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Ammani Ammal Vs. Ramasawmi Naidu and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported in51Ind.Cas.57; (1919)37MLJ113
AppellantAmmani Ammal
RespondentRamasawmi Naidu and ors.
Cases ReferredShiam Lal v. Rant Piari I.L.R.
Excerpt:
.....in discharge of his debts. it is well settled that there is no such broad obligation under the contract act; 306 and the doctrine comes to this that where a person buys property in good faith and for the purpose of clearing a mortgage on that property pays money to the vendor to be so applied then even if the vendor had no title, still as the mortgage was binding on the estate the vendee becomes an equitable assignee of the mortgage......clearly of opinion that this doctrine does not apply.7. it is next argued that the equitable doctrine entitles us to give relief, and reliance is placed on the case of mohori bibi v. dharmodas ghose i.l.r. (1903) cal. 539 a decision of the privy council. in that case a minor had executed a mortgage in favour of one brahmo dutt to secure the payment of rs. 20,000. a suit was brought on the mortgage. on the day the mortgage was executed the minor signed a declaration that he was of age. two months after the execution of this mortgage he by his mother as guardian brought a suit against the mortgagee praying for a declaration that the mortgage was void and inoperative and that it should be delivered up and cancelled. their lordships of the privy council deal with the question as to.....
Judgment:

Sadasiva Aiyar, J.

1. The 1st defendant is the appellant before us. The plaintiff brought a suit for possession of certain properties which had been bequeathed to him by his elder brother Abboy Naidu (when the plaintiff was a minor) under a will dated 4th August 1901. The plaintiff's mother asserting a title in herself to the property sold it to the 1st defendant in February 1904 under Exhibit VI for a sum of Rs. 3,400. The title she asserted against her deceased son Abboy Naidu (in whose name the title deeds stood) and against Abboy Naidu's brother and legatee, the minor plaintiff, was based upon her contention that though the property was purchased in Abboy Naidu's name Abboy Naidu was a benamidar for herself (his mother). The plaintiff of course denied that Abboy Naidu was a benamidar for his mother and he sued upon his title derived from Abboy Naidu. He also prayed in his plaint for the cancellation, if necessary, of the deed of February 1904 executed by his mother. I might at once say that not only is no such cancellation necessary but that the plaintiff has no legal cause of action to get the relief of the cancellation of a document which was not executed and which does not even purport to have been executed by himself or by anybody from whom he traces his title. The lower Appellate Court has found on the facts in the plaintiff's favour and on his title so found given a decree for him.

2. The contentions argued before us in Second Appeal were that the plaintiff in any event should have been ordered to pay the amounts of the debts binding on Abboy Naidu and therefore on his legatee (the plaintiff) and paid by the 1st defendant as purchaser under Exhibit VI before the plaintiff recovers the properties; secondly, that so far at least, as a mortgage debt binding on the plaintiff was paid by her she was entitled to be subrogated to the rights of the mortgagee and that the plaintiff ought to be made to pay the amounts due to her as such mortgagee by right of subrogation before recovering the properties.

3. So far as the debts other than the mortgage debt are concerned, the learned vakil for the appellant, Mr. Seshagiri Sastri put forward his contention under three heads. The first head may be formulated thus: though the plaintiff's mother purported to execute the deed in her own right alleging herself to be the sole owner, the 1st defendant as a bona fide purchaser for value is entitled to treat the sale deed as having been executed by the plaintiff's mother as his guardian and in that view, the plaintiff is bound to reimburse so much of the purchase money as went to discharge the debts binding upon the plaintiff. Having heard full arguments I do not think that any case quoted on the appellant's behalf supports her contention. On the other hand, the decision of their Lordships of the Privy Council in Balwant Sigh v. R. Clancy I.L.R. (1912) All. 206 directly held that where a person who was the de jure manager of an undivided family purported to create a mortgage as if he was the full owner denying the right of the junior member of the family, the alienee cannot under either the ordinary principles of equity or under the statutory provision (Section 41 of the Specific Relief Act) claim to be reimbursed the portion of the consideration which went to discharge the debts binding on the junior member of the family. As regards the decisions of this Court in Sabapathi Chetti v. Ponnusawmy Chetti 28 Ind.Cas. 365 and Audimula Mudali v Alamelammal (1916) 2 M.W.N. 115 the alienations were by a father who for certain purposes has got all the powers of a full owner and in whom the interest of a full legal owner is vested for many purposes notwithstanding that he might have undivided sons. The decisions in those cases seem to have gone on the particular facts of those cases and the Court came to the conclusion on the evidence that there was nothing to prevent the Court, from holding that the father (alien or) intended also to make the disputed alienation in a capacity which would have given him an interest sufficient to affect the rights of his sons also, and that in the case of a bona-fide purchaser for value such an inference should, if possible, be drawn from the facts and circumstances of those particular cases. In this case it seems to me it is impossible on the evidence and on the pleadings to hold that the plaintiff's mother could have intended to act in any other capacity than that of herself being the full owner. Further in those cases, the documents of alienation were not mere waste papers conveying no title or interest whatever in the property alienated as in this case, but did affect, at least, the part-ownership right of the alienor. In the case in Bij Raj Neopani v. Pura Sundary Dasee I.L.R. (1914) Cal 56 the document was executed (along with others) by a person who was the full legal owner, who had the right to convey the full legal ownership and who intended to convey such full rights. It was under those circumstances held that the erroneous description of the origin and incidents of his title in the sale deed did not prevent the alienee from obtaining a valid title to the rights of a full owner. I do not think that case has any bearing upon the question we are now considering. As regards the English cases of salvage quoted by the appellant's learned vakil, they were cases where a person who was not the owner of goods paid freight and other similar charges and the jury were held justified in estimating damages to allow such charges to be deducted in favour of the wrong doer where the plaintiff's action was brought for damages in trover or where the defendant had an option to return the goods or to pay damages. Those cases also have no bearing on the question now under consideration. On the other hand there is a case in Nathu v. Balwant Rao I.L.R. (1903) Bom. 390 which is a direct authority on this point; and respectfully concurring in that decision, I would hold that the 1st defendant has no right to recover any sums which she paid to discharge Abboy Naidu's debts and which were not charged upon any immoveable property. As stated by the Privy Council in Bam Tuhul Sing v. Bisseswar Lall Shaoo quoted in the above case ' It is not in every case in which a man has benefitted by the money of another that an obligation to repay that money arises. The question is not to be determined by nice considerations of what may be fair or proper according to the highest morality. To support such a suit, there must be an obligation, express or implied, to repay.'

4. Then we have left for consideration the other point based upon the allegation that the 1st defendant has released the property from the mortgage charge created by Abboy Naidu by payment of certain sums of money to the mortgagee. I think that if the 1st defendant in good faith purchased the property from the plaintiff's mother and as such purchaser felt herself bound to pay a mortgage charge created by the real owner which charge the plaintiff was himself under an obligation to meet, she is entitled to be subrogated to the rights of the mortgagee in so far as her money went to discharge that mortgage. I think I need refer only to the two decisions of this Court in Syamalarayudu v. Subbarayudu I.L.R. (1897) Mad. 143 and Chamaswami v. Padala Anandu I.L.R. (1908) Mad. 439 in support of this proposition. The lower Courts however, have not gone into that question, namely, whether the 1st defendant after her purchase paid any money to the mortgagee mentioned in Exhibit VI in payment of the mortgage dated 19th April 1899. Before finally disposing of this appeal it is therefore necessary to obtain a finding from the lower Appellate Court on the following issue on the evidence on record : Did the 1st defendant pay any amount to the mortgagee under the mortgage deed of 1899 for the purpose of discharging the encumbrance on the plaint properties and if so what are the amounts and dates of such payments The finding will be submitted within 4 weeks from the date of the receipt of the records and 10 days will be allowed for objections.

Napier, J.

5. I agree.

6. The first point taken by the appellant is that we shoud not accept the finding of the lower appellate Court that the plaintiff's mother purported only to convey her own interest and totally ignored any interest in the plaintiff; and reliance is placed on the decision in Audimulct Mudali v. Alamelammal (1916) 2 M.W.N. 115 where the Court stated as follows ' In our opinion Courts should incline to the view that the transferor alienated the property in the capacity most beneficial to the bonafide purchaser '. This doctrine may be properly applicable for the purpose of ascertaining on the evidence what the intention of the transferor is, but whereas in a case like this, the transferor deliberately claimed that the person in whom the title stood was only a binomial for her and that the property was her own absolute property it is impossible to find any ambiguity and thereby give any scope for the application of this doctrine. We must deal with this case on the footing that a stranger having no interest in any property but making a claim against the titles which were vested in another person sold that property to a third person. It is now further argued that as part of the proceeds of the purchase money went to discharge the debts which would have been binding on the vendor if the title had vested in her and were in fact debts which were binding on the true owner the true owner cannot recover the property without making compensation for the discharge of those debts. It is sought to support this proposition on two grounds : one, that it is covered by the language of the Specific Relief Act, Sections 39 and 41, the other, that there is an equity which the Courts should apply. With regard to the claim under the Specific Relief Act reference to the chapter shows that this claim only arises in suits for cancellation of instruments, Section 41 being ' On adjudging the cancellation of an instrument, the Court may require the party to whom such relief is granted to make any compensation to the other which justice may require'. This is undoubtedly an application of the English doctrine of the Chancery Courts that he who seeks equity must do equity; and the first point we have to be satisfied on is whether there was any necessity for the plaintiff in this case to seek equity. As my learned brother pointed out, all that the plaintiff said in his suit was that if it was necessary to have the document cancelled the Court should do it. To my mind it is clear that there is no necessity to have this document cancelled. The illustrations to Section 39 indicate that it is only where a party cannot get his legal remedy without first having the document set aside that he comes within the section. This is a suit by the true owner to recover possession of the property. The title adverse to him is not one procured from him or from any one under whom he claims or from any one who purported to convey an interest of his. It seems to me therefore that there can be no necessity for him to apply to have the document cancelled and further that the Court would have no jurisdiction to do so. But it is urged on us that in a case reported in Mallacheruvu Raghavayya v. Mallacheruvu Subbayya (1917) 7 L.W. 124 where the suit was to recover possession of property, the Court held that they were empowered to give compensation under this section. The case is S.A. No. 803 of 1916. In that case, however, the plaintiff who brought the suit to recover the property himself executed a sale-deed of certain lands to the 2nd defendant jointly with his undivided brother, the 1st defendant. At the time of the conveyance he was a minor. The Court then considered the question as to whether he represented he was of age and found that was not proved. So in that case there was in existence a document from the true owner which on the face of it conveyed the property. In those circumstances although the suit was one for recovery of property the learned Judges thought that the document must be set aside first and that therefore the doctrine applied. It is therefore no authority for the contentions in this case. I am therefore clearly of opinion that this doctrine does not apply.

7. It is next argued that the equitable doctrine entitles us to give relief, and reliance is placed on the case of Mohori Bibi v. Dharmodas Ghose I.L.R. (1903) Cal. 539 a decision of the Privy Council. In that case a minor had executed a mortgage in favour of one Brahmo Dutt to secure the payment of Rs. 20,000. A suit was brought on the mortgage. On the day the mortgage was executed the minor signed a declaration that he was of age. Two months after the execution of this mortgage he by his mother as guardian brought a suit against the mortgagee praying for a declaration that the mortgage was void and inoperative and that it should be delivered up and cancelled. Their Lordships of the Privy Council deal with the question as to whether compensation should be given under two heads on which it was argued, viz. Specific Relief Act and the equitable right. Their Lordships appear to have recognised the possibility of the application of Section 41 of the Specific Relief Act to the case. But they say that the Lower Courts saw no reason for ordering the return of the money and they themselves would not interfere. They then consider the application of the purely equitable doctrine and state the proposition, ' It was also contended that one who seeks equity must do equity.' Now it must be noted that in this case there was no question but that the plaintiff was seeking equity, namely for directing the mortgage to be delivered up and cancelled. And then referring to the decision of the Court of Appeal in Thurstan v. Nottingham Permanent Benefit Society (1902) 1 Ch. 1 they quoted the language of Lord Justice Romer which is as follows' the short answer is that a Court of Equity cannot say that it is equitable to compel a person to pay any moneys in respect of a transaction which, as against that person the Legislature has declared to be void'. So that apart from the Statute they held that even where a minor has received a benefit under a void mortgage he cannot be compelled by any principle of equity to give compensation. The fundamental doctrine was stated in the judgment of the Privy Council in a case which is quoted in Nathu v. Balwant Rao I.L.R. (1908) Bom 390 whichis Ram Tuhul Singh v. Bisseswar Sahu (1875) 2 I.A.131. The doctrine is as follows : ' It is not in every case in which a man has benefited by the money of another that an obligation to repay that money arises. The question is not to be determined by nice considerations of what may be fair or proper according to the highest morality. To support such a suit, there must be an obligation, expressed or implied, to repay. It is well settled that there is no such obligation in the case of a voluntary payment by A of B's debt'. We have therefore to find some obligation on the part of the plaintiff in this case to repay the amounts which have been paid by the 1st defendant in discharge of his debts. It is well settled that there is no such broad obligation under the Contract Act; and it rests on the 1st defendant to find some doctrine which will enable her to ask the Court to make the order. This language here is a very specific and definite warning to Courts that they must not use their powers simply to avoid hardships. The question in which this very point arose was decided by the Privy Council in Balwant Singh v. R. Clancy I.L.R. (1912) All. 296. There undoubtedly a person sought to be charged has been largely benefited by money lent by a bank to his brother for the discharge of debts binding on the family. The brother had however borrowed the money claiming to be a Rajah owning an impartible Zamindari. The Privy Council decided that, the money was borrowed by him in that capacity and in no other and that it is not open to the Courts to find that because he was the manager of a joint family the borrowing could be attributed to that capacity; and the claim of the Bank to make his younger brother liable in respect of debts which had been cleared from the joint family property being the debts of his father was negatived. It seems to me that we cannot make any order for compensation in this case without directly disregarding the '. decision in Balwant Singh v. R. Clancy I.L.R. (1912) All. 296. I am therefore of opinion that there is no doctrine which will empower a Court to make an order for compensation where the property has been sold by a stranger as the stranger's property even though the true owner has benefited. That is the broad proposition.

8. There is, however, another doctrine which may affect some payments in this case, and that is one analogous to the doctrine of salvage. It is dealt with in the case of Syamalarayudu v. Subbarayudu I.L.R. (1897) Mad. 148 and Chama Swami v. Padala Anandu I.L.R. (1908) M. 439 : 18 M.L.J. 306 and the doctrine comes to this that where a person buys property in good faith and for the purpose of clearing a mortgage on that property pays money to the vendor to be so applied then even if the vendor had no title, still as the mortgage was binding on the estate the vendee becomes an equitable assignee of the mortgage. This doctrine has been applied in those two cases and although some doubts have been thrown upon it in Shiam Lal v. Rant Piari I.L.R. (1905) A. 25 it seems to me that it is founded on right principles and I think that we should follow the decisions of our Court. I agree therefore with the order of my learned brother remanding an issue for trial.

[In compliance with the order contained in the above judgment, the Temporary Subordinate Judge of Tanjore submitted the following.

9. The first defendant paid Rs. 285-0-0 to the mortgagee under the mortgage deed of 1899 for the purpose of discharging the encumbrance on the plaint properties, and that amount was paid on the date of Exhibit 1-B, 6th October 1905.]

10. This Second Appeal coming on for final hearing after the return of the finding of the Lower Appellate Court upon the issue referred by this Court for trial, the Court delivered the following

11. We accept the finding.

12. The Lower Court's decree will be modified by directing that Rs. 285 and interest from date of plaint shall be set off against the supplemental decree for mesne profits directed to be passed by the Lower Appellate Court's decree.

13. The appellant will pay respondent's costs of this Second Appeal.


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