The main legal point established in the judgment is that the prior mortgage must be within time for the plaintiff to obtain priority over the subsequent mortgagee, and a subsequent mortgagee is not bound by an acknowledgment in favor of a prior mortgagee made after the date of the subsequent mortgage.

1. The following points have been referred to us for decision:

(1) When a prior mortgagee obtains a renewal and sues the mortgagor and mesne incumbrancer on the subsequent mortgage, must the prior mortgage itself be in time (apart from renewal) for the plaintiff to obtain priority over the mesne incumbrancer? (2) In order to decide this, is it necessary to decide whether a subsequent mortgagee is bound by an acknowledgment in favour of a prior mortgagee? If so, is he so bound? (3) Does the Money-lenders Amending Act of 1939 apply to suits instituted from 1st April 1935 to 19th March 1937?

In dealing with the first question we assume that the suit is based on the subsequent mortgage, as in the present case.

2. The facts may be briefly stated as follows. In 1904 certain property was mortgaged to A for a sum that was repayable by instalments, of which the last was payable on 17th May 1916. On 13th May 1924, accounts were made up and the same property was mortgaged for the sum found due, which was repayable by instalments, of which the last was payable in 1944. In the meantime the property had been mortgaged to B in 1915 for a sum repayable after ten years; on 8th June 1928, accounts were made up and a second mortgage was executed for the amount found due and a further sum then advanced. On 23rd December 1935, A sued to enforce his mortgage of 1924, impleading B as a puisne mortgagee on the strength of the mortgage of 1928. B pleaded that he was entitled to rely on his mortgage of 1915, and was therefore a prior mortgagee. To this A replied that he (A) was entitled to rely on his mortgage of 1904 and was therefore prior to B. The above is a simplified statement of the facts but is sufficiently accurate for the purposes of this reference. An issue was framed on the question which mortgagee was entitled to priority against the other.

3. As regards the first question it is well settled and has not been disputed that a mortgagee who takes a second mortgage in renewal of an earlier mortgage and sues on the second mortgage is entitled to rely on the first mortgage as a shield against a mesne incumbrancer. That is settled by the decision of the Judicial Committee in Shankar Sarup v. Mejo Mal, 1901 28 IndApp 203 in which they remarked that the plaintiffs by suing on a later bond had done nothing to imply, or to lead others to believe, that they abandoned what, apart from abandonment, was a subsisting hypothecation. The question is whether the plaintiff is entitled to rely on an earlier mortgage that has become barred by limitation. Mahomed Ibrahim Hossain Khan v. Ambika Pershad Singh, 1912 39 ILR(PC) 527 is one of the few cases in which a question of limitation arose. A suit was brought on a mortgage of 17th February 1888; part of the money borrowed under this mortgage was used to pay off the debt on a zarpeshgi deed of 20th November 1874; between these two dates various intermediate mortgages had been executed. The Judicial Committee held that the mortgagee of 17th February 1888 must be presumed to have intended to keep alive for her benefit the charge created by the zarpeshgi deed of 20th November 1874, and that she thereby obtained priority over the intermediate mortgagees but that her right of priority under the zarpeshgi deed of 1874 was barred as the suit had not been instituted within 12 years from the date when the money under that deed became payable.

4. In that case the money borrowed under the mortgage in suit was utilised to pay off a mortgage executed not in favour of the plaintiff but in favour of a third person, though the word ''subrogation'' was not, used. The right of subrogation is dealt with in Section 92, T.P. Act, as amended in 1929. By that Act certain persons on redeeming property subject to a mortgage or persons who have advanced to a mortgagor money with which the mortgage has been redeemed are subrogated to the rights of the mortgagee whose mortgage has been redeemed. Before the amendment of 1929 subrogation