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Rajani Nath Sil Vs. Ennatali Howladar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1936Cal313,166Ind.Cas.783
AppellantRajani Nath Sil
RespondentEnnatali Howladar and ors.
Cases ReferredMohammad Ibrahim Hossain Khan v. Ambika Pershad Singh
Excerpt:
- .....the second point, that there can be no subrogation if the subsequent mortgagee paid off the prior mortgage out of the mortgage money, is a more difficult question of law. it was urged on one side that the issue is governed by section 92, t. p. act. on the other side it was urged that that section had no application as the mortgages were effected before april 1930, when section 92 came into force. the question is of mere academic importance. if section 92 does not apply then sub-section 74 and 75 which were repealed would apply and the effect of those sections is the same as of section 92 in this case. the question here is whether in the circumstances of his case the court should presume an intention on the part of defendant 3 to keep the first charge alive for his own benefit......
Judgment:

M.C. Ghose, J.

1. This is an appeal by defendant 3 in a suit for sale by enforcing a simple mortgage bond executed by defendants 1 and 2 in favour of the plaintiff in April 1923. The facts which are necessary to discuss the issue raised in this Court are that defendants 1 and 2, who may be called the mortgagors, mortgaged the property in dispute in March 1923 to Moslem Khan. About a month thereafter, in April 1923, they again mortgaged the same property to the plaintiff. Four years later, in April 1927, they mortgaged the same property to defendant 3. In that mortgage bond they stated that the properties were previously mortgaged to Moslem Khan, that about Rs. 700 was due on that mortgage and the mortgagors agreed that defendant 3 should keep the required amount in deposit to pay off the said mortgage, and that on redemption thereof, defendant 3 would keep the bond. They also stated that except that mortgage in favour of Moslem Khan, the properties were not otherwise encumbered. Thereafter defendant 3 paid a sum of Rs. 680 to Moslem Khan and redeemed the first mortgage and obtained the mortgage bond. The present suit was instituted in 1932. Defendant 3 contested the suit. He raised various defences which were repelled by the Court of appeal below and the suit was decreed in full.

2. In appeal the learned advocate has urged only one issue, namely whether the appellant is entitled to be subrogated to the rights of the first mortgagee Moslem Khan. The Court of appeal below decided the issue against the appellant on the grounds that both the first and third mortgages were usufructuary mortgage bonds and two usufructuary bonds could not subsist at one and the same time, and that there could be no subrogation if the subsequent mortgagee paid off the first mortgage out of his mortgage money. Upon hearing the learned advocates on both sides it appears that the first ground of the learned Subordinate Judge is of no weight. The appellant obtained a usufructuary mortgage and though the first mortgage was usufructuary he redeemed it forthwith and there could be therefore no conflicting interest as to possession.

3. The second point, that there can be no subrogation if the subsequent mortgagee paid off the prior mortgage out of the mortgage money, is a more difficult question of law. It was urged on one side that the issue is governed by Section 92, T. P. Act. On the other side it was urged that that Section had no application as the mortgages were effected before April 1930, when Section 92 came into force. The question is of mere academic importance. If Section 92 does not apply then Sub-section 74 and 75 which were repealed would apply and the effect of those Sections is the same as of Section 92 in this case. The question here is whether in the circumstances of his case the Court should presume an intention on the part of defendant 3 to keep the first charge alive for his own benefit. Many cases were cited by the learned advocates on both sides. On the side of the respondent the case in Jagmohan Das v. Jugal Kishore 1932 P C 99 was cited. In that case where the vendee of a half share of a property already mortgaged stipulated to pay, as part of the consideration, half the mortgage-debt, but afterwards he paid the whole of the mortgage money to defeat a Court sale, it was held that in redeeming the mortgage in suit, the said vendee would get no credit for that half of the sum which he was bound to pay under the terms of the purchase, but would get credit for the other half. In that case the vendee had bound himself to pay half of the mortgage money, and it was his duty to pay that half, therefore he could not get subrogation for that half. The case in Mukaram Marwari v. Mohammad Hossain 1936 Cal 42 was also cited. In that case the subrogation was claimed by a purchaser of a portion of the equity of redemption; it was refused by this Court.

4. On the other side is quoted the case in Dinobundhu Shaw v. Jogmoya Dasi (1902) 29 Cal 154. In that case the property was mortgaged first to A and then to B and then attached by a certain creditor of a mortgagor. The mortgagor raised money by a third mortgage to C agreeing with him that he would pay the two prior mortgages out of the consideration of the third mortgage and would make over the mortgage-deeds to the third mortgagor. Accordingly the mortgages to A and B were paid off and the reconveyances handed over to C. Their Lordships of the Judicial Committee held in the circumstanees that there was no intention to extinguish the prior mortgages and that the mortgagor paid the debts in pursuance of a mortgage with C for the benefit of C. C was therefore allowed subrogation against the attaching creditor. In the case of Mohammad Ibrahim Hossain Khan v. Ambika Pershad Singh (1912) 89 Cal 527, where the fifth mortgagee paid off the first mortgage and there were 3 intermediate mortgages, their Lordships of the Judicial Committee held that he must have intended to keep the first mortgage alive and to stand in the place of the first mortgagee. Every case must be decided upon its own facts. In the present case the mortgagors stated solemnly to the appellant that there was only one prior mortgage subsisting on the property, namely that due to Moslem Khan, and that the properties were otherwise unencumbered. They stated that if afterwards it was found that they made a false statement they could be criminally prosecuted for cheating the appellant. In these circumstances the appellant made an agreement with the mortgagors that they would, out of the consideration money, pay the mortgage of Moslem Khan and make over the deed to him. This was, in fact, done. In the circumstances there can be no doubt that the appellant intended to keep that prior mortgage alive as a shield against any intermediate mortgagee who might be discovered afterwards. There cannot be any doubt about the intention of the appellant.

5. The next question is whether in justice and equity his prayer for subrogation should be allowed. If the appellant had not paid off the prior mortgage, the plaintiff could not sell the property without the charge of that first mortgage. He would have only got the property after the charge of the first mortgage was satisfied. The appellant has saved the plaintiff from that liability. In justice therefore the plaintiff is bound to pay that sum of Rs. 680 to the appellant before he can satisfy his own mortgage out of the mortgage property. In the result the appeal is allowed with costs. The plaintiff's suit is decreed in part subject to the first charge of Rs. 680 to be paid to defendant 3. Defendant 3 will get his costs against the contesting plaintiff in this Court, and in the lower Courts the parties will bear their own costs. Leave to appeal under Section 15 of the Letters Patent is refused.


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