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Muthusami Pillai Vs. Arasayee Ammal and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1936Mad901
AppellantMuthusami Pillai
RespondentArasayee Ammal and anr.
Cases ReferredRamamurti Garu v. Rangayya
Excerpt:
- - she was directed to enjoy the said, property for her life. the only relief he can claim is that as the suit properties which the plaintiff claims as well as other properties purchased by him are subject to a common charge he is entitled to get from the plaintiff an amount proportionate to the value of the suit properties. charan singh 1930 52 all 358 pointed out the plaintiff can well say: their lordships observed that as between a, b and c and d under the sale deed in d's favour it was clearly understood that his half share should be free from any further liability and that as a and b are bound by the said agreement, the plaintiff who had purchased the equity of redemption from them was also bound by it......in the second appeal. subsequent to the purchase in court auction defendant 4 sold portions of the property purchased under exs. f and c for discharging the encumbrance on the suit properties and in fact the mortgage deed dated february 1906 and the usufructuary mortgage deed dated 1919 were actually discharged. the present suit is filed as aforesaid by the plaintiff to recover possession of the property from defendants 3 and 4. the main defence is that she is not entitled to recover possession without paying the amount which went in discharge of the encumbrance. the main question therefore in this appeal is whether defendants 3 and 4 are entitled to insist upon payment of the said amounts by the plaintiff. both the lower courts have negatived the claim and gave a decree for the.....
Judgment:

Venkataramana Rao, J.

1. The suit out of which this second appeal arises was instituted by the plaintiff for the recovery of possession of two items of immoveable property under the maintenance deed dated 13th February 1920 executed by defendants 1 and 2 in her favour. She was the widow of one Muruga Pillai who died undivided from defendants 1 and 2. The deed purports to be in satisfaction of her right to maintenance and residence which she had against them. In and by the said deed defendants 1 and 2 purport to give her the suit properties which consist of 50 cents of nanja lands, 7 1/2 cents of dry land, a house and some jewels. She was directed to enjoy the said, property for her life. The deed recites that the said properties were subject to a mortgage along with other properties for a sum of Rs. 4,500 in favour of one Narasimha Iyer under Ex. 2, a usufructuary mortgage deed dated 14th August 1919, and that until they redeem the said mortgage and give her possession of the same, they agree to give her every year in respect of income of the said nanja land 8 kalams of samba paddy and 7 kalams of kar paddy and for the income of the dry land which is a cocoanut tope Rs. 20 every year. There is also a covenant for assurance that besides the mortgage mentioned in the said document there is no other encumbrance on the property. As a matter of fact besides the said usufructuary mortgage there were two other encumbrances On the said property, namely a simple mortgage dated 24th February 1906 on item 1 in the plaint and a security bond Ex. 4 dated 4th September 1919 hypothecating the said property to the Sub-Court of Trichinopoly of items 1 and 2 in the plaint. In execution of a simple money decree against defendants 1 and 2 the suit properties and other properties were brought to sale and purchased by defendant 4 on 15th June 1921 and the sale was confirmed on 26th July 1921. The sale was subject to the encumbrances Exs. 2 and 4 existing on the property and also the rights of the plaintiff under the maintenance deed dated 13th February 1920. The sale certificate mentions that the auction sale was held subject to the following:

(1) Othi mortgage in favour of one Narasimha Iyer for Rs. 4,500 on 14th August 1919 in respect of items 1 to 4 herein, (2) security bond executed in favour of the Sub-Court, Trichinopoly, in O.S. No. 43/17 for Rs. 2,000, (3) maintenance deed dated 13th February 1920 in favour of one Arasayee Ammal on the following properties : Item 2, 1 acre 8 cents out of this southern side 50 cents. Item 4, 15 cents, out of this northern side 7 1/2 cents. Item 5, 10 cents out of this same portion.

2. It is admitted that defendant 4 was benamidar for defendant 3, so that in this second appeal the interests of defendants 3 and 4 are identical and defendant 3 is the appellant in the second appeal. Subsequent to the purchase in Court auction defendant 4 sold portions of the property purchased under Exs. F and C for discharging the encumbrance on the suit properties and in fact the mortgage deed dated February 1906 and the usufructuary mortgage deed dated 1919 were actually discharged. The present suit is filed as aforesaid by the plaintiff to recover possession of the property from defendants 3 and 4. The main defence is that she is not entitled to recover possession without paying the amount which went in discharge of the encumbrance. The main question therefore in this appeal is whether defendants 3 and 4 are entitled to insist upon payment of the said amounts by the plaintiff. Both the lower Courts have negatived the claim and gave a decree for the plaintiff. Defendant 3 has preferred this second appeal. Defendant 3's claim for the entire amount paid in discharge of the mortgages is obviously unsustainable. The only relief he can claim is that as the suit properties which the plaintiff claims as well as other properties purchased by him are subject to a common charge he is entitled to get from the plaintiff an amount proportionate to the value of the suit properties. The question is whether he is entitled to even this relief of contribution.

3. On a true construction of the deed dated 13th February 1920, it appears to me that there was a conveyance of a life interest in favour of the plaintiff by defendants 1 and 2 and there is a covenant on their part to discharge the encumbrances subsisting on the property themselves. The result of the said agreement is that so far as the items conveyed to the plaintiff are concerned they stand exonerated from the liability on the mortgage and the burden of the mortgage is entirely thrown on the remaining items of the property under the mortgage retained by defendants 1 and 2. This would be a contract to the contrary between defendants 1 and 2, and the plaintiff within the meaning of Section 82, T.P. Act. The view taken in Ramabhadrachar v. Srinivasa Ayyangar (1901) 24 Mad 85 that the expression 'contract to the contrary' means only a contract between the mortgagor and the mortgagee and that taken in Kunchithapatham Pillai v. Palamalai Pillai 1918 32 MLJ 347 that a covenant between a mortgagor and a purchaser of the equity of redemption would not be a contract to the contrary is no longer tenable after the decision of the Privy Council in Ganesh Lal v. Charan Singh 1930 52 All 358. In Barea Saheb v. Krishna Boyan 1936 Mad 898 I have held that the said Privy Council decision establishes that:

Expression 'contract to the contrary' in the section might include a contract between mortgagor and purchaser of equity of redemption and can be enforced by the mortgagor or a subsequent purchaser of the equity of redemption of another portion of the mortgaged pro-petty if the benefit of the contract has been assigned to him.

4. No doubt in Ganesh Lal v. Charan Singh 1930 52 All 358 the relief was not given because their Lordships held the benefit of the covenant in favour of the mortgagor did not pass to the assignee of the equity of redemption. In this case it is the assignee of the equity of redemption of one portion of the property in whose favour the covenant is entered into by the mortgagor who is seeking to rely on it. It is contended that the plaintiff cannot do so because though the benefit of a contract might be assigned the obligation thereunder cannot pass to the assignee. But the argument is untenable if the true scope of Section 82 is understood. Section 82 affords a statutory right of contribution subject to a contract to the contrary. Therefore it follows that the right of contribution can be released or varied by a contract. In this case before the property was purchased in Court auction the covenant had been entered into between defendants 1 and 2 and the plaintiff, so that the properties which have been retained by defendants 1 and 2 became subjected to the said burden. On the date of the Court purchase the said property was subject to this equity. From the draft sale proclamation and the sale certificate it is absolutely clear that what defendant 4 purchased in Court auction was not merely the property subject to the encumbrances but also subject to the obligation entered into by defendants 1 and 2 of discharging the usufructuary mortgage and holding the items conveyed to the plaintiff free and harmless of the said mortgage. Defendant 4 must be deemed to have purchased this property subject to this obligation: vide Gulzari Lal v. Ali Ahsan 1933 All 929. If defendants 1 and 2 were under an obligation as between themselves and the plaintiff to discharge the mortgages they could not have frustrated the contract by merely assigning the property. As observed by Venkatasubba Rao, J. in Muthia Bhagavathar v. Venkatarama Ayyar 1936 69 MLJ 303:

It is somewhat difficult to conceive that one party can at his will thwart the other by enabling his assignee to call in a statutory right, which ex hypothesi never came into existence by reason of there having been, at the very inception, a contract to the contrary.

5. In this case before defendant 4 purchased the property, the statutory right which he would have called in aid had already been released by defendants 1 and 2. As the Privy Council decision in Ganesh Lal v. Charan Singh 1930 52 All 358 pointed out the plaintiff can well say: 'There is a contract under which the properties I hold are free from any liability to contribute.' Again in my view the contract in and by which the properties retained by defendants and 2 were subject to the said equity must be held to be binding on defendant 4 he having purchased with notice of the said contract. In Veerabhadra Pillai v. Ramanuja Ayyengar 1927 Mad 1086 a similar question arose. There a property was owned by A, B and C and all of them sold half of the property to D for discharging half the mortgage debt subsisting on the property. The property was sold free from encumbrances. Subsequently A and B sold two sixths of the remaining half to the plaintiff. In execution of the mortgage decree D was compelled to pay the whole. Then he brought a suit for contribution. It was held that in respect of the half which he undertook to pay there is no question of contribution, and in respect of the remaining half he was bound to get the entire amount from the plaintiff and the other co-sharer. Their Lordships observed that as between A, B and C and D under the sale deed in D's favour it was clearly understood that his half share should be free from any further liability and that as A and B are bound by the said agreement, the plaintiff who had purchased the equity of redemption from them was also bound by it. This view is in accordance with the principles that if an equity is attached to the property by the owner no one purchasing with notice of that equity can stand in a different position from the party from whom he purchased.

6. In Kamta Singh v. Chathurbuja Singh 1929 8 Pat 585 where two properties were subject to a mortgage and the mortgagor sold one of the properties free from encumbrance and subsequently sold the other property covenanting that the entire mortgage should be discharged from and out of the said property, it was held that the later purchaser is not entitled to claim any contribution from the prior purchaser. Boss, J. observed:

The conveyance that Haribans Narayan Singh (the second purchaser) took recited the mortgage and threw the liability for the mortgage debt upon him. In other words, the mortgagors in making these terms with Har-bans Narayan Singh were implementing their own contract with the defendant first party (first purchaser) when they sold part of the property to them free of encumbrances and this, on these authorities they were entitled to do; and this term of the conveyance in my opinion gives the defendants first party a right to marshal.

7. He again observed:

The matter may be stated in another form. Prima facie the plaintiff has a right to contribution against the defendants first party. These defendants have their remedy against their vendor on the covenant against encumbrances. He in his turn would have his remedy against the plaintiff on the plaintiff's covenant to pay off the encumbrance; and consequently when the rights of the parties are adjusted in equity in one suit, the defendants-first party would have a short answer to the plaintiff's claim, based ultimately upon the rights of the plaintiff's vendor against the plaintiff.

8. Chatterji, J. in the same case observed:

In the present case, the owner did not mention the mortgage when selling portions to the defendants first party and made an unequivocal declaration that the same was free from encumbrances. Then, he arranged with a subsequent purchaser Harbans Narayan that, the latter would pay off the entire mortgage debt and it is clear on the authorities that the portions originally conveyed stand exonerated from all liabilities, as between the co-owners of the estate. To hold that the plaintiff is entitled to a contribution would be in effect to allow Harbans Narayan to reap an advantage from the non-fulfilment of his part of the contract which he would not have obtained if he had carried out his agreement.

9. The decision of Jackson, J. in Muthukumarasami Mudaliar v. Govinda, Padayachi 1932 35 MLW 145 is relied on by the appellant. The learned Judge there expressed a dissent from the view in Veerabhadra Pillai v. Ramanuja Ayyengar 1927 Mad 1086 and purports to follow the view laid down in Ramabhadrachar v. Srinivasa Ayyangar (1901) 24 Mad 85. I have shown that the view enunciated in Ramabhadrachar v. Srinivasa Ayyangar (1901) 24 Mad 85 is no longer tenable and I respectfully dissent from the view expressed by Jackson, J. Further as stated by me, defendant 3 purchased the property expressly covenanting to discharge the encumbrances and there fore he cannot claim any subrogation being under an obligation to do so: vide Mali Reddi Ayya Reddi v. Gopalakrishnayya 1924 47 Mad 190. Therefore the principle of the decision in Ramamurti Garu v. Rangayya 1934 39 MLW 729 relied on by the appellant is inapplicable. Thus the view of the lower Courts negativing defendant 3's claim is correct. Mr. Aravamudhu Iyengar contends that the property in respect of which the plaintiff has sought relief in this suit is not the property purchased by defendant 4. This question was never raised in any of the Courts below. There is no material on which it can be decided. Therefore I do not propose to deal with the matter. In the result, the second appeal fails and is dismissed with costs. Leave refused.


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