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Issues: (i) Whether a puisne mortgagee, after the prior mortgage debt in the earlier mortgage suit had been satisfied by the mortgagor and no sale had taken place, could institute a separate suit on his own mortgage and obtain a preliminary decree. (ii) Whether interest could be awarded at the contractual rate of 12% per annum with monthly rests after the date of suit, or whether the Court ought to have applied a reduced simple rate for the period after suit.
Issue (i): Whether a puisne mortgagee, after the prior mortgage debt in the earlier mortgage suit had been satisfied by the mortgagor and no sale had taken place, could institute a separate suit on his own mortgage and obtain a preliminary decree.
Analysis: A puisne mortgagee impleaded in a prior mortgagee's suit is added mainly to preserve the opportunity to redeem the prior mortgage and to claim any surplus sale proceeds, if sale takes place. The decree in the prior mortgagee's suit does not operate as a decree in favour of the puisne mortgagee so as to compel a sale for his benefit when the prior mortgagee has already been paid off by the mortgagor and the property is not sold. In that situation, the puisne mortgagee's remedy is not confined to execution in the earlier suit.
Conclusion: The separate suit by the puisne mortgagee was maintainable and the objection to its institution failed.
Issue (ii): Whether interest could be awarded at the contractual rate of 12% per annum with monthly rests after the date of suit, or whether the Court ought to have applied a reduced simple rate for the period after suit.
Analysis: In a mortgage suit, the special provisions governing interest in Order 34 prevail over the general discretion under Section 34. After the 1929 amendment, the Court has discretion under Order 34 Rule 11 in respect of pendente lite and subsequent interest, and it is not bound in every case to continue the contractual rate after the institution of the suit. On the facts, the award of the contractual rate beyond the date of suit was not justified.
Conclusion: Interest after the date of suit was reducible, and the decree was modified to allow simple interest at 6% per annum from the date of suit as directed.
Final Conclusion: The appeal succeeded in part, the decree was varied on the question of interest, and the respondent's claim to costs was also adjusted accordingly.
Ratio Decidendi: A puisne mortgagee's position in a prior mortgagee's suit is limited to redemption and participation in surplus sale proceeds, and after the 1929 amendment to Order 34 Rule 11 of the Code of Civil Procedure, 1908, pendente lite and subsequent interest in a mortgage decree is subject to judicial discretion rather than an inflexible contractual rule.
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