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Arumilli Surayya Vs. Pinisetti Venkataramanamma and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1940Mad701; (1940)1MLJ831
AppellantArumilli Surayya
RespondentPinisetti Venkataramanamma and ors.
Cases ReferredCreet v. Ganga Ram Gool Raj I.L.R.
Excerpt:
- - , that what is sold in a court sale is the right, title and interest of the judgment-debtor, so that the auction purchaser is in no better position than the judgment-debtor himself, and he is therefore subject of the same equities as the judgment-debtor was......subject to a prior charge is not free from doubt. as he law stands at present, section 100 of the transfer of property act makes it clear that no charge shall be enforced against any property in the hands of a purchaser to whom such (property has been transferred for consideration and without notice of the charge; but the charge in the present case was prior to the amendment of section 100, which introduced the clause above quoted. the learned subordinate judge relied on a decision of sadasiva ayyar and spencer, jj., in srinivasa raghava aiyangar v. ranganatha aiyangar (1918) 36 m.l.j. 618, but that case can be distinguished, in that sadasiva aiyar, j., was of opinion that the document then under consideration was something more than a mere charge and amounted to an anomalous mortgage......
Judgment:

Horwill, J.

1. The plaintiff brought this suit for maintenance and sought to enforce it against the suit property over which she had a charge. The appellant was impleaded because he was in possession, he having purchased the property in a suit for sale brought by himself on a mortgage. He filed in the trial Court on the ground that he was not a bona fide purchaser with notice and he preferred an appeal which was dismissed on the ground that even if he did not have notice of the charge, his right would be subject to it because the charge was prior to the sale.

2. The question whether a sale without notice would be subject to a prior charge is not free from doubt. As he law stands at present, Section 100 of the Transfer of Property Act makes it clear that no charge shall be enforced against any property in the hands of a purchaser to whom such (property has been transferred for consideration and without notice of the charge; but the charge in the present case was prior to the amendment of Section 100, which introduced the clause above quoted. The learned Subordinate Judge relied on a decision of Sadasiva Ayyar and Spencer, JJ., in Srinivasa Raghava Aiyangar v. Ranganatha Aiyangar (1918) 36 M.L.J. 618, but that case can be distinguished, in that Sadasiva Aiyar, J., was of opinion that the document then under consideration was something more than a mere charge and amounted to an anomalous mortgage. Mollaya Padayachi v. Krishnaswami Iyer : AIR1925Mad95 , the other case relied on by the learned Subordinate Judge, contains a reference to the decision in Srinivasa Raghava Aiyangar v. Ranganatha Aiyangar (1918) 36 M.L.J. 618, but there was no discussion of it as it seemed to be unnecessary for the decision of that case. Even Aravamudhu Ayyangar v. Zamindarini Srimathi Abhiramavalli Ayah (1933) 66 M.L.J. 566, relied on by the learned advocate for the appellant, does not really discuss this point. However, Indra Narain v. Mohammad Ismail (1939) A.L.J. 849, which has been quoted in another connection, says that Section 100 of the Transfer of Property Act has retrospective effect. If that is so, then there would be no doubt that a purchaser without notice would not be bound by a prior charge.

3. The appellant however did not come into possession by means of a private sale, but by purchasing in Court auction the property which was subject to his own mortgage. In a similar case reported in Indra Narain v. Mohammad Ismail (1939) A.L.J. 849, it was held that Section 100 of the Transfer of Property Act does not apply to auction sales. Two reasons were given. Section 2(d) of the Transfer of Property Act says that the Act does not apply to cases of transfer by operation of law, save in certain cases with which we are not here concerned. The second reason is that having regard to the definition of 'transfer' in Section 5 of the Transfer of Property Act, it is clear that a transfer within the meaning of the Act does not include an auction sale; for a transfer is denned as an act by which a living person conveys property to one or more other living persons. Property that passes to an auction purchaser is not conveyed to him by the judgment-debtor. Both these reasons seem valid. There is another reason for not applying Section 100, viz., that what is sold in a Court sale is the right, title and interest of the judgment-debtor, so that the auction purchaser is in no better position than the judgment-debtor himself, and he is therefore subject of the same equities as the judgment-debtor was. In a private sale without notice, on the other hand, the purchaser is not subject to equities at all. Creet v. Ganga Ram Gool Raj I.L.R. (1937) 1 Cal. 203, says:

The position of a purchaser at an execution sale is the same as that of a judgment-debtor; his position is somewhat different from that of a purchaser at a private treaty. Execution purchasers purchase subject to all the charges and incumbrances - legal and equitable - which would bind the debtors.

4. This principle has been laid down in Halsbury's Laws of England Vol. 13, page 95, paragraph 87, where it is said:

Ordinarily, an assignee takes subject to all equities to which the assignor was subject; and this is the case where the assignee is a volunteer, and also where he is a purchaser for value if he has notice of the circumstances which raise the equity. But if he is a purchaser for value without notice, the equity cannot be asserted against him. Trustees in bankruptcy and judgment or execution creditors take only what was vested in the bankrupt or debtor; hence they do not rank as purchasers, but take subject to prior equities.

5. The learned advocate for the appellant argues that if he cannot rely on his sale, he can fall back on his mortgage. I doubt whether he can; but even if he could, Section 100 would not help him, for the proviso says:

No charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge.

6. If the appellant is treated as a simple mortgagee, he cannot by any stretch of the imagination be considered to have the property in his hands.

7. The appeal therefore fails and is dismissed with costs.


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