1. The appellant executed on 20-4-1936 in favour of the respondent a deed of simple mortgage for a sum of Rs. 99,999. The properties secured under the mortgage included houses in the city and lands in the district of Krishna. He executed a second mortgage in favour of his mother, V. Sundaramma for Rs. 1,60,000 on 3-11-1936. She, as puisne mortgagee filed an application on the Original Side of this Court (No. 827 of 1949) to scale down the debt due to the respondent. On that application, Krishnaswami Nayudu J. made an order directing the matter to be enquired into by the Official Referee, after holding that V. Sundaramma was an agriculturist entitled to the benefits of the Madras Agriculturists' Relief Act. The respondent filed an appeal against the said order, O. Section A. No. 119 of 1950. Meanwhile, the respondent filed a petition O. P. No. 139 of 1949, on the original side, under Section 69-A. T. P. Act, 'inter alia' to restrain the appellant from collecting the rents of some of the properties which were included in the mortgage, which in fact were the only properties left after other properties mortgaged had been sold.
There was an ex parte order on the application on 22nd April 1949 restraining the appellant from collecting the rents of the suit properties.
Subsequently, the court varied the order by appointing an advocate of this court as a receiver for collecting the rents and depositing the same into court towards the credit of the said petition (O. P. No. 339 of 1949). The appellant then filed an application No. 2532 of 1950, purporting to be under Section 19-A, Madras Agriculturists' Relief Act for scaling down his debt on the basis that he was entitled to the benefit of the newly added Section 13-A of the said Act. That application was dismissed by Rajagopalan J. on the ground that a substantive application by the appellant under Section 19-A of the Act was not maintainable as he was not an agriculturist within the definition in Section 3(2) of the Act. The appellant carried the matter in appeal (O. S. A. No. 24 of 1951), but the appeal was dismissed. The respondent contended before Rajagopalan J. that the appellant was in any event not entitled to rely on Section 13-A of the Act, but this contention was not dealt with in the view taken by the learned Judge. This point was not dealt with in appeal either. Rajagopalan J. in the course of his judgment made it clear that his decision did not imply that the appellant had no other remedy. He said:
"It may be open to the debtor to sue the creditor for a declaration that only a certain amount is due, as calculated with reference to Section 13-A. It may equally be possible for the debtor to resist a claim in a court of law by the creditor as plaintiff to the contract rate of interest and say that only statutory rate of interest referred to in Section 13-A should be allowed. I am not exhausting the list of remedies open to a creditor or debtor."
The learned Judge concluded by saying that the disposal of the application before him in no way precluded the appellant from enforcing his rights in other and appropriate proceedings .
2. After the disposal of O. S. A. No. 24 of 1951, the appellant filed an application, No. 3461 of 1952, in O. P. No. 139 of 1949 for several reliefs of which it is sufficient to mention one, namely, to discharge the receiver from the office of the receivership. In the affidavit filed by him in support of this application, he alleged that on a proper calculation in accordance with the provisions of Section 13-A the mortgage debt in favour of the respondent had been wiped away and nothing was due from him to the respondent and therefore the receiver should be discharged. We are not concerned with the other allegations and reliefs claimed by the appellant. The application was heard and disposed of by Panchapakesa Aiyar J. on 12-12-1952. The learned Judge held that the application was not the proper form to agitate the matter of the liability of the appellant. In his opinion, the appellant could either file a suit for redemption or resist a suit against him for the full unsealed amount and in such proceedings he could plead his right to scale down the debt. It is against this order of Panchapakesa Aiyar J. that the above appeal has been preferred.
3. On 28-4-1953, when the appeal was called, the learned counsel for the respondent made a representation to us that the matter had been compromised on the previous day, that is, 27-4-1953. This was denied by the appellant. The appeal was therefore adjourned at the instance of the respondent who represented that he would file an application to enforce the compromise. He accordingly filed on 3-7-1953 an application C. M. P. No. 6930 of 1953, praying that this court may record the compromise entered into between the parties and pass a decree in terms thereof. The terms of the compromise, according to the respondent;, were contained in a letter dated 27-4-1953 from the appellant to the respondent (Ex. R. 2). The letter was annexed to the affidavit in support of the application. The letter 15 signed by the appellant, and there is also the signature of the respondent in token of his acceptance. The appellant opposed the application on the ground that there had been no completed compromise binding on him. As there was a dispute on a question of fact, namely, who ther there was a concluded compromise or not, we thought it desirable to direct the1 Master to hold an inquiry after notice to the parties and they submit a report on a consideration of the evidencd adduced before him on the question whether there was a concluded compromise between the parties.
In pursuance of our order, the Master made an enquiry and has sent up his finding that, there was no completed and lawful compromise so as to bind the appellant. Mr. Viswanatha Aiyar, learned counsel for the respondent in the appeal and the petitioner in the application attacked the correctness of this finding.
4. The following is the text of the letter, which is alleged to contain the terms of the compromise :
"Please calculate interest on all amounts at nine and half annas per cent, per mensem and give credit to all amounts paid towards interest and principal amounts. You can calculate compound interest at the same rate on interest due yearly. If overpaid the amount can be adjusted and credited for principal. The amounts of credit and debit are not disputed. Please kindly remove the receiver from court and collect monthly Rs. 900 yourself till the debt is paid off. Please deduct the monthly interest and municipal taxes and pay the balance monthly to my mother and oblige. Out of the court amount please pay me Rs. 6000 cash and my mother Rs. 11500 only and receive the balance. Please give credit towards our account. You will be given priority and first charge on both the properties which are already mortgaged to you. Kindly let me know the account amount so that I will request Mr. M. G. Markandeyulu and after papers are signed we can move an urgent motion tomorrow and have orders passed once for all. In this connection I depend on your good will and grace in my (Delhi) land suit matter which is coming in Supreme Court in August or September. I am in Madras till I receive your final approval and consent and your good blessings also."
The case of the respondent is that the appellant called at his residence at about 10-30 a.m. on 27-4-1953, that the terms were settled then and written out by the appellant on a piece of paper, Ex. B. 1 and signed by him, that lie got it typed, that the appellant signed the letter and that the respondent said that he would not sign before consulting his lawyer and that he took the appellant in his own qar & dropping him at a hotel in Royapettah went to his lawyer in Mylapore and came back to the hotel after his advocate had approved of the terms of the compromise and thereafter signed the letter to express his approval at or about 8 p.m. Thereafter, according to the respondent, he and his son and the appellant went to the house of one Markandeyulu, the power of attorney agent of the mother of the appellant at about 9 O'clock but the said Markandeyulu would not consent to the compromise. The appellant's version, on the other hand, is that he wrote the letter in question to the dictation of the respondent and his son and he signed it at about 8 p.m. in the respondent's house on 27-4-1953, that it was contemplated by both the parties that the compromise would go through only if the appellant's mother consented to it but her power of attorney agent would not consent to the course.
He also stated that the letter was not signed by the respondent on 27-4-1953 itself, as appears on the face of the document and that it must have been signed later. His case is that it was only after the appellant intimated to the court that there was no concluded compromise that the respondent must have signed the letter. The Master, on a consideration of the evidence adduced before him, held that the respondent did not sign the letter on 27-4-1953 and the consent of the mother's power-of-attorney agent was never secured, and it could not therefore be said that there was a concluded lawful compromise binding on the parties. We see no reason to differ from the findings of the learned Master. On a perusal of the terms contained in the letter, it becomes obvious that some of the most important terms relate to the surrender by the appellant's mother of her right of priority in favour of the respondent. Indeed it may be said to be the main basis of the compromise. It is now common ground that Markandeyulu, the power-of-attorney agent of the mother, did not consent to surrender her rights. On this, the whole thing must be deemed to have failed.
5. The application made on behalf of the respondent is to record the letter as the compromise and to pass an order in terms thereof. We asked Mr. Viswanatha Aiyar how that could be done without the mother's consent. He realised the difficulty and put forward a totally new case, namely, that the respondent would be content to enforce the terms other than those relating to the appellant's mother and that he would not insist on the terms relating to her. Now, this abandonment of some of the terms of the alleged compromise was made by the respondent's counsel only in the course of the argument. Counsel admitted that at no time prior to the hearing of the case did he intimate this attitude on his part to the appellant or his counsel. In our opinion, this attempt on the part of the respondent to make out as it were a new contract of compromise conclusively leads to the inference that there was no concluded and enforceable compromise. We hold agreeing with the Master that there was no concluded compromise and therefore the application, C. M. P. No. 6930 of 1953 must be dismissed.
6. This leaves us with the main appeal, which as already mentioned is against the order of Panchapakesa Aiyar J. dismissing the appellant's application for the discharge of the receiver appointed in O. P. No. 139 of 1949, on the ground that the debt due under the mortgage in favour (sic) the respondent had been wiped out on an application of the provisions of Section 13-A, Madras Agriculturists Relief Act. We do not agree with the learned Judge that the appellant can get the benefit of the application of Section 13-A, Madras Agriculturists Relief Act, only in a suit filed by him for redemption or in a suit by the respondent on foot of the mortgage. In our opinion, the appellant can get relief, if he is otherwise entitled to it, in the present application itself. Section 69-A(2), T. P. Act, 'inter alia' provides that a receiver may at any time be removed by writing signed by or on behalf of the mortgagee and the mortgagor or by the court on application made by either party and on due cause shown. Though there is no direct authority on the point, we are inclined to hold that the language of this provision would cover a case in which it is alleged by the mortgagor that there is no debt outstanding and therefore there should be no receiver. Under Sub-section (8), Clause (iv) of Section 69-A the receiver is bound to apply the money received by him in payment of the interest falling due under the mortgage, and under Clause (v) in or towards the discharge of the principal money if so directed by the mortgagee.
Suppose in a particular case it is alleged by the mortgagor that there is no amount due for principal or interest under the mortgage or again, take a case where the mortgagor alleges that the mortgage has become barred. Can it be said that the mortgagor in such circumstances is precluded from putting forward such pleas and has to submit to the receiver being in possession and collecting the income from the property and making payments which are not due? We think not. In the present case, the mortgagor says that no further amount is due and payable to the mortgagee. Then, should there be the continuance of the receiver? We are of opinion that the appellant's plea based on Section 13-A of the Madras Agriculturists Relief Act should be enquired into and disposed of in the application. Mr. Viswanatha Aiyar contended that on a proper construction of Section 13-A the appellant will not be entitled to the benefit of its provision. This point was not considered by Panchapakesa Aiyar J. and we do not think necessary or desirable that we should deal with it, as the entire matter is at large.
7. The appeal is allowed and the order of Panchapakesa Aiyar J. dismissing the appellant's application is hereby set aside. The application will be taken up on file and disposed of in accordance with law in the light of this judgment. Costs costs in the cause. The appellant will have a refund of the court-fee paid on the memo of appeal.