M RAGHAVACHARIAR Vs. PONNUSWAMI MUDALI

JUDGEMENT

(1.) This is an appeal by the plaintiff in the suit against the order of the lower appellate Court, which reversed the order of the trial Court directing the fifth defendant personally to pay the costs of the suit. The facts are as follows. The first defendant as mortgagor executed on the 29 October, 1921, a mortgage in favour of the plaintiff. On the 15 November, 1923, the fifth defendant bought one item of the mortgaged property which had been put up for sale, the purchase price being Rs. 1,434 and the vendor being the mortgagor. The fifth defendant as purchaser gave an undertaking to the vendor to pay to the plaintiff the sum of Rs. 1,240 out of the purchase price to be devoted towards the mortgage debt. There was no contract or privity of contract between the mortgagee and the fifth defendant as purchaser. The fifth defendant gave to the mortgagee (plaintiff) a promissory note for Rs. 340 in 1924 and subsequently made a small payment of Rs. 105. In order to enforce the promissory note the plaintiff was compelled to sue and obtain a decree against the fifth defendant upon that instrument. No other payments were made although the purchase was made by the fifth defendant in 1923. In his evidence he stated that he refrained from making any further payments to the mortgagee since he had been informed by some rumour in the village where he lives that the first defendant was becoming insolvent and that he might find himself in difficulties if he made payments to one person when another person was legally entitled to the money, This rumour reached him only about 1930, that is to say, about 7 years after he had bought the property and long after time when he should have paid for this purchase. It may also be mentioned that he never made any payment to the mortgager and remained in occupation and enjoyment of the property. The suit in the Court below was filed in October, 1933, the claim being upon the mortgage debt for a decree to be satisfied within a specified time, failing which the property to be put up for sale and the sale proceeds devoted towards the mortgage debt and for a decree for any balance left over against the mortgagor and the members of his family who would be responsible. The plaintiff as mortgagee was entitled to ask in the suit for a personal decree against the mortgagor and those responsible and that failing discharge the property should be put up for sale. The fifth defendant was in occupation and it follows that he was a necessary party to the suit. In drafting the decree the learned District Munsiff directed, as was claimed in the plaint, that the fifth defendant personally should bear the costs of the suit since through his conduct the mortgagee was forced to take proceedings in the suit. The fifth defendant appealed against the decision of the trial Court and the learned District Judge on appeal reversed the trial Court's -finding and directed that the costs should not be borne by the fifth defendant.

(2.) The main contest appears to have been that since the plaintiff was not a party to the arrangement or understanding between the fifth defendant and the mortgagor that the sale price of the property should be paid to the mortgagee, the plaintiff, no order for costs should be made against the fifth defendant. It is quite clear that no claim could be made by the plaintiff against the fifth defendant in pursuance of an arrangement made between the latter and the mortgagor. The learned District Munsiff by whom the suit was tried appears to have examined the matter very fully when he was making up his mind whether the fifth defendant should bear the costs of the suit. Wide powers of discretion are given to a Judge when considering the question of costs. His discretion must be exercised judicially and must be in accordance with general principles of law. Undoubtedly, and it is conceded, the fifth defendant was a necessary party to the suit and upon the facts disclosed and on information before all Courts the suit itself was occasioned only by the conduct of the fifth defendant, not that he failed to carry out any contract as between himself and the plaintiff but that having purchased this property he promised the vendor to pay the price to the plaintiff. He did not carry out that promise nor did he pay his vendor the price which he had bargained to give for the property, possession of which he took. It was his failure to carry out his contract of purchase and pay the purchase price that occasioned these proceedings. The lower appellate Court has reversed the learned District Munsiff principally it would appear on the ground that since there was no privity of contract between the fifth defendant and the plaintiff (mortgagee) no order for costs should be made against the former in respect of the suit transaction. Before a decision in regard to costs is reversed it must be shown that the order has been made contrary to a proper exercise of discretion and general principles of law. I cannot say that the learned District Munsiff has acted improperly or contrary to general principles and has exercised his discretion in a wrong way. In my view the order which he made was the correct one or at any rate one which in the exercise of his discretion he was entitled to make and it has not been shown that he exercised his discretion wrongly. It follows that the reversal of his decision by the learned District Judge was wrong. The fifth defendant has himself alone to blame and that was the reason which operated in the mind of the learned District Munsiff when he exercised his discretion.

(3.) This appeal is accordingly allowed with costs both here and in the lower appellate Court and the order of the trial Court is restored.