1935 (8) TMI 24 - HC - Indian Laws

Summary

The appeal concerns a suit for the sale of a mortgaged property, with the central issue being whether defendants 8 to 10 had acquired the rights of a prior mortgagee from 1913 and could use that mortgage to defend against the plaintiff-appellant's claim.

The facts reveal that Muqaddam initially mortgaged his property in 1913 to Murlidhar through a simple mortgage deed. He subsequently mortgaged the same property in 1919 to the plaintiff-appellant. Murlidhar pursued legal action on his mortgage, obtaining a preliminary decree in 1925 and a final decree in 1926. Following this, Muqaddam's equity of redemption was sold under a simple money decree and purchased by Babu Ram, the predecessor of defendants 8 to 10. Babu Ram satisfied the final decree by paying Murlidhar Rs. 539-4-0 in 1928. Notably, Murlidhar did not include the current plaintiff in his suit for sale, allowing the plaintiff to pursue his mortgage claim.

Defendants 8 to 10 argued that by settling Murlidhar's decree, they acquired his rights as a prior mortgagee, thus barring the plaintiff from selling the property without first settling the amount due under the 1913 mortgage. Both lower courts upheld this defense. The plaintiff-appellant contended that Babu Ram did not redeem the mortgage in full, as the payment made was less than the total amount due under the final decree, and thus did not acquire subrogation rights as per Section 92 of the Transfer of Property Act.

The Court examined the plaintiff's argument, which relied on the provision that subrogation rights are not conferred unless the mortgage is redeemed in full. The Court clarified that full redemption does not necessitate the payment of the entire decree amount if the mortgagee consents to a lesser payment. In this case, there was no evidence that Murlidhar did not agree to the reduced payment, and his son testified that the decree was discharged. Consequently, the mortgage was deemed redeemed in full, and defendants 8 to 10 were subrogated to Murlidhar's rights under the 1913 mortgage.

In conclusion, the Court affirmed the lower courts' decisions, dismissing the appeal with costs. The judgment underscores the principle that subrogation rights can be acquired through partial payment if the mortgagee consents, aligning with the provisions of the Transfer of Property Act.