Decided on August 08,1955



- (1.) This second appeal is by the plaintiff in a suit for redemption of a mortgage Ext. A executed by one Raghavan Pillai in favour of the defendants 1 and 2, brothers, on 5.9.1106. The plaintiff is the purchaser of the equity of redemption under Ext. B dated 8.3.1119. It would appear there was an arrear of land tax accrued due on 15.8.1106 to the extent of Rs. 2 Chs. 8 Cash 2 under Thandaper in the name of Raghavan Pillai comprising the mortgage holding and other property. Notice of demand Ext. VI dated 20.6.1106 in respect of this tax arrears was served on Raghavan Pillai two days after the sale Ext. A i.e., on 7.9.1106. The mortgagees defendants 1 and 2 were also aware of the tax default and subsequent revenue sale proceedings but neither they nor Raghavan Pillai took remedial steps with the result that the property was sold in revenue auction on 17.10.1107 in favour of one Gopala Pillai, who was a distant brother of the defendants 1 and 2. Gopala Pillai subsequently sold his interest in the property under Ext. II dated 28.10.1112 to the 3rd defendant, who was the common wife of defendants 1 and 2, and she resisted this suit on foot of the revenue sale. The plaintiff impugned the revenue sale as fraudulent and collusive both Gopala Pillai and the 3rd defendant being mere name lenders for the mortgagees defendants 1 and 2, and asserted that his right to redeem the mortgage remained at all relevant times unaffected. The Trial Court allowed the suit. The court below in appeal by the 3rd defendant dismissed the suit. Hence this second appeal.
(2.) The main dispute between the parties is the subject of additional issue No. 3 in the case which runs as follows:- 'Is the revenue sale referred to in the written statement conducted collusively and fraudulently through the defenants as alleged in the replicaton ' In dealing with this issue the Trial Court took into consideration the relationship that existed between defendants 1 and 2 and the 3rd defendant and Gopala Pillai, who was examined in the case as PW 2, and further the consciousness of the mortgagees, defendants 1 and 2, as admitted by the 1st defendant examined as PW 1 that they were bound to pay tax for the plaint property as per Ext. VI demand notice even though it was an arrear which had accrued due before date of the mortgage. The Trial Court found that the evidence in the case was sufficient to lead to the inference that fraud had been committed by the defendants 1 to 3 and PW 2 in bringing about and purchasing in the revenue sale and it held accordingly that the revenue sale could not stand against the plaintiff's right to redeem. The learned Temporary Additional District Judge found the issue against the plaintiff in the view he took that there was no definite pleadings in the case that the revenue sale was taken by PW 2 for and on behalf of defendants 1 and 2 or that the 3rd defendant took the sale Ext. II for and on behalf of the mortgagees. In so doing he omitted to take into consideration the essential fact that the 3rd defendant and PW 2 were closely related to defendants 1 and 2 and also the admission made by PW 2 that he had not reduced the property into his possession nor paid tax in respect thereof at any time subsequent to the revenue sale in his favour. There can be no doubt in all the circumstances of the case that defendants 1 and 2 had arranged with PW 2 to purchase the property on thier behalf in the first instance and later on taken it in the name of the 3rd defendant again on their behalf.
(3.) Learned counsel for the 3rd defendant would argue that even so the plaintiff could not maintain the suit for redemption so long as the revenue sale stood confirmed. For the mortgagees here were under no duty to pay the arrear in question and so avert the revenue sale and it was only in cases where the mortgagee was guilty of a wrongful utilisation of his position as mortgagee and gained an advantage over the mortgagor that he would be bound to account for the result of his wrong. According to learned counsel the mortgagees here must be deemed to be in the position of mere strangers when they purchased the property for themselves, as now found in the name of PW 2. In my judgment the question turns upon the existence or otherwise of an obligation in the mortgagees to pay the tax arrear for which the property was sold by the revenue authorities. It is no doubt true that the tax had accrued in Meenom before the date of sale and the document of mortgage mentions that the mortgagee will assume possession from the date thereof and would pay tax in respect of the property. There is no indication one way or the other as to whether the tax referred to was that which had accrued due already or which may fall due later. It is clear from the evidence in the case however that both the mortgagor and the mortgagee were aware at early stage of the fact that there were tax arrears and proceedings under the Revenue Recovery Act were being pursued for realisation thereof. It is improbable that the mortgagor would have kept quiet without saving the property both for himself and the mortgagees and the mortgagees also would remain quiet without taking any steps in the matter unless there has been a common understanding between them that the mortgagees would discharge the arrears and avoid the sale. If the mortgagees were really unconcerned there was no reason why, as 1st defendant would have it, they approached the Revenue authorities with an offer to pay the tax arrear, both before and after the revenue sale and at all, adopted the dubious method of getting the sale in the name of their relation PW 2. It is conceded that if the mortgagees were under obligation to pay the tax arrears and did not fulfil their obligation and so brought about the sale they should not be allowed to take advantage of their default to claim the property which they had come by as a result of their wrong and I will add, it does not matter for this purpose whether the obligation arises by virtue of the covenant express or implied.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.