Decided on November 10,1970

Bomma Naicker Appellant
Mariayayye Ammal and Ors Respondents


- (1.) The appellant herein was the second plaintiff in O.S. No. 525 of 1957 on the file of the Court of the District Munsif of Kulitalai and the second respondent in I.A. No. 114 of 1963 therein. The suit itself was one for redemption of the mortgage instituted by the first plaintiff, who is dead, on the basis of a document dated 4th August, 1930, executed by the first plaintiff's predecessors-in-interest in favour of the respondents' predecessor-in-interest. That document was in the form of an absolute sale with a condition that the vendee should recovery the property, whenever the vendor paid the consideration. In the suit for redemption that document was construed as a mortgage by conditional sale and the suit for redemption was decreed. The conclusion that the transaction constituted a mortgage by conditional sale was confirmed by the first appellate Court and by this Court in Mariyayi Ammal and 4 Ors. v. Family Manager, Rengappa Maicker S.A. No. 405 of 1960, disposed of by Anantanarayanan, J., as he then was, on 25th April, 1962. In the second appeal, a further question arose as to the right to recover the value of the improvement said to have been effected in the form of digging a well in the property by the predecessors-in-interest of the respondents herein. With regard to the value of the said improvement as well the liability to pay the same by the present appellant, the matter was remanded. This is what this Court stated on that occasion: The first Court will now specifically consider whether there is a well in the said items, which was not in existence at the time of the original transaction, and whether defendants are not entitled to the value of the well on the ordinary presumption that, since it is an artificial construction which came into existence during the period of the mortgage it must have been constructed only by them. The question whether, under law, the defendants are entitled to the entire value of that improvement, will, of course, also have to be gone into by the trial Court and embodied in the final decree. It is thereafter, I.A. No. 114 of 1963 wag filed by the respondents herein under Order 34, Rule 8, Code of Civil Procedure, to direct the appellant herein to pay the respondents a sum of Rs. 2,000 by way of compensation for improvement said to have been effected in respect of item 1 of the suit property. In this interlocutory application, two questions arose. One was the fact and value of the improvement and the second was the liability of the appellant to pay the said value. As far as the fact and the value of the improvement was concerned, the learned District Munsif came to the conclusion that the well was dug by the mortgagee and its value was Rs. 1,000. With regard to the liability of the appellant to pay the said value, the learned District Munsif negatived the same. Before the learned District Munsif and in the affidavit filed in support of the said interlocutory application, the claim was made on the basis of Section 63-A of the Transfer of Property Act, hereinafter called the Act, and the learned District Munsif pointed out that no case had been put forward, nor had it been proved so as to invoke Section 63-A(2) of the Act. With reference to Section 63-A(1) of the Act, the learned District Munsif pointed out that there was no contract between the parties to pay the value of the improvement by the mortgagor and therefore the respondents herein were not entitled to the same. An argument was advanced that the respondents herein would be entitled to the said value under Section 51 of the Act and that claim also was negatived by the learned District Munsif. In this view, the said Interlocutory application was dismissed by the learned District Munsif on 17th December, 1964. Against the said dismissal, the respondents herein preferred an appeal to the learned District Judge of Tiruchirappali, who, on 7th December, 1965, allowed the appeal. The learned District Judge confirmed the conclusion of the learned District Munsif, on the value of the improvement, but he differed with regard to the right of the respondents herein to receive the said value. He pointed out that the construction of the well in a pucca way had been done 12 years after the document, dated 4th August, 1930, and under Section 51 of the Act, the respondents would be entitled to the said value. For the purpose of coming to this conclusion, he primarily relied on a decision of this Court in Pandiyan Pillai v. K.V. Vellayappa Rowther and Anr., 1918 AIR(Mad) 572 . It is against the judgment and decree of the learned District Judge that the present second appeal has been preferred by the second respondent in the interlocutory application who was the second plaintiff in the suit.
(2.) The contention of the learned Counsel for the appellant is that Section 51 of the Act has no application to the case of mortgage, since it is Section 63-A of the Act that is exclusively applicable and also on the facts and circumstances of this case, Section 51 of the Act cannot be applied. The learned Counsel for the respondents counters this contention. Therefore, the question for consideration is whether the view of the learned District Judge is correct.
(3.) For the purpose of considering this question, it is desirable to refer to the statutory provisions themselves. In the first place, Section 51 of the Act is as follows: Section 51. When the transferee of immovable property makes any improvement on the property believing in good faith that he is absolutely entitled thereto, and he is subsequently evicted therefrom by any person having a better title, the transferee has a right to require the person causing the eviction either to have the value of the improvement estimated and paid or secured to the transferee, or to sell his interest in the property to the transferee at the then market value thereof, irrespective of the value of such improvement. The amount to be paid or secured in respect of such improvement shall be the estimated value thereof at the time of the eviction. When, under the circumstances aforesaid, the transferee has planted or sown on the property crops which are growing when he is evicted therefrom he is entitled to such crops and to free ingress and egress to gather and carry them. This section (Section 51) occurs in Chapter II of the Act under the heading "of Transfers of property by act of parties". Chapter IV of the Act deals with mortgages of immovable property and charges. Section 63 dealt with accession to mortgaged property. It provided that where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, received any accession, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled as against the mortgagee to such accession; where such accession has been acquired at the expense of the mortgagee and is capable of separate possession or enjoyment without detriment to the principal property, the mortgagor desiring to take the accession must pay to the mortgagee the expense of acquiring it; if such separate possession or enjoyment is not possible, the accession must be delivered with the property and the mortgagor is liable, in the case of an acquisition necessary to preserve the property from destruction, forfeiture or sale, or made with his assent, to pay the proper cost thereof, as an addition to the principal money with interest. Section 72 of the Act dealt with the rights of mortgagee in possession and Section 72(b) provided that a mortgagee may spend such money as is necessary for the preservation of the mortgaged property from destruction, forfeiture or sale, and may, in the absence of a contract to the contrary, add such money to the principal money, with interest. Thus, it will be seen that there was no specific provision in Chapter IV of the Act dealing with mortgages to cover a case where a mortgagee in possession effects improvements. It is in this situation there was a conflict of decisions by the Courts in India with regard to the right of a mortgagee in possession to recover the value of improvements effected by him.;

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