Skip to content


Sambandasami Mudaliar Vs. Ramaswamy Mudaliar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1998)3MLJ497
AppellantSambandasami Mudaliar
RespondentRamaswamy Mudaliar and ors.
Cases ReferredSundaram Aiyar v. Valia Mannadiar
Excerpt:
- constitution of india article 141; [a.p. shah, c.j., f.m. ibrahim kaliffulla &v. ramasubramanian, jj] reference to larger bench - precedent - full bench decision held, it is binding on the division bench. only if the full bench comes to conclusion that earlier full bench decision is incorrect, there is scope for making reference to larger bench. division bench doubting correctness of full bench decision cannot direct registry for placing papers before chief justice to make reference to larger bench. .....is the appellant in the above second appeal. the plaintiffs filed the suit for holding that the suit mortgagee created on 14.6.1972 be redeemed and discharged on the plaintiff's depositing a sum of rs. 900 and ordering delivery of possession of the property to the plaintiffs through court.3. according to the plaintiffs the property belonged to the plaintiffs and the third defendant, the first plaintiff being the father and plaintiffs 2 and 3 and the third defendant being his sons. on 14.6.1972 the plaintiffs and the third defendant had executed a simple mortgage in favour of the first defendant in respect of the suit property for a sum of rs. 4,500. even though the document recites that the transaction was a simple mortgage, the intention of the parties was only to create a.....
Judgment:

K.P. Sivasubramaniam, J.

1. This second appeal is directed against the judgment of the learned Principal Subordinate Judge, Cuddalore, in A.S. No. 38 of 1984 dated 25.6.1985, confirming the judgment of the learned District Munsif, Cuddalore, in O.S. No. 1206 of 1980 dated 21.1.1984.

2. The first defendant in the suit is the appellant in the above second appeal. The plaintiffs filed the suit for holding that the suit mortgagee created on 14.6.1972 be redeemed and discharged on the plaintiff's depositing a sum of Rs. 900 and ordering delivery of possession of the property to the plaintiffs through Court.

3. According to the plaintiffs the property belonged to the plaintiffs and the third defendant, the first plaintiff being the father and plaintiffs 2 and 3 and the third defendant being his sons. On 14.6.1972 the plaintiffs and the third defendant had executed a simple mortgage in favour of the first defendant in respect of the suit property for a sum of Rs. 4,500. Even though the document recites that the transaction was a simple mortgage, the intention of the parties was only to create a usufructuary mortgage and the first defendant agreed to lend money if he was put in possession of hypothecate. Plaintiffs and the third defendant agreed for this. As the stamp duty payable for usufructuary mortgage was far higher than the stamp duty payable for a simple mortgage, the first defendant himself suggested that it was less expensive to style the document as a simple mortgage and hence the plaintiffs and the third defendant executed the document as simple mortgage, though the intention of the parties was to treat the transaction as usufructuary mortgage. The plaintiffs further pleaded that the first defendant entered into the hypothecation and from 14.6.1972 and has been exercising his rights as a usufructuary mortgage only. The absence of demand for payment of interest and the conduct of the first defendant all these eight years would clearly confirm the fact that the transaction was only a usufructuary mortgage and therefore, the first defendant was estopped from contending that the transaction was not a usufructuary mortgage. In fact, the first defendant was in possession and enjoyment of the suit property eversince the date of mortgage only as a usufructuary mortgagee. On 27.6.1980 the plaintiffs had issued notice to the first defendant claiming that they were entitled to the benefits of Tamil Nadu Debt Relief Act 40 of 1979, that eight-tenths of the principal amount get wiped out by virtue of Section 9 of Act 40 of 1979 and that they were ready and willing to pay-off the sum of Rs. 900 being the 2/10ths of the principal amount payable and the first defendant should deliver possession of the hypotheca and record full discharge of the mortgage. Further in his reply notice dated 30.6.1980 the first defendant denied and repudiated the demands as novel and fictitious claim of his being put in possession of the suit property under an oral agreement of sale as a purchase. The said allegations to the reply notice were false and unsustainable. When the first defendant had obtained a registered deed from the plaintiffs and the third defendant evidencing the creation of the mortgage, it was absurd and improbable for the first defendant to contend that there was an oral agreement of sale in June, 1972. Therefore, in view of the refusal of the demand for redemption of the suit mortgage, the plaintiffs were constrained to file the suit for redemption. The third defendant was also a co-mortgagor and was unable to join the plaintiffs as he was aboard, and therefore, he was impleaded as a defendant. The second defendant was the son of the first defendant and as the plaintiffs learnt that the second defendant intended to obstruct the plaintiffs' right he was also impleaded.

4. In the written statement filed by the first defendant, it was contended that both the plaintiffs and the first defendant were good friends and the first defendant had rendered help to the plaintiffs and the third defendant in several ways and they had mutual trust and confidence and the plaintiff's claim that the mortgage deed was executed on 14.6.1972 for a sum of Rs. 4,500 was denied. The first defendant questioned the execution and attestation of the said mortgage. He also contended that he came to know about the existence of the document only from the written statement of the plaintiffs in O.S. No. 1106 of 1980, which was a suit filed by the defendant for specific performance. He was not in possession of original document and the plaintiffs and the third defendant must have got up such a document with ulterior motive without the knowledge of the first defendant to defeat his rights. The first defendant advanced a sum of Rs. 4,500 for family expenses and marriage expenses of Thirunavukkarasu and it was advanced as loan on several occasions' without taking any document from the plaintiffs and the third defendant. In or about 1972 the first defendant insisted upon the amount due to him and the plaintiffs and the third defendant represented that they had no money with them and they offered to sell the suit property for the amount of the suit Rs. 4,500 as already borrowed by them. The said sum of Rs. 4,500 represented the value of the property, and thus a contract of sale of the suit property was arrived at between the plaintiffs and the third defendant on the one hand and the first defendant on the other, whereunder it was agreed that the suit property would be sold for Rs. 4,500. The plaintiffs and the third defendant represented further that as there was no written partition evidencing the allotment of the property to the share of the first plaintiff, they would execute a sale deed in favour of the first defendant after the partition deed was registered and he agreed for the postponement of the sale. The first defendant would also contend that in pursuance of the agreement of sale, the possession of the property was delivered to him and since then he has been in continuous possession and enjoyment of the property as a person holding under the agreement of sale. However the plaintiffs and the third defendant were postponing the registration under the pretext that there was a delay in effecting the partition. Therefore, the contention that the intention of the parties had always been to create a usufructuary mortgage and that the first defendant had agreed to land and that the first defendant had agreed to lend money only if he was let in possession of the property were false. The first defendant never made any suggestion nor was there any need for making such a suggestion. The first defendant was not at all aware of the execution of the so called simple mortgage in his favour by the plaintiffs. Since the plaintiffs were setting up such a case in the plaint, the first defendant was not party to such a fraud practice on the Government. The transaction as pleaded by the plaintiffs was denied by the first defendant. He was holding the property, in possession and enjoyment only as a person holding under the agreement of sale and not as a usufructuary mortgagee. The document dated 14.6.1972 was sham and nominal and it was not true. The plaintiffs were not entitled to sue for redemption as there was no mortgagee either simple or usufructuary. The plaintiffs are not entitled to claim benefits under Act 40 of 1979.

5. On the basis of the said pleadings and the-evidence both oral and documentary, the trial Court held that the first defendant was in possession of the property only in the capacity of a mortgagee. With the result, the suit for redemption of mortgage was decreed. The suit filed by the appellant herein for specific performance for enforcement of the alleged sale agreement namely, in O.S. No. 1160 of 1980 was also tried along with the present suit under appeal and by a common judgment the said suit was dismissed against the appellant on the basis of a finding that the alleged agreement for sale was not established. As against the said judgment the appellant herein filed two appeals before the lower appellate Court. Both the appeals were dismissed by the lower appellate Court. Second Appeal No. 1480 of 1985 was filed as against the dismissal of the suit for specific performance in O.S. No. 1106 of 1980 and the said second appeal was dismissed by this Court on 30.8.1985. Therefore, the present second appeal is directed against the redemption suit filed by the respondent herein in O.S. 1206 of 1980 and as confirmed by the lower appellate Court in A.S. No. 38 of 1984.

6. A Preliminary objection was taken by the learned Counsel for the respondents to the effect that the dismissal of the second appeal as against the suit for specific performance filed by the appellant would be a complete bar for arguing the present second appeal on merits inasmuch as both the suits and the two first appeals thereon had been disposed of by the Courts below by a common judgment, based on same evidence and findings. As such the result of the second appeal in respect of one suit has to be followed in the other, according to the learned Counsel for the respondents. I am unable to agree with the said objection. For whatever the reasons both the suits were tried together, the issue which arises for consideration in the suit for specific performance is whether there was an agreement and if so whether the plaintiff was entitled to a decree or not. In the mortgage suit even if the mortgagee's claim for agreement for sale may fail the mortgagee may yet successfully plead the other defences against redemption such as plea of limitation or that the mortgage debt still remains undischarged. In fact, even though both the suits were tried together it was possible for the Courts below to have dismissed the suit for specific performance and at the same time to have dismissed the suit for redemption also for valid reasons. Therefore, the result of the specific performance suit filed by the mortgagee need not affect the result of the suit for redemption which has to be independently considered. Therefore, the said objection is overruled.

7. On the merits of the second appeal the findings rendered by both the Courts below pertain to pure questions of fact which cannot be set aside in this second appeal. The defence of the appellant in the redemption suit was one of denial of the execution of the mortgage itself. The Courts below on a very detailed consideration of the evidence have concurrently found that the mortgage as pleaded by the plaintiffs was true and that the first defendant was in possession of the property only in the capacity of a mortgagee. Learned Counsel for the appellant has not been able to convincingly establish how the said findings were in any manner illegal or perverse.

8. However, learned Counsel for the appellant contends that there was no proper consideration of the claim of the plaintiffs that they were entitled to the benefits of Act 40 of 1979 and that there has been absolutely no discussing on the said issue.

9. In this context, the plaintiffs have clearly pleaded that they are entitled to the benefits of Act 40 of 1979. In the evidence also plaintiffs had stated that he has also secured agricultural loan under Ex.B-3. On this issue the plaintiff was not at all cross-examined. The first defendant had concentrated only on the issue of proof of the sale agreement in his favour and he did not seriously challenge the claim of the plaintiff being entitled to the benefits of Act 40 of 1979. When once the plaintiffs have prima facie established that he was a small agriculturist being entitled to the protection of the Act, the burden of proof that he was not entitled to the protection of the Act was on the first defendant. Therefore, the plea that the plaintiffs had not established their claim, cannot be entertained at the stage of the second appeal.

10. Learned Counsel for the appellant contends that he had made certain improvements over the land and the fact that he had dug up a well has not been disputed by the plaintiffs and that therefore, he was entitled to be compensated for the improvement as provided under Section 63-A of the Transfer of Property Act. It is true that Section 63-A of the Transfer of Property Act entitled the mortgagee to claim for the improvements. Inasmuch as the fact that the first defendant had dug up a well was admitted by the plaintiffs in the interest of equity. I was inclined to uphold the claim of the appellant, but the contention of the learned Counsel for the respondents that Section 63-A of the Transfer of Property Act will not apply to the facts of the present case, was well taken, Section 63-A of the Transfer of Property Act is as follows:

63-A Improvements to mortgaged property: (1) Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, been improved, the mortgagor, upon redemption shall, in the absence of a contract to the contrary, be entitled to improvement, and the mortgagor shall not, save only in cases provided for in Sub-Section (2), be liable to pay the cost thereof. (2) Where any such improvement was effected at the cost of the mortgagee and was necessary to preserve the property from destruction or deterioration or was necessary to prevent the security from becoming insufficient, or was made in compliance with the lawful order of any public servant or public authority, the mortgagor shall, in the absence of a contract to the contrary, be liable to pay the proper cost thereof as an addition to the principal money with interest at the rate of nine per cent, per annum, and the profits, if any, accruing by reason of the improvement shall be credited to the mortgagor.

11. Learned Counsel for the respondents rightly contends that the entitlement for improvement as envisaged under Section 63-A (i) is made subject to the requirement under Section 63-A.

(ii) The claim can be sustained and restricted only to the class of improvements specified thereunder namely, when such improvement was effected at the cost of the mortgagee and was necessary to preserve the property from destruction or deterioration or was necessary to prevent the security from becoming insufficient or was made in compliance of lawful order of any public servant or public authority etc., as provided under Section 63-A(2) of the Transfer of Property Act. It cannot be disputed that digging up of well cannot be stated to be an improvement as contemplated under the said provision. Learned Counsel for the appellant relied on a judgment of this Court reported in Md. Mohideen Rowther v. Mohd. Mohideen Rowther : AIR1960Mad24 . In the said case, the issue which arose before the Court was the cost of the repair carried out by the mortgagee. In fact, the learned Judge has elaborately considered whether repairing should be construed as an improvement. The learned Judge has also concluded after the analysis of the expression 'repair' and 'improvement', that all repairs were improvements though all improvements need not be repairs. Therefore, in that case, the claim of the mortgagee was allowed on the basis of the finding that what was carried out was only repair and that in terms of Section 63-A of the Transfer of Property Act, the mortgagee was entitled for reimbursement.

12. Reference was also made to a judgment of Division Bench of this Court reported in Sundaram Aiyar v. Valia Mannadiar : AIR1947Mad197 . In that case, the Division Bench did not deal with the question as to whether the improvements did or did not satisfy the requirements under Section 63-A of the Act. The nature of the improvements were not called in question and the issue decided in the said judgment was only to the effect whether the mortgagee would be entitled to claim the cost of improvement and the Division Bench merely held that the mortgagee will not be entitled to claim the cost of improvement unless and otherwise there was a contract to the contrary, the mortgagor will be entitled to improvements. The said judgment therefore, does not deal with any issue which arises for consideration in the present second appeal. The expression in the Section itself is very clear. Unless and otherwise the improvement pertains to any of the terms as prescribed under Section 63-A(2) of the Transfer of Property Act, the mortgagee will not be entitled for reimbursement. In the present case, digging up of a well does not fall within any of such classifications and as such I am unable to sustain the claim of the counsel for the appellant that the appellant will be entitled for reimbursement of the improvement. 13. Therefore, there being no merits in the above second appeal, the same is dismissed. No costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //