Subsequent mortgagee not entitled to priority

JUDGEMENT :- This is an appeal by the plaintiff from the judgement of the learned II Additional Subordinate Judge of Salem in O.S. No.8 of 1974.

2. The appellant instituted O.S. No.8 of 1974 on the file of the Sub-Court, Salem, for recovery of a sum of Rupees 16,849.26 due under a mortgage by deposit of title deeds created by defendants 1 and 2 on 12-6-1970, receiving a consideration of Rs. 12,000/-, repayable with interest at 4'/2 per cent over the Reserve Bank of India official rate with a minimum of 9'/2 per cent per annum with quarterly rests, every month, and in default, at the rate of 12 per cent per annum with quarterly rests.

3. Respondents 1 and 2 herein, who were defendants 1 and 2, filed a memo on 30-9-1974 admitting the suit claim. The third defendant, who is the contesting respondent, is the Salem Co-operative Land Mortgage Bank, Ltd. in whose favour the second defendant executed a registered mortgage deed in respect of one of the suit items, namely S.No.147/4C of Anupur Village, for a consideration of Rs. 9,500/- received as loan by him. The third respondent contended that by reason of the provisions of S.28 of the Tamil Nadu Co-operative Land Mortgage Banks Act X of 1934 the claim of the plaintiff is enforceable only subject to the rights of the third respondent under the mortgage deed in favour of the latter, though the mortgage deed was executed by the second defendant after the mortgage in favour of the plaintiff. The contention was accepted by the learned Subordinate Judge and a preliminary decree was passed as prayed for with costs less Rs. 500/- paid on 22-2-1975 payable by defendants 1 and 2 subject to the priority rights of the third defendant secured by the mortgage deed under Exhibit B-9 in respect of the first item of the suit properties. Against this judgement and decree of the learned Subordinate Judge granting priority to the third defendant the plaintiff, who is a prior mortgagee, has preferred this appeal.

4. The question to be considered is whether the mortgage executed in favour of the third defendant should have priority over the mortgage in favour of the plaintiff. It is contended by the learned counsel for the third defendant-third respondent that under S.28 of the Tamil Nadu Co-operative Land Mortgage Banks Act, as amended by the Tamil Nadu Act 17 of 1968, to be referred to hereafter as the Act, the third defendant is entitled to such a priority. Section 28 sub-s.(2) of the Act reads as follows:

"Without prejudice to the provisions of sub-sec.(1), and notwithstanding anything contained in the Madras Co-operative Societies Act, 1961 (Madras Act 53 of 1961) or in any other law for the time being in force, a mortgage executed in favour of a mortgage bank after the 4th day of July, 1968, shall, subject to the claim of the Government in respect of land revenue, have priority over all other claims against the property secured by such mortgage".

The question to be considered is whether the word "claims" used in sub-s.(2) of S.28 covers mortgage rights. I am of the opinion that it does not.

5. A "claim" is "a demand of a right or supposed right; an assertion which is open to challenge; a right to claim or demand; a just title to anything; the thing claimed or demanded, especially a piece of public land staked out". (The Lexicon

Webster Dictionary, Encyclopedic Edition, Vol. I).

6. " 'Claim, title, pretension, pretence' are comparable when they denote an actual or alleged right to demand something as one's possession, quality, power, or prerogative. 'Claim' carries the strongest implication or any of these terms of a demand for recognition; only the context can indicate whether that demand is regarded as justifiable or not or whether the right is actually asserted by the person involved (though the house was legally the daughter's, the father, as the one who had paid for it and had taken care of all taxes and insurance, had a moral claim to live there the rest of his life), (intelligent persons can