Dasari Polayya Dora vs Onarasi Anantha Patro and Others

Ramesam, J.—This appeal arises out of a suit filed on foot of a mortgage (Ex. A) dated the 9th January 1912 in favour of the plaintiff for Rs.

1,800. The mortgagors are five brothers. They are the eighth and eleventh defendants, the father of the twelfth defendant, and the thirteenth and

eighteenth defendants. Ninth and tenth defendants are the sons of the eighth defendant. Defendants 14 to 17 are the sons of the thirteenth

defendant. The interests of these five mortgagors in the family property will be hereafter referred to as the shares of the 1st, 2nd, 3rd, 4th and 5th

branches respectively. On the 27th May, 1913 these five branches mortgaged their properties. The 1st and 5th branches executed Ex. I in favour

of the seventh defendant (a sister of the first defendant) for Rs. 900, the 3rd branch executed I(a) for Rs..400 in favour of the same person and the

2nd and 4th branches executed Ex. II in favour of the first defendant. On the same day the five branches leased the properties to the first defendant

- the lease being evidenced by two muchilikas Ex. J and J(1), Ex. J being in favour of the 1st, 3rd and 5th branches and J(1) in favour of the 2nd

and 4th branches. On the 16th May 1914 the 1st, 4th and 5th branches executed an agreement (Ex. H) in favour of the first defendant agreeing to

sell their shares of the properties to him. On the 26th September 1914 all the five branches sold their properties by Ex. C to the plaintiff but they

continued to be in physical possession of the lands as plaintiff''s tenants under the muchilikas Ex. F and F(1), dated the 24thNovember 1914. The

first defendant on the basis of Ex. H filed O.S. No. 32 of 1916 on the file of the Berhampore Additional District Munsif''s Court for specific

performance of the agreement, the 1st, and 4th and 5th branches having acted in breach of that agreement by joining in Ex. C. To this suit the

plaintiff was also made a party defendant on the ground that he had notice of the prior agreement (Ex. H) and therefore his sale-deed (Ex. C)

canrtot prevail against it so far as the 1st, 4th and 5th branches are concerned. A decree was passed in favour of the first defendant. In that suit

there was a prayer for possession but a formal decree for possession was regarded as unnecessary as the first defendant was in physical

possession of the lands as tenant under Exs. J and J(1). We must take it that the effect of the decree was that the first defendant after its date was

in possession of the shares of the 1st, 4th and 5th branches in the suit lands as their vendee and the plaintiff''s sale-deed (Ex. C) became

inoperative so far as those shares were concerned. In the present suit the plaintiff claims to recover possession of the shares of branches 2 and 3

by partition with mesne profits and as to the shares of branches, 1, 4 and 5 he claims to fall back upon Ex. A seeking such reliefs as the Court may

think fit to grant. There are. alternative forms of relief claimed by the plaintiff but it is unnecessary to refer to them as the above description of the

relief as finally presented before us is sufficient for our purpose. The Subordinate Judge gave a decree for possession of the shares of branches 2

and 3 with profits but as to the shares of branches 1, 4 and 5 he dismissed the suit, the reason for his conclusion being that the mortgage (Ex. A)

was extinguished by the sale-deed (Ex. C) and Ex. C has not been wholly inoperative. The plaintiff appeals.

The reasons of the Subordinate Judge are contained practically in paragraph 44 of his judgment. He thinks that there was no intention in the

mind of the plaintiff to keep Ex. A alive. It is true that the plaintiff had no intention to keep Ex. A alive if Ex. C is completely effective. But it is

equally clear that if at the time of Ex. C it is put to the plaintiff whether he has an intention to keep Ex. A alive in respect of the share of a particular

branch if for any reason the sale of the share of that branch turns out to be inoperative, his answer must be that he does intend to keep it alive.

There can be no other answer from any sane person. The fact that such a contingency was not contemplated does not matter. This is the whole

principle of Section 101 of the Transfer of Property Act. This is so elementary that it requires neither authority nor further discussion. The

Subordinate Judge seems to have been prejudiced by the conduct of the present plaintiff in the former suit for specific performance which is

entirely irrelevant. It is enough to refer to the decision in Har Chandi Lai v. Sheoraj Singh (1916) 44 I.A. 60 : I.L.R.1916 39 All. 178 : 32 M.L.J.

241 (P.C.) as authority for the proposition that where the second transaction replacing a former mortgage is frustrated wholly or partially the

mortgagee can fall back on the earlier mortgage.

But Mr. Suryanarayana, the learned Advocate for the respondents, seeks to support the judgment of the Subordinate Judge in two ways. First

he contends that the sale-deed was operative to some extent and therefore the plaintiff cannot fall back upon the earlier mortgage. It is true that a

party cannot rely on a later transaction and keep it valid for some purpose and also fall back on the earlier transaction and there are cases in the

reports illustrating such a position. But in the present case there is no scope for the application of that principle. Ex. C is really a combination of five

sale-deeds by the five different branches. It is merely an accident that they are all in one sale-deed. As a result of the decree for specific

performance three of these sale-deeds i.e., by the 1st, 4th and 5th branches have become frustrated. The sale-deeds by the 2nd and 3rd branches

remain operative. The plaintiff cannot fall back on Ex. A so far as the shares of the second and third branches are concerned but there is no

obstacle to his falling back on Ex. A so far as the shares of the 1st, 4th and 5th branches are concerned. The principle that where the later

transaction is operative for some purposes, one cannot fall back on the earlier transaction has nothing to do with portions of the transactions

referable to distinct parties. As an illustration of this principle the decision In Daso Polai Vs. Narayana Patro and Others, of Jackson and

Madhavan Nair, JJ. may be mentioned. There the purchaser put in a claim petition objecting to an attachment by a simple money decree-holder.

The claim petition was dismissed with the result that a regular suit by him became necessary to establish his claim against the attaching decree-

holder. The purchaser failed to bring such a suit. The result was that so far as the attaching decree-holder was concerned, his rights to the property

in dispute were lost. But he might pay the attaching decree-holder or the judgment-debtor himself might pay him. Subject to the rights of the

attaching decree-holder the sale-deed remained wholly operative as between the vendor and the purchaser. No part of the sale-deed with respect

to any particular party to it became ineffective. It remained wholly operative as between the parties to it. Only as against the attaching decree-

holder it became useless and that by reason of the plaintiff''s own fault. This was pointed out by the learned Judges who therefore held that Har

Chandi Lal v. Sheoraj Singh (1916) 44 I.A. 60 : I.L.R.39 All. 178 : 1916 32 M.L.J. 241 (P.C.) would not help the plaintiff. The decision in

Lachhman Prasad v. Lachmcswar Prasad 20 A.L.J. 151 is also similarly distinguishable. In that case at the time of the sale the property was

subject to an attachment by a judgment creditor of the vendor, and the sale cannot prevail against him. Subject to his rights the sale was perfectly

valid. As between the parties to the transaction no part of it became void. This case is similar to that in Daso Polai Vs. Narayana Patro and

Others, . The two cases therefore relied on by Mr. Suryanarayana do not help him. The decision in Har Chandi Lal v. Sheoraj Singh (1916) 44

I.A. 60 : ILR 39 All. 178 : 1916 322 M.L.J. 241 (P.C.) itself is authority for the position that where a distinct portion of the second transaction

has become frustrated qua that portion the mortgagee can fall back on his earlier mortgage.

The second ground on which Mr. Suryanarayana seeks to support the judgment of the Court below is that relying on Section 101 of the

Transfer of Property Act the mortgagee can use the former mortgage as a shield against some claimant only as a defendant but cannot sue on it as

a plaintiff. In support of this he relies on the decision of Wallis, C.J. and Seshagiri Ayyar, J. in Arumugasundara. v. Narasimha Ayyar (1915) 29

M.L.J. 583. The actual decision in that case was that Section 101 was not applicable to the case because there was no intermediate encumbrance.

Seshagiri Ayyar, J. at the end of a long paragraph dealing with the main point in the case makes the observation relied on by the respondents.

Wallis, C.J. makes no such observation. It is purely obiter for the case. No authority was referred to. The whole paragraph of Seshagiri Ayyar, J.

ending with this particular sentence was quoted with approval by Moore, J. in The Rajah of Kalahasti Vs. Sree Mahant Prayag Dossjee Varu, ,

but the other learned Judge (Sadasiva Ayyar, J.) does not make any reference to it. This particular observation was not necessary for the decision

itself. It comes in merely as part of a larger quotation which had to be relied on. We are not referred to any cases where such a distinction as is

contended for by the respondents was actually applied for the conclusion reached in the case. We do not find any authority to support such a

distinction and must reject this contention.

The result is that in addition to the decree granted by the lower Court in respect of the shares of the 2nd and 3rd branches the plaintiff will have

the usual mortgage-decree for sale against the shares of the 1st, 4th and 5th branches for three fifths share of the mortgage amount which comes to

Rs. 5,700-4-0 (and which is less than Rs. 6,000 the maximum valuation given in the plaint) with further interest at the contract rate up to 6th

March, 1929 and further interest at six per cent on the aggregate amount till date of payment. The date fixed for redemption will be 16th July,

1935. The appellant will have costs on Rs. 3,600 throughout as against 1st, 4th and 5th branches and also from first respondent.