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Sesha Ayyar v. Krishna Ayyangar

Madras High Court
Aug 26, 1900
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Structured Summary of the Opinion

Factual and Procedural Background

The plaintiffs are mortgage-holders of a mortgage for Rs. 10,000 executed on 24 April 1889. They sought to enforce ordinary remedies of mortgagees against their mortgagors and the mortgaged property, and additionally sought contribution so that any balance still due to them could be charged against other property which, together with the property comprised in their mortgage, had earlier been included in a prior mortgage in favour of Rangayya Goundan.

In execution of the decree on Rangayya Goundan's mortgage, some property that had been included in Rangayya Goundan's mortgage and also in the plaintiffs' mortgage was sold, diminishing the plaintiffs' security. The plaintiffs were parties to Rangayya Goundan's suit but did not prevent the sale. The plaintiffs brought the present suit (including a claim for contribution and ordinary mortgage relief). There was also an earlier separate mortgage of Rs. 500 of the same date; a suit in 1891 on that Rs. 500 mortgage resulted in a decree and the sale of some property to a defendant, that sale being stated in the plaint to have been made subject to the plaintiffs' Rs. 10,000 mortgage (an admission by some defendants).

The trial court deducted Rs. 4,695 from the plaintiffs' claim on the ground of profit from purchases at execution sales and found that the plaintiffs had waived their right to interest at an enhanced rate. The plaintiffs appealed. Various grounds were argued, including (1) whether the plaintiffs could claim contribution under Section 82 of the Transfer of Property Act against persons in possession of other property which had formed part of the earlier joint mortgage; (2) whether the suit was barred by Section 43 of the Code of Civil Procedure because a prior suit had been brought on the Rs. 500 instrument; and (3) the correctness of deductions and the finding as to waiver of higher interest.

Legal Issues Presented

  1. Whether the plaintiffs, as second mortgagees whose security was diminished by sale in execution of a prior mortgage decree, had a legal right of contribution under Section 82 of the Transfer of Property Act against third parties in possession of other property comprised in the prior mortgage.
  2. Whether the plaintiffs could properly join their contribution claim in the same suit as the ordinary mortgage claim, or whether it was a claim that could not be joined.
  3. Whether Section 43 of the Code of Civil Procedure barred the present suit because a prior suit had been brought on a separate but contemporaneous Rs. 500 mortgage instrument affecting some of the same property.
  4. Whether the District Judge was correct in finding that the plaintiffs had waived their right to interest at an enhanced rate.
  5. Whether the District Judge was correct in deducting Rs. 4,695 from the plaintiffs' claim on the ground of profit arising from purchases at sale in execution of Rangayya Goundan's decree (i.e., whether the plaintiffs' purchase reduced their mortgage claim).

Arguments of the Parties

Plaintiffs' Arguments

  • The plaintiffs claimed that, by the principle of contribution, they could charge any balance remaining due to them against other property (property Y) which had been included in a prior mortgage to Rangayya Goundan and from which Rangayya Goundan's claim had been satisfied by sale of other property (including property X that was also in the plaintiffs' mortgage).
  • The plaintiffs asserted their ordinary remedies under their Rs. 10,000 mortgage and sought to enforce the mortgage debt.
  • The plaintiffs argued that their purchase at the execution sale did not impair their mortgage claim (they contended they had paid full value and should be treated as strangers for purposes of the sale).

Defendants' Arguments

  • Respondents (defendants) argued that the plaintiffs could not maintain a contribution claim in point of law under Section 82 of the Transfer of Property Act and that such a claim could not properly be joined with an ordinary mortgage suit.
  • On the objection arising from the earlier Rs. 500 suit, the defendants argued that Section 43 of the Code of Civil Procedure prohibited institution of the present (second) suit because of the prior suit (i.e., that the cause of action had already been litigated or was the same).
  • The District Judge's finding that plaintiffs waived their right to interest at the enhanced rate was relied upon by respondents; that finding was contested by appellants on appeal.
  • Defendants contended that the plaintiffs' purchases at execution sales (including purchases in which the plaintiffs were parties to the prior decree) required a deduction from the plaintiffs' claim to reflect any advantage or profit realized from such purchases.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Seshagiri v. Pichu I.L.R. 11 Mad. 452 Illustrates that when estates are subject to a common demand and one pays (e.g., land revenue) he has right to call others to contribute and may have a lien on others' land. Used to show that a lien or right of contribution arises only upon antecedent payment and consequent right of contribution; court relied on it to emphasize the necessity of actual payment before a lien arises.
Ibu Husain v. Ramdi I.L.R. 12 All. 110 Instances from Allahabad High Court that seem to support a wider operation of Section 82 of the Transfer of Property Act. Cited as examples of authorities suggesting a broader interpretation of Section 82; the court observed these decisions but noted the point did not seem to have been argued fully there and did not adopt a broader reading.
Baldeo Sahai v. Baij Nath I.L.R. 13 All. 371 Another Allahabad decision appearing to justify a wider operation of Section 82. Noted by the court as examples from Allahabad; the court did not follow a broader rule based on them for the facts at hand.
Chagandas v. Gansing I.L.R. 20 Bom. 615 Illustration of an ordinary claim for contribution. Referenced as an example of standard contribution claims; used to contrast with the present claim which the court found inapplicable to Section 82.
Jagat Narain v. Qutub Husain I.L.R. 2 All. 807 Another illustration of the ordinary claim for contribution. Used similarly as an illustration of situations where contribution is recognized; distinguished from present facts.
Hart v. Tara Prasanna Mukherji I.L.R. 11 Calc. 718 Authority relied on by the District Judge to justify deduction of profit made by plaintiffs who purchased part of mortgaged property at an execution sale. The court distinguished this case on its facts and rejected its application to the present matter: the present case differed materially and the court did not accept the District Judge's reliance on it to justify the deduction.
Sheonath Doss v. Janki Prosad Singh I.L.R. 16 Calc. 132 Illustration where a decree-holder who buys at his own execution sale must give credit for amount of his bid when proceeding to execute against other property or the mortgagor personally. Used as an illustrative authority for the proposition that where a decree-holder buys under his own decree and then seeks further execution, a credit must be given for the bid; the court distinguished such cases from the present facts.
Erusappa Mudaliar v. Commercial and Land Mortgage Bank, Ltd I.L.R. 23 Mad. 377 Case cited that, if in conflict with Shaw v. Bunny, would be disregarded. The court expressly stated it would disregard this case to the extent it conflicted with Shaw v. Bunny, following the latter and authorities approving it.
Shaw v. Bunny 34 L.J. Ch. 257 Holds that a defendant who bought a house sold by a first mortgagee, though himself a second mortgagee, acquired an absolute title like that of a stranger, unless he used his position to procure an advantage. Followed by the court as decisive: it supports the conclusion that the plaintiffs, though mortgagees who bought at the sale, took an absolute title as strangers and were not under a fiduciary disability. The court relied on Shaw to reject the contention that purchase impaired the plaintiffs' claim.
Raja Kishendatt Ram v. Rajah Mumtaz Ali Khan L.R. 6 IndAp 145 : I.L.R. 5 Calc. 198 Judicial Committee approval of the principle that leave to bid removes the disability of a decree-holder. Cited as approving Shaw v. Bunny; the court said it was bound to follow that approval and so to disregard contrary authorities.
Ballam Das v. Amar Raj I.L.R. 12 All. 537 One of several Allahabad cases cited regarding the proposition that a mortgagee purchasing part of mortgaged property may have to submit to some reduction of his claim. Cited among cases that appear to support reduction of claim where purchase is made subject to incumbrances; the court observed these are distinguishable from the present facts and that Ballam Das was itself questioned.
Chunna Lal v. Anandi Lal I.L.R. 19 All. 196 Case where sale was made subject to existing incumbrance and used to show circumstances requiring adjustment of the mortgagee's claim. Used to illustrate situations where a purchaser (even a mortgagee) would have taken account of existing incumbrance and thus a reduction may be appropriate; the court distinguished such circumstances from the present case.
Nand Kishore v. Raja Hariraj Singh I.L.R. 20 All. 23 Case examining whether a decree was discharged by purchases made and assuming some satisfaction of the decree by those purchases — supports proportional reduction where purchase was made subject to mortgages. Cited as a case where a proportionate reduction of the mortgagee's claim was appropriate given the special facts; the court relied on its reasoning to distinguish present facts where plaintiffs paid for unencumbered value.
Lakhmidas v. Jamnadas I.L.R. 22 Bom. 304 Illustration among cases dealing with purchase at execution sales and consequences for mortgage claims. Referenced in discussion of related authorities; the court used it as part of the context to distinguish classes of cases from the present facts.
Pirjada Ahmadmiya v. Shah Kalidas Kanji I.L.R. 21 Bom. 544 Another authority cited in relation to purchases at execution sales and consequences for mortgagee's claims. Referred to among cases distinguishing different factual classes; the court took it as part of the background jurisprudence but found it not controlling here.
Krishnasami Ayyar v. Janakiammal I.L.R. 18 Mad. 153 Case where a decree-holder bought at his own execution sale and then proceeded to further execution — the decree-holder had to give credit. Cited as belonging to the class of cases where a decree-holder who buys at his own sale must give credit; the court distinguished such situations from the present facts where plaintiffs bought at sale in execution of a different decree and were to be treated as strangers.
Gunga Pershad v. Jawahir Singh I.L.R. 19 Calc. 4 Illustrative authority on adjustments when decree-holder purchases and then seeks further execution. Used as an illustration of the principle that decree-holders who buy may have to give credit when enforcing the decree further; distinguished from present facts.

Court's Reasoning and Analysis

The court proceeded in logical stages, applying statutory provisions and authorities cited to the facts before it.

  1. Contribution claim under Section 82:
    • The plaintiffs sought contribution under Section 82 of the Transfer of Property Act against persons in possession of other property (property Y) which had been included in an earlier joint mortgage to Rangayya Goundan.
    • The court examined Section 82 (both paragraphs) and concluded the second paragraph did not apply because it addresses a different factual matrix (where first mortgage is paid off out of the only property comprised in it and apportionment between properties is required).
    • The court also rejected the applicability of the first paragraph. It reasoned by analogy: if the plaintiffs had bought the property included in both mortgages and allowed it to be sold under Rangayya Goundan's decree, they would have had no right to claim compensation at the expense of persons interested in other property included in Rangayya Goundan's mortgage — because Rangayya Goundan's claim had been satisfied and nothing was done to keep his lien alive for the plaintiffs' benefit.
    • The court emphasized that Section 82 declares how a debt shall be borne by several properties but does not keep a lien alive after the mortgage debt had been paid off; a right of contribution and lien arises only where a party has actually paid off the debt and thereby acquired a right to contribution (antecedent payment is necessary).
    • Because the plaintiffs did not pay off Rangayya Goundan's debt (they did not redeem or save the property from sale), no right of contribution or lien arose in their favour; accordingly their contribution claim failed and the suit as against the defendants interested in that other property was rightly dismissed.
  2. Joinder of claim:
    • The court observed that even if such a contribution claim were maintainable, it ought not to have been joined with the ordinary mortgage claim; the joinder was improper. The appeal was dismissed as regards certain respondents accordingly (respondents Nos. 9, 10, 11 and 13 to 26) with costs payable to some defendants.
  3. Objection under Section 43 CPC (prior suit on Rs. 500 instrument):
    • The defendants argued the present suit was barred by Section 43 of the Code of Civil Procedure because a prior suit on a separate Rs. 500 mortgage had been instituted in 1891 and a decree passed, under which some property was sold to a defendant (the sale having been stated as subject to the Rs. 10,000 mortgage).
    • The court analyzed the point and concluded that Section 43 did not apply where parties, for whatever reason, have two instruments and two obligations; the courts are not justified in treating them as a single obligation merely because the securities relate to the same property.
    • The court therefore held the objection under Section 43 was not available and overruled it, finding the present suit maintainable on that ground.
  4. Waiver of enhanced interest:
    • The District Judge had found that plaintiffs waived their right to interest at the enhanced rate. The appellate court disagreed, holding that the plaintiffs' intention was to waive interest at the higher rate only up to the date of the promissory note; they did not waive the enhanced rate beyond that date.
  5. Effect of plaintiffs' purchase at sale in execution of Rangayya Goundan's decree:
    • The District Judge had deducted Rs. 4,695 as profit realized by the plaintiffs for buying part of the mortgaged property at execution sale, following Hart v. Tara Prasanna Mukherji. The appellate court examined authorities and distinguished classes of cases.
    • The court identified different factual classes: (a) cases where a decree-holder buys at his own sale and then seeks to execute his decree further (in which case credit must be given for the bid); (b) cases where sale and purchase are made subject to existing incumbrances (where purchase price would reflect incumbrance and a proportionate reduction may be warranted); and (c) cases where the purchaser is a mortgagee but the sale was of the property free from incumbrance and the purchaser must be treated as a stranger having paid full value.
    • The court found the present facts fall in the third category: plaintiffs, although mortgagees, bought at the sale in execution of Rangayya Goundan's decree and must be treated as strangers for purposes of that purchase, having taken the property free from incumbrance and having presumably paid the full unencumbered value.
    • Relying on Shaw v. Bunny and approval by higher authority, the court held that a purchaser in such circumstances takes an absolute title and is not under a fiduciary disability merely because he was (or is) a second mortgagee; accordingly, the plaintiffs' mortgage claim was not impaired by their purchase and no deduction of Rs. 4,695 was justified on that account.
  6. Resulting amendments and directions:
    • The court directed amendment of the decree to substitute the full amount of the claim less Rs. 1,500-13-4 (admitted received by the plaintiffs); and as to interest, to give interest at the enhanced rate from the date of the promissory note up to the date fixed for payment (or until payment if sooner).
    • The court fixed 28 February 1901 as the day for payment and directed the first, second, ninth, tenth and eleventh defendants to pay costs of plaintiffs calculated on the amount allowed by the decree.

Holding and Implications

Holding:

Primary holdings:

  • The plaintiffs do not have a right of contribution under Section 82 of the Transfer of Property Act against third parties in possession of other property which had been included in a prior mortgage to Rangayya Goundan, because no antecedent payment was made by the plaintiffs to preserve or redeem the prior mortgage and thus no lien or right of contribution arose.
  • The objection under Section 43 of the Code of Civil Procedure does not bar the present suit brought on the Rs. 10,000 mortgage, notwithstanding an earlier suit on a separate Rs. 500 instrument affecting some of the same property; the court held Section 43 inapplicable in these circumstances.
  • The plaintiffs' purchase at the sale in execution of Rangayya Goundan's decree did not impair their mortgage claim; they were to be treated as strangers who paid the full unencumbered value and therefore no deduction for profit (as applied by the District Judge) was warranted.
  • The District Judge's finding that the plaintiffs waived the enhanced rate of interest was reversed; the court held the waiver related only to interest at the higher rate up to the date of the promissory note.
  • The decree was amended to substitute the full amount of the plaintiffs' claim minus Rs. 1,500-13-4 admitted to have been received, and to provide for interest at the enhanced rate from the date of the promissory note up to the date fixed for payment; the date for payment was fixed as 28 February 1901. The resulting decree amount specified by the court was Re. 18,156-9-10 with interest at 15% on the principal Rs. 8,500 up to 28 February 1901 or until payment if sooner.
  • Appeal outcomes: The appeal was dismissed as regards certain respondents (including the sixteenth and fifth respondents in specified parts) with costs as stated, and the memorandum of objections was dismissed with costs.

Implications:

  • The court clarified that Section 82 does not create a contribution or lien in favour of a party who has not made an antecedent payment to discharge an earlier mortgage debt; a right of contribution and an associated lien arises only where such payment has been made. Thus, a purchaser or mortgagee who allows a prior mortgage to be satisfied by sale without redeeming it does not, by that inaction, acquire a claim of contribution against other proprietors of jointly mortgaged property.
  • The decision distinguishes between factual classes of purchase-at-execution-sale cases and confirms that where a purchaser takes property free from incumbrance and pays full value (even if he happens to be a mortgagee), he takes an absolute title like a stranger and the mortgagee's ordinary claim is not reduced by such a purchase.
  • The court signalled that procedural objections under Section 43 CPC will not be lightly applied to treat separately documented obligations as a single cause of action when parties have deliberately created distinct instruments and obligations.
  • The court limited the broader applicability of some Allahabad authorities on Section 82, preferring a narrow approach requiring antecedent payment; it also followed Shaw v. Bunny and authorities approving it on the effect of purchases by mortgagees at execution sales.
  • Beyond the direct relief to the parties (amendment of the decree, payment directions, and costs), the court did not announce a new doctrinal rule beyond its applications of established principles to the facts; the decision is therefore primarily case-specific in its legal consequences.

This summary is prepared exclusively from the text of the provided opinion and does not add facts or inferences beyond that source.

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JUDGMENT

1. The plaintiffs are the holders of a mortgage for Rs. 10,000 executed on the 24th April 1889. Besides seeking to enforce the ordinary remedies of mortgagees against their mortgagors and against the property comprised in the mortgage, they claim on the principle of contribution to charge any balance which may still remain due to them against certain other property which, with the property comprised in their own mortgage, was included in a prior mortgage executed in favour of Rangayya Goundan, It will be convenient to deal first with this latter claim, as to which it is argued, firstly, that in point of law it cannot be maintained and, secondly, that it cannot properly be joined in a suit by the mortgagee on his own mortgage. The claim arises in this way--

2. In execution of the decree on Rangayya Goundan's mortgage, some of the property which is included in the latter mortgage of the plaintiffs was sold and to that extent the plaintiffs' security has been diminished. It was not competent to the plaintiffs, though they were parties to Rangayya Goundan's suit, to insist that he should prosecute his claim in the first instance; against the property other than that comprised in the plaintiffs' mortgage, because the plaintiffs had notice of Rangayya Goundan's mortgage and therefore could not call in aid the provision of section. 81 of the Transfer of Property Act. Their case is that they, being interested in property X, comprised in both mortgages, are entitled, as against the defendants who have become possessed of property Y, comprised in Rangayya Goundan's mortgage only,, to make them contribute to Rangayya Goundan's claim, inasmuch as that claim has been paid off out of property X. It is not necessary to consider the effect of Section 56. The question is whether, under Section 82 of the Act, the plaintiffs have any legal claim against a third parson in possession of property Y. The second paragraph of the section clearly has no bearing on the present case; for that paragraph merely deals with a case in which,, the first mortgage having been paid off out of the only property comprised in it, it remains to be determined how the second mortgage debt is to be borne as between the remainder of that property and another property which is also made security for the second debt. In such a case contribution works, not in favour of the second mortgagee, but in favour of other persons interested in one or other of the two properties comprised in his mortgage. Nor do we think that the first paragraph of the section is applicable in the circumstances of the case. If the plaintiffs, instead of taking a mortgage on the 24th April 1889, had bought the property then mortgaged to them and had; as purchasers, been included in Rangayya Goundan's suit and had allowed that property to be sold under his decree, what possible right could they have had to claim compensation at the expense of persons interested in other property included in Rangayya Goundan's mortgage? Ex hypothesi, Rangayya Goundan's claim has been satisfied and nothing has been done to keep his lien alive for the benefit of the plaintiffs. The first paragraph does not provide for the keeping alive of the lien after the mortgage debt bad been paid, for it; merely declares the manner in which the debt shall be borne by the several properties. It would come into effect when the administration of the estate of the mortgagor was under consideration and may be taken to recognize a lien possessed by the person who, being interested in one of the mortgaged properties, pays off the debt and so acquires a right of contribution; but we do not think that the section gives any further right. In the present case the plaintiffs, who certainly cannot be in a better position than they would be if they had simply bought part of the mortgaged property subsequently sold under Rangayya Goundan's decree, had the opportunity, and they might, by paying off the debt and saving the property from sale, have acquired a right of contribution secured by a lien on the other property. They would then have stood in a position analogous to that of one of several mortgagors who has redeemed the whole property and claims to take advantage of Section 95 of the Act. But the plaintiffs did nothing, and therefore, no right of contribution arose and the other property stood free from any lien.

3. The principle of contribution is not peculiar to the law of mortgage. Whenever estates are subject to a common demand and that demand is satisfied by the person interested in one of them, he has the right to call upon the other owners to contribute, and, if the demand was on account of land revenue payable to Government, it has been held in this Court that he has in addition a lien on the land of others forming part of the entire estate in respect of which revenue was payable Seshagiri v. Pichu I.L.R. 11 Mad. 452. It has never been suggested that, in such cases, any lien could come into existence unless there had been an antecedent payment and a consequent right of contribution. We are aware that in the Allahabad High Court there are cases which seam to justify the notion that Section 82 of the Transfer of Property Act has a wider operation Ibu Husain v. Ramdi I.L.R. 12 All. 110; Baldeo Sahai v. Baij Nath I.L.R. 13 All. 371 But the point does not seem to have been argued. The cases of Chagandas v. Gansing I.L.R. 20 Bom. 615 and Jagat Narain v. Qutub Husain I.L.R. 2 All. 807 are illustrations of the ordinary claim for contribution. In the passage cited in argument from Robbins on 'mortgages,' volume 1, page 779, it is stated that one of the owners' has paid off the debt; and there is a close resemblance between the language of that paragraph and the language of the section. In our opinion section' 82 does not justify the notion that a man who has bought a property, which at one time was, with other property, subject to a mortgage, may, after the mortgage debt has passed into a decree and after the decree has been satisfied by the sale of that other property, be held responsible for part of the mortgage debt, and, therefore, the suit as against the defendants interested in property X was rightly dismissed. If the claim were maintainable, we should also be prepared to hold that it ought not to have been joined with the ordinary claim on the mortgage. Accordingly we dismiss the appeal as regards respondents Nos. 9, 10, 11 and 13 to 26, with coats payable to defendants Nos. 13 and 26.

4. It remains to consider the question raised by the ninth ground of appeal and also the objections taken on behalf of the first and second respondents. The objections actually argued resolve themselves into the question whether, in view of the fact that the plaintiffs had another mortgage of even date comprising the same property and had obtained a decree on that mortgage, they could maintain this suit. It appears that, on the 24th April 1889, besides the mortgage already mentioned for Rs. 10,000, another mortgage for Rs. 500 was executed in the plaintiffs' favour. It cannot be doubted that it was owing to the accident that the plaintiffs already had a stamped paper which sufficed for a Rs. 500 mortgage that the transaction was split up into two. In 1891 a suit; was brought on the Rs. 500 mortgage, decree was passed, and under the decree some property was sold to the present fifth defendant. In the plaint it is stated that this sale was made subject to the plaintiffs' mortgage for Rs. 10,000 and the averment, so far from being denied by the defendants, is admitted by the second and fifth defendants. It is argued, however, on their behalf that Section 43 of the Code of Civil Procedure prohibits the institution of the second suit which is now brought. Regarding the case as one of a mere personal claim on the instrument of mortgage, we think it is clear that Section 43 does not apply. It may be true that the term cause of action is used in that section in a peculiar way, but we do not think that when parties, for whatever reason, choose to agree that there should be two instruments and two obligations,, the Courts are justified in saying that there is only one obligation. The case put by Sir V. Bhashyam Ayyangar, of a man advancing Rs. 10,000 on a deposit of title-deeds and then on another day advancing another such sum on the same security is, we think, distinguishable; for, in that case, there would not be the declared intention of the parties that the two loans should be treated a& giving rise be distinct obligations. The case would be in no way different from that in which successive loans were made without* any written instrument or security. It is then contended that the fact that the same security is given by both instruments made it obligatory on the plaintiffs to join in one suit the two claims and that it was not competent to them to ask in a suit on the Rs. 500' mortgage for a sale of the property subject to the other mortgage. Whether the suit of 1891 on the Rs. 500 mortgage was a suits which, having regard to Sections 85 and 99 of the Transfer of Property Act, ought to have been maintained and whether in that suit the relief given was lawfully given, are questions which we need not consider. We have to deal with the admitted fact that under the decree, rightly or wrongly made in that suit, property was sold subject to the mortgage now sued on; and, unless it can be said that the suit is barred by Section 43 of the Code of Civil-Procedure, we think we are bound to hold that the suit is maintainable. In our opinion that section does not apply and this objection must be overruled.

5. There are two questions raised by the appellants, The District Judge has found that the plaintiffs waived their right to interest at She enhanced rate. We cannot agree with this finding. In our, opinion the intention was to do no more than waive interest at the higher rate up to the date of the promissory note which was given.

6. The other question relates to the point raised by the ninth issue. The District Judge has deducted Rs. 4,695 from the amount of the plaintiff's claim, and in doing so he professes to follow She ruling in Hart v. Tara Prasanna Mukherji I.L.R. 11 Calc. 718, The sum deducted represents, according to the Judge, the profit which the plaintiffs have made by their purchase at the sale in execution of Rangayya Goundan's decree of a part of the property comprised in their own mortgage. The case of Hart v. Tara. Prasanna Mukherji I.L.R. 11 Calc. 718 so far resembles the present that in both cases there is found a mortgagee buying at one execution sale part of the mortgaged property. In other respects the cases are totally different. Here it is not the decree-holder who has bought, and the question does not arise between rival creditors of the mortgagor, but between the mortgagee and his mortgagor see Sheonath Doss v. Janki Prosad Singh I.L.R. 16 Calc. 132. Moreover, the judgment in the case, in so far as it favours the notion that a mortgagee decree-holder, who buys having first obtained leave to bid, is in the position of a trustee cannot be supported; for it has been distinctly decided by the Judicial Committee that leave obtained removes the disability under which, in the absence of leave, a decree-holder labours. In the present case the plaintiffs not being decree-holders at the time of the purchase, it is argued that in their character of second mortgagees they stood in a fiduciary position towards their mortgagors and therefore cannot be treated as independent strangers buying at an auction sale. Shaw v. Bunny 34 L.J. Ch. 257 gives a complete answer on this point. There, Lord Justice Knight Bruce, affirming a decision of the Master of the Rolls, held that the defendant who had bought a house sold by a first mortgagee in exercise of his power of sale had, though himself a second mortgagee of the same house, acquired an irredeemable and absolute title such as a stranger buying under the circumstances would have taken. It might have made a difference, be added, if the defendant had availed himself of his position as a mortgagee to procure some facility or advantage relating to the purchase or connected with it. This abatement of the law being clearly approved by the Judicial Committee in Raja Kishendatt Ram v. Rajah Mumtaz Ali Khan L.R. 6 IndAp 145 : I.L.R. 5 Calc. 198, we are bound to follow it, and therefore to disregard the case of Erusappa Mudaliar v. Commercial and Land Mortgage Bank, Limited I.L.R. 23 Mad. 377, which was cited, if that case conflicts with Shaw v. Bunny 34 L.J. Ch. 257. No difference can be suggested between the position of a second mortgagee buying as the defendant; bought in Shaw v. Bunny 34 L.J. Ch. 257 and the plaintiffs baying, as they aid, at the sale in. execution of the decree in which they were parties and which was obtained at the suit of the first mortgagee, In either case the title conveyed is that which the mortgagor and mortgagee could have legally conveyed at the date of the mortgage and the purchaser takes the property free from any claim by the second mortgage. We must, therefore, hold that the plaintiffs took an absolute title such as strangers might have taken. They were under no sort of disability and there is nothing to show that they took any advantage of their position (see Section 90, Indian Trusts Act).

7. This then being the state of things, it has to be asked how the plaintiff's claim on their mortgage is affected by their purchase of part of the property, When the facts are once understood it seems clear that the purchase has no effect at all, since presumably the whole value of the unencumbered property was paid by the plaintiffs, There are, however, cases which seem to support the general proposition that a mortgagee who purchases part of the mortgaged property must submit to some reduction of his claim. In several Allahabad cases language has been used which may be held to justify that proposition Ballam Das v. Amar Raj I.L.R. 12 All. 537; Chunna Lal v. Anandi Lal I.L.R. 19 All. 196; Nand Kishore v. Raja Hariraj Singh I.L.R. 20 All. 23; and a case decided in this Court was also cited. In Nand Kiskore v. Raja Hariraj Singh I.L.R. 20 All. 23, there had been two mortgages to the same person and there were two decrees; a part of the mortgaged property included in the first mortgage was sold in execution of another decree, a decree for money, and bought by the mortgagee, and another part of the property included in both mortgages was sold under the decree on the second mortgage and bought by the mortgagee. The question was whether the decree on the first, mortgage was absolutely discharged by these purchases, and the question was answered in the negative. It was assumed that to some extent the decree must have been satisfied by the purchases and, regard being had to the special facts, the rightneas of that assumption cannot be questioned; for it is clear that & person bidding at the sale under the decree on the second mortgage could only have expected to buy the property subject to the first mortgage and that in calculating the amount of his bid be would take into account the proportionate part on the mortgage money on the property. The mortgagee who cannot be supposed to have paid any higher price could cot be allowed to gain the difference between the value of the property unincumbered and the value of it subject to the proportionate part of the debt, and therefore would rightly be made to submit to a proportionate reduction of his claim. Chunna Lal v. Anandi Lal I.L.R. 19 All. 196 is another case in which the sale was made subject to an existing incumbrance see also Lakhmidas v. Jamnadas I.L.R. 22 Bom. 304 Pirjada Ahmadmiya v. Shah Kalidas Kanji I.L.R. 21 Bom. 544. It was otherwise in Ballam Das v. Amar Raj I.L.R. 12 All. 537, but that case is questioned by Banerji, J., in Nand Kishore v. Raja Hariraj Singh I.L.R. 20 All. 23 and is not easy to understand. The cases in which the property has been sold and bought subject to the mortgage which it is sought to enforce are clearly distinguishable from the present case in which the purchasers, though they happened to be mortgagees, must be taken to have paid the full. value of the unincumbered property.

8. No less distinguishable are those cases in which the mortgagee, having under his decree for sale bought part of the mortgaged property, proceeds to execute his decree against other property or against the mortgagor personally. It is plain that in such a case the mortgagee must give credit for the amount of his bid, it being. assumed that he had leave to bid and to set off the amount of his decree against the purchase-money. We refer by way of illustration to. Sheonath Doss v. Janki Prosad Singh I.L.R. 16 Calc. 132 and Gunga Pershad v. Jawahir Singh I.L.R. 19 Calc. 4. See Lakhmidas v. Jamnadas I.L.R. 22 Bom. 304. There are, again, the oases in which, in consequence of a purchase made by the mortgagee from one of the mortgagors, the question arises as between the mortgagee and the other mortgagors. Those oases also are radically different from the present, because it cannot be supposed that a mortgages buying under such circumstances has dealt with the mortgagor as if he were the holder of unincumbered property. On the contrary, it must be taken that, in calculating the price paid by the mortgagee, allowance has been made to him for a proportionate part of the mortgaged debt. The case in Krishnasami Ayyar v. Janakiammal I.L.R. 18 Mad. 153 belongs to the class of oases in which a decree-holder, having bought at the sale in execution of his own decree, proceeds to further execution of the decree against the judgment-debtor. It is thus distinguishable from the present because, here, it will be remembered, it was at the sale in execution of Rangayya Goundan's decree that the plaintiffs bought. For some reason which is not clear the Court held that the decree-holder ought to give credit, not for the mere amount of his bid but for that sum plus the amount undertaken to be paid to the mortgagee.

9. On the facts of the present case, it being granted that the plaintiffs, with regard to their purchase at the sale in execution of Rangayya Goundan's decree must be treated as strangers and that the whole property free from incumbrance and free from the plaintiffs' right of redemption was put up for sale and bought, we can see no ground for holding that their claim under their mortgage is in any way impaired. The sale to the plaintiffs was not effected at their instance and brought no gain to them. It had the effect of diminishing the security, but it leaves the plaintiffs' claim as against the other property included in their own mortgage as it was before, wholly unsatisfied.

10. The decree must be amended by substituting for the amount decreed the full amount of the claim minus the sum of Rs. 1,500-13-4 admitted to have been received by the plaintiffs and with regard to interest, by giving interest at the enhanced rate from the date of the promissory note up to the date fixed for payment. The decree must also be amended by fixing the 28th February 1901 as the day for payment. In the result, there will be a decree for Be. 18,156-9-10 with interest at 15 per cent. on the principal Rs. 8,500 up to 28th February 1901, or till payment, if sooner. The first, second, ninth, tenth and eleventh defendants must pay the costs of plaintiffs calculated on the amount allowed by the decree.

11. The appeal is dismissed as against the sixteenth respondent with costs and also against fifth respondent with costs.

12. The memorandum of objections is dismissed with costs.