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Chekku Vs. Puliyaseri Parvathi Alias Amma Ammal - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai High Court
Decided On
Reported inAIR1956Mad634; (1956)2MLJ348
AppellantChekku
RespondentPuliyaseri Parvathi Alias Amma Ammal
Cases ReferredGovinda Mahapatra v. Venkatakrishnayya
Excerpt:
.....equity of redemtion and the purchaser has to redeem the mortgage. under these circumstances, there can be no doubt whatever that it is perfectly within the competence of the fifth defendant to question the validity of exhibit a-1. 10. the further argument of the learned counsel for the appellant is that the mortgage is binding on the family of defendants 1 to 4. the learned subordinate judge in paragraphs 8 and 9 of his judgment discusses this question, and holds that the mortgage was executed at a time when a suit was pending against krishna menon for removing him from karnavasthanam, and eventually he was removed for his misdeeds and mismanagement......the learned subordinate judge relies is authority for the proposition that when a member of the tarwad questions the validity of a certain transaction, along with him, a stranger who is also interested in questioning it can join. it is unnecessary for the purpose of this case to rely on the observations of the learned judge in that case. for there is no doubt that all the rights of the tarwad-had devolved upon the fifth defendant. the principle that a stranger cannot attack the binding nature of a transaction, where the members of the tarwad did not attack, the same is applicable only to such instances, where that stranger has not vested in him proprietary rights in the property which the tarwad had. the plaintiff melcharidar in the case just cited was only a second mortgagee as it.....
Judgment:

Govinda Menon, J.

1. The suit out of which this second appeal arises was for recovery of a sum of money by sale of the plaint items on the strength of a mortgage deed, Exhibit A-1, dated 2nd May, 1934, for a sum of Rs. 750 executed by one Krishna Menon, Karnavan of the tarwad of defendants 1 to 4 in favour of the plaintiff. The fifth defendant is the purchaser of the jenm right, etc., in some of the mortgaged items in Court auction under Exhibit B-10. The other defendants were impleaded ither as persons in possession or as mortgagees.

2. The main contest by the fifth defendant was that the hypothecation deed was not valid and binding on the tarwad of defendants 1 to 4 and as such the plaint items could not be sold in enforcement of that document. There were other pleas raised by her with which at this juncture we are not concerned. The trial Court found that to the extent of Rs. 635-7-11 the mortgage was binding on the tarwad and decreed the suit for sale of the properties to that extent.

3. The fifth defendant preferred an appeal to the lower appellate Court, contending that Exhibit A-1 was totally invalid and unenforceable. The plaintiff did not put forward any memorandum of cross-objections with regard to the sum not found binding. The learned Subordinate Judge accepted the objections raised by the fifth defendant and allowed the appeal, thereby dismissing the suit. The second appeal is filed by the plaintiff.

4. Though the trial Court found that the fifth defendant as purchaser of the jenm rights, etc., over some of the mortgaged items has got herself substituted to all the rights and liabilities of the mortgagor's tarwad with regard to these items, and therefore, could justifiably object to the validity of the mortgage, on the finding that to the extent of Rs. 635-7-11 it was binding, that Court gave the decree. Before the learned Subordinate Judge one of the main points urged was that being a stranger to the tarwad, the fifth defendant cannot attack the validity of the mortgage, which could be done only by a member of the family and by none else. The learned Suborinate Judge, following the decision in Cherutty v. Saraswathi Ammal : AIR1945Mad457 , held that as at least one member of the tarwad, namely the fourth defendant had impugned the validity of Exhibit A-1 it is open to the fifth defendant to contest the binding nature of that document. The learned Judge held also that no portion of the consideration was binding on the tarwad.

5. The first question for consideration is whether it is open to the fifth defendant to allege and prove the invalidity of the mortgage. What is urged by Mr. N. Sundaram Iyer on behalf of the-appellant is that Exhibit B-10 which is the sale-certificate issued in favour of the fifth defendant in O.S. No. 255 of 1934 on the file of the District Munsiff of Walluvanad, as a result of which these properties came to-be sold and purchased by the fifth defendant, it has been stated in the column relating to encumbrances charged on the properties that a sum of Rs. 750 and interest due under the document No. 640 of 1934 was an encumbrance. The reference is to Exhibit A-1 and the mortgagee's name is also mentioned thereunder. In the column relating to remarks, what is stated is that the jenmom, kanom, kuzhikur and chamayam rights which belong to the tarwad have been sold after reserving the encumbrances. Relying upon these recitals, the learned Counsel for the appellant urges that what the fifth defendant has obtained is only the right, title and interest of the tarwad, namely jenmom, kanom, kuzhikur and chamayam rights, subject to the encumbrances in favour of the plaintiff. If that is so, having purchased in Court-auction, only the residuary rights after reserving the mortgage, it is not open to the fifth defendant now to come forward and say that the mortgage is not binding.

6. Krishnaswami Nayudu, J., who heard the second appeal in the first instance being of the opinion that a substantial question is involved in this argument has referred the case to this Bench.

7. We have, therefore, to see what exactly is the positiion occupied by the fifth defendant, as a result of the purchase under Exhibit B-10. No doubt in the remarks column, there is a mention that the rights of the tarwad have been purchased subject to the encumbrance. In our opinion, what is meant is that if there are binding and valid encumbrances then the purchaser would be bound by them. What is the effect and the nature of the sale certificate, is then to be noticed. In a mortgage suit the purchaser under such conditions is certainly a respresentative of the holder of the rights of the mortgagor. Whether the rights of the mortgage have also become submerged in the purchase need not be considered now. But one thing is clear, that when in execution of a hypothecation decree the equity of redemption of the mortgage is sold and purchased by a third party, certainly he steps into the shoes of the mortgagor, having all the rights, liabilities and privileges, which the mortgagor had. That being the case, it seems to us that under Exhibit B-10 in the place of the tarwad of defendants 1 to 4, the fifth defendant, is substituted, the result being that so far as the fifth defendant is concerned, she had got every right, which the tarwad-could exercise. Now there is no doubt whatever that the mortgagor an entity, or a juristic person as a tarwad, acts through its accredited representative, the karnavan. Therefore if a karnavan acts is excess of his powers, then it is open to any member of the tarwad to avoid the transaction and claim the properties on behalf of the taward. The decision in Chappan v. Ram I.L.R.(1912) Mad. 420, is an authority for the proposition. It is contended on behalf of the appellant that the transaction is not void but voidable. But even if that is so, as has been held in a number of decisions of this Court, there is no necessity for a junior member of a tarwad, in impugning a transaction by the Karnavan, to file a suit to have it set aside. He can ignore it and recover possession of the property, if the acts of the karnavan cannot be said to be within his powers. Under these circumstances, and since the fifth defendant has stepped into the shoes of the mortgagor if the mortgagor is entitled to question the transaction, the fifth defendant is equally entitled to do so. The juristic person styled the tarwad is within its rights in questioning the mortgage. That can be done by any member acting on behalf of the tarwad, and since the rights of the tarwad had devolved upon the fifth defendant, there is no doubt whatever that she can question the validity of the mortgage. Mr. Sundaram Iyer argued that the suit was originally decreed ex parte, and it was only as against the fifth defendant that the ex parte decree was set aside, and retrial ordered. That being the case, the mortgage decree has become final as against the tarwad. The answer to this question is this.

8. When the entire rights of the taward have passed on to a third party, the mortgage decree against persons, who have no right in the property is a nullity and cannot bind the property, It is as if a decree has been passed by a Court against persons thoroughly unconcerned with the mortgage alone being made parties. Therefore we do not think there is any bar for the fifth defendant to object to the mortgage by the ex parte decree against defendants 1 to 4. The decision in Cherutty v. Saraswathi Ammal : AIR1945Mad457 , on which the learned Subordinate Judge relies is authority for the proposition that when a member of the tarwad questions the validity of a certain transaction, along with him, a stranger who is also interested in questioning it can join. It is unnecessary for the purpose of this case to rely on the observations of the learned Judge in that case. For there is no doubt that all the rights of the tarwad-had devolved upon the fifth defendant. The principle that a stranger cannot attack the binding nature of a transaction, where the members of the tarwad did not attack, the same is applicable only to such instances, where that stranger has not vested in him proprietary rights in the property which the tarwad had. The plaintiff melcharidar in the case just cited was only a second mortgagee as it were from the family. He does not stand in the shoes of the family at all. It is because of that situation, that it becomes obligatory that one who is entitled to question the transaction should join him in doing so. We are, therefore, clearly of the opinion that it is open to the fifth defendant to impugn the validity or otherwise of Exhibit A-1.

9. Mr. Kuttikrishna Menon, for the respondent, raised a further contention that because the sale certificate stated that the properties were sold subject to the mortgage that alone would not preclude the purchaser from contesting the binding nature of the mortgage, unless there was a decision by the Court at the time the sale proclamation was settled under Order 21, Rule 62, that there was a valid and binding mortgage on the property. He relied upon various cases. In Daso Polai v. Narayana Patro : AIR1933Mad879 , it was held that the Code of Civil Procedure makes a clear distinction between a case where property is sold subject to a mortgage as under Order 21, Rule 62, and a case in which notice of an alleged mortgage is given in the proclamation of sale as under Order 21, Rule 66. In the former case the Court is satisfied of the existence of the mortgage and sells only the judgment-debtor's equity of redemtion and the purchaser has to redeem the mortgage. In the latter case the purchaser buys the property with notice of the mortgage, subject to such risk as the notice might involve. In other words, the executing Court does not decide whether the mortgage subsists or not and the purchaser is not precluded from questioning the validity of the mortgage. In the instant case it has not been shown that there has been any adjudication of the validity of the mortgage, in accordance with the provisions of Order 21, Rule 62, Civil Procedure Code. Mookerjee and Panton, JJ., in Kalidas, Chaudhuri v. Prasanna Kumar Das I.L.R.(1919) Cal. 446, were of the opinion that where a purchaser merely buys an estate, which is under a mortgage, but does not take it subject to the encumbrances nor undertakes to discharge it, he is not precluded from impeaching the validity of the mortgage. The distinction between the two classes of cases, depends upon the question whether the property has been sold subject to, the mortgage, or whether mere notice of the alleged mortgage has been given in the proclamation. To find out whether the property has been sold subject to the mortgage, one has to see whether there has been adjudication under Order 21, Rule 62, Civil Procedure Code. The other case on which the learned Counsel relies is Sambasiva Aiyar v. Subramania Pillai : AIR1936Mad70 , where there are observations which are similar. A somewhat similar case in point is the decision in Ramnath v. Sundarabai A.I.R. Nag. 310, where it is observed that an auction purchaser, who purchased the entire joint family interest in an item of property can impeach the mortgage for want of legal necessity, and the learned Judge cites as authority for that statement, Ram Kishore v. Baij Nath I.L.R.(1928) Luck. 598, and Shyambehari Singh v. Rameshwar Prasad Sahu I.L.R.(1941) Pat. 904. The principle to be observed in such matters is whether the purchaser is entitled to the entire rights of the family as a result of his purchase. There can be no doubt whatever that after the purchase under Exhibit B-1 o the tarwad of defendants 1 to 4 did not have any vesting of a right over the properties in question, all of which have come into the ownership of the fifth defendant. We may also in this connection refer to the decision in Govinda Mahapatra v. Venkatakrishnayya : AIR1950Ori6 , which contains certain useful observations. Under these circumstances, there can be no doubt whatever that it is perfectly within the competence of the fifth defendant to question the validity of Exhibit A-1.

10. The further argument of the learned Counsel for the appellant is that the mortgage is binding on the family of defendants 1 to 4. The learned Subordinate Judge in paragraphs 8 and 9 of his judgment discusses this question, and holds that the mortgage was executed at a time when a suit was pending against Krishna Menon for removing him from Karnavasthanam, and eventually he was removed for his misdeeds and mismanagement. A mere glance at Exhibit A-1 shows that most of the items of consideration are such as cannot be said to be binding on the family at all. The plaintiff never made any enquiries before advancing the money. Most of the members of the tarwad were living separately and were maintaining themselves. The karnavan was highly indebted and also filed an insolvency petition. It was under these circumstances that the mortgage came to be executed. We entirely agree with the elaborate discussion by the learned Subordinate Judge about the invalidity of the mortgage contained in paragraphs 8 and 9 of his judgment and that being a question of fact is binding upon us. No other question is argued before us.

11. The Second Appeal, therefore, fails and is dismissed with costs.


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