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Gobinda Chandra Basak Vs. Parsa Nath Nag Biswas and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1926Cal231,89Ind.Cas.116
AppellantGobinda Chandra Basak
RespondentParsa Nath Nag Biswas and ors.
Cases ReferredButler v. Rice
Excerpt:
transfer of property act (iv of 1882), section 74 - mortgage--payment of mortgage-money by stranger, effect of--subrogation. - .....for the proposition which i have indicated with regard to the-rights of a stranger who has paid money which has been applied in the liquidation of the mortgage-debt consequently it seems to me that if you apply the principle of these cases to the facts of the case before us the plaintiffs are entitled to stand in the shoes of defendant no. 3 for the amount of their advance in so far as that amount has been paid in reducing the amount due on the mortgage. the only difficulty is whether one can infer from the kobala of the 12th march 1917 that any intention was negatived thereby to keep alive the mortgage in favour of the man whose money had been applied in reducing the mortgage-debt. now the document is a very inartistic document. it first of all refers to the fact that defendant.....
Judgment:

Ewart Greaves, J.

1. This is an appeal by the second defendant against a decision of the Additional District Judge of the Second Court of Dacca reversing the decision of the Subordinate Judge of the Fifth Court of the same place. The suit out of which the appeal arises was brought by the plaintiffs to recover money due on mortgage executed by defendant No. 1 in favour of the plaintiffs on the 31st January 1914. Two properties belonging to defendant No. 1 were comprised in the mortgage but we are only concerned for the purposes of this appeal with property No. 1 because no question arises with regard to the charge in respect of property No. 2. On the 25th of January 1912 the first defendant mortgaged property No. 1 to defendant No. 3 to secure an advance of Es. 1,000. Subsequent to this sometime in the year 1912 a money-decree was obtained against defendant No. 1 and in execution of the decree the right of defendant No. 1 was put up for sale. This right of course at this time was an equity of redemption in the property subject to the mortgage created in favour of defendant No. 3. At the execution-sale the equity of redemption in property No. I was bought by defendant No 2 on the 10th May 1913 for a sum of Rs. 30. We are told that the value of the property free from mortgage amounted to Rs. 4,000 of Rs. 5,000. Anyhow Es. 30 was an inadequate price if the property was free from encumbrance. The sale was confirmed on the 11th June 1913 and from this time forward' defendant No. 1 had no interest in the property No. 1 Nevertheless on the 31st January 1914, he purported to mortgage both properties Nos. 1 and 2 to the plaintiffs to secure a sum of Rs. 2,0.00. Rupees 760 were paid at the time of the execution of the mortgage to defendant No. 1 and the balance of Es. 1,240 was left in the hands of the plaintiffs. Subsequently this money was withdrawn and as the lower Appellate Court has found was taken to defendant No. 3 by defendant No. 1 accompanied by an officer of the plaintiffs and the money was applied in, reducing the sum due on the original mortgage in favour of defendant No. 3. The whole of the charge was paid off with the exception of sum of Es. 60 and on the 12th March 1917 in consideration of a sum of Rs. 87 paid by the plaintiffs to defendant No. 3 a kabala was executed by defendant No. 3 in favour of the plaintiffs. Thereby defendant No. 3 purported to sell to the plaintiffs his interest in the original mortgage-bond of the 25th January 1912 for a consideration of Rs. 87 Under these circumstances the suit was brought by the plaintiffs to recover the money which they had paid to defendant No. 1 and which had been applied pro tanto in the reduction of the mortgage-debt to defendant No. 3.

2. Now the argument urged before us is that as on the 31st January 1914 the defendant No, I had no interest in property No. 1 the provisions of Section 74 of the Transfer of Property Act have no application and that accordingly the plaintiffs, being strangers are not entitled to be subrogated to the rights of defendant No. 3 by virtue of his mortgage in respect of his Property otherwise than in respect of the sum of Es. 87 which had been paid by the plaintiffs on the 12th March 1917 and in respect of which the kobala of that date had been executed and that is the real point which arises for our decision in this appeal, namely, whether a stranger, notwithstanding the provisions of Section 74 of the Transfer of Property Act under the circumstances which I have in dicated is entitled to be subrogated to the rights of defendant No. 3 in respect of the mortgage-debt which was paid off by the money of the plaintiffs and secondly assuming that this is so, whether or not there was anything in the kobala of the 12th March, 1917 which prevents this principle being carried into effect. Nobody disputes that if a person at the instance of somebody interested in the property, the mortgagor or some other person, discharges the mortgage-debt the person who pays the money is entitled to stand in the shoes of the mortgagor to the extent of his mortgage for the amount of the debt that has been paid. It seems to me that the doctrine, has been further extended so that a stranger who pays off the mortgage-debt even if not asked to do so by the mortgagor is entitled to the same rights, that is to say, in both the cases, which I have mentioned, the Court assumes that even though there has been no assignment of the debt it was the intention of the parties that the debt should be kept alive for the benefit of the person who has provided the money out of which the debt or a portion thereof was paid off. I have not been able to discover that there is any actual authority to this effect in any of the decisions which have been given either in this country or by the Judicial Committee. But there is no doubt that the, two decisions to which I shall presently, refer by the Chancery Division in England have extended the doctrine of subrogation to a stranger under certain circumstances. The irst of those decisions in the case of Chetwynd v. Allen (1899) 1 Ch. 353 : 68 L.J. Ch. 160 : 47 W.R. 200 : 80 L.T. 110. In that case Chetwynd who was a trustee for his wife, of certain property and his wife joined in mortgaging this property to a man named Tyrell. Subsequently the husband, Mr Chetwynd, approached a man named Mynors and asked him to make an advance to/ discharge Tyreil's debt. Mynors accordingly advanced the money and this money was applied in part discharge of Tyreil's debt, and Chetwynd, the husband, with put the consent of his wife purported to create a charge in Mynors' favour in respect of the sum which Mynors had advance ed Clearly, he had no authority to do so and there was no valid mortgage in favour of Mynors and Mynors had no interest in the property and was merely a stranger although he had advanced money to be applied in the liquidation of the mortgagee-debt. But even so, Mr. Justice Romer, as he then was, decided that Mynors was entitled to stand in the shoes of the original mortgagee Tyrell for the amount he had advanced. This clearly laid down the principle that the doctrine of subrogation can be extended even in respect of a stranger who had no interest in the mortgage property. That case was followed. by Mr. Justice Warrington in the case of Butler v. Rice (1910) 2 Ch. 277 : 79 L.J. Ch. 652 : 103 L.T. 94. In that case Mr. Rice was the owner of a certain property which was charged in favour of a Bank to secure a sum of 450. The husband of Mrs. Rice got Mr. Butler to advance a sum of money out of which the charge to the Bank was paid off. But Mrs. Rice refused subsequently to execute a mortgage in favour of Butler and accordingly he sued. Butler, on these facts was a stranger and was not interested in the mortgage-property or in. the equity of redemption. But notwithstanding that, Mr. Justice Warrington found that he was entitled to stand in the shoes of the Bank for the amount which he had advanced to pay off the charge to the Bank. This again is an authority for the proposition which I have indicated with regard to the-rights of a stranger who has paid money which has been applied in the liquidation of the mortgage-debt Consequently it seems to me that if you apply the principle of these cases to the facts of the case before us the plaintiffs are entitled to stand in the shoes of defendant No. 3 for the amount of their advance in so far as that amount has been paid in reducing the amount due on the mortgage. The only difficulty is whether one can infer from the kobala of the 12th March 1917 that any intention was negatived thereby to keep alive the mortgage in favour of the man whose money had been applied in reducing the mortgage-debt. Now the document is a very inartistic document. It first of all refers to the fact that defendant No. 3 the mortgagee had received from. certain realizations some sums on account of the mortgage. It does not refer to the fact that this sum had been provided by money of the plaintiffs and in consideration of a sum of Rs. 87-10, he purports to convey the interest of defendant No. 3 to the plaintiffs in the mortgage bond. We think that there is no doubt that if the document is read literally it was a conveyance of the interest at the date of the conveyance of defendant No. 3 in the mortgage-bond the only interest at that time, having regard to the previous payment, was to receive a sum of Rs. 87. But we think that you must take the transaction as a whole and I do not think that this document, if it hears the narrower interpretation which I indicated, necessarily negatives the idea that it was the intention of the parties that the mortgage should be kept alive for the benefit of the plaintiffs who had provided the money.

3. Consequently, we think that the decision of the District Judge was right and that the plaintiffs are entitled to the relief which he has given and this appeal accordingly fails and is dismissed with costs.

Cuming, J.

4. I agree.


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