Lakshmana Naicker alias Lakshmanaswami Naicker vs Jayaram Naicker and Others

Sundaram Chetty, J.—S.A. No. 887 of 1931. The plaintiff is the appellant. This second appeal arises out of a suit filed by the plaintiff for the

recovery of a certain amount alleged to be due under the mortgage bond Ex. A, which was executed by defendants 1 and 2 in favour of the

plaintiff and his deceased brother Parthasarathi Naicker, the husband of the 4th defendant. The plaintiff''s case is that, though this mortgage bond

was taken in the names of himself and his deceased brother, he (the plaintiff) is now entitled to recover the entire amount, as his deceased brother

has relinquished his interest in that bond, when a sum of Rs. 1,500, which belonged to him by virtue of the partition arrangement and which was left

in the plaintiff''s hands, was subsequently taken back by him. In support of this plea, reliance was placed upon a document, Ex. A-2, which

purports to be a receipt executed by the 4th defendant''s husband in favour of the plaintiff on 26th September, 1923. That document runs thus:

Out of the amount got by me for my share in the partition, dated 17th September, 1921, the amount paid to you by me is Rs. 1,500. As I have this

day received from you this sum of Rs. 1,500 in cash, you shall yourself recover the sum of Rs. 1,500 advanced by you and me together to R. K.

Jayaram Naicker and K. Palanisami Naicker on the mortgage of land. I have no right whatever to the said mortgage deed. To this effect is this

receipt written and given by me with consent.

There is no doubt that the suit mortgage deed is the one referred to in Ex. A-2. As regards the genuineness of this document, the lower appellate

Court has distinctly found in paragraph 4 of its judgment that Ex. A-2 was really executed by the 4th defendant''s husband to the plaintiff on 26th

September, 1923. This finding is based upon the evidence adduced in this case, which the lower appellate Court saw no reason to disbelieve. This

finding of fact has to be accepted in this second appeal.

The only difficulty is as regards the question whether Ex. A-2 is admissible in evidence in the absence of registration. There is, no doubt, that, so

far as it evidences an extinguishment of the 4th defendant''s husband''s right in the mortgage security, it would be inadmissible in evidence and

inoperative as against him. But it does contain a clear admission of the transfer of his interest in the mortgage debt itself, for it specifically says that

the plaintiff alone is entitled to collect the full amount of the debt, namely, Rs. 1,500. The lower appellate Court evidently thought that this

document could not be acted upon for the purpose of enabling the plaintiff to realise the mortgage amount by applying in his own right for the sale

of the mortgaged property by way of enforcement of the security. In this view, it gave a decree for the sale of the mortgaged property in favour of

both the plaintiff and the 4th defendant. It is now contended by the learned Advocate for the appellant that in the light of the recent decision of the

Privy Council reported in The Imperial Bank of India v. The Bengal National Bank, Ltd. (1931) 61 M.L.J. 589 (P.C.) the plaintiff can be given a

declaration of his sole right to the mortgage debt itself, apart from his interest in the Immovable property given as security for the debt. The facts of

that case appear to be on all fours with the facts of the present case. The observations of their Lordships are to the effect, that the mortgage debt

as such can be dissociated from the security for the repayment of the debt; and if there is no bar to the admissibility of a document for the purpose

of showing the transfer of the debt itself, apart from the security, the appropriate relief, which ought to be given to the plaintiff, should not be denied

to him. At page 594 it is observed thus:

The debts may be secured either on Immovable property or on merchandise; they may be wholly secured or partly secured; the security may have

been given when the debt was created or later; but in any case, the debts exist as moveable property and do not, if secured, become identified

with the security or transformed into land in the one case or merchandise in the other. The separation between debt and security is well established;

the creditor is entitled to take a judgment for the debt without having recourse to his security.

Applying this principle to the present case, the plaintiff can very well take a judgment for the debt in question, even though no relief can be given

to him with respect to the security as he wants.

It is brought to our notice, that since the passing of the decree by the lower appellate Court, the mortgaged property was brought to sale and the

amount of the sale proceeds was also deposited in the Court of first instance. The admitted share of the plaintiff in that amount was drawn by him,

and what remains still in deposit to the credit of the 4th defendant''s husband is the only property about which any direction has now to be given in

the decree to be passed in this second appeal. The principle recognised in several decisions is to the effect, that the Court can take into

consideration any event which happened subsequent to the institution of the suit, if that is necessary in order to enable the Court to pass an

appropriate decree. If the mortgaged property still remains unsold, a direction for its sale has to be given; in that case, we cannot give the plaintiff

alone such a right. But now there is absolutely no need to direct a sale of the mortgaged property. Even in the decision of the Privy Council above

referred to, the Imperial Bank was held to be entitled to the benefit of all sums received in reduction of the debts, whether from the realisation of

securities or otherwise. In the present case, the amount in deposit in Court represents a portion of the sum realised from the mortgage security. The

only point to be decided now is, whether the plaintiff or the 4th defendant is entitled to receive that sum from the Court. The course adopted in the

aforesaid decision of the Privy Council seems to us to be the appropriate course to be followed in the present case also.

In the result, in modification of the decrees of the Courts below, it is hereby declared that the amount in deposit in the Court of the District

Munsif of Sholinghur as representing half of the sale proceeds of the mortgaged property in this suit belongs to the plaintiff, and that he alone is

entitled to draw it out from the Court. In the peculiar circumstances of this case, we direct the plaintiff and the 4th defendant to bear their own

costs throughout.

C.C.C.A. No. 50 of 1930.--In view of our decision in the above second appeal which would operate as res judicata in this case, the learned

Counsel for the appellant does not press this appeal. It is accordingly dismissed but without costs throughout.