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lien.

On the lOfch of September 1882, two brothers, named Kazim Hasan
and Nadir Hasan, in consideration of Eg. 2,901 advanced to them by
Hari Prasad, one of the defendants respondents before us, executed a
simple mortgage in his favour, and thereby hypothecated an 8-anna share
in mauza Barwa Kutwa and a 5-anna share in mauza Biswa Kutiya.

On the 23rd of February 1884, Hari Prasad advanced a further sum
of Es. 2,799 to Kazim Hasan and Nadir Hasan, and in consideration of
that advance they on that date executed a simple mortgage in favour of
Hari Prasad, by which they hypothecated the same 8-annas share in
mauza Barwa Kotwa and 4-annas of the 5-annas share of Biswa Kutiya
hypothecated by the deed of the 10th of September 1882, and in addition
certain shares in Mauzas Cap-[435]tainganj, Eudhauli, Jamgal, Banki,
Purasrampur and Bharpurwa.

On the 6th of August 1885, Kazim Hasan borrowed Es. 1,000 from
Mata Din Kasodhan, who ia the plaintiff-appellant, and on that day, and
in consideration of that advance, Kazim Hasan executed in favour of the
plaintiff-appellant a simple mortgage, hypothecating his 4 annas of the
8 annas of Burwa Kutwa, 2 annas of Biswa Kutiya, and some small shares
in Captainganj and Bharpurwa.

On the 12th of August 1885, Nadir Hasan borrowed Es. 1,999 from
Hari Prasad, and in consideration of that advance executed on that date a
deed in favour of Hari Prasad, by which be hypothecated bis 4 annas of
the 8 annas share in Barwa Kutwa, and 2i annas share in Biswa Kutiya,
and certain share? in Captainganji and Bharpurwa.

On the 21st of August 1885, Kazim Hasan borrowed Es. 999 from
Mata Prasad, and in consideration of that advance executed a simple
mortgage in favour of Mata Prasad, by which be hypothecated his 4 annas
of the 8-annas share in Barwa Kutwa, 2 annas in Biswa Kutiya and cer-
tain shares in Captainganj and Bbarpurwa.

On the 20bh of September 1886 Kazim Hasan and Nadir Hasan, by
a sale-deed of that date, sold to Hari Prasad the 8-annas share in mauza
Barwa Kutwa for Es. 14,530, and with that sum Hari Prasad's mortgages
of the 10th of September 1882, the 23rd of February 1884, and the 12fch

278



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13 All. 437



of August 1885, were paid off. It was to pay off those mortgages that
the sale of the 20bh of September 1886 was made.

On the 8th of January 1887, Mata Din brought his suit in the Court
of the Subordinate Judge of Gorakhpur against Kazim Hasan and Hari
Prasad. So far as is material for the consideration of this appeal, he
sought by his suit a decree setting aside the sale-deed of the 20th of
September 1886, and decreeing a sale of the 4-annas share in Barwa
Kutwa in enforcement of his lien under the deed of the 6th of August 1885.

[436] The plaintiff did not ask for redemption of the mortgages of
the lObh of September 1882 and the 23rd of February 1884, nor did he
seek foreclosure of the mortgage of the 21st of August 1885.

Kazim Hasan did not defend the suit. Mata Prasad was not made a
party to the suit.

The Subordinate Judge dismissed Mata Din's claim to have the sale-
deed of the 20th of September 1886 set aside, and to have the 4-annas
share in Barwa Kutwa brought to sale.

Mata Din appealed. The District Judge on appeal found that Hari
Prasad, when he purchased on the 20bh of September 1886, intended to
keep alive as shields for his protection the securities of the lObh of Sep-
tember 1882 and the 23rd of February 1884.

The Distrct Judge also found that Mata Din had never tendered
payment to Hari Prasad of the amount which had been due under Hari
Prasad's prior incumbrances, and had not offered to bring the money into
Court, and dismissed the appeal with costs.

The questions which we have to consider in this Second Appeal are
what, on the findings of fact of the lower appellate Court, are the
respective rights of Mata Din and Hari Prasad, and what is the decree
which we should pass in appeal in this case.

It has been contended on behalf of Mata Din that Hari Prasad is
not entitled to use as shields the mortgages of the 10th of September 1882
and the 23rd of February 1884 ; that Mata Din was not bound to ask for
redemption of either of those mortgages ; that Mata Prasad is not a neces-
s$ry party to the suit ; that Mata Din was not bound to seek foreclosure
so far as Mata Prasad's mortgage is concerned, and that Mata Din is
entitled to a decree for sale of the 4 annas in mauza Barwa Kutwa freed
of any incumbrance of Hari Prasad, or at least to a decree for sale of those
4 annas, subject to the mortgages of the 10th of September 1882 and the
23rd February 1884, or to a decree for sale of the rights and interest of
Mata Din and Kasim Hasan in those 4 annas.

[437] I hold without the slightest doubt on the authority of Gokuldoss
Gopaldoss v. Rambux Seochand (1) ; Gay a Prasad v. Saltk Prasad (2) ;
Mul Chand Kuber v. Lallu TriJcam (3) ; Shantapa v. Balapa (4) ; Rama
Naikan v. Subbaraya Mudali (5) ; SirbadhRai v. Raghunath Prasad (6) ;
Janki Prasad v. Sri Matra Mautangui Debia (7) and Gungadhara v.
Sivarama (8), as applied to the facts found by the lower appellate Court
in this case, that Hari Prasad is entitled to use the mortgages of the 10th
of September 1882 and the 23rd of February 1884 to the extent of the
amount which was due under them on the 20th of September 1886 as
shields against the plaintiff's claim to bring the 4 annas of mauza Barwa
Kutwa to sale. Having- regard to the view expressed by their Lordships
of the Privy Council inUmes Chunder Sircar v. ZahurFatima (9), I am of

(1) 11 1. A. 126- IOC. 1035. (2) 3 A. 68H. (3) 6 B 404. (4) 6 E. 561.
(5) 7 M.H.C.R. 229. (6) 7 A. 568. (7) 7 A. 577. (8) 8 M. 246.

(9) 17 I.A. 201 = 180. 164.



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opinion that as Hari Prasad has, since the 20fch of September 1886, been
in possession of the 8-annas share of mauza Barwa Kutwa, which he
practically took as representing the amounts due under the mortgages of
the 10th of September 1882, the 23rd of February 1884, and the 12bh of
August 1885, the interest which would otherwise be payable under the
mortgages of the 10th of September 1882, and the 23rd of February 1884,
subsequent to the 20th September 1886, should, if an account be directed
to be taken, be treated as satisfied by the rents and profits received by
Hari Prasad from the 8 annas of mauza Barwa Kutwa since the 20th of
September 1886.

Although all the mortgages in this case were ma.de subsequently to
the coming into force on the 1st of July 1882 of the Transfer of Property
Act, 1882 (Act IV of 1882), and the rights of the Darbies are consequently
governed by that Act, still as that Act was passed "to define and amend cer-
tain parts of the law relating to the Transfer of Property by Act of parties;"
and as there has been in the course of the arguments in this case much con-
tention as to [4381 what, prior to the coming into force of Act IV of 1882,
was the law in British India relating to the rights and liabilities of mort-
gagors, first mortgagees and subsequent mortgagees inter se, and as to how
far the law in that respect has been defined and amended by Act IV of 1882,
I propose before attempting to construe Act IV of 1882 to refer as shortly
as possible to such of the decisions of the Courts in India, and of their
Lordships of the Privy Council, which I have been able to find as throwing
any light on the contention of the parties before us. Undoubtedly before
the coming into force of Act IV of 1882, and also, as I have had reason
to know, since the coming into force of that Act, first mortgagees and also
second and subsequent mortgagees have, in suits on their mortgagors,
obtained decrees for sale of mortgaged or hypothecated immoveable property
without having redeemed or foreclosed the other mortgages or made the
other mortgagees parties to their suits.

Such suits and decrees throw no light upon the questions I propose
to consider, except in so far as they were the causes of subsequent litiga-
tion as to the rights of mortgagees who were not parties to them.

Most of the decisions which throw any light on the contentions of
the parties here have been decisions in suits which were subsequently
brought by such decree-holders for declarations that they weie entitled to
bring the property to sale under such decrees or in suits brought by other
mortgagees either against such decree-holders or the purchasers at sales
under such decrees for possession, for declarations of their rights as
mortgagees, for declarations that such decree-holder could not under such
decrees bring the property to sale without giving such other mortgagees an
opportunity to redeem or without redeeming their mortgages, as the case
might be, or for similar reliefs.

With the exception of Raghunath Prasad v. Jurawan Rai (1), to
which I shall refer later on, I am not aware of any case in which
a second or subsequent mortgagee suing on his mortgage for a decree
for sale of the mortgaged property and having made the prior [439]
mortgagee or mortgagees party or parties to his suit and obtained on
appeal otherwise from any High Court in India a decree for sale of the
mortgaged property or of any interest of his own or of the mortgagors
in it except on his redeeming the prior mortagagee or mortgagees.

(1) 8 A. 105.
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13 All. 450



I shall now proceed to refer to the cases of which I am aware, taking
them, as far as possible, in the order of date of the final decisions. In
Syud Wajed Hcssein v. Hafez Amhed Rezah (1) the plaintiffs sued for
possessions as purchaser at a sale held in execution of a decree upon a mort-
gage of the llth of October 1859. The defendants resisted the suit on the
ground that they had on the 15th of May 1868 by bill of sale purchased the
property, the consideration of that bill-of-sale having been money advanced
by them to pay off mortgages prior in date to that of the 1 Ith of October
1859. In that case Loch and Ainslie, JJ., in 1872, gave the plaintiffs a
decree for possession, conditional on their paying to the defendants all
sums for principal and interest paid by them on account of the mortgages
existing previous to the mortgage of the llth of October 1859, and remit-
ted the suit to the Court below that the amount so payable to the defendants
might be ascertained and embodied in the decree.

In Ramu Naikan v. Subbaraya Mudali (2), the plaintiff sued to recover
the amount due under a mortgage of 1869 by means of the mortgaged pro-
perty, as the reports says, which I understand to mean that the plaintiff
sought a decree for sale on his mortgage. The suit was resisted by the
second defendant on the ground that he was a prior mortgagee of the parti-
cular lands, and, as such, had a right to have the lands held liable for his
debt first. The facts, so far as they are material, appear to have been
that the second defendant having obtained a simple money decree on cer-
tain mortgage-bonds made between 1861 and 1870, by which the property
in question had been hypothecated to him, brought the property to sale under
his decree, and purchased it for a sum considerably less than the amount
which had been due under his mortgage-bonds. I infer from the report
[440] that the District Munsif bad given the plaintiff a decree for sale,
that on appeal the Civil Judge of Chittur had reversed so much of the
District Munsif's decree as related to the particular lands, tbat is, that
the Civil Judge had dismissed the plaintiff's suit to that extent, and that
on appeal to the High Court of Madras, Holloway, Officiating C. J., and
Kindersley, J., in 1873, affirmed the decision of the Civil Judge. In
their judgment in that case they are reported to have said that "Dernburg
justly observes that the subsequent mortgagee gets aft to which he is
entitled when he is allowed to redeem the prior mortgage."

That passage shows that those learned Judges were of opinion that a
second mortgagee who had not redeemed could not maintain a suit for the
sale of the mortgaged property or of any interest in it.

The decision of the Madras High Court in Ramu Naikan v. Subbaraya
Mudali was referred to apparently with approval by their Lordships of
the Privy Council in Gokuldoss Gopaldoss v. Rambux Seo Chand(3). Their
Lordships did not suggest that in Ramu Naikan v. Subbaraya Mudali
the Madras High Court had misapplied the principle of the shield.

In Vencata Chella Kandian v. Panjanadien (4), Turner, G. J., in
September 1881, threw some doubts on the correctness of the decision in
Ramu Naikan v. Subbaraya Mudali, and in reference to that decision
said that " when a second mortgage is created in favour of a person who
is not the holder of the first mortgage, the, second mortgagee is entitled
to pay off the first mortgage, or to sell the estate subject to the first
charge. On the same ground of regard for the interests of all parties that
dictates the preservation of the right created by the first charge, I am



(1) 17. W.B.O.R. 480.
(3)111 A. 126 (at p. 133).



A VII 36



(2) 7 M.H.C.R. 239.
(4) 4 M. 213.



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unable to see why the acquisition by the first mortgagee of the right
remaining in the owner deprives the second mortgagee of his right to enforce
his charge by a sale of the property subject to the right of the first mort-
gagee. If the first mortgagee had not acquired the rights remaining in the
441] owner it is unquestionable that the second mortgagee would have
been entitled to call for a sale of the property subject to the rights of the
prior inoumbrancer. His right should not be defeated by a transaction to
which he is no party. If it had been considered an objection to the pre-
servation of his right that the first mortgagee might subsequently have
applied to the Court to order a sale (and I do not think it is, for the
purchaser under the second mortgage might redeem the first mortgage and
prevent a sale), then a sale should have been ordered of the property to
discharge both mortgages, and the proceeds should have been applied to
their satisfaction in order of priority ; but I believe the course which
would have best fulfilled the contracts and secured the right of the parties
would have been to allow a sale subject to the first iucumbrance."

The first comment to be made on those observations of Turner,
C. J., ic that from the point of view from which he regarded the
case then before him they ware entirely obiter. The second com-
ment is that although Turner, C. J., was of opinion that "when a
second mortgage is created in favour of a person who is not the holder
of the first mortgage, the second mortgagee is entitled to pay off the first
mortgage, or to sell the estate subject to the first charge," he does not
explain how, if the first mortgage was an usufructuary mortgage with
possession, the usufruct to be applied to the discharge of the principal
and interest, the second mortgagee could have a right to redeem until the
principal and interest had been satisfied by the usufruct-or how, in any
other case, a second mortgagee could have a right to redeem a first
mortgage the time for the redemption of which, as fixed by the mortgage
contract, had not arrived, or, in other words, how a second mortgagee in
such cases could by a transaction to which the first mortgagee was no
party, have acquired a right as against him which their mortgagor did
not possess.

The third comment, is that Turner, C. J., referred to no authority in
support of his view of the rights of a first and second mortgagee respect-
ively. It would have enabled us to judge of the soundness or other-
wise of those obiter dicta, if Turner, C. J., has referred to [442] the
authority, if any, which was present to his mind, or had given some
indication as to whether he thought that the views which he was enunci-
ating without any doubt or hesitation were consistent with the princioles
of law or equity which had before then been applied in India or in Eng-
land. Those obiter dicta are the first judicial suggestions which I have
been able to find that the rights of a second mortgagee as against a, first
mortgagee included a right to bring the mortgaged property or an interest
in it to sale without even an offer to redeem the prior mortgage having
been made.

In 1876 in the case of Khub Chand v. Kalian Das (1) Turner, J.,
bad defined the rights as they then appeared to him of a second mortga-
gee. He is "there reported to have said : " In the case now before the
Court the mortgagor, instead of making a transfer of the whole of his
interest in the property pledged, aliened it in part by the creation of a
subsequent incumbranoe in the nature of a conditional mortgage. He

(1) A. 240 (at p. 217).
282



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thereby conferred on the conditional mortgagee the right to redeem the
first mortgagor, at whatever time it could have been redeemed by the
mortgagor, and the right, in the event of default being made in payment
of the debt due to him, to foreclose and bold the property subject to the
first incumbrance." The first incumbrance in that case was a simple
mortgage. It does not appear whether Turner, J., then considered that
a right to hold included a rfght to sell the mortgaged property subject to
the first incumbrance.

In Gaya Prasad v. Salik Prasad (1) Sfcuart, C. J., Oldfied and Straight,
JJ., in April 1881, held that a person who had been prior incum-
brancer, and who subsequently to a mortgage of the same property to
another person purchased the property intending to keep alive his prior
incumbrance as a shield for his protection, could defeat a suit by the
puisne incumbrancer to bring the property to sale. Although Pearson, J.,
dissented in that case, he apparently dissented on the ground that in his
opinion the pre-existing lien of the prior incumbrancer had been extinguish-
ed by his purchase.

[443] In Kasum-un-nissa Bibee v. Nilratna Bose (2) Pontifex and
Field, JJ., in May 1881 held that a patnidar should have been made a
party to a mortgage suit relating to the property, and gave the patnidar a
decree for redemption.

In Damodar Dev Chand v. Naro Mahadev Kelkar(S) Westropp, C. J.,
and Pinhey, J., in September 1881, held that a second mortgagee was
entitled to be made a party to a suit by the first mortgagee on his mort-
gage, in order that be might have an opportunity of redeeming the first
mortgage, and not having been a party to that suit, could not be deprived
of that right by proceedings to which be was not a party. In the suit of
the first mortgagee a decree for sale bad been made, and the property had
been sold and purchased benami for the first mortgagee. In the suit of
the second mortgagee a decree for redemption was made in his favour.

In Har Prasad v. Bhagwan Das (4) Oldfied and Brodhurst., JJ., in
January 1882, followed the decision of the majority of this Court in Gaya
Prasad v. Salik Prasad and held that the person who was entitled to the
protection of a prior mortgage was, until his mortgage debt was satisfied,
entitled to have a suit by a puisne incumbrancer to bring the mortgaged
property to sale dismissed.

In Muhammad Ibrahim v. Tek Chand (5) Stuart, C. J., and Oldfield,
J., in March 1882, following Gaya Prasad v. Salik Prasad, dismissed a
suit for sale brought by a puisne incumbrancer against a prior mort-
gagee.

In Mul Chand Kuber v. Lallu Trikam (6), the facts were that a
house was mortgaged to the father of the defendant, was subsequent-
ly mortgaged by the same mortgagor to the plaintiff, and was still
later purchased from the mortgagor by the father of the defendant,
who in purchasing intended to keep his mortgage alive as a shield
for the protection of his interest. The plaintiff having obtained a
decree upon his mortgage attached the property. The attachment
was successfully resisted by the defendant. Upon which [444] the
plaintiff brought a suit to establish his right to levy, by sale of the house,
the amount due under his mortgage. Melvill, West and Pinhey, JJ.,



(1) 3 A. 683. (2) 8 C. 79.

(5) 2 A.W.N. (1882) 59.



(3) 6 B. 11.



(4) 4 A. 196.
(6) 6 B. 401.



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in March 1882, held that the defendant might properly require the redem-
ption of bis mortgage as the condition of the plaintiff's enforcing his decree
upon his mortgage against the property. That case had been referred to
the Full Bench by Westropp, C. J., and Nanabhi Hari Das, J. By their
referring order it appears that they were of opinion that the fair course
was to permit the plaintiff to redeem the defendant's mortgage.

In Shantapa v. Balapa (1), Melvill and Pinhey, JJ., followed the
decision in Mul Chand Kuber v. Lallu Trikam.

In Ali Hasan v. Dhirja (2) an usufructuary mortgage of a 2-annas
6-piea share was in 1874 made to the plaintiff who was put in possession.
In 1875 a portion of the same property was again mortgaged to the plaintiff.
In July, 1877, the 2-annas 6-pies share less 2 pie^ was mortgaged to one
Niamat, who took with notice of the previous incumbrances. In
October, 1877, the 2-annas 4-pies share, which had, in July 1877, been
mortgaged to Niamat, was again mortgaged to the plaintiff. In Sep-
tember 1879, Niamat obtained a decree for sale of the 2-annas 4-pies share
in enforcement of his lien under his mortgage of July 1877. The plaint-
iff was not a party to that suit. On the 2nd of October 1879, the plaint-
iff purchased from one of the mortgagors what had become of the other
mortgagor I do not know- -2 annas of the 2-annas 6-pies share mortgaged
to him in 1874. Part of the consideration for that purchase was the
principal and interest due under the mortgages of 1874 . and 1875.
On the 20th of November 1880, the defendants at an auction sale,
held under Niamab's decree, purchased the 2-annas 4-pies share. There-
upon the plaintiff brought his suit for a declaration that he was entitled
to the proprietary right in, and possession of, the 2-annas share pur-
chased by him. The above are the faots, so far aa they are material, on
the question before us. In June, 1882, Tyrrell and Mahmood, JJ., held
that the plaintiff was entitled to insist upon his prior charges being
[445] paid off before the defendants could either oust him or be entitled
to absolute nroprietary right in the property. At page 529 of the Eeport,
Mahmood, J., is reported to have said " under this view, which in my
judgment is consistent with the opinion of the Full Bench of this Court
in Gay a Prasad v. Salik Prasad, I bold that all that the plaintiff was
entitled to in this litigation was a declaration that as holder of the prior
mortgages of 7tb July 1874 and 17th July 1875, respectively, he is
entitled to continue in possession by virtue of his said liens that the
rights purchased by the defendants-appellants are subject to these liens,
and cannot be enforced as against the plaintiff till full payment of the
moneys due to him under the mortgage-deeds abovementioned. "

In Parse v. Girand Singh (3) the plaintiffs in 1879 had purchased
property over which they had held mortgages of the 28th of February
1876 and the 23rd of February 1877, part of the consideration for the
purchase being set off against the money due under their two mort-
gages. On the 13th of May, 1877, the mortgagor mortgaged the pro-
perty to the defendant. In 1880 the defendant sued the mortgagor
alone to enforce his hypothecation by sale of the property, and on the llth
of August of that year obtained a decree. On the defendant applying for
attachment and sale the plaintiffs objected. Their objection was disallowed,
and they brought their suit tc have he attachment removed. Oldfield
and Tyrrell, JJ. in April 1885, held that the plaintiffs by purchasing
the property on which they had a prior charge had not lost the benefit



(1) 6 B. 561.



(2) 4 A. 518.
284



(3) 5 A. W. N. (1885), 155,



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MATA DIN KASODHAN V. KAZIM HUSAIN



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of their charge, and thab they were entitled to resist the sale of the proper-
ty by the defendant, subsequent mortgagee, until their prior charge was



Online LibraryChas. A. Stevens & BrosThe Indian decisions (New series) : being a re-print of all the decisions of the Privy Council on appeals from India and of the various high courts and other superior courts in India reported both in the official and non-official reports from 1875 (Volume 7) → online text (page 43 of 155)