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Sri Gangavamsam Satyanarayana Vs. Routu Ramaswaminaidu and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai
Decided On
Reported inAIR1946Mad305; (1946)1MLJ129
AppellantSri Gangavamsam Satyanarayana
RespondentRoutu Ramaswaminaidu and ors.
Cases ReferredVenkata Siddayya v. Sanjappa
Excerpt:
- - the mortgagee was to take possession of the properties and enjoy the rents and profits in lieu of interest......to spend on account of the mortgagor on repairs to the irrigation sources. it follows that the mortgage in question is not covered by the exemption under section 10(2)(i) and is liable to be scaled down under the provisions of the act.4. applying, however, these provisions, it is seen that the petitioner derives no benefit. he has elected to seek relief under section 8(2) and not under section 8(1). for the purpose of section 8(2) it has been decided in venkata siddayya v. sanjappa : air1943mad479 that in dealing with a consolidated debt, payments made towards the debts consolidated should be clubbed together and treated as payments towards the consolidated debt. applying section 8(3) in the light of that decision, it is found that the sums paid under the mortgage during the period.....
Judgment:

Patanjali Sastri, J.

1. This revision petition arises out of an application made by the petitioner under the rules framed under Madras Act IV of 1938 for a declaration that the debt due by him to the respondent under a mortgage for Rs. 2,000 dated 8th April, 1911, was discharged under the provisions of that Act. The Court below has dismissed the application on the ground that the exemption under Section 10(2)(i) of the Act applied to the case and that therefore there was no question of scaling down the debt. Hence this Civil Revision Petition.

2. The bond of 1911 was executed by way of renewal of an earlier mortgage dated the 16th May, 1894, to the extent of Rs. 1,000 and for a further sum of Rs. 1,000 due under a compromise decree in O.S. No. 104 of 1903. The Court below in considering the applicability of Section 10(2)(i) to the case has based its conclusion exclusively upon the earlier bond of 1894 and made no reference whatever to the bond to which the provisions of the Act were sought to be applied. This is obviously wrong. The question for consideration was whether the provisions of the later bond of 1911 were such as would bring the case within the scope of Section 10(2)(i). It is, however, unnecessary to remit the case to the Court below for the consideration of this question as the matter is clear on the terms of this bond. It is executed in favour of 7 persons apparently members of a joint family, 3 of whom were parties to the original deed. After reciting that the principal advanced under that deed, namely, Rs. 1,000 was outstanding and that a further sum had become due under the compromise decree referred to above, it provided that the same lands which were mortgaged under the earlier deed were to be the security for the sum of R3. 2,000 made up as aforesaid. The mortgagee was to take possession of the properties and enjoy the rents and profits in lieu of interest. It is also provided that if certain specified irrigation sources for the lands mortgaged required repairs to be effected to the extent of more than Rs. 16-4-0 the mortgagor should pay interest on the excess at the rate of 12 per cent, per annum and such excess amounts together with interest calculated as above should be paid along with the sum, of Rs. 2,000 as a condition of redemption of the properties by the mortgagors.

3. It is argued for the petitioner that this mortgage does not fall within the exemption in Section 10(2)(t) as it contains a stipulation for payment of interest due to the mortgagee in the contingency referred to above, as even a stipulation for payment of interest in certain events takes the case out of the scope of the exemption. I think the contention must be accepted as it is supported by Jagannatha Aiyangar v. Senni Veera Chettiar : (1941)1MLJ172 which shows that even a contingent stipulation for payment of interest to the mortgagee is sufficient to take the case out of the exemption. Mr. Suryanarayana for the respondent, however, urges that the decision referred to above has no application here as the stipulation for interest in that case was in respect of the amount advanced to the debtor, whereas here interest is payable only on the cost of repairs incurred by the mortgagee in excess of a specified sum. No doubt the decision admits of that distinction. But it seems to me that it is immaterial whether the contingent stipulation for payment of interest is in respect of the amount advanced to the debtor or is in respect of an amount which according to the bargain between the parties the mortgagee is authorised to advance on account of the debtor adding it to the mortgage amount. In the latter case also the amount must be regarded as part of the amount due under the mortgage. As already observed, the payment of this amount in. addition to the amount of Rs. 2,000 is made a condition of redemption and the security granted under the deed covers this additional sum. No distinction can, therefore, be drawn for this purpose between the amount originally advanced under the document and the amounts which the mortgagee is authorised to spend on account of the mortgagor on repairs to the irrigation sources. It follows that the mortgage in question is not covered by the exemption under Section 10(2)(i) and is liable to be scaled down under the provisions of the Act.

4. Applying, however, these provisions, it is seen that the petitioner derives no benefit. He has elected to seek relief under Section 8(2) and not under Section 8(1). For the purpose of Section 8(2) it has been decided in Venkata Siddayya v. Sanjappa : AIR1943Mad479 that in dealing with a consolidated debt, payments made towards the debts consolidated should be clubbed together and treated as payments towards the consolidated debt. Applying Section 8(3) in the light of that decision, it is found that the sums paid under the mortgage during the period it was in force was Rs. 1,700, while twice the amount of the principal as defined in the explanation to the section is Rs. 4,000. The amount payable, therefore, to the creditor will be Rs. 2,300, while according to the provisions of the bond, the petitioner is entitled to redeem the mortgage by payment of Rs. 2,000 only, no claim having been made for the cost of repairs. Application of the provisions of the Act to the debt in question does not therefore in any way benefit the debtor.

5. The application fails on this ground and the revision petition is dismissed with costs.


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