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Maksud Ali Khan and anr. Vs. Sheikh Abdullah Khan and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1928All77; 108Ind.Cas.728
AppellantMaksud Ali Khan and anr.
RespondentSheikh Abdullah Khan and ors.
Cases ReferredMohammad Khaleef Shirazi v. Les Tanneries Lyounaises A.I.R.
Excerpt:
- - in such cases, it is clearly to the benefit of the purchaser to keep the prior incumbrance alive and to put the same as a shield against the claim of the puisne incumbrancer, and therefore in such cases, in the absence of evidence to the contrary, the presumption is that he did not intend, by discharging the prior mortgage, to extinguish the same but intended to keep it alive. the appellants did not, by their declaration, act or omission, cause or permit the plaintiff to believe something which the plaintiff did not believe and to act upon such belief, and to change his position in any way we, therefore, fail to appreciate the grounds on which the courts below held that the appellants were estopped from calling in question the validity of the mortgage in suit. nazir-un-nisa as well......in the two villages and, though the plaintiff was entitled to a decree for sale of mt. nazir-un-nisa's share, such a decree could not be granted to the plaintiff inasmuch as there was nothing on the record to show the extent of mt. nazir-un-nisa's share in village asafpur. but it held that the defendants-appellants, having undertaken to discharge the mortgage in suit out of the sale consideration left in their hands, were estopped from disputing the validity of the mortgage, and that the defendants-appellants were not entitled to set up the prior mortgage discharged by them as a shield against the plaintiffs' claim and, accordingly, it granted a simple money decree to the plaintiff against the defendants-appellants. the defendants-appellants filed an appeal in the lower court and the.....
Judgment:

Iqbal Ahmad, J.

1. This is a defendants' appeal and arises out of a suit for sale on a mortgage, dated the 4th August 1919. The mortgage was executed by Mt. Nazir un-Nisa, defendant 1, on her own behalf and on behalf of her minor son Sayed Ahmad Khan, defendant 2. The mortgage was for a sum of Rs. 500, and the mortgaged property consisted of shares in two villages, Nagla Rumi and Asafpur, which belonged both to Mt. Nazir-un-Nisa and to Sayed Ahmad Khan. Though Mt. Nazir-un-Nisa was a certificated guardian of her minor son, she executed the mortgage-deed without taking the permission of the District Judge.

2. About a month after the execution of the mortgage-deed, viz., on the 10th September 1919, Mt Nazir-un-Nisa, with the sanction of the District Judge, sold the share belonging to her and to her minor son in Nagla Rumi to defendants 3 and 4, who are the appellants before us, and, out of the sale consideration, left with the vendees the amounts due on the basis of a prior mortgage and of the mortgage now in suit for payment to the respective mortgagees. The appellants discharged the prior mortgage, but did not pay the amount left with them for payment to the plaintiff-respondent, and hence the suit giving rise to the present appeal was brought by the plaintiff for recovery of the mortgage debt by sale of the shares in the two villages mortgaged.

3. Sayed Ahmad Khan did not contest the suit. Mt. Nazir-un-Nisa alleged that out of the entire sum of Rs. 500 paid before the Sub-Registrar, the plaintiff-respondent took back a sum of Rs. 250 from her and she only received Rs. 250 as consideration for the mortgage in suit.

4. The defendants-appellants contested the suit mainly on two grounds: (1) that the mortgage having been executed without the permission of the District Judge was invalid and (2) that they having discharged the prior mortgage were entitled to set up that mortgage as a shield against the plaintiff's claim.

5. The trial Court held that the mortgage in suit was supported by consideration and that the entire mortgage-money, viz., Rs. 500, was paid to Mt. Nazir-un-Nisa. This finding of the trial Court was not challenged in the lower appellate Court, and has not been challenged before us.

6. The trial Court further held that the mortgage in suit having been executed without the permission of the District Judge, was ineffective so far as it affected the interest of the minor in the hypothecated property and, therefore, the plaintiff-respondent was not entitled to a decree for sale of the minor's share in the two villages and, though the plaintiff was entitled to a decree for sale of Mt. Nazir-un-Nisa's share, such a decree could not be granted to the plaintiff inasmuch as there was nothing on the record to show the extent of Mt. Nazir-un-Nisa's share in village Asafpur. But it held that the defendants-appellants, having undertaken to discharge the mortgage in suit out of the sale consideration left in their hands, were estopped from disputing the validity of the mortgage, and that the defendants-appellants were not entitled to set up the prior mortgage discharged by them as a shield against the plaintiffs' claim and, accordingly, it granted a simple money decree to the plaintiff against the defendants-appellants. The defendants-appellants filed an appeal in the lower Court and the plaintiff filed cross-objection.

7. The lower appellate Court agreed with the trial Court in holding that by paying the prior mortgage the defendants-appellants did not obtain a priority over the plaintiff's mortgage and that they were estopped from pleading that the mortgage in suit was invalid. It also agreed with the trial Court in holding that the mortgage, having bean executed without the permission of the District Judge, was ineffectual to adversely affect the minor's share in village Asafpur and, as the extent of Mt. Nazir-un-Nisa's share in that village was not ascertainable, the plaintiff was not entitled to a decree for sale of the share in Asafpur. As a result of these findings, the lower appellate Court passed a decree for the full amount claimed by the plaintiff by sale of the share in village Nagla Rumi. In appeal before us the decrees of the Courts below are assailed on the two grounds that were raised by the defendants-appellants in the trial Court and that have been noted above.

8. We agree with the Courts below in holding that by discharging the prior mortgage the defendants-appellants are not entitled to set up the prior mortgage discharged by them as a shield against the plaintiff's claim. As already stated, there were two incumbrances on Nagla Rumi on the date of the purchase made by the appellants. Out of the sale consideration sufficient amount was left with the appellants for the discharge of both the mortgages. The appellants having undertaken to pay off both the incumbrances cannot by paying off the prior mortgage, step into the shoes of the prior mortgagee and be allowed to claim priority as against the plaintiff-respondent. In all cases whore a subsequent purchaser claims priority over a puisne mortgagee by reason of his having discharged a prior mortgage, the question is whether or not it was his intention, while discharging the prior mortgage, to keep that mortgage alive as against the puisne mortgage and, in absence of evidence to the contrary, it is presumed that a man acts according to his interest: vide Gokal Das Gopal Das v. Puranmal Prem Sukhdas [1884] 10 Cal. 1035. But when a purchaser of a property, subject to various incumbrances, undertakes to discharge all those incumbrances out of the sale consideration, the presumption is that he intended to discharge and extinguish all the incumbrances over the property purchased by him and not to keep the prior mortgages alive to be set up as a shield against the claims of the puisne incumbrancer. The reason for this is not far to seek. When the purchaser retains out of the sale consideration amount enough to discharge all the incumbrances over the property purchased by him, he intends to clear the property of all the incumbrances. The case is otherwise when a purchaser does not undertake to discharge all the incumbrances on the property purchased by him. In such cases, it is clearly to the benefit of the purchaser to keep the prior incumbrance alive and to put the same as a shield against the claim of the puisne incumbrancer, and therefore in such cases, in the absence of evidence to the contrary, the presumption is that he did not intend, by discharging the prior mortgage, to extinguish the same but intended to keep it alive. This was the view taken by this Court in the Full Bench decision in Mahomed Sadiq v. Gaus Mahomed [1911] 33 All. 101 and Mahhan Lal v. Nathi A.I.R. 1923 All. 503. We therefore hold that the defendants-appellants cannot claim priority as against the plaintiff-respondent.

9. But we are unable to agree with the Courts below in holding that it was not open to the defendants-appellants to attack the validity of the mortgage in suit. The Courts below were of opinion that the appellants, having undertaken to pay off the mortgage in suit out of the sale consideration left with them, were estopped from contesting the validity of the plaintiff's mortgage. In our judgment the Courts below were wrong in arriving at this conclusion. The mortgage-deed having boon executed without the sanction of the District Judge, could, in view of the provisions of Section 30, Guardians and Wards Act. be avoided by any person affected thereby. It is clear therefore that Sayed Ahmad Khan could avoid the mortgage in suit. The question then remains whether the defendants-appellants, who are transferees of Sayed Ahmad Khan's property, have a right to contest the validity of the mortgage in suit. As purchasers of the minor's property the appellants are representatives-in-interest of the minor. The relief sought in the present suit is that the plaintiff be allowed to recover the mortgage-money by sale of the property purchased by the appellants and, therefore, the mortgage in suit affects the appellants and they as representatives-in-interest of the minor, are entitled, unless estopped from doing so, to question the validity of the plaintiff's mortgage.

10. We are unable to hold that the appellants were estopped from contesting the validity of the plaintiff's mortgage. It is true that the appellants undertook to discharge the plaintiff's mortgage out of the sale consideration retained by them but the plaintiff was not a party to the sale-deed and there was no privity of contract between him and the appellants. The plaintiff had, before the purchase made by the appellants, already advanced the money secured by the mortgage. The appellants did not, by their declaration, act or omission, cause or permit the plaintiff to believe something which the plaintiff did not believe and to act upon such belief, and to change his position in any way We, therefore, fail to appreciate the grounds on which the Courts below held that the appellants were estopped from calling in question the validity of the mortgage in suit.

11. But even if the minor himself had sought to avoid the mortgage in suit, he could only be allowed to do so on condition of making restitution to the extent to which he had benefited by the mortgage, vide Nur Bakhsh v. Rukam Singh [1911] 8 A.L.J. 754 and, therefore, the appellants, as representatives-in-interest of the minor, can only be permitted to get rid of the liability created by the mortgage on condition of making restitution to the extent to which the minor benefited by the mortgage money. There is no finding by either of the Courts below on the question as to what extent the minor benefited by the mortgage in suit.

12. Moreover, as already stated, the property mortgaged to the plaintiff comprised shares not only of the minor in the two villages, but of his mother Mt. Nazir-un-Nisa as well. The plaintiff-respondent is undoubtedly entitled to enforce his mortgage as against the share of Mt. Nazir-un-Nisa in both the villages. The lower appellate Court granted a decree only for sale of the share in Nagla Rumi and declined to pass a decree for sale of the share of Mt. Nazir-un-Nisa in village, Asafpur on the ground that there were no materials on the record to determine the extent of her share in that village. The plaintiff has not challenged the decree of the lower appellate Court by way of appeal so far as it directs the dismissal of the claim for sale of the share in Asafpur. But there was obvious reason for the plaintiff not to have appealed in this Court as the probabilities were that the entire decretal amount could be realized by sale of the share in Nagla Rumi. But it is clear that as a result of our findings the plaintiff cannot be hold entitled to a decree for the sale of the minor's share in either of the two villages provided the appellants make restitution to the extent to which the minor benefited by the mortgage in suit. The question then arises: Have we jurisdiction, while modifying the decree of the lower appellate Court in favour of the appellants, to grant a relief to the plaintiff which was denied to him by the lower appellate Court. We think that Order 41, Rule 33, Civil P.C., vests us with ample jurisdiction to do so. As was pointed out by this Court in the Full Bench decision in Rangam Lal v. Jhandu [1911] 34 All. 32.

the object of Rule 33 is manifestly to enable the Court to do complete justice between the parties to the appeal, where, for example, it is essential in order to grant relief to an appellant that some relief should at the same time be granted to the respondent also, the Court may grant relief to the respondent although he has not filed an appeal or preferred an objection.

All the parties to the suit are before us and we can see no justification for not granting to the plaintiff a decree for sale of Mt. Nazir-un-Nisa's share in both the villages. By holding that it is open to the appellants to challenge the validity of the mortgage we are denying to the plaintiff-respondent the relief granted to him by the lower appellate Court, While refusing to enforce the mortgage against the minor's share we think it consonant with justice to grant the plaintiff a decree for sale of Mt. Nazir-un-Nisa's share in the villages mortgaged. Reliance has been placed by the learned Counsel for the appellants; on the case of Mohammad Khaleef Shirazi v. Les Tanneries Lyounaises A.I.R. 1926 P.C. 34. In our opinion that case is distinguishable. In that case the plaintiff sued two defendants and the suit against one of the defendants was dismissed by the trial Court but that defendant was made liable for the plaintiff's costs. The plaintiff did not appeal against the decree of the trial Court and the Court of first appeal, on appeal by the defendants, dismissed the claim against both the defendants. The plaintiff thereupon appealed to His Majesty in Council and arrayed both the defendants as respondents to the appeal. It was held by their Lordships of the Privy Council that the plaintiff, not having appealed in the Court of first appeal against the decree of the trial Court dismissing: his claim as against one of the defendants, was not entitled in appeal before their Lordships to contest the validity of the decree of the trial Court, as against that defendant. In that case the validity of the decree of the trial Court not having been assailed in the Court of first appeal, their Lordships held that to grant relief to the plaintiff against the defendant who was successful in the trial Court, would be in effect to allow 'an appeal direct to his Majesty in Council from the decree of the trial Judge' and that 'O. 41, Rule 33, Civil P.C., was not intended to apply to such an appeal.' This is not so in the present case. The plaintiff in the lower appellate Court filed cross objections against the decree of the trial Court claiming a decree for sale of the shares of Mt. Nazir-un-Nisa and of the minor. For these reasons we hold that Mt. Nazir-un-Nisa's share in both the villages is liable to answer the plain tiff's claim.

13. We cannot dispose of this appeal without having a finding from the lower appellate Court on the following points:

(1) To what extent did the minor Sayed Ahmad Khan benefit by the money advanced under the mortgage in suit

(2) What is the extent of Mt. Nazir-un-Nisa's share in village Asafpur

14. Parties will be allowed to adduce additional evidence. The findings must be returned to this Court within two months from to day's date. On receipt of the findings, ten days will be allowed for filing objections.


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