MANICKA NADAR Vs. ARUMUGA SUNDARA SATHIA GNANA PANDARA SANNADHI AVERGAL
HIGH COURT OF MADRAS
ARUMUGA SUNDARA SATHIA GNANA PANDARA SANNADHI AVERGAL
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Chandrasekhara Ayyar, J. -
(1.) THE plaintiff, the head of a math, created a usufructuary mortgage over certain immovable properties on 5th May, 1938, under Ex. I for a sum of Rs. 625 in favour of the defendant, appellant in this second appeal. It is provided in the mortgage that the mortgagee should enjoy the mortgaged property for a period of eleven years from the date of mortgage, himself paying the Government kist. Then comes the relevant clause:
After the expiry of the period I shall pay the amount and have the schedule property redeemed.
(2.) THE consideration of Rs. 625 was made up of three items, a sum of Rs. 214 -14 -11 due to one Mayakootha Pillai, a sum of Rs. 310 -1 -1 due to one Saminatha Desikar, and a sum of Rs. 100 paid in cash. The mortgagee was directed to pay the sums due to Mayakootha Pillai and Saminatha Desikar but he did not pay the amounts, and the mortgagor discharged the debts in April and May, 1939, owing to pressure from the creditors. The plaintiff brought this suit for redemption on 23rd November, 1939, setting out these facts alleging that the properties would yield an annual income of Rs. 75 and that as against the sum of Rs. 100 which alone was advanced by the mortgagee under the deed of mortgage what would be due and payable to him after debiting with the income of Rs. 75 was Rs. 31 only, Rs. 6 being taken as the rate of interest agreed upon between the parties. This suit was resisted by the mortgagee as premature because it was brought before the expiry of the eleven years' period fixed in the deed. He raised the contention that though he was always ready and willing to pay the creditors, they demanded higher amounts and that consequently he had to go before the Debt Conciliation Board with unsuccessful results, as the plaintiff would not co -operate with him. These pleas have been overruled by both the lower courts. On the question whether the suit was premature, they came to a conclusion in favour of the plaintiff and allowed redemption even before the period fixed in the deed of mortgage following an equitable rule enunciated in Chhotku Rai v. Baldeo Sukul : I.L.R. (1912) All. 659 and adopted in Narasimha Rao Pantulu v. Seshayya, (1924) 48 M L J. 363. This conclusion is challenged in this second appeal by the defendant. Chhotku Rai v. Baldeo Sukul : I.L.R. (1912) All. 659 is no doubt a case exactly like the present one and redemption was allowed before the period fixed on the ground that it was equitable to do so as the defendants did not perform what was a most essential part of the contract so far as they were concerned. But in the same volume in Rashik Lal v. Ramnarain : I.L.R. (1912) All. 273 is a decision of another Bench where the distinction between a contract and a conveyance is pointed out and it is laid down that the mere fact that part of the mortgage money has not been paid does not render the mortgage invalid nor does it entitle the mortgagor to rescind it at his option. They dissent from a Full Bench decision of the Lahore High Court where it was held that failure to pay a prior encumbrancer avoids the mortgage and destroys the mortgagee's lien and right to possession even on a subsequent tender of the unpaid consideration it being immaterial whether the non -payment has or has not caused inconvenience or loss to the mortgagor. Chamier, J., points out that there is no distinction in principle between the case of a sale and that of a mortgage and that interest in the mortgaged property is transferred even where the mortgagee refuses to advance part of the money agreed to be advanced. He was however inclined to hold that the Court was not bound in every case to enforce the mortgage according to the letter where the whole of the mortgage money has not been advanced and he observed:
where the mortgagee sues for possession, he may, I think, be required to pay the balance of the mortgage money before he takes out execution of his decree, and there may be other cases in which he may properly be put upon terms.
(3.) THE decision in Chhotku Rai v. Baldeo Sukul : I.L.R. (1912) All. 659 was dissented from in Kandasami Pillai v. Ramasami Mannadi, (1918) 36 M.L.J. 313:, I.L.R. 42. This was a case of a lease where the lessees sued for possession of a demised property without discharging a mortgage debt on the property which they agreed to discharge and in consequence of which failure on their part it became necessary for the lessor to execute a usufructuary mortgage to third parties. Wallis, C.J., and Kumaraswami Sastri, J., differed, the former holding that the lessees were entitled to recover possession and the latter taking the view that as they failed to discharge the debts ' which they had undertaken to discharge, they were not entitled to sue for possession. As the suit was for possession the learned Chief Justice imposed a condition on the plaintiffs that they will not get possession until they repaid to the subsequent mortgagees what they had advanced to the lessor for payment to the prior mortgagees. Speaking of the subsequent mortgagees, he says that:
they are entitled to be sub -mortgaged to the rights of the prior mortgagees whom they had paid off and to retain possession until they have been repaid what, but for their intervention, would have become payable to the original mortgagees.;
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