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Sri Rajah Mommadevara Naganna Naidu Bahadur Jamindar Garu (Died) and ors. Vs. Sri Rao Janardhana Krishna Rangarao Bahadur Jamindar Garu and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Contract
CourtAndhra Pradesh High Court
Decided On
Case NumberAppeal No. 651 of 1950 and Civil Misc. Petn. No. 1345 of 1959
Judge
Reported inAIR1959AP622
ActsTransfer of Property Act, 1882 - Sections 82 and 100; Contract Act, 1872 - Sections 70
AppellantSri Rajah Mommadevara Naganna Naidu Bahadur Jamindar Garu (Died) and ors.
RespondentSri Rao Janardhana Krishna Rangarao Bahadur Jamindar Garu and ors.
Appellant AdvocateE. Venkatesam and ;M. Ramachandra Raju, Advs.
Respondent AdvocateD. Narasa Raju, Adv. General, ;K.B. Krishnamurty, ;D. Venkatappayya Sastri, ;G. Balaparameswari Rao, ;A. Kuppuswami, ;I. Vishu Rao, ;S. Ramamurty, ;P. ramachandra Rao, ;Ch. Sankara Sastri, ;V.V. Sastr
DispositionAppeal dismissed
Excerpt:
.....100 not available to plaintiff - not entitled to recover contribution as charge of maintenance created by decree not by operation of law. - all india services act, 1951.sections 8 & 11 & a.p. buildings (lease, rent and eviction) control rules, 1961, rule 5: [v.v.s. rao, g. yethirajulu & g. bhavani prasad, jj] refusal by landlord to receive rent - deposit of rent in court - held, a tenant has the option to take recourse to section 8 in case of refusal or evasion by landlord to receive rent and if landlord were to not name a bank or refuse even the money order of rent, the tenant can deposit the rent in accordance with sub-rules (1) to (3) of rule 5. the notice to person entitled to rent and proper maintenance of accounts of such deposits under sub-rules (4) and (5) of rule 5 are..........would suggest an intention to include a charge created by a decree ......i have no doubt that a chargecreated by a decree is governed by section 100.' it is not clear whether the learned judge meant that the charge should be given that attribute because it was based upon the act of the parties, who referred the litigation to arbitration or whether he thought that the decree of a court was tantamount to operation of law. assuming that the learned judge intended to lay down that section 100 applied to all charges created under a decree, the point is whether there is warrant for that interpretation.12. this decision was referred to with approval by lokur j., in rustamalli v. aftabhusein khan air 1943 bom 414 and by bell j., in venkalachala pillai v. rajagopala naidu, a(r 194b mad 51.....
Judgment:

P. Chandra Reddy, C.J.

1. This appeal has been referred to a Full Bench by the order of Manohar Prasad and Raganadham Chctty JJ. because of conflicting judicial opinion on the interpretation of Section 100 of the Transfer of Property Act.

2. The facts that have contributed to the litigation may be briefly given. The plaintiff, who is tile appellant, instituted a suit for the recovery of Rs. 32,394/- by way of contribution from the defendants in the following circumstances. One Bom-madevara Narasimha Naidu was the owner of considerable properties. He died in 1918 leaving he-hind him his two sons, the plaintiff and the 1st defendant and his second wife, Rajya Lakshmi De-vamma. The 1st defendant and his sons filed O. S. No. 38 of 1919 in the Court of the Subordinate Judge, Eluru for partition of the family properties and for separate possession of their share.

Their step-mother Rajya Lakshmi Devamma was1 impleaded as the second defendant in that suit as she was entitled to maintenance. The suit ended in a decree for partition in which the properties set out in schedules A and B annexed to the present plaint were allotted to the share of the plaintiff, The 2nd defendant was awarded maintenance, past and future, at the rate of Rs. 600/- per month to be paid by the plaintiff and the 1st defendant in two equal moieties and the maintenance was made a charge on the estate of the plaintiff and the 1st defendant, with the result that the A and B schedule properties were subject to a charge.

3. In execution of decree obtained against the plaintiff, the A schedule properties were brought to sale and defendants 1 to 13 and 17 to 19 purchased them in court auction and the items set out in the A schedule passed into their hands. Some time latter, the plaintiff was adjudged an insolvent at the instance of one of his creditors. The insolvent filed a petition, C. M. P. No. 670 of 1943, suggesting a composition scheme. This scheme was accepted by the Court as the majority of the creditors were agreeable to it.

The plaintiffs second wife guaranteed the payment of the amounts agreed to be paid to the several creditors 'and also undertook the management of the estate so that she could reimburse herself the amount due to her in that regard. Since the maintenance claim of the 2nd defendant was not satisfied, the latter took out several executions and item 11 of the B schedule was put up for sale. In order to avert the sale and at the request of the plaintiff, his wife made several payments between 29th November, 1943 and 22nd July, 1946 totalling Rs. 34,846-14-0.

4. The plaintiff brought the present suit alleging that all the items of the A and B schedules were-liable to pay the amounts rateably since they were all charged for the maintenance of the 2nd defendant and apportioning it on the basis of the values of the various items charged as on the date when the charge was created, Several defences were raised in the suit, the chief of them being that the properties in the possession of the defendants were not subject to contribution since the charge declared by the Court does not attract the incidents of a mortgage and that even otherwise, being bona fide purchasers for value without notice, they are protected. A number of issues were raised on the pleadings and almost all of them were held against the plaintiff. In the result, the suit was dismissed with costs.

5. The aggrieved plaintiff has brought this appeal. It may be mentioned that pending this appeal the plaintiff and; the 1st defendant died while the 2nd defendant died pending suit and their legal representatives have been brought on record.

6. It is urged by Sri Venkatesarn, Counsel for the appellant, that the view of the Subordinate Judge that the plaintiff could not have the benefit of contribution as the charge declared by the Court does not fall within the purview of Section 100, Transfer of Property Act, is erroneous and a charge-holder under a decree of a Court is also entitled to contribution from all the persons who subsequently acquired the properties over which the charge subsisted.

7. The decision of the appeal turns on the interpretation of Sections 82 and 100 of the Transfer of Property Act. The right to get contribution is conferred on mortgagors of several items of property by Section 82 of the Transfer of Property Act. It is in these words:--

'Where property subject to a mortgage belongs to two or more persons having distinct and separate rights of ownership therein, the different shares in or parts of such property owned by such persons are in the absence of a contract to the contrary liable to contribute rateably to the debt secured by the mortgage, and for the purpose of determining the rate at which each such share or part shall contribute, the value thereof shall be deemed to he its value at the date of the mortgage after deduction of the amount of any other mortgage or charge to which it may have been subject on that Sate.'

8-9. The rules relating to charges are contained in Section 100 of the Transfer of Property Act. It is therefore convenient to extract hero the terms of that Section:--

'Where immoveable property of one person is by act of parties or operation of law made security for the payment of money to an other, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained, which apply to a simple mortgage shall, so far as may be; apply to such charge.

Nothing in this section applies to the charge ofa trustee on the trust property for expenses properly incurred in the execution of his trust and, save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred or consideration and without notice of the charge.' It is seen that all the provisions applicable to simple mortgages are attracted to charges within Section 100. So, if the charges in question fall withinthe ambit of Section 100, ,the plaintiff will be entitled to the advantages derived from Section 82. In order to fulfil the definition of charge in Section 100, it must be one created 'by act of parties or operation of law.'

10. Obviously, a charge created by a decree cannot be deemed to have been created by act of parties. The pertinent question, therefore, is whether it falls within the category denoted by the words 'operation of law'. What then is the meaning of' the words 'operation of law'?. Would it include an act of Court? One line of cases is inclined to the view that these words are sufficiently comprehensive to take in decretal charges also, while theopposite view has been countenanced in a large number of cases, the preponderance being in favourof the latter.

11. The leading case, which gives an extended meaning to these words, is Abdul Ghaffar v. Ishtiaq Ali, AIR 1943 Oudh 354 (FBI, One of the questions referred to the Full Bench was:--

'Where a charge is created by a decree of Court based upon an award made upon an agreement out of court or otherwise, is such, a charge binding and enforceable against a bona fide transferee for value without notice.'

In dealing with this question, Bennett. J., who spoke for the Court, remarked that the charge created by a decree should be considered to come within the purview of Section 100 because 'operation of law' meant only working of the law and that there was no reason why it should be restricted in its application to such 'cases as fall under Section 55 or Section 73. He added:--

'In the present case, it may be said that the charge resulted from the operation of the law consequent on the act of the parties in referring their litigation to arbitration and upon the application of Mashuq All to make the award a rule of the Court-. There is nothing in Section 100 itself which would suggest an intention to include a charge created by a decree ......I have no doubt that a chargecreated by a decree is governed by Section 100.'

It is not clear whether the learned Judge meant that the charge should be given that attribute because it was based upon the act of the parties, who referred the litigation to arbitration or whether he thought that the decree of a court was tantamount to operation of law. Assuming that the learned Judge intended to lay down that Section 100 applied to all charges created under a decree, the point is whether there is warrant for that interpretation.

12. This decision was referred to with approval by Lokur J., in Rustamalli v. Aftabhusein Khan AIR 1943 Bom 414 and by Bell J., in Venkalachala Pillai v. Rajagopala Naidu, A(R 194B Mad 51 Raghava Rao J., of the same Court in Rajagopala 'Chetty v. Abdul Sukkoor Sahib. : AIR1950Mad396 fell in line with this. It may be mentioned here that none of the three Judges indicated any reason as to why they accepted that view. On the other hand, several of theHigh Courts, including Madras, have taken the opposite view.

13. Govinda Menon and and Basheer Ahmed SayeeS JJ., of the Madras High Court dissented from the above view in Thangavelu v. Thirumalswami, (S) AIR .1956 Mad 67. In their opinion, the words are incapable of such wide import as is ascribed to them in the case cited above. (S) AIR 1958 Mad 67 (supra) was followed by Ramaswami J., in Seethalakshmi Animal v. Srinivasa, AIR 1958 Mad 23.

14. Older cases of the same Court also proceeded on the assumption that Section 100 of the Transfer of Property Act is inapplicable to charges created by decrees. Sowbagia Ammal v. Manika Mudali, 33 Mad LI 601: (AIR 1918 Mad 668) is one such instance. The question that arose for consideration there was whether a widow, who had obtained a decree charging her maintenance on immovable property, had to enforce her charge by instituting a fresh suit as contemplated by Order XXXIV Rule 1* read with Rule 15 C.P.C. The learned Judges answered it m the negative on the ground that the widow acquired charge on specified immovable properties for the first (time, and therefore, Order XXXIV Rule 14 did not come into play.

15. Another Bench of the same Court in Ven-kataramana Murthy v. Sundara Ramaiah, AIR 1919 Mad 894 adopted the reasoning in 33 Mad LJ 601: (AIR 1918 Mad 668). The Bench said that the learned Judges, who decided 33 Mad LJ 601: (AIR 1918 Mad 6fi8) (Supra) remarked that

'the position of a widow who by virtue of her maintenance decree, for the first time, acquires a charge on specified immoveable properties is different from' that of a holder of a charge under Section 100 of the Transfer of Properly Act.' and that it does not fall within the scope of Order XXIV Rule 14. It may be incidentally mentioned that the words 'is different from that of a holder of charge under Section 100 of the Transfer of Property Act' ,are not to be found in 33 Mad LJ 601: (AIR 1918 Mad 668) (supra). Evidently, the Bench In the later case thought that (hat was the effect of the language employed in the earlier case.

16. In Maina v. Ahsan Hussain, 169 Ind Gas 169 (Nag). Niyogi J., thought that Section 100 of the Transfer of Property Act would, not govern a charge for maintenance created by a decree of Court, since the maintenance decree was one passed in invitum and not on consent and that such a charge could not be said to have been created by operation of law such as arising under sections 55(4)(b), 55(6)(b) and 73 of the Transfer of Property Act.

17. The above principle found acceptance in Gliasiram v. Mt. Kunclanbai, AIR 1940 Nag 163 decided by Stone C.J., and Vivian Bose J. The rulings of the Patna High Court are also in consonance with this rationale. This doctrine is illustrated by Debendranath v. Trinayani Dast, AIR 1945 Pat 278. The learned Judges, Sinha and Das JJ., followed AIR 1940 Nae 163 (Supra) and a judgment of the Allahabad High Court, which will be referred to presently. Meredith J., also expressed the same opinion while dealing with the applicability of Order XXXIV, Rule 14 to a charge provided by a decree in Shconandan Pandey v. Asaraji Kuer, AIR 1946 Pat 216. The same rule, is contained in Prem Kuer v. Ram Lagan Rai;' AIR 1948 Pat 199.

18. We may now refer to Manesh Prasad v. Mt. Mundar, : AIR1951All141 (FB), which is a leading case on the subject Having regard to the conflict between AIR 1943 Oudh 354 (FB) and Durga Prasad v. Tulsa Knar, AIR 1939 AH 579Malik C.J., and Agarwala J., referred, inter alia, the question whether sections 39 and 100 of the Transfer of Property Act had any application to a charge created under a decree, to a Bench of five judges. The Full Bench expressed the opinion that such a charge was beyond the pale of Section 100 of the Transfer of Property Act. Both Malik C.J.; who delivered the leading opinion, and Agarwala J., discussed this matter at some length. They stated that the words 'operation of law' could not comprehend within their compass a charge created by a Court. The expression 'operation of law' connotes a legal consequence following something happening without the intervention of any agency. Agarwala J., has pointed out the distinction between the two categories of 'charges by referring to Section 2 (d) of the Transfer of Properly Act itself, which recites:--'Save as provided by Section 57 and Chapter IV of this Act, any transfer by operation of law or by or in execution of a decree or order of Court of competent jurisdiction.

19. We express our respectful accord with the Ratio Decidendi of this case. The reasons adduced by the learned Judges in support of their conclusion are quite sound if we may say so with respect. In our judgment, Section 100 does not contemplate a charge provided by a decree. The main consideration that prevailed with AIR 1943 Oudh 354 (FB) was that the words 'operation of Law' meant working of law. But that does not elucidate the matter any further. It can only mean a charge, which results from the working of law. That does not convey the idea of a charge being created by a court or by any other agency, applying the provisions of a particular law.

We feel that those words have relation only to statutory charges. There are several instances of such charges. Some of them are contained in the Transfer of Property Act itself. When a charge springs into existence by the application of some rules of law to a set of facts and without the intervention of a Court or any other agency, it could be said to have been created by operation of law. The property should be made security by force of law, and not by the act of court invoking the provisions of any particular law. It should come into play as a legal consequence flowing from a particular set of facts.

20. If the intendment of the section was to include all categories of charges, the general word 'charge' would have been used instead of confining them to the two types enumerated there. In our opinion, the Legislature had advisedly confined this to two categories. That the Act kept in view the distinction between 'operation of law' and 'act or decree of a court' is illustrated by Section 2 (d) itself. If the words 'operation of law' are wide enough to include a charge created by a Court, there was no need for using two different expressions.

This, in our judgment, furnishes some clue to the interpretation of the words 'operation of law without stretching its meaning to interpret it in the way done by the Full Bench of the Oudh High Court. It is also not out of place to mention that the Act is limited, as stated in the preamble, to transfer of property by act of parties except for certain exceptions which apply to transfers by operation of law. This is made clearer by Section 5 of the Act, which defines a 'transfer' of property. Therefore, Section 100 may not be regarded as exhaustive of all the charges. A charge created by a court may be regarded as 'judicial lien'.

21. There is another consideration, which is relevant in interpreting this section. If Section 100is construed as embracing a charge recorded in a decree, it would be causing hardship to a person like a Hindu widow, who would be put to the necessity of filing a suit to enforce such a charge as required by Order XXXIV Rule 14, read with Rule 15, when a charge is merely declared on immoveable property without a direction for the property being sold for arrears of maintenance. In the words of Meredith J.:--

'It would be grossly anomalous and unfair to hold that the provision put into the decree as an additional safeguard for the lady would prevent her from executing her decree at all as she should otherwise have done.'

Section 100 is not intended to lead to such a result. We have thus readied the conclusion, both on the language of the section and the preponderating judicial authority, that Section 100 is restricted in its operation to two categories of charges and cannot be extended to charges created by decrees of courts.

22. Radhe Lal v. Ladli Parshad, (S) is in conformity with the doctrine enunciated above. To the same effect is the judgment of a single Judge of the Calcutta High Court in Jata Bhusan v. Krishna Bhamini Debi, : AIR1957Cal204 : Guha Ray J., stated there that a charge created by a decree would be one by operation of law only where the decree merely embodies a charge which exists in law apart from the decree itself. Hence, the appellant is not entitled to the benefit of Section 82 read with Section 100 of the Transfer of Property Act and as such could not claim any contribution from the defendants.

23. Alternatively it is contended that Section 70 of the Contract Act would come to the rescue of the appellants. The stress of the argument in this behalf is that since the plaintiff discharged a liability, which the various items of property purchased by the respondents would have to bear, Section 70 would come into play. We are unable to accede to this theory. To appreciate this argument, it is necessary to refer to Section 70 of the Contract Act. That section runs as follows:--

''Where a person lawfully does anything for another person or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of or to restore the thing so done or delivered.'

24. It is plain that in order to invoke this section, the requisite condition is that the other persons sought to be proceeded against under that section should enjoy some benefit consequent upon the act of the person claiming compensation. This could arise only if one person is in law bound to do something and another person does it for him. The various purchasers of the property charged with liability would incur the obligation to contribute only in the event of Section 82 of the Transfer of Property Act being applicable to them. It is not disputed that there is no personal liability in a matter of this kind.

If Section 82 of the Transfer of Property Act has no application by virtue of the charge not coming within the scope of Section 100, these defendants are not obliged to make any payment and consequently they cannot be said to have derived any benefit from the payment made by the plaintiff. Hence Section 70 does not come in their way.

25. We do not think the decision in Bhagwati Saran Singh v. Maiyan Murat Mati Kuer AIR 1931 Pat 394 is in any way helpful to the appellant in this regard. In that case, there wag a mortgage decree both against the plaintiff and the defendant and both of them were in law bound to dischargethat debt. The plaintiff paid off the decretal amount in order to set aside the sale effected in execution of the mortgage decree and also took steps to have the sale avoided to protect the property. That ruling turned upon the question as to whether Section 69 or Section 70 of the Contract Act applied. The point in controversy now did not fall to be considered there. It follows that Section 70 does not avail the plaintiff.

26. In the view we have taken as regards the scope of the first paragraph of Section 100 of the Transfer of Property Act, it is unnecessary for us to consider the further question whether the auction purchasers are saved by the second paragraph of that section.

27. In the result, the appeal fails and is dis-missed with costs one set to be divided amongst-the contesting respondents.


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