Bharathi v. Ayissa Umma — 1969 DIGILAW 280 (KER)

Judgment :- 1. The second appeal is filed by defendants 5 and 7 to 9 against the decree allowing the plaintiff to redeem Ext Al dated 19-7-1933 and to recover possession of the properties comprised therein from the defendants. 2. The plaint property belonged to Marath tarwad and the karnavan thereof had executed a possessory mortgage in respect of the same to Unniali who is the husband of the plaintiff. Unniali executed a sub-mortgage in favour of the defendant and Ext. Al is the kychit executed by the latter in favour of Unniali. The plaintiff claiming to have purchased the equity of redemption of the plaint property from the Marath tarwad under Ext. A2 on 611936 has instituted the suit for redemption of the sub-mortgage in favour of the defendant. The defendant died pending suit and his legal representatives some of whom are the appellants have been impleaded. The trial court held that the suit for redemption of the sub-mortgage by the plaintiff is not maintainable and the plaintiff cannot also recover possession of the plaint items as the transaction evidenced by Ext. Al is a kanam. 3. The appellate judge did not specifically deal with the question of the maintainability of the suit but held that the transaction evidenced by Ext. Al is a Kaivasa Panayam and decreed the suit. 4. The learned counsel for the appellants contended before us that the suit by the plaintiffs being one to redeem the sub-mortgage by the owner of the property is not maintainable. It was also contended by him that Ext. Al is not a Kaivasa Panayam but is a transaction in respect of which the defendants are entitled to the benefits of Act I of 1964. 5. We are of the view that on the first point raised by the appellants' counsel the appeal has to succeed. As already stated the plaintiff is the wife of Unniali. She purchased the equity of redemption of the plaint property from the Marath tarwad on 61 1936 evidenced by Ext. A2. It is alleged in the plaint that the mortgage was surrendered by Unniali to the plaintiff. The trial court has found against the surrender and the appellate judge has not considered the question of surrender. She purchased the equity of redemption of the plaint property from the Marath tarwad on 61 1936 evidenced by Ext. A2. It is alleged in the plaint that the mortgage was surrendered by Unniali to the plaintiff. The trial court has found against the surrender and the appellate judge has not considered the question of surrender. The appellate judge has taken the view that even if the surrender is not proved the plaintiff being one of the heirs of Unniali is competent to redeem the sub-mortgage. The suit is brought by the plaintiff only on the basis of Ext. A2 alleging that she has obtained a surrender of the mortgage right from Unniali. There is no evidence to prove that the plaintiff got surrender of the mortgage from Unniali. The trial court has disbelieved on proper grounds the case of the plaintiff that she paid off the mortgage money due to Unniali. The resultant position is that the plaintiff without securing the mortgage right from Unniali has instituted the suit for redemption of Ext. Al. 6. In these circumstances we should have had no difficulty in answering the question of the maintainability of the suit in favour of the defendants had it not been for the decision of Isaac, J. in Kaliyamma Pillai v. Krishna Pillai 1969 KLT.151, where the right of the original mortgagor to redeem the sub-mortgage without redeeming the mortgage has been upheld relying on the wording of S.91 of the Transfer of Property Act. Isaac, J. after distinguishing Gouri iv. Lekshmi AIR. 1953 TC. 271 and Padgava bin Nagaya v. Baji Babaji Moholkar ILR. 20 Bombay 549 has observed thus: "the question is whether a mortgagor or a person claiming under him can redeem a sub-mortgage, without seeking to redeem the mortgage, or even impleading the mortgagee. The matter appears to be covered by S.91 of the Transfer of Property Act. Clause (a) of this Section provides that'any person (other than the mortgagee of the interest sought to be redeemed) who has any interest in, or charge against the property mortgaged or in or upon the right to redeem the same' may redeem a mortgage. On the language of the section, there can be no doubt that a mortgagor is a person entitled to redeem a sub. mortgage." In Gouri v. Lekshmi AIR. 1953 TC. 271 Sankaran. On the language of the section, there can be no doubt that a mortgagor is a person entitled to redeem a sub. mortgage." In Gouri v. Lekshmi AIR. 1953 TC. 271 Sankaran. J. pointed out: "The sub-mortgagee has no privity of estate or privity of contract with the original mortgagor, who is now represented by the defendant. So far as the sub-mortgage is concerned, the privity of estate and privity of contract are between the mortgagee and the sub-mortgagee and as such the sub-mortgage can be put an end to by redemption or by release, only by the original mortgagee and his representative-in-interest. No doubt the defendant as representing the mortgagor can redeem the original mortgage and put an end to it. In such a suit for redemption of the mortgage be can terminate the sub-mortgage by making the sub-mortgagee also a party to that suit. But the mortgagor has no right to directly terminate the sub-mortgage independent of the mortgage. It cannot also be said that on the mortgagor acquiring the rights under the sub-mortgage there is a merger of the sub-mortgage in the ownership of the property. Such merger is possible only if there is no intermediate charge subsisting. As between the ownership of the property and the rights under the sub-mortgage there is mortgage charge subsisting and so long as that intermediate charge subsists, there can be no merger of the sub-mortgage in the ownership of the property." The above decision was distinguished on the ground that the observations of Sankaran, J. are obiter and do not appear to the fully correct. In Padgaya bin Nagaya v. Baji Babaji Moholkar ILR. 22 Bombay 549 the facts were, the plaintiff filed a suit for redemption of a mortgage in favour of the first defendant. He joined the 2nd defendant as being the mortgagee of the first defendant and in possession of the property. Pending suit the first defendant died and no steps were taken to implead his legal representatives. The suit was continued against the second defendant and a redemption decree was passed. He joined the 2nd defendant as being the mortgagee of the first defendant and in possession of the property. Pending suit the first defendant died and no steps were taken to implead his legal representatives. The suit was continued against the second defendant and a redemption decree was passed. In second appeal by the second defendant their Lordships of the Bombay High Court observed: "We must, therefore, hold that the appellant (2nd defendant) was not the assignee, but the sub-mortgagee of defendant No. 1, and this being so on the death of defendant No.1 no cause of action survived to the respondent (Plaintiff) as against the appellant (2nd defendant), and the suit abated under S.368 of the Civil Procedure Code (Act XIV of 1882)." The above decision also was not followed by Isaac, J. for the reason that the existence of privity of contract or privity of estate is not a matter of consequence for deciding the right of the original mortgagor to sue for redemption of the sub-mortgage because of the language of S.91 of the Transfer of Property Act. In Madhavikutty Amma v. Raman Pillai, 1957 KLT.1285 it was held that in a suit for redemption of a mortgage to which the mortgagee and the sub-mortgagees were parties it was not competent for the sub-mortgagee to resist the suit on the ground of partial redemption. 7. We shall now examine the language of S.91(a) of the Transfer of Property Act. S.60 of the Transfer of Property Act Act gives the mortgagor a right to redeem and also lays down the condition for claiming redemption. Under S.91 a number of persons, besides the mortgagor are given the right to redeem the mortgaged property. S.91 (a) of the Transfer of Property Act reads: "91. Besides the mortgagor, any of the following persons may redeem, or institute a suit for redemption of, the mortgaged property, namely: "(a) any person (other than the mortgagee of the interest sought to be redeemed) who has any interest in, or charge upon, the property mortgaged or in or upon the right to redeem the same;" The rest of the sub-sections are. unnecessary for the present purpose. The above refers to four classes of persons who are entitled to redeem: 1. persons having an interest in the property mortgaged; 2. persons having a charge upon the property mortgaged; 3. unnecessary for the present purpose. The above refers to four classes of persons who are entitled to redeem: 1. persons having an interest in the property mortgaged; 2. persons having a charge upon the property mortgaged; 3. persons having an interest in the right to redeem the property mortgaged; and 4. persons having a charge upon the right to redeem the property mortgaged. Sub-sections (b) & (c) of S.91 of the Transfer of Property Act enumerate the persons who have no interest or charge upon the mortgaged property or upon the right to redeem but to whom the right to redeem has been granted. 8. It is clear from the context that the words 'property mortgaged' have reference to to the totality of the rights of the mortgagor which he had in the property before the execution of the mortgage while the words 'right to redeem the same' refer to the mortgagor's interest which remains after the execution of the mortgage. In Pawankumar v. Jagdeo AIR. 1947 Nagpur 210 at 222 Hidayatulla, J. pointed out: "While it is true that the words 'any interest' are of such generality that any interest however small is comprehended, the interest that enables a person to claim redemption must be an interest in'the property mortgaged' or the 'right of redemption'. I do not consider that the matter is to be judged by referring to 0,34, R.1, Civil P.C. That provision is merely procedural and does not create substantive rights. In my opinion, the matter is to be determined on a true construction of S.91 (a) T. P. Act. As pointed out in Chitaley's Transfer of Property Act p. 1372, the two phrases in S.91 (a) refer to different stages. The words 'property mortgaged' indicate the rights existing prior to the mortgage and the words 'the right to redeem' indicate the rights left in the mortgagor subsequent to the mortgage". 9. The plaintiff in the case before us does not answer the above description when be wants to redeem the sub-mortgage. With reference to the sub-mortgage he cannot be termed the mortgagor. The plaintiff cannot be said to be interested in the right to redeem the property mortgaged. We do not think that the plaintiff can be said to be a person having an interest in the 'property mortgaged'. With reference to the sub-mortgage he cannot be termed the mortgagor. The plaintiff cannot be said to be interested in the right to redeem the property mortgaged. We do not think that the plaintiff can be said to be a person having an interest in the 'property mortgaged'. Sub-section (a) of S.91 of the Transfer of Property Act was amended in 1929 and it was made to follow the English rules under which the mortgagor and all persons having any interest in the property subject to the mortgage are allowed to redeem. Dealing with the rights of a sub-mortgagee Coote in his book on Mortgages, Volume II, page 360, observed: "Where there is a sub-mortgage, the security will comprise: first, the personal covenant of the sub-mortgagor; secondly, the transfer of the original mortgage debt and mortgaged property, subject to redemption with the benefit of the power of sale, and other powers and remedial clauses contained in the original mortgage; thirdly, a power of sale enabling the sub-mortgagee to dispose of the original mortgage debt and security." And at page 861 the learned author observes that the sub-mortgagor "is in a position bearing a great resemblance to that of a surety." The above is not the position under the Indian Law. The sub-mortgagor merely mortgages his interest in the property mortgaged as security for the repayment of the amount advanced by him. When a mortgagee has sub-mortgaged his interest in the property mortgaged to him, the sub-mortgagee is entitled to sell the interest of his sub-mortgagor in the property without impleading the original mortgagor and foreclosing his equity of redemption., The words "property mortgaged" in S.91 (a) of the Transfer of Property Act cannot have reference only to the actual immovable property comprised in the original mortgage but will include other kinds of immovable property forming the subject matter of the mortgage. In Jaggeswar Dutt v. Bhuban Mohan Mitra, ILR. 33 Calcutta 425 their Lordships of the Calcutta High Court bad to construe the words "property comprised in a mortgage" in S.85 of the Transfer of Property Act (Act IV of 1882). Mr. Justice Mookerjee said: "What is the precise meaning of the words 'property comprised in a mortgage?'. Is the word 'property' used in this section to indicate the actual physical object, or does it merely denote the rights in such object, which form the subject-matter of the transaction. Mr. Justice Mookerjee said: "What is the precise meaning of the words 'property comprised in a mortgage?'. Is the word 'property' used in this section to indicate the actual physical object, or does it merely denote the rights in such object, which form the subject-matter of the transaction. In our opinion, the latter is the construction which ought to be placed upon the term. We are unable to adopt the view of the majority of the learned judges of the Allahabad High Court, who decided the case of Matasin Kasodhan v. Kazim Hussain, (1891) ILR. 13 All. 432, in their view that the term'property' means an actual physical object and does not include mere rights relating to physical objects. That view is inconsistent with the decision of the Court in Surji Ram Marwari v. Barhamdeo, (1905) 1 CLJ. 337, and, if adopted, would lead to startling results. To take one concrete illustration, the Government may be owner of a particular parcel of land, A may be the zamindar of that parcel under the Government, B a patnidar under A and C a darpatnidar under B. C executes a mortgage of his darpatni interest in favour of X. If X sues to enforce bis security, is the Government or A or B a proper or necessary party to the litigation? If the term'property' in S.85 means the physical object, each of them would be a necessary party. But it is difficult to conceive upon what principle and with What object in view, any of these persons, who have no interest in the mortgage transaction, should be dragged into the litigation. We must hold that the property comprised in a mortgage is the interest which the mortgagor is competent to transfer by way of mortgage at the date of the transaction." Instead of the expression "property comprised in a mortgage" we find in S.91 (1) (a) of the Transfer of Property Act the words "property mortgaged". In our view, the same interpretation has to be given to the term "property mortgaged" in S.91 (1) (a) of the Transfer of Property Act. 10. There is also another reason to hold that an original mortgagor cannot file a suit for redemption of the sub-mortgage. A person interested in the property mortgaged must be bound by the mortgage transaction to enable him to redeem the same. The original mortgagor is not bound by the sub-mortgage. 10. There is also another reason to hold that an original mortgagor cannot file a suit for redemption of the sub-mortgage. A person interested in the property mortgaged must be bound by the mortgage transaction to enable him to redeem the same. The original mortgagor is not bound by the sub-mortgage. It is true that some Courts have taken the view that it is open to a sub-mortgagee to file a suit for the recovery of the amount based on the original mortgage by the sale of the mortgaged property and have all the accounts settled. But that cannot affect the present question. If the sub-mortgage had been executed for a larger amount than due under the original mortgage, when redeeming the original mortgage the mortgagor need pay only the amount shown in the original mortgage and not the amount due under the sub-mortgage. Further a sub-mortgagee cannot proceed against the mortgage right for realising the amount due to him if the original mortgagor without notice of the sub-mortgagee pays off the mortgage amount. This obviously shows that the sub-mortgage is not binding on the original mortgagor and if the original mortgagor is not bound by the terms of the sub-mortgage there is no question of his redeeming the sub-mortgage and he cannot be considered to be a person competent under S.91 (a) of the Transfer of Property Act to redeem the sub-mortgage. 11. In the case before us the original mortgage is a possessory mortgage and under the sub mortgage also the sub-mortgagee was given possession of the property comprised in the original mortgage. So long as the original mortgage is not redeemed the sub-mortgagee whose rights are derived from the original mortgage is entitled to continue in possession. It is not open to the original mortgagor to recover possession of the property from the sub-mortgagee because the right to recover possession so long as the original mortgage subsists is in the original mortgagee or the sub-mortgagor. Since the original mortgagor is not redeeming his mortgage the effect of his redeeming the sub-mortgage is not to extinguish it because of the intermediate mortgage right. In effect therefore the plaintiff will be constituted an assignee and the suit in effect will not be one for redemption but will be one to compel the sub-mortgagee to assign his right to the original mortgagor. In effect therefore the plaintiff will be constituted an assignee and the suit in effect will not be one for redemption but will be one to compel the sub-mortgagee to assign his right to the original mortgagor. Thus it can be seen that the plaintiff cannot take advantage of S.91 (a) of the Transfer of Property Act to redeem a sub-mortgage. 12. We are therefore of the view, with respect to the learned judge that the decision in Kaliyamma Pilla v. Krishna Pillai 1969 KLT 151 does not lay down correct law and we overrule the same. In the result we set aside the decree and judgment of the court below and allow the second appeal dismissing the plaintiff's suit. The parties will bear their costs throughout. Dismissed.