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Mollaya Padayachi and anr. Vs. Krishnaswami Iyer and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1925Mad95; 85Ind.Cas.855; (1924)47MLJ622
AppellantMollaya Padayachi and anr.
RespondentKrishnaswami Iyer and ors.
Cases ReferredGopala Aiyangar v. Mummachi Reddiar
Excerpt:
- - 55 of 1914 on the file of the tanjore additional sub-court, which was passed against the 1st and 2nd defendants and the deceased murugayee in favour of dandapani vaithiyan the properties were brought to sale and purchased by the decree-holder on the 20th of january, 1916, that with a view to set aside the sale, the 1st defendant who was the owner of the properties which were sold, executed the plaint mortgage deed, that the amount advanced by the plaintiff was deposited in court by the 1st defendant towards the amount due under the decree and the court sale was set aside on the 1st of february, 1916, and that the money advanced on the suit mortgage thus satisfied the decree of court against the 2nd defendant also and went to set aside the court sale. he states that she had no funds.....kumaraswami sastri, j.1. the 4th and 5th defendants are the appellants.2. the plaintiff sued to recover rs. 6,669- i-o with costs and further interest due on a deed of mortgage dated the 27th of january, 1916 executed by the 1st defendant in his favour for rs. 5,500 with interest at 9 per cent, per annum. it is alleged that the amount was repayable within the 27th of january, 1917, and that, in default of payment, interest at 12 per cent. was chargeable from the date of the bond and was to be added to the principal with annual rests.3. the 1st defendant is the son of the 2nd defendant. the case for the plaintiff is that the mortgaged properties belong to murugayee, the mother of the 1st defendant and the wife of the 2nd defendant, that murugayee who died on the 7th january, 1916, executed.....
Judgment:

Kumaraswami Sastri, J.

1. The 4th and 5th defendants are the appellants.

2. The plaintiff sued to recover Rs. 6,669- I-O with costs and further interest due on a deed of mortgage dated the 27th of January, 1916 executed by the 1st defendant in his favour for Rs. 5,500 with interest at 9 per cent, per annum. It is alleged that the amount was repayable within the 27th of January, 1917, and that, in default of payment, interest at 12 per cent. was chargeable from the date of the bond and was to be added to the principal with annual rests.

3. The 1st defendant is the son of the 2nd defendant. The case for the plaintiff is that the mortgaged properties belong to Murugayee, the mother of the 1st defendant and the wife of the 2nd defendant, that Murugayee who died on the 7th January, 1916, executed a will, dated the 2nd of April, 1914, whereby she bequeathed the properties to the 1st defendant, that the 1st defendant became the exclusive owner of the properties, that in execution of the decree in O.S. No. 55 of 1914 on the file of the Tanjore Additional Sub-Court, which was passed against the 1st and 2nd defendants and the deceased Murugayee in favour of Dandapani Vaithiyan the properties were brought to sale and purchased by the decree-holder on the 20th of January, 1916, that with a view to set aside the sale, the 1st defendant who was the owner of the properties which were sold, executed the plaint mortgage deed, that the amount advanced by the plaintiff was deposited in Court by the 1st defendant towards the amount due under the decree and the Court sale was set aside on the 1st of February, 1916, and that the money advanced on the suit mortgage thus satisfied the decree of Court against the 2nd defendant also and went to set aside the Court sale. The plaintiff states that the 2nd defendant has no interest in the mortgaged properties, that in case the 2nd defendant claims the mortgaged properties as joint properties, the mortgage is binding on him as the 1st defendant was acting as the manager of the family and borrowed the money for preserving the estate and for satisfying the decree against the 2nd defendant, that in any event the 2nd defendant was bound in law to reimburse the plaintiff to the extent to which he, the 2nd defendant was benefited by the amount advanced for the mortgage and that he is liable to pay the plaintiff half the amount deposited in O.S. No. 55 of 1914, as the decree was personally against the 2nd defendant, and his wife Murugayee and against the family properties of the 1st defendant.

4. The 3rd defendant was made a party as he is a subsequent purchaser from the 1st defendant. Defendants 4 to 8 were made parties as mortgagees and purchasers from the 2nd defendant. Defendants 9 and 10 were made parties as they are the sisters of the 1st defendant and live in the first item of the mortgaged properties with the plaintiffs' permission.

5. The 1st defendant filed a written statement admitting the plaintiff's claim and the allegations in the plaint.

6. The 2nd defendant filed a written statement denying that the properties belonged to his wife, Murugayee, and denying her right to dispose of the properties by will. He states that she had no funds to purchase the properties, that he went to the Transvaal, stayed there for several years, earned money and remitted money by post and brought money with him whenever he came to India, that the properties were purchased with his own funds benami in the name of his wife and were his exclusive properties and that the plaintiff was well aware that the properties stood in Murugayee's name only benami and that he was the real owner. He admits that a decree was passed in O.S. No. 55 of 1914 on the file of the Additional Sub-Court, Tanjore, against himself, his wife Murugayee and his son, the 1st defendant, and the suit properties were brought to sale and that a sum of Rs. 4,203-1-4 was paid for setting aside the sale. He states that in any event there was no consideration for the suit mortgage to the extent of Rs. 1,500. He denies that the properties are the joint properties of himself and his son and states that he is the exclusive owner of the properties and has been managing the same. He denies that he is bound by the mortgage as the 1st defendant was only a volunteer and paid the money to set aside the sale, alleging title hostile to the real owner. He states that he sold items 2 to 18 for a proper consideration to the 6th defendant, that the 4th defendant purchased those items from the 6th defend-ant and that the first item was mortgaged by him to the 6th defendant who assigned the mortgage to the 5th defendant. He attacks the sale of the suit properties to the 3rd defendant by the 1st defendant as fraudulent. The 3rd defendant filed a written statement pleading that as he is not in possession of the suit properties he has not paid the amount due on the mortgage to the plaintiff and that he should not be made liable for costs.

7. Defendants 4 and 5 adopt the written statement of the 2nd defendant. The 6th defendant died pending suit and the nth and 12th defendants were added as his legal representatives. The nth defendant filed a written statement stating that he is an unnecessary party to the suit, that he is not the legal representative of the 6th defendant and is not in possession of any assets, that Lakshmanan Chetti, the 12th defendant, is the legal representative of the 6th defendant, that the 6th defendant died even before the suit and that the suit is not maintainable against him.

8. The Subordinate Judge, while disbelieving the case that the deceased Murugayee had funds of her own and that the suit properties were purchased out of such funds, held, that the 2nd defendant, her husband, purchased the properties with his own funds but for the benefit of his wife, Murugayee and not benami in her name, that there was nothing to show that the plaintiff was aware that Murugayee was a benamidar and that the 2nd defendant was estopped from setting up the rights of a real owner against the plaintiff. He also held, that apart from any question of the purchase being benami or of estoppel, the mortgage was enforceable against the 2nd defendant on the principle of salvage lien and passed the usual mortgage decree in favour of the plaintiff as prayed.

9. Against this decree the 4th and 5th defendants appeal. Their contention is that the evidence shows clearly that the properties were purchased by the 2nd defendant in the name of his wife Murugayee, that the plaintiff was fully aware of the benami nature of the purchase, that the 1st defendant executed the mortgage alleging title hostile to the 2nd defendant his father, and claiming the properties mortgaged as his absolute properties vested in him as legatee under the will of his mother, Murugayee, who was the absolute owner and that even though a portion of the mortgage money went to set aside the Court sale, the mortgage would not bind the 2nd defendant or his transferees, the 4th and 5th defendants, as the suit mortgage was executed by the 1st defendant alleging title hostile to the 2nd defendant and without his consent.

10. The main questions for determination are whether the purchase of the suit properties by the 2nd defendant was benami in the name of his wife Murugayee, whether the plaintiff had notice of the benami nature of the transaction, whether the mortgage is binding on the 2nd and the 4th and 5th defendants to the extent to which the mortgage amount went to discharge the amount of the decree in execution of which the properties were sold and whether, if the mortgage is not binding, the plaintiff is entitled to a charge to that extent

11. It is admitted that the 2nd defendant was not possessed of any ancestral properties. The evidence shows that he was a barber by caste and went to South Africa at least on three occasions. He made money there and either brought money when he visited India or sent money from South Africa to India. The properties purchased by him consisted of 13 3 4 cawnies. Excepting three-fourths of a cawny which he purchased in the name of himself and another wife of his, Meenakshi, the remaining lands were purchased in the name of Murugayee.

12. The case for the plaintiff and the 1st defendant is that Murugayee got moneys from her mother, but the evidence which is unreliable has been rightly discredited by the Subordinate Judge. He finds, and I think, rightly on the evidence that the consideration for all the purchases came from the 2nd defendant and that the moneys were both brought and sent by him from the Transvaal.

[His Lordship then considers the evidence in the case.]

13. These are all the documents connected with the plaint properties, and it is clear that almost all the documents are executed by Murugayee and attested by her husband, the 2nd defendant, or executed by both the 2nd defendant and Murugayee. It is also clear from the evidence that the money for the purchase of the properties was supplied by the 2nd defendant and that where they had to borrow money either for purchasing properties or for family expenses, it was the 2nd defendant that discharged the debts. There is no evidence worth the name to show that Murugayee was ever in a position either to purchase properties or to pay the loans which were raised upon the properties.

14. Stress was laid down on the fact that the documents recite that the properties belong to Murugayee but where the purchase is benami and moneys have to be raised, the person who lends money would require a recital as to ownership and it is the invariable practice in such cases to get the attestation of the real owner so that if any question should arise subsequently, he may be bound by the attestation. It is the com-mon belief that attestation by the husband or near relation of the executant is evidence of his consent and will bind him; and parties hardly realise the effect of the recent decision of the Privy Council that attestation does not by itself import consent to or knowledge of the contents of the document.

15. It is clear that the source of purchase money is a very important criterion for determining the real ownership. In Gopeekristo Gosain v. Gangapersad Gosain (1854) 6 MIA 53 it was held by their Lordships of the Privy Council that the test is as to who advanced the purchase money and that there is no presumption of advancement where property is purchased by a father in the name of his son. In Moulvie Sayyud Uzhur Ali' v. Musammat Bebee Ultaf Fatima (1869) 13 MIA 232) it was held that the principle of benami laid down in Gopeekristo Gosain v. Gangapersad Gosain (1854) 6 MIA 53 applies equally to Mahomedans and that there is no presumption of advancement by the name of the son being used as purchaser. Their Lordships at page 247 observe, ' that the criterion of these cases in India is to consider from what source the purchase money comes; that the presumption is that a purchase made with the money of A, in the name of B, is for the benefit of A; and that from the purchase by a father, whether Mahomedan or Hindu, in the name of his son, you are not at liberty to draw the presumption, which the English Law would draw of an advancement in favour of that son. Again, the mere fact that this property was purchased, not in the sole name of the son but in the name of the wife as well as of the son affords a strong argument in favour of the hypothesis that it was a benami purchase for there was no such community of interest between the wife and the son as would render it probable that they had been made joint owners of the property; and the reason for putting two names rather than one into a trust applies almost as strongly in India as it would in this country.'

16. There being no presumption of advancement, the onus lies on the respondents to show that in purchasing the properties in the name of Murugayee, the 2nd defendant intended that it should be for her benefit. As I have already pointed out, out of the 13 3 4 cawnies only three-fourths of a cawny was purchased by the and defendant in the name of himself and his second wife Meenakshi and the balance of 13 cawnies were purchased in the name of his first wife Murugayee. He was thus practically without any property, and this circumstance, I think, strongly militates against the view that the purchase was for her benefit. It is hardly likely that a man in the position of the 2nd defendant would have denuded himself of all his properties with the idea of benefiting his first wife at the expense of himself, his second wife, his first wife's son and his second wife's children. I may in this connection refer to the observations of their Lordships of the Privy Council in Kerwick v. Kerwick ILR (1920) C 260 : 39 MLJ 296. After noting the fact that all the properties were in the name of the wife, their Lordships observe : ' If he had been possessed of an uncontrollable passion to bestow upon his wife beneficially every fragment of property he could acquire, to leave himself with nothing to live upon but his salary and at the same time be burdened with debt and his children being absolutely unprovided for, he could not have gratified that passion more fully than he apparently did if his wife's case be true.' Their Lordships think that it is impossible to draw a presumption of advancement where almost all the property was purchased in the name of the wife. This is the view taken in cases between Englishmen where the presumption of advancement prevails and it applies a fortiori to cases of Hindus where there is no such presumption.

17. I find it difficult to agree with the Subordinate Judge when he states that the suit properties were purchased by the 2nd defendant for the benefit of his wife and I have no hesitation in coming to the conclusion that the properties were purchased by the 2nd defendant benami in the name of his wife and that she had no interest in them.

18. On the 13th of March, 1913 the 2nd defendant and his wife Murugayee executed a promissory note (Ex. 8) for Rs. 600 in favour of Sundarappier. The consideration is said to have been received for the purpose of paying the amount of the absolute sale deed obtained on the 12th of March, 1913 from one Velayudha Mudali in favour of Murugayee and for domestic purposes. Another promissory note, Ex. 8 (a), dated the 7th of April, 1913 was executed by the 2nd defendant and his wife for Rs. 1000 in favour of Sundaram Iyer. The object is said to be for paying the amount of the sale deed got on the 3rd of April, 1913 from one Kandasami Mudaliar in favour of Murugayee and for the purpose of meeting certain repairing charges.

19. The 3rd defendant in this suit is the son of Sundarappier and he was appointed by the plaintiff's father as guardian of plaintiff and executor of his will. The 3rd defendant's father Sundarappier filed O.S. No. 184 of 1914 on the file of the District Munsif's Court of Chidambaram on Exs. 8 and 8 (a) praying for a personal decree against the 2nd defendant Murugayee and against the 1st defendant to the extent of the family properties and he got an attachment before judgment of the properties now in dispute.

20. The 2nd defendant and his wife Murugayee executed a promissory note for Rs. 3,434 on the 7th of October, 1911 in favour of one Dandapani Vaidiar who filed O.S. No. 48 of 1914 on the file of the Court of the Subordinate Judge of Mayavaram which was transferred to the file of the Temporary Subordinate Judge of Tanjore and numbered there as O.S. No. 55 of 1914 to recover Rs. 4,439-9-0 the principal and interest due under the promissory note. He prayed for a personal decree against Murugayee and her husband the and defendant herein and the 1st defendant, their son, was made a party in order to bind the joint family properties. He applied for attachment before judgment. A decree (Ex. P) was passed on the 22nd of February, 1915 for Rs. 4,271-2-0 with costs and further interest against the 2nd defendant herein and Murugayee personally and against the 1st defendant to the extent of the joint family properties. Execution was applied for by Dandapani Vaidiar and the sale of the properties was fixed for the 20th of January, 1916. The 2nd defendant herein who was the 1st defendant in that suit filed an application (Ex. Z) under Order 21, Rule 83, Civil Procedure Code, praying for a postponement of the sale for six months and for leave to effect a private sale or to mortgage the properties. It was alleged in the affidavit (Ex. Zi), that his wife was dead, that the properties were purchased by him benami in her name, that there were misunderstandings between himself and his wife and that he was therefore not able to raise money to discharge the debts. On the 20th of January, 1916, the petition was dismissed as it was not pressed. The properties were brought to sale and sold. The 1st defendant in this suit applied under Order 21, Rule 89, Civil Procedure Code, to set aside the sale and paid into Court a sum of Rs. 4,256-15-4 being the balance of the amount due under the decree and the five per cent, of the-purchase money payable to the purchaser. The application is Ex. AA. The affidavit in support of the application is Ex. AAi. It was filed by the 1st defendant herein who was the 3rd defendant in that suit and he stated that his mother, the 2nd defendant in that suit died, that the properties which belonged to him and his mother were sold in Court auction on the 20th of January, 1916, and the plaintiff himself purchased the moveable and immoveable properties and that he had paid the balance due and the five per cent, of the purchase money and wanted the sale to be set aside. The 2nd defendant herein after his application (Ex. Z) was dismissed, did nothing. The amount paid into Court to set aside the sale under Order 21, Rule 89, was borrowed from the plaintiff in this suit under, Ex. A executed by the 1st defendant herein. The mortgage deed recites that the properties belonged to his mother Murugayee who purchased and enjoyed them, that he is now in possession and enjoyment of the same and that he has borrowed Rs. 5,500 for the purpose of getting back the properties which had been sold in execution of Dandapani Pandithan's decree. The Subordinate Judge finds that out of the mortgage money borrowed from the plaintiff a sum of Rs. 4,629-11-4 was paid into Court to get back the properties as appears from Ex. AA3, and states that the properties which were worth Rs. 12,000 or 13,000 were sold in execution of Dandapani's decree and were purchased by Dandapani himself for less than one-fourth of their market value.

21. Sundarappier applied to execute his decree and to bring the properties to sale which had already been sold in execution of Dandapani's decree. The 1st defendant herein filed Ex. 9 objecting to the sale in execution and stated that the immoveable properties under attachment belonged to his mother, that he got them from her by a will, that the 2nd defendant herein who was the 1st defendant in that suit had no right to those properties, that they had been sold in execution of the decree in O.S. No. 55 of I9I4, that he borrowed Rs. 5,500 and executed a mortgage of the properties on the 27th of January, 1916, that out of the sum borrowed Rs. 4,629-11-4 was paid into Court to set aside that sale and that the properties should be sold subject to that mortgage. Ex. 3 is the sale proclamation in O.S. No. 184 of 1914 and it states that there was a mortgage over the properties, dated the 27th of January, 1916, for Rs. 5,500 in favour of Krishnaswami Iyer but that it was subsequent to the attachment before judgment. It appears from Ex. IV that on the 16th of September, 1916, items 1 to 17 of the sale proclamation were sold to the plaintiff's vakil in that suit for Rs. 1,012. It appears from Ex. V that the 2nd defendant herein applied to adjourn the sale on the ground that he had arranged to raise money elsewhere but that the 3rd defendant therein who is the present 1st defendant was unwilling to join in the petition and the petition was dismissed and the properties were brought to sale.

22. On the 12th of October, 1916 the present 2nd defendant agreed to sell the properties to Sevagan Chetty, the deceased 6th defendant herein. Ex. I (a), dated the 12th of October, 1916, recites that the properties were purchased by him benami in the name of his wife, Murugayee, that the properties were sold in execution of the decree in O.S. No. 184 of 1914 and that he received Rs. 2,400 for the purpose of setting aside the sale. It appears from Ex. II that a sum of Rs. 2,348-0-2 was paid into Court and that the sale was set aside on the 17th of October, 1916.

23. The question therefore arises as to how far on these facts the mortgage in favour of the plaintiff is binding on the 5th and 6th defendants and the first question I have to consider is whether the plaintiff Krishnaswami Iyer is a bona fide mortgagee from the 1st defendant without notice of the fact that the 1st defendant's mother was only a benamidar. The Subordinate Judge finds that the will, Ex. Y, dated the 2nd of April, 1914, executed by the 1st defendant's mother, was genuine and valid so that if the properties belonged to Murugayee or if the plaintiff had advanced the money bona fide without knowledge that Murugayee was only a benamidar he would be protected under Section 41 of the Transfer of Property Act. I have already given my reason for holding that Murugayee was only a benamidar.

24. The next question is whether the plaintiff is a bona fide lender without notice. I do not think that the plaintiff is protected under Section 41 of the Transfer of Property Act. I think the evidence shows that the plaintiff must have been aware of the fact that Murugayee could not be the real owner of the properties. Murugayee, her husband and their children were all living in the house which is one of the items mortgaged to him. The plaintiff in his evidence admits that he knows the 1st and 2nd defendants and that the 1st defendant is the son of the 2nd defendant and that the 2nd defendant had money dealings with him. He admits that in 1914 he got a transfer of the decree in O.S. No. 98 of 1910 on the file of the Shiyali District Munsif's Court in 2nd defendant's favour which had been attached by Dandapani in O.S. No. 55 of 1914, Though he says that he does not remember it, it is clear from Ex. XXI (a) that he filed a claim and that it was dismissed. He says that when he took Ex. A, though he knew of the existence of the and defendant he did not make any enquiries of him. He also states that he knew that the 3rd defendant's father had attached the properties at the time of his mortgage Ex. A, and that he saw all the deeds of sale and mortgage in respect of the properties at the time of the mortgage Ex. A. It is therefore clear that the fact that some of the deeds were jointly executed by Murugayee and her husband, the 2nd defendant, and that her husband attested almost all the documents, must have put the plaintiff on notice, and the absence of any enquiry by him from the 2nd defendant who was living in one of the houses mortgaged shows that the plaintiff had constructive notice, because, if he had pursued the matter further and made enquiries from the 2nd defendant he would have been told all the facts. It is also clear that he had notice both of Dandapani's suit and of Sundarappier's suit. He says that he paid the money under Ex. A to set aside the Court sale. If he had made enquiries he would have known that there were disputes between the father and the son as regards the title to the properties. It is clear from the evidence of the plaintiff's 7th witness, Subbarama Aiyar, who admittedly negotiated the mortgage, Ex. A, that he must have known that the 2nd defendant was asserting that he was the real owner. He admits that he was the writer of Ex. XV, dated the 27th of January, 1914, where it is distinctly stated that the properties mortgaged were purchased by the 2nd defendant benami in the name of his wife Murugayee. Plaintiff's 8th witness, Ramachandra Aiyar (3rd defendant), admits that he was an executor appointed under the plaintiff's father's will and that he knew the 2nd defendant from 1912. He states that he did not know Murugayee before Ex. XII and how she acquired the properties. I find it difficult on the evidence to hold, that the plaintiff when he lent the money for the purpose of paying it into Court to set aside the sale in execution of Dandapani's decree was ignorant of all that had happened before and lent the money bona fide believing that Murugayee was the real owner and that her husband, the 2nd defendant, had or claimed no interest in the properties.

25. The question remains as to the relief if any to which the plaintiff is entitled on these facts. There can be little doubt on the evidence that the properties mortgaged were sold in execution of a decree to which the 1st and 2nd defendants were parties and that but for the act of the 1st defendant in raising money from the plaintiff and setting aside the Court sale under Order 21, Rule 89, Civil Procedure Code, the properties would have been lost to the 2nd defendant who on the evidence is the real owner of the properties. The 2nd defendant wanted an order postponing the sale and permission to raise moneys to pay off the decree amount but his application was dismissed as the 1st defendant did not concur. He then did nothing and the 1st defendant claiming to be the real owner of the properties applied to set aside the sale under Order 21, Rule 89, Civil Procedure Code, and paid the amount clue under the decree into Court. The result has been that not only has the liability of the 2nd defendant under the decree been satisfied but the 2nd defendant and the transferees from him are now in a position to put forward their claim to the properties on the ground that Muru-gayee, the mother of the 1st defendant, was only a benamidar.

26. Reliance was placed by the respondents' vakil on Sections 69 and 70 of the Contract Act but these sections would not apply. It is clear that the payment into Court under Order 21, Rule 89 by the 1st defendant was not made for the 2nd defendant but was made in the assertion of a hostile title and for the protection of the interest of the person making the payment. The mere fact that the 2nd defendant was benefited will not be sufficient.

27. In Ram Tuhul Singh v. Biseswar Lal Sahoo (1875) LR 3 I A 131 their Lordships of the Privy Council observe : ' The question is not to be determined by nice considerations of what may be fair or proper according to the highest morality. To support such a suit there must be an obligation express or implied to repay. It is well settled that there is no such obligation in the case of a voluntary payment by A of B's debt. Still less will the action lie when the money has been paid against the will of the party for whose use it is supposed to have been paid.' It is thus clear that where a person makes a payment in the assertion of a hostile title and for the protection of his own interests, in order to save property which he claims to be his from passing out of his hands, the mere fact that the other party is benefited will not, if it is found that the person making the payment has no title, entitle him to be reimbursed. In Veeraraghava Iyer v. Lakshmana Iyer (1912) 25 MLJ 312 it was held that the interest contemplated by Section 69 of the Indian Contract Act is an existing interest which the payment is intended to protect and not an interest which is created by the payment itself, that Section 70 of the Indian Contract Act has no application where the person making the payment makes it for himself and not for the person against whom the claim for reimbursement is made and that Section 101 of the Transfer of Property Act does not create a security where there was no security before. In Sri Sri Sri Chandra Deo v. Srinivasacharlu : (1913)25MLJ433 it was held that the test to bring the case under Section 70 of the Indian Contract Act is that a person should have in fact enjoyed the benefit by accepting or adopting without objecting to it and that it is not necessary that before the act is done by the other party an option must have been given to the persons sought to be made liable, of accepting or declining the benefit before the benefit is given. All the authorities on the subject have been reviewed by the learned Judges. The scope of Section 70 was also considered in Gopala Aiyangar v. Mummachi Reddiar (1922) 17 LW 254. In that case the plaintiff sued to recover moneys paid by him for discharging encumbrances on certain properties purchased by him. The sale to the plaintiff was held not to be binding and was set aside against the defendants in the previous proceedings. Spencer, J., after a review of the authorities, held that the plaintiff was entitled to recover under Sections 69 and 70 of the Indian Contract Act moneys paid by him for discharging encumbrances but that he was not entitled to a charge for the same. Devadoss, J. held that the plaintiff was not entitled to recover, as he was a mere speculating volunteer and as he was aware that the sale to him conveyed no title. I agree with the view taken by Spencer, J., but it will not help the plaintiff in the present case. Unless there is a charge in his favour he would have no relief against the 5th and 6th defendants who are purchasers from the 2nd defendant.

28. The 1st defendant may have a claim for contribution as the decree was a joint decree but this again will give him no charge. If Sections 69 and 70 do not apply, the mere fact that a person setting up a hostile title discharges encumbrances which the other party was liable to discharge would of itself give no right. In Ammani Ammal v. Ramaswami Naidu (1918) 37 MLJ 113 it was held that where the guardian of a minor purports to sell the minor's property as the guardian's own property the mere fact that part of the consideration for the sale went to discharge debts binding on the minor would not cast on him an obligation of repaying the debts found to be binding on him and discharged out of the purchase money. In Balwant Singh v. R. Clancy ILR (1912) A 296 it was held that where a person who was the manager of an undivided family mortgaged property as if he was the full owner denying the right of the junior members of the family, the alienee cannot claim to be paid back the portion of the mortgage money which went to discharge the debts binding on the junior members of the family.

29.Reference has been made by Mr. Bhashyam Aiyangar for the respondents to Bhagwati Prasad v. Radha Kishen Sewak Pande ILR (1893) A 304 where their Lordships of the Privy Council held that where a person lent money to the nominal purchaser of a property who was the agent of the real purchaser in order to purchase the property, there was a charge on the purchase money so advanced. This decision was considered in Roy-zuddi Sheik v. Kali Nath Mookerjee ILR (1906) C 985 and it was held that where a person who held a tenure benami for another executed a bond in favour of the landlord, who knew that the person executing the bond was only a benamidar, for arrears of rent, it would not affect the tenure and that the landlord suing on the bond was not entitled to claim a charge on the land under the Bengal Tenancy Act. The learned Judges distinguish this case on the ground that there were no such equitable considerations in this case as those that arose in Bhagwati Prasad v. Radha Kishen Sewak Pande ILR (1893) A 304.

30. The facts of the present case, however, can be distinguished from the cases I have referred to and in my opinion entitle the plaintiff to a charge for the sum which went to set aside the sale under Order 21, Rule 89. The decree was a joint decree against the 1st and 2nd defendants, and the deceased Murugayee. It was on a promissory note executed by the 2nd defendant, the real owner and Murugayee, the benamidar. The sale was a sale that will bind both the real owner and the benamidar, and if the sale was not set aside, the title of the real owner would have been extinguished because the judgmet-debtors were the benamidar and the real owner and whether the properties belonged to him or were Murugayee the purchaser would have got an absolutely good title.

31. It is clear that under the Civil Procedure Code of 1908 title vests in the auction purchaser from the moment of Sale and that no confirmation is necessary. I need only refer to the decision of the Privy Council in Bhawani Kuar v. Mathura Prasad Singh (1912) ILR 40 C 89 (PC) where it was held that a sale in execution took effect from the actual date of the sale and not from the date of confirmation. A similar view was taken by a Full Bench of this Court in Venkatachellamayya v. Nilakanta Girjee ILR (1917) M 474 : 34 MLJ 156.

32. As, therefore, title passed out of the real owner and the benamidar at the Court sale, the setting aside of that Court-sale by the 1st defendant by payment of money into Court must be treated as a re-purchase by the 1st defendant and the mortgage to the plaintiff in so far as the consideration went to set aside the sale must be treated as money borrowed to repurchase the properties. In Mallireddi Ayyareddi v. Adusmili Gopalakrishnayya ILR (1923) M 190: 1923 46 MLJ 164 their Lordships of the Privy Council treated money paid by a puisne encumbrancer to discharge a mortgage and to stave off proceedings being taken to bring the mortgaged properties to sale, as purchase money. It is also clear that a benamidar is an agent or trustee for the real owner. In Choudhri Gur Narayan v. Sheo Lal Singh (1918) 36 MLJ 68 it was held that a benamidar represents the real owner and so far as their relative legal position is concerned, is in the position of a mere trustee for him. Their Lordships of the Privy Council observe:--'As already observed, the benamidar has no beneficial interest in the property or business that stands in his name; he represents, in fact, the real owner, and so far as their relative legal position is concerned he is a mere trustee for him. '

33. In the present case the properties were sold in execution of the decree against the real owner and the benamidar and there was no misconduct or default by the benamidar which led to the sale. It seems to me that where a person in the position of an agent or trustee repudiates his character and repurchases properties in his own name, it is open to the real owner to treat such repudiation as a nullity and to claim that the properties are held by the benamidar in trust for him and the benamidar cannot treat the re-purchase as for his own benefit. But at the same time I can find no authority for holding that the real owner can get the properties free from the obligation to pay the money that was the consideration for the re-purchase. Section 62 of the Trusts Act which deals with wrongful purchase by a trustee states that the beneficiary if he wants to have the property so purchased declared subject to the trust or re-transferred by the trustee should repay the purchase money paid by the trustee with interest. Section 90 which deals with advantages gained by a qualified owner similarly makes the holding of the advantage to be for the benefit of the other party but subject to repayment of expenses properly incurred. It is obvious that but for the raising of the money on the mortgage to the plaintiff the properties would have been legally and effectively lost to the real owner. Applying therefore the law as regards purchase by agents or trustees of property which the principal or cestui que trust can claim the advantage of, no case has been referred to us which decides that because the re-purchase was made by the agent or trustee in his own name, it passed free of any obligation created on the property for the purpose of meeting the purchase money in cases where the original sale was not brought about by any default of the agent or trustee and would be binding on the cestui que trust.

34. Where property is sold in execution of a decree against the real owner and the benamidar re-purchases the property or raises money for the purpose of setting aside the sale, it, seems to me to be contrary to all principles of equity and justice to hold that the real owner who took no steps to discharge the decree and who allowed the property to be sold could step in and claim the property free from any obligations to repay the money borrowed by the benamidar for the purpose of setting aside the sale. In the present case it is clear that the sale proclamation in the decree to pay off which the 2nd defendant alienated the properties to the 5th and 6th defendants, distinctly states that the Court sale was subject to the mortgage in favour of the plaintiff and any enquiry which the 5th and 6th defendants ought to have made would have shown that the mortgage to the plaintiff was to set aside the sale under Order 21, Rule 89 in the other suit. But even if they had no notice, it is clear from Srinivasaraghava Aiyangar v. Ranganatha Aiyangar (1918) 36 MLJ 618 that where there is a charge on immoveable property, a purchaser of the immoveable property, although without notice of the charge, takes it only subject to the charge. I think that the plaintiff in the present case is entitled to 3 charge for Rs. 4,629-11-4. If he is entitled to a charge it is clear that that charge would bind the alienee from the 2nd defendant. I think the plaintiff is entitled to a mortgage decree for Rs. 4,629-11-4, with costs and interest at 6 per cent. from the date of plaint to date of payment. I would modify the decree of the Subordinate Judge accordingly. The parties will pay and receive proportionate costs throughout. Time for redemption three months from this date.

Spencer, J.

35. I agree with my learned brother that, on the evidence, the 2nd defendant was the real owner of the properties which were purchased with his money benami in the name of his wife Murugayee and of items 2, 3 and 4 which were purchased in the name of himself and his wife Meenakshi and I think that the fact that the purchases in Murugayee's name were not of one or two items but of the greater part of 2nd defendant's acquisitions negative the theory of advancement. Cf. Kerwick v. Kerwick ILR (1920) C 260.

36. I do not find any justification for the learned Subordinate Judge's opinion that the 2nd defendant grossly exaggerated his earnings in South Africa when he spoke of them as amounting to 50 or 60 a month. He ran a shaving saloon and opened a railway hotel during the height of the gold boom in Natal and the Rand and may easily have found those ventures very remunerative.

37. The circumstance that he mortgaged some of the lands that he had purchased for the occasion of his daughter's marriage does not in the least disprove his story of the manner in which he earned the capital that he invested in land.

38. As regards the plea of estoppel there is evidence that the 2nd defendant transferred a decree to plaintiff (Ex. XXII) and the plaintiff preferred a claim petition when the decree was attached before the judgment upon Dandapani Vaidyan's suit and it was dismissed [vide Ex. XXII (a)]. The plaintiff must have been aware of the circumstances of 2nd defendant's family as it appears from his admissions in the witness-box and there can be no estoppel in favour of a party who knows the truth.

39. The mortgage suit must therefore fail except in respect of a sum of Rs. 4,629-11-4 which went to pay off the sale of the properties in favour of Dandapani. The 1st defendant, as the reversionary heir of 2nd defendant, was sufficiently interested in the preservation of the property to be entitled to redeem it under Section 91 of the Transfer of Property Act, or to apply to have a Court sale set aside under Order 21, Rule 89, Civil Procedure Code. He was entitled to an equitable lien for the amount of the money so utilised [see observations in Bhagwan Singh v. Mazhar Ali Khan ILR (1914) A 272 at 276 and Raja of Pithapuram v. Secretary of State 16 MLT 375 and Section 32 of the Indian Trusts Act]. He acted neither speculatively nor officiously in paying money that 2nd defendant was bound as well as himself to pay. The plaintiff having obtained an assignment of 1st defendant's rights through the suit mortgage deed (Ex. A) is entitled to recover the amount by way of charge on the redeeemd properties vide Narayana Kutti Goundan v. Pechiammal ILR (1911) M 426 : 1911 22 MLJ 364. There is no bar of limitation here, as there was in Gopala Aiyangar v. Mummachi Reddiar (1922) 17 LW 254, as the present suit has been instituted on 19th April, 1918, and the sale was set aside on 31st January, 1916. I agree with the modification of the lower Court's decree proposed by my learned brother.


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