RATTAN CHAND Vs. PRITE SHAH SANT RAM OF AMRITSAR

JUDGEMENT

(1.) THIS is an appeal by defendant No. 4 from the decree, dated December 24, 1954, of the First Class Subordinate Judge of Amritsar.

(2.) THE facts, for the purpose of this appeal are not really in dispute. On november 12, 1943, defendant no. 1 and his two brothers mortgages property C with Prabhat Bank Limited, defendant No. 3 by the deposit of title deed, of which the copy is Exhibit D. 4, accompanied by the letter Ex. D. 7 asking for acknowledgement receipt of the title deed for the mortgage of the property for Rs. 10,000/ -. On March 13, 1945, by a registered mortgage deed Exhibit P. 3 defendant No. 1 mortgaged his one-third shared in the properties A, B and C, along with some other properties which do not concern the present litigation, for a consideration of Rs. 10,000/- in favour of the plaintiff from Prite Shah-Sant Ram, of which plaintiffs Nos. 2 to 5 are the partners. On September 27, 1945, defendant no. 1 again mortgaged his one-third share in the three properties A, B and C for a consideration of Rs. 15,00/- in favour of defendant No. 2 by a registered mortgage deed Exhibit P. 13. On August 1, 1946 defendant No. 3 instituted as suit to enforce its mortgage security under the mortgage of November 12, 1943, in its favour. To that suit plaintiff No. 1 or its partners were not made parties as second mortgagees. Defendant No. 3 obtained a preliminary decree in that suit against defendant No. 1 and his two brothers on December 18, 1946, and final decree on february 20, 1947. In execution of that decree property C was put to sale and it was purchased by defendant No. 4 in auction on August 3, 1948. The sale was confirmed on March 10, 1949 and two days later sale certificate was issued to the auction-purchaser, defendant No. 4. After meeting the mortgage debt of defendant no. 3 the surplus sale proceeds left in Court were Rs. 6,428/9/6. on October 27, 1948, before confirmation of the sale plaintiff No. 1 made the application Exhibit d. 2 in the executing Court under Order 34 Rule 13, and Section 151 of the Code of Civil Procedure that as it was second mortgagee of the one-third share of defendant No. 1 in property C and had not been made a party to its mortgage suit by defendant No. 3 it was entitled to payment of the surplus proceeds in Court towards the satisfaction of its mortgage, pointing out at the same time that it was not bound by the mortgage decree in favour of the first mortgagee, defendant no. 3, nor by the sale of the property and receiving all its other rights against the property. It claimed the amount as substituted security. Defendant No. 1 on March 31, 1949, replaying to this application of plaintiff No. 1 in his application exhibit D. A did not question the existence or the validity of the mortgage in favour of plaintiff No. 1 but clamed that as, plaintiff no. 1 was not a party to the suit the sale of the mortgaged property does not in any way affect its rights and consequently it is not entitled to meet its mortgage debt from the sale proceeds in court. The prayer was that the application of the plaintiff No. 1 be dismissed and it be directed to seek its remedy in a competent Court. In the meantime other creditors of defendant No. 1, defendants Nos. 5 to 7, had obtained money decrees against defendant No. 1 respectively for amounts of Rupees 2,301/8/-, Rupees 1457-8-0 and Rupees 2,631/ -. They moved for an attachment of the surplus sale proceeds in Court. On April 2, 1949, plaintiff No. 1 moved by application Exhibit D. 11 in the executing Court that the surplus sale proceeds be not sent to any court in connection with any simple money decree against defendant No. 1. On August 23, 1949, plaintiff No. 2 made the statement Ext. D. 1 in the executing Court claiming the surplus sale proceeds and stating that he had a charge on those sale proceeds belonging to defendant No. 3. On the same date the executing Court made its order Exhibit D. 16 that "the mortgage deed in favour of the petitioners is proved. The balance will be utilized as directed in Order 34 Rule 139 (1 ). Lastly the judgment-debtor will get any money if left after payment to this petitioner. " so the plaintiffs obtained an order from the executing Court for payment of the surplus sale proceeds from the sale property C under the mortgage decree of defendant no. 3. But somehow they did not succeed in actually obtaining the amount. the amount to the extent of the money decrees of defendants Nos. 5 to 7 was withdrawn by these three defendants and the remaining amount by the defendant No. 1. On October 24, 1949, plaintiff No. 1 moved application Exhibit D. 12 to recover the amount from defendants Nos. 1 and 5 to 7 t whom it had been paid. A similar, but amended application was again moved by plaintiff No. 1 on march 3, 1950, which is Exhibit D. 13. On March 16, 1950, the executing Court refused to issue any further direction in the matter under Order 34, Rule 13 of the code of Civil Procedure and directed plaintiff No. 1 to have recourse to an action. On May 12, 1948, while the execution proceedings in the decree of the defendant no. 3 were in progress, defendant No. 2 instituted a suit on the food of his mortgage (Exhibit P. 13) of September 27, 1945, to recover the amount due under the mortgage. To that suit of course defendant No. 1 as the mortgagor was a party and the second defendant was plaintiff No. 1. Defendant No. 3 was not a party to that suit. In that suit as between the defendants, present defendant No. 1, the matter of consideration of the mortgage or present plaintiff No. 1 came for consideration of the Court. The trail Judge in his judgment, exhibit P. 14, October 29 1949 with reference to plaintiff's mortgage says

(3.) ON February 19, 1954, the plaintiff's instituted the suit, giving rise to the present appeal by the defendant No. 4, against the mortgagee defendant No. 1, subsequent mortgagee defendant No. 2, prior mortgagee defendant No. 3, auction purchaser at the sale pursuant to the decree of the prior mortgagee defendant No. 3 and that is defendant No. 4, and defendants Nos. 5, 6 and 7 who as decree holders against defendant No. 1 withdraw parts of the surplus sale proceeds after satisfaction of the mortgage debt of defendant No. 3 in execution of the decree obtained by this defendant. In the suit the plaintiffs, in paragraph No, 6, give the date of the mortgage in favour of the in paragraph No, 6, give the date of the mortgage in favour of the defendant No. 3 to be November 12, 1945, whereas the actual date is November 12, 1943. The mortgage in favour of the plaintiffs is dated march 13, 1945. In the same paragraph the plaintiffs refer to the suit of defendant no. 3, and the decree obtained by it against defendant No. 1. With this knowledge it cannot be accepted that the plaintiffs did not know the date of the mortgage in favour of defendant No. 3 for that must have been stated in the suit of defendant no. 3, and it appears that they stated wrong date of the mortgage of defendant no. 3 with the object of showing defendant N. 3 as a subsequent mortgage and themselves as prior mortgagees. It is in the wake of this stand in the plaint by the plaintiffs that in the relief paragraph they first clam satisfaction of their mortgage debt by an outright sale of the three mortgaged properties A, B, and C to the extent of course of the share of defendant No. 1. This has proceed on the basis that their mortgage is prior to that in favour of defendant No. 3. The alternative relief claimed by the plaintiffs has been that, if one-third share of property C is proved to have been validity sold by auction in execution of the decree of defendant No. 3 and the equitable mortgage of defendant No. 3 is proved to have been validity effected, a decree for the recovery of the decretal amount be made first by the sale of defendant No. 1's share in properties Nos. A, and B and then By recovery of the amounts withdrawn by defendants Nos. 1 and 5 to 7 from the sale proceeds in Court after the sale of property C in execution of the decree in favour of defendant No. 3 and then further prayer is for personal decree for the remaining amount against defendant No. 1. The plaintiffs have framed their relief's in the alternative, as pointed out, because of their stand in the plaint that they are prior mortgagees as compared to defendant No. 3, but at the same time they appear to have been conscious that defendant No. 3 might well prove to be prior mortgagee, and they the second mortgagees, and hence the alternative relief claimed by them. In the manner in which relief's have been claimed by the plaintiffs in the alternative there has been some argument on behalf of defendant No. 4 that while the first relief claims sale of defendant No. 1's share in the three properties and proceeds on the basis that the plaintiff's mortgage is prior to that in favour of defendant No. 3, where in the alternative relief claimed plaintiff's expect mortgage in favour of defendant No. 3 to be proved and prior to their mortgage, they do not claim then sale of property C in the hands of the auction purchaser, defendant No. 3 defendant No. 4. It has been said on behalf of defendant No. 4 that in the circumstances no relief to the plaintiff's against property C in the hands of defendant No. 4 as auction-purchaser by way of sale of it can be given. The plaintiff's have, as explained taken this stand because of the frame of the plaint, but in their replication dated June 9, 1954, they clearly stated that "the plaintiff is entitled to put every item of property to sale. " If, therefore any ambiguity was created by the manner in which the plaint has been framed on behalf of the plaintiffs and in regard to meaning of the relief's claimed by them that matter has been clarified in the replication. In the circumstances this approach of behalf of the defendant No. 4 on the basis of the form of the alternative relief's clamed in the plaint it without substance.