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V.A.Ar. Arunachalam Chettiar (Deceased) and ors. Vs. Ramanathan Chettiar - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in156Ind.Cas.67
AppellantV.A.Ar. Arunachalam Chettiar (Deceased) and ors.
RespondentRamanathan Chettiar
Cases ReferredParamasivan Piliai v. Ramaswami Chettiar
Excerpt:
mortgage - receiver, appointment of--effect--crops raised, after appointment of receiver but after salt of equity of redemption, whether belongs to mortgagee or purchaser. - .....not being mortgaged, the mortgagee is really trying to proceed against the property other than the mortgage property. but if the idea is carefully examined, it seems to me there is fallacy. in the first place the mortgagee never seeks to obtain possession for himself. secondly the attempt to place the property in the hands of the receiver is really proceeding against the property so as to utilise it for the discharge of the debt. now profits of property are an accession to the property and proceed out of it. when the property is taken from the hands of the mortgagor and placed in the hands of the receiver, the receiver has to get it cultivated and derive income from it and that income has to be utilised for the benefit of the mortgagee.3. it is true that this case does not specifically.....
Judgment:

1. The facts, of this case are not clearly stated in the order under appeal. The appellant was the plaintiff in O.S. No. 625 of 1922 on the file of the District Munsif of Tirumangalam and be obtained a simple money decree against his judgment debtor. In execution of that decree he brought to sale and purchased the equity of redemption in a certain property. The properly was knocked down on April 15, 1929, the certiticate is dated June 6, 1929, but delivery was not effected until January 5, 1930. The respondent to this appealed was a simple mortgagee, of the same property and he sued to enforce hie mortgage in O.S. No. 97 of 1927, on the file of the Sub-Court of Madura and obtained a compromise decree on November 5, 1927, to sell the property. The appointment of a Receiver was then applied for in the mortgage action and granted by the Sub-Court on December 16, 1929, i.e., after the sale to the appellant but before delivery. There was opposition by the appellant to this order and the Court heard the matter and confirmed the order, on January 8, 1930, directing that the Receiver should harvest the crops in the presense of the parties and deposit the proceeds in Court. Accordingly the Receiver proceeded with the harvest during the rest of January.

2. The argument addressed to us on behalf of the appellant by Mr. Venkatachari in supporting a claim to these proceeds is that the title to the land vested in the appellant from the date of the sale, viz., April 15, 1929 and that he raised the crops. There is no doubt that whatever crops were raised upon the land belonged to the appellant as owner from the date of the purchase. It is then said that the proceeds of the harvested crops should not be put to the credit of the mortgagee unless by force of the personal remedy against the mortgagee, and that the personal remedy would not apply to the purchaser of the equity of redemption. That principle, which is based on the View that the gathered crops do not form part of the mortgage security, no doubt would have to be followed if it were a true principle to apply to a case of this nature. But we do not think that it is the correct principle. Where a Receiver is appointed in a mortgage action, he is appointed for the benefit of the mortgagee, and all proceeds from the property which are realised after his appointment go to the credit of the mortgage debt. This principle has been recognised by a Full Bench of this Court in Paramasivan Piliai v. Ramaswami Chettiar 145 Ind. Cas. 449 : 65 M.L.J. 222 : 33 L.W. 96 : A.I.R. 1933 Mad. 570 : 6 R.M. 70 : 56 M. 915 (F.B.) in which the question arose for decision whether a Receiver could be appointed when the personal remedy against the mortgagor was barred, and Ramesam, J. has put the matter very clearly. In a passage in his judgment which runs as follows:

But where a mortgagee seeks to obtain the appointment of a Receiver he does not proceed against the other properties of the mortgagor but wants to proceed against the mortgaged property itself. The underlying idea in the opposite view is that the profits of the property not being mortgaged, the mortgagee is really trying to proceed against the property other than the mortgage property. But if the idea is carefully examined, it seems to me there is fallacy. In the first place the mortgagee never seeks to obtain possession for himself. Secondly the attempt to place the property in the hands of the Receiver is really proceeding against the property so as to utilise it for the discharge of the debt. Now profits of property are an accession to the property and proceed out of it. When the property is taken from the hands of the mortgagor and placed in the hands of the Receiver, the Receiver has to get it cultivated and derive income from it and that income has to be utilised for the benefit of the mortgagee.

3. It is true that this case does not specifically decide what is to happen when the crops are raised before the Receiver is appointed and harvested afterwards; but the only practicable principle seems to be that all proceeds from the land realised after the Receiver takes possession are to go to the credit of the mortgage debt and are not the property of the mortgagor or of the purchaser of that equity of redemption, although he may have raised them. It follows from the nature of this principle that the position of a purchaser of the equity of redemption is in no way different from that of the mortgagor.

4. For these reasons we think that the order of the lower Court giving the crops to the mortgagee decree-holder is correct and we dismiss the appeal with costs.


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