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Madhavarapu Sathiraju and ors. Vs. Madhavarapu Venkanna and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai
Decided On
Reported inAIR1935Mad333; 157Ind.Cas.1056
AppellantMadhavarapu Sathiraju and ors.
RespondentMadhavarapu Venkanna and ors.
Cases ReferredNasiruddin v. Ahmad Hussain
Excerpt:
- - pitchi reddi 1915 mad 37 even in such a case, the defeated purchaser may in certain circumstances be entitled to the benefit of subrogation, as held by the privy council in nasiruddin v. for the reasons already stated, the correct legal position is that the plaintiffs, as owners of the property on the date of the decree for specific performance, are entitled to draw the money and if they had failed to discharge their obligations under the sale deed in their favour, the venders may have their remedy against them. 12,000 odd which they have actually paid, and the attaching creditors stand in no better position than the vendors......1916. 0.s. no. 8 of 1928 was filed on 13th february 1928 and during the pendency of that suit the present plaintiffs, as vendees under ex. a, paid a sum of rupees 12,000 odd to defendant 7, on 29th february 1928, in discharge of ex. b. the suit for specific performance was decreed in favour of the present defendant 1 and by that decree defendant 1 was directed to deposit into court a sum of rs. 14,465 before 2nd december 1929, but it was directed that the amount so deposited be kept in court till 4th january 1930as there might be equities to which defendants 1 to 3 (the present plaintiffs) may be entitled on account o their having discharged the mortgage debt.2. on a later application, after the amount had been so deposited, the court ordered, on 6th september 1930, that only a sum of.....
Judgment:

Veradachariar, J.

1. The plaintiffs-appellants purchased some properties from defendants 2 to 6 under a sale deed, Ex. A dated 28th January 1928, and they obtained possession. This sale was executed in pursuance of an agreement, Ex. N, dated 26th January 1928. The present defendant 1, however claimed to have obtained an earlier agreement for sale of the same properties (Ex. 4) though dated the same date as Ex. N and he filed 0.S. No. 8 of 1928 for specific performance of that agreement. The properties which formed the subject of these sales and certain other properties were liable to a mortgage claim in favour of defendant 7 under Ex. B dated 19th January 1916. 0.S. No. 8 of 1928 was filed on 13th February 1928 and during the pendency of that suit the present plaintiffs, as vendees under Ex. A, paid a sum of Rupees 12,000 odd to defendant 7, on 29th February 1928, in discharge of Ex. B. The suit for specific performance was decreed in favour of the present defendant 1 and by that decree defendant 1 was directed to deposit into Court a sum of Rs. 14,465 before 2nd December 1929, but it was directed that the amount so deposited be kept in Court till 4th January 1930

as there might be equities to which defendants 1 to 3 (the present plaintiffs) may be entitled on account o their having discharged the mortgage debt.

2. On a later application, after the amount had been so deposited, the Court ordered, on 6th September 1930, that only a sum of Rs. 8,000 should be drawn by the present plaintiffs out of the deposit amount, as the present defendants 2 to 6 (who were defendants 4 to 8 in that suit) did not admit that more than Rs. 8,000 should have been paid in discharge of the mortgage. The plaintiffs were left to work out any further claim of theirs in a regular suit.

3. This suit was accordingly instituted on 8th September 1930. claiming that the plaintiffs are entitled to Rs. 4,319 being the balance of the amount that they had paid to defendant 7 and they prayed that this amount with future interest may be directed to be paid either as a charge on the properties covered by the mortgage or out of the amount in Court deposit. Various defences were raised by the different sets of defendants. Defendant 1 (who is the succesful decree-holder in the suit for specific performance) contended that the properties in his possession should not be made liable at all. Defendants 2 to 6 contended that the plaintiffs were not entitled to more than Rs. 8,000, if at all and they further contended that the plaintiffs' claim was barred by limitation. They also pleaded some misrepresentation and estoppel in connexion with the circumstances under which the plaintiffs were alleged to have told them that they would get the mortgagee to accept Rs. 8,000 in full discharge. Certain attaching creditors of defendants 2 to 6, who were also impleaded as defendants in the suit, pleaded that the plaintiffs' remedy, if any, was against the properties themselves and not against the amount in Court deposit which they had attached in execution of money decrees obtained by them against defendants 2 to 6. The learned Subordinate Judge held that the plaintiffs' claim was not barred by limitation and that there was no estoppel made out against them and also that the amount of Rs. 12,319 paid by them to the mortgagee was a proper payment and did not include any penal interest. But he was of opinion that the plaintiffs were not in the circumstances entitled to claim any kind of charge either on the properties covered by the mortgage or on the amount in Court deposit and he therefore granted only a personal decree for a sum of Rs. 7,500 odd and subsequent interest against defendants 2 to 6. The plaintiffs have filed this appeal claiming that they are entitled to a charge either on the properties or on the amount deposited in Court.

4. The discussion of the true legal position has been to a certain extent obscured by the way the plaintiffs presented their claim. The case is not one of subrogation in the correct sense. Before-defendant 1 filed the suit for specific; performance, defendants 2 to 6 had executed the sale deed Ex. A to the plaintiffs; and in pursuance thereof the plaintiffs had become the legal owners of the properties from 28th January 1928. As provided in Section 91, Trusts Act, the natural result of the plaintiffs having; purchased the property with notice of1 the prior contract in defendant l's favour was that they must hold the property for the benefit of the latter to the' extent necessary to give effect to the contract. For all other purposes, and as between themselves and their vendors the plaintiffs were the owners : see Subbiah Pillai v. Vellappa Naicker (1912) 13 IC 176. And this is the reason why several cases have held that in such circumstances the decree for specific performance must direct the first purchaser; also to join in executing the conveyance : see Gaffur v. Bikkaji (1902) 26 Bom 159 and Ranga Reddi v. Pitchi Reddi 1915 Mad 37 Even in such a case, the defeated purchaser may in certain circumstances be entitled to the benefit of subrogation, as held by the Privy Council in Nasiruddin v. Ahmad Hussain 1926 PC 109. But here, the plaintiffs were parties to the suit for specific performance and the decree in that suit directed defendant 1 to deposit in Court an amount representing the full value of the property and not merely the value of the equity of redemption subject to the mortgage. Ordinarily, as provided for in Section 55(5)(b), T.P. Act, when a, purchaser is called upon to pay the full value of the property, he will be entitled to retain in his hands the amount required to discharge any encumbrance existing on the property. The reasonable construction of the decree in O.S. No. 8 therefore is that, instead of exercising that right, defendant 1 deposited the full amount in Court and the present plaintiffs who have drawn a considerable portion of that amount in satisfaction of their claim are bound to apply it in discharge of the mortgage and certainly cannot seek to hold the properties of defendant 1 liable over again for payment of the mortgage debt. The learned Judge was therefore justified in dismissing the suit as against defendant 1.

5. But as against defendants 2 to 6 arid the attaching creditors, we are unable to agree with the learned Judge in holding 'that the plaintiffs were not entitled to the proceeds deposited in Court. For the reasons already stated, the correct legal position is that the plaintiffs, as owners of the property on the date of the decree for specific performance, are entitled to draw the money and if they had failed to discharge their obligations under the sale deed in their favour, the venders may have their remedy against them. No such question arises in the present case. The vendors undoubtedly authorised the plaintiffs, by the terms of Exs. N and A, to pay the mortgagee a much larger amount than the sum of Rs. 12,000 odd which they have actually paid, and the attaching creditors stand in no better position than the vendors. In these circumstances, the plaintiffs are entitled to draw, out of the amount deposited in Court by defendant 1, the sum of Rs. 4,319 required to make up the Rs. 12,319 paid by them to defendant 7. But we do not think it will be right to allow interest to the plaintiffs on the basis of the mortgage document. They will be entitled to interest on the amount of Rs. 4,319 at 9 per cent per annum from the date of this suit up to the date of the 1st Court's decree and to interest on the aggregate amount from that date up to date of payment, at 6 per cent per annum. To the extent required to make up the total of these amounts, they will be entitled to draw From the amount in deposit in the lower Court and, if and in so far as that amount may not be sufficient to meet the claim as above decreed, they will have a personal decree for the balance against defendants 2 to 6.

6. A point was raised on behalf of the attaching creditors that the present suit is not legally sustainable and that the rights of the plaintiffs must have been worked out in execution of the decree in O.S. No. 8 of 1928 itself. We are unable to agree with this contention. The bar cannot possibly arise under Section 47, Civil P.C. The only suggestion was that the prior decree is in the nature' of a 'preliminary' decree and all further relief in the working out of the preliminary decree must also be obtained in that suit itself. But the issues in that case do not in any manner relate to the claims inter se of the several defendants-in that suit and it will not be right to-describe the decree in that suit as a. preliminary decree. No doubt the learned Judge desired, if possible, to distribute-the amount in Court deposit amongst the various claimants, but that does not mean that he was legally bound to do-so in that very suit or that the parties are precluded from enforcing their rights-in a regular suit even when that Court,, by its order dated 6th September 1930 referred the plaintiffs to a regular suit. The appellants will pay the costs of the-first respondent in the appeal. Defendants 2 to 6 will pay the costs of the-plaintiffs here and in the Courts below. The appeal has abated against respondent 11 his legal representatives not. having been brought on record.


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