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Charni Vs. Raj Bahadur and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Judge
Reported in2Ind.Cas.495
AppellantCharni
RespondentRaj Bahadur and ors.
Cases ReferredHassan Bhai v. Umaji
Excerpt:
mortgage - prior and puisne mortgagees--prior' mortgagee purchasing property in execution of his own mortgage decree--puisne mortgagee entitled to be redeemed--registration act (iii of 1877), section 50. - - the plaintiff, charm',on the 19th august 1907 brought the suit out of which this appeal has arisen for sale of the property upon his mortgage and he impleaded the mortgagors and the 1st mortgagee, as defendants to his suit. what would be the good of a priority which was lost by the very act of putting it in force......that the plaintiff could not obtain a decree against the mortgaged property without redeeming the prior mortgage in favour of raj bahadur defendant. the learned munsif decreed the claim holding that raj bahadur was in possession as purchaser under his decree and not as mortgagee and that he purchased the property with notice. in support of this view he relied on abool hossein v. raghunath sahu 13 c. 70. the learned judge reversed the decree of the learned munsif and dismissed the plaintiffs' suit. he relies on section 50 of the registration act and remarks 'the learned munsif has in one sentence of his judgment brushed away section 50 altogether with the remark that it can have no application as raj bahadur has purchased the property under his decree. but on what principle does he gain.....
Judgment:

1. Jassu father of defendants Nos. 1 to 3 mortgaged the property in suit to Charni on 8th June 1895. The mortgage was for Rs. 75 and was unregistered. Puttu Lal defendant No. 1 again mortgaged the same property to Raj Bahadur on 2nd January 1902. This mortgage was registered and it has been found by the lower appellate Court that Raj Bahadur had no notice of the former unregistered mortgage on the date on which he obtained the mortgage. The mortgage in favour of Raj Bahadur, therefore, under Section 50 of the Registration Act III of 1877 is to be deemed prior to the unregistered mortgage. This, however, does not extinguish the mortgage in favour of Charni dated 8th June 1895. Raj Bahadur brought a suit for sale upon his mortgage, but did not make Charni a party to the suit. A decree for sale was passed in favour of Raj Bahadur in execution of which he purchased the property. In the sale proclamation the mortgage was notified. The plaintiff, Charm', on the 19th August 1907 brought the suit out of which this appeal has arisen for sale of the property upon his mortgage and he impleaded the mortgagors and the 1st mortgagee, as defendants to his suit. One of the pleas raised in defence was that the plaintiff could not obtain a decree against the mortgaged property without redeeming the prior mortgage in favour of Raj Bahadur defendant. The learned Munsif decreed the claim holding that Raj Bahadur was in possession as purchaser under his decree and not as mortgagee and that he purchased the property with notice. In support of this view he relied on Abool Hossein v. Raghunath Sahu 13 C. 70. The learned Judge reversed the decree of the learned Munsif and dismissed the plaintiffs' suit. He relies on Section 50 of the Registration Act and remarks 'The learned Munsif has in one sentence of his judgment brushed away Section 50 altogether with the remark that it can have no application as Raj Bahadur has purchased the property under his decree. But on what principle does he gain priority ! Because he brings the property to sale as holder of the prior security. What would be the good of a priority which was lost by the very act of putting it in force. The Munsif's view is not one which can be seriously cntertained.''

2. The plaintiff comes here in second appeal. 1 have allowed the learned vakil for the appellant to contend that the plaintiff as a puisne mortgagee who was not made a party by the prior mortgagee to his suit for sale upon his mortgage, has in no way lost his right to have the equity of redemption sold subject to the prior mortgage. In a recent Full Bench ruling of this Court Ham Shankar Lal v. Ganesh Prasad 29 A. 385 the learned Chief Justice has said: In a properly constituted suit a puisne mortgagee or sub-mortgagee may have a sale of the interest mortgaged to them, respectively, subject in the case of a puisne mortgagee to the rights of a prior encumbrancer and subject in the case of a sub-mortgagee to the rights of redemption of the original mortgagor.' Thus it is lawful under the authority of the ruling for a subsequent mortgagee to bring the equity of redemption subject to the rights of the prior mortgagee, to sale. When the first mortgagee without making the subsequent mortgagee a party to his suit brought the property mortgaged to sale what passed to him consisted of the right, title and interest of the mortgagors as they existed at the date on which the mortgage of 2nd January 1902 was made 'with which would go the rights and interest of the mortgagee. See Gajadhar v. Mulchand 10 A. 520. This being the case, the mortgagee who is the auction purchaser is in possession of the equity of redemption which belonged to his mortgagors. He is also in possession of the rights of the prior mortgagee. The plaintiff as a second mortgagee, is under the authority of Kanti Ram v. Kutubuddin Mahomed 22 C. 33 entitled to an order for sale of the mortgaged property subject to the lien of the prior encumbrancer and the 1st mortgagee under-the authority of Hassan Bhai v. Umaji 28 B. 153 can, as the purchaser of the equity of the redemption belonging to the mortgagor, redeem that equity of redemption by paying off the mortgage money to which plaintiff is entitled. Having regard to the above authorities I hold that the 1st mortgagee who has purchased the property in execution of his mortgage decree is entitled to pay off the plaintiff the principal and interest due to him on his mortgage. If the money is not paid before the end of November 1909, the plaintiff will be entitled to sell property mortgaged subject to the principal and interest due to the defendant Raj Bahadur upon the registered mortgage dated the 2nd January 1902. I, therefore, set aside the decree of the lower appellate Court and give the plaintiff a decree as stated above. I make no order as to costs.


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