1. This is a second appeal by defendant 7, Sarda Prasad under the following circumstances: There were two properties, one in Jaswantnagar and one in Mubarakpur Gudha owned by Ganga Prasad, and he executed on 1st March 1909, a simple mortgage for Rs. 1;200 in favour of Nand Kishore and Dilasaram, and on 17th September 1913, a simple mortgage for Rs. 200 in favour of the' same persons. On these two simple mortgages the mortgagees brought a suit, for sale, Suit No. 42 of 1917 and a decree was obtained in that year, and again sale was made, and the property of Jaswantnagar was purchased by a person Gulzari Lal on behalf of Sarda Prasad, the appellant, before us. The sale was confirmed on 21st February 1919. Now Ganga Prasad had made another simple mortgage on 20th February 1914, in favour of the present plaintiff. The plaintiff has sued on his simple mortgage and he made the present appellant Sarda Prasad a defendant 7, on the ground that he was a subsequent purchaser of part of the mortgaged property, the sale being in 1919 and the mortgage in. suit being in 1914. The' written statement of the appellant was to the effect that he had not got the status, of a subsequent purchaser but that his claim was prior to the claim of the plaintiff by reason of the fact that he had purchased the property in satisfaction of the debt due under prior mortgages. The' present appellant claimed that he was entitled to set up the prior mortgages of 1909 and 1913-as a shield and to demand that the present plaintiff should redeem those mortgages, and the sum which was claimed in the written statement was the sum paid by the appellant at auction-sale which amounted to Rs. 4,350. Both the lower Courts have disallowed the claim of the appellant on the strength of a ruling reported as Lachmi Narain Das v. Hirdey Narain : AIR1926All480 .
2. It is admitted that in the Suit No. 42 of 1917 on the mortgages of 1909 and 1913, the present plaintiffs, who were subsequent mortgagees, were not made parties. It is claimed therefore by learned Counsel for plaintiffs that because they were not parties,, therefore the decree passed in suit No. 42 of 1917 is not binding on the plaintiffs, and further that the mortgages of 1909 and 1913 have merged in that decree and ceased to exist. The claim for the plaintiffs therefore is that although defendant-appellant is in possession as an auction-purchaser, he should be dispossessed without any compensation whatever. The case of Lachmi Narain Das v. Hirdey Narain : AIR1926All480 a case where the plaintiff was the prior mortgagee, and the defendant was a puisne mortgagee. Both of them sued the mortgagor upon their mortgages without: impleading each other in their suits. Both obtained decrees for sale, and in,. execution of the property was sold and purchased by decree-holders. The sale-in execution of the decree of the puisne mortgagee being earlier in point of time, he succeeded in obtaining actual possession of the property. The prior mortgagee also obtained formal possession by virtue of his purchase. The prior mortgagee then brought a suit for actual possession against the puisne mortgagee offering the puisne mortgagee an opportunity to redeem him. It was held that the prior mortgagee was not entitled to a decree for possession, and that having regard to the-fact that the suit to enforce the prior mortgagee's original mortgage was time barred at the date of the suit, the puisne mortgagee could not be compelled to redeem the prior mortgagee. 3. Now the present case differs from this ruling in various facts. One fact is that in the present case the person who has purchased the rights of the prior mortgagee in an auction-sale is not a plaintiff but is a defendant. In the second place, this person is not out of possession and suing to obtain possession, but this person is in actual possession of the property which he purchased. We consider that these two facts differentiate the two cases, and that the rule' of law which was laid down in Lachmi Narain Das v. Hirdey Narain : AIR1926All480 will not apply in the present case. For the law to be applied in the present case we will refer to the Full Bench ease reported in Ramsanehi Lal v. Janki Prasad : AIR1931All466 . In this case the ruling in Lachmi Narain Das v. Hirdey Narain : AIR1926All480 was considered, and the points of distinction which we have mentioned were brought out. This is. shown at p. 742 (of 1931 A.L.J.). The case before the Full Bench was similar in some respects to the present case. It was a case where in the suits of each of two simple mortgagees the other mortgagee was not a party, and although in execution of the second mortgagee's decree the sale took place earlier, the sale was during the pendnecy of the suit of the first mortgagee. The first question was whether the auction-purchaser in execution of a decree obtained on a prior mortgage, without impleading the subsequent mortgagee, acquires at least the rights of the mortgagor who was a party, including his rights to possession in cases where both the mortgages were simple. The answer to this was in the affirmative, if either no suit by the subsequent mortgagee is pending or the purchase in execution of the prior mortgagee's decree was earlier in point of time. On p. 741 (of 1931 A.L.J.), it was laid down as follows:
The question of allowing a prior mortgagee whose mortgage had long since become barred by time, but who was in possession of the property under a decree obtained without impleading the subsequent mortgagee, to set up his prior mortgage as a shield, even though the limitation for the mortgage had run out, was prominently before their Lordships, and their Lordships allowed Ghulam Safdar to recover the amount due on his mortgage of 1883. This, to my mind, is a clear authority for the proposition that a prior mortgagee, if he is in possession, can set up in defence a prior mortgage as a shield, although in his suit he had not impleaded the subsequent mortgagee and even though a fresh suit to enforce it would now be barred by time.
3. This ruling of law is, in our opinion, applicable to the present case. In the present case the appellant has been in possession, and although a suit on the original mortgages of 1909 and 1913 would now be time barred, the fact that the appellant is in possession entitles him to set up these mortgages as a shield. We also refer to the ruling of their Lordships of the Privy Council in Sukhi v. Ghulam Safdar Khan A.I.R. 1922 P.C. 11. In that case it was laid down that the mortgagee who has obtained a sale or foreclosure decree under Order 34, without joining a puisne mortgagee, and afterwards is sued on the pusne mortgage, can use his mortgage as a shield in all cases in which he could have done so before the Act of 1882. This ruling was passed in 1921, and their Lordships held that after the introduction of the Civil Procedure Code of 1908, the law which applied prior to the Transfer of Property Act of 1882 is now again in force. We therefore consider that the appellant in the present case is entitled to set up the mortgages of 1st March 1909 and 17th September 1913, as a shield and to claim that the plaintiffs in the present case should redeem those mortgages before they put the property in Jaswantnagar to sale. As to the amount which is due to the' defendant-appellant, we consider that he is not entitled to the amount which he claims, the amount which he paid at the auction-sale.
4. But we consider that we should follow the principle laid down in the ruling of Nannu Mal v. Ram Charan Lal 1930 A.L.J. 573 A.I.R 1930. In that case there was a suit for recovery of money on a prior mortgage without impleading the subsequent mortgagee then sued for recovery of obtained a decree for sale and purchased the property, and the subsequent mortgagee then usded for recovery of his money impleading the prior mortgagees as subsequent purchasers of the property. The case therefore was precisely similar to the present csae. The prior mortgagees pleaded that they should be allowed to hold their prior mortgage as a shield against a subsequent mortgagee's suit. The subsequent mortgagees offered to redeem the prior mortgage, and it was held that the prior mortgagees were entitled to the principle amount and interest at the stipulated rate up to the date of obtaining possession. We note that the head-note in this case is incorrect in saying that the interest was to run up to the date of redemption. Now in the present case the date of the appellant obtaining possession is 1st October 1919, which is shown by the dakhalnama, Ex. B-l. Accordingly therefore the appellant is entitled to the principle amounts of the mortgages, that is, Rs. 1,200 and Rs. 200 with interest at the contractual rates from 1st March 1909, in the case of Rs. 1,200, and from 17th September 1913, in the case of Rs. 200, up to 1st October 1919, in both cases. The office will make calculations of the amounts in question. If however the amount under this calculation is in excess of the amount claimed, Rs. 4,350, then the amount of the decree will only be for Rs. 4,350. Some argument was made by learned Counsel for plaintiffs to the effect that the mortgage-money on the original mortgages of 1909 and 1913 should be divided in proportion to the values of the two properties in Jaswantnagar and Mubarakpur. learned Counsel argued that the values of these particular properties should be ascertained by evidence. We do not consider that any doctrine of law requires us to undertake this division of the mortgage-money. The mortgage-money was taken as a single amount on the whole property mortgaged and the whole amount was due from the mortgagor. Consequently we consider that the order which we have passed is correct. We therefore allow this appeal with costs. Full costs throughout are allowed to the appellant.