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Janakiammal Vs. Rathinam Asari and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1974)2MLJ350
AppellantJanakiammal
RespondentRathinam Asari and ors.
Cases ReferredDawoodhbai v. Shaikhali
Excerpt:
- - but in dealing with the costs of a mortgage suit, the court would be exercising its discretion under section 35 of the civil procedure code as well. that discretion will have to be exercised according to the well-known principles relating to the awarding of costs......entitled to redeem. but the defendants contested the suit in regard to the costs of the suit, the mesne profits payable by them and in regard to a sum of rs. 302.23, which they claimed as being due to the third defendant in addition to the amount of rs. 7,000 deposited. in regard to the costs, the third defendant contended that, since there was no tender made to her, though the suit was filed subsequent to the assignment, she was entitled to the costs of the suit. so far as mesne profits were concerned, it was the case of the third defendant that, since the amount of rs. 7,000 in deposit did not represent the full amount due under the mortgage, she was not liable to pay mesne profits. in any case, her liability to mesne profits could not be extended prior to the date of the filing of.....
Judgment:

V. Ramaswami, J.

1. The third defendant is the appellant. O.S. No. 229 of 1967, out of which this second appeal arises, is a suit for redemption of a usufructuary mortgage dated 9th March, 1955, executed by one Santhanathammal in favour of the fourth defendant in the suit. The plaintiffs are the legal representatives of the mortgagor. The fourth defendant assigned his rights under the mortgage in favour of one Mahalingam, the husband of the first defendant. The second defendant in the suit is the power of attorney agent of the said Mahalingam. Subsequently by a deed, dated 23rd January, 1967, registered on 18th February, 1967, the first defendant and the second defendant, as the power of attorney agent of the first defendant's husband, assigned the mortgage rights to the third defendant. In the meanwhile, on 7th February, 1967, the plaintiffs herein filed O.P. No. 28 of 1967, on the file of the Subordinate Judge's Court, Madurai, under Section 83 of the Transfer of Property Act and deposited a sum of Rs. 7,000 on 16th February, 1967 to the credit of the said original petition. In that petition, the first, second and fourth defendants alone were made parties and the third defendant was not made a party. The first and second defendants refused to receive the mortgage money and filed a counter stating that they had assigned their right to the third defendant and that without impleading her as a party in that petition, no orders could be passed in that petition. Neither the plaintiffs impleaded the third defendant in the original petition, nor the third defendant got herself impleaded and therefore that petition was dismissed. Thereafter, the plaintiffs filed the present suit for redemption.

2. There was no dispute that the plaintiffs were entitled to redeem. But the defendants contested the suit in regard to the costs of the suit, the mesne profits payable by them and in regard to a sum of Rs. 302.23, which they claimed as being due to the third defendant in addition to the amount of Rs. 7,000 deposited. In regard to the costs, the third defendant contended that, since there was no tender made to her, though the suit was filed subsequent to the assignment, she was entitled to the costs of the suit. So far as mesne profits were concerned, it was the case of the third defendant that, since the amount of Rs. 7,000 in deposit did not represent the full amount due under the mortgage, she was not liable to pay mesne profits. In any case, her liability to mesne profits could not be extended prior to the date of the filing of the suit.

3. The sum of Rs. 302.23 represents two items and the interest thereon. The first item is a sum of Rs. 90 which was paid by the first and second defendants to the first plaintiff for the purpose of enabling him to pay the municipal tax in respect of the mortgaged property. The second item is a sum of Rs. 70.23 representing the amount paid by the first and second defendants towards one half of the municipal taxes payable by the plaintiffs. With interest at 12 per cent. on these amounts, the total amount claimed came to Rs. 302.23. The case of the plaintiffs was that since they had tendered a sum of Rs. 7,000 on 16th February, 1967, itself by deposit of the money into Court even prior to the registration of the assignment deed in favour of the third defendant on 18th February, 1967, there was no need for any separate tender in favour of the third defendant and that therefore the third defendant was not entitled to claim the costs of the suit, but that they were entitled to be paid their costs of the suit. So far as mesne profits were concerned, their case was that since they had deposited the entire sum of Rs. 7,000 as early as 16th February, 1967, they were entitled to mesne profits from the date of deposit. In regard to the sum of Rs. 302.23, they contended that that was an independent transaction of loan and therefore if the third defendant is entitled to the amount, she would have to file a separate suit in respect of the same and that it would not be open to her to claim this sum as part of the mortgage money.

4. Both the Courts below held that the sum of Rs. 90 and Rs. 70.23 represented independent loan transactions and that therefore the third defendant was not entitled to claim the same in this suit. The lower appellate Court had also held that the amount due under the mortgage was only Rs. 7,000 and since that had been deposited on 16th February, 1967, itself, the plaintiffs were entitled to mesne profits as and from that date.

5. But on the question of costs, the trial Court held that the plaintiffs were not entitled to the costs of the suit and that the third defendant was entitled to be paid her costs. This decree was given in the view that though in the counter filed by the first and second defendants in O. P. No. 28 of 1967, it was stated that they had assigned their rights to the third defendant, the plaintiffs did not choose to implead her as a party to that petition. Even after the dismissal of the original petition, before the filing of the suit, they did not tender the amount to the third defendant and therefore the third defendant was entitled to her costs of the suit and the plaintiffs were not entitled to their costs The lower appellate Court took the view that there were suspicious circumstances relating to the assignment of the mortgage in favour of the third defendant, that on the date when the original petition was filed on 7th February, 1967, the assignment was not registered and that therefore the tender in favour of the first and second defendants, the assignors, was valid, which disentitled the third defendant from claiming any costs in the suit. In that view, the lower appellate Court allowed the costs of the plaintiffs and refused the costs of the third defendant.

6. The first question that arises for consideration in this appeal is whether the order of the lower appellate Court with regard to costs is sustainable in law. This being a mortgage suit, the question of costs will have to be considered with reference to Order 34, Rule 10 of the Civil Procedure Code, which runs as follows:

In finally adjusting the amount to be paid to a mortgagee in case of a foreclosure, sale or redemption the Court shall, unless in the case of the costs of the suit the conduct of the mortgagee has been such as to disentitle him thereto, add to the mortgage money such costs of the suit and other costs, charges and expenses as have been properly incurred by him since the date of the preliminary decree for foreclosure, sale or redemption up to the time of actual payment.

It has been held by this Court in Chidambaram Chettiar v. Ramaswami Chettiar : AIR1939Mad654 and Minakshi Ayyar v. Achalier : AIR1942Mad592 , that in a suit for redemption the Court is bound to give the mortgagee his costs of the suit unless the Court is of opinion that his conduct has been vexatious or unreasonable so as to disentitle him thereto; nor can he, where his conduct was neither vexatious nor unreasonable, be asked to pay the costs of the person suing for redemption. In such cases the discretion vested in the Court under Section 35 of the Code of Civil Procedure in regard to costs would have to be read, subject to the provisions of Order 34, Rule 10. Though in terms Order 34, Rule 10 is applicable to costs incurred by the mortgagee, since the date of the preliminary decree, up to the time of actual payment, the principle in that provision has been held to apply even with regard to costs of the suit of the mortgagee prior to the date of the preliminary decree. But in dealing with the costs of a mortgage suit, the Court would be exercising its discretion under Section 35 of the Civil Procedure Code as well. In so exercising its discretion, if the mortgagee is not guilty of misconduct, the Court must award to him the costs of the suit. It has been so held by a Division Bench of the Bombay High Court in Dawoodhbai v. Shaikhali : AIR1953Bom445 .

7. It is, therefore, clear that in a suit; for redemption, or in a suit for enforcement of a mortgage, what the Court will have to consider is whether the mortgagee by his conduct has disentitled himself to the costs of the suit. If there were no circumstances, or misconduct disentitling the mortgagee from claiming the costs, the Court would have no option, but to give him the costs of the suit and to include that amount in the amount due under the mortgage. Only in cases where the Court finds that the mortgagee is disentitled to the costs, it will have to go into the further question, whether it could use its discretion in awarding costs to the mortgagor. That discretion will have to be exercised according to the well-known principles relating to the awarding of costs. The lower appellate Court approached the question from the point of the view of the mortgagors-plaintiffs and came to the conclusion that they tendered the amount to the assignor prior to the assignment itself, that was all that was required of them to be done before the filing of the suit and that therefore the plaintiffs were entitled to the costs and the third defendant was not entitled to her costs. As seen from the above, this approach of the lower appellate Court could not be sustained.

8. The learned Counsel for the respondents contended that, on the facts of this case, though nothing could be said about the conduct of the assignee as disentitling her from costs, the plaintiffs should be held to be entitled to their costs. He argued that on the date when the plaintiffs tendered the money, or deposited the same to the credit of the original petition, the assignment deed was not registered, and that therefore the tender was validly made to the assignors. On such valid tender being made, the plaintiffs got a right to file a suit for redemption and that right could not be taken away by the voluntary act of the assignors in assigning the mortgage in favour of the third defendant. Nor will the assignment require the plaintiffs to again make a tender to the assignee. He further submitted that if the assignors were to claim costs they would be disentitled since there was a valid tender in their favour. Such disentitlement of the assignor will also attach to the assignee in this case as the assignment itself was subsequent to the tender. In other words, what the assignee got under the assignment are the rights and liabilities of the assignor and therefore the third defendant had disentitled herself from claiming the money. There is great force in this contention. But I am unable to accept this contention. As already noted, in the matter of costs in a suit for redemption, the only thing that is relevant for the Court to consider is whether the mortgagee by his conduct disentitled himself from claiming the costs. So far as the assignee in this case is concerned, she had not done anything to disentitle her to the costs of the suit. In fact, there is evidence in this case to the effect that it was the assignee who asked the assignors to file a counter in the original petition informing the plaintiffs of the assignment so that they could pay the money due under the mortgage to the third defendant-assignee. In spite of the information given about the assignment, the plaintiffs did not choose to implead her as a party in O. P. No. 28 of 1967. Nor did they make any tender of the amount before the filing of the suit. In view of the special provision under Order 34, Rule 10, I am of the view that not only are the plaintiffs not entitled to costs, but also that they are liable to pay the costs of the mortgagee. The judgment and decree of the lower appellate Court in so far as the costs are concerned are therefore set aside and those of the trial Court are restored.

9. So far as mesne profits are concerned, as already stated, the amount was deposited by the plaintiffs on 16th February, 1967, itself and that was available on the date of suit. Though the deposit made on 16th February, 1967, would not enable the plaintiffs to claim mesne profits as and from that date, they are entitled, to claim mesne profits as and. from the date of the suit, since the amount was available to the credit of the suit even from the inception. But what is contended by the learned Counsel for the appellant is that the tender of Rs. 7,000' was not of the full amount, that in addition to the sum of Rs. 7,000 the appellant was also entitled to the sum of Rs. 302.23 referred to above and that therefore the appellant is not liable to pay any mesne profits at all in respect of the same until the entire amount is paid. It is also stated that possession had already been handed over and no further question of mesne profits would arise.

10. The question of mesne profits could be considered along with the claim for the sum of Rs. 302.23 as the liability to mesne profits would arise only if the amount deposited is found to be the entire mortgage money. Out of the two. sums of Rs. 90 and Rs. 70.23, admittedly, the sum of Rs. 90 is a loan transaction. Though that amount was paid to the mortgagors for the purpose of paying the property tax, that cannot be treated to be the amount due under the mortgage itself, because it represented a separate transaction. Therefore, if the third defendant is entitled to that money, she will have to seek her remedy in a separate suit and cannot claim the amount as part of the mortgage money in this suit itself.

11. So far as the other sum of Rs. 70.23 is concerned, the finding of the trial Court is that this amount represented the half share of property tax paid by the assigners on behalf of the mortgagors. Even so, it is contended by the learned Counsel for the respondents, that the assignment of the mortgage did not in terms assign this amount also in favour of the assignee and as such it could not be included in the mortgage amount. I think this contention will have to be accepted on the peculiar facts and circumstances of this case. It is admitted that the assignment deed itself did not specifically include the sum of Rs. 70.23. It is only by a receipt issued subsequent to the assignment, the third defendant is able to prove that she paid the amount to the assignors. Inferentially the third defendant claims that that amount is recoverable by her from the mortgagors. I am unable to agree with the learned Counsel for the appellant that this amount is also payable as part of the mortgage money. It may be that the parties did not choose to include this sum in the assignment deed as that will attract additional stamps as a fresh mortgage. But that is not an excuse for not including the same in the assignment itself, if the third defendant wanted to claim the money as part of the mortgage money itself. Therefore, the tender of Rs. 7,000 is valid and the third defendant is not entitled to any more amount under the mortgage. In view of this finding, the third defendant is liable to pay mesne profits only from the date of the suit. It is needless to say that this finding will not in any way affect the rights of the third defendant if any, to file a separate suit for claiming the two sums of Rs. 90 and Rs. 70.23 with interest thereon.

12. No other point arises in the second appeal.

13. The second appeal is allowed in part in regard to the costs and mesne profits prior to suit and is dismissed in other respects. The parties will bear their respective costs in the second appeal. The third defendant will be entitled to her costs both in the trial Court and in the lower appellate Court. No leave.


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