JUDGMENT 1. This is an appeal by the plaintiffs in a suit to enforce a mortgage security executed in their favour on the 20th April 1908. On the 14th June 1900, the mortgagors took a lease from the mortgagees of a number of villages for a term of nine years upon an annual rental of Rs. 12,125. On the same date, the lessees executed a security bond in favour of the lessors by which two properties were hypothecated to secure the due performance of the engagement for payment of rent. On the 12th October 1900, the mortgagors executed a mortgage in favour of Harak Narayan Singh. On the 20th April 1908, they executed in favour of their lessors the mortgage-bond now in suit. The consideration for the mortgage was the arrears of rent due under the lease; and the rights of the lessors under the security bond of the 14th June, 1900, were expressly kept alive. In the present litigation, the plaintiffs claim priority over the mortgage of Harak Narayan Singh. The representatives of Harak Narayan, now dead, resist the claim, and also urge that the plaintiffs have prejudiced their position, because they released the properties of Nandlal Singh covered by the security bond, when they took the mortgage they now seek to enforce. The questions in controversy between the parties at this stage are, first, are the plaintiffs entitled to priority over the mortgage of Harak Narayan, dated the 12th October 1900, and, secondly, how far have the plaintiffs prejudiced their position by the release in favour of Nandlal Singh? 2. In so far as the first question is concerned, it is clear from the terms of the lease of the 14th June 1900, that no rent had accrued due thereunder on the 12th October 1900. Consequently, whatever rent is now sought by the plaintiffs to be charged upon the security properties, it is clear, accrued due subsequently to the mortgage of Harak Narayan Singh. The rights of the parties must, consequently, be determined with reference to the terms of Sections 79 and 80 of the Transfer of Property Act as explained in the case of Dalip Narayan v. Chait Narayan 16 C.L.J. 395 : 17 Ind. Cas. 927.
The rights of the parties must, consequently, be determined with reference to the terms of Sections 79 and 80 of the Transfer of Property Act as explained in the case of Dalip Narayan v. Chait Narayan 16 C.L.J. 395 : 17 Ind. Cas. 927. u/s 79, two elements have to be considered, first, whether the subsequent mortgagee took with notice of the prior mortgage, and, secondly, whether the prior mortgage expresses the maximum secured thereby. With reference to the first of these elements, we observe that the security bond of the 14th June 1900, was presented for registration on the next day and was registered on the 16th June 1900. The subsequent mortgage of Harak Narayan was executed and registered on the 12th October 1900. Prima facie, therefore, if Harak Narayan had made an inquiry in the registration office, as an intending creditor with ordinary prudence would do, he would have discovered that part of the property proposed to be mortgaged to him had already been hypothecated by the security bond of the 14th June 1900. Whether he made any inquiry or not, does not appear from the papers on the record. We are, consequently not in a position to say whether he took with notice of the prior mortgage, and the matter must be investigated. With reference to the second element mentioned in Section 79, we are of opinion that the prior mortgage did express the maximum to be secured thereby, on the principle that that is certain which can be made certain. The deed states that a lease had been granted for a term of nine years upon an annual rental of Rs. 12,125 and that the proprietors lessors wanted reliable security for the payment of the annual rent; it then recites that the lessees hypothecated their properties for the payment of the annual rent and interest on defaulted instalments Even if we assume for a moment that the amount of interest was not sufficiently specified, there can be no question that the aggregate rent payable under the lease could be determined by a simple arithmetical calculation. To take a view most favourable to the subsequent incumbrancer, the hypothecated properties could be held liable at any time for four years' rent, for the recovery whereof a suit could be brought by the landlord within the period of limitation prescribed by the Bengal Tenancy Act.
To take a view most favourable to the subsequent incumbrancer, the hypothecated properties could be held liable at any time for four years' rent, for the recovery whereof a suit could be brought by the landlord within the period of limitation prescribed by the Bengal Tenancy Act. We hold, therefore, that the prior mortgage expressed the maximum to be secured thereby within the meaning of Section 79 of the Transfer of Property Act and would be enforceable against a subsequent mortgagee, if the latter took with notice. This question of notice must be investigated on evidence to be adduced, and the Court must determine whether the subsequent mortgagee had notice, actual or constructive, of the prior mortgage. The first contention of the appellants must, therefore prevail in part. 3. In so far as the second question is concerned, it is clear that the plaintiffs have prejudiced their position in so far as they have released the properties of Nandlal Singh by the mortgage instrument of the 20th April 1905. It is well settled that in circumstances like these, the mortgagee cannot release the properties of one of the mortgagors to the detriment of the others: Mir Eusuff Ali Haji v. Panchanan Chatterjee 15 C.W.N. 800 : 11 C.L.J. 639 : 6 Ind. Cas. 842; Imam Ali v. Baij Nath 10 C W.N. 551 : 3 C.L.J. 576; 33 C. 613; Ramranjan v. Indra Narayan 10 C.W.N. 862 and Hakim Lal v. Ram Lal 6 C.L.J. 46. The plaintiffs, therefore, must apportion what was chargeable upon all the properties covered by the security of the 14th June 1900 and proceed against the properties over which they have not relinquished their lien, only to the extent of the sum fairly chargeable thereon; in other words, as pointed out in Venkata Chella v. Srinivasa 28 M. 555; 15 M.L.J. 442 if they have relinquished a valuable property for an inadequate consideration, they cannot be permitted to throw the burden of the balance of the debt upon the remaining properties. The materials on the record are not sufficient for the determination of this question, which must, consequently, be determined by the Court below on evidence to be adduced by the parties. The second question which is raised by the respondents, must, therefore, be partially answered in their favour. 4.
The materials on the record are not sufficient for the determination of this question, which must, consequently, be determined by the Court below on evidence to be adduced by the parties. The second question which is raised by the respondents, must, therefore, be partially answered in their favour. 4. The result is that this appeal is allowed, the decree of the Subordinate Judge set aside, and the case remanded to him in order that the mortgage accounts may be taken and the rights of the parties adjusted after determination of the questions mentioned as also other questions incidental thereto. There will be no order for costs in this appeal, as both the parties have successfully assailed the decree of the Court below. 5. The documents which have been filed in this Court will be made part of the record and sent down to the Court below.