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Muthammal Vs. Razu Pillai Alias Subbaraya Pillai and ors. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported inAIR1918Mad103; 44Ind.Cas.753
AppellantMuthammal
RespondentRazu Pillai Alias Subbaraya Pillai and ors.
Cases ReferredRangayya Chettiar v. Parthasarathi Naickar
Excerpt:
mortgage - prior and puisne encumbrancers--decree for sale in first mortgagee's suit--puisne mortgagee not impleaded--purchaser at auction sale, rights of--accounts of profits, enquiry as to, after date of sale--revivor of mortgage, nature and extent of--subrogation, principles relating to--improvements, right to, by transferee from purchaser--transfer of property act (iv of 1882), section 51. - 1. this is an appeal by the plaintiff from the decree of the temporary subordinate judge of ramnad, dated 21st september 1914, in a suit to enforce a mortgage. the question is what amount is due to the 4th defendant on two prior mortgages which, it is agreed, should be deemed to be still outstanding against the plaintiff. on march 29, 1899, defendants nos. 1 to 3, the owners of certain houses in the town of madura, mortgaged them to the hindu permanent fund of that town to secure the repayment of the sum of rs. 1,500 and interest. on the 26th september of the same year they again mortgaged the same houses and certain lands of theirs to sevugan chetty, the 4th defendant to secure the repayment of rs. 1,000 and interest. on february 9, 1901, they again mortgaged the houses alone to the.....
Judgment:

1. This is an appeal by the plaintiff from the decree of the Temporary Subordinate Judge of Ramnad, dated 21st September 1914, in a suit to enforce a mortgage. The question is what amount is due to the 4th defendant on two prior mortgages which, it is agreed, should be deemed to be still outstanding against the plaintiff. On March 29, 1899, defendants Nos. 1 to 3, the owners of certain houses in the town of Madura, mortgaged them to the Hindu Permanent Fund of that town to secure the repayment of the sum of Rs. 1,500 and interest. On the 26th September of the same year they again mortgaged the same houses and certain lands of theirs to Sevugan Chetty, the 4th defendant to secure the repayment of Rs. 1,000 and interest. On February 9, 1901, they again mortgaged the houses alone to the plaintiff's husband (deceased) to secure the repayment of Rs. 500 and interest. Sevugan Chetty sued on his mortgage in the Madura Munsif's Court, obtained a decree for Rs. 1,265-10 0 and further interest till payment, and for sale of the mortgaged properties, brought them to sale and purchased the houses on the 15th April 1904 for Rs. 1,100 and the lands on the 21st August 1905 for Rs. 500, and soon after obtained possession. His decree was satisfied except for a small sum of about Rs. 95. As the Fund had a first mortgage on the houses, Sevugan Chetty after his purchase paid to the Fund Rs. 2,537-6-11 on June 16, 1906, that being the sum then due for principal and interest, and redeemed the mortgage. Plaintiff's husband was not a party to Sevugan Chetty's suit, and was not bound by the proceedings therein. He, in September 1906, claimed to redeem Sevugan Chetty, unless he was himself redeemed; Sevugan Chetty was quite willing to be redeemed on payment of the sum due on foot of both his mortgages, but nothing was done as plaintiff's husband probably found that the properties were not worth more than the value of the prior mortgages. Sevugan Chetty has subsequently sold the properties and the purchasers of the houses are parties to this suit. Plaintiff's husband died in August 1912 without taking any steps to enforce his mortgage. In the meantime house property in Madura had risen considerably in value and the plaintiff instituted this suit in December 1912, claiming over Rs. 5,000 on her mortgage offering to redeem Sevugan Chetty or his assignees, but claims to do so on payment of what would be found due on the prior mortgages up to the date of delivery of possession to Sevugan Chetty, Savugan Chetty and his assignees on the other hand claim the whole amount that would be found due according to the terms of the deeds of mortgage up to the date of payment, without taking into account the profits or the income which they have received from the lands and houses. The learned Judge in the Court below has substantially accepted the contention of Sevugan Chetty, and allowed the amount due up to the date of the written statement in this suit--why that particular date was fixed is not clear- though in calculating the sum due he made a mistake. The question then is, on what basis is to be calculated the amount due on the prior mortgages which must be deemed to be still outstanding as against the plaintiff.

2. A number of cases were referred to in which the question has come up for decision, but before we deal with them let us first consider how the matter stands on principle. A mortgagee who sues for foreclosure of the equity of redemption or for the sale of the secured properties, if he succeeds, gets the title of the mortgagor as it stood on the date of his mortgage or transfers that title to the purchaser, free from all interests or liens subsequently created by the mortgagor, provided he makes the owners of such interests or liens parties to the suit; but if he omits to make any of them parties, their rights or liabilities are not affected, but the purchaser (we are concerned in this case only with sales, though the same principle would apply to foreclosure also) would acquire the rights in the mortgaged properties of all the persons who were parties, just as if he had obtained an assignment from all of them, without, however, a merger of the interests or extinction of the liens so acquired. It is immaterial whether the purchaser is the mortgagee who sued, or another person except that the latter would be subrogated to the rights of the mortgagee only to the extent to which the debt was paid out of the price. It must, however, be remembered that the several interests or liens so acquired are kept distinct or kept alive only against the excluded party; for example, the purchaser at a first mortgagee's sale in a suit against the mortgagor to which the puisne incumbrancer is not a party, cannot by subrogation claim to keep alive the first mortgage debt against the mortgagor. This is a matter of substantive rights and no mere conveyancing device can give a larger right; and the same result would follow if instead of a purchase in a Court sale, the purchaser had obtained by private treaty a transfer of the first mortgage and the equity of redemption subject to that mortgage. In such a case as between himself and the mortgagor, the purchaser assumes the payment of the mortgage and whether on payment he extinguishes the debt or takes a transfer, cannot in any way affect the mortgagor. Further, if a purchaser agrees with the mortgagor to pay all the encumbrances, he cannot by paying an earlier mortgage keep it alive as against a puisne encumbrance, for he has got all he bargained for, and by merely performing his own obligation cannot get a larger right. The matter may also be viewed in another aspect which brings it closer to the present question. The mortgagor having given money's worth to the purchaser to pay all the encumbrances, when the purchaser pays them or any of them, he does so really with the money of the mortgagor and the mortgage is extinguished in just the same way as if it had been paid by the mortgagor himself, pro-vided that the purchaser is not deprived of the property given to him. If, before he is deprived of the property given to him by the mortgagor, he has derived any benefit from it, to that extent it is the mortgagor's money in his hands for which he must account in a suit to redeem him. It follows, therefore, that if the mortgagor or the owner of the final equity of redemption is not made a party to the suit, the purchaser at the sale at the best acquires only the interest of the mortgagee and he can be redeemed on payment of whatever is due on the mortgage at the time of payment, on taking accounts, as if such purchaser was a legal assignee of the mortgage. Sivathi Odayan v. Ramasubbayyar 8 M.L.J. 21 : 7 Ind. Dec. 402; Dadoba Arjunji v. Damodar Raghunath 8 Ind. Dec. 803. If the mortgage was a simple mortgage the purchaser would be entitled to the whole of the principal and interest then due. If, however, such a purchaser takes possession claiming to do so as purchaser of the equity of redemption, though he did not obtain the title, he would be accountable for the profits derived from the property, for such profits would be money of the mortgagor in his hands. If after such purchase he does not get possession as purchaser of tine equity of redemption, but by subrogation by paying a mortgagee with possession, he can only be called on to account on foot of the mortgage with possession when that mortgage is sought to be redeemed. If the owner of the equity of redemption is a party to the suit, but a puisne encumbrancer is not, the purchaser becomes the assignee of the mortgage sued on, as well as the transferee of the equity of redemption subject to the mesne mortgage, and if the purchaser obtains possession on sale from the owner, he must account for the profits at least in cases where the price he pays is not more than sufficient to pay the mortgage sued on; for in such a case the purchaser pays nothing for the equity of redemption and the profits of the land are to be considered as the money of the mortgagor placed in the hands of the purchaser to discharge the mortgage pro tanto. If beyond the value of the mortgages a price is paid for the equity of redemption and the purchaser gets possession from the owner of the equity of redemption who is and who is entitled to be in possession, it may be the purchaser would not be bound to account for the profits (Jones on Mortgages, Volume II, Section 1118a); but we think justice requires that there should be an apportionment of the profits between the value of the mortgage and of the equity of redemption.

3. In this case all the three mortgages are simple mortgages and the mortgagees as mortgagees were not entitled to possession either before or after default. The price paid at the Court sale was not sufficient even to pay the mortgage sued on. The 4th defendant and his assignees would, therefore, be entitled to the principal and interest due on foot of the two mortgages dated March and September 1899 and be bound to account for the rents and profits of the properties from the respective dates on which the 4th defendant obtained possession through Court, the account being carried up to the date fixed for payment.

4. This view is consistent with and, we think, supported by the authority of the cases binding on us. In Umes Chunder Sircar v. Zahur Fatima 17 I.A. 201. Zahur Fatima sued on a mortgage dated the 29th July 1873 executed to her predecessor-in-title, obtained a decree in 1875, brought the mortgaged property to sale, purchased it herself in 1879 and soon after obtained possession. She did not join, as parties to her suit, the owners of the encumbrances created before the institution of her suit. The plaintiff became the assignee of these mortgages and sued to enforce them. Zahur's mortgage carried 24 per cent. interest, which was reduced to 6 per cent. per annum after it had passed into a decree. The Trial Judge held that her mortgage was not extinguished by the decree and she was entitled to the amount due under it irrespective of the price paid at the sale, but was entitled to interest only at 6 per cent. per annum, the rate fixed in the decree after its date, and that no interest was to be calculated after the date of the purchase, as the profits of the land were to be considered a fair equivalent for further interest. Their Lordships in the Privy Council altered the rate of interest to that provided in the bond, and the reason given by their Lordships for their alteration is this: 'The Court's power to regulate interest is given by Section 10 of Act XXIII of 1861, which answers to the 209th Section of the present Civil Procedure Code. That power is given when a plaintiff sues for money due to him, and it is a discretionary power to give such rate as the Court may think proper by decree. The decree can only operate between the parties to the suit and those who claim under them. The plaintiff getting the security of a decree has his interest reduced in the generality of cases. But the plaintiff in this case comes to take away from Zahur the benefit of the decree. It would be unjust if he could use the decree to cut down her interest, while he deprives her of the whole advantage of the decree. His case is, that as to him Zahur is still but a mortgagee, and if so, she would be allowed such benefit as her mortgage gives her. If Zahur had not got a decree, and the plaintiff had come to redeem her mortgage, he must have paid whatever interest her contract entitled her to, and the Court would have had no jurisdiction to cut it down; and that is the position in which the parties are placed by the decree in this suit.' That to our minds is conclusive to show that the mortgage which is revived against the puisne mortgagee, though extinguished against the mortgagor, is kept alive to the fullest extent as if no action had ever been brought on it. The price of redemption must be the same, whether it is the puisne incumbrancer or the mortgagor who redeems. It is on this principle that the purchaser in the prior mortgagee's execution sale is required to account for the profits. On the same principle if the purchase was for a sum less than the amount due on the mortgage sued on and if the mortgagor paid the balance, the puisne mortgagee would be entitled to redeem on payment of the price, i.e., the amount due on the mortgage less the amount paid by the mortgagor. See Bradley v. Snyder 58 Am. Dec. 564 As to the other rule, viz., that the profits should be taken as equivalent to the interest, their Lordships observe that the rule appears just and convenient and is not objected to by either party, will relieve Zahur from giving an account of her receipts and will deprive her of interest from the time she took possession. We understand that observation to mean that in that particular case, the profits and the interest were taken to be fairly equal as a matter of fact--that obviously must be the reason for the parties not objecting to it--and we do not think their Lordships meant to lay down, as a matter of law, that even if either party insisted, there should be no account of profits or allowance of interest. This was the view taken in two cases in this Court after discussion Thenappa Chettiar v. Marimuthu Nadan 18 M.L.J. 344; Ponnambala Chetti v. Muthuswami Pillai (1912) M.W.N. 1199 and it is materially strengthened by what happened in Ganga Pershad Sahu v. Land Mortgage Bank 21 I.A. 1a decision of the Privy Council after Umes Chunder Sircar v. Zahur Fatima 17 I.A. 201. There also the rights of the parties as finally settled by the decision were exactly the same as those in the previous case. The decree of the High Court directed accounts of profits to be taken and allowed interest up to the date of redemption at the rate fixed in a previous decree against the mortgagor. (See the decree set out at page 370 of the report in 21 Calcutta.) The Privy Council altered the rate of interest to that in the bond and confirmed the rest of the decree, namely, that portion which directed the taking of accounts. The judgment in both the oases was delivered by Lord Hobhouse. It is to be observed that the amount of profits is to go in reduction of the amount due for principal and interest and not to be set off against the interest alone. The same principle appears to have been adopted in Calcutta Girish Chunder Nandi v. Kedar Nath Kundu 10 C.W.N. 502; Sat Narain v. Sheobaran Singh 11 Ind. Cas. 649.

5. Counsel for the appellant, however, relied on a later case in this Court, in which the learned Judges apparently adopted the rule of disallowing interest after the date of purchase Ibrahim Sahib v. Armugathayee 16 Ind. Cas. 877; There the plaintiff's father had a first and second mortgage of which the first was a usufructuary mortgage, the profits being taken in lieu of interest. He purchased the property from the mortgagor, the price settled being Rs. 900, of which Rs. 830 was the amount due till then for the principal of the two mortgages and interest on the simple mortgage, Rs. 55, due to the mortgagee for certain taxes and other small sums lent to the mortgagor; the balance Rs. 15 was paid in cash. Before the sale the mortgagor had mortgaged the same property to the defendant, who sued the plaintiff who had succeeded to her father, brought the properties to sale and purchased them himself subject to the previous encumbrances of the plaintiff. The plaintiff in her turn sued to recover the amount due on her mortgages and claimed interest till payment on the simple mortgage at the rate fixed in the bond. The learned Judges held that during the period the plaintiff or her father was in possession as vendee, interest should cease. The reasons given for this conclusion are (1) that as the mortgagee and mortgagor agreed that after the sale the property should be enjoyed for the price settled, the mortgagee is not entitled to any compensation in the shape of interest for his money so long as he had the enjoyment; (2) that the prior mortgage is kept alive only to a limited extent, and in each case the Court is to determine how far it is kept alive for doing justice. We very respectfully differ from both these propositions. It is to be observed that it is because the agreement is not binding on the mesne incumbrancer, that he is entitled to ignore it, and it is difficult to see why he should have any benefit out of it. It often happens that a person is willing to pay much more to obtain an absolute title than what he would be willing to lend on the same property as usufructuary mortgagee. The mortgagee may pay a large price for the equity of redemption which he may wholly lose by the action of the puisne encumbrancer. On principle we do not think that it is possible to sustain the doctrine of partial revivor against the puisne mortgagee and the illustration given by the learned Judges, viz., a stipulation for lower rate of interest, does not support it. Such a stipulation operates to extinguish or release a portion of the debt and there is no question of merger against the mortgagor and no merger against the mesne encumbrancers. The puisne mortgagee pays the same price for redemption as the mortgagor and that, as we have said already, is the test, namely, what amount the mortgagor could have to pay if there had been no sale. If for instance in the case under reference the mortgagee had the transfer of the equity of redemption made to a trustee for him, there can be no merger in law and there would apparently be nothing to prevent the mortgagee from recovering the whole amount due on the mortgages if a subsequent mortgagee brings the equity of redemption to sale. So long then as the prior mortgage is kept alive, the senior mortgagee is entitled to the rights and is subject to the liabilities under his mortgage against the puisne encumbrancer. We, therefore, think that in that case the plaintiff was entitled to the interest on the simple mortgage, as she was entitled to take the profits in lieu of interest on the usufructuary mortgage, and there was no money of the mortgagors in her hands for which she was bound to account. The attention of the learned Judges does not appear to have been drawn to Thenappa Chettiar v. Marimuthu Nadan 18 M.L.J. 344 and Ponnambala Chetti v. Muthuswami Pillai 17 Ind. Cas. 291: (1912) M.W.N. 1199 the latter decision had not then been reported. They however refer to certain decisions which we shall consider now. The first is the decision of the Privy Council in Times Chunder Sircar v. Zahur Fotima 17 I.A. 201to which we have already drawn attention. In Gangadhara v. Sivarama 9 Ind. Jur. 146 the mortgagor borrowed Rs. 3,500 in May 1878 on the security of certain lands and paid Rs. 1,900 out of it to discharge a mortgage decree on a mortgage of 1866 on some of the lands. Plaintiff in the suit was an intermediate mortgagee. It was held that the later mortgagee had priority over the plaintiff to the extent of Rs. 1,900, the sum paid to discharge the previous mortgage. Apparently no subsequent interest was allowed. It does not appear from the report whether the subsequent mortgagee or the mortgagor had possession. If the former had possession the interest on his mortgage was being discharged from the usufruct and as he was not entitled to interest against the mortgagor, he was not entitled to it against the puisne mortgagee. If the mortgagor was in possession, then even according to the decision in Ibrahim Sahib v. Armugathayee 16 Ind. Cas. 877 interest should have been allowed, for the decision in Spamalarayudu v. Subbarayudu 7 Ind. Dec. 457 where interest was allowed, is distinguished on that very ground. In Seetharama v. Venkatakrishna 5 Ind. Dec. 773 the suit was, as finally decided, by a prior simple mortgagee against the mortgagor and the puisne encumbrancer who had sued on his mortgage and purchased the property without making the first mortgagee a party. There was a remand for a finding as to the amount due and the finding was that the plaintiff was entitled to Rs. 300 for principal and interest thereon at 9 per cent. and this finding was accepted. In the report no mention is made of the interest Curiously enough the decree as drafted here omits mention of interest, though apparently the judgment allowed it. In Vanamikalinga Mudali v. Chidambara Chetty 29 M. 37 the mortgagee who claimed priority by subrogation had a usufructuary mortgage. Under the bond there was no interest payable and the usufruct was to be taken in lieu of it. It is to be observed that in this last case as well as in Chetwynd v. Allen (1899) 1 Ch. 353 and in other cases where a mortgage was executed in renewal of or to pay off a previous mortgage, the mortgage was in force against the mortgagor himself and the agreement charging a lower rate of interest or no interest accrued to the benefit of the mortgagor, as well as the puisne mortgagee. The mesne incumbrancer in such oases does not repudiate the subsequent transaction between the mortgagor and the mortgagee but seeks to avail himself of it as a discharge or extinguishment of the debt, while such is not its effect as between the parties to the transaction.

6. A number of decisions of the Allahabad High Court were cited, in which it appears to have been held that the profits should be taken in lieu of interest after purchase. In the first of these oases Dip Narain Singh v. Hira Singh (1897) A.W.N. 147; Banerji and Aikman, JJ. held that the puisne mortgagee can only redeem on payment of the full amount due on the prior mortgage, just the same amount as the mortgagor himself would have to pay if a suit had not been brought against him, and refer as authority to the judgment of the Calcutta High Court in Ganga Pershad Sahu v. Land Mortgage Bank 21 C. 366 and of the Bombay High Court in Dadoba Arjunji v. Damodar Raghunath 8 Ind. Dec. 803; in the former interest was allowed at the bond rate and accounts were directed of the profits, and in the latter interest was allowed at the bond rate till decree without accounts as the mortgagee had no possession. In answer to the contention that the profits should be accounted for, the learned Judges say that considering the amount of profits arising from the property it would be fair not to take the profits into consideration at the same time not to allow interest on the mortgage money, i.e., not, as we understand it, as a rule of law, but as being fair in that case. In a later case of Sri Ram v. Kesri Mal (1903) A.W.N. 219 it was ruled that the prior mortgagee cannot claim interest after the purchase, giving credit for the profits realised; the reason given being the same as that given in Ibrahim Sahib v. Armugathayee 16 Ind. Cas. 877viz. that every person who purchases property for a certain value must be presumed to pay such value as would yield to him a sufficient return for the money invested by him in the property. In this case there were three mortgages. An intermediate mortgagee purchased the property by private sale for a price enough to pay all the three mortgages, the price being reserved with the vendee for that purpose. The vendee paid the first mortgagee and paid himself the amount due on his. He did not pay the third mortgagee who sued to enforce his security. We do not understand how the vendee was allowed to set up the prior mortgages which were extinguished by payment of the money belonging to the mortgagor, the party primarily liable to pay, and how by merely performing his duty the vendee obtained an advantage. The third mortgage under the circumstances became the first. It is not a case of a person who did not get what he bargained for and the vendee was not entitled to even the principal of the mortgages which he paid, much less to interest. This case, however, was followed in Jugal Kishore v. Bahal Rai 21 Ind. Cas. 593 in the same Court and the learned Judges held, setting aside the accounts taken by the lower Court, that the profits and interest must be deemed equal. Bat in the latest case in that Court, Phul Chand v. Roshan Lal 36 Ind. Cas. 703 under circumstances precisely similar to those in Ibrahim Sahib v. Armugathayee 16 Ind. Cas. 877 the learned Judges, one of whom was Banerji, J., came to just the opposite conclusion, and held that a purchaser at a senior mortgagee's execution sale, who obtains possession from a prior usufructuary mortgagee whom he redeemed after his purchase, was entitled to the whole of the principal and interest at the contract rate till the date of the suit. The purchaser in this case, who knew of the previous usufructuary mortgage subject to which he bought, must on the reasoning in Sri Ram v. Kesri Mal (1903) A.W.N. 219 be presumed to have paid such value for the property, i, e., the equity of redemption and the first mortgage, as would yield a sufficient return for his money, in which case he should not get any interest after the date of the purchase. We do not propose to deal with the other oases as they follow one or other of the cases mentioned above.

7. The conclusion then we come to, which is supported by preponderance of authority, is that if either party insists, accounts of the profits must be taken, allowing interest on the mortgage as provided in the bond. It is, however, unnecessary to express dissent from Ibrahim Sahib v. Armugathayee 16 Ind. Cas. 877 as the learned Judges do not lay down an inflexible rule, but say that each case should be dealt with on the merits. The circumstances here strongly support the suggestion of the learned Judge in the Court below that owing to the considerable increase in the value of house property in Madura, the plaintiff in this suit is now attempting to revive a claim which was practically abandoned by her husband. The 4th defendant and his assignees have made considerable improvements in the property and it would not be fair to them not to allow interest on the prior mortgages, as it is fairly certain that the income from the properties even in the improved condition would be wholly insufficient to meet the interest. We are, therefore, unable to accept the contention of the appellant. We are equally unable to accept the contention of the 4th defendant, who claims the whole of the principal and interest due on the mortgages without accounting for the profits. The learned Judge in the Court below misunderstood the decision in Punnambala Chetti v. Muthuswami Pillai (1912) M.W.N. 1199 which he purported to follow, but the learned Pleader for the 4th defendant argues that as his client was entitled to and obtained possession of the mortgaged properties only as purchaser of the equity of redemption (for which, however, he paid nothing), he was entitled to the enjoyment of the properties as the transferee of the mortgagor; and inasmuch as the mortgagor if he had remained in possession would not be accountable for the profits, similarly he too should not be obliged to account for them. He relied on a passage in Section 1118 (a) of Jones on Mortgagee, Volume II, and a similar passage in Dr. Ghose's book which appears to be really based on Jone's book. He was not able to refer us to any report. It is to be remembered that in some States, the English theory of mortgages as a conditional transfer of the fee with an equitable right to redeem is adopted, in others, probably the largest number, a mortgage is considered to be merely a security though for certain purposes, as between the parties, it is considered to be a conveyance of the property and in yet others a mortgage is only a lien, the mortgagee not being entitled to foreclosure under any circumstances. See Brobost v. Brock (1870) 10 Wallace 519; McMillan v. Richards (1858) 70 Am. Dec. 655; Goodenow v. Ewer (1860) 76 Am. Dec. 540 and Frische v. Kramer's Lissee (1847) 47 Am. Dev. 368. It would, therefore, be necessary to examine with care any particular decision which may be relied on as supporting an incident of the mortgage relation in India, as our Statute recognises different kinds of mortgages. In Moulton v. Cornish (1893) 20 L.R.A. 370 from New York where sale is the ordinary remedy, in a case similar to the present, it was held that the purchaser was bound to account, though he obtained possession from the owner of the equity of redemption after sale. To the same effect is the decision in Anson v. Anson (1865) 89 Am. Dec. 514 from another State. In Harrison v. Wyse (1853) 63 Am. Dec. 151 Connecticut 1 the mortgagee had first entered on the property and then purchased the equity of redemption It was held he was bound to account as mortgagee in possession, though the mortgagor would not be if he was in possession. It would, therefore, appear that there is no authority in support of such a broad contention as that raised here by the respondent. However that may be, the decision of the Privy Council and the decisions of this Court to which we have already referred are conclusive on this point and there is no need to speculate on the theoretical basis of this doctrine, though we have ventured to point out that on principle the purchaser may justly be held liable to account for the profits in cases like the present.

8. Two further points were raised, one by the appellant and the other by the 6th respondent. As we have already stated, the purchase by the 4th defendant included the lands on which the plaintiff has no lien. In these lands the 4th defendant acquired absolute rights and he has sold them to persons who are not parties now. The plaintiff claims that the mortgage money due to the fourth defendant on his mortgage should be apportioned among the several properties according to their value and the plaintiff allowed to redeem on payment of that portion of the mortgage-debt that is chargeable on the houses on such apportionment. He has not laid any basis in his plaint or evidence to claim marshalling, and he has not made the owners of the lands parties to the suit so as to claim contribution. We have tried to see if the plaintiff cannot be allowed to redeem a portion of the mortgage, on the ground that the mortgage has been split by the mortgagee purchasing the equity of redemption in a part of the secured property (see last clause of Section 60 of the Transfer of Property Act) but on consideration we think the plaintiff is not entitled to a decree for partial redemption. As she sues to redeem ignoring the purchase, she cannot be allowed to treat it as good in part against the prior mortgagee-purchaser.

9. The 6th respondent, the transferee of the houses from the 4th respondent, claims the value of improvements. According to the decision in Ibrahim Sahib v. Armugathayee 16 Ind. Cas. 877 she is not entitled to them. See also Rangayya Chettiar v. Parthasarathi Naickar 7 Ind. Dec. 84. It is argued that she is entitled to them as a bona fide purchaser for value under Section 51 of the Transfer of Property Act. Assuming that that section applies to this case, the 6th respondent cannot be considered to be a bona fide purchaser, as the sale certificate to the 4th defendant, of which the 6th defendant had notice before her sale, distinctly mentions the encumbrance to the plaintiff's husband as a subsisting lien. In determining the amount due to the 4th defendant on the mortgage to the Fund, the learned Judge in the Court below allowed compound interest at 2 per cent. per annum. The bond provides only for simple interest after the period fixed for repayment and the amount due to the 4th defendant should be calculated on that basis. Before passing a final decree it would be necessary to have a finding on the amount due to the 4th defendant on taking accounts on the basis above set out. New evidence may be allowed as to the amount of profits. Time for the submission of the findings will be till the re-opening of this Court after summer recess and? days will be allowed for objections

10. The memorandum of cross-objections filed by the 6th respondent will be dismissed with costs.

11. In compliance with the order contained in the above judgment, the Temporary Subordinate Judge of Ramnad submitted the following

FINDING.--* * * *

12. The amount paid by the 4th defendant on the mortgage to the Fund is Rs. 2,537-6-11 on 18th June 1906, from that date interest up to the 31st August 1917 at two pies per rupee is Rs. 3,553-4-9. So the total is Rs. 6,090-11-8. The total of the amounts due under both heads is Rs. 12,389-10-11. I find the amount due to the 4th defendant to be Rs. 12,400--in round figures.

13. This appeal and the memorandum of cross-objections filed by the 4th respondent coming on for final hearing after the return of the finding of the lower Appellate Court upon the points referred to it for trial, the Court delivered the following

14. The first objection to the finding is as to the calculation of compound interest on the bond of Rs. 1,000. It is argued that that is a penal provision and ought to be relieved against. But no such question was raised before one of us and Srinivasa Aiyangar, J., when the appeal was first heard and it cannot be gone into now.

15. The second objection relates to the question whether interest ought to be allowed on that portion of the amount paid by the 4th defendant to the chit fund which consisted of interest on the original bond. There is nothing in our judgment to show that the 4th defendant who paid the amount due was to be deprived of interest on any portion of the money paid by him. That objection also fails.

16. Then Mr. Devadoss argued that some of the properties had been sold, and so the amount of the sale-proceeds must be debited against the respondents. But that is quite a mistake. The plaintiff is seeking to redeem the properties on the ground that the sales are invalid; He cannot get the properties as well as the sale-proceeds.

17. We confirm the finding of the Subordinate Judge and there will be a decree in accordance with that finding. Time for redemption will be extended to three months from this date and the accounts will be continued on the basis of the finding of the Subordinate Judge up to the date of redemption. As regards costs, the ordinary rule will be followed for we do not see why the appellant should be made personally liable for the costs of the 4th respondent.


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