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of <h1>Board overturns High Court, upholds Subordinate Judge's decree. Roys to be indemnified for payment to Bray.</h1> <h3>Sachindra Nath Roy and Ors. Versus Maharaj Bahadur Singh and Ors.</h3> The Board allowed the appeal, reversing the High Court's judgment and affirming the Subordinate Judge's decree of August 12, 1914. The Roys were entitled ... - Issues Involved:1. Priority of equitable mortgage over legal mortgage.2. Applicability of Limitation Acts (1877 and 1908).3. Validity of voluntary payment under unenforceable decrees.4. Entitlement to indemnity under the deed of April 23, 1894.5. Evidence of the handling of mortgage deeds.Detailed Analysis:1. Priority of Equitable Mortgage Over Legal Mortgage:The financial dealings between the parties began with the Roys borrowing sums from Dhanpat Singh, secured by three mortgages. Dhanpat Singh created an equitable mortgage by depositing these deeds with a firm, which was not initially known to the Roys. When Dhanpat Singh settled with the Roys, the Roys borrowed from the Eastern Mortgage Agency Company and executed a mortgage. The firm later claimed priority over the legal mortgage executed to the company. The Subordinate Judge ruled in favor of the firm but subject to the company's lien. The High Court reversed this, giving priority to the firm's equitable mortgage, leading to the present appeals.2. Applicability of Limitation Acts (1877 and 1908):The High Court determined that the decrees of August 26, 1905, had not been kept alive by obtaining an absolute order for sale, thus becoming unenforceable by August 26, 1908. The Limitation Act of 1908 did not revive these decrees. Payments made by the Roys to Bray in 1910 were considered voluntary since the decrees were unenforceable by that time.3. Validity of Voluntary Payment Under Unenforceable Decrees:The Roys paid Bray Rs. 50,000 to settle the decrees assigned to him, despite the decrees being unenforceable due to the lapse of the limitation period. The High Court held that the payment was voluntary and not enforceable under the indemnity deed. The Board concurred that the payment was voluntary but differed on the consequences, suggesting that the Roys were still entitled to indemnity.4. Entitlement to Indemnity Under the Deed of April 23, 1894:The indemnity deed provided that the Roys were to be indemnified against all losses, damages, actions, and claims related to the mortgage deeds. The Board held that the Roys were entitled to recover amounts paid to remedy the damage caused by Dhanpat Singh's actions, despite the decrees being unenforceable. The indemnity covered the costs incurred to remove the encumbrance placed on their property.5. Evidence of the Handling of Mortgage Deeds:The case lacked evidence on the handling of the mortgage deeds post the assignment of decrees to Bray. The Board assumed that the deeds were delivered in a business-like manner, from the firm to Bray, and then to the Roys or the company. This assumption was necessary to address the indemnity claim, as the litigation focused on the decrees rather than the deeds.Conclusion:The Board allowed the appeal, reversing the High Court's judgment and affirming the Subordinate Judge's decree of August 12, 1914. The Roys were entitled to indemnity for the payment made to Bray, with interest. However, due to the new grounds raised, each party was ordered to bear their own costs in the Indian courts and the appeal to His Majesty in Council.
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