Madras High Court
A.L.A.R.R.M.V. Vellayan Chettiar vs Mahalinga Pathan And Ors. on 20 August, 1937
Equivalent citations: 173IND. CAS.781, (1938)1MLJ171, AIR 1938 MADRAS 30
JUDGMENT Venkataramana Rao, J.
1. The question in this second appeal is when a sub-mortgagee sues, for sale of the properties mortgaged to his mortgagor, that is, the original mortgagee, impleading the original mortgagor, should he pay court-fee on the amount due under the original mortgage or on the amount due under the sub-mortgage? Ordinarily a sub-mortgagee's right just like any other mortgagee is to enforce his mortgage and bring to sale the property mortgaged to him, that is, the interest of the mortgagee in the property mortgaged to the latter. But the law permits him to enforce sale of his said property under circumstances and conditions which would entitle the original mortgagee to bring the properties to sale. To such a suit the original mortgagor should be made a party. The principle on which this is allowed is that a sub-mortgagee's claim is by a derivative title from the mortgagee and he is in fact an assignee of the mortgagee. When the mortgagee effects a mortgage of his mortgage interest he is creating a transfer of his right as mortgagee though not absolutely. Therefore when a sub-mortgagee sues for sale of the property he is enforcing the right of the original mortgagee. The amount claimed by him is the amount due under the said mortgage though as sub-mortgagee he is duly entitled to a portion of the said amount. He is in effect asking for a decree for the amount due on the original mortgage and in default the property should be brought to sale. No doubt in such a suit accounts between the original mortgagor and the original mortgagee on the one hand and the latter and sub-mortgagee on the other are taken once for all and the respective claims of the three parties are adjusted and settled at the same time. See Muthu Vijaya Raghunatha Ramachandra Vacha Mahali Thurai v. Venkatachallam Chetty (1896) 6 M.L.J. 235 : I.L.R. 20 Mad. 35 at 39. But this does not alter the nature of the claim. A reference to the Form No. II of Appendix D to the Civil Procedure Code, which provides for a decree in a case where the sub-mortgagee sues for sale of the property, renders the position very clear. A decree is passed on the basis of the original mortgage and the principal, interest and costs payable are calculated as if a suit was instituted by the original mortgagee, and on payment into Court of the said sum so declared to be due to the original mortgagee by the original mortgagor, the sub-mortgagee is at liberty to apply for the payment of the amount due to him. It is thus clear that the amount claimed in the suit is the amount due to the original mortgagee. Under Section 7, Clause (1) of the Court-Fees Act, the court-fee has to be paid on the amount claimed. It is contended that the sub-mortgagee is entitled only to claim the amount due on his mortgage and he cannot claim more and therefore he cannot be made to pay more court-fee by virtue of the fact he is asking for sale of the property. This contention proceeds on the misconception of the right the sub-mortgagee is enforcing in the suit. The property mortgaged to him is the original mortgagee's interest and ordinarily he can only claim a sale of that interest for the realisation of the amount due on his sub-mortgage and if he was therefore praying only for this relief, the amount claimed by him in the suit would be the amount due on his sub-mortgage in which case the court-fee will be on that basis. But when he is asking for the sale of the property the amount claimed by him is as assignee of his mortgagor the amount due to the latter and it is only after getting a decree for the same, he gets a subsidiary relief for the payment of the amount due to him. I am therefore of opinion that the court-fee payable by a sub-mortgagee asking for a sale of the property mortgaged to the original mortgagee is on the amount due and payable in respect of the original mortgage and not on the amount due and payable in respect of the sub-mortgage. The property mortgaged to the appellant in this appeal comprised two sets of properties : (1) A schedule properties wherein his mortgagor had an absolute interest and (2) B schedule properties wherein he had the interest of a mortgagee. In so far as the appellant prayed for the sale of B schedule properties, the view of the lower Courts that he should pay the court-fee on the amount due and payable in respect of the original mortgage is correct; and the second appeal therefore fails.
JUDGMENT
2. After I delivered judgment in this case last week, Mr. S. Narasimha Aiyangar submitted that his client may be permitted to pay the deficit court-fee and that the issue as to the amount payable under the original mortgage may be directed to be determined and I directed the office not to issue the decree and to have this matter posted to be spoken to. After hearing the learned Counsel on both sides I vary my prior order and give leave to the appellant to pay the deficit court-fee in regard to the relief claimed in respect of the B schedule properties; and on payment of the said fee the Court of the District Munsiff of Tanjore is hereby directed to determine the issue relating to thdischarge raised in issue No. 2 and give the appropriate relief to the plaintiff. The case is therefore remanded for disposal to the District Munsiff's Court of Tanjore. The appellant will pay costs of the respondents in this second appeal. Time for payment of the necessary court-fee will be one month from the date of the receipt of the order by the District Munsiff of Tanjore.