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C.R. Subramania Aiyar Vs. Panchanada Odayar and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1932Mad175
AppellantC.R. Subramania Aiyar
RespondentPanchanada Odayar and anr.
Cases ReferredSita Nath Ghouse v. Thahurdas Chahravarthy
Excerpt:
- - a itself shows that the profits of the properties mortgaged and intended to bo delivered were to be enjoyed by the plaintiff in lieu of interest. it would be a very bad precedent if we hold that a usufructuary mortgagee could lie by and not take the trouble to get into possession, relying upon his being able afterwards to make a claim before the court for damages for not having been given possession. by failure to deliver possession of the property the plaintiff is deprived of his interest, and the claim for such damages for failure in the shape of interest cannot be barred so long as the main claim is not barred. 448. i think the interests of justice will be best served by giving interest at 12 per cent on the principal sum of rs......of fact possession of the properties was not delivered to the plaintiff. the plaintiff therefore claims damages in the shape of mesne profits for three years, which he claims to be rs. 285 at the rate of rs. 95 a year. defendant 1 pleaded that the mortgage was not supported by consideration. both the lower courts found that it was supported by consideration to the extent of rs. 300. mr. seshagiri sastri, the learned advocate for the respondents, repeated the argument that the document was merely nominal and was not supported by consideration. he has not filed any cross-objections but has mentioned this point merely for supporting the decree so that i may not give the additional relief which the appellant seeks. however, i do not see any reason why i should not accept the finding of.....
Judgment:

Ramesam, J.

1. The plaintiff is the appellant in this case. The suit is filed upon a mortgage bond, Ex. A, dated 31st August 1912. It was executed for Rs. 400, but the plaintiff admits that only Rs.300 out of the consideration was advanced and the other Rs. 100 was not advanced to defendant 1. The mortgage purported to be a mortgage with possession of certain properties of defendant 1, but as a matter of fact possession of the properties was not delivered to the plaintiff. The plaintiff therefore claims damages in the shape of mesne profits for three years, which he claims to be Rs. 285 at the rate of Rs. 95 a year. Defendant 1 pleaded that the mortgage was not supported by consideration. Both the lower Courts found that it was supported by consideration to the extent of Rs. 300. Mr. Seshagiri Sastri, the learned advocate for the respondents, repeated the argument that the document was merely nominal and was not supported by consideration. He has not filed any cross-objections but has mentioned this point merely for supporting the decree so that I may not give the additional relief which the appellant seeks. However, I do not see any reason why I should not accept the finding of both the Courts below that the document is supported by consideration to the extent of Rs. 300. The Courts below disallowed the damages claimed, namely, Rs. 285 on the ground that the plaintiff's claim for possession of the properties is now barred and there fore the claim for mesne profits of these properties is also barred. The document fixed three years for payment of the principal, but as possession of the properties was not delivered, it is true that the plaintiff's cause of action for getting possession of the properties arose on the date of the document itself, namely, 31st August 1912. But Mr. Venkatachariar, the learned advocate for the appellant relies on Exs. B and B-1 as acknowledgments and he relies also on a case in Anant Barn v. Inayat Ali Khan [1920] 2 L.L.J. 549.

2. The entries in Exs. B and B-1 are merely entries showing that defendant 1 received Rs. 293 towards the consideration of the mortgage document. It is difficult to say that these amount to acknowledgments of the liability to transfer possession of the mortgaged properties. In the case in Anant Ram v. Inayat Ali Khan [1920] 2 L.L.J. 549, it was observed that acknowledgment of a right carries with it all its consequences. Very often it may be so; but even then it is difficult to infer by the acknowledgment of the mortgage document itself that the liability to deliver possession of the properties was intended to be also acknowledged. However I do not wish to express any final opinion on this matter as the case can be disposed of on other grounds. The right to damages is merely the right to get interest. Ex. A itself shows that the profits of the properties mortgaged and intended to bo delivered were to be enjoyed by the plaintiff in lieu of interest. So the damages the plaintiff sustains by the non-delivery of possession are merely interest. In Linga Reddi v. Sama Rau, [18941 17 Mad. 469, it was observed at p. 472, it is the same interest that is awarded as damages. That ease is practically on all fours to this ease with this difference, that the rate of interest was mentioned in the document of that case as 10 per cent, whereas it is not mentioned in the document before us, and here the plaintiff's claim is now confined only to damages for throe years. The decision in Sita Nath Ghouse v. Thakurdas Chakravarthy [1919] 46 Cal. 448 also supports the appellant. That case resembles the present case much more than the case in Linga Reddi v. Sama Rau [18941 17 Mad. 469, because the rate of interest was also not mentioned in the document there, 12 per cent was claimed as damages in that case, and the High Court observed that it was not excessive. As against these two decisions Mr. Seshagiri Sastri relies on two decisions of the Bombay High Court. One is Mahadaji v. Joti [1893]17Bom.425. In that case it was observed that the plaintiff was entitled to possession in lieu of interest and if he never troubles himself to obtain possession ha lost his right to interest. That sentence by itself produces the impression that the defendant in that case was willing to give possession or offered to give possession to the plaintiff, but the plaintiff did not care to take it. But I do not find in the statement of facts anything to support the suggestion that the plaintiff was not willing to take possession. If the decision in that case rests on that fact it may be correct, i.e., that the mortgagee is not willing to take possession or does not want to take the trouble of taking possession and managing the properties though the mortgagor is willing to deliver then to him. It may be in such a case he is not entitled to interest, but if the mortgagor fails to deliver possession to the mortgagee in breach of the covenant in the document, in such a case, to say that the mortgagee loses his right to interest merely because the mortgagee has not taken any immediate steps to enforce possession, is not justified. This decision is followed in another decision of the same Court in Manikchand Maganchand v. Rangappa Kondappa A.I.R. 1921 Bom. 28. That decision practially presents to me the same difficulty as the earlier decision.

3. Where a mortgagor is guilty of the breach of the covenant to deliver possession, the mortgagee is entitled to fall back on the claim for interest, whether it is described as interest or described as damages for breach of the covenant to deliver possession, but to say that it is the business of the mortgagee to get into possession and if he does not get possession he is not entitled to interest or damages at all does not commend itself to me. A proposition of that kind gives a premium to the mortgagors to commit breaches of the covenant into which they have entered. It is observed by the Chief Justice in this case:

It would be a very bad precedent if we hold that a usufructuary mortgagee could lie by and not take the trouble to get into possession, relying upon his being able afterwards to make a claim before the Court for damages for not having been given possession.

4. If it is meant that a mortgagee who is not willing to take possession even if the mortgagor is willing to offer possession is not entitled to sympathy. I agree. But if mote is meant by the sentence quoted that even where a mortgagor refuses to deliver or does not deliver possession the mortgagee should lose interest because he has not immediately taken steps to get into possession is to make a person who breaks his contract not liable for the consequences of the breach, and I do not agree with it. The two Bombay decisions are in my opinion inconsistent with the decisions in Linga Beddi v. Shama Rau [18941 17 Mad. 469 and Sita Nath Ghouse v. Thakurdas Chakravarthy [1919] 46 Cal. 448 and I prefer to follow the decision of this Court and of the Calcutta High Court. I see that my brother Sundaram Chetty, J. is also taking the same view in his decision in Gurusami Thevan v. Ganapathi Chetty : AIR1932Mad173 . He has also tried to distinguish the case in Manikchand Manganchand v. Rangappa Kondappa A.I.R. 1921 Bom. 28 by an observation that in that case, the amount was to be recovered without interest according to the terms of the mortgage bond. This is not the ground upon which the learned Judges base their decision, and I prefer to express my disagreement of the decision rather than distinguish it in this way.

5. Mr. Seshagiri Sastri also contended that a claim for damages cannot be maintained after six years of the breach and he referred to cases of leases and sales. We have nothing to do with these cases, In the case of a mortgagee, if there is a broach of a covenant, a claim for damages remains unbarred so long as the claim for the principal is also unbarred. This is the principle stated by the Privy Council in Mathura Das v. Rajah Narindar Bahadur (1897) 19 All. 39. That is a case where there is no provision for payment of interest after the due date. It is given as damages by the Privy Council and they held that it is not barred. This was followed by this Court in Nityananda Patnayudu v. Sri Radha Chairana Deo [1897] 20 Mad. 371. I think the principle of those cases applies. By failure to deliver possession of the property the plaintiff is deprived of his interest, and the claim for such damages for failure in the shape of interest cannot be barred so long as the main claim is not barred. In this case however the plaintiff confined it to damages for three years only prior to suit. He is not entitled to get larger or very exorbitant rate of interest under the guise of a claim for mesne profits, especially as he did not care even to have the rate of interest mentioned in the mortgage bond as in the case of Sita Nath Ghouse v. Thahurdas Chahravarthy [1919] 46 Cal. 448. I think the interests of justice will be best served by giving interest at 12 per cent on the principal sum of Rs. 300 in addition to the sum decreed by the lower Court. The plaintiff will be entitled also to get interest at 6 per cent from the date of the decree up to the date of payment. The plaintiff will be entitled to a decree at 12 per cent on the sum of Rs. 300 from 27th February 1922 to 6th September 1926, the date of the District Munsif's decree, and on the aggregate amount at 6 per cent. It is admitted that Rs. 300 already decreed by the Courts below has been paid, so that the further interest at 6 per cent will be calculated only on the amount of interest, i.e., Rs. 162 with interest at 6 per cent from the date of the District Munsif's decree. Each party will bear his own costs throughout except in the memorandum of objections filed in the lower appellate Court as to which the order of the lower appellate Court will stand.


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