JUDGMENT
Courtney-Terrell, C.J.
1. This is an appeal from a decision of the Subordinate Judge of Bhagalpur, in a suit by the plaintiff to recover a sum of Rs. 8,817 on a mortgage bond dated June 18, 1924, executed, by the defendant No. 1 as karta of the family and as guardian of defendants Nos. 2 to 5 inclusive. Defendants Nos. 6 to 14 have been impleaded as subsequent purchasers of portions of the mortgaged property. We are only concerned with the contentions of defendants Nos. 7 and 8 who have launched this appeal against the decision in favour of the plaintiff by the Subordinate Judge. The defendants Nos. 7 and 8 were purchasers at an auction sale of a portion of the mortgage properties which had been sold on March 21,1926, for arrears of Government revenue and owing to the effect of Section 51 of the Revenue Sale Act, the sale being of a portion of the estate was subject to incumbrance. The estate having been sold and the Government revenue having been paid there was in deposit at the Collectorate a sum representing the surplus sale proceeds. We have been informed and it is not contested by any of the parties that since the suit by the plaintiff these proceeds have been withdrawn by certain other parties, and are no longer in existence. The plaintiff mortgagee sued and asked not only that he should be entitled to take the surplus sale proceeds by reason of Section 73 of the Transfer of Property Act, but also that he should be able to pursue his mortgage remedy against the mortgaged property of which defendants Nos. 7 and 8 had come into possession by reason of the auction sale. To that contention the Subordinate Judge acceded and passed a mortgage decree. It has been contended in appeal that under Section 73 of the Transfer of Property Act the mortgagee has an option and he must elect whether he will, go for the surplus sale proceeds or whether he will rely upon his mortgage rights against the property which was sold subject to the mortgage. It was contended that the surplus sale proceeds must be treated as substituted for the mortgaged property at the option of the mortgagee. An examination of Section 73 of the Transfer of Property Act and a comparison of that section with the section now repealed which it replaced w ill snow that that contention cannot be supported. As the section stood before amendment it was as follows:
Where mortgaged property is sold through failure to pay arrears of revenue or not due in respect thereof the mortgagee has a charge on the surplus (if any) of the proceeds, after payment there out of the said arrears, for the amount remaining due on the mortgage, unless the sale has been occasioned by some default on his part.
2. The section there was clearly dealing with a sale for arrears of revenue of the entire mortgaged property and by reason of Section 37 of the Revenue Sale Act where the whole of the estate is sold for arrears of revenue, incumbrances are extinguished and the sale of the property is free from incumbrances and therefore in such a case there is in truth substitution of the sale proceeds for the mortgaged property, because the mortgagee’s lien over the mortgaged property was extinguished. As the law then, stood there was no provision for a similar right on the part of the mortgagee in the case where a portion only of the estate had been sold. That defect in the law was remedied by the new section. The new section begins with these words:
Where the mortgaged-property or any part thereof or any interest therein is sold owing to failure to pay arrears of revenue or other charges of a public nature or rent due in respect of such property, and such failure did not arise from any default of the mortgagee, the mortgagee shall be entitled to claim payment of the mortgage money, in whole or in part, out of any surplus of the sale proceeds remaining after payment of the arrears and of all charges and deductions directed by law.
3. The new section therefore gives to the mortgagee rights against the sale proceeds. If the sale was of the whole of the estate, then the rights given under the section as in the case of the section which it replaced corresponded with the right of substitution. Where however the right of substitution did not exist and where the sale was of a portion of the mortgaged property nevertheless the right of the mortgagee to go against the sale proceeds was conferred by the Act. Nothing is said in the section against the contention of the right of the mortgagee in addition to such rights as were conferred by the section to proceed against the mortgaged property, and by reason of Section 54 of the Revenue Sale Act and by reason of the fact that the mortgage rights still subsisted the mortgagee retained the right to proceed against the mortgaged property. The long series of cases that were decided on the old section were, it is true, based upon the doctrine of substitution and such doctrine was properly applicable because the rights under the old section to proceed against the sale proceeds were limited by the form of the section to the case only in which the whole of the mortgaged property was sold. In my opinion therefore the learned Subordinate Judge was right in his view of the law that notwithstanding the claim against the sale proceeds (which by reason of the fact that all the sale proceeds have been withdrawn is no longer of any value to the mortgagee and is no longer of importance) the mortgagee has the right to follow the mortgaged-property in the hands of the purchaser.
4. There was a further point taken by the defendants Nos. 7 and 8. They relied upon the purchase by them in execution of a money decree and an alleged attachment by them of this portion of the mortgaged property prior to the date of the execution of the mortgage, and they argued that having regard to that attachment the mortgagor had no power to mortgage nor had the mortgagee any right to take any benefit by reason of the mortgage; Upon the conclusion of fact arrived at by the Subordinate Judge with which conclusion we are in entire agreement, that argument cannot be supported for two reasons; Firstly, it appears that even if there had been service of the notice which is said to have been notice of attachment, that which has been shown to have been served as a notice was not a notice of attachment at all. It has been proved that the notice which was actually served was a notice to the officer of the Court to seize and hold in his custody movable property, that is to say, the proper notice for movables was used instead of the notice in the case of immovables and there was no notice to the mortgagor or to the public of the injunction against parting with the property or receiving the property from the owner. Secondly, there was a finding of fact into which it is unnecessary to go; we have examined the evidence and it is clear that, even if the proper notice had been served the notice in fact was not served. Notwithstanding these defects Mr. Khurshaid Husnain on behalf of the appellants-defendants Nos. 7 and 8 has urged that the mortgagee is the representative in interest of the mortgagor and that inasmuch as in the proceedings under Section 47 in objection to the sale which in fact took place after the attachment, the question of the validity of the attachment must betaken to have been closed “by the decision in the execution case. To my mind that is not a sound argument. The validity or otherwise of the attachment was not the subject of dispute or decision in the execution proceedings. In those proceedings it is not suggested that the validity of the sale in execution is open to attack. The only question is whether the sale was or was not subject to the mortgage which was effected. If the attachment had been valid and effective then needless to say the subsequent mortgage would not have been valid and Mr. Husnain’s point would have been good. If on the other hand the attachment was not valid then notwithstanding that the sale may well have been good, for a sale is not rendered invalid by reason of failure of the attachment, it follows that the mortgage was not in the least affected by the alleged attachment. So that both on the two points of fact, that is to say that no notice of the attachment was served and on the point that the service was not actually effected and on the point of law that the question in the execution proceeding did not involve any decision upon the validity of the attachment and that it is not proposed in this suit to attack the validity of the sale the appellants fail completely. I would, therefore dismiss this appeal with costs.
KulwantSahay, J.
5. I agree.