Research › Browse › Judgment

Allahabad High Court · body

1905 DIGILAW 170 (ALL)

Shib Kumar Singh v. Sheo Parshad Singh

1905-08-04

BANERJI, HARDS

body1905
JUDGMENT : BANERJI, J.:— This appeal arises in a suit brought by the first respondent for sale upon a mortgage. The appellant, who was defendant No. 4 in the Court below, purchased at auction in execution of a simple money decree the rights of the mortgagor in the mortgaged property. As such purchaser, he was made a party to the suit. He resisted the claim on the ground that the plaintiff's mortgage bond was fictitious and without consideration. The Court of first instance found in his favour and dismissed the suit. The lower appellate Court has set aside the decree of the Court of first instance and remanded the case under section 562 of the Code of Civil Procedure. From this order of remand the present appeal has been brought. The learned Judge was of opinion that the appellant was precluded from raising the plea that the mortgage deed was fictitious and without consideration for two reasons, first, that he was the legal representative of the mortgagor and could not for that reason dispute the validity of the mortgage; secondly, that as mention of the plaintiff's mortgage was made in the proclamation of sale issued in the execution case in which the appellant purchased the property, the property must be deemed to have been sold subject to the mortgage, and the appellant by his auction purchase acquired only the right to redeem the mortgage. In our judgment the learned Judge has erred on both these points. It is true that the appellant is in one sense the legal representative of the mortgagor, but the fact of his having purchased the mortgagor's rights does not debar him, any more than the mortgagor himself would have been debarred, from questioning the fact or validity of the mortgage. As for the second point, it is clear that the Court did mot sell the property subject to a mort-gage as contemplated by section 282 of the Code of Civil Procedure. All that it did was to mention in the sale proclamation the fact that there was an alleged mortgage on the property. It was not therefore incumbent on the judgment-debtor to bring a suit under section 283 to have it declared that no mortgage existed on the property. All that it did was to mention in the sale proclamation the fact that there was an alleged mortgage on the property. It was not therefore incumbent on the judgment-debtor to bring a suit under section 283 to have it declared that no mortgage existed on the property. The object of specifying the mortgage in the sale proclamation was to give to intending purchasers all the information which it was necessary for them to know in respect of the property advertised for sale. The fact that the appellant purchased the property with notice of the alleged mortgage does not estop him from questioning the mortgage. The Code of Civil Procedure clearly makes a distinction between a case in which property is sold subject to a mortgage and a case in which notice of an alleged mortgage is given in the proclamation of sale. The former is provided for by section 282 and the latter by section 287. In the former case the Court, after being satisfied of the existence of the mortgage, sells only the judgment-debtor's right of redemption, so that the purchaser does not acquire any greater rights than those of redeeming the mortgage. In the latter he buys the property with notice of the mortgage and subject to such risks as the notice might involve. The Court does not decide whether the mortgage subsists or not. If there is in reality a subsisting mortgage, the purchaser has to redeem it. If, on the other hand, the mortgage specified in the proclamation of sale is a fictitious mortgage or did not subsist at the date of the sale by reason of its having been previously discharged by payment, the purchaser acquires the property free from liability for the mortgage. Any other conclusion might work hardship and injustice. Take, for instance, the case of a creditor who has obtained a decree for money and has applied for and obtained leave to bid at the sale to be held in execution of his decree, because he is aware that his debtor with a view to defeat and defraud him has executed a fictitious mortgage of his property. Take, for instance, the case of a creditor who has obtained a decree for money and has applied for and obtained leave to bid at the sale to be held in execution of his decree, because he is aware that his debtor with a view to defeat and defraud him has executed a fictitious mortgage of his property. If, upon his buying the property at auction under these circumstances, the fact of the mortgage having been notified at the sale be held to preclude him from proving the real nature of the mortgage when a suit is brought on the basis of it, the very object with which the mortgage was fraudulently made would be obtained. The case of Inayat Singh v. Izzat-un-nissa, [1904] I.L.R., 27 All, 97, upon which the learned Vakil for the respondent relies, has, in our opinion, no bearing on the present case. That case was decided upon the particular facts of it. In our judgment the order of remand is erroneous. We accordingly set it aside and allowing the appeal with costs, remand the case to the Court below with directions to re-admit it and dispose of it according to law. Costs in this Court will include fees on the higher scale.