1957 (1) TMI 60 - HC - Indian Laws

Court dismisses appeal seeking property redemption over fidelity bond, rules in favor of purchaser.

The court dismissed the plaintiff's second appeal seeking enforcement of a prior charge or redemption over a property initially secured by a fidelity bond ... - Issues:- Suit for enforcement of alleged prior charge or for redemption- Interpretation of court sale subject to encumbrance- Claim of subrogation by the plaintiffAnalysis:1. The plaintiff filed a second appeal seeking enforcement of a prior charge or redemption, which was dismissed by the lower courts. The property in question was initially secured by a fidelity bond and later mortgaged to the defendants. The plaintiff claimed to be the first charge-holder for a specific sum over the property held by the defendants. The defendants contested the suit, arguing that the prior charge did not exist and was discharged upon the retirement of the plaintiff's brother. Both lower courts ruled against the plaintiff, leading to the second appeal.2. The appellant's counsel argued that the court sale to the defendants was not subject to encumbrances unless explicitly stated in the sale deed. However, the court held that all court sales are inherently subject to encumbrances unless stated otherwise. In this case, the sale sannad explicitly referred to the charge under Ext. A, indicating that the property was sold subject to the encumbrance. Citing legal precedents, the court emphasized that if encumbrances are later found to be invalid, the benefit goes to the purchaser, not the vendor.3. The court referenced a previous case to highlight that the vendor's indemnity against encumbrances ends once the property is sold, and the vendor cannot claim any benefit derived by the purchaser post-sale. Additionally, a bench decision was cited to clarify that a statutory charge arises only if there is an agreement between the vendor and vendee regarding payment of encumbrances. The court distinguished cases of sales free of encumbrances from the present case, where the property was sold subject to encumbrances.4. The plaintiff's counsel relied on certain cases to support the claim of subrogation in case the plaintiff paid off the liability under Ext. A. However, the court noted that since the liability did not mature and did not fix itself on the property or the plaintiff, the defendants were not liable. The court ultimately dismissed the second appeal, upholding the lower courts' decision and ordering costs to be paid by the appellant.