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R. Srinivasa Thathachariar Vs. Minor Sivasubramania Chettiar by Next Friend, Veerappa Chettiar - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1943Mad196; (1942)2MLJ631
AppellantR. Srinivasa Thathachariar
RespondentMinor Sivasubramania Chettiar by Next Friend, Veerappa Chettiar
Cases Referred and Marina Ammayi v. Mirza Bakhar Beg Saheb
Excerpt:
.....for contribution in respect of the reduced amount paid by him but for the full amount of the mortgage debt; 6,655 deposited by him into court, but, having under section 92, the same rights as the mortgagee whose mortgage he redeems',he might well claim to recover the full amount of the mortgage debt by the sale of the rest of the hypotheca, which rather makes a reductio ad absurdum of the argument. if it is found, however, that the mortgagee has realised his debt from the different parcels of the mortgaged property in the hands of the appellant and the 18th defendant otherwise than according to their rateable share of the mortgage debt, we see no obvious reason why a claim for contribution by the appellant under section 82 of the transfer of property act should be defeated merely..........from this, order.3. it is argued by mr. a.v. viswanatha sastri for the appellant that the mortgage debt having been sealed down so far as the appellant was concerned under the provisions of the madras agriculturists' relief act and the mortgage security being indivisible, the appellant was entitled to redeem the security as a whole on payment of the amount found payable by him, and that the court was bound to enter satisfaction of the whole decree. we are unable to accede to this argument. as already observed, the decree has been scaled down only so far as the appellant is concerned and has been left intact as against the 18th defendant who is not an 'agriculturist'. this is in accordance with our decision in ramier v. srinivasiah : air1941mad204 . which indeed, ruled this case......
Judgment:

Patanjali Sastri, J.

1. This appeal raises the question whether a purchaser of a portion of mortgaged property who is an 'agriculturist' within the meaning of the Madras Agriculturists' Belief Act is entitled to redeem the whole of the property on payment only of the scaled down amount of the debt, so as to prevent the mortgagee from recovering the mortgage money in full from the rest of the hypotheca in the hands of a non-agriculturist purchaser from the mortgagor.

2. One Ramaswami Chetty now represented by the respondent brought the suit out of which this appeal arises to enforce a mortgage executed in his favour on 7th November, 1917, for Rs. 4,000 repayable with interest at 12 per cent. per annum with yearly rests. The mortgage comprised a house and a village with its, hamlets. As the result of certain proceedings in execution of decrees obtained by third parties against the mortgagor a portion of the mortgaged house worth about Rs. 1,000 passed to the appellant (22nd defendant) who is an 'agriculturist', and the rest of the hypotheca to the 18th defendant who is not an 'agriculturist'. The original mortgagor who is also not an 'agriculturist' has thus ceased to have any interest in the mortgage security. A preliminary decree for sale in the usual form was passed on 16th August, 1937, for Rs. 37,772, but as the Madras Agriculturists' Relief Act came into force in March, 1938, an application was made by the appellant in July, 1938, to have the decree amended by scaling down the amount payable in accordance with the provisions of that Act, and the decree was amended 'so far as the 22nd defendant is concerned' by scaling down the amount declared due to Rs. 6,638-8-3 including costs. No. consequential amendments, however, were made in the rest of the decree which was otherwise left intact. None of the defendants having paid the amount due within the date fixed, a final decree in the usual form followed in November 1939, and the respondent applied in December, 1939, for execution of the decree by the. sale of the mortgaged properties against the appellant and the 18th defendant, the other defendants being no longer interested in the hypotheca. While the execution petition was pending, the appellant deposited in Court the sum of Rs. 6,638-8-3 and the execution costs, or Rs. 6,655 in all, for payment to the respondent on condition that he was allowed to redeem the whole of the mortgage security so as to enable him to claim contribution from the 18th defendant for a rateable proportion of the sum paid. He also filed an application (E.A. No. 13 of 1940) for entering satisfaction of the decree as a whole. The Court below, however, refused to allow the appellant to redeem the entire mortgaged properties on payment only of the scaled down amount of the debt as the 18th defendant who had become the owner of the bulk of such properties was not an 'agriculturist' and was, therefore, liable to pay out of such properties the balance of the decree amount. It accordingly dismissed E.A. No. 13 of 1940. The present appeal has been preferred from this, order.

3. It is argued by Mr. A.V. Viswanatha Sastri for the appellant that the mortgage debt having been sealed down so far as the appellant was concerned under the provisions of the Madras Agriculturists' Relief Act and the mortgage security being indivisible, the appellant was entitled to redeem the security as a whole on payment of the amount found payable by him, and that the Court was bound to enter satisfaction of the whole decree. We are unable to accede to this argument. As already observed, the decree has been scaled down only so far as the appellant is concerned and has been left intact as against the 18th defendant who is not an 'agriculturist'. This is in accordance with our decision in Ramier v. Srinivasiah : AIR1941Mad204 . which indeed, ruled this case. It is there laid down that, having regard to the non-obstante clause in Section 7 of the Act, the principle that a mortgage is indivisible and can only be redeemed as a whole has to be trenched upon to the extent necessary for giving effect to the provisions of the Act in cases like the present where the mortgagor is not an 'agriculturist' and a person deriving title from him and bound by the mortgage is an 'agriculturist', and the judgment proceeds to indicate the lines on which the decree in such cases will have to be framed; that is to say, the decree will have to declare separately the amount payable by the agriculturist judgment-debtor as scaled down under the Act, and provide that, on payment of such amount by him, the property in which he is interested will not be liable to be sold or foreclosed and that, in default of such payment by him within the time fixed, such property will be sold only for the recovery of that amount, the rest of the hypotheca being liable to be sold for the full amount of the decree. We wish to observe here, in view of the criticism directed by Mr. Viswanatha Sastri against the form of the decree there indicated, that it was intended only to point out the main lines on which the decree will have to proceed in the circumstances of that case, and was not intended to embody exhaustively all the provisions which it should contain to meet various eventualities, provisions such as usually find place in a preliminary decree for sale the central principle to be borne in mind being indicated in the concluding portion of the judgment, viz., that the form to be adopted should be such as 'will give to the agriculturist judgment-debtor the full benefit of the relief to which he is entitled under the Act and will safeguard the rights of the decree-holder as against those judgment-debtors who are not entitled to the benefits of the Act.' It follows that the appellant is not, on payment of the scaled down amount, entitled to redeem the whole mortgage as the security must be deemed to be split up in such cases in order to give effect to the provisions of the Act which benefits only agriculturist debtors and does not affect remedies against debtors who are not agriculturists.

4. Mr. Viswanatha Sastri placed reliance on the line of cases where it has been held by this Court that when an agriculturist mortgagor redeems the mortgage by paying the mortgage money as scaled down under the Act, a purchaser of a portion of the hypotheca is also benefited under the general law by reason of the whole property being relieved of the incumbrance, although such purchaser is not an agriculturist and cannot himself claim the benefit of the Act, vide Arunachalam v. Seetharam (1941) 1 M.L.J. 561 : I.L.R. 1941 Mad. 930. , Nachiappa Chettiar v. Ramachandra Reddiar : AIR1942Mad527 . and Marina Ammayi v. Mirza Bakhar Beg Saheb : AIR1941Mad557 . and argued that the same principle should be applied here as the appellant, having regard to Section 59-A of the Transfer of Property Act, stood in the same position as the mortgagor for the purpose of applying the provisions of that Act relating to mortgages, and was under Section 91, entitled to redeem the whole mortgage although the 18th defendant, the purchaser of the rest of the hypotheca,. might indirectly be benefited by such redemption in that he might have to pay to the appellant only a rateable proportion of the scaled down debt by way of contribution. Mr. Viswanatha Sastri further submitted that unless the right to redeem the entire mortgage security by paying the reduced amount is conceded to the appellant, it was highly doubtful whether the latter could successfully claim contribution from the 18th defendant, for unless' the mortgage is redeemed in full, the last paragraph of Section 92 might stand in the way of the appellant making such a claim. It was urged that this would be anomalous as it would, in effect, deprive the appellant of the benefit which the Madras Agriculturists' Relief Act was undoubtedly intended to confer upon him; for, the scaling down of the debt would be of no benefit to him if he had to pay Rs. 6,655 to save from execution sale property which was worth much less, unless he could recover from the rest of the hypotheca a rateable contribution. This argument looks somewhat plausible but we have to come to the conclusion that it is fallacious and should not be accepted. While it is true that, generally speaking, the provisions of the Transfer of Property Act relating to mortgages are applicable alike to mortgagors and to persons deriving title from them, the Act itself recognises the difference between their respective positions for some purposes, e.g., in Section 92. Although it has been held by this Court that the liability of a purchaser of a part of the hypotheca who is an agriculturist to pay the mortgage money out of the property purchased is a 'debt,' within the meaning of the Madras Agriculturists' Relief Act, it cannot be said that he stands in relation to the mortgagee in the same position for all purposes as the original mortgagor who borrowed the debt. In the case of the latter, if he pays the scaled down amount, the contractual relation of debtor and creditor is put an end to and no part of the debt can subsist thereafter, with the result that the property which under the mortgage contract is charged with the due payment of that debt becomes into whosoever hands it may have passed, freed from the burden of the charge. The decisions referred to above proceed on this principle. But when a purchaser of part of the hypotheca, being an agriculturist, pays the sealed down amount of the debt, there is no obvious reason why the debt should be regarded as wiped out even as against the mortgagor, or a person deriving title from him, who is not an agriculturist;' for, the Agriculturists' Relief Act is clearly intended to benefit | only agriculturist debtors and it nullifies the rights of creditors | and overrides the general law only to the extent necessary for giving effect to its provisions and no further. The very argument of Mr. Viswanatha Sastri based upon Section 92 of the Transfer of Property Act serves to emphasise the distinction between the position of the original mortgagor and that of a purchaser of part of the hypotheca. If an agriculturist mortgagor is allowed to redeem the mortgage as a whole by paying the scaled down amount, he would not have the right of subrogation under Section 92 and there would be no question of his claiming to recover any portion of the amount paid by him from a non-agriculturist purchaser of a part of the hypotheca who may be indirectly benefited by such redemption; whereas the result of allowing an agriculturist purchaser of part of the hypotheca to redeem the entire mortgage by paying the scaled down amount of the debt might well be to enable him under Section 92 to proceed against the rest of the hypotheca in the hands of a non-agriculturist not merely for contribution in respect of the reduced amount paid by him but for the full amount of the mortgage debt; or, in other words, the appellant might, if his contention were accepted, claim from the 18th defendant not merely rateable contribution on the basis of the Rs. 6,655 deposited by him into Court, but, having under Section 92, 'the same rights as the mortgagee whose mortgage he redeems', he might well claim to recover the full amount of the mortgage debt by the sale of the rest of the hypotheca, which rather makes a reductio ad absurdum of the argument. It was suggested that the appellant, having claimed to redeem the whole mortgage on the footing of Rs. 6,655 being the only amount payable under it, would be held estopped from claiming as against the 18th defendant that any larger amount was due. It is, however, difficult to see how any estoppel can arise, as the appellant could not be taken to have represented that the amount payable under the mortgage was the reduced sum as against the 18th defendant in respect of whose liability there was no scaling down.

5. As regards the argument that the scaling down of the debt would be of no benefit to the appellant in the circumstances of this case unless he is allowed to redeem the mortgage as a whole so as to enable him to claim contribution from the 18th defendant, it is to be observed that a claim to contribution would arise only if the 18th defendant is benefited by the payment made by the appellant which can be ascertained only when the mortgage security is realised. If the mortgaged properties in the hands of the 18th defendant are sold up for discharging the balance remaining due under the mortgage, no question of the appellant recovering any contribution could arise. If it is found, however, that the mortgagee has realised his debt from the different parcels of the mortgaged property in the hands of the appellant and the 18th defendant otherwise than according to their rateable share of the mortgage debt, we see no obvious reason why a claim for contribution by the appellant under Section 82 of the Transfer of Property Act should be defeated merely because he has not been allowed to redeem the whole mortgage on 'payment of the scaled down amount. Be that as it may, we cannot agree that the mortgagee's right to recover the full amount of the debt from the property in the hands of the 18th defendant should be nullified in order to safeguard the appellant's possible right of recovering contribution from the 18th defendant. It may be that in certain circumstances the relief provided in the Agriculturists' Relief Act is of no practical benefit to an agriculturist debtor but the latter cannot claim in seeking such relief that the creditor's rights should be prejudiced to a greater extent then the provisions of the Act clearly warrant.

6. For the reasons indicated, we do not consider that the principle of the decisions relied on for the appellant should be extended to cases like the present where the mortgagor is not an agriculturist and the question arises between purchasers of different portions of the hypotheca, some of whom are, and the others are not, agriculturists.

7. In the result, the appeal fails and is dismissed with costs.

8. Mr. Viswanatha Sastri submitted that it should be made clear that, in the event of the appeal being dismissed, the appellant would be entitled to withdraw the amount deposited by him in Court as provided in the order of Horwill, J., dated the 9th October, 1941, in C.M.P. No. 5115 of 1941. As the said order entitled the respondent to draw the money unconditionally 'without prejudice to the claim of the petitioner' (i.e., the appellant herein) 'to demand it back in case he is unsuccessful in the appeal,' the appellant will be entitled to get back the amount if he has not already recovered it from the respondent as we are dismissing the appeal.


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