C.V. Ramachandra Ayyar vs N.V. Sivaram Ayyar and Others

Pandrang Row, J.—This is an appeal from the order of the Subordinate Judge of Madura, dated 15th April 1935 in an appeal from the

decree of the District Munsif of Madura town dated 17th July 1933 in O.S. No. 270 of 1932, a suit for the recovery of the amount due to the

plaintiff on a mortgage bond by sale of the mortgaged property. The mortgage was executed by defendants 1 and 2 who were carrying on trade in

partnership. As the plaint recites defendants 1 and 2 incurred debts in the course of that trade and owed to various persons various amounts and

as a result of an arrangement between the creditors and the debtors a mortgage, Ex. A, was executed by them on 26th November 1925 in favour

of the creditors including the plaintiffs. The plaintiff alleges that his share of the mortgage money was ''fixed at Rs. 1,100. The total amount of the

mortgage was Rs 19,950. Subsequently defendants 1 and 2 were adjudged insolvents and the Official Receiver was impleaded as defendant 11.

Defendants 4, 6 and 8 to 10 are said to have assigned their mortgage rights under Ex. A to defendant 3 who is also a mortgagee. Defendant 5''s

right under the mortgage is said to have been purchased by defendant 3 in the name of defendant 12 and defendant 7''s share is said to have been

also got by defendant 3 in the name of defendant 13. The plaintiff contended that the arrangement between the creditors and the debtors was that

each of the creditors was to be paid the amount due to him by the debtors.

He also pleaded that some time after the mortgage was executed, when he made a demand for payment of his share defendants 1 and 2 agreed

to pay him his share separately. The main ground on which the suit was resisted by the contesting defendants was that the arrangement relied on by

the plaintiff cannot be proved and that the suit being for recovery of only a portion of the mortgage money by one of several co-mortgagees was

not sustainable. The District Munsif dismissed these contentions and passed a preliminary decree in the usual form for sale of the mortgaged

property and directed that the amount realised by sale would be subject to further orders of the Court"" to be obtained by an application by the

plaintiff or defendant 3. On appeal by defendant 3 the Subordinate Judge came to the conclusion that the suit for a portion of the mortgage due to

one of several co-mortgagees was not sustainable and that the agreements pleaded in the plaint, whereby it is said the mortgagors agreed to pay

the plaintiff''s share separately, could not be proved in view of Section 92, Evidence Act. He accordingly allowed the appeal and set aside the

preliminary decree passed by the trial Court and remanded the suit to the trial Court with a direction that the plaint should be returned to the party

for presentation to the proper Court after giving a chance to the plaintiff to amend his plaint. The present appeal is from that order.

The main point for determination in this appeal is whether the suit as framed is maintainable, namely suit by one of several co-mortgagees for his

share of the mortgage money. No doubt in this suit the prayer is for the sale of the entire hypotheca and the other co-mortgagees have been

impleaded as defendants. No objection can therefore be taken to the maintainability of the suit on the ground that the other co-mortgagees are not

parties or on the ground that the prayer is for the sale of only a part of the mortgaged property. The objection is really based on the ground that

there was no covenant in the deed for payment of separate amounts or fractions of the mortgage money to the co-mortgagees separately. The

stipulation in Ex. A is for payment of the entire amount and in the operative part of the document it is not stated that any particular amount is to be

paid to any particular co mortgagee. It is only in the account of particulars of money received that it gives the various amounts received from the

various creditors separately making up the total mortgage money. This recital of details does not, in my opinion, show that there was an agreement

by the mortgagors to pay the separate amounts due to the creditors separately. On the other hand, it is admitted by the plaintiff himself in his plaint

and in his evidence that a joint mortgage was taken by all the creditors because it was considered essential by the creditors that there should be no

difficulty about priority, or, as the plaintiff puts it in his evidence, it was to avoid disputes as to priority that a document was writen consolidatedly.

It is also admitted by him that at the time the mortgage was executed the creditors were pressing the mortgagors and that all the creditors are

included in the mortgage. No doubt the plaintiff says in his cross-examination that there was no talk about what should happen if the property

proved insufficient for payment of the debts. In any case it is obvious, whether there was a talk about this matter or not, that the creditors were

anxious that none of them should have priority over any other, and that it was on this account that a joint mortgage was taken, though otherwise

there was no reason whatever for a joint mortgage in favour of so many independent creditors. The intention therefore of the parties was that the

entire mortgage money should be recovered at one and the same time and should be shared between the various co-mortgagees according to their

respective shares. Though the shares were indicated in the deed, the intention at the same time was very clear that the entire money was to be

recovered at the same time before it was shared.

It was never contemplated that any particular co-mortgagee should be in a position to insist upon payment of his share before any others were

paid or that he should be entitled to bring a suit to recover his own share. If for instance the price fetched at the sale of the mortgaged property

proved to be less than the amount due under the mortgage, it is obvious that as the intention was that none of the co-mortgagees should have

priority, the loss should be borne equally by all the co-mortgagees, so that the share of the plaintiff or any other co-mortgagee cannot be

determined beforehand, i.e. till it is known how much the mortgaged property fetches at the sale; it is thus clear that what was intended by the

parties was that not only the whole of the mortgaged property was to be sold but that the sale proceeds should be shared between the various co-

mortgagees in accordance with their shares, and if the amount fetched at the sale was insufficient, proportionately according to their shares. This is

essentially therefore a case in which the document sued on itself shows beyond doubt that a suit of the present nature cannot be maintained

successfully. It is in my opinion not necessary to refer to the various decisions that have been quoted daring the argument. The general principle is

clear that unless there is a covenant to pay the amount due to any particular co-mortgagee separately there can be no suit for a share of the

mortgage money. It is enough to refer to the decisions in Huthaaanan Nambudri v. Parameswaran Nambudri (1899) 22 Mad 209, Annapurnamma

v. Akkayya (1913) 36 Mad 544 and Siluvaimuthu Mudaliar v. Muhammad Sahul 1927 51 MLJ 648. The Privy Council decision in Sunitibala

Debi v. Dharasundari Debi 1919 47 Cal 175 does not really support the appellant. In view of this decision it has been held by a Bench of the

Allahabad High Court in Lal Ram Sarup v. Kunji Lal 1935 159 IC 48, that a suit of the present nature cannot be maintained. There is no doubt

another decision almost at the same time by another Bench of that High Court reported in Lachhmi Narain v. Babu Ram 1935 All 391 which

points to the contrary. The learned Subordinate Judge has referred to the decisions in Seth Bansiram Jashamal through his authorised Agent and

Managing Partner, Lilaram Vs. Gunnia Naga Aiyar and Others, and A.M.P.R. Muthuraman Chetty by agent Subramania Aiyar and Others Vs.

Sivasubramania Chetty and Others, and there is really nothing to add to his discussion of these decisions.

The present case is one in which it can be said that not only is there no covenant to pay the shares of the co-mortgagees separately but that on

the other hand parties intended clearly that there should be no separate payment till the entire amount was recovered and then that amount was to

be shared between the co-mortgagees either in full according to their shares or proportionately. That being the case it is obvious that the present

suit which is for recovery of only the plaintiff''s share is not maintainable. Another difficulty in accepting the appellant''s contention is that if it is

accepted it would be possible for a mortgage suit involving more than Rs. 20,000 to be decided by the District Munsif merely because the share of

the plaintiff is less than Rs. 3,000. There is also the difficulty of levying court-fee on the entire mortgage amount. Even if this difficulty of court-fee

can be got over as suggested by Ramesam, J. in Seth Bansiram Jashamal through his authorised Agent and Managing Partner, Lilaram Vs. Gunnia

Naga Aiyar and Others, the difficulty about jurisdiction remains and no solution of this difficulty has been suggested in Seth Bansiram Jashamal

through his authorised Agent and Managing Partner, Lilaram Vs. Gunnia Naga Aiyar and Others, . That difficulty is a serious one. It follows that

the learned Subordinate Judge was right in coming to the conclusion that the suit is not maintainable as framed. It follows therefore that the order

remanding the suit to the trial Court was right and this appeal must fail. The appeal is accordingly dismissed with costs.