The Himalaya Bank Limited vs The Simla Bank Limited And Anr. on 16 November, 1885

Allahabad High Court
The Himalaya Bank Limited vs The Simla Bank Limited And Anr. on 16 November, 1885
Equivalent citations: (1886) ILR 8 All 23
Author: W C Petheram
Bench: W C Petheram, Tyrrell


W. Comer Petheram, C.J.

1. I am of opinion that this appeal must be allowed, and that judgment must be given in favour of the plaintiff. The real question in the case is, whether the title of the Himalaya Bank or that of the Simla Bank should prevail with respect to the mortgages executed by the defendant, Mrs. E. McMullen. The facts of the case are, that on the 30th June 1881, the defendant, Mrs. McMullen, mortgaged a house in Saharanpur to the Simla Bank, to secure a sum of money. The mortgage deed was never registered, and the amount due upon it was never paid off. On the 17th July 1883, the same mortgagor executed a mortgage-deed in respect of the same house in Saharanpur in favour of the Himalaya Bank, to secure a sum of money, and this deed was duly registered on the 10th August 1883. There is no finding on the subject, but it must be assumed for the purposes of this case that the Himalaya Bank had no knowledge of the mortgage-deed of the 30th June 1881, which at the time of their own deed, was not registered.

2. The first question is, what was the condition of the titles to the property in suit at the time of the registration of the second mortgage-deed? The titles herein questions are titles created by two mortgage-deeds. The matter is governed by Section 50 of the Registration Act, which is in the following terms: “Every document of the kinds mentioned in Clauses (a),(b),(c), and (d) of Section 17, and Clauses (a) and (b) of Section 18”–which includes the mortgage-deeds before us–“shall, if duly registered, take effect, as against the property comprised therein, against every unregistered document relating to the same properly.” It is only necessary to read the section to see what was the condition of the titles possessed by the two Banks at the time when the second mortgage-deed was registered. The registered deed of the Himalaya Bank was, by Section 50, given priority over the unregistered deed of the Simla Bank; so that at that time the Himalaya Bank, by virtue of their registered deed and the terms of the statute, was in the position of a first mortgagee, and the Simla Bank was in the position of a second mortgagee. The only interest, therefore, which Mrs. McMullen or the Simla Bank had in the property was what would remain after the debt of the Himalaya Bank had been satisfied. That was the condition of the titles in August 1883. Upon this state of things, the Simla Bank took proceedings against Mrs McMullen–to which the Himalaya Bank was not made party–to realise their security, and obtained a decree. Now, at the time when that decree was passed, the interest which Mrs. McMullen had was subject to the Himalaya Bank’s mortgage. So that the Himalaya Bank held a first charge on the property, and the Simla Bank held a decree for money against Mrs. McMullen, and against any interest which remained in her after the first charge had been paid off. That was the effect of the decree. Then the present suit was brought by the Himalaya Bank, and the question raised by it is, whether the plaintiffs are entitled to have the property sold to satisfy their mortgage, or whether their mortgage is subject to the decree held by the Simla Bank.

3. I am of opinion that the decree of the Simla Bank only affected what was left of the property after satisfaction of the mortgage of the Himalaya Bank, and that the Himalaya Bank is therefore entitled to have the property sold.

4. The authorities on the subject appear to be somewhat at variance with each other. The difficulty arises from the words in Section 50 of the Registration Act immediately following those I have already quoted,–“not being a decree or order, whether such unregistered document be of the same nature as the registered document or not.” This, in my opinion, means that if a decree has been obtained to bring property to sale under a hypothecation bond, or under a money bond, and under that decree the property has been attached, that decree cannot be ousted by a subsequent registered instrument. I do not think that the section can in any way make a decree effect a transfer of more than the interest which the judgment-debtor possessed. Such an interpretation would lead to manifest injustice, and would defeat the very object with which the registration law was enacted–namely, that publicly registered documents should have effect as against documents not registered. To give priority to a decree obtained against a mortgagor behind the mortgagee’s back would be to defeat this object.

5. I should have thought it necessary to refer the determination of this case to the Full Bench were it not that my brother Tyrrell concurs in the opinion which I have just expressed. It appears from the judgment in Kanhaiya Lal v. Bansidhar Weekly Notes 1884 p. 136 that my brother Straight is now of the same opinion. Again, in the case of Shahi Ram v. Shib Lal Weekly Notes 1885 p. 63 Mr. Justice Oldfield and Mr. Justice Mahmood expressed the same view in the following words: “There is no doubt in my mind that the registered bond of the plaintiff takes effect, as regards the property comprised in it, against the defendant’s unregistered bond under Section 50. This gives priority to the incumbrance created by it over the incumbrance created by the defendant’s bond; and this priority is not affected by the subsequent decrees obtained on the bonds, which only give effect to the respective rights under the bonds.” This precisely expresses the view which I take in the present case; and the same view has been taken by the Madras High Court in Madar v. Subbarayalu I.L.R. 6 Mad. 88.

6. We therefore have the concurrent opinions of Mr. Justice Oldfield, Mr. Justice Mahmood, Mr. Justice Straight, Mr. Justice Tyrrell, the Madras High Court and myself, that this is the correct construction of the terms of Section 50 of the Registration Act; and under these circumstances I have thought it right to deliver judgment in the case now. The appeal is allowed with costs, and the plaintiffs declared entitled to judgment, that this mortgage be realised as a first charge against the mortgaged property.

Tyrrell, J.

7. I am of the same opinion, and, having given careful consideration to the terms of Section 50 of the Registration Act of 1877, I accept the interpretation placed on the words “not being a decree or order” by the learned Chief Justice.

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