Madras High Court
Draviam Chettiar And Anr. vs Ramaiya Chettiar on 20 March, 1934
Equivalent citations: 159IND. CAS.857, (1935)68MLJ362, AIR 1935 MADRAS 390
JUDGMENT Krishnan Pandalai, J.
1. The lower Courts have found that the plaintiff is successor in title to Subba Naick brothers who bought the property from Ayyarappa Naick, the former owner, in 1900 under Ex. A and that the defendants are in possession as successors in title of Manickam Chetty, the mortgagee with possession from Subba Naicks under Ex. B of 1900. It has also been found that the plea of adverse possession raised by defendants is not sustainable as Manickam Chetty was in possession as mortgagee till 1918 and after the sale deed by him of that year only 8 years had elapsed before the suit. In view of these findings the plaintiff was entitled to possession of the property but was bound to redeem the mortgage.
2. The learned Judge's decree for unconditional possession has therefore to be set aside. The respondent-plaintiff asks that he may be given what the District Munsif gave him, a decree for redemption. Although there may have been a formal objection against converting a suit in ejectment to one for redemption if the defendants had been admittedly holding as mortgagee's, yet as the defendants were claiming as purchasers of an absolute interest from a mortgagee the District Munsif gave a decree if the plaint had contained an offer to redeem. The appellants (defendants) submit that in case of redemption they would be entitled to repayment of the amount of a previous hypothecation deed of 1889 Ex. XV111 which Manickam Chetty paid to set aside the Court sale of the property in execution of a decree on that hypothecation. As this point was not taken in the lower Courts whether the appellants are entitled to any such sum and if so how much, will have to be determined after further enquiry. The best course is therefore to remit the following issues, i.e. (1) Did Manickam Chetty pay any and what amount to avoid a Court sale of the property on Ex. XVIII?
(2) Are the defendants entitled to payment of any or what amount on that account before giving up possession?
3. In compliance with the order contained in the above judgment the Subordinate Judge of Tuticorin submitted the following * * * * *
4. Issue I. Considering the evidence I feel no hesitation to conclude that Manickam Chetty paid Rs. 716-1-10 in satisfaction of the decree obtained by Arumugam Chetty on his mortgage, dated 20th February, 1898. I find the first issue accordingly.
* * * * *
5. Issue II. I hold that the defendants are not entitled to the payment of any money before surrender of possession as the mortgage concerned in O.S. No. 178 of 1903 is time barred. I find the second issue in the negative.
6. This second appeal coming on for final hearing after the submission of the findings by the Court of the Subordinate Judge of Tuticorin, the Court delivered the following JUDGMENT
7. The learned Subordinate Judge of Tuticorin has submitted his findings on the issues remitted by my order of 19th April, 1933.
8. On the first issue he finds that Manickam Chetty paid Rs. 716-1-10 on 27th July, 1904 into Court to avoid a Court sale to the suit properties and other properties, covered by Ex. XVIII the mortgage, dated 20th February, 1898, and that the payment was made in pursuance of his purchase Ex. XV, dated 20th July, 1904 for Rs. 1,000 of the suit properties and other properties comprised in that sale deed. I accept this finding which is not seriously objected to.
9. On the second issue whether the defendants are entitled to payment of any and what amount on the above account before giving up possession, the Subordinate Judge has held relying on Kotappa v. Raghavayya (1926) I.L.R. 50 Mad. 626 : 52 M.L.J. 532 that the defendants are not entitled to payment of any amount on account of that payment.
10. The defendants-appellants object to this finding.
11. The suit properties are 5 and odd-acres of land in Adangal Nos. 451 and 452 in Soorangudi Village. These and 29 other properties belonged to Ayarappa Naick who executed a simple mortgage of them on 20th February, 1898 (Ex. XVIII). On 31st August, 1900, by Ex. A he sold the suit properties and 14 others to P. Subba Naicka and C. Subba Naicka who on the same day by Ex. B mortgaged with possession the suit properties to Manickam Chetty. The mortgagee under Ex. XVIII having sued and brought the properties to sale, on 20th July, 1904, by Ex. XV Ayarappa purported to sell the suit properties and 9 other properties to Manickam Chetty for Rs. 1,000 to pay off the mortgage of 1898 and Manickam on the same date paid Rs. 716-1-10 to avoid the Court sale of those properties. On 2nd October, 1906, P. Subba Naicka and C. Subba Naick by Ex. D sold the suit properties to one Perumal. The plaintiff has acquired the rights of Perumal over the suit property on the latter's insolvency through steps it is not necessary to mention.
12. On 7th October, 1918, Manickam Chetty sold his rights under Ex. B, and Ex. XV to one Reddy from whom by family partition and sale from one of the sharers the defendants have got possession of the suit property.
13. It has been held at the previous stages of this case that the plaintiff is the owner of the equity of redemption in pursuance of the sales A and D and the further devolution of that right and that the defendants in the right of Manickam Chetty are entitled to the usufructuary mortgage right of Rs. 500 under Ex. B, which the plaintiffs are entitled to redeem.
14. The further question now left is whether Manickam Chetty having in pursuance of the sale deed Ex. XV for other properties (because his vendor had at that time no interest in the suit properties as they had been already sold under A) paid the debt under Ex. XVIII to save the mortgaged properties from Court sale, the defendants can in Manickam's right claim from plaintiff payment of the whole or any portion of Rs. 716 and odd and if so whether they can in this suit to redeem Ex. B, retain possession till the amount paid to satisfy the debt under Ex. XVIII is also paid.
15. The above two questions are distinct and must be dealt with separately. The first question is one of contribution and of subrogation which depends on intention to be inferred from the facts. Ayarappa the owner of the suit properties and 29 others having jointly mortgaged them under Ex. XVIII and having then sold the suit properties with 14 others out of the above 29 to P. Subba Naicken and C. Subba Naicken who mortgaged suit properties to Manickam, and Manickam having under Ex. XV subsequently bought from the mortgagor Ayarappa under Ex. XV, 9 other properties included in Ex. XVIII (along with the suit properties over which his vendor had no title) and out of the purchase money paid off the mortgage Ex. XVIII. Manickam's payment of Ex. XVIII was really made as owner of the properties he bought from Ayarappa and not as mortgagee of the suit properties from P. Subba Naicken and C. Subba Naicken. Even if we regard his payment as made under the mortgage Ex. B, which is contrary to the fact, still the rights arising therefrom cannot be greater than if his mortgagors P. Subba Naicken and C. Subba Naicken had themselves paid the debt under Ex. XVIII in which case also the payment will be regarded as made by the purchasers of 14 of the properties mortgaged under Ex. XVIII. In either view the debt under Ex. XVIII was paid off by a purchaser of part of the mortgaged properties. In either case the plaintiff as owner of suit properties can only be asked to contribute the share of Rs. 716-1-10 which the value of the suit property bears to that of the rest of the properties mortgaged under Ex. XVIII. This was admitted by the appellants' Advocate.
16. Though there was no discussion of the above facts in the Court below where the Judge dealt with the issue as a pure question of law, it was agreed before me that if the plaintiff is entitled to contribution and resist redemption till the amount is paid, the sum payable to plaintiff on this head should be Rs. 100.
17. But the question remains whether the defendants can use this right of contribution to Ex. XVIII as a shield and refuse to give up possession till they are paid Rs. 100 in addition to the mortgage money under Ex. B.
18. If the defendants had to bring a suit for contribution on the mortgage Ex. XVIII, apparently it was barred long before 1926 when this suit was brought, whether the cause of action arose on the date of the mortgage of 1898or on the date of payment of the decree on it in 1904. But the appellant argues that he is in possession under Ex. B, and is a defendant and is entitled to use his right to the amount of Rs. 100 as a shield to protect his possession. In other words the fact that a new suit for contribution under Ex. XVIII would be barred is no answer to his right to remain in possession so long as he is not paid that amount also. Kotappa v. Raghavayya (1926) I.L.R. 50 Mad. 626 : 52 M.L.J. 532 is an express authority against the appellant on the point that the right to sue for a sub-rogated mortgage which the subrogee has paid arises on the date of the original mortgage. As I am bound by this decision I am not competent to consider whether this view is right. It would seem by implication to be an authority also on the point that on facts like the present, the subrogee cannot use such payment as a shield to protect his possession under another mortgage and insist on keeping it till he is paid the subrogated amount also. This last point was not raised or considered in that case. But if it were a good ground, it would probably have been. However that may be as pointed out for the respondent (plaintiff) the principle of using a mortgage debt as a shield for possession is confined to possession obtained by Court sale or otherwise in satisfaction of that debt in which case the defendant before he is deprived of his possession can claim to be put back into the situation when he was put into possession, i.e., when he was entitled to be paid his debt. As the Privy Council put it, the owner of property who is in the right of a first mortgagee and of the original mortgagor as acquired at a sale under the first mortgage is entitled at a suit of a subsequent mortgagee who is not bound by the sale or the decree on which it proceeded to set up the first mortgage as a shield Sukhi v. Ghulam Safdar Khan (1921) L.R. 48 I.A. 465 : I.L.R. 43 All. 469 : 42 M.L.J. 15 (P.C.) relied on in Chinnaswami v. Darmalinga (1932) I.L.R. 56 Mad. 115 at 131 : 63 M.L.J. 394 and Compare, Adams v. Angell (1877) 5 Ch. D. 634 a case of sale by the trustee in Bankruptcy of the mortgagor to the first mortgagee of the equity of redemption on the mortgaged property; and Mirza Yadalli Beg v. Tukaram (1920) L.R. 47 I.A. 207 : I.L.R. 48 Cal. 22 : 39 M.L.J. 147 (P.C.) a case of sale to the first mortgagee of mortgaged property in pursuance of a compromise decree on the first mortgage to which the second mortgagee was not a party. Here there has been no sale on the first mortgage Ex. XVIII, nor possession by any purchaser under it which is endangered at the suit of a subsequent mortgagee. The only possession of the defendant is under the mortgage Ex. B, sought to be redeemed and the defendant is proposing to use the first mortgage contribution to which he may have been entitled had he enforced it in proper time not as a shield to protect his own possession obtained in lieu thereof but as sword against the owner's independent equity of redemption. The appellants relied on Venkataramana Reddi v. Rangiah Chetii (1920) 41 M.L.J. 399 as in their favour. But it does not carry the principle of shield any further than the above authorities. On the facts which are rather complicated being disentangled, it will be found that all that was held was that the purchaser at a Court sale on a third mortgage who had been, put in possession and the 25th defendant appellant claiming under him as a mortgagee, could use as a shield to protect his-possession the priority of the third mortgage over the fourth mortgage rights of the plaintiff who had not been impleaded in the third mortgagee's suit though a fresh suit on the third mortgage would have been time barred on the date when the subsequent question arose. This is the same but no more than the principle enunciated in Sukhi v. Ghulam Safdar Khan (1921) L.R. 48 I.A. 465 : I.L.R. 43 All. 469 : 42 M.L.J. 15 (P.C.) and is of no assistance to the appellant. The appellant also relied on. Rangappa Kondappa v. Vithu Krishnaji (1913) I.L.R. 47 Bom. 652 and Jokhu Bhunja v. Sitla Baksh Singh (1929) I.L.R. 52 All. 539. In the latter case there was an express stipulation that a simple mortgage amount was to be added to the amount due under a usufructuary mortgage before redeeming it. In the former case there were four mortgages the first three of which were simple and the last usufructuary. It was held that the mortgagor could not redeem the usufructuary mortgage without paying off the amount of the simple mortgages. It does not appear whether there was a stipulation similar to the one in the Allahabad case. The Chief Justice said "If this decision were to stand (permitting redemption on payment of the usufructuary mortgage alone) it would follow-that the mortgagee in possession though he could not sue for the mortgage debt would still be liable to be redeemed without receiving any of the mortgage money." If by this is meant that where there are several mortgages to the same person of the same property, one of which is usufructuary the mortgagor seeking to redeem the usufructuary mortgage must redeem the simple mortgages also, then it is clearly against the Madras case and the rule in the Transfer of Property Act by which tacking is abolished. But the report is silent as to the stipulation in the mortgage deeds and I am inclined to think that there was some agreement binding the mortgagor to pay off all the mortgages before demanding back possession.
19. The appellant's contention about retaining possession till he is paid Rs. 100 more is thus unfounded. In the result in modification of the decree of the lower Court there must be a preliminary decree for redemption on payment of Rs. 500.