RAMASWAMY CHETTY BY THEIR AUTHORISED AGENT AIYASWAMI PILLAI Vs. MADURA MILLS CO, LTD, THROUGH THEIR AUTHORIZED AGENT, DWGILLESPIE

JUDGEMENT

(1.) The appeal before us is by the representatives of the 8th defendant who holds a mortgage derived from the 2nd and 9th defendants, dated the 6th January 1908. His mortgage covers item No. 11 and 31 other items of property. The learned Vakil who appears for the representatives of the 8th defendant contends, and that is the only question raised before us excepting some other point as to the form of the decree, that he is entitled, under Section 81 of the Transfer of Property Act, to have the securities marshalled so that the plaintiff may be compelled to realize his debts from properties other than item No. 11. The 2nd defendant was a purchaser of the property, item No. 11, from the 1st defendant who owned all these properties, her purchase being on the 6th November 1916, that is, subsequent to the plaintiff s mortgage.

(2.) A Full Bench decision of this Court reported as Appayya v. Rangayya 31 M. 419 : 18 M.L.J. 229 : 3 M.L.T. 287 has held that Section 81 of the Transfer of Property Act gives no right of marshalling to a purchaser. It only applies to the case of security-holders, that is, mortgagees. That case may perhaps be distinguishable on the ground that here the 8th defendant is not claiming the right to marshal as a purchaser but as a mortgagee, though a mortgagee under the purchaser. It is not, however, necessary to come to a definite conclusion whether that distinction is or is not a sound one, because there are other facts which clearly stand in the way of the 8th defendant s claim. The 8th defendant derives his mortgage not only from the 2nd but also from the 9th defendant, that is to say, his debtors are these two persons; of whom one alone or rather the assignor of one alone is the debtor of the plaintiff and it is well established that where the debtor is not the same, no question of marshalling arises. The point has been decided by this Court so far back as in Gopala v. Saminathayyan 12 M. 225, in which the question arose where the property was mortgaged to one creditor by the manager of a joint Hindu family consisting of himself and another co-parcener and the subsequent mortgage was effected by one of the co-parceners after division, that co-parcener being the man who was the manager of the family when it was joint. The judgment in that case refers to the English rulings and relies upon the decision of Lord Eldon, where the doctrine is clearly propounded that, in order that a right to marshal may arise, the contending creditors must be creditors of one and the same person and must claim against the same property. This is quite enough to dispose of the claim of the 8th defendant. It may, however, be also pointed out that the 8th defendant has a number of other properties to look to besides item No. 11 and that being so, it is extremely doubtful whether he can invoke the assistance of this Court to exercise what is in the nature of equitable discretion. It also appears from the facts that the 8th defendant must have had notice of the plaintiff s mortgage when he obtained his security and that again in itself would be sufficient to bar his claim under Section 81 of the Transfer of Property Act. It is curious that he did not raise properly before the lower Court the question as to his right of marshalling. No issue was framed on the point and apparently the question was raised only at the last moment, when the facts bearing on the matter could not be fully investigated. That is the substantial question raised before us on behalf of the 8th defendant, and that failing, the appeal must be dismissed. The costs of the plaintiff will be included in the mortgage amount due to the plaintiff.

(3.) It is pointed out that the decree as framed does not give the 8th defendant the right to redeem the plaintiff by paying off the amount he is entitled to. In the first paragraph of the decree, the first defendant alone is given the right to redeem the plaintiff. That is not correct. The decree must be amended giving also the 8th defendant or rather his representatives the right to redeem the plaintiff and on payment of whatever may be found due to the plaintiff, he is entitled to have the securities transferred to him. Time will be extended to 6 months from the date of the decree of this Court.