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Pedapati Mangayya Vs. Garapati Achayamma and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Case NumberA.A.O. No. 601 of 1946
Judge
Reported inAIR1950Mad224
ActsTransfer of Property Act, 1882 - Sections 56 and 82
AppellantPedapati Mangayya
RespondentGarapati Achayamma and ors.
Appellant AdvocateV. Parthasarathy, Adv.
Respondent AdvocateN.C.V. Ramanujachari, Adv.
DispositionAppeal dismissed
Cases ReferredPrithiraj Singh v. Rukmin Kuer
Excerpt:
.....sale deeds of mortgaged property in favour of respondents 2 to 4 with intention to pay whole mortgage debt - respondents 2 to 4 did not pay money - whether contracts of sale were 'contract to contrary' between respondents 2 to 4 on one hand and appellant on other - words 'contract to contrary' in section 56 refer only to contract between mortgagor and mortgagee - although appellant promised to pay money obtained after sale to discharge mortgage debt but no provision made as to what was to happen in case money not paid - no time fixed for payment of money - contract was not 'contract to contrary' within meaning of section 56. - - 3000. on 18th september 1940 he executed three sale deeds in respect of certain items of the mortgaged property in favour of respondents 2 to 4,..........property in favour of respondents 2 to 4, clearly intending that by these sales the whole mortgage debt should be paid off and the vendees left to enjoy the property free of mortgage, unfortunately, respondents 2 to 4 did not pay the money, although it is alleged that some years later the money was deposited in court. on an application under the agriculturists' relief act, the debt was scaled down in o. p. no. 406 of 1943 to rs. 3100-14-6. the mortgagee thereupon sought to bring the hypotheca to sale for the mortgage debt; but the appellant in e. a. no. 217 of 1946, asked that the court in equity should sell first the items of the hypotheca that had been sold to respondents 2 to 4. the learned subordinate judge, in a very brief order, dismissed the application, saying that the.....
Judgment:

Horwill, J.

1. On 27th March 1934 the appellant mortgaged a number of items of property to the transferor of respondent 1 for Rs. 3000. On 18th September 1940 he executed three sale deeds in respect of certain items of the mortgaged property in favour of respondents 2 to 4, clearly intending that by these sales the whole mortgage debt should be paid off and the vendees left to enjoy the property free of mortgage, Unfortunately, respondents 2 to 4 did not pay the money, although it is alleged that some years later the money was deposited in Court. On an application under the Agriculturists' Relief Act, the debt was scaled down in O. P. No. 406 of 1943 to Rs. 3100-14-6. The mortgagee thereupon sought to bring the hypotheca to sale for the mortgage debt; but the appellant in E. A. No. 217 of 1946, asked that the Court in equity should sell first the items of the hypotheca that had been sold to respondents 2 to 4. The learned Subordinate Judge, in a very brief order, dismissed the application, saying that the respondents had a statutory right under Section 56, T. P. Act to have the items sold to them, sold last.

2. Respondents 2 to 8 were ex parte when the order of the lower Court was made; but in appeal to this Court they sought to adduce additional evidence which they might have put forward in the lower Court, but did not. Clearly, they cannot be allowed to do that. It has been contended on their behalf that they were not served in E. A. No. 217 of 1946. We have perused carefully the B-Diary, and it would seem that although it is true that they were not personally served, yet they did instruct the counsel who appeared for them in the earlier proceedings to appear for them in E. A. No. 217 of 1946 also. When E. A. no. 217 of 1946 was called, they and their pleader were, however, absent ; and so the matter was heard ex parte.

3. It is first argued that the words 'contract to the contrary' in Section 56 refer only to contracts between the mortgagor and the mortgagee. The learned Advocate in support of this argument has referred to Ramabhadrachar v. Srinivasa Aiyangar, 24 Mad. 85, Charan Singh v. Ganeshilal : AIR1926All352 and other cases which held that the words 'contract to the contrary' in Section 82, T. P. Act, related to contracts only between the mortgagor and the mortgagee. It was held in Ramabhadrachar v. Srinivasa Aiyanagar, 24 Mad. 85, which was cited with approval in Charansingh v. Ganeshilal : AIR1926All352 , that the law enunciated in Section 82, T. P. Act, was the same as the law in England; but it was nevertheless pointed out in that decision that if there was a contract between the mortgagors, that contract could be enforced, although it was not a contract contemplated in Section 82. Since, however, a contract between co-mortgagors is not an agreement that runs with the land, it would not bind assignees from the mortgagors. Assuming these decisions to have been rightly decided, we see no reason for thinking that the contracts contemplated in Section 82 are precisely those contemplated in Section 56. Many cases have been cited to us in which the question arose whether certain contracts between mortgagors and purchasers from them or other mortgagors were 'contracts to the contrary' within the meaning of Section 56. We need cite only Pirthiraj Singh v. Rukmin Kunwar : AIR1926All415 and Muhammad Abbas v. Muhammad Hamid, 9 A. L. J. 499 : 14 I. C. 179 as examples. Even if the 'contract to the contrary' referred to in Section 56 were a contract between the mortgagor and the mortgagee, Ramabhadrachar v. Srinivasa Iyengar, 24 Mad. 85, would be an authority for the position that that contract could be enforced.

4. The learned advocate for the respondents, however, argued that it would be beyond the province of the Court in bringing a property to sale in pursuance of a mortgagee's right to sell, to enforce a contract between mortgagors and their alienees, which can only properly be enforced in a suit for specific performance. In support of this argument, he has read certain passages from one or two decisions cited by him. In particular, he referred to Mahomed Karimul Rahman Khan v. Saraswati Sugar Syndicate : AIR1939All314 . In the last paragraph of that judgment the learned Judges said :

'The case before us is not a case is which a subsequent transferee from the mortgagor invokes the assistance of the Court for the protection of the interest acquired by him in some of the items of the mortgaged properties. This is a case in which the legal representatives of the mortgagor in effect seek the specific performance of an agreement entered into between them and their transferees for payment of a portion of the amount due on the basis of the decree for sale. No authority has been shown to us which would justify out acceding to the request of the appellants to fetter the rights of the decree-holders in the present case by laying down the order in which the various items of the mortgaged properties are to be sold.'

A reference to Section 56, T. P. Act, would show that the interest of the mortgagee remains dominant and that any right given to the purchaser of certain items of the hypotheca is subject only to the superior rights of the mortgagee, whose interest is not to be injured or jeopardised by any order which the Court might pass in favour of the purchasers; for that section reads: '.. the buyer is, in the absence of a contract to the contrary, entitled to have the mortgage debt satisfied out of the property or properties not sold to him... but not so as to prejudice the rights of the mortgagee.'

This passage seems only to emphasise the superior rights of the decree-holder, which cannot be fettered by an arrangement entered into between the mortgagors and their transferees. It does not suggest that the mortgagors and their transferees should be driven to a separate suit.

5. We are, therefore, left to consider the question whether we can spelt out of the three contracts of sale entered into on 18th September 1940 a 'contract to the contrary' between respondents 2 to 4 on the one hand and the appellant on the other. The learned advocate for the appellant placed a great deal of reliance on the decision of Chandrasekhara Aiyer J. in Sivaramayya v. Venkayamma : (1945)2MLJ412 , which is a case very similar to that which we are here considering. The learned Judge based his decision on Muhammad Abbas v. Muhammad Hamid, 9 A. L. J. 499 : 14 I. C. 179, where it was held that an agreement to discharge a mortgage was a 'con-tract to the contrary' within the meaning of that term in Section 82. Chandrasekhara Aiyar J. held that since marshalling was the converse of contribution, the rules, principles and decisions which applied to contribution would apply equally to marshalling. It seems to us, however, that a clear distinction can be drawn between the effect of an arrangement entered into between a mortgagor and a purchaser from Mm to discharge the mortgage debt on a right to contribution and on a right of priority in the sale of the hypothecated items. In the former case, the parties agree that the vendees shall bear the whole burden of the mortgage debt, which necessarily implies a contract that if there be a suit or other proceeding for contribution, the transferee shall not bear merely a pro-rata burden but the whole burden. On the other hand, a bare promise to pay off the mortgage debt may not imply a willingness to have the promissor' property sold 'first in a court sale; or such a contingency may never have been foreseen and its implications thought out. Even if, therefore, Section 56 may be said to be dealing with a principle which is the converse of that of Section 82, it does not follow that from a contract entered into between the parties, whereby one agrees to pay off the mortgage amount, a 'contract to the contrary' can be spelt out within the meaning of Section 56. One would have to consider in every case, upon an examination of the contract itself, whether expressly or by necessary implication, it was a contract to the contrary. In certain cases a 'contract to the contrary' can be spelt out of the agreements entered into between a mortgagor and a transferee of his interests as was the ease in Prithiraj Singh v. Rukmin Kuer : AIR1926All415 , but if Chandrasekhara Aiyer J. intended to hold that a 'contract to the contrary' would exist in all cases where a person had undertaken to discharge a mortgage debt and did not do so, we should have with due respect to express our dissent. It is not however necessary for us to say whether on the facts of that particular case Chandrasekhara Aiyar J. was justified in passing the order he did; for, we have to decide this case upon a reading of the sale deeds entered into on 18th September 1940. All that we find there which is relevant to the case is that the vendees pro-missed to pay a certain sum of money to the mortgagee in part discharge of the mortgage debt. It was no doubt contemplated that the whole mortgage debt would be discharged if all the three vendees did pay as they promised to do. Unlike the case dealt with in Prithiraj Singh v. Rukmin Kuer : AIR1926All415 , however, no provision was made in these three sale deeds as to what was to happen in case the money was not paid promptly. In fact, no time was fixed for payment of the money. Reading through the sale deeds we have no material for thinking that the parties ever contemplated the possibility of the property being brought to sale and a question arising as to the priority of the sale of the various items. In these circumstances, we are unable to spell out of these three sale deeds themselves any 'contract to the contrary' within the meaning of Section 56.

6. The appeal is, therefore, dismissed with costs.


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