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Rathna Mudali Vs. Perumal Reddy and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported in17Ind.Cas.837; (1912)23MLJ576
AppellantRathna Mudali
RespondentPerumal Reddy and ors.
Cases ReferredTheabala Chetti v. Ramanathd Aiyar I.L.R.
Excerpt:
- - that view is clearly opposed to the principles of equity, justice and good conscience and though recognised in shed prasad v. any such case like huthasanan nambudri v......property ' cannot be construed to mean that a plaintiff who owned only a fractional share can redeem shares other than his own when the owners of those other shares object to his redeeming their fractions or contend that their shares have already been redeemed by them. in the above view the decree of the lower appellate court allowing plaintiff to redeem the plaintiff's half share alone on payment of half the mortgage amount (which half of the mortgage amount alone remains due to the mortgagee) and allowing the plaintiff in execution to be put in possession of his half share by permitting him to take possession of the whole land as common owner with the 4th defendant seems to me to be correct. strictly speaking the second appeal should be dismissed as plaintiff and 4th defendant did.....
Judgment:

Sundara Aiyar, J.

1. The facts of this case so far as they are necessary for the decision of this second appeal are briefly as follow. One Vedachala executed an usufructuary mortgage deed to one Thangavelu on the 7th April 1900, Ex. II. This mortgage was subsequently transferred to the 2nd and 3rd defendants in the suit. The 1st defendant is the heir of Thangavelu. Vedachala had three sons. He and each of the sons were therefore entitled to a fourth share in the property. On the 2nd May 1900 two of the sons Singaravelu and Tiruvengada sold their half share of the property to the 4th defendant. The mortgagees, the 2nd and 3rd defendants received half of their debt from the 4th defendant and gave up possession of a portion of the properties to him.

2. The plaintiff obtained a transfer of the equity of redemption from Vedachela and his remaining son and he has instituted his suit for redemption of the mortgage. He claims to be entitled to be put in possession of the whole property mortgaged by Vedachala on payment of the whole amount and is not content with a decree for possession of half the property on payment of half the mortgage amount. The 4th defendant resists the plaintiffs attempt to recover the whole of the property and contends that as he has become the owner of half of the equity of redemption and the plaintiff entitled only to the remaining half, he should not be allowed to recover possession of more than half of the properties and he claims to be entitled to retain possession of the property in his possession as representing the share of his transferors. The District Munsif gave the plaintiff a decree for the whole property. On appeal the District Judge modified the Munsif's decree holding that the plaintiff was not entitled to recover the whole of the property and held that on payment by the plaintiff of half of the mortgage amount, the plaintiff and 4th defendant should be held to be jointly entitled to the possession of the mortgaged lands. The second appeal to this Court is preferred by the plaintiff and he contends that he is as a matter of right, entitled to recover the whole of the property mortgaged under Ex. II. The question for decision is whether the plaintiff is entitled as a matter of right to redeem the whole of the mortgage and to recover possession of the whole of the property in the circumstances of the case. It will be noticed that the mortgagees have split up the mortgage so far as they could by receiving a portion of the mortgage amount from the 4th defendant, the assignee of half of the equity of redemption and the 4th defendant has now become the owner of a share both in the equity of redemption and mortgage. Section 91 of the Transfer of Property Act lays down that any person having an interest in the right to redeem the property may redeem or institute a suit for redemption of the mortgaged property but I do not think that it lays down that a person who is entitled to a share only of the equity of redemption has under all circumstances, the right to insist on redeeming the whole of the mortgage and recovering possession of the whole of the mortgaged property. Section 60 enacts that a person entitled to a share only of the mortgaged property is not entitled to redeem his share only on payment of a proportionate part of the amount remaining due on the mortgage and lays down an exception where a mortgagee has acquired in whole or in part a share of the mortgagor. The mortgagee under this section has ordinarily a right to insist on treating the mortgage as indivisible and on the redemption of the whole mortgage. But he cannot do so where he has split up the equity of redemption by becoming the owner of a part of it himself. I do not think that there is any principle of justice which requires that a person who is entitled only to a part of the equity of redemption should necessarily he held to have a right to redeem the whole of the mortgage. If there are several persons in whom the equity of redemption is vested, there is no reason why one of them and the mortgagee acting together should not be held to be entitled to deal with his interest in the equity of redemption and the mortgagee's right as against him provided the rights of the other owners in the equity of redemption are not thereby injuriously affected. Of course nothing done either by a mortgagor or a mortgagee behind the back of the other can affect the right of that other so as to injure him in any way. Where the mortgagee has dealt with one of those entitled to the equity of redemption, it has been held that a person entitled to the remainder may claim to redeem his share only of the equity of redemption. See Marana Ammanna v. Pendyala Perubhotulu I.L.R. (1881) M. 230 and Subramainam v. Mandayan 9 M.k 453. It has also been held that a mortgagee may claim to recover the share of the debt due from a person entitled to a portion of the equity of rede nption when he has already entered into an arrangement with the owner of the remainder provided the right of the defendant is not prejudiced by the arrangement entered into between the mortgagee and the defendant's co-owners of the equity of the redemption. See Hari Kishen Bhagavat v. Valiat Husain I.L.R. (1903) C. 755, Mahadaji Hari Lenaji v. Ganapat Shet Dhoud Shet 15 B.H 257, Brijkishore v. Mcuiho Singh I.L.R. (1905) A. 279 and Venkatachala Chetty v. Sreenivasavuradachariar I.L.R. (1904) M. 552. In Lakshmangururaja Naik v. Madhu Kristo Shervai 15 B.K 186 it was held that the mortgagee was entitled to have an account taken between him and the owner of a part of the equity of redemption when he had already settled his rights as against the owner of the remainder of the equity. The objection to a mortgagee splitting up a mortgage is entitled to weight only where the owner of a part of the equity of redemption is prejudicially affected by the splitting. In Huthasanan Nambudri v. Parameswarcr Nambudri I.L.R. (1904) M. 209 it was no doubt held by this Court that a person entitled to a part only of the equity of redemption had a right to redeem the whole notwithstanding the mortgagee's objection that he should not be permitted to redeem more than his share of the equity. In that case the persons who were entitled to the remainder of the equity were parties to the suit and also seem to have resisted the plaintiff's attempt to redeem the whole. It does not appear whether they claimed to continue the mortgage in so far as their shares were concerned. The decision proceeded on the principle that a mortgage contract was indivisible and that it was the right equally of the mortgagor and mortgagee to keep it indivisible. The judgment was based on some decisions of the English Courts Pearse v. Morris (1869) 5 Ch. A. 227 and Hall v. Heward (1886) 32 Ch. D. 430 but in those English cases the plaintiff's co-owners in the equity of redemption were not parties and it does not appear that they objected to the redemption of the whole of the mortgage by the plaintiff. I cannot see any principle on which it should be held that even if some of the co-owners of the equity of redemption should desire to continue the mortgage of their shares one of the co-owners be held to be entitled to redeem the whole of the mortgage. I do not think that Huthasanan Nambudri v. Parameswara Nambudri 22 M.K 209 intended to go the length of laying down such a general rule and certainly the English cases which were followed there did not propound any such rule. The question whether the court will allow redemption of the whole of the mortgage at the instance of a person entitled to a part only of the equity of redemption must depend on the circumstances of each case and the rights acquired by the mortgagee or by third persons subsequent to the mortgage. In this case there is no reason why the plaintiff should first be allowed to redeem the whole of the mortgage and the 4th defendant who has a right both of a mortgagee and mortgagor be left to bring a fresh suit for recovering his share of the equity of redemption from the plaintiff. In 2 cases Mar altar Akath Kondara Kayil Maniu v. Punjapatath Kuttu I.L.R. (1882) M. 61 and Thachi Chettiar v. Ramanatha Aiyar I.L.R. (1896) M. 295 it was held that when the plaintiff was entitled only to a part of the equity of redemption and the defendant entitled to another part the plaintiff could not sue to redeem at all without first getting a partition of the equity of redemption. With all respect it seems to me that those have gone too far in holding that the plaintiff's suit should be altogether dismissed. It may be noted that in those cases it was the mortgagee himself who had acquired a share of the equity of redemption and there was in my opinion, the less reason for holding that a partition should be first effected between the parties to the suit before a suit for redemption could be maintained. In Bombay on the other hand, it was held that notwithstanding that the mortgagee had become owner of a part of the equity of redemption, the mortgagor was entitled to insist on redeeming the whole mortgage. See Mora Joshi v. Ratnachandra Dinkar Joshi I.L.R. (1890) B. 24 and Narayan v. Ganapat I.L.R. (1896) B. 619. In my opinion, both the Madras cases and the Bombay cases mentioned above are contrary to the principle of the proviso to Section 60 of the Transfer of Property Act.

3. I can see no reason why on the facts found there should not be a decree for partition in this case so as to allow plaintiff to recover half the properties included in the mortgage? The 2nd and 3rd defendants did not claim to be entitled to any part of the properties now. The 4th defendant according to their admission is entitled to all that the plaintiff cannot claim. I ought to notice a contention that Vedachala was himself entitled to the whole of the property and that the 4th defendant acquired no right by the conveyance he obtained from the two of the sons of Vedachala. I am unable to see that this contention was put forward in either of the Courts below. It has not been raised even in the memorandum of second appeal. It was held in O.S. 261 of 1901 which was instituted by the original mortgagee Thangavelu against Vedachala and his sons and the 4th defendant that the latter was entitled to the shares of the two sons that were conveyed to him subject to the mortgage in Thangavelu's favour. The plaintiff in this suit did not as I have already observed, contend in the lower courts that Vedachala was solely entitled to the property. No doubt the plaintiff's object in insisting on recovering possession of the whole property is to make an attempt to set up a claim to the whole in case the 4th defendant be driven to another suit for recovering the shares of his transferors. I don't think that this course should be followed. The learned Vakil for the appellant consents to a decree for partition if we hold that he ought not to be allowed to redeem the whole mortgage. I have already held that the plaintiff was in no way prejudicially affected by the mortgagee's splitting up the mortgage and receiving half the amount due to him from the 4th defendant and I am therefore of opinion that the decree of the lower appellate Court should be modified by the plaintiff being allowed to redeem only half the properties on payment of half the mortgage amount is Rs. 187--5--0. The plaintiff will be put in possession of half the properties included in the mortgage deed after a fair partition between him and the 4th defendant. The 4th defendant must be put in possession of the remainder. It would be desirable to allot the lands in 4th defendant's possession to him in partition in so far as that can be done without injustice to the plaintiff. In the circumstances we think the parties should bear their own costs throughout.

Sadasiva Aiyar, J.

4. I do not think it necessary to set out the facts which have been mentioned in some detail in the judgment just now pronounced by my learned brother. I shall content myself with making some observations on the principal question of law involved in this case. It is unnecessary for the purpose of deciding on that question of law to consider the cases where the objection of the mortgagee to partial partition by the owner of a fraction of the equity of redemption was allowed as a valid objection or the cases where a similar objection of the mortgagee who had himself split up the mortgage was disallowed. Such cases have very little relevancy to the question in dispute before us.

5. In the Privy Council Case Nawab Aymal Alikhan v. Jowahir Singh (1870) 13 M.I.A. 404 their Lordships say at page 416 that co-mortgagors who were entitled only to a portion of the mortgaged property could not redeem against the will of the mortgagee any portion of the mortgaged property except the one village in which co-owners (the plaintiffs) were interested. That suit was brought by the purchasers of the equity of redemption in one of the four mortgaged villages for redemption of all the 4 villages. And their Lordships say that the mortgagee ' if desirous of retaining possession ' of the other three villages ' as mortgagee was entitled to do so against the plaintiffs whose rights in that case were limited to the redemption and recovery of their village Hissanipur upon payment of so much sum deposited in Court represents the portion of the mortgage debt chargeable on that village.' I think that this opinion of the Privy Council is binding on us and. I therefore do not propose to deal with Indian and English cases decided before and after the Privy Council decision and I shall make reference only to a few of the latest cases.. In Mimshi v. Daulat I.L.R. (1906) A. 262 it was held, following Kuramul v. Purumal I.L.R. (1879) A. 565 that where all the proprietors of an estate joined in mortgaging it and the mortgagee subsequently purchased the share of one of the mortgagors and when another mortgagor sued to redeem his own share and also the share of yet another mortgagor, the plaintiff could only redeem his own share. In Mir Esuff Alt Huji v. Panchanan Chatter jee 15 C.W.N. 800 the following observations occur : ' Now what was the true position of the mortgagors when they transferred a portion of the property to Henasatulla, who obtained a release from the mortgagee by payment of a sum of money? It is a firmly settled doctrine that as between the original parties, the release of a part of the premises does not affect the lien of the mortgagee upon the residue, which is bound for the whole debt. No doubt as against others who have liens upon the remainder of the mortgaged premises, a mortgagee with notice of such lien has no right to release any portion of the mortgaged premises to the injury of the owners of such liens. To put the matter in another way, as between the mortgagor and mortgagee the latter is not entitled to release a portion of the hypothecated property and diminish their own security to that extent. While therefore we adhere to the view taken in the cases Imam All v. Baij Nath Rain Sahu 33 C.A 613 and Hakin Lal v. Bam Lal (1907) 6 C.L.J. 46 that the mortgagee who has security upon two or more properties which he knows belongs to different persons cannot release his lien upon one so as to increase the burden upon the others without the privity and consent of the persons affected (Kettlewell v. Watson (1882) 21 Ch. D. 686 we are of opinion that this doctrine has no application to the present case where the release took place at a time when the appellants had not purchased any interest in the mortgaged premises and the mortgagors alone were the persons affected by the release. We must not however be assumed to adopt the rule laid down by the learned judges of the Allahabad High Court that such a release may be granted even to the prejudice of persons who had previously acquired an interest in the mortgaged properties. That view is clearly opposed to the principles of equity, justice and good conscience and though recognised in Shed Prasad v. Bccgan Lal I.L.R. (1902) A. 79 Musri Lal v. Muthu Lal I.L.R. (1905) A. 19 Sheo Takal Ozhem v. Sheo Dan Bai I.L.R. (1905) A. 174 and Pirbu Narayan Singh v. Amir Singh I.L.R. (1907) A. 369 was not adopted in Ram Ramjah Chakravarthi v. Indra Narain Das T.L.R. 33 C. 890. The case in Krishnayyar v. Muthukwnarasainy Pilial I.L.R. (1905) M. 217 which lays down a similar principle cannot to that extent be supported. The contrary view which accords with the rule adopted by this Court was followed in Ponnusamy Mudali v. Perianna Naikar I.L.R. (1908) M. 333. It is again unnecessary for the purpose of deciding this case to express a final opinion on the question whether the mortgagee himself as plaintiff can sue for sale of a portion alone of the mortgaged property after releasing the other portions at his pleasure. As at present advised and notwithstanding the great respect I have for the opinions to the contrary including that of Ashutosh Mukerjee J., I do not see any objection on principle to the mortgagee doing so. A mortgagee can sue for a personal decree alone against his mortgagor giving up all claims to bring any portion of the mortgaged properties to sale if he so desires why should he not therefore be allowed to sue for the sale of a portion of the mortgaged property for the whole (or the portion remaining due and unpaid) of his mortgage money, leaving the owners of the equity of redemption in the mortgaged properties to settle their claims as between themselves either in the same suit (if convenient) or in another suit? He would of course be barred afterwards from attaching other portions of the mortgaged properties and bringing them to sale in execution of the money decree he obtained. He might also perhaps be barred from again suing for a mortgage decree for sale of the other portions left out in his first suit for sale. But these considerations have nothing to do with his right to release any portion or to sue for the sale of a portion only of the mortgaged property though such release or abstention would not affect the rights and liabilities as between themselves of the owners of the different portions of the equity of redemption in the mortgage properties. If he has himself purchased any portion he must of course make proportionate abatement of the mortgage amount when bringing a suit for sale. In the present case the plaintiff claims only an undivided half share in the mortgaged property. Therefore it seems to me that against the will of the mortgagee and of the 4th defendant who has obtained half the mortgagee's interest by paying half the mortgage money to the mortgagee and half share in the equity of redemption by purchase of same from two out of four owners of the equity of redemption the plaintiff cannot claim to redeem more than plaintiff's half share of the mortgaged properties. As I said before I hold this view following Kuray Mall v. Puran Mul I.L.R. (1879) A. 565 Munshi v. Daulet I.L.R. (1906) A 262 and Nawab Aymal Ali Khan v. Jowhar Singh. (1870) 13 M.I.A. 404

6. There are no doubt some comparatively old cases and some English cases in which it was said that a mortgagee could not compel even the owner of only a portion of the equity of redemption to redeem only that portion. But in most of those cases it does not appear that the owners of the other portions of the equity of redemption were parties to the suit or objected to the plaintiffs redeeming the whole. Any such case like Huthasanan Nambudri v. Paramcswara Nambudri 22 M.K 209 which decided that even in that state of circumstances the plaintiff is entitled to redeem the whole against the will of the mortgagee and against the wishes of the other owners of the equity of redemption, I respectfully dissent from. I am also against making any distinction between cases where the mortgage is split up (a) by the mortgagee releasing certain of the properties or certain share of the properties comprised in the mortgage (6) by himself purchasing a portion of the mortgaged property and (c) by the joint owners of the equity of redemption effecting a partition of their properties either by metes and bounds or by agreeing to hold the property in common in definite shares instead of jointly. I hold generally that against the mortgagee's consent the owner of a definite share of the equity of redemption should not be entitled to redeem more than his share unless the owners of the other shares consent, or do not object to plaintiff's redeeming their shares also. The very general words of Section 91 of the Transfer of Property Act ' any person having any interest in or charge on a property can institute a suit for the redemption of the mortgaged property ' cannot be construed to mean that a plaintiff who owned only a fractional share can redeem shares other than his own when the owners of those other shares object to his redeeming their fractions or contend that their shares have already been redeemed by them. In the above view the decree of the Lower Appellate Court allowing plaintiff to redeem the plaintiff's half share alone on payment of half the mortgage amount (which half of the mortgage amount alone remains due to the mortgagee) and allowing the plaintiff in execution to be put in possession of his half share by permitting him to take possession of the whole land as common owner with the 4th defendant seems to me to be correct. Strictly speaking the second appeal should be dismissed as plaintiff and 4th defendant did not express their consent in the Lower Court to have a partition effected between them; see Theabala Chetti v. Ramanathd Aiyar I.L.R. (1866) M. 295. But as before us the plaintiff and the 4th defendant have so consented to an order allowing partition on redemption, I concur in the decree proposed by my learned brother.


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