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Soorneedi Sathiraju and ors. Vs. Batchu Venkata Rao - Court Judgment

LegalCrystal Citation
SubjectProperty;Commercial
CourtChennai High Court
Decided On
Case NumberA.A.O. Nos. 495 of 1951 and 541 of 1952
Judge
Reported inAIR1953Mad873; (1953)2MLJ152
ActsDebt Law; Madras Agriculturists' Relief Act, 1938 - Sections 8(2); Transfer of Property Act, 1882 - Sections 82
AppellantSoorneedi Sathiraju and ors.
RespondentBatchu Venkata Rao
Appellant AdvocateG. Balaporamaswami Rao, Adv.
Respondent AdvocateD. Narasaraju and ;K.B. Krishnamurthy, Advs.
DispositionAppeals dismissed
Cases ReferredPoovan Chettiar v. Maddan
Excerpt:
commercial - mortgage - sections 60 and 82 of transfer of property act, 1882 - section 60 makes exception in regard to mortgage purchasing share in mortgaged property - it creates entitlement to redeem own share by payment of proportionate amount due on mortgage - proportionate amount will be calculated applying provisions of section 82. - - 3367-3-0, which has been given credit to, could be treated as payment, to the appellants could well claim the benefit of it.krishnaswami nayudu, j.1. the appellants are the judgment-debtors in a mortgage decree passed against them and their father, defendant i, in o. s. no. 39 of 1941 on the file of the sub-court of kakinada. this appeal arises out of their application, i. a. no. 1640 of 1951 filed in the said court under sections 8 and 19 of the madras agriculturists' relief act 4 of 1933 as amended by act 23 of 1948. the mortgage is dated 18-4-1924 and the principal sum of the mortgage is rs. 3,000. the appellants and their father were also indebted to the plaintiff decree-holder on a pro-note dated 31-1-1933. the plaintiff obtained a decree on the pro-note in o. s. no. 458 of 1938 on the file of the district munsif's court, kakinada, and brought one out of three items of properties that were mortgaged, to.....
Judgment:

Krishnaswami Nayudu, J.

1. The appellants are the judgment-debtors in a mortgage decree passed against them and their father, defendant I, in O. S. No. 39 of 1941 on the file of the Sub-Court of Kakinada. This appeal arises out of their application, I. A. No. 1640 of 1951 filed in the said Court under Sections 8 and 19 of the Madras Agriculturists' Relief Act 4 of 1933 as amended by Act 23 of 1948. The mortgage is dated 18-4-1924 and the principal sum of the mortgage is Rs. 3,000. The appellants and their father were also indebted to the plaintiff decree-holder on a pro-note dated 31-1-1933. The plaintiff obtained a decree on the pro-note in O. S. No. 458 of 1938 on the file of the District Munsif's Court, Kakinada, and brought one out of three items of properties that were mortgaged, to sale and purchased the same for Rs, 1140 subject to the mortgage in his favour. He filed E. P. No. 195 of 1946 in Sub-Court, Kakinada, for execution of the mortgage decree. The appellants contested the said execution petition by pleading complete discharge by reason of the plaintiff purchasing one of the mortgaged properties. The Subordinate Judge of Kakinada applying the provisions of Sections 60 and 82 of the Transfer of Property Act held that the plaintiff decree-holder was bound to give credit to the sum of Rs. 3367-3-0 being the proportionate liability of item (1) of the mortgaged decree. The said order was confirmed by the High Court in C. M. A. No. 451 of 1947 on 13-12-1949.

2. It must be mentioned here that apart from the sum of Rs. 3367-3-0 to which the appellants would be entitled to credit in the mortgage, it is common ground that they made payments to the extent of Rs. 2984-15-0 towards the mortgage debt. The result is that the mortgage decree is discharged to the extent of more than Rs. 6000 which is double the amount of the principal sum of Rs. 3000.

3. In the present proceedings, the applicants invoke to their aid Clause (2) of S. 8 and contend they have paid to the creditor twice the amount of the principal and that therefore the debt must be deemed to have been wholly discharge). The question therefore for determination is whether apart from the sum of Rs. 2984-15-0, which represents in fact payments made by the debters, the sum of Rs. 3367-3-0, which was directed to be given credit towards the mortgage decree in consequence of the plaintiff purchasing the equity of redemption in item (1) of the mortgaged properties, could be said to be a payment by the agriculturist coming within the scope of Clause (2) of Section 8 of the Madras Agriculturists' Relief Act. The sum of Rs. 3367-8-0 was arrived at by applying the provisions of Sections 60 and 82 of item (1) of the mortgaged properties to contribute to the entire mortgage debt. Section 60 of the Transfer of Property Act makes an exception in regard to a mortgage purchasing a share in the mortgaged property and held entitled to redeem his own share by payment of a proportionate part of the amount due on the mortgage, the proportionate part of the amount to be ascertained by applying the provisions of Section 82 of the Act. Section 82 lays down that where the property subject to a mortgage belongs to two or more persons having distinct and separate rights of ownership therein, the different shares in or parts of such property owned by such persons are, in the absence of a contract to the contrary, liable to contribute rateably to the debt secured by the mortgage and for the purpose of determining the rate at which each such share or part shall contribute, the value of the property as on the date of the mortgage should be deemed to be its value. The plaintiff-decree-holder having purchased the equity of redemption for Rs. 1140 in execution of the money decree in O. S. No. 458 of 1938 on the file of the District Munsif's Court, Kakinada, has acquired whatever rights the appellants had in the property. The only right they had was the equity of redemption, which equity of redemption has vested in the plaintiff-decree-holder by reason of the purchase. The appellants therefore ceased to have any interest in item 1 which was sold, the property from thenceforward belonging to the plaintiff decree-holder subject to the mortgage liability in his own favour. The rights of the appellants in the said property have therefore become extinguished in consequence of the sale in favour of the plaintiff decree-holder. The payment that is contemplated under Section 8(2) must be a payment by the agriculturist and not even by a non-agriculturist debtor. But there being no dispute that the appellants are agriculturists, if the sum of Rs. 3367-3-0, which has been given credit to, could be treated as payment, to the appellants could well claim the benefit of it. The payment must therefore be a payment in cash or in kind by an agriculturist or on his behalf. The appropriation of the sum of Rs. 3367-3-0 is obviously not a payment, nor even appropriation made on behalf of the appellants, nor out of the property in which the appellants had any interest on the date. The appropriation, of the sum which went to the credit of the mortgage was in discharge of the liability of the mortgage, that is, the plaintiff-decree-holder, which liability has become fastened on him by his having purchased the equity of redemption. It is neither a payment by the appellants, nor an appropriation on their behalf, nor a discharge of any liability of theirs, since by the sale of the said item, the appellants' liability to contribute to the mortgage debt had ceased, and the liability being attached to the property item (1), the plaintiff decree-holder alone has therefore become liable. The legal effect of the purchase by the mortgage of the equity of redemption in a part of the mortgaged properties is to discharge that portion of the mortgage which was chargeable on the part of the mortgaged property that has been purchased and though it would operate as a partial discharge of the mortgage debt, the point that has to be considered here is not whether the mortgage has become discharged partially, but whether that discharge is as the result of a payment made by the debtors.

4. Reliance was placed on the judgment of Patanjali Sastri J. in -- Poovan Chettiar v. Maddan : AIR1944Mad549 , in support of the appellants' contention. But the facts of that case are entirely different from the one which I am now considering. In that case, the plaintiff-mortgage purchased part of the hypotheca in 'pro tanto' discharge of the debt. It was held that as a result of the sale, there is a reduction of the debt by transfer of a portion of the hypothecs to the creditor himself, and the balance remaining due is the same old debt reduced by a payment. If, even in the present case, instead of the plaintiff decree-holder purchasing the equity of redemption in a court auction for a consideration of Rs. 1140 which went in payment of the money decree in O. S. No. 458 of 1938, he directly purchased the said item of mortgaged property from the appellants, it being agreed that the sale price of such property is to be appropriated towards the mortgage debt, then, notwithstanding that an actual payment is not made by the agriculturists the property having been sold in 'pro tanto' discharge of the debt, it must be deemed to be a payment and the agriculturist can rely on such a payment as payment under Section 8 Clause 2 of the Act. By the sale by the mortgagor to the mortgage of a part of the hypotheca the sale proceeds being appropriated towards the mortgage debt, the mortgagor must be deemed to have made a payment towards the debt, though the payment may not be in cash but by a transfer of a portion of the mortgaged property. There the debtor was transferring to the creditor a property in partial discharge of the liability and as such it can be held to be a payment under Section 8, Clause (2) of the Act. But as already pointed out, in the present case, the debtors having ceased to have any interest in the property any reduction of the liability of the mortgage by appropriation of the rateable value fixed under Section 82 of the Transfer of Property Act would not ensure to the benefit of the mortgagors as the property no longer belonged to them. I am therefore of the view that the sum of Rs. 3367-3-0 appropriated towards the mortgage liability is not a payment within the meaning of Section 8 Clause (2) of the Act.

5. In the result, the appeal is dismissed with costs.

6. C. M. A. No. 495 of 1951 (Mad) (B): This is an appeal against the order dismissing an application under Section 20 of Madras Act 4 of 1938. In view of the orders passed in the application under Section 19, no orders are necessary in this appeal. This appeal also will stand dismissed. But there will be no order as to costs.


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