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A.V. Ramachandra Naidu Vs. Hassina Bi and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1968)1MLJ139
AppellantA.V. Ramachandra Naidu
RespondentHassina Bi and ors.
Cases Referred and Ahobala Sastriar v. Kalimuthu Pillai
Excerpt:
- orderm. natesan, j.1. the plaintiff, the mortgagee in a suit for sale who has failed in both the courts below, has preferred this second appeal. defendants 1 to 4 are the legal representatives of the mortgagor one abdul rahim sahib, the first defendant being the wife and defendants 2 to 4 being the children of the mortgagor. the 5th defendant has taken a deed of sale of the mortgaged properties from defendants 1 to 4 on 25th june, 1955. the claim for sale relates to two mortgages, both possessory in character, namely (1) exhibit a-1 dated 2nd july, 1940, under which the mortgagor had borrowed a sum of rs. 3,000 and (2) exhibit a-2 dated 21st december, 1942, for a sum of rs. 1,000. under the terms of the deeds the amounts do not carry any interest and the mortgagee in lieu of interest was.....
Judgment:
ORDER

M. Natesan, J.

1. The plaintiff, the mortgagee in a suit for sale who has failed in both the Courts below, has preferred this second appeal. Defendants 1 to 4 are the legal representatives of the mortgagor one Abdul Rahim Sahib, the first defendant being the wife and defendants 2 to 4 being the children of the mortgagor. The 5th defendant has taken a deed of sale of the mortgaged properties from defendants 1 to 4 on 25th June, 1955. The claim for sale relates to two mortgages, both possessory in character, namely (1) Exhibit A-1 dated 2nd July, 1940, under which the mortgagor had borrowed a sum of Rs. 3,000 and (2) Exhibit A-2 dated 21st December, 1942, for a sum of Rs. 1,000. Under the terms of the deeds the amounts do not carry any interest and the mortgagee in lieu of interest was to hold and enjoy the properties.

2. The short question for consideration is whether on the terms of the documents a suit for sale for recovery of the mortgage moneys is maintainable. The plaintiff came to Court inter alia with the averment that the mortgagor failed to deliver possession of properties in terms of the deeds of mortgage, and that he had not been able to secure possession of the mortgaged properties subsequently. He pleaded:

Hence the plaintiff is entitled in law to sue to recover the mortgage money and interest and realise the same by sale. Besides, there is personal covenant to pay by the mortgagor in both the deeds 'A' and 'B'.

The plaint averred that the cause of action for the suit arose on 2nd July, 1940, and on 21st December, 1942, when the two mortgages were executed and 2nd July, ig45 and 21st December, 1945, when the moneys became payable and the plaintiff prayed for a direction to the defendants to pay the plaintiff a sum of Rs. 5,300 and subsequent interest and costs in respect of the two mortgage deeds within a time to be fixed by the Court and in default for sale of the mortgage properties for realisation of the mortgage amounts. It is averred that the suit was not barred by limitation, as there was an acknowledgment of the mortgages in the sale deed dated 25th June, 1955, in favour of the 5th defendant. The plaint claim included a sum of Rs. 1,300 as and for interest on the two mortgages based on the averment in the plaint that under some arrangement the mortgagor himself continued in possession o the properties paying interest without surrendering possession to the mortgagee and that he did not pay interest from 1952 The Courts below have rejected the plaintiff's case that the mortgagor failed to deliver possession of the mortgage properties to him. This is a finding of fact not open to review in second appeal and naturally not the subject of any discussion before me.

3. The plaintiff has not put forward any case that while in possession of the properties he had been deprived of the same. He had rested his claim to the money on the personal covenant and on the ground that the mortgagor failed to deliver the mortgage properties to him. The tenability of the plaintiff's claim on the covenant was examined in the trial Court from the standpoint of his right to a personal decree. A perusal of the judgments of the Courts below shows that it has been completely lost sight of that the claim is for a decree for sale. Reference is made by the trial Court only to Section 68 of the Transfer of Property Act and it is stated that a usufructuary mortgagee has a right to sue for the mortgage money, if for instance, there is a personal covenant to repay the mortgage amount by the mortgagor, or as contemplated under Sub-clause (4) of Section 68 where the mortgagee being entitled to possession of the mortgaged property the mortgagor fails to deliver the same to him, or to secure possession thereof to him without disturbance by the mortgagor or any person claiming under a title superior to that of the mortgagor. It finds that neither under Exhibit A nor under Exhibit A-2 there is a personal covenant to pay. A decision of the Allahabad High Court in Bisnan Datt Singh v. Mathur Prasad : AIR1939All260 , is referred to as authority. The learned Subordinate Judge states that Counsel for the plaintiff during the arguments represented that he was not pressing his client's case under the personal covenant, as the plaintiff's claim under the head would be barred by time. The learned Judge states that for the enforcement of a personal covenant the period of limitation is six years from the due date. Clearly in the context I do not understand learned Counsel as conceding that he had no case for a decree for sale on the personal covenant. Learned Counsel was obviously referring to a personal decree against the mortgagor. In the erroneous view that there was no personal covenant for payment in the mortgage deeds the other question, a claim to the mortgage money under Section 68(1)(d) only of the Transfer of Property Act, was taken up for consideration and was found against on the merits. The appellate Court proceeds to consider the claim only from the point of view of Section 68(1)(d), though the point set up for consideration is sufficiently wide, namely, whether the suit is maintainable? As already indicated the plaintiff's case that possession of the mortgage properties was not delivered to him, was rejected on appeal also. In appeal also it is found that the claim for mortgage money is barred by limitation, as more than 12 years had elapsed from the date of mortgages.

4. At the outset it may be stated that if under the terms of the mortgage deeds the plaintiff can have a decree for sale no question of limitation can arise. If the plaintiff's construction of the deeds that there are covenants to pay is accepted then under the mortgage Exhibit A-1 dated 2nd July, 1940 the principal amount was payable on or before the 30th June, 1945 and under the mortgage Exhibit A-2 dated 21st December, 1942, the principal amount was payable on or before 21st December, 1945. The plaintiff who under Article 132 of the Limitation Act, 1908 had 12 years to bring the suit for sale from when the mortgage money became due, relied upon the acknowledgment of the mortgages under the registered sale deed Exhibit A-3 dated 25th June, 1955. The acknowledgment is within twelve years from when the moneys became due. The suit was instituted, on 2nd January, 1959. So no question of limitation can arise, viewed as a suit for sale of the mortgage properties, which in fact it is.

5. Now to come to the construction of the documents, it is really regretable that the trial Court has gone to a decision of the Allahabad High Court when there are a catena of decisions of this Court covering the point. The terms of the mortgage Exhibit A-2 are practically indentical with the terms of Exhibit A-1 and it is sufficient to take up for consideration the document Exhibit A-1. Literally translated it is styled as a Usufructuary mortgage debt deed for Rs. 3,000. After referring to the details of the consideration it is stated that it did, not carry any interest and the mortgagee had to enjoy the proceeds of the land in lieu of interest. The mortgagor then covenants as follows:

I shall pay the principal amount within a period of five years, that is, before the 30th June, 1945, at the end of any Ani, make the endorsement of payment and take return of the document. Should I fail to pay at the aforesaid time limit, this document shall be treated as a sale deed. I have delivered possession of the properties described herein to you this day itself. I shall not pay the principal during the middle of the cultivation season. The payment shall be at the close of the season.

There is no dispute before me that the clause in the deed debarring the mortgagor for ever from redeeming the properties after the period fixed by providing that on the expiry of the period the transaction shall be treated as a sale, is a clog on redemption and invalid. Neither side relies on this clause. Can it be said that there is no covenant in this case by the mortgagor to repay the mortgage money? Did not the mortgage money become due under this mortgage on the 30th June, 1945? In Kangaya Gurukal v. Kalimuthu Annavi : (1904)14MLJ61 , a usufructuary mortgage contained covenant as herein under:

Thereafter on the 30th Panguni Bhava year on paying the aforesaid Rs. 200 we shall recover back our land. If on the date so fixed, the amount be not paid and the land recovered back, in whatever year we may pay the Rs. 200 in full on the 30th Panguni of any year then you shall deliver back our lands to us.

The Full Bench referring to the first sentence in the extract from the mortgage set out above stated that it contained a promise by the mortgagor to pay on the date named. Referring to the second sentence, the Full Bench observed:

The second sentence of the extract provides that in the event of the mortgagor not paying on the due date, but subsequently, he may pay only on the corresponding day of future year, and there shall then be an obligation on the part of the mortgagee to give up the land.

The Full Bsnch held that the mortgage was combination of a simple and a usufructuary mortgage and the mortgagee was entitled to a decree for the mortgage money under Clause (a) of Section 68 of the Transfer of Property Act. Clearly Under the terms of the mortgage now Under consideration the covenant to pay is more pronounced. There is not even an option as in the aforesaid case to pay in any year after the date first fixed. In an earlier Full Bench case Sivakami Ammal v. Gopala Savundaram Aiyan : (1894)4MLJ50 , the mortgage contained a covenant that the mortgagor was to pay the mortgage amount on a certain date in 1883, and that if he failed to pay on the said date, the mortgagee was to receive the amount on the. corresponding date of whatever year the mortgagor paid. The Full Bench held that clearly 1-ht re was a covenant to pay and a suit for sale therefore lay. Udayana Pillai v. Senthvelu Pillai (1896) 6 M.L.J. 210 : I.L.R. (1896) 19 Mad. 411, is another case where similar language has been construed to contain a covenant to pay. In Mamoona Labbai v. Ramanatha Pillai : AIR1946Mad312 , a decision of Rajamannar, J. (as he then was) the deed provided for the mortgagee to enjoy the property under othi for a period of six years from the date of the mortgage and there is a further clause that on the expiry of the stipulated period, the mortgagor shall pay the amount and redeem the othi. Following the decisions in Kangaya Gurukal v. Kalimuthu Annavi : (1904)14MLJ61 , and Udayana Piliai v. Senthivelu Pillai (1896) 6 M.L.J. 210 : I.L.R. (1896) Mad. 411, above referred to, the learned Judge held that there was a personal covenant to pay the othi amount, and that it could be implied that a date was fixed for payment. The contention that the provision is only for redemption on payment and, does not import an obligation to pay, was not accepted. In Ahobala Sastriar v. Kalimuthu Pillai : (1962)1MLJ304 , Veeraswami, J., held, that the recitals in a mortgage deed, 'On the expiry of the three year period I shall pay the aforesaid principal amount and redeem the property scheduled hereunder' clearly amounted to a personal covenant to pay the debt entitling the mortgagee to bring a suit for sale of the mortgaged property. The decision in Mamoona Labbai v. Ramanatha Pillai : AIR1946Mad312 was followed.

6. Learned Counsel for the defendants relied principally on the decisions of this Court in Palaniappa Chettiar v. Periaswami Konar : AIR1941Mad885 , and Rengayya Pillai v. Narasimha Iyengar (1918) M.W.N. 672. In the former case the deed of usufructuary mortgage stated:

In any year after giving you notice in Panguni and after paying your money in Chitrai, I shall redeem the properties.

7. On the recitals extracted above, the learned Judges held that there was no enforceable covenant to pay and a suit for sale of the mortgage property was unsustainable. In addition, the mortgage deed contained a term that the mortgagee was to enter upon the properties and enjoy the name under the right of usufructuary mortgage for a period, of seven years from the date of the mortgage. Its effect, as pointed out by the learned Judges (Leach, C.J. and Krishnaswami Aiyangar, J.) was that the mortgagee was to have the right of enjoying the property undisturbed, for a period of seven years certain. During that period, the mortgagor was not to have the tight to redeem. After the expiry of the period the mortgagor could, if he chose, redeem in any subsequent year but he must give notice in Panguni and pay money in Chitrai for redemption. The learned Judges observed that there were no words in the deed casting an obligation on the mortgagor to pay and redeem, capable of being enforced at the instance of the mortgagee. There is nothing comparable or similar in the document in the present case. Rajamannar, J. (as he then was) in Mamoona Labbai v. Ramanatha Pillai : AIR1946Mad312 , distinguished Palaniappa Chettiar v. Periaswami Konar : AIR1941Mad885 , observing thus:

Two features which distinguish the language used in the document construed in that case from the language used in the document in the present case may be noted. The first is that that there is an option to pay in any year, and secondly the main idea of the clause is that the mortgagor is at liberty to redeem after the expiry of the stipulated period, and as a condition of redemption to the issue of notice in a particular month and payment in another month are specified.

The language of the mortgage instrument construed in Rangayya Pillai v. Narasimha Iyengar (1918) M.W.N. 672, resembles the language of the instrument in Palaniappa Chettiar v. Periaswami Konar : AIR1941Mad885 . It ran thus:

at whatever cultivation season in the month of Chitrai in any year after the stipulated period of ten years, I may pay the principal amount, you shall at that time receive the amount.

Then holding that there is nothing in the deed to suggest that there is any personal covenant, the learned Judges (Philips, J., and Krishnan, J.) observed:

This stipulation as to payment is one entirely for the benefit of the mortgagor. For it allows him to choose his own time for payment if he wishes to pay. To construe this as a personal covenant to pay at the end often years which the mortgagee could, enforce at once would be to destroy the whole benefit of the stipulation so far as the mortgagor is concerned.

Learned Counsel for the respondents pressed that in effect and substance the recitals in the mortgages construed in Sivakami Ammal v. Gopala Savundaram Aiyan : (1894)4MLJ50 , Udayana Pillai v. Senthivelu Pillai (1896) M.L.J. 210 : I.L.R. (1896) Mad. 411 and Kangaya Gurukkal v. Kalimuthu Annavi : (1904)14MLJ61 , are similar to the recitals in Rangayya Pillai v. Narasimha Iyengar (1918) M.W.N. 672, and Planiappa Chettiar v. Periaswami Konar : AIR1941Mad885 . Learned Counsel would point out that in the former cases also there was a provision against the redemption before a particular period. The clause providing for payment were not in recognition of any obligation to pay, but related only to the period of redemption and the time for redemption in any particular year. After the period fixed for redemption the mortgagor is left with an option to choose the year of payment and the time for redemption is fixed having regard to the convenience of the mortgagee that there may be no interference, with his enjoyment during the agricultural season. Under the definition of a usufructuary mortgage the mortgagor should deliver possession of the mortgaged property to the mortgagee and authorise him to retain such possession until payment of the mortgage money. The recitals in some usufructuary mortgage deeds regarding payment and redemption, according to learned Counsel express only that feature of a usufructuary mortgage. It is contended that the language expressing a covenant against payment and redemption within a particular period or offering to redeem on a particular date or after a particular period should not be construed as a covenant to pay the mortgage money that is only postponing redemption, and may in a given case govern the starting point for limitation under Article 148 of the Limitation Act of 1908, There is much to be said for this argument and if I have to construe in the present case similar language, I would have shared with Veeraswami, J., the difficulty the learned Judge expressed in Thirumani Chettiar v. Veluswami Naicker (1964) 77 L.W. 666, in implying a covenant to repay in such recitals while feeling bound by the decisions. The documents now under consideration do not give much difficulty and the recitals are in their purport, substance and in effect the same as found in Mamoona Labbai v. Ramanatha Pillai : AIR1946Mad312 , and Ahobala Sastriar v. Kalimuthu Pillai : (1962)1MLJ304 . Moreover in the documents now under consideration there is indeed the time for payment and redemption. The penal clause may be invalid as a clog, but it brings out forcibly that the mortgage money bt comes due on a particular date. In the circumstances following the said two decisions I hold that there is in-personal covenant to pay entitling the mortgagee to bring a suit for sale. It is settled proposition of law that if a deed of mortgage contains a personal covenant to pay, there is a right of sale. Section 67 of the Transfer of Property Act entitles a mortgagee, in the absence of a contract to the contrary at any time after the mortgage money has become due to him and before a decree has been made for the redemption of the mortgaged property, or the mortgage money has been paid or deposited as provided in the Act, a right to obtain from the Court a decree that the property be sold. No doubt Section 67 Clause (a) provides that nothing in that section shall be deemed to authorize a usufructuary mortgagee as such to institute a suit for sale. But the mortgages under consideration here are not pure usufructuary mortgages. In the light of decisions of this Court their language warrants the inference that the mortgage money does fall due showing also a covenant for payment. They are therefore composite or anomalous mortgages. This is a case of usufructuary mortgage where the mortgagor also binds himself personally to pay the mortgage money. It follows that the plaintiff would be entitled to a decree for sale.

8. The defendants plead that they are agriculturists entitled to relief under Section 9-A of Madras Act IV of 1938. But this Court has in a series of decisions held that having regard to the scheme of the Act Section 9-A is only intended to apply when the mortgagor seeks to redeem the mortgage. The present is a suit for sale by the mortgagee. It maybe that the mortgagors are entitled to relief in a proceeding where Section 9-A may be applied. But they cannot invoke it is a suit for sale. The present claim includes the principal sum of Rs. 4,000 due under the mortgages and a sum of Rs. 1,300 as interest. Under the mortgage deeds the plaintiff in not entitled to any interest and there is nothing in the plaint to warrant awarding interest in this case. The decree in the circumstances can only be for the principal amounts totalling Rs. 4,000, under the two deeds.

9. In the result the second appeal is allowed and the judgments and decrees of the Courts below are set aside. The plaintiff is entitled to a mortgage decree for sale. There will be a preliminary decree in favour of the plaintiff for a sum of Rs. 4,000, the principal amount due under the mortgages. The defendants will have a period of four months from this date for payment.

10. Coming to the question of casts, from the judgments of the Courts below it does not appear that decisions of this Court which have a direct bearing on the case have been placed before the Courts. In my view, this is a circumstance which cannot be overlooked in awarding costs. The plaintiff is entitled to his proportionate costs in the trial Court against all the defendants. The defendants will be entitled to proportionate costs on the interest disallowed. The plaintiff had substantial reasons for not accepting the sum of Rs. 4,000 tendered by the 5th defendant. He has been challenging the alienation in favour of the 5th defendant as sham and intended to defeat his rights as decree holder. In fact he has succeeded and it has been held that the 5th defendant has no title to the suit properties. But this adjudication was after the institution of the suit. Having regard to the circumstances of the case, I disallow costs in the lower appellate Court and award plaintiff proportionate costs in this Court against defendants 1 to 4. Defendants 1 to 4 will be entitled to their proportionate costs on the value of the claim disallowed.


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