1.The question argued in this second appeal relates to the application of Section 125 of the Madras Estates Land Act read with Section 72 of the Transfer of Property Act to sums paid by a usufructuary mortgagee after the passing of the former Act to preserve the mortgaged property from sale in execution of a simple money decree.
2. At a sale for arrears of rent under the Madras Estates Land Act, Section 125 saves the rights created by the ryot in favour of third persons if he has obtained the landholder's permission in writing registered for them, and also saves encumbrances created before the Act.
3. Lavanna Chetti's mortgage being one of 1906 was in existence before the Act was passed, but the payments made by the mortgagee to save the property from sale in a Civil Court were made in December 1908 after the passing of the Act in June 1908.
4. It is contended for the appellants, who purchased the lands at the rent sales, that neither are these payments encumbrances nor were they created before the passing of Act 1 of 1908.
5. The lower courts have held that they are both. I think that they are right. Section 72, Transfer of Property Act permits a mortgagee in possession to tack on payments made to preserve the mortgaged property from sale to his prinicipalmoney and to charge interest at the rate payable on the principal.
6. It is argued that 'sales' in Section 72, Clause (b) must be understood as being on the same footing as acts of destruction or forfeiture mentioned in the same clause, and the sales which would leave unaffected the mortgagee's security need not be prevented and so do not count in the category of things which jeopardise the mortgagee's interest.
7. Under Section 128 of the Estates Land Act, the persons who have a right to prevent sales by paying the requisite amount are persons having an interest in the holding which would be affected by the sale. There can be no doubt that an encumbrancer's interest would be affected in a different degree according as the sale was a sale for arrears of revenue, or a sale under a mortgage decree, or a sale under a money decree, and in the first case according as his encumbrances happened to be before or after the Act.
8. But there is no reason for putting a narrow construction on the word 'sale' in Section 72(b) Transfer of Property Act or for confining it to that class of sale which virtually has an effect akin to destruction or forfeiture of the mortgagee's security.
9. That fact that his possessory right is likely to be endangered either temporarily or for the duration of his mortgage period, by allowing the sale to go on would be a sufficient ground for a usufructuary mortgagee spending money to preserve his right in the property.
10. The fact noticed by my learned brother, namely, that the mortgage was created while the attachment was pending, makes the respondent's case all the stronger, but I am pre-pared to support it even otherwise. Time for payment is extended by 3 months.
11. The second appeal fails and is dismissed with costs.
12. The Plaintiffs' undivided brother and predecessor-in-title obtained from the 3rd defendant a usufructuary mortgage of the suit properties (among others) under a registered deed dated 27-2-1906 and got into possession. On 18-12-08, he paid Rs. 379-8-0 to avert the sale of the properties in pursuance of an attachment that had been subsisting at the date of the mortgage and got the sale stopped. In a later litigation, the High Court held that his mortgage was good to the extant of (1) Rs. 47-12-0 to which extent only it was found that the original mortgage was supported by consideration and (2) the sum of Rs. 379-8-0 just mentioned. The present suit is to recover these amounts with interest from the date of dispossession. The lower decree. Courts gave a
13. The defendants 1 and 2 only appeal. Some of the suit properties being held by 3rd defendant as a ryot, they were purchased in 1916 by the appellants in a sale for arrears of rent under Chapter VI of the Madras Estates Land Act and the only point raised in Second Appeal is that the properties so purchased are subject only to the encumbrance in respect of Rs. 47-12-0 and not to the charge for Rs. 379-8-0 as the latter was, according to their contention, created after the passing of the Act (28-6-1908) and Section 125, of the Madras Estates Land Act is relied on. The Lower courts and the respondent rely in this connection on Section 72 of the Transfer of Property Act.
14. Assuming, as I am inclined to hold, that the word 'sale' in Section 72(b) of the Transfer of Property Act should be construed ejusdem generis with the words ' destruction ' and ' forfeiture' that precede it and therefore it applies only to sales endangering the mortgagee's security and not to sales merely of the equity of redemption (of the remarks of Sargant, C.J. and Telang, J. in Narsinga Rao v. Narayan Rao Bom. L.J. 1890 . It is clear that Section 72(b) applies to the sale averted in this case as it was a sale in pursuance of an attachment, during the pendency of which the mortgage was effected; and the mortgagee is entitled to add the amount paid for averting it, to his principal money and recover it along with the latter (see Syed Ibrahim Sahib v. Arumuga Thayee I.L.R. (1912) Mad. 18 at p. 24
15. The result is not that there is, besides an encumbrance for Rs. 47-12-0 created by Ex. A on 27-2-1906, a charge for Rs. 379-8-0 created on 18-12-08. There is only one encumbrance viz., that under Exhibit A which was created before the passing of the Act and the amount of Rs. 379-8-0 is recoverable as part of the amount claimable under it. Section 125 of the Madras Estates Land Act does not disentitle the plaintiff to recover this amount which is claimed' by him under an encumbrance created before the passing of the Act.
16. The Second Appeal fails and is dismissed with costs. Time for payment extended to three months from this date.