1. These appeals arise out of two suits on foot, of two mortgage-deeds, both dated 3rd December 1917, executed by one Bakhat Bahadur, in which, the same properties, seven in number, were hypothecated. One of the deeds was for Rs. 36,000 and the other for Rs. 1,950. The deed for Rupees, 36,000 was in favour of four sets of mortgagees, while the other was in favour of only three out of those four. Most of the mortgage money was left with the mortgagees for payment to certain prior mortgagees, who had encumbrances on the mortgaged properties. A peculiar feature of the deeds is that the sum advanced by each of the mortgagees was specified in the deed, making up the entire sum advanced under them. The details are. as follows:
------------------------------------------------------------------------------------------Sum advanced Sum advancedNo. of Names of mortgagees, each set under the deed under the deed Totalsets for forRs. 36,000 Rs. 1,950------------------------------------------------------------------------------------------1 Doongar Mal, Misri Lal and Ram Rs. Rs. Rs.Chander (hereafter called mor- tgagees, 1st set) ... 12,000 650 12,6502 Raghunath Sahai and Ram Sarup(hereafter called mortgagee2nd set) ... 7,000 400 7,4003 Babu Ram and Salig Ram (here-after called mortgagees 3tfset) ... 13,000 900 13,9004 Gulzari Lal and Shib Charan,(hereafter called mortgagees4th set) ... 4,000 ____ 4,000-------------------------------------------------------------------------------------------Total ... 36,000 1,950 37,950-------------------------------------------------------------------------------------------
2. The interest of the original mortgagor in the mortgaged properties has since passed to a number of persons who purchased it at sales held in execution of decrees against him. On 8th November 1929, the second and the third of the four sets of the mortgagees instituted suit No. 49 of 1929 for recovery of the amounts due to them under the mortgages by sale of the entire mortgaged property. They impleaded the other two sets of the mortgagees and the representatives-in-interest of the original mortgagor. On 3rd December 1929, the first and fourth sets of the mortgagees instituted suit No. 55 of 1929 for recovery of what was due to them under the mortgages, impleading their co-mortgagees (plaintiffs in suit No. 49 of 1929) and the representatives-in-interest of the mortgagor.
3. Written statements were filed by the transferees, who contested the claims of both sets of the plaintiffs in the two suits. Their main pleas were that : (1) The deeds in suit were not genuine and for consideration. (2) The properties to which the mortgages in suit relate were under attachment in execution of decrees in which the contesting defendants purchased, and therefore the mortgages were invalid. (3) Each of the suits being only for a portion of the mortgage money was bad and therefore not maintainable; and (4) one of the mortgaged properties, namely, mahal Ganga Ram Gir in village Barsua, having been exempted from the claim in suit No. 49, that suit was bad.
4. Some other pleas of minor importance were also taken; but they were not the subject of arguments in this Court and need not be mentioned.
5. The plaintiffs in suit No. 55 filed written statements in the other suit joining the plaintiffs of that suit in the prayer for sale of the mortgaged property; and in reply to the objection of the contesting defendants that the suit, being for recovery of part of the mortgage money, was bad, they requested that the two suits be connected. Similarly the plaintiffs in the first suit (No. 49) made an application that the two suits be consolidated. This application was however dismissed by the lower Court on 24th March 1930, as it thought that this course would prejudice the defendants, whose objection that the suit is not maintainable would fail. The second suit, i.e., the one brought by the first and fourth sets of the mortgagees was dismissed on that date on the ground that the plaintiffs, who were entitled only to a portion of the mortgage money, could not maintain the suit. Strangely enough the other suit, in which precisely the same question arose, was not dismissed on that date or any other date. It was tried on the merits and decreed on 14th June 1930, for such amount as was found due to the plaintiffs of that suit, under the deed for Rs. 36,000 but not as regards the other deed because the plaintiffs were directed to confine their claim to one deed only and they elected to proceed with their claim on the basis of the deed for Rs. 36,000. The learned Judge held in that suit that the plaintiffs were entitled to maintain it. First Appeal No. 347 of 1930 has been preferred by the mortgagees first and fourth sets, whose suit No. 55 was dismissed; while F.A. No. 8 of 1931 has been preferred by the contesting defendants (transferees of the original mortgagor) from the decree in suit No. 49 in favour of the mortgages second and third sets.
6. The first question which calls for decision is whether each of the two suits being for part of the mortgage money and brought by some of the mortgagees is not maintainable. This question arises in both the appeals the appellants in one contending that it is not maintainable and those in the other urging the contrary. It cannot be disputed that ordinarily a mortgage is indivisible both as regards the mortgagees and the mortgaged security, the mortgagees being joint tenants of the entire mortgaged property which is charged with every portion of the mortgage money. Where however there is severance of interests as between the mortgagees with the consent of the mortgagor, the position is different so far as the frame of the suit is concerned. The mortgagor, in the present case, states in the deed that he has borrowed specified amounts from each set of the mortgagees and that he has created a common charge in favour of all of them on the property therein specified for recovery of the total sum advanced by all the mortgagees. The implication is that as between the various sets of the mortgagees inter se each is entitled to recover, not necessarily separately, from the mortgaged property the sum advanced by him. The entire mortgaged property is hypothecated to each of them. None has priority over the other. Ordinarily it is in the interests of all the mortgagees that one suit should be brought for the recovery of the entire mortgage money due to all the mortgagees. In the present instance, for all practical purposes, one suit supplements the other; and in our opinion the lower Court should have consolidated the two suits. The defendants would not have been prejudiced so far as their liability was concerned. The learned Subordinate Judge was undoubtedly influenced by the consideration that they would be deprived of the benefit of their plea that the suits were not maintainable. The defendant is always deprived of such benefit, whenever the Court allows formal defects in the suit to be remedied by amendment or otherwise. In our opinion this ground by itself is not sufficient for refusing to exercise a discretion which the Court possesses. The ends of substantial justice should prevail over technical objections, if the Court has a discretion to adopt one course or the other. We are inclined to think that, on the date the learned Subordinate Judge rejected the application for consolidation and dismissed suit No. 55, he was of opinion that each of the suits was not maintainable. Apparently the other suit was not fixed for that date; and when it was taken up later, he was convinced by arguments of counsel that the suit was maintainable. If suit No. 55 had not already been dismissed, we have no doubt he would have re-considered the question of consolidation.
7. The general rule undoubtedly is that a mortgage is indivisible both as regards redemption by the mortgagor and recovery of the mortgage money by the mortgagee. It can be inferred from Section 60, T.P. Act, which declares that a person interested in a share only of the mortgaged property is not entitled to redeem his own share only on payment of a proportionate part of the amount due on the mortgage, and from Section 67, which empowers 'the mortgagee' to obtain a decree for foreclosure or for sale, which implies that if several persons have jointly advanced money to the mortgagor on the security of the mortgaged property, they are denoted by the word 'mortgagee,' so that some only of them cannot be considered to be the mortgagee. In Clause (d) appended to that section, which expressly negatives the right of:
a person interested in part only of the mortgage money to institute a suit relating only to a corresponding part of the mortgaged property, unless the mortgagees have, with the consent of the mortgagor, severed their interest under the mortgage
is contained in an exception to the general rule above referred to in so far as it allows a separate remedy to each of several mortgagees, who with the consent of the mortgagor have severed their interests. The extent to which each of them can separately sue the mortgagor is not clearly provided by that clause. The effect of the exception is to indicate that the prohibition contained in the earlier part of the clause does not apply to a case in which the mortgagees have severed their interests with the consent of the mortgagor, the prohibition being that one of several persons interested in part only of the mortgage money cannot institute a suit for sale or foreclosure of a corresponding part of the mortgaged property. As to whether one of several mortgagees, who 'have severed their interests with the coiv sent of the mortgagor, can sue for recovery of his share of the mortgage money by sale of the mortgaged property is neither expressly forbidden nor permitted by the section. Unless such a suit violates the general rule of indivisibility or is prohibited by some other rule of law, the question of its maintainability should be judged on general principles.
8. Where severance of interests of several mortgagees arises from their own action to which the mortgagor is not privy, it is obvious that the indivisibility of the mortgage is not affected. Any private arrangement between the mortgagees over the head of the mortgagor cannot destroy their joint character as against the mortgagor. Where however the mortgagor and all the mortgagees agree in the mortgage-deed, itself that the former should be deemed to have borrowed particular sums forming the consideration of the deed from individual mortgagees, each of the mortgagees should be considered to be a creditor to the extent of the sum advanced by him. In such a case, if the mortgaged property has also been split up and the charge of each individual mortgage is to rest of a specified part of the mortgaged property, the deed should be construed as one containing as many mortgage transactions as the number of mortgagees. As their Lordships of the Privy Council pointed out in the case to which we shall presently refer, such a conveyance is conceivable, though it is inconvenient. In the present case the entire mortgaged property is charged with the aggregate amounts due to the mortgagees. The result is that each of the creditors is a mortgagee to the extent of the sum advanced by him which is secured on the entire mortgaged property, so that none of them can claim priority as would be the case if they had advanced different sums to the mortgagor on different occasions.
9. It is open to all the mortgagees to bring one suit for recovery of the entire amount due to them by sale of the mortgaged property. Indeed, it is highly desirable that one suit only should be brought and the sale proceeds distributed among them. The question is whether some only of the mortgagees can separately sue the mortgagor for sale of the entire mortgaged property. In Gobind Ram v. Sundar Singh (1802) 15 All. 108, the right, of one of several joint mortgagees to institute a suit for recovery of Ms share of the mortgage money by sale of the mortgaged property was negatived, even though the other mortgagees be impleaded as defendants. In Kanhai Lal v. Jwala Dei (1896) A.W.N. 153, in which one of two mortgagees had insituated a suit impleading his comortgagee, and obtained a decree for 'sale, it was held that the other mortgagee could not subsequently, bring another suit for recovery of his share of the mortgage money. The decision was based on the ground that the same mortgage cannot be enforced by sale of the whole mortgaged property twice. Though the judgment does not make an express mention of that fact, it is clear that the case was one in which no severance of interest between the two mortgagees had taken place.
10. Sunitabala Debi v. Dhara Sundari Debi 1919 P.C. 24 is a case which appears to us to be on all fours with the present case. By a compromise between two ladies and the representatives of the estate of a deceased relative it was agreed that each of them should receive a sum of Rs. 80,000, and that the entire sum, viz., Rupees 1,60,000, would be a charge on an estate of which the value was mentioned to be Rs. 2,95,000. The two ladies and the Administrator-General of Bengal, who represented the estate of the deceased, had executed the compromise. It was thus clearly a case in which two mortgagees were entitled to specified sums of money collectively charged on the entire estate and this was consented to by the Administrator-General, Bengal, who should be considered to have been in the position of a mortgagor. One of the two ladies instituted a suit for recovery of Rs. 80,000 and interest, awarded to her under the compromise, by sale of half of the property charged under the compromise. The other lady was impleaded as a co-defendant with the then representatives of the estate. Objection was taken to the frame of the suit on the ground that one of the two mortgagees could not maintain a suit for recovery of her share of the mortgage money by sale of half of the mortgaged property. The trial Court decreed the suit. On appeal the High Court allowed an application for amendment by which the plaintiff sought to have the entire property sold. After this amendment the High Court decreed the suit for sale of the entire mortgaged property. We may mention in passing that neither the report in Sunitabala Debi v. Dhara Sundari Debi 1919 P.C. 24 nor that in Sunitabala Debi v. Dhara Sundari Debi 1919 P.C. 24, mentions the fact htat the plaintiff had originally sued for sale of half only of the mortgaged property and subsequently the High Court allowed the amendment seeking a decree for sale of the entire property mortgaged for recovery of the money due to both mortgagees. We have obtained these facts from the report of the same case in Sunitabala Debi v. Dhara Sundari Debi 1919 P.C. 24. This fact is material for ascertaining the exact ratio decidendi adopted by their Lordships of the Privy Council in deciding the case. Their Lordships observed as follows:
This mortgage clearly affects the conveyance of the real estate of the mortgagees as tenants-in-common, and no redemption could be effected of part of the property by paying to one of the mortgagees her separate debt. It is not a mortgage to each of a divided half but a conveyance to them of the whole property.
Where a mortgage is made by one mortgagor to two tenants-in-common, the right of either mortgagee who desires to release the mortgaged property and obtain payment of the debt, if the consent of the co-mortgagee cannot be obtained, is to add the co-mortgagee as a defendant to the suit and to ask for the proper mortgage decree, which would provide for all the necessary accounts and payments, excepting that there could be no judgment for a sum of money entered as between the mortgagee defendant and the mortgagors.
11. It cannot be said that their Lordships contemplated a claim by one of the two mortgagees who are tenants-in-common for recovery of the entire mortgage money and that as against the mortgagor the integrity of the mortgage has to be maintained; but it seems to us that their Lordships meant that one of the two mortgagees, where the consent of the other could not be obtained, could sue for recovery of what, was due to him; but in granting him the relief everything should be done which might be necessary to work out the entire (security except so far that the plaintiff mortgagee alone would recover in that suit what was due to him. This is made clear by the remark that:
In their Lordships' opinion the amendment of the plaint as directed by the High Court is not properly worded, and they consider the trial Judge should, on the re-hearing of the suit, mate such amendment as may be necessary and proper.
12. This is also clear from the observation that:
There could be no judgment for a sum of money entered as between the mortgagee defendant and the mortgagor.
13. If one of the two mortgagees must sue for the entire mortgage money by sale of the mortgaged property and the Court is to decree the claim, a judgment has to be entered as between the mortgagee defendant and the mortgagor. The fact that the Court may safeguard the interest of the mortgagee defendant and pay to the plaintiff only his share will not prevent judgment being entered between the mortgagee defendant and the mortgagor. It seems to us that their Lordships held that one of the two mortgagees, who are tenants-in-common, can bring a suit for recovery of what is due to him by sale of the entire mortgaged property, that if payment is made to him by the mortgagor, he ceases to have any interest, but if he is not paid the entire mortgaged property will have to be sold and his share paid to him out of sale proceeds on rateable distribution. The mortgagee defendant would not be entitled to be paid, unless there is some amicable settlement between him and the mortgagor. He will have to bring a suit against the mortgagor just as the other mortgagee did. Of course, sale of the mortgaged property having already taken place, his charge will fasten on the balance of the sale proceeds which is held by the Court as substituted security. For these reasons we hold that, where one of several mortgagees who are tenants-in-common brings a suit for sale of the entire mortgaged property, making his co-mortgagees defendants, they having refused to join with him as plaintiffs, he need not sue for the mortgage money. To our mind this is clear from the fact that the High Court had allowed an amendment in the case noted above, the effect of which was to enable one of several co-mortgagees to sue for the entire mortgage money, but their Lordships disapproved of the amendment and made it clear that as between the mortgagor and the mortgagee defendant no judgment should be entered.
14. In the case before us, the second and third sets of mortgagees sued for their share of the mortgage money by sale of the entire mortgaged property, impleading their co-mortgagees as defendants, the latter having refused to join as plaintiffs. Similarly, the mortgagees first and fourth sets instituted their suit for the rest of the mortgage money. Both suits were, in our opinion, maintainable, even apart from consolidation which ought to have been allowed by the lower Court. If consolidation had been essential and the suits had not been maintainable without such consolidation, we would have ordered consolidation which we have every power to do. As a matter of fact, whether consolidation is formally ordered or not, the result would be the same as in the two appeals before us, the right and liabilities of all the mortgagees and mortgagors in whom the equity of redemption is vested will be adjudicated upon in respect of the entire mortgage money.
15. The next question of importance is whether the mortgage deeds in suit, which were executed during the continuance of an attachment in execution of the decree in which the contesting defendants purchased the mortgaged property are void as against them. It has been found by the lower Court in suit No. 49 of 1929 (F.A. No. 8 of 1931) that all the mortgaged properties except No. 6, were under attachment when the mortgage deeds in suit were executed. This finding is supported by warrants of attachment and the inventory of the property attached under them. It is not disputed that the contesting defendants purchased at the auction sale held in pursuance of the attachment. It must therefore be held that the mortgage deeds in suit, so far as they are contrary to the attachment, are void as against all claims enforceable under the attachment (Section 61, Civil P.C). The lower Court however held that, in so far as sums advanced under the deed of Rs. 36,000 were paid by the plaintiffs, mortgagees, to prior encumbrancers who had a charge on most of the mortgaged properties, the deeds in suit are valid to the extent of sums thus paid and create a valid charge on the properties which were redeemed by the plaintiffs, mortgagees.
16. The learned advocate for the defendants-appellants strenuously contended that the lower Court allowed the plaintiffs to -succeed on a claim of subrogation which claim had not been in the plaint, and that they were prejudiced inasmuch as they might have pleaded limitation and want of due execution and attestation. We are of opinion that the learned Subordinate Judge has not allowed the plaintiffs to succeed by an appeal to the doctrine of subrogation, though his judgment is somewhat vague on the point.
17. The mortgage deed of Rs. 36,000 gives details of prior encumbrances and except for three small sums the entire consideration is left with the mortgagees for the discharge of those encumbrances. It has been found that the mortgagees paid Rs. 14,003-14-3 to prior mortgagees having a charge on the mortgaged properties except No. 6. The consideration of the other ?deed, namely, that for Rs. 1,950, was partly left for payment to certain creditors who had no charge on any property and was partly paid to the mortgagors in cash. There can be no doubt that this mortgage was contrary to attachment under which the defendants-respondents claim and should be considered to be void against them. The same view must be taken as regards so much of the consideration of the mortgage for Rs. 36,000 as was paid to the mortgagors in cash; but as regards Rs. 14,003-14-3, which represents prior encumbrances discharged by the plaintiffs, mortgagees the position is quite different. The attachment was subject to the prior encumbrances. The mortgagors' equity of redemption as it was on the date of attachment should alone be considered to have been attached. The interest in the property vested in the prior I mortgagees was not affected by the attachment, and so far as that interest passed to the new mortgagees, the mortgage for Rs. 36,000 was not contrary to the attachment. Section 64, Civil P.C. merely provides that:
where an attachment has been made, any private transfer...of the property attached or of any interest there in contrary to such attachment shall be void as against all claims enforceable under the attachment.
18. A mortgage is the transfer of an interest to the mortgaged property by the mortgagor to the mortgagees. As already stated, the attachment could not affect the interest which had been previously transferred to the prior encumbrances and the only enforceable I claim which the attaching creditor had, under the attachment was in respect of the mortgaged property minus that interest. So far as that interest was transferred by the new mortgage during the continuances of the attachment, it was in no way contrary to the attachment, and to that extent the mortgage for Rs. 36,000 is valid. This result is not materially different from the one which would have been arrived at if the plaintiffs-mortgagees had been allowed to succeed on a claim of subrogation. The latter course would lend some support to the contesting defendants' contention that it was not put forward in the plaint in so many words. At the same time, the plaint makes it perfectly clear that the mortgage money under the deeds in suit was applied towards the payment of prior encumbrances. It is not necessary to invoke the aid of the doctrine of subrogation, as we hold that the mortgage deed for Rs. 36,000, on which the present claim is based, is itself valid to the extent of prior encumbrances paid thereunder.
19. Section 276, Civil P. C, of 1882, has been re-enacted as Section 64 of the present Code of Civil Procedure with slight verbal alterations which, if anything, strengthen the case of the plaintiffs, mortgagees. The words 'during the continuance of attachment' have been replaced by the words 'contrary to such attachment.' It was held under the old Code by their Lordships of the Privy Council in Dinobundu Shaw Chowdhry v. Jogmaya Dasi (1902) 29 Cal 154 that the new mortgage in circumstances similar to those of the present case was valid to the extent of the prior encumbrances paid out of the mortgage money advanced during the continuance of an attachment. Their Lordships observed as follows:
So far as mortgage for Rs. 40,000 (mortgage, made during the continuance of attachment prejudiced the execution creditor, it is void as against him: but the section does not render void, transactions which in no way prejudice him, and to hold the mortgage void so as to confer upon him a benefit, which no one ever intended he should have, is entirely to ignore the object of the section and to pervert its obvious meaning. It is impossible to hold that the effect of that section is to give an execution creditor an unencumbered fee simply instead of an equity of redemption against the intention of the parties.
20. Accordingly we hold, on the language of Section 64, Civil P.C. and on the authority of the case noted above, that the conclusion arrived at by the lower Court as regards the liability of the mortgaged properties other than No. 6 in respect of Rs. 14,003-14-3 is correct.
21. One of the questions raised in the lower Court was that the deeds in suit were not genuine or for consideration. That Court held those deeds to be genuine. As regards consideration, it found that the deed for Rs. 36,000 was valid to the extent of Rs. 14,003-14-3. We have already mentioned this fact. It recorded no finding as regards the consideration of the other mortgage deed for Rs. 1,950, as it dismissed suit No. 55 of 1929 (in which the claim on the basis of that mortgage was persisted in) on a preliminary ground. It recorded no rending on that part of the case in the other suit, as the plaintiffs elected to confine their claim to the mortgage for Rs. 36,000. The question is not material, as we have 'held that that mortgage is void as against the contesting defendants having regard to Section 64, Civil P.C. The lower Court decreed five ninths of Rupees 14,003-14-3 in suit No. 49 of 1929 (F.A. No. 8 of 1931), which represents the share of the plaintiffs of that suit, The remaining four ninths of that sum must be deemed to be the share of the plaintiffs of suit No. 55 of 1929 (F.A. No. 347 of 1930), which was dismissed by the lower Court. In the view of the case we have taken, this latter suit should also be decreed. Though the lower Court has left other issues undecided, Ave think that it is not necessary for us to remand the suit or remit issues, as the findings of the lower Court confirmed by us in appeal No. 8 of 1931 have become conclusive. All those who are parties in suit No. 55 of 1929 are also parties in the other suit. Nor is there any material question which cannot be disposed of on the materials before us. The remaining four-ninths of Rupees 14,003-14-3 represents the share of the plaintiffs in suit No, 55 of 1929 (F.A. No. 347 of 1930). A decree in terms similar to those of the decree in suit No. 49 of 1929 (F.A. No. 8 of 1931) should be passed in suit No. 55 of 1929 (F.A. No. 347 of 1930).
22. The only other question which was urged before us in F. A. No. 347 of 1930 has reference to property No. 6, as to which the lower Court held in the other case that there was no evidence as to whether it was under attachment in execution of decree. Accordingly it directed sale of that property. If all the issues arising in the connected suit had been decided 'by the lower Court, this part of the decree would have been otherwise, as we find, from the evidence of Doongar Mal, one of the mortgagees, 'but property No. 6 (village Barsua, mahal Ganga Ram Gir) had been sold in execution of a decree obtained by a prior mortgagee before the present suit, was brought.' He made this statement in answer teethe contesting defendants' plea that one of the mortgaged properties not having been included in the claim the suit was bad. He explained the reasons why that property had been, left out. Accordingly we must hold that suit No. 55 of 1929 is not bad for the reason that one of the mortgaged properties has been left out, as it has been sold at the instance of a prior mortgagee and the plaintiffs-mortgagees can now have no claim to ale thereof. This fact did not appear in suit No. 49 of 1929 (F.A. No. & of 1931), and the decree of the Court directing the sale of property No. 6 will be ineffectual.
23. The result is that F. A. No. 8 of 1931 is dismissed with costs, F.A. No. 347 of 1930 is allowed with proportionate costs, and we direct that a decree in terms similar to that in suit No. 49 of 1929 (F.A. No. 8 of 1931) giving six months' time for payment from this date be passed for recovery of four-ninths of Rupees. 14,003-11-3 except in so far that property No. 6 will not be sold. Cross-objection filed by Krisna Murari Lal and another is dismissed.