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R. Raghavachariar Vs. M.V. Kandaswami Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1947Mad393; (1947)1MLJ105
AppellantR. Raghavachariar
RespondentM.V. Kandaswami Chettiar and ors.
Cases ReferredPonnambala Pillai v. Annamalai Chettiar
Excerpt:
- - 5,596-4-0. on that date the mortgagors conveyed to the mortgagee the agricultural lands comprised in mortgage a for rs, 7,000, which was satisfied to the extent of rs. it was stipulated that the mortgage a and mortgage b should be kept alive as security as well as a shield in case of dispute......items subject to their mortgage. the value of the 33 items was more than the amount due under the mortgage decree. it was held that the mortgagee could not proceed against the 34th item in execution of the mortgage decree. this decision was expressly overruled by the full bench which decided ponnambala pillai v. annamalai chettiar (1920)38 m.l.j. 339 : i.l.r. 43 mad. 37210. a case which is on all fours with the present case is mahalakshmi v. somaraju : air1939mad393 . there the mortgagee had bought a part of the hypotheca by private treaty and the learned judges (varadachariar and abdur rahman, jj.) applied the principle laid down in ponnambala pillai v. annamalai chettiar (1920) 38 m.l.j. 339 : i.l.r. 43 mad. 372.11. we concur in the judgment of somayya, j., and dismiss the appeal with.....
Judgment:

Alfred Henry Lionel Leach, C.J.

1. In order to appreciate the point of law involved in this Letters Patent Appeal the facts must be stated fully.

2. On the 27th November, 1925, defendants 1 to 6, members of a joint family, mortgaged certain immoveable properties to the plaintiff to secure a sum of Rs. 7,000. The properties covered by the mortgage comprised a rice godown in Madras and agricultural lands in a village in the Chingleput district. Under a separate deed executed on the same date other properties belonging to the family were mortgaged to the plaintiff to secure a sum of Rs. 11,000. We will refer to the mortgage for Rs. 7,000 as 'mortgage A' and the mortgage for Rs. 11,000 as 'mortgage B.' On the 7th May, 1933, there was due under mortgage A the sum of Rs. 5,596-4-0. On that date the mortgagors conveyed to the mortgagee the agricultural lands comprised in mortgage A for Rs, 7,000, which was satisfied to the extent of Rs. 6,446 by partial discharge of both the mortgages.

3. Before the 7th May, 1933, the eighth defendant had obtained a charge over the lands comprised in mortgage A. The charge was given to him by a decree which he obtained on the 25th July, 1932, and by virtue of it he was in the position of a puisne mortgagee. When he agreed to buy the lands covered by mortgage A for Rs. 7,000, the plaintiff was not aware of the eighth defendant's charge. In the deed of conveyance the mortgagors declared that the lands were not subject to any other charge and agreed that if a dispute arose they would indemnify the purchaser. It was stipulated that the mortgage A and mortgage B should be kept alive as security as well as a shield in case of dispute.

4. In 1939 the eighth defendant decided to enforce the charge which he held over the lands subject to mortgage A and obtained from the Court an order for sale. The sale took place on the 5th July, 1939. He purchased the greater part of the properties and obtained possession from the plaintiff. His purchase was, of course, subject to mortgage A.

5. On the 10th October, 1939, the plaintiff instituted in the Court of the Subordinate Judge of Chingleput the present action to enforce mortgage A by the sale of the properties purchased by the eighth defendant. On this date there was, according to the plaint due to him the sum of Rs. 5,170-10-0, after giving credit for Rs. 1,000 which he estimated to be the value of the mortgaged properties of which he was in possession. The plaintiff did not ask for a decree for Rs. 5,170-10-0, but one for Rs. 4,500, on the ground that the properties in respect of which relief was sought had gone down in value. The Subordinate Judge gave the plaintiff a decree for Rs. 1,437-4-7 including interest and costs. It is common ground that the Subordinate Judge made errors in calculation and that his decree could not in any event stand.

6. The plaintiff appealed to the District Judge who passed a decree for Rs. 5,759-7-0, including interest and costs. It was accepted in the District Court that the value of the properties bought by the plaintiff under the conveyance of the 7th May, 1933, and of which he was in possession at the time of the institution of the suit was Rs. 3,087-12-0. We have already mentioned that the amount due on the mortgage on the date of the conveyance was Rs. 5,596-4-0. The basis of the decree passed by the District Judge was this. He took the value of the property in the plaintiff's possession and of the property in the eighth defendant's possession. The property in the eighth defendant's possession was valued at Rs. 5,764-12-0. The plaintiff was entitled to contribution based on the value of the property in the possession of the eighth defendant. The total value of the properties was Rs. 8,852-8-0 and the eighth defendant had to contribute so much of this sum as was proportionate to the value of the property in his possession.

7. During the pendency of the plaintiff's appeal to the District Court the eighth defendant died. His legal representative, the 14th respondent in the District Court filed an appeal to this Court. The appeal was heard by Somayya, J., who confirmed the decree of the District Judge. The present appeal is from the judgment of Somayya, J , under Clause 15 of the Letters Patent.

8. The appellant says that the District Judge erred in holding that he was liable to make a contribution based on the value of the lands held by him. He maintains that the mortgage was discharged to the extent of Rs. 3,087-12-0 by the sale to the plaintiff of the 7th May, 1933, and that this sum must be taken into account. His learned advocate has pointed to certain observations made in the judgment of Ramesam, J., in Ramaswami Pillai v. Narayanaswami Pillai (1924) 48 M.L.J. 100. The observations do lend support for the contention but they were regarded by Somayya, J., as being obiter and were rightly rejected by him by reason of the decision of a Full Bench of this Court in Ponnambala Pillai v. Annamalai Chettiar : (1920)38MLJ239 . In that case it was held that in the absence of fraud, the purchase by the mortgagee at a Court sale of the equity of redemption in some of the mortgaged properties discharges that portion of the mortgage debt which is chargeable on the items purchased. In other words, it discharges that part of the mortgage debt which bears the same ratio to the whole mortgage debt as the value of the items purchased bears to the value of all the mortgaged properties.

9. Mr. Panchapakesa Sastri, on behalf of the appellant, has suggested that the position is different where the mortgagee purchases part of the mortgaged properties by private treaty. We can see here no ground for a distinction. In Sami Rowappa v. Kuppuswami Iyengar (1911) 2 M.W.N. 342 a Bench of this Court said that the purchase by a mortgagee of a portion of the hypotheca does not necessarily operate as a full discharge of the mortgage without regard to the whole of the property purchased and the price paid. In that case the mortgagees bought 33 out of 34 items subject to their mortgage. The value of the 33 items was more than the amount due under the mortgage decree. It was held that the mortgagee could not proceed against the 34th item in execution of the mortgage decree. This decision was expressly overruled by the Full Bench which decided Ponnambala Pillai v. Annamalai Chettiar (1920)38 M.L.J. 339 : I.L.R. 43 Mad. 372

10. A case which is on all fours with the present case is Mahalakshmi v. Somaraju : AIR1939Mad393 . There the mortgagee had bought a part of the hypotheca by private treaty and the learned Judges (Varadachariar and Abdur Rahman, JJ.) applied the principle laid down in Ponnambala Pillai v. Annamalai Chettiar (1920) 38 M.L.J. 339 : I.L.R. 43 Mad. 372.

11. We concur in the judgment of Somayya, J., and dismiss the appeal with costs in favour of the plaintiff-respondent.


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