Mootham, J. - (1.) In my opinion this appeal must be dismissed.
(2.) The relevant fasts can be stated very-shortly. Three persons mortgaged sixteen villages to the appellant to secure an advance. In 1932 the appellant obtained a mortgage decree, but before any steps were taken to execute that decree the Co-operative Bank obtained a simple money decree against one of the mortgagors and in execution of that decree the interest of that mortgagor in eight of these sixteen villages was sold. The other two mortgagors (who are the present respondents) then applied under Section 8,. United Provinces Debt Redemption Act, 1940, for amendment of the mortgage decree. The learned Civil Judge dismissed the application on the ground that the mortgagors' liability for the repayment of the advance had, by virtue of the sale in execution of the decree obtained by the Co-operative Bank, been transferred to another person, and that therefore there was no loan within the meaning of Section 2 (9) of that Act. There was an appeal to the learned District Judge of Azamgarh who took a different view of the effect of the execution sale and allowed the appeal. The mortgagee now appeals to this Court,
(3.) Now Section 2 (9) which defines "loan," provides that that term shall not include an advance 'the liability for the repayment of which has, by a contract with the borrower ... or by sale in execution of a decree, been transferred to another person." and it has been argued that the learned Civil Judge was right in holding that as a result of the execution sale the liability for repayment of the advance had been transferred to a third person, the auction purchaser, within the meaning of this sub-section. The effect of the Sub-section was considered by a Full Bench of this Court in-Saran Singh v. Miththan Lal, 1946 A. L. J. 91: (A.I.R. (33) 1946 ALL. 174 F. B.), a ease upon which Mr. Jagnandan Lal, who-appeared for the appellant, placed much reliance. In that case a mortgagor executed two successive mortgages of his property and left in the hands of the second mortgagee a sum of money sufficient to cover the principal and interest due on the first mortgage on the understanding that the second mortgagee would, with such money, pay off the first mortgage. The second mortgagee failed to do so, and subsequently the first mortgagee instituted proceedings against the mortgagor for recovery of the amount due to him on the first mortgage and obtained a decree for sale. The mortgagor, who was admittedly an agriculturist, applied for amendment of the decree under the United Provinces Debt Redemption Act. Iqbal Ahmad C. J., who delivered the judgment of the Court said: "The question is whether the words 'recoverable' and 'liability for repayment' refer to the strictly formal right of recovery or right to enforce repayment which in the circumstances of the case exists only between the first mortgagee and the mortgagor, or whether they should be read in a wider sense so as to refer to the right to recover and the liability to repay in the sense of the ultimate incidence of the burden of the mortgage debt. In our view both on the construction of the words and the definition itself and on a consideration of its purpose, it la the latter and wider construction that is the right one." Applying that principle the Court held that in a case in which the mortgagor had left a sufficient part of the mortgage money in the hands of the second mortgagee, or of a purchaser of the property, for the purpose of discharging the first mortgage he had, as between himself and the second mortgagee or the purchaser, transferred the entire liability for the first or only mortgage, in the sense of the ultimate burden of bearing it. Mr. Jagnandan Lal has contended that because at the time of the auction sale the eight villages were sold subject to the mortgage decree the ultimate incidence of the burden of the mortgage debt had passed to the auction purchaser. In my opinion this is not so. Not only is it obvious that without the consent of the mortgagee the judgment-debtor's interest in the eight villages sold in execution o the Bank's decree could be sold only subject to the mortgage, but there is nothing whatever to suggest that there had been transferred to the auction purchaser any liability for the charge of the mortgage debt. As was emphasised in Saran Singh's case, (1946 A. L. J. 91 : A.I.R. (33) 1946 ALL. 174 F.B.) (Supra) it is not the transfer by the mortgagor of the mortgaged property or of his equity of redemption therein which is the determining factor, but the transfer of the liability for repayment. Of that I can, in this case, find none.;