JUDGMENT Allsop, J. - This appeal arises out of an order passed in the course of proceeding under the Encumbered Estates Act. The Respondent, Dallu Sahu, had made a claim to recover a sum of Rs. 45,000 on the basic of a usufructuary mortgage. His claim was reduced by the learned Special judge, and he afterwards made an application for review of this order. The learned judge reviewed his previous order by another order dated February 27, 1942. He accepted Dallu Sahu contention that the whole sum of Rs. 45,000 should be decreed. Dallu Sahu had apparently also asked that part of bis debt should rank in priority over the debt of certain ether creditors, including the Appellant, Sant Prasad Sahu. The learned Judge in his order said: The creditor has further prayed that the debt consists of some prior items of his own and hance classification and order of each item will be so shown. The office will beep(sic) this point in view at the time of drawing up a fresh list of debts and priority 2. Against this order Sant Prasad Sahu has appealed He his urged in his grounds of appeal that the list of debtors drawn up by the learned Special Judge in order of priority is wrongs and that the Appellant's debts should have priority overall other debt, except the fust three items shown in the list. It appears from the list which was ultimately drawn up after the order of February 27, 1942 that the first three debts in the list consisted of rather small sums and that the debt due to Dallu Sahu had been divided into two items, of Rs. 23,408 and Rs. 21,592, of which the first item appeared above the debt of Rs, 39,000 due to Sant Prasad Sahu and the other item appeared below that debt. Having examined the list and the order of the Court below, we feel that there may be room for some misconception, although we are not by any means certain that the learned Judge intended that the debts should be paid off in the order in which they are given in the list, or, in other words that the first debt should be paid in its entirey before the second debt and so on to the end.
It has been urged before us on behalf of the Respondent that the learned Special Judge had full discretion u/s 16 of the Encumberd Estates Act to rank all debts in order of priority. We do not think it is necessary for us to go so far as to say that it is not possible in any. circumstances that the Special Judge may rank such debts as among themselves in order of priority; but we are satisfied that he could do so only in exceptional cases because be could not pass an order ranking such debts as between themselves in order of priority unless he could apply some recognised principle of law. Where there were only secured debts and they were all secured on the same property and that was the only property which was available for the payment of the debts, it may be that the Special Judge might feel justified in ranking the debts so that the prior mortgages were paid off before the subsequent mortgages, but in no other circumstances that we can at the moment envisage would it be possible to apply any principle under which debts in the same class could be ranked in priority among themselves. There is no reason at all why a debt secured by a mortgage on one property, even if it is earlier in date, should take priority over a debt secured by a mortgage on some other property if that mortgage is later in date. In the present case it appears that the mortgages with which we are at the moment concerned were usufructuary mortgages on different properties. There is no principle by which one mortgagee could be preferred to another. The learned Judge has rightly put the various debts into their separate class in the list.
In the present case it appears that the mortgages with which we are at the moment concerned were usufructuary mortgages on different properties. There is no principle by which one mortgagee could be preferred to another. The learned Judge has rightly put the various debts into their separate class in the list. We are not by any means certain that he intended that those debts would be paid off as between themselves in the order given in the list; but as that impression might be created by his order, wa make it clear that it must be understood to mean that the debts in each class as among themselves shall have no priority and that the amounts due shall be paid off pro rata if there not sufficient money to pay them in full We cannot accede to the suggestion underlying the grounds of appeal that the Appellant should have any priority over the other secured creditors Having made the position clear, we dismiss this appeal As there was some ground for misapprehension, we direct that the parties shall pay their own costs.