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Thamattoor Chelamanna and anr. Vs. Thamattoor Kurumbikkat Pare Manakkal Parameswaran and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtKerala High Court
Decided On
Case NumberA.S. Nos. 208, 209 and 210 of 1964
Judge
Reported inAIR1971Ker3
ActsTransfer of Property Act, 1882 - Sections 60 and 92; Code of Civil Procedure (CPC) , 1908 - Order 34, Rule 1
AppellantThamattoor Chelamanna and anr.
RespondentThamattoor Kurumbikkat Pare Manakkal Parameswaran and ors.
Appellant Advocate K. Kuttikrishna Menon and; A.P. Chandrasekhran, Advs.
Respondent Advocate P.C.B. Menon, Adv.
DispositionAppeals allowed
Cases ReferredSubrogation and Badan v. Murari Lal
Excerpt:
.....no such right of subrogation - no question of mortgagor holding redeemed sub-mortgage as separate right - redemption effected in suit brought by mortgagor against mortgagee without making sub-mortgagee as party cannot effect rights of sub-mortgagee - held, in view of position of law plaintiffs cannot claim possession of properties from hands of defendant. - - a-2 dated 6-7-1947 was a piece of fraud perpetrated by the 7th defendant and that the right to redeem the earlier mortgage of 1909 was lost by reason of the failure to comply with the direction in ext. b-3. but the question of merger can arise only when two distinct rights come to inhere in the same person, and the argument pre-supposes, what is clearly not the case, that when a mortgagor redeems a mortgage it is as if he..........appeal relates only to item 1 of the properties in suit, and we shall hereafter refer to it as the suit property. this property belonged (not in jenm but under some lesser possessory title, but that docs not matter) to a namboodiri joint family called the kakkat mana of which the 7th defendant is the present manager. this and 13 other items of property were mortgaged by the mana on 27-3-1900 to one kunhukutty amma whose successors are defendants 1 to 4 in the suit. the mortgage, so far as the suit property is concerned, was possessory, and it way to redeem this mortgage of 1909 that the suit was brought. (the mortgage deed is not in evidence. it would appear that the original is lost and no registration copy can be got since the records of the particular sub-registrar's office were burnt.....
Judgment:

Raman Nayak, C.J.

1. These appeals arise out of three suits for redemption (O. S. No. 213 of 1930, O. S. No. 1 of I95J and O. S. 2 of 1951 of the Munsiff's Court, Perinalalmanna) brought by the same two plaintiffs, two of the suits, O. S. No. 1 of 1951 and O. S. No. 2 of 1.951, against the same three defendants. In all the three suits, the plaintiffs traced their right to redeem to a possessory mortgage dated 15-9-1911 -- this has been marked as Ext. A-1 -- and the three suits were tried together along with a fourth (O. S. No. 91 of 1951) with which we arc not concerned. The trial Court dismissed all the three suits; the dismissal was reversed and the suits decreed in first appeal; the decrees made in first appeal were confirmed by this Court in second appeal; and the 5ih defendant in O. S. No. 213 of 1950 and the 3rd defendant in O. S. No. 1 of 1951 and O. S. No. 2 of 1951 have come with these appeals, A. S. No. 209 of 1964 A. S. No. 210 of 3904 and A. S. No. 208 of 1964 respectively, on certificate granted under Section 6(iii) of the Kerala High Court Act. The Division Bench that heard these appeals in the first instance has referred them to a Full Bench because it thought that an authoritative decision on the effect of the redemption of a mortgage, bysuit, on the rights of a sub-mortgagee who was not made a party to the suit, was necessary. It thought that there was an apparent conflict between the provisions of Order XXXIV, Rule 1 of the Code, according to which the sub-mortgagee is a necessary party to the redemption suit, and too statement in Mulla's Transfer of Property Act, 5th Edition, pages 377 and 878, to the effect that more registration may not be notice of the sub-mortgage to the mortgagor and that, if a mortgagor redeems the mortgage without notice of the sub-mortgage, the sub-mortgage will be extinguished so far as the property is concerned. It also thought that Viswanatha v. Chimmukutti Amma, AIR 1932 Mad 115 spoke in two voices on this question. We might observe that the question posed arises only in A. S. No. 208 of 1904 and A. S. No. 210 of 1964 and out in A. S. No. 209 of 1964.

2. Wo shall take up first A. S. No. 209 of 1964, the appeal by the 5th defendant in O. S. No. 213 of 1950. The appeal relates only to item 1 of the properties in suit, and we shall hereafter refer to it as the suit property. This property belonged (not in jenm but under some lesser possessory title, but that docs not matter) to a Namboodiri joint family called the Kakkat Mana of which the 7th defendant is the present manager. This and 13 other items of property were mortgaged by the Mana on 27-3-1900 to one Kunhukutty Amma whose successors are defendants 1 to 4 in the suit. The mortgage, so far as the suit property is concerned, was possessory, and it way to redeem this mortgage of 1909 that the suit was brought. (The mortgage deed is not in evidence. It would appear that the original is lost and no registration copy can be got since the records of the particular Sub-Registrar's Office were burnt during the Moplah Rebellion of 1921. There is however no dispute with regard to this mortgage and its non-production is therefore of no consequence).

By Ext. A-1 dated 15-9-1911, Naravanan Atisseripad, the then Manager of the Kakkat Mana, mortgaged 46 items of property, including the suit property and the other properties comprised in the mortgage of 1909, to one Sundarnunni Variyar, the 8th defendant in the suit, for Rs. 10,000/-. This mortgage also was possessory so far as the suit properly was concerned and Sundaranunni Variyar was directed to redeem the mortgage of 1909 within a year. He, however, did nothing for 66 years and what he did thereafter was not to redeem the mortgage of 1909 but to assign his mortgage Ext. A-1 (by means of Ext. A-2 dated 0-7-1947) to the two plaintiffs in the suit, who, it is stressed on behalf of the 5th defendant, are the sons-in-law of the 7th defendant, the present manager of the Kakkat Mana, although that circumstance has no real bearing on the case. Meanwhile, in 1932, the Kakkat Mana and by its manager, the 7th defendant, partially redeemed the mortgage of 1909 aa a result of a compromise decree, Ext B-3 dated 16-6-1932, to a suit for redemption (O.S. No. 80 of 1931) and had, in pursuance thereof, taken possession of the suit property from the mortgagee, Kunhukutty Amma, who was, of course, a party to the suit. Sundaranunni Variyar, the mortgagee under the puisne mortgage Ext. A-1 dated 15-9-1911, was, however, not made party to the suit, and therefore, his rights under that mortgage remained unaffected thereby By Ext B-8 dated 24-5-1938, the Kakkat Mana sold the suit property to one Krishnan Nambudiri. From him the 5th defendant bought it by Ext. B-11 dated 6-8-1946 and ho is admittedly in possession.

3. The suit as against the 5th defendant was on the footing that ho was in possession under the mortgagees, defendants 1 to 4. The 5th defendant denied this and asserted that he was in possession by virtue of his purchase from the original mortgagor the Kakkat Mana, which had redeemed the mortgage so far as the suit property was concerned, and that, the suit mortgage of 3909 having already been redeemed by the mortgager, there was nothing left for the puisne mortgagees, the plaintiffs, to redeem.

4. This defence specifically taken in the written statement of the 5th defendant and in his memorandum of second appeal -- the first appeal was by the plaintiff's and the 5th defendant was only a respondent thereto --and also, although not so specifically, in the memorandum of appeal before us, is the defence which (after canvassing at some length a number of untenable defences which loomed large in the Courts below and which had no difficulty in repelling such as that the puisne mortgage, Ext. A-1, was sham and nominal, that it was not binding on the Kakkat Mana, that it was not executed by Narayanan Atisscripad as manager of that Mana, that it had been declared not binding on the Mana in a suit to which the puisne Mortgagee, Sundaranunni Variyar, was not a party, that its assignment to the plaintiffs by means of Ext. A-2 dated 6-7-1947 was a piece of fraud perpetrated by the 7th defendant and that the right to redeem the earlier mortgage of 1909 was lost by reason of the failure to comply with the direction in Ext. A-1 that this should be done within a year) counsel for the 5th defendant presses before us as his real defence. Issue was joined with regard to it. 'Whether the plaint properties are held under the plaint mortgage', but, as often happens, in their preoccupation with the large number of untenable contentions raised, the parties as also the Courts seem to have lost sight of this real defence until counsel for the 5th defendant stumbled upon it is the course of the bearing before us.

5. The plaintiffs have, and can have, no answer to this defence. It is said on their behalf that the intervening puisne mortgage.

Ext. A-1, prevented a merger of the right of the mortgagor, the Kakkat Mana in the suit property with the right of the mortgagee under the mortgage o 1909 on the redemption of the property from that mortgage in pursuance of Ext. B-3. But the question of merger can arise only when two distinct rights come to inhere in the same person, and the argument pre-supposes, what is clearly not the case, that when a mortgagor redeems a mortgage it is as if he obtains an assignment of the mortgage right. What happens is not that at all, but an extinction of the mortgage right by its satisfaction, and the question of a redemption partaking of the nature of an assignment, thus keeping the mortgage; right alive, can arise only in eases where the redemption gives the person redeeming the right of subrogation to the rights of the mortgagee whose mortgage he redeems. Section 92 of the Transfer of Properly Act makes it quite clear that the mortgagor (which term, it would appear, would, by reason of Section 59A of the Transfer of Property Act, include a person deriving title from the original mortgagor, it not being otherwise expressly provided; but that is not a question that arises here since the redemption in the present case was by the original mortgagor, the Kakkat Mana) has no such right, and it seems to us clear that when a mortgagor redeems a mortgage the mortgage is extinguished and is in no sense kept alive even if there bo some intervening interest like a puisne mortgage -- see Sheldon on Subrogation and Badan v. Murari Lal, ILR 37 All 309 = (AIR 1915 All 242).

6. It is pointed out that the present Section 92 of the Transfer of Property Act was enacted only in 1929 by Act 20 of that year and it is said that to apply it to the case of the redemption of a mortgage executed before its enactment is to give it retrospective effect. But, what the section does is to specify the rights that flow from the redemption of a mortgage, not the rights that flow from the execution thereof, and, with great respect to the decisions which seem to hold otherwise, we should have thought that to apply the section to a case where the redemption has taken place, as in the instant case, after its enactment is not to give the section retrospective effect even if it be that the mortgage redeemed was executed before its enactment. We need not, however, finally decide that question here since the redemption in this case was by the original mortgagor and it is not disputed that the law always was that the redemption of a mortgage by the original mortgagor gives him no right of subrogation. He is after all only discharging a debt he himself had incurred, and, in the process, relieving his properly of the encumbrance he had placed upon it. And there is no reason why the entire properly, as relieved of the burden, should not be availableto satisfy the claims of his creditors whether secured or unsecured, There is no reason why he should be allowed to hold the redeemed mortgage against a subsequent mortgagee or even against in unsecured creditor. And a transferee who has agreed to pay the mortgage would, on redeeming it, be in no different position.

7. We might also mention that the partial redemption of a mortgage cannot give rise to any right of subrogation.

8. It follows that, in so far as the suit property is concerned, the mortgage of 1909 sought to be redeemed is in no sense extant, the property having been redeemed from the mortgage as long ago as 1932. This redemption having been by the original mortgagor, the mortgage was extinguished so far as the suit properly was concerned and was in no sense kept alive. The 5th defendant holds the property not under the mortgage but by reason of his purchase of the rights of the mortgagor. No doubt the puisne mortgagee, Sundaranunni Variyar, not being a party to the suit (p. S. No. 80 of 1931) in which the redemption was effected, his rights under his mortgage, Ext. A1., remain unaffected thereby -- it is as if the mortgagor, the Kakkat Mana, had redeemed the property from the mortgage of 1909 outside court without the conjunction of the puisne mortgagee, Sundaranunni Variyar. The lights of Sundaranunni Variyar, since assigned to the plaintiffs, under the mortgage, Ext. A1, were in no way affected by the redemption and it might be open to the plaintiffs to enforce that mortgage against the 5th defendant and obtain possession on the strength thereof by a suit of the kind described in Article 135 of the Indian Limitation Act, 1908. But the present suit is not such a suit, and, if it were, we think it would be barred by time since the mortgagor's right to possession would have determined as against the puisne possessory mortgagee the moment the mortgagor got possession by redemption of the prior possessory morlgage. The suit is not for possession in enforcement of the plaintiffs' title under Ext. A1, but for redemption of the prior mortgage of 1.909 (now extinct) in exercise of their rights as subsequent mortgagees.

9. For these reasons the suit must fail so far as the appellant 5th defendant and the property in his possession (namely, item 1 in the plaint) are concerned.

10. The 5th defendant gave evidence as D. W. 1 and in cross-examination he said, 'The suit O. S. No. 80/1931 was filed in collusion between the 7th defendant and Parangolasa Menon. That suit was compromised in collusion to defeat other people.' This statement is fastened upon on behalf of the plaintiff to raise the contention, for the first time raised before us, that there was, in fact, no redemption in pursuance of the decree Ext. B3, only the make-believe ofcollusion. Therefore the possession of the 5th defendant, must be under the mortgagees defendants 1 to 4, not as he pretends, by reason of the purchase made under Exts. B8 and B11 which could only have been of the equity of redemption. But, until now, the plaintiffs have had no such case, and, although by his written statement the 5th defendant claimed to be in possession by virtue of his predecessor the Kakkat Mana having redeemed the mortgage, the plaintiffs' case was not that there was no such redemption but that despite the redemption the mortgage was alive since the puisne mortgagee was not party to the redemption and that as puisne mortgagees they were entitled to redeem the mortgage. They cannot at this stage be allowed to take advantage of the 5th defendant's statement to put forward an entirely new case. Moreover Parangotassa Menon, who it would appear was a brother of the mortgagee, Kunhukutty Annna was not a party to the suit O. S. No. 80 of 1931 in which the decree for redemption was made. Nor had he at that time any interest in the mortgage right. It is nowhere said that ho was acting for his sister and it is difficult to understand what the 5th defendant meant by collusion between him and the 7th defendant, the manager of the Kakkat Mana.

11. The properties concerned m the remaining two appeals, A. S. Nos. 208 and 310 of 1964 (by the 3rd defendant in O. S. Nos. 2 and 1 of 1951 respectively), belonged in jemn to a Namboodiri joint family called the Chelamanna Mana from which the Kakkat Mana took them on possessory mortgage under Ext. B12 dated 4-1-1907. The Kakkat Mana in him mortgaged the properly in O. S. No. 1 of 1951 by Ext. A14 dated 20-4-1007 and the property in O. S. No. 2 of 1951 by Ext. A10 dated 5-0-1907. These mortgages were with possession, and the mortgage right came to vest in the 1st defendant in the two suits. These properties were also the subject-matter of the possessory mortgage, Ext. A1 dated 15-9-1911, by the Kakkat Mana in favour of Sundaranunni Variyar whose assigns are the present plaintiffs. Thus, after the exceution of Ext. A1, the position was that the Kakkat Manu was the mortgagee of the properties in both the suits, the 1st defendant the 1st sub-mortgagee and Sundaranunni Variyar the 2nd sub-mortgagee. Tho 3rd defendant having bought the jenm right of the Chelamana Mana instituted a suit, O. S. No. 60 of 1946 of the Subordinate Judge's Court, Ottapalam, for redeeming the mortgage, Ext. B12, in favour of the Kakkat Mana. The Kakkat Mana and the 1st sub-mortgagee, the 1st defendant, were made parties to that suit but not the 2nd sub-mortgagee, Sundaranunni Variyar. That suit ended in the compromise deeree, Ext. E14 dated 10-7-1947, granting redemption, and, in execution thereof, the properties were delivered to the 3rd defendant under Ext. B15 dated 12-9-1947.

As in O. S. No. 213 of 1950, the plaintiffs chose to ignore all the transactions they thought inconvenient, and, admitting that the 3rd defendant was in possession, brought the suits for the redemption of the first sub-mortgages, Exts. A-14 and A-16, and for consequent possession from the bauds of the 3rd defendant, on the footing that as puisne sub-mortgagees they had the right to redeem the first sub-mortgagees -- their case was that the 3rd defendant was in possession under the 1st sub-mortgagee the 1st defendant. The 3rd defendant's defence was that he was in independent possession as the owner of the properties after his purchase of the properties from the mortgagor, he had redeemed the mortgage as also the first sub-mortgages and thus obtained possession from the sub-mortgagee, the 1st defendant, who was in possession. His possession was in no sense possession under the first sub-mortgages now sought to be redeemed. The first sub-mortgages had in fact become extinct by redemption, and there was nothing left for the plaintiffs as puisne sub-mortgagees to redeem. He (the 3rd defendant) had no notice of the second sub-mortgage when he effected the redemption, and the plaintiffs' right if any was to enforce their sub-mortgage. Ext. A1, against the money paid to their mortgagor, the Kakkat Mana, for the redemption of the mortgage, Ext. B12, in its favour. After the redemption of their mortgagor, the Kakkat Mana, the plaintiffs had no manner of right in the properties mortgaged.

12. The learned single Judge who heard the second appeals however rejected this defence. He took the view that what happened by reason of the redemption of the mortgage, Ext. B12, in execution of the decree, Ext. B14, in O. S. No. 00 of 1946, was that the sub-mortgage rights of the 1st defendant passed to the 3rd defendant and that there was no merger of the sub-mortgage rights in the rights of ownership because of the subsistence of the puisne sub-mortgage which remained unaffected by the redemption, the puisne sub mortgagee, Sundaranunni Variyar, not being party to the redemption suit.

13. We take a different view. A sub-mortgage effects a partial transfer of the mortgage right, and, when a mortgage is redeemed in the presence of the sub-mortgagee, the sub-mortgage also is redeemed. The property is freed of the sub-mortgage, and the sub-mortgagee must thereafter look for payment to his mortgagor and to the money paid for the redemption. The test for determining whether the sub-mortgage right remains with the person redeeming as a separate right so as to be subject to redemption by a subsequent sub-mortgagee, would be whether the person redeeming has a right of subrogation in respect of the redeemed sub-mortgage. We have already indicated our view that where, as in these,cases, the person redeeming is the mortgagor there is no such right of subrogation, and hence no question of the mortgagor holding the redeemed sub-mortgage as a separate right. Even if it be that the exclusion of the mortgagor from the right of subrogation by Section 92 of the Transfer of Property Act docs not apply to the redemption effected by the 3rd defendant, either in the view that the word, 'mortgagor' in the section means the original mortgagor and docs not include a purchaser of the mortgaged property, or in the view that Section 92 has no retrospective application, the question would still he one of intention. It does not appear that the 3rd defendant was aware of the subsequent sub-mortgage and there is no reason to think that it was his intention to keep the earlier sub-mortgages alive.

14. A sub-mortgage being a partial transfer of the mortgage security, Order XXXIV, Rule 1 of the Code requires that the sub-mortgagee should be joined as a party to a suit for redemption of the mortgage. But, the non-joinder of a necessary party does not render the decree in the suit a nullify though it might, in some cases, make the decree ineffectual. The decree is good as against the party to the suit, and the redemption effected in a suit against the mortgagee without the sub-mortgagee on the party array, is an effective redemption so far as the mortgagee is concerned. All that can be said is that the redemption cannot affect the rights of the sub-mortgagee. His sub-mortgage remains in force, and, if the redeeming mortgagor is bound thereby, he can enforce his sub-mortgage against the property in the hands of the mortgagor.

15. A redemption effected in a suit brought by the mortgagor against the mortgagee, without the sub-mortgagee on the party array, is effective so far as the mortgagee is concerned, but cannot affect the rights of the sub-mortgagee. It is no bettor but, at the same time, no worse than a redemption effected outside the court to which the sub-mortgagee is not a party. But, whether, after the redemption, the sub-mortgagee has any right which he can enforce against the property in the hands of the mortgagor is an entirely different matter. That depends on whether the mortgagor was aware of the sub-mortgage at the time of the redemption. Once this is appreciated, it will readily be seen that there is no inconsistency whatsoever between statements such as that under Order XXXIV, Rule 1 of the Code a sub-mortgagee is a necessary party to a suit for redemption of the mortgage, and statements such as that registration of the sub-mortgage is not notice thereof to the mortgagor. The former pertains to the question as to whether the redemption by suit affects the rights of the sub-mortgagee; the latter to the question whether a sub-mortgagee has any right at all which he can enforce against the propertyin the hands of the mortgagor after redemption.

16. A sub-mortgage being in the nature of an assignment of the mortgage, the principle underlying the proviso to Sub-section (1) of Section 130 of the Transfer of Property Act (which is only a codification of the preexisting law) has always been applied to the case of a redemption of a mortgage by the mortgagor without the conjunction of the sub-mortgagee. The express notice contemplated by the proviso is not insisted upon the section is, of course, not in terms applicable-- but if the redemption be without notice to the sub-mortgage, then it is valid and effective as against the sub-mortgage, and it is settled law that the mere registration of the sub-mortgage is not notice thereof to the mortgagor since by the redemption, he does not acquire the property transferred under the sub-mortgage or any part thereofsee Explanation I of what might be called the definition of 'notice' in Section 3 of the Transfer of Property Act.

17. In the present suits there is nothing to show that either the Chelamanna Mana, the original mortgagor, or its successor, the 3rd defendant, had notice of this sub-mortgage, Ext. A1, under which the plaintiffs claim, at the time the 3rd defendant redeemed the mortgage, Ext. B12. Indeed there is not even an averment to that effect.

18. It follows from what we have said that the plaintiffs cannot claim possession of the properties in suit from the hands of the 3rd defendant either as subsequent sub-mortgagees redeeming the prior sub-mortgages, Exts. A14 and A16, those sub-mortgages having been extinguished as a result of the redemption of the mortgage by the mortgagor, or in enforcement of their sub-mortgage, Ext. A1, against the mortgagor, the redemption effected by the latter being without notice of their sub-mortgage and therefore valid as against that.

19. In the result we allow these appeals and dismiss the suits with costs throughout as against the appellants, namely, the 5th defendant in O. S. No. 213 of 1950 and the 3rd defendant in O. S. No. 1 of 1951 and in O. S. No. 2 of 1951.


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