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Shripad Laxman Nakadi Vs. Kashibai Dinkar Jog - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberSecond Appeal No. 260 of 1942
Judge
Reported inAIR1945Bom248; (1945)47BOMLR108
AppellantShripad Laxman Nakadi
RespondentKashibai Dinkar Jog
DispositionAppeal dismissed
Excerpt:
transfer of property act (iv of 1882), section 70 - mortgage-mortgage decree-accession made to mortaged property after passing of decree-whether mortgagee entitled to sell such accession for satisfaction of his decree.;under section 70 of the transfer of property act, 1882, a mortgagee who has obtained a mortgage decree is entitled to have his decree satisfied by the sale of an accession (e.g. a new building erected on the site of the old one which was mortgaged) made to the mortgaged property after the passing of the decree.;sukhi v. ghulam safdar (1921) l.r. 48 i.a. 465 : s.c. 24 bom. l.r. 590, followed.;mysore kapniah shivananjih v. k. sithay goudar [1921] a.i.r. mad. 627, distinguished.;haradhan chakerverty v. hargobind dutta [1021] a.i.r. pat. 188, referred to and..........the darkhast was that the shop which was built after the award decree was passed was not the property mortgaged and as the mortgage had become merged in the decree, the new shop could not be treated as an accession to the mortgaged property, to which the mortgagee became entitled for the purpose of the security under section 70 of the transfer of property act, 1882, the executing court upheld the contention and ordered the sale of only the mortgaged site below the newly constructed shop. in appeal the learned district judge took a different view and ordered the sale of the shop building also, and laxman has now appealed against that order.2. section 70 of the transfer of property act provides that if, after the date of a mortgage, any accession is made to the mortgaged property,.....
Judgment:

Lokur, J.

1. The only question in this appeal is whether the holder of a mortgage decree is entitled to have his decree satisfied by the sale of an accession made to the mortgaged property after the passing of the decree. It arises in this way. In 1887 one Mahadeo Vithoba Nakadi, along with his brother Venkoba as his surety, mortgaged his shop, Municipal Survey No. 915 in Belgaum, to one Umabai, and on October 28, 1910, an award decree was passed, which declared that Rs. 2,700 were due to Umabai and provided that the amount should be paid by annual instalments of Rs. 150, and that in default of payment of two consecutive instalments the mortgagee should recover the amount due to her by sale of the shop and also from the person and property of the mortgagor's son Laxman,-the original mortgagor having died in the meantime. The mortgaged shop was destroyed by fire in 1921 and another shop building was constructed in its place. Umabai having died, her heirs presented a darkhast in 1934 to recover the arrears of the instalments which were still in time, by sale of the new shop building. Laxman's sons were also impleaded in the darkhast and they contended that the new shop had been constructed by them and that Laxman had no interest in it. But that contention was disallowed and is not now pressed. The main ground on which Laxman registered the darkhast was that the shop which was built after the award decree was passed was not the property mortgaged and as the mortgage had become merged in the decree, the new shop could not be treated as an accession to the mortgaged property, to which the mortgagee became entitled for the purpose of the security under Section 70 of the Transfer of Property Act, 1882, The executing Court upheld the contention and ordered the sale of only the mortgaged site below the newly constructed shop. In appeal the learned District Judge took a different view and ordered the sale of the shop building also, and Laxman has now appealed against that order.

2. Section 70 of the Transfer of Property Act provides that if, after the date of a mortgage, any accession is made to the mortgaged property, the mortgagee, in the absence of a contract to the contrary, shall, for the purposes of the security, be entitled to such accession. Illustration (b) to that section says:

A mortgages a certain plot of building land to B and afterwards erects a house on the plot. For the purposes of his security B is entitled to the house as well as the plot.

3. What was mortgaged by Mahadeo was the shop with the site on which it was standing and on the principle of the maxim quidquid plantatur solo solo cedit (whatever is attached to the earth becomes part of it) any building constructed on the mortgaged plot becomes a part of that plot and an accession to it. But Mr. Gajendragadkar contends for the appellant that although the new shop building may be deemed to be an accession to the mortgaged property, it was constructed after the mortgage was extinguished by being merged in the award decree and hence the decree-holder cannot claim the benefit of Section 70 of the Transfer of Property Act. He relies upon the rulings in Mysore Kapiniah Shivananjih v. K. Sithay Goudar A.I.R [1921] Mad. 627 and Haradhan Chakerverty v. Haragobind Dutta A.I.R [1921] Pat. 188 on which the judgment of the executing Court is based. The facts in Shivananjih's case can be easily distinguished; There the acquisitions which were-claimed as an accession to the mortgaged property were made not only after the mortgage decree was passed, but after the mortgaged property had been sold in execution of the decree. At that time the decree-holder had ceased to be a mortgagee and it cannot be disputed that the benefit of Section 70 is available only to the 'mortgagee.' Spencer J.; however, observed that Sections 63 and 70 of the Transfer of Property Act must be read together as both of them involved the principle of Roman law that accessions go with the principal and applied it to mortgaged property. Section 63 says that where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, received any accession, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled as against the mortgagee to such accession. For the application of the principle of this section accession to mortgaged property must be received 'during the continuance of the mortgage' and Spencer J. says that under Section 70 also it must be the same and that although the words of that section only make it necessary that the accession should be 'after the date of the mortgage,' it must also be understood that it must be before the mortgage becomes extinguished. But the omission of these last words in Section 70 must have been deliberate. The mortgagor is the owner : of property mortgaged and as such naturally entitled to the accession to his own property, whereas the mortgagee holds it only by way of security. It need not, however, be disputed that the mortgagee can claim the benefit of Section 70 only if the accession to the mortgaged property is during the subsistence of the mortgage, because under that section only 'the mortgagee' is entitled to its benefit and he ceases to be a mortgagee as soon as the mortgage is extinguished. So the question is whether a mortgage becomes extinguished as soon as a decree is passed on it.

4. Regarding this question the learned District Judge has relied upon the ruling in Ajijuddin Sahib v. Sheik Budan Sahib I.L.R (1895) Mad. 492. In that case a Mahomedan woman together with her eldest son executed a mortgage comprising the whole of an estate in which her younger children were also entitled to certain shares, and after the decree on the mortgage was passed, their shares were increased by inheritance of the share of one of the other children who died after the passing of the decree. It was held by Best and Subramania Ayyar JJ. that the increased shares were liable to be sold in execution of the decree. The reason, according to Subramania Ayyar J., was that the mortgagors had mortgaged the whole of the land and not merely the shares which belonged to them at the date of the mortgage. Best J., however, applied to the case the principle embodied in Section 43 of the Transfer of Property Act and said (p. 495):.the words of Section 43 of the Transfer of Property Act 'at any time during which the contract of transfer subsists' are, in my opinion, wide enough to cover the present case, the contract has no doubt merged in the decree, but it must be held to subsist all the same, till the mortgage is satisfied and the mere fact of the share in question having devolved on respondent subsequent to the decree appears to me to be no reason for holding Section 43 of the Transfer of Property Act to be inapplicable.

5. By parity of reasoning this may be held to apply even to cases arising under Section 70 of the Transfer of Property Act. But in Haradhan Chakerverty v. Hargobind Dutta, the second case relied upon by the executing Court, it was held that where a mukarraridar mortgaged his mukarrari right and the mortgagee obtained a decree on the mortgage for sale of the mortgaged property, the decree-holder was not entitled in execution of the decree to sell the brahmottar right in the property which had been acquired by the mortgagor subsequent to the passing of the decree. Two reasons were given for that decision. It was held that the mortgage security as well as the mortgagor's right to redeem were both extinguished after the mortgage decree was passed and that the executing Court had to sell the property specified in the decree to be sold for the satisfaction of the decree obtained by the mortgagee and that the decree directed the sale of the mortgaged property, which at that time was admittedly the mukarrari right of the mortgagor. In support of the first proposition the ruling of the Privy Council in Het Ram v. Shadi Lal was relied upon. Het Ram's case was followed by the Board in Matru Mal v. Durga Kunwar (1919) L.R 47 I.A. 71 : 22 Bom. L.R. 553. In both those cases it was held that the decree passed under Section 89 of the Transfer of Property Act for the sale of the mortgaged property has the effect of substituting the right of sale thereby conferred upon the mortgagee for his rights under the mortgage, and the latter rights are extinguished. In both the cases the decrees which had to be considered had been passed under Section 89 of the Transfer of Property Act. There is no doubt that in foreclosure suits the final decree extinguishes the equity of redemption, while in decrees for sale the repealed Sections 89 and 93 of the Transfer of Property Act expressly provided that on the making of the order for sale the right to redemption and the security would both be extinguished. It was upon these words in those sections that the two decisions of the Privy Council were based. Owing to some difference of opinion in the different High Courts regarding the effect to be given to those words, the provision for the extinction of the right of redemption and the mortgage security on the passing of the final decree for sale was omitted in the corresponding Rules 5 and 8 of Order XXXIV of the Civil Procedure Code, 1908. This omission was emphasized by the Privy Council in Sukhi. v. Ghulam Safdar and it was held that the effect of the omission was that the law remained the same as it was before the passing of the Transfer of Property Act, so that by the passing of a mere decree on the mortgage, neither the right nor the mortgage security became extinguished. It may be noted that this decision of the Privy Council was given on April 19, 1921, and does not appear to have been reported when the two cases relied upon by the executing Court were decided. It must, therefore, be held that the award decree had not the effect of extinguishing the mortgage security and in spite of that decree the mortgagee has continued to be a mortgagee and is, therefore, entitled to the benefit of Section 70 of the Transfer of Property Act.

6. The property mortgaged consisted of both the shop and the site on which it stood and the award decree directs the sale of the shop for the satisfaction of the arrears of the instalments awarded to the mortgagee. That shop having disappeared, another shop has now come into being on the same place. It is undoubtedly an accession and is as much liable to satisfy the mortgage as the shop which stood in its place at the date of the mortgage. As pointed out in Saila Bala v. Sworna Moyee : AIR1939Cal275 , if a mortgagor mortgages a house and thereafter makes an addition to the house, say by putting up new rooms on the roof or by enlarging the bath-rooms and putting in sanitary appliances at great cost, all these additions would go as security to the mortgagee. By parity of reasoning it follows that the new shop building, though not specifically mentioned in the decree, as it was not then in existence, is available to the mortgagee for the satisfaction of his decree as an accession to the original mortgaged property. The appeal is, therefore, dismissed with costs.


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