Muthurakku Maniagaran vs Rakkappa Maniagaran and Others

Miller, J.—This appeal, I think, must succeed, and I put my decision on Section 69 of the Contract Act.

The 2nd defendant bought subject to the whole mortgage and was bound by law to satisfy the mortgagee himself either by payment or by

suffering a sale of that part of the mortgaged property which was sold to him. The fact that a portion of the property had the previous day been

transferred to the plaintiff did not affect that obligation : the property purchased by the plaintiff was rightly or wrongly ordered to be sold under the

decree, and the plaintiff, to save the sale, paid the whole of the mortgage money. He was, I think, interested in making the payment : and. the 2nd

defendant was bound by law to pay : there seems to be nothing more required to attract the provisions of Section 69.

The District Judge recognises that Section 69 would apply to the case, but fails to see that the 2nd defendant was bound by law to pay the

whole mortgage money and not only his proportionate part thereof.

I agree in the decree which my learned brother proposes to make.

Sadasiva Aiyar, J.

The learned District Judge has reversed the District Munsif''s Judgment and remanded the suit to the Court of First Instance for the purpose of

deciding the suit on the basis that the plaintiff''s claim is one for contribution from the 2nd defendant in respect of monies paid by the plaintiff to a

mortgagee of both the 1st and 2nd schedule properties.

The material facts are shortly these. The 1st defendant was the owner of both the schedule properties. He sold the 1st schedule properties to the

plaintiff''s father on the 31st July 1895, the circumstances showing that it was to be a sale freed from the prior encumbrance of 1889 in favour of a

Zemindar. On the next day, i.e., the 1st August 1895, he sold the 2nd schedule properties to the 2nd defendant, part of the purchase money being

left with the 2nd defendant in order that he might discharge the Zemindar''s mortgage of 1889. The 2nd defendant failed to discharge the

Zemindar''s mortgage of 1889. The Zemindar brought a suit against the 1st defendant and the plaintiff''s father in 19,01 for sale of both the 1st and

2nd schedule properties and for personal decrees against the 1st defendant and against the plaintiff''s father. The plaintiff''s father, however, was

dead when the suit was brought and so the decree in that suit of 1901 exonerated the plaintiff''s father and his interest (if any) in the properties from

all liability but ordered the, sale of both the 1st and 2nd schedule properties, and further gave a personal decree against the 1st defendant for the

mortgage money due to the Zemindar.

It is clear that a sale under such a decree could not at all affect the title of the plaintiff''s father (or rather of the plaintiff, who had become the heir

of his father) in the 1st schedule properties, as his father''s rights were expressly exonerated by the decree. But when the 1st schedule property

was brought to sale in execution of the Zemindar''s decree in the suit of 1901, the plaintiff paid up the whole amount to save the 1st schedule

property from sale and brought the present suit for recovery of the sum so paid on the charge of the 2nd schedule properties and from the 1st

defendant personally. The District Munsif dismissed the suit as against the 1st defendant but gave a decree on the charge of the 2nd defendant''s

2nd schedule properties for the sum of Rs. 260 with interest at 4 per cent. per annum from the 16th December 1908 till date of decree and at 6

per cent. from date of decree. The District Munsifs''s decree seems also to give a personal remedy against the 2nd defendant for the amount

decreed.

On appeal by the 2nd defendant; to the District Court, the learned District Judge held that, as these was no privity of contract between the

plaintiff''s father and the 2nd defendant, though the 2nd defendant (sic) promised to the 1st defendant to discharge the Zemindar''s mortgage, the

plaintiff cannot recover the whole amount which he paid to the Zemindar (mortgagee-decree-holder) from the 2nd defendant and the 2nd schedule

properties, but can only recover contribution from the 2nd defendant in the proportion of the value of the 2nd defendant''s property to the value of

the 1st and 2nd schedule properties together. The learned District Judge held that Section 69 of the Contract Act could not help the plaintiff.

In Second Appeal the plaintiff''s learned Vakil contended

(a) that the District Judge ought to have found that there was privity of contract between the plaintiff''s father and the 2nd defendant;

(b) that under Sections 69 and 70 of the Contract Act, the plaintiff was entitled to recover the whole of the Rs. 260 etc. from. the 2nd defendant;

(c) that under the general law he was so entitled ;

(d) that the District Judge should have given a decree against the 1st defendant though the plaintiff had not appealed to the District Court against

the Munsif''s Judgment exonerating the 1st defendant;

(e) and that in any event, the order of reversal and remand passed by the District Judge is wrong, as the Mansiff had not decided the suit on any

preliminary ground.

Taking the last contention first, it is clear from the decision in Nabin Chandra Tripati v. Kali Kumar Das (1913) 18 C.L.J. 613 : 20 I.C. 39,

that the Lower Court, even on the view held by it on the facts and the law, could have only called for findings from the Court of First Instance as to

the contribution which the 2nd defendant and the 2nd schedule properties were liable to make to the plaintiff and could not have reversed the

judgment of the Court of First Instance and remanded the suit wholly. The Lower Court''s order therefore should be reversed in any event.

As regards the first contention, it is a question of fact whether there was a privity of contract between the plaintiff''s father and the 2nd

defendant, and I am not prepared to dissent from the finding of the Lower Appellate Court that there was no such privity of contract.

Then there remain three questions of law. I shall take the contention (d) first. The District Judge was no doubt entitled to give a decree aginst

the 1st defendant though the plaintiff had not appealed against the Munsif''s decision exonerating, the 1st defendent (see Order XLI Rule 33). But I

am not inclined to say in this case that the Lower appellate Court should have given such a decree against the 1st defendant, as it was the default of

the 2nd defendant in not paying to the Zemindar (mortgagee) (in accordance with the 2nd defendant''s promise given to the 1st defendant) that has

caused all this trouble and the 1st defendant was really innocent of any fraud against the plaintiff.

Then we have only to consider the two contentions (b) and (c) which for ready reference might be here re-stated.

(b) That under Sections 69 and 70 of the Contract Act, the plaintiff was entitled to recover the whole money from the 2nd defendant ;

(c) that under the general law, he was so entitled. I think both these contentions ought to prevail. It has been held by the Allahabad High Court

Hakim Alt Khan v. Dalip Singh (1913) 11 A.L.J. 478, 19 I.C. 676 that when the plaintiff purchased a property from the mortgagor, owner, when

the defendant Had (for consideration) promised to the mortgagor to discharge the mortgage, and had failed to so discharge the mortgage, and

when in consequence of sush failure the plaintiff was obliged to pay up the mortgage money to the mortgagee who had obtained a decree on his

mortgage, the plaintiff was entitled to recover the money so paid by him from the defendent. The plaintiff''s right in such a case is based by the

learned Judges on the ground that the plaintiff was entitled to stand in the shoes of the original owner (mortgagor) and as that mortgagor had a right

as against the defendant to recover the money which the defendant had failed to pay to the mortgagee and had thus committed a breach of the

contract with the mortgagor (owner), the plaintiff, standing in the shoes of the mortgagor, was entitled to recover compensation from the defendant

just as the plaintiff''s vendor (the original mortgagor) could have recovered it from the defendant. This reasoning appears to me to be in consonance

with justice, equity and good conscience. I would therefore uphold the contention (c) of the appellants in this case. Again coming to the contention

(b), it has been held in Debnarain Dutt v. Ramadhan Mondol (1913) 17 C.W.N. 1143 that, where a sum was payable by the defendant under a

contract with (A) for the benefit of (B) i.e., where defendant had promised to (A) for consideration to pay a sum of money to (B), (B) could

enforce the contract. Lord Hatherley''s observations in Touche v. Metropolitan Railway warehousing Company (1871) 6 Ch. A. 671 are quoted in

support of the said proposition. Applying this principle, it seems to me that the Zemindar mortgagee could have obtained a decree against the 2nd

defendant for the money which the 2nd defendant agreed with the 1st defendant to pay to the mortgagee at the time of the sale by the 1st

defendant to the 2nd defendant of the 2nd schedule properties.

The second defendant having been thus bound to pay to the Zemindar (mortgagee) the whole amount of the mortgage money and the plaintiff

being interested in the 2nd defendant''s payment of such money to the Zemindar (mortgagee) and the plaintiff having paid such money, it seems to

me that Section 69 of the Contract Act directly applies in the plaintiff''s favour. In Vctikuntam Aiyangar v. Kallipiran Ayyangar ILR (1903) M. 497

: 13 M.L.J. 25, Subrahmania Aiyar and Davies JJ. held that a Hindu widow who was interested in her daughter''s welfare and therefore spent

money for the marriage expenses of her daughter which her husband''s brother was legally bound to incur, could u/s 69, recover the money from

the husband''s brother. In Subramania Iyer v. Rungappa Reddi ILR (1909) M. 232 : 19 M.L.J. 750 Benson and Krishnaswami Aiyar JJ. held that

even if the plaintiff had merely an apprehension of any kind of loss or convenience or even of any detriment by the non-payment of a debt due by a

3rd person to another, the plaintiff was "" interested"" in paying that debt of that third person and, if he discharges it, he could rely upon Section 69

of the Contract Act. Even if Vaikuntam Aiyangar v. Kallipiram Aiyangar ILR (1902) M. 497 goes a little too far in considering that an interest

other than a pecuniary interest will do to attract the provisions of Section 69, 32 Mad. 232 is clear authority for the proposition that pecuniary

interest even in the shape of detriment or inconvenience will entitle the plaintiff to take advantage of Section 69 of the Contract Act see also

Tulsakunwar v. Jageshar Prasad ILR (1906) A. 563 and Acha Ranganaikammall Vs. Acha Ramanuja Aiyangar and Others, .

In Bhadra Mhamed v. Gunamoni Pali (1911) W.I.C.156 the facts were as follows: The plaintiff whose property was about to be sold by the

landlord for a sum which was solely due by the defendant as between the plaintiff and the defendant paid that sum to the landlord. The sum was

charged both upon the plaintiff''s interest and upon the defendant''s interest in certain properties. On these facts the plaintiff was entitled to recover

the whole from the defendant u/s 69 of the Contract Act. The learned Judges further held in that case that even if Section 69 of the Contract Act

did not apply, Section 70 applied in the plaintiff''s favour because the payment was not voluntary, as the plaintiff''s property was about to be sold,

the payment was a lawful act by the plaintiff and the defendant reaped its benefit as the debt due by him was therefore discharged. See also

Rauhaya Lal v. The National Bank of India, Limited 11 C.W.N. 541 to what is a voluntary payment. In Kutti Goundan v. Mahali Ammal (1911)

22 M.L.J. 364 Sundara Aiyar and Spencer JJ. held that even a contingent reversioner after the death of a widow under the Hindu Law, who pays

a mortgage debt to save a property from sale under a mortgage decree, obtains a lien on the property which was cleared of the mortgage debt,

and Section 69 of the Contract Act has also been relied upon by both the learned Judges. In Joy Narain Singh v. Badri Das (1910) 13 I.C.141

Section 70 of the Contract Act is relied upon to establish the right of a mortgagee who paid a decree passed against the mortgagor u/s 161 of the

Bengal Tenancy Act. In Sri Sri Sri Gajapathi Kistna Chendra Deo Guru, Proprietor of Nandigam Estate being minor under the Court of Wards by

his Next Friend the Collector of Ganjam Vs. P. Srinivasa Charlu (died) L.R. of the Late Dewan Bahadur P. Anantha Charlu, decided by my

learned brother and myself I have ventured to make some observations indicating that Section 69 and 70 of the Contract Act should be liberally

interpreted to advance substantial justice. In the result I would hold that not only was the order of remand and reversal unsustainable even on the

learned District Judge''s view of the law, but that that view of the law is itself unsustainable. The order of the District Judge should therefore be set

aside and the District Munsif''s decree restored with costs in this and in the Lower Appellate Court The 2nd defendant is, however, not personally

liable for the decree amount, and the District Munsif''s decree will be made clear on that point.