The Court established the principle that a mortgage is subject to the equities created in favor of a purchaser by a previous contract of sale, and a decree for specific performance creates a title in the purchaser relating back to the date of the agreement.

Baker—The plaintiffs, who are mortgagees from one Bhiku Patel of an 8 annas share in mouza Budbuda, Mahal No. 5, and of 1 anna 4 pies share in mouza Narodi, sued for foreclosure of the mortgage. Defendant 2, Gujaba, who is the contending defendant in this case, is a purchaser from Bhiku for his 1 anna 4 pies share in mouza Narodi by a contract made previous to Defendant 1's mortgage. The date of the mortgage is 16th June 1917. As Bhiku did not execute the sale deed, Defendant No. 2 sued him for specific performance in Suit No. 31 of 1917 and obtained a decree on 24th October 1917 for specific performance; and a sale deed was executed, Gujaba being a heady in possession under the previous mortgage.

2. The lower Court held that the plaintiffs' mortgage was not binding on Defendant 2 as the plaintiffs took their mortgage with notice of the previous contract of sale between the mortgagor Bhiku and Defendant No. 2. Their claim against him was therefore dismissed and a decree passed against Defendant No. 1 only as he admitted the claim. The plaintiffs-appeal.

3. Although the judgment of the lower Court is long and the record is bulky, the only question in this case is a comparatively simple one. We are not concerned with the mortgage of the 8 annas share of the other village Budbuda, nor are we in this appeal concerned with the question of the redemption by the plaintiffs of the Defendant No. 2's previous mortgage of the share of 1 anna 4 pies share of mouza Narodi, because, although the lower Court has gone at some length into that question, it has finally held in paragraph 15 of its judgment that ''the plaintiffs have not only not paid Court-fee stamp on the claim for redemption but they have not filed any written statement containing that claim, non is the plaint amended so as to include that claim.'' We are therefore not concerned with this point, and the sole question in this appeal which is comparatively a simple one, is whether at the date of the plaintiffs mortgage there was a subsisting contract for sale between the mortgagor Bhiku and the present respondent, Gujaba.

4. Gujaba obtained a decree for specific performance of that contract of sale on 24th October 1917, but it is settled law that title in the case of a suit for specific performance relates back to the date of the agreement on which the suit is based and the decree cannot be rendered nugatory by intermediate conveyances: cf. Jahar Lal Bhutra v. Bhupendra Nath Basu,1922 AIR(Cal) 412.

5. It is also admitted in the present case that the contract to sell 1 anna 4 pies share of mouza Narodi to Defendant No. 2 was made in 19 6 prior to the plaintiffs' mortgage. According to the defendant it was made about the 30th of August 1916. It has been contended on behalf of the plaintiffs that it was made in November 1916, this being based on the fact that the defendant has admitted in his deposition that the agreement was that an application for sanction to transfer the sir land should be made within a week after the contract and as the defendant Bhiku's application to the Deputy Commissioner for sanction to transfer the sir is dated 28th November 1916 ( Ex. P. 18) it is argued that the contract must have been made a week before that time. I do not myself see that it makes much difference in this case, whether the contract was made in August 1916 or November 1916, as in either case it would be before the plaintiffs' mortgage, although the learned pleader for the appellants has argued at some length that it does make a difference because at the time the contract was made Bhiku was pressed by creditors and, therefore, it was necessary that Gujaba should pay the money as soon as possible in order to relieve Bhiku from his difficulties, and the contract fell through because he did not do so.

6. It has been argued on behalf of the respondent that the defendant Gujaba had no knowledge as to when the application for sanction to transfer the sir was made by Bhiku and therefore it ca