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Kandaswami Naicker and ors. Vs. Venkata Reddiar and ors. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in91Ind.Cas.577
AppellantKandaswami Naicker and ors.
RespondentVenkata Reddiar and ors.
Cases ReferredMohesh Lal v. Mohant Bawan Das
Excerpt:
transfer of property act (iv of 1882), sections 71, 91 - subrogation--mortgage by father for himself and son--partition between father and son--father undertaking discharge of mortgage--mortgage, subsequent, by father--part of consideration applied towards discharge of prior mortgage--second mortgagee, whether entitled to be subrogated to first mortgagee's rights against son. - .....1st defendant, who was an adult in 1912 when the suit mortgage (ex. a) was executed by his father akkal naicker, did not join in executing it and that, therefore, he and his minor sons, defendants nos. 2 and 3, who are the three appellants before us, are not directly bound by it; secondly, that between the date of the earlier mortgage of 1898 executed by akkal naicker on behalf of himself and his then minor son 1st defendant and the date of the suit mortgage, there was a partition in 1907 between akkal naicker and 1st defendant, in which the mortgage of 1898 was allotted to the share of the father akkal naicker, and, therefore, akkal naicker had no power to encumber the separate estate of 1st defendant even if he intended to do so, and that he had an intention to do so is not apparent.....
Judgment:

Charles Gordon Spencer, J.

1. The facts of this case appear from my learned brother's judgment which I have had the benefit of perusing, and from the judgment of the Court below. The important points to be noted are first that the 1st defendant, who was an adult in 1912 when the suit mortgage (Ex. A) was executed by his father Akkal Naicker, did not join in executing it and that, therefore, he and his minor sons, defendants Nos. 2 and 3, who are the three appellants before us, are not directly bound by it; secondly, that between the date of the earlier mortgage of 1898 executed by Akkal Naicker on behalf of himself and his then minor son 1st defendant and the date of the suit mortgage, there was a partition in 1907 between Akkal Naicker and 1st defendant, in which the mortgage of 1898 was allotted to the share of the father Akkal Naicker, and, therefore, Akkal Naicker had no power to encumber the separate estate of 1st defendant even if he intended to do so, and that he had an intention to do so is not apparent from his action in signing only on behalf of himself and the 4th defendant, his minor son by a second wife. The only question, for our decision in this appeal, apart from a question of limitation which it becomes unnecessary to decide if on this point we find for the appellants, is whether the plaintiff has any right through subrogation to bring the properties of the appellants to sale on account of part of the consideration of Ex. A having gone to discharge the debt under Ex. B.

2. Upon this question I think that the Subordinate Judge was mistaken in following the decision in Chidambara Nadan v. Musuvathi Muni Nagendrayyan 12 L.W. 393 : 28 M.L.T. 300, as if the facts of that case were similar to the present. That was a case, where there was an intermediate encumbrance. The fourth mortgagee having paid of the first and third mortgagees claimed to stand in the shoes of the first mortgagee and to have priority over the second mortgagee. The learned Judges held that because the fourth mortgagee had undertaken in writing to pay off the prior mortgage with his own money there was a presumption that ha intended to keep that encumbrance alive for his own benefit. They refer to certain observations of K. Srinivasa Iyengar, J., in Mathammal v. Razu Pillai (19188) M.W.N. 251 : 7 L.W. 420 as obiter and say that they were coloured by a view of the effect of Mohesh Lal v. Mohant Bawan Das 13 C.L.R. 221 : 7 Ind Jur. 382 : 4 Sar. P.C.J. 424 : 4 Ind. Dec. 1291 which they regarded as erroneous. I can only understand this as meaning that they considered Srinivasa Iyengar J.'s view to be erroneous and not that they doubted the correctness of Mohesh Lal v. Mohant Bawan Das 13 C.L.R. 221 : 7 Ind Jur. 382 : 4 Sar. P.C.J. 424 : 4 Ind. Dec. 1291 which is a Privy Council decision. I do not find any essential conflict of principle between Mohesh Lal v. Mohant Bawan Das 7 Ind Jur. 382 : 4 Sar. P.C.J. 424 : 4 Ind. Dec. 1291 (P.C.) and Gokaldas Gopaldas v. Puranmal Premsukhdas 8 Ind. Jur. 396 : 4 Sar P.C.J. 543 : 5 Ind. Dec. 692 (P.C.) which is also a decision of the Privy Council. The latter was a case where a purchaser of the equity of redemption, who exercised the owner's right of redeeming his property from encumbrance, paid off the first mortgagee and then used that prior mortgage as a shield against the claims of a subsequent mortgagee. When the question arose whether the party paying off the charge intended to extinguish it or to keep it alive, their Lordships observed that he must be presumed to have acted according to his interest. In Mohesh Lal v. Mohant Bawan Das 4 Sar. P.C.J. 424 : 4 Ind. Dec. 1291 (P.C.) the plaintiff lent a sum of Rs. 10,641 in cash which was used by Mangal Das partly to pay off a debt to another creditor named Lakshminarain, to whom he had mortgaged not only three villages belonging to a religious institution held by him under a grant from the then mohant but also one village of his own purchased by him with money lent by the plaintiff previously. The question arose whether Mangal Das intended to keep Lakshminarayan's mortgage alive. Their Lordships held that Mangal Das had no interest in keeping Lakshminarain's mortgage alive, and that it was paid off by him and not by the plaintiff. Then they observe: 'it must be presumed that, when the plaintiff lent the money to Mangal to pay off the mortgage, he lent it upon the security expressed in the bond and for which he stipulated. Equity cannot give him an additional security because the security relied upon turns out to be bad as regards a portion of the lands included in it.' Similarly, in the present case, there is no room for a presumption of an intention, on the1 part of the parties that Ex. B should be kept alive after it was discharged. There was no intermediate encumbrance against which it might have served as a shield. Before the subsequent mortgage was executed, the prior mortgage had been discharged and ceased to exist. Section 74 of the Transfer of Property Act gives a subsequent mortgagee a right to pay off a prior mortgagee, but he cannot by so doing enlarge the scope of the security which he has got by his own mortgage deed upon the property of his mortgagors. This section covers independent acts of subsequent mortgagees, paying off prior mortgagees and has no application to the facts of this case for Avudaiy Wimal's mortgage was finally discharged on April 12th, 1912, before the plaintiff's mortgage was executed on April 21st, 1912, as it appears from the endorsement on Ex. B. Section 91 is not applicable, because the plaintiff had no interest in redeeming property other than what was legally the subject of his mortgage. In the words of Sir Barnes Peacock: 'There is nothing in the bond, or in the evidence, or even in the surrounding circumstances to show that the mortgagor (there Mangal, here Akkal Naicker) intended to keep the mortgage (there Lakshminarain's, here Avudayanimal's) alive or that he or the plaintiff intended that the latter should hold the mortgage as an additional security for the loan'. The mortgagor's interest was to extinguish Avudayammal's mortgage which carried 12 per cent, interest by giving a mortgage to the plaintiff at 9 percent, and die, therefore, cannot be. presumed to have intended to agree to its being kept alive.

3. Following Mohesh Lal v. Mohant Bawan Das 4 Sar. P.C.J. 424 : 4 Ind. Dec. 1291 (P.C.), I agree with my learned brother that this appeal must be allowed with costs in both Courts and the plaintiff's suit dismiss ed against defendants Nos. 1 to 3. The decree will be drafted so as to make the 4th defendant's properties alone liable.

4. Time for payment is extended to six months from this date.

Ramesam, J.

5. The appeal arises out of a suit brought on a deed of mortgage (Ex. A, dated 21st April 1912) executed by one Akkal Naicker on his own behalf as well as on behalf of his (then) minor son Alagiriswami Naicker 4th defendant. The 1st defendant is another son of the said Akltal Naicker by a different wife. So he is a half brother of the 4th defendant. Second and third defendants are his sons. The defendants Nos. 1, 2 and 3 were impleaded on the ground (among other grounds which need not be considered) that part of the consideration of Ex. A went in discharge of an earlier mortgage bond' (Ex. B, dated 20th July 1898) executed by the said Akkal Naicker for himself and as guardian of the 1st defendant. To the extent it was so utilised, the Subordinate Judge granted a decree against defendants Nos. 1 to 3, who appeal.

6. It is now conceded that the 1st defendant' and Akkal Naicker had been divided on the date of Ex. A and a suit by Akkal Naicker for re-opening the partition was actually pending on that date. The suit was afterwards dismissed. It is also conceded that properties which had fallen to the share of the 1st defendant in the partition according to the findings in the suit were included in the document (Ex. A.). Prima facie, this]document cannot, by itself, bind the appellants or their properties. But the Subordinate Judge held, following Chidambaram, Nadan v. Musavathi Muni Nagendrayyan 58 Ind. Cas. 813 : 12 L.W. 393 : 28 M.L.T. 300, that the plaintiff could claim the rights of the mortgagee by subrogation. It may be at once observed that that decision cannot help the respondent. That was the case of a fourth mortgagee, the consideration being partly the discharge of a third mortgage, which itself was in consideration of paying off a portion of the first mortgage, and partly the discharge of the balance of the first mortgage. It was held that the fourth mortgagee could claim priority over the second mortgagee. I agree with the decision, though not with the remarks in the judgment which imply that the decision in Mohesh Lal v. Mohant Bawan Das 4 Sar. P.C.J. 424 : 4 Ind. Dec. 1291 (P.C.) is inconsistent with that in Gokaldas Gopaldas v. Puranmal Premsukhdas 10 C. 1035 : 11 I.A. 126 : 8 Ind. Jur. 396 : 5 Ind. Dec. 692 (P.C.) that the former presented some difficulty which has to be got over; and that the observation in Srinivasa Iyengar, J., in Muthammal v. (sic) Pillai 44 Ind. Cas. 753 (19188) M.W.N. 251 : 7 L.W. 420 are erroneous. I do not think that the observations in Muthammal v. (sic) Pillai 44 Ind. Cas. 753 : 23 M.L.T. 106 : (19188) M.W.N. 251 : 7 L.W. 420 are erroneous though (sic) are obiter. In my opinion, the two decisions in Mohesh Lal v. Mohant Bawan Das 4 Sar. P.C.J. 424 : 4 Ind. Dec.1291 (P.C.) and Gokaldas Gopaldas v. Puranmal Premsukhdas 11 I.A. 126 : 8 Ind. Jur. 396 : 4 Sar P.C.J. 543 : 5 Ind. Dec. 692 (P.C.) are not inconsistent and represent two types of cases. In MoheshLal v. Mohant Bawan Das 7 Ind Jur. 382 : 4 Sar. P.C.J. 424 : 4 Ind. Dec. 1291 (P.C.) there was no intermediate incumbrance, whereas there was one in Gokaldas Gopaldas v. Puranmal Premsukh (sic) 8 Ind. Jur. 396 : 5 Ind. Dec. 692 (P.C.). The latter governed the facts of Chidambaram Nadan V. Musuvathi Muni Nagendrayyan 58 Ind. Cas. 813 : 39 M.L.J. 445 : (1920) M.W.N. 534 28 M.L.T. 300 and was rightly applied but, there was no need to explain the decision in Mohesh Lal v. Mohant Bawan Das 13 C.L.R. 221 : 7 Ind Jur. 382 : 4 Ind. Dec. 1291 (P.C.) as it could not present any difficulty in the disposal of the case. On the other hand the decision in Koopmia Sahib v. Chidambaram Chetti 6 Ind. Dec. 778 and Chellamcherla Kalagayya v. Mummareddi, Yanadamma 9 Ind. Cas. 139 : 21 M.L.J. 180 : 9 M.L.T. 258 follow and apply Mohesh Lal v. Mohant Bawan Das 10 I.A. 62 : 13 C.L.R. 221 : 7 Ind Jur. 382 : 4 Sar. P.C.J. 424Mollayya Padayachi v. Krishnaswami Aiyar. A.I.R.(1925) (M.) 95 : 21 L.W. 336. Though the learned Judges in that case agreed in the conclusion, they gave differing reasons. The reasons of Kumaraswami Sastri, J., are not applicable in the present case. Spencer, J., relied on Narayana Kutti Goundan v. Pechiammal (1912) M.W.N. 353 : 22 M.L.J. 364 and Bhag-wan Singh v. Muhammad Mazhar Ali Khan 23 Ind. Cas. 339 : 12 A.L.J. 394 and held that the plaintiff was interested in paying the amount. The case in Narayana Kutti Goundan v. Pechiammal 22 M.L.J. 364 was, the case of a reversioner and as was pointed out by me in Narayanasami Naicker v. Periasamy Odayar 68 Ind. Cas. 731 : (1921) M.W.N. 465 : 41 M.L.J. 163, a reversioner may, in certain circumstances, be entitled to redeem even during the lifetime of the widow [the report at page 959 erroneously refers to Meda Vengamma v. Mitla Chelamiah 15 Ind. Cas. 17 : 12 M.L.T. 293 : 23 M.L.J. 168 instead of the case in Narayana Kutti Goundan v. Pechiammal 11 M.L.T. 174 : (1912) M.W.N. 353 : 22 M.L.J. 364. The case in Bhagwan Singh v. Muhammad Mazhar Ali Khan 23 Ind. Cas. 339 : 12 A.L.J. 394 is the case of a co-mortgagor. Neither of these cases nor the decision in Mollayya Padayachi v. Krishnasivami Aiyar 85 Ind. Cas. 855 21 L.W. 336 are helpful to me in deciding the present case. Mr. Ramachandra Iyer also relies on Dinobundhu Shaw Chowdhry v. Jogmaya Dasi 4 Bom. L.R. 238 : 8 Sar. P.C.J. 217 (P.C) and Ammani Animal v. liamaswami Naidu 51 Ind. Cas. 57 : 37 M.L.J. 113 . But these cases are distinguishable. In the former, the second mortgage became futile even against the mortgagor as it was effected during the pendency of an attachment and it was held that the first mortgage was intended to be kept alive. But in the case before us, Ex. A remains perfectly valid, against Akkal Naicker and 4th defendant and their properties and the plaintiff wishes to add to the security by claiming a charge even against the appellant's properties wrongly included in Ex. A. I at first thought that Ex. A being a valid mortgage of Akkal Naicker's propeities (common to Exs. A and B) as regards the consideration other than that which was utilised in the payment of Ex. B, the plaintiff might be regarded as second mortgagee of Akkal Naickers's properties and could thus redeem Ex. B Sectin 74 of the Transfer of Property Act and thus subrogate himself to the rights of the mortgagee under Ex. B., and thus indirectly could claim a charge even against such of the properties of the 1st defendant which were common to Exs. A and B. But the same might be said on the facts of Mohesh Lal v. Mohant Bawan Das 4 Ind. Dec. 1291 and as the Judicial Committee refused any relief against Bavan Das by splitting up the suit bond into two parts), I do not think this line of reasoning is permissible: See Chellamcherla Kalagayya v. Mummareddi Yanadomma 9 Ind. Cas. 139 : 21 M.L.J. 180 : 9 M.L.T. 258; Koopmia, Sahib v. Chidambaram Chetti 6 Ind. Dec. 778 and Govindaswami Thevan v. Doraiswami Pillai 8 M.L.T. 132 : (1910) M.W.N. 390.

7. If the plaintiff after finding he was misled by Akkal Naicker in dealing with the properties of 1st defendant abstained from the payment of the amount due on Ex. B as provided for in Ex. A and informed Akkal Naicker of the same, he might then possibly become a second mortgagee of Akkal Naicker's properties only, whether he would then be entitled to redeem Ex. B by reason of his position as such second mortgagee, need not be discussed as it is not suggest ed in the present case that the payment of the amount due on Ex. B was paid otherwise than in pursuance of the terms of the deed (Ex. A). We are bound to follow Mohesh Lal v. Mohant Bawan Das 4 Sar. P.C.J. 424 : 4 Ind. Dec. 1291 (P.C.). If is not suggested that there are any other facts from which an intention to keep Ex. B alive can be inferred, The primary object of Ex. A was to pay off Ex. B.

8. In the view I take of this point, it is unnecessary to consider the question of limitation.

9. The result is that the appeal must be allowed and the plaintiff's suit will be dismissed with costs throughout so far as the defendants Nos. 1 to 3 are concerned. The decree against 4th defendant will stand. A fresh mortgage-decree will be drawn up against the properties of the 4th defendant only. The time for payment is extended to 24th August 1925.


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