1. The substantial question of law which calls for decision in this appeal relates to the precise limits of the right of subrogation of one of several joint mortgagors who has discharged the entire mortgage-debt. The events which have given rise to the controversy between the contesting claimants are matters of record and do not admit of any doubt or dispute. On the 18th July 1898, the respondent along with 4 other persons borrowed Rs. 6,500 from the appellant Digambar Das and another person by name Ram Ratan Tewari and executed usufructuary mortgage in their favour. Under the mortgage instrument, the principal amount was to carry interest at the rate of 24 per cent, per annum, but the mortgagees were to be placed in possession and were to receive the profits in lieu of the interest. No particular time was fixed for the repayment of the loan, but option was reserved to the mortgagors to pay or deposit in Court the entire principal in the month of Ashar in any year. On the 12th July 1902, the plaintiff deposited the entire amount of the principal in Court under Section 83 of the Transfer of Property Act, and on the 24th September 1904 commenced the action, the decree made wherein is now under execution. In this suit, he alleged that the mortgagees had purchased from one of the mortgagors his one-third share in the equity of redemption. The plaintiff consequently prayed for declaration that he had satisfied the entire mortgage debt, he had been subrogated to the rights of the mortgagees and was consequently entitled to a charge upon the shares of his co-mortgagors (one of them now represented by the mortgagees) and that till such charge was extinguished by repayment of the sum paid by him and interest thereon and costs, he was entitled to be placed in possession of the mortgaged properties. On the 30th December 1905, the Subordinate Judge made his decree in the suit in which he declared that the plaintiff had a charge to the extent of one third of the amount deposited by him upon the one-third share of the properties purchased by the mortgagees and that upon the failure of the latter to repay such sum within a specified time, the plaintiff was entitled to be placed in possession of that share. The Court further directed the mortgagees defendants in their character as representatives of one of the mortgagors to pay the plaintiff his costs of the suit. But the Court disallowed the claim of the plaintiff to interest upon the principal sum deposited by him and decreed in his favour. This decree was not actually signed till the first February 1906; but on the 27th January the defendant deposited in Court the decretal amount, and the Court directed notice of the deposit to issue on the plaintiff. The plaintiff subsequently appealed to this Court and on the 30th January 1908 a Division Bench (Sir Francis Maclean, C.J., and Mr. Justice Coxe) varied the decree so far as the question of interest was concerned. It was declared that the plaintiff was entitled to interest upon one-third share of the amount deposited by him at the rate of 24 per cent, per annum, as stipulated in the mortgage. It will be observed that neither the decree nor the judgment, whereon it was based, defines the point of time from which the interest was to run, nor the period during which it was to continue. On the 16th June 1908, the plaintiff applied for execution of the decree. He prayed that the defendant might be directed to pay him an one-third share of the amount deposited by him together with interest from the date of deposit to the date of realization, as also the cost of the litigation. He completely ignored in substance the amount brought by the defendant into Court on the 27th January 1906 and asked that the properties might be sold upon failure of the defendant to pay the decretal amount. It is not disputed that the prayer for sale is not authorised by the decree but the question is of no practical importance as the defendant has brought into Court whatever is alleged by the plaintiff to be due to him. The defendant, however, contests the right of the plaintiff to get any interest after the 27th January 1906, that is, after the date on which he paid, into Court the sum adjudged by the Subordinate Judge to be due to the plaintiff and this is the point in controversy between the parties. The District Judge has held on this question in favour of the plaintiff decree-holder. The defendant judgment debtor has now appealed to this Court, and on his behalf it has been argued that as the decree does not specify the period for which interest is to be allowed, it is vague and incapable of execution, and that, in any event, interest ought not to be allowed at the rate specified in the mortgage contract after the date of the deposit in the Court below which ought to be treated as a valid payment in partial satisfaction of the decree.
2. With regard to the first branch of this contention, we are of opinion that there is considerable force in it. It cannot be disputed that the decree of this Court is indefinite, inasmuch as it does not specify the period, during which the interest is to be allowed. It has been contended on behalf of the respondent that as the plaintiff claimed interest at the mortgage rate from the date of the payment made by him to the date of realization, the decree should be interpreted, in the light of the plaint and it ought to be held that the Court intended to decree interest for the period mentioned therein. We are unable however, to adopt this contention as sound, because, as observed in the judgment of the Subordinate Judge in the original suit, the plaintiff based his claim, not on the case as stated in the plaint but on general principles of law and especially on the doctrine embodied in Section 95 of the Transfer of Property Act. The decree, therefore, must be treated as indefinite, and up an a strict view of the law, the judgment-debtor would' perhaps be entitled to succeed in his contention that the execution proceedings ought to be discharged on that ground alone. In our opinion, however, it would not be right in this case to adopt such a course, for it was conceded by the appellant that if his contention prevailed, it would be open to the decree-holder to apply at-once to this Court for review of the previous judgment, and as neither of the two learned Judges who originally heard the appeal is now a member of this Court, the application would, in ordinary course, be heard by this Bench as at present constituted. Under such circumstances, the litigation between the parties should not be needlessly protracted and we must consequently proceed to consider the precise extent of the right of subrogation of the respondent.
3. On behalf of the appellant judgment-debtor, it has been contended that although a co-mortgagor who redeems the mortgaged property acquires thereby a charge on the share of each of the other co-mortgagors in the property for his proportion of the expenses properly incurred in so redeeming, he is not entitled as a matter of right to claim interest either at the mortgage rate upon the amount of his deposit or from the date of his deposit to the date of realization of his dues from his co-mortgagors. In support of this argument reliance has been placed upon the decision of the Judicial Committee in the case of Malik Ahmad v. Samsi Jahan Begam 33 I.A. 81 : 28 A. 482 :10 C.W.N. 626 : 3 A.L.J. 360 : 3 C.L.J. 481 : 1 M.L.T. 143 : 16 M.L.J. 269 : 8 Bom. L.R. 397. It has further been argued on behalf of the appellant that the amount deposited on the 27th January 1905 ought to be treated as part payment of the sum determined as due under the decree of the High Court; and that whatever the rate of interest allowed by the Court may be, it ought, after that date, to run only upon the balance. In answer to these contentions, it has been argued on behalf of the decree-holder respondent, that as the co-mortgagor who redeems the mortgaged property is subrogated to the rights of the original mortgagee, he is entitled as a matter of right to interest at the mortgage rate from the date of deposit to the date of realization, and that as the whole amount determined as due upon this principle was admittedly not deposited in Court, he was not bound to accept such partial payment, especially as the acceptance of the smaller amount might be deemed a waiver on his part of the claim for interest and might thus practically frustrate his appeal to this Court. In support of this contention, reliance has been placed on the decisions of the Judicial Committee in Hewanchal Singh v. Jawahir Singh 16 C. 307 and Ram Chandra Marwari v. Rani Keshabati Kumari 36 C. 810 : 2 Ind. Cas. 935 : 19 M.L.J. 435 : 6 M.L.T. 1011 Bom. L.R. 765, 13 C.W.N. 1102 : 36 I.A. 85 : 6 A.L.J. 617 : 10 C.L.J. 1. To determine which of these contentions ought to prevail, it is necessary to examine the nature of the right of subrogation obtained by one of several joint mortgagors who redeems the mortgaged property by repayment of the entire debt.
4. Section 95 of the Transfer of Property Act provides that where one of several mortgagors redeems the mortgaged property and obtains possession thereof, he has a charge on the share of each of the other co-mortgagors in the property for his proportion of the expenses properly incurred in so redeeming and obtaining possession. This section as construed by their Lordships of the Judicial Committee in -Milik Ahmal v. Shamsi Jahan Begam 33 I.A. 81 : 28 A. 482 : 10 C.W.N. 626 : 3 A.L.J. 360 : 3 C.L.J. 481 : 1 M.L.T. 143 : 16 M.L.J. 269 : 8 Bom. L.R. 397, shows that the charge follows on redemption so that where one of three mortgagors pays case the mortgage-debt in full, and then sues the other two to recover the whole amount, he is entitled to a decree for a proportionate share of the money paid and the decretal amount is a charge upon the interest of the defendants in the property redeemed. The section, however, it will be observed, mikes no express provision for the payment of interest upon the, sum claimed, much less does it indicate the period for which interest ought to be allowed. Judicial decisions which have any direct bearing upon this matter are also not by any means numerous. In Rani v. Amir Bakhsh (1898) A.W.N. 39, Sir John Edge, C.J., appeal's to have ruled that if one of several joint mortgagors redeems the entire mortgage, he is entitled to a charge upon the share of his co-mortgagors for a proportionate share of the redemption money and reasonable interest from the date of redemption. Again in the case of Ahmud Wali Khan v. Shams-ul-Jahan Begam 33 I.A. 81 : 28 A. 482 : 10 C.W.N. 626 : 3 A.L.J. 360 : 3 C.L.J. 481 : 1 M.L.T. 143 : 16 M.L.J. 269 : 8 Bom. L.R. 397, to which our attention has been invited, the Judicial Committee appears to have allowed, apparently without any discussion on the point at the Bar, interest upon the redemption money at the Court rate only from the date of the institution of the suit. It appears that the mortgage in that case, which carried interest at a very high rate, was redeemed on the 2nd November 1896, and the suit by the mortgagor, who has satisfied the mortgage-debt, against his co-mortgagors was not commenced till the 2nd April 1900. Their Lordships declared that the plaintiff was entitled to recover against the defendants two-thirds of the sum paid by him to redeem the mortgage with interest at 6 per cent, per annum from the date of the institution of the suit, and that he was entitled to a charge in respect thereof upon the interest of the defendants in the mortgaged property. A similar decree was made by the Supreme Court of the United States in Pratt v. Law 9 Cram. Ch. 456, in which the Court sustained the right of subrogation of one of three mortgagors who was compelled to satisfy the entire mortgage, but allowed interest upon the redemption money only at the rate of 6 per cent, from the date of redemption. No doubt it is stated broadly in Lovrey v. Byers 80 Ind. 443 that where the plaintiff paid a mortgage made by him and another jointly, the plaintiff would be subrogated to all of the rights of the mortgagee, but the proposition more generally maintained is that where a tenant-in-common of mortgaged property pays the mortgage debt, he is entitled to have the lien of the mortgage kept alive until his co-tenants pay him their respective shares of the amount paid by him to satisfy the mortgage. Parsons v. Urie (1906) 104 Maryland 238, Silk v. Eyre (1875) I.R. 9 Eq. 393. No doubt, as stated in Harris on Subrogation, Section 117 and Sheldon on Subrogation, Section 173, there are cases in which interest has bean allowed upon the redemption money at the same rate as in the original mortgage. Thus in Simpson v. Gardiner (1881) 97 III. 237 A and B had purchased land in common and jointly executed a mortgage for the purchase money; B upon the death of A was obliged to pay the entire mortgage money to save the land; it was ruled that he was subrogated to the rights of the mortgagee and was entitled to the same rate of interest on the debt as originally agreed upon. It is clear, however, that Judicial decisions as well as opinions of text writers generally affirm the rule that if one joint mortgagor in order to protect his interest pays the joint debt, he is subrogated merely to the interest of the joint mortgagor until he is repaid (Jones on Mortgages, Section 878; Sheldon on Subrogation, Section 179; Harris on Subrogation Sections, 386 and 424). In fact if we remember for a moment the principle upon which the doctrine of subrogation rests, it becomes obvious that the Court has a discretion so far at any rate as the rate of interest and the period during which it is to run are concerned. It is only by a fiction of law that the mortgagor who redeems the security is substituted in the place of the original creditor, and although it is sometimes said that the substitute is put in all respects in the place of the party to whose rights he is subrogated, even a superficial consideration will show that the statement is too broad and requires qualification. In so far as any question of priority is concerned, he no doubt enjoys the same advantages as the original mortgagee and is entitled to priority over subsequent mortgagees from his co-mortgagor Har Prosad v. Raghunandan 31 A. 166 : 6 A.L.J. 67 : 1 Ind. Cas. 825. In so far as the amount of money which, he is entitled to recover from his co-mortgagors is concerned, he can claim contribution only with reference to the amount actually and properly paid to effect redemption, to which sum he can add his legitimate expenses. In so far as interest on these sums is concerned, he cannot claim it for any period antecedent to the redemption. The substitution, therefore, of the new creditor in place of the original one, does not place the former precisely in the position of the latter for all purposes. If we now bear in mind that the doctrine of subrogation was borrowed by Courts of Equity from the Civil Law and developed by them with a view to do substantial justice it becomes clear that, as pointed out in In re Hewitt 25 N.J. Eq. 210, the extent to which subrogation would be carried in any particular case, must be governed by equitable considerations, (Sheldon on Subrogation, Sections 1 and 155). See also Harris on Subrogation, Section 4 and Dowat on Civil Law, Cosling's edition, Vol. I, page 694, Part I, Bk. III, Tit. I, Section VI. Surjiram Marwari v. Berham Deo Persad 2 C.L.J. 288 at p. 298, Gurdeo Singh v. Chandrika Singh 1 Ind. Cas. 913 : 36 C. 193 at p. 217 : 5 C.L.J. 611. If, therefore, one of several mortgagors satisfies the entire mortgage-debt, though upon redemption he is subrogated to the rights and remedies of the creditor, the principle has to be so administered as to attain the ends of substantial justice regardless of form; in other words, the fictitious cession of the rights and remedies of the creditor in favour of the person who effects the redemption, operates only to the extent to which it is necessary to apply it for his indemnity and protection. The cases, therefore, which recognise the doctrine that the Court when invited to enforce the right of subrogation can exercise its judicial discretion in the award of interest and in the determination of the period for which it is to be allowed, are based on sound equitable principles. In this connection it is worthy of note that a useful analogy is furnished by the class of cases where the Court is called upon to allow redemption at the instance of an owner of a fragment of the equity of redemption who has been excluded from a mortgage suit. It is well-settled, Kedar Lal v. Bishen Pershad 31 C. 332 and Gangadas Bhattak v. Jogendra Nath Mitter 5 C.L.J. 315 : 11 C.W.N. 403, that although redemption is allowed on the basis that the mortgage, though merged in the decree as regards the parties to the suit, still subsists as regards the party excluded, yet interest at the contract rate runs only up to the date allowed by the decree in the previous suit. Similarly in cases like the one before us, it may well be maintained that interest at the mortgage rate ought to be allowed only up to the date of the decree of the Court of first instance by which the amount payable by the defendant is determined. As a matter of fact, this Court on the 30th January 1903 allowed interest at the rate stipulated in the mortgage, that is, 24 per cent, per annum and this rate we think ought to continue up to the 30th December 1903 when the decree of the first Court was made. From that date up to the date of realization, interest may be allowed at the Court rate of 6 per cent, per annum.
5. This brings us to the consideration of the second point in the case, namely, the effect of the payment into Court by the defendant of the sum determined as due by the Subordinate Judge on the 27th January 1903. As already stated this amount though sufficient to cover the sum decreed by the Subordinate Judge falls short of the amount calculated to be due under the decree of this Court. The respondent decree-holder contends that as he stands in the position of a mortgagee he was not bound to accept what turns out to be only a partial payment. Now it may be conceded, as pointed out by this Court in the cases of Rani Kamlessuri v. Sukhan Singh 7 C.W.N. 172 and Bechu Singh v. Bichharam Sahu 1 Ind. Cas. 677 : 10 C.L.J. 91 at p. 98 that a mortgagee is not bound to accept any sum in part satisfaction of his decree and is entitled to an order absolute unless the entire amount specified as payable is brought into Court for payment to him. This view is founded upon the decision in Dixon v. Clark (1848) 5 C.B. 365 : 75 R.R. 747. As pointed out, however, by Mr. Justice Telang in Abdul Rahman v. Haji Noor Mahomed 16 B. 141, this doctrine is applicable only in cases in which there is no dispute as to what is due. The cases of Bowen v. Owen (1847) 11 Q.B. 130 : 75 R.R. 594, Read v. Goldring 2 M. & S. 86 : 14 R.R. 594, Eckseni v. Reynolds 7 A. & E. 80 : 45 R.R. 676, Henwood v. Oliver 1 Q.B. 409 : 55 R.R. 290 : 1 G.L.D. 25 : 10 L.J.Q.B. 158 and Bull v. Parker 2 Dawling (N. & S.) 345 show that an unconditional tender of a sum which turns out in the end to be less than what is really due, may be valid pro tanto if there is a dispute as to the amount due, though a tender of only part of what was admittedly due is of no avail. In fact, in the case last mentioned, the amount tendered was less than what was found to be due; and yet the tender was upheld as sufficient. The point is well illustrated by the case of Greenwood v. Sutcliffe (1892) 1 Ch. 1 : 65 L.T. 797 : 40 W.R. 214. There, a mortgagor tendered to a mortgagee in possession the balance appearing to be due for principal, interest and costs, according to an account made out by the mortgagor from documents furnished by the mortgagee, such balance being less than what the mortgagee claimed to be due. The mortgagor stated at the time that he did not admit the correctness of the mortgagee's accounts and that he intended to take steps to dispute them and to have the costs taxed. The mortgagee refused to accept the sum tendered. The mortgagor then brought an action to redeem and it was held that the tender, as it did not impose any condition on the mortgagee, was a good tender. In the case before us, there was a dispute between the parties as to the right of the plaintiff to claim interest. The Court of first instance decided against the plaintiff and the defendant forthwith brought into Court the whole of the sum adjudged to be due. The Court of Appeal ultimately took a different view and held that the decree of the Court below must be varied as to interest. Under these circumstances the plaintiff is not entitled, in our opinion, to ignore the payment into Court, The learned Vakil for the respondent suggested, on the authority of the decisions of the Judicial Committee in Hewanchal Singh v. Jawahir Singh 16 C.307 and Ram Chandra Marwari v. Rani Keshabati Marwari 36 C. 840 : 2 Ind. Cas. 935 : 19 M.L.J. 435 : 6 M.L.T. 1011 Bom. L.R. 765, 13 C.W.N. 1102 : 36 I.A. 85 : 6 A.L.J. 617 : 10 C.L.J. 1, that he might have prejudiced his position if he had withdrawn from Court the money deposited. In our opinion there is no foundation for this contention. He might easily have protected himself if he had withdrawn the money, subject to an express reservation that this was to be without prejudice to his right of appeal; for it is well settled, Bowen v. Owen (1847) 11 Q.B. 130 : 75 R.R. 306, that though a tender of a smaller amount than that of which an indivisible and entire claim consists may be invalid as a tender, there is nothing to prevent the creditor from accepting the amount tendered in part payment and his doing so will not preclude him from afterwards claiming the residue of his account, always provided that the debtor did not make it a condition of his tender that it be accepted in discharge of the whole. It has further been faintly suggested that there is nothing to show that the decree-holder was aware of the deposit made on the 27th January 1906. We are not prepared to attach any importance to this suggestion. We must assume that the order of the Court that the decree-holder be informed was carried out, and in any event, it is extremely unlikely that the decree-holder would have stayed his hands so long if he had not known that-the amount was in the custody of the Court. Our conclusion upon the whole case, therefore, is that interest at the mortgage rate allowed by this Court on the 30th January 1908 should be calculated from the date of payment by the plaintiff, that is, the 12th July 1902 to the date of decision, by the first Court that is, the 30th December 1905; that on the amount due on the latter date, interest should run at six per cent. per annum; that the amount deposited on the 27th January 1906 should be duly set off, and that upon the balance, interest should run at the rate of 6 per cent, per annum up to the 16th September 1905, when the final deposit was made by the defendant. The account so taken shows that on this last date the defendant was found to deposit only Rs. 2,144-10, He was compelled, however, to bring into Court Rs. 3,791-12-6 the whole of which, sum has been taken out by the decree-holder. The latter has, therefore, been over-paid Rs. 1,647-2-6 and as he has had the benefit of this money from the 16th September 1908, he is bound to refund it to the plaintiff with interest at 6 per cent, per annum from that date up to the date of realization.
6. The result, therefore, is that this appeal must be allowed and the order of the Court below modified. The decree-holder respondent is directed to repay to the judgment-debtor appellant the sum of Rs. 1,647-2-6 with interest thereon at 6 per cent, per annum from the 16th September 1908 to the date of realization. Upon his failure to do so, the appellant will be entitled to realize the same in execution of the decree. To avoid any possible dispute in future, we may add that no question has been argued as to the costs of the original litigation, the right to which will not be affected by the present decision. The appellant is entitled to his costs, both in this Court and in the Court below. We assess the hearing fee in this Court at five gold mohurs.