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S. Nanjundasetty Vs. Silpi Venkatachar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKarnataka High Court
Decided On
Case NumberSecond Appeal No. 112 of 1949-50 and Civil Revn. Petn. No. 45/49-50
Judge
Reported inAIR1953Kant122; AIR1953Mys122
ActsTransfer of Property Act, 1882 - Sections 101
AppellantS. Nanjundasetty
RespondentSilpi Venkatachar and ors.
Appellant AdvocateA.R. Somanatha Iyer and ;E. Kanakasabhapathy, Advs.
Respondent AdvocateH. Sreenivasa Murthy, Adv.
Excerpt:
.....a period of 40 years from the date of the document and as such the said document could only be a mortgage deed in substance and not a sale deed. the transaction was transfer within the meaning of section 3(e) of the ptcl act. section 4 of ptcl act prohibits the transfer of granted lands. sub section (2) of section 4 further provides that no person shall, after the commencement of the said, act, transfer or acquire by transfer any granted land without the previous permission of the government. the mortgage of the said land by the defendant/grantee in favour of the plaintiff authorizing the plaintiff to enjoy usufructs was clearly in violation of the provisions of section 4 of the ptcl act. the burden is heavy on the plaintiff to prove that the said mortgage was not obtained by him in..........in substance was that out of two properties purchased by defendant 1 at the court sale, viz. the suit property and the adjacent one both of which were subject to mortgage, defendant 1 gave up his rights as purchaser in the adjacent item and perhaps in consideration of this the decree amount was to be paid. if the plaintiff relies upon the compromise, he cannot seek redemption as the suit property is declared therein la belong absolutely to defendant 1. this is consistent with what is stated in the sale proclamation and sale certificate. both these mention that the property was purchased by defendant 1 subject to the mortgage. the expression 'subject to the mortgage' cannot be construed as limiting the rights of the purchaser to those of the mortgagee as that would amount to the sale.....
Judgment:

1. This is an appeal by the plaintiff in a suit for redemption of a mortgage of a house situated in Bangalore City effected under a registered deed dated 15-8-1921 for a sum of Rs. 3,000/- and prescribing a period of 26 years. Defendants 2 and 3 are plaintiff's sons and do not contest the suit. Defendant 1 while admitting the mortgage pleaded that the plaintiff has no right to redeem as the equity of redemption was purchased by defendant 1 in Ex. Case No. 1121 of 1936-37 in execution of a decree of the Court of Small Causes for payment of money due on a bond, against the plaintiff and defendants 2 and 3. The suit was dismissed by the learned Munsiff and the decision is confirmed in appeal. It is contended that the sale has not the effect of extinguishing the mortgage and that plaintiff as a person having interest in the property is entitled to redeem. Prior to the present suit defendants 2 and 3 sued the present plaintiff and defendant 1 in O. S. 36 of29-30 impeaching his rights under the purchase. The suit ended in a compromise terms of which are set forth in Exhibit 3 dated 1-12-1932. The compromise expressly recites at the beginning that the property now in dispute was acknowledged to be that of defendant 1 and that the others viz. defendants 2 and 3 and the plaintiff have no right to it.

2(a). Sri Somanath Iyer, learned Advocate for the appellant, argued that since the present plaintiff was not a party to the compromise and according to the compromise the money due under the decree had to be paid, defendant must be deemed to have given up his rights under the Court sale. He also argued that the recitals in the sale proclamation and the sale certificate that the sale was subject to the mortgage denotes that intention of defendant 1 at the time was to keep the mortgage alive and that even if the equity of redemption is deemed to have been acquired by the 1st defendant he was only a trustee for the plaintiff. Plaintiff cannot pick out a portion of the compromise and ignore the rest to support his claim. The terms are to be read as a whole and the understanding in substance was that out of two properties purchased by defendant 1 at the Court sale, viz. the suit property and the adjacent one both of which were subject to mortgage, defendant 1 gave up his rights as purchaser in the adjacent item and perhaps in consideration of this the decree amount was to be paid. If the plaintiff relies upon the compromise, he cannot seek redemption as the suit property is declared therein la belong absolutely to defendant 1. This is consistent with what is stated in the sale proclamation and sale certificate. Both these mention that the property was purchased by defendant 1 subject to the mortgage. The expression 'subject to the mortgage' cannot be construed as limiting the rights of the purchaser to those of the mortgagee as that would amount to the sale conferring on the purchaser no rights at all. The sale implies that the rights of the mortgagor are acquired by the purchaser and these include the equity of redemption.

2(b). There is no prohibition for a mortgagee being the purchaser of the property mortgaged to him see -- 'Nimma Subba Rao v. Shame Gowda', 10 Mys LJ 478 (A) and the effect of the purchase is to bring about a merger of rights as mortgagee with those of purchaser except in relation to a puisne mortgagee under section 101, Transfer of Property Act. As stated in Mulla's Transfer of Property Act at page 559

'When the mortgagee purchases the equity of redemption and acquires ownership he may keep the mortgage alive for his own defence as against a puisne encumbrance but the mortgage is nevertheless extinguished as , between the mortgagor and mortgagee or as between the mortgagee and a stranger.'

The provision is intended for the benefit of the mortgagee. Plaintiff js not either a puisne mortgagee or a stranger and cannot in spite of the sale contend that the equity of redemption is not lost.

3. In -- 'Bhawani Kumar v. Mathura Prasad Singh', 40 Cal 89 (PC) (B) it was held

'When a charge-holder acquired the ownership of the property charged and there were no intermediate incumbrances and no other circumstances showing that if would be forhis benefits to keep the charge alive, thecharge was extinguished by merger.'

It is not apparent how the mortgagee can beconsidered to be trustee in any sense by becoming the purchaser of the property. No caseor statutory provision in support of this wasreferred to. As the appellant is not shown tohave any right or interest in the propertywhich entitles him under law to seek redemption and the mortgage is extinguished by themortgagee becoming owner of the property thesuit was rightly dismissed. Consequently, theappeal fails and is dismissed with costs.

4. Appeal dismissed.


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