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Narayanaswami Goundar Vs. Perumal Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 1578 of 1947 and C.M.P. No. 8183 of 1950
Judge
Reported inAIR1953Mad720; [1953]23ITR400(Mad); (1952)2MLJ103
ActsTransfer of Property Act, 1882 - Sections 60 and 72; Debt Law; Madras Agriculturists Relief Act, 1938 - Sections 9A(7)
AppellantNarayanaswami Goundar
RespondentPerumal Chettiar and ors.
Appellant AdvocateC.S. Swaminathan, Adv.
Respondent AdvocateS.V. Venkatasubramaniam, Adv.
DispositionApplication dismissed
Excerpt:
.....created in favour of only one person--subsequent assignment in favour of two or more--subsequent partition of mortgagee interest--sub-clause (c) of section 9-a (7) (ii) applies--partition protected;he proviso which was added to section 72 of the transfer of property at (iv of 1882) in 1920 has no retrospective operation, though it is not one of the amendments which are expressly declared by section 63 of the transfer of property amendment act (xx of 1929) to be not retrospective. the right which accrued to the mortgagee prior to the amendment to pay the municipal tax due for the property and to add it to the mortgage amount, which is a vested right, cannot therefore be taken away by the new proviso.;in view of the new definition of a 'mortgagee' contained in section 3 (vi) of the..........section 72(b) as stood before the amendment of 1929, payments made for the preservation of the mortgaged property from destruction, forfeiture or sale, by the mortgagee can be tacked on to the mortgage amount without further limitations. a new proviso was added to this section by which it requires that there should be a prior notice before payment is made so as to treat it as a necessary payment which can be added to the mortgage amount. the contention now urged is that this proviso applies and that, as no such notice was ever given by the first defendant, he was not entitled to add that amount to the redemption amount. the new proviso is not retrospective in operation and the right to pay and add it to the mortgage amount accrued to the first defendant under the mortgage of 1908.....
Judgment:
1. The first defendant is the appellant in the second appeal. The suit was for redemption of a mortgage executed by the plaintiff and others on 23-4-1908 (Ex. D. 1) in favour of one Veeraraghava Piliai, the mortgage being a usufructuary mortgage. Contemporaneously with the document, there was a lease-back of the properties to the mortgagors by the mortgagee. On 28-9-1910 under Ex. D. 2, the mortgagee assigned his rights under the mortgage to one Venkatarama Gowder who was the head of a joint family. In a partition of 1941, evidenced by Ex. P. 1 dated 30-4-1941, the rights under this mortgage were allotted to the first defendant, the present appellant. In the mortgagors' family, there were four members viz., the plaintiff, Palani Chettiar, the 2nd defendant and the third defendant. These were the member; of the joint family at the time of the execution of the deed. The assignee-mortgagee purchased in 1916 in a court auction sale one-fourth interest of Palani Chettiar who is now dead and therefore there was a merger of the two interests to the extent of one-fourth. The substantial defence, apart from some other minor matters, to the action for redemption was that the plaintiff should not be allowed to redeem more than one-fourth share in the hypotheca as, by reason of his purchase of one-fourth interest of Palani Chettiar the integrity of the mortgage Was broken.

The learned District Munsif who tried this suit upheld this contention and directed that the plaintiff should get only one fourth share after partition particularly as there were no other properties in the family to be divided and as he was not inclined to dismiss the suit for redemption on the ground that it was not maintainable which was the objection taken on behalf of the defendants. This course was all the more necessary because after the mortgage, Ex. D. 1, the third defendant created two usufructuary mortgages in favour of Venkatarama Gowder one dated 1-9-1917 (Ex. D. 5) for a sum of Rs. 100 and the other dated 29-8-1924 (Ex. D. 5a) for Rs. 200. The second defendant created on 5-9-1925 under Ex. D. 6 a usufructuary mortgage for a sum of Rs.

350. The mortgages will undoubtedly operate on their respective shares and cannot affect the interests of the plaintiff. Notwithstanding the fact that defendants 2 and 3 remained ex parte, he also directed division 'inter se' between defendants 2 and 3 and also redemption of one fourth share to each of them subject however to the condition that before they get possession of the property from the first defendant they should pay the amount due under the usufructuary mortgages to the first defendant. There was some dispute regarding tacking on of some payments made by the first defendant to the mortgage amount, the main item being Municipal taxes paid by the first defendant in respect of the property hypothecated to him. He held that he was entitled to tack it on and granted him relief accordingly. On appeal, the learned Subordinate Judge reversed the decree of the trial Court directing partition and granted instead a decree for redemption of the entire property and directed the first defendant to work out his rights by a separate suit for partition.

2. In the second appeal, the main ground urged by Mr Swaminathan, counsel for the first defendant-appellant is that the view taken by the trial Court was correct and that the learned appellate Judge ought not to have interfered with it. It cannot be disputed that the integrity of the mortgage was broken by reason of the merger of one fourth interest of Palani Chettiar in the mortgagee, the first defendant. A suit for redemption in such circumstances of the entire property was not the proper remedy of the plaintiff who owns only an one-fourth share in the property. He should have sued for partition and claimed redemption in respect of his share. But the trial Court took, what appears to us a sensible view of giving such relief to the plaintiff even in this suit, as the first. defendant did not seriously object to that course. The effect of the judgment of the learned Subordinate Judge is that It would practicably drive the first defendant to another suit and multiplicity of suits could have been avoided by giving the plaintiff the relief which he is entitled to under the law without a separate suit either by the first defendant or the plaintiff. Further, there is the fact that defendants 2 and 3 created I usufructuary mortgages on their interests in the properties in favour of Venkatarama Gowder and without payments to the first defendant amounts due under those documents, it would be unfair to deprive him of possession of the shares of even defendants 2 and 3. We are, therefore, of the opinion that the view taken by the trial Judge on this aspect of the case is correct and that by the appellate Judge is wrong.

3. There is a memorandum of cross objections which pertains to the finding of the appellate Court which confirmed the finding of the District Munsif that the first defendant was entitled to add to the mortgage amount, the municipal taxes paid on the property. Section 76 of the Transfer of Property Act does not apply to the case as there is a contract to the contrary between the parties by which the mortgagors undertook to pay the municipal taxes. No doubt ordinarily the first defendant who paid the amount would be entitled to recover it from the mortgagors but he claims a further right that he is entitled to add this amount to the mortgage amount. This he can only do under Section 72 of the Transfer of Property Act. Under Section 72(b) as stood before the amendment of 1929, payments made for the preservation of the mortgaged property from destruction, forfeiture or sale, by the mortgagee can be tacked on to the mortgage amount without further limitations. A new proviso was added to this section by which it requires that there should be a prior notice before payment is made so as to treat it as a necessary payment which can be added to the mortgage amount. The contention now urged is that this proviso applies and that, as no such notice was ever given by the first defendant, he was not entitled to add that amount to the redemption amount. The new proviso is not retrospective in operation and the right to pay and add it to the mortgage amount accrued to the first defendant under the mortgage of 1908 long before the amendment. That right cannot be taken away. This Court has held that notwithstanding the omission by the Legislature to include in Section 63 of the Transfer of Property Amendment Act, 1929 any of the sections of the Amending Act, by that circumstance alone the section or sections could not be treated as retrospective. If the proviso newly Introduced affects the vested rights, it cannot be deemed to have retrospective operation. Whatever may be the view taken by the other Court, we are governed by the view taken by this Court. Therefore we think that retrospective operation cannot be given to the proviso to Section 72 which was introduced by the Amendment Act 20 of 1929. It follows that the view taken by both the Courts on this question is correct and the amount was rightly added to the mortgage amount.

4. The result is that the second appeal must be allowed, the decree of the lower appellate Court is set aside and that of the trial Court is restored with costs here and the Court below. The memorandum of cross objections is dismissed. No costs.

5. There remains C. M. P. No. 8183 of 1950, an application filed by the plaintiff under Act 4 of 1938 to scale down the decree debt. The first defendant in answer to this contention relies on the new provision, Section 9-A, Sub-section 7 (ii) (c). The Sub-clause 7 states that nothing contained in this section (Section 9-A) except Sub-section (1) shall apply to any usufructuary mortgage in respect of property situated in any other area in the cases mentioned below. Sub-section (ii) (c) states:

"Where the mortgagee's interest in the property subject to the usufructuary mortgage or any part of such interest belonged to, or devolved on, two or more persons and during the period aforesaid, a partition' has taken place among such persons, then, to the whole or such part of the interest as the case may be."

Sub-section (ii) deals with the assignments during the period after 30-9-1937 and before 30-1-1948. Sub-section 11(a) relates to the transfer 'inter vivos' by the mortgagor of his interest. Sub-section (ii) (b) deals with bona fide transfer for valuable consideration during the said period of the mortgagee's interest and (c) deals with partitions during that period. This is the scheme of the section which must be borne in mind in construing the section. The argument advanced on behalf of the plaintiff-petitioner was that Clause (c) docs not apply because it requires that the mortgagee's interest in the mortgage which is the subject-matter of the usufructuary mortgage should have vested from the date of the creation of the mortgage to the date of the partition on two or more persons and when such interest was assigned the assignee-mortgagee is not entitled to the benefit of this exception as he was not the original mortgagee. On the other hand, it is contended on behalf of the respondent that the clause applies both to the original mortgagee and the assignee from the mortgagee of his interests provided that in either case it belonged to two or more persons by the time it came to be partitioned during the period indicated in this section. When Section 9-A was introduced a definition of "mortgagee" was also included by Clause (vi) of Section 3 thus "'mortgagee' includes his heirs, legal representatives and assigns".

6. When Clause (c) speaks of "mortgagee's interest" it includes also the interests acquired by an assignee from the mortgagee. The word "belonged" imports ownership and the ownership must be by two or more persons. The ownership contemplated by the use of the word "belonged" in contrast with the word "devolved" implies that it was acquired by a mode other than devolution. "Devolution" in ordinary legal language means descent by succession. The property might belong to two or more persons either because the original mortgage was in favour of two or more persons or even though the original mortgage was in favour of one person at a time before the period indicated in the section commenced, there was an assignment of the mortgagee's interest in favour of more than two persons. There is really no conflict between the word "belonged" and the word "devolved" and none of those two words would become otiose if the interpretation which we have placed is accepted; nor is there anything in the section or the subject or context to exclude the operation of the definition of "mortgagee". In Clause (vi) of Section 3 "mortgagee" includes "assigns". Therefore it follows that the clause applies not only to a case where the mortgagee's interest was in the first instance created in favour of two or more persons but also to a case where the mortgagee's interest was created only in favour of; one person to start with and there was later an assignment of that interest in favour of two or more persons the condition however being that the assignment must have taken place before the date of the partition. The main object of this Sub-clause (c) is to protect partitions effected during the particular period just as Clause (b) is intended for the protection of, bona fide transfers for value of the interest of the mortgagee. In the present case though the mortgage was in favour of Veeraraghava Pillai there was an assignment in favour of Venkatarama Gowder who was the head of the joint family and there was a partition in 1941 between the members of the family. The sub-clause therefore applies to this case and the benefit of the provisions of the Act cannot be taken advantage of by the plaintiff.

7. The application is therefore dismissed with costs.


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