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Clara Mookerjea Alias Smt. Mathuri Devi and anr. Vs. Surendra Manilal Mehta and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. No. 285 of 1960
Judge
Reported inAIR1963Mad208
ActsCode of Civil Procedure (CPC) , 1908 - Order 1, Rule 10; Transfer of Property Act, 1882 - Sections 69
AppellantClara Mookerjea Alias Smt. Mathuri Devi and anr.
RespondentSurendra Manilal Mehta and ors.
Appellant AdvocateK. Kumaraswami, Adv. for ;K. Sanjeevi Naidu and ;J. Nagarajan, Advs.
Respondent AdvocateJiddu Lakshmayya, ;L.V. Krishnaswami Iyer, ;Vedantam Srinivasan, ;T.A. Bhanukumar and ;C.P. Rajagopala Aiyangar, Advs.
DispositionPetition allowed
Cases ReferredPichai Moideen v. Chaturbuja Das
Excerpt:
.....' it is not difficult to understand the philosophy of some solicitousness for the mortgagee who has advanced monies and who finds himself in a sad plight due to the dilatory conduct of the mortgagor. 5. the trend of decisions in support of the mortgagee's unqualified right to exercise the power of sale and the acquisition of valid title by the purchaser points out clearly that the mortgagor cannot indefinitely postpone payment of the mortgage money, by mere tactics and devices. it is a power given to him for his own benefit to enable him the better to realise his mortgage debt......that under that provision of law the mortgagee has a right to exercise what is called a private right of sale. this application for injunction was ultimately dismissed by order of court dated 18-12-1958. the mortgagee had therefore a tree hand in exercising the right of sale under section 69 of the tarnsfer of property act and he purported to exercise that right.it is now claimed that one srimathi madamkavar galada has become the purchaser of the property in the auction sale held on 20th march 1958, which resulted in the mortgagee's exercise of the right of private sale. the petitioners thereupon filed the present application out of which this civil revision petition arises to implead the fifth respondent as a party defendant to the suit. this application was made on 10th january.....
Judgment:
ORDER

Jagadisan, J.

1. The petitioners filed the suit O. S. No. 1989 of 1957 on the file of the City Civil Court, Madras, for redemption of a mortgage dated 21-5-1952 executed by them in favour of the second defendant in the suit. The petitioners contention was that the mortgage debt was fully discharged and that the mortgage should therefore be declared to be redeemed. Pending the suit, the petitioners prayed for a temporary injunction to restrain the mortgagee from bringing the property to sale under Section 69. of the transfer of Property Act. It must be mentioned that under that provision of law the mortgagee has a right to exercise what is called a private right of sale. This application for injunction was ultimately dismissed by order of court dated 18-12-1958. The mortgagee had therefore a tree hand in exercising the right of sale under Section 69 of the Tarnsfer of Property Act and he purported to exercise that right.

It is now claimed that one Srimathi MadamKavar Galada has become the purchaser of the property in the auction sale held on 20th March 1958, which resulted in the mortgagee's exercise of the right of private sale. The petitioners thereupon filed the present application out of which this civil revision petition arises to implead the fifth respondent as a party defendant to the suit. This application was made on 10th January 1959, it was dismissed by order dated 30th January 1960 and hence this petition by the aggrieved plaintiffs-petitioners.

2. The learned City Civil Judge following the decision in Ramakrishna Mudali v. Official Assignee, Madras, ILR 45 Mad 774 : AIR 1922 Mad 390 held that the purchaser has acquired a good title to the hypotheca under the private sale and that the purchase has brought about an extinction of the right of redemption. It is true that this Court has held that there is no bar of lis pendens where the hypotheca is sold away in exercise of a private right of sale by the mortgagee. I am not concerned at this stage as to what would be the result of the purchaser being impleaded as a party. The only question that is now relevant is whether the fifth respondent is a necessary or proper party to be impleaded in the suit for redemption.

3. The right of sale of the hypotheca, without the intervention of the process of Court, which a mortgagee has under Section 69 of the Transfer of Property Act, is a statutory right. It is as much and as full a right as the right of redemption of the mortgagor. The mortgagee is in no sense a trustee for the mortgagor in holding the power of sale, as he holds it for protection of his interests and for his benefit. Indeed, the swing of the law is so much in favour of the mortgagee, that he is not deterred from exercising his power of sa'e, even if the mortgagor files a suit for redemption. So long as the mortgage money is not paid or validly tendered, the mortgagee with full knowledge of a pending suit for redemption and perhaps to defeat the suit, can enforce his power of sale under Section 69.

4. In Baba Miya v. Jehangir Dinshaw : AIR1941Bom339 Wadia J. observes,

'The mortgagee cannot be restrained from exercising his power of sale merely by reason of the mortgagor tiling a suit for redemption, unless he pays the mortgage amount to the mortgagee or tenders the same. There is however nothing to prevent a mortgagor from seeking to restrain the exercise of the mortgagee's power of sale if the power is exercised in a wrong and improper manner contrary to the terms of the contract.'

It is not difficult to understand the philosophy of some solicitousness for the mortgagee who has advanced monies and who finds himself in a sad plight due to the dilatory conduct of the mortgagor. But this is really one side of the picture only. Instances where the mortgagee grabs at the hypotheca and squeezes the property out of the mortgagor are not rare. I must observe that sometimes the power of sale is used by the mortgagee ruthlessly as an instrument of oppression, as he is entrenched in the position of law that his powers of sale are absolute and that the purchaser gets an indefeasible title.

5. The trend of decisions in support of the mortgagee's unqualified right to exercise the power of sale and the acquisition of valid title by the purchaser points out clearly that the mortgagor cannot indefinitely postpone payment of the mortgage money, by mere tactics and devices. That is all. It would be a mistake and a misapprehension to imagine that the mortgagee is omnipotent and that Courts are powerless to check and correct fraudulent acts. In Kennedy v. De Trafford, 1896 1 Ch. 762, Lindley L.J. observes:

'A mortgagee is not a trustee of a power of sale for the mortgagor at all; his right is to look after himself first. But he is not at liberty to look after his interests alone, and it is not right or proper or, legal, for him either, fraudulently or wilfully or recklessly to sacritice the property of the mortgagor.'

The purchaser in a sale under Section 69 of the Act cannot avoid its setting aside by a Court on the ground of fraud. Warner v. Jacob, (1882) 20 Ch. D. 220, Haddington Island Quarry Co. v. Huson, 1911 AC 722, Pichai Moideen v. Chaturbuja Das, 65 MLJ 491. In (1882) 20 Ch. D. 220 Kay J. said :

'A mortgagee is, strictly speaking, not a trustee of the power of sale. It is a power given to him for his own benefit to enable him the better to realise his mortgage debt. If he exercises it bona fide for that purpose, without corruption or collusion with the purchaser the Court will not interfere even though the sale be very disadvantageous, unless indeed the price is so low as in itself to be evidence of fraud.'

6. 'Bona fides' is therefore of the essence of the matter. Any oblique motive, any underhand dealing or anything not consistent with the honest realisation of the secured money, on the part of the mortgagee would sufficiently be destructive of all pretentions of bona fides.

7. Now the question is whether the order of the Court below refusing to implead the fifth respondent as party to the suit is correct. The party sought to be impleaded claims to be the purchaser of the hypotheca with absolute rights. She is therefore a necessary and a proper party. The petitioners claim that nothing is due under the mortgage. It is not possible to avoid a feeling that the mortgagee has acted post haste to short-circuit the suit. If the petiioners' version of the discharge of mortgage represents the true position, it would be unjust to deprive them of their property. I am not expressing any opinion in the matter, as it has to be tried as an issue in the suit. The Court below acted improperly in dismissing the application for addition of a necessary and a proper party.

8. In the result, the civil revision petition is allowed. The order of the Court below is set aside and it is hereby directed that the fifth respondent, the purchaser, should be impleaded as the fifth defendant in the suit, mere will be no order as to costs in this civil revision petition.


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