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Lachman Prasad Vs. Lachmeshwar Prasad and ors. - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported inAIR1922All76; 66Ind.Cas.203
AppellantLachman Prasad
RespondentLachmeshwar Prasad and ors.
Cases Referred(P. C.) and Ram Kishan. Das v. Fakir Chand
Excerpt:
mortgage - sale-deed executed subsequently in favour of mortgagee, effect of, on mortgage. - - lachman prasad pleaded, in effect, that the mortgage deed of the 18th of june 1808 had been completely discharged under the terms of a subsequent sale-deed of the 25th of august 1914. he made sundry allegations of bad faith against the plaintiff, or the plaintiff's father, and raised various questions affecting the merits of the dispute which have not been gone into. the main question raised by the pleadings, and the only one with which we are concerned here, is whether the mortgage deed in suit was or was not discharged by a sale-deed of the 25th of august 1914, we have bad to consider the terms of that sale-deed carefully. the trial court held that the mortgage-deed of june the 18th, 1908,..........deed of the 18th of june 1808 had been completely discharged under the terms of a subsequent sale-deed of the 25th of august 1914. he made sundry allegations of bad faith against the plaintiff, or the plaintiff's father, and raised various questions affecting the merits of the dispute which have not been gone into. the main question raised by the pleadings, and the only one with which we are concerned here, is whether the mortgage deed in suit was or was not discharged by a sale-deed of the 25th of august 1914, we have bad to consider the terms of that sale-deed carefully. it was by gokaran singh, the original mortgagor, in favour of bhairon prasad, who is described in the plaint as the father of the plaintiff, living jointly with him. the property consisted of all the five items.....
Judgment:

1. This was a suit brought by the respondent, Lachmeshwar Prasad, on a mortgage deed of the 18th of June 1908. The defendants were Gokaran Singh, the mortgagor under the said deed, Bhola Singh and Lath man Prasad, impleaded as subsequent purchasers of a portion of the mortgaged property. The deed in question was for a sum of Rs. 7,000, interest to run at 15 percent per annum, compoundable with six monthly rests. Five items of property were hypothecated. In the third paragraph of the plaint it is stated that Bhairon Prasad, father of the plaintiff and a member of the same joint family, had subsequently acquired the equity of redemption in respect of two out of the five items of property. The plaintiff admits that the integrity of the mortgage had thereby been broken up, so that he is only entitled to claim a proportionate amount of the mortgage-money against a proportionate amount of the security. He then submits an account showing that the sum due under the mortgage-deed amounted on the date of the suit to Rs. 17,000, This, by a sum in proportion based upon a valuation of the five items of mortgaged property, he proceeds to apportion as follows:

2. Rs. 11,820-4-0 chargeable on the two items of property of which his father has become the purchaser.

3. Rs. 5,179-12-0 chargeable against the three remaining items of property, which have, as a matter of fact, been purchased by the second and third defendants under circumstances to be presently noted.

4. Inasmuch as the market-value of these properties is now less than the sum due from them under the mortgage, the plaintiff limits his claim to a sum of Rs. 4,000. The suit was contested by the third defendant, Lachman Prasad, who is the appellant now in this Court. The original mortgagor had no longer any further interest in the matter and apparently the other transferee, Bhola Singh, did not consider the property purchased by him of sufficient value to make it worth his while to contest the suit. Lachman Prasad pleaded, in effect, that the mortgage deed of the 18th of June 1808 had been completely discharged under the terms of a subsequent sale-deed of the 25th of August 1914. He made sundry allegations of bad faith against the plaintiff, or the plaintiff's father, and raised various questions affecting the merits of the dispute which have not been gone into. The main question raised by the pleadings, and the only one with which we are concerned here, is whether the mortgage deed in suit was or was not discharged by a sale-deed of the 25th of August 1914, We have bad to consider the terms of that sale-deed carefully. It was by Gokaran Singh, the original mortgagor, in favour of Bhairon Prasad, who is described in the plaint as the father of the plaintiff, living jointly with him. The property consisted of all the five items covered by the mortgage-deed of Jane the 18th, 1908, and certain other properties besides. The consideration was stated at Rs. 30,000. Of this only Rs. 950 were actually paid to the vendor. A sum of Rs. 3,566 was left in the hands of the vendee Bhairon Prasad in full satisfaction of a decree held by him against the vendor Gokaran Singh. There remained a large item of Rs. 25,483, in respect of which it is stated that it is left in deposit with the vendee to discharge three previous mortgage-bonds. One in this bond of Jane the 18th, 1908, which it is now sought to pat in suit, and the other two are bonds in favour of Jagdamba Prasad, own brother of Bhairon Prasad. It so happened that at or about the time when this sale-deed was executed, certain properties belonging to Gokaran Singh were under attachment in execution of simple money decrees, The auction-sale actually took place on the 20th of August 1914 five days prior to the execution of this sale-deed. At this auction-sale three of the items of property comprised both in the mortgage-deed of June the 18th, 1908, and in the sale deed of August the 25th 1914, were purchased by certain auction-purchasers, including the defendant appellant Lachman Prasad. These persons, no doubt, bid for and purchased the equity of redemption subject to the mortgage of June the 18th, 1908, which no one suggests to have been discharged before the 20th of August 1914, the date of the auction-sale. As the first Court has rightly remarked, Lachman Prasad, defendant, will be somewhat fortunate if the result of this litigation is to leave him in possession of the item or items of property purchased by him, without his having to contribute any portion of the mortgage-debt. The question, however, is whether the present suit as brought is maintainable. The Trial Court held that the mortgage-deed of June the 18th, 1908, had been completely discharged by the execution of the safe-deed of August the 25th, 1914, so that no suit could be maintained upon its basis. The learned District Judge in appeal has reversed this finding. He puts the point somewhat curiously; that is to say, he records a finding that the sale-deed of the 15th of August 1914 does not bar the present suit. We san only understand him to have found that the mortgage in suit was not discharged, or, at any rate, was not completely discharged, by the aforesaid sale deed. On this finding the lower Appellate Court has remanded the suit to the Court of first instance in order that a variety of other issues raised by the pleadings may be gone into. The appeal before us being against the order of remand, we have simply to determine the question on which the two Courts below have differed. It is to be noted at once that, for the purposes of argument, we have to treat the plaintiff Lachmeshwar Prasad and his father Bhairon Prasad as virtually one and the same person. This is, insubstance, the position taken up by the plaintiff himself in the third paragraph of the plaint, to which we have referred, and the question has been discussed on this basis in both the Courts below. If Lachmeshwar Prasad, the mortgagee under the deed of June the 18th, 1908, were a person totally unconnected with Bhairon Prasad, the vendee under the deed of August the 25th, 1914, it is obvious that other considerations would necessarily arise. Under existing circumstances, when Bhairon Prasad covenanted to retain in his own hands out of the total purchase-money of Rs. 30,000 a sum estimated as sufficient to pay off the mortgage of Jane the 18th, 1903, in favour of his own son, it seems to us that the Trial Court was right in holding that the said mortgage was thereby paid off and extinguished. No question would have arisen whatsoever, had it not been for the fast that the equity of redemption with regard to the less important items of the mortgaged property had been put up for sale four days before the execution of the sale-dead of August the 25th, 1914. To that extent no doubt Bhairon Prasad failed to receive the full consideration for which has had stipulated in return for the Rs. 30,000 set forth as the purchese-money under the sale-deed. The contingency was contemplated by the deed itself and a remade provided in the event of its turning out that the vendor was unable to convey a good title in respects of the whole of the property purporting to be sold. Bhairon Prasad has elected not to avail himself of this remedy but to set up the claim that, in consequence of this partial failure of consideration, he himself has only partially discharged the debt due under the mortgage of June the 18th, 1908, and is entitled to maintain a suit for the balance. In argument before us cases have been quoted, such as that of Har Chandi Lal v. Sheoraj Singh 39 Ind, Cas. 343 : 39 A. 178 : 32 M. L. J. 241 : 15 A. L. J. 223 : 1 P. L. W. 330 : 5 L. W. 502; (1917) M. W. N. 290 : 25 C. L. J. 316 : 21 M. L. T. 292 : 21 C. W. N. 765 : 19 Bom. L. R. 444 : 41 I. A. 60 (P. C.) and Ram Kishan. Das v. Fakir Chand 19 Ind. Cas. 18 : 11 A. L. J. 386, in which questions arose as to the extinguishing of a prior mortgage on the execution of a subsequent mortgage. The former of the two eases was, on the faac of it, a very peculiar one. The decision eventually arrived at was that the later covenant of mortgage which was pleaded as having discharged an earlier mortgage, was wholly void and inoperative so far as that earlier mortgage was concerned, because the contract had been entered into with a person who bad no concern whatever in the mortgage property and no right to deal with the same. It seems to us that the case is altogether a different one from that now before us. In our opinion the Trial Court took the right view. Bhairon Prasad discharged the mortgage of the 18th of June 1908, when he accepted the sale-deed of the 25th of August, 1914 in his own favour. There was a partial failure of consideration under that deed and for this an appropriate remedy was provided. The fact that Bhairon Prasad has passed over that remedy and has thought it more profitable to claim to set up the mortgage of June the 18th, 1908, with its heavy rate of interest, cannot now affect the question whether the mortgage was or was not discharged by the execution of the sale-deed.

5. We, therefore, set aside the order under appeal and restore the decree of the first Court with costs in favour of the defendant-appellant throughout.


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