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Narayanan Namboodiri Vs. Parukutty and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKerala High Court
Decided On
Case NumberS.A. No. 931 of 1976-A
Judge
Reported inAIR1982Ker53
ActsTransfer of Property Act, 1882 - Sections 54 and 92
AppellantNarayanan Namboodiri
RespondentParukutty and ors.
Appellant Advocate T. Unnikrishna Menon, Adv.
Respondent Advocate P.N. Krishnakutty Achan,; K. Vijayan and; N.N. Sugunapal
DispositionAppeal allowed
Cases ReferredKunhami v. Pokker
Excerpt:
.....- sections 54 and 92 of transfer of property act, 1882 - whether appellant-plaintiff entitled to charge decree with respect to entire amount claimed in plaint - principle of salvage lien applicable to present case - puisne mortgagee obtained partial discharge of prior mortgage without redeeming that mortgage to save property from being sold for realisation of installments of mortgage amount fallen due - such puisne mortgagee entitled to charge for amount spent by him to save property from being sold on application of principles of salvage lien - held, plaintiff's claim not barred on assumption that plaintiff was not entitled to charge decree. - - the principle of salvage lien is a concept of wider application than the doctrine of subrogation as stated in section 92 of the transfer..........he had a subsisting interest in the property, being a puisne mortgagee; and that, therefore, a charge decree with respect to the entire amount claimed in the plaint ought to have been granted to the appellant-plaintiff by the courts below. sri. p. n. krishnankutty achan, the counsel for respondents 1 to 5, on the other hand sought to support the decision of the courts below, contending that as a puisne mortgagee the appellant-plaintiff's interest confined to the realisation of the money due to him under the simple mortgage executed in his favour; that his rights over the plaint schedule property were subject to the rights of the bank over the property as a prior mortgagee; that he had already filed a suit and obtained a decree for sale of the plaint schedule property; and that it was.....
Judgment:

K. Bhaskaran, J.

1. Though the amount involved is rather small, an important question of law relating to the application of the principles of salvage lien is raised in this second appeal. The plaint schedule property belonged to one Mariniuthu, the predecessor-in-interest of respondents 1 to 5 (defendants 1 to 5). The said Marimuthu had mortgaged it to the appellant (plaintiff) for Rs. 3500/- as per document No. 1963 of 1964 of Vadakkancherry Registry Office. The appellant had filed O. S. No. 91 of 1969 of the Vadakkancherry Munsiff's Court as a mortgagee and obtained a decree for sale of the property. Prior to the mortgage executed in favour of the appellant the said Marimuthu had executed a mortgage of the same property in favour of the Cochin Land Mortgage Bank (the Bank). The said Marimuthu not having paid two instalments due to the Bank, it initiated proceedings under the Revenue Recovery Act for the realisation of the amount due to it by sale of the property. The appellant paid a sum of Rs. 700/- on 15-3-1969 and a sum of Rs. 834/- on 3-11-1969 to wipe off the arrears towards the two instalments in default, thus averting the sale. The appellant thereafter filed O. S. No. 118 of 1972 in the Munsiff's Court, Vadakkancherry for the recovery of the amounts paid by him to the Bank for discharging the liability of the respondents with interest and costs, claiming a charge on the property. Repelling the contentions of the respondents the trial Court found that the amounts were actually paid by the appellant, that Court, however, held that the appellant was not entitled to a charge as he was only entitled to a personal decree for the reimbursement of the money paid by him on behalf of the respondents. He was given a decree for Rupees 834/- paid on 3-11-1969 with interest thereon against the assets of the deceased Marimuthu, if any, in the hands of respondents 1 to 5. and dismissed the suit for that part of the claim relating to the amount of Rs. 700/- paid on 15-3-1969, holding that it was barred by limitation. In A. S. No. 239 of 1974 the District Judge of Trichur has confirmed the decision of the trial Court; hence this second appeal.

2. Sri. T. Unnikrishna Menon, the counsel for the appellant-plaintiff, contended inter alia that the amounts paid by the appellant were for discharging the instalments defaulted by the respondents for averting the sale of the property and the consequential loss that might have been fallen on all concerned; that this was done at a time when he had a subsisting interest in the property, being a puisne mortgagee; and that, therefore, a charge decree with respect to the entire amount claimed in the plaint ought to have been granted to the appellant-plaintiff by the Courts below. Sri. P. N. Krishnankutty Achan, the counsel for respondents 1 to 5, on the other hand sought to support the decision of the Courts below, contending that as a puisne mortgagee the appellant-plaintiff's interest confined to the realisation of the money due to him under the simple mortgage executed in his favour; that his rights over the plaint schedule property were subject to the rights of the Bank over the property as a prior mortgagee; that he had already filed a suit and obtained a decree for sale of the plaint schedule property; and that it was subsequent to that the appellant had paid the amounts towards the two instalments due to the Bank for which he was entitled only to a personal decree for reimbursement, which would fall squarely under Section 69 of the Indian Contract Act which reads as follows:--

'69. A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it is entitled to be reimbursed by the other.

3. The Privy Council had occasion to consider the application of the principles of salvage lien to cases arising from India, in Monohar v. Hazarimull, (AIR 1931 PC 226). Whether the holder of a final decree for sale of the mortgaged property was entitled to maintain a separate suit to enforce a further charge against such property for payments made to prevent a sale for arrears of revenue which fell due after the passing of the final decree and while execution proceedings were pending was the question that arose for decision in that case. After having referred to an earlier decision of the Board in Nugenderchunder Ghose v. Sreemutty Kaminee Dossee (1800) 11 Moo Ind App 241 : 8 WR 17 (PC), in reversal of the decision of the Calcutta High Court (AIR 1930 Cal 151) the Privy Council held:

'As regards the present question, the only effect of the preliminary decree was to make the mortgaged property security for the judgment debt pending realisation by sale as provided in the decree, and, pending such realisation, the plaintiff, as a secured decree holder, was just as much interested in the preservation of the security as he had been under his mortgage while it subsisted, and their Lordships see no reason why he should not be entitled, in accordance with the opinion of the Board in the case already cited, to a first charge in respect of the payments of revenue made after the passing of the final decree, which were really in the nature of salvage payments on behalf of all persons interested'.

The Madras High Court in Swaminatha Iyer v. Ramanatha Iyer, (AIR 1943 Mad 573, following the earlier decision of Varadhachariar and Stodart JJ., in Chen-galraya Reddi v. Udai Kavoor (71 Mad LJ Sup 1 : AIR 1936 Mad 752) held that the doctrine of salvage lien would apply to a subsequent mortgagee who paid the fee for the renewal of the kanom and that he was entitled to a prior charge in respect of the sum which he paid. It was observed in that judgment at page 577 of the report as follows:--

'The application of the doctrine of salvage lien does not depend upon the question whether the demand which was not a charge and a first charge on the property. If it was a first charge, the doctrine of subrogation also would be helpful. If all that is relied upon is the rule of subrogation, then the demand which was paid would have to be a charge on the property. By the doctrine of subrogation, the person whose money goes to pay off an earlier demand due to another person gets only the rights of the person whose dues were paid off with his money. But the doctrine of salvage lien which is applied to cases to this kind is based upon wider grounds.'

4. In a suit filed by the landlord for eviction of the tenants in possession under a marupet, a sub-tenant who was im-pleaded in the suit, deposited the arrears of rent payable by the tenants to the landlord from time to time in order to ensure that the eviction of the tenants continued to be stayed by Madras Act 27 of 1916 and Madras Act 24 of 1949 conditionally on deposit of arrears of rents prescribed to avoid his sub-tenancy coming to an end in the event of eviction. The sub-tenant who deposited the rent in the eviction suit, as stated aforesaid, subsequently sued to recover the sum of money which he had deposited in that suit. The contesting defendants contended that the suit was barred by limitation having been filed more than three years after the date of the last deposit and that no charge was allowable. Repelling these contentions Velu Pillai J., who heard the second appeal, in Kunhami v. Pokker, (1964 Ker LT 315), following the decision cf the Madras High Court in Swaminatha Iyer v. Ramanatha Iyer, (AIR 1943 Mad 573), upheld the decree granted by the courts below in favour of the plaintiff.

5. Sri. Achan relied on a Division Bench ruling of the Rangoon High Court in Ma Lon v. Ma Nyo, (AIR 1924 Rang 204) to contend for the position that inasmuch as the plaintiff claimed to have made only some payments in partial discharge of the liability of the respondents to the Bank, without redeeming the mortgage, he was not entitled to be sub-rogated to the position of the prior mortgagee, as partial discharge of the debt under a mortgage by a subsequent mortgagee would not entitle him to step in the shoes of such prior mortgagee. And the plaintiff based his claim for charge merely under Section 92 of the Transfer of Property Act, this contention would have been accepted and his claim for a charge decree rejected. The principle of salvage lien is a concept of wider application than the doctrine of subrogation as stated in Section 92 of the Transfer of Property Act and is capable of covering wider ranges of cases than what the principles of conventional subrogation could comprehend inasmuch as even in cases where the doctrine of subrogation is not strictly found applicable, as an equitable remedy the doctrine of salvage lien may apply where the Court is satisfied that the person who made the payment on behalf of another had a subsisting interest in the subject-matter and that but for his making the payment, the interest of the person on whose behalf the amount was paid together with that of others, if any, who had interest in the property would have been destroyed. Two other decisions cited by Sri Achan to support the judgments and decrees of the Courts below are: (1) Bhubneshwari Kuer v. Manir Khan (AIR 1928 Patna 641) and (2) Hriday Narain v. Haricharan, (AIR 1952 Patna 81). So far as the first of these cases, namely, Bhubneshwari Kuer v. Manir Khan (AIR 1928 Patna 641) is concerned, it was a case of one co-sharer paying the Government revenue for the whole estate in order to save the estate from being sold; and the question was whether the payment so made shall be treated as a charge on the property of the co-sharer. The facts in this case are, as already noticed, different from those of the Patna case, and it is not, therefore, necessary for me, in this second appeal, to examine the correctness of the principle laid down by that Court in a different context on different set of facts. As far as the second of these decisions, namely, Hriday Narain v. Haricharan (AIR 1952 Patna 81) is concerned, it was a case in which the relief on the principle of salvage lien was claimed by one who had absolutely no interest in the property when the payment to avert the sale was made, the claim having been based only on an advance made to the defendant to discharge a liability in consideration of which subsequently a mortgage was granted to him (who advanced the money). The correctness of the observations made in that case also, therefore, does not call for examination by this Court in this case based on totally different set of facts.

6. Respectfully following the view expressed by the Privy Council in Monohar v. Hazarimull (AIR 1931 PC 226), the Madras High Court in Chengal-raya Reddi v. Udai Kavoor (AIR 1936 Mad 752) and Swaminatha Iyer v. Rama-natha Iyer (AIR 1943 Mad 573) and this Court in Kunhami v. Pokker (1964 Ker LT 315) I would hold that the principle of salvage lien squarely applies to the case. The legal position that emerges from the above discussion, therefore, is that in a case where a puisne mortgagee who obtains a partial discharge of a prior mortgage, without redeeming that mortgage, to save the property from being sold for realisation of the instalments of the mortgage amount fallen due, such puisne mortgagee is entitled to a charge for the amount spent by him to save the property from being sold, on the application of the principles of salvage lien though, in the strict sense, right to subrogation under Section 92 of the Transfer of Property Act may not be available to that puisne mortgagee. The. Courts below, therefore, went wrong in holding that the claim for the earlier among the two payments made by the plaintiff was barred by limitation on the assumption that the plaintiff was not entitled to a charge decree.

7. The result, therefore, is that the second appeal is allowed and in modification of the judgments and decrees of the Courts below the plaintiff is given a decree, charged on the plaint schedule property, for the amount claimed in the plaint with interest at 6% from the date of suit. The plaintiff will also be entitled to his costs throughout.


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