1. This in an appeal by only one of many defendants in a suit for sale brought on foot of two mortgages, dated 8th March 1911, for the sale of the same property and under the following circumstances. The mortgagor Maqbul-ur-Rahman, who is Defendant 1 in the case, made the two mortgages aforesaid in favour of one Shadi Ram and five others. One of these creditors was one Lakhpat Rai whose name would again appear in the course of the judgment. The properties mortgaged were several including the village of Khajuri. The Plaintiff No. 1 and Defendant 15, Cheddan Lal, obtained a mortgage from Maqbul-ur-Rahman for a sum of Rupees 4,000 on 16th February 1913. On foot of that mortgage they brought a suit for sale and obtained a decree. Cheddan Lal sold his share in the decree to Brij Bashi Lal, father of Plaintiff No. 2. The plaintiffs have paid off the mortgages of 1911 to the mortgagees and have obtained a receipt discharging the mortgages. The plaintiffs claim that having paid off the prior mortgage of 1911 they have been subrogated to the position of the original mortgagees and are entitled to sue on foot of these mortgages.
2. Among the defendants was the present appellant he having purchased, in execution of a simple money decree, a portion of the property mortgaged. He contested the claim two of his pleas were these: (1) The mortgages of 1911 were without consideration and (2) that, in any case, the present plaintiffs acquired no right to maintain the suit simply because they paid off the original mortgagees. The Court below found against the appellant on both the points and hence this appeal. In this Court these two very points have been raised and we proceed to consider them.
3. On the first point, the burden of proof would be on the defendant-appellant, he being a representative of the mortgagor who has admitted in the bonds themselves the receipt of the consideration money. The plaintiffs however adduced evidence to prove the passing of the consideration money and the appellant has also adduced some evidenced to rebut the same and we have to see whether consideration actually passed or not.
4. The plaintiffs' case is that Maqbul-ur-Rahman had borrowed a sum of Rs. 7,000 on foot of a promissory note, dated 4th April 1908, that on account of principal and interest close upon a sum of Rupees 11,000 was due, that the debt being an unsecured one the creditors were anxious to obtain some security, and accordingly, in lieu of this debt and a sum of Rs. 300 paid in cash, the two bonds were executed. The judgment then dealt with evidence and held that the bond in suit is not without consideration. The second point urged is this. There was an intermediate mortgage over the village Khajuri and other properties, namely, one dated 18th April 1912. It is urged that the payment of the bonds of 1911 by the plaintiffs, over the head, as it were, of the bond of 1912, did not en-title the plaintiffs to be subrogated to the position of the mortgagees Shadi Ram and others under the mortgages of 1911. We have to consider how far this contention is right. The learned Counsel for the appellant takes his stand on Section 74 of the Transfer of Property Act. It lays down that
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... shall on obtaining a receipt, acquire in respect of the property all the right and powers of the mortgagee as such, to whom he has made such tender.
5. It has been argued that this can mean only this: that a mortgagee, who is not an immediately next mortgagee has no right to be subrogated to the position of a mortgagee, if there be a mease mortgage between the person making the payment and the person receiving the same. The argument comes to this: that the plaintiffs, being the mortgagees of 1913, could pay off the mortgage of 1912 and acquire the rights of the mortgagee of 1912. But the plaintiffs could not by satisfying the mortgage of 1911, but not satisfying the mortgage of 1912, acquire the rights of the mortgagee of 1911. No authority has been produced in support of this contention. Section 74 lays down, what would be the result when a subsequent mortgagee pays up the next prior mortgagee. It does not say what would be the result when a subsequent mortgagee pays up a mortgagee who is not the next prior mortgagee but who is a mortgagee with a mesne mortgage between, himself and the mortgagor making the payment. But it is argued that, if a subsequent mortgagee can, without satisfying a mesne mortgage, acquire the rights of a prior mortgagee, the enactment of Section 74 would be superfluous and meaningless.
6. It is conceded that Section 75 of the Transfer of Property Act does give any second or other subsequent mortgagee a right to redeem any one of the prior mortgages. But it is urged that section does not say what would be the rights of the person making the payment, and therefore it should be inferred that the person making the payment does not acquire any such rights as are spoken of in Section 74. In other words, the redemption would be purely, for other people's benefit.
7. In this country, even after the enactment of the Transfer of Property Act, it has never been denied that a second or other subsequent mortgagee could acquire the rights of a prior mortgagee by payment, if there happen to be an unredeemed mesne mortgagee. Indeed, as already stated, no authority could be produced on behalf of the appellant to establish such a proposition as this. It is not necessary for us to speculate why Section 74 was enacted, if it be the cause that the second or any other subsequent mortgagee can acquire the rights of the prior mortgagee, whom he pays off. It is possible that the rule was taken from. English law which gives a subsequent mortgagee an absolute right to redeem the next prior mortgagee, but does not give any such absolute right to redeem any other prior mortgagee. The English law is stated as follows, by Sir Rash Behari Ghosh in his Law of Mortgage at page 241(4th edition):
In the case of several successive mortgages the mortgagor can redeem the last mortgage made by him without, redeeming any other. But he cannot redeem an anterior mortgage without also redeeming all who stand between himself and the prior mortgagee, whom he wishes to redeem. The position of a puisne mortgagee is however somewhat peculiar; for though he is entitled to redeem all prior encumbrances, he cannot do so without foreclosing those who stand between himself and the ultimate equity of redemption as well as the mortgagor. It follows that a puisne mortgagee cannot redeem before he is entitled to foreclose on his own mortgage, it being a settled rule that there can be no adverse redemption unless the mortgagor is before the Court. In other words, the right of the puisne mortgagee is not an absolute right but only ancillary to his claim to work out his remedy against the mortgaged estate.
8. Jones in his Book of Mortgages, 7th edition (Article 878, paragraph 2) says:
The junior mortgagee, by redeeming from the prior mortgagee, is subrogated to the right of a first mortgagee. If it were otherwise it would be impossible, in a large number of cases, for a junior mortgagee to secure his debt as the first mortgagee is not obliged to assign his mortgage on payment.
9. These quotations show that the English law, as it prevailed at the time when the Transfer of Property Act was passed, did not give any subsequent mortgagee an absolute right to redeem a prior mortgage', with an unredeemed mesne mortgage between the two. This is exactly what Section 74 of the Transfer of Property Act says. But with the enactment of Section 75, which gave full power to any subsequent mortgagee to redeem any prior mortgage and with the abolition of tacking and consolidation of mortgages, the result is that, on a redemption, a subsequent mortgagee would acquire the rights of the mortgagee who has been redeemed. The enactment of Section 74 becomes virtually superfluous.
10. However, as we have already said, it is not necessary to speculate as to the reason that led the legislature to enact Section 74 of the Transfer of Property Act. This case may be decided without speculating on the motive of that rule. For, as already pointed out, Section 74 has DO application to this case, unless we accept the argument of the appellant that we must hold, because of the language of Section 74, that in no case other than that mentioned in Section 74, a right of subrogation arises. The question before us is concluded by the Privy Council case of Syed Mahomed Ibrahim Hossein Khan-v. Ambika Pershad Singh (1912) 39 Cal 527. In that case a 6th mortgagee had paid off the first mortgages and it was held that the person making the payment was entitled to be put into the position of the first mortgagee, so far as the security was concerned.
11. It was contended before us that the principle of Section 101 of the Transfer of Property Act could be applied only where a party has acquired an absolute title to a property. But the Privy Council case already quoted shows that this need not be the case. A subsequent mortgagee by redemption of one of the prior mortgages becomes entitled to the position of the mortgagee redeemed and he can keep alive the prior mortgage that he has redeemed if it suits his purpose to do so.
12. We are, therefore, of opinion that the; Court below was perfectly right in holding that the plaintiffs could enforce the mortgages of 1911. The result is that the appeal must fail.
13. There is a cross-objection on behalf of the plaintiffs-respondents. It appears that the certificate of counsel's fees was filed in Court but it was not taxed. In the course of the argument it was admitted before us that according to the rules in force at the date of the decision of the case, the certificate of fees should have been filed on the date originally fixed for the hearing of the suit, and not on the date on which ultimately the suit came to be heard. In the view of this admission of the learned Counsel this objection as to the fees goes.
14. The other objection is that the Court below has made a clerical mistake in the decree in awarding future interest only on a portion of a consolidated amount of the decree. As we read the judgment the lower Court was not disposed to refuse to award interest to the plaintiffs on any portion of their claim. It decreed the suit in the usual terms including costs and interest. Under the circumstances the usual rule should have been followed in preparing the decree, namely, future interest should have been awarded on the consolidated amount of the amounts claimed, interest pendente lite and the costs. The decree must, therefore, be modified by substituting for the figures Rs. 25,879-8.0, the figures Rs. 30,154-12-0.
15. The appeal is dismissed with costs including counsel's fees in this Court on the higher scale and the cross-objection is allowed to the extent indicated above. We make no order as to the costs of the cross objection,
16. I agree. In view of the arguments which took place before us in this appeal I would like to add a few words. Section 74 of the Transfer of Property Act deals solely, on the fact of it, with the case of a mortgagee redeeming the next prior mortgage. It can have no bearing on the case where a mortgagee redeems not the next prior mortgage but a mortgage with one or more other mortgages intervening which he does not redeem, except in so far as, where a section lays down that in certain circumstances a certain result is to follow the suggestion, but nothing more than a suggestion, is always possible that where those circumstances do not exist the result does not follow. 14 is strenuously argued by counsel for the defendant-appellant that when a mortgagee exercises the rights given to him by Section 75 to redeem a mortgage notwithstanding that he does not redeem an intervening mortgage, he does not acquire the rights of the prior mortgagee; in other words, that he is not subrogated to the position of that mortgagee. But this argument left him in the difficulty that he was entirely unable to suggest, when invited to do so, in what circumstances it would be to the advantage of a subsequent mortgagee to exercise his rights under Section 75 if he did not, in fact, become subrogated to the position of the mortgagee whom he redeems.
17. On the other hand, counsel for the plaintiffs-respondents was unable to suggest what was gained by the insertion of Section 74 if a subsequent mortgagee exercising his rights under Section 75 was able to step into the shoes of the mortgagee whom he redeems notwithstanding that he did not redeem an intervening mortgage. According to the view that he must ask us to take, Section 74 is surplusage, It is, in my opinion, a conclusion to be arrived at with great caution in any case that a section in an Act is snrplusage. It calls for still greater caution when we find that the two sections one of which is said to be surplusage, are actually contiguous to each other in the Act and neither could by any possibility have been overlooked when framing the other. At the same time it is certainly difficult to appreciate what was in the minds of the framers of the Act when drafting Section 74 if the view be correct that a mortgagee redeeming under S, 75 a prior mortgage without redeeming an intervening mortgage is to step into the shoes of the prior mortgagee. It is, however, unnecessary to further consider this in view of the judgment of their Lordships of the Privy Council in Syed Mohomed Ibrahim v. Ambika Pershad (1) to which my learned brother has referred and which is wholly applicable to the facts of this case.
18. It only remains to notice that in that case no reference was made either in the judgment or in the arguments as reported to Section 74 or Section 75. Their Lordships held that in the circumstances of the case the plaintiff must be held to have intended to keep the first mortgage alive, and that 'applying the rule of justice, equity and good conscience' they held that the first mortgage was kept alive for the benefit of the plaintiff.
19. I agree in the order proposed.