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Achanta Chittamma Vs. Gunisetti Mureyya and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1937Mad92
AppellantAchanta Chittamma
RespondentGunisetti Mureyya and ors.
Cases ReferredIn Cooling v. Saravana
Excerpt:
- - makes the following observations referring to the amendment as to the notice in section 100 of the act :but it may be said that the amendment does not alter the law but shows more clearly what the rights and liabilities of a charge-holder are......arises was instituted by the plaintiff to enforce a statutory charge which defendant 1 had under a sale-deed dated 5th may 1915 executed by him in favour of defendant 3 of the suit property and which the plaintiff purchased at a court-sale. the sale by defendant 1 was for rs. 5,500 and out of the same a sum of rs. 833 was retained with defendant 3. the object was to enable defendant 3 to pay maintenance out of the interest thereon to one manickam, the step-mother of defendant 1. the sale-deed was executed on 5th may 1915, and on the same date an agreement was also executed by defendant 3, ex. 1, in favour of defendant 1 reciting the retention of the said sum of rs. 833 and providing that the sum should be retained with defendant 3 so long as the maintenance payable to the stepmother.....
Judgment:

Venkataramana Rao, J.

1. The suit out of which this second appeal arises was instituted by the plaintiff to enforce a statutory charge which defendant 1 had under a sale-deed dated 5th May 1915 executed by him in favour of defendant 3 of the suit property and which the plaintiff purchased at a Court-sale. The sale by defendant 1 was for Rs. 5,500 and out of the same a sum of Rs. 833 was retained with defendant 3. The object was to enable defendant 3 to pay maintenance out of the interest thereon to one Manickam, the step-mother of defendant 1. The sale-deed was executed on 5th May 1915, and on the same date an agreement was also executed by defendant 3, Ex. 1, in favour of defendant 1 reciting the retention of the said sum of Rs. 833 and providing that the sum should be retained with defendant 3 so long as the maintenance payable to the stepmother continues, that he should pay the interest on the said amount at the rate of nine per cent towards the maintenance payable to the said Manickam and that the principal sum of Rs. 833 should be paid after the death of the said Manickam whenever demanded or if in the meanwhile, the maintenance claim was adjusted. The said sale-deed refers to Ex. 1. The said Manickam died on 1st June 1923. In execution of a decree in O.S. No. 306 of 1917 on the file of the Court of the District Munsif of Narsapur, a creditor of defendant 1 attached the right to the said sum of money and the same was sold and purchased by the plaintiff. On the strength of the said purchase the plaintiff has instituted this suit to recover the said sum by the sale of the said property. The main contesting defendant is defendant 4, wife of defendant 3, who purchased the suit property by a sale-deed dated 3rd April 1931. Both the Courts have decreed the plaintiff's claim.

2. Mr. Raghava Rao on behalf of defendant 4 urges three contentions before me. His first contention is that as defendant 1 has taken Ex. 1 the statutory charge Under Section 55(4), T.P. Act, has been extinguished. This contention seems to me to be untenable. In order to extinguish the statutory charge there must be an express contract or something from which it is a necessary implication that such contract exists and it is not excluded by a contract, covenant, or agreement with respect to the purchase money which is not inconsistent with the continuance of the charge: vide Webb v. Macpherson (1904) 31 Cal 57. It is on this principle that the mere taking of a promissory note or a collateral security was held not to extinguish a statutory charge. In this case Ex. 1 embodies an arrangement in and by which the principal sum of Rs. 833 was to be paid after the happening of a certain event. Instead of embodying the conditions relating thereto in the sale-deed, a separate document was executed and the sale-deed does refer to Ex. 1 so that both the sale-deed and Ex. 1 must be treated as one transaction. There is absolutely nothing from the recitals of Ex. 1 to indicate that the statutory charge was intended to be extinguished. The payment of the said sum was only deferred and nothing more. I am therefore of opinion that the statutory charge subsisted on the date of the purchase by the plaintiff.

3. The next contention is that there was no assignment of the charge. On a reference to the sale proclamation and the sale list it is clear that what was sold was the right which defendant 1 had under the sale-deed. It was not a right to mere money alone that was sold and purchased but all the rights which defendant 1 had under the sale-deed. Therefore the charge was also sold and it passed to the plaintiff. The last contention of Mr. Raghava Rao is that his client is a bona fide purchaser for value without notice. I do not find this plea has been specifically taken nor is there any issue relating thereto. The only issue which I find is whether the sale in favour of defendant 4 is a nominal transaction. I find in para. 8 of the learned District Munsif's judgment that the sale in favour of defendant 4 was held to be a nominal transaction. The learned Subordinate Judge has not given any finding on the point as he considered it unnecessary to do so. A finding on this issue does not necessarily establish that the purchase was without notice. The purchase in this case was made and the suit was filed before the amendment of the Transfer of Property Act. The case, therefore, will have to be judged according to the law which prevailed before it. So far as our High Court is concerned the charge was held to be enforceable even against bona fide purchasers for value without notice : vide Cooling v. Saravana (1889) 12 Mad 69, Srinivasa Raghava Ayyangar v. Ranganatha Ayyangar AIR 1919 Mad 528 and Mollaya Padayachi v. Krishnaswami Ayyar : AIR1925Mad639 . Mr. Raghava Rao relies upon Arvamuda Ayyangar v. Abiramanalli Ayah AIR 1934 Mad 353, wherein at p. 569, Madhavan Nair, J. makes the following observations referring to the amendment as to the notice in Section 100 of the Act :

But it may be said that the amendment does not alter the law but shows more clearly what the rights and liabilities of a charge-holder are.

4. There is no discussion of the matter and further the position seems to have been conceded. If the observations are meant to imply that the law as declared by the amendment was the same as before, I am not inclined to agree. It was certainly intended to set at rest the conflict of views prevailing in the various Courts. The statutory charge Under Section 55(4) has been held to be an interest in immoveable property : vide the decision of Madhavan Nair, J. in Ranganatha v. Rajagopala : AIR1933Mad181 following Dayal Singh v. Indar Singh AIR 1926 PC 94 and Rajagopala v. Ranganatha AIR 1934 Mad 615 which confirmed the decision of Madhavan Nair, J. If therefore it is an interest in immoveable property and not a mere equity, the purchaser can only take such interest as his vendor can convey which will be the property subject to such interest. The decisions of our High Court are based upon this view. In Cooling v. Saravana (1889) 12 Mad 69 where the facts were that A mortgaged his land to B to secure repayment of the loan and A agreed that in case the property is lost by an adverse claim, B can realise the money from A's house, a charge was held to be created on the house so as to be operative against a bona fide purchaser for value without notice. At p. 71, Muttusami Ayyar, J. observes as follows :

When that document was executed Varada Desikachari was competent to encumber his property either at once or subject to a contingency, and a subsequent purchaser who can only stand in his place takes the property subject to such restrictions, as would attach to him as owner if he never parted with the property. In the absence of a special provision of law we do not see how a bona fide purchase can operate to secure a larger interest than the vendor himself had and was competent to transfer.

5. It seems to me therefore that defendant 4, even if he were a bona fide purchaser for the value without notice, will be bound by the charge. I therefore dismiss the second appeal with costs. (Leave refused.)


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