Right of purchaser of mortgaged property to claim marshalling.

This is an appeal under clause 15 of the Letters Patent against the judgment of Viswanatha Sastri, J., dismissing S.A. No 1178 of 1947, with his leave. The appeal arises out of a suit brought by the original respondent to recover the amount due under a mortgage-deed, dated 24th January 1927, executed by one Muthu Goundan to one Kannayya Reddi for Rs.1,000. The respondent claimed under an assignment from the original mortgagee. The mortgaged property comprised three items. Subsequent to the mortgage by a sale-deed, dated 4th Tune, 1941, Muthu Goundan conveyed to the 1st defendant a moiety of items 1 and 2 of the mortgaged properties. On the same day, a brother of Muthu Goundan sold the other moiety in these items to the 2nd defendant. The third item continued to remain with the mortgagor. The suit was brought against the purchasers, as defendants 1 and 2, but the original mortgagor was not made a party. The plaint schedule, however, included item 3 also, though the mortgagor who was in possession of it was not made a party. But at the time of the trial, the plaintiff’s vakil made an endorsement on the plaint that he did not claim any relief against item 3 and that the plaintiff exonerated it from the suit. The suit was, therefore tried only against defendants 1 and 2. The learned Subordinate Judge who tried the suit dismissed it as against the 2nd defendant as he held that the mortgage executed by Muthu Goundan was not binding on his brother whose share in items 1 and 2 was purchased by the 2nd defendant. That dismissal became final because the appeal filed by the plaintiff was dismissed as out of time by the learned District Judge of North Arcot. The learned Subordinate Judge decreed the suit against the share of Muthu Goundan in items 1 and 2 in the hands of the 1st defendant. There was an appeal by the 1st defendant, but that was dismissed by the learned District Judge. He then preferred a second appeal to this Court, viz., S.A. No.1178 of 1947, which was also dismissed by Viswanatha Sastri, J. Pending the Letters Patent Appeal, the 1st defendant appellant died and his legal representatives were also brought on record.

Mr.K. Bhashyam Ayyangar, learned Counsel for the appellants, raised two-contentions in the main. But both the contentions were founded on the fact that the original mortgagor, Muthu Goundan, had not been made a party to the suit. The first contention was that the 1st defendant was entitled to the right of marshalling conferred by section 56 of the Transfer of Property Act as it now stands after the amending Act of 1929. The view taken by Viswanatha Sastri, J., was that the section as it now stands does not apply to the present case which is covered by the section as it stood before the amendement. The section as it stood originally was as follows:-

"Where two properties are subject to a common charge, and one of the properties is sold, the buyer is, as against the seller, in the absence of a contract to the contrary, entitled to have the charge satisfied out of the other properties, so far as such property will extend ".

It was well established that this provision did not entitle the purchaser to claim marshalling as against the. mortgagee himself. The mortgagee had a right to proceed against whatever property he chose to realise the sum due to him under the mortgage and he could not be compelled to split his security. The purchaser of a portion of the property was not entitled to insist on an abatement of the amount due in respect of the mortgage proportionate to the value of the property in his hands. That this was the law, in any event so far as this Court was concerned, on the construction of the original section, was not seriously disputed by Mr. Bashyam Ayyangar. Indeed, he could not do that, having regard to the ruling of the Full Bench of this Court in Perumal Pillai v. Raman Chettiar1. It was there held that a mortgagee releasing from the suit a portion of the mortgaged property was not