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Sansarman Vs. Mt. Ram Dulari and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 736 of 1947
Judge
Reported inAIR1952All459
ActsDebt Law; Uttar Pradesh Redemption Act, 1940 - Sections 2(9)
AppellantSansarman
RespondentMt. Ram Dulari and ors.
Appellant AdvocateHyder Husain, Adv.
Respondent AdvocateS.N. Roy, Adv.
DispositionAppeal allowed
Excerpt:
property - liability of transferee - section 2 (9) of u.p. debt redemption act, 1940 - transfer by sale of portion of property which was mortgaged - mortgagor-transferor left sufficient amount in hands of transferee for repayment of mortgage-debt - liability is transferred to transferee and mortgage-debt loses its character under section 2 (9) - after such transfer mortgagor can not claim any benefit of act. - - thedecision in shiam sunder lal's case has beenrelied upon before us as well. the contention raised on behalf of the respondentsbased upon shiam sunder lal's case hasbeen effectively answered by the full bench. 600 had to be mentionedbut the obvious intention of the vendor was thatthe liability under the deed had to be satisfied bythe vendee whatever the amount......of the property morgaged issold and the money is left with the venee to pay off themortgagee, the mortgage-debt ceases to be loan as theliability is transferred and the mortagor renders himself to be disentitled to the benefits of the debt redemptionact. the primary liability in all such cases vis-a-vis thecreditor is that of the person who is in possession of theencumbered estate, and this liability devolves upon himby reason of the transfer which amounts to a contractfor the purpose of sub section (9) of section 2 fo the act.' the allahabad cases are in conformity with thisview. in saran singh v. l. miththan lal : air1946all174 , a full bench of theallahabad high court construed the words'recoverable' and 'liability for repayment' insection 2(9) in a wider sense so as to refer to the.....
Judgment:

Ghulam Hasan, J.

1. This second appeal hasbeen referred to a Bench by Sankar Sarah J., asin his opinion there was a conflict of authoritybetween the Allahabad High Court and the lateChief Courth of Avadh.

2. The facts leading to the reference are these:Two persons Nandkishore and Bhagwat Prasadmade a posessory mortgage on 16th August 1912in favour of Shri Krishen in respect of 11 plotsmeasuring 2.54 acres for 15 years. Nandkishoredied and Bagwat prasad made a simple mortgage of five plots on 30.7.1924 in favour of Sansarman,the son of the original mortgagee, ShriKrishen for Rs.600 giving credit for the considerationof the previous mortgage. Bhagwat Prasadalso died and his window Ram Dulari sold thequity of redemption in a portion of the mortgagedplots to Dabhal and Mohan includingcertain other property for Rs. 750. (Ex. 2).Rupees 636 were made dehanid Sansarman filed asuit in 1937 on the basis of mortage of 1924impleading Ram Dulari and her tranferees underB-1. A permilinary decree ofor recovery ofRs.1,249 6-0 by sale of the property was made on3rd June 1937. On 31st May 1941, Ram Dulariapplied for amendment of the decree under theDebt Redemption Act. The decree was amendedin August 1941. A year later in August 1942 Sansarman made an application for making the preliminarydecree final. Dabhal and Mohanresisted the application on the ground that themortgage had been paid off by the usufruct of thedeed of 1912. The Court of first instance madethe decree final and dismissed the objection. Thelower appellate Court allowed the appeal andfound on accounting that nothing was due to thedecree-holder except certain costs which wereawarded to him under the preliminary and thefinal decree. The decree-holder has appealed.

3. The only point has been raised beforeus in whether the sale (Ex. B-1) had the effect oftransferring the liability for the repayment of theloan to the transferee within the meading of Section 2(9) U.P. Debt Redemption. Act, and whetheron that account the judgement-debtors were deprivedof the benefit of the Act. This point is raised in grounds Nos. 1 and 2 of the memorandumof appeal. This question has been thesubject-matter of judicial decisions, both in Allahabadand Avadh on a number of occasions andhas been authoritatively decided.

4. In Muneswar Bux Singh v. Jang Bahadur, 1944 Oudh W. N. 505, the matter came up beforeme and Madeley J. and it was decided that whenthere is a transfer of liablity from the transferorto the transferee, the debts ceases to be loan withinthe meaning of Section 2 (9) and the transferor rendershimself disentitled to the benefits of the Act. Thisview was followed by a Bench of Misra and KaulJJ. in Ram Prasad v. Bachcha Singh, 20 Luck435. It was held that whenever tht liability of aborrower for the repayment of an advance isextinguished and that of another person is broughtinto existence by virtue of a transfer forvaluable consideration, the transation ceases tobe a loan within the meaning of the Debt RedemptionAct. It was also held that the liability torepay the advance may be transferred either byvoluntary alienation or may devolve on a purchaserat an auction sale in execution of a decree.

5. A similar view was taken by Kaul J. sittingsingly in Bisheshar Nath v. Ram Nath, 1945Oudh W.N. 151. This view received confirmationfrom another Bench of which I was a member inMinhin Lal v. Chittar, 1947 Oudh W.N. 576. Thehead-note of that case reads:

'Where even a portion of the property morgaged issold and the money is left with the venee to pay off themortgagee, the mortgage-debt ceases to be loan as theliability is transferred and the mortagor renders himself to be disentitled to the benefits of the Debt RedemptionAct.

The primary liability in all such cases vis-a-vis thecreditor is that of the person who is in possession of theencumbered estate, and this liability devolves upon himby reason of the transfer which amounts to a contractfor the purpose of Sub Section (9) of Section 2 fo the Act.'

The Allahabad cases are in conformity with thisview. In Saran Singh v. L. Miththan Lal : AIR1946All174 , a Full Bench of theAllahabad High Court construed the words'recoverable' and 'liability for repayment' inSection 2(9) in a wider sense so as to refer to the rightto recover and the liability to repay in the senseof the ultimate incidence of the burden of mortgage-debt.The learned Chief Justice, sittingwith Varma and Braund JJ., held that in a casein which a mortgagor, as between himself and asecond party or a purchaser of the equity, has lefta sufficient part of the mortgage or purchasemoney in the hands of the second mortgagee, orpurchase, he has certainly as between themtransferrd the entire liability for the mortgagein the sense of the ultimate burden of bearing it.There is thus a transfer of the liability for repaymentby contract with the borrower within themeaning of Section 2(9) of the Act and from thatmoment the mortgage-debt ceases to be a loanwithin the meading of the Act. The decision ofPlowden J. in Badri Das v. Qibul Chand, 1943ALL. L w 288 to the effect the transfer bya mortgagor of his entire equity of redemptionmight effect a transfer within a meaning of Section 2(9) but the transfer of a part of the equitywould not, was not approved, The view of PlowdenJ. was also shared by some members of theCourt in certain cases unreported. It was remarked by the learned Chief Justice:

'It is not, we think, transfer of the quity in theland that is the determining factor, but the transfer ofthe liability for repayment.'

The Avadh view expressed in Muneshwar BuxSingh's case, (1944 oudh W.N. 505) was followed.

6. This decision was followed by anotherFull Bench of the Allahabd High Court consistingof Malik C. J., waliullah and Seth JJ. inMahmud Hasan Khan v. Narayan : AIR1949All210 . The case was referred to the FullBench, in the case of Saran Singh v. L. Miththan Lal : AIR1946All174 did not fullyconsider the decision in Shiam Sunder Lal v.Data Ram : AIR1946All147 . Thismatter is dicussed in para. 9 of the report. Thedecision in Shiam Sunder Lal's case has beenrelied upon before us as well. That case decidedthat liability in the proviso to Section 2 (9) means thewhole liabilkity. It also held that the originalborrower, not having trasnferred either the liabilityto repay the debt or the whole of the mortgaged property, remained liable for its repaymentand the debt, theredore, did not cease to be aloan, The learned Chgief Justice rightly remarksthat both these points were fully considered inSaran Singh's case by the Full Bench and thoughthe former view was upheld, the latter namely, that ehte transfer of the entire mortgaged propertymust take place, was not accepted, it beingremarked that the question whether the debtcontinues or ceases to be a loan did not dependupon the transfer of the mortgaged property buton transfer of the liability for its repayment.The contention raised on behalf of the respondentsbased upon Shiam Sunder Lal's case hasbeen effectively answered by the Full Bench. Itappears clear, therefore, that there is no conflictwhatever between the views taken by the twoCourts prior to the amalgamation.

7. It was also contended for the respondentsthat there was a partial transfer of the liabiltyin that only Rs. 636 were left for payments to themortgagee while he obtained a decree for Rs. 1249.A reference to the deed shows that what was transferred was the whole liability under thesimple morgate of 1924. Whatever the amountof the liability may be of course in the recital ofconsideration at the foot of the deed the principalconsideration of Rs. 600 had to be mentionedbut the obvious intention of the vendor was thatthe liability under the deed had to be satisfied bythe vendee whatever the amount. The referenceto the deed was only descriptive. In SaranSingh's case : AIR1946All174 as wellthe facts were similar. Rs 436 were lefts withthe transferee but the mortgagee ultimately got a decree for over Rs. 5000. This point was consideredin Minhin Lal v. Chattar, 1947 Oudh W.N.576 where it was remarked that the primaryliability in all such cases vis a-vis the creditor isthat of the person who is in possession ofencumbered estate, and liability devolvesupon him by reason of the transfer which amountsto a contract for the purpose of Sub-section (9) of Section 2 ofthe Act.

8. The result of the foregoint discussion isthat this appeal must be allowed. The appeal is accordingly allowed, the decree of the lowerappellate Court is set aside and the objection ofthe judgment debtor is dismissed and the finaldecree stands. The appellant will be entitled tohis costs from the respondents in all the Courts.


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