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1954 DIGILAW 516 (MAD)

N. Sathia Nathan v. N. R. Venkatarama Ayyar

1954-12-10

GOVINDA MENON

body1954
Judgment.-The house which is the subject-matter of this litigation belongedto one Kamakshi Ammal, wife of the first defendant and the motor of the minor2nd defendant. Under Exhibit A-2, dated 30th November, 1938, Kamakshi Ammalmortgaged the same for a sum of Rs. 400 with interest thereon at the rate of Rs.1-2-0 per Rs. 100 per mensem. While matters were in that stage Kamakshi sheauthorised the plaintiff to negotiate for the sale of the house and deliverpossession of the same to any purchaser whom he finds and to discharge themortgage debt of Rs. 400 with interest thereon as per the terms of Exhibit A-2from and out of sale proceeds. Nothing seems to have been done in pusuanceof Exhibit A-1 for nearly two years. By an oral agreement, dated 4thMarch, 1946, the plaintiff was put in under Exhibit A-2 and continue to remainin possession of the property and when Kamakshi Ammal paid him the amount spentby him in redeeming the mortgage, the property would be surrendered over to her.it is now found by both the lower Courts that the plaintiff discharged themortgage on 4th March, 1946, itself and got into possession of the house.Subsequently under Exhibit B-1, dated 6th May, 1946, Kamakshi Ammal sold theproperty to the third defendant. The present suit is for realisation of Rs.981-12-0 from defendants 1 and 2 who are the legal representatives of KamakshiAmmal who has since died from and out of the assets of Kamakshi Ammal in theirhands and for a charge over the house as against the third defendant. Variousdefences were raised of which the important ones were whether the agreementalleged by the plaintiff is true or not and whether the plaintiff is entitled toa charge or any other relief on the suit property. Both the lower Courts havefound that the agreement pleaded by the plaitiff is true and they have granted adecree for the amount claimed and for costs payable from and out of the assetsof Kamakshi Ammal, if any, other than the suit house in the hands of defendants1 and 2 and dismissed the suit as against the third defendant. Hence this SecondAppeal. The oral agreement which has been found to be true by both the lower Courtswas to the effect that the house should be put in possession of the plaintiffand in view of his occupaiton the plaintiff should adjust a sum of Rs. Hence this SecondAppeal. The oral agreement which has been found to be true by both the lower Courtswas to the effect that the house should be put in possession of the plaintiffand in view of his occupaiton the plaintiff should adjust a sum of Rs. 5 permonth towards charge can be created only by a registered document then the provisions, of section 100 that no charge can be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge would be meaningless for the purchaser in such a case would have notice of the charge if the same is to be by a registered document. Under these circumstances the learned Subordinate Judge felt a doubt that there was no need for a provision under section 100 that a charge cannot be enforced against a bona fide transferee for value. It is true that registration of a document is notice of the transaction regarding a property to the person acquiring such property or any part of or share or interest therein. If by agreement of parties a charge is created then under the provisions of the amended section 100 of the Transfer of Property Act it can be done only by a registered document. But there are other ways and methods by which charges can be created. For example a charge can be created by the operation of law, by an award of the arbitrators and by various other means. In such cases the last clause of section 100 of the Act which says that a bona fide purchaser without notice of the charge is protected would come into play. I do not think that because of the last clause of section 100 of the Act it is possible to create a charge orally in view of the amendment of section 100. Therefore, the decision in Viswanadhan v. Menon1, is binding on me. The plaintiff, in my opinion, can retain the property until he is paid off the monies expended by him for redeeming the mortgage. Therefore, the decision in Viswanadhan v. Menon1, is binding on me. The plaintiff, in my opinion, can retain the property until he is paid off the monies expended by him for redeeming the mortgage. Under section 221 of the Indian Contract Act in the absence of any contract to the contrary, an agent is entitled to retain goods, papers, and other property whether movable or immovable of the principal received by him until the amount due to himself for commission, disbursements and services in respect of the same has been paid or accounted for to him. In the present case it cannot be doubted that the plaintiff acted as the agent of Kamakshi Ammal as he was. directed by her to redeem the mortgage and to recoup himself of the amount by selling the property. It is urged on behalf of the third defendant that the question of agency has not been put forward in the Court below and the trial Court was of the opinion that there was no such plea in the plaint. But paragraphs 5 and 6 of the plaint in my opinion contain sufficient averments by which the plaintiff says that he was the agent of Kamakshi Ammal for the purpose of selling her house. The observations in The West of England Bank v. Batchelor2, can be applied to the facts of the present case It seems to me, therefore, that the plaintiff is entitled to remain in possession of the property until he is paid the amount spent by him. The plaintiff is already in possession of the property and he is entitled to continue in possession until all the amounts due to him are paid as he cannot claim a charge on the house. In the result the Second Appeal fails and is dismissed but without costs. The order of the lower Courts directing the plaintiff to pay costs to third defendant is set aside but the dismissal of the suit is confirmed No leave. R.M. ----- Appeal dismissed. In the result the Second Appeal fails and is dismissed but without costs. The order of the lower Courts directing the plaintiff to pay costs to third defendant is set aside but the dismissal of the suit is confirmed No leave. R.M. ----- Appeal dismissed. charge can be created only by a registered document then the provisions, of section 100 that no charge can be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge would be meaningless for the purchaser in such a case would have notice of the charge if the same is to be by a registered document. Under these circumstances the learned Subordinate Judge felt a doubt that there was no need for a provision under section 100 that a charge cannot be enforced against a bona fide transferee for value. It is true that registration of a document is notice of the transaction regarding a property to the person acquiring such property or any part of or share or interest therein. If by agreement of parties a charge is created then under the provisions of the amended section 100 of the Transfer of Property Act it can be done only by a registered document. But there are other ways and methods by which charges can be created. For example a charge can be created by the operation of law, by an award of the arbitrators and by various other means. In such cases the last clause of section 100 of the Act which says that a bona fide purchaser without notice of the charge is protected would come into play. I do not think that because of the last clause of section 100 of the Act it is possible to create a charge orally in view of the amendment of section 100. Therefore, the decision in Viswanadhan v. Menon1, is binding on me. The plaintiff, in my opinion, can retain the property until he is paid off the monies expended by him for redeeming the mortgage. Therefore, the decision in Viswanadhan v. Menon1, is binding on me. The plaintiff, in my opinion, can retain the property until he is paid off the monies expended by him for redeeming the mortgage. Under section 221 of the Indian Contract Act in the absence of any contract to the contrary, an agent is entitled to retain goods, papers, and other property whether movable or immovable of the principal received by him until the amount due to himself for commission, disbursements and services in respect of the same has been paid or accounted for to him. In the present case it cannot be doubted that the plaintiff acted as the agent of Kamakshi Ammal as he was. directed by her to redeem the mortgage and to recoup himself of the amount by selling the property. It is urged on behalf of the third defendant that the question of agency has not been put forward in the Court below and the trial Court was of the opinion that there was no such plea in the plaint. But paragraphs 5 and 6 of the plaint in my opinion contain sufficient averments by which the plaintiff says that he was the agent of Kamakshi Ammal for the purpose of selling her house. The observations in The West of England Bank v. Batchelor2, can be applied to the facts of the present case It seems to me, therefore, that the plaintiff is entitled to remain in possession of the property until he is paid the amount spent by him. The plaintiff is already in possession of the property and he is entitled to continue in possession until all the amounts due to him are paid as he cannot claim a charge on the house. In the result the Second Appeal fails and is dismissed but without costs. The order of the lower Courts directing the plaintiff to pay costs to third defendant is set aside but the dismissal of the suit is confirmed No leave. R.M. ----- Appeal dismissed.