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B.V. Sundararaja Iyer and ors. Vs. Kanakaraj - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1958)2MLJ374
AppellantB.V. Sundararaja Iyer and ors.
RespondentKanakaraj
Cases ReferredIn Probodh Kumar Das v. Dantamara Tea
Excerpt:
.....states that the partnership was only between two brothers other than the plaintiff's father and that the latter had deposited large sums of money with the partners and on his death the respondent became entitled to recover the monies as a creditor of the firm which claim was satisfied by the assignment of the assets......up the respondent was given on 1st january, 1938, several items of assets one of which was the mortgage right which; belonged to the firm in satisfaction of his claim. the consideration attributable to the assignment was rs. 5,500-13-9. that-assignment was oral but the respondent claimed that as he entered into possession of the mortgaged properties immediately he had perfected his title as an assignee of the mortgage by adverse possession and that he would be entitled to a sum of rs. 5,500-13-9 on the basis of the proviso to section 9a(10)(ii)(b) of the act. the learned subordinate judge held that as the assignment was not effected by a registered instrument, as required by section 54 of the transfer of property act, the respondent could not be deemed to be an assignee even though.....
Judgment:

Ramachandra Iyer, J.

1. This appeal at the instance of the mortgagors is directed against the judgment of Mack, J., in C.M.A. No. 502 of 1951, which arose out of proceedings instituted by the appellants for a declaration of the amount due under an usufructuary mortgage after applying the provisions of Section 9-A of Madras Act IV of 1938. The father of the appellants 1 and 3 had executed an usufructuary mortgage on 25th April, 1924, for Rs. 7,499 in favour of one Mohideen Meeraganni Rowther. After he death of the mortgagee his heirs transferred on 13th August, 1935, their rights, under the mortgage, to one Alagannan Chettiar for a consideration Rs. 5,500. The respresentatives of the assignee-mortgagee and the respondent who claimed rights to the mortgage were impleaded as parties and it was claimed that only a sum of Rs. 917 would be due in respect of the usufructuary mortgage. The representatives of Alagannan Chettiar disclaimed all interest in the mortgage stating' that the mortgage along with certain other out-standings had been assigned to the respondent on 1st January, 1938, in partial satisfaction of a large sum due to him. The case for the respondent was that Alagannan Chettiar who obtained the assignment of the mortgage from the original mortgagee did so on behalf of a firm in which he and his brother Suppan Chettiar were partners, that the respondent's father who was a divided brother of Alagannan Chettiar had deposited large sums of money in the firm and after his death the respondent became entitled to the monies so deposited, that the firm fell on evil days and it had to be wound up, and that in the course of winding up the respondent was given on 1st January, 1938, several items of assets one of which was the mortgage right which; belonged to the firm in satisfaction of his claim. The consideration attributable to the assignment was Rs. 5,500-13-9. That-assignment was oral but the respondent claimed that as he entered into possession of the mortgaged properties immediately he had perfected his title as an assignee of the mortgage by adverse possession and that he would be entitled to a sum of Rs. 5,500-13-9 on the basis of the proviso to Section 9A(10)(ii)(b) of the Act. The learned Subordinate Judge held that as the assignment was not effected by a registered instrument, as required by Section 54 of the Transfer of Property Act, the respondent could not be deemed to be an assignee even though he might have acquired the mortgagee's right by adverse possession and that Section 9-A(10)(ii)(b) would not apply. He granted a declaration that the amount due under the mortgage was Rs. 917.

2. The respondent appealed to this Court against that order and Mack, J., allowed, the appeal, holding that on an equitable construction of Section 9-A, there should be no distinction between an assignee of an usufructuary mortgage by virtue of a registered instrument and a person who acquired title to the mortgagee's right by adverse possession. The learned Judge further held that the respondent was entitled to' protection under Section 53-A of the Transfer of Property Act and, therefore, the debt was not liable to be scaled down. In this view the learned Judge dismissed the appellants' application for scaling down the mortgage debt without even giving a declaration in conformity with the admitted case of the respondent that he would be entitled to Rs. 5,500-13-9. The appellants have filed this appeal under Clause 15 of the Letters Patent against the judgment of Mack, J.

3. To appreciate the respondent's contention which was accepted by the learned Judge, it is necessary to set out the relevant portions of Section 9-A(ii)(b) which run as follows:

Nothing contained in this section except Sub-sections (1) and (2) shall apply to any mortgage:.

(b) Where during the period aforesaid the mortgagee or any of his successors in interest has transferred either wholly or in part the mortgagee's rights in the property bona fide and for valuable consideration, then to the whole or such part as the case may be:

Provided that the transferee of the mortgage shall not be entitled to recover in respect of such mortgage anything more than the value of the consideration for the transfer....

The period referred to in the above provision is from 1st October, 1937, to 30th January, 1948. Therefore, if an usufructuary mortgage is assigned by the mortgagee, the statutary discharge provided for in Section 9-A of the Act would not operate if (1) the assignment is made during the period 1st October, 1937 and 30th January, 1948, and (2) the mortgagee transferred his rights bona fide and for valuable consideration: but the assignee would be entitled to the amount due under the mortgage or the consideration for the assignment in his favour whichever is less.

4. As the benefit of the section is granted only to a transferee it is necessary that there should be a valid transfer. An instrument of mortgage of immovable properties is itself an interest in immovable property and if its value is more than Rs. 100 it could be effected only by a registered document. Vide Elumalai Chetti v. Balakrishna Mudaly : AIR1922Mad344 . In the absence of such an instrument a mere oral assignment of the mortgage right, as in the present case, cannot invest in the respondent the rights of the transferee of the mortgage. We do not agree with the learned Judge that Section 53-A of the Transfer of Property Act would enable the respondent to claim the benefit as a transferee. For one thing there was no contract to transfer the mortgage right in writing signed by the transferors. Even if the conditions for the applicability of Section 53-A are deemed to be satisfied, the doctrine of part performance embodied in the section does not operate to effect a transfer of title, which under the provisions of Section 54 can be effectuated only by a registered instrument. In Probodh Kumar Das v. Dantamara Tea & Co. Ltd. ., Lord Macmillan observed:

The Section 53-A is so framed as to impose a statutory bar on the transferor; it confers no active title on the transferee.

5. Another contention on behalf of the respondent is that although the transfer was oral and incompetent to convey title of its own force, he, purporting to be an assignee for consideration entered into and maintained possession of the mortgaged properties for more than twelve years, with the result that his title to the right was perfected. That may be so; but the question in the case is whether he is a transferee from the mortgagee. A claim by adverse possession is in negation of the right of the -owner while a claim as a transferee is one under him. In the former case the title of the owner is extinguished by virtue of Section 28 of the Limitation Act. The title of the adverse possessor is one acquired by him in his own right by virtue of long possession. Such an acquisition of title cannot amount to a transfer within the meaning of Section 9A(1o)(ii)(b) of the Act.

6. Mr. A.V. Narayanaswami Iyer appearing for the respondent has tried to support his case with reference to Section 9-A(10)(ii)(c) which runs as follows:

Where the mortgagee's interest in the property subject to the mortgage or any part of such interest belonged to or devolved on two or more persons and during the period aforesaid a partition has taken place among such persons then to the whole or such part of the interest, as the case may be.

7. His contention was that the assignment of the mortgage right in favour of the respondent was the result of a partition betwen partners. He relied in this connection on Exhibit B-4, a petition filed by Alagannan Chettiar to the Zamindar of Bodinaickanoor to transfer the patta of the mortgaged lands in the name of the respondent, Exhibit B-4 stated 'the lands have fallen in a partition amongst us to the share of the minor Kanakaraj Chettiar (the respondent) and that the same is in his holding.' Exhibits B-8 to B-11 are the pattas granted by the zamindar in favour of the respondent. According to the learned Advocate, the respondent's father was a partner with Alagannan Cnettiar and his brother Suppan Chettiar and the assignment of the assets in favour of the respondent which took place on 1st January, 1938, was only the result of a division of the partnership assets between him and his uncles. This contention was not raised at any stage of the proceedings. It is unnecessary however to reject the contention on that technical ground as we are satisfied that the contention is wrong both in law and on the facts. Section 9-A(10)(ii)(c) would seem to apply to a case of partition between co-owners or members of a coparcenary. An assignment of property obtained as a result of the settlement of accounts between partners cannot amount to a partition within the meaning of the sub-section as the relationship between the partners is neither that of co-owners not co-parceners. We are no I even satisfied that on the facts of this case there has been a partition even; in the sense of dissolution of a firm and an adjustment of the rights between the partners. From the pleadings and the evidence in the case it is clear that the respondent's father was not a partner in Alagannan Chettiar's firm. The counter-statement filed by the respondent states that the partnership was only between two brothers other than the plaintiff's father and that the latter had deposited large sums of money with the partners and on his death the respondent became entitled to recover the monies as a creditor of the firm which claim was satisfied by the assignment of the assets. Exhibit A-1 which is the reply notice sent on behalf of the respondent to the appellant states that the partnership was carried on by Alagannan Chettiar and another brother of his and that the respondent's father was only a creditor of the firm and that certain assets were transferred to the respondent in satisfaction of the liability of the partners.

8. On these admissions it is clear that the respondent had no pre-existing title to the mortgage either as co-owner, coparcener or even as a partner and that he entered into possession of the mortgaged properties under an invalid oral assignment of the mortgage. That cannot be construed to be a partition. The provisions of Section 9-A(10)(ii)(c) cannot, therefore, be invoked to render the statutory discharge of the mortgage debt ineffective. We cannot, therefore, sustain the judgment of the learned Judge. We allow the appeal, set aside the judgment of the learned Judge and restore the order of the learned Subordinate Judge. The appellants will have their costs in this appeal.


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