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MADRAS HIGH COURT
JAGADISAN
Bangaru Ammal
Versus
M. V. Kuppuswami Chettiar and others
Appeal No. 288 of 1957
Decided On : 9 April, 1962
SUBROGATION - TRANSFER OF PROPERTY ACT, S. 92 - REQUISITES - INTEREST IN PROPERTY - REDEMPTION OF MORTGAGE - PAYMENT OF PRIOR MORTGAGE BY SUBSEQUENT MORTGAGEE - NO RIGHT OF SUBROGATION.
Fact of the Case:
The appellant, a subsequent mortgagee, claimed a right of subrogation to the extent of Rs. 850 under S. 92 of the Transfer of Property Act. The appellant's assignor, a puisne mortgagee, discharged a prior mortgage under a term of the puisne mortgage. The appellant contended that she was entitled to invoke the benefit conferred by the first part of S. 92 as she had an interest in discharging the encumbrance in favor of the prior mortgagee.
Finding of the Court:
The court held that the appellant was not entitled to subrogation under S. 92 of the Transfer of Property Act. The court found that the appellant's assignor had no antecedent right or interest in the hypotheca prior to the mortgage in her favor, which needed protection. The court also found that the appellant's assignor paid the prior mortgagee only as the agent of the mortgagor, from and out of his funds reserved with her for that purpose.
Issues: Whether the appellant was entitled to subrogation under S. 92 of the Transfer of Property Act.
Ratio Decidendi: The court held that the first part of S. 92 of the Transfer of Property Act deals with persons who having a preexisting interest in the property redeems a prior mortgage to protect his own interest and that a person who acquires interest only by advancing money with which the prior mortgage is satisfied does not come within the first paragraph even though he secures his advance by a mortgage or becomes a purchaser.
Final Decision: The appeal was dismissed.
JUDGMENT :- This is a simple appeal; but a question of law is raised on facts which are plain and undisputed. The appellant claims a right of subrogation to the extent of Rs. 850 under S. 92 of the Transfer of Property Act in the following circumstances.
2. The first respondent, who is now dead and is represented by his legal representatives, respondents 2 to 5, instituted the suit, O. S. No. 60 of 1956, Sub Court, Tiruchirapalli, for recovery of money due on a simple mortgage dated 1-11-1944 in his favour executed by the first defendant in the suit. Items 1 to 3 of the plaint schedule properties belonged absolutely to the first defendant. Defendants 2, 3 and 4 were impleaded as puisne mortgagees, holding usufructuary mortgages, of items 1 to 3 respectively. The first defendant held only mortgage rights over items 5 and 6 of the plaint schedule and the fifth defendant was impleaded as he claimed a vendors lien over these items. The fourth defendant, who was the usufructuary mortgagee of the plaint item 3 resisted the suit, questioning the truth and validity of the mortgage sued upon, and also claiming priority to the extent of Rs. 850, in respect of that item relying upon the doctrine of subrogation. The learned Subordinate Judge found that the suit mortgage was true, valid and supported by consideration and negatived the right of subrogation. He passed the usual preliminary mortgage decree for the suit amount and granted two months time for redemption. This appeal is by the fourth defendant against the said judgment and decree. The mortgagor first defendant has been adjudicated as insolvent pending the appeal and the Official Receiver in charge of his estate is now the sixth respondent before me.
3. The necessary facts, on which the appellants claim for priority to the extent of Rs. 850 rests, may now be stated. Plaint item 3 was originally owned by one Kaveri Ammal. She executed an othi deed (usufructuary mortgage) in favour of one Nagammal under a registered document dated 9-9-1940, to secure a debt of Rs. 850. The first defendant purchased the property from Kaveri Ammal under a conveyance dated 21-5-1954, agreeing to discharge Nagammals mortgage in part payment of the consideration due for the purchase. He failed to do so, and executed an othi deed dated 4-4-1947 in favour of Radhakrishnammal securing a debt of Rs. 1600. He got Rs. 750 cash from Radhakrishnammal and directed her to discharge Nagammals mortgage. Radhakrishnammal paid Rs. 850 to Nagammal, discharged her mortgage and obtained possession of the hypotheca. On 23-5-1954, Radhakrishnammal assigned her mortgage right to the fourth defendant for proper consideration and thus the fourth defendant came to occupy the position of an usufructuary mortgagee. Her contention is that Radhakrishnammal got subrogated to the rights of Nagammal who was a prior incumbrancer to the plaintiff. As already stated, the plaintiff obtained the suit mortgage only on 1-11-1944. The fourth defendant as the assignee of Radhakrishnammal is entitled to stand in her shoes, but the question is whether Radhakrishnammal has a valid claim of subrogation under S. 92 of the Transfer of Property Act, in respect of Nagammals mortgage which she admittedly discharged.
4. The relevant provisions of the Transfer of Property Act relating to subrogation are :
"91. Besides the mortgagor, any of the following persons may redeem, or institute a suit for redemption of the mortgaged property, namely :
(a) any person (other than the mortgagee of the interest sought to be redeemed) who has any interest in, or charge upon, the property mortgaged or in or upon the right to redeem the same;......
92. Any of the persons referred to in S. 91 (other than the mortgagor) or any co-mortgagor shall, on redeeming property subject to the mortgage, have so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other m
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