Aulad Ali vs Abdul Hamid

Mullick, J.—Appeal No. 156 of 1922 is preferred by a mortgagee whose mortgage lien covered 4 lots of property and who obtained a preliminary decree against the respondent on the 28th July 1918 and a final decree on the 13th July 1919. Meanwhile on the 16th April 1918 the appellant had bought the equity of redemption in lot No. 1 in execution of a money decree which he had obtained against the respondent. Then on the 4th August 1920 the appellant took out execution of his mortgage decree and applied for the sale of lots, 2, 3 and 4 only but this course the judgment debtor objected and the execution case was dismissed. In his next application for execution the appellant entered in the list of the properties to be sold all the four lots but he requested that lot No. 1 should be sold last because he had purchased the equity of redemption in it. The judgment-debtor opposed this prayer and on the 11th December 1920 lot No. 1 was put up to sale and the whole decretal debt realised therefrom.

The appellant thereupon appealed to the District Judge but without success, and he files the present second appeal on the ground that in the absence of any direction in the decree to the contrary and of any equities created against himself he was entitled to sell the mortgaged properties in whatever order he chose. I think this contention is well founded. The purchase of the equity of redemption split up the mortgage and the appellant became entitled to recover only a proportionate share of the mortgage money by the sale of lots 2, 3 and 4. He was not entitled to sell these 3 lots for the entire debt and all that the execution Court could compel him to do was to sell lots 2, 3 and 4 for the reduced amount. But the Court could not compel him to sell lot No. 1 and its order was therefore bad.

But the lot having been purchased by a third party bona fide and without notice, we are unable in this appeal to set aside the sale.

It is alleged by the appellant that the purchaser Latifur Rahman is a benamidar for the judgment-debtor, but that has not been proved. The appellant might perhaps have been in a better position if he had, when the Court decided to sell lot No. 1 declined to proceed with the execution and preferred an appeal: but as matters stand this second appeal must be dismissed with costs.

S.A. No. 155 of 1922.

This appeal has been heard with the above appeal No. 156.

It appears that after Latifur Rahman purchased the property, the mortgagee made an application under Order 21 rule 89 C.P.C. for leave to deposit the purchase money with interest and to get the sale set aside. The Munsif decided in the appellant''s favour, but the District Judge in appeal held that by putting the four properties up for sale without stating in the sale proclamation that he had purchased the equity of redemption in lot. No. 1, the appellant had created an equitable estoppel against himself. He accordingly reversed the Munsif''s order and dismissed the appellant''s application. Against his order the appellant files the present appeal.

It is clear no appeal lies but the appellant asks that his petition may be treated as an application for revision. In the special circumstances of this case we grant his prayer and proceed to consider the merits of his case.

Far from attempting to conceal that he was the purchaser of the equity of redemption the appellant had from the moment that he filed his first execution case strenuously contended that lot No. 1 could not be sold because he was its owner by purchase and I can see no representation on his part by reason of which the auction-purchaser was induced to change his position. I think therefore that there was no equitable estoppel in the case.

The next question is whether the appellant was entitled to make the deposit. In my opinion his purchase of lot 1 did not extinguish the equity of redemption; the right purchased was in the first place not co-extensive with his right as mortgagee and in the second place here the presumption of an intention to keep the security alive is very strong.

Therefore he was at the time of the mortgage sale the owner of the property, and he was competent to make the deposit under Order 21 Rule 89 of the Civil Procedure Code, in my opinion, the Munsif''s order setting aside the sale was right and the learned District Judge was wrong in reversing it.

It is however contended by the opposite party that this is not a case in which we can interfere u/s 115 C.P.C. The reply is that it is now the settled practice of the Court to treat a refusal to accept a deposit tendered for the purpose of setting aside a sale as a refusal to exercise jurisdiction and I think that the present application is maintainable u/s 115 C.P.C.

The result is that the application is allowed with costs: the order of the District Judge is set aside and that of the Munsif restored. The appellant is entitled to his costs in the Courts of the Munsif and the District Judge. The hearing fee in this Court is fixed at Rs. 32.

Macpherson, J.

I agree.