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1965 DIGILAW 235 (KER)

Aliyamma v. Mathai Kunju Nina

1965-08-24

S.VELU PILLAI

body1965
JUDGMENT S. Velu Pillai, J. 1. The suit property is a part, 40 cents in extent, of a larger property,1 acre 6 cents in extent, which belonged to one Narayana Pillai. He mortgaged 15 cents of the larger property on the 9th Medom,1100, to one Padmanabha Pillai by Ext. III. He also mortgaged the suit property on the 7th Karkadakom,1100, to Padmanabha Pillai by Ext. II. The rights under Exts. II and III were hypothecated by Padmanabha Pillai to the Kerala Bank Ltd., on the 15th Vrischigom, 1101. On the 6th Mithunam,1102, Narayana Pillai hypothecated the suit property and others to the plaintiff and his father for a chitty debt. On the 15th Makarom,1103, Padmanabha Pillai, the mortgagee, released his rights under Exts. II and III to Narayana Pillai, the mortgagor, by Ext. IX with a direction to the latter to discharge the debt due to the Bank. On the hypothecation of 1101, the Bank instituted O.S. 412 of 1106 against Padmanabha Pillai as the first defendant, and Narayana Pillai as the additional second defendant. The suit was decreed in terms of the plaint, by Ext. A judgment and Ext. IV decree. In execution, the suit property and the 15 cents mortgaged under Ext. III, were purchased by the assignee-decreeholder on the 16th Vrischigom,1109, under Ext. V sale certificate, and were delivered to him under Ext. VI dated the 16th Chingom,1110. He then made a gift of his rights in respect of the suit property to the defendant - appellant on the 4th Thulam, 1110. On the hypothecation of 1102, the plaintiff and his father instituted O.S. 982 of 1103 and obtained a decree, Ext. B. purchased the suit property and others on the 23rd Thulam,1122, in execution, subject to a mortgage right of Rs. 200/-, and took delivery of possession of the equity of redemption on the 19th Thulam,1124, under Ext. D. Basing on this, the plaintiff instituted the present suit for redemption of Ext. II. The defendant contended, that by the purchase under Ext. V, she has become the owner of the suit property and that the plaintiff is not entitled to redeem. This contention prevailed with the Munsiff who dismissed the suit, but it was repelled by the Subordinate Judge in appeal. 2. The question for consideration in second appeal is whether the plaintiff is entitled to redeem the defendant. V, she has become the owner of the suit property and that the plaintiff is not entitled to redeem. This contention prevailed with the Munsiff who dismissed the suit, but it was repelled by the Subordinate Judge in appeal. 2. The question for consideration in second appeal is whether the plaintiff is entitled to redeem the defendant. If the defendant is to be considered as standing in the shoes of the auction-purchaser in execution of the decree on the prior mortgage, notwithstanding the fact that the plaintiff and his father, who were the puisne mortgagees, were not parties to the decree, the title of the defendant has to prevail But it was contended for the plaintiff, that the defendant's predecessor-in-interest, the Kerala Bank Ltd., was only in the position of a sub-mortgagee, that its security is only the mortgage right under Exts. II and III, that what was sold in execution of the decree was such mortgage right, and that the defendant cannot be considered to be in the position of a prior mortgagee-auction-purchaser. At the time O.S. 412 of 1106 was instituted, Exts. II and III had been released by Ext. IX to Narayana Pillai, who had notice of the sub-mortgage to the Bank and was even charged with paying it off. As noted, he was a party to Ext. IV decree. The summary of the plaint as set out in Ext. IV discloses, that the decree prayed for was against the properties and not against the right under Exts. II and III. Ext. V also is clear that the properties as such, not the mortgage right in them, were purchased in execution. It was argued, that sale in pursuance of the sub-mortgage cannot affect the equity of redemption of the original mortgagor, and can pass only the mortgage right. This is not always the case. The sub-mortgagee may realise the amount due to him in one of two ways; he may enforce his security by bringing to sale the mortgage right which was sub-mortgaged to him, or he may, in his capacity as the assignee of the mortgagee, sue for the sale of the property itself and incidentally realise his dues. The sub-mortgagee may realise the amount due to him in one of two ways; he may enforce his security by bringing to sale the mortgage right which was sub-mortgaged to him, or he may, in his capacity as the assignee of the mortgagee, sue for the sale of the property itself and incidentally realise his dues. This has been recognised in a very early case, Kanhal Lal v. Mahadeo Prasad 18 Indian Cases 389, where the law was stated "to be, that the sub-mortgagee by virtue of the assignment is not only entitled to the usual remedies against his own mortgagor. But he is also entitled to a remedy against the original mortgagor. The position of the original mortgagee after a sub-mortgage becomes as it were that of a surety, the sub-mortgagee becoming the creditor while the original mortgagor continues to remain the debtor ...the operation of the sub-mortgage was to transfer to the sub-mortgagee all the rights and remedies which Jot Singh (mortgagee) had against his mortgagor (Debi Singh)". This has been followed in later cases in the Madras High Court, such as, Muthu Vijia Raghunatha Ramachandra Vacha Mahali Thurai v. Venkatachallam Chetti, ILR. 20 Madras 35, K. Vengannan Chettiar and Sons v. N. Ramaswami Pillai, AIR. 1943 Madras 498 A.L.A. R.R.M. V. Vellayan Chettiar v. Mahalinga Pathan, AIR. 1958 Mad. 30. These were accepted as laying down good law, by a full bench of the same court in Chinnah Goundan v. Subramania Chettiar AIR. 1959 Madras 246. In view of these pronouncements, it may be held that the sub-mortgagee can, in a properly framed suit, enforce his security against the property itself which was the subject of the mortgage. Form 11, Appendix D of the Civil Procedure Code, also relates to the decree for sale to be passed in such a case. 3. It was however urged by learned counsel for the plaintiff, that O.S. 412 of 1106 can be considered to be only a suit upon the sub-mortgage to enforce the mortgage security, and not a suit on the mortgage itself for the sale of the mortgaged property. In terms, the plaint as summarised in Ext. IV did not pray for the enforcement of Exts. II and III as distinguished from the sub-mortgage. In terms, the plaint as summarised in Ext. IV did not pray for the enforcement of Exts. II and III as distinguished from the sub-mortgage. It cannot be overlooked, that the mortgagor too was made a party to the suit which was quite unnecessary, had it been a suit simply to realise the security of the sub-mortgage and that the prayer in the plaint was expressly and clearly for the sale of the property itself, without any qualification or reservation. It has also to be borne in mind, that at the time the suit was instituted, the mortgages Exts. II and III had themselves been released under Ext. IX, and there was not much point for the Kerala Bank Ltd., to insist, that they still remained intact. There is, however the fact, that the Bank sought to realise only the amount due to it and not the amount of the mortgages and paid court fee accordingly, but this has to be viewed in the light of the fact just stated, that the mortgages had been released, and that a decree was prayed for, though not personally against the mortgagor, against his interests in the mortgaged property. The amount of court fee paid is not material, what are determinative being, the prayer for the sale of the property and the impleadment of the mortgagor. I am satisfied that Ext. IV was a decree not only against the mortgage security, which by that time had become merged in the larger interests of the mortgagor, but also against the equity of redemption. It was this equity of redemption which was sold under Ext. V. It must follow from the above, that the defendant's predecessor-in-interest was the prior purchaser of the equity of redemption in a mortgage suit and so his title thereto has to prevail over the title of the plaintiff by virtue of his later purchase. 4. The plaintiff, as the later purchaser under a mortgage decree has still the right to redeem the prior purchaser, but this is subservient to the right of the latter to compel the former to submit to redemption, and the two rights can be worked out and adjusted in the same suit or proceeding, on equitable considerations. Eapen Varghese v. Kunjutti Sanku 29 T.L.J. 263 (FB.) is an authority in point and it is unnecessary to cite other decided cases. Eapen Varghese v. Kunjutti Sanku 29 T.L.J. 263 (FB.) is an authority in point and it is unnecessary to cite other decided cases. The defendant had not in her written statement set up a right to redeem the plaintiff and her learned counsel has moved C.M.P. 5558 of 1965 for amending the written statement, so as to include a prayer to compel the plaintiff to submit to redemption, The plaintiff has all along been contesting the right of the defendant and contending that he is the owner of the equity of redemption. He has also pleaded, quite contrary to Ext. V that only the mortgage rights under Exts. II and III were sold in execution of the decree Ext. IV. In these circumstances, I consider that I should stretch a point in favour of the defendant, especially as her right to the equity of redemption is established and she and her predecessor-in-interest have been in possession of the property ever since the year 1110, though I am sure this can be done only on appropriate directions as to costs. Though the plaintiff has lost in his claim to the ownership of the property and normally the defendant is entitled to the full costs so far incurred, in view of the belated amendment of the written statement, I think that the plaintiff need pay only half such costs. Future costs shall be in the discretion of the court, but regard shall be had to the normal rule in a suit for redemption that the mortgagee is ordinarily entitled to his costs. These I think, are sufficient terms to impose on the defendant, for her failure to pray for redemption earlier. In the result, I allow C.M.P 5558 of 1965 for amendment of the written statement, set aside the decree of the Subordinate Judge and send back the case to the first court for the disposal of the prayer for redemption on the basis of the amended written statement and for passing a fresh decree. The second appeal is allowed as stated above, but the plaintiff shall pay only half the costs of the defendant in all the three courts and the defendant shall bear her own.