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Elichi Ussack and 5 ors. Vs. Ramaswami Iyer and 18 ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1915Mad11173; (1915)28MLJ662
AppellantElichi Ussack and 5 ors.
RespondentRamaswami Iyer and 18 ors.
Excerpt:
- - 30,000. 3. the lower court's decree is clearly unsustainable and is not in accordance with the judgment. 4,000. they failed to pay the rent due......1886 and the interest on the principal at 5 percent per annum. he therefore passed a preliminary mortgage decree directing the sale of the properties for rs. 53,841--10--8 the amount due under exh. a, b and c subject to the usufructuary mortgage of rs. 30,000.3. the lower court's decree is clearly unsustainable and is not in accordance with the judgment. on the finding that plaintiffs are precluded from suing to recover the amounts due under exh. a, b and c and that they have a right only to recover the amount due under ex. d and t, that is in accordance with the agreement subsequently entered into between the parties settling the amount payable by the defendants no decree should have been based on ex. a, b and c. if the subsequent agreement settling the amounts due by the defendants,.....
Judgment:

1. This is an appeal against the decree of the Sub-Judge of Calicut directing the defendants to pay the plaintiff a sum of Rs. 51,801-3-2 and in default directing the mortgaged properties to be sold. The representatives of the family of defendants 1 to 8 mortgaged certain properties to the deceased Sankumani Iyer the predecessor-in-title of the plaintiffs for a sum of Rs. 30,000 on the 24th July 1882. They subsequently hypothecated the same properties to the same creditor for Rs. 5,000 on the same date (Ex. A) for another sum of Rs. 5,000 on 11th April 1882 (Exhibit E) and for Rs. 7,000 on 22nd September 1882 (Ex. C.) They acknowledge the receipt of Rs. 4,154-10-0 and sue to recover the money due under these 3 instruments of mortgage Exh. A, B and C. The main defence is that the plarntiffs are not entitled to sue on these hypothecation bonds because in July 1886 there was a settlement of accounts between the parties and it was agreed that the amount of Rs. 60,000 was payable under Ex. A, B and C under the usufructuary mortgage deed and in settlement of certain other transactions which are not in question in this suit. It was also agreed that the defendants were to sell to the plaintiffs a portion of the properties included in these instruments. The defendants say that they are still willing to carry out the agreement and that the suit is therefore not maintainable.

2. The Sub-Judge found that so far as the settlement of accounts is concerned it is binding on the parties and the plaintiffs are therefore entitled to recover only the amounts then agreed upon. But he was of opinion that the agreement for sale cannot now be carried out as certain arbitrators who were appointed by that agreement to carry out some of the terms of that agreement are now dead. He was therefore of opinion that the plaintiffs are precluded from suing for the entire sums payable under Ex. A, B and C that they have however right to sue for the sale of the plaint properties for the sums fixed by Ex. D and the original of Ex. T the agreement of 1886 and the interest on the principal at 5 percent per annum. He therefore passed a preliminary mortgage decree directing the sale of the properties for Rs. 53,841--10--8 the amount due under Exh. A, B and C subject to the usufructuary mortgage of Rs. 30,000.

3. The Lower Court's decree is clearly unsustainable and is not in accordance with the judgment. On the finding that plaintiffs are precluded from suing to recover the amounts due under Exh. A, B and C and that they have a right only to recover the amount due under Ex. D and T, that is in accordance with the agreement subsequently entered into between the parties settling the amount payable by the defendants no decree should have been based on Ex. A, B and C. If the subsequent agreement settling the amounts due by the defendants, not only under these hypothecation instruments but also under the prior usufructuary mortgage, is valid, then the plaintiffs are only entitled to recover the amount of money then settled. The amount cannot be apportioned as, between the hypothecation instruments and usufructuary mortgage deed. Apparently realising this difficulty, the learned pleader for the respondents attempt to support the decree on the ground that the entire agreement is incapable of specific performance and therefore inoperative and therefore he is entitled to fall back on the 3 instruments of mortgage now sued upon. The defendants retained possession of the properties after the usufructuary mortgage for Rs. 30,000 on executing a lease promising to pay to the plaintiffs (mortgagees) an annual rent of Rs. 4,000. They failed to pay the rent due. Accordingly the mortgagees obtained a decree for possession in O.S. No. 24 of 1883 with arrears of rent. There were apparently certain disputes between the parties and it was under these circumstances that the agreement now in question was entered into. See Ex. T, dated 19-7-86. It recites that the parties have settled all disputes between them including the amounts payable under the lease, that the defendants withdraw all their claims and disputes regarding the properties and that the amount due to the mortgagee was fixed at Rs. 60,000 an additional sum of Rs. 500 was then borrowed from the creditor and for this sum of Rs. 60,500 the defendants agreed to sell to him so much of the plaint properties as will in the estimation of three arbitrators therein named, yield him an interest at 5 p. c. on the amount then found due. Subsequently another agreement was entered into on 18-8-87 confirming the prior agreement and it recited that as one of the arbitrators mentioned in Ex. T was found to be an incompetent, man the defendants would find another man as arbitrator in his place. They borrowed an additional sum of Rs. 2,000 subject t,'o the same conditions as were mentioned in the 1st agreement D, In '89 when a member of defendant's family who was a minor at the time of the execution of these documents Ex. D and T attempted to set it aside the plaintiff maintained their vahdity See Ex. IV and in 1904 in a partition deed executed amongst the members themselves the amount due from the defendants was stated to be Rs. 62,500 that is the amounts payable under Ex. D and T. The plaintiffs have obtained the full benefit hi the agreement for sale. They are in possession of all the properties, whereas what was sold to them was only a portion of such properties. They could not in any event get any property under Ex. D and T in addition to what is included in these agreement's for the amount that is payable to them. Whereas if they got a decree now for the amounts that might be found to be due on the bonds as prayed for by them the result will be that to 1915. get not only the properties in these instruments of mortgage in Ex. D and T but will also be entitled to sell other properties of the defendants. For the amount as settled no interest is payable as the mortgagee is in possession of the land and the plaintiffs are now entitled to recover only the principal amount under Ex. D and T in substitution of the sums under the usufructuary mortgage and the hypothecation bonds and the other liabilities then dealt with. There is no evidence that the plaintiff's ever repudiated the agreement; whereas they acknowledged the binding character even in 1904. The defendants now accept that agreement and are willing to abide by it. It is doubtful whether the only question that remains to be settled between the parties for the specific performance of the contract, that is the ascertainment of the properties which would yield interest at 5 p. c. for the amount payable is not a matter that should be settled by the Court if any dispute arose between the parties themselves. We are not therefore prepared to assume for this reason the agreement is now incapable of specific performance. We think the proper course for the plaintiffs to follow in the circumstances of the case is to sue for specific performance or in the alternative for a decree for the recovery of Rs. 62,500 due under Ex. D and T. The suit now brought is only upon the 3 instruments of mortgage that the entire agreement is incapable of specific performance is not a question that is in issue and tried by the Court below. Whether the entire agreement is incapable of specific performance or not, it is not now open to the plaintiffs to re-open the accounts which have been settled. It will be difficult at this distance of time to ascertain the amount which was payable at that time by the parties respectively. The defendants gave up at the time of the settlement as cited in Ex, T, the questions that they had raised with reference to the lands in the suit. They cannot be restored to their old position and the plaintiffs are estopped from re-opening the accounts so settled; and if that settlement of accounts is binding the plaintiffs are not entitled to maintain a suit for the recovery of the amounts due under Exs. A, B. and C. In either view, therefore the plaintiff's suit tails. We therefore reverse the decree of the Lower Court and dismiss the plaintiffs suit. As the defendants did not take any steps for the ascertainment of the value of the lands we direct each party to bear his own costs.


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