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Manicka Nadar Vs. Arumugha Sundara Sathia Gnana Pandara Sannadhi Avergal, Atheena Kartha of Sengole Madam - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1945Mad340
AppellantManicka Nadar
RespondentArumugha Sundara Sathia Gnana Pandara Sannadhi Avergal, Atheena Kartha of Sengole Madam
Cases ReferredKandaswami Pillai v. Ramaswami A.I.R.
Excerpt:
- - it is provided in the mortgage that the mortgagee should enjoy the mortgaged property for a period of eleven years from the date of mortgage himself paying the government kist. he raised the contention that though he was always ready and willing to pay the creditors, they demanded higher amounts and that consequently he had to go before the debt conciliation board with unsuccessful results, as the plaintiff would not co-operate with him. 659 is no doubt a case exactly like the present one and redemption was allowed before the period fixed on the ground that it was equitable to do so as the defendants did not perform what was a most essential part of the contract so far they were concerned. they dissent from a full bench decision of the lahore high court where it was held that..........of rs. 75 and that as against the sum of rs. 100 which alone was advanced by the mortgagee under deed of mortgage what would be due and payable to him after debiting with the income of rs. 75 was rs. 31 only, rs. 6 being taken as the rate of interest agreed upon between the parties, this suit was resisted by the mortgagee as premature because it was brought before the expiry of the eleven years' period fixed in the deed. he raised the contention that though he was always ready and willing to pay the creditors, they demanded higher amounts and that consequently he had to go before the debt conciliation board with unsuccessful results, as the plaintiff would not co-operate with him. these pleas have been overruled by both the lower courts. on the question whether the suit was premature,.....
Judgment:

Chandrasekhara Aiyar, J.

1. The plaintiff, the head of a math, created a usufructuary mortgage over certain immovable properties on 5th May 1938 under Ex. I for a sum of Rs. 625 in favour of the defendant-appellant in this second appeal. It is provided in the mortgage that the mortgagee should enjoy the mortgaged property for a period of eleven years from the date of mortgage himself paying the Government kist. Then comes the relevant clause: After the expiry of the period I shall pay the amount and have the schedule property redeemed.

2. The consideration of Rs. 625 was made up of three items, a sum of Rs. 214-14-11 due to one Mayakootha Pilial, a sum of Rs. 310-1-1 due to one Saminatha Desikar, and a sum of Rs. 100 paid in cash. The mortgagee was directed to pay the sums due to Mayakootha Pillai and Saminatha Desikar but he did not pay the amounts, and the mortgagor discharged the debts in April and May 1939, owing to pressure from the creditors. The plaintiff brought this suit for redemption on 23rd November 1939 setting out these facts alleging that the properties would yield an annual income of Rs. 75 and that as against the sum of Rs. 100 which alone was advanced by the mortgagee under deed of mortgage what would be due and payable to him after debiting with the income of Rs. 75 was Rs. 31 only, Rs. 6 being taken as the rate of interest agreed upon between the parties, This suit was resisted by the mortgagee as premature because it was brought before the expiry of the eleven years' period fixed in the deed. He raised the contention that though he was always ready and willing to pay the creditors, they demanded higher amounts and that consequently he had to go before the Debt Conciliation Board with unsuccessful results, as the plaintiff would not co-operate with him. These pleas have been overruled by both the lower Courts. On the question whether the suit was premature, they came to a conclusion in favour of the plaintiff and allowed redemption even before the period fixed in the deed of mortgage following an equitable rule enunciated in Chotku Rai v. Baldeo Shukul 34 All. 659 and adopted in Narasimharao Pantulu v. Seshayya A.I.R. 1925 Mad. 825. This conclusion is challenged in this second appeal by the defendant.

3. Chotku Rai v. Baldeo Shukul 34 All. 659 is no doubt a case exactly like the present one and redemption was allowed before the period fixed on the ground that it was equitable to do so as the defendants did not perform what was a most essential part of the contract so far they were concerned. But in the same volume in Rashik Lal v. Ramnarain 34 All. 273 is a decision of another Bench where the distinction between a contract and a conveyance is pointed out and it is laid down that the mere fact that part of the mortgage money has not been paid does not render the mortgage invalid nor does it entitle the mortgagor to rescind it at his option. They dissent from a Full Bench decision of the Lahore High Court where it was held that failure to pay a prior encumbrance avoids the mortgage and destroys the mortgagee's lien and right to possession even on a subsequent tender of the unpaid consideration it being immaterial whether the non-payment has or has not caused inconvenience or loss to the mortgagor. Chamier J. points out that there is no distinction in principle between the case of a sale and that of a mortgage and that interest in the mortgaged property is transferred even where the mortgagee refuses to advance part of the money agreed to be advanced. He was however inclined to hold that the Court was net bound in every case to enforce the mortgage according to the letter where the whole of the mortgage money has not been advanced and he observed,

where the mortgagee sues for possession he may, I think, be required to pay the balance of the mortgage money before he takes out execution of his decree, and there may be other cases in which he may properly be put upon terms.

4. The decision in Chotku Rai v. Baldeo Shukul 34 All. 659 was dissented from in Kandaswami Pillai v. Ramaswami A.I.R. 1919 Mad. 168. This was a case of a lease where the lessees sued for possession of a demised property without discharging a mortgage debt on the property which they agreed to discharge and, in consequence of which, failure on their part it became necessary for the lessor to execute a usufructuary mortgage to third parties. Wallis C.J. and Kumaraswami Sastri J. differed, the former holding that the lessees were entitled to recover possession and the latter taking the view that as they failed to discharge the debts which they had undertaken to discharge, they were not entitled to sue for possession. As the suit was for possession, the learned Chief Justice imposed a condition on the plaintiffs that they will not get possession until they repaid to the subsequent mortgagees what they had advanced to the lessor for payment to the prior mortgagees. Speaking of the subsequent mortgagees he says that:

They are entitled to be subrogated to the rights of the prior mortgagees whom they have paid off and to retain possession until they have been repaid what, but for their intervention, would have become payable to the original mortgagees.

5. Owing to this difference of opinion, the case came up before a Bench of three Judges and they upheld the view of Wallis C.J. Chotku Rai v. Baldeo Shukul 34 All. 659 and Subbarau v. Devu Shetti 18 Mad. 16 which were referred to with disapproval in the earlier Allahabad case were considered by the Bench and dissented from. With reference to the former case, Abdur Rahim J. says:

They cite no authority and do not enunciate any general and well recognized principle of equity by which the case could be said to be governed. With all respect to the learned Judges, it is not open to us to proceed on some sort of vague equitable grounds, especially in a case like this, where the plaintiffs are seeking a remedy in law.

As regards Subbarau v. Devu Shetti 18 Mad. 16 the decision was put aside as obscure in the absence of the necessary facts. Coutts-Trotter J. observed as follows:

All I can say is that I do not understand it as reported, nor do I gather upon what principle the learned Judges proceeded. With regard to the case in Subbarau v. Devu Shetti 18 Mad. 16. I have no hesitation in saying that unless it can be explained by an omission in the report as to the existence of an express power of cancellation, it must be regarded as contrary to the trend of authority.

6. If the correct principle has been laid down in Tatia v. Babaji 22 Bom. 176, Rashik Lal v. Ramnarain 34 All. 273 and Kandaswami Pillai v. Ramaswami A.I.R. 1919 Mad. 168 we must consider that Subbarau v. Devu Shetti 18 Mad. 16 and Chotku Rai v. Baldeo Shukul 34 All. 659 as wrong decisions, not binding on us. The lower Courts have however followed Rashik Lal v. Ramnarain 34 All. 273 as a decision later in date to Kandaswami Pillai v. Ramaswami A.I.R. 1919 Mad. 168 and it has to be presently examined. Mr. A. Swaminatha Iyer, the learned advocate for the respondent, pointed out that the view taken by Devadoss J. in that case was upheld in Letters Patent appeal by Venkatasubba Rao and Reilly JJ. in Seshkyya v. Lakshminarasimha Rao A.I.R. 1930 Mad. 160 and he contended on these authorities that a suit for redemption instituted before the expiry of the period fixed for redemption in a deed of usufructuary mortgage will lie when the mortgagee does not advance the full amount of consideration but pays only less and the amount lent can be said to have become discharged from his enjoyment of the usufruct of the property. He argued that it would be very oppressive to the mortgagor if in a case like the present where the sum advanced was only Rs. 100, the mortgagee could still take advantage of the term in the deed that he should remain in possession for the full period of 11 years, when long before that date, the debt would become discharged. I agree that there is hardship but the question is whether considerations of hardship entitle us to invent or create equitable rules or principles to circumvent or overcome such hardships. In this connexion, attention may be drawn to Krishnamma v. Kottipalli Mali A.I.R. 1920 Mad. 164 where referring to Velayudham Chetty v. Govindaswami Naieker 34 Mad. 543 the learned Judges say:

Can Courts give equitable relief to mitigate or suspend the consequences laid down by a statute; and they came to the conclusion that the proposition that the plain words of the statute could be whittled away by the application of the so called equitable doctrines, was an absolutely untenable one and they expressed their dissent from the contrary decision in Baijnath Singh v. Paltu 30 All. 125

7. In Narasimharao Pantulu v. Seshayya A.I.R. 1925 Mad. 825 though the suit was for redemption by the mortgagor against the usufructuary mortgagee and was brought before the period of 55 years stipulated in the mortgage, the question of possession became academic inasmuch as the period expired after the decree in the District Munsif's Court and before the appeal was filed in the District Court and possession was actually handed over by the mortgagee to the plaintiff. Moreover, the mortgage-deed in that case was apparently unlike the mortgage-deed in the present case. On Letters Patent appeal, Venkatasubba Rao J, observes that the case was covered by Clause (a) of Section 62, T.P. Act, which is in these terms:

In the case of a usufructuary mortgage, the mortgagor as a right to recover possession of the property (a) where the mortgagee is authorized to pay himself the mortgage money from the rents and profits of the property when such money is paid.

8. The question that they had to consider was whether a sum of Rs. 60 which the mortgagee undertook to pay to the mortgagor as a personal allowance was to be treated as rents and profits of the property for which he was bound to account to the mortgagor in the redemption suit. It was held that as the sum was set apart from the rents and profits of the property for this purpose, its non-utilization for the object stated in the deed rendered it part and parcel of the rents and profits for which the mortgagee was accountable on redemption. Though reference is made by Devadoss J. to Chotku Rai v. Baldeo Shukul 34 All. 659 it is really strange that no mention is made of the later decision in Kandaswami Pillai v. Ramaswami A.I.R. 1919 Mad. 168 dissenting from the Allahabad decision. Citing Chotku Rai v. Baldeo Shukul 34 All. 659 in his support, the learned Judge says:

I think it is equitable that he should not be allowed to insist upon one of the terms of the mortgage, deed being given effect to when he himself gives a go by to the other terms of the deed.

9. It is exactly the existence of any such supposed rule of equity that was negatived in Kandaswami Pillai v. Ramaswami A.I.R. 1919 Mad. 168 Venkatasubba Rao and Reilly JJ. do not go into the question of possession as it became unnecessary and they rest their decision on the simple ground that the mortgagee was to be debited with a sum of Rs. 60 which he undertook to pay as a personal allowance to the mortgagor and which by reason of the non-payment had become part and parcel of the rents and profits of the property from which it was carved out. It was in this manner that they met the argument raised for the mortgagee that the sum of Rs. 60 was to be treated as an independent amount in his hands for which the mortgagor should file a separate suit.

10. The present is not a case where the mortgagee sues for possession when probably we can impose on him the term that he should pay to the mortgagor the two amounts which he undertook to pay to the creditors and which the mortgagor had to pay be reason of his default. This is a case where the mortgagor comes to Court and says that he is entitled to redeem before the period fixed for redemption because what was advanced was much less than the amount of the consideration specified in the mortgage. It should be noted also that this suit was not filed after the sum of Rs. 100 was discharged, for plaintiff admits according to his calculation that there was still a sum of Rs. 31 due and that he was prepared to pay it to the mortgagee. According to the findings of the lower Court, the income from the property is only Rs. 25 and on the date when the suit was filed only 1 1/2 years had elapsed from the date of the mortgage. It is a case therefore where the suit for redemption even assuming the contentions of the plaintiff to be correct was really premature. The mortgage-deed does not provide for any particular rate of interest nor does it give any estimate of the rents and profits. Mr. Swaminatha Iyer contended that as Rs. 100 only had been advanced, we must cut down the period pro rata and also work out the interest at the rate of Rs. 25 on a principal of Rs. 625. All this is speculation and to say anything of the kind would be to make a new contract for the parties. We are beyond the stage of a contract and in the stage of a conveyance of property, and the period fixed for redemption must govern the rights and relations of the parties in the absence of a contract to the contrary. If one of the parties does not conform to or fulfill the requirements or the obligations imposed on him the other party may have a remedy in damages against him. But to say that because he has failed to advance the full amount, the mortgagor has got a right to come before the Court seeking possession even though he has definitely undertaken that the mortgagee should remain in possession for a period of 11 years, is to hold what the law will not allow on the authorities cited and discussed above. The second appeal is allowed. Each party will bear their own costs in the lower Courts, but the respondent will pay the appellant's costs here. (Leave refused.)


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