Madras High Court
E. Jeevadhas And Anr. vs G. Babu And Ors. on 11 March, 1998
Equivalent citations: (1998)2MLJ526
JUDGMENT S.S. Subramani, J.
1. Both these second appeals arise out of the same suit in O.S.No. 392 of 1978 on the file of Additional District Munsif, Kuzhithurai. In S.A.No. 2226 of 1983 the appellants are defendants 5 and 6, and in S.A.No. 59 of 1984, the appellants are defendants 1 and 2. The description of parties will be according to their rank in the suit.
2. Plaintiffs two in number filed the suit for declaration of their title and possession and also for partition. The plaint schedule properties are three in number. Item No. 1 is northern-most 1 acre, 32 cents, which is 1/3rd of the total extent in S.No. 4666 of Mehtukummal Village. Item No. 2 is another 1/3rd in S.No. 4667, in the northern 50 cents. Item No. 3 is the eastern-most 96 cents, which is 1/3rd portion of S.No. 4668. All these properties originally belonged to one Mallan Neelakantan's family by name Pilloor house. From that family a mortgage was executed in favour of one Padmanabban Thaveethu as per Ex.A-1 dated 4.1.1064 M.E. The mortgagee left his five sons to inherit his right over the said property and they are Poulu, Menuel, Manas, Nallathampi and Arumanayakam, each having 1/5th share in the property. It is the further case of the plaintiffs that two of the mortgagees viz. Nallathampi and Arumanyakam, who had 2/5th share in the mortgage right executed a mortgage in respect of their share in favour of one Madan Isaac and Yovan Simpson as per Ex.A-2, dated 26.8.1101 M.E. Both these mortgagees came into possession and were enjoying the same. It is the further case of the plaintiffs that equity of redemption in respect of the plaint survey number properties was partitioned amount the jenmies in the year 1103 M.E and the plaint schedule properties were allotted to the branch of the 1st defendant. Even though there was partition, the possession was with the two mortgagees - Madam Isaac and Yovan Simpson, Out of the two mortgagees, one of them viz., Yovan Simpson assigned his one half right in favour of one Gnanabaranam in the year 1112 M.E., as evidenced by Ex.A-3, dated 21.10.1112 M.E. Gnanabaranam died and his right was inherited by his two daughters - Christal Bai and Saleelal. The one half which belonged to Madan Isaac under Ex.A-2 devolved on his only son Matheyee. It is said that the right of Nallathampi and Arumanayakam was never redeemed, and the mortgagees perfected title as the mortgage become barred. Christal Bai, Saleelal and Mathayi executed sale deeds in favour of the plaintiffs under Exs.A-4, A-5 and A-6 in this case. It is the case of the plaintiffs that on the basis of these documents, they are in possession of the scheduled properties, and the defendants are interfering with their possession. Since it is in respect of 2/5th share, they seek a decree for partition of their 2/5th share in the suit items by metes and bounds and for separate possession.
3. In the written statement filed by defendants 1 and 2, they contended that even though in the plaint three survey numbers are mentioned, the property in S.No. 4666 was not the subject matter of the mortgage under Ex.A-1, which is a separate property. Survey Nos. 4667 and 4668 alone form one property. The mortgage under Ex.A-1 is in respect of S.Nos. 4667 and 4668 only, and not for S.No. 4666. The mortgagee under Ex.A-1 was in possession of the properties in S.Nos. 4667 and 4668, and on his death, it devolved on his five sons as referred to in the plaint. While they were in possession, a fresh mortgage was executed under Ex.B-2 dated 11.11.1087 M.E., and the mortgage under Ex.A-1 stood redeemed when they obtained Ex.B-2. The mortgagees were in possession of only these two survey numbers under Ex.B-2. Regarding Ex.A-2, it is contended that it is only a mortgage executed by two of the mortgagees, and therefore, it is only a sub-mortgage. It never took effect not it was intended to take effect. It was also not followed by possession The mortgagees under Ex.A-2 never enjoyed the property and Nallathampi and Arumanayakam continued in possession. The sub-mortgagees also never dealt with the property. At the same time the jenme family had direct dealings with the mortgagees. They had no knowledge about the sub-mortgages or of the execution of the sub-mortgage rights in favour of Isaac and Simpson. As per the partition deed of 1103 M.E., in the owner's family, 1/3rd share was allotted to 1st defendant's mortgagee. As per Ex.B-1, dated 10.1.1104 M.E., executed by 1st defendant's father as his guardian a mortgage was executed in favour of Manuvel for all the properties covered by Exs.A-1 and B-2 mortgages Manuvel was directed to get redemption of the properties from his brothers. In fact, Manuvel became a superior mortgagee, and on that basis he redeemed from his brothers as evidenced by Ex.B-3. After redemption, Manuvel was in physical possession of the property. Nallathampi and Arumanayakam also surrendered their rights under Ex.B-3. Manuvel's right devolved on his death on his sons viz., Enose and Thankayyan. Ex.B-4 mortgage was redeemed by the 1st defendant on 29.3.1962 as per Ex.B-5 and the 1st defendant came into possession of the property. Thereafter, he sold one cent of property to Enose and Thankayyan and also to third persons. He also gifted 50 cents on 11.10.1970 in S.No. 4668 under Ex.B-36, in favour of his daughter Sumangala Devi. It is said that the 1st defendant is not aware of any sub-mortgage in favour of Isaac and Simpson. Without knowledge of the sub-mortgage, they have already redeemed the original mortgage, and therefore, the plaintiffs who claim right under the sub-mortgage is not entitled to any right. The sub-mortgagees have also lost their rights, since it is more than 12 years from the date of redemption of the original mortgage. They prayed for the dismissal of the suit.
4. The defendants 5 and 6 are alienees from defendants 1 and 2 and they also supported the case of their vendors. Hence, their contentions are not repeated. But their specific case is that no portion of S.No. 4666 is subject matter of Ex.A-1 mortgagee.
5. The trial court on the above pleadings took oral and documentary evidence. On the side of the plaintiffs, the 1st plaintiff got himself examined as P.W.1, apart from two other independent witnesses, and Exs.A-1 to A-13 were marked. On the side of the defendants D.Ws.1 to 4 were examined and Exs.B-1 to B-50 were marked. After evaluating the entire evidence, the trial court came to the conclusion that S.No. 4666 was not the subject matter of Ex.A-1 mortgage. It further came to the conclusion that Exs.A-1 and B-2 mortgages were redeemed, and therefore, the plaintiffs cannot claim any right. The sub-mortgagees were also not in possession. The plaintiffs also cannot claim any right over specific plots as scheduled to the plaint. It also came to the conclusion that after Ex.A-2 sub-mortgage, the original mortgagees and their successors in interest were directly dealing with the 1st defendant and others under various documents, and they alone continued in possession till their rights were extinguished as evidenced by Ex.B-5, dated 29.3.1962. It also came to the conclusion that the 1st defendant has also executed various documents in favour of his daughter, the 2nd defendant and also to strangers and alienees are also in possession. The trial court was of the view that the plaintiffs have miserably failed to prove their possession, and therefore, dismissed the suit.
6. Aggrieved by the said judgment, plaintiffs preferred A.S.No. 49 of 1981, on the file of Subordinate Judge, Kuzhithurai. The lower appellate court was of the view that the sub-mortgagees, on the basis of the recitals in the documents might have come into possession, and therefore, the plaintiffs are also entitled to a right as claimed by them. A decree was granted as prayed for. It is the said judgment that is assailed by the defendants 1 and 2 and defendants 5 and 6 in these two second appeals. It may also be worthwhile to note that in the first appeal, a Commissioner was also deputed, who prepared a plan and report, and the same were marked as additional evidence as Exs.C-1 and C-2.
7. In S.A.No. 2226 of 1983, the following substantial questions of law have been raised for consideration:
1. Whether the lower appellate court is right in overlooking the principle relied on by the trial court on the basis of the decision reported in Sahadev Ravji Bagade v. Shekh Papa Miya 22 M.L.J. 249, that when a mortgagee sub-mortgages his mortgage to another person without the knowledge of the original mortgagor, on redemption of the original mortgage the sub-mortgage will be automatically extinguished;
2. Whether the lower appellate court is right in reversing the judgment of the trial court by overlooking the principle that when there is a dispute regarding the identity of property, bounded is the deciding factor.
In S.A.No. 59 of 1984, the following substantial question of law has been formulated for consideration:
Whether Ex.A-2 mortgage could be redeemed and whether the same has not become barred by the law of limitation.
According to me, all these questions of law could be considered together. The claim of the plaintiffs is based on Ex.A-2. In Ex.A-2, Nallathampi and Arumanayakam, who are the two sons of original mortgagee Padmanabhan Thaveethu do not describe their right to execute the document. The only statement in Ex.A-2 is that the property belong to them.
8. Ex.A-1 is admitted by all sides. That was executed by the family of the 1st defendant. Ex.B-2 of the year 1087 M.E., was executed in favour of five sons of the mortgagee - Padmanabhan Thaveethu. It is in evidence that Padmanabhan Thaveethu was alive during that time and he died a few moths before Ex.A-2. It is admitted in the plaint that the rights of Padmanabhan Thaveethu devolved on his five sons. The recital in Ex.B-2, while the five sons take the mortgagees, is that they are adjusting the mortgage amount covered under Ex.A-1. Even though Padmanabhan Thaveethu was alive at that time when Ex.B-2 was executed, on his death, his sons naturally become the mortgagees directly under the 1st defendant's family and since there was an adjustment of a prior debt, Ex.A-1 also stands redeemed. The mortgage amount under Ex.A-1 is adjusted in the total consideration in Ex.B-2. So there is aft automatic redemption of Ex.A-1.
9. Thereafter, a partition was effected among the members of the 1st defendant's family in 1103 M.E. The 1st defendant is allotted the plaint schedule properties under that deed is admitted in the plaint itself. While the 1st defendant was a minor his father as his guardian' executed Ex.B-1, superior mortgage in favour of one of the sons of Thaveedu, with a direction to redeem Ex.B-2 mortgage. Pursuant to the same, Manuvel, the mortgage under Ex.B-1 redeemed all the remaining four shares of the sons of Thaveedu under Ex.B-3, dated 5.12.1113 ME. Nallathampi and Arumanyakam are also parties to Ex.B-3. A reading of Ex.B-3 shows that even Nallathampi and Arumanayakam surrendered physical possession of the property, they never said that the property is the subject of any mortgage executed by them under Ex.A-2. After Ex.B-3, Nallathampi or Arumanayakam did not have any right over any portion of the plaint schedule property.
10. In this case, the plaintiffs claim right on the basis of a mortgage executed by Nallathampi and Arumanayakam under Ex.A-2. That was in the year 1101.M.E. It was three years thereafter, Ex.B-3 document was executed by the executants therein, wherein they said that they have also surrendered physical possession. Nowhere in Ex.B-3, there is any reference to Ex.A-2. The only reference that is made in Ex.B-3 is of Ex.B-2 document of 1087 M.E. The plaintiffs claim right under Exs.A-4, A-5 and A-6, on the basis of documents executed by persons claiming under the sub-mortgagees under Ex.A-2. The claim is based on the footing that sub-mortgage has not been redeemed by anyone and therefore, they have obtained absolute right. It is the said legal position that requires consideration in these second appeals. The fact that Ex.A-2 is a sub-mortgage cannot be disputed, for it was executed by the mortgagees under Ex.B-2. A sub-mortgage is a partial transfer or assignment of the mortgagee's interest. As between the sub-mortgagee and the original mortgagor there is no privity of contract. In cases, where the original mortgagor pays of the mortgagee what is the legal effect under sub-mortgage?
11. In one of the early decision of our High Court reported in Viswanatha Ayyar v. Chimmukutti Amma and Ors. A.I.R. 1932 Mad. 115, it was held thus:
If a mortgagor without notice of any sub-mortgage pays off his mortgagee out of court, the sub-mortgagee cannot after that redemption bring the right mortgaged to him to sale....
A sub-mortgagee left out of a redemption suit against his mortgagor, which ends in redemption cannot claim afterwards to bring either the property originally mortgaged to his mortgagor or what was mortgaged to himself to sale. There is a distinction between the position of a puisne mortgagee and a submortgagee in that respect. A puisne mortgagee obtains an interest in the property originally mortgaged and every puisne mortgagee in his turn has a right to have his claim satisfied out of the property originally mortgaged until it is exhausted. A submortgagee has no direct interest in the property originally mortgaged by his mortgagor's mortgagor. He has only an interest in the mortgage right obtained by his mortgagor - a right which he knows is terminable - and, when that right has been legally terminated, his security so far is gone. A mortgagor cannot be allowed by redeeming some of his mortgagees to defeat others, but, when a mortgagor wishes to exercise his legal right to redeem a mortgage created by him, he cannot be obstructed or delayed by the existence of a submortgage of which he has never had knowledge or notice. We are certainly not at liberty to allow new obstacles to be invented in the way of redemption.
12. In Fateh Bahadur Singh v. Mt. Subhago Kuer and Ors. A.I.R. 1938 Pat. 265, it was held thus:
Payments of interest and payments on account of principal, made by a mortgagor to a mortgagee after, but without notice of, a transfer must, in absence of collusion, be allowed to the mortgagor as against the transfer. The principle applies to a case when the mortgagor has paid off the whole of the mortgage debt in the absence of notice.
13. In Mohan Singh and Ors. v. Pandi Sewa Ram and Ors. A.I.R. 1924 Oudh 209, it has been observed thus:
It is a well settled principle of law that if the sub-mortgagee given no notice to the original mortgagor of the assignment of the mortgagee's rights in his favour the original mortgagor would be justified in paying the debt wholly or in part to the assignor thereby extinguishing the original mortgage altogether. It follows that on such an extinction taking place the sub-mortgagee has no remedy left against the property.
14. A Division Bench of the Allahabad High Court in a decision reported in Dhagwati Prasad v. Dullan Singh and Anr. A.I.R. 1939 All. 719 held thus:
A sub-mortgagee stands in no higer position than the mortgagee. He is bound by the state of account between the mortgagor and mortgagee. He must take the accounts as they stand after the creation of security, unless he protects himself by giving notice to mortgagor and a decree fixing the state of account, though a compromise decree is binding on him.
15. A Full Bench of the Kerala High Court in a decision reported in Chellamma v. Kurumalkate Paremanakkal Parameswaran 1970 K.L.T. 313 (F.B.), after referring to the decision reported in Viswanatha Ayyar 's case A.I.R. 1932 Mad 115, held thus:
The non-joiner of a necessary party does not render the decree in the suit a nullity though it might, in some case, make the decree ineffectual. The decree is good as against the party to the suit and the redemption effected in the suit against the mortgagee without the submortgagee on the party array is an effective redemption so far as the mortgagee is concerned. The redemption cannot affect the rights of the sub-mortgagee. His sub-mortgage remains in force, and, if the redeeming mortgagor is bound thereby, he can enforce his sub-mortgage against the property in the hands of the mortgagor. The question whether, after the redemption, the sub-mortgagee has any right which he can enforce against the property in the hands of the mortgagor depends on whether the mortgagor was aware of the sub-mortgage at the time of the redemption.
A sub-mortgage being in the nature of an assignment of the mortgage, the principle underlying the proviso has always been applied to the case of a redemption of a mortgage by the mortgagor without the conjunction of the sub-mortgagee. The express notice contemplated by the proviso is not insisted upon, but, if the redemption be without notice of the sub-mortgage then it is valid as against the sub-mortgage. Mere registration of the sub-mortgage is not notice thereof to the mortgagor since by the redemption he does not acquire the property transferred under the sub-mortgage or any part thereof.
16. Mulla on the Transfer of Property Act - Eighth edition - 1995, at page 449 has said that:
When a mortgagee sub-mortgages his mortgage to another person without the knowledge of the original mortgagor, and the original mortgagor pays off the amount to the mortgagee the sub-mortgagee's rights against the land are extinguished.
None of the plaintiffs had a case that Ex.A-2 was made known to either the 1st defendant or his predecessors and the circumstances show that the sub-mortgage was not brought to the notice of the real owners and they redeemed the entire property under Ex.B-3. The mortgagees also surrendered their right and declared that they are in possession. The possessory right was also transferred.
17. Once the mortgagee has received the entire mortgage amount, even if there is a sub-mortgage that also stands extinguished, the sub-mortgagee has no enforceable right against the mortgagor. The plaintiffs claim only the right of the so-called sub-mortgagee. If the sub-mortgage also stands extinguished as against the original mortgagor, there will be no transferable right and Exs.A-4, A-5 and A-6 fall to the ground. The trial court has also considered the evidence and has rightly come to the conclusion that the sub-mortgagees Were also not in possession. The various transactions after Ex.B-3 show that they could not have been in possession. After Ex.B-3, another mortgage was executed in the year 1117 M.E., and a fresh charge was also created under Ex.B-4, dated 13.11.1120 M.E. The 1st defendant borrows further amount from Enose one of the sons of Manuvel. In that document, the mortgagee declares that he is in physical possession of the entire property and that mortgage is also redeemed under Ex.D-5 on 29.3.1962. Thereafter, the 1st defendant executed a gift deed in favour of his daughter, the 2nd defendant in this case. He also sold a portion of the property to a stranger. It may be noted that between 1120 M.E., and 1962, Manuvel, the mortgagee under Ex.B-4 also executes various documents in favour of third persons and those rights are also extinguished, when Ex.B-5 was taken. Exs.B-29 B-30 and B-33 are documents executed by the 1st defendant in respect of portions of the plaint schedule and the transferee also came into possession. After the gift was executed in favour of the 2nd defendant, she executes a mortgage under Ex.B-31, in favour of one Packianathan Nadar and Jebamabni, under Ex.B-31. A suit was filed for redemption as O.S.No. 147 of 1978. Ex.B-32 is the plaint. From these documents, it is clear that the so-called sub-mortgagees under Ex.A-2 would not have come into possession.
18. From 1101 M.E., till the date of suit, no tax is paid by the plaintiffs or the so-called sab-mortgagees. It is settled law that in a case of possessory mortgage, it is the mortgagee who is bound to pay kist to the property. If in fact, the mortgagees were in possession under Ex.A-2, they would have paid the tax or kist for the property. At the same time, we find that the tax was being paid only by the father of the 1st defendant, and from 1950 onwards the various mortgagees for the property. The tax receipts filed by the plaintiffs - Exs.A-7 to A-12 are all after the suit. Under the above circumstances, the finding of the trial court that sub-mortgagees would not have been in possession has force. Even assuming that sub-mortgage was there, once the parent mortgage is redeemed, automatically the sub-mortgage also stands redeemed. They have no right to continue in possession, nor they can claim a declaration of title. The effect of various exhibits was not properly considered by the lower appellate court. The, lower appellate court was of the view that Ex.A-2 says that possession has passed and it has to be believed, and on the presumption an interpretation has been given by the lower appellate court that sub-mortgage is not redeemed, and therefore, the plaintiffs are entitled to title. This according to me, is not only misappreciation of evidence, but also a misunderstanding of the facts.
19. This itself is sufficient to dismiss the suit. But in the second appeal filed by defendants 5 and 6, they have also taken a contention that survey No. 4666 is not the subject matter of Ex.A-1 mortgage. Admittedly, S.No. 4666 is not mentioned in Ex.A-1. On that date, survey numbers were also not assigned. The name of the property alone is mentioned. The boundaries are also different. The extent also differs: The name of the property in S.No. 4666 is also different. Of course, the lower appellate court on appreciation of evidence, has come to the conclusion, that S.No. 4666 also included in Ex.A-1. Being an appreciation of evidence, I do not think that I will be justified in interfering with that finding, unless there is a substantial question of law. The question of law raised is only on the basis of appreciation of evidence and the finding can only be against the appellant. Even though the finding on the question of law in S.A.No. 59 of 1984 is against the appellants, in view of my finding in S.A.No. 59 of 1984, that the sub-mortgage stands extinguished, the appeal filed by the defendants 5 and 6, is also to be allowed.
20. In the result, the judgment and decree of the lower appellate court in A.S.No. 49 of 1981 are set aside, and the judgment and decree in O.S.No. 392 of 1978, on the file of Additional District Munsif, Kuzhithurai, are restored, and the suit stands dismissed. The second appeals are allowed. There will be no order as to costs.