1946 (4) TMI 29 - HC - Indian Laws

Summary

Issues Involved:
1. Validity and priority of the 1926 mortgage over the 1919 mortgage.
2. Applicability of Section 101, Transfer of Property Act, 1882.
3. Limitation period and acknowledgment under Section 19, Limitation Act, 1908.
4. Effect of the 1929 acknowledgment by the 1919 mortgagees.
5. Estoppel due to the 1929 acknowledgment.

Detailed Analysis:

1. Validity and Priority of the 1926 Mortgage Over the 1919 Mortgage:
The primary issue was whether the plaintiffs, as mortgagees under the 1926 mortgage, could enforce their security in priority to Munshi Lal's title derived under the 1919 mortgage. The court noted that the 1926 mortgage was executed by Abdul Noor, Abdul Shakur, and Mt. Tamizunnissa to secure a principal sum of Rs. 3250, with interest, and it included shares previously mortgaged under the 1914 and 1918 mortgages. The court found that the 1926 mortgage did not extinguish the 1914 and 1918 mortgages but kept them alive as a shield against the 1919 mortgage.

2. Applicability of Section 101, Transfer of Property Act, 1882:
The court held that Section 101, T.P. Act, 1882, applied, meaning the 1914 and 1918 mortgages were not extinguished and did not merge into the 1926 mortgage. This principle allowed the plaintiffs to use the earlier mortgages to protect their interest against the 1919 mortgage. The court emphasized that the cause of action on the earlier mortgages was kept alive to give priority over the intermediate estate.

3. Limitation Period and Acknowledgment Under Section 19, Limitation Act, 1908:
The court examined whether the 1926 mortgage contained an acknowledgment within the meaning of Section 19, Limitation Act, 1908, which could extend the limitation period for the 1914 and 1918 mortgages. It was determined that the 1926 mortgage was executed before the limitation periods for the 1914 and 1918 mortgages expired. However, the acknowledgment in the 1926 mortgage did not bind the 1919 mortgagees, who were not parties to it.

4. Effect of the 1929 Acknowledgment by the 1919 Mortgagees:
The court considered the application made by the 1919 mortgagees in 1929, which acknowledged that the 1926 mortgagees were prior mortgagees. This acknowledgment was deemed to constitute a fresh starting point of limitation for the 1918 mortgage, allowing the plaintiffs to assert their priority over Munshi Lal's estate. The court held that the acknowledgment by the 1919 mortgagees in 1929 effectively recognized the plaintiffs' right to priority under the 1918 mortgage.

5. Estoppel Due to the 1929 Acknowledgment:
The plaintiffs argued that the 1929 acknowledgment by the 1919 mortgagees constituted an estoppel, preventing Munshi Lal from asserting priority over the 1926 mortgage. The court did not find sufficient grounds for estoppel, as there was no evidence that the plaintiffs altered their position based on the acknowledgment.

Conclusion:
The court concluded that the plaintiffs were entitled to a preliminary mortgage decree in respect of the 1918 mortgage, which was kept alive in their favor. They were also entitled to a decree for the 1926 mortgage, except for parts already covered by the 1918 mortgage. The plaintiffs were granted priority over Munshi Lal's estate in the shares acquired through the 1919 mortgage, but Munshi Lal retained priority for any parts not covered by the 1918 mortgage. Each party was ordered to bear their own costs throughout the proceedings.