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been argued, the mortgages in which were made prior to the coming into
force of Act IV of 1882. In my opinion the rights, liabilities and reliefs of
mortgagors and mortgagees, including second and subsequent mortgagees, so
far as redemotion, foreclosure and sale are concerned, were in British India
before Act IV of 1882 came into force what Chapter IV of that Act has defin-
ed and declared such rights, liabilities and reliefs to be. The procedure by
which such rights and liabilities were allowed to be determined and
enforced, and by which such reliefs were allowed to be obtained, was not
always the same and was in some respects inconsistent with the provi-
sions of Chapter IV of Act IV of 1882.

It has been contended that sections 96 and 97 of Act IV of 1882
indicate that under Chapter IV of that Act a Court may, at the suit of a
second mortgagee, order the mortgaged property to be sold subject to the
prior mortgage, that is, order that the [457] property be sold without the
prior mortgage being redeemed, and without the consent of the prior
mortgagee to the property being sold freed from the prior mortgage being
given. Section 96 is not happily worded : but I cannot find in Chapter
IV any provision enabling a Court to make such an order or protecting
the interests of the prior mortgagee. If such an order could be made
certainly section 97 would not protect his interests. I regard the words
" subject to a prior mortgage " in section 96 as mere words of descrip-
tion. If section 96 were intended to have the meaning which it has been
contended it has, it ought to have been " If any property the sale of
which is directed under this chapter in order to be sold subject to a



1891
JULY 25.

FULL
BENCH.

13 A 432.

(F.B.).



U) 6 A. 262.



(2) 12 C. 583.
291



(3) L.R. 4 Ch. D. 752.



13 All. 458



IUDIAN DECISIONS, NEW SERIES



[Yol.



1891

JULX-25,

BULL
BENCH.

13 A. 432
(MM.



prior mortgage, the Court may, etc." It has been contended that as
section 295 of the Code of Civil Procedure contemplates a judgment-
creditor bringing to sale in execution of an ordinary money-decree mort-
gaged property, and selling it subject) to a mortgage or charge, and also
contemplates immoveable property being sold in execution of a decree
ordering its sale for the discharge of an incumbrance thereon, we should
construe Chapter IV of Act IV of 1882 so as to give to a second mortgagee
the same rights which a judgment-creditor would have under his ordinary
money-decree. That, in my opinion, cannot be done. We must construe
each Act on its own wording and in accordance with its own context.
Besides the cases are not similar. In the one case, the second mortgagee
has the rights and reliefs which Act IV of 1882 declares he has under
the mortgage contract which he accepted. They are the creation of a
mortgage contract controlled by the law relating to mortgage contracts.
In the other case, the judgment-creditor's decree may have been obtained
in a suit brought upon any one of a great variety of causes of action in
no way dependent on, or relating to a mortgage contract. Although such
judgment-creditor would, under section 91 of Act IV of 1882, when he had
attached the mortgagor's interest in the property, be a person entitled to
redeem and to institute a suit for redemption, he would not, unless he were a
mortgagee of the property which he sought to sell, be compelled by sec-
tion 99, in order to bring the property to sale, to [458] bring a suit under
section 67 of that Act. The case of immoveable property being sold in
execution of a decree ordering its sale for the discharge of an inoumbrance
referred to in clause (c) of section 295 of the Code of Civil Procedure must
of necessity, if the suit was instituted after the 1st of July, 1882, be a case
in which the order for sale had been made under Chap. IV of Act IV
of 1882.

The plaintiff's mortgage of the 6th of August 1885 is a simple mort-
gage. This suit was instituted after the mortgage money had become
payable to him. No decree had been made for redemption, nor had the
mortgage-money been paid or deposited. If that mortgage had been the first
and only mortgage, it is clear that under sections 67 and 88 of the
Transfer of Property Act, 1882, the plaintiff would have been entitled to a
decree to the effect mentioned in the first and second paragraphs of
section 86, and also ordering that in default of the mortgagor paying as
therein mentioned the mortgaged property or a sufficient part thereof be
sold and that the proceeds of the sale (after defraying thereout the expenses
of the sale) be paid into Court and applied in payment of what would be found
due to the plaintiff in account, and that the balance if any, be paid to the
mortgagor-defendant or other persons entitled to receive the game. Does
the fact that the plaintiff is not a sole, but a second mortgagee, and that
there is a subsequent mortgage, namely, that of the 21st August 1885,
alter the rights which he would have had under sections 67 and 88 if he
had been the sole mortgagee ? The answer to that question must in my
opinion, depend on a consideration of other sections of the Transfer of
Property Act, 1882. In considering those sections, and in endeavouring
to ascertain what was the intention of the Legislature, we must; bear in
mind that the property which a Court is, under section 88 to order to be
sold, is the " mortgaged property or a sufficient part thereof."

The plaintiff, in order to bring the mortgaged property to sale,
was compelled by section 99 to bring his suit under section 67 of the
Act. The plaintiff having had notice of Hari Prasad's [459] mortgages
was bound by section 85 to join Hari Prasad as a party to the suit.

292



YII] MATA DIN KASODHAN V. KAZIM HUSAIN 13 All. 460

What is the effect on his suit of his not having joined Mata Prasad, I will 1891
consider laier on. JULY ?5.

The object of section 85 must be to give to all the parties thereby
required to be joined as parties to the suit an opportunity of protecting FOTJj
their own 'interests, and to enable the Court to determine the respective BENCH.
rights of all such parties, and to pass a decree and order which would be 13 ~^ 82
consistent with, and not in violation of, such rights, and thus to prevent ,p' B .
opportunities for harassing and complicated subsequent litigation arising.

The rights of a second or subsequent mortgagee, so far as regards
redemption, foreclosure and sale of the mortgaged property are, by reference,
declared and defined by section 75. Those rights, as I have pointed out,
are as against the prior mortgagee or mortgagees the same rights as his .
mortgagor has against such prior mortgagee or mortgagees, and no more,
and as against subsequent mortgagees, if any, the same rights which he
has against his mortgagor and no more.

Now what are the rights which the mortgagor has against a mort-
gagee, so far as redemption or sale are concerned ?

Those rights of the mortgagor, so far as mortgages other than usufruc-
tuary mortgages are concerned, are declared, and denned by sections 60 and
61. The right of the mortgagor under section 60 is a right to redeem,
which is to be enforced by a suit for redemption. The right to redeem
does not, under section 67, arise until the principal money has become
payable. As the right of the second or subsequent mortgagee as against
a prior mortgagee is confined to the right which the mortgagor has against
such prior mortgagee, let us see what is the decree which a mortgagor
can, in a properly framed suit on a mortgage other than an usufructuary
mortgage obtain against his first mortgagee. That decree is a decree under
section 92 " ordering that an account be taken of what will be due to the
defendant for the mortgage -money and for his costs of the suit, if any,
awarded to him on the day next hereinafter referred to, or declaring the
amount so due at the date of [460] the decree ; that upon the plaintiff
paying to the defendant or into Court the amount so due on a day
within six months from the date of declaring in Court the amount so
due, to be fixed by the Court, the defendant shall deliver up to the.
plaintiff or to such person as he appoints, all documents in his possession
or power relating to the mortgaged property, and shall retransfer it to
the plaintiff free from the mortgage and from all incumbrances created
by the defendant or any person claiming under him ; or, when the defend-
ant claims by derived title, by those under whom he claims and shall,
if necessary, put the plaintiff into possession of the mortgaged property ;
and that if such payment is not made on or before the day to be fixed
by the Court, the plaintiff shall (unless the mortgage be simple or usufruc-
tuary), be absolutely debarred of all right to redeem the property, or
(unless the mortgage be by conditional sale) that the property be sold."

It is obvious from section 93 that in case of default by the plaintiff
in paying the amount due, it is the defendant, and not the plaintiff, who
can obtain in one case an order that the plaintiff be debarred of all right
to redeem, and in the other that the mortgaged property be sold.

In case of an order for sale under sections 92 and 93, the order must
be that " such property or a sufficient part thereof be sold, and that the
proceeds of the sale (after defraying thereout the expenses of the sale) be
paid into Court, and applied in payment of what is found due to the
defendant, and that the balance be paid to the plaintiff or other persons
entitled to receive the same."

293



13 All. 461



INDIAN DECISIONS, NEW SEEIES



[Yol.



1891

JULY 25.

FULL
BENCH.

13 A. 432

(F.B.).



Section 93 further enacts that "on the passing of any order under this
section the plaintiff's right to redeem, and the security, shall, as regards
the property affected by the order, both be extinguished."

As I read the sections of the Transfer of Property Act, 1882, relating to
the rights and liabilities of mortgagors and mortgagees the word "property"
is used throughout those sections as meaning the actual immoveable pro-
perty mortgaged, and not as meaning merely particular rights and interests
in such property as di8-[461]tingui8hed and separated from the actual
immoveable property itself. In other words, the word .property' is, in
my opinion, used throughout Chapter IV of the Transfer of Property Act,
1882, in the same sense and with the same meaning as that word is used
in section 58, where a mortgage is defined as "the transfer of an interest
in specific immoveable property for the purpose of securing the payment.&c."
If, as has been contended, the Legislature bad intended that a bare right
to redeem, as apart and distinguished from the immoveable property, should
be treated and considered as "property," as that word is used throughout
Chapter IV of Act IV of 1882, the Legislature could have so enacted ; but
in my opinion it has not. The property to be sold within the meaning of
section 67 must mean the immoveable property. " The mortgaged property
or a sufficient part thereof " in section 88 must mean the mortgaged
immoveable property or a part of it, and ia neither section can the word
"property" mean merely, the bare rights and interests of a mortgagor,
although the sale of the immoveable mortgaged property under a decree
for sale in a properly framed suit would carry with it such rights and
interests.

In a suit for foreclosure the defendant in one event is to be put into
possession of the property, and in the other possession of the property is to
be delivered to the plaintiff. In a suit for redemption the plaintiff is in one
event to be put into possession of the mortgaged property, and in the other
possession of the property is to be delivered to the defendant. By secion 91
the right which (a) any person (other than the mortgagee of the interest
sought to be redeemed) having any interest in, or charge upon the pro-
perty, or (b) any person having any interest in, or charge upon the right
to redeem the property, or (/) the judgment-creditor of the mortgagor,
when he has obtained execution by attachment of the mortgagor's-interest
in the property, has, is a right to redeem or to institute a suit for
redemption of the "mortgaged property." It is, in my opinion, obvious
that in section 91 an " interest " in the property is not synonymous
with the" mortgaged property." In section 95 actual possession of the
[462] mortgaged property, and not the possession of an interest in the
mortgaged property.or a right to the possession of the mortgaged property,
must be the possession referred to.

To construe the word " property " as it is used in Chapter IV of Act
IV of 1882 otherwise than as I construe it, would, it appears to me,
necessarily lead to the conclusion that under that chapter a bare right
which is known in England as an equity of redemption can be brought to
sale and sold.

It has been contended that " immoveable property" as defined in
clause (5) of section 2 of the General Clauses Act, 1868 (Act I of 1868)
includes the rights and interests of a mortgagor or of a mortgagee, and,
for example, of a second mortgagee in mortgaged property. Whether or
not that contention be well founded, it would, in my opinion, be repug-
nant to the context to hold that the word " property," as it is used in
Chapter IV of Act IV of 1882, means rights and interest in mortgaged

294



YII]



MATA DIN KASODHAN V. KAZIM HUSAIN



13 All. 464



property as distinct from the actual immovable property, as for instance,
land itself. The law in England or works on Equity or Jurisprudence
can, in my opinion, no more help us to a construction of the word " pro-
perty " in Chapter IV than can Webster's Dictionary.

Now let us see whether it could possibly have been the intention of the
Legislature that a second mortgagee should, without redeeming a prior
mortgage, be entitled to bring the mortgaged property, or any part of it, to
sale under the Transfer of Property Act ; and having regard to s. 99, it
ia only by a suit under that Act that he could, if at all, bring such property
or any part of it to sale. It could not have been the intention of the
Legislature to give to a second mortgagee as against the prior mortgagee
more extensive rights than the mortgagor had against such prior mortgagee.
If the prior mortgage was an usufructuary mortgage, under which the
mortgagee was authorised to pay himself the mortgage- money from the
rents and profits of the property, the mortgagor's right was to recover
possession of the property when such money was paid. Tbe mortgagor
could not, either before or since the Transfer of Property Act, 1882, came
[463] into force, redeem or get possession of or bring to sale such property
or any part of it until the usufruct had satisfied the mortgage-money. I
fail to see on what principle : the second mortgagee could redeem that pro-
perty or bring it or any part of it to sale, or how be by a subsequent con-
tract to which the prior mortgagee was ndt a party could deprive that prior
mortgagee of any of the benefits of his prior contract.

Let us take another case, namely, that of a prior simple mortgage,
the time for payment of the principal money of which had not arrived.
In that case the mortgagor could not, either before or since the Transfer of
Property Act, 1882, came into force, redeem or bring to sale the hypothe-
cated property. On what principle could the second mortgagee redeem or
bring that property to sale, or how could be under his subsequent contract
obtain the right to deprive the prior mortgagee of the benefits of his prior
contract by redeeming or bringing to sale before the due date of that prior
mortgage the property 'or any part of it which had been hypothecated as
security for the repayment of the mortgage-money of the first mortgage ?

It has been contended that, if my construction of Act IV of 1882 be
the correct one, cases of great hardship would occur, and as an instance, a
case has been supposed in which there are two mortgages of the same
property, the first of which was made on the 1st of January 1890,
the 1st of January ]900 being the date when, according to the mort-
gage contract, the principal money might be repaid and the mortgage
be redeemed; and the second mortgage made on the 1st of February
1891, the 1st of February 1893 being the date when, according to
the mortgage contract, the principal money should become due and
repayable. It has been contended that in such a case it would be hard
and unjust to prevent the second mortgagee from instituting and success-
fully maintaining a suit to obtain repayment of his mortgage-money by
sale of the mortgaged property until the 2nd of January 1900, when his
mortgage contract made the money repayable on the 1st of February 1893.

[464] I can see no injustice in such a case ; and as to hardship, if
there were any, the second mortgagee brought it upon himself. If the
second mortgagee had, before he advanced his money on the second mort-
gage, notice in fact of the first mortgage, he advanced his mortgage
money with his eyes open. If the first mortgage was registered, the
second mortgagee could by a search in the Registry have ascertained the
nature of the security which he was taking. If the first mortgage was not-

295



1891

JULY 25.

FULL
BENCH.

*'



13 All. 465



INDIAN DECISIONS, NEW SERIES



[Yol.



1891 ne which, in order to make it available against the immoveable property
JULY 95. comprised in it, it was necessary to register under the Registration Act of

1877 (Act III of 1877), and was not in fact registered, the second mort-

FULL gagee could obtain priority for his second mortgage by registering it,
BENCH, provided he had not had notice of the first mortgage.

On the other baud, it appears to me that it would be grossly unjust
13 A. 932 and inequitable to deprive a first mortgagee of any of the benefits of his
(F.B.). mortgage contract for the advantage of the second mortgagee, to whose
contract the first mortgagee was not a party and who had not been in-
duced to enter into that contract by any representations of the first
mortgagee such as would entitle the second mortgagee to relief against
the first mortgagee.

Having regard to section 89, and particularly to the latter half of it,
I am of opinion that the suit for sale under section 88 can only be
brought by a person entitled to foreclose against a person having a, right
to redeem. As I construe Act IV of 1882 a second mortgagee, if he desires
to bring the mortgaged property or any part of it feo sale, must bring his
suit under that Act ; and that suit, so far as it is a suit against the mort-
gagor, must be one for sale; so far as it is a suit against the prior mort-
gagee, it must be a suit under sections 92 and 93, in which case without re-
demption he could not get an order for sale of the mortgaged property or
any part of it under section 88 against the mortgagor, and his suit
so far as it is a suit against the subsequent mortgagees, must be a
suit for foreclosure of sale. The suit before us in appeal is not such
a suit. I would be disposed even at this stage of the suit to allow
the plaintiff to amend in order that such relief as he might be
[465] entitled to might be granted to him, if in other respects the suit was
one in compliance with Act IV of 1882. But it is not. Mata Prasad, the
mortgagee of the 21st of August 1885, was not joined as a party to this
suit. Mata Prasad's mortgage was a registered mortgage, and Mata
Prasad's suit on his mortgage was instituted in the Court of the Subordi-
nat Judge of Gorakhpur on the same day, the 7th January 1877, on
which the present plaintiff's suit was instituted in the same Court Mata
Prasad's suit being entered ie the Court Kegister of original suits as No. 2
of 1887 and the plaintiff's as No. 3 of 1887. The two suits were heard
together by the Subordinate Judge.

Having regard to those facts, and to section 3 of Act IV of 1882,
which enacts, so far as is material, that" a person is said to have ' notice'
of a fact when he actually knows that fact, or when, but for wilful absten-
tion from an enquiry or search which he ought to have made, or gross
negligence, he would have known it," I am bound to hold that the plain-
tiff had, within the meaning of section 85 of Act IV of ]882, notice of
the interest of Mata Prasad in the property comprised in the plaintiff.s
mortgage here in suit, and that not having joined Mata Prasad as a
party to this suit, the plaintiff has failed to comply with the imperative
condition of section 85 of Act IV of 1882. If the plaintiff had through
an oversight omitted, in the first instance, to join Mata Prasad, he could
have applied under section 32 of the Code of Civil Procedure to have Mata
Prasad made a defendant. He never did so. Notwithstanding section 34
of that Oode, I am of opinion that we must act upon the imperative words
in section 85 of Act IV of 1882. At this stage of the suit I think wa
ought not to exercise the discretionary power vested in a Court under
section 32 of the Code of Civil Procedure, particularly as the suit is not
one which, without other amendments involving practically a fresh trial

296



Yin



MATA DIN KASODHAN V. KAZIM HUSAIN



13 All. 467



could be maintained. It is necessary that litigants should be made to
know and feel that the Statute Law, when it affects their rights of suit,
must be complied with, and that in such a case as this Chanter IV of Act
IV of 1882 must not be- ignored and treated as a dead [466] letter. Sec-
tion 85 was advisedly, and wich the object of preventing multiplicity of
suits, introduced into Act IV of 1882, and we must give effect to it by
dismissing, as I would on that ground alone if there were no other, this
appeal with costs, and confirming the dismissal of the suit so far as it has
been dismissed below with costs.

MAHMOOD, J. This case is so closely connected with S. A. No. 1213
of 1888 that both these cases were disposed of together by the two Courts
below, and I think it will be convenient to dispose of them here in one
and the same judgment.

Dealing with these two cases together, the facts, although clearly
stated in the judgment of the learned Judge of the lower appellate Court,
may be recapitulated here, since the points of law which they raise are im-
portant, and have been referred to a Full Bench consisting of all the mem-
bers of this Court.

The facts are these. Two brothers Kazim Husain and Nadir Husain
owned shares in various villages and they have dealt with chose shares
by various deeds of transfer which, so far as these two cases are concerned,
require mention only of the following transactions :

(1) Both Kazim Husain and Nadir Husain executed a simple
mortgage in favour of the defendant Hari Pra?ad, hypothecating their 8
annas share in mauza Barwa Kutwa and their 5 annas and 4 pies share
in mauza Bhisia Kattiya, covenanting that they would repay the amount
of money due on the mortgage in the course of one year, that till such pay-
ment they would not alienate the hypothecated property, and that in default
of such payment, the money should be recoverable by sale of the hypothe-
cated property in due course of the law. The amount for which this
hypothecation was made is represented in the deed to be Es. 2,901, and
the deed is dated the 10 September 1882.

(2) On the 23rd February 1884, the same mortgagors, namely Kazim
Husain and Nadir Husain, took a further advance from the same mort-
gagee, viz., Hari P.rasad, of a sum of Es! 2,799 and executed a simple
mortgage hypothecating again their 8-annas share [467] in the above-
mentioned mauza Barwa Kutwa and only a 4 annas share in mauza
Bhisia Kattiya together with other shares in five other villages of
which express mention is not necessary for the purposes of this case.
I may mention, however, that the deed contains a covenant to the effect,
that the money due upon the bond would be repaid within a year, that
till such payment the mortgagors would not alienate the hypothecated
property, and that in default of payment, the mortgagee would be entitled
to recover the money due upon the mortgage by enforcement of the
mortgage.

(3) On the 6th August, 1885, a third transaction took place to which
the aforesaid mortgagee Hari Prasad was no party. This transaction was
a simple mortgage executed by the above-mentioned Kazim Husain alone
in favour of the plaintiff Mata Din Kasodhan in lieu of Es. 1,000 hypothe-
cating the mortgagor's 4-anna share in mauza Barwa Kutwa and 2-annas



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 45 of 155)