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Achanta Venkata Purna Sivaramayya and ors. Vs. Manne Venkayya and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported in(1945)2MLJ412
AppellantAchanta Venkata Purna Sivaramayya and ors.
RespondentManne Venkayya and ors.
Cases ReferredMuhammad Abbas v. Muhammad Hamid
Excerpt:
- - we are governed in this matter by section 56 of the transfer of property act which confers a statutory right on the purchaser to insist on the mortgage debt being satisfied out of the property rot sold to him, in the absence of a contract to the contrary. in a case where, as between the mortgagors and the purchaser the latter undertook to discharge a previous encumbrance on one of the properties and failed to do so, he cannot insist on the burden of the mortgage which subsists only by reason of his default, being thrown in the first instance on properties which were intended under the contract to be relieved from the obligation of the encumbrance......the plaintiff now stands in the shoes of the mortgagee. in 1930 the mortgagors sold one of the two items mortgaged to the 9th defendant under ex. p-4, and he sold it to the 10th defendant who gifted it to the 14th defendant. the sale to the 9th defendant was for the purpose of discharging the mortgage debt of rs. 3,000, and it is expressly recited in the deed that ' it has been settled that the aforesaid sale consideration shall be paid by you, immediately after the registration of this document, towards the debt due in respect of the mortgage dated 14th december, 1919.' a debt due on another mortgage is also mentioned in the sale deed as an item that the 9th defendant undertook to pay off; but nothing appears from the records as to what happened to that mortgage. the 9th defendant.....
Judgment:

Chandrasekhara Aiyar, J.

1. This appeal has been preferred by defendants 1 to 8 and it relates to a mortgage executed by defendants 1 and 2 and their deceased father in favour of the. 13th defendant for a sum of Rs. 3,000 on 14th December, 1919. The plaintiff now stands in the shoes of the mortgagee. In 1930 the mortgagors sold one of the two items mortgaged to the 9th defendant under Ex. P-4, and he sold it to the 10th defendant who gifted it to the 14th defendant. The sale to the 9th defendant was for the purpose of discharging the mortgage debt of Rs. 3,000, and it is expressly recited in the deed that ' it has been settled that the aforesaid sale consideration shall be paid by you, immediately after the registration of this document, towards the debt due in respect of the mortgage dated 14th December, 1919.' A debt due on another mortgage is also mentioned in the sale deed as an item that the 9th defendant undertook to pay off; but nothing appears from the records as to what happened to that mortgage. The 9th defendant claimed the right to have item (1) sold to him, sold last stating that he had discharged the mortgage by payment to the 13th defendant. The Subordinate Judge was not prepared to record any definite finding if the amount had or had not been paid by the 9th defendant, but proceeded to consider the question whether it was an open payment, assuming that the amount had been paid. In paragraph 11 of his judgment, he does not wish to record a finding; but, in paragraph 12 he says:

I, therefore, hold that though the payment of Rs. 3,000 by the 9th defendant is true, it has not been proved to be an open payment.

2. Finally, while decreeing the suit, he gave a direction that item (1) should be sold last.

3. On appeal by defendants 1 to 8, the District Judge found against the payment pleaded, in these words:

These are some of the circumstances on the strength of which I am inclined to agree with the appellant's contention that the 9th defendant did not pay the purchase money under Ex. P.4.

4. But, still he allowed the direction in the decree about item (1) being sold last to stand, as he was of the opinion that there was no ' contract to the contrary ' made out within the meaning of Section 56 of the Transfer of Property Act, which provides for marshalling.

5. The question in this appeal is whether this part of the decree in favour of the 9th defendant, in whose shoes stands the 14th defendant, that item (1) should be sold last is justified and warranted. We are governed in this matter by Section 56 of the Transfer of Property Act which confers a statutory right on the purchaser to insist on the mortgage debt being satisfied out of the property rot sold to him, in the absence of a contract to the contrary. The contract to the contrary need not be express; it may be implied; that is, if, from the facts and surrounding circumstances, an inference could be drawn negativing the right of marshalling, effect must be given to that inference, even though the contract does not say in so many words that there shall be no such right in the purchaser. From the circumstance that the 9th defendant undertook in the sale deed to discharge this particular encumbrance--in fact the sale to him was for the very purpose that the other properties subject to the mortgage should be freed from the encumbrance--how could we say that he could claim marshalling and thus throw the burden of the mortgage primarily on the properties not sold to him. I am not able to see why we should not hold that there was a contract to the contrary. Iri Muhammad Abbas v. Muhammad Hamid (1912) 9 A11.L.J. 499, where a question arose as regards the right to contribution by purchasers of properties mortgaged, it was held that the plaintiffs, who undertook to discharge the encumbrance that existed on the two properties and were left in possession of funds for that purpose, could not claim contribution from the defendants who purchased one of the properties as free from encumbrances. Marshalling which is enunciated in Section 56 is the converse of contribution and the ground on which the Privy Council in Ganeshi Lal v. Charan Singh (1930) 59 M.L.J. 177 : L.R. 57 L.A. :89:I.L.R. 52 All. 358 distinguished Muhammad Abbas v. Muhammad Hamid (1930) 59 M.L.J. 177 : L.R. 57 L.A. :89:I.L.R. 52 All. 358 from the facts before them was that, in the case with which they had to deal, the appellants who claimed the right to contribution, were not parties.to the contract between the mortgagor and the purchaser Shersingh, the ancestor of the respondents. In a case where, as between the mortgagors and the purchaser the latter undertook to discharge a previous encumbrance on one of the properties and failed to do so, he cannot insist on the burden of the mortgage which subsists only by reason of his default, being thrown in the first instance on properties which were intended under the contract to be relieved from the obligation of the encumbrance. In my view, a case has been made out even for the appellants insisting that item (I) should be sold first; but that is not what is wanted now. All that we are concerned with is whether there should be any direction that the 9th defendant's item (i) should be sold last. Neither law nor equity justifies such a direction.

6. The second appeal is allowed with costs right through.


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