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Baswannewa Malleshappa Appaji Vs. Dodgowda Basangowda Dyawangowda - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberSecond Appeal No. 224 of 1940
Judge
Reported in(1942)44BOMLR15
AppellantBaswannewa Malleshappa Appaji
RespondentDodgowda Basangowda Dyawangowda
DispositionAppeal allowed
Excerpt:
.....money decree against the husband of defendant no. 3, applied to execute the decree by sale of the house mortgaged, and at the court-sale purchased it himself. then defendant no. 1 sold his mortgage rights in the house and land f to plaintiff; and thereafter defendants nos. 2 and 3 sold their rights under the mortgage to the plaintiff. the plaintiff having sued to recover proportionate mortgage dues by sale of the house:-;(1) that the mortgage as regards the house was, under the circumstances, extinguished: section 101 of the transfer of property act;;(2) that at the time of the court-sale the only interest of defendants nos. 2 and 3 in the house was the equity of redemption, and that that was all that was sold to defendant no. 4; ;(3) that defendant no. 4 thus became a mortgagor jointly..........plaintiff has now filed this suit for recovery of the proportionate mortgage dues by sale of the suit house', and the learned district judge says 'the plaintiff then filed the present suit to recover rs. 4100 as the proportionate amount of the mortgage debt due on the house by sale of the house '. it is contended on behalf of defendant no. 4 that section 82 does not apply unless the mortgage is still subsisting. that is not so. it can apply while the mortgage is still subsisting; but it applies even more when the mortgage has been paid off out of some only of the properties mortgaged, and the owner or the person interested in the properties from which the mortgage has been paid off then has a right to claim contribution from the owner of other properties which were liable under the.....
Judgment:

Macklin, J.

1. This second appeal has arisen in this way: In October, 1930, defendant No. 2 and the late husband of defendant No. 3 mortgaged the house and land in suit for Rs. 1,000. On November 21, 1930, the house was attached by defendant No. 4 in execution of a money decree against defendant No. 3's husband. In May, 1932, the house was sold by the Court and was bought by defendant No. 4, and in due course that order was confirmed in 1935 by the High Court in second appeal. But in the meantime defendant No. 1, the original mortgagee, sold his mortgagee's rights to the plaintiff, and in June, 1935, defendants Nos. 2 and 3 sold both the house and the land to the present plaintiff for the amount of the mortgage debt.

2. In 1933 the plaintiff brought a suit to restrain defendant No. 4 from taking possession of the property under his Court purchase. This was dismissed because it was held that, defendant No. 4 having bought the equity of redemption of the house in execution proceedings, his rights could not be affected by the plaintiff's purchase of the house. The plaintiff then brought the present suit on her mortgage. It was contended by defendant No. 4 that the transaction by which the plaintiff bought from defendants Nos. 2 and 3 extinguished the mortgage so far as the house was concerned, and any suit with respect to the house based upon the plaintiff's rights in the mortgage could not lie. The trial Court refused to accept that contention, holding that the consideration as regards the house had failed and the sale accordingly was ineffective as regards the house, with the result that the plaintiff continued to hold the mortgage rights over the house. That decision was reversed in appeal, the learned District Judge holding that the mortgage was extinguished as a whole,; and that it was not open to the plaintiff to rely upon Section 101 of the Transfer of Property Act in order to recover the mortgage amount of the house from defendant No. 4. The plaintiff accordingly comes in second appeal.

3. She takes two points. The first is that as mortgagee she is protected by Section 101 and on that ground can recover from defendant No. 4. The second is that by reason of Section 82 of the Transfer of Property Act she, as one standing in the shoes of the original mortgagor, is entitled to claim contribution from defendant No. 4 as purchaser of part of the equity of redemption of the mortgage.

4. The plaintiff's sale-deed contains the following passage:-

As the said properties have been handed over to you by absolute sale in payment of the said debt owing to you, there remains nothing whatever owing between you and ourselves regarding the transaction of mortgage on this day.

5. That means that the mortgage debt was extinguished, and the ordinary result of extinguishing a mortgage debt is that the mortgage itself is extinguished. But on behalf of the plaintiff Mr. Murdeshwar relies on Section 101 of the Transfer of Property Act as keeping the mortgage alive as between the plaintiff and defendant No. 4. Section 101 of the Transfer of Property Act reads as follows:-

Any mortgagee of, or person having a charge upon, immoveable property, or any transferee from such mortgagee or charge-holder, may purchase or otherwise acquire the rights in the property of the mortgagor or owner, as the case may be, without thereby causing the mortgage or charge to be merged as between himself and any subsequent mortgagee of, or person having a subsequent charge upon, the same property; and no such subsequent mortgagee or charge-holder shall be entitled to foreclose or sell such property without redeeming the prior mortgage or charge, or otherwise than subject thereto.

6. In terms it applies only when there is a subsequent mortgagee or charge-holder. But the authority of Mahalakshmi v. Somaraju [1939] Mad. 600 is relied upon as showing that the principle of the section would apply also to the case of a Court-purchaser of the equity of redemption. The old Section 101 read as follows:-

Where the owner of a charge or other incumbrance on immoveable property is or becomes absolutely entitled to that property, the charge or incumbrance shall be extinguished, unless he declares, by express words or necessary implication, that it shall continue to subsist, or such continuance would be for his benefit.

7. If the section had not been amended, there can be no question but that the plaintiff would be entitled to rely upon the last words 'or such continuance would be for his benefit'. Sir Dinshah Mulla at page 556 of the second edition of his Transfer of Property Act says 'the law has been altered not in substance but only in form or expression'; and the learned Judges who decided Mahalakshmi v. Somaraju applied the equitable principle underlying the section before amendment to the section as amended. That principle was based upon the equitable rule obtaining in England that the merger which in a case like this would otherwise take place under the common law is prevented by the intention of the. parties, and that the intention of the parties not to extinguish the mortgage may be presumed until the contrary is apparent. But the position with which the learned Judges of the Madras High Court were dealing was somewhat different. In that case there had been certain claim proceedings. The mortgagee-purchaser based a claim on his purchase or alternatively on his mortgage, and the Court, while disallowing the claim in so far as it was based upon his purchase, allowed it in so far as it was based upon his mortgage; and neither party to the proceedings had challenged that decision, with the result that the mortgage had to be treated as still subsisting. Apart from that, with respect, we should have some difficulty in holding that a principle which might clearly be apparent in Section 101 before it was amended still underlay the section after amendment when the amendment omits the words recognizing the principle. Moreover, the case cited made no reference to another case, Kedar Nath Goenka v. Bhagwat Prasad Kumar (1935) I.L.R. 15 Pat. 120, in which the situation was very much the same as in the present case. There a mortgagee bought the mortgaged property for the amount of the sum due upon the mortgage, and the deed contained the following words 'keeping intact the effects of the mortgage created under the simple mortgage and the usufructuary mortgage bonds aforesaid'. In spite of that reservation their Lordships held that the mortgage was extinguished. So far as Section 101 is concerned, we do not think that there are any grounds upon which we could differ from the conclusions arrived at by the learned Judges of the Patna High Court in that case.

8. But there can be no doubt that it would be a serious hardship to the plaintiff if that were to be the end of the matter. In this appeal she has taken her further stand upon Section 82 of the Transfer of Property Act, which provides for contribution by different properties mortgaged when the mortgage debt has been wholly satisfied out of one of the properties. On behalf of defendant No. 4 it is contended that this is a new point. It is not mentioned anywhere in the memorandum of appeal to this Court. But even if it were a new point, it is a point of law, and we should not hesitate to allow it to be argued. Actually it cannot be regarded as a new point, since this is in substance a suit for contribution, though Section 82 is not actually mentioned. We have not been referred to the original plaint; but the learned trial Judge says 'the plaintiff has now filed this suit for recovery of the proportionate mortgage dues by sale of the suit house', and the learned District Judge says 'the plaintiff then filed the present suit to recover Rs. 4100 as the proportionate amount of the mortgage debt due on the house by sale of the house '. It is contended on behalf of defendant No. 4 that Section 82 does not apply unless the mortgage is still subsisting. That is not so. It can apply while the mortgage is still subsisting; but it applies even more when the mortgage has been paid off out of some only of the properties mortgaged, and the owner or the person interested in the properties from which the mortgage has been paid off then has a right to claim contribution from the owner of other properties which were liable under the mortgage but which were not called upon to pay it off. If authority for this is needed it will be found in Rama Shankar Prosed v. Ghulam Husairi (1921) I.L.R. 43 All. 589. At the time of the Court-sale the only interest of defendants Nos. 2 and 3 in the house was the equity of redemption, and that is all that could be sold to defendant No. 4. He thus became a mortgagor jointly with defendants Nos. 2 and 3, the mortgagors not only of the house but of the land also; and defendants Nos. 2 and 3 could have relied upon Section 82 to claim contribution from defendant No. 4 if circumstances had arisen which justified it. By her sale-deed the plaintiff took over from defendants, Nos. 2 and 3 their rights in the land and the house, including the rights of the mortgagor, and she is Clearly standing in their shoes with regard to any rights that they might have to exercise against defendant No. 4.

9. The appeal must therefore be allowed. But it is being allowed upon a point which was not argued before the learned District Judge, whose decision so far as it goes was perfectly correct. We therefore think that each party should bear its own costs of the appeal in the District Court. Subject to that, the decree of the trial Court is restored, except that the date by which the defendant should pay to the plaintiff Rs. 400 with costs and future interest is altered from January 28, 1939, to February 21, 1942. The costs of this appeal will be paid by defendant No. 4.


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