Judgment :- 1. Defendants 1 and 2 are the appellants. The suit was for recovery of plaint property with mesne profits. The plaintiffs, 3rd defendant and the deceased Kamapalan are the children of the deceased Adichan Narayanan. The plaint property belonged to Adichan Narayanan and he sold the same to the 1st defendant on 29.2.1105 for 6500 fanams. Ext. A is copy of that sale deed. Out of the sale consideration a sum of 4431 fanams had been reserved with the vendee for discharging a hypothecation debt of 1104 in favour of one Pichandy Chettiyar. The balance consideration of 2069 fanams had been received, as recited in Ext. A. The 1st defendant did not discharge the hypothecation debt and so, Adichan Narayanan instituted the suit O.S. 301 of 1108 in the Munsiff's Court, Trivandrum, for realising the sum reserved in the sale deed. Pending the suit, Adichan Narayanan died and the plaintiffs had got themselves impleaded as his legal representatives. In that suit, the 1st defendant had contended that, by virtue of the decree in O.S. 114 of 1097 of the District Court, Trivandrum, Adichan Narayanan had lost his right to one-fourth of the plaint property, that, therefore, the sale deed in favour of the 1st defendant was invalid, that the 1st defendant was to get back the sale consideration actually paid by her from Adichan Narayanan and that the latter was not entitled to a decree, as prayed for. Accepting the contention of the 1st defendant, a decree was passed in that case on 18.1.1110 allowing the 1st defendant to recover 2069 fanams with 12 per cent interest per annum charged on the plaint property from the date she surrendered the property to the plaintiffs in that case. Ext. B is copy of the decree, Ext. C copy of the judgment and Ext. D copy of the written statement filed by the present 1st defendant. The plaintiffs would say that possession of the 1st defendant as vendee had changed to that of a mortgagee, with a right to retain possession of the property for 2069 fanams. The suit was to redeem the mortgage after settling accounts with the 1st defendant as regards the profits collected by her and which had not been accounted for.
The plaintiffs would say that possession of the 1st defendant as vendee had changed to that of a mortgagee, with a right to retain possession of the property for 2069 fanams. The suit was to redeem the mortgage after settling accounts with the 1st defendant as regards the profits collected by her and which had not been accounted for. The plaintiffs would say that the profits would come to 600 fanams per annum and that the 1st defendant would be entitled to get only 2069/6500 share out of the same and that she was to account for the balance. When such accounts are taken, it would be seen that the mortgage amount had been wiped off and that, on the date of the suit, a sum of 5962 fanams would be due to the plaintiffs. The suit was, therefore, for the recovery of possession of the property with past profits amounting to 5962 fanams and future profits at 600 fanams a year. 2. The 2nd defendant is the 1st defendant's husband. He was impleaded in the case as it was stated that he had secured some right over the property. The 4th defendant is Kamapalan's widow and the 5th defendant is the 4th defendant's daughter. Defendants 3 to 5 supported the plaintiffs. Defendants 1 and 2 contended that the suit was barred by limitation, that the plaintiffs were entitled to get only three-fifths share of the assets of the deceased Adichan Narayanan, that the decree in O.S. 301 of 1108 was invalid and not binding on the defendants and plaint schedule property, that the 1st defendant had, therefore, not become the mortgagee of the plaint schedule property, that defendants 1 and 2 were entitled to get the full profits from the property, that the profits would not however be 600 fanams as claimed by the plaintiffs, and that the plaintiffs were not entitled to any remedy. The set off of the profits against the amount due to the 1st defendant was objected to. 3. The plaintiffs by a replication stated that they were entitled to get possession of the property, as claimed in the plaint. 4.
The set off of the profits against the amount due to the 1st defendant was objected to. 3. The plaintiffs by a replication stated that they were entitled to get possession of the property, as claimed in the plaint. 4. The lower court found that the suit was not barred by limitation, that the 1st defendant had only a mortgage right over the plaint item, that she was liable to account for the profits collected by her and that the plaintiffs were entitled to a decree, as prayed for in the plaint. 5. The main argument of the learned Advocate for the appellants was that, by virtue of Ext. B decree, no mortgage had been created, as contended for by the plaintiffs. We are not prepared to consider the propriety of the decree passed in O.S. 301 of 1108, as both parties had submitted to the same. The effect of that decree was to allow the 1st defendant to retain possession of the property and to claim the sum of 2096 fanams (this is mentioned to be Rs. 300/- in that decree) with 12 per cent interest from the date on which she surrendered possession of the property to the plaintiffs. She can, therefore, retain the property until the amount due to her is paid. This has all the characteristics of a mortgage. The learned Advocate argued that mortgages could be created only by acts of parties and not by operation of law. He based his argument for this on the provisions in the Transfer of Property Act, which does not provide for the creation of a mortgage, as contended for by the plaintiffs in the case. 6. The provisions in the Transfer of Property Act will not apply to the facts of the present case. The Transfer of Property Act itself was enacted to define and amend certain parts of the law relating to the transfer of property by acts of parties. S. 2, Cl. (d) specifically provides that nothing contained in the Act shall be deemed to affect any transfer by operation of law or by, or in execution of, a decree or order of a court of competent jurisdiction, save as provided for by S. 57 and Chapter IV of the Act. Chapter IV deals with Mortgages of Immovable Property and Charges and S. 57 deals with Discharge of Incumbrances on Sale.
Chapter IV deals with Mortgages of Immovable Property and Charges and S. 57 deals with Discharge of Incumbrances on Sale. So, the Transfer of Property Act will have no application to the present case. At page 14 of Vol. I of the Law of Mortgage in India by Ghose (Tagore Law Lectures), it was stated that a legal mortgage was, as the name imports, one which was created merely by operation of law. In other words, the law attached to certain obligations a charge on the debtor's property with the same incidents as a consensual security. It was further pointed out there that a legal mortgage, however, should not be confounded with implied conventional mortgages which could arise only out of the voluntary consent of the parties, the distinction between the two being the same as that between quasi-contracts and implied contracts. So, it is possible to create a mortgage apart from what is provided for in the Transfer of Property Act. 7. The 1st defendant here was allowed to retain possession of the property till she got her amount. She was also given the option to surrender possession of the property and claim the amount with 12 per cent interest. The plaintiffs can, therefore, file a suit for redemption of the mortgage thus created for which the period of limitation is 50 years. It may also be mentioned that the mortgage in question was created at a time when the Transfer of Property Act was not law in Travancore. Where under a hypothecation deed the creditor was given possession of some of the hypotheca for enjoyment in lieu of interest on the debt and the hypothecatee was subsequently dispossessed by prior encumbrancer of the properties, it had been held in Gouri Kutty Amma v. Ponnamma Pillay 1949 T.L.R. 208, that the document in question was a usufructuary mortgage in regard to certain properties and a simple mortgage or hypothecation in regard to others, and that despite this composite nature of the deed the transaction was a single and indivisible one and the mortgagee should have the same period of limitation to enforce repayment of the mortgage money against all the properties on which the debt was charged.
It was also laid down that the receipt of the rent and profits by the mortgagee in possession was deemed to be payment of the interest by the mortgagor, and that a fresh period shall be computed from the time when such payment was deemed to have been last made, that is from the date of dispossession. 8. In this case, the 1st defendant was allowed to appropriate the profits from the property till she was paid her amount or till she surrendered possession of the property and claimed the amount with 12 per cent interest thereafter. She has, therefore, to surrender possession of the property on receipt of Rs. 300, as ordered in Ext. B case. 9. The lower court has allowed the plaintiffs to set off the alleged excess profits against the mortgage amount due and decreed to the plaintiffs a huge amount on account of arrears of mesne profits. This cannot be allowed. So long as the 1st defendant was not paid her amount, she had a right to appropriate the profits arising from the property and she cannot be asked to account for the same. So, that portion of the decree of the lower court has to be set aside. 10. The result is that the plaintiffs are allowed to recover possession of the property on payment of Tr. Rs. 300/- (Travancore Rs. Three hundred) to the 1st defendant. The plaintiffs' right to set off is disallowed. The plaintiffs will however get profits at 600 fanams (six hundred) a year from the date on which notice of the deposit of Rs. 300/- is served on the 1st defendant. In view of the exorbitant claim made by the plaintiffs and the vexatious contentions raised by the 1st defendant, we think it proper to order the parties to bear their costs throughout.