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1963 DIGILAW 334 (KER)

Damodaran Namboodiripad v. Thatchudaya Kaimal Others

1963-11-01

M.MADHAVAN NAIR, M.S.MENON

body1963
Judgment :- 1. This appeal arises in execution of a mortgage decree. At execution, Rs. 11,000 odd have been deposited as the price of redemption and the property has been delivered to the plaintiff. The 12th defendant, the mortgagee on record, prayed for payment of the amount in court less what has been claimed out of it by the other defendants. In other words, the prayer was only that the undisputed portion of the amount in court that belonged to him might be delivered to him. The court below dismissed that prayer, directing him to a fresh suit therefor. Hence this appeal. 2. The facts show no justification for the order of the court below. If the mortgagee, after surrender of the property to the mortgagor, claimed to be paid only such portion of the mortgage amount that is beyond dispute by the other parties in the case, we do not see why the same was not allowed forthwith. 3. The practice found in some courts of directing redemption to the plaintiff-mortgagor, leaving the rival claims to the mortgage amount of the dependents, the mortgagees and the sub-mortgagees, to be settled in a fresh suit is not warranted in law. Order XXXIV, R.4 (4) C.P.C. directs that, in suits for sale where "persons deriving title from ... mortgagees are joined as parties, the preliminary decree ... shall provide for the adjudication of the respective rights and liabilities of the parties to the suit in the manner and form set forth in ... Form No.11...with such variations as the circumstances of the case may require". A like provision in regard to adjudication of the rights and liabilities of sub-mortgagees occur in Order XXXIV, R.3(3) CPC. as regards suits for foreclosure. See Form No. XI in Appendix D to the Code of Civil Procedure and Vengannan Chettiar and sons v. Ramaswami Pillai (AIR. 1943 Mad. 498). There is, however, no provision in Order XXXIV as to whom the price of redemption lodged in court shall be given. But as "the mortgagor's right of redemption and the mortgagee's right of foreclosure or sale are co-extensive" (Mulla's Transfer of Property Act, 4th Edn. 1943 Mad. 498). There is, however, no provision in Order XXXIV as to whom the price of redemption lodged in court shall be given. But as "the mortgagor's right of redemption and the mortgagee's right of foreclosure or sale are co-extensive" (Mulla's Transfer of Property Act, 4th Edn. p. 378), the procedure in regard to payment of the price of redemption cannot be different from that regarding payment of the proceeds of the sale of the mortgaged property; and therefore an adjudication as to the relative rights of the mortgagee and the sub-mortgagee becomes necessary in redemption suits as well. The AIR. Commentaries on the Code of Civil Procedure in Note No. 4 to Order XXXIV, R.7 puts the position succinctly thus: "In a suit for redemption of a mortgage to which the sub-mortgagee also is joined as a party, the decree should direct accounts to be taken of the mortgage as well as of the sub-mortgage and should provide that out of the mortgage money, the sub-mortgagee should be paid the amount due to him and the balance, if any, should be paid to the mortgagee." In Narayan Vithal Maval v. Ganoji (ILR. 15 Bom. 692) one of the issues framed by the trial court was "Can accounts be taken between the defendants inter se in this case?" The Subordinate Judge found the issue in the negative. On appeal, Sir Charles Sargent, C.J. and Candy, J. remanded the suit "for an account of the sub-mortgage to be taken", observing: "In the case of a derivative mortgage or sub-mortgage the judgment directs an account of what is due to the original mortgagee or his assignee, and then of what is due to the derivative or sub-mortgagee; and that upon payment to the latter of the sum due to him, not exceeding the sum found due to the original mortgagee, and on payment of the residue, if any, of what is due to the original mortgagee, both of them shall reconvey to the mortgagor." This was followed by Sir John Stanley, C.J. and Sir George Knox, J. in Gokul Das v. Debi Prasad (ILR. 28 All. 638) where the suit was one for redemption of a mortgage of 1860, on which there were two sub-mortgages of the years 1890 and 1895. 28 All. 638) where the suit was one for redemption of a mortgage of 1860, on which there were two sub-mortgages of the years 1890 and 1895. It was held: "The sub-mortgagees have derivative interests in the mortgage as sub-mortgagees and they were therefore properly impleaded in the suit. The proper course, we think, for the court below to have adopted was to ascertain what sum is due to the sub-mortgagees or to their representatives on foot of the sub-mortgages which are dated respectively the 15th of September 1890 and the 6th of September 1895, and to direct payment of this sum out of the money lodged in court which is the full amount of principal which the plaintiffs are liable to pay." and remanded the suit for ascertainment of sums due on the sub-mortgages. Again in Eshanali v. Kikabhai (AIR. 1956 M.B. 118) Chaturvedi, J. held: "It is well settled that in any suit for redemption or foreclosure of the original mortgage, the accounts between the original mortgagor and the original mortgagee on the one hand, and the latter and the sub-mortgagee on the other, hare to be taken and the respective claims of the three parties adjusted and settled." From the above, it is clear that, in a suit for redemption of a mortgage the sub-mortgagee's claims in the price of redemption found due to the original mortgagee have to be adjudicated. However, the decree in the present case directed: "The mortgage amount can be withdrawn either jointly by all interested persons or on proving the rights of individual claimants in separate proceedings." The "separate proceedings" in the context must mean a proceeding in the suit itself, not a fresh suit. 4. The court below is therefore directed to pay the portion of the mortgage amount in court which has not so far been claimed by the other parties to the suit, and, as respects the disputed portion of the amount, to proceed to adjudicate the claims of the defendants inter se. Needless to say that in such adjudication the party, who obstructed disbursement of the amount to the rightful claimant, may, if the court finds his obstruction vexatious, be made liable to pay damages by way of interest to the latter. The appeal is allowed as indicated above. There will be no order as to costs here. Allowed.