lal v. Ganesh Prasad, 29 ALL. 385 (F.B.), it was decided by a bench of six Judges that a sub-mortgagee of mortgagee rights in immovable property is entitled to a decree for sale of the mortgagee rights of his mortgagor. It was observed by Stanley C. J., at page 398 that :

'In the case of a derivative mortgage that is, a sub-mortgage, it is usual to implead the original mortgagor and to foreclose the original mortgagor as well as the sub-mortgagor,'

In Kanhai Lal v. Mahadeo Prasad, 18 Ind. Cas. 389 (oudh), Lindsay A. J. C., stated :

'The position of the original mortgagee after a sub-mortgage becomes as if it were that of a surety, the sub-mortgagee becoming the creditor while the original mortgagor continues to remain the debtor'

and held that a sub-mortgagee is entitled to a remedy against the original mortgagor as well. In Vijiaraghavalu v. Arunachalam A. I. R. 1939 Mad. 165, a sub-mortgagee was allowed to maintain a suit against the original mortgagor.

15. In Po Hla Maung v. Ma Ngwe Sint, A. I. R. 1937 Rang. 56, and Bhag Chand v. Sujan Singh, A. I. R. 1938 Pesh. 73, the contrary view was taken and a sub-mortgagee was held not entitled to join the original mortgagor in a suit for sale and to sell the property mortgaged by him or to foreclose his mortgage. The basia of this decision was that there exists no privity of contract between a sub-mortgagee and the original mortgagor. A sub-mortgagee takes his sub-mortgage from the mortgagee and the original mortgagor is no party to the contract of sub-mortgage. A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money. It is not a contract. The transfer of an interest in specific immovable property will result from a contract and so a mortgage is preceded by a contract but when the mortgage is executed the contract becomes an accomplished contract and nothing remains to be done under it. The question of privity of contract arises only when under a contract something remains to be done by one party and the other party seeks to enforce it to do it. When a mortgagee sues to enforce the mortgage, the mortgage is an accomplished fact and what he seeks to do is simply to enforce the right that he possesses in the property. It is stated by Ghose at page 70 :

'Regarded as a promise by the debtor to repay the loan, it (mortgage) is a contract creating a personal obligation. Bat it is also a conveyance, because it passes to the creditor a real right in the property pledged to him.'

When it is a question of enforcing a certain right in the property, there should not arise any question of privity of contract. What is true of a mortgage is also true of a sub-mortgage. I have already explained the nature of a sub-mortgage: it gives the sub-mortgagee a power to proceed against the property mortgaged by tbe original mortgagor. The Bangoon case was referred to in Vijiaraghavalu v. Arunachalam (A. I B. 1939 Mad. 165) and was dissented from. It was pointed out that Form no. 11 in Appendix D, Civil P. C., clearly contemplates a suit by a sub-mortgagee in which he can ask for relief by way of sale of the property comprised in the original mortgage. The plaintiff was, therefore, entitled to sue fur sale of mahal Lalta Singh on the foot of his sub-mortgage.

16. The claim of the appellant to subrogation to the rights of Sheo Dayal and Sheo Sagar mortgagees under the 1918 mortgage, and to a lien for the sum of Rs. 23,169 paid in satisfaction of his own debt, is without any foundation. When he purchased the property he had a claim for Rs. 23,169 against Har Bux Singh on the foot of his mortgage of 1921 and Har Bux Singh left this amount out of the sale consideration in his hands in order to discharge the claim in full. I do Dot understand how there can arise any question of lien or subrogation. Har Bux Singh discharged the mortgage debt of 1921 and the relationship of debtor and creditor came to an end. It was not possible for the appellant to keep the mortgage in his own favour alive when he purchased the equity of redemption. There was clearly a merger of the equity of redemption with the mortgagee right.

17. There was no agreement between Har Bux Singh and the appellant that on his paying off Sheo Dayal and Sheo Sagar he would be sub-rogated to the rights as mortgagee.' Therefore, if Section 92, T. P. Act applies, he was not entitled to subrogation. And this section does not apply. It came into effect in 1929 and the appellant discharged the mortgage debt of Sheo Dayal and Sheo Sagar afterwards. A right of subrogation accrues when the prior encumbrance is wholly discharged. So the appellant became entitled to the right of subrogation if at all on 29-2-1932 by which date the amended section had already come into force. In any case, it has been held in numerous cases that the amendment has retrospective effect. A Full Bench of the Allahabad High Court in Tota Ram v. Ram Lal : AIR1932All489 , held that where a third mortgagee professes to keep in his hand a part of the mortgage money in order to pay off the first mortgage, in a suit by the second mortgagee to enforce his mortgage it is open to the third mortgagee to insist on his being treated as a first mortgagee whose mortgage must be paid off before the second mortgagee brings the mortgaged property to sale. In Hira Singh v. Jai Singh : AIR1937All588 , another Full Bench held that a subsequent mortgagee or vendee who pays off a prior mortgage is entitled to subrogation if he does so out of his own funds and is thus out of pocket in excess of the amount of the mortgage money or the sale consideration, and is not entitled to subrogation when he does so with the money left out of the mortgage or sale consideration in his hands by the mortgagor or vendor. In Abdul Hamid v. Ram Kumar, 1942 oudh W. N. 165, a Full Bench of the Chief Court of Oudh took a different view and held that a subsequent mortgagee who redeems a prior mortgage with money left with him for that purpose is subrogated to the rights of the prior mortgagee even without a registered instrument. I prefer the view taken in the case of Hira Singh, if I am not actually bound by it. It is one thing to say that the debt of the creditor who has been paid off is to be treated as assigned to the lender who provided the money and another thing to say that the security which may be held by the creditor as well as priority over other creditors should be ceded. A right to cession or assignment of the security can be claimed only by a person who, though not primarily liable to discharge a debt, is obliged to pay it for his own protection. It cannot be claimed by a purchaser who agreed to buy the property free of all encumbrances and undertakes to discharge them all out of the purchase money but fails to do so. See Ghose on the Law of Mortgage, page 355. At page 364 Ghose writes :

'A claim to subrogation can be sustained only when there is an agreement with the debtor that the lender shall be surrogated to the rights of the mortgagee, and though such an agreement may be presumed when the money is expressly advanced for the purpose of paying off an incumbrance; there can be very little doubt that the mere fact that the money borrowed by the debtor is used to pay oS a prior mortgage does not entitle the lender to the benefit of the discharged security. The real question in all such cases is whether the payment made by the stranger was a mere loan to the debtor on his personal security, or whether it was made under an agreement that he should be substituted for the creditor. The law does not usually thrust benefits on people for which they do not themselves stipulate, and we find that in the Roman Law and the systems based on it subrogation is permitted only when there is an agreement to that effect with the borrower. In America, too, where the right of subrogation is very freely recognised, it is never allowed except where there is a distinct bargain to that effect with the mortgagor by the lender when he advances the money. In England also, as a rule, if there is no bargain for a transfer, an incumbrance will not be kept alive simply because it is paid off with the lender's money.'

18. There is no evidence of any agreement between Har Bux Singh and the appellant and the sale-deed does not at all indicate that it was contemplated that the appellant would be sub-rogated to the rights of the mortgagees whom he pays off.

19. When the appellant paid off Sheo Dayal and Sheo Sagar ho did so not with his money but with the money of Har Bux Singh left with him in trust for that purpose. When he did not use his own money he cannot claim the right of subrogation. When he paid off Sheo Dayal and Sheo Sagar he did so in order to fulfil his own obligation to Har Bux Singh and not to protect his own interest. He was bound to pay them off according to the contract with Har Bux Singh. If Har Bux Singh had retained the liability in his hands by taking the full sale consideration and leaving nothing in the appellant's hand and if the appellant had been obliged on account of coercive process to pay off Sheo Dayal and Sheo Sagar, he might have been entitled to claim subrogation to their rights. But the facts here are different. The appellant is, therefore, not entitled to any subrogation or lien.

20. In the result the appeal must be dismissed with costs.

Waliullah, Ag. C.J.

21. I agree.


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