S. Kannan and another v. G. Saraswathi Ammal — 1999 DIGILAW 40 (MAD)

Judgment : 1. The defendants 1 and 2 in O.S.No.98 of 1983 on the file of the Sub-Court, Madurai, who have succeeded before the trial court and lost before the first appellate court are the appellants in this second appeal. This second appeal is directed against the judgment and decree dated 30.12.1996 made in A.S.No.54 of 1986 on the file of the District Court, Madurai. 2. At the time of admission the following substantial questions of law were framed by this Court:- .(a) Whether the order of attachment before judgment made in the money suit without notice to the third defendant-judgment debtor is valid and of legal effect? .(b) Whether the purchase of the suit site by the decree holder in the name of his son the 4th defendant without the sanction of the Court was legal and the Court auction sale is valid in law? .(c) Whether the first defendant would be subrogated to the rights of the mortgagee or his payment to mortgage decree-holder would be of a volunteer? 3. Heard Mr. T.M. Hariharan, the learned counsel appearing for the appellants and Mr.R. Kannan, learned counsel for the respondents. For convenience, the parties to this appeal will be referred as arrayed before the trial court. 4. The plaintiffs instituted the suit O.S.No.98 of 1983 on the file of the Sub-Court, Madurai for declaration of her title and for permanent injunction or in the alternative for recovery of possession. The trial court after elaborate consideration dismissed the suit and uphled the defendants title, as the defendants who are the auction purchasers have discharged the earlier subsisting mortgage debt. On appeal by the plaintiff the first appellate court set aside the judgment and decree of the learned trial Judge, allowed the appeal and decreed the suit declaring the plaintiffs title. Being aggrieved, the defendants 1 and 2 have preferred the present second appeal. 5. With respect to the factual matrix, there is not much of controversy and the chronology of events alone need be referred to. V.S. Ramalingam, the third defendant in the suit under Ex.B.4 purchased the suit property on 18. 1973 from one Deivanai Achi, who had in turn purchased the very same property under Ex.B.3 dated 27. 1964 from one Somasundaram Pillai. The title of the third defendant is admitted by either side. .6. The third defendant had borrowed a sum of Rs. V.S. Ramalingam, the third defendant in the suit under Ex.B.4 purchased the suit property on 18. 1973 from one Deivanai Achi, who had in turn purchased the very same property under Ex.B.3 dated 27. 1964 from one Somasundaram Pillai. The title of the third defendant is admitted by either side. .6. The third defendant had borrowed a sum of Rs. 2, 000 from one Appasamy Pillai on 15. 1975. The third defendant had borrowed a sum of Rs.6, 000 from one Thulasiram Visalakshi on 26. 1975 to secure repayment of the principal amount of Rs.6, 000 and interest and the third defendant deposited the title deeds with the said Thulasiram Visalakshi on 30.6.1975. Thus the third defendant had deposited Exs.B.3 and B.4 the documents of title with the said Thulasiram Visalakshi and created an equitable mortgage. The above facts are not in dispute. 7. Appasamy Pillai who had advanced a sum of Rs.2, 000 on 15. 1975 instituted the suit O.S.No.40 of 1978 against the third defendant for recovery of the money due to him. Thulasiram Visalakshi, the mortgagee also instituted a suit O.S.No.222 of 1978 on the file of the Sub-Court, Madurai at or about the same time for recovery of the amount due on the equitable mortgage. The suit O.S.No.222 of 1978 has been instituted on 30th of March 1978 while the suit O.S.No.400 of 1978 on the file of the District Munsif court, Madurai by Appasamy Pillai had been instituted on 20th March, 1978. 8. The said Appasamy Pillai applied for attachment of the suit property before judgment and by order dated 14. 1978 made in I.A.No.355 of 1978, the District Munsif Court, Madurai Town ordered interim attachment before judgment at the instance of the said Appasamy Pillai. In O.S.No.222 of 1978 on the file of the Sub-Court, instituted by the equitable mortgagee a preliminary decree was passed on 8. 1978 as seen from Ex.A.19. Thereafter on 31. 1979 as seen from Ex.A.3, the interim attachment made in I.A. No.355 of 1978 in O.S.No.400 of 1978 on the file of the District Munsif Court, Madurai Town was made absolute. 9. The said suit in O.S.No.400 of 1978 on the file of the District Munsif Court, Madurai Town was decreed on 2. 1979 as seen from Ex.A.4. The equitable mortgaged in whose favour a preliminary decree has been passed applied for passing of final decree. 9. The said suit in O.S.No.400 of 1978 on the file of the District Munsif Court, Madurai Town was decreed on 2. 1979 as seen from Ex.A.4. The equitable mortgaged in whose favour a preliminary decree has been passed applied for passing of final decree. As seen from Ex.B.5 dated 30.7.1979 a final decree has been passed in favour of the said Thulasiram Visalakshi in I.A.No.118 of 1979 in O.S.No.222 of 1978 on the file of the Sub- Court, Madurai. .10. Admittedly, the third defendant had not discharged the mortgaged debt and a final decree has been passed and even thereafter also the third defendant has failed to discharge the mortgage decree. Without proper disclosure the third defendant constituted one Kumar as his power of attorney under Ex.B.2 dated 8. 1980 to sell the suit property The said power of attorney holder by a private sale Ex.B.1 dated 9. 1980 sold the suit property to the first defendant Kannan for a consideration of Rs. 12, 500 while directing the said purchaser to discharge the mortgage decree amount of Rs. 10, 095 as per the final decree passed in I.A. No.1 18 of 1978 and the said sum had been reserved by the purchaser under Ex.B.1. Under Ex.B.6 dated 9. 1980 the purchaser namely the first defendant discharged the mortgage decree by remitting the sum of Rs. 10, 095 to the decree holder Thulasiram Visalakshi and full satisfaction has been entered. Simultaneously, the money decree-holder who had attached the property in I.S.No.355 of 1978 in O.S.No. 400 of 1978 on the file of the District Munsif Court, Madurai Town levied execution for sale of the suit property. 11. In Ex.P. No. 54 of 1980 in O.S. No. 400 of 1978 on the file of the District Munsif Court, Madurai Town the 4th defendant, Swamiratinam had purchased the very suit property on 210. 1980 and a sale certificate was issued in favour of the 4th defendant on 1. 1981 under Ex. A. 2. Under Ex.A.6, dated 14. 1982 the 4th defendant had taken delivery of the suit property on 14. 1982. The 4th defendant auction purchaser, in whose favour sale certificate has been issued by the court after taking delivery had sold the suit property in favour of the plaintiff under Ex. A.1 dated 26. 1982. Thereafter on 3. A. 2. Under Ex.A.6, dated 14. 1982 the 4th defendant had taken delivery of the suit property on 14. 1982. The 4th defendant auction purchaser, in whose favour sale certificate has been issued by the court after taking delivery had sold the suit property in favour of the plaintiff under Ex. A.1 dated 26. 1982. Thereafter on 3. 1983 the plaintiff who is the purchaser under Ex.A.1 from the 4th defendant had instituted the present suit for declaration of title and for permanent injunction or alternatively for recovery of possession. 12. The trial court dismissed the suit in its entirety. The first appellate court allowed the appeal and decreed the suit declaring the plaintiffs title and granting a decree for recovery of possession. 13. There is no dispute about the mortgage or the attachment or the preliminary decree or final decree and the court auction sale. It is not being contended by either side that the proceedings are either collusive or not being bona fide or fraudulent transactions. Therefore it follows that the equitable mortgage is true and after the creation of the equitable mortgage the third defendant had owned the equity of redemption alone on the date when the suit property was attached i.e., on 14. 1978, which attachment was eventually made absolute as seen from Ex.A.3 dated 37. 1979. .14. The sale deed Ex.B.1 in favour of the first defendant on 9. 1980 is the sale of equity of redemption alone as already pointed. Though the equity of redemption alone has been attached and sold in a court auction in E.P.No.54 of 1980 in O.S.No.400 of 1978 on the file of the District Munsif Court, Madurai Town and what was purchased by the 4th defendant is the equity of redemption. The sale in E.P.No.54 of 1980 is subject to the earlier subsisting mortgage. It is not the case of the money decree-holder or the purchaser of the property that the subsisting mortgage had been discharged by them. In other words the 4th defendant had purchased the equity of redemption alone validly, who had in turn sold it to the plaintiff. 15. The first defendant had purchased the property under Ex.B.1 during the currency of the attachment of equity of redemption and had discharged the earlier binding mortgage decree with reference to which a preliminary decree was passed on 8. 15. The first defendant had purchased the property under Ex.B.1 during the currency of the attachment of equity of redemption and had discharged the earlier binding mortgage decree with reference to which a preliminary decree was passed on 8. 1978 and a final decree has been passed on 30.7.1979 as seen from Ex.A.19 and B.5. The first defendant in other words could not have purchased the euqity of redemption which has already been attached under Ex.B.1 as such the sale is void as it is not only pending litigation but also pending attachment. The first defendant had without notice of the earlier proceedings had discharged the mortgage decree as seen from Ex.B.6 and had remitted a sum of Rs. 10, 095 to Thulasiram Visalakshi, thus stepped into the shoes of the Thulasiram Visalakshi the mortgagee. 16. The third defendant had kept quiet and had not chosen to disclose the proceedings which went on simultaneously and the defendant as well as the plaintiff as found by the two courts below were not aware of the proceedings. In fact the 4th defendant who is the auction purchaser under Ex.A.2 sale certificate had taken delivery under Ex.A.6 and there was no obstructions to the said delivery. The plaintiff had thereafter purchased the property from the 4th defendant as seen from Ex.A.1 on 26. 1982 and the present suit has been filed on 3. 1983 by the plaintiff for declaration of title and for recovery of possession. The first defendant though claimed that he had taken delivery of the suit property, the possession not being with the plaintiff, the present suit has been filed for declaration of title and for injunction alternatively for recovery of possession. .17. It has to be pointed out that the private sale under Ex.B.1 dated 9. 1980 is void in terms of Section 64 of the Code of Civil Procedure. Even otherwise what had been purchased under Ex.B.1 is the equity of redemption by the first defendant and the first defendant had stepped into the shoes of the mortgage decree holder Thulasiram Visalakshi on and from 9. 1980 on which date, he has discharged the mortgage decree as seen from Ex.B.6. 18. Even otherwise what had been purchased under Ex.B.1 is the equity of redemption by the first defendant and the first defendant had stepped into the shoes of the mortgage decree holder Thulasiram Visalakshi on and from 9. 1980 on which date, he has discharged the mortgage decree as seen from Ex.B.6. 18. As already pointed out the equity of redemption had been purchased validly and the purchase of equity of redemption under Ex.B.1 is void and inoperative and will not confer any right on the first defendant as the equity of redemption has already been attached and sold in court auction. The first defendant had not discharged the mortgage voluntarily and he could only claim subrogation and as a subrogee he could claim reimbursement of the money paid by him to Thulasiram Visalakshi under Ex.P.6. 119. The first defendant would not have discharged the mortgage decree had he been aware of the attachment of the property. The first defendant as found by the court below was not aware of the earlier proceedings. It cannot be said that the first defendant had made the payment under Ex.B.6 and discharged the mortgage decree as a volunteer. It cannot also be said that the first defendant had purchased the suit property with the knowledge. The plaintiff’s vendor had purchased the equity of redemption subject t o the subsisting encumbrance namely the mortgage which has resulted in a final decree Ex.B.5 dated 30.7.1979. 120. The learned counsel for the respondent heavily relied upon the decisions of this Court reported in Sengottian, P. v. B. Lakshmi, 1981 (94) L.W. 353 and contended that there could be no subrogation nor the payment made under Ex.B.6 cold be claimed. This contention cannot be appreciated as on the facts of the case it is evident that the parties to the two suit proceedings of sale were not aware of the parallel proceedings which went on and the third defendant had chosen to conceal the simultaneous proceedings for obvious reasons. .21. The sale of equity of redemption under Ex.B.1 in favour of the first defendant is void as the said equity or redemption has already been attached as seen from Ex.A.3 dated 31. 1979 and the said attachment has been confirmed and the attached property namely the equity of redemption in the property was brought in court auction in E.P.No.54 of 1980. 1979 and the said attachment has been confirmed and the attached property namely the equity of redemption in the property was brought in court auction in E.P.No.54 of 1980. That being so, in law it would be just that the plaintiff who had purchased the equity of redemption is entitled to the property subject to his reimbursing the sum of Rs.10, 095 to the first defendant with 9% interest from 9. 1980 the date on which he had remitted the said sum to the mortgagee-decree holder as seen from Ex.B.6. 122. Taking into consideration of the entire facts, the conduct of the parties, the parallel proceedings and the effect of attachment on the equity of redemption, the sale of equity of redemption in E.P.No.54 of 1980 and the issuance of sale certificate under Ex.A.2 and the purchase by the 4th defendant court auction purchaser and the subsequent sale by the 4th defendant to the plaintiff under Ex.A.1, this Court upholds the plaintiffs title to the suit property and further holds that the plaintiff will be entitled to recover the suit property subject to the plaintiff paying the sum of Rs. 10, 095 with interest of 9% from 3. 1983. 123. The learned counsel for the appellant namely the defendants 1 and 2 in fact pointed out that the defendants will be entitled to recover the money which they have paid under Ex.B.1 as their payment is not voluntary. Though the learned counsel for the appellant relied on various decisions to show that the sale of equity of redemption already attached is void, the proposition of law is not being disputed, and hence there is no necessity to refer to those decisions. 124. The first question of law framed has to be answered holding that the attachment before judgment and the money suit is valid and binding on the judgment debtor, the third defendant and the sale of equity of redemption in violation of the said attachment is void. No argument has been advanced on the second question of law. 125. As regards the third question of law, this Court has already held that the first defendant would be entitled to subrogation with the rights of the mortgagee-decree holder and entitled to payment of the money paid by him to discharge the final decree. 126. In the foregoing circumstances, the second appeal is allowed in part. 125. As regards the third question of law, this Court has already held that the first defendant would be entitled to subrogation with the rights of the mortgagee-decree holder and entitled to payment of the money paid by him to discharge the final decree. 126. In the foregoing circumstances, the second appeal is allowed in part. The judgment of the first appellate court is modified and the plaintiff’s title to the suit property is declared and the plaintiff will be entitled to recover the suit property subject to his paying the sum of Rs.10, 095 with 9% interest from 3. 1983 the date of the suit and this Court is not inclined to grant interest for the earlier period. 20.28. The plaintiff is granted three months time to deposit the said sum of Rs.10, 095 with interest at 9% from 3. 1983 onwards and recover possession of the suit property from the first defendant thereafter. Both the parties shall bear their respective costs throughout. 229. The second appeal is allowed in part and the judgment and decree of the first appellate court is modified in part to the extent indicated above.