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A.R.M.T.T. Muthukaruppan Chettiar Vs. S.P.L. Subbiah Chettiar and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1942Mad34; (1941)2MLJ653
AppellantA.R.M.T.T. Muthukaruppan Chettiar
RespondentS.P.L. Subbiah Chettiar and anr.
Excerpt:
- - in 1938 the decree-holder, not being satisfied with the security given under the mortgage, filed two applications :one for the appointment of a receiver and the other for the attachment of certain agricultural lands belonging to the judgment-debtor by way of defence to these applications the judgment-debtor came forward with an offer to give the agricultural lands, of which attachment was claimed, as additional security for the amount of the debt......the mortgage in question was originally contracted on 5th january, 1931, on the security of house property situated within a municipality. the suit was filed on the mortgage in 1937, resulting in a preliminary decree dated 26th february, 1938 and it is that preliminary decree which the appellant sought to scale down under section 19 of the act. in 1938 the decree-holder, not being satisfied with the security given under the mortgage, filed two applications : one for the appointment of a receiver and the other for the attachment of certain agricultural lands belonging to the judgment-debtor by way of defence to these applications the judgment-debtor came forward with an offer to give the agricultural lands, of which attachment was claimed, as additional security for the amount of.....
Judgment:

Wadsworth, J.

1. This appeal arises out of an application by the appellant to scale down a preliminary decree on a mortgage. The mortgage in question was originally contracted on 5th January, 1931, on the security of house property situated within a municipality. The suit was filed on the mortgage in 1937, resulting in a preliminary decree dated 26th February, 1938 and it is that preliminary decree which the appellant sought to scale down under Section 19 of the Act. In 1938 the decree-holder, not being satisfied with the security given under the mortgage, filed two applications : one for the appointment of a receiver and the other for the attachment of certain agricultural lands belonging to the judgment-debtor By way of defence to these applications the judgment-debtor came forward with an offer to give the agricultural lands, of which attachment was claimed, as additional security for the amount of the debt. This offer was accepted and on the execution of a bond (Ex. D) dated 23rd July, 1938, both the receiver application and the attachment application were dismissed. The contention upon which the application under Section 19 is based is that by reason of the terms of Ex. D the mortgage-debt, in respect of which the preliminary decree has been passed, becomes a debt contracted not only on house property within a municipality but also on the security of agricultural property so as to rule out the exception in Section 4 (d) of the Act.

2. The security bond (Ex. D) provides that:

The mortgagor has agreed to give the said property as security along with the property originally mortgaged for the amount of the said decree. The mortgagor hereby mortgages to the mortgagee the undermentioned property as additional security for the debt under the said decree.

3. There is also a clause empowering the mortgagee to realise the entire debt not only out of the original hypotheca but also out of the additional security and prescribing that the additional security is liable to be sold in execution of the decree through Court in the same manner as the property mentioned in the decree. No doubt the effect of this bond is to give to the decree-holder a right to execute his decree against both sets of property in any order he pleases in respect of the whole amount of the decree. But we cannot see in this bond any contract whereby the parties agree that the mortgage debt shall be deemed to have been secured on both sets of properties with effect from the date of the original contract. Nor do we see in the bond any agreement whereby the additional security shall be deemed to be part of the hypotheca covered by the preliminary decree. The truth is that when Act IV of 1938 came into force on the 22nd March, 1938, there was in existence a preliminary decree for the enforcement of a mortgage secured on a municipal house property alone. On the 1st October, 1937, the date on which under Section 8 the outstanding interest is to be cancelled, there was also a debt contracted on the security of house property alone. By the terms of Section 4 (d) of the Act such a debt is excluded from the operation of the Act. It is difficult to see how any addition of security at a date after the Act came into force can have retrospectively created a debt contracted on the security of property other than municipal house property so as to bring into force Sections 7 and 8 of the Act and to exclude Section 4 (d).

4. In the result therefore we agree with the conclusion taken by the lower Court and dismiss the appeal with costs of the 1st respondent.


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