Maclean, C.J:— The Appellants obtained against the Respondents an order absolute for sale, under sec. 89 of the Transfer of Property Act, of property mortgaged to them by the latter. The property was advertised for sale in pursuance of the order but before the sale took place the mortgagor applied for permission to pay into Court the mortgage money and costs in satisfaction of the decree. The Court executing the decree declined to receive the money tendered by the Respondents. The District Judge on appeal held that the money should have been received under the power conferred on the Court by sec. 291 of the Code of Civil Procedure and ordered accordingly. The mortgagees have appealed.
The contention on behalf of the Appellants is that an order absolute for sale having been passed and having regard to sec. 89 of the Transfer of Property Act, the mortgagor's right to redeem was extinguished, and as the practical effect of an order under sec. 291 permitting deposit of the mortgage debt and costs is to extend the period for redemption, the section can have no application in a proceeding for sale in pursuance of an order under sec. 89. This contention is based on the words at the end of the section, “and thereupon the Defendant's right to redeem and the security shall both be extinguished.” In the view we take of the construction of that section it becomes immaterial to consider whether sec. 291 of the C.P Code should properly be regarded as inconsistent with, or as ancillary to, sec. 89 of the Transfer of Property Act, nor is it necessary to consider whether the rules of this Court making sec. 291 applicable to sales of mortgaged properties are or are not ultra vires, or whether, in fact, any such rules were really necessary. If the words “and thereupon” relates to the passing of the order absolute for sale only, a difficulty might arise as to the application of sec. 291 of the Code of Civil Procedure, but, in our opinion, these words relate to the actual sale and the distribution of the proceeds, and not merely to the order passed for the purpose. It is not until a sale takes place and the sale proceeds are distributed and the mortgage debt is thereby satisfied that the mortgagee's security ought to be extinguished. The legislature can scarcely have intended that the security was to be extinguished on the mere making of the order for sale, and before the mortgagee had been paid out of the proceeds of sale. The mortgagee continues to be the owner of the property subject to the payment of the debt until the sale is completed and then the ownership passes to the auction-purchaser. This seems to us to be a reasonable construction of the concluding words of sec. 89 of the Transfer of Property Act, and prevents numerous anomalies which would otherwise arise. In this view the rule of procedure laid down in sec. 291 of the Code of Civil Procedure is not inconsistent with sec. 89 of the Transfer of Property Act, as the right to redeem is not extinguished until the sale has been actually completed and the proceeds of sale dealt with. Though the result has been arrived at by a different train of reasoning the view we take is in accord with that taken by the High Court at Madras in Mallikar Junadu v. Lingamurti(1), by the High Court at Bombay in Krishnaji v. Mahadeo Vinayak(2), by the High Court at Allahabad in Raja Ram Singhji…(Decree-Holder); v. Chunni Lal…(Objector).*(3), and by this Court in Shyam Kishen v. Sundar Koer(4). The appeal, therefore, is dismissed with costs.
Brett, J.:— I agree.
Mitra, J.:— I agree with the learned Chief Justice.
Geidt, J.:— I agree and I think that the interpretation proposed derives support from the difference in the penalty foreshadowed in the preliminary decree as attaching to default in payment, according as the preliminary decree is for foreclosure or for sale.
When the preliminary decree is for foreclosure the mortgagor is told that if payment of the amount found due is not made on the day fixed, he will be absolutely debarred of all right to redeem the property (sec. 86). But when the preliminary decree is for sale, no such consequence is foreshadowed as the penalty for default of payment on the day fixed. In the latter case the mortgagor is told (sec. 88) that in default of payment, the mortgaged property will be sold, and the proceeds of the sale applied in payment of what is due to the Plaintiff. If the legislature had intended that the extinguishment of the Defendant's right to redeem should be one of the immediate consequences of the Defendant's default to pay on the day fixed, we should have expected it to be mentioned in the preliminary decree.
Woodroffe, J.:— I agree with the learned Chief Justice in thinking that having regard to the grounds of decision the questions whether cl. 3 of the Circular Order of this Court of the 27th April, 1892, declaring sec. 291 of the Civil Procedure Code to be applicable to mortgage decrees is or is not ultra vires as also whether (as has been argued before us) the execution sections of the Civil Procedure Code apply to mortgage decrees do not arise in this appeal which I agree should be dismissed not upon any ground based upon or connected with cl. 3 of the Circular Order or the provisions of sec. 291 of the Civil Procedure Code but for the reason that in my opinion a mortgagor has the right to redeem at any time until the sale of the mortgaged property has been completed and that upon a reasonable construction of sec. 89 of the Transfer of Property Act it does not prohibit the exercise of such right after the passing of an order absolute for sale and before the sale under such order has actually taken place. This view as to the right of redemption is in conformity with the practice which, so far as I am aware, has prevailed on the Original Side of this Court and with the observations made in the judgment in the case of Jogendra Nath Mukerji v. Methana Abraham(5) though there it was considered that the equitable right of the mortgagor to redeem at any time before the property is sold is not based on but is outside the provisions of the Transfer of Property Act.
This construction of sec. 89 is, it seems to me, also supported by the fact that the extinction of the right to redeem and of the security are treated as being on the same footing by that section. As the extinction of the security merely refers to the sale of the property free of the lien, it cannot of course occur until the sale has taken place, the security not being extinguished by the order absolute, see Popple v. Sylvester(6). I agree therefore in thinking that the right to redeem also is not lost until the sale has taken place and in holding that it was open to the Respondents to pay the mortgage debt notwithstanding that an order absolute for sale had been passed, no sale under such order having in fact taken place.
S.C.S
Appeal dismissed with costs.