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Narayana Kekunnaya and anr. Vs. Meloth Chathukutti Nambiar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Trusts and Societies
CourtKerala High Court
Decided On
Case NumberA.S. No. 1168 of 1953 (M)
Judge
Reported inAIR1959Ker94
ActsTrusts Act, 1882 - Sections 90; Transfer of Property Act, 1882 - Sections 76; Kerala Revenue Recovery Act - Sections 59
AppellantNarayana Kekunnaya and anr.
RespondentMeloth Chathukutti Nambiar and ors.
Appellant Advocate S. Narayanan Potti, Adv.
Respondent Advocate V.P. Gopalan Nambiar,; B. Pocker and; Srinivasa Rao,
Cases ReferredK. Achan v. K.C. Velayudhan
Excerpt:
property - mortgage - transfer of property act, 1882 and kerala revenue recovery act - mortgagees purposely and wilfully committed default in payment of revenue and purchased properties in revenue auction - mortgagees bound to hold property with all its liabilities in relation to mortgagors - mortgagor entitled to redeem mortgaged property. - - their contention in brief was that the properties had been sold for default of payment of revenue under the revenue recovery act and the plaintiff is barred from challenging it under section 59 of the said act and the sale having become absolute, the plaintiffs' tarwad have lost the equity of redemption in the b schedule property as well. but he held that it was not open to the plaintiffs to challenge the validity of the sale, in separate.....c.a. vaidialingam, j. 1. the pfaintiffs, whose suit o. s. 212/1951 for redemption of the mortgage after taking an account has been dismissed by the learned subordinate judge of south kanara, are the appellants before us.2. the plaintiffs' case was that the properties mentioned in the schedules a to c of the plaint originally belonged to a tarwad known as the kuikolari tarwad. the second plaintilf is the present karnavan of the said tarwad. the properties were usufructuarily mortgaged on 4-9-1888 by the tarwad for rs. 2000/- to one meloth rama of the tarwad of defendants 1 and 2, for a period of 30 years as evidenced by ex. bl. subsequently, for the aggregate amounts then due, the mortgagors executed, on 26-9-1909, a usufructuary mortgage for rs. 5,981/- vide ex. al. the mortgage under ex......
Judgment:

C.A. Vaidialingam, J.

1. The pfaintiffs, whose suit O. S. 212/1951 for redemption of the mortgage after taking an account has been dismissed by the learned Subordinate Judge of South Kanara, are the appellants before us.

2. The plaintiffs' case was that the properties mentioned in the schedules A to C of the plaint originally belonged to a tarwad known as the Kuikolari tarwad. The second plaintilf is the present Karnavan of the said tarwad. The properties were usufructuarily mortgaged on 4-9-1888 by the tarwad for Rs. 2000/- to one Meloth Rama of the tarwad of defendants 1 and 2, for a period of 30 years as evidenced by Ex. Bl. Subsequently, for the aggregate amounts then due, the mortgagors executed, on 26-9-1909, a usufructuary mortgage for Rs. 5,981/- vide Ex. Al. The mortgage under Ex. At was for a period of 40 years from the date of the expiry of the 30 years mentioned in Ex. B1.

According to the plaintiffs, the plaint A and C schedule properties were in the possession of the mortgagors themselves as lessees and the B schedule items alone were in the possession of the mortgagees. On 25-5-1950, the properties comprised in A and B schedules were sold to the first plaintiff under Ex. A2 with a direction to redeem the mortgage under Ex. Al. The C schedule properties were retained by the tarwad of the mortgagors. Therefore, the suit was filed for redemption, after making the necessary adjustments under the provisions of the Madras Agriculturists Relief Act, the first plaintiff claiming redemption of the A and B schedule pronerties and the second plaintiff of G schedule items.

3. The plaintiff also contended that the sale of the B schedule properties under the Revenue Recovery Act due to the default of the mortgagees is not binding on the plaintiffs and in any event, they claim compensation for toss of the property.

4. Defendants 1 and 2 contended that the plaintiffs have lost their right to redeem the A and C schedule properties, in view of the decision of the District Munsiff's Court, Kasaragode in O. S. 243/1922. That was a suit by the Karanavan of the mortgagee tarwad praying for a decree directing the defendant therein the Karnavan of the mortgagor tarwad to surrender possession of the properties with mense profits. In spite of contest, the suit was decreed and the decree has been executed and the properties had been sold and the sale has been confirmed on 3-3-1936, the decree-holder mortgagee being the purchaser. Therefore, the plaintiffs have lost all rights in respect of A and C schedule properties.

5. So far as the B schedule prooerties are concerned, defendants 3 and 4 contested the plainliffs' right to redeem those items. Their contention in brief was that the properties had been sold for default of payment of revenue under the Revenue Recovery Act and the plaintiff is barred from challenging it under Section 59 of the said Act and the sale having become absolute, the plaintiffs' tarwad have lost the equity of redemption in the B schedule property as well.

6. Regarding A and C schedule properties, the learned Subordinate Judge held that they were the subject matter of O. S. 243/1922. He held that it was the second plaintiff who represented the mortgagor tarwad in execution proceedings in the said suit which ultimately resulted in the sale of the properties in favour of the mortgagees-decree-holders. No doubt, the learned Judge held that the application for execution under which the properties were sold, was barred by limitation.

But he held that it was not open to the plaintiffs to challenge the validity of the sale, in separate proceedings like the present suit and that they should have challenged the sale in the execution proceedings in O. S. 243/1922 itself. Therefore, he held that the plaintiffs have no right to redeem the items comprised in plaint-schedules A and C.

7. So far as the B schedule items are concerned, the learned Judge held that the fraud and collusion set up by the plaintiffs regarding the Revenue sale have not been substantiated by them. The court held that even if the mortgagees had committed default in payment of the revenue, it was still open to the plaintiffs to have paid the same and averted the proceedings by way of sale under the Revenue Recovery Act. The learned Judge also took the view that Section 59 of the Revenue Recovery Act is an effective bar against the plaintiffs' right to institute the present proceedings.

8. He also held that the plaintiffs are not entitled to recover any damages from the mortgagees in respect of the sale caused by their default in paying the revenue. The learned Judge also held that none of the defendants have proved their right to get the value of improvements,

9. On all these grounds, the learned Judge dismissed the suit directing the parties to bear their own costs.

10. In appeal before us, the learned counsel Mr. S. Narayanan Potti has attacked the findings of the learned Judge as regards all the items.

Regarding items A and C, his contentions were two fold : (I) that the last application for execution by which the properties were sold in O. S. 243/1922, is barred by limitation and as such, the sale and purchase in pursuance of the last execution petition are all illegal and void; and

2. that there was no proper representation of the mortgagor-tarwad in the execution proceedings.

11. Taking the first contention, the decree in O. S. 243 of 1922 was passed on 19-6-1923. Mr. Potti has taken advantage of the finding of the learned Judge that the last execution application namely, R. E. P. 681/1935 was filed on or after 25-6-1935 and therefore, it is barred by limitation. Mr. V.P. Gopalan Nambiar, learned counsel for defendants 1 and 2 who opposed the plaintiffs' appeal regarding these items, has challenged the conclusions of the learned Judge on this point and has submitted that the last execution petition R. E. P. 681 of 1935 was filed on 15-8-1935 well within the period of limitation. After hearing the contentions of both the learned counsel, we are of the view that the finding of the learned Judge on this point is not correct.

12. As stated earlier, the decree in the suit O. S. 243 of 1922 was on 19-6-1923. Ex. A4, the notification issued regarding the summer vacation of that court, shows that the Kasaragode District Munsiff's Court is closed for six weeks from Saturday the 11th May to Friday the 21st June, 1935 both days inclusive. There is no dispute that Saturday the 22nd June, 1935 was also a Holiday and the court re-opened on 23-6-1935.

No doubt, the original records regarding these proceedings are not available and an extract of the suit register has been filed as Ex. A10. The learned Judge evidently looked into the original register and found some tampering regarding the dates pertaining to R. E. P. 681/1935. He also took into account that two earlier execution petitions R, E. P. 681/1935 and 677/1935 in other suits were filed on 25-6-1935.

This execution petition in O. S. 243/1922 bearing a later number namely, 681/1935 must have been filed later than R. E. P. Nos. 671 and 677/1935 which were filed on 25-6-1935, On this reasoning, the learned Judge came to the conclusion ' that R. E. P. 681/1935 must have been filed only on 25-6-1935 or later, though the court re-opened on 23-6-1935. This reasoning of the learned Judge does not at all appeal to us. In our opinion, the learned Judge should not have looked into R. E. P. 671 and 677 because we have absolutely no evidence before us to show whether there were any defects in those applications.

Further, even if an application had been filed earlier and if there were any defects, it would not have been numbered till the curing of the defects; whereas all other applications in which there are no defects, though filed subsequently, would be numbered almost immediately. Therefore, the fact that the applications filed on 25-6-1935 were given numbers as 671/1933 and 677/1933 is not a sound reason to hold that the present application, which has been given a later number, must have been filed either on 25-6-1935 or later.

13. Further, we do not have the benefit of looking into the original suit register extract ourselves. The learned Judge again committed a mistake in looking into the original without marking it at least as a court exhibit having it on record. Further, the conclusion arrived at by him that there must have been tampering in the dates regarding R. E. P. 681/1935 is not also justified as he had no materials before him to arrive at such a conclusion. A conclusion regarding tampering cannot certainly be arrived at in such a summary way.

14. But so far as the evidence on record goes, We have got the suit register extract, Ex. A10. That gives the several execution application filed, together with the dates of the application, and the reliefs claimed therein. It is clearly seen from Ex. A10 that R. E. P. 681/1935 has been filed on 15-6-1935 and there is also a further endorsement on 16-6-1935 about notice to be issued. That an execution application can be filed during the holidays notwithstanding the closure of the court is also dear from a reading of paragraphs 2 and 3 of Ex. A4.

Therefore, in the absence of any further positive evidence on the plaintiffs' side, we have to proceed at this distance of time on the basis that the entries in the suit register extract, Ex. A10 are correct. They show that R. E. P. 681/19-35 was filed on 15-6-1935 and there is also the endorsement about the issue of notire on 16-6-1935. If the application had not been filed on 15-6-1935, the endorsement about notice on 16-6-1935 will be absolutely meaningless.

Therefore, it is clear that the execution application was filed on 15-6-1935 well within the period of limitation and not on or after 25-6-1935, as found by the learned Judge. In this view, it is unnecessary for us to consider the other question as to the validity of a court sale, if an application for execution is barred by the law of limitation.

It is also unnecessary for us to consider the further question as to whether the plaintiffs should have challenged the execution proceedings in O, S. 243/1922 under Section 47 C. P. C., as held by the learned Judge, or as to whether they could challenge by way of a separate suit, like the present one, as contended by the learned counsel for the appellants. We do not find any fraud or misrepresentation made by the plaintiffs about their execution application being within time when it was really out of time. But we have held that their application was well within the period of limitation.

15. The second contention regarding the A and C schedule properties is that at the time of the execution proceedings there was no proper representation of the mortgagor-tarwad. In the plaint, there is only a very bold allegation in paragraph 9 to the effects that in the execution proceedings there has been no proper or legal representation of the family of the mortgagors. No further particulars as to why or how there was no proper representation has been given in the plaint. This will become very important because it is only for the first time sought to be made out in the oral evidence adduced by the plaintiffs that there was no proper representation of the tarwad.

In paragraph 6 of the written statement of the first defendant, it has been definitely stated that the second plaintiff herein was the then Karnavan at the time of the execution proceedings and he was impleaded in such capacity and he represented the tarwad. Again in paragraph 7 of the written statement, it is stated that the allegation of the plaintiffs that there was no. proper representation is not correct especially when the second plaintiff himself was a party as Karnavan of the tarwad in those proceedings.

16. In view of this definite allegation about the second plaintiff being the then Karnavan of the tarwad and of his having been brought on record as such in the execution proceedings, one would have expected the second plaintiff to go into the witness-box and establish facts to controvert the statements of the defendants. But the second plaintiff, who is about 70 years of age and who could have very well given very useful information about the various Karnavans of the family and more especially about the Karnavan at the time of the execution proceedings, did not go into the witness-box; whereas he was content to rely upon the evidence of Pw. 1.

The learned Judge has considered the material evidence on this point and come to the conclusion that the second plaintiff must have been the then Karnavan who was brought on record and this finds support from Ex. A5. The learned Judge has also very severely commented about the evidence of Pw. 1 who was not at all able to give any cogent evidence on this point.

The learned Judge has accepted the oral evidence adduced on the side of the defendants regarding the proper representation of the plaintiffs' tarwad, especially the evidence of Dw. 1. More significant than that is the fact that Pw. 1 admitted that there is a geneology of their family prepared at an undisputed time and the ages of the various members are given there. He also admitted that his brother Choyi has got it and that it will show the various persons who would have been the Karnavans of the family on various occasions.

17. The non-production of this very important document which is admittedly existing as per the admissions of Pw. 1 himself, is, in our opinion, very fatal to the case of the plaintiffs. They have purposely suppressed the said geneology as, if produced, it would not be in favour of the case that the plaintiffs are now trying to put up before court.

18. Mr. Potti has not been able to show how exactly the reasoning of the learned Judge on this point is not supported by the evidence on record. For all these reasons, we accept the finding of the learned Judge on this point that the plaintiffs' tarwad was properly represented at the time of the execution and sale proceedings in O. S. 243/1922 and that they do not suffer from any infirmity or lack of proper representation.

19. Both the contentions of Mr. Potti regarding A and C schedule properties fail and it follows that the plaintiffs are not entitled to redeem the properties comprised in the plaint A and C schedules. Therefore, the suit will have to be dismissed so far as these two schedules are concerned. The decree and judgment of the learned Judge regarding plaint A and C schedule properties are hereby confirmed and the appellants will pay half the costs of the appeal to the defendants 1 and 2 in this court.

20. Coming to B schedule properties, there is no dispute that the items comprised in this schedule were in the possession of the mortgagees and there is also no dispute that the mortgagees are bound to pay the revenue due upon the property. There is further no dispute that the Patta for the properties also was transferred in the name of the mortgagees. It is in evidence that the mortgagees defaulted to pay the revenue of Rs. 5/- due to the Government and in consequence, the properties of the extent of about 1 acre 25 cents of wet land was sold by the Government under the Revenue Recovery Act for the recovery of arrears of Rs. 5/-.

As the Patta stood in the name of the mortgagees, no notice was issued to the mortgagors. The properties appear to have been purchased by one Purakkad Kunhambu Nair for Rs. 155/- as is evidenced by sale certificate, Ex. B15 dated 12-11-1931. It is also seen that on 26-11-1931 this Kunhambu Nair transfers this property under Ex. B17 to the 4th defendant who is a cousin sister of the second defendant, the present Karnavan of the mortgagee-tarwad.

21. It is the case of the plaintiffs that the mortgagees, with the fraudulent intention of knocking off these properties, purposely defaulted in paying the revenue and thus had it sold under the Revenue Recovery Act. The mortgagees have purchased it nominally in the name of their Kariasthan Kunhambu Nair who has, within a few days of getting the sale certificate, resold it in favour of 4th defendant, a member of the family of the second defendant.

Therefore, it is virtually a purchase by the mortgagee-tarwad and as such, they hold the property again in trust for the mortgagors with all its orginal liability to be redeemed.

22. On the other hand, it is the contention of the mortgagee-tarwad that because of difficulty of funds, the tarwad could not pay revenue and that they have not committed any wilful default. Further, they also disputed that Kunhambu Nair was their Kariasthan and in any event, they said that the 4th defendant has purchased it on her own account from a stranger and that the mortgagees have no right to the same. Further, they also took up the contention that the plaintiffs' claim is barred under the Revenue Recovery Act, they having not filed a suit as contemplated under Section 59 of the Revenue Recovery Act,

23. The 4th defendant, the purchaser under Ex. B17, has filed a written statement contending that she has purchased the property from Kunhambu Nair bona fide and that she was not a party to any fraud. She also stated that she has executed a mortgage in favour of the third defendant.

24. The third defendant has also contested the claim on the ground that the purchase by the 4th defendant is a genuine purchase and that she has executed a mortgage in his favour regarding the portion of the amount still outstanding. He has further stated that in case of redemption of B schedule property, he is entitled to the proportionate mortgage amount and Rs. 1,000/- as value of improvements.

25. The learned Judge has non-suited the plaintiffs on the ground that they have not taken the necessary proceedings to challenge the revenue sale under Section 59 of the Revenue Recovery Act. The learned Judge has also proceeded on the basis that it was open to the mortgagors themselves to have paid up the arrears of revenue and prevented sale of the property. There is also the reasoning of the learned Judge that the mortgagees' family does not appear to nave been benefited by the revenue sale and that the purchaser was a third party who has subsequently sold his right to the 4th defendant who is not a member of the family of the mortgagees.

26. In our opinion, there are several mistakes in the reasoning of the learned Judge set out above. In the first place, the plaintiffs are not seeking to set aside the revenue sale as such, in which event alone Section 59 of the Revenue Recovery Act will be a bar. Their contention is that the mortgagees' family purposely and wilfully committed default in payment of the revenue and ultimately purchased the properties for themselves in the revenue auction. Therefore, they are in the position of trustees. This aspect of the matter has not at all been considered by the learned Judge.

27. Further, the learned Judge is not also quite correct when he says that the mortgagees' family has not been benefited by the revenue sale, and that the purchaser was the third party and that the 4th defendant is not a member of the family. The suggestion of the plaintiffs is that Kunhambu Nair is a clerk of the father of the 4th defendant and that the 4th defendant is a cousin sister of the second defendant, the Karnavan.

A perusal of the evidence of D. W. 2, the present Karnavan of the mortgagee-tarwad coupled with the quick succession in which the property changed hands after purchase gives us the impression that Kunhambu Nair is only a name lender for the mortgagees' family. Even Dw. 2 is not able to satisfactorily explain as to why the revenue of a paltry sum of Rs. 5/- was not paid to Government when there was a duty cast upon the mortgagees to pay the same and preserve the properties for the mortgagors.

28. Further the statement of the learned Judge that the 4th defendant is not a member of the family is also opposed to the pleadings and the evidence in the case. In fact, in the written -statement of the first defendant, it has been admitted in paragraph 11 that the 4th defendant is a member of his family and that the properties were purchased by the 4th defendant even before the award in the family, There is also the oral evidence of the first defendant as Dw. 1 that the 4th defendant is a member of his family. He was not able to satisfactorily explain as to why this Kunhambu Nair paid the assessment of the properties on some previous occasions.

In our opinion, this could have only been on the basis that this Kunhambu Nair, purchaser under revenue sale Ex. B15, was the Kariasthan of the father of the 4th defendant. When there are these admissions in the written statement and in the evidence, the learned Judge has really committed a serious mistake when he says that the 4th defendant is not a member of the family of the mortgagees. Therefore, the properties have been purposely caused to be sold by the mortgagees in the revenue sale and ultimately, they have purchased it for their own family.

29. The learned Judge is not also correct when he says that it was open to the plaintiffs to have prevented the sale by paying the revenue. In the first place, as stated earlier, the Patta admittedly stood in the name of the mortgagees and no notice would have been issued to the mortgagors. There is also nothing in the evidence to show that the plaintiffs were in any way made aware of the fact that there was a default in the payment of the revenue by the mortgagees who were in possession of the properties. Therefore, in our opinion, the plaintiffs had no opportunity at all to prevent the revenue sale.

30. Now the question that remains to be considered is what is the effect of the purchase in revenue sale by the mortgagees themselves, when they have purposely defaulted the revenue. Whatever may be the position, when the properties are purchased in the revenue sale by third parties, so far as the purchase by the parties who are themselves responsible for the revenue sale is concerned, the position is entirely different. In view of our finding that the purchase by Kunhambu Nair and the subsequent sale to the 4th defendant, a member of the family, is really for and on behalf of the mortgagee family, it follows that the principles of Section 90 of the Trusts Act -- Central Act II of 1882 -- will apply especially, the illustration (c) to Section 90 will apply on all fours.

It is not necessary for us to deal with this matter very elaborately, as we are in full agreement with the decision of the Madras High Court of die learned Chief Justice and Mr. Justice Venkatarama Ayyar reported in K. Achan v. K.C. Velayudhan AIR 1954 Mad. 144. The learned Judge, in more or less analogous circumstances, held that if there is a deliberate breach of obligation contained in the deed resulting in the sale of the properties and the purchase is by the defaulting mortgagee, the equity under Section 90 will fasten upon the property in his hands. After referring to illustration c to Section 90 of the Trusts Act, the learned Judges observed at page 146:

'That shows that when a person enters into possession of properties as a mortgagee and deliberately fails to pay the Government revenue and purchases the property in the revenue sale, his purchase falls within the purview of the section. Considerable reliance was placed on behalf of the respondent 1 on the words 'with a view to the land being put up for sale and his becoming himself the purchaser of it' occurring in the illustration. It was argued that it was not sufficient merely to establish that then? was a breach of an obligation imposed by the deed, but that it must further be proved that the Breach was with a view to the land being put up for sale and the mortgagee himself becoming the purchaser and that there was no such proof in the instant case. Now, when the breach of an obligation must necessarily result in the properties being brought to sale, it must be taken that the breach was made with a view to the properties being put up for sale, for a person must be taken to intend the natural and probable consequences of his act. Likewise, when that person purchases the properties himself at the sale, it is a legitimate inference to draw that it was with that intention that the properties were allowed to be brought to sale. Therefore, when there was a default on the part of the mortgagee, a sale consequent thereon and a purchase by mm at such sale, it could, if nothing else appears, be properly inferred that the default was made with a view to the hypotheca being sold and purchased by himself.'

We respectfully agree with the reasoning of the learned Judges.

31. Therefore, it follows that the mortgagees who have now purchased the property in a sale occasioned by their own wilful default, are bound to bold the property with all its liabilities in relation to the mortgagors. Therefore the plaintiffs will be entitled to redeem the mortgage so far as the plaint B schedule items are concerned, by paying the proportionate amount due on the same.

32. The third defendant has also contended before us that he will be entitled to value of improvements in case of redemption. He has no doubt stated in paragraph 3 of his written statement that he has spent about Rs. l,000/-. Apart from the fact that there is no evidence to support his contention, we also find that he never took any steps to have the improvements, if any, valued when a commissioner was appointed in this case to value the improvements and he submitted his report, Ex. B13. Therefore, it is not possible for us to accept his contention that he is entitled to the value of improvements.

33. We have already held that the original purchase by Kunhambu Nair in the revenue sale and the subsequent purchase by the 4th defendant from Kunhambu Nair are part or the same transaction and the purchase is really by the mortgagees who wilfully defaulted to pay the revenue with a view to the properties being put up for sale and the mortgagees themselves becoming the purchasers of the said properties. In this view, it follows that the third defendant who has obtained a mortgage from the 4th defendant cannot claim any higher title to the properties than his mortgagors had. Therefore, it is not open to him to plead that the purchase by the 4th defendant in the revenue sale is in her own independent right and that the rights of the plaintiffs have been extinguished.

34. In the result, the decree & judgment of the learned Subordinate judge so far as plaint B schedule properties are concerned, are set aside and the trial court is directed to pass the usual preliminary mortgage decree for redemption in favour of the plaintiffs regarding these items after fixing the proportionate mortgage liability. So far as this item is concerned, parties will bear their own costs hero and in the court below. The decree of the lower court will be modified suitably regarding the plaint B schedule properties in accordance with the directions contained in this judgment.

35. In the earlier portion of the judgment, we have already confirmed the decree and judgment of the learned Judge regarding plaint A and C schedule properties with a direction to the appellants paying half the costs of the appeal to the defendants 1 and 2 in this court. Therefore, it follows that the appeal will be dismissed so far as the plaint A and C schedule properties are concerned, in accordance with the directions contained in this judgment.


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