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Ranganatha Pillay Vs. Paripurnam - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in16Ind.Cas.217
AppellantRanganatha Pillay
RespondentParipurnam
Excerpt:
mortgage - redemption--ejectment, suit in--claim to possession after discharge of usufructuary mortgage--finding against discharge set up--right of plaintiff to redeem mortgage--form of decree--taking of accounts--mesne profits--part payment of principal--profits of usufruct, how to be appropriated--defendant's costs of prior litigation wherein he supported plaintiff's causes whether defendant entitled to credit--interest on amount--transfer of property act (iv of 1882), section 72. - .....redemption. if, on the accounts being taken, it be found that the whole of the debt has not been paid the decree would, of course, be conditional on payment of whatever might be found due to the mortgagee. but, even if the suit is regarded as one in ejectment, we would not be disposed to interfere with the discretion which the subordinate judge undoubtedly had in allowing redemption in the case. the proper course to pursue in such a case was to direct the accounts to be taken of the amount due to the 1st defendant and of any amount for which the 1st defendant might be accountable on account of profits of the mortgaged properties received by him and then pass a final decree for redemption. this course, the subordinate judge did not adopt. nor did he record any finding on the 3rd issue.....
Judgment:

1. The plaintiff in this suit owed to the 1st defendant several debts. One of these was on a usufructuary mortgage of the year 1880, and another hypothecation debt of 1892. In the year 1902, a varthamanam was executed by the 1st defendant in plaintiff's favour. At. that time, apparently, a settlement was made of the amounts due by the plaintiff on account of the usufructuary mortgage, hypothecation bond and on account of the decree in Original Suit No. 106 of 1897. The amount due was taken to be Rs. 400. It is alleged, and probably it is the fact, that the 1st defendant remitted a portion of the amount actually due; shaving stated the amount, the document goes on to say that Rs. 300 were received by the 1st defendant before the date of Exhibit A, and then it states: 'As the amount of rupees three hundred, the total of the two items, has been received by me, I shall receive the balance of Rs. 100 and assign to you the bonds.' The document is executed ostensibly in favour of one Ramanatha Iyer, but it is admitted that Ramanatha Iyer was only a benamdar for the plaintiff. The substance of the transaction, therefore, is that the 1st defendant agreed to return the debt bonds to the plaintiff on payment of the remaining Rs. 100. The plaintiff alleged in her plaint that the remainder of the debt had been discharged, because it was agreed that the 1st defendant should remain in possession of the lands till the remainder of the debts was discharged and that, as a matter of fact, the debt had been wiped out before the institution of the suit. On these allegations, the plaintiff sued to recover the lands with mesne profits, after giving credit to the 1st defendant for the debt due to him out of the total profits of the property.

2. This agreement was denied by the 1st defendant and his denial has been upheld by both the lower Courts. The District Munsif, finding the agreement set up not proved, dismissed the suit. On appeal, the Subordinate Judge held that, notwithstanding the plaintiff's failure to prove 8 the agreement, she was entitled to a decree for redemption W payment of what might be due to the 1st defendant. It is argued before us in second appeal that the Subordinate Judge ought not to have adopted the course he did as the suit was really one in ejectment and not for redemption. We are not inclined to uphold this contention. It is, perhaps, not strictly correct to say that the suit was not one for redemption. A mortgagor, alleging that the debt due on a usufructuary mortgage had been re-paid out of the usufruct and seeking to recover the property mortgaged, is, in reality, suing for redemption. If, on the accounts being taken, it be found that the whole of the debt has not been paid the decree would, of course, be conditional on payment of whatever might be found due to the mortgagee. But, even if the suit is regarded as one in ejectment, we would not be disposed to interfere with the discretion which the Subordinate Judge undoubtedly had in allowing redemption in the case. The proper course to pursue in such a case was to direct the accounts to be taken of the amount due to the 1st defendant and of any amount for which the 1st defendant might be accountable on account of profits of the mortgaged properties received by him and then pass a final decree for redemption. This course, the Subordinate Judge did not adopt. Nor did he record any finding on the 3rd issue which raises the question whether the 1st defendant was entitled to credit for the expenses incurred by him in defending a suit in which the plaintiff's right to the Rs. 300 paid in pursuance of Exhibit A was impeached by the benamdar, in whose favour Exhibit A was ostensibly executed. It is contended by the learned Vakil for the appellant that the question of the several items in the account between the parties considered by the Subordinate Judge in his judgment was not really argued, and that the Subordinate Judge has merely proceeded on the statement made by the plaintiff in her plaint in the Munsif's Court--the question turned upon the question whether the. plaintiff was entitled to a decree for redemption at all and if we judge from the grounds of appeal raised in the lower. Appellate Court, that was the central point of the argument in that Court also. The learned Counsel for the respondent is not able to show what evidence there is in support of the figures adopted by the Subordinate Judge iu his judgment. We, therefore, consider it desirable that an account should be taken before a final decree is passed as to the amount due to the 1st defendant.

3. We must, however, decide two questions that have been argued before us as having a bearing on the taking of the accounts between the parties. The first question is, whether the 1st defendant is accountable at all for the profits received by him. According to the terms of the document Exhibit If, the whole of the income was to be appropriated in lieu of interest, but on the date of Exhibit A the plaintiff paid a sum of Rs. 300. If a portion of this sum of the debt, then the position is that out of the total amount of Rs. 200 the plaintiff paid and the 1st defendant received a certain amount. It is not equitable that in those circumstances, the 1st defendant should be entitled to appropriate the whole of the income towards the interest due on the balance of the principal due. Exhibit II does not fix the rate of interest to be paid for the amount of the usufructuary mortgage. The proper course, therefore, would be to appropriate a portion of the rent proportionate to the balance of principal remaining unpaid towards the interest and to hold the 1st defendant accountable for the balance. If no portion of the amount paid would be debitable towards the principal, no question of accountability for the profits would arise.

4. The next question argued related to the plaintiff's liability to reimburse to the 1st defendant for the expense incurred by him in defending Section 0. No. 958 of 1908 in the Tanjore Subordinate Judge's Court. We are of opinion that she is bound to do so. The question in that suit was whether the person entitled to the Rs. 300 paid to the 1st defendant on the date of Exhibit A was the plaintiff or her benamdar, Ramanatha Iyer. The 1st defendant was, therefore, substantially defending the plaintiff's right to the amount. He was interested in doing so and bound to do so. He is, therefore, entitled to credit for the amount spent as costs of that litigation as an item in the taking of accounts between him and the plaintiff with respect to the mortgage. He is also entitled to interest at 9 per cent, thereon, see Section 72 of the Transfer of Property Act. We reverse the decrees of both the Courts below and pass a preliminary decree for redemption and direct the District Munsif to take and account of the sum due to the 1st defendant on the mortgage, Exhibit II. After taking the account, he will pass a final decree. Costs hitherto incurred will abide the result.


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