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1936 DIGILAW 121 (CAL)

Sm. Annapurna Roy v. Ram Ranjan Mullick

1936-03-09

body1936
JUDGMENT McNair, J. - This is an application that the applicant should be added as a party Defendant in a mortgage suit with liberty to bid, and for orders that the properties should be marshalled in such a way that the property which is subject to the applicant's mortgage, may not be sold until after certain mofussil properties which are also subject to the mortgage of the Plaintiff's in the suit. The Plaintiff's mortgage was dated August 28th, 1928, and was a legal mortgage duly registered. The Plaintiff sued on that mortgage on November 30th, 1931. A preliminary decree was passed in February 1932, and the final decree in March 1933. 2. The applicant obtained an equitable mortgage by deposit of title deeds on two of the properties, viz., Nos. 3 and 4, Bhuban Mohan Sircar Lane in Calcutta, in October, 1931. He sued on this, equitable mortgage in August 1933, and obtained a preliminary decree in July 1934 and a final decree in March 1935. In his petition the applicant states that the title deeds of the properties are still in his custody and possession, and that he only came to know that the properties over which he had an equitable mortgage were going to be sold by the Registrar by seeing an advertisement on November 3rd, 1935. He then had searches made and came to know of the proceedings in this suit. 3. The other property which is the subject-.matter of the first mortgage is known as touzi No. 506. It is a zemindary property in the mofussil, and in his petition the applicant states that he is informed and believes that this property is of sufficient value to meet the Plaintiff's demands. That statement of itself carries no weight for it does not state the source of the information. 4. The main object of this application is to have the zemindary property sold first so that, if possible, the first mortgagee's claim should be satisfied out of that property and the sale of the Calcutta properties became unnecessary. 5. The Plaintiff objects to the order prayed for on two main grounds. He contends that the application is bad in that it does not come within the correct interpretation of Rule. 57 of Chapter XXVII of the Rules and Orders of this Court. 5. The Plaintiff objects to the order prayed for on two main grounds. He contends that the application is bad in that it does not come within the correct interpretation of Rule. 57 of Chapter XXVII of the Rules and Orders of this Court. Rule 57 is as follows:-- An incumbrancer, not a party to the suit, may, at any time before the sale, apply, by motion in Court, to be made a party, or, without being formally made a party, for leave to join in the sale; and such order shall be made thereon, and in protection of his rights, and as to costs, as to the Court shall seem fit. 6. In opposing this application Mr. Banerjee argues that the words " an incumbrancer" must be restricted to a prior incumbrancer, and in support of that contention he relies on sec. 57 of the Transfer of Property Act and on Or. 1, r. 10, of the Civil Procedure Code. He contends further that a party can-not be added after the final decree, and in support of this contention he relies on the case of Attorney-General v. Corporation of Birmingham L.R. 15 Ch. Div. 425 (1880) decided in 1880 and reported in 15 Ch. D. 425. He contends that the wording of the relevant rule at that date in England was similar to the wording of Or. 1, r. 10, of our present Code. The applicant relies on sub-r. (2) of Or. 1, r. 10, which empowers the Court at any stage of the proceedings, on such terms as may appear to the Court to be just, to order that the name of any person who ought to have been joined, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added. 7. In my view, under Or. 1, r. 10, of the Code, the Court has ample power, even after the final decree in a mortgage suit, to order that a person whose presence may be necessary to enable the Court effectually and completely to adjudicate upon the questions involved in the suit be added as a party to the proceedings. The applicant has relied on the case of The Duke of Buccleuch [1892] Pro. Div. The applicant has relied on the case of The Duke of Buccleuch [1892] Pro. Div. 86, where in an admiralty action the Court decided that the words " at any stage of the proceedings " justified the Court in substituting the name of the owner of the cargo in place of that of the agent as Plaintiff, although there had been a decree in the admiralty action fixing the liability hut leaving damages to be assessed. In his judgment reported at page 212, Fry. L. J., says: I base my decision upon the words 'at any stage of the proceedings.' It has been argued that the rules do not apply after final judgment. They apply, in my opinion, so long as anything remains to be done in the case. 8. In my view, although the final judgment in the mortgage suit has been passed, it now appears that there is another mortgagee who, under Or. 34, r. 1, was a necessary party to the suit, and that person ought to be joined as a party in order to enable the Court effectually and completely to adjudicate upon the questions involved. 9. It is further objected that the applicant is debarred from relief owing to his laches. He must be taken to have had notice of the mortgage at the time of registration, for under sec. 3 of the Transfer of Property Act, explanation (1), registration of a mortgage must he taken to be notice of that mortgage, and it is contended that the applicant guilty of negligence in not ascertaining by searches that the property was already subject to the Plaintiff's mortgage. 10. I am not satisfied that there has been any unnecessary delay. The Plaintiff accepted the statement of his predecessor-in-title that the title deeds had been burnt some years previously when the Defendant's kutchery caught fire and was destroyed. In accepting that explanation of the lack of title deeds he undoubtedly took a risk. The present applicant states that he only got to know of the suit in November 1935. It may be that he ought to have known of the mortgage, but even had he known of that mortgage, such knowledge would not necessarily imply that he should know that a suit had been filed on that mortgage. There has not, in my opinion, been any such laches as to destroy his rights to equitable relief. 11. It may be that he ought to have known of the mortgage, but even had he known of that mortgage, such knowledge would not necessarily imply that he should know that a suit had been filed on that mortgage. There has not, in my opinion, been any such laches as to destroy his rights to equitable relief. 11. It is next contended that even if the applicant is entitled to be joined in the sale he is not entitled to the benefits of marshalling for which he contends and for which he relies on sec. 81 of the Transfer of Property Act. Sec. 81 provides that-- if the owner of two or more properties mortgages them to one person and then mortgages one or more of the properties to another person, the subsequent mortgagee is entitled to have the prior mortgage debt satisfied out of the properties not mortgaged to him. 12. Then come the words on which Mr. Banerjee, in opposing this application, lelies. The words are: but not so as to prejudice the rights of the prior mortgagee. 13. Mr. Banerjee contends that an order compelling the prior mortgagee to have the mofussil properties sold first will be prejudicing his right to have the properties mortgaged to him sold in any order which he may prefer and he relies on the case of Thanmull Sowear v. Ramadoss Reddiar ILR 51 Mad, 618 (1927), where two Judges of the Madras High Court have decided that Mr. Banerjee's contention is correct. That decision was under the old section of the Transfer of Property Act, but it is contended that there is no material difference in the new sec. 81 which. was substituted in 1929. Sir Dinshaw Mulla in his treatise on the Transfer of Property Act (1933 Edition) at page 445 refers to the construction which has been placed upon this section by this decision, and his comment is: This construction would make the section a dead letter, and the omission of the words 'as against the solier' which occurred in the old sec. 56 shows that this view is no longer tenable. 14. In my view, the comment of Sir Dinshaw Mulla is justified, and I do not propose to follow this decision. The section itself appears to me clearly to be dealing with properties, the subject-matter of two mortgages from the same mortgagor. 56 shows that this view is no longer tenable. 14. In my view, the comment of Sir Dinshaw Mulla is justified, and I do not propose to follow this decision. The section itself appears to me clearly to be dealing with properties, the subject-matter of two mortgages from the same mortgagor. All of those properties have been mortgaged to the prior mortgagee, one or more of them is mortgaged to a subsequent mortgagee, and the whole object of the section appears to me to be to enable the subsequent mortgagee to call upon the prior mortgagee to exercise his rights, so far as they can be satisfied, as against the properties which are not the subject-matter of the subsequent mortgagee's charge. 15. Moreover, in the affidavits there is no statement which shows clearly that the actual rights of the mortgagee will be interfered with save in so far as he is prevented from choosing the order in which the properties should be sold. In paragraph 8 of the affidavit in opposition the only suggestions of prejudice are, that a forced sale of the properties may not produce a sufficient sum to cover the Plaintiff's dues, and that the adding of the applicant as a party Defendant will result in delay. " There does not seem to me to be any substance in either of these contentions. There must, in any event, be a forced sale and the Plaintiff has the carriage of the proceedings. 16. In these circumstances, the applicant will have leave to bid for and join in the sale to be held by the Registrar in Suit No. 2237 of 1931, at the instance of the Plaintiff, so far as concerns properties Nos. 3 and 4, Bhuban Mohan Sircar Lane. 17. There will be an order in terms of prayer (3). The Registrar will have liberty to sell all the properties on the same date. 18. There will be an order in terms of prayer (4), and also of prayer (5) with the following alteration: The surplus sale proceeds of the Calcutta properties, after satisfaction of the Plaintiff's claim, shall be applied in payment of the amount due," etc. 19. There will be an order in terms of prayer (6). Each party is entitled to add his costs to his claim.