1. The appellant was the plaintiff in a suit on a mortgage executed on 5th February, 1935, by the first defendant. In July, 1937, the second defendant who is the contesting respondent here, purchased the hypotheca in Court auction under a money decree against the mortgagor-first defendant. Madras Act IV of 1938 came into force on the 22nd March, 1938. On this date the mortgagor who is admittedly an agriculturist was under a personal liability to discharge the debt. However no action was taken by the mortgagee to recover the debt from him. In 1940 the contesting respondent deposited two sums of Rs. 1,287 and Rs. 18 under Section 83 of the Transfer of Property Act claiming that this was all that was due under the mortgage having regard to the provision of Madras Act IV of 1938 and asking to redeem the mortgage. This petition was dismissed but it appears that the mortgagee was permitted to withdraw the amounts deposited and he has given credit to those amounts in the suit. The suit was filed claiming on the mortgage Rs. 569-11-4 which is the balance due after giving credit to the amounts deposited in Court. There was also a claim for another amount due on account which has been disallowed and there is no appeal with reference to that. It is established that the contesting respondent, the purchaser, is not an agriculturist.
2. Two contentions were raised in the Courts below, one was based on Section 4(d) of Madras Act IV of 1938, the mortgagee contending that this mortgage was a debt contracted on the security of house property alone in a panchayat which was a union before the 26th August, 1930, while the respondent contended that the security comprised not merely house property but also an oil engine and a vacant site. The other contention related to the right of the contesting respondent to the relief, so far as his property is concerned, which would be due to the mortgagor on the footing that he was an agriculturist liable to discharge the debt as at the commencement of the Act.
3. The question whether this mortgage is a mortgage on the security of house property alone is not free from difficulty. It is common ground that the property is situated within a union. The schedule to the mortgage deed enumerates firstly a site measuring 32 yards into 44 yards on the northern side of which there is a tiled building and on the western side another tiled building and verandhas on both sides. It then proceeds to give details of the doors and door frames of these buildings, the site on which they are built and the garden appurtenant thereto and the wells within the site. Then follow the words ' fixed in the said building, one 20 horse power Rapson Crude Oil Engine, one No. 1 huller, two sangli decorticator boxes and tank, shafting wheel belt, etc., relating to this.' Finally the mortgage comprises another site situated to the east of the building already referred to measuring 46 yards into 70 yards surrounded by a wall and having on its western side a building with zinc sheet, wooden door, one pair of door frames, and two iron windows. The schedule concludes with the sentence, ' the house bears the union No. 72.'
4. It is contended for the respondent, and this contention has been accepted by the lower appellate Court, that the engine is a separate item not treated as part of the building and that it must be deemed to have been mortgaged as a chattel and not as part of the house property so as to take the mortgage out of the exemption contained in Section 4(d) of the Act. It is also contended that the last item, the vacant site with the zinc sheet shed in it, must also be regarded as not being house property. The case-law on the question whether engines, fixed to the ground inside buildings, pass to the mortgagee as part of the building mortgaged has been summarised in my judgment in Subramanian Chettiar v. Chidambaram Servai (1939) 51 L.W. 155 and it seems unnecessary to repeat the summary contained therein. We do not know how the oil engine in the present case was fixed, but that it must have been fixed in some fairly rigid manner is apparent for such an engine could not work otherwise ; and the probability is that it was fixed in the way in which such engines usually are fixed, viz-, by being bolted on to a concrete platform. Assuming that it was so fixed, that is to say, in a manner which would hold it semi-permanently attached to the ground though capable of removal, the question seems to be whether in the circumstances of the case it may be regarded as fixed to the ground for the beneficial enjoyment of the building or whether it should be regarded as merely held in place for its own beneficial enjoyment without any particular reference to the building to which it was attached. In the present circumstances, in the absence of further materials except the fact that the engine belonged to the owner of the building and was apparently fixed there for the purpose of trade being carried on in the building, I am inclined to the view that the engine must be regarded as a fixture for the beneficial enjoyment of the building, and that ordinarily the mortgage of the building would have been a mortgage of the engine fixed thereto, even if it was not expressly recited in the document of mortgage. Having regard to the way in which this mortgage deed is drafted with an enumeration of all the doors and the windows, I do not think that it can be said that the special mention of the engine in the schedule of property can be taken to imply that the engine is regarded as a separate chattel and not as a fixture on the property mortgaged.
5. With reference to the contention regarding the last item of property, the site with the zinc sheet shed situated in one side of it, it appears from the oral evidence, which has been recorded in a very illegible and elliptic manner, that the site in question is a paved yard used for drying grains. Probably, though there is no express statement on this point, the shed in the yard is used for the storage of grains. At any rate here we have a yard surrounded by a wall containing a shed with a door and two windows. The shed itself is certainly house property and it seems to me that it is reasonable to regard the yard as appurtenant to the shed and not as a separate entity. In this view I hold that the mortgage is exempt from the operation of the Act by the provisions of Section 4(d). In the light of this decision the further question regarding the effect of the agriculturist status of the mortgagor on the liability of the non-agriculturist purchaser becomes less important, but as the question has been argued fully and the matter may go further it is desirable that I should give a decision.
6. The appellant relies strongly on certain observations in Viswasundara Rao v. Kusalaramayya (1946) 2 M.L.J. 73. That was a case in which a non-agriculturist purchaser from the Official Receiver in the insolvency of a non-agriculturist-debtor wished to establish that the sons of the insolvent whose interest was held not to pass by the Official Receiver's sale were in fact agriculturists so that the debt might be scaled down in so far as it related to them. This contention was presumably put forward in the hope of giving an indirect benefit to the purchaser who, whatever the rights might be, appears to have been in possession of the whole of the property. The Bench held that seeing that the second and third defendants, sons of the insolvent, had not claimed any relief under Madras Act IV of 1938 and had not adduced evidence to show that they were agriculturists, it was not open to the alienee from the Official Receiver to ask that evidence should be taken on the question of the agriculturist status of those two defendants merely with the object of giving an accidental relief to the non-agriculturist purchaser. The observations on which the appellant relies are as follows:
We have no doubt held that when the mortgagors are given relief under Madras Act IV of 1938 and the burden upon the property is thereby lightened, the fortuitous benefit of that relief will be enjoyed by a subsequent purchaser, though the latter is not himself entitled to claim the benefits of the Act. This fortuitous benefit, however, cannot be claimed as of right by the purchaser who is not an agriculturist. It is the accidental result of a claim successfully advanced by the mortgagors.
7. The reference in this passage to the 'accidental benefit' given to a non-agriculturist is presumably a reference to the two cases Marina Ammayi v. Mirza Bakhar Beg Sahib : AIR1941Mad557 and Arunachalam Pilial v. Seetharam Naidu (1941) 1 M.L.J. 561. The first of these cases arose out of an application by the agriculturist mortgagors themselves under Section 19 of Madras Act IV of 1938 to scale down a decree passed in a suit by the mortgagors themselves for the redemption of a mortgage over property in which certain non-agriculturists had acquired an interest. The second case was a case of a suit by the mortgagee against an agriculturist mortgagor and a non-agriculturist Court-auction purchaser of the equity of redemption. The suit was pending when the Act came into force and the mortgagors were permitted to file an additional written statement raising the plea that they were agriculturists as defined by the Act and the debt was liable to be scaled down. It was held that the mortgagors were agricalturists as on the 1st October, 1937 and were indebted on the mortgage and that the plain consequence of Section 8 of the Act is that all interest outstanding on that date was wiped out and the principal amount then outstanding was repayable. It was also held that when the purchaser took the properties in Court auction he took them subject to the burden of the mortgage and if the burden is by reason of the provisions of Section 8 of Act IV of 1938 reduced without payment, there is nothing in the Act to deprive the purchaser of the fruits of his lucky purchase even though he is not an agriculturist. The respondent emphasises the words ' If as a result of the Act there is a statutory discharge or reduction of the debt, the prbperties cannot, it seems to us, be proceeded against for anything more than the scaled down amount of the debt.' This sentence taken out of its context is read as laying it down that whenever there is a debt due from an agriculturist at the commencement of the Act that debt by statute becomes discharged automatically without any procedure in the Court and any person who is liable for the same debt by reason of the purchase of property gets the benefit of the automatic reduction of that debt. I doubt very much whether any such general proposition was in contemplation of the learned Judges when these words were used and any such general proposition is difficult to reconcile not only with the words used in the last paragraph of the decision in Viswasundara Rao v. Kusalaramayya : AIR1946Mad434 but with the undoubted fact that in all the years which have passed since Madras Act IV of 1938, there is apparently no case in which the Courts have recognised the right of a non-agriculturist purchaser to relief when the agriculturist mortgagor is not at the time when the matter comes before the Court a person liable to discharge the debt.
8. I am not now concerned with what would be the position if the personal remedy against the mortgagor was still subsisting or if the mortgagor himself had claimed relief under the Act. When the matter came before the Court there was no liability due from an agriculturist and unless one was prepared to accept the theory that a relief which the mortgagor himself had never sought in respect of a liability which was never enforced against him, must be granted for the benefit of and be claimable by a non-agriculturist at a time when the agriculturist mortgagor himself was no longer liable and did not claim the relief, the contention raised on behalf of the respondent must fail. As was pointed out in Subbaraya Goundan v. Nachimuthu Mudaliar : AIR1944Mad82
even after the mortgagor has ceased to be liable to pay the debt personally by reason of the law of limitation and has ceased to be liable to pay the debt out of his property by reason of the sale of the hypotheca, he still has a right to redeem the debt and must for that reason be impleaded in the suit on the mortgage. We are, however, not prepared to hold that in such circumstances the mere existence of a right on his part to pay the debt involves a consequence of deeming him to be under a liability to pay that debt.
9. It seems to follow that if the mortgagor is at the time of the suit not under a liability to pay the debt there is no reason why the debt should be scaled down merely because he was, before the matter was brought before the Court, theoretically liable to pay the debt. I hold therefore that the contesting respondent is not entitled to have the debt scaled down merely because the mortgagor was, at the time of the commencement of the Act, an agriculturist entitled to the benefits of the Act, which benefits he has not claimed.
10. In the result therefore the appeal is allowed with costs throughout and the decree of the trial Court is restored.
11. Time for redemption--three months. (Leave to appeal is granted).