The doctrine of subrogation allows a surety who has redeemed a mortgage to proceed against the mortgaged property for reimbursement.

P.B. SURESH KUMAR, J.

1. This appeal is preferred against an order allowing an application under Order 38 Rule 8 of the Code of Civil Procedure.

2. The appellant filed O.S. No. 46 of 2011 on the file of the Court of the Subordinate Judge, Koyilandy for recovery of a sum of Rs. 4,62,423/- with interest and costs from the second respondent. The case of the appellant in the suit is that the second respondent, who is none other than his brother had availed a loan from the Kerala State Co-operative Bank; that the appellant had mortgaged an item of property, in addition to the mortgage created by the second respondent in respect of a property owned by him to secure the repayment of the said loan, and that when proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was initiated by the said Bank against the secured assets, the appellant had to liquidate the outstanding liability in the loan account amounting to Rs. 4,62,423/- in installments between 29/10/2005 and 16/4/2008 and that the second respondent who is bound to reimburse the said amount to the appellant is not reimbursing the same despite various requests made by him.

3. Along with the suit, the appellant filed I.A. No. 366 of 2011 and obtained attachment over the property mortgaged by the second respondent to the Bank.

4. The second respondent filed a written statement in the suit, contending inter alia that the appellant had not mortgaged any of his properties towards security for the loan availed by him from the Bank and that the only security for the loan was the attached property. It was also contended by the second respondent that the appellant had liquidated his liability on an understanding that a property owned by him will be transferred to the appellant in consideration of the same and as agreed to by the appellant, the said property was transferred to the appellant and therefore, there is no further amount due to be paid to the appellant. It is, however, admitted by the second respondent in the written statement that the appellant was a surety to the loan availed by him from the Bank and that the liability was liquidated by him after proceedings had been initiated by the Bank for recovery of the amounts due from the appellant.

5. On receipt of information of the attachment, the first respondent filed I.A. No. 799 of 2011, to lift the attachment, invoking Order 38 Rule 8 of the Code of Civil Procedure. It is alleged in the said application that he had purchased the attached property from the second respondent as per sale deed No. 2608 of 2005 of Chemanchery S.R.O. as early as on 15.10.2005 and therefore, the second respondent had no attachable interest in the property.

6. The appellant filed objections to I.A. No. 799 of 2011 contending that the property being one mortgaged to the State Co-operative Bank, the second respondent had no authority to sell the property and therefore, the first respondent has not acquired any right in the property. It was also contended by the appellant that the document claimed to have been executed by the second respondent in favour of the first respondent is a sham document and the property is still in the possession and enjoyment of the second respondent.

7. Evidence was taken on I.A. No. 799 of 2011. One witness was examined on the side of the first respondent as PW1. She has also produced Exts.A1 to A3 documents, of which Ext.A1 was the assignment deed executed by the second respondent in his favour.

8. The court below took the view that merely for the reason that the appellant has liquidated the liability of the second respondent, he is not entitled to proceed against the property sold by the second respondent and consequently, allowed I.A. No. 799 of 2011 and ordered to lift the attachment.

9. It is beyond dispute that the attached property was a property mortgaged by the second respondent to the Kerala State Cooperative Bank to secure the loan availed