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Kamakshi Ammal Vs. Ananthanarayana Swami Pillai and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported in(1947)1MLJ142
AppellantKamakshi Ammal
RespondentAnanthanarayana Swami Pillai and ors.
Cases ReferredKrishnabandhu Ghatak v. Panchkari Saha I.L.R.
Excerpt:
.....application which has given rise to this appeal on the 25th august of the same year praying that a personal decree for the amount declared due under the preliminary decree with subsequent interest be passed against the assets of the deceased mortgagor in the hands of the appellant. on appeal by the present respondents the lower appellate court held that the mortgagee's right to apply for a personal decree accrued only when is was ifnally decided that the mortgagor had no title to the property which he had mortgaged, that is to say, when this court dismissed the mortgagee's second appeal on the 6th august, 1941, and that the present application filed a few days thereafter was well within time. the limitations and qualifications of that right are to be found in sub-section (2) of that..........application which has given rise to this appeal on the 25th august of the same year praying that a personal decree for the amount declared due under the preliminary decree with subsequent interest be passed against the assets of the deceased mortgagor in the hands of the appellant. in the affidavit filed in support of the application he referred to the proceedings in mookayi's suit culminating in the dismissal of his second appeal to this court, and stated that ' as after the said decision the plaintiff and the defendants (mortgagor's representatives) have lost their rights in the mortgaged properties it is not possible to bring to sale in execution the properties relating to the decree in this suit.' the application was opposed by the appellant herein on the ground that it was barred by.....
Judgment:

Patanjali Sastri, J.

1. This appeal was heard by Chandrasekhara Aiyar, J., in the first instance and was referred by the learned Judge to a Division Bench as an important question of law was raised and the point is not covered by any direct authority.

2. One Pal Kangani, the predecessor in interest of respondents 1 to 3 in this appeal obtained a preliminary decree for sale on a deed of simple mortgage executed by one Natesa Goundan, the appellant's deceased husband on the 11th October, 1924. The decree was passed on the 14th February, 1933, by the District Munsiff of Turaiyur in O.S. No. 5 of 1933. The final decree tallowed on the 9th January, 1934. During the pendency of that suit Natesa Goundan's sister, Mookayi, brought a suit against the appellant as the widow and representative of Natesa Goundan for a declaration of her title to certain properties including the properties mortgaged by Natesa and for other consequential relief. The mortgagee was impleaded as the second defendant in that suit and one of the issues was 'whether the mortgage in favour of the second defendant by Natesa Goundan is binding on the plaintiff' (issue 5). The trial Court passed a decree declaring that the suit properties belonged to the second plaintiff (Mookayi's legal representative) and declaring also that ' the mortgage deed executed by Natesa Goundan in favour of the second defendant in respect of items 1 and 2 of the plaint Schedule and the mortgage decree obtained by the 2nd defendant on his mortgage are not binding on him.' From this decree which imperilled his security the mortgagee preferred, after an unsuccessful appeal to the first appellate Court, a second appeal to this Court which was also dismissed on the 6th August, 1941. The mortgage decree obtained by him having thus been declared to be invalid and inoperative, he made the application which has given rise to this appeal on the 25th August of the same year praying that a personal decree for the amount declared due under the preliminary decree with subsequent interest be passed against the assets of the deceased mortgagor in the hands of the appellant. In the affidavit filed in support of the application he referred to the proceedings in Mookayi's suit culminating in the dismissal of his second appeal to this Court, and stated that ' as after the said decision the plaintiff and the defendants (mortgagor's representatives) have lost their rights in the mortgaged properties it is not possible to bring to sale in execution the properties relating to the decree in this suit.' The application was opposed by the appellant herein on the ground that it was barred by limitation under Article 181 of the Limitation Act which prescribes for applications for which no period of limitation is provided elsewhere in the Act a period of three years commencing from the time ' when the right to apply accrues.' The appellant contended that the respondent's right to apply for a personal decree accrued as soon as the trial Court decided in Mookayi's suit that the mortgagor had no title to the mortgaged properties, that is, on the 20th July, 1936, and the present application made more than three years alter that date was barred. The District Munsiff accepted this contention and dismissed the application. On appeal by the present respondents the lower appellate Court held that the mortgagee's right to apply for a personal decree accrued only when is was ifnally decided that the mortgagor had no title to the property which he had mortgaged, that is to say, when this Court dismissed the mortgagee's second appeal on the 6th August, 1941, and that the present application filed a few days thereafter was well within time. Chandrasekhara Aiyar, J., in his referring order thought that this was a ' sensible view,' but doubted whether it was legally correct, having regard to the ' analogous decisions ' cited before him. We have come to the conclusion for reasons which we will presently indicate, that the view is not only sensible but also correct.

3. Mr. M.S. Vaidyanatha Aiyar urged on behalf of the appellant that the reasoning of the Subordinate Judge was erroneous and unsound and the conclusion based thereon was unsustainable. The learned Judge said:

If instead of straightaway filing a petition under Order 34, Rule 6, after the decision of the High Court in S.A. No. 1024 of 1938, the decree-holder had gone through, the formality of a sale of these properties which he would be legitimately entitled to do--for the mortgagor judgment-debtor would not be entitled to prevent a sale of the properties in execution of the decree--the mortgagee decree-holder would be entitled to file an application for the passing of a personal decree within three years from the date of that sale in execution of the said properties. In these circumstances I do not think that it could be said that the appellant gave up his rights under the decree until the final adjudication of the mortgagor's title to the hypothecated property which took place only on the High Court dismissing the second appeal.

This reasoning is no doubt open to criticism. In the face of the decision in Mookayi's suit to which the mortgagee was a party it would not be possible for him to bring the property to sale in execution of the mortgage decree, for that would be asking the Court to be a party to a mockery and fraud. As pointed out in Periyasami Kone v. Muthiah Chettiar I.L.R. (1913) Mad. 677 'it is an elementary principle of law that the Court will not do a vain thing, nor will it compel a man to do a fruitless thing.' Nor could there be any question of the mortgagee ' giving up his rights' after it was finally decided that the mortgagor had no title to the property mortgaged. It does not, however, follow that the conclusion of the learned judge is unsustainable.

4. It must now be taken as fairly settled that Article 181 of the Limitation Act is applicable to applications for a supplemental personal decree in mortgage actions. (Rama Venkatasubba Aiyar v. Shanmukham Pillai (1913) M.W.N. 867 Pell v. Gregory I.L.R. (19925) Cal. 828 Muhammad Iltifat Husain v. Alimunnissa Bibi I.L.R (1918) All. 551) This was not disputed before us by Mr. S. Ramachandra Aiyar for the respondents. Now, Article 181 is the residuary article applicable to applications of all kinds and as such is content to define the starting point of limitation in general language ' when the right to apply accrues.' It is, accordingly, necessary in each case where the article is invoked, to see when having regard to the nature of the application, the applicant, first had the right to make it. It was contended for the appellant that the respondent's application was one made under Order 34., Rule 6, although there was or could be no sale of the mortgaged property under Rule 5, a sale being deemed to have taken place and to have realised nothing and that, inasmuch as the right to apply under that rule for a personal decree arises when the sale proceeds ' are found insufficient to pay the amount due,' limitation must be counted from the earliest moment when the mortgagor's want of title was established, i.e., the 20th July, 1936.

5. In support of the first step in that argument, which takes us pretty far into the land 01 action reference was made to Sivasubramaniam Pillai v. Poovalingam Pillai (1936) 24 L.W. 380 Gurumukh Singh v. Harichand I.L.R. (1935) Lah. 67 and Adhar Chandra Naskar v. Sarnwamoyi Dasi (1928) 32 C.W.N. 1160. In the first mentioned case a sale held in execution of a mortgage decree was declared to be void in collateral proceedings as the property was found to be trust property which the mortgagor had no right to mortgage, and the mortgagee applied for a personal decree more than three years after the date of the decree declaring the sale to be void but within three years of his dispossession. Phillips, J., held that the application was barred by limitation. The learned Judge regarded it as one falling under Order 34, Rule 6 and observed that:

as soon as the decree declaring the sale to be void was passed it must be deemed to have been found mat the sale of the property was insufficient to pay the mortgage debt.

In Gurumukh Singh v. Harichand I.L.R. (1935) Lah. 67 there was not even a sale in execution of the mortgage decree as the property had been previously sold in execution of the decree of a prior mortgagee. But the fiction was extended and the case brought within Rule 6, the learned Judges observing that 'even if no sale was held under Order 34, Rule 5, in circumstances similar to those existing in the present case, an application under Order 34, Rule 6 could be maintained.' The case in Adhar Chandra Maskar v. Sarnwamoyi Dasi (1928) 32 C.W.N. 1160 arose on similar facts and it was held that the Court had jurisdiction to pass a personal decree under Rule 6. The learned judges regarded the matter as having been settled by the decision of the Judicial Committee in Jeuna Baku v. Parmeshwar Narayan Mahtha (1918) 36 M.L.J. 215 : I.L.R. 47 Cal 370. (P.C) . It is to be observed that except in Sivasubramania Pillai v. Poovalingam Pillai (1936) 24 L.W. 380 no question of limitation arose, and the only point in controversy was whether, in the circumstances of those cases, the mortgagee was entitled to a personal decree at all, it being assumed that, if he was, it must be by virtue of Order 34, Rule 6. It seems to us that it would be doing violence to the language of Rule 6 to hold that it applies to cases where the mortgagor is found, in an adjudication binding on the mortgagee, to have had no right to mortgage the property. The decision in Jeuna Bahu v. Parmeshwar Narayan Mahtha (1918) 36 M.L.J. 215 : I.L.R. 47 Cal. 370 (PC) lends, in our opinion, no countenance to the view taken in cases referred to above. Their Lordships were dealing with a combined decree passed under Sections 89 and 90 of the Transfer of Property Act (corresponding to Order 34, Rules 5 and 6 respectively) ordering the realisation of the amount due by the sale of the mortgaged property and, in case of any deficit, from the mortgagor personally, observing that it was not a condition precedent to the power of decreeing the payment of the balance that the mortgaged property must first be sold and found insufficient to satisfy the debt. In other words, the Court has jurisdiction to pass a combined decree awarding relief first against the mortgaged property and then against the mortgagor personally for the deficit, if any, instead of passing two decrees successively at the different stages contemplated. This, in our view, is no authority for holding that Rule 6 applies to a case where the mortgagee is deprived of his security by the assertion of a title paramount.

6. This, however, is not to say that the mortgagee is not entitled at all, in such circumstances, to a personal decree for the amount due to him. His right to have a personal decree is provided for in Section 68 of the Transfer of Property Act. The limitations and qualifications of that right are to be found in Sub-section (2) of that section as well as in Order 34, Rules 6 and 14. According to these provisions, the right cannot be effectively enforced until the mortgagee has realised the security in full, in appropriate proceedings. But this impediment to the exercise of his right disappears when he is deprived of his security in consequence of the mortgagor's wrongful act in purporting to charge property to which he had no title. And where, as in the present case, he has already instituted a suit to enforce the mortgage and obtained a decree for sale which has been however declared void and inoperative in proceedings to which both the mortgagor and the mortgagee were parties, the relationship of decree-holder and judgment-debtor disappears and the parties are relegated to the position of plaintiff and defendant. A somewhat similar position arose in Bisheshwar Nath v. Chandulal I.L.R. (1927) All 321 where the Court held that Order 34, Rule 6 did not apply but that the mortgagee was entitled, apart from that rule, to a personal decree in the suit which he had already brought, when the mortgage was declared invalid for want of title in the mortgagor at the instance of third parties in collateral proceedings.

7. If what we have indicated above was the true position when the respondent's final decree was declared to be inoperative in Mookayi's suit, it would seem arguable, and it was so argued by Mr. Ramachandra Iyer before us, that no question of limitation could arise as no ' application ' by the mortgagee was necessary for the passing of a personal decree, and the application made by the respondents was no more than a reminder to the Court of its duty to terminate the pending suit by passing a personal decree after making such further enquiry as might be necessary, Cf. Ramanathan Chetti v. Alagappa Chetti (1929) 59 M.L.J. 102 : I.L.R. 53 Mad. 378 and Ramasubramania Pattar v. Karimbil Pati : AIR1940Mad124 . But, as we have already observed, it has been held that an application is necessary to commence the proceeding for passing a personal decree and that Article 181 is applicable to it. This was laid by this Court even before the words ' on application by him ' were introduced into Rule 6 by the Transfer of Property (Amendment) Supplementary Act, 1929 (Rama Venkatasubba Aiyar v. Shanmukham Pillai (1913) M.W.N. 867) In Bisheshwar Nath v. Chandu Lal I.L.R. (1927) Ali 321 too, Article 181 was applied, although the application for a personal decree in that case was held not to fall under Rule 6. We prefer, therefore, to deal with the question on the assumption that Article 181 applies.

8. As we have already observed, the terminus a quo under that article has to be determined having regard to the nature of the particular case and the right to relief claimed therein. In this connection it must be borne in mind that it is obviously a matter of great importance to the mortgagee to safeguad his security by defending the mortgagor's title to the property against attacks by third parties, as a successful defence might conceivably make all the difference between realisation of his debt and total loss of his money. That, we apprehend, is why an implied covenant is annexed to every contract of mortgage that the mortgagor will defend his title (Section 65(6) of the Transfer of Property Act) and the mortgagee is given the right to spend such money as is necessary for supporting the mortgagor's title to the property and to add such money to the principal where the mortgagor fails to take proper steps to support his title [Section 72(c)]. It is therefore perfectly legitimate for the mortgagee to take all such steps to support the mortgagor's title as are open to him under the law, and if his defence of such title fails in the Court of first instance, to carry the matter to the appellate Courts, where appeals are allowed. Why, then, should the mortgagee be required to commence proceedings for a personal decree as soon as the issue is first decided against him, on pain, if he does not, of losing the remedy by the bar of limitation setting in, where the law allows a right of appeal and he desires to avail himself of it To make the time start from the first adverse decision would lead to the anomaly that, while he is permitted to spend money in supporting the mortgagor's title even in the Court of appeal and add it to the principal money, the money so spent might become irrecoverable, by reason of the mortgage money to which it is to be added getting barred before the proceedings in the appellate Court are concluded.

9. It was said that the mortgagee's right to apply for a personal decree must be taken to have accrued at the moment when he could first have made the application and that on the 20th July, 1936, when it was first decided that the mortgagor had no title to the property. It is true that under Article 181 time must be computed from the date when the right to apply first accrued, and it is also true as a general proposition that when once time has begun to run the uncertainty caused by an appeal or other proceeding cannot suspend its course. But the question remains when did the mortgagee's right first accrue on the facts of this case Obviously, it accrued only when he was deprived of his security. Can it be said that he was deprived of it as soon as the first Court declared Mookayi's title to the mortgaged property Evidently, he did not think so himself, or he would not have appealed. When deprivation of a mortgagee's security turns on the varying fortunes of a law suit, his own view of the matter cannot altogether be ruled out of consideration If he thought that an appeal was worthwhile and preferred one which he must have done on legal advice, why should he be supposed to have been deprived of his security as soon as the first Court gave its adverse decision Until the second appeal was dismissed by this Court the mortgagor's title was sub judice and the mortgagee cannot, in such circumstances, be reasonably considered to have been deprived of his security. It was, of course, open to him to accept the decree of the first Court and apply for a personal decree forthwith. In that case the date of the deprivation would be the date of that decision. But he was not bound to do so as the law allows him to take all proper steps to support the mortgagor's title, and, so long he was bona fide taking such steps, he cannot, in our judgment, be held to have suffered deprivation of his security.

10. We do not feel much oppressed by the authority of Juscurn Boid v. Pirthichand Lal Choudhury (1918) 36 M.L.J. 557 : L.R. 46 IndAp 52 : I.L.R. 46 Cal. 670 (P.C.) which was strongly pressed upon us by Mr. Vaidyanatha Aiyar. That was a suit by a purchaser at a rent sale for recovery of sums paid to the 7amindar after the sale was set aside. Treating the suit as one for money paid upon an existing consideration which afterwards failed, governed by Article 97 of the Limitation Act, the Judicial Committee held that the 'date of the failure ' from which limitation starts under that Article was the date of the first Court's order setting aside the sale and not the date when that order was affirmed by the appellate Court. Their Lordships observed:

Both Courts have held that the failure of consideration was at the date of the first Court's decree. Their Lordships feel no doubt that as between these two decrees this is the correct view, for whatever may be the theory under other systems of law, under the Indian law and procedure an original decree is not suspended by presentation of an appeal nor is its operation interrupted where the decree on appeal is one of dismissal.

The consideration being the rent sale, its failure occurred when the sale was ' reversed ' by the decree of the first Court, and as the operation of that decree was not suspended during the pendency of the appeal it could not be said that there was any fresh failure of consideration at the date of the appellate decree. We do not think that the principle of that decision has any application here.

11. We were referred by way of analogy to numerous other decisions holding that the decree of the appellate Court did or did not furnish, as the case may be, the starting point for limitation. We think that no useful purpose will be served by canvassing these decisions at any length. As we have already observed, Article 181 is an 'omnibus' one and the general language of column 3 has to be applied having regard to the nature of the right which forms the basis of the application in particular case. The decisions cited on either side serve only to illustrate the variety of cases coming within the purview of the article and are not of much assistance to the party citing them. For instance, Ramaswami Mudali v. Velayudha Mudali (1869) 4 M.H.C.R. 266 referred to by Mr. Vaidyanatha Aiyar, lays down no general principle. The case arose under the Limitation Act of 1859 which provided that in cases founded on fraud the cause of action shall be deemed to have arisen when the fraud was first discovered, and it was held that a purchaser suing for his purchase money when it was found that his vendor had already sold the property to another must have first discovered the fraud as soon as the prior purchaser's suit was decreed by the Court of first instance and not when that decree was affirmed by the appellate Court. The observation that ' the appeal from the decree was a voluntary proceeding taken at the plaintiffs' own risk ' must be understood with reference to the facts of that case, and not as laying down a general rule that, wherever limitation has to be reckoned from the date of a judgment of Court, the date of the judgment of the Court of first instance and not the date of its affirmation by the appellate Court should be the terminus a quo. On the other hand, it has been held by the Privy Council in Chandramani Shaha v. Anarjan Bibi (1934) 67 M.L.J. 79 : L.R. 61 IndAp 248 : I.L.R. 61 Cal. 945 (P.C.) that the three years' period prescribed under Article 180 for an application for delivery of possession by a purchaser at an execution sale starts not from the date of the order of the first Court confirming the sale but from the date when that order is affirmed by the appellate Court, as that is to be regarded as the time ' when the sale becomes absolute.' Applying that principle this Court held in Rajambal v. Tkangam (1935) 42 L.W. 518 (which furnishes the nearest analogy to the present case) that the right to apply for a personal decree accrues to the decree-holder under Article 181 only on the date of the dismissal of the judgment-debtor's appeal against the order refusing to set aside the execution sale, dissenting from the observations in Krishnabandhu Ghatak v. Panchkari Saha I.L.R. (1930) Cal. 741 with regard to the decree-holder's right to wait until such an appeal is disposed of.

12. On a careful consideration of the question which is by no means free from difficulty, we think that the conclusion reached by the learned Subordinate Judge is right and we accordingly dismiss the appeal with costs.


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