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1907 DIGILAW 246 (CAL)

Shahebzadah Mahomed Kazim Shah v. Robert Savi Hills and Shahebzadah Fatteh Mahomed Shah

1907-12-19

body1907
JUDGMENT Maclean, C.J. - The question in this appeal is whether or not, in the circumstances I am about to state, the present Appellants, to whom two sums of Rs. 37,000 and Rs. 9,500 have been awarded by way of owelty on partition, are entitled to priority over certain mortgagees whom I will refer to as the Roy mortgagees, on a portion of the property which was partitioned. The facts lie within a very narrow compass and are as follows:-- A suit was instituted some time in 1901, to set aside a certain trust-deed. To that suit all the parties either interested under the trust or who would be interested if the trust-deed were set aside, were parties; and Borne of them apparently were minors. The result of that suit was that the trust-deed was Bet aside and, upon that decree being passed, the minors ceased to have any further interest in the estate. By the decree in that suit, which is dated the 8th of August 1904, all the parties who, upon the trust-deed being set aside, become entitled to the property in certain shares, agreed amongst themselves to have it partitioned. The estate at the time was vested in the official trustee; and under the decree, the official trustee was ordered to convey to Fateh Mahomed Shah, the mortgagor to the Roy mortgagees, the house premises No. 52-2, Park Street in Calcutta. By the same decree it was ordered and decreed "with the like consent (i.e. of all the parties interested in the properties) that Fateh Mahomed Shah (the mortgagor) should pay to the present Appellants two several sums of 37,000 and 9,500 rupees, as in the decree directed, and it was declared with the like consent that the said two sums of Rs. 37,000 and Rs. 9,500 respectively formed a charge upon the premises No. 52-2 Park Street allotted to Fateh Mahomed Shah, and that the allotments made to the various parties (including the mortgagor) should stand charged with the respective incumbrances and charges created by them respectively over their respective shares and interests in the aforesaid properties." 2. The mortgages under which the Roys claim are dated (1st) the 29th of January 1902, (2nd) the 2nd of June 1902 and (3rd) the 2nd of September 1902; and, they were mortgages to secure an aggregate principal sum of Rs. The mortgages under which the Roys claim are dated (1st) the 29th of January 1902, (2nd) the 2nd of June 1902 and (3rd) the 2nd of September 1902; and, they were mortgages to secure an aggregate principal sum of Rs. 18,000 with the interest at 18 per cent, per annum with quarterly rests. The security was the share of the mortgagor in the various properties which had not then been partitioned. The result of the partition proceedings was to give the mortgagor the house, No. 52-2 Park Street, subject to the charge for the two sums of Rs. 37,000 and Rs. 9,500, and the question now is, as between the present Appellants and the Roy mortgagees, whether the Appellants are entitled, in respect of those sums, to priority over the Roy mortgagees. The learned Judge in the Court of first instance has held that they are not; and consequently they have appealed. 3. It is quite clear that after the partition was effected, the mortgagee was entitled to regard his mortgages as attaching to the house No. 52-2 Park Street, in substitution for the security on the mortgagor's undivided share in the property generally. The security was shifted, as the result of the partition, from the undivided share of the mortgagor on to the property directed to be conveyed to him under the decree. 4. This is not disputed. 5. Then arises the question of priority. To determine that question it becomes necessary to ascertain what was the substituted property which the mortgagor took under the partition. It is clear that all he took was the house No. 52-2 Park Street, subject to the charges of Rs. 37,000 and Re. 9,500 in favour of the Appellants; and it can only be upon that, that the Roy mortgagees can rank as mortgagees, that is, upon No. 52-2 Park Street subject to the charges created by the decree. But it is said that this was a consent decree. That does not seem to me to make any real difference unless the Roys can show that the partition effected was either the result of fraud, or unfair or improper as against the mortgagee who was not a party to the partition proceedings. 6. But it is said that this was a consent decree. That does not seem to me to make any real difference unless the Roys can show that the partition effected was either the result of fraud, or unfair or improper as against the mortgagee who was not a party to the partition proceedings. 6. Undoubtedly a person who advances money upon a mortgage of property which the mortgagor holds in au undivided share must be taken to take it subject to the liability of the property to be subsequently partitioned. Now, what is the attitude of the Roy mortgagees in this suit? Do they approbate or do they reprobate the partition proceedings? If we look at pragraph 2 of their written statement they ask that their mortgage may be regarded as the first charge upon the premises, No. 52-2 Park Street, "if it is shown that the partition was fair and proper." There is absolutely nothing to show, nor have we heard any argument that it was unfair or improper. 7. The Plaintiff then have come into Court upon the footing of adopting the partition proceedings; and if they adopt these proceedings, their mortgage can only be on the interest of their mortgagor under the partition. 8. That interest has been already stated This concludes the matter. 9. A point was made that the Appellants must be taken to have surrendered their security, because the possession of the house No. 52-2 Park Street, had, in accordance with the decree, been handed over to the mortgagor by the Official Trustee. I am unable to appreciate that argument; I can not see why, if the mortgagor were put into possession by the Official Trustee, and in accordance with the decree, the Appellants have lost their right to the charge which is specifically created by that decree in their favour. 10. There is one argument of Mr. Garth which I ought to notice. It is said that, if a transaction of this sort can stand, the result may be that co-sharers may on a partition, knowing that one of them has mortgaged his share, so arrange matters that he should get no portion of the immoveable property on the partition, but receive the whole of his share in cash, the effect of which would be to defeat the rights of his mortgagee. We are not dealing with that case now; there is no suggestion that this partition was unfair or improper; at any rate, there is no evidence of it. If such a case arise as Mr. Garth suggests, I dare say, the Court will be able to deal with it satisfactorily. 11. The appeal must succeed. The Appellants must have, as between themselves and the Roy mortgagees, who must pay them, the costs of this appeal and also the extra costs which have been occasioned by the raising of the present point in the Court of first instance and which they were ordered to pay. 12. Mr. Sinha's clients, the Defendant Appellants, must in the first instance by the plaintiff's costs and may add them to their security. Stephen, J. 13. I agree. I would add that it is quite plain that the Appellants' claim which la a charge upon the property, constitutes a deduction from the corpus of the property and is not affected by any dealings with the possession of the property on which the decision of the Judge of the Court of first instance is based. Woodroffe, J. I agree with the judgment of the learned Chief Justice.