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Sinnaswami Goundan Vs. Rama Goundan and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1941Mad563; (1941)1MLJ519
AppellantSinnaswami Goundan
RespondentRama Goundan and ors.
Cases ReferredHira Singh v. Jai Singh I.L.R.
Excerpt:
- - that decree has been satisfied by means of two payments, one by the first defendant of rs. 398 by the plaintiff the decree was satisfied in full......principal opponent is the first defendant. he claims that he is equally entitled to the right of subrogation and that the sums of both rs. 398 to the plaintiff and rs. 350 to himself must be paid before either the mortgage to the seventh defendant or the mortgage to the plaintiff is paid off. the seventh defendant, who is also represented before me, does not seriously contest the position that there is a priority coming before his mortgage. the real dispute is therefore between the plaintiff and the first defendant and the question is whether the right of subrogation should be conceded to the plaintiff alone or to both the plaintiff and the first defendant.2. section 92 of the transfer of property act governs the decision of this point and it runs as follows:any of the persons.....
Judgment:

King, J.

1. This appeal raises the question of subrogation. There are three mortgages with which the appeal is concerned. The first was executed in 1917 and the mortgagee's rights in that mortgage were finally assigned to the fifth defendant who filed a suit in 1933 and obtained a decree. That decree has been satisfied by means of two payments, one by the first defendant of Rs. 350 made in 1934 and one by the plaintiff of Rs. 398 made in 1935. By the payment of that Rs. 398 by the plaintiff the decree was satisfied in full. The second mortgage was in favour of the seventh defendant and was executed on the 6th June, 1918. The third was in favour of the plaintiff executed in September, 1922. Plaintiff has obtained a decree on this third mortgage and the question is as to the order in which the money which will be realised by the sale of the mortgaged properties is to be distributed. Plaintiff claims that he is to be paid first the sum of Rs. 398 which he utilised to pay off the first mortgage, that the seventh defendant should then be paid the amount due under his mortgage, and thirdly, that the balance should be paid in satisfaction of the plaintiff's own mortgage. Plaintiff's principal opponent is the first defendant. He claims that he is equally entitled to the right of subrogation and that the sums of both Rs. 398 to the plaintiff and Rs. 350 to himself must be paid before either the mortgage to the seventh defendant or the mortgage to the plaintiff is paid off. The seventh defendant, who is also represented before me, does not seriously contest the position that there is a priority coming before his mortgage. The real dispute is therefore between the plaintiff and the first defendant and the question is whether the right of subrogation should be conceded to the plaintiff alone or to both the plaintiff and the first defendant.

2. Section 92 of the Transfer of Property Act governs the decision of this point and it runs as follows:

Any of the persons referred to in Section 91 (other than the mortgagor) and any co-mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee.

The right conferred by this section is called the right of subrogation, and a person acquiring the same is said to be subrogated to the rights of the mortgagee whose mortgage he redeems.

A person who has advanced to a mortgagor money with which the mortgage has been redeemed shall be subrogated to the rights of the mortgagee whose mortgage has been redeemed, if the mortgagor has by a registered instrument agreed that such persons shall be so subrogated.

Nothing in this section shall be deemed to confer a right of subrogation on any person unless the mortgage in respect of which the right is claimed has been redeemed in full.

3. It is argued for the plaintiff, who is the appellant here, that there can be no right of subrogation unless a mortgage has been completely redeemed and therefore it is only by the act of some person which results in the complete redemption of the mortgage that any right of subrogation can be created. : In the present case as the first defendant paid Rs. 350 on the 20th August, 1934, and the mortgage was still left outstanding in part after that payment he could, by that payment, acquire no right of subrogation. It was the plaintiff's payment alone which resulted in the redemption of the mortgage. It does not seem to me that such a position is in accordance with the equitable principles upon which the right of subrogation is based. Nor do I find anything within Section 92 itself which prohibits a claim made by the first defendant in the circumstances of this case. The one essential proviso for the coming into existence of the right of subrogation is that a mortgage shall have been redeemed in full. When the present suit was filed the mortgage of 1917 had been redeemed in full. There appears to me therefore nothing in the section itself to prevent any person who is qualified by the first portion of the section from claiming a right of subrogation. It is not denied by any one before me that both the plaintiff and the first defendant are qualified within the first clause of Section 92 and it is obviously a mere accident that the payment by the first defendant happened to be prior in time to the payment by the plaintiff. If the situation be analysed as a whole it will be clear that this mortgage has been paid off by two persons, neither of whom would have been able to pay it off without the help of the other. I cannot see any principle upon which one of these persons should be granted and the other denied the right 6f subrogation. As I see it, all that the section requires is that when the right is claimed the mortgage shall have been redeemed in full. I have not now to consider whether the first defendant had or had not the right of subrogation during the twelve months or so which intervened between his payment and that of the plaintiff. What I have to decide is whether the first defendant could claim the right of subrogation while the present suit was pending. There are no direct authorities dealing with a similar situation to which my attention has been called. But it seems to me that the discussion of the Full Bench of the Allahabad High Court at the conclusion of their judgment in, Hira Singh v. Jai Singh I.L.R. (1937) All. 880 and the facts of that case, can be utilised in support of the position that both the first defendant and the plaintiff in this appeal are entitled to the right of subrogation. It is pointed out by the learned Judges in that paragraph that the section does not require that the person claiming subrogation should himself have paid the entire amount of the previous mortgage debt. The facts of the Allahabad case are that the mortgagor sold the mortgaged properties to three separate purchasers contracting with each of them that they should pay off a portion of the mortgage debt binding upon the property, and the mortgage debt was eventually paid off on the same day by all the three purchasers with the addition of a small sum paid by the mortgagor himself. Of course in one sense of the word the payments by the three vendees in this case could be called simultaneous. But if the situation be more closely analysed, it follows that one of the three vendors must have paid first, another must have paid second and the third must have paid third even if there were only a few minutes interval between each of the payments. If the argument of the learned Counsel for the appellant in this case were accepted it would follow that though the vendee who paid first and the vendee who paid second would get no right of subrogation, the vendee who paid last would have a right of subrogation for the full amount of the payment. Such a situation could never have been contemplated as possible by the Legislature; and as has already been indicated, there is nothing in Section 92 which lays it down that when a mortgage is paid off by more than one person only the person who makes the final payment in point of time is entitled to the right of Subrogation. It seems to me therefore that the decree of the lower appellate court in this matter, ordering that both the first defendant and the plaintiff should be entitled to this right in the payment of the money realised by the sale of the mortgaged properties is the correct decree. This appeal fails and must be dismissed with costs.

4. There is however an application on behalf of the appellant under the Agriculturists' Relief Act (Act IV of 1938). This application will be remitted to the court of first instance for disposal and the decree of this Court will be subject to its decision.

5. Leave to appeal is refused.


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