Ramaswami and others v. C. S. Venkitasubramania Iyer
1992-07-08
ABDUL HADI, BELLIE
body1992
DigiLaw.ai
Judgment :- Bellie, J. The only question that arises for consideration in this appeal is whether the amount claimed as mortgage amount due is liable to be scaled down under Sec.8 of the Tamil Nadu Agriculturists Relief Act, IV of 1938. This question has been answered by the trial court in the negative. 2. The suit properties were sold by the plaintiff to the defendants 1 and 2 and their father Appichi Gounder for a sum of Rs.40,000. A sum of Rs.20,000 was paid in cash and for the remaining Rs.20,000 a mortgage deed mortgaging the same property was executed as per which the amount shall be paid with interest at the rate of 15% per annum within a period of one year. Alleging that the mortgage amount is due the suit has been filed. Appichi Gounder died and his wife has been impleaded as the third defendant on the allegation that she is also liable to pay the mortgage amount from out of the properties left by Appichi Gounder. 3. The defendants pleaded that they have paid a sum of Rs.3,000 towards interest which has not been given credit to in the suit. They further pleaded citing a number of Debt Relief Act that the amount due under the mortgage stands discharged or must be scaled down as per the provisions of the said Acts. 4. The trial court held that it is true that an amount of Rs.3,000 has been paid by the defendants towards interest and therefore it has to be given credit to. As regards the other contentions raised by the defendants the trial court rejected them. As regards the contention raised by the defendants that the mortgage amount is liable to be scaled down under Act 4 of 1938 as amended by Act 8 of 1973 the trial court held that the mortgage has been executed as security for the unpaid balance purchase money and therefore under Sec.55 (4)(b) of the Transfer of Property Act, the plaintiff has a charge over the suit property and under Sec.10(2)(ii) such a liability is excepted from scaling down and as such the defendants will have no remedy under Act 4 of 1938. In the result the trial court passed a preliminary decree for the suit amount less Rs3,000. 5.
In the result the trial court passed a preliminary decree for the suit amount less Rs3,000. 5. In the appeal by the defendants Mr.V. Narayanasamy, learned counsel appearing for them submits that the mortgage amount is liable to be scaled down under Act IV of 1938 as amended by Act VIII of 1973 and the finding of the trial court to the contrary is erroneous. 6. Now, as seen above, for the sale consideration of Rs.40,000 Rs.20,000 was paid in cash and for the balance amount of Rs.20,000 due to the plaintiff the suit mortgage was executed mortgaging the same property sold. Clearly the mortgage was executed as security for payment of the balance amount. However, Mr.Narayanasamy would argue that by execution of the mortgage deed the balance of sale consideration would stand discharged and therefore there is no question of there being a charge over the property under Sec.55(4)(b)of the Transfer of Property Act as held by the trial court and hence Sec.l0(2)(ii) of Act IV of 1938 is not attracted. In support of this contention the learned counsel relies on a Division Bench decision in Krishnaswami Aiyangar and another v. Subramania Ganapatigal and another, 35 M.I. J. 304: 7L.W. 210, from which the following proposition emerges: “It is open to a vendor to accept a security from the vendee for part of the purchase money in lieu of cash and thus lose his lien for the unpaid purchase money. But whether he actually does so or whether he accepts the agreement merely as collateral security for future payment is question of the intention of the parties. The intention of the parties must by inferred from the documents of sale itself and the surrounding circumstances giving due weight to the fact, that the vendor has a statutory lien for unpaid purchase money which he can enforce in the absence of an agreement to the contrary”. 7. In the instant case the Sale Deed has not been filed. A reading of mortgage deed Ex.A-1 also does not show that the parties had the intention that the execution of the mortgage deed shall be in lieu of the cash consideration, and on account of that the seller-mortgage has lost his lien for the unpaid purchase money. Therefore the said decision cited by the learned counsel does not help him much. 8.
Therefore the said decision cited by the learned counsel does not help him much. 8. There is a later Division Bench decision in K.G.Lakshmana Aiyar and another v. Ramaswami Naicker and others, (1940)2 M.L.J. 827 , wherein the vendees of some property executed a mortgage in favour of the vendors for the full amount of the sale price giving as security not only the property sold but also some other property. The principal was repayable after five years but was to carry interest from the date of the bond. In an application to scale down the decree passed in a suit on the mortgage it was held that the terms of the mortgage do not constitute a contract to the contrary so as to exclude the statutory charge under Sec.55(4)(b) of the Transfer of Property Act, and by reason of Sec.10(2)(ii)of Act IV of 1938 to debt is excluded from the scaling down provisions. In this decision the earlier decision in Krishnaswami Aiyangar and another v. Subramania Ganapatigal and another, 35 M.L.J. 304: 7 L.W. 210, has been referred to. 9. There is absolutely nothing to suggest that the mortgage deed Ex.A-1 contains terms that constitute a contract to the contrary so as to exclude the charge under Sec.55(4)(b) of the Transfer of Property Act. 10. In another later judgment rendered by a single judge in Athiyappa Goundan v. Ramanathan Chettiar, (1940)1 M.L.J. 367 , a mortgage deed was executed for Rs.7,000 on the 4th November, 1914, the whole of the mortgage debt being the price payable by the mortgagors for lands purchased by them from the mortgagees and subsequent to the mortgage there was a partition among the mortgagors and after the partition the mortgage debt was split up and a subsequent mortgage for Rs.2,500 of other ancestral properties was executed by the new mortgagor for the portion of the debt that fell to him and a decree was passed on that mortgage. When it was sought to be scaled down under Sec.19 of the Act IV of 1938 it was held that Sec.10(2) (ii) of Act IV of 1938 is a sufficient answer to the petition for scaling down.
When it was sought to be scaled down under Sec.19 of the Act IV of 1938 it was held that Sec.10(2) (ii) of Act IV of 1938 is a sufficient answer to the petition for scaling down. In view of the scheme of the Act and in view of the wording of the clause the giving of other property as security did not affect the applicability of the clause in Sec.10 as to the lien for unpaid purchase money. 11. The facts in the present case are more in favour of the plaintiff than those in the said latter two decisions K.G.Lakshmana Aiyar and another v. Ramaswami Naicker and others, (1940)2 M.L.J. 827 and Athiyappa Goundan v. Ramanathan Chettiar, (1940)1 M.L.J. 367 , inasmuch as wherein the present suit the very same property has been mortgaged, in the first of the said two decisions besides the property sold some other property also has been mortgaged, and in the second decision entirely different property has been mortgaged. 12. Considering all these we are clearly of the view that the money due under the mortgage must be considered as unpaid purchase money and therefore it is subject to a charge under Sec.55(4)(b) of the Transfer of Property Act and hence in view of Sec.10(2)(ii) of Act IV of 1938 the mortgage amount is not liable to be scaled down under Sec.8 of Act IV of 1938. 13. We thus find no merit in the appeal. Apparently, it is dismissed with costs.