Abdur Rahman, J.
1. This appeal arises out or a suit instituted by the present Raja of Kalahasti (Venkatalingamma by name) on the basis of a mortgage deed executed by his father the late Rajah of Kalahasti (Timma Nayanim Varu) in favour of his second wife Chinnamma for a sum of Rs. 63,000 on the 2nd January, 1913- Ex. Rules The late Rajah of Kalahasti whom it will be more convenient to refer in this judgment as Timma, died on the 5th December, 1919, after he had held the impartible estate of Kalahasti for about 14 years. Timma had two sons by his first wife Chellamma one of whom is the present plaintiff and the other was Akkappa.
2. Akkappa was given in adoption by Timma to his elder brother Muddu Venkatappa who held the impartible estate of Kalahasti after the death of his father Venkatappa Nayanim Varu (commonly known as the C. S. I. Raja) up till the 22nd March, 1894. Muddu Venkatappa had, while he held the impartible estate, executed a mortgage in 1893 on some of the villages of his estate for a large sum of money in favour of a rich Hyderabad banker Raja Narasingh Girji. Muddu Venkatappa was succeeded by his adopted son Akkappa who, as stated above, was the natural son of Timma and remained in possession of the impartible estate of Kalahasti, between March, 1894 and May, 1905. It might be mentioned here that the estate being indebted to the extent of a sum of Rs. 33,48,879-1-6 was made over by Akkappa to the Court of Wards some time in 1900, but they relinquished their charge of the same on Akkappa's death or to be definite three months later. Since then the estate remained in Timma's possession up to the time of his death when it passed on to the present plaintiff. During his lifetime Timma seems to have been obliged to renew the mortgage in Raja Narsingh Girji's favour for an amount which had by then grown to be 6 lakhs but to this we will have to refer again.
3. Timma had a daughter Rangamma by his second wife Chinnamma. She was alive when Chinnamma died in 1919 and passed away in 1925 leaving behind her an adopted son Venkatarama, who is the 5th defendant in the present suit.
4. Venkatappa Navanimvaru (that is the C. S. I. Raja) executed a will on the 16th February, 1881 (Ex. A), in favour of his eldest son Muddu Venkatappa under which the whole of the estate of Kalahasti was bequeathed by the former to the latter although a charge was created in favour of his other sons for their maintenance. Timma and his son Venkatalingamma the present plaintiff instituted a suit (Ex. B) on the 17th March, 1890 (O.S. No. 12 of 1890), in the District Court of North Arcot for partition on the ground that Kalahasti was not impartible and that it could not be legitimately bequeathed by the C.S.I. Raja to his eldest son. To this suit Akkappa, who had already been given in adoption to Muddu Venkatappa, was impleaded as a defendant along with Timma's other brothers. This suit was compromised on the 1st August, 1892 (Ex. C), according to which the estate was conceded by all the parties to the suit to be impartible and the allowance fixed by C.S.I. Raja in his will for his sons was increased to some extent although certain villages which were allotted to Timma and his brothers under the will were agreed to be relinquished by them. This compromise was incorporated in a decree passed on the 30th March, 1893 (Ex. C-1). Muddu Venkatappa died on the 22nd March, 1894; but before his death objections were taken to certain clauses being embodied in the decree. The matter eventually came up to this Court and was decided by the judgment appearing in Venkatappa Nayanim v. Thimma Nayanim (1916)(1894)Mad. 410. It was held in that appeal that the decree should not have embodied matters which did not form the subject-matter of that suit. This seems to have led to some differences between Timma and his natural son Akkappa, the holder of the impartible estate. Akkappa however executed a deed of mortgage in respect of maintenance due by him in favour of his natural father Timma on the 14th July, 1896, for a sum of Rs. One Lakh. -Ex. M. This Was followed by another agreement executed on the 14th October, 1896 (Ex. D), by which Akkappa undertook to raise Timma's maintenance from Rs. 600 the sum which he had agreed to pay in the compromise in O.S. No. 12 of 1890, to Rs. 650 per mensem from the 1st July, 1896. On the 30th August, 1898, Akkappa executed a registered promissory note in Timma's favour (Ex. G). On the 1st April, 1899, Akkappa executed a mortgage deed (Ex. F-1) for Rs. 50,000 in Timma's favour for amounts due to him under the promissory note Ex. G and for the balance which had still remained unpaid out of the decree in O.S. No. 12 of 1890. Akkappa was succeeded by his natural father Timma under the rule of primogeniture. Thus Timma became a representative of Akkappa-the person who had mortgaged the property with Timma-being already a mortgagee of some of the villages of the estate under Exs. M and F-1.
5. In the meantime an Act was passed by the local Legislature in regard to impartible estates. It was the Madras Impartible Estates Act (II of 1904) under which certain restrictions were placed on impartible estate holders in regard to the alienation of such estates. This was due to the fact that in several cases that had gone up to the Privy Council, it was held that the impartible estate holders could devise or bequeath their estates in? any manned that they liked without any restrictions while the prevention of such transfers was considered desirable on grounds of public policy. Be that as it may, the effect of the legislation passed in 1904 on the impartible estate holders was that they did not continue to be absolute owners of the property as they were before this legislation and could only deal with it in certain circumstances mentioned in the Act. It was after this legislation that Timma succeeded to the impartible estate of Kalahasti in 1905.
6. A creditor of Akkappa had instituted a suit O.S. No. 7 of 1899 in the District Court of Nellore for a sum of Rs. 5,89,415-9-0 which was decreed a couple of months later. This was a simple money debt. It was in execution of this decree that the equity of redemption of the villages belonging to the estate which were mortgaged with Raja Narasingh Girji and Timma was sold and purchased by defendants 1, 2 and the father of defendant 3. A suit for redemption (O.S. No. 1 of 1917) was instituted by them in the Court of the Subordinate Judge of Nellore against Raja Narasingh Girji and others. This was decreed by their Lordships of the Privy Council finally in 1924 (vide Narasingh Girji v. Partkasaradhi Rayanim Garu (1924) 47 M.L.J. 809 : L.R. 51 IndAp 305 : I.L.R. 47 Mad. 729 (P.C.)). They however failed to pay the mortgage in Timma's favour.
7. Since the sale comprised the villages which were mortgaged by Akkappa in favour of Timma in 1899 under Ex. F-1 and since Timma had on account of his succession to the Kalahasti estate become subsequently a representative of Akkappa, he was advised to transfer the mortgage Ex. F-1 by way of gift in favour of his wife Chinnamma. This he did by the deed, dated the 19th August, 1912 (Ex. PP-1). As the sum of Rs. 50,000 for which Ex. F-1 was executed in 1899 had according to him come to be more than Rs. 1,13,600, Timma in his capacity of the holder of the impartible estate and hence as a mortgagor and in renewal of the mortgage Ex- F-1 executed a usufructuary mortgage in favour of his wife for Rs. 50,000 on the 2nd January, 1913 (Ex. QQ) and a simple mortgage on the same date for a sum of Rs. 63,600 (Ex. RR). The usufructuary mortgage has been paid off and has passed outside the pale of controversy-although the question whether the money was received by Timma or by Chinnamma Rao is still relevant in order to ascertain the legal effect of the other deed Ex. RR which had come into existence on the same date. The present suit was instituted in January, 1927, on the basis of the mortgage (Ex. RR) by Timma's son Venkatalingamma who is also the present holder of the impartible estate. It was dismissed in March, 1931, on a portion of one of the issues framed by the trial Court. The portion read as follows:
Whether the plaintiff is entitled to sue thereon (the mortgage deed, dated 2nd May, 1913), seeing that the plaintiff's father was himself the mortgagor.
When the matter came up in appeal, a Division Bench of this Court, without going into the merits of that decision, preferred to have all the issues in the suit decided and remanded the suit for that purpose in January, 1938. The learned Subordinate Judge of Nellore has submitted his findings on the other issues as well and the whole appeal has been argued before us now.
8. Chinnamma's daughter Rangamma died as stated before in .1925. Venkataraina Nayanim Varu, the 5th defendant is her adopted son. The 1st defendant who is no other than the present Raja of Panagal made a settlement of his rights in the property on the 4th July, 1929, in favour of the 6th defendant who, while a minor, unfortunately died in England. His father, the 7th defendant, is his legal representative. The defendants who had purchased the equity of redemption in the Court sale (defendants 1-2 and father of defendant 3) mortgaged their rights with the Raja of Venkatagiri with the object of paying off Raja Narasingh Girji and redeeming the villages mortgaged with him. The Raja of Venkatagiri was the 4th defendant but he died pendente lite and his legal representatives are defendants 8 to 10. The dispute between these defendants and the plaintiff was compromised after the appeal was remanded for a decision on the remaining issues.
9. A number of objections have been raised on behalf of the defendants. It has been contended on behalf of the 1st defendant that since Timma, who was the original mortgagee, became the representative of the mortgagor Akkappa, his rights in the mortgage which he had taken from his son in 1899 under Ex. F-1 were, on his succession to the impartible estate, extinguished and there was no subsisting mortgage after that day. This contention has found favour with the Court below. Mr. Satyanarayana Rao, however, contends that in view of Timma's declarations both expressly and by necessary implication, his rights as a mortgagee continued to subsist and in any case, since their continuance was for his benefit, they could not be held to have been extinguished. It was further urged that at all events, after the Madras Impartible Estates Act, had come into existence in 1904, Timma could not be said to have been absolutely entitled to the impartible estate to which he succeeded only in 1905.
10. Section 101 of the Transfer of Property Act was amended in 1929 by Act XX of 1929. Since the present suit was instituted in 192,7 and all the rights which have to be dealt with in this appeal arose even earlier, they would have to be determined in accordance with the law as it existed prior to the Amending Act -unless that Act was either retrospective in its operation or it remained unaffected by this new piece of legislation which was purely declaratory in character.
11. The first question to decide therefore is whether there was a merger within the meaning of that section (S. 101 of the Transfer of Property Act). The Transfer of Property Act is not exhaustive and does not in terms profess to be so. We would, therefore, be entitled to apply rules of English law as rules of justice, equity and good conscience only if we find that the present case is not covered by the Act as it existed in 1927. If, on the other hand, we find the present case to be covered by the Act as it existed on the relevant dates in this case it would have to be applied and if there was a difference between the Indian and the English law on that date, the English law would have to be disregarded by us in deciding this case. Before we examine the cases which have been cited by the learned Counsel for the parties it seems to be preferable to have the provisions of the old Section 101 of the Transfer of Property Act before us. The section reads as follows:
Where the owner of a charge or other encumbrance on immoveable property is or becomes absolutely entitled to that property, the charge or encumbrance shall be extinguished, unless he declares, by express words or necessary implication, that it shall continue to subsist, or such continuance would be for his benefit.
In construing the section, it would be our duty to adhere to the grammatical and ordinary sense of the words used therein and if the meaning of the words is found by us to be plain and unambiguous we would have to give effect to them regardless of any other consideration, and would not be justified in ignoring any part of the language of the section. Bearing these principles in mind let us now examine the language of the section and ascertain its meaning.
12. The first words which seem to be necessary to be borne in mind are 'is or becomes'. The word 'is' was apparently meant to convey the idea that a person who is absolutely entitled to the property may, on account of certain circumstances, subsequently become the owner of a charge or other encumbrance which was in existence on the date when he acquired the property. This might happen in various circumstances-the case which we are now called upon to decide being one of the illustrations of such instances. The words 'or becomes' have apparently been used in contradistinction with the word 'is'. Either a person is absolutely entitled to a property on the date on which he becomes the owner of a charge or other encumbrance on that property or is already the owner of a charge or other encumbrance on immovable property before he becomes absolutely entitled to that property. The first case would be covered by the words 'or becomes' and the second case by the word 'is'.
13. In this connection our attention was drawn by Mr. Narasimhachari to an Allahabad case reported in Badan v. Murari Lal (1916)(1915) All. 309. The facts of that case were that one Badan mortgaged his property first to one Umrao Singh and then to Bhoop Singh. Umrao Singh brought a suit on his mortgage without impleading Bhoop Singh (the puisne mortgagee) and obtained a decree for sale which he transferred to the mortgagor's brother Bahal. The puisne mortgagee subsequently transferred his mortgage rights to the respondents in that appeal who obtained a decree for sale subject to the prior mortgage. Bahal died leaving Badan, the mortgagor, as his sole heir. The respondents applied for the execution of their decree and claimed to be entitled to bring the property to sale free from the prior mortgage. They contended that when Bahal died, the benefit of the prior mortgage passed to Badan, the mortgagor, and since he was the owner of the property, the mortgagee's rights became merged and were extinguished. Badan, on the other hand, opposed this contention. The Court of first instance held against the merger. On appeal the lower appellate Court overruled the first Court's decision and found in favour of the merger. When the case came up before the High Court, the learned Judges were of opinion that the lower appellate Court was right and the first Court wrong. While deciding that case, the learned Judges expressed themselves in the following manner:
Section 101 of the Transfer of Property Act was referred to in the course of the arguments; but that section appears to apply only to the converse ease of the owner of an encumbrance becoming the absolute owner of the property though it is not easy to see why the words 'is or' were inserted in the section.
Having failed to appreciate the meaning of the words 'is or', the learned Judges continue to say:
There being no legislative provision on the question for decision, the case must be decided according to broad principles of equity and good conscience, with such assistance as may be afforded by the reported decisions of the Courts.
In our view, the assumption made by the learned Judges that there was no legislative provision on the question for decision, was unjustified. Had the learned Judges tried to appreciate the meaning of the word 'is' as it appears in the context, we have no doubt that they would have seen that Section 101 was in terms applicable to the facts of the case which they were called upon to decide. Unless we hold that the word 'is' was redundant and this we cannot do on the well-recognised principles of interpretation, it would be impossible to agree with the reasoning of the learned Judges in this decision. The plain object of the Legislature in placing the word 'is' was obviously to provide for one of the contingencies to which we have referred a little while ago. It is true that ordinarily it is the holder of a charge or an encumbrance who acquires the equity of redemption subsequently- but we can well conceive of a case where a person may have acquired the equity of redemption by inheritance or otherwise first and subsequently come to be the holder of a charge or an encumbrance, e.g., when he inherits the property from two persons one of whom was the owner of the equity of redemption and the other the owner of a charge or an incumbrance. We are thus not satisfied, and say so with considerable deference, that the case in Badan v. Murari Lal I.L.R.(1915)37 All. 309, was correctly decided.
14. To resume the construction of Section 101. The next words which call for our attention are those which begin with the word 'unless'. Having laid down the general rule of law in regard to cases where a charge or encumbrance shall be extinguished, the legislature added two provisos or exceptions, the first being that when the owner of a charge or other encumbrance or immovable property, as the ease may be, became absolutely entitled to the property or came to own the charge or encumbrance, the charge or encumbrance was extinguished unless he declared 'by express words or necessary implication that it 'would' continue to subsist '. If he did so declare, the rule laid down by the section was that the charge or encumbrance was not extinguished. The second proviso or exception went even further. Even if such a person did not declare either by express words or necessary implication but if the Court found that the continuance of the charge or encumbrance would be for a person's benefit, it was required to presume, in accordance with the natural presumption, that a person would not have acted or intended to act against his benefit and that he must have intended to keep the charge or encumbrance alive and not to permit it to be merged with the ownership of the property. This was held by a Division Bench of the Calcutta High Court in Sonaulla Karikar v. Abu Sayad Mohammad Ismail I.L.R.(1929) Cal. 473, and we are inclined, with respect, to agree with that decision and not with certain observations which are to be found in Bai Rewa v. Vali Md. Miah Md I.L.R.(1922) 46 Bom. 1009. The same view appears to have been taken by Dr. Rash Behari Ghose in his well-known work on the Law of Mortgages at page 524, Vol. I (5th Edn.).
15. In this particular case, Timma was the owner of a charge or encumbrance before he became a representative of. the mortgagor and became entitled to the property. Leaving the question whether he became absolutely entitled to the property or not for the time being out of consideration in view of Act II of 1904, we will have to determine, on the language of the section, whether the continuance of the charge or mortgage was for Timma's benefit or whether he made any declaration either by express words or necessary implication that the charge or encumbrance which he had acquired in 1899 continued to subsist in 1905 when he became the representative of his natural son Akkappa the mortgagor.
16. It has been argued by the learned Counsel for the respondent that Section 101 has, in the absence of any intervening encumbrances, no application. In other words, the contention is that the doctrine of merger must be held to come into operation in every case when the owner of a property or encumbrance happens to become the owner of the encumbrance or property unless an intervening encumbrance had been created in the meantime, i.e., between the time when he was the owner of the property or encumbrance and the date on which he subsequently acquired the encumbrance or the property. There is nothing in the language of Section 101 of the Transfer of Property Act which would justify us in imposing a condition which is not to be found in the section itself unless it be that some other principle of law is attracted which renders it incumbent upon us to read something more in the section; but if as we have said before, the case falls within the ambit of that section and no other principle of law is found which has to be super-imposed on the provisions contained in the section, it would be impossible for us to go to English or to any other system of law to find what the Indian law on the subject is. We would have in that case to be governed by the statute law in force in this country in preference to any other law and apply it regardless of the principles that are being acted upon elsewhere.
17. A number of rulings were cited on behalf of the parties in this connection and since, as we have said before, there is nothing in the words of Section 101 of the Transfer of Property Act itself, it would be better to examine the decisions with the object of ascertaining if it is essential for us to introduce any other principle and read the provisions of the section subject to that principle.
18. The first case on which great stress was laid by the learned Counsel for the respondent was that of Bhavani Kuwar v. Mathura Prasad Singh (1912) 23 M.L.J. 311 : L.R. 39 IndAp 228 : I.L.R. 40 Cal. 89 . The facts of that case briefly were that a mortgagee brought a suit on the basis of his mortgage deed and purchased the mortgaged property himself on the 19th March, 1900, in execution of his decree. Nine days later a charge for arrears of land revenue arose and the land was sold by the Collector. The revenue sale purchaser sued to recover possession and the mortgagee set. up his mortgage as a defence. This contention, although it found favour with the Courts in India, was overruled by their Lordships of the Privy Council, who held that the mortgage was extinguished by merger. One of the reasons given by their Lordships in their judgment was that there were no interests of any kind existing oil the 19th March, the crucial date in question, which could enter into account or be taken into consideration so as to impede the full and complete ownership of the estate as such. They also adverted to the fact that the whole property, and not merely the equity of redemption, was put for sale by the Court in execution of the mortgage decree and purchased by the decree-holder and that even if a stranger other than the mortgagee had purchased the property his position would have been the same as that of the mortgagee purchaser. Mr. Narasimhachar however drew our attention to their Lordships' observation appearing at page 103, which reads as follows:
And it would seem to follow as a necessary consequence that when the mortgagee thus became the purchase and owner of the subjects mortgaged, he was not in a position to maintain as against himself, or as against third parties unconnected with mortgage transactions upon the property, the position that his mortgage still remained an incumbrance thereon.
Emphasis was laid by the learned Counsel for the respondent on the underlined words and he urged that their Lordships intended to lay down that if a mortgagee became a purchaser and owner of the subjects mortgaged-such as Timma was after he had succeeded to the impartible estate-he or the plaintiff who is no other than Timma's legal representative would not be able to maintain as against third parties-such as his client who happens to be a stranger purchaser of the property is the position that Timma's mortgage still remained alive and did not merge in the equity of redemption. We do not understand their Lordships to mean anything of that kind. They were not intending to lay down the whole of the law in that sentence but were merely confining their attention to the usual type of cases in which a merger ordinarily takes place. This, would be clear when we find that towards the close of' the very next paragraph they expressed themselves as follows:
On the 19th March, 1900, the crucial date in question there were no interests of any hind to enter into account or consideration so as to impede the full and complete transfer of ownership of the estate as such.
If Mr. Narasimhachar's contention be correct, why did their Lordships use the expression 'interests of any kind'. It would be futile to contend that this expression was loosely used by their Lordships in the judgment or that they were meaning to refer to mesne incumbrances alone when they used these words. In the present case, there are interests of one kind which have to enter into account or to be taken into consideration. We have already pointed out that when Akkappa died, the Kalahasti estate was very heavily encumbered. It was therefore only natural or, would in any case be, beneficial, for Timma to keep the mortgages which he had taken from Akkappa during the time that the latter was the holder of the impartible estate, distinct and separate.
19. It might be mentioned here that in order to advance his argument Mr. Narasimhachar urged that Timma's personal property became liable for the debts due by Akkappa although his liability, he conceded, had to be limited to the extent of the estate received by the former from the latter. He argued that the decree was not against the estate of Akkappa but to the extent of the estate of Akkappa in his, i.e., Timma's hands and this meant that even his personal property was liable to discharge the debts although to the extent of the estate received by him from Akkappa. The contention was so unreasonable and would have led to such startling results that it would have been impossible for us to accept it, even if Section 52 of the Code of Civil Procedure had not been fortunately as explicit in this respect as it is. But a perusal of that section leaves no room for doubt that the contention is entirely wrong and it is the duty of the decree-holder to proceed against the estate of the deceased first and only when no such property remained in his legal representative's possession that the decree-holder is entitled to request the Court to proceed against the legal representative's property and this also after he, i.e., the legal representative, fails to satisfy the Court that he had duly applied such property of the deceased as was proved to have come into his possession.
20. The next case in the chronological order on which stress was laid by the learned Counsel for the respondent was that of Arumughasundara Maharaja Pillay v. Narasimha, Aiyar (1915) 29 M.L.J. 583. Where a Division Bench of this Court held that if a mortgagee purchased the equity of redemption, the mortgage or encumbrance would be merged in the subsequent purchase in the absence of any mesne encumbrances on the property. The facts of that case are given fairly clearly in the head note to that decision which reads as follows:
A mortgaged his property to M who assigned his mortgage right to B's father in 1892. In 1897. B's father obtained a fresh mortgage from A for the amount due on the mortgage of 1892. On his father's death, B succeeded to his mortgage right. In 1899 B purchased A's equity of redemption in the mortgaged property. In 1905 B sold the same property to A purporting to reserve his rights under the mortgages in favour of his father. Subsequently B instituted a suit on foot of the mortgages reserved in the conveyance of 1905.
From the facts, it would be seen that at the time when the equity of redemption of the morgaged property was purchased by B in 1899, there were no encumbrances and no reasons of any other kind which could have led him to declare either by express words or necessary implication that the mortgagee's rights which had devolved on him from his father would continue to subsist separately from the equity of redemption subsequently purchased by him or that such continuance would have been for his benefit. Since the relevant point of time which we have to bear in mind in order to ascertain whether the charge or encumbrance was extinguished or not is that of the subsequent acquisition by the prior holder of a charge or an encumbrance or of absolute title to the property, it would be immaterial to consider the subsequent circumstances which might have led him to act differently. It is on that date that the Court would have to ascertain whether there was a merger or to use the words of the section 'an extinction of liability under the charge or incumbrance' and this could only mean whether there was any declaration express or implied by him or whether it was beneficial for him to keep his subsequently acquired rights separately and not permit them to be merged in his rights of which he was already the owner on the date of his subsequent acquisition. If we bore those considerations in mind, we would have to respectfully agree with the decision of the Division Bench of this Court that there was a merger of the mortgagee's rights, which had devolved on B on his father's death, with the equity of redemption which he had purchased in 1899. This is because there were no circumstances existing on that date which could have possibly led the purchaser of the equity of redemption in 1899 to keep the mortgagee's rights unextinguished and once they were merged and the purchaser of the equity of redemption became the complete owner of the property, it would not have been possible for him later on to separate the mortgagee's rights which his father had acquired in 1892 or 1897 and alienate the equity of redemption alone which he, i.e., B had purchased in 1899. We have, therefore, absolutely no hesitation in coming to the conclusion that the decision of that case was unassailable. But in concurring with the judgment, delivered by Sir John Wallis, C.J., as he then was, Mr. Justice Seshagiri Aiyar, observed that he understood the decision in Bavani Kuwar v. Mathura, Prasad Singh (1912) 23 M.L.J. 311 : L.R. 39 IndAp 228 : I.L.R. 40 Cal. 89 , to lay down that when there were no encumbrances, there would be an extinguishment of the rights under the mortgage when the equity of redemption was acquired. White interpreting Section 101 of the Transfer of Property Act he observed at page 594 as follows:
It is clear that section contemplates the existence of puisne incumbrances. Unless that be the object, the clause relating to the subsistence of the encumbrance being for the benefit of the purchaser can have no meaning. The person who becomes absolutely entitled to the property cannot reserve in his favour and as against himself Ms own mortgage. As I read the section it leaves untouched the general rule of law that when a mortgagee purchases the equity of redemption the encumbrance in his favour is extinguished. It. only enacts that where there are other mortgages on the property an intention will be imputed to the mortgagee purchaser that he intended to keep alive his own mortgage as a protection against subsequent claimants. The discussion in the House of Lords in the ease already referred to shows that the rule enabling the purchaser to fall back on his mortgage is an infringement of legal rights. Consequently a strict construction, should be placed on this provision of law. I am of opinion that the mortgagee purchaser can use his previous mortgage only as a shield if there are mesne encumbrances, and that also only in respect of the properties which are covered by such encumbrances.
With very great deference to the learned Judge, we cannot agree to most of these observations. There is nothing in. Section 101 of the Transfer of Property Act itself which provides for the existence of puisne encumbrances. That is why the learned Judge uses the word 'contemplates' in the first sentence quoted above. The reason for this conclusion is given by him in the next two sentences. The provisos or exceptions which have been added to the section lay down clearly when may a person 'reserve in his favour and as against himself his own mortgage' and when that encumbrance would not be extinguished. It cannot be denied that the existence of puisne encumbrances may be one such consideration: but to say that it is the only consideration does not seem to us to be justified. There may be other reasons for instance, such as those existing in. the present case which may lead a previous mortgagee to keep his mortgage rights unextinguished or which may lead the Court to hold that the continuance of his previously acquired rights was for his benefit. In fact as we read the section we are of opinion that if a purchaser makes a declaration, either express or implied that he would keep his subsequently acquired rights as subsisting and not allow them to be merged, it would be unnecessary to find whether such subsistence was to his benefit or not so. Under the section he is the sole arbiter of his destinies and it seems to be impossible to substitute any other person's will for his. Then the learned Judge adverted to the general rule of law that when a mortgagee purchases the equity of redemption, the encumbrance in his favour would be extinguished. By the general rule of law, we suppose he means the general rule of common law of England. So far as the Indian law is concerned, Section 101 codifies the law of merger arid it cannot be denied that it is exhaustive so far as it goes. If a mortgagee who purchased the equity of redemption happened to fall within the ambit of this section, there seems to be no justification for us to go to the common law of England. Moreover there are instances where a person may occupy a dual or a double capacity but these do not seem to have been considered by the learned Judge. We will discuss this question in some detail a little later when we examine Mr. Narasimhachariar's arguments which were advanced in connection with cases where debts were held to have been extinguished by the coalescence of the rights of creditors and the duties of debtors in the same persons. The learned Judge then goes on to say that Section 101 only enacts that when there are other mortgages on the property, an intention will be imputed to the mortgagee purchaser that he intended to keep his own mortgage alive. We are afraid we do not find anything in Section 101, which will lead us to limit the application of that section to those cases only where there are other mortgages on the property. Then there is nothing in the section that the mortgagee purchaser can use his previous mortgage only as a shield and cannot use Ms previous mortgage which has not been extinguished under Section 101, as a spear or by way of an attack. In coming to that decision the learned Judge referred to an old decision of this Court in Ramu Naicben v. Subbaraya Mudali (1873) 7 M.H.C.R. 229, where it was held that the mortgage right could only be used as a shield against puisne encumbrances. We find nothing in Section 101 which would entitle a person who has acquired an absolute title to the property or happens to become a charge or an incumbrance holder of the property of which he was the owner to plead the charge or incumbrance only by way of defence and not to enforce the same against the puisne or the mesne encumbrancers as a plaintiff. See in this connection cases reported in Polayya, Dora v. Anantha Patro : AIR1936Mad61 and Arumugha Bathan v. Semba Goundan : AIR1936Mad814 .
21. The third case to which our attention was drawn was that of Raja of Kalahasti v. Sree Mahant Prayag Dossjee Varu : (1916)30MLJ391 . It is interesting to observe that this was the appeal which was brought by Timma himself. It is true that it was held in that case that where a mortgagee became also entitled by inheritance to the equity of redemption, his rights under the mortgage would be, unless there were puisne encumbrancers against whom he was to be protected, extinguished. But this judgment simply follows the observations by Seshagiri Aiyar, J., in Arumughasundara Maharaja Pillai v. Narasimha Aiyar (1915) 29 M.L.J. 583 and advances the position no further.
22. Two more cases of Lahore were cited during the course of Ms argument by the learned Counsel for the respondent. The first one was that of Gobind Sarup v. Kuldeep Singh A.I.R. 1924 Lah. 377, where it was held by a Division Bench of that Court that part II of Section 101 of the Transfer of Property Act would not apply where no intervening encumbrances existed and where a merger of a lesser estate takes place in a greater estate as distinguished from the merger of a lower in a higher security. We have already referred to Section 101 in some detail in an earlier portion of this judgment and it is unnecessary for us to repeat the reasons that have led us to hold that the last portion of Section 101 could not be necessarily confined to those cases alone where there were intervening encumbrances. No reasons have been given by the learned Judges for coming to a contrary decision and we have, to some extent, discussed the cases on which their opinion was based. The only case to which we have not made any reference so far was that of Mohesh Lal v. Mohant Bawan Das , where it was held by the Judicial Committee that the question whether a mortgage which was paid off was kept alive or was extinguished depended upon the intention of the parties and the mere fact that it had been paid off could not decide the question whether it was or was not extinguished. In coming to that decision, their Lordships had referred to Adams v. Angell (1877) L.R. 5 Ch.D. 634, where it was held that the question 'whether a mortgage which was paid off was kept alive or extinguished depended on the intention of the parties' and since in that case no intention to the contrary was expressed or could be deduced, it was held that the person who made the payment and claimed to be the owner of the estate must be taken to have intended that the money was to be applied in extinguishing the charge. While stating the rule on the subject their Lordships referred to the following observations made by the Master of the Rolls in that case:
In a Court of equity it has always been held that the mere fact of a charge having been paid off does not decide the question whether it is extinguished. If it is paid off by a tenant for life without any expression of his intention, it is well established that he retains the benefit of it against the inheritance; for, although he has not declared his intention of keeping it alive, it is presumed that his intention was to do so, because it is manifestly for his benefit. On the other hand, when the owner of an estate, in fee, or in tail, pays off a charge, the presumption is the other way, but in either case the person paying off the charge can, by expressly declaring his intention, either keep it alive or destroy it.
This would show as we have ventured to point out before, that the existence of another incumbrance was only one of the reasons which could have led a person who acquired an absolute title to the property or a charge or an incumbrance as the case may be, to keep the charge or encumbrance alive and not the sole reason for its continuance. This case cannot thus be said to be an authority for the proposition that a mortgagee or an owner of an absolute estate can be held to have kept the previous charge alive only when there are intervening incumbrances in existence. It is unnecessary in the present case to go into the second reason given by the learned Judges of the Lahore High Court to hold that Section 101 was not applicable. We refer to what was observed by them in regard to the merger of a lesser estate taking place in a greater estate as distinguished from a merger of a lower in a higher security. They were apparently adverting to a distinction between what they called an estate and security.
23. The other Lahore case was that of Lala Lakhmi Chand v. Bhai Santokh Singh (1930) 12 Lah.L.J. 56, where the following observations were made by the learned Judges:
If there is a mesne mortgagee, then it is conceivable that the prior mortgagee who acquires full proprietary rights may keep alive his prior mortgage and use it as a shield, if occasion arises. In the present case, there was no occasion whatsoever for the mortgagee joint family represented by Pratap Singh to keep alive the three mortgages. It was a straight dealing between the mortgagee on the one side and the mortgagor on the other, whereby the mortgagee obtained the sale deed of the equity of redemption from the mortgagor and thus acquired full ownership, the result of the transaction being the confluence of the interests of the mortgagor and the purchaser of the equity of redemption. Thus, the doctrine of merger fully came into operation.
With great deference to the learned Judges who decided that case, we do not find ourselves in agreement with the proposition as enunciated by them. According to the learned Judges, it is only when a mesne mortgage existed that it would be possible for a prior mortgagee of a property who acquired full proprietary rights in that property to keep his prior mortgage alive and that also by using them merely as a shield and not by way of attack. This, we have already tried to show, cannot be legitimately inferred either from the words of the section which we are called upon to construe or from the cases decided by their Lordships of the Privy Council to which reference has already been made. According to the learned Judges, in a straight dealing between the mortgagee on the one side and the mortgagor on the other, it is not possible for the mortgagee to keep his mortgage alive and distinct from the equity of redemption which he acquires subsequently. We cannot, with great respect, assent to that statement in the way in which it was stated. It would be so however if there was no reason for the mortgagee to keep his mortgage alive at the time when he acquired the equity of redemption or in other words when the keeping of these two rights separately was not to his advantage or when there was no express or implied declaration by him to that effect.
24. Our attention was then drawn by the learned Counsel for the respondent to another decision of their Lordships in Malireddi Ayyareddi v. Gapalakrishnayya (1923) 46 M.L.J. 164 : L.R. 51 IndAp 140 : I.L.R. 47 Mad. 190 , in which their Lordships observed that where there were several mortgages on a property, the owner of the property might by paying off his earlier charge treat himself as buying it and standing in the same position as that of his vendor or, to put it in another way, he may keep the encumbrance alive for his benefit and thus come in before a later mortgagee. This is not different from what we have understood the rule to be but learned Counsel obviously wished to rely on the exception stated by their Lordships that this rule would not apply if the owner of the property had covenanted to pay the later mortgage debt. This limitation was mentioned by their Lordships for the obvious reason that if a person was under a liability to pay, he must be, when paying his debt, held to have discharged his own liability and as it would thus follow as a necessary con-elusion that the security which depended upon the existence of the debt was extinguished as soon as the debt itself was paid off and ceased to exist. This is however a different matter and has nothing to do with the case which we are now called upon to decide. Here Timma had never agreed to become personally liable for the debts incurred by his predecessor, Akkappa and the case could not therefore fall within the exception enunciated by their Lordships of the Judicial Committee. It might be however useful that even in this decision Malireddi Ayyareddi v. Gopalakrishnayya (1923) 46 M.L.J. 164 : L.R. 51 IndAp 140 : I.L.R. 47 Mad. 190 , their Lordships observed as follows:
It is further to be presumed, and indeed the Transfer of Property Act, Section 101, so enacts, that if there is no indication to the contrary the owner has intended to keep alive the previous charge if it would be for his benefit.
This, in our opinion, clinches the matter and puts an end to the contention raised by Mr. Narasimhachar. It is true that there is an observation in the Law of Mortgages by Dr. Ghose that:
A merger can take place only when a security comes into immediate contact, so to speak, with the ownership, or in other words, when they unite without any outstanding interest in a third person.
But we believe that the learned author was contemplating the ordinary case where a puisne mortgagee acquires an absolute interest subsequently and happens to find no intervening encumbrances existing at the time.
25. It was, however, urged that since Akkappa was liable to pay the debt and if he had paid the debt, the security would have been extinguished, his heir and legal representative Timma should similarly be, as being so to say a continuation of Akkappa's person, held liable to pay and if he paid or otherwise became the owner of the mortgagee's rights, the debt should be held to have been paid and the security extinguished. This is really the same argument put in other words to which reference has already been made. An heir is not personally liable for the debts of the person of whom he is the representative and there is no warrant for the statement that Timma had made any covenant that he would be personally liable to pay the debts of the person to whose rights he had succeeded.
26. On behalf of the appellant Mr. Satyanarayana Rao referred to several cases, two of which Dinobundhu Shaw Chowdhry v. Jogmaya Dasi I.L.R.(1901) Cal. 154 and Mahalakshmi v. Somaraju : AIR1939Mad393 , were cited to show that the existence of mesne encumbrances was not the only reason which could prevent merger, from taking effect. Both of these were cases where property was found to have been mortgaged at the time when it was attached and the subsequent mortgage in one case or sale in the other were effected by the mortgagors with the object of paying off the prior incumbrances. After the prior incumbrances were paid off-the persons who had paid these amounts, when faced with the attachments effected on the property before the dates of their payments but after the dates on which prior incumbrances were created, claimed to be subrogated to the rights of prior charge holders and urged that the mortgagor's liabilities under the prior encumbrances were not extinguished. It was held that the intention of the parties in the circumstances was that the earlier morgages when paid off should not be extinguished but kept alive for the benefit of the charge holders who had paid for the encumbrances created before the attachment, although actually paid after the attachment had been effected. The decisions might have been, if we were otherwise satisfied as to the soundness of the contention put forward by Mr. Narasimhachar, capable of being distinguished on the ground that the rights created by the attachments were very similar to those created by mesne incumbrances and had to be governed by the same principle. These cases cannot thus support the appellant's contention. The third case referred to us was that of Dulhin Lacckambatit Kumari v. Bodh Nath Tiwari A.I.R. 1922 P.C. 94 : L.R. 48 IndAp 485 . The facts of this case were that one Mathura Nath Ghosh who was a proprietor of a Mauza granted a Mukarrari lease respecting Jadua patti in favour of two persons D and N of a Tewari family. Sometime later the proprietor of the Mauza granted a patni lease of the whole Mauza to two other persons T and K of the same Tewari family. Shortly after this T sold his share of the patni lease to K. It was contended in this case that D and N who had acquired the Mukarrari lease of the patti in the first instance and T and K who took the patni lease of the whole Mauza later were members of a joint family and inasmuch as these rights were acquired by members of the same family, they should be held to have merged. It was denied that D and N on the one hand and T and K on the other were members of a joint Hindu family. In holding that there was no merger their Lordships of the Judicial Committee assumed for the sake of argument that these persons were members of a joint family and observed as follows:
But, if the doctrine of merger is appealed to, that doctrine must be taken as it stands. Merger is not a thing which occurs ipso jure upon the acquisition of what, for the sake of a just generalisation, may be called the superior with the inferior right. There may be many reasons-convevancing seasons, reasons arising out of the object of the acquisition of the one right being merely for a temporary purpose, family reasons and others -in the course of which the expediency of avoiding the coalescence of interest and preserving the separation of title may be apparent. In short, the question to be settled in the application of the doctrine is, was such a coalescence. of right meant to be accomplished as to extinguish that separation of title which the records contain? This is in accord with settled law, of which two recent instances may be given--namely Capital and Counties Bank v. Rhodes (1903) 1 Ch.D. 631, and especially the judgment of Farwell, J., in Ingle v. Jenkins (1900) 2 Ch. D. 368.
'The doctrine of merger being thus applied to the present case, it is found, on an examination of the circumstances, that they show with great clearness, that instead of the mukarrari lease having been extinguished by merger, it was, on the contrary kept up as upon the one hand the source of right to the cultivators proceeding from the mukarraridars, and upon the other hand, the separate grant of subsisting right to the mukarraridars by their lease in respect of which the payment into the patni exchequer of the specific Rs. 66, specified in the mukarrari lease, continued to be made. The argument of Mr. Kenworthy Brown upon the documents made this clear. It is not, however, necessary to enter upon the details thereof, for both of the Courts in India, after full investigation, are satisfied in that particular. Had there been a true merger in fact, and in intention, the whole of such transactions would, in all probability, have taken a different shape, and in particular no more would have been heard of the mukarrari rent.
'This raises the last question in the case, and it is one of some importance. It was strongly argued by the appellants' counsel that it was sufficient for his purpose to show that mukarraridars and patnidatr, were of the same joint family, and that the difference of name of the one set of persons from the other person was of no account.
'Their Lordships are not of this opinion. The difference of name, it is not going too far to say, may be at least an element, and an important element, in the question whether merger was ever truly intended. There may, under the law of England, be complete fundamental identity of right between the holder under one title, and the holder under another, but a convenient method of indicating intention on the subject is to create, for the purpose of keeping up the separation of title, a trust by which merger in the legal sense is clearly avoided. In short, although the same person is truly and comprehensively the owner of all the rights which might have coalesced, the substance of separation is preserved by the form of title not having been allowed to merge into the one name.
'To apply this doctrine to the Indian joint family, when a joint family interest might be said to cover rights acquired to property by several individuals belonging to the family, but when the rights, which might otherwise be merged, are conferred by titles taken in the names of different members of the family, and thereby the means of articulate differentiation is continued as effectively as by the artifice employed in England of the setting up of a trust ad hoc, then it appears to their Lordships that these circumstances are elements, for consideration.
It must be admitted that their Lordships were considering the rights created under the Mukarrari and patni leases in this case while we are concerned here with a mortgagee's rights who had succeeded to his mortgagor's estate but since their Lordships were dealing with the principles underlying the law of merger and also referred to the devices adopted by people in England as a convenient method of indicating intention and for the purpose of keeping up the separation of title when there is a fusion of two kinds of rights in one person we have quoted extensively from this judgment. These observations would be of great help to us when we are considering the effect of Timma's action in making a transfer of his rights to his wife Chinnamma Rao. Two other decisions were cited by Mr. Satyanarayana Rao in this connection. There are observations at pages 543 and 544 in one of them Subbarayudu v. Lakshminarasamma : AIR1939Mad949 , which go to support his contention. It is true that they are obiter and were not, as it was a case of conventional subrogation, necessary for the decision of that case. But since they were made by our esteemed brother Venkataramana Rao, J., and were based on a consideration of a large number of cases, they are entitled to great respect. The last case on which reliance was placed was a decision by their Lordships of the Privy Council in Someshwari, Prasad v. Mdheshwari Prasad I.L.R.(1936)Pat. 1 : L.R. 63 IndAp 441 where in holding that the interest of a Khorposhdar in the land granted to him for maintenance by the holder of an impartible estate did not merge in the estate on its subsequent purchase by the grantor, Sir Shadi Lal who delivered the judgment of the Board observed at page 7 as follows:
There is neither a statutory provision in India nor any rule of common law which can be cited in support of merger in a ease of this character. Nor can merger be established on the doctrine of justice, equity and good conscience. Even in eases where a lesser interest vests in a person who holds the greater interest, merger would depend upon the intention, of that person. If no intention is expressed or implied, or the party is incapable of expressing his intention, the Court has to consider what is beneficial to him.
It is true that this was not a case to which Section 101 could in terms be held to be applicable; but the observations make it clear that the language of Section 101 of the Transfer of Property Act and in any case, the principles underlying it were taken by their Lordships into consideration.
27. The same result was arrived at by the House of Lords in The Liquidation Estates Purchase Co., Ltd., v. Sir John Christopher Willoughby (1898) A.C. 321, when reversing the decision of the Court of Appeal that in the absence of any evidence in the deed or the circumstances of any intention to extinguish the charge and when it was for the purchaser's benefit to keep it alive, the assignment of a charge upon the property to a person who had purchased its equity of redemption was not extinguished.
28. Our conclusion, thus, is that even if it be assumed for the sake of argument that Timma became absolutely entitled to the villages mortgaged to him by Akkappa during his lifetime, there would be no merger under Section 101 of the Transfer of Property Act and the provisos or exceptions to the section would prevent the subsequent rights from being merged in the encumbrance which he held previous to his accession to the impartible estate.
29. There is, however, another difficulty in the respondents' way in this connection which seems to us to be insurmountable. It would be remembered that Timma succeeded to the impartible estate in 1905. Whatever the legal position of the impartible estate holders before the Impartible Estates Act came into being was, there is 110 doubt that they could not after that enactment be regarded as absolute owners of the estate, their powers of disposal to a large extent being limited by virtue of Section 4 of that Act. This enactment reduced the status of these estate holders to be that of merely qualified owners. If that be so, even the first portion of Section 101 would not be applicable to the facts of the present case and the encumbrances held by Timma before he succeeded to the impartible estate would not merge in the equity of redemption for the simple reason that he could not be held to have become an absolute owner of the property on Akkappa's death. Ghose in his Law of Mortgage (Vol. I, p. 524, 5th Edn.) states the proposition thus: But I believe the expression 'absolutely entitled' which occurs in the section does not imply the absence of intervening charges but has reference only to the nature of the estate and is used for the purpose of designating what English lawyers call the fee simple as opposed to a limited estate.
If I am right in this view no question of merger can arise in the case of a person who becomes entitled only to a qualified estate in the property ....
To the same effect was the decision in Sonaulla, Karikar v. Abu Sayad Md. Ismail I.L.R.(1929)Cal. 473, to which we had referred in another connection. Mr. Justice Suhrawardy who delivered the judgment in that case observed as follows:
Where the full interest and the limited interest coalesee, the limited interest is extinguished. But in the present case, there was no combination of the two interests. The word 'absolutely' is used in the' section to indicate that the interest in which the encumbrance should merge must be the absolute interest and not a limited one. And the incumbrancer must become entitled to the absolute interest.
If this reason is sufficient to prevent the extinction of liability and to avoid a merger, it would be unnecessary to go into the question of intention or that of benefit. But since we have discussed the questions of intention and of benefit in some detail already, it would be better if we record our conclusions in that respect as well. The impartible estate, as we have already stated in the beginning, was heavily encumbered during Akkappa's lifetime (Exs. Z-1 and Z-2) with the result that it was taken over by the Court of Wards sometime in 1900 and continued to be administered by them for about three months even after Akkappa's death in 1905. Shortly after Timma's succession to the estate, however, the Court of Wards must have considered the task of administration of such an encumbered estate to be hopeless and decided to discontinue their own administration and delivered possession of the estate to Timma. Timma, thus succeeded to the impartible estate at the time when it was heavily encumbered and it would have been obviously to his benefit to keep the encumbrances which were already executed in his favour alive and distinct from the impartible estate which had devolved on him subsequently. This by itself would be enough to hold that the liability under the mortgage Ex. F-1 was not extinguished; but Timma's conduct almost from the time that he succeeded to the impartible estate, also leads to the same conclusion. It was admitted in paragraph 10 of the amended written statement of the 1st defendant that a sum of Rs. 21,045-2-3 was received by Timma between June, 1906 and September, 1908, in regard to his mortgage. This payment is supported by Exs. 1-C, printed at page 175 and Ex. AA-1, printed at page 151 of the records. This would clearly show Timma's intention to keep it separate from the equity of redemption to which he succeeded in 1905. We also find that he received three more payments in 1914 and 1916 towards Ex. Rules (Exs. XVI, XVII and XVIII) aggregating to Rs. 1,900. But before this Timma attempted to transfer the mortgage Ex. F-1 to his wife Chinnamina Rao in 1912 (Ex. PP-1), under legal advice and then having split up the amount due under that, deed into two, executed two mortgage deeds Exs. QQ and RR, apparently in his capacity as a representative of Akkappa-the mortgagor. Ex. QQ was a usufructuary mortgage for Rs. 50,000 and Ex. RR a simple mortgage for the balance of Rs. 63,630 which was according to him due at the time as regards the mortgage Ex. F-1. The property covered by Ex. RR, it may be remembered, was new and did not form a part of the mortgage executed in 1899.
30. The criticism by Mr. Narasimhachar in regard to this conduct relates first of all to the time when this intention might be taken to have been expressed by Timma. His contention is that Timma should have declared either expressly or by necessary implication OH the date on which he succeeded to the impartible estate in 1905 that he would keep the mortgages executed by Akkappa in his favour alive and distinct from the rights which he acquired to the estate on Akkappa's death. There is no doubt that the relevant date, in order to ascertain Timma's benefit was when he succeeded Akkappa. We have already shown how the merger of the encumbrances which he held with the equity of redemption would not have been for his benefit. As for the intention, the contention that the owner of a, charge or encumbrance must simultaneously with his succeeding to the equity of redemption, declare his intention to keep the charge or encumbrance alive expressly or by necessary implication and if he fails to do that, the liability must be hold to be extinguished is not sound. It would be enough in our opinion for him to do so within a reasonable time at least although the rule deducible from Hatch v. Skelton (1855) 20 Beav. 453 : 52 E.R. 678, appears to be as referred to in Halsbury, Vol. 13, paragraph 173, and as stated in Vol. 23, paragraph 767 (Hailsham) that his conduct during the remainder of his life would be relevant unless of course, he has already said or done something which would show that he has decided not to keep his previous encumbrance or charge distinct from his subsequently acquired rights. Akkappa died in May, 1905. Timma could not, however, get the impartible estate from the Court of Wards until August, 1905 and the receipt of money due under the mortgage deed Ex. F-1 in June, 1906, was not more than ten months after he succeeded to the estate. In the absence of any other conduct to the contrary, Timma's conduct in receiving the money towards his mortgage (Ex. F-1), in 1906, coupled with his subsequent conduct in trying to convey the security to his wife, leave no doubt in our minds as to his intention and the expression of that intention from 1906 onwards must be held in the circumstances to be sufficient.
31. This is however, not all. It was argued by Mr. Satyanarayana Rao that the mortgage Ex. F-1 was Timma's joint family property and since he and his son, the present plaintiff, were members of a coparcenary, the rights acquired by Timma under Ex. F-1 could not possibly merge with the rights which he acquired in his personal capacity as a successor of the impartible estate and that inasmuch as the capacities in both these cases were different, there could be no merger. In view of our decision that there could be no merger of the mortgagee's rights acquired by Timma with those which he acquired on his accession to the impartible estate under Section 101 either on account of the fact that he had not become absolutely entitled to the estate in 1905 or that the merger was not for his benefit and that he had been expressing his intention to the contrary from the time it was possible for him to do so, it seems to us really unnecessary to go into this question at this stage although it may be necessary to do so in connection with the gift which Timma is said to have made in favour of his wife Chinnamma Rao. We will not, therefore, discuss this question here but reserve it to be discussed, if necessary, later.
32. Learned Counsel for the respondent then urged that even if the encumbrance be held not to have been extinguished under Section 101 of the Transfer of Property Act, it must be held to have been so independently of that section as a person cannot be, on general principles of law, held to occupy the position of both a creditor and a debtor in regard to the same debt. The contention is that Section 101 is not exhaustive and does not provide for every case of extinction of liability. When a secured debt for instance, it was argued, ceases to exist by virtue of a payment, liability to discharge the debt would cease and the security for the debt must in consequence be found to have come to an end. No exception can be taken to this statement so far as it goes; but it, is in our opinion entirely useless to the respondent. Security in a case such as suggested by the learned Counsel for the respondent, would be extinguished by the acts of parties as soon as the mortgagor has paid the mortgage money after it became due and got the mortgaged property re-transferred or got an acknowledgment in writing (registered in cases where the mortgage deed was registered) to the effect that the mortgagee's rights have ceased to exist or that all the rights in derogation of the mortgagor's interest have been extinguished. It may also be extinguished by other acts of parties such as a remission or a gift or by operation of law, e.g., a decree for foreclosure. There is then no difficulty in agreeing with the contention that the term 'extinction of liability' is more general than that of 'merger' and the latter provides for only one of the methods by which liability is extinguished. But the learned Counsel goes wrong, in our opinion, when he adds that as soon as there is an identity of jurat persona of a secured creditor with that of his debtor, the liability for the debt must be held to have been extinguished and the security for the debt discharged. It must be borne in mind that we are not dealing here with cases where a person under a personal covenant to discharge the debt comes to occupy the position of a creditor. Cases of that type would be governed by decisions such as contained in Mahireddti Ayyareddi v. Gapalakrishnayya (1923) 46 M.L.J. 164 : L.R. 51 IndAp 140 : I.L.R. 47 Mad. 190 , to which we have already referred. But where there is no such covenant, the effect of agreeing to this contention would be really to amend Section 101 of the Transfer of Property Act. It cannot be denied that the case of a secured creditor who is or becomes absolutely entitled to the immovable property over which he had a charge or incumbrance would be covered by the first part of Section 101. In Mr. Narasimhaehar's words there would be an identity in such a case of jurat persona of the secured creditor with that of the debtor who is or becomes entitled to the immovable property. If this is correct, there should be an extinction of liability according to the learned Counsel for the respondent. But the section contains two provisos or exceptions-which we must ignore if (we) are to get the result desired by Mr. Narasimhachar and this, it is obvious, we cannot do. The fact is that the present case falls within the ambit of Section 101 and as long as it falls within the provisions of that section, it would be impossible for us to go beyond its terms--however plausibly the argument may be put. Two English cases were cited by the learned Counsel for the respondent in this connection. The decision in Hummel v. George Boutledge and Sons, Ltd. (1904) 2 Ch.D. 474 is governed by the same principle on which the decision of their Lordships of the Privy Council in Malireddi Ayyareddi v. Gopalakrishnayya (1923) 46 M.L.J. 164 : L.R. 51 IndAp 140 : I.L.R. 47 Mad. 1.90 , was based. A limited company which had issued certain debentures and had thus agreed to pay the debts for which the debentures were issued purchased some 16 debentures itself, subsequently. It was held that the result of the purchase of the debentures by the company was that in each case the debt was absolutely gone and the security had therefore also ceased to exist. Inasmuch as Timma had neither raised the loan as was done by the limited company nor had he, unlike the company, undertaken any personal liability for the same, this case can render no assistance to the respondent. The second ease was that of Ellis v. Kerr (1910) 1 Ch.D. 529, where a covenant to which some of the covenantor and covenantees were common was held void. This is not the plea raised in the present case. The contention just now is that the mortgagee's rights were extinguished as soon as they came to vest in a person who happened to become a representative of the mortgagor subsequently and this case is no authority for that contention. Moreover, as we have observed more than once in the course of this judgment that if we find a case covered by a provision contained in the statute law of this country, it will be our duty to apply it regardless of any consideration as to what the law in any other country is.
33. Since the present Section 101 of the Transfer of Property Act after its amendment in. 1929, would not apply to the facts of the present case, it was contended by Mr. Narasimhachar towards the close of his arguments on this point that the section after its amendment by Act XX of 1929 must be held to be retrospective in its operation and the present law must be held to have been in existence even before the Amending Act was passed. In support of this contention, he relied on a Full Bench decision of the Allahabad High Court in Tota Ram v. Ram Lal I.L.R.(1982) All. 897 . Under general principles of construction, retrospective effect cannot be given to a statute unless an intention to that effect is expressed therein in plain and unambiguous language or at least unless such an interpretation arises by necessary implication. (See also Srinivasalu Naidu v. Damodaraswami Naidu) A.I.R. 1938 Mad. 779. There is nothing in the Amending Act XX of 1929, which may lead us to construe that Act in that manner. It is impossible to hold that the other sections of the enactment were retrospective in character simply because only some of the sections were stated not to have any retrospective effect. This as observed by Mr. Justice Varadachariar in the Full Bench case of Lakshmi Amma v. Sankara-narayana Menon (1935) 70 M.L.J. 1 : I.L.R. 59 Mad. 359 .
may well be a provision, inserted ex majore cautela.
Nor is it possible for us to apply the principles underlying the amended section on the ground that it would be a safe guide to follow as laying down correctly the rule of justice, equity and good conscience for cases arising before the passing of the Act XX of 1929. This would be virtually holding the section to be retrospective in effect and to ignore that the Legislature must have intended to amend or alter the law from what it was before the Amending Act was passed, although the change in the language clearly points to the conclusion that the Legislature intended to amend the law. A. Division Bench of this Court in Kanjee and Muljee Bros. v. Shunmugam Pillai : AIR1932Mad734 , also takes the view that the Amending Act of 1929 cannot be held to be retrospective in its operation. We have, thus, no hesitation in repelling the contention raised by Mr. Narasimhachar that the amended section or the principles embodied in the amended section should be held applicable to a suit which was started two years earlier. Nor is it possible to hold that the Amending Act of 1929 was purely declaratory and was merely reproducing the law as it existed prior to that date. A comparison of the various sections on the old Act with the provisions contained in the Amending Act would show at once that such a contention is unjustified. For the above reasons we must hold that the rights under the mortgage deed Ex. F-1 were not extinguished when Timma happened to succeed to Akkappa.
34. The next important question which we have been called upon to decide in this case relates to the nature of the transactions covered by the deed of gift, dated the 19th August, 1912 (Ex. PP-1) by Timma favouring his wife Chinnamma Rao, of the mortgage which was executed by Akkappa in his favour on the 1st April, 1899 (Ex. F-1) and by the two subsequent mortgage deeds which Timma executed as the holder of the impartible estate on the 2nd January, 1913. The sum of Rs. 50,000 for which the mortgage was executed in 1899 had, according to Timma, swelled to Rs. 1,13,630 by January, 1913, when the two mortgage deeds wore executed. This debt was, as stated before, divided into the two bits, one of which was covered by the usufructuary mortgage Ex. QQ and the other by the simple mortgage Ex. RR which forms the basis of the present suit. The plaintiff's case is that the transfer of title under the deed of gift Ex. PP-1 and the, execution of the deeds of mortgage Exs. QQ and RR were effected under legal advice to prevent a merger-the use of Chinnamma Rao's name being really benami for Timma. It is true that the plea raised in the plaint was not happily worded and the plea of benami which was attempted to be made out at the hearing in the trial Court and before this Court was not expressly taken; but the user of the expression that the transaction was nominal seems to have been really intended to convey that Chinnamma Rao's name was benami and that Timma did not intend to part with the mortgagee's rights at all. As is well known, pleadings in India are not up till now, drafted with as much care and precision as they should be and it would not be proper or conducive to justice to interpret them very rigidly. Mr. Narasimhachao' took some pains before us to distinguish between a nominal and benami nature of a transaction and although we entirely agree with him that there is considerable difference between the two, we think that the case put forward in the plaint was not really different from what was attempted to be made out at the hearing. We have, therefore, to decide whether the gift by Timma in favour of his wife Chinnamma Rao was a real gift or was benami in character and merely intended to be for his own benefit. If the gift was real, the suit must fail as the mortgage then could not be enforced by the plaintiff who is Timma's son but by Rangamma as the daughter of Chinnamma Rao and on her, i.e., Rangamma's demise, by her son, the 5th defendant in the suit. Mr. Narasimhachar also attempted to argue the question that if the gift in favour of Chinnamma Rao was not real but was merely nominal or benami the mortgage deed Ex. RR in favour of Chinnamma Rao would be, as no money could then be said to have been due to her by the impartible estate, without consideration. Lastly it was contended that Timma was not entitled to effect the mortgage in. view of the limitations placed on holders of impartible estate by Act II of 1904.
35. To take up the question as to the nature of the gift first. It was pointed out to us by Mr. Satyanarayana Rao that the device to introduce Chinnamma Rao's name was resorted to by Timma with the object of keeping his capacity as a mortgagor distinct from his capacity as a mortgagee and even if legal title be assumed to be vesting in her, there would be a resulting trust in Timma's favour and would be enforceable on his death by his son-the present plaintiff. In order to determine the nature of this deed of gift it is necessary to take the position of parties, their relationship to each other, the surrounding circumstances, the motives which could govern their actions and their subsequent conduct into consideration.
36. As for the position of the parties to the deed of gift Ex. PP-1, the gift was made by a husband in favour of his wife. Ordinarily if a transfer is effected as between a husband and wife, the presumption, in the absence of any other circumstance to the contrary, would be that the transferee holds the property for the benefit of the transferor. The circumstances which were prevailing at the time when this document was executed by Timma, if considered along with the oral evidence, point to the conclusion that the object of this so called gift was to improvise a scheme by which the mortgage Ex. F-1 may be enforced. The Kalahasti estate, as shown by Exs. Z-1 and Z-2 was heavily encumbered and Timma could not, even after his succession to that estate, do very much to reduce that burden. This would be clear from the fact that he had himself executed a mortgage deed on the 4th August, 1908, for no less than a sum of rupees Six lakhs. Since Timma had succeeded to the estate of Kalahasti when it was so heavily burdened, he must have realised the difficulty of recovering the debt due to him under the mortgage deed Ex. F-1. The statement made by Mr. Srinivasachari, P.W. 3, who was a lawyer of some standing and who had special means of knowledge in regard to the facts to which he deposed, is, in our opinion, quite trustworthy and was not, in fact, challenged seriously on behalf of the respondents. It was not disbelieved by the trial Court and we have no doubt that he was a witness of truth. He was a senior member of the Chittoor Bar and retired from practice some three years ago. The statement of P.W. 2 is also more or less to the same effect.
37. Let us now examine the circumstances and the documents on which Mr. Narasimhachar has placed reliance in order to show that the deed of gift was real. The first circumstance on which he relied was that the donee happened to be Timma's second wife while the plaintiff was the son of the first wife Chellamma who had died before Timma married for the second time. Chellamma and Chinnamma were sisters. It was alleged that there was misunderstanding between the plaintiff and his father Timma at the time when the latter made the gift in favour of his wife, and that the son had instituted a suit against his father (O.S. No. 30 of 1910) alleging mismanagement and praying for the appointment of a receiver. This would have been of some assistance to Mr. Narasimhachar's clients but unfortunately for them we find that this suit was not fought out to the end and was withdrawn. Mr. Narasimhachar has been unable to show anything on the record which would lead us to presume that the suit was withdrawn because the plaintiff thought that it could not be successfully prosecuted against his father and not on account of some understanding having been arrived at between them. There is no reliable evidence on the record to show that there was any misunderstanding between the father and son on the date when the deed of gift was executed. The defence witness D.W. 3 who deposed to ill-feelings between the plaintiff and his father during the cross-examination by defendants 1, 3 and 5 had to admit in the cross-examination by the plaintiff that they became friendly a year after the suit had been disposed of and continued to be so until the father's death. D.W. 4 who was a more reliable witness does not say anything beyond the fact that the relations between the father and son were not friendly for sometime from 1910. The statement by P.W. 3 goes no further. On the other hand the statement by P.W. 5, who is an old man and being as he says a physician for both Timma and plaintiff to the effect that they began to live together after the suit was withdrawn, points to a different conclusion.
38. Our attention was next invited to a number of letters written by Timma to his counsel P.W. 3 in the case and letters written by P.W. 3 to Timma. As to the latter, we find the letters by P. W. 3 to Timma were not put to P. W. 3 in cross-examination although his statement, if true, would go to show that the deed of mortgage was transferred by Timma to his wife for his own benefit and simply because he could not bring a suit on the deed himself. The letters written by Timma to this witness, such as Exs. FFF, FFF-3 and GGG-4 are not very material for deciding the question whether the transfer by Timma was real. Since documents wore executed by Timma first in his capacity of a mortgagee and subsequently in the capacity of being a holder of an impartible estate, it is only natural that in his correspondence with P.W. 3, he would keep up the fiction and write to him in regard to the money due under the mortgage Ex. QQ in the name of his wife. But when the money in regard to Ex. QQ was received, and this is extremely important, it appears to have been credited to Timma in Timma's accounts (Ex. EEE). This document was challenged before us by Mr. Narasimhachar as a forgery. It happens to be in the handwriting of one P. Govindu and is signed in the end by one M. Pulliah, the cashier, both of whom died in 1938. It is proved by the statements of P. W. 1 and 2 who swore before the Court that they could identify their handwriting and signatures. The Court seal on this document, shows it was originally produced in the Chittoor Sub-Court in 1922 in O.S. No. 15 of 1922. This suit was disposed of in 1927, but before it was decided, the plaintiff instituted another suit (O.S. No. 1 of 1926) against Rangamma for the recovery of the Rs. 50,000 in regard to Ex. QQ. But when it was discovered that this money had been received by Timma himself and was duly entered in the chittas which were produced by the plaintiff in 1922 in O.S. No. 15 of 1922, the second suit had to be withdrawn. Had the document been forged in 1922 at the instance of the plaintiff, it is impossible to believe that he would have forgotten this fact in 1925 and brought a suit for the recovery of Rs. 50,000 against his step-sister. We have seen the document ourselves and it appeared to us to be genuine. The lower Court does not consider it safe to rely upon the solitary entry in this document as it does not contain Timma's initials and signatures ; but we consider it to be hardly likely that Timma, the Raja-of Kalahasti, as he then was, would initial or sign the chittas himself. The fact that it was filed after Timma's death does not detract from its value. It could not have been produced in Court obviously before a litigation started and there was no litigation in regard to this matter till December, 1919, when Timma died. It may be, that the document is in one person's hand, but if a person continues to be an accountant for a number of years as Govindu was, the fact that the whole of the document was in his hand, would not create any suspicion. To say that the whole document was written in one ink and what appears to be an innuendo underlying therein, at one time does not seem to us to be correct, and is not, in any case, borne out by anything on the record. The appearance of the document and the evidence of these witnesses unrebutted as it is, leads us to hold that the document was a genuine one and the money was received by Timma himself and credited in his account. If the money due under Ex. QQ was actually received by Timma himself as we find it was, it would throw considerable light on the nature of the deed of gift Ex. PP-1 and of the mortgage deeds Ex. QQ and Ex. Rules Similarly when certain monies were received by Timma by sale of certain villages covered by Ex. F-1 from D. W. 1 and for which sale deeds Ex. XVI, XVII, and XVIII were executed in his favour, they find a place in Ex. EEE. The statements contained in these sale deeds that the sales were effected with the object of paying off Chinnamma Rao and on account of Ex. QQ or Ex. RR show the reason for the sale but do not lead us to conclude, in the absence of any other evidence, that the money was actually received by Chinnamma Rao and not by Timma himself as shown to have been entered in Ex. EEE. Nor do certain claim petitions in Chinnamma Rao's name carry the case any further. It was Timma who was writing to his lawyer and since the deed of gift was executed in favour of Chinnamma Rao in order to enable him to recover the mortgage amount originally due under Ex. F-1 and this fact was known to his lawyer, there is nothing surprising in the petitions being made in Chinnamma Rao's name.
39. It was then argued that the plaintiff has made certain admissions and since he has not gone into the witness box to explain them, they should be taken to be more or less conclusive against him. These admissions are said to be contained in Exs. III and V. It must be remembered, however, that these statements appear to have been made not in regard to Ex. RR which forms the basis of the present suit but in regard to Ex. QQ which has been discharged already. Moreover, the original document (Ex. III) does not say, as the translation at page 209 of the printed records does, that a sum of Rs. 50,000 was 'due' to the Rani Garu. The word 'due' does not appear in the original although there is no doubt that after the sum of Rs. 50,000 the word Rani Garu does appear in the original. Whether it was intended to be conveyed that the money was due to her or only that the money was payable in her name is not clear. The second document on which reliance is placed is a copy of the plaint in O.S. No. 1 of 1925 (Ex. V). This suit, as observed before, was instituted by the plaintiff against his step-sister Rangairima and the plaint contained the plaintiff's allegation in paragraph 8 that his father was executing nominal deeds of sale and gift in favour of his wife Rani Chinnamma Rao and an assertion in paragraph 9 that the said deed of gift was void in law and passed no interest to his mother and that his father was not competent in law to make the gift. Then follows the statement in paragraph 12 on which stress was laid on behalf of the respondent that Rani Chinnamma Rao was put in possession of the properties. This might have been so but we cannot overlook the fact that the suit was for the recovery of the Rs. 50,000 which she was stated to have realised in regard to the mortgage Ex. QQ without any right or authority. The suit was withdrawn apparently because it was found to be based on a misapprehension and the statement even if taken to be an admission, cannot be, in view of the plaintiff's discovery that it was wrong, regarded to be of any value. But even if it be not so, it contains no admission which can be of any assistance to the respondent. The plaint has to be read as a whole and it is impossible to tear a sentence out of the context and read it regardless of what was said there both before and after. If read as a whole it cannot be construed to say that the plaintiff ever admitted that Chinnamma Rao was the sole owner of the money due under the mortgages Exs. QQ and RR.
40. Lastly, it was alleged that in the suit O.S. No. 1 of 1917 (a suit for redemption by defendants 1, 2 and father of defendant 3 against Raja Narasingh Girji) which was finally disposed of by their Lordships of the Privy Council and is reported in Narasingh Girji v. Parthasarathi Rayaynim Garu (1924) 47 M.L.J. 809 : L.R. 51 IndAp 305 : I.L.R. 47 Mad. 729 , Timma although a party did not raise any plea that any money was due to him under the mortgage-Ex. F-1 or its successors Ex. QQ and Ex. Rules This it was contended would show that the gift to Chinnamma by Timma was real. But no copy of Timma's written statement has been produced in this case, and in the absence of any evidence on the record, it is impossible to hold that Timma had raised no such plea.
41. In this connection, the defendants filed a Civil Miscellaneous Petition in this Court No. 5980 of 1939 with the object of producing certain documentary evidence on the record. The application is extremely belated. When the suit was remanded by the High Court in 1938, the defendants were authorised to file an additional written statement and produce such further documents as they considered necessary. They did file an additional written statement and produced documents. But no reference to the execution petition in E. P. No. 29 of 1921 in O.S. No. 9 of 1910 or to the counter-affidavit in E.P. No. 29 of 1921 was made by them. Moreover, it would be useless for us to permit certified copies of documents to be produced at this stage as we find that they are not being admitted by the other side. We are not satisfied that copies of an execution petition or of a counter-affidavit are public documents and do not require to be proved before they are admitted in evidence. Had we therefore been inclined to accept these documents it would have been necessary for us to permit additional evidence to be recorded. This in the circumstances we would not have permitted. The result is that C.M.P. No. 5980 of 1939 is dismissed.
42. The only other point which was urged by Mr. Narasimha-char to prove the reality of the gift was that Rangamma received a sum of Rs. 8,000 from the 2nd defendant in 1924. Bearing in mind her relationship to the 1st defendant, we are not inclined to attach any importance to this fact. Timma died in 1919 and two suits at least were brought after his death by the present plaintiff, the latter being, as we have said before, O.S. No. 1 of 1925 against Rangamma herself. There is no doubt that the contesting defendants, were, to a large extent, favouring Rangamma and this is borne out even by the position taken on behalf of the 5th defendant in the present suit.
43. Having considered all the circumstances and documents which were referred to us by Mr. Narasimhachar we are of opinion that the deed of gift Ex. PP-1 was not a real gift and was executed by Timma benami for his own benefit and that in executing Ex. RR, Timma conferred rights on Chinnamma Rao only with the object of her being able to realise the money for him. We have also no doubt that the devices of first making a gift and then executing Ex. RR were resorted to by Timma in order to enable him to save his mortgage Ex. F-1 from the hands of the creditors of Kalahasti estate and to be able to recover his money through Chinnamma Rao's agency. We have already quoted extensively from the judgment of their Lordships of the Judicial Committee in Dulhin Lachhambati Kumari v. Bodhnath Tiwari A.I.R. 1922 P.C. 94 : L.R. 48 IndAp 485 , which would show that what could be done in England by the creation of a trust for the purpose of keeping up the separation of title was attempted to be done by Timma under legal advice by the benami transfer of the mortgage to his wife Chinnamma Rao to avoid the complication which had come into existence on account of Timma's accession to the impartible estate and thus to save the money from being lost.
44. Since we have come to the decision that the gift and the mortgage made by Timma were benami for himself and not nominal, it is unnecessary for us to consider any further if the mortgage Ex. RR was without any consideration at all. That contingency could have arisen only if we were of opinion that the transfers under Ex. PP-1, Ex. QQ or Ex. RR were nominal only. Nor is it necessary for us to consider the question as to what result would have followed if we had found in favour of the reality of gift and transfers.
45. The only contention raised by the learned Counsel for the respondent, if we arrived at the conclusion that the transfers Ex. RR were benami, was that even if the mortgage deed (Ex. F-1) executed by Akkappa was found to be binding on the Kalahasti estate, a fresh security could not be, after Act II of 1904 had come into existence, created by Timma and the mortgage deed Ex. RR cannot therefore be enforced. The only restrictions placed on the proprietor of an impartible estate in regard to the alienation of such estates are to be found in Section 4 of that Act; and after reading the section the only question which emerges for decision on this point is whether under the circumstances existing in this case Timma would have been as a managing member of a joint Hindu family (not being the father or grandfather of the other coparceners) entitled to make an alienation of the joint property in such a manner as to be binding on shares of other coparceners independently of their consent. This resolves itself into the question whether the alienation by Timma (Ex. RR) was made either for legal necessity or for the benefit of the estate. There is no doubt that Akkappa had executed Ex. F-1 in 1899 as he owed money which he was liable to pay under the promissory note Ex. G and for the balance of what had still remained unpaid out of the decree in O. S. No. 12 of 1890. These Akkappa was bound to discharge as long as he was alive. This is however not enough. We must find if Timma's act could be justified on the ground of benefit or necessity to the estate. Since there can be no doubt that Akkappa would have been bound to maintain the members of his family out of the impartible estate in his possession, if the same be regarded for this purpose as joint family property and inasmuch as the decree in O.S. No. 12 of 1890 was passed against him in respect of the arrears of maintenance and some of these had remained unpaid and the promissory note Ex. G was executed by him partly in respect of interest which was payable by him towards the mortgage deed Ex. M and partly in discharge of the debt which he owed to one Mr. Sesha Aiyar, a Vakil of Tirupati, under a promissory note, dated the 30th April, 1898, which was transferred to Timma and for the maintenance allowance due to Timma for 3 months, the mortgage deed Ex. F-1 in 1899 must be held to have been executed by Akkappa for necessity and to discharge antecedent debts. If the alienation by Akkappa is found to be one for necessity and binding on the estate, a renewal of the same by his successor in 1913 must also be held to be effective and of a nature which Timma as a managing member of a joint Hindu family would have been entitled to make.
46. It was contended on behalf of the appellant that Timma was in any case incompetent to make a gift of the mortgage Ex. F-1 in favour of his wife Chinnamma Rao on the ground that it consisted of joint family property and could not be bequeathed after the plaintiff had been born as he undoubtedly was. The contention is that inasmuch as the will executed by the C.S.I. Rajah in 1881 (Ex. A) created the maintenance and other property given to Timma under the will as joint family property and formed a kind of nucleus out of which the mortgage Ex. F-1 was taken, it must be held to be joint family property. It was also urged that as under the Razinama, dated the 1st August, 1892 in O.S. No. 12 of 1890 (Ex. C) the decree passed thereon (Ex. C-1) and the agreement, dated the 14th October, 1896 (Ex. D), the amount of maintenance which was agreed to be given first by Muddu Venkatappa and then by Akkappa was not only for Timma's maintenance but was intended to be made also for the plaintiff, the mortgage which was taken by Timma must therefore he held to be the joint family property of the father, i.e. Timma and of his son--the present plaintiff. Mr. Satyanarayana Rao argued that if it could be shown that Timma had sufficient nucleus out of which the mortgage Ex. F-1 could have been secured by him the. onus must lie on the respondents to show that the money belonged to Timma personally and was not that of the joint family. It was submitted that not only was the maintenance granted by Akkappa to be regarded as belonging to the joint family but that the income of the village received by Timma under his father's will along with jewels and other movable property of high value which the former had received from the latter must be held to be joint family property--the possession of these properties being by itself sufficient to raise a presumption as to the joint family character of the money due under the mortgage Ex, F-1.
47. It would be remembered that although O.S. No. 12 of 1890 was instituted not only by Timma but on behalf of the present plaintiff also yet the allowance that was fixed in the compromise Ex. C was for Timma alone, and the plaintiff's name was not even mentioned. The words and his male descendants' used in paragraphs 1 and 4 of the agreement (Ex. D) do not in our opinion convey the idea suggested by Mr. Satyanarayana Rao that the maintenance was being granted to Timma and his descendants jointly. We take them to mean on the other hand that it was granted to him from generation to generation and could be claimed by his descendants only after his death. The question whether the right of a member of an impartible estate holder's family to maintenance arises as a result of his co-ownership in the joint family property which the impartible Zamindari is considered to be or is wholly inconsistent with the Zamindar's interest in the property does not call for a decision in this suit. There are two recent conflicting decisions on this point in this Court for which see Maharaja of Venkatagiri v. Rajarajeswararao : (1939)1MLJ831 and Obla Kondama Naicker Ayan v. Raja Venugopalaswami Obala Kondama Naicken Ayan : AIR1939Mad278 (A.S. No. 77 of 1935), to which one of us was a party. Based as both of them are on certain Privy Council decisions, we have no doubt that the difference would be authoritatively settled in due course. But whatever the basis of the right of maintenance may be, there is no doubt that Muddu Venkatappa, who took the impartible estates or even Timma who, so far as the maintenance and the village given to him under the will are concerned, took portions thereof under his father's will must be taken to have done so in accordance with the Privy Council decision in Ulaga-him Perunnal Sethurdyar v. Rani Subbalakshmi Nachiar (1939) 1 M.L.J. 812 : L.R. 66 IndAp 134 : I.L.R. (1939) Mad. 443 , as self-acquired property; and in the absence of any custom to that effect, the claim to maintenance at all events made by Timma in O.S. No. 12 of 1890 from his brother Muddu Venkatappa, although based on their father's will must be held to have been, in consequence of the compromise (Ex. C) and according to the decision in M. Subbayya Thevar v. Sivagnana Mamdappa Pandian : AIR1936Mad828 , made or granted not as of right but only by way of grace. It may be that the maintenance was granted by Muddu Venkatappa to all his brothers-but this did not mean that the grant was made to the head of each branch of the family as such and even if each brother's descendant is held entitled to sue subsequently, it would be on the basis of the agreement arrived at originally between Muddu Venkatappa and his brothers as modified by other agreements and not because they had any right to be maintained out of the estate independently of any custom or agreement. The village granted to Timma by his father C. S. I. Raja under his will may be in view of certain decisions, of this Court Nagalingam Pillai v. Ramachandra Thevar : (1901)11MLJ210 , Indoji Jithaji v. Kothapalli Rama Charlu (1919) 10 L.W. 498, Salakshi Ammal v. Doraimanikka Nadan : AIR1926Mad51 and Kasi Viswesra Rao v. yarahanarasimham : AIR1937Mad631 , regarded as ancestral property but when we find that this village was (together with other villages mentioned in the will) continued to be enjoyed in spite of the will by the holder of the impartible estate (for which see paragraph 6 in Ex. C) and was agreed to be given up by Timma at the time of the compromise the contention loses all its force. It is true that Timma was in possession of family jewels of some value which were given to him under his father's will but there is no evidence in this case that they were ever sold by him and being unproductive of any income, cannot be assumed to have formed a nucleus for or the means of acquiring the various items contained in the mortgage Ex. F-1 even if the same is regarded to be immovable property.
48. In these circumstances the presumption that the mortgage deed was joint family property would not arise in our opinion. It is interesting to observe that the plaintiff alleged in his plaint against his step-sister Rangamma (Ex. DDD) that all the jewels (presumably those which are now alleged to have formed the nucleus) were taken away by her.
49. This takes us to issue No. 5. As to the first portion of the issue it is sufficient to say that nothing has been said by the learned Counsel for the respondent, in spite of his elaborate arguments, to indicate that the mortgage deed Ex. RR was not true or invalid. As for the question of this deed being without consideration, the only argument put forward was based on the assumption that the deed of gift in favour of Chinnamma Rao (Ex. PP-1) was nominal or fictitious. It was conceded that if the transfer by Timma under the deed were found to be benami and not nominal, there would be no force in this contention. Since we have already arrived at the conclusion that the transfer by Timma under the deed of gift Ex. PP-1 was really benami, this part of the issue must be decided against the defendants. The money under Ex. F-1 was undoubtedly due and would form a good and valuable consideration for the mortgage Ex. RR.
50. The present suit was dismissed by the trial Court in the first instance, as observed before, in consequence of its finding on the second part of this issue. This portion of the issue reads as if it was intended to cover the objection regarding the plaintiff's locus standi to maintain the action on the ground of his father Timma being the mortgagor himself rather than the objection that Timma could not, if the transaction represented by the deed of gift Ex. PP-1 was merely benami for himself, execute the mortgage Ex. RR in his own favour. Since the point raised by Mr. Nara-simhachar was that of law and we were not quite certain that this aspect of the question was not intended to be covered by the objection raised on behalf of the contesting defendants and it was actually considered and decided by the trial Court, we allowed it to be argued here as well.
51. It would be remembered that the liability under Ex. F-1 was split up by Timma in January, 1913 and two mortgage deeds Ex. QQ and Ex. RR were executed by him, as the holder of the Kalahasti estate in favour of his wife Chinnamma Rao. We have already held that the gift Ex. PP-1 was not real and was effected to avoid a merger and intended to be for his (i.e. Timma's) own benefit. The argument advanced by the learned Counsel for the respondents in this connection was that if the gift in favour of Chinnamma Rao be not held to be real, the execution of the mortgage deeds Ex. QQ and Ex. RR by Timma as a mortgagor (in his capacity of being Akkappa's representative) in favour of his wife as a benamidar for Timma the mortgagee would be wholly invalid on the ground that a person could not execute a deed of mortgage in his own favour or in other words, a debtor could not make a covenant with himself and thus become his own creditor. As observed elsewhere in this judgment, Ex. QQ was satisfied in Timma's lifetime and thus passed out of the controversy long ago. It must not be also overlooked that in view of the endorsement made oh Ex. F-1 on the 1st August, 1904 by the Court of Wards (Ex. F-7) the liability under the mortgage deed Ex. F-1 was not barred by limitation. Moreover, the mortgage deed (Ex. RR) executed by Timma even if benami and made for his own benefit, was nevertheless, a transfer made with the object of clothing Chinnamma Rao with the legal ownership in the mortgage Raja of Deo v. Abdullah (1918) 35 M.L.J. 46 : L.R. 45 IndAp 97 : I.L.R. 45 Cal. 909 and Gur Narayan v. Sheolal Singh (1918) 36 M.L.J. 68 : L.R. 46 IndAp 1 : I.L.R. 46 Cal. 566 although in view of the deed of gift Ex. PP-1 being benami in character there was to be a resulting trust in Timma's favour with the result that if she had succeeded in recovering any money due under the mortgage deed, she would have had to hold it for his benefit and repay it to him-vide Section 88 of the Indian Trust Act. Since Timma succeeded to Akkappa as the holder of the impartible estate, he would be entitled to renew the mortgage Ex. F-1; but this would be in his capacity as mortgagor's representative only. Timma's position could not be worse than if the money under the mortgage deed Ex. F-1 was paid on behalf of the mortgagor's estate to Chinnamma Rao who had the legal title to recover the mortgage money. Although the mortgage deed was undoubtedly to enure for his (i.e. Timma's) benefit ultimately, yet for the time being it was being made by Timma in favour of Chinnamma Rao who was a different person and since it was for Timma's benefit, there could be no objection to the plaintiff suing as Timma's heir for the recovery of that benefit-particularly as we find that the mortgagor's rights had passed to the defendants 1 and 2 and the father of the defendant 3 in the action. We do not think that there is any force in the contention that the document was invalid on account of the fact that Timma was executing it in favour of himself. It was not so ex facie and the same devise which English lawyers adopt to keep two estates distinct by the creation of a trust was being resorted to by Timma himself to keep the mortgage Ex. F-1 in his own favour alive and enforceable.
52. It was not disputed before us that in the absence of a merger it might have been possible for Timma the mortgagee to enforce the liability under the document Ex. F-1 even after he had succeeded to the impartible estate; but this, it was alleged, was due to the fact that there was a pre-existing liability which the Kala-hasti estate was bound to discharge. If the pre-existing liability could have been enforced by Timma even after he had succeeded to Akkappa, no objection could be lawfully raised to Timma, the mortgagor, executing a deed of mortgage in favour of Chinnamma, Rao although she might have been then really a trustee for the benefit of Timma, the mortgagee. It may at times happen that a person may come to occupy two capacities and may hold rights in one capacity against himself in another capacity. But it would not necessarily follow that his rights and duties are on account of that incident extinguished. A manager or karta of a joint Hindu family may in his capacity as a karta legitimately sell a joint family property for joint family necessity or benefit to one of the members of the family or even to himself in his individual capacity as long as the transaction is not fraudulent or he does not take any undue advantage of his position. He cannot be said in a case like this to be contracting with himself. He has really a dual capacity. Similarly, after his succession to the impartible estate, Timma occupied two capacities and was in possession of two kinds of property. He was a mortgagee to start with and became a representative of his mortgagor independently of his will. Moreover his personal property, even if it was not ancestral, would devolve on his widow and other heirs in accordance with the rules of Mitakshara while the impartible estate would not be, taken by his heirs but by one who would be entitled to succeed in accordance with the rules of lineal primogeniture. To such a case, decisions in Vallabhdas Mulji v. Pranshanker Narbeshankar A.I.R. 1929 Bom. 24, Henderson v. Astwood (1894) A.C. 150, Boyee v. Edbrooke (1903) 1 Ch.D. 836 and Farrar v. Farrars, Ltd. (1888) 40 Ch.D. 395, would have no application. In the first case, (i.e. Vallabhdas Mulji v. Pranshanker Narbeshankar A.I.R. 1929 Bom. 24 , certain mortgagees, who were authorised by their mortgage deeds to sell the mortgaged property on default by the mortgagor, sold it by auction to a benamidar or a trustee for themselves and it was held that the transaction did not affect the relations between the mortgagor and the mortgagees and the sale was void and unenforceable. This case was so decided as first of all the mortgagees were held to have been merely authorised to sell the property and not to purchase it themselves which if allowed would have put them in a position where there, would have been a conflict of duty and interest (their duty being to sell to the best advantage of the mortgagor and their interest being to purchase to the best advantage for themselves) and, secondly as the mortgagees' capacities were not different and continued to remain the same throughout. They worked as mortgagees all along and could not sell the property to themselves.
53. The second case is that of Henderson v. Astwood (1894) A.C. 150. The facts of this case were that Miss Astwood conveyed her property in a wharf at Kingston known as Astwood Wharf to one Davies by way of a mortgage. The deed contained a power of sale in the event of interest being in arrears. After a notice by Davies the mortgaged premises were put to auction and purchased by one Cobbold, who was the son-in-law of Davies, the mortgagee. Cob-bold was acting on behalf of Davies and no money had passed. Davies, however, executed a conveyance to Cobbold who in his turn signed an undertaking at the same time to convey the property to Davies when called upon to do so. After the auction Davies treated himself to be the owner. He remained in possession, improved the property and carried on business in his own name and on his own behalf. Davies subsequently agreed to sell Astwood Wharf to the defendant Henderson. In regard to the auction sale that was held at Davies' instance, Lord Macnaghten in delivering the judgment of their Lordships of the Privy Council observed as follows:
The so-called sale was of course inoperative. A man cannot contract with himself. A man cannot sell to himself, either in his own person or in the person of another. But such a transaction is not necessarily a fraud or evidence of fraud.
Learned counsel for the respondent has relied on this passage. The main facts of the case are very similar to those in Vallabhdas Muljee v. Premshankar A.I.R. 1929 Bom. 24. The mortgagee in this case also acted in one capacity throughout and having been authorised to sell in certain circumstances sold the property really to himself. This case would not be an authority for the proposition that the representative of a mortgagor would not be, after he came to occupy that position, competent to renew a mortgage or execute a conveyance in favour of the representative of a mortgagee who had held a mortgage before he came to occupy the position of the mortgagor's representative. It is unnecessary for us to go into the cases covered by Section 101 of the Transfer of Property Act again. But independently of Section 101, these cases do not seem to be any authority for the proposition contended for.
54. The third case is that of Boyce v. Edbrooke (1903) 1 Ch.D. 836. In this case a tenant for life had granted lease of premises consisting of a dwelling house and a soda water factory to himself, his son and a stranger. In holding that such a covenant was bad in law, Far-well, J., observed at page 843 as follows:
Then there only remains the last point, which is one of very considerable interest. If there is one doctrine better settled than another in a Court of Equity it is that a man shall not put himself in such a position that his interest conflicts with his duty. A man cannot be both buyer and seller, or lessor and lessee. Now to that principle there is said to be one exception, that under powers of leasing, the donee of the power can lease to a trustee for himself. Assume that it is so. It is a. perfect anomaly. It is an exception which owes its existence to authority, and not, with all respect, to common sense. There is no possible ground for it that I can see, and I should decline to extend it one hair's breadth. But it is clear to my mind that there is no authority, and no ground for saying, that the donee of a power of leasing could lease to himself, either alone or jointly that he can lease to a trustee; that must be because you get a perfectly that he can lease to a trustee; that must be because you get a perfectly good contract at law, with covenants at law which can be sued upon and recovered on; and it may be that the fact that the trustee has a right to indemnity over against the lessor may be disregarded. However that may be, there is no authority to show that the donee with a power of leasing call lease to himself, and I am clearly of opinion that he cannot.
Here, as in Dulhin Lachhanbati Kumari v. Both Nath, Tiwari A.I.R. 1922 P.C. 94 : L.R. 48 IndAp 485 it was assumed that the lease could have been possible with the interposition of a trustee. Is Chinnamma Rao's position in the present case not that of a trustee? If it is, and we are of opinion that it is not different from that of a trustee, there would be no difficulty in holding that the general principle stated in Boyce v. Edbrooke (1903) 1 Ch.D. 836, has no application to the present case.
55. The last case brought to our notice in this connection was that of Farrar v. Farrars, Ltd. (1888) 40. Ch.D. 395. The facts of this case were that a sale was made by certain mortgagees under powers to sell for an incorporated company Farrars, Ltd. It was impeached on two grounds, the first of which is not relevant in this case. But the second was that the defendant John Riley Farrar, who was one of the three mortgagees was personally interested in the purchase being at the time of the sale the holder of certain shares in the company. The sale was not set aside by Chitty, J., and on appeal being preferred Lindley, L.J., observed as follows:
A sale by a person to himself is no sale at all and a power of sale does not authorise the donee of the power to take the property subject to it at a price fixed by himself, even although such price be the full value of the property.
Then follow the words on which particular reliance was placed by Mr. Narasimhachar:
Such a transaction is not an exercise of the power, and the interposition of a trustee although it gets over the difficulty so far. as form is concerned, does not affect the substance of the transaction.
Relying on these words, learned Counsel for the respondent contended that the interposition of Chinnamma Rao in this case would not affect the substance of the transaction although it might have helped him in getting over the difficulty so far as the form was concerned. We must, however, remember that in this case Lindley, L.J., was, if we understand him correctly, laying down the rule that the interposition of a trustee would not affect the substance of the transaction as he was of opinion that the power of sale did not originally authorise the donee of the power to take the property himself and that he could not be permitted to get round the want of authority and thus commit a breach of faith by employing an intermediary or a trustee and thus achieve the object which he could not otherwise have. This would not be so in the present case. There can be no breach of faith and no conflict of interest and duty in the present case. Moreover, Lindley, L.J., observed a little later in that case as follows:
A mortgagee with a power of, sale, though often called a trustee, is in a very different position from a trustee for sale. A mortgagee is under obligations to the mortgagor, but he has rights of his own which he is entitled to exercise adversely to the mortgagor. A trustee for sale has no business to place himself in such a position as to give rise to a conflict of interest and duty.
This would show the distinction pointed out by the noble Lord between the mortgagee with a power of sale who was not permitted to employ a trustee to carry out a fraud or breach of faith and do what he was not authorised to do by the contract, that is, to purchase the property himself and the trustee for sale (or for mortgage as Chinnamma Rao was) who has no business to place himself in such a position as to give rise to a conflict of interest and duty. By means of the deed of gift Ex. PP-1 Chinnamma Rao was placed in a position to recover the mortgage money due under Ex. F-1, which the mortgagee intended to keep distinct from his other rights to which he had become subsequently entitled on account of Akkappa's death. There was nothing in that transfer to Chinnamma Rao to which exception could be taken on any known principle of law.
56. If we remember that Timma the mortgagee came to occupy a different capacity on his succeeding to the impartible estate of Kalahasti and it was possible for him in one capacity to have rights or duties against or in respect of the capacity to which he succeeded later, the case would not present that difficulty as it seems prima facie to do. That a person may have rights in one capacity against himself in another capacity is also clear from the following passage in Salmond's Jurisprudence (9th Edn.) at page 424:
It often happens that a single human being possesses a double personality. He is one man, but two persons, unus homo, it is said, plures per-Sonas sustinet. In one capacity, or in one right as English lawyers say, ho may have legal relations with himself in his other capacity or right. He may contract with himself or owe money to himself, or transfer property to himself. Every contract, debt, obligation or assignment requires two persons; but those two persons may be the same human being. This double personality exists chiefly in the case of trusteeship. A trustee is, as we have seen, a person in whom the property of another is nominally vested, to the intent that he may represent that other in the management and protection of it. A trustee, therefore, is for many purposes two persons in the eye of the law. In right of his beneficiary he is one person, and in his own right he is another. In the one capacity he may owe money to himself in the other. In the one capacity he may own an encumbrance over property which belongs to himself in the other. Ho may be his own creditor, or his own landlord; as where a testator appoints one of his creditors as Ms executor, or makes one of his tenants the trustee of his land. In all such cases, were it not for the recognition of double personality the obligation or encumbrance would be destroyed by merger, or confusio, as the Romans called it, for two persons at least are requisite for the existence of a. legal relation. No man can in his own right be under any obligation to himself, or own any encumbrance over his own property. Nulli res sua servit.
In view of the facts that the mortgage deed Ex. F-1 was not extinguished by merger and was enforceable in 1913, Timma was competent, in our opinion, to make a transfer in favour of his wife Chinnamma Rao (although benami for himself) and since Chinnamma Rao was a separate person for this purpose, the, mortgage Ex. RR by Timma as a holder of the Kalahasti estate and in his capacity of Akkappa's representative cannot be held to be infructuous on the ground that the two capacities of the mortgagor and the mortgagee happened to continue in Timma at one time and can be enforced by the present plaintiff as an heir to Timma the mortgagee, against the person who had purchased the equity of redemption subject to Timma's mortgage.
57. Mr. Narasimhachar wanted us, towards the end of his arguments, to permit him to argue the question of subrogation and priority-particularly as it was considered by the lower Court in its finding submitted to this Court after the order of remand. This point was being raised on the allegation that a large sum of money was paid by the first, the second and the father of the third defendants to Raja Narasingirji whose original mortgage was prior in point of time (1893) to that taken by Timma in 1899. It was conceded by the learned Counsel for the respondent that no such plea was raised either in his client's written statement or in the written statements of those who had purchased the equity of redemption along with the first defendant. He alleged, however, that this question was raised by the fourth defendant in his written statement and an issue (issue 11) was Framed for that purpose. It might be stated here that the Raja of Venkatagiri (defendant No. 4) was impleaded as a defendant in the suit as he was admitted by the plaintiff to be a subsequent mortgagee of the property in suit and thus interested in the equity of redemption (plaint paragraph 13). It was alleged on behalf of the first defendant that the money was paid by him, the second defendant and the father of the third defendant to Raja Narasingirji by raising a loan from the Raja of Venkatagiri and that a major portion of this amount has been repaid by them during the pendency of this suit. The plea of priority raised on behalf of the Raja of Venkatagiri was in respect of the transaction covered by Ex. XV, i.e., the mortgage deed executed by the first defendant and his brother in 1919. No such plea was raised on behalf of the defendants 1 to 3. It was apparently not raised as it was considered by them that the Raja of Venkatagiri who had advanced the whole of the money which went to pay off Raja Narasingirji had raised it himself. It may be that these defendants paid a little over four lakhs of rupees to the Raja of Venkatagiri or his heirs subsequently and a balance of about Rs. 1,50,000 only or thereabouts remained to be paid to them in respect of the mortgage Ex. XV. But We cannot forget the fact that when the case was remanded by the High Court in 1938, the defendants were permitted to put in additional written statements and although they had by then according to their allegations paid large sums of money to the Raja of Venkatagiri or his heirs who appear to have instituted a suit against them separately yet they failed to raise any plea of subrogation or priority, While the case was proceeding, a compromise was arrived at between the plaintiff and the Raja of Venkatagiri's heirs under which the plaintiff accepted or conceded that they (i.e. the Raja of Venkatagiri's heirs) would have priority for the sum actually due to them and agreed in addition to forego his own (i.e. the plaintiff's) rights to recover any money from some 32 villages which the Raja of Venkatagiri's heirs had purchased from these defendants. This was done while the defendants were present in Court and without any objection or demur on their behalf. This would mean that the plaintiff was permitted to change his position to his detriment in consequence of his compromise with the defendants 8 to 10 and nothing was said on behalf of the defendants (1-3), which may have led the plaintiffs to think that any such plea would be raised on their behalf subsequently. The compromise cannot now be annulled and the Raja of Venkatagiri has not naturally after the compromise taken care to be represented before us. We fail to see how the lower Court in view of these facts, could permit the defendants 1 to 3 to take advantage of the issue framed in consequence of the objection raised by the Raja of Venkatagiri. But this the Court happened to do. After hearing his arguments, we told Mr. Narasimha-char that the lower Court was not, in our opinion, justified to permit his client to take advantage of the 11th issue and he might, if he was so advised, make an application for an amendment of his written statement. This application was made by him and was rejected by us for the reasons which we have mentioned in our order on C.M.P. No. 3448 of 1940. Even after his petition was rejected, Mr. Narasimhachar wanted us to decide the question whether the attitude taken up by the trial Court, in this connection, was correct. We have already stated our reasons for holding that it was not so and we say so in this judgment in accordance with the learned Counsel's wishes.
58. The only question that now remains to be disposed of is that of payments. The lower Court has, while disposing of issue No. 19 held that payments were made by the first defendant to the extent of Rs. 2,650. It did not apparently read the entire documents Ex. XVI and XVIII or it would not have fallen into this error. The payment referred to in Ex. XVI towards the mortgage was for Rs. 1,100 and not for Rs. 1,450. Similarly the payment referred to in Ex. XVIII was for Rs. 800 and not for Rs. 1,200. This would reduce the amount of Rs. 2,650 to Rs. 1,900 only.
59. As to the payment by the second defendant to Rangamma, the matter has been discussed by the trial Court under issue No. 8- Chinnamma Rao was the mortgagee under Ex. RR and even if the mortgage Ex. RR was benami as we have found it to be, she was still entitled to represent Timma and give a complete discharge. After Chinnamma Rao's death, Rangamma would be her heir and was entitled to do the same. The second defendant was, therefore, justified in making a payment of Rs. 8,000 to her. It may be that the plaintiff is entitled to recover this amount from Rangamma or her heir in requisite proceedings; but so far as the second defendant is concerned, it would not be possible for the plaintiff to make him liable for the same amount twice over. The defendants are, therefore, entitled to receive a credit for this amount. The receipt Ex. II acknowledging this payment is, however, an unregistered document and could not effect the release of the second defendant's share from the mortgage without registration which it purports to do. The second defendant is not thus legally entitled to ask for a release of his share and this his learned Counsel conceded before us. What he urged was that the plaintiff should be in the event of a decree being passed in his favour, directed first to proceed against the share of the defendants 1 and 3 and to proceed against the share of the second defendant only if any portion of his decree remained unsatisfied. This request, was not opposed by the other contesting defendants except to a small extent on behalf of the third defendant, who made a similar prayer in regard to the property which appears to have fallen to his share in some private partition. We propose to consider these prayers towards the end of this judgment.
60. As for the sum of Rs. 21,045 the respondents' contention was that a credit for the amount should be granted to him. The details for this amount are to be found in paragraph 10 of the amended written statement of the first defendant. These payments were alleged to have been received by Timma long before he executed the deed of gift or Ex. RR and we agree with the lower Court that these items must have been taken into consideration by Timma before he executed the mortgage Ex. Rules If interest was calculated in accordance with the terms of the mortgage deed, it would have come to much more and this shows that these payments must have been taken by Timma into account.
61. As for the sum of Rs. 12,283-5-10, the details of which are also given in the same paragraph of the same written statement, we find that the matter was discussed by the trial Court in paragraphs 58 to 61 of its judgment. These amounts appear to have been paid to Timma and the only reasons which the lower Court has given to disallow them to the defendants are that they could not have been appropriated towards Ex. RR and that Ex. RE cannot be re-opened now at the instance of the defendants. The defendants were no parties to Ex. RR and if any payments were made by them which were not taken into account, they would be entitled to get that done. We must, therefore, allow these items (of a total of Rs. 12,283-5-10) mentioned in paragraph 10 of the amended written statement of the first defendant and hold that they were received on the dates stated therein.
62. The plaintiff has produced Ex. KKK which would show that if the sum of Rs. 12,283-5-10, be given credit to the defendants on the dates on which the various items comprising this amount were; received by Timma, a sum of Rs. 1,09,898-2-0 would be due in January, 1913, in respect of Ex. F-1 and not the sum of Rs. 1,13,630 as represented by Exs. QQ and Rules Since Ex. QQ was a usufructuary mortgage for a sum of Rs. 50,000 only, the balance in regard to Ex. RR would have to be taken, as shown in Ex. KKK to be Rs. 59,898-2-0 on the 2nd January, 1913, instead of the sum of Rs. 63,630, which is to be found in Ex. Rules Mr, Narasimhachar's contention that. Timma must be presumed to have foregone a sum of Rs. 11,000 independently of these items did not appeal to us. If these items were not to be taken into consideration, something like Rs. 1,24,000 would have been due on, the 2nd January, 1913, in respect of Ex. F-1 while according to Timma's accounts it came to a sum of Rs. 1,13,898. The difference between this amount and the amount of Rs. 1,09,898-2-0 appears to have been mainly due to the calculation of interest from the dates on which these amounts were received. We have no reason to assume Timma's generosity in relinquishing an amount of something like Rs. 12,000 on the one hand and dishonesty in refusing to allow credit to the items of Rs. Rs. 12,283-5-10 received by him on the other. We are prepared to do neither and must therefore agree with the account given in Ex. KKK and hold that Ex. RR should have been for Rs. 59,898-2-0 only and not for Rs. 63,630.
63. As for the requests made on behalf of the second and the third defendants that their shares of the properties which have been allotted to them in some private partition or compromise may be sold only if the decree passed in favour of the plaintiff remains unsatisfied from the properties which have fallen to the first defendant's share, since no objection has been raised to this on behalf of the first defendant there appears to be no objection to accede to these prayers so far as the defendants inter se are concerned but the plaintiff was no party to any arrangement and it is only equitable that the order should not affect him adversely. We would, therefore order that in realising his decree the plaintiff shall proceed against the properties allotted to the first defendant and it is only when he finds that the whole of the decretal amount would not be realised from out of the mortgaged properties which have fallen to the first defendant's share that he may proceed against the other properties which have been allotted to the second and third defendants. It does not, however, mean that if any dilatory tactics are adopted by or on behalf of the first defendant that the plaintiff would be disabled from proceeding against the properties which have fallen to the shares of the second and third defendants. We have acceded to the prayers made on behalf of the second and the third defendants purely for the sake of convenience; but if the plaintiff finds that he is being inconvenienced by these conditions, he would be entitled to proceed against their properties simultaneously with those of the properties belonging to the first defendant as well. As between the second and the third defendant, the plaintiff may, subject to what we have said, proceed against the properties which have fallen to the second defendant's share before he proceeds against the properties belonging to the third defendant. Learned Counsel for the second defendant was agreeable to this course.
64. For the foregoing reasons, the decree passed by the trial Court, and the finding on the issues after remand are vacated and a preliminary decree is passed in favour of the plaintiff with costs of this and the trial Court both before and after remand. We have already observed the amount due under Ex. RR would be taken to be Rs. 59,898-2-0 and not Rs. 63,630. The plaintiff would be entitled to the contractual rate of interest up to the time of this decree and to 6 per cent, from the date of the decree up to the date of realisation. Time for payment 6 months.
65. The compromise arrived at between the plaintiff and the defendants 8 to 10 may be recorded and embodied in the decree.
66. The long pendency of this appeal from 1931 to 1938 has attracted our serious attention and we have felt compelled to have the matter closely examined with a view to prevent similar delays in future.