Jwala Prasad, J.@mdashThis appeal arises out of a mortgage suit. Defendant No. 14 Edal Singh, who died after the institution of the suit, is now represented by his minor son Rajkeshwar Prasad Singh under the guardianship of Mi. Dulbin Sona Kuer. The plaintiff is Muhammad Khalil-ul-Rahman. He seeks to enforce two mortgages, both of them bearing the same date, viz., the 9th July, 1904, one was for Rs. 500 in favour of Jadunandan Prasad Singh defendant No. 48 in the suit (Exhibit 1) the other was in favour of Baldeo Narain Singh, defendant No. 49, for Rs. 900 (Exhibit ha). The last-mentioned bond was taken in the name of Raghunath Prasad Singh, defendant, No. 50. The mortgagor was Mt. Wahidunnissa, wife of Sheikh Muhammad Ahsan alias Abmadi. The plaintiff par-abased the aforesaid mortgages by two deeds of sale (Exhibits 2 and 2-a). Exhibit 2 was executed on the 23rd July, 1915, by Baldeo Narain Singh. Exhibit 2-a was executed onthe20th July, 1915, by Jadunandan Singh. The plaintiff thus is an assignee of the mortgage bonds of the 9th July, 1904, and he seeks to enforce the aforesaid mortgages by sale of the mortgaged properties detailed in the bonds and reiterated in the schedule attached to the plaint. Defendant No. 14, who is the appellant before us, had taken three mortgages from Mt. Wahidunnissa: (1) dated 25th October, 1914, for Rs. 13,000, (2) dated 29th November, 1915, for Rs. 6,500 and (3) dated 3rd December, 1915, for Rs. 800. We are concerned with two of the properties mortgaged in these three bonds: Maksudpur Ogawan and Nisf Ogawan as they are also mortgaged in the bonds in suit.
2. Edal Singh enforced his mortgages, obtained consolidated decree on the 22nd December, 1917, and is said to have purchased the mortgaged properties in execution of that decree. His defence in the present case inter alia is that the mortgages which the plaintiff wants to enforce have been extinguished, inasmuch as under the sale-deed (Exhibit A) executed by Sheikh Muhammad Ahsan alias Ahmadi and Wabhidunnissa on the 22nd November, 1914, in favour of Mr. Zakaria Gauhar Ali (defendant No. 20) and Bibi Roqaitul Fatraa (defendant No. 21) the vendees had to pay the mortgages in suit and had for that purpose kept with them sufficient money out of the consideration of the sale deed and, as a matter of fact, did pay up the mortgages in suit and got the assignment deeds (Exhibits 2 and 2-a) executed in the farzi name of the plaintiff, who is their relation. Defendant No. 14, therefore, says that the plaintiff has no right to institute a suit.
3. The next point urged is that the bond of the defendant No. 14 is subsequent to that of the plaintiff, and consequently he has a right to marshalling; in other words, his case is that the properties which were not mortgaged to defendant No. 14 should be sold first in order to satisfy the mortgages in suit and if any sum be still found due, then and then only the properties mortgaged to defendant No. 14 should be sold, The learned Subordinate Judge has overruled both these contentions and has given a decree in favour of the plaintiff giving him right to sell the mortgaged properties in any order he likes. Defendant No. 14 impugns the decision of the Subordinate Judge.
4. The first ground urged by Mr. Bhaduri who appears for the appellant, relates to limitation which is covered by issue No. 1 framed in the lower Court. The learned Subordinate Judge says that the issue was not pressed before him and on the face of his finding that the suit was tiled on the 28th June, 1919, and that the due date of the two mortgage bonds was 9th July, 1907, no question of limitation could arise. Mr. Bhaduri disputes that the suit was filed on the 28th June, 1919, and says that in fact it was filed on the 22nd July, 1919. That was the date on which the plaint was admitted and registered. Order No. 1 in the Order Sheet of the Court below clearly shows that although the, plaint was registered on the 22nd July, 1919, it was filed much earlier on the 28th June, 1919, and that the delay in the registration of the plaint was due to the Court-fee stamps having had to be replaced as those originally filed bore endorsement of the Patna High Court. These facts being pointed out, Mr. Bhaduri now concedes that the point taken by him was raised under misapprehensions.
5. He next contends that the mortgages in suit have been discharged. It is not disputed that Mr. Zakiria and Roqaitul Fatma undertook to pay to the original holders thereof, Jadunandan and Baldeo, the dues under the two mortgages in suit and in order to pay them retained with them sufficient money out of the consideration of the sale-deed (Exhibit A) of 22nd May, 1914. In fact, the deeds of assignment (Exhibits 2 and 2-a), dated 23rd July, and 20th July, 1915, respectively, on the strength of which the plaintiff has brought this action, recite this, but add that the vendees Mr. Zakaria Gauhar Ali and Roqaitul Fatma did not pay the mortgages in suit. On behalf of the defendant it is urged that the recital is false and in fact the original mortgagees, Jadunandan and Baldeo, were paid by Mr. Zakaria and Roqaitul Fatma, who in order to prejudice the defendant got the said deeds of assignment executed in the farziname of the plaintiff, their relation. In order to prove this case the defendant has examined three witnesses Girbardhari Mahto, Etwari Mahto and Bamdban Lal. Girbardhari was formerly a servant of Mohammad Ahsan alias Ahmadi. husband of the mortgagor Wahidunnissa. He wants to prove that in a regular conference in which Mohammad Ahsan, husband of Wahidunnissa, Jadunandan and Baldeo, the original mortgagees, Musa representing his brother, Mr. Zakaria and Mahbub Alam representing his mother Roqaitul Fatma were present, it was settled that Mr. Zakaria and Roqaitul Fatma would pay the mortgages in suit and take the deeds of assignment in the fariziname of the plaintiff. Etwari Mahto is a vendee of certain properties from Mohammad Ahsan and "Wahidunnissa and took from them a sale-deed Ex. B on the same day as the sale-deed Ex. A in favour of Zakaria and Roqaitul Fatma was executed, that is the 22nd May, 1914. He says that he had to pay the dues of Edal Singh and Raja Harihar Prasad Singh just in the same way as Zakaria and Roqaitul Fatma had to pay the mortgages in suit of Jadunaudan and Baldeo, and that he paid Edal Singh and Raja Harihar Prasad Singh and Mr. Zakaria and Roqaitul Fatma got their dues satisfied by taking deeds of assignment in the name of their friend. Ram-dhan Lal says that Kbalii-ul-Rahman is the son of the maternal uncle of Roqaitul Fatma who along with Zakaria purchased village Do9ut under sale-deed (Ex. A) and paid the dues pf Baldeo and Jadunandan and took assignment of their deeds. No connection of Khalil-ul-Rahman with Zakaria has been established; Ramdhan Lal who is a karpardaz of Edal Singh admits it in cross-examination. The presence of Girbardhari Mahto, servant of Mohammad Ahsan, at the negotiation seems to be suspicious. He is now the tenant of the appellant and this may account for this evidence. Etwari Mahto does not pose himself to be an eye-witness to the payment of the mortgage debts in question by Mr. Zakaria and Mb. Roqaitul Fatma. The evidence given by the defendant is not convincing and reliable.
6. The plaintiff on the other hand, has examined witnesses to prove that the money was actually paid by him and that the assignment was taken for his benefit. The learned Vakil for the appellant has also drawn our attention to the statement of Sheikh Abdul Hafiz, witness No. 4 on behalf of the plaintiff, to show that Khalil had himself no intention of acquiring properties and purchasing the bonds himself. True, this witness says that Khalil took these bonds as Shah Ali Syed told him that the properties were accessible to him and that if he would not like to keep them he would take them. He also says that Khalil has not purchased any other deed. Such statements are not enough to show that as a matter of fact Khalil was not the real purchaser. The bond of Jadunandan was to some extent considered in the case brought by Edal Singh to enforce his mortgages, judgment of which (Ex. 3) was delivered on the 22nd December, 1917. In that case Khalil was defendant No. 35. No doubt, there is an observation in the judgment in that case that the circumstance connected with the bond were suspicious, but the actual finding was that the bond of Jadunandan of the 9th July, 1904, was prior to that of Edal Singh and thus no effect was given to the contention that Khalil was a benamidar only under the deeds of assignment in question.
7. We have carefully considered the evidence on the record. All that we can say is that the circumstances disclosed in the evidence referred to above and relied upon by the learned Vakil for the appellant raise some suspicion as to Mr. Zakaria and Roqaitul Fatma being the assignees of the mortgages in question and the plaintiff being their farzidar, but the evidence falls short of the conclusive proof of Khalil-ul-Rahman being a mere farzidar. We agree with the learned Subordinate Judge in the view that he has taken of the transaction in question and the conclusion arrived at by him as regards this issue relating to the farzi character of the assignments in favour of the plaintiff. This contention of the appellant on this point is, therefore, overruled.
8. The next question raised relates to marshalling. The learned Subordinate Judge concedes that if defendant No. 14 had continued to be the mortgagee of the properties held by him under his mortgages he would have been entitled to compel the plaintiff to have his debts satisfied in the first instance, out of the properties not mortgaged to defendant No. 14. He, however, seems to think that the right, which the defendant No. 14 had, ceased to exist upon his having purchased the properties in execution of his mortgage decree. In short, his view is that whereas the principle of mashalling applies to the case of a subsequent mortgagee it ceases to apply when he purchases the mortgaged property in execution of his mortgage decree. In support of this, he has cited the case of Magniram v. Mehdi Hossain Khan (1901) 31 Cal. 95. The facts of that case are not similar. On the 15th October, 1881, the defendant first party mortgaged four properties to defendant fourth party. On 12th January, 1888, the first two properties were purchased by defendant first party and on the 9th July, 1888, the remaining two properties were purchased by the plaintiff. On the 26th April, 1892, the defendant fourth party the mortgagee obtained a decree on his mortgage of the 15th October, 1881, and in execution of his decree he purchased two of the properties which had been purchased by the plaintiff in 1888. The plaintiff then commenced an action for contribution from defendant first party, the purchaser of the first two properties. His case in short was that all the four properties were liable to contribute rateably to the satisfaction of the mortgage-debt and whereas the entire mortgage-debt was satisfied out of the two properties purchased by him, the defendant who had purchased the remaining two properties ought to contribute to the defendant proportionate to the value of those properties. The question of marshalling did not, therefore, directly arise in that case but an analogy drawn from it as an argument against the plaintiff''s right of contribution was disposed of by their Lordships in the following words:
The Rule of marshalling as laid down in the Transfer of Property Act, Section 81, is no doubt limited to the case of mortgagees, and does not apply to the case of purchasers of mortgaged properties subject to prior incumbrances. Nor does the Rule of marshalling in the case of purchasers as laid down in Section 56 of the Act apply to a case between purchaser and purchaser, Section 56 being limited in its operation to the case in which the party claiming marshalling is a purchaser and the party against whom it is claimed is the original mortgagor. For the same reason the case of Lala Dilawar Sahai v. Dewan Bolakirom (1885) 11 Cal. 258 cited in the argument, in which a claim for marshalling was disallowed, may be distinguished from the present case. Upon reason and principle it is difficult to-say why, if marshalling is to be allowed as between two subsequent mortgagees, it should not be allowed as between subsequent purchasers. But though that is so, and though, as has been found by the Court below, the defendant''s first party go without notice of the prior mortgage in favour of the defendant''s fourth'' party, as the plaintiff was a purchaser for value it would not be right to hold that the plaintiff is not entitled to claim contribution if the sale of his property results in the satisfaction of the mortgage debt completely.... In our opinion then, if the sale of the plaintiff''s property has resulted in the complete satisfaction of the mortgage debt, the plaintiff is entitled to contribution.
9. Then their Lordships laid down the principle upon which contribution should be allowed. The fight in that case was not between a prior and subsequent mortgagee as to marshalling but was one of contribution between two private purchasers from the owner of different properties all of which were previously mortgaged to a third person who obtained entire satisfaction of his mortgage by sale of the properties held by one of the purchasers, the properties held by the other purchaser having thus been altogether exonerated from the mortgage incumbrance. That case is not, therefore, an authority for the point for which the learned Subordinate Judge has used it that a mortgagee having purchased the mortgaged property in execution of his decree loses his right of marshalling. The learned Vakil for the respondent has cited the case of Kommineri Appaya v. Mangala Rangayya (1907) 31 Mad. 419. The same remark applies to this ease as to the case of Magniram v. Mehdi Hossain Khan (1901) 31 Cal. 95 already dealt with. The right of marshalling was claimed not by the purchaser in execution of a subsequent mortgage decree but by a subsequent private purchaser who comes not u/s 81 but u/s 56 of the Transfer of Property Act. In that case their Lordships while holding that the private purchaser was not entitled to have the property marshalled pointed out�
Under Section 88 of the Transfer of Property Act, the Court may order that a portion sufficient to discharge the plaintiff''s debt be sold, and if parcel No, 2 is sufficient and if the plaintiff cannot possibly be prejudiced by such sale, it may be open to the Court to direct in the decree itself its sale before the other property.
10. Referring to Section 56 of the Transfer of Property Act which entitles the buyer of one of the two properties mortgaged to another to have the charge satisfied out of the other property as against the seller only. Sir Hash Behari Ghose in his book on mortgage seems to be of opinion that the object of the enactment is to secure that the rights of the creditor must not be diminished or unduly hampered and he quotes the case of Webb v. Blessinton (1828) Moll. 123 in order to show that a purchaser of part of the mortgaged property may claim that the plaintiff shall not resort to the purchaser''s part of the estate unless the remainder of the lands and premises should prove insufficient.
11. Their Lordships of the Madras High Court in the case of Kommineri Appayya v. Mangala Rangayya (1907) 31 Mad. 419 cited on behalf of the respondents and referred to above, observed that the right of the private purchaser arising u/s 56 to marshall the property claimed by him was not referred to a Full Bench for decision nor was it argued; and as to the right of private purchaser to marshall, their Lordships in the case of Magniram v. Mehdi Hossain Khan (1901) 31 Cal. 95 referred to above, observed-
Upon reason and principle it is difficult to say why, if marshalling is to be allowed between two subsequent mortgagees, it should not be allowed as between subsequent purchasers.
12. The Courts have, however, in practice given effect to it, and the particular equities arising in a case are often adjusted by direction under Order 34, Rule 4 of the CPC (corresponding to Section 88 of the Transfer of Property Act) given by the Court to sell the property in a particular order. We are not concerned in this case with the rights of private purchasers to marshall u/s 56 of the Act, but with the rights of the purchaser in execution of a subsequent mortgage decree to marshall u/s 81 of the Transfer of Property Act. Section 81 of the Transfer of Property Act runs as follows:
If the owner of two properties mortgages them both to one person and then mortgages one of the properties to another person who has no notice of the former mortgage, the second mortgagee is, in the absence of a contract to the contrary, entitled to have the debt of the first mortgagee satisfied out of the property not mortgaged to the second mortgagee so far as such property will extend, but not so as to prejudice the rights of the first mortgagee or of any other person having acquired for valuable consideration an interest in either property.?
13. Now, it is conceded that the right of marshalling was available to defendant No. 14 up to the moment he had not actually purchased the properties in execution of his mortgage decree. That right to my mind continues so long as the properties mortgaged to defendant No. 14 are available to be sold in execution of a prior mortgage of the plaintiffs. The object of Section 81 is to protect the subsequent mortgagee from the properties mortgaged to him being sold to satisfy the dues of a prior mortgagee who has the additional security of some other properties also. It will be dangerous, and in many oases will make the provision nugatory, if it were held that the moment the subsequent mortgagee purchases in execution of his mortgage, his rights of marshalling are extinguished, Now, a mortgagee is a transferee of property and the mortgagee acquires certain rights and incurs certain obligations in the property mortgaged from the time be takes his mortgage. One of those rights is the right of marshalling. The right acquired by him passes to the purchaser in execution of the mortgage decree whether he or a third person is the purchaser. The execution sale does not extinguish the rights or obligations already acquired or incurred by the mortgagee at the time when the mortgage was executed. His rights and obligations against the mortgagor are thus not extinguished. Hence the purchaser of the property in execution of his mortgage decree is entitled to enforce the rights of marshalling as against a prior mortgagee so long as that prior mortgage is not extinguished. None of the cases cited seem to conflict with this view. On the other band, the case of Inder Dewan Pruthad v. Gobind Lall Chowdhry (1896) 23 Cal. 790 seems to favour this view. In that case on the 2l8t JuDa, 1886, the defendant No. 1 mortgaged to plaintiff two houses and some share in a mouza. On the 17th August, 1886, defendant No. 1 mortgaged to defendant No. 2 one of the houses only. On the 30th July, 1887, defendant No. 2 obtained a mortgage decree against defendant No. 1 passed upon his mortgage of 17th August, 1886. On the 15th April, 1891, he sold in execution of his decree dated the 30th July, 1887, and purchased the house mortgaged. On the 4th April, 1893, the plaintiff instituted a suit to enforce his mortgage of the 21st June, 1886, the first mortgage. It was held that defendant No. 2, the subsequent mortgagee, who had purchased the house in execution of his mortgage decree one of the properties mortgaged to the plaintiff in the first mortgage of 1886, was entitled to marshalling, in other words, be was entitled to compel the prior mortgagee to sell in the first instance the properties which were not mortgaged and purchased by defendant No. 2.
14. Therefore, defendant No. 14 in the present case is entitled to marshalling and to compel the plaintiff to sell in the first instance the properties other than the properties mortgaged to him and purchased by him in execution of his subsequent mortgage. Those properties are: (1) Present tauzi No. 10913, old 348 Maksudpur Ogawan; (2) Present tauzi No. 11041, old 476 proprietary interest in Mauza Ogawan Nisf. It is said that defendant-appellant has failed to prove that these were the properties subsequently mortgaged to him and purchased by him in execution of that mortgage. Before the learned Subordinate Judge the point does not seem to have been seriously raised, as will appear from the following discussion in his judgment:
The defendant''s mortgage was subsequent and he has purchased the property in his own decree obtained on his mortgage. The plaintiff''s mortgage is prior and, therefore, binding on the defendant.
15. Witness No. 3 has also referred to these two villages Maksudpur Ogawan and Ogawan Nisf in his evidence as being the properties mortgaged to Edal Singh and purchased by him in execution of his mortgage decree. In the judgment Ex. 3 of the 22nd December, 1917, passed in the mortgage suit brought by Edal Singh, Muhammad Ehalil as well as Jadunandan the original mortgagee, Mr. Zakaria Gauhar Ali and Mt. Roqaitul Eatma were all parties. In that case it was recited that the properties mortgaged to Edal Singh were Maksudpur Ogawan and Ogawan Nisf and the case was fought out on the assumption that Ehalilur was the assignee of the mortgage in which these properties were hypothecated. Therefore, the fact that these two properties were mortgaged to defendant No. 14 and that he purchased the properties in execution of his decree obtained on foot of his subsequent mortgage cannot now be seriously challenged.
16. It was then argued by the learned Vakil for the respondent that at the time when Edal Singh purchased the property in execution of his mortgage he was aware of the prior mortgage. To my mind that does not alter the position and the real question is as to whether he was aware of the prior mortgage at the time when he took his own mortgage and on that point the learned Subordinate Judge has held that the mortgage by Edal Singh was taken without notice. The subsequent proceedings to enforce his own mortgage were in due course of time and the fact that he came to know of the existence of the prior mortgage at the time he purchased the property, does not deprive him of the right of marshalling which he had acquired already, This point seems to have been also concluded by the authority of the case Inder Dewan Prasad v. Mt. Man Kuer (1896) 23 Cal. 790 already referred to.
17. Apart from the question of marshalling it appears to me that the Court has undoubtedly right to direct under Order 34, Rule 4 that the properties mortgaged should be sold in a particular order. The Section says that in the event of the default of the defendant in paying the decretal amount the mortgaged property or a sufficient part thereof should be sold. Now, ordinarily the right of selling the property in a particular order rests with the decree-holder and in the absence of any contract between the parties the decree-holder may proceed to sell the properties in whatever order he thinks best so as to facilitate his realization of his mortgage debt. But the court can, in the circumstances of a case and in view of the equities arising in favour of the various parties, direct the order in which the properties should be sold. Whereas the decree-holder has the right in the first instance to prescribe the order of the progress of the sale, the final orders rest with the Court which has to adjust and determine the equities of the parties before it. This seems to be now the accepted view of She law, In the present case no order has been prescribed in the mortgage bond in which the properties should be sold and, therefore, in the circumstances of the case and in view of the complications created by the nonpayment of the mortgage bonds by Mr. Zakaria and Roqaitul Fatma, the latter of whom is related to the plaintiff, and in view of the equities arising in the case, we think that defendant No. 14 is entitled to have the properties mentioned above, Maksudpur Ogawan and Ogawan Nisf, sold last of all the properties mentioned in the mortgage bond. Accordingly we vary the decree made by the learned Subordinate Judge and order that the decree be modified by inserting therein an express direction that the properties be sold in the order dicated above.
18. In the circumstances of the case we think that defendant No. 14 is entitled to only half the costs incurred by him in this Court as well as in the Court below.
Kulwant Sahay, J.
19. I agree.
