Narayanaswami Goundar vs Perumal Chettiar and Others

Satyanarayana Rao, J.—The first defendant is the appellant in the second appeal. The suit was for redemption of a mortgage executed by

the plaintiff and others on 23-4-1908 (Ex. D. 1) in favour of one Veeraraghava Piliai, the mortgage being a usufructuary mortgage.

Contemporaneously with the document, there was a lease-back of the properties to the mortgagors by the mortgagee. On 28-9-1910 under Ex.

D. 2, the mortgagee assigned his rights under the mortgage to one Venkatarama Gowder who was the head of a joint family. In a partition of

1941, evidenced by Ex. P. 1 dated 30-4-1941, the rights under this mortgage were allotted to the first defendant, the present appellant. In the

mortgagors'' family, there were four members viz., the plaintiff, Palani Chettiar, the 2nd defendant and the third defendant. These were the member;

of the joint family at the time of the execution of the deed. The assignee-mortgagee purchased in 1916 in a court auction sale one-fourth interest of

Palani Chettiar who is now dead and therefore there was a merger of the two interests to the extent of one-fourth. The substantial defence, apart

from some other minor matters, to the action for redemption was that the plaintiff should not be allowed to redeem more than one-fourth share in

the hypotheca as, by reason of his purchase of one-fourth interest of Palani Chettiar the integrity of the mortgage Was broken.

The learned District Munsif who tried this suit upheld this contention and directed that the plaintiff should get only one fourth share after partition

particularly as there were no other properties in the family to be divided and as he was not inclined to dismiss the suit for redemption on the ground

that it was not maintainable which was the objection taken on behalf of the defendants. This course was all the more necessary because after the

mortgage, Ex. D. 1, the third defendant created two usufructuary mortgages in favour of Venkatarama Gowder one dated 1-9-1917 (Ex. D. 5) for

a sum of Rs. 100 and the other dated 29-8-1924 (Ex. D. 5a) for Rs. 200. The second defendant created on 5-9-1925 under Ex. D. 6 a

usufructuary mortgage for a sum of Rs. 350. The mortgages will undoubtedly operate on their respective shares and cannot affect the interests of

the plaintiff. Notwithstanding the fact that defendants 2 and 3 remained ex parte, he also directed division ''inter se'' between defendants 2 and 3

and also redemption of one fourth share to each of them subject however to the condition that before they get possession of the property from the

first defendant they should pay the amount due under the usufructuary mortgages to the first defendant. There was some dispute regarding tacking

on of some payments made by the first defendant to the mortgage amount, the main item being Municipal taxes paid by the first defendant in

respect of the property hypothecated to him. He held that he was entitled to tack it on and granted him relief accordingly. On appeal, the learned

Subordinate Judge reversed the decree of the trial Court directing partition and granted instead a decree for redemption of the entire property and

directed the first defendant to work out his rights by a separate suit for partition.

In the second appeal, the main ground urged by Mr. Swaminathan, counsel for the first defendant-appellant is that the view taken by the trial

Court was correct and that the learned appellate Judge ought not to have interfered with it. It cannot be disputed that the integrity of the mortgage

was broken by reason of the merger of one fourth interest of Palani Chettiar in the mortgagee, the first defendant. A suit for redemption in such

circumstances of the entire property was not the proper remedy of the plaintiff who owns only an one-fourth share in the property. He should have

sued for partition and claimed redemption in respect of his share. But the trial Court took, what appears to us a sensible view of giving such relief

to the plaintiff even in this suit, as the first. defendant did not seriously object to that course. The effect of the judgment of the learned Subordinate

Judge is that It would practicably drive the first defendant to another suit and multiplicity of suits could have been avoided by giving the plaintiff the

relief which he is entitled to under the law without a separate suit either by the first defendant or the plaintiff. Further, there is the fact that

defendants 2 and 3 created I usufructuary mortgages on their interests in the properties in favour of Venkatarama Gowder and without payments

to the first defendant amounts due under those documents, it would be unfair to deprive him of possession of the shares of even defendants 2 and

We are, therefore, of the opinion that the view taken by the trial Judge on this aspect of the case is correct and that by the appellate Judge is

wrong.

There is a memorandum of cross objections which pertains to the finding of the appellate Court which confirmed the finding of the District

Munsif that the first defendant was entitled to add to the mortgage amount, the municipal taxes paid on the property. Section 76 of the Transfer of

Property Act does not apply to the case as there is a contract to the contrary between the parties by which the mortgagors undertook to pay the

municipal taxes. No doubt ordinarily the first defendant who paid the amount would be entitled to recover it from the mortgagors but he claims a

further right that he is entitled to add this amount to the mortgage amount. This he can only do u/s 72 of the Transfer of Property Act. u/s 72(b) as

stood before the amendment of 1929, payments made for the preservation of the mortgaged property from destruction, forfeiture or sale, by the

mortgagee can be tacked on to the mortgage amount without further limitations. A new proviso was added to this section by which it requires that

there should be a prior notice before payment is made so as to treat it as a necessary payment which can be added to the mortgage amount. The

contention now urged is that this proviso applies and that, as no such notice was ever given by the first defendant, he was not entitled to add that

amount to the redemption amount. The new proviso is not retrospective in operation and the right to pay and add it to the mortgage amount

accrued to the first defendant under the mortgage of 1908 long before the amendment. That right cannot be taken away. This Court has held that

notwithstanding the omission by the Legislature to include in Section 63 of the Transfer of Property Amendment Act, 1929 any of the sections of

the Amending Act, by that circumstance alone the section or sections could not be treated as retrospective. If the proviso newly Introduced affects

the vested rights, it cannot be deemed to have retrospective operation. Whatever may be the view taken by the other Court, we are governed by

the view taken by this Court. Therefore we think that retrospective operation cannot be given to the proviso to Section 72 which was introduced

by the Amendment Act 20 of 1929. It follows that the view taken by both the Courts on this question is correct and the amount was rightly added

to the mortgage amount.

The result is that the second appeal must be allowed, the decree of the lower appellate Court is set aside and that of the trial Court is restored

with costs here and the Court below. The memorandum of cross objections is dismissed. No costs.

There remains C. M. P. No. 8183 of 1950, an application filed by the plaintiff under Act 4 of 1938 to scale down the decree debt. The first

defendant in answer to this contention relies on the new provision, Section 9-A, Sub-section 7 (ii) (c). The Sub-clause 7 states that nothing

contained in this section (Section 9-A) except Sub-section (1) shall apply to any usufructuary mortgage in respect of property situated in any other

area in the cases mentioned below. Sub-section (ii) (c) states:

Where the mortgagee''s interest in the property subject to the usufructuary mortgage or any part of such interest belonged to, or devolved on, two

or more persons and during the period aforesaid, a partition'' has taken place among such persons, then, to the whole or such part of the interest as

the case may be.

Sub-section (ii) deals with the assignments during the period after 30-9-1937 and before 30-1-1948. Sub-section 11(a) relates to the transfer

''inter vivos'' by the mortgagor of his interest. Sub-section (ii) (b) deals with bona fide transfer for valuable consideration during the said period of

the mortgagee''s interest and (c) deals with partitions during that period. This is the scheme of the section which must be borne in mind in construing

the section. The argument advanced on behalf of the plaintiff-petitioner was that Clause (c) docs not apply because it requires that the mortgagee''s

interest in the mortgage which is the subject-matter of the usufructuary mortgage should have vested from the date of the creation of the mortgage

to the date of the partition on two or more persons and when such interest was assigned the assignee-mortgagee is not entitled to the benefit of this

exception as he was not the original mortgagee. On the other hand, it is contended on behalf of the respondent that the clause applies both to the

original mortgagee and the assignee from the mortgagee of his interests provided that in either case it belonged to two or more persons by the time

it came to be partitioned during the period indicated in this section. When Section 9-A was introduced a definition of ""mortgagee"" was also

included by Clause (vi) of Section 3 thus ""''mortgagee'' includes his heirs, legal representatives and assigns"".

When Clause (c) speaks of ""mortgagee''s interest"" it includes also the interests acquired by an assignee from the mortgagee. The word

belonged"" imports ownership and the ownership must be by two or more persons. The ownership contemplated by the use of the word

belonged"" in contrast with the word ""devolved"" implies that it was acquired by a mode other than devolution. ""Devolution"" in ordinary legal

language means descent by succession. The property might belong to two or more persons either because the original mortgage was in favour of

two or more persons or even though the original mortgage was in favour of one person at a time before the period indicated in the section

commenced, there was an assignment of the mortgagee''s interest in favour of more than two persons. There is really no conflict between the word

belonged"" and the word ""devolved"" and none of those two words would become otiose if the interpretation which we have placed is accepted;

nor is there anything in the section or the subject or context to exclude the operation of the definition of ""mortgagee"". In Clause (vi) of Section 3

mortgagee"" includes ""assigns"". Therefore it follows that the clause applies not only to a case where the mortgagee''s interest was in the first

instance created in favour of two or more persons but also to a case where the mortgagee''s interest was created only in favour of; one person to

start with and there was later an assignment of that interest in favour of two or more persons the condition however being that the assignment must

have taken place before the date of the partition. The main object of this Sub-clause (c) is to protect partitions effected during the particular period

just as Clause (b) is intended for the protection of, bona fide transfers for value of the interest of the mortgagee. In the present case though the

mortgage was in favour of Veeraraghava Pillai there was an assignment in favour of Venkatarama Gowder who was the head of the joint family

and there was a partition in 1941 between the members of the family. The sub-clause therefore applies to this case and the benefit of the provisions

of the Act cannot be taken advantage of by the plaintiff.

The application is therefore dismissed with costs.