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(Chennubhotla) Venkatasubbarayudu Vs. (Duvvuri) Nagamma and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1930Mad570
Appellant(Chennubhotla) Venkatasubbarayudu
Respondent(Duvvuri) Nagamma and ors.
Cases ReferredVenkatagiri v. Satagopachariar
Excerpt:
- - it would seem that if the right to sue for sale remains, the right to sell remains, and with it the ability to give the purchaser a good title. it has not been contended here that condition was not satisfied......to his purchase.7. i consider therefore that the appellant is entitled to possession of the suit property as against defendant 4 and the plaintiffs who derive title from him. defendant 3 holds the property subject to the first mortgage rights acquired by the purchaser under the earlier sale. the plaintiffs sued for possession and prayed that if they could not recover it defendant 3 might be made to pay compensation. neither of these prayers can be granted. they ask me to compel defendant 3 to redeem them. this would be to allow them to put forward newly an alternative case, and ask for an alternative relief, after fighting their claim on the footing that the execution proceedings were void. it appears that defendant 3 has been continuously in possession of the property since,.....
Judgment:

Curgenven, J.

1. The property in suit was twice mortgaged, first by the original owner, Chenna Peribhotlu, and again by Yegyanna the purchaser of the equity of redemption. The first mortgagee sued in O.S. No. 369 of 1897, making parties Peribhotlu and Yegyanna (with his sons), but not the puisne mortgagee, and obtained a decree. The puisne mortgagee sued in O. Section 184 of 1901, impleading Yegyanna and his sons, and obtained a decree on 15th November 1901. After this decree in 1.902, defendant 4 through whom the plaintiffs (now respondents) claim, purchased the property in Court sale under the prior mortgagee's decree. The property was again sold under the puisne mortgagee's decree and bought by defendant 3, who is the appellant before me. The question for decision is whether the title of the 4th or of the 3rd defendant is to prevail.

2. An answer in favour of each claimant may, if I construe them correctly, be derived from cases decided by Courts. Broadly stated the one view is that the auction-purchaser at the later sale, here defendant 3, would buy nothing because the saleable interest of the judgment-debtor had already passed to the earlier auction-purchaser; the other view is that the puisne mortgagee not having been made a party to the prior mortgagee's suit, his rights would not be in any way affected, and his auction-purchaser would secure a title subject to the first mortgage interest vested in the first purchaser. Examples of the former line of argument are Kutti chettiar v. Subramania Chettiar [1909] 32 Mad. 485 and Vekatagiri v. Satagopa Chariar : (1912)22MLJ129 ; of the latter. Mulla, Veetill Seethi v. Achuthan Nair [1913] 21 M.L.J. 213 and Chinnu Pillai v. Venkatasamy Chettiar [1917] 40 Mad. 77. In the first of these cases the puisne mortgagee sued first and sold first, and the view taken was that both the mortgagees have an equal right to sell the property, and once it is sold at the instance of one mortgagee there is no further saleable interest left in the judgment-debtor to be sold again. That, no doubt, is indisputable. The only question seems to be whether it necessarily settles the point. The next case in order of time is the Full Bench judgment in Mulla Veetil Seethi v. Achuthan Nair [1913] 21 M.L.J. 213. The question referred was whether a first mortgagee who has bought in execution of his decree can sue to eject a puisne mortgagee with possession. The judgment contains an elaborate review of the case law dealing with the rights of puisne mortgagees. It is urged that many of the observations made are obiter, but I do not think so; the learned Judges begin with the remark that there are conflicting decisions and that the source of the difficulty seems to lie mainly in arriving at a definite conception of the rights of the second mortgagee. What those rights are therefore had to be investigated. It was held that the subsequent mortgagee could not be affected by proceedings to which he was not a party, and if the rights of the puisne incumbrancer who was not made a party to the suit of the prior mortgagee are preserved in every respect, the right to sue for sale of the equity of redemption which existed previous to the suit by the first mortgagee must continue to remain after it. It would seem that if the right to sue for sale remains, the right to sell remains, and with it the ability to give the purchaser a good title. But it would, I dare say, be going too far to use the passage above cited as authority for the proposition that the second mortgagee may sell behind the back of the first auction-purchaser, though indeed the first sale was conducted behind his own back notwithstanding that he was a necessary party to the first mortgagee's suit. This Full Bench opinion was considered by Munro and Sankaran Nair JJ. in Venkatagiri v. Satagopachariar : (1912)22MLJ129 , another case of two competing sales, They remark, what is no doubt true, that a different question was referred to the Full Bench, though it was apparently decided that a puisne mortgagee may sue the purchaser of the equity of redemption without redeeming the prior mortgage. Their own view is that the puisne mortgagee has a right to sell the property even after sale by the first mortgagee, but he can exercise that right only after redeeming the prior mortgage.

3. The rights of the two mortgagees in the matter of sale came up again for consideration by Coutts, Trotter, J. (as he then was) and K. Srinivasa Ayyangar J. in Chinnu Pillai v. Venkatasami Chettiar [1917] 40 Mad. 77. The several cases which 1 have alluded to are reviewed by the latter learned Judge. Referring in particular to the argument relied on in Venkatagiri v. Satagopa Chariar : (1912)22MLJ129 and the cases, that the judgment-debtor's interest having been sold there is nothing left for the puisne mortgagee to sell, he observes that:

this ignores the fact that the first purchaser purchases it subject to the rights of the second mortgagee to sell.

4. and later on he thus criticizes the opposite view, with cogency, if I may most respectfully say so:

Therefore it comes to this: That the second mortgagee is entitled to, and must bring a fresh suit against the purchaser in the first sale to sell the property for the satisfaction of the second mortgage debt subject to which the first purchaser took, and that the whole of the proceedings taken by the second mortgagee to realize his security, which proceedings were regularly and properly constituted, in which he obtained the decree he was entitled to get... become wholly infructuous not owing to any fault of his, but because a purchaser comes into existence pendente lite, whose purchase is in execution of a decree in a suit improperly constituted.

5. The learned Judges refused to regard the dicta in the Full Bench case Mulla Veetil Seethi v. Achuthan Nair [1913] 21 M.L.J. 213 as obiter, approved them and deemed them to be binding on them, and dissented from Venkatagiri v. Satagopachariar : (1912)22MLJ129 and other cases to the same effect. At the end of his judgment Srinivasa Ayyanger J. deduces seven general propositions. The last of these applies to the circumstances of the present case; and I propose to adopt this view of the law in preference to the view that no title can pass by the sale.

6. One of the conditions laid down in the other cited proposition is that where there has been a sale under the first mortgage the auction-purchaser should be made a party. It has not been contended here that condition was not satisfied. Defendant 4, who bought the property in the sale under the first mortgagee's decree, is a son of Yegyanna, the transferee of the equity of redemption. The learned District Munsiff found, indeed, that this purchase was on behalf of the joint family, in other words, by the holder of the equity of redemption. The learned Subordinate Judge differed from him on this point. The propriety of the Subordinate Judge's finding is questioned here but on the view I take I do not think it is necessary to pronounce upon it. In the second suit Yegyanna and his sons were impleaded as the mortgagors, so that in that capacity defendant 4 was before the Court which ordered the sale now in dispute. It is perhaps worth repeating that defendant 4 did not buy the property until after the decree in O. Section 184 had been passed against him and his father and brother. The principle of lis pendens, I think, applies to his purchase.

7. I consider therefore that the appellant is entitled to possession of the suit property as against defendant 4 and the plaintiffs who derive title from him. Defendant 3 holds the property subject to the first mortgage rights acquired by the purchaser under the earlier sale. The plaintiffs sued for possession and prayed that if they could not recover it defendant 3 might be made to pay compensation. Neither of these prayers can be granted. They ask me to compel defendant 3 to redeem them. This would be to allow them to put forward newly an alternative case, and ask for an alternative relief, after fighting their claim on the footing that the execution proceedings were void. It appears that defendant 3 has been continuously in possession of the property since, 1915, and under Article 132, Lim. Act such a claim, if now preferred would be barred. In these circumstances I do not think that I ought to comply with the request.

8. The result accordingly is that the second appeal is allowed and the plaintiff's suit dismissed, with costs of defendant 3 throughout.


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