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P.V.Ar.Kr. Arunachellam Chettiar Vs. Madaswami and ors. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in56Ind.Cas.146
AppellantP.V.Ar.Kr. Arunachellam Chettiar
RespondentMadaswami and ors.
Cases ReferredDurham Brothers v. Robertson
Excerpt:
chose-in-action, mortgage of - mortgagee, right of, to sue - mortgagor, whether necessary party--liability of mortgagee--transfer of property act (iv of 1882), section 134. - - if the mortgagee, owing to his default, failed to recover the money, as pointed out by the learned chief justice in muthukrishna aiyar v. 411 he will be liable to the mortgagor to account for his failure......defendant so that the matter may be settled in his presence.3. we must, therefore, reverse the decree of the subordinate judge. the learned vakil for the respondent suggested that there are questions of limitation and that he also intends to raise the question that the chit right is not a chose in action. we express no opinion upon these contentions. on remand, the subordinate judge will deal with them. he must also deal afresh with the necessary objection. costs will follow the event. re-fund of court-fee allowed.
Judgment:

1. The father of the defend-ants Nos. 1 to 3 mortgaged in 1806 to ore Sankaralingam certain immoveable proper-ties and his rights in a Chit transaction. Sankaralingam assigned the mortgage to the plaintiff. The suit is to enforce the mortgage. The 4th defendant is the manager of the Chit Fund. The Munsif gave a decree against defendants Nos. 1 to 3 for the Bale of the immoveable properties and against the 4th defendant for the amount of the Chit Fund. The Subordinate Judge has reversed the latter portion of the decree. We are unable to agree with him. He has proceeded on the assumption that the Chit transaction was a chose in-action. He seems to be right: however that may be, we shall also deal with the second appeal on that assumption without deciding the point.

2. The first question for consideration is whether the mortgagee of a chose-in action is entitled to institute in his own name a suit to recover the amount due under it. So far as this Court is concerned, that question is covered by authority. In Muthukrishna Aiyar v. Veeraraghava Aiyar 21 Ind. Cas. 316 : 88 MK 297 : 25 M.L.J. 356 : (1913) M.W.N. 839 : 14 M.L.T. 411 a Full Bench of this Court held that by mortgaging a chose-in-action a complete assignment of it was effected. The learned Chief Justice says that, after the mortgage, the only party who can sue to recover the amount das is the mortgagee. The same view is taken in Bombay; vile Ardesir Bejonji Surti v. Syed Sirdar Ali Khan 4 Ind. Cas. 891 : 33 B.K 610 : 10 Bom.L.R. 1146. The decision of the Judicial Committee in Mulraj Khatau v. Vishwanath Prabhuram Vaidya 17 Ind. Cas. 627 : 37 BP 198 : (1912) M.W.N. 1247 : 12 M.L.T. 652 : 11 A.L.J. 7 : 24 M.L.J. 60 : 17 C.W.N. 209 : 15 Bom. L.R. 9 : 17 C.L.J. 162 : 40 I.A. 24 although the language of the Committee suggests that the assignments in that case may not have been by way of mortgage, has been understood in the Fall Bench in this Court as holding that a mortgage operates as a transfer of the right of action in the chose-in-action. We do not want to refer to English authorities on this subject because, as pointed out is Durham Brothers v. Robertson (1898) 1 Q.B. 765 : 67 L.J.Q.B. 484 : 78 L.T. 438, the matter was complicated in England to some extent by the conflicting jurisdictions of law and equity although, after the Judicature Acts, the question had been settled. It is clear from the decision of the Court of Appeal in the case referred to by us that, although the mortgagor should be made a party to prevent him from subsequently suing the promisor under the chose-in-action the right to recover on the chose-in action is in the mortgagee. Language of Section 134 of the Transfer of Property Act indicates the same conclusion. The section speaks of the transferee of a chose in action, to whom it has been assigned 'for the purpose of securing the existing or future debt,' being entitled to recover the amount due under it and as being bound to apply the money in a particular manner, in other words, although there is the duty of accountability on the part of the mortgagee, he is the only person whom the Court of law would recognise as entitled to maintain an action for the recovery of the amount due, That being the position of a mortgagee of a chose-in action, we are wholly unable to understand the somewhat hazy notion which seems to have guided the Subordinate Judge in dealing with this matter. If we understand him rightly, he seems to hold that, if a suit is brought on the chose- in- action against the mortgagor it would be barred by limitation, having been instituted more than six years after the date of the mortgage, the claim against the holder of the Chit is barred. He speaks of a principal right and of a subsidiary right and concludes that as the principal was barred, the subsidiary right cannot be enforced. The learned Vakil for the respondent used similar language before us. We are wholly unable to understand the idea which underlies this contention. As we pointed out, the only person who can sue upon the chose in action is the mortgagee. No suit by the assignee of a chose-in-action against the assignor to recover money is contemplated, consequently there is not a principal right and an accessory right. If the mortgagee, owing to his default, failed to recover the money, as pointed out by the learned Chief Justice in Muthukrishna Aiyar v. Veeraraghava Aiyar 21 Ind. Cas. 316 : 88 M K297 : 25 M.L.J. 356 : (1913) M.W.N. 839 : 14 M.L.T. 411 he will be liable to the mortgagor to account for his failure. It follows that the mortgagor has no right to prosecute his claim against the holder of the Chit. It is for that very reason that the mortgagee is compelled, as was pointed out in Durham Brothers v. Robertson (1898) 1 Q.B. 765 : 67 L.J.Q.B. 484 : 78 L.T. 438, to implead his mortgagor a a party defendant so that the matter may be settled in his presence.

3. We must, therefore, reverse the decree of the Subordinate Judge. The learned Vakil for the respondent suggested that there are questions of limitation and that he also intends to raise the question that the Chit right is not a chose in action. We express no opinion upon these contentions. On remand, the Subordinate Judge will deal with them. He must also deal afresh with the necessary objection. Costs will follow the event. Re-fund of Court-fee allowed.


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