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Andi thevan Vs. Nagayasami Chettiar and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported in(1928)55MLJ369
AppellantAndi thevan
RespondentNagayasami Chettiar and anr.
Cases ReferredDinobundhu Shaw Chowdhry v. Jogmaya Dasi I.L.R.
Excerpt:
.....raised in respect of it, we are not satisfied that it would be in the interests of justice to non-suit the plaintiffs on the mere ground that the plaint did not contain any averments with regard to it. 73. in that case also there was an attachment before judgment and their lordships held that as the previous mortgage was paid off and discharged with the moneys advanced by the plaintiff-mortgagee and, as the intention was also clear that he paid off the previous mortgage not for the purpose of extinguishing it, it must be assumed that he must have intended to keep it alive because it was clearly to his advantage to do so. 126 clearly put it as, a question of justice, equity and good conscience. if the real question should be one of justice, equity and good conscience, the principle..........3rd defendant who was the auction-purchaser of one item and part of another item covered by the suit mortgage, it was contended that in execution of a money decree obtained against the 1st defendant an attachment had been effected of the suit items and that the suit mortgage was made at a time when such attachment was in force and that as the 3rd defendant purchased the suit items at the sale held in pursuance of such attachment the suit mortgage could not prevail against the purchaser. on these facts the further and the only question that arose was whether the plaintiffs would be entitled to be subrogated to the right, title and interest of a previous mortgage of the said items whose mortgage was paid off with the moneys advanced by the plaintiffs on the suit mortgage. the lower.....
Judgment:

Srinivasa Aiyangar, J.

1. This second appeal arises from a suit instituted by the respondents before us, as plaintiffs, on a deed of mortgage. It was an ordinary suit for sale of the mortgage security. In the defence raised on behalf of the 3rd defendant who was the auction-purchaser of one item and part of another item covered by the suit mortgage, it was contended that in execution of a money decree obtained against the 1st defendant an attachment had been effected of the suit items and that the suit mortgage was made at a time when such attachment was in force and that as the 3rd defendant purchased the suit items at the sale held in pursuance of such attachment the suit mortgage could not prevail against the purchaser. On these facts the further and the only question that arose was whether the plaintiffs would be entitled to be subrogated to the right, title and interest of a previous mortgage of the said items whose mortgage was paid off with the moneys advanced by the plaintiffs on the suit mortgage. The Lower Appellate Court having held that the plaintiffs were so entitled gave a mortgage-decree in favour of the plaintiffs for the sum of Rs. 200 with interest thereon. The present appeal is by the 3rd defendant.

2. The learned vakil for the appellant has argued at considerable length before us taking two points. The first point may be briefly referred to and disposed of and that was that the plaintiffs' suit as it was originally laid was a simple suit on a mortgage. There was no reference in the plaint whatsoever to the previous encumbrance or the discharge of it, much less to any rights of subrogation claimed by the plaintiffs. In these circumstances it was argued by the learned vakil for the appellant, 3rd defendant, relying upon Mohesh Lai v. Mohant Bawan Das I.L.R. (1883) C. 961 : 10 I.A. 62 and Maharaj Singh v. Balwant Singh I.L.R. (1906) A. 508 that the plaintiffs having failed to plead their rights as on subrogation are not entitled to recover on that footing. It must also be observed that after the defence was raised on the ground of the attachment no application for amendment of the plaint was made on behalf of the plaintiffs. But it is clear, as pointed out by the learned vakil for the 1st respondent, that the matter was treated in both the Lower Courts as one only for the determination of this question of subrogation. This particular objection on the ground of pleading does not appear to have been taken either in the trial Court or in the Lower Appellate Court. It has not been taken specifically even in the grounds of appeal to this Court. If the point had been taken, it might have been open to the plaintiffs to ask for a formal amendment of the plaint. But when we see that the point was not taken on behalf of the defendant-appellant and substantially both the Lower Courts have dealt with the question as though a direct issue was raised in respect of it, we are not satisfied that it would be in the interests of justice to non-suit the plaintiffs on the mere ground that the plaint did not contain any averments with regard to it.

3. The next question that was argued was that the Lower Appellate Court was wrong in holding that the plaintiffs were entitled to be subrogated to the right, title and interest of the prior mortgagee. The facts of this case are very similar to the facts of the case reported in Dinobundhu Shaw Chowdhry v. Jogmaya Dasi I.L.R. (1901) C. 154 : 29 I.A. 9 : 12 M.L.J. 73. In that case also there was an attachment before judgment and their Lordships held that as the previous mortgage was paid off and discharged with the moneys advanced by the plaintiff-mortgagee and, as the intention was also clear that he paid off the previous mortgage not for the purpose of extinguishing it, it must be assumed that he must have intended to keep it alive because it was clearly to his advantage to do so. The only distinction between that case and the present one that was emphasized and argued before us was that in that case payment and discharge of the prior mortgage is stated to have been pursuant to an agreement entered into between the mortgagor and the mortgagee that with the moneys being advanced the prior mortgage should be discharged. In the present case though the language of the document, Ex. A, is not very clear, still we find that in a portion of the document, which has not been translated, there is reference to the particulars of the receipt of consideration and one of the items of consideration so particularised is payment in discharge of the prior mortgage. The reference to the prior mortgage is not merely indicative of the purpose for which the mortgagor was borrowing under the mortgage, but it is clear that the reference to it as part of the consideration carries and involves an implied obligation on the part of the mortgagor who was borrowing the money to pay off and discharge the prior encumbrance. There is also no doubt that, as in the case in Dinobundhu Shaw Chowdhry v. Jogmaya Dasi I.L.R. (1901) C. 154 : 29 I.A. 9 : 1901 2 M.L.J. 73 in the present case there is also a covenant in the deed of mortgage that the mortgagee should obtain under the suit instrument a first mortgage over the properties. If that was the intention between the contracting parties, an implied obligation on the part of the mortgagee to pay off and discharge the prior mortgage would undoubtedly have to be inferred. On principle therefore the present case is not really distinguishable from the case in Dinobundhu Shaw Chowdhry v. Jogmaya Dasi I.L.R. (1901) C. 154 : 29 I.A. 9 : 1901 12 M.L.J. 73. A great deal of argument was addressed by the learned vakil for the appellant for the purpose of showing that it is incumbent on the party claiming rights of subrogation to make out affirmatively that there was the intention on his part to keep alive the prior mortgage that is paid off and discharged. To such a proposition so largely stated we cannot possibly accede. In the leading case on the subject of subrogation in Gokaldas Gopaldas v. Puranmal Premsukhdas I.L.R. (1884) C. 1035 : 11 I.A. 126 their Lordships of the Judicial Committee speak of the intention being ascribed. A similar expression occurs in many other cases that deal with the subject. From such an expression it is clear that the intention need not always be express or even capable of being directly inferred. It is clear also that their Lordships of the Judicial Committee in the case in Gokaldas Gopaldas v. Puranmal Premsukhdas I.L.R. (1884) C. 1035 : 11 I.A. 126 clearly put it as, a question of justice, equity and good conscience. It was also contended by the learned vakil for the appellant that the person who pays off the prior encumbrance and claims subrogation must have had notice of the intermediate encumbrance or obstacle having regard to which the question arises. On the decided cases it seems to us that no such principle can possibly be postulated. If the real question should be one of justice, equity and good conscience, the principle cannot be that it is only when the party has notice of the obstacle or intermediate encumbrance that relief can be given to him. On the other hand it would seem that it is only when a person acts bona fide in ignorance that he can be said to be in greater need of equitable relief. In the present case, if the plaintiff-mortgagee had been aware of the real state of facts, namely, the attachment order that had been issued by the Court there would have been no doubt whatever that he would have expressly stipulated for the previous encumbrance being kept alive for his benefit. In these circumstances, it is difficult to say why such an intention should not necessarily be ascribed to him even if it should be equitable to do so. We have, therefore, come to the conclusion that on the main features the case is not distinguishable from the case in Dinobundhu Shaw Chowdhry v. Jogmaya Dasi I.L.R. (1901) C. 154 : 29 I.A. 9 : 1901 12 M.L.J. 73. In the result we agree with the Lower Appellate Court with regard to this question of subrogation.

4. Two other questions were also raised by the learned vakil for the appellant. It was contended that the discharge of the prior encumbrance was only a partial discharge. There is no foundation for such an argument. It has not been shown that at the time when Rs. 200 was paid in respect of the prior encumbrance there was any balance left over and unpaid. The expression 'partial discharge' would have no meaning or significance otherwise. If, therefore, at the time of making the payment of Rs. 200 for the purpose of discharging the previous encumbrance the mortgagor paid to the prior encumbrancer from his own pocket all the interest due and from the amount of the mortgage paid the balance, namely, the principal amount, there is no reason why such discharge should be regarded only as a partial discharge even when it admittedly resulted in a complete discharge of the prior encumbrance. Further, this point also does not appear to have been taken at any earlier stage.

5. Lastly it was argued that in any case the 3rd defendant-appellant would be entitled to an order that the plaintiff-respondents should be directed to proceed in execution of the mortgage decree in the first instance only in respect of items of plaint properties not purchased by the 3rd defendant. That is undoubtedly an equitable order to which the appellant may be entitled and it is not opposed. We, therefore, direct that the decree passed by the Lower Appellate Court be modified by directing that the suit properties not claimed by the 3rd defendant be sold in the first instance, and the properties in which the 3rd defendant is interested be sold only if there should still be a deficiency in the amount due. As we are satisfied that the respondents are really to blame in not having referred to and relied upon the subrogation in their plaint and having regard to the fact that the appellant has in any case obtained some relief before us, the proper order for costs would be that each party in this second appeal do bear his own costs.


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