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K. Chunilal Sowcar Vs. M.N. Srinivasa Aiyengar and ors. - Court Judgment

LegalCrystal Citation
Subject Property
CourtChennai
Decided On
Reported inAIR1944Mad276
AppellantK. Chunilal Sowcar
RespondentM.N. Srinivasa Aiyengar and ors.
Cases ReferredSesha Aiyer v. Krishna Iyengar
Excerpt:
.....conferred a right on a mortgagee to proceed against the mortgagor personally in the event of the mortgage debt not being satisfied against the hypotheca: the words of the section are, in their opinion, satisfied in eases where the court passes a decree that on the happening of the event when the nett proceeds of the sale are found to be insufficient, the balance should be paid. the order, though made at the time of the decree for the sale of the mortgaged estate, operates at a future date, and is made in such terms that it can only operate when the sale has failed to satisfy the debt, and this is the event specified and defined in the section as the event when the decree can be made. and i can see no objection to its being stated in the decree that section 82 does apply, and that if,..........would have begun to run only from the date when it was found that he was unable to satisfy his decree debt; but the fact that he was not able at the time of the filing of the suit to claim contribution from defendants 3 and 4 is not, i think, conclusive. that a decree can be passed to the effect that in the event of the decree amount not being satisfied from one fund, it might be satisfied from another, is indicated by the fact that although under the old civil procedure code of 1882 there was no provision whereby a personal decree could be passed against a mortgagor until the mortgagee had proceeded against the hypotheca; yet it was held in mt. jeuna bahu v. parameshwar narayan mahta a.i.r. 1918 p.c. 159 that such a relief could be granted in a suit for sale. it was argued there, as.....
Judgment:

Horwill, J.

1. On 6th April 1914, one Venkatachari mortgaged two items of property in favour of the Kothandaramaswami Devasthanam for Rs. 4750. He died in 1920 and left his property by will to his wife. On 9th October 1924, by. Rxs. E and E-l, defendants 1 and 2, who are the son and widow of Venkatachari, sold the whole of their lands to defendants 8 and 4, the vendees, undertaking to pay off the mortgage on the lands. On 6th April 1927, defendant 2 transferred the property by gift to her son, defendant 1, who on the following day, viz., 7th April 1927, mortgaged to the plaintiff for the sum of Rs. 4000, four items of property, the first of which was also item 1 in the earlier mortgage. In 1931, the Kothandaramaswami Devasthanam brought O.S. No. 35 of 1931 on its mortgage and obtained a decree. In due course, that mortgage was completely satisfied by a payment by defendants 3 and 4 and by the sale of item 1 for Rs. 5001. Meanwhile, on 4th April 1930, items 3 and 4 were sold for arrears of land revenue; so that the plaintiff was left as security for his mortgage with but item 2, which is valued by himself at Rs. 100 and by the defendants at Rs. 200. He has now brought a suit for sale against item 2, impleading defendants 1 and 2 on that account. He has also impleaded defendants 3 and 4 and prays that a decree may be passed for the sum remaining due after item 2 is sold against the second item of property mortgaged by Ex. F, which is described as the B schedule property; for that property was not made liable at all for the mortgage debt of Ex. F. The Courts below have found against the appellant on a number of grounds, the principal of which are: (1) that the plaintiff has lost his right to proceed against the B schedule property because he did not exercise his right of redeeming the prior mortgage; (2) that the suit is premature; because the cause of action for seeking contribution has not yet arisen; and (3) that there was a mis-joinder of causes of action. On the first point, there is now no room for doubt; because the question has been finally decided by a Full Bench of this Court in Narayanan v. Nallammal A.I.R. 1942 Mad. 685, overruling Sesha Aiyer v. Krishna Iyengar (1901) 24 Mad. 96, which the Courts below followed.

2. The principal question that arises in this appeal is whether the suit, so far as it relates to the prayer for contribution is premature. At first sight it would appear that it is so; because the plaintiff is not entitled to contribution at all if he is able to satisfy his mortgage debt out of the remaining property mortgaged to him. I have no doubt that if he had chosen to proceed against item 2 first and had subsequently brought a suit for contribution against defendants 8 and 4, time would have begun to run only from the date when it was found that he was unable to satisfy his decree debt; but the fact that he was not able at the time of the filing of the suit to claim contribution from defendants 3 and 4 is not, I think, conclusive. That a decree can be passed to the effect that in the event of the decree amount not being satisfied from one fund, it might be satisfied from another, is indicated by the fact that although under the old Civil Procedure Code of 1882 there was no provision whereby a personal decree could be passed against a mortgagor until the mortgagee had proceeded against the hypotheca; yet it was held in Mt. Jeuna Bahu v. Parameshwar Narayan Mahta A.I.R. 1918 P.C. 159 that such a relief could be granted in a suit for sale. It was argued there, as it was here, that the personal remedy could not accrue until after the hypotheca had been sold and that therefore a decree which gave the mortgagee a right to proceed against the mortgagor personally in the event of his being unable to satisfy the decree by proceeding against the hypotheca, could not be passed. Their Lordships did not accept this argument and said referring to Section 90, T. P. Act, which conferred a right on a mortgagee to proceed against the mortgagor personally in the event of the mortgage debt not being satisfied against the hypotheca:

The words of the section are, in their opinion, satisfied in eases where the Court passes a decree that on the happening of the event when the nett proceeds of the sale are found to be insufficient, the balance should be paid. The order, though made at the time of the decree for the sale of the mortgaged estate, operates at a future date, and is made in such terms that it can only operate when the sale has failed to satisfy the debt, and this is the event Specified and defined in the section as the event when the decree can be made.

Section 82, T.P. Act, says that,

Where, of two properties belonging to the same owner, one is mortgaged to secure one debt and then both are mortgaged to secure another debt, and the former debt is paid out of the former property, each property is, in the absence of a contract to the contrary, liable to contribute rateably to the latter debt after deducting the amount of the former debt from the value of the property out of which it has been paid

and indicates that as soon as one property has been sold to satisfy the former debt, then the other properties which have not been sold become liable to contribute rateably to the latter debt; and I can see no objection to its being stated in the decree that Section 82 does apply, and that if, therefore, the debt cannot be satisfied out of the hypotheca, then recourse can be had against the property liable to contribute. Such a decree, like the decree referred to by their Lordships of the Privy Council in Mt. Jeuna Bahu v. Parameshwar Narayan Mahta A.I.R. 1918 P.C. 159, only states what is to be found in the relevant, section of the Transfer of Property Act, i.e., that upon a certain future contingency, the money may be recovered in a certain way. Although there seems to be no reported case in which this point was directly raised and decided; yet it is clear that the learned Chief Justice in Ibn Hassan v. Brij Bhukan Saran (1904) 26 All. 407, and Wallace J. in Thanmull Sowcar v. Ramadoss Reddiar A.I.R. 1928 Mad. 500, were of opinion that in a suit for sale properly framed, the question of contribution could be gone into. The same questions were raised in Sesha Aiyer v. Krishna Iyengar (1901) 24 Mad. 96, in which the learned Judges considered at very great length whether, if the puisne mortgagee did not redeem the earlier mortgage, he could sue for contribution; and they held that he could not. It was this decision that was overruled. There is, however, an incidental reference to the other point in that judgment; and Mr. Desikan contends that this point there came up for decision and was decided, and that on this point Sesha Aiyer v. Krishna Iyengar (1901) 24 Mad. 96 has never been overruled. A very short passage in which reference is made to this is as follows:

If the claim were maintainable, we should also be prepared to hold that it ought not to have been joined with the ordinary claim on the mortgage.

3. I cannot read into this short passage a finding that such a claim would be premature. I am therefore of opinion that, having regard to the decisions pointed above, the claim of, the plaintiffs cannot be regarded as premature. Sesha Aiyer v. Krishna Iyengar (1901) 24 Mad. 96 does undoubtedly say in the passage above quoted that there was a mis-joinder; but it has to be remembered, not only was that question not discussed by the learned Judges, but that it was a decision under the old Code when the provisions with regard to joinder of parties were much stricter1 than they are now. I am satisfied that such a combination of causes of action would not be regarded as a misjoinder to-day. It is true that it cannot now be definitely said what amount will be due from defendants 3 and 4 by way of contribution; but there can be no doubt that the sum will be large, because, even according to the valuation of the defendants, the property is worth not more than Rs. 200, whereas the amount due on the mortgage is still Rs. 4000.

4. A minor objection of defendants 3 and 4 to the decree passed in favour of the plaintiff is that' Section 82 can only be invoked when the mortgages are made by the same persons. The first mortgage was made by Venkatachari, whereas the second mortgage was by defendant l. The learned Subordinate Judge accepted this argument and relied on Ramaswami Chetty v. Madura Mills Co., Ltd. A.I.R. 1917 Mad. 372. That decision, however, does not apply, because in that case one mortgage was to two persons and the other to only one. Section 82 does not say that the persons making the mortgages should be the same; but only that at the time when one of the properties is sold and Section 82 is sought to be invoked, the two properties should belong to the same owner. When item 1 of the properties was sold, both the properties belonged to defendant 1. Section 82 therefore applies.

5. Another argument raised by defendants 3 and 4 is that regard should be had to the fact that when items 3 and 4 were brought to sale for arrears of revenue, the plaintiff made no attempt to pay off those arrears and so save a portion of his hypotheca. It is contended that because the plaintiff did not do this, defendants 3 and 1 naturally suffered; because they were called upon to pay a sum of money which perhaps would not have been payable if the plaintiff had taken steps to save items 3 and 4 from being sold. The fact that the plaintiff omitted to do a certain act would only be relevant if the plaintiff had been under any legal obligation to do that act. The plaintiff may not have then been in a position to pay the arrears of revenue. A very similar objection was raised in Narayanan v. Nallammal A.I.R. 1942 Mad. 685 when it was argued that the plaintiff should have redeemed the earlier mortgage; and the learned Chief Justice, referring to Sesha Aiyer v. Krishna Iyengar (1901) 24 Mad. 96, said:

That decision, if allowed to stand, would mean that persons in the position of the plaintiffs would lose everything unless they were sufficiently well off to discharge the prior mortgage. It would not only be most unjust, but it would mean inserting into the section a provision which is not there and a provision which runs counter to its tenor.

I have no doubt that as the plaintiff was not bound to pay the arrears of revenue, he cannot be penalised in his present suit, because of his failure to do so. It follows that the plaintiff is entitled to have a decree in which the liability of the Schedule B properties for contribution is set out. It will be necessary to determine the maximum extent to which that property is liable and that can only be determined by evaluating Schedule B properties as well as item l. A decree has already been passed against defendants 1 and 2; and it is not necessary to interfere with that. The suit will therefore be remanded to the trial Court for passing a conditional decree against defendants 3 and 4 with regard to the extent to which the Schedule B properties are liable to contribute. The parties are at liberty to adduce evidence as to the value of the lands. This matter came before this Court on a prior occasion, when costs were ordered to abide the result of. the suit upon remand. Since then the matter has been heard by the lower appellate Court and by this Court. Defendants 3 and 4 should therefore bear the costs of the appellant up to date in all the Courts. The court-fee paid in second appeal will be refunded.


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