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Shanmugha Nadar Vs. Sivan Pillai and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Case NumberSecond Appeal Nos. 1579, 1580 of 1961 and 1145 of 1953
Judge
Reported inAIR1967Mad418
ActsTransfer of Property Act - Sections 91 and 94
AppellantShanmugha Nadar
RespondentSivan Pillai and ors.
Cases ReferredIn Mulla Viteel v. Achuthan Nair
Excerpt:
.....a suit on his mortgage without impleading the first mortgagee, obtained a decree and brought the suit property to sale through court. the appellant claimed the suit property from the earlier court auction-purchaser under the earlier mortgage, whereas the respondents claimed the suit property under the later court auction-purchaser under the later mortgage. second appeal filed to the high court on the question whether the auction-purchaser in execution of the sale by the first mortgagee held earlier, was entitled to redeem the auction-purchaser in the sale by the puisne mortgagee held subsequently,;held, that the puisne mortgagee was an assignee of the equity of redemption and was, therefore, entitled to redeem the prior mortgagee. when a prior mortgagee suing to enforce his mortgagee..........the conflict is between the auction purchaser in execution sales by the puisne mortgagee and the prior mortgagee were not made parties. after the order of remand a comprehensive suit was filed in which all the interested parties were impleaded so that their equities may be worked out.the right of the puisne mortgagee to redeem a prior mortgagee and the right of a prior mortgagee to foreclose a puisne mortgagee is dealt with in s. 91(a), and s. 94 of the transfer of property act provides that any person who has any interest in, or charge upon, the property mortgaged or in, or upon the right to redeem, the same may institute a suit for redemption of the mortgaged property. the puisne mortgagee is an assignees of the equity of redemption and is therefore entitled to redeem the prior.....
Judgment:
(1) These three appeals are connected and may be dealt with together. Four suits O.S. 665 of 1123 (M.E.). O.S. 375 of 1950 O.S. 297 of 1124(M.E.). and O.S. 703 of 1950 on the file of the Principal District Munsif, Kuzhithurai, relate to portions of S. No. 63-A measuring 2 ac. 94 cents in Arudesam Pakuthi. The trial court after taking evidence disposed of all the four suits together.

All the suits were taken on appeal to the District Court of Nagarcoil and the District Court O.S. 665 of 1124 and remanded the other three suits for retrial of the disputes of the parties in one consolidated suit and directed the plaintiff in O.S. 297 of 1124 to implead all persons who claim title and possession under the various mortgages and court sales in O.S. 904 of 1127 and 320 of 1105. It directed the plaintiff in O.S. 297 of 1124 to amend the plaint and convert the suit into one of trill and for partition of his share in the property. It also directed that the rights of the plaintiff in the other three suits should be decided in O.S. 297 of 1124. Accordingly the plaint in O.S. 297 of 1125 was amended as one for declaration of title partition and redemption of marayapattom.

(2) As the principal suit O.S. 297 of 1124 and the other suit relate to different portions of the same survey number, it is sufficient if O.S. 297 of 1124 is dealt with. The plaintiff in O.S. 297 of 1124 is the appellate in S.A. 1579 of 1961. The dispute in O.S. 297 of 1124 relates to one acre 15 cents in the southern portion of S. No. 63-A, a total extent of 2 ac. 84 cents. The property originally belonged to two brothers, Thammanatham Vaithyan and Thammanathan Chevithian had three sons, Thammanathan, Gnanamuthu and Savarianandan. On the death of Vythian these three sons succeeded to his estate. On 19-2-1094 Chevithian executed an othi and kuzhikanom to his brother's sons, Thammanathan, Gnanamuthu and Savarianandan. Thus, the three sons were in possession of one acre 15 cents as jenmis and the other half as mortgagees.

On 6-7-1904, under Ex. M they executed a Chitti hypothecation bond in favour of one Vedamanickam of their half share in the jenmom right and the other half share of Cravithaian. Vedamanickam filed a suit O.S. 320 of 1100 on the mortgage and obtained a decree Ex. C. He assigned his rights to one Ummini Mathavan. Mathavan brought the property to sale in execution of the decree and purchased the same under Ex L on 31-9-1105. He got delivery through court on 21-11-1105. He thus became entitled to the jenmom right over one half and the mortgage right over the other remaining half. Mathavan assigned his right in favour of the plaintiff on 27 1 1121. Out of one acre 15 cents 43 cents in the northern portion was acquired by the Government for a marker and the remaining 72 cents in the southern portion is now in dispute. The plaintiff released the mortgage right in favour of his son, the 6th defendant, retaining the jenmom right over one half of the property.

(3) Vaithiyan and Chevithian, the brothers who originally owned the property, jointly executed a mortgage in favour of Gnanaprakasam, Savarimuthu and Thammanathan Noyyal of a portion of the A schedule property being the B schedule property under Ex. E. on 13-1-1072. The othi right regarding the B schedule property subsequently devolved on one Subramania, and Subramania executed a marayam lease under Ex. G on 8-12-1101 to one Thanu Pillai. Subramania, the mortgagee, died and his wife Krishnammal, who got the mortgage right, released her right in favour of the plaintiff under Ex. F. on 21-9-1123. The first defendant took an assignment of the marayam lease from Thanu Pillai. and the 2nd defendant is in possession of B schedule property. In the suit the plaintiff prayed for a declaration of his title and for partition by metes and bounds of his share in the A schedule property and also for redemption of the marayam lease in respect of the B schedule property. According to the directions in the order of remand he included the other defendants, who claimed rights in respect of the property.

(4) The case of the defendants is as follows. The three sons of Vaithyan, Thammanathan, Gnanmuthu and Savarinandan hypothecated their jenmom and mortgage right to one Kaduvayon Kochan on 23-6-1099. Kochan filed a suit O.S. 904 of 1107 on the hypothecation bond and obtained a decree, and in execution of that decree, brought the entire rights of Vaithiayan's sons to sale and the first defendant purchased them. The first defendant, as auction purchaser, took delivery under Ex. II on 7-12-1123, and under Ex. V. he sold half of the B schedule property to the 2nd defendant on 29-11-1123. Thus defendants 1 and 2 claim that they are entitled to the property by purchase in execution of the decree in O.S. 904 of 1107.

(5) There were some disputes about the identify of the properties which were sold in execution of the decree in O.S. 320 of 1100 and O.S. 904 of 1107. But the courts below have found that the properties in both the suits were the same. Thus, the plaintiff claims the plaint property from an earlier suction purchaser under an earlier mortgage, whereas defendants 1 and 2 claim under a later auction purchaser under a later mortgage. Each of the mortgagees had not impleaded the other in his suit. Though on the date of O.S. 320 of 1120 a second mortgage in favour of one Oochan was in existence, Oochan was not made a party. So also in the subsequent suit, O.S. 904 of 1107 the first mortgagee was not impleaded, in both these suits only the mortgagor was made a party. The trial court decreed the suit O. S. 297 of 1124 declaring that the plaintiff was entitled to A schedule property and allowed him to redeem B schedule property from the defendants. It also passed a preliminary decree for partition of one half of A schedule property. On appeal the lower appellate court found that the plaintiff was not entitled to redeem the plaint property and that the sale in the second suit O.S. 904 of 1107 would prevail against the earlier sale in O.S. 320 of 1100, and that the defendants were entitled to redeem the plaint property.

(6) The question that arises in this second appeal is whether the auction purchaser in execution of the sale by the first mortgagee held earlier is entitled to redeem the auction-purchaser in a sale by a puisne mortgagee held subsequently. In this connection it may also be stated that possession is admittedly with the defendants. The conflict is between the auction purchaser in execution sales by the puisne mortgagee and the prior mortgagee were not made parties. After the order of remand a comprehensive suit was filed in which all the interested parties were impleaded so that their equities may be worked out.

The right of the puisne mortgagee to redeem a prior mortgagee and the right of a prior mortgagee to foreclose a puisne mortgagee is dealt with in S. 91(a), and S. 94 of the Transfer of Property Act provides that any person who has any interest in, or charge upon, the property mortgaged or in, or upon the right to redeem, the same may institute a suit for redemption of the mortgaged property. The puisne mortgagee is an assignees of the equity of redemption and is therefore entitled to redeem the prior mortgagee.

Section 94 the Transfer of Property Act provides that where a property is mortgaged for successive debts to successive mortgagees, a mesne mortgagee has the same rights against mortgages posters to himself as he has against the mortgagor. That is a prior mortgagee has the same rights against the subsequent mortgagee can foreclose a puisne mortgagee. The effect of these two sections is expressed by the familiar rule "redeem up, foreclose down". When a prior mortgagee suing to enforce his mortgage does not make the puisne mortgagee a party of the suit and brings the property to sale, the auction purchaser acquires the rights both of the mortgagee and mortgagor, and as assignees of the mortgagor he may sue to redeem the puisne mortgagee. Under S. 91 the puisne mortgagee as an assignees of the equity of redemption has a statutory right to redeem an earlier mortgage.

The conflict is between the auction purchaser in the first mortgagee's sale to redeem as against the purchaser in a puisne mortgagee's sale, where the puisne mortgage has a right to redeem. The right between these two auction purchasers to possession that been the subject matter or several decisions of this court. In Nagendran Chettiar v. Lakshmi Ammal AIR 1933 Mad 583, a Full Bench of this court had to consider as to which of the purchasers in court auction sales by a prior mortgagee without impleading the puisne mortgagee and by a puisne mortgagee without impleading the prior mortgagee is entitled to possession. In the case cited an immovable property was mortgaged twice without possession. Each of the mortgagees filed separate suits to realise the money due on his mortgage by sale making the mortgagor only party to the suit. In execution of the two sales two different persons became the purchaser. In determining, which of the two purchasers is entitled to possession, it was held that the priority of the date of sale carried with it a right to possession.

One Lakshmi Ammal obtained a deed of maintenance from her deceased husband's brothers in 1918 for payment of maintenance, for which a house was charged. The owners of the house executed a second mortgage in 1922. As the maintenance was not paid till 1927, Lakshmi Ammal filed a suit without making the second mortgagee a party and obtained a decree. In execution of the decree she was appointed receiver for realisation of the profits of the house and for appropriating the same towards her decree. Subsequently she obtained possession.

The second mortgagee filed a suit with out making Lakshmiammal a party and obtained a decree and brought the property to sale. Nagendran Chetti purchased the property and sought to obtain possession but was resisted by Lakshmiammal. The question before the Full Bench was which party was entitled to possession till the rights of parties were finally settled in a properly framed suit. The court was concerned only with the right to possession and not with the priority of mortgages. The Full Bench after a full and exhaustive discussion on the case law came to the conclusion that no right to possession passed to Nagendra Chetti, because at the time of the sale the mortgagors had no right to possession, it having already passed to Lakshmiammal. It was made clear that they were not concerned with the rights of the parties, but were only concerned merely with the right to possession.

The Full Bench after referring to decisions in Venkatanarasamma v. Ramiah, (1987-80) ILR 2 Mad 108, Birgopal Lal v. Bolakee, ILR 5 Cal 269, Chinnu Pillai v. Venkatasami Chettiar ILR 40 Mad 77=(AIR 1917 Mad 751), Nanakchand v. Teluckdye Koer, (1880) ILR 5 Cal 265 expressed the view that the first purchaser was entitled to possession and that the priority of the mortgagees need not be considered. The right of redemption of the parties was not considered in these cases.

The Full Bench also referred to decision in Kutti Chettiar v. Subramania Chettiar (1909) ILR 32 Mad 485 where it was observed that the rights of the second mortgagee were unaffected by the same held in execution of the prior decree to which he was not a party but these rights could not be enforced in a suit for possession but only in a suit for redemption or for sale.

In Mulla Viteel v. Achuthan Nair (1911) 21 mad LJ 213, a Full bench of this court held that a first mortgagee, who has purchased the mortgaged property in execution of a decree on his mortgage, is not entitled to a decree for possession against a puisne mortgagee with possession, who was not impleaded in the first mortgagee's original suit, even subject to the puisne mortgagee's right of redemption, that the puisne mortgagee's rights at the date of his mortgage whether to possession or to sale or foreclosure--remain altogether unaffected by the first mortgagee's suit to which the former was no party and that he has also the right to redeem the prior mortgage, which is preserved in law in spite of the purchase by the prior mortgagee of the equity of redemption. It was further held that redemption is a right which the puisne mortgagee may seek to enforce and not a liability which he may be compelled to discharge. Referring to the decision in (1911) 21 mad LJ 213, the Full Bench in AIR 1933 Mad 583 observed that the second mortgagee's right to recover his mortgage money, his right to have an opportunity of redeeming the earlier mortgage or selling the property subject to the rights of the first mortgagee always remains.

(6A) A simple mortgagee has no right to possession and the right to possession remains with the mortgagor. He is entitled to create a subsequent mortgage or sell the equity of redemption to a stranger and put him in possession. The rights of persons thus acquired cannot be prejudiced by the conduct of a prior mortgagee filling a suit to recover the money by sale of the properties without bringing them on record. The right of a prior simple mortgagee cannot be enlarged by his omission and he cannot take advantage of his own omission.

As between the prior mortgagee and the punish mortgagees, it has to be noted that, while the puisne mortgagee can bring a suit without impleading the prior mortgagee, the prior mortgagee is required to implead the puisne mortgagee as a party to his suit. Thus, while the suit brought by the prior mortgagee is defective, the suit by the puisne mortgagee does not suffer from any such defect. While the puisne mortgagee has a statutory right to redeem the prior mortgagee, the right of the purchaser in a suit by the prior mortgagee is as an assignees of the mortgagor. The auction purchaser's claim as an assignees of the mortgagor is by virtue of a sale without notice to the puisne mortgagee as required under law. If the puisne mortgagee has been made a party, he would have had the option of redeeming the mortgage. By not making the puisne mortgagee a party, the right to which the puisne mortgagee was entitled, cannot be taken away or the right of the purchaser without notice be enhanced. Taking all the circumstances into consideration I am of the view that the right of the puisne mortgagee to redeem a Perrier mortgagee cannot be prejudiced by a court sale at the instance of the prior mortgagee without impleading the puisne mortgage. Though in law the purchaser in the prior mortgagee's sale as an assignees of the mortgagor is entitled to redeem, his right of redemption in law or in equity cannot prevail over the puisne mortgagee's right to redeem. In the result I agree with the conclusion arrived at by the lower appellate court and hold that the plaintiff is not entitled to redeem and dismiss the appeal with costs.

The other two appeals are also dismissed with costs. Leave refused.


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