Chundru Venkanna vs Chundru Brahmadu and Others

Chandrasekhara Ayyar, J.—The appellant sued upon a mortgage, but the suit was dismissed as barred under Article 11, Limitation Act. In

filing certain sale papers in connexion with the execution of a decree for the payment of money, the decree-holder referred to the existence of two

mortgages on the property but said that they were collusive transactions. On this, notice was ordered to the mortgagees. One of them, the present

plaintiff Chundru Venkanna, appearing in answer to the notice, filed a petition, called by the very familiar but wholly wrong name ""counter"" stating

that the mortgage in his favour was a true one and that it was fully supported by consideration and asking the Court for directions that the sale of

the property to be held at the instance of the plaintiff decree-holder should be held subject to his mortgage bond. The Court posted the matter for

inquiry on 4th December 1935, heard the parties on that date, said that the question would be considered at the time of the settlement of the

proclamation on 7th December 1935 and finally directed in settling the draft that this mortgage and another should be notified at the time of sale but

with the remark that the decree-holder alleged that they were collusive. This remark is found at the very end of the proclamation as finally settled,

Ex. D-2. The present suit was filed more than one year after that date. The Subordinate Judge has differed from the District Munsif and held that

the suit was barred under Article 11, Limitation Act.

It was urged for the appellant that the case did not fall under Order 21, Rule 58, Civil P. C, as there was no claim preferred by the appellant or

objection raised to the attachment and that an order made in the course of settling the terms of the sale proclamation under Rule 66 is not an order

of the kind referred to in Rule 63, when alone Article 11 will apply. This, however, is not correct. Under Rule 66 it is the duty of the Court after

such inquiry as may be necessary to specify any encumbrances to which the property is liable and for this purpose it has got the right to summon

and examine any persons if necessary. In the course of such an inquiry if a mortgagee prefers a claim on the basis of his mortgage, the Court has to

investigate it so that the sale proclamation that issues over its name and authority should be correct as far as possible. Order 21, Rule 62 provides

for a case where the objection is not really on the ground that the property is not liable to attachment but is merely to the effect that the mortgage

or charge should be notified so that intending purchasers might know of its existence and realise that what is being sold is only the equity of

redemption. That the provisions of Order 21, Rule 63 will be attracted even in cases of applications filed by mortgagees in the course of the

settlement of the sale proclamation, is laid down in Ponnuswami Pillai v. Samu Ammal AIR 1918 Mad. 1054, Lakshman Chettiar v. Parasivah

Pillai AIR 1920 Mad. 936 and Velu Padayachi v. Arumugham Pillai AIR 1920 Mad. 191. It is not necessary that the mortgagee should come

before the Court as a claimant or objector under Order 21, Rule 58. In the present case, when notice went to him, the appellant filed a petition

challenging the allegation that his mortgage was a collusive affair and prayed for an order that the property should be sold subject to his mortgage.

The Court did not grant him this relief for it directed the issue of the sale proclamation subject to the remark that the mortgage is challenged as

collusive. True it did not decide the question of the genuineness of the mortgage but it is equally true that it did not award the relief that the plaintiff

wanted to be given. The case, though a hard one, falls within the principle laid down in Cannanore Bank v. Arrayanveetil. Madhavi AIR 1942

Mad. 41 where more or less a similar case as the present one, Co-operative Credit Society v. Narasimharao AIR 1941 Mad. 77 which was

decided by two of the three Judges who took part in the Full Bench was overruled by themselves as wrong.

The second appeal is dismissed with costs.

Leave refused.