AIR 1930 NAGPUR 139(2)

Nagpur High Court

Hon'ble Judge(s): Subhedar , J

*(A) Transfer of Property Act (4 of 1882) , S.68(b)— Vendee of mortgagor cannot be made personally liable for mortgage money. Applying the definition of mortgagor as contained in S. 58 (a) to the same word occurring in S. 68 (b) it is clear that the purchaser from the mortgagor of the mortgaged property cannot be made personally liable for the mortgage money under the latter section *(B)Mortgage - "Substituted security" - Docrtine of, enunciated. The rule of "substituted security" is based upon the principle that the property mortgaged has taken another shape not by the tortious action of a party who was a stranger to the original contract but by the voluntary action of the mortgagor himself as by taking another property on partition or by operation of law as in the case of (1) compensation money obtained in respect of the mortgage property under the Land Acquisition Act or (2) surplus sale proceeds of the mortgage property left over, after satisfaction of the prior mortgage deb; or (2) pre-emption price obtained on sale of the mortgaged holding under the provisions of the C. P. Tenancy Act. The doctrine of "substituted security" does not extend to cases of wrougful conversion of the mortgage security by a person other than the mortgagor, though he may be an....