Nallamilli Veerayamma vs Nallamilli Venkanna and Others

Subba Rao, J.—The only question in this appeal is whether a widow is entitled to a share in a mtge. debt under the Hindu Women''s Bights

to Property Act, before it was amended by Act XXVI (26) of 1947. Deft. 2 & Ammi Reddi were brothers & sons of deft. 1, Venkanna. Deft. 3

is the son of deft. 2. Deft 4 is the widow of deft. 1 who died pending suit. The father & sons constituted members of a joint Hindu family. The pltf.

as the widow of Ammi Reddi filed the suit for partition & for recovery of possession of her share in the joint family property under the Hindu

Women''s Rights to Property Act. The learned Subordinate Judge gave her a decree for partition in regard to the properties other than agricultural

lands. Items 4 & 5 of Sch. B are properties mortgaged in favour of the family. Ex. D. 2 dated 7-3-1945 is the mtge. deed in respect of item 4. Ex.

D. 1 dated 21-6-1937 is the mtge. deed in regard-to item 5. The properties secured under the aforesaid two documents consist of both

agricultural & house property. The learned Subordinate Judge held that the mtge. debts are liable for partition proportionate to the value of the

house property & that the pltf. is not entitled to a partition of the balance of the debt. The pltf. preferred the above appeal against the decree &

judgment of the Subordinate Judge in so far as it was against her.

The solution to the problem depends upon the nature of a mtge. debt, & whether the debt is separable from the security for certain purposes.

Fortunately this question had an authoritative treatment in the hands of the Judicial Committee in AIR 1931 245 (Privy Council) . The facts in that

case are that, as security for a loan the Bengal National Bank Issued to the-Imperial Bank of India debentures creating a floating charge upon their

whole undertaking, properties, assets, interests, present & future. The debentures were not registered under the Indian Registration Act. It was

conceded in that case that the debentures as they were not registered did not create a charge upon any Immovable property. The Judicial

Committee held that the debentures created a charge over the debts due to the National Bank, whether secured on Immovable property or not, &

therefore the Imperial Banto was entitled to the benefit of all sums received in reduction of the debts whether from the realisation of securities or

otherwise. When an argument was addressed to the effect that as the debentures were not registered no charge was created In respect of the

debts in favour of the Imperial Bank, the Judicial Committee negatived the contention & made the following observations:

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; & do not, if secured, become identified with

the security or transformed into land in the one case or merchandise in the other. The sepation between debt & security is well established; the

creditor is entitled to take a Judgment for the debt without having recourse to his security. There would, therefore, appear to be no reason in

principle why a creditor should not be able to charge his moveable assets, the debt due to him, even if he be unsuccessful by reason of statutory

restrictions in transferring the security.

When the difficulty created by the exclusion of the mtge. debt from the definition of actionable claim was pointed out their Lordships met that

objection as follows:

The effect of the amendment is to restrict the statutory rights on transfer such as the right to sue in the transferees'' name, etc., to such transfers as

are transfers of actionable claims as defined. There appears to be no difficulty in a transfer of the debt without security; the original debtor can

always redeem; the relations between him & the original creditor are not altered; indeed, in the present case, It would appear that the Imperial

Bank can only enforce the debt in the name of the resp. bank, which, no doubt, the latter bank must permit. The transferee takes no further interest

than the transferor was able to give him. The rights of the parties are further declared by the amended Section 134, T. P. Act, which would appear

to apply to their case.

The same principle has been applied & followed toy the Judicial Committee in AIR 1935 108 (Privy Council) . After considering the earlier

decision at some length their Lordships observed:

Applying that case, which need not be gone into in more detail, to the present the result is this, as It appears to their Lordships: the transfer of this

mtge. debt was effective as between the transferor & the transferees. But any proceedings to recover the debt brought against the mtgor, must be,

not in the name of the transferee, but in that of the transferor.

From the aforesaid two judgments it is clear that a debt, apart from the security, can be transferred though the debt could be realised by

enforcing the security by the mtgee. or an assignee from him. If it is assignable as a debt ''simpliciter'' it is equally partible. Applying the aforesaid

principle, I hold that the mtge. debt covered by Exs. D. 1 & D. 2 are partible & the pltf. will be entitled to her share.

Resps. 1 to 3 preferred a memorandum of objections in regard to item 20 of C schedule property. Item 20 is 250 bags of paddy. The Comr.

found only 140 bags in three cells belonging to the family. One Karri Subbanna & Karri Venkatrayudu claimed 70 & 40 bags stored in two of the

cells. Karri Subbanna was not a witness in the case, but Karri Venkatarayudu was examined as D. W. 2. He gave conflicting evidence &

prevaricating answers in the witness box, & therefore the evidence. As the cells admittedly disbelieved his evidence. The cells admittedly belonged

to the family, in the absence of any other evidence it is reasonable to assume that the bags found therein belonged to the family. I accept the finding

of the Ct. below in regard to this item.

In the result, the appeal is allowed with costs, but the memorandum of objections is dismissed with costs.