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Kurumpakoehika Vs. Narayana Pillai - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtKerala High Court
Decided On
Case NumberSecond Appeal No. 94 of 1956 (E)
Judge
Reported inAIR1959Ker56
ActsTransfer of Property Act, 1883 - Sections 81 and 86; Code of Civil Procedure (CPC) , 1908 - Order 34, Rules 1 and 5
AppellantKurumpakoehika
RespondentNarayana Pillai
Appellant Advocate K.P. Abraham, Adv.
Respondent Advocate M. Madhavan Nair and; N. Krishna Pillai, Advs.
DispositionAppeal dismissed
Cases ReferredVarughese v. Anantha Iyen
Excerpt:
- - to that suit the present plaintiffs as well as chacko the first mortgagee and the latter's assignee, dr. the learned judges observed at page 572: the consequence of redemption by the usufructuary mortgagees was that the mortgage was satisfied and therefore ipso facto the decree and the sale were vacated. ' this passage clearly gives an indication as to what passes to a mortgagee in his proceedings to enforce the mortgage in court sale......mortgagee, b instituted a suit against the mortgagor a and the usufructuary mortgagee y. in that suit a decree was passed that y should redeem b and on his default, b should redeem y. b the first mortgagee was redeemed by y and the mortgagors instituted an action for redemption of the usufructuary mortgage on payment of the amount due on the usufructuary mortgage and the amounts paid by y to b. the learned judges held that when y redeemed b by payment, the equity of redemption revived in favour of the original mortgagor. the learned judges observed at page 572: 'the consequence of redemption by the usufructuary mortgagees was that the mortgage was satisfied and therefore ipso facto the decree and the sale were vacated. the decree for redemption by the usufructuary mortgagees was.....
Judgment:

Vaidialingam, J.

1. The short point for consideration in this Second Appeal is whether the plaintiff-appellants are entitled to exercise their right of redemption. The trial court held that the plaintiffs are entitled to recover possession of the plaint items on depositing certain amounts mentioned in the decree. But on appeal by the plaintiffs, the learned District Judge, Mavelikara, has reversed the decision of the trial court and held that the plaintiffs are not entitled to redeem the suit properties and in consequence, has dismissed the suit. The plaintiffs have come up in Second Appeal to this court.

2. The circumstances under which the plaintiffs instituted the present suit for redemption claiming a right in them are briefly as follows:

3. The suit properties belonged to the second plaintiff and on 10-12-1103 he executed a mortgage in favour of one Chanda Pilla Chacko. On 11-6-1105, the second plaintiff along with his sister, executed a second mortgage as evidenced by Ex. B in favour of one Krishna Pillai, the deceased father of the defendants. In or about 1107 the second plaintiff appears to have sold some of the suit items to his wire the first plaintiff as is evidenced by Ex. A. The first mortgagee Chacko filed a suit O. S. 123/ 1108 District Munsiff's Court, Mavelikara and obtained a decree on his mortgage on 28-2-1108 as evidenced by Ext. 1.

The present plaintiffs were parties to that suit but the second mortgagee namely, the father of the present defendants, was not made a party. It is also seen that Chacko, in pursuance of the decree in his favour, purchased the properties in court-auction and also got delivery on 27-2-1110. Chacko appears to have sold his entire rights in the properties to one Doctor Cheriyan on 26-7-1111 -- Vide Ext. 4.

4. The father of the defendants, the second mortgagee in turn, filed a suit O. S. 594/1112 District Munsiff's Court, Mavelikara on his mortgage covered by Ext. B. To that suit the present plaintiffs as well as Chacko the first mortgagee and the latter's assignee, Dr. Cheriyan were all made parties. It is seen from the decree Ext. 3 that Dr. Cheriyan was declared to have a prior charge over the plaint-items to the extent of Rs. 1,622--1Ch.--4c. and subject to this right of Doctor Cheriyan, a decree was passed in favour of Krishna Pilla, the father of the defendants.

The present defendants, as the legal representatives of Krishna Pilla the decree-holder under Ext. 3, took proceedings by way of debt relief petitions in respect of the amounts due to Doctor Cheriyan and it is seen by the High Court's order Ext- F that they got the necessary relief. As per the final directions of the High Court in Ext. F, the defendants deposited a sum of Rs. 1,135-14 Ch. due to Cheriyan under the decree Ext. 3 and also ultimately got possession of the properties from the legal representatives of Doctor Cheriyan under the Utambadi Ext. 5.

5. The plaintiffs who are the original mortgagors, after all these court proceedings, filed the present suit for redemption of the mortgages and forgetting possession of the properties from the defendants on payments of the amounts paid by the defendants to Doctor Cheriyan as also the amounts due to them under the mortgage Ext. B.

6. This suit was resisted by the defendants on the ground that after the court sale in the proceedings in O. S. 123/1108 District Munsiff's Court, Mavelikara, the plaintiffs have lost all their rights in the suit properties and as such they are not entitled to redeem. Certain other minor contentions also were taken on the merits regarding the amounts due, the value of improvements and also the transfer in favour of the second plaintiff.

7. The learned District Munsiff, in a rather summary way, has held that the plaintiffs are entitled to redeem the suit properties as prayed for and on payment of the amounts mentioned by the plaintiffs. The plaintiffs carried the matter on appeal and the learned District Judge, Mavelikara, after a consideration of the several points arising for decision, has held that after the, court sale in pursuance of the decree in O. S. 123/1108 District Munsiff's Court, Mavelikara, the plaintiffs have lost all their rights in the suit properties and as such, they are not entitled any longer to intervene and redeem theproperties. In this view, the learned Judge setaside the decree and judgment of the trial court and dismissed the plaintiffs suit with costs.

8. In Second Appeal before us, Mr. K.P. Abraham, learned counsel for the appellants, has contended that the view of the lower appellate court is not correct in law. According to him, when the subsequent mortgagee, who was not made a party in the first mortgagee's suit, pays off the first mortgagee, the sale proceedings automatically stand cancelled and in that event the equity of redemption reverts back to the original mortgagors namely, the plaintiffs. As the equity of redemption has reverted back to them, the plaintiffs are entitled to maintain the suit for redemption.

9. On the other hand, Mr. Madhavan Nair, learned counsel for the respondents, contended that the plaintiffs were parties to the suit by the first mortgagee and whatever may be the binding nature of the proceedings in that suit so far as the second mortgagee is concerned, that question has no bearing so far as the plaintiffs are concerned. The plaintiffs were parties to the first mortgagee's suit and they never offered to redeem. Similarly, the plaintiffs were also parties to the second mortgagee's suit and even there, they did not offer to redeem either the first mortgage or the second mortgage.

The proceedings in the first mortgagee's suit has ultimately resulted in the sale of the entire right, title and interest of the mortgagors in favour of the first mortgagee and the plaintiffs have nothing left in them which will give them a right to redeem. Even in the subsequent suit, the second mortgagee had obtained a decree and his only liability was to pay a sum of Rs. 1,622--1 Ch. --4c. to the assignee of the rights of the first mortgagee. So ran the argument of Mr. Madhavan Nair.

10. Mr. Abraham relied upon certain decisions in support of his contention that in circumstances similar to the present case, the equity of redemption reverts back to the mortgagor. He relied upon the decisions in Delhi and London Bank Ltd. v. Bhikari Das, ILR 24 All 185; Wahid-Un-Nissa v. Gobardhan Das, ILR 25 All 388 (FB); Dhana Koeri v. Ram Kewal, AIR 1930 Pat 570 and Gopi Kanta v. Kalikanta, AIR 1950 Assam 59.

The decision reported in ILR 24 All 185 does not, in our opinion, give any assistance regarding the point in dispute. At page 188 the learned Judges pose the question as follows:

'The mortgagor's equity of redemption either passed to the first mortgagees under the sale made to them, or it did not. If it did pass to them, they acquired it at the auction sale held in execution of their decree, as purchasers and not as mortgagees. If it did not pass to them the equity of redemption remains outstanding in the mortgagor who has not been made a party to this suit.'

Having made these observations, the learned fudges do not give any final decision on this point but decided the case on other considerations. But this decision itself, in Our opinion, makes it quite clear that in certain sales at least the mortgagor's equity of redemption also passes to the mortgagee who files the suit and ultimately purchases the property in pursuance of his decree.

11. The next decision relied upon by the learned counsel is the one in ILR 25 All 388 (FB). Even there, the main point that is discussed is about the right of a puisne mortgagee who has not been made a party in the suit by the prior mortgagee. The whole discussion centres round as to how exactly the rights of the subsequent mortgageeare to be worked out in the latter's to which the prior mortgagee and the auction-purchaser, in pursuance of the prior mortgagee's decree for sale, are to be worked out. This decision, in our opinion, does not help us in any way.

12. The next decision is the one in AIR 1930 Pat 570. That was a case where A gave an usufructuary mortgage of land to Y. Prior to that A had executed a simple mortgage to B. B took proceedings on his mortgage without impleading Y the usufructuary mortgagee and in execution of his decree purchased the suit properties. As B could not get possession from the usufructuary mortgagee, B instituted a suit against the mortgagor A and the usufructuary mortgagee Y.

In that suit a decree was passed that Y should redeem B and on his default, B should redeem Y. B the first mortgagee was redeemed by Y and the mortgagors instituted an action for redemption of the usufructuary mortgage on payment of the amount due on the usufructuary mortgage and the amounts paid by Y to B. The learned Judges held that when Y redeemed B by payment, the equity of redemption revived in favour of the original mortgagor. The learned Judges observed at page 572:

'The consequence of redemption by the usufructuary mortgagees was that the mortgage was satisfied and therefore ipso facto the decree and the sale were vacated. The decree for redemption by the usufructuary mortgagees was meaningless unless it was based on the assumption that the sale had gone; and the effect of the redemption was that the equity came again into the hands of the original mortgagor because the second mortgagees paid only for the first mortgage. Barhamdeo Rai could have got in the whole of the estate by redeeming the second mortgagees, but if he did not take that course, then he fell back on his mortgage and thus revived the equity in the original mortgagor. The case is then governed by Section 74, T. P. Act, and the second mortgagee obtains the rights and powers of the first mortgagee by redeeming him.'

It may be mentioned that Barhamdeo Rai referred in this passage is the simple mortgagee B. Though no doubt, prima facie this passage appears to support the contention of Mr. Abraham, in our opinion, it does not apply to the present case. The learned Judges specifically say that it was open to Barhamdeo Rai (Party B) to have got the whole estate by redeeming the second mortgagees and that he did not take that course and chose to fall back on his mortgage and in that event, the equity of redemption revived in the original mortgagor.

This is really an instance probably where the first mortgagee (Party B) has not purchased the equity of redemption of the mortgagor in execution of his decree or gave up his rights as purchaser of the equity of redemption and relied only on his mortgage. In any event, in the case cited, the mortgagee chose to rest his case only as a mortgagee who desired to be redeemed' and did not at any time put forth his title as purchaser of the equity of redemption.

Therefore, the learned Judges had no occasion to consider a case where the rights of the mortgagor have been foreclosed by a decree obtained by the first mortgagee as in this case. If the decision in the Patna case cited above is considered to lay down the law regarding the reverting of the equity of redemption in the original mortgagors in all such cases, we must express our respectful dissent from that decision. The learned Judges have not considered really the scope of Order XXXIVC. P. C., and the exact effect of a purchase by the first mortgagee in a properly instituted suit against his mortgagors.

13. The last decision relied upon by Mr. Abraham is the one in AIR 1950 Assam 59. In this case, it will be seen that the correctness of the decision in AIR 1930 Pat 570 referred to above was questioned by the learned counsel for the respondents and the learned counsel relied upon the decision of the Allahabad High Court in ILR 24 All 185 to the effect that a mortgagee purchasing the property in a suit on his mortgage obtains not only the rights as mortgagee in the property but also the rights of the mortgagor in the property namely, the equity of redemption.

The learned Judges held that they are prepared to agree with the decision in the Patna case but came to the conclusion that the mortgagors before them have no subsisting interest in the properties. What we said regarding the Patna case applies to this decision also. There is no independent discussion of the question and the learned Judges have merely expressed their approval of the Patna case notwithstanding the fact that such a question did not arise before the learned Judges in the Assam case.

14. Mr. Abraham finally relied upon the note in Mr. Mulla's Transfer of Property Act, 4th edition. At page 567 it is stated:

'If the puisne redeems a prior mortgagee who has brought the property to sale without joining him as a party, he acquires the rights of the prior mortgagee and steps into his shoes by subrogation. In that case, it has been held that the mortgagor's right to redeem revives.'

Among the authorities cited in the foot-note 'O' in support of this proposition are the decisions of the Allahabad High Court in ILR 24 All 185 and Patna High Court in AIR 1930 Pat 570. We have already considered the said Allahabad decision and we also expressed the view that that case does not lay down any such proposition. On the other hand, that decision even contemplates cases where the first mortgagee becomes the owner of even the equity of redemption in proceedings taken in execution of his decree.

15. Regarding the Patna decision relied upon by Mr. Mulla, we have also expressed our opinion. Therefore, with great respect to the author, we are not able to, accept the note as a correct statement of the law.'

16. Mr. Madhavan Nair, learned counsel for the respondents, has relied upon the decision of the Privy Council in Jadunath v. Parameswar, AIR 1940 PC 11'. At page 14 of the reports their Lordships observed as follows:

'While the purchaser at an execution sale under a mere money decree gets on more than the right, title and interest of the judgment-debtor at the date of the sale, the purchaser under a mortgage decree gets the right, title and interest in the mortgaged subjects which the mortgagor had at the date of the mortgage and charged thereby. Buying the mortgaged property free from incumbrances he gets, as it is sometimes put, the title both of the mortgagee and of those interested in the equity of redemption.'

This passage clearly gives an indication as to what passes to a mortgagee in his proceedings to enforce the mortgage in court Sale.

17. Mr. Madhavan Nair also referred us to the Full Bench decision of the Travancore High Court reported in Varughese v. Anantha Iyen, 1944 TLR 1. The learned Chief Justice has very exhaustively considered the rights of a prior mortgagee who has purchased the property in a suit on his mortgage without the second mortgagee on record and also the rights of the second mortgagee in his separate suit to enforce his mortgage. In fact, in that case it was contended by the puisne mortgagee that the decree and execution proceedings in the prior mortgagee's suit were void and of no effect. In dealing with the contention that the decree and execution sale in favour of the first mortgagee are void so far as the second mortgagee is concerned, the learned Chief Justice at page 15 observed as follows:

'A puisne mortgagee's rights are subservient to the first mortgage and his right over the equity of redemption is no more than the power to bring to sale, subject to the first mortgagee's rights, the identical properties which the first mortgagee may also bring to sale .................. He may be entitled to say that his rights ought not to be prejudiced by a proceeding in Court to which he was not a party .................... But he cannot bepermitted to say that the proceedings taken by the prior mortgagee against the mortgagor in his absence amounted to a mere nullity.'

18. In discussing the position of a court-auction-purchaser in execution of a mortgage decree by the first mortgagee, the learned Chief Justice observed at page 25 as follows:

'After the two hypothecations, the possession of the mortgaged properties remained with the mortgagor ................ He could have subsequently sold, assigned or otherwise dealt with the equity of redemption with all the possessory rights to a third party. There is nothing to prevent the mortgagor from transferring the benefit of his possession to the mortgagee for a consideration. The court-auction-purchaser in a suit instituted by the first mortgagee cannot be placed in a worse position than a private transferee of the mortgagor of his rights in the mortgaged properties.'

These observations, in our opinion, make it clear that unless the equity of redemption is specifically excluded, either the first mortgagee-purchaser or the auction-purchaser in the sale on the first mortgage obtains the equity of redemption also.

19. If the equity of redemption has passed out of the mortgagor to the first mortgagee, it is not possible to understand how there could he a revival of such a right in the mortgagor when the subsequent mortgagee pays off the first mortgagee.

20. The first mortgagee has become the purchaser of the equity of redemption also which was with the mortgagor namely, the plaintiffs. In the suit by the second mortgagee, the plaintiffs who were parties, did not take any steps or express their intention to redeem the mortgages. There is a specific finding to the effect that the second mortgagee will have a decree as prayed for by him subject to his paying a sum of Rs. 1,622--1 Ch -- 4c. to Doctor Cheriyan, the successor-in-interest of Chacko. In view of all these circumstances, it is not possible for us to accept the contention of Mr. Abraham that the equity of redemption revives in favour of his clients when the second mortgagee has paid off Doctor Cheriyan.

21. In the result, the Second Appeal fails and is dismissed with costs throughout.


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