KARUPPANAN SERVAI Vs. DAIVASIGAMANIA PILLAI
HIGH COURT OF MADRAS
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Venkatarama Aiyar, J. -
(1.) This appeal arises out of a suit for redemption instituted by the respondent. The properties which are the subject-matter of this litigation consist of two plots Survey No. 61 and Survey No. 115 in the village Tirumehoor in the District of Macturai. They belonged to two brothers Solamalai Piliai and Vaduhanatha Pillai. On 7-8-1830 Solamalai Pillai executed a usufructuary mortgage for Rs. 100 over Survey No. 115 in favour of one Srinisava Iyengar, Ex. D. 1. On 5-5-1892 Solamalai Pillai and Vaduhanatha Pillai executed a usufructuary mortgage Ex. P. 1 over both Survey No. 61 and Survey No. 115 in favour of one Venkatadri Iyengar for Rs. 500 directing him to redeem the mortgage Ex. D. 1 in favour Of Srinivasa Iyengar. The present action is for the redemption of this mortgage. Venkatadri Iyengar got into possession of Suryey No. 61 under this mortgage and before the time for redeeming Ex. D. 1 had arrived, he executed on 5-1-1893 a sub- usufructuary mortgage over both the items in favour of one Kandaswami Achari for Rs. 175 Ex. D. 2. On 21-12-1893 Venkatadri Iyengar borrowed a further sum of Rs. 50 from Kandaswami Achari on a simple mortgage of his mortgage rights under Ex. P. 1. Kandaswami sued to enforce this simple mortgage in O. S. No. 146 of 1898 on the file of the Court of the District Munsif, Turumangalam, obtained a decree on 21-41898 Ex. D. 3 and in execution of the decree purchased the hypotheca on 1-111898 (vide the sale certificate Ex. D. 4) and got into possession of Survey No. 61. One of the points in controversy between the parties in this litigation is as to what was actually sold in execution of the decree in O. S. No. 146 of 1898 on the file of the District Munsif's Court, Tirumangalam, whether it was only the mortgage right under Ex. P. 1 or the properties themselves which were mortgaged thereunder. Kandaswami as purchaser under Ex. D. 4 Instituted O. S. No. 591 of 1899 on the file of the court of the District Munsif, Madurai for redeeming the usufructuary mortgage over Survey No. 115 Ex. D. 1. The defendants to this action were the two sons of this original mortgagee Srinivasa Iyengar who was by this time dead; and also Solamalai. Pillai and Vaduhanatha Pillai. The sons of the mortgagee pleaded that Solamalai Pillai had redeemed them and that they had no further interest in the property. Solamalai Pillai and his brother were 'ex parte'. On 19-31900 the court decreed redemption on payment of Rs. 100 to Solamalai Pillai within two months. The amount was paid on 8-5-1900 (Ex. P. 2) and possession was taken through court on 8-8-1900 Ex. D. 5(c).
(2.) In execution of a decree passed against Kandaswami in S. C. S. No. 1269 of 1910 on the file of the court of the Subordinate Judge of Madhurai, his interest in the two items was brought to sale and purchased by one Balaguru Naidu (vide Sale Certificate Ex. D. 11). He got into possession of the properties and on 14-61922 he sold them to one Rajammal for a sum of Rs. 900 Ex. D. 14. On 23-1-1926 Rajammal released her interest in favour of one Alagaraswami Naidu Ex. D. 16 and he in turn sold the properties to the defendant on 23-3-1940 under Ex. D. 20. On 19-8-1943 the respondent who is the son of Solamalai Pillai instituted the suit out of which the present appeal arises for redeeming the usufructuary mortgage Ex. P. 1. The plaint alleges that in execution of the decree in O. S. No. 146 of 1898 on the file of the court of the District Munsif of Tirumangalam it was only the mortgage right under Ex. P. 1 that was brought to sale; that under Ex. D. 4 what passed to Kandaswami was only the mortgage right under that document; that it was only that mortgage interest that passed to Balaguru Naidu under Ex. D. 11; that as purchaser from him under Ex. D. 14 Rajammal could acquire only the mortgage interest to which her vendor was entitled; that likewise, the defendant as purchaser from Rajammal under Ex. D. 20 acquired only that mortgage interest and that, therefore, the plaintiff as representing the mortgagor Solamalai Pillai was entitled to a decree for redemption. The defendant pleaded that what was sold in execution of the decree in O. S. No. 146 of 1898 was not merely the mortgage right under Ex. P. 1 but the properties themselves; that under the sale certificate Ex. D. 4 Kandaswami acquired full ownership over the properties; that Ex. D. 11 conveyed that absolute title to Balaguru Naidu; that the purchasers under Exs. D. 14 and D. 20 thus became owners of the property and not merely assignees of the mortgage interest under Ex. P. 1; and that the plaintiff had no right to redeem. It was further contended that as the defendant and his predecessors-in-title had been in possession as full owners of the properties from 8-8-1900 (vide Ex. D. 5(c) ), they had acquired a title by adverse possession and that in any event the suit was barred by Article 134 of the Limitation Act. The District Munsif of Madurai taluk held on a construction of Ex. D. 4 that what was sold in court auction in execution of the decree in O. S. No. 146 of 1898 was not merely the mortgage right under Ex. P. 1, but the properties themselves and that, therefore the title of the mortgagor had been extinguished by the sale. On the question of limitation he held that Article 134 would not be applicable as there was no transfer by the mortgagee of the hypotheca but only a court sale. But he also held that as Kandaswami and his successors had been in possession as absolute owners for a period of over 40 years, they had acquired a title by adverse possession. In that view he dismissed the suit. On appeal by the plaintiff the District Judge agreed with the District Munsif that Ex. D. 4 conveyed not merely the mortgage right over the properties themselves absolutely and that the title of the mortgagor had been extinguished. In this view he did not consider it necessary to express any opinion on the question of limitation. The appeal was accordingly dismissed. The plaintiff preferred S. A. No. 416 of 1046 against the decision and that was heard by Satyanarayana Rao J. He held that on a proper construction of Ex. D, 4 what was sold was only the mortgage interest under Ex. P. 1 and that, therefore the court auction did not put an end to the right of the mortgagor to redeem. On the question of limitation, he held that no question of adverse possession could arise as between mortgagor and mortgagee; and dealing with Article 134, Limitation Act, he held that it did not apply to court sales under Exs. D. 4 and D. 11 and-that though the sale under Ex. D. 14 would be a transfer under Article 134, it would not be a transfer by the mortgagee under Ex. P. 1, but by persons who had succeeded to his rights and that Article 134 had no application to such transfers. In the result, he held that the suit was within time under Article 148 and granted a decree for redemption. Against this judgment the defendant, has preferred the present appeal under the Letters Patent.
(3.) The first question for determination in this appeal is whether Kandaswami acquired full ownership over the properties by reason of the court sale in execution of the decree in O. S. No. 146 of 1898 on the file of the Court of the District Munsif of Tirumangalam, and whether the right of the mortgagor to redeem Ex. P. 1 was extinguished thereby. Under Section 60, T. P. Act the right of redemption can be extinguished only by act of parties or decree of court. No question of any act of parties terminating the right of redemption arises here. The question is whether it has been extinguished by a decree of court. In --'Raghunath Singh v. Hansraj Kunwar', AIR 1934 PC 205 (A) it was held that the decree of court contemplated in this section is the final decree in a mortgage action foreclosing the mortgagor of his right to redeem. Vide also --'Chinna Subbarao v. Matapalli Raju'. AIR 1950 FC 1 (B). Admittedly no suit was filed on the basis of Ex. P. 1 for redemption or for foreclosure. The contention of the appellant is that it is open to a sub-mortgagee in an action to en-force his mortgage to obtain a decree foreclosing the right of not merely his mortgagor but also of the main mortgagor to redeem; that in O. S.| No. 1-16 of 18G8 Solamalai Pillai, the owner, was impleaded as second defendant obviously for the purpose of giving him an opportunity to exercise his right of redemption and that the decree Ex. D. 3 and the sale thereunder would operate to extinguish the right of redemption in respect of Ex. P. 1. That a sub-mortgagee can sue to foreclose the right of not merely his mortgagor but of also the owner is well settled, vide --'Vengannan Chettiar and Sons v. Ramaswami Pillai', AIR 1943 Mad 498 (C) and a final decree passed in such an action would operate to extinguish the right of redemption. But the question is, was such a decree passed in o. S. No. 146 of 1898. The plaint in that suit has not been filed and it is not known why Solamalai Pillai was impleaded as a party. But the decree Ex. D. 3 makes it clear ;hat he was only a 'pro forma' party to the action. Ex. D. 3 mentions the amount due to the sub-mortgagee from his mortgagor and directs that in default or payment the "hypothecated property" should be sold and that any balance remaining after payment of the amount due to the plaintiff should be paid to the first defendant who was the son of the mortgagee. There is no adjudication of the rights of parties under Ex. P. 1. The amount due by Solamalai Pillai to the first defendant is not declared; no period is fixed for his redeeming Ex. P. 1; and there is no provision for any payment of surplus sale proceeds to him. In AIR 1943 Mad 498 (C) discussing the rights of sub-mortgagees against the original mortgagor, the Chief Justice observed as follows :
"A sub-mortgagee has two courses open to him. He can, if he wishes, limit his suit to the sub-mortgagor, in which case he can only ask for the sale of the sub-mortgagor's interest in default of payment of the decretal amount. On the other hand, he may join the original mortgagor, and ask for a decree for the sale of the mortgaged property in default of payment. In this case the relief to which he is entitled is to be gathered from form No. XI in App, D. to the Civil Procedure Code. In that form the original mortgagor is described as defendant No. 1 and the original mortgagee as defendant No. 2. The form provides for a declaration of the amount due to defendant No. 2 on his mortgage and then directs that defendant No. 1 shall pay into court the amount due to defendant No. 2 and that on payment into court of the money the plaintiff shall be at liberty to apply for payment out. In default of payment, the plaintiff may apply to the court for a final decree for sale. The form also provides that if defendant No. 2 pays into court to the credit of the suit the amount adjudged due to the plaintiff, but defendant No. 1 makes default in the payment of the amount due to defendant No. 2, the latter shall himself be at liberty to apply to the Court for a final decree for sale." In O. S. No. 146 of 1898 Kandaswami plainly chose to adopt the first course and the decree Ex. D. 3 is the one appropriate for such a course. It is not in conformity with form No. XI in App. D. to the Civil Procedure Code. Indeed at the time of Ex. D. 3 Solamalai could not have exercised his right of redemption of Ex. P. 1 as the period fixed for redemption had not expired. In --'Muthu Vijia v. Venkataclialam Chetty', 20 Mad 35 at p. 39 (D) in affirming the right of a sub-mortgagee to obtain a decree for sale against the original mortgagor, Subramauia Aiyar J. observed :
"A sub-mortgagee can ask for a sale of the original mortgagor's interest in cases and in circumstances which would have entitled the original mortgagee on the date of the sub-mortgage to claim such relief." There cannot be any doubt, therefore that Ex. D. 3 could not be read as declaring the right of redemption in respect of Ex. P. 1 and that neither the decree nor the execution proceedings in pursuance thereof could operate to extinguish the right of the mortgagor to redeem Ex. P. 1.;
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