The court has the discretion to order the sale of mortgaged properties in a particular order in order to protect the equities of the parties, even if the provisions of Sec. 56 of the Transfer of Property Act do not apply.

K.M. NATARAJAN, J,

This appeal is filed by the 3rd defendant in the suit O.S. 175 of 1979 on the file of the Subordinate Judge of Coimbatore.

2. The facts which are necessary for the disposal of this appeal can be briefly stated as follows: The first respondent herein, who is the plaintiff in the suit, filed the suit for recovery of a sum of Rs. 89632-50 on the basis of a mortgage deed dated 3.2.1965 executed by one Sankarappa Thevar and his son, the first defendant, agreeing to pay interest at 12 per cent per annum. Subsequently, Sankarppa Thevar died and the first defendant is his only legal heir and legal representative. The second defendent is a subsequent mortgagee of the property on the same date as the plaintiff. The 3rd defendant purchased item 2 of the hypothecal in court auction in or about 1974. Hence they were impleaded as parties in the suit.

3. The second defendant in the suit remained ex-parte. The first defendant in his written statement claimed benefits of Act. 4 of 1938 and also partial discharge to the extent of Rs. 8000. The third defendant, who is the appellant herein, had contended in her written statement that she is a prior mortgage of item 2 of the suit property. The first defendant became a subscriber ofa chit conducted by her. On 21.1.1964, he created an equitable mortgage and received the chit amount and it is only on the basis of the said equitable mortgage, she filed a suit in O.S. 64 of 1972 and obtained a decree and in execution thereof, brought item 2 of the suit property for sale and she herself punchased the same in Court auction. She had no notice of the present mortgage on the date of the suit and so she could not give an opportunity to the present plaintiff to redeem her mortgage. She therefore prayed that a suitable decree may be passed directing the plaintiff to pay the sum due to her, in the event of the second item of the suit property is desired to be brought to sale.

4. The learned trial Judge framed as many as four issues and the relevant issue for decision in this appeal is issue No. 3, viz., “What is the nature of decree to be passed regarding item 2 of the suit property?”

5. The trial Court found issue No. 3 against the third defendant and issue Nos. 1 and 2 in favour of the plaintiff and conseqently passed a preliminary decree as prayed for. Aggrieved by the same, the third defendant has preferred this appeal.

6. The learned counsel for the appellant Mr. N. Varadarajan submitted that the reasening given by the lower Court for rejecting the plea of equity raised by the appellant is not sustainable, The learned counsel further submitted that though the encumbrance certificate produced by the appellant in this suit is one that was obtained after the institution of the suit the appellant had already obtained another encumbrance certificate in connection with the execution proceedings in O.S. 64 of 1972. But, there is no mention in the earlier E.C. also about this suit mortgage in favour of the plaintiff in this suit. Even otherwise, learned counsel submitted that though under Sec. 56 of the Transfer of Property Act the appellant being a court auction purchaser is not entitled to the benefits, yet the court has got ample discretion in equity to grant the request of the appellant. In this connection, the learned counsel brought to our notice two decisions of this court reqported in Sarangapanipillai v. Kumbakonam Bank Ltd. 1 and Jagannathan v. Ammtham and others 2 , 1980 T.LN.J. 402,. In 78 L.W. 35 referred to above, Venkatadri J. held that the principle of marshalling as provided in S. 56 of the Transfer of Property Act, can be applied to a bona fide purchaser for value without notice of a prior mortgage. It is the constant equity of the court that if a creditor has two funds he shall take his satisfaction out of that found upon which another creditor has no lien. Marshalling implies the existence of two sets of properties one of which is subject to both the mortgages and the