Mr. Ramakrishna Mudali vs The Official Assignee of Madras, as such the legal representatives of S. Daivasigamani Chetty an insolvent since deceased and Others

The plaintiff in this case in 1904 executed a mortgage in favour of the Mylapore Benefit Fund to secure a loan of Rs. 1,500. The mortgage

conferred a power upon the mortgagee to sell the property on failure by the mortgagor to carry out the terms as to repayment and so forth. In

1910 the Fund was pressing for repayment and the plaintiff was not able to repay. Thereupon the Fund announced its intention of selling the

property. Just before the sale the plaintiff was enabled to produce one Daivasigamani Chetty who stepped into the breach, paid off the Fund and

took over the security. Daivasikhamani Chetty, further more, made a new advance of I think Rs. 800 over the original consideration of Rs. 1,500

to the plaintiff and secured that by a further equitable mortgage by deposit of title-deeds of the same property that was covered by the original

mortgage to the Mylapore Fund. Daivasikhamani Chetty fared no better than the Fund, because he, in his turn, could get no repayment. So he sub-

mortgaged the property to the 2nd defendant in this case who ultimately, purporting to act in the exercise of the power of sale conferred under the

documents, sold it to the present 4th defendant. The plaintiff now brings this suit for redemption of the property and that suit has been dismissed by

the learned judge in the Court below. Hence the appeal to us.

On behalf of the plaintiff several points have been raised with the most important of which I will deal very shortly. The first argument is based

upon Section 52 of the Transfer of Property Act and was this, that, as the plaintiff had started this suit for redemption before the sale to the 4th

defendant the sale fell under the doctrine of lis pendens and, by virtue of the provisions of Section 52 of the Act, no rights could be conferred

under it. It has been held in a series of cases in the Bombay High Court that the doctrine embodied in Section 52 of the Transfer of Property Act

has no application whatever to a mortgagor who has given under that mortgage an express power of sale and that he cannot, by starting a suit

perhaps a perfectly hopeless suit for redemption, derogate from that which he has in express terms conferred upon the mortgagee by the instrument

namely, the power of sale. It appears to us that that is the only logical result that can be arrived at and we agree with the view of the Bombay High

Court that to hold otherwise would simply be to tear up the instrument which contains the contract agreed upon between the parties.

The next argument that was put forward was that by the assignment the power of sale in the mortgage was not conveyed and authorities were

cited to the effect that a mere assignment of the mortgage does not inevitably carry with it the power of sale arising from certain eventualities, It is

sufficient to say that having examined the words of the assignment here we are quite clear that they are not only wide enough to convey the power

of sale but were expressly designed to do so.

Then it is said that the power of sale, in any event, can only be exercised by the party to the original instrument and not by somebody claiming

under him. This part of the argument, we think, was founded on a fallacy engendered by an attempt to apply the case of In re Rumney v. Smith

(1897) 2 Ch. 351, where it was held that, on a transfer and upon the true construction of the deed considered in that case it was not intended that

any one but the original contracting party should have the right to exercise the power of sale. That may very well have been in that case, and it may

be that that intention was disclosed and could be inferred from the deed and from the known circumstances. But in this case there was an express

provision in the mortgage that all the rights and powers conferred by it should be exercisable by the assign of the mortgagee and, therefore, the

whole analogy of In re Rumney v. Smith (1897) 2 Ch. 351 fails to apply from the outset.

Finally, an argument was put forward which was based upon Section 69 of the Transfer of Property Act. It appears that this property was

brought to sale under the power not only for the original debt of Rs. 1,500 and interest covered by the mortgage originally given to the Mylapore

Fund but also in respect of the subsequent indebtedness of Rs. 800 - created by the loan of Daivasikhamani Chetty secured only by an equitable

mortgage by deposit of title-deeds and obviously not covered by the power of sale; and it was suggested that, as the power of sale has been

exercised in part as to the indebtedness which it did not in truth cover, the whole sale should be set aside. Now it appears to us that is covered

both by the Act itself and by the authorities. By Section 69 it is enacted as follows: ""When a sale has been made in professed exercise of such a

power,"" (that is the power of sale in the given instrument) ""the title of the purchaser shall not be impeachable on the ground that no case had arisen

to authorise the sale or that due notice was not given, or that the power was otherwise improperly or irregularly exercised; but any person

damnified by an unauthorised, or improper, or irregular exercise of the power shall have his remedy in damages against the person exercising the

power"". That remedy is available to this plaintiff if he can show that he has been in any way damnified by the exercise of this power. That is the

section and it is in accordance with the settled line of decisions of the English Chancery Courts on the subject, and we need only refer to a

judgment of Sir George Jessel M.R. in Dicker v. Angerstein L.R. 3 Ch. Dn. 600, where the sale was held good even though it was proved that the

security had actually been satisfied. A similar doctrine has been acted upon in this Court in The Madras Deposit and Benefit Society v. Passanha

I.L.R.(1885) Mad. 201.

We therefore, are of opinion that all the points taken by the plaintiffs and very clearly put in an interesting argument, when examined, fail to stand

the test of criticism and that the learned Judge was right in dismissing the plaintiff''s suit.

The appeal fails and must be dismissed with costs, one set.