P L D 1952 Dacca 125 (PLP)

ISPAHANI, J.

‑The appellant was defendant No. 1 in other suit No. 23 of 1945 filed in the 1st Subordinate Judge's Court, Chittagong, by the plaintiff for redemption of the prior mort gage with a prayer for possession of the mortgage property. The property in suit originally belonged to defendants Nos. 2 A and 3 who borrowing some money mortgaged the same on) the 27th May, 1937, to pro forma defendant No. 5, the Comilla Banking Corporation, Ltd. After the mortgage the mortgagors borrowed Rs. 7,950 from pro forma defendant No. 4, Krisna Chandra Dutta on four promissory notes. They were unable to pay the dues under the promissory notes and so executed two mortgage bonds in favour of pro forma defendant No. 4 in respect of the disputed property on the 31st May, 1939, for the amounts borrowed from them. In 1942 the prior mortgagee filed mortgage suit No. 4 of 1942 against defendants Nos. 2 and 3 without impleading the second mortgagee as party defendant and obtained a decree. In execution of 'the said decree, the mortgaged property was sold and purchased by defendant No. 1 in February, 1944, and he took delivery of possession on the 13th December, 1944. On the 23rd May, 1945, the plaintiff purchased the interest of defendant No. 4 by two kabalas, Exhs. 2 and 2 (a). After that the plaintiff asked defendants Nos. 2 and 3 to pay up the mortgage dues but they denied liability stating that the mortgage property had been purchased by defendant No. 1 in execution of the mortgage decree obtained by pro forma defendant No.

5. After that the present suit was filed. Defendant No. 1 contested the suit on the ground that it was not maintainable in the present form ; that the plaintiff had no right to bring a suit for redemption ; that the promis sory notes mentioned in the plaint were not genuine docu ments and no consideration passed under them ; that the mortgage bond alleged to have been executed by defendants Nos. 2 and 3 in favour of defendant No. 4 were not genuine documents and no consideration passed under them ; that the plaintiff paid only Rs.2,000 as considerations for the kabalas executed in his favour ; that the plaintiff could not maintain the suit without giving him an opportunity to redeem the prior mortgage ; that the plaintiff was not entitled to get deduction of profits as claimed by him ; that he (defendant No. 1) had made improvements in the properties in dispute and, therefore, the plaintiff could not redeem him without paying compensation for the improvements so made and that the plaintiff's prayer for recovery of possession of the disputed lands was not maintainable. The Subordinate judge decreed the suit in part on contest against defendant No. 1 and ex parte against the‑rest and ordered that defendant No. 1 would redeem the plaintiff with respect to the mort gage bonds, Exhs. 1 and 1 (a) within three months and while so redeeming defendant No. 1 would pay the plaintiff full consideration money of the said bonds and also interest at eight per cent. per annum of the amount ‑of the consideration money of the mortgage bonds till the date of the filing of the suit. He further ordered that if defendant No. 1 failed to redeem the plaintiff within the time specified; then the plaintiff would have right to redeem defendant No. 1 in the way indicated above. He also gave directions as to how costs of the suit would be calculated. From that decision an appeal was preferred by the plaintiff and a cross‑objection filed by defendant No. 1 to the effect that the pro‑notes, Exhs. 4 and 4 (a), evincing the passing of partial consideration amounting to Rs.2,300 being inadmissible in evidence on account of defect in the stamps, the trial Court had erred in law in admit ting them in evidence. The learned District Judge, Chittagong, by his judgment and decree, dated the 30th November, 1948, allowed the appeal with costs and the judgment and decree of the trial Court were modified to this extent that instead of defendant No. 1 the plaintiff was held to have preferential right of redemption and he was directed to redeem the first mortgage. He directed that the suit be sent back to the trial Court for assessing the amount payable by the plaintiff to defendant No.

1. He, however, found against defendant No. 1 and dismissed the cross‑objection. Being aggrieved defendant No. 1 has come in second appeal to this Court. The facts are not disputed. The prior mortgagee, defend ant No. 5 filed mortgage suit No. 4 of 1942 against the mort gagors, defendants Nos. 2 and 3, in the Court of the 1st Subordinate judge, without impleading the second mortgagee, defendant No. 4, in that suit and obtained a decree. In February, 1944, the appellant, defendant No 1; purchased the mortgaged property in execution of the said decree. On the 23rd May 1945, the plaintiff‑respondent purchased the interest of defendant No. 4 by the kabalas, Exhs. 2 and 2 (a). On the 28th December, 1945 the present suit was filed by the plaintiff respondent for redemption of the first mortgage in favour of defendant No. 5 and for possession. The question, therefore, before us is as to who should be allowed to redeem in preference to the other. The appellant's contention is that as purchaser of the mortgaged property in execution of the decree in favour of the prior mortgagee, he has the preferential right to redeem the plaintiff respondent who had purchased the interest of defendant No. 4, the puisne mortgagee, while the plaintiff respondent's contention is that as the purchaser of the interest of the puisne mortgagee, who was not made a party defendant in the prior mortgagee's suit, he and not the appellant defendant No. 1 has the preferential right to redeem the appellant who has stepped in the shoes of the first mortgagee. The learned District judge, accepting the contention raised on behalf of the plaintiff respondent has held in his favour setting aside decision of the learned Subordinate judge who held a contrary view. The learned Advocates, appearing for the parties, have argued the matter at length on the lines indicated above and it is, therefore, to be seen which party has a preferential claim of right of redemption. The learned District judge in coming to his decision did not rely on the authorities cited on behalf of the appellant bat relied on those cited on behalf of the plaintiff respondent. Those authorities were also placed before us and they are the following : In Sukhi v. Golam Safadar Khan I L R 43 All. 469 ; the facts were very different. Their Lordships of the Privy Council were considering the effect of the repeal of section 89 of the Transfer of Property Act (IV of 1882), which provided that in execution of a mortgage decree the security was extinguished and the purchaser represented the mortgagor alone. In a suit by a puisne mortgagee, the purchaser could not put forward his security as a shield. That section has been repealed by the Code of Civil Procedure, 1908 (Act V of .1908), and provision is now made in Order XXXIV, rules 3 and 5, which do not provide for the extinction of the mortgage security. The position now is that the first mortgagee can put forward his mortgage as a shield in a suit by the second mort gagee. In the present case there is a dispute between the claimants for redemption which was absent in the above cited authority. In Hara Krishna Maiti v. Gajendra Nath Hatoi, A I R (1939) Cal. 15 ; Sen J. was considering a case where first mortgagee without impleading the second mortgagee, brought a suit on his mortgage and purchased the property in execution of the decree obtained by him. In a suit brought by the second mortgagee for redemption of the first mortgagee, the second mortgagee contended that the first mortgagee should be made to account for the rents and profits of the property in his pos session. The first mortgagee opposed this, contending that he was not liable to account because he was in possession not as mortgagee but as auction‑purchaser. It was held that in spite of the sale in execution of the first mortgagee's decree, the second mortgagee held the equity of redemption and as such the first mortgagee was bound to account. Here also the question mooted before us was not raised and there was no question of a preferential claim of right of redemption. In Sailendra Nath Bhattachara v. Amarendra Nath Mukherjee 45 C W N 530, no question of a preferential claim of right of redemption arose or decided. In that case it was held that the defendant third party purchaser was not bound to account, for rents and profits for the periods of his possession up to the date of redemption fixed in the suit. This view is contrary to the view taken by Sen, J. in A I R (1939) Cal.

15. Their Lordships further held that the equity of redemption not having been wholly unrepresented in the prior mortgagor's suit, the purchaser had acquired at the sale the right of both the mortgagee and the mortgagor in that suit and although he had no right to possession as the purchaser of the mortgagee's rights, the mortgage being a simple mortgage he had such right as the purchaser of the mortgagor's rights and his possession, taken in due course of law, had to be referred to the second capacity. This case instead of helping the plaintiff respondent in a way helps the contention raised on behalf of the appellant that he, as purchaser of the interest not only of the prior mortgagee, but also of the mortgagor, has a preferential claim of right to redeem which the law cannot deny him. The learned District Judge did not properly construe the authorities cited before him and erred in law in holding that they supported the plaintiff‑respondent's case. Mr. De, appearing for the plaintiff respondent, has placed before us other authorities also to substantiate his argument. In Umes Chandra Sircar v. Zahur Fatima I L R 18 Cal. 164 (P. C.), the puisne mortgagee was not impleaded in the prior mortgagee's suit and it was held that his interest was not affected. This proposition of the law cannot be disputed and was conceded by Mr. Dass for the appellant. No. question of a pre ferential claim of right of redemption was raised or decided in that case. A similar view was taken in Jnanendra Nath Singh Roy v. Shorashi Charan Mitra I L R 49 Cal. 627, which follows the previous decision. These authorities also, in our opinion, do not support the plaintiff respondents's case and when Mr. De was asked if he had any authority on all fours with the facts of the present case confessed that he could not find any. Mr. G. C. Das, appearing for the appellant, referred to some authorities cited in both the lower Courts as well as other authorities as supporting the case of the appellant. In Hassanbhai Valad Budhanbhai v. Umaji and Chimnaji Bin Manaji I L R 28 Bom. 153, the mortgagors brought a redemp tion suit against the prior mortgagee without impleading the puishe mortgagee as a party to it. The usual redemption decree was passed but as the mortgagors failed ‑to redeem within the time allowed, the order of foreclosure was made absolute in favour of the prior mortgagee to recover his mortgage debt by sale of the mortgaged property and in that suit the prior mort gagee was joined as the person in possession. The lower Court allowed the puisne mortgagee to redeem the property from the prior mortgagee on payment of the money due to him under the foreclosure decree but their Lordships held, reversing the decree, that the prior mortgagee had a right to redeem superior to that of the puisne mortgagee. The case was followed in Paras Ram Singh v. Pandoni I L R 44 All.

462. On page 467 Ryves J. observes as follows :‑ Although it has been held that subsequent mortgagee who should have been made a party to the suit on a prior mort gage but had not been made a party, cannot in any way he affected by the decree in that suit, and cannot be put in a worse position than he would have been in if he had been made a party, on the other hand, it seems to me, he cannot be put in a better position than he would have been if represented then. If he had been made a party in the former suit, no doubt he could have redeemed the prior mortgage, but he would not thereby have obtained possession of the property. What he now claims is that, not having been made a party to the former suit, that decree must be considered a nullity, and that he is now entitled on redeeming the prior mortgage to become the owner of the whole property originally mortgaged. This manifestly, he cannot do. The result of the former suit un doubtedly was to vest the ownership of the property in the defendants and, as such, they must have a right to redeem the plaintiff. The facts in the cited authority are more or less the same as the facts in the present case and the argument advanced therein is identical to the argument advanced before us. This authority is a complete answer to the plaintiff respondent's case and as upholding the appellant's case. In Ram Baran Chaube v. Bhag wati Pande I L R 47 All. 751, their Lordships held that where the mortgagor's equity of redemption happens to have vested by purchase in a person who is also a prior mortgagee and that person as owner of the equity of the redemption wants to re deem a puisne mortgage while at the same time the puisne mortgagee wants to redeem the prior mortgage, the claim of the former not as a prior mortgagee but as owner of the equity of redemption will be preferred. At page 755 their Lordships observe as follows :‑ "It is urged that the prior mortgagee filed his suit and got his decree without making the plaintiff puisne mortgagee a party to his suit, and then himself purchased deliberately with the intention of depriving the puisne mortgagee of his right to redeem, This may be so, but how does it help the plaintiff? If, to mark our disapproval, the plaintiffs were given the right to redeem which he claims, what would he gain thereby ? The prior mortgagee has by his purchase of the mortgagor's rights secured the right to redeem the mort gage of the plaintiff, and if the plaintiff redeemed his mort gage, he would be able immediately in turn to redeem the plaintiff's mortgage. The case is in all essentials indistin guishable from that of Paras Ram Singh v. Pandoni. We find ourselves in complete agreement with that decision and the reasoning to be found therein . . . . . . . . . . . . . . .". The view taken in the above case was that even if the prior mortgagee deliberately purchased the mortgaged property in execution of his decree obtained against the mortgagor without impleading the puisne mortgagee with the intention of depriv ing the puisne mortgagee of his right to redeem the prior mort gage even in those circumstances the prior mortgagee having purchased the equity of redemption of the mortgagor had a preferential right to redeem the puisne mortgagee. Mr. De, however, relies on Govindrao v. Rukhamand A I R (1924) Nag. 198 ; to show that except the Bombay and Allahabad High Courts a different view was taken by the Nagpur High Court. The facts in that case were that in a prior suit by the puisne mortgagee the prior mortgagee was made a party and he plead ed paramount lien. He was, however, discharged from that suit. After that he filed a suit as prior mortgagee without impleading the puisne mortgagee intentionally and obtained a decree and possession of the properties. Prideaux A. J. C. held that a prior mortgagee who has foreclosed the equity of redemption of the mortgagor without impleading the subsequent mortgagee and taken possession, cannot insist upon his being maintained in possession by offering to redeem the subsequent mortgagee, whose title to possession came into exis tence subsequent to the foreclosure, under an auction sale under his mortgage decree. His Lordship observed that the case in I L R 28 Born. 153, unquestionably favoured the posi tion contended for by the appellant and he observed further that it seemed to him that in the present case the appellant could not be permitted to gain a position which he would not have gained except by a breach of the law. That case was de cided by a single judge and does not say that the case in I L R 28 Born. 153 (supra) was wrongly decided. It appears that the case was decided more on equitable grounds than on other grounds. As against the decision Mr. G. C. Das has referred to Yado Bao v. Amrit Rao A I R 1926 Nag. 135, in which Hallifax A. J. C. field that at a sale in execution of a mortgage decree the purchaser acquires the right of both mortgagor and mortgagee and as the purchaser of the equity of redemption he is entitled if he wishes, to redeem a later mortgagee, or as purchaser of the rights of the mortgagee he can claim priority over the later mortgagee. In Ram Kinkar Hazra v. Hareram Hazra A I R (1933) Cal. 181, Ghose J. held that as between two purchasers of mortgaged property, the title to the outstanding equity of redemption is determined by the priority not of the respective mortgages but of the respective sales and the person who first buys the equity of redemption whether he be the mortgagee himself or a stranger would be entitled to redeem all the subsisting mortgages on the property and thus acquire an absolute title. This authority lay, down the principle that as between rival claimants to a mort gaged property on account of their purchase in execution of their mortgage decrees, the title to the outstanding equity of redemption is determined not by the priority of their respective mortgages but by the priority of the respective sales. In the present case the plaintiff respondent has not even filed a suit as puisne mortgagee to enforce his mortgage against the mort gagor. As between him and appellant who has purchased the equity of redemption of the mortgagor in execution of the decree obtained by the prior mortgagee, he has a preferential claim of right to redeem the puisne mortgagee. The authorities cited on behalf of that appellant are to the point and un doubtly support the appellant's contention. That the plaintiff‑respondent, as purchaser of the interest of the puisne mortgagee, defendant No. 4, has a right to enforce the mortgage against the mortgagor cannot be denied. The prior mortgagee also has a similar right against the mortgagor and the law requires that. in a suit by him to enforce his mortgage he should make the puisne mortgagee a party defendant in order that he is given an opportunity to redeem the prior mort gagee. If the prior mortgagee without impleading the puisne mortgagee in his suit purchases the equity of redemption of the mortgagor in execution of the decree obtained by him, the law does not debar him from redeeming the puisne mortgagee. Where a mortgagor's equity of redemption vests by purchase in a prior mortgagee or in a third party, and that person as owner of the equity of redemption wishes to redeem a puisne mort gage and the puisne mortgagee wishes also to redeem the prior, mortgage, the claim of the former not as a prior mortgagee or as a person having purchased the interest of the prior mort gagee but as owner of the equity of redemption and as having an inherent right under the law must be given preference. If the plaintiff respondent's contention is given effect to the pur chaser of the equity of redemption being in possession, the puisne mortgagee can never get possession of the mortgaged property which will lead to an anomalous position. We are, therefore., satisfied that the conclusion arrived at by the learned District judge cannot be supported and his decision in favour of the plaintiff respondent must be reversed. Mr. Das, as his last argument, contended that if this Court accepts the case of the plaintiff respondent, relief should not be given to the extent of Rs. 2,300 being the consideration of the promissory notes, Exhs. 4 and 4 (a), for which the mortgage bond, Exh. 1 (a) was executed because the said promissory notes being defectively stamped cannot be used in evidence and no oral evidence can be adduced to prove their contents. Both the trial and lower Appellate Courts have found that there were other materials on record to prove that consideration had passed under the said promissory notes. This is a finding of fact which cannot be upset in second appeal. The rejection of the appellant's argument in this connection will not affect the first argument advanced and which has been accepted by us. As he has succeeded on the main argument, the determination of the last point is neither here nor there. The result, therefore, is that this appeal is allowed with costs of this Court and of the lower Appellate Court. The judgment and decree of the learned District judge, dated the 30th November, 1948, are set aside and those of the learned Sub‑Judge, dated the 13th September, 1947, restored with this notification that as three months give by the trial Court to the appellant to redeem the mort, gage of the plaintiff have expired, appellant is for the purpose allowed three months' time from the date of receipt of the notice of the arrival of the record in the trial Court. Such notice is to be given by that Court on receipt of the records, If the appellant fails to redeem the mortgage of the plaintiff within the time allowed, the plaintiff will be at liberty to redeem and pay off the appellant and to enforce his mortgage and to put the property to sale and realise the entire money due on his mortgage as well as the money paid to the appellant subject to the provisions of the Bengal Money Lenders Act, if necessary. CHOWDHURY, J.‑

I agree. A. H. Appeal allowed.