Andhra HC (Pre-Telangana)
Prathipati Subba Rao vs Union Bank Of India, Pasumarru Branch ... on 14 September, 2004
Equivalent citations: 2005(1)ALD92
Author: L. Narasimha Reddy
Bench: L. Narasimha Reddy
JUDGMENT L. Narasimha Reddy, J.
1. The CMA and the two CR.Ps referred to above arise out of the execution proceedings in E.P. No. 20 of 1998 in OS No. 56 of 1980 on the file of the Senior Civil Judge (hereinafter referred to as "SCJ"), Parchur.
2. The relevant facts may, briefly, be stated as under:
The 2nd respondent, Narra China Lingaiah and one Karumanchi Rattamma executed a deed of mortgage dated 25-8-1973, in favour of the 1st respondent, the Union Bank of India, Pasumarru Branch, Guntur District, to secure a sum of Rs. 15,000/-. As many as 5 Items of agricultural lands, situated in Gannavaram Village of Prakasam District, were mortgaged. Out of them, the land in Items 1 and 2 was owned by Karumanchi Rattamma and the other items of landed property were owned by Lingaiah. The deed of mortgage does not indicate as to whether the amount advanced by the 1st respondent was shared by the mortgagors. Since the amount was not paid, as stipulated under the mortgage deed, the 1st respondent filed OS No. 56 of 1980 in the Court of SCJ, Ongole, for a decree of foreclosure.
3. Even while the mortgage was subsisting, Karumanchi Rattamma entered into an agreement of sale on 22-6-1976, in respect of entire Item No.l and Ac. 1.60 cents in Item No. 2, in favour of the appellant in the CMA. Respondent No. 5 herein is the daughter of Karumanchi Rattamma, and Respondent No. 2, the co-mortgagor, is the husband of Respondent No. 5. They claimed that Karumanchi Rattamma executed a gift deed in their favour in respect of the said two items of land.
4. The appellant filed OS No. 44 of 1976 in the Court of SCJ, Chirala, for specific performance of agreement of sale, dated 22-6-1976. Respondent No. 5 filed OS No. 18 of 1977 in the same Court, for the relief of perpetual injunction against her mother, the appellant herein and some others, on the strength of the gift deed. Karumanchi Rattamma filed OS No. 125 of 1980 in that very Court for cancellation of the alleged gift deed. OS.No.56 of 1980 was filed by the 1st respondent in the Court of SCJ, Ongole, for foreclosure of the mortgage, when the suits referred to above were pending in the Court at Chirala. In that suit, the 1st respondent, one of the mortgagors, was impleaded as Defendant No.l. Karumanchi Rattamma, the vendor of the appellant and mother of Respondent No. 5 herein, was impleaded as Defendant No. 2. Defendants 3 and 4 are said to be guarantors for the transaction. The appellant was impleaded as Defendant No. 5, and daughter of Karumanchi Rattamma, the 5th respondent herein, was impleaded as Defendant No. 6, on the ground that they are claiming rights in respect of Items 1 and 2 of the mortgaged properties.
5. A preliminary decree was passed in OS No. 56 of 1980 on 1-12-1981. The suit was dismissed against Defendants 5 and 6, namely, the appellant, and Respondent No. 5, herein. OS Nos.44 of 1976, 18 of 1977 and 125 of 1980 on the file of the SCJ, Chirala, were disposed of through a common judgment, dated 26-11-1984. Through that judgment, OS No. 44 of 1976 filed by the appellant herein, for specific performance of a decree was decreed. OS No. 18 of 1977 filed by the 5th respondent, for the relief of perpetual injunction was dismissed. The suit filed by Karumanchi Rattamma against Respondents 2 and 5 for cancellation of the gift deed, was decreed. All the decrees became final and a sale deed came to be executed in favour of the appellant, in respect of the lands covered by the agreement of sale, dated 22-6-1976. The preliminary decree in OS No. 56 of 1980 also became final.
6. The 1st respondent filed I.A.No. 187 of 1995 for passing final decree in the Court of SCJ, Addanki. E.P. was also filed in that Court. However, it was transferred to the Court of SCJ, Parchur (hereinafter referred to as "the Executing Court") on the ground that the village, in which the petition schedule property situated, has since been brought within the jurisdiction of that Court.
7. The 1st respondent sought to bring Item 1 of the petition schedule properties to sale. On coming to know these steps, the appellant filed EA Nos.214, 215,223 and 224 of 1999, raising objections for the steps. He pleaded that the two items of property purchased by him cannot be brought into sale for the reasons that, the executing Court has no territorial jurisdiction; the EP is not maintainable, since the amount representing interest was also included in it, though there is no decree for interest; even if the sale becomes inevitable, the Court has to enforce marshalling under Section 56 of the Transfer of Property Act (hereinafter referred to as "the Act") etc.
8. Principal among these applications is E.A. No. 224 of 1999. The applications came to be dismissed for default on 7-8-2000. On the same day, the Trial Court confirmed the sale in favour of the 6th respondent herein. The appellant challenged the orders of dismissal for default by filing CRP No. 3829 of 2000. Pursuant to the directions issued by this Court in that CRP., the executing Court restored the applications. Since the sale was conducted by that time, and the 6th respondent emerged as the highest bidder, the appellant filed EA No. 260 of 1999 to set-aside the sale. One Mr. Cherukuri Venkanna Rao, claiming to be the tenant of the appellant, in respect of an item of the petition schedule property filed EA No. 270 of 2000, challenging the sale in favour of the 6th respondent. Through the common order dated 5-12-2003, the executing Court dismissed the EA.Nos.224 and 216 of 1999 filed by the appellant. On the same day, the executing Court dismissed the EA.No.270 of 2000 through a separate order. The appellant filed C.M.A No. 48 of 2004 against the order in E.A.No.260 of 1999, C.R.P No. 96 of 2004 against the one in E.A. No. 224 of 1999. The petitioner in EA No. 270 of 2000 filed the C.R.P No. 6634 of 2003. Since there is no conflict of interest among the appellant in the CMA., and the petitioner in CRP No. 6634 of 2003, they are referred to as appellants, except where it becomes necessary to refer to them separately.
9. Smt. V. Dyumani, learned Counsel appearing for the appellant submits that the E.P. is not maintainable for more reasons than one. She submits that the village Gannavaram was never within the territorial jurisdiction of the Court of SCJ, Ongole, and it was within the jurisdiction of the Court of SCJ, Chirala, much prior to, and at the time of filing of OS No. 56 of 1980. She submits that the 1st respondent was very much aware that as many as three suits were filed in respect of the petition schedule properties in the Court of SCJ, Chirala, and still it has filed OS No. 56 of 1980 in the Court of SCJ, Ongole. She submits that the appellant, who was impleaded as Defendant No. 5 in the suit, raised an objection in this regard and the necessity for him to canvass it further did not arise, on account of the fact that the suit was dismissed against him. Placing reliance upon Section 16 of CPC, learned Counsel submits that the suit as well as the EP was filed in Courts, which did not have territorial jurisdiction.
10. The second contention raised by the learned Counsel is that neither in the preliminary decree nor in the final decree, interest was awarded and still, the E.P. was filed for a very huge sum, by calculating interest at the rate of the choice of the 1st respondent. She submits that the executing Court ought not to have entertained the E.P., since it does not accord with the decree. The third contention raised by her is that even assuming that the suit and E.P were maintainable in law, being purchasers of one of the items of schedule properties, the appellant has a right to insist on marshalling and the executing Court denied that relief contrary to Section 56 of the Transfer of Property Act. It is also her contention that the execution proceedings are vitiated, inasmuch as there was collusion between the 1st respondent, on the one hand, and the principal debtor, the 2nd respondent, on the other. She submits that the ban among was availed by the 2nd respondent, and when his attempts to grab the property, owned by the late Rattamma, his mother-in-law, failed, he got the suit schedule property brought to sale and that the 6th respondent is none other than the co son-in-law of his son. Her further contention is that it was not competent for the executing Court to have confirmed the sale when several applications, raising objections, were pending. She placed reliance upon several judgments, in support of her contention.
11. Sri Ganta Rama Rao, learned Counsel for the 1st respondent submits that any objection as to territorial jurisdiction has to be raised within a stipulated time, as provided for under Section 21 CPC, and that there is nothing on record to disclose that the appellant raised an objection in the suit, as to territorial jurisdiction. He submits that the application for final decree -proceedings was filed in the Court of SCJ, Addanki, since the village came within the jurisdiction of that Court by that time, and that the E.P., came to be filed in the executing Court at Parchur, because that Court was constituted by carving out certain areas, which were hitherto within the territorial jurisdiction of the Courts of SCJ at Ongole, Chirala and Addanki. As to the contention of interest, learned Counsel submits that the decree was passed in the form prescribed in the C.P.C., and though there is no specific mention about the rate of interest, the 1st respondent was entitled to recover the principal amount with interest at the contracted rate.
12. Learned Counsel submits that the appellant cannot enforce marshalling for the reason that Section 56 of the Act applies only where there is solitary mortgagor and not in cases where the mortgagors are more than one. He draw support from the judgment rendered by this Court in Kamarsu Raja Row v. Kamarsu Rajaiah, 1963 (2) An.WR 474. He refutes the allegation of collusion between the 1 st respondent, on the one hand, and Respondents 2 and 6, on the other. After referring to Ex.A-3, agreement of sale, dated 22-6-1976, learned Counsel submits that even according to this document, the purchase made by the appellant was subject to mortgage and he cannot avoid the liability. Learned Counsel submits that the executing Court was justified in confirming the sale, since the applications filed by the appellant were dismissed for default. He too has referred to several judgments and made submissions on other aspects also.
13. Sri V. Srinivas, learned Counsel appearing for the 2nd respondent has adopted the arguments of Sri Ganta Rama Rao.
14. The validity of the execution proceedings that culminated in the sale of Item 1 of suit schedule properties in O.S. No. 56 of 1980, is in challenge in this set of proceedings. It is not necessary to repeat the facts referred to in the preceding paragraphs, since there is not much of a dispute. The controversy is only as to consequences flowing from the various acts and omissions in the proceedings, that led to the sale of the said properties. In view of the facts narrated and submissions made by the parties, the following questions arise for consideration:
(a) Whether the executing Court possessed the territorial jurisdiction to entertain the EP.
(b) Whether the 1st respondent was entitled to file EP by adding interest to the decretal amount, and
(c) Whether the appellant was entitled to seek marshalling under Section 56 of the Transfer of Property Act.
15. Though certain other contentions are also advanced, they are not of such a significance, as to be dealt with elaborately.
16. The 1st respondent filed OS No. 56 of 1980 for a preliminary decree of mortgage in the Court of SCJ, Ongole. It is not in dispute that at the relevant point of time, the suit schedule properties were within the territorial jurisdiction of the Court of SCJ, Chirala. The assertion of the appellant in this regard is not controverted. It is a matter of record that as many as three suits came to be filed in respect of the same property in the Court of SCJ, Chirala, at the relevant point of time. Section 16(c) of CPC, mandates that the suits for foreclosure, sale or redemption in ' case of a mortgage or charge upon an immovable property, shall be instituted in the Court within whose territorial jurisdiction, the property is situate. Unlike Sections 17 and 20, Section 16(c) CPC, does not contemplate of a situation, of a suit referred to therein, being filed in more Courts than one. The factors, such as origination of cause of action, place of residence of defendant etc., are of hardly any significance, in choosing the forum for the relief of foreclosure or redemption of mortgage. The provision being mandatory, non-compliance with the same would entail in drastic consequences.
17. A Division Bench of the Kerala High Court in Mrs. Rosy Joseph v. Union Bank of India, , held as under:
"Hence in a case which is directly governed by Section 16(c), Section 20 cannot be called in aid and it is not permissible for the plaintiff to institute the suit in any Court other than the one within the local limits of whose jurisdiction the mortgage properties are situate....."
18. In Kandukuri Satyanarayana v. Sanam Ramamurthy, 1960 ALT 985, a Division Bench of this Court discussed the provisions of Sections 16, 17 and 20 CPC. In that case, relief was claimed in respect of certain items of movable properties also, along with, items of immovable properties. The law was summed up as under:
"What follows on this discussion is, if a suit relates to immovable property, it has to be instituted in a Court within whose local limits the immovable property is situate notwithstanding the fact that the claim for moveable is also joined to that suit. It follows that the decision under appeal is correct and cannot be successfully impeached."
These precedents are directly on the point and permit of no further discussion on the matter.
19. It is true that an objection as to territorial jurisdiction has to be raised at the initial stage (See Section 21 CPC). The question as to whether the objection said to have raised by the appellant in this regard can be said to have been sustained or overruled by the Trial Court, expressly or by implication, becomes insignificant, on account of an important circumstances. As observed earlier, though the Trial Court passed a preliminary decree in that suit, it was dismissed against the appellant and Respondent No. 5 herein. With that, the appellant did not have any subsisting grievance. Therefore, the bar contained under sub-section (1) of Section 21 CPC, does not operate against the appellant.
20. Whatever may have been the justification for the Trial Court to assume territorial jurisdiction in passing the preliminary decree against the second respondent, the question of territorial jurisdiction becomes significant in executing proceedings vis-a-vis the appellant. Sub-section (3) of Section 21 CPC, reads as under :
"No objection as to the competence of the executing Court with reference to the local limits of its jurisdiction shall be allowed by any appellate or revisional Court unless such objection was taken in the executing court at the earliest possible opportunity, and unless there has been a consequent failure of justice."
21. This presupposes that the judgment-debtor or a third party can raise an objection as to the territorial jurisdiction of the executing Court to entertain the E.P. By and large the same principles, as are applicable to suits, in relation to territorial jurisdiction, apply to execution proceedings also. The appellant raised a specific objection in this regard.
22. The learned Counsel for the 1st respondent attempts to justify the filing of EP in the Court at Parchur by stating that the Court of SCJ at Parchur was constituted by carving out the area from the Courts of SCJ, Ongole, Addanki and Chirala, and earlier to that, the village was within the territorial jurisdiction of the Court of SCJ at Addanki. He submits that the final decree was in fact, passed by the Court at Addanki. He places reliance upon explanation to Section 37 of C.P.C. In fact, the executing Court repelled the contention of the appellant only by placing reliance upon Section 37 C.P.C. This provision defines the expression "Court which passed a decree." This expression is used in Section 38 and other provisions. Under Section 38, a decree may be executed either by the Court which passed it, or by the Court to which it is sent for execution. The circumstances, under which a decree can be transferred for execution, are provided for under Section 39. Therefore, it is important to extract Section 37 C.P.C.
Section 37. Definition of Court which passed a decree :-The expression "Court which passed a decree", or words to that effect, shall, in relation to the execution of decrees, unless there is anything repugnant in the subject or context, be deemed to include,-
(a) where the decree to be executed has been passed in the exercise of appellate jurisdiction, the Court of first instance, and
(b) where the Court of first instance has ceased to exist or to have jurisdiction to execute it, the Court which, if the suit where in the decree was passed was instituted at the time of making the application for the execution of the decree, would have jurisdiction to try such suit.
Explanation :-The Court of first instance does not cease to have jurisdiction to execute a decree merely on the ground that after the institution of the suit wherein the decree was passed or after the passing of the decree, any area has been transferred from the jurisdiction of that Court to the jurisdiction of any other Court; but, in every such case, such other Court shall also have jurisdiction to execute the decree, if at the time of making the application for execution of the decree it would have jurisdiction to try the said suit."
23. The explanation to Section 37 takes care of a situation where the Courts are reorganized and the territorial jurisdiction is changed on account of such reorganization. The explanation, in a way, provides for succession of the jurisdiction by a newly constituted Court, in relation to matters, which were dealt with by its predecessor Court. The explanation does not deal with the cases of transfer under Section 39 C.P.C.
Explanation to Section 37 can come to the rescue of the 1st respondent, if it were to be a case, where the village Gannavaram was situated within the territorial jurisdiction of the Court of SCJ, Ongole, when the suit was instituted or when the preliminary decree was passed and later on, the village came to be brought within the territorial jurisdiction of one Court or the other. The said village was never within the territorial jurisdiction of Ongole and it was the Court of Senior Civil Judge at Chirala that held the territorial jurisdiction over it, when the suit was filed and when the preliminary decree was passed. It is a fact that the Court of JCJ, Addanki was constituted by carving out some areas from the territorial jurisdiction of the Court of JCJ, Ongole and Chirala. However, the village Gannavaram was transferred to its jurisdiction from the Court of JCJ, Chirala and not that of Ongole. Same is the case, with the Court of SCJ, Parchur. Once it has emerged that the village in which the petition schedule property was never within the territorial jurisdiction of the Court of JCJ at Ongole, transfer of some other areas of it, to a newly constituted Court at Addanki or Parchur, cannot confer the territorial jurisdiction upon them, to entertain the execution proceedings, in relation to the decree in question. Therefore, the E.P. was presented to a Court, which did not have the territorial jurisdiction and the objection raised in terms of sub-section (3) of Section 21, by the appellant, deserves to be sustained.
24. The second question relates to the entitlement of the 1st respondent to file E.P., by adding interest to the decretal amount. The preliminary decree was passed in the suit for a sum of Rs. 49,809/-. The E.P. was filed for recovery of a sum of Rs. 85,410/-. In arriving at this figure, interest at 6% per annum was calculated on the decretal amount. If the preliminary decree awarded interest at 6%, no exception can be taken to the E.P. However, the Trial Court did not award any interest for the period, subsequent to the preliminary decree.
25. In a suit for foreclosure of mortgage, the preliminary decree is to be drawn in Form No. 5 of Appendix-D of First Schedule of C.P.C. Unless the Trial Court grants interest, particularly for the period subsequent to the preliminary decree, the decree-holder is not entitled to claim the same. Further, Rule ll(b) of Order 34 C.P.C mandates that unless the Court, which passed the decree awards interest, for the period from the date of decree to the date of realization, it is not competent for the decree-holder to claim it.
26. A Division Bench of this Court in Mokam S. Ramaiah v. Sri Ram Narasimhaiah and others, 1967 (1) ALT 3 (NRC) (DB), held that it is not open to the executing Court to fix an interest, if the decree is silent on that aspect. Their Lordships also took the view that sub-section (2) of Section 34 C.P.C, does not confer any power on the Court to award interest, and merely embodies a rule of construction, that where the decree is silent, as to interest, it must be deemed that the interest was refused. It is not in dispute that the Trial Court did not award any interest, while passing the preliminary decree. The terms in a deed of mortgage, as to interest, would enable the mortgagor to claim interest up to the date of the preliminary decree. For the period subsequent thereto, award of interest, and the rate thereof, is absolutely within the discretion of the Court. Therefore, there was no basis for the 1st respondent to file the E.P., for an amount excess of the one specified in the preliminary decree. In that view of the matter, the E.P., for a sum of Rs. 89,642/-, ought not to have been entertained at all.
27. The third question is about in marshalling, under Section 56 of the Act. The appellant is a purchaser of one of the items of property, mortgaged to the 1st respondent. Transfer of Property Act does not prohibit sale of mortgaged properties. However, such sale shall be without prejudice to the rights of mortgagee, in respect of the property. Consequently, the purchaser shall acquire the rights in the properties subject to the mortgage. Section 56 of the Act is a special measure evolved to protect the interests of purchaser of properties from a mortgagor. It is to the effect that if a mortgagor sells one or some of the mortgaged properties, the purchaser can insist that before the property purchased by him is proceeded against, steps be taken against other items of property. This facility is, however, subject to any contract to the contrary. The expression "contract to contrary", occurring in Section 56, has been explained by various High Courts.
28. A Division Bench of the Madras High Court in Mangayya v. Achayamma, , held that a promise, by a purchaser of a mortgaged property, to pay certain sum, in part discharge of the mortgaged debt, cannot be construed as a contract to the contrary. In Tulsi Ram v. Maiku Lal, , the Allahabad High Court held that an indemnity clause contained in a sale deed, through which a mortgaged property was sold, indicating that the purchaser shall be entitled to recover any loss, occasioned on account of defect in title, cannot be construed as "contract to contrary", referred to under Section 56. In Brajkishore Rai v. Ramraj Rai, , the Patna High Court held that the rights of a mortgagee cannot be defeated, on account of a sale of an item of mortgaged property to third parties, but his right to proceed against such properties would arise, only after he exhausts his remedies, vis-a-vis the other items of properties, mortgaged by the same mortgagor.
29. It is not in dispute that as many as 7 items of property were mortgaged, in favour of the 1st respondent. The mortgage deed wags executed by the 2nd respondent as well as late Karumanchi Rattamma. From the record, it does not appear that Karumanchi Rattamma was extended any loan or amount by the 1st respondent. Be that as it may, their liability has to be treated as joint and several. The executing Court refused to extend the benefit of marshalling under Section 56 to the appellant, on the basis of a clause contained in Ex.A-3, the agreement of sale dated 22-6-1976, executed by Rattamma, in favour of the appellant. The clause is to the effect that out of the sale consideration of Rs. 60,000/-, a sum of Rs. 5,000/- is payable to the 2nd respondent. The recital indicates that the amount of Rs. 5,000/- was paid by the 2nd respondent to her, at the time of execution of the deed of mortgage. The payment of Rs. 5,000/-, was purely an arrangement between two co-mortgagors. In view of the judgment of the Madras High Court in Mangayya's case (supra), this clause cannot be construed as a "contract to the contrary". Therefore, the view taken by the executing Court cannot be approved.
30. Learned Counsel for the respondents submits that the benefit of Section 56, will be available to a purchaser, only where the mortgagor is a single person, and not where they are many. In support of his contention, he places reliance upon a judgment of this Court in K.K. Rao v. K.V. Rao, .
31. In that case, as in the present case, two individuals executed a common mortgage deed, in respect of six items of property, held by them separately. One of the mortgagors was declared as an insolvent. Three items of property held by him, which were subject-matter of the mortgage, were brought to sale. The petitioner therein purchased those items, in the auction conducted by the "Court. The mortgagee obtained a preliminary decree on the basis of the mortgage deed. In the execution, he intended to bring the properties purchased by the petitioner, to sale. The application by the petitioner for availing the benefit under Section 56 of the Act was rejected by the executing Court. A learned Single Judge of this Court held that the benefit of marshalling under Section 56 of the Act can be extended only when the mortgagor is a single person. The ratio of the judgment reads as under:
"On a plain reading of the section, it is clear to me that the provision contained in it is intended to apply only to cases of a common debtor, and not to cases of more than one debtor mortgaging their separate properties jointly for contracting a debt and one of the mortgagors selling his properties subsequently. The same view has been taken in some of the decided cases".
The following reasoning was adopted.
"It does not appear that the right of marshalling as provided in Section 56 is intended to apply to cases where there is more than one debtor. The reason seems to be obvious. In the case of more than one debtor, when the properties of one of the debtors are ordered to be sold, in the first instance, it will cause prejudice to his rights though he may have a right to contribution against the other debtors. But that would not be the case in the case of a single debtor where the liability to discharge the debt would entirely be on him. It is true that in the present case the third respondent namely the other mortgagor did not seem to have raised any objection for the prayer made by the petitioner to sell the properties purchased by him".
32. Reliance was placed on two judgments in coming to that conclusion. Venkayya v. Venkataramayya, AIR 1930 Mad. 178, was a case, where out of the two common mortgagors, one of them, further mortgaged his property, and the other mortgagor sold his share. In the execution of the decree, in relation to the common mortgage, the second mortgagee of some of the items insisted that the properties that were sold by the other mortgagor be brought to sale first. In fact, he wanted the reverse application of the principle of marshalling contained in Section 56 of the Act. The Madras High Court rejected the contention. The second judgment was the one in D.C. Johar v. Mathew, . In that case, two mortgagors executed a mortgage deed in favour of South Indian Bank Limited. One of the mortgagors created a second mortgage in favour of another bank. In the execution taken out by South Indian Bank Limited, the second mortgagee pleaded that the property of the other mortgagor be brought to sale first. The relief was claimed under Section 81 of the Act. The prayer was rejected by Kerala High Court. Even in the words of the learned Judge, who decided K.K. Rao's case (supra), the said judgment arose under Section 81, but not under Section 56 of the Act. The nature of marshalling under these provisions, differs from each other.
33. In Section 56 of the Act, the expression employed is "owner of two or more properties". It was in the context of this expression that Section was held not applicable, where such owners are more than one. It is not uncommon that Legislature refers to situations. Bodies or instances etc., in singular. Unless the context provides for otherwise, reference to singular is to be taken as reference to plural and vice versa. According to Sub-section 42 of Section (3) of the General Clauses Act, "person" shall include any company or association or body of individuals, whether incorporated or not;
34. In Rameshwar Prasad v. Keshab Prasad, , it was held that the term "person" includes in it, more than one person and even family comprising of adults and minors. It would also be beneficial to refer to sub-section (35) of Section 3 of A.P. General Clauses Act, 1891, which reads:
"Number". Words in the singular shall include the plural, and words in the plural shall include in the singular;
35. In the context of Section 56, no perceptible or qualitative change of rights is evident, if the mortgage is by more individuals than one. The focal point of the provision is the purchaser of mortgaged property, and the object is to protect his interest, to the extent possible. It hardly makes any difference, whether the mortgage was made by one or several individuals. Further, there is no in compatibility in the situations, where the mortgagor is singular on the one hand and where they are many on the other hand. The requirements for application of the section are:
(a) More items of properties than one, are mortgaged,
(b) One or some of the mortgaged properties are sold in favour of third party,
(c) The purchaser insists that steps be taken against other mortgaged properties, before the one purchased by him, is proceeded against.
(d) There does not exist any contract to the contrary.
36. In the ultimate analysis, it is only a matter of fixing priorities in the matter of sale of mortgaged properties. All the items of properties, mortgaged through a common deed, stand on the same footing, in the context of discharge of the liability. It is immaterial whether the mortgaged properties are held by the same individual, or many. It is not as if that by acceding the request of marshalling, the Court completely galvanizes the property, that was sold during subsistence of the mortgage.
37. The expression "but not so as to prejudice the rights of the mortgagee" occurring in Section 56 of the Transfer of Property Act, clearly indicates that in case the sale of other items of property is not going to satisfy the decree, the item that is kept aside as a measure of marshalling, is also be liable to be brought to sale. Therefore, it makes little difference whether the mortgaged properties are sold in one order of preference, or the other. While the order contemplated under Section 56 would protect the interests of the mortgagee, mortgagor and a subsequent purchaser, the other would defeat the rights of the subsequent purchaser, and in a given case, may promote collusion between a dishonest mortgagor and the un-reasonable mortgagee.
38. For the foregoing reasons, with great respect to the learned Judge, the judgment rendered in K.K. Rao's case (supra) cannot said to be reflecting the true purport of Section 56 of the Transfer of Property Act. It is found that the plea of the appellant squarely fits into that provision. Hence, he is entitled for the benefit of marshalling.
39. The record also discloses that the money was extended to the second respondent. He cannot have any plausible objection for the sale of the properties owned by him. The cumulative effect of the events such as, the attempt by Respondent No. 2 and his wife Respondent No. 5 to grab the properties held by Rattamma, the highest bidder in the sale in question, being none other than the co-son-in-law of the son of the second respondent, is that there were no bona fides on the part of the Respondents 1 and 2, in proposing to proceed against the properties conveyed to the appellant by a Court in pursuance of a decree for specific performance.
40. Though certain other contentions were also urged by both the parties, this Court feels that it is not necessary to discuss the same in view of the findings recorded above. Before parting with the case, it is felt necessary, to acknowledge the effective assistance rendered by learned Counsel for the parties.
41. For the foregoing reasons, CMA No. 48 of 2004 and CRP No. 96 of 2004 are allowed and the various steps taken by the executing Court against the lands purchased by the appellant are set aside. It shall be open to the sixth respondent to take back the amount deposited by him. This order does not preclude the first respondent from proceeding against the other items of mortgaged properties in accordance with law.
42. In view of the relief granted in favour of the appellant herein, CRP No. 6634 of 2003 filed by the tenant becomes infructuous and the same is accordingly dismissed as infructuous. There shall be no order as to costs.