1. This appeal originally came on for hearing before Subrahmanyara J. who considered that it was necessary to have an authoritative ruling by a Bench of this court on the question which arose in the case. The facts have been set out by the learned Judge in his order of reference and may briefly be mentioned.
2. The properties described in schedules A and B belonged to two brothers Nagappa and Angappa. Both of them usfructuarily mortgaged the properties under Ex. A-1 on 20-9-1924 in favour of two persons, Eswara Nagasubramania lyer and Sambamoorthi Ganapatigal for a sum of Rs. 3000. Nagasubramania lyer assigned his share in favour of one Subramania Ganapatigal on 3-10-1939. One Ramanathan Chettiar obtained a money decree against the two brothers, Nagappa and Angappa, and in execution of that decree purchased the properties in 1928 subject to the usufructuary mortgage
After his purchase Ramanathan Chettiar sold the properties described in schedule A to the defendant for Rs. 3000 under a sale deed dated 5th April 1948. It was provided in and by that sale deed that the said consideration of Rs. 3000 should be paid by the defendant to redeem ' the usufructuary mortgage and after taking possession of the properties from the mortgagees she should deliver possession of the properties in B schedule to the vendor, Ramanathan Chettiar.
The defendant, however, actually paid Rs. 1500 to the usufructuary mortgagee and took possession of the A schedule properties. Ramanathan Chettiar sold the B schedule properties to the plaintiff under a sale deed dated 20-1-1950 for Rs. 2750.
The properties were sold free of encumbrances evidently because of the provision in the sale deed to the defendant that she should discharge the entire debt of Rs. 3000.
The plaintiff could not obtain possession of the properties because they were still in the possession of the mortgagee. As the defendant had not discharged the debt in full the plaintiff was obliged to pay the balance of Rs. 1500 to the mortgagee and to obtain possession of the property in schedule B. Thereafter the plaintiff filed the suit out of which the present second appeal arises for recovery of Rs. 1500 which he had paid to the mortgagee with interest at 5 1/2 per cent per annum from the date of payment.
The learned District Munsif of Dindigul who tried the suit granted a decree to the plaintiff as prayed for but on appeal the learned Subordinate Judge, Dindigul, allowed the appeal and dismissed the suit, holding that the plaintiff must be deemed to be a volunteer and his remedy, if any, must be against his vendor and that Sections. 69 and 70 of the Contract Act had no application to the facts of the case. He relied on the observations on Kunchitra-padam Pillai v. Palamaki Pillai, 1918 32 MLJ 347 : (AIR 1918 Mad 1012), that the expression 'bound by law to pay' in Section 69 of the Contract Act referred to a legal liability and not to a contractual liability.
In the second appeal that came up before Subrahmanyam J., he was inclined to agree with the learned Subordinate Judge that Section 69 of the Contract Act had no application to the facts of the case in view of the observations in 32 MLJ 347 : (AIR 1918 Mad 1012). At the same time learned Judge, apparently impressed by the justice of the plaintiffs claim, was inclined to hold that a trust was created in respect of the sum of Rs. 3000/- which was the consideration for the sale in favour of the defendant which had to be applied to redeem the B schedule properties.
Ramanathan Chettiar was the author of the trust. The defendant was the trustee and Ramanathan Chettiar was also the beneficiary. The obligation was to apply that part of the money to redeem the B schedule properties and deliver them to Ramanathan. The plaintiff obtained a transfer of Ramanathan's beneficial interest under the trust as per the sale deed in his favour and as such he could recover the money. The learned Judge was obviously not prepared to decide the case on this footing and considered that it was better to have the point decided by a Bench of this court.
3. With great respect to the learned Judge, we are unable to discover any of the ingredients of a trust. To spell out a trust created by Ramanathan in his own favour by reason of his direction to the purchaser to pay the consideration and discharge a debt due by him is far-fetched.
4. At the same time we are clearly of the opinion that the plaintiff's claim is well founded. The learned Judge Subrahmanyan J. took the view that the decision in 32 MLJ 347 : (AIR 1918 Mad 1012) conclusively negatived the plaintiff's claim under Section 69 of the Contract Act. That case actually dealt with a question of the interpretation of Section 82 of the Transfer of Property Act. There, the owner of a mortgaged property had sold portions of the property to three different purchasers directing each one of the purchasers to pay a particular sum of money to discharge the mortgage. The mortgage was not discharged and there was a suit by the mortgagee.
That debt was eventually discharged by the three purchasers. One of the purchasers brought a suit for contribution against the other purchasers alleging that he had paid more than he was bound to pay under his sale deed. All that was held in that case was that the liability to contribute under Section 82 of the Transfer of Property Act was founded on the liability relating to the property did not rest on personal obligation. In that case the learned Judges were not inclined to uphold the plaintiff's claim on the basis of the provisions of Sections. 69 and 70 of the Contract Act. The relevant: observations of the learned Judges are these:
'To our mind the obvious inapplicability of the Contract Act sections arises from the consideration that the plaintiff in this case cannot be said to have paid anything which the other was bound to pay'. What is intended is contractual obligation and not a legal one. It is argued that a person is bound by law to pay his contracted debts; and in one sense this is true; but we are inclined to think that that it is not what was intended by the section.'
These observations cannot avail the defendant after the pronoun cement of the Privy Council in Govindavam Gordhandas Sakserja v. State of Condal 1950 2 MLJ 1: AIR 1950 PC 99). Their Lordships there laid down that the words 'bound by law to pay' in Section 69 of the Contract Act do not exclude those obligations of law which arise inter partes whether by contract or tort and are not confined only to those public duties which are imposed by statute or general law. They extend to any obligation which is an effective bond in law. In the words of their Lordships 'to say that the payment made by the plaintiff in this case is a voluntary payment appears to involve some misuse of language.' Their Lordships referred to the authority of the courts in India to hold that the words. 'bound by law' cover obligations of contract or tort. We respectfully accept this interpretation.
We are, therefore, of the opinion that the plaintiff's claim can be sustained under Section 69 of the Contract Act as all the requirements of Section 69 of that Act are satisfied. The plaintiff was interested in the payment of money because without such payment he could not obtain possession of the property which he had purchased. This amount which he paid, the defendant was bound by law to pay because he had undertaken to pay it under the sale deed relating to the property in the A schedule. The plaintiff is, therefore, entitled to be reimbursed by the defendant.
5. The next question which arises is, even assuming that the plaintiff is entitled to maintain the action and the defendant is liable what is the quantum of liability. The defendant pleaded that he was entitled to the benefits of the Madras Act IV of 1938. The plea that is raised in paragraph 9 of the written statement is this:
'Contrary to the right of depositing the scaled down amount as per Section 9-A of the Madras Agriculturists Relief Act, the plaintiff has no reason whatever to pay Rs. 1500 on 14th August 1950 in respect of the said amount. The plaintiff is not bound to pay the said amount to the said usufructuary mortgagee as per law. Therefore the aforesaid person is not entitled to collect the said amount from the defendant. If the debt incurred of the aforesaid 20-8-1924 is scaled down not more than Rs. 200 need be paid for it on 14-8-1950.'
The learned District Munsif overruled this plea of the defendant, But the learned Subordinate Judge did not give any final finding on the point because of the view he took, namely, that the plaintiffs suit should fail. This matter must, therefore, be disposed of. There appears to be some dispute as to the actual applicability of the provisions of the Madras Act IV of 1938 on several grounds. All these must be gone into.
6. In the result the second appeal is allowedand the appeal is remanded to the file of the learned Subordinate judge who shall decide the secondpoint set out in the judgment under appeal, namely,whether the defendant is entitled to the benefitsof Madras Act IV of 1938. There will be no orderas to costs. The appellant will be entitled to arefund of court fee paid on the memorandum ofappeal.