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Chalikani Venkatarayanim Garu and ors. Vs. Sri Raja Vatsavya Venkata Subhadrayamma Jagapathi Bahadur Garu and ors. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in45Ind.Cas.437
AppellantChalikani Venkatarayanim Garu and ors.
RespondentSri Raja Vatsavya Venkata Subhadrayamma Jagapathi Bahadur Garu and ors.
Cases ReferredGopeswar Saha v. Jadab Chandra
Excerpt:
.....by mortgagor for statement of accounts and expression of readiness to pay, whether constitutes tender--assertion by mortgagee of title in himself, whether causes cessation of interest--legal practitioners act (xviii of 1879), rules under, rule 41--case involving large pecuniary value--two sets of fees, award of. - - if the argument of the appellants were well founded, the position would be this: in every case where the mortgagee in good faith, as in this case, asserts that he has acquired an absolute right to the property, the mortgagor or the person who has purchased the equity of redemption, by reason of that fact alone, would be exempted from payment of interest, provided he has expressed his willingness to pay the debt. if he had anything like that amount with him at the time,..........to a suit for damages. but as regards the question whether the interest on a debt ceases from the date of tender or deposit, that class of cases depends upon the provisions of the transfer of property act and upon a different principle. that act lays down the conditions relating to a valid tender and valid deposit. it nowhere says that even if a valid tender has not been made, interest will cease to run if the mortgagee happens to set up a right to the property in himself. if the argument of the appellants were well founded, the position would be this: in every case where the mortgagee in good faith, as in this case, asserts that he has acquired an absolute right to the property, the mortgagor or the person who has purchased the equity of redemption, by reason of that fact alone, would.....
Judgment:

Abdur Rahim, J.

1. This appeal is in a suit to enforce a usufructury mortgage, and the question that is argued before us is as to Whether there was a valid tender of the amount due on the mortgage on the 17th January 1899 or whether the respondents dispensed with the necessity for such a tender. On either ground the claim is that interest ceased to run from the date mentioned. Mr. Narayanamurthi who has argued the case for the appellants before us conceded, and we think rightly, that what happened could not be stated to amount to a valid tender within the meaning of Section 84 of the Transfer of Property Act. The so-called tender really depends on what the 2nd appellant wrote to the respondent on the date in question. That letter is Exhibit B, and there he asked the mortgagee to give him an account of What was due to him and expressed his willingness to pay what was due to the mortgagee. In his reply the mortgagee stated that under the terms of Exhibit A, the deed of mortgage, he had acquired an absolute right to the property and, therefore, he was not bound to render any account to the appellants and refused to do so. He did, however, mention what was the amount that had become be oil his mortgage. That amount was Rs. 3,19,946. It is argued that that would be the correct amount upon the term's of the mortgage, that is, calculating interest at the rates specified therein. This or any amount was never actually tendered by the appellants, nor was it sought to be deposited in Court. In fact, before the institution of the suit, no deposit or tender was made, and even now after decree, no portion of the amount due to the respondents has been paid. The mere expression of willingness on the part of a debtor to pay a debt cannot possibly amount to a tender within the meaning of the law. In fact, as we have said, Mr. Narayanamurthi did not contend so far. But he has strongly urged upon us that inasmuch as the respondent put forward the allegation that he had acquired an absolute right to the property and, therefore, the appellants were not entitled to redeem him, it must be taken in law to amount to a dispensation of tender.

2. On this point we have been referred to a number of Indian and English cases dealing with contracts for sale or other cases of reciprocal contracts; for instance, Dayabhai Dipchand v. Dullabhram Dayaram 8 B.H.C.R. 133, Owners of the 'Norway' v. Ashburner (1865) 3 Moore. 245 : Br. and L. 11 Jur 892 : 13 L.T. 50 (1085) 148 R.R. 62 : 16 E.R. 92. But the principle laid down in those cases is that where there are reciprocal promises and one of the promisees waives or dispenses with the performance of the promise made to him, he cannot afterwards put forward the non-performance of that promise as an answer to a suit for damages. But as regards the question whether the interest on a debt ceases from the date of tender or deposit, that class of Cases depends upon the provisions of the Transfer of Property Act and upon a different principle. That Act lays down the conditions relating to a valid tender and valid deposit. It nowhere says that even if a valid tender has not been made, interest will cease to run if the mortgagee happens to set up a right to the property in himself. If the argument of the appellants were well founded, the position would be this: In every case where the mortgagee in good faith, as in this case, asserts that he has acquired an absolute right to the property, the mortgagor or the person who has purchased the equity of redemption, by reason of that fact alone, would be exempted from payment of interest, provided he has expressed his willingness to pay the debt. No authority whatever has been cited in support of such a proposition which, in our opinion, is altogether untenable. We have been referred to a Privy Council decision in Harendara Lal Rai Chowdhri v. Maharani Dasi 28 I.A. 89 : 8 Sar. P.C.J. 48 There what happened was that under the contract between the parties the mortgagee engaged to appraise the mortgaged property if there was any proper negotiation for the sale of that property and it was brought to his notice. There was in fact a bona fide offer to purchase the property which was brought to the notice of the mortgagee in that case and he was asked to say whether he would appraise the property and fix the value. He refused to do so and in consequence the mortgagor was unable to find a purchaser for the property and re-pay the mortgage amount. Their Lordships held that the mortgagee having rendered impossible the sale of the property by the mortgagor by which the latter would have been in the position to re-pay the debt, the matter stood 'as if it was a case of tender.' Mr. Narayanamurthi has attempted to build an argument upon this phrase to the effect that their Lordships treated the case as one of a tender. But we do not think that there is any warrant for such an interpretation. There was no case of tender there and the Judicial Committee merely cited the case of a tender only by way of analogy. The other case referred to, Gopeswar Saha v. Jadab Chandra 32 Ind. Cas 537 stood apparently on the same footing and none of those cases support the broad proposition which has been contended for before us on behalf of the appellants. We, therefore, hold that what happened between the appellants and the respondents in 1899 did not have in law the effect of making interest cease to run from that date. The Subordinate Judge also finds upon the evidence that, in fact, the 1st appellant had not the necessary amount at his disposal on the date of Exhibit Va. Pie is no doubt a large landlord with an income of about Rs. 40,000 a year. But the evidence does not show that he had, on the date in question, the amount which would be required to discharge the mortgage debt at his disposal. He was obliged to borrow even small sums of money and sometime after 1899 be got considerably involved in debt. He swore in the witness box that he had Rs. 1,50,000 in his chest. The Subordinate Judge has disbelieved that evidence and we think rightly. If he had anything like that amount with him at the time, his account books would have been the best evidence to show it. He must have kept accounts which he has withheld from Court, and it was not the case of the 8th defendant, the principal appellant before us, that he had been negotiating to raise money, still less that he had actually raised money in that way. We, therefore, accept the conclusion of the Subordinate Judge that if Exhibit B would be construed as an offer to pay, it was not a bona fide offer in the sense that the appellants had the means of making the payment at the time. It may be pointed out that the 8th defendant bought the bulk of the mortgaged properties for Rs. 2,40,000, while on 17th January 1899 the amount payable to the mortgagees was over Rs. 3,00,000. That also supports the finding of the Subordinate Judge that the so-called offer in Exhibit B, if offer it can be called at all, was really rot bona fide, for we are not prepared to hold that the 8th defendant was able and willing to pay that amount on the date in question.

3. The 3rd point which has been raised before us relates to costs. The Subordinate Judge has given a personal decree against defendants Nos. 3, 8 and 12 for the entire costs. As regards the conduct of the suit we think that the Subordinate Judge was right in saying that the way in which the defence was conducted was vexations. Defendants Nos. 3, 8 and 12 have been rightly made liable to pay the costs finally. But we do not think that they ought to be made personally liable for the costs relating to the stamp duty. So that amount must be deducted from the amount of costs for which defendants Nos. 3, 8 and 12 have been made personally liable. In other respects, the decree of the Subordinate Judge is confirmed.

4. The 1st respondent's memorandum of objections relates to the expenses of the establishment charges, repairs to canals, etc., expenses for the village head man, service Inams to village headman, and village duties and other similar expenses. The Subordinate Judge has allowed Rs. 3,000 a year for all these charges, which are amounts actually spent by the mortgagee. But the contention is that Rs. 4,000 is provided for in a lump sum in the deed of mortgage, that being the amount which was settled with the mortgagee as payable on account of these charges. The clause in question says that it is agreed that after deducting for Government taxes so much and Rs. 4,000 on account of establishment charges, etc., and other payments mentioned therein, the mortgagors should take an account of the balance of the net income from the mortgagee's officials on the 1st February of each year. The agreement is only to account for the balance and not with regard to any of the items mentioned in that clause. This view is suggested also by the clause at page 7 of the document which says that, if in addition to the usual earthwork whieh may have to be executed, any extensive repairs have to be done in respect of river Bunds, etc., in respect of these unusual expenses, the mortgagee is entitled to charge the actual amount paid in excess of the Rs. 4,000. There is no mention here as to the other items comprised in the Rs. 4,000, that is to say, it is not provided that, if for establishment charges, the mortgagee has actually spent more than what was taken into account, he would be entitled to the excess. Nor is it anywhere provided that if anything less than Rs. 4,000 is spent the mortgagee must account for the rest. It seems to us that with respect to these petty and recurring items of expenditure, which were of a variable character, both the parties agreed that they should be fixed at a certain figure. If all that they intended was that the actual expenses incurred under these heads should alone be allowed to the mortgagee, there would have been no necessity to fix this figure at all. We must allow the memorandum of objections with costs to come out of the estate.

5. The 3rd respondent's memorandum of objections is not pressed and is dismissed.

6. Oldfield, J.--I agree with my learned brother's judgment; but I prefer not to base my conclusion on any implication from the particular reason which the 1st plaintiff gave in his letter Exhibit v. for refusing to receive money from the defendants. The foundation of Section 84 of the Transfer of Property Act is that liability for interest on the amount due on the mortgage shall cease from the date of the tender, inasmuch as the person who has made the tender not merely has to produce money in order to make it, but must also keep it ready for payment in Court or otherwise, It is clear that no money could have been produced in this case and that none was kept ready for payment. There is, no doubt, a distinction to be drawn between the proposal to make a tender, such as we have in this case, and an actual tender; but there is no reason why a person who makes the former should be treated any better than a person who makes the latter. In these circumstances, it seems to me that the appellants, who made no bona fide proposals and who, it is admitted, made no tender of any sort, cannot benefit by the principle of Section 84. On the other points, I entirely agree with my learned brother's judgment.

7. This case coming on for hearing for orders this day, the Court made the following

8. Order.--In this appeal Mr. K. Srinivasa Ayyangar for the respondent has applied to us for fees for two Veils under the new Rule 41 framed under the Legal Practitioners Act. This Ruler empowers the Court in cases of special difficulty or importance to allow two sets of fees to a party who has engaged more than one Vakil. This case involved about seven laces of rupees, but it did not strike us that there was any specially difficult question involved in the appeal and in fact we did not call upon the learned Vakil for the respondent to reply. It is, however, urged that the case is of special importance having regard to the amount involved. We are inclined to agree with that contention; for the respondent, in view of the fact that no less than seven laces were concerned in the litigation, was justified in engaging two Veils. We, therefore, allow fees for two Veils, which will be taxed according to the rules.


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