BISHESHUR DIAL Vs. RAM SARUP
LAWS(PVC)-1900-4-3
PRIVY COUNCIL
Decided on April 03,1900

BISHESHUR DIAL Appellant
VERSUS
RAM SARUP Respondents

JUDGEMENT

Banerji, J - (1.) This appeal has arisen in a suit brought under Section 88 of Act No. IV of 1882 for sale upon a mortgage, dated the 3 of November 1885. A moiety of the mortgaged property was sold by auction on 21 of November 1893, in execution of a simple decree for money held by other creditors of the mortgagor, and was purchased by the mortgagee subject to the above mortgage. The plaintiffs, who represent the mortgagee, seek in this suit to bring to sale the other moiety of the mortgaged property for recovery of a moiety of the amount due upon the mortgage. The Court of First Instance made a decree in favour of the plaintiff's for one-half of the principal amount of the mortgage and dismissed the claim for interest. Upon the appeal of the defendant, who represents the original mortgagor, the Lower Appellate Court dismissed the suit. The Court found that the market value of the moiety of the mortgaged property purchased by the mortgagee, if sold as unincumbered property, was Rs. 3,000, that the price paid for it by the mortgagee was Rs. 1,500, and that the difference between those two sums was equal to the amount due upon the mortgage. The Court held that the purchase by the mortgagee had thus the effect of fully discharging the mortgage, and that the plaintiffs claim was not therefore maintainable. The correctness of this conclusion has been challenged in this second appeal, and it is contended that the purchase of a moiety of the mortgaged property by the mortgagee extinguished the mortgage debt to the extent of one-half only, and not in its entirety.
(2.) The view of the Court below is supported by the ruling in Sumera Kuar v. Bhagwant Singh Weekly Notes 1895 p. 1. Having regard to that ruling and certain observations contained in the judgments of my brother BLAIK and myself in the Full Bench case of Nand Kishore V/s. Raja Hariraj Singh (1897) I.L.R. 20 All. 23, this case has been referred to a Full Bench.
(3.) In some of the earlier cases decided by this Court, it was held that the mere fact of the mortgagee buying a part of the mortgaged property subject to his mortgage had the effect of totally extinguishing the mortgage. This view was dissented from in the Full Bench ruling referred to above, and it was held that such a purchase "has not necessarily the effect of fully discharging the mortgage." To what extent the mortgage should be held to have been discharged by the purchase was not decided in that case. That question, however, arises in this appeal, and is the only question to be determined by the Tall Bench.;


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