IN THE HIGH COURT OF MARAS
S Aiyar, Ayling
Titali Venkata Seetharamaya
Versus
Vedvla Venkataramaya And Ors.
Decided On : 23 April, 1912
Attachment of Property - Mortgage - The court held that an attaching creditor is entitled to bring the property to sale in pursuance of their attachment, and a private alienation by the mortgagor after attachment would be invalid against the attaching creditor's claims. The plaintiff failed to make the attaching creditors parties to the suit for sale, and therefore, the sale was not binding on them.
Fact of the Case:
The plaintiff held a mortgage from the 3rd defendant over a property. The 1st and 2nd defendants obtained a money-decree against the 3rd defendant and attached the mortgaged property. The plaintiff instituted a suit for sale on his mortgage, imp leaded only the 3rd defendant as a party, and obtained a decree for sale. The 1st and 2nd defendants then applied to bring the property to sale in pursuance of their attachment. The plaintiff claimed that the 3rd defendant had no longer any saleable interest in the property due to the mortgage decree.
Finding of the Court:
The court found that the plaintiff failed to make the attaching creditors, defendants Nos. 1 and 2, parties to his suit for sale, and therefore, the sale was not binding on them. The attaching creditors were entitled to bring the properties to sale under their attachment.
Issues: Failure to make attaching creditors parties to the suit for sale, validity of the attachment and sale of the property.
Ratio Decidendi: An attaching creditor is entitled to bring the property to sale in pursuance of their attachment, and a private alienation by the mortgagor after attachment would be invalid against the attaching creditor's claims. The plaintiff failed to make the attaching creditors parties to the suit for sale, and therefore, the sale was not binding on them.
Final Decision: The second appeal was dismissed with costs.
1. In this case, the plaintiff is a person holding a mortgage from the 3rd defendant over some properly belonging to him; the 1st and 2nd defendants obtained a money-decree against the 3rd defendant and attached the mortgaged property. After the attachment, the plaintiff instituted a suit for sale on his mortgage, but imp leaded only the 3rd defendant as a party and obtained a decree for sale. The defendants Nos. 1 and 2 then made an application to bring the property to sale in pursuance of their attachment. The plaintiff then put in a claim petition stating that the 3rd defendant had no longer any saleable interest in the property as he had brought it to sale in pursuance of his mortgage decree. The claim was disallowed and he instituted the present suit for a declaration that the 1st and 2nd defendants are no longer entitled to bring the property to sale. An attaching creditor is one of the class of persons that are entitled to redeem a mortgage under Section 91 of the Transfer of Property Act. A private alienation by the mortgagor after attachment would admittedly be invalid as against an attaching creditors claims to bring the property to sale in pursuance of his attachment. Section 85 of the Transfer of Property Act requires all parties interested in the property to be made parties to a suit for sale. Section 91 recognises an attaching creditor as one who, by virtue of his interest in the property, is entitled to redeem the mortgage. There can be no doubt that the plaintiff ought to have made the attaching creditors, defendants Nos. 1 and 2, parties to his suit for sale, and, as he failed to do so, the sale is not binding on them, and they are entitled to bring the properties to sale under their attachment. The decision in Ghulam Husain v. Dina Nath 23 A. 467 is in accordance with this view. The fact that there was an order for sale in that case made no difference in the rights of the attaching creditor. A mere order for sale does not increase the interest in the property which the attaching creditor has by virtue of his attachment.
2. The second appeal must be dismissed with costs.
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