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1949 DIGILAW 59 (KER)

Pannel Joni v. Velayudhan Nadar Yovan Nadar

1949-12-05

K.T.KOSHI, MATHEW MURICKEN

body1949
JUDGMENT : Mathew Muricken, J. Appellants are the legal representatives of the deceased plaintiff in O.S. 282 of 1119 on the file of Kuzhithura Munsiff's Court. The suit is for reimbursement of money deposited by plaintiff in O.S. 704 of 1112 in discharge of the liability of defendant No. 1 under the decree in that case. The suit is filed on the following allegations: Plaintiff obtained a decree against defendant No. 1 and others in O.S. 284 of 1108 for recovery of the amount due to him under a mortgage of 1088 and 2 purakadams of 1095 and 1105 executed by defendant No. 1. He purchased the properties in court auction and obtained delivery on 10.3.1112. Subsequent to the mortgage of 1088 and purakkadom of 1095 defendant No. 1 executed a hypothecation bond in 1104 in respect of the properties to P.W. 1 for chitty money due to him. P.W. 1 assigned the bond to P.W. 2 and he obtained a decree on the bond in O.S. 704 of 1112 on 31.1.1114 for 589 odd fanams. In that suit there was dispute between plaintiff and P.W.2 about the priority of plaintiff's charge and the decree provided that the properties could be sold only subject to plaintiff's charge. Defendant No. 1 did not pay off the decree amount in O.S. No. 704 of 1112 and P.W. 2 therefore proclaimed the properties for sale subject to plaintiff's charge. When the properties came up for sale, plaintiff deposited 1070 odd fanams in discharge of the liability of defendant No. 1 and sued defendant No. 1 for reimbursement of the amount deposited by him with interest. Defendant No. 1 contends among other things that plaintiff did not deposit the amount on behalf of the defendant, but solely for the protection of his own interest in the property purchased by him in execution of the decree in O.S. 264 of 1108 and that therefore defendant is not liable to make good the amount. The trial court decreed the suit on the finding that plaintiff is entitled to the amount claimed by him under Ss. 70 and 71 of the Contract Act X of 1115 (Travancore). The lower appellate court dismissed the suit on the finding that plaintiff's claim was not sustainable both under S. 70 and 71 of the Contract Act X of 1115. Hence the appeal by the legal representatives of the plaintiff. 70 and 71 of the Contract Act X of 1115 (Travancore). The lower appellate court dismissed the suit on the finding that plaintiff's claim was not sustainable both under S. 70 and 71 of the Contract Act X of 1115. Hence the appeal by the legal representatives of the plaintiff. The point for decision in this appeal is whether plaintiff's claim is sustainable under S. 70 and 71 of the Contract Act. S. 70 of Travancore Act corresponds to S. 69 of the Indian Contract Act. S. 70 runs thus:- "A person who is interested in the payment of money which another is bound by law to pay and who therefore pays it, is entitled to be reimbursed by the other". Plaintiff has therefore to make out that he was interested in making the payment of money which defendant No. 1 was bound by law to pay. The lower court finds that defendant No. 1 was bound by law to pay the decree amount in O.S. No. 704 of 1112. But the lower court holds that plaintiff was not interested in making the payment and that therefore the claim is not sustainable under S. 70 of the Contract Act. The question whether plaintiff was interested in making the deposit in O.S. 704 of 1112 therefore needs consideration. In para. 15 of his written statement defendant No. 1 admits that plaintiff deposited the amount for the protection of his interest in the properties purchased by him in execution of the decree in O.S. No. 304 of 1112. This is his statement : Defendant No. 1 thus admits in clear terms that plaintiff was interested in making the payment. This admission along with the finding of the lower court that defendant No. 1 was bound by law to pay the decree debt in O.S No. 704 of 1112 is sufficient to grant a decree to plaintiff. But we do not propose to base our conclusion on the admission of the defendant alone. The word "interested" in S. 70 of the Contract Act has been interpreted in a series of decisions to include apprehension of any kind of loss or inconvenience or any detriment capable of being assessed in money. But we do not propose to base our conclusion on the admission of the defendant alone. The word "interested" in S. 70 of the Contract Act has been interpreted in a series of decisions to include apprehension of any kind of loss or inconvenience or any detriment capable of being assessed in money. We have therefore to see whether plaintiff had any reason to apprehend loss or inconvenience or any detriment capable of being assessed in money when he deposited the decree debt in O.S. 704 of 1112. Plaintiff's son as P.W. 3 swears that plaintiff purchased the properties in execution of his decree in O.S. 264 of 1108 for Rs. 552 chs. 7. This amount must represent the money due to him under the mortgage of 1088 and the purakkadams of 1095 and 1105. In O.S. 704 of 1112 defendant No. 1 was exparte. In that suit there was a dispute between plaintiff and P.W. 2 with regard to the extent of plaintiff's prior charge to fanams 1442 only. It cannot therefore be said that plaintiff had no reason to apprehend any loss or inconvenience or detriment in respect of the sale of the properties, in execution of the decree in O.S. 704 of 1112. He therefore deposited the amount from defendant No. 1 under the decree in O.S. 704 of 1112 and avoided the sale for the protection of his interest in the properties. In Karan Singh v. Ishiaq Husain, reported in I.L.R. 43 All. at 268, a Division Bench of the Allahabad High Court held that a claim for reimbursement is sustainable in similar circumstances. In that case a prior mortgagee had obtained a decree without impleading the puisne mortgagee and had the properties sold in court auction for the amount due to him under his decree. A third person purchased the properties in court auction. The puisne mortgagee who had also obtained a decree for sale on his mortgage proceeded to execute his decree and the auction purchaser in execution of decree of the prior mortgagee paid up the decree amount of the puisne mortgagee and then brought a suit for recovery of the amount from the mortgagors. The puisne mortgagee who had also obtained a decree for sale on his mortgage proceeded to execute his decree and the auction purchaser in execution of decree of the prior mortgagee paid up the decree amount of the puisne mortgagee and then brought a suit for recovery of the amount from the mortgagors. It was held in that case that the court purchase by plaintiff in that suit in execution of the decree of the prior mortgagee was not subject to the puisne mortgagee and that he was entitled to reimbursement of the money which he paid to discharge the subsequent mortgage for which defendants in that suit were primarily liable. We therefore hold that plaintiff was interested in depositing the decree amount in O.S. 704 of 1112 which defendant No. 1 was bound by law to pay and that he is entitled to a decree under S. 70 of the Contract Act (Travancore) corresponding to S. 69 of the Indian Contract Act. In the view we take it is unnecessary to consider whether S. 71 of the Travancore Contract Act would or would not apply to this case. Hence on the finding that plaintiff is entitled to a decree under S. 70 of the Contract Act we set aside the decree of the lower appellate court and restore that of the Munsiff. The appeal is thus allowed with costs. Koshi, J. To me it looks clear that the present is a case which falls directly within the scope of S. 69 of the Indian Contract Act. The decree in O.S. 704 of 1112 made defendant (the mortgagor) personally liable for the debt due there under and he was therefore 'bound by law to pay' the same. The plaintiff's suit (O.S. No. 264 of 1108) was no doubt not properly constituted as to parties as the subsequent hypothecatee, the predecessor-in-interest of the decree-holder in O.S. No. 704 of 1112 was not made a party thereto. All the same the sale held in execution of the plaintiff's decree had effectively cut off the mortgagor's equity of redemption and the plaintiff had become the owner the proper-ties, subject to course, to the puisne mortgagee's right to redeem him. All the same the sale held in execution of the plaintiff's decree had effectively cut off the mortgagor's equity of redemption and the plaintiff had become the owner the proper-ties, subject to course, to the puisne mortgagee's right to redeem him. It is therefore idle to think, as the learned Judge in the court below has done, that the plaintiff was not interested in making the payment of the decree debt in O.S. No. 704 of 1112. S. 69 therefore applies in terms to the present claim for reimbursement. 2. At the first blush the decision in I.L.R. 43 All. 268 referred to by my learned brother may appear to be founded on the circumstance that the surplus funds brought in by the sale held in the prior mortgagee's suit were drawn by the mortgagors. A closer study would however show that that was not the only ground of the decision and that even without that circumstance the claim for re-imbursement against the mortgagors by the purchaser at the sale held in the prior mortgagee's suit of the amounts he paid to avert a sale at the instance of the puisne mortgagee would have been upheld by the Court. The following extract from the judgment makes this clear:- "It cannot be said that the plaintiff purchased the property subject to the subsequent mortgages held by Mohabhat Bahadur and others. The sale was in execution of a decree obtained upon the prior mortgage held by Khurshed-un-nissa and others. The only defect in the plaintiff's title was that it was still open to the second mortgagees who had not been made parties to the first mortgagee's suit, to redeem the prior mortgage, but it cannot be said that the plaintiff did not acquire the property itself but only such rights as remained in the mortgagors, and subject to the subsequent mortgages. In our opinion, the only right which the subsequent mortgagees had was the right to redeem the prior mortgage and if they did so, to sell the mortgaged property for the consolidated amounts of the prior mortgage and their own subsequent mortgages. Subject only to this right the whole property must be deemed to have been purchased by the plaintiff. In our opinion, the only right which the subsequent mortgagees had was the right to redeem the prior mortgage and if they did so, to sell the mortgaged property for the consolidated amounts of the prior mortgage and their own subsequent mortgages. Subject only to this right the whole property must be deemed to have been purchased by the plaintiff. In a subsequent case before the Allahabad High Court Nanden Sahu v. Fathech Bahadur (A.I.R. 1940 Allahabad 104) the question arose whether a puisne mortgagee-purchaser was entitled to reimbursement by the mortgagor of the amounts paid to avoid a sale pursuant to a decree obtained by a prior mortgagee and the decision in 43 All. 268 was cited in support of the claim. In holding that that decision cannot govern the case before them Bennet and Varma, JJ. after referring to the mortgagors' withdrawal from the Court of the surplus amounts stated:- "It was further pointed out that the purchase made by the plaintiff of that suit in execution of the decree of the prior mortgagee was not, as it could not be, subject to the puisne mortgage, and it was held that he was entitled to be reimbursed the money which he paid in discharge of the subsequent mortgages 'for which the defendants were primarily liable'. It seems to us that this case can be of no assistance to the appellants." The judgment was pronounced by Varma, J. (as he then was) Bennet, J. concurring. 3. The above remarks besides explaining the basis of the decision in 43. All. 268 also support the conclusion my learned brother and I take in this case. With these observations I concur in my learned brother's decision and the decree proposed by him. Appeal allowed.