K. Narayana Rao vs Meenakshi Velu and Others

K. Veeraswami, C.J.—There are two appeals before us, one arising out of a suit for specific performance which had been decreed and the

other, for redemption of a mortgage which was dismissed. The appellant is a third mortgagee who was not a party to the suit for redemption

instituted by the mortgagor; but, by leave of this court, he preferred these appeals. The third mortgagee was, however, a party to the suit for

specific performance. One Kasturi Sakuntala mortgaged to one V. Ranganathan Chetti on 6-3-1956 for Rs. 13,200/-. The deed of mortgage

reserved to the mortgagee a power of sale u/s 69 of the Transfer of Property Act. Though there was a suit to prevent the exercise of the power of

sale, the mortgagee eventually, through auctioneers, exercised his power of sale and accepted the highest bid of Rs. 52000. The purchaser

immediately paid Rs. 13000 into the hands of the auctioneers. The balance of Rs. 3900 was paid by the purchaser on 1-3-1963, and it is not in

dispute that a fair sale deed engrossed on stamp paper was drawn up on 15-3-1963. On that day, the mortgagor instituted O.S. No. 605 of 1963,

which was converted into C.S. 193 of 1963, for redemption. She claimed that the sale held in execution of the power of sale under the deed was

invalid and she had still the right of redemption. The second mortgagee, one Swarnakumari, was impleaded as a defendant. Pending the suit, an

interim injunction was granted. The purchaser, at the same time, instituted O.S. No. 175 of 1963 for specific performance. As indicated earlier to

this suit the second and third mortgagees were made parties. Ramamurti, J., who tried both the suits together, granted specific performance and

declined to allow redemption.

The two appeals thus turn on the question whether the right of redemption in these circumstances subsisted so that the mortgagor could redeem

the mortgage. As we mentioned, it is not the mortgagor who has filed these appeals, but the third mortgagee. But that, we think, can make no

difference, as the third mortgagee has been granted leave to file the appeals and has the right to redeem up. Ramamurti, J., differed from Abraham

Ezra Issac Mansoor Vs. Abdul Latif Usman, and, on equitable considerations and in the light of Maring (Lord) v. London and Manchester

Assurance Co., 1935 Ch 310 was of opinion that the mortgagor had no longer the right of redemption after the auction sale had been held and

purchaser had paid the entire purchase money. In fact, we find from the record that, after the money was deposited, the third mortgagee himself

applied for distribution of his share which was ordered out of the purchase money.

Mr. V. K. T. Chari for the appellant contends that, since the sale deed in exercise of the power of sale u/s 69 had not been executed yet as

required by law, the right to redemption was still available, and it had not been extinguished by any act of the parties. We are, however, unable to

subscribe to the view that, only as and when the sale is completed by a registered instrument, extinguishment of the right to redemption is brought

about. That certainly is one way by which the right to redemption may be extinguished. But there may be other acts of parties which, in the light off

facts and circumstances, may well be held to have extinguished the right to redemption. The right to redemption is not always controlled by

conveyance in accordance with law. Section 60 of the Transfer of Property Act defines the right of a mortgagor to redemption. But the proviso to

this section suggests that the right conferred by the section may be extinguished by act of parties or by decree of court. We are not, in these

appeals, concerned with the sales in enforcement of mortgages through court. In passing, we may say that, in such cases, until confirmation of court

sales, the right to redemption subsists, in view of the specific provision in the Code of Civil Procedure.

On the facts of this case, we are of the view that the mortgagor''s right to redemption had been extinguished, because, after the purchaser had

paid the full purchaser money and the same had been appropriate towards the debt and the balance distributed, the mortgage itself no longer

subsisted. That situation was brought about by the parties which had the effect of extinguishing the mortgagor''s right to redemption. AIR 1944

Bom 156, Thota Chinna Subbarao v. Matta Palli Raju, 1949 FCR 484 = AIR 1950 FC 1 and Abraham Ezra Issac Mansoor Vs. Abdul

Mahomed Alibhai, , are distinguishable on facts. We do not understand those cases to lay down that, only when there is a conveyance by a

registered instrument, the right to redemption is extinguished.

Take for instance, the case of a mortgagor himself having paid the entire mortgage money and the same having been applied and adjusted. No

one will say that, even thereafter, the mortgage subsisted and, therefore, the mortgagor had the right to redemption. When the mortgagor gave the

power of sale to the mortgagee u/s 69 of the Transfer of Property Act, the mortgagee exercised that power and, when the purchaser paid the

money which, as we said, has been distributed, that would certainly have the effect of discharging the mortgage. The mortgagee having been paid

the mortgage debt the mortgage came to an end and, with that, the mortgagor''s right to redemption. That is what has happened in this case. That

situation, in our view, squarely falls within the ambit of the proviso to Section 60.

On that view, the appeals are dismissed. The plaintiff-respondent in O.S.A. No. 79 of 1966, will be entitled to her costs. No costs in the other

appeal.

Appeals dismissed.