(1) This appeal comes before us for final disposal after the submission of the findings by the learned city Civil Judge in pursuance of an order of this court dated 1-1-1963, calling for a finding. The questions that arise for consideration lie in a narrow compass. The brief facts of the case are as follows.
(2) One A. C. Kannappa executed a settlement deed, Ex. B. 5, dated 25-2-1934, under which he gave a life estate to his son, Rajakannappa in an extent of land, with certain buildings, now bearing door No. 5 Nowroji Road, Chetput, the land measuring about 14 grounds 2070 sq. ft. The vested remainder was given to minor Rajasekharan, the settler's grandson. Rajakannappa's wife is the first defendant, and his son, minor Rajasekharan aforesaid is the second defendant. The third defendant is Rajakannappa's mother-in-law, the mother of the first defendant. Rajakannappa executed two mortgages, Ex. A. 1 dated 28-2-1946 for Rs. 10,000 and Ex. A. 2 dated 23-1-1947 for Rs. 5000 in favour of the plaintiffs, mortgaging the aforesaid property, over which he had a life interest. In the operative portion of the two mortgages, it is specially stipulated that the properties comprised in the settlement deed, the land and the building then existing as well as any future building or buildings that may be erected with all fixtures and fittings attached would remains security for the amounts advanced under the aforesaid mortgages. In this connection, it may also be mentioned that when the first loan of Rs. 10,000 was advanced the mortgagees and the mortgagor particularly contemplated erection of buildings on the land in question.
Under Ex. B. 1 dated 1-7-1951 Rajakannappa and his wife and son executed in favour of one Chandrasekhara Mudaliar, the 4th defendant in the suit, a mortgage for Rs.5000, comprising the land in question, as well as a new construction which was put up by the mortgagor on the land in question. Rajakannappa was adjudged insolvent in I. P. No. 28 of 1953 and the Official assignee of Madras sold in public auction under a deed of conveyance, Ex. B. 2, dated 28-12-1953, the suit properties including the newly constructed building aforesaid and the same was purchased by the third defendant for a sum of Rs. 500 subject to the mortgage of Rs. 5000 in favour of the 4th defendant. It may be mentioned that this sale by the Official Assignee did not contain any reference to the two mortgages, Exs. A. 1 and A. 2 in favour of the plaintiffs. By this time, Rajakannappa died on 28-8-1953.
(3) The plaintiffs filed the suit O. S. No. 641 of 1957 to recover s sum of Rs. 15,000 representing the balance due on the two mortgages aforesaid (giving up a portion of the claim) and the main contest relates to the question as to how far this claim is enforceable against the superstructure which was subsequently put up by the mortgagor, Rajakannappa. The claim of the 4th defendant, the mortgagee under Ex. B, 1, has been satisfied and therefore we are not concerned with him.
(4) Defendants 1 to 3 contested the suit mainly on the ground that the plaintiff cannot have any claim against the superstructure, No. 5-A Naoroji Road, newly constructed by the mortgagor, the life tenant, and that the said new building became a part of the land itself, and that after the death of the life tenant, the remainderman, the second defendant, became the owner both of the land as well as the superstructure newly erected. The third defendant raised a further contention that in the sale deed executed (in her favour) by the Official assignee there was no reference to the mortgages of the plaintiffs, and that she is a bona fide purchaser without knowledge of the same, as the property was sold to her subject only to the mortgage in favour of the 4th defendant. a further plea was also raised that in O. P. 30 of 1956 the plaintiff filed an application on the file of the City Civil Court for the appointment of a Receiver under S. 69-A of the Transfer of Property Act, and that as the learned City Civil Judge held that three plaintiffs were not entitled to any mortgage right over the new building, the present claim of the plaintiffs was barred by res judicata. The learned City Civil Judge upheld that contentions of the defendants and dismissed the plaintiff's suit, mainly on the ground that whatever rights the plaintiffs had, became extinguished on the death of the life-tenant, Rajakannappa.
(5) The present appeal has been preferred by the defeated plaintiffs and the Bench, of which one of us was a member, called for a findings to whether the third defendant was a bona fide purchaser for value of No. 5-A Naoroji Road, and as to whether the plaintiffs were entitled to recover the suit amount from the suit property on the basis of Exs. A. 1 and A. 2. The learned City Civil Judge had submitted a finding that the third defendant is not a bona fide transferee but had full knowledge of the two mortgages, Exs A.1 and A. 2. He has also recorded a finding that the plaintiffs will be entitled to enforce their rights against the newly constructed house, door No. 5-A Nawroji Road.
(6) We have no hesitation in accepting the finding of the learned City Civil Judge that the third defendant is not a bona fide transferee at all but both legally and factually she is a transferee with full knowledge of Exs. A. 1 and A. 2. In fact it is impossible even to contend otherwise. The two mortgages, Exs. A.1 and A. 2, are registered mortgages. Under S. 3 of the Transfer of Property Act constructive knowledge has got to be imputed to the third defendant. The fact that the Official assignee in his sale deed did not refer to the mortgages of the plaintiffs cannot in any way affect the latter's rights. Further, the facts of the case also clearly show that the third defendant, who is no other than the mother-in-law of the mortgagor, knows every detail and fact connected with the transactions.
(7) On the question of the rights of the plaintiffs as against the new construction, we have no doubt whatsoever that the view taken by the learned City Civil Judge and his findings are perfectly correct and sound. The recitals in the two mortgage deeds, Exs. A. 1 and A. 2, are unambiguous and clear and the security which is furnished is not only the land and the guiding then existing, but expressly takes in any building or buildings that may be put up in future. Some argument was advanced in the courts below, as will as before us, that the moneys advanced by the plaintiff's were not utilised by the mortgagor for putting up the superstructure in question, and that some other moneys were utilised. We are clearly of the opinion that that circumstance, even assuming it to be true, has absolutely no bearing on the question.
(8) The main point which was stressed before us by the learned counsel for the respondents was that as the mortgagor had only a life interest the rights of the mortgagees as against the superstructures newly built would enure only so long as the mortgagor was alive, and that on his death, the whole right became extinguished, there being no distinction between the land and the superstructure. In support of this argument learned counsel relied upon the English Law of Fixtures based upon the Maxim 'quic quid inaedificatur solo, solo credit'. He also relied upon a judgment of the Calcutta High Court in Kandarpa Nath v. Jogendra Nath, 12 CLJ 391. There is no substance in this contention. This maxim--whatever is affixed to the soil belongs to the soil--is a rule of considerable antiquity and has been held to be inapplicable in this country. The following classical statement of Sir Barnes Peacock in Thakoorchander Poramanick v. Ramdhone Bhuttacharjee, 6 Suth WR 228 has been followed in all the subsequent cases as representing the true position of law in India:
'We think it clear that, according to the usages and customs in this country, buildings and other such improvements made on the land do not, by the mere accident of their attachment to the soil, become the property of the owner of the soil; and we think it should be laid down as a general rule that, if he who makes the improvement is not a mere trespasser, but is in possession under any bona fide title or claim of title, he is entitled either to remove the materials, restoring the land to the state in which it was before the improvement was made, or to obtain compensation for the value of the building if it is allowed to remain for the benefit of the owner of the soil--the option of taking the building or allowing the removal of the material, remaining with the owner of the land, in those cases in which the building is not taken down by the builder during the continuance of any estate he may possess.'
In India the view has been uniformly taken that the English doctrine of fixtures as to buildings would not apply, and that the party who builds on another's land should be allowed to remove the materials. Vide Mammunhi v. Kunhibi, : AIR1961Ker147 which contains a relevant discussion of the case law on the matter.
(9) In a recent judgment of the Supreme Court in Dr. K. A. Dhairyawan v. J R. Thakur, : 1SCR799 the question arose as to how far the superstructure put up by the lessee would get annexed to the land so as to vest title therein in the lessor under the above said maxim. The Supreme Court after referring with approval to the statement of the law of Sir Barnes Peacock in 6 SWR 228 held that the English Law of fixtures is inapplicable in India, and that the lessee continued to be the owner, and that the superstructure would not vest in the lesssor. The same question arose in a somewhat slightly different context in a latter judgment of the Supreme Court in Appasaheb Tuljaram Desai v. Bhalchandra Vithal Rao Thube, : 2SCR163 . In that case, the Supreme Court held that even though watan land was inalienable and therefore could not be sold in execution the same considerations would not apply to a wada (house) constructed on the site which was watan land on the ground that the superstructure cannot be regarded as an inseparable accretion to the land. The principle of this decision would apply to the instant case. Vied, for a succinct statement of the law, Mull, Transfer of Property Act, 4th Den. page 20. We are therefore of the opinion that the plaintiffs will be entitled to a mortgage decree in respect of house No. 5-A Nowroji Road, newly constructed, though subsequent to the mortgages.
(10) Learned counsel for the respondents next submitted that the decision on O. P. 30 of 1956, the proceedings under S. 69-A of the Transfer of Property Act operate as res judicata and that the plaintiffs cannot seek any remedy as mortgagees in respect of the property in question. There is no substance in this contention. A perusal of the provisions of S. 69-A of the Transfer of Property Act shows that an order passed in a proceeding thereunder cannot operate as res judicata as the City Civil Court in such a proceeding has no jurisdiction to adjudicate upon competing questions of title. The limited jurisdiction conferred upon the court is to appoint a person as a Receiver under the contingencies mentioned in sub-section (2) of Section 69-A. The Court has no power to decide any other question. Sub-section (100 of S. 69-A which provides for an application being made to court for its opinion or advice or for direction respecting the management and administration of the mortgaged property does not confer any jurisdiction in the court to adjudicate upon questions of title. The order of the City Civil Court on O. P. 30 of 1956 cannot therefore operate as res judicata.
(11) In this connection reference may be made to the judgment of the Privy Council in Bhagwan Din v. Gir Har Saroop, in which the question arose whether the doctrine of res judicata would apply to a decision of the District Judge in a proceeding under Ss. 3 and 6 of the Charitable and Religious Trusts Act of 1920. The Judicial Committee held that the fact that in a proceeding under Ss. 3 and 6 of the aforesaid Act the District Court ordered accounts to be furnished by the trustees holding that the trust in question was a charitable and religious trust did not operate as res judicata in a suit filed by the owners of the property to establish that no such charitable or religious trust existed. Sir George Rankin delivering the judgment of the Board put the matter thus, (approving the view taken in Haidarali Gulamali v. Gulam Mohiuddin, : AIR1934Bom343 and Premnath v. Harram, ILR 16 Lah 85:AIR 1934 Lah 771.
'Their Lordships agree with the Chief Court. They hold that the decision of the District Judge under the Act of 1920-a decision from which by S. 12 there is no appeal--is a decision in a summary proceeding which is not a suit nor of the same character as a suit; that it has not been made final by any provision in the Act: and that the doctrine of res judicata does not apply so as to bar a regular suit even in the case of a person who was a party to the proceedings under the Act........It is readily intelligible that the District Judge should be required to stay proceedings under the Act in any case in which the person against whom they have been taken is willing to bring a suit. But it would be both drastic and anomalous provide that a person in possession, if not willing to bring a suit to establish his own title affirmatively, must be content to abide without right of appeal by the decision of the District Judge in a proceeding of this character. The terms of S. 6 f the Act are intended, in their Lordships view, to define the consequences of such an order as was made in this case by the District Judge on 1-10-1930, but the words 'if a trustee without reasonable excuse fails to comply' cannot be read to exclude a contention in a regular suit that the plaintiff is not a trustee or to prevent a similar contention being raised by a defendant to a suit under S. 92 of the Code.'
(12) In ILR 16 Lah 85 : AIR 1934 Lah 771 Jai Lal J. delivering the judgment on behalf of the Bench has stated the law thus:
'The only question that fails to be decided on this appeal is whether this property has been proved to have been dedicated for public religious objects. A subsidiary question was raised though not pressed on behalf of the respondents that the decision of Mr. Johnston (District Judge) in 1924, holding that the property was not a religious endowment operates as res judicata to the present suit. There is, however, in my opinion, no force in this contention. It is true that the Charitable and Religious Trusts Act, 1920 authorises the District Judge to decide the question whether the property is for is not devoted to public, religions or charitable purposes, this, however, is only in order to enable him to determine whether he would or would not order the respondents to file accounts. No appeal is allowed from his decision and the District Judge is not empowered to enforce his order to file accounts if he decides the question of the nature of the property in favour of the applicants. The only effect of the disobedience or the order of the District Judge is that a suit can be brought against the respondents without the sanction of the Advocate General, as is dinarily required by S. 92 C. P. C. The proceedings of the District Judge are of a summary nature and do not fall within the definition of a suit, it is impossible to hold under the circumstances that his decision was intended to operate s res judicata.'
applying the rationale of the above decisions we held that the machinery provided under S. 69-A is purely of a summary nature and does not contemplate any decision or adjudication so as to attract the principles of S. 11 C. P. C.
(13) The appeal is allowed and the plaintiffs suit is decreed as against the superstructures 5A Nowroji Road with costs throughout as against the third defendant.
(14) The fourth defendant has preferred Memorandum of Cross objections with regard to the award of costs. In view of the claim made by him he was made a party and he did not state in the written statement that his claim has already been satisfied. On the legal contentions he took up the same untenable pleas as the other defendants. It now transpires that his claim has been fully satisfied. But, in view of his conduct, we think that he is not entitled to any costs either in the trial court or in the appeal.
(15) The memorandum of cross objections is therefore dismissed, but without costs.
(16) Appeal allowed.