P. Sankumny Menon vs Thom(sic) Mathai and Others

Koshi, C.J.—The Appellant as the assignee of the rights under a hypothecation bond dated 8-1-1106 brought O.S. No. 101 of 1119 Oil the file of the Parur District Court for realisation of the amounts due thereunder personally from Defendant 1, the executant of the bond, and by sale of the hypotheca. Under the terms of the bond the amount became payable only 6 years after the date of the bond.

On 25-12-1104 the Appellant''s assignor had sold the equity of redemption for 3 items of properties to Defendant 1 for a consideration of Rs. 4539-25-3/8 chs. Exhibit I is that sale deed. The plaint hypothecation bond, Ex. B (copy), was executed for Rs. 1500/- out of the consideration for the sale. Defendant 1 contended that the consideration for the bond had failed almost to the entire extent. Item 1 in the sale deed was long prior to it sold away in execution of the decree in O.S. No. 406 of 1094 and Defendant 1 would have it that on the date of Ex. I the Illom had no title over that item.

Again, on the date of the sale there was a suit pending (O.S. No. 329 of 1103) for enforcement of a hypothecation bond in respect of item 2 and certain other properties of the Illom. Pursuant to the ultimate decree passed in that litigation item 2 also happened to be sold away. The title to the equity of redemption over item 3 alone, therefore, continued to inhere in, the vendee and it was contended that as the value of the two items lost far exceeded the consideration for the hypothecation bond the Plaintiff (Appellant) was not entitled to any relief in the suit.

According to Defendant 1 the value of item 3 came only to Rs. 399/- and 4-3/4 chs. The Plaintiff joined issue about that valuation end according to him item 3 was worth not less than Rs. 1000/- In the absence of evidence on the point the lower Court accepted the Plaintiff''s valuation and in holding that the Plaintiff was not entitled to any relief in the suit stated:

There is no evidence in the case to arrive a its (item 3) value. Hence the value fixed by the Plaintiff has to be accepted as the burden of proving failure of consideration is on Defendant 1. It follows that the sale deed has failed in consideration to the extent of Rs. 3,569 and chs. 20-3/8. The amount due under the hypothecation bond is smaller, the principal being Rs. 1500/-. So the whole hypothecation bond can be held to have failed in consideration.

The Plaintiff was accordingly non-suited.

While O.S. No. 101 of 1119 was pending Defendant 1 instituted O.S. No. 30 of 1120 against the Appellant and his assignor Poonallur Illom to set aside the hypothecation bond and for recovery of the damages sustained by him on account of the loss of items 1 and 2. The two suits were tried together. On the basis of the findings entered in O.S. No, 101, the hypothecation bond was set aside but the claim for damages was negatived on the ground of limitation.

While stating that the damages came to over Rs. 4771 the Plaintiff (Defendant 1 in O.S. No. 101), was content with, recovering, 2100 Fs., that is, Rs. 294/12/-. The Appellant, that is, the Plaintiff O. S. No, 101, preferred A.S. No. 572 of 1951 as ten consolidated appeal against both the decrees. When the appeal first came up for hearing, it was 1 pointed out to the Appellant''s Counsel that the procedure adopted was irregular and that he should either limit the appeal to one of the suits or pay the court-fee on the valuation of the other suit as well.

The court-fee paid when the appeal was instituted was on the basis of that paid in O.S. No. 101. The Appellant afterwards paid the court-fee necessary for an appeal against the decree in O.S. No. 30 as well. Defendant 1 had before that preferred a memorandum of cross-objections impugning the dismissal of his claim for damages.

In view of the payment of the court-fee for an appeal against tire decree in O.S. No. 30 also, at the final hearing of the appeal, the Appellant was directed to file Anr. memorandum of appeal. He has since done that and that memorandum has been registered as A.S. No. 572A of 1951. The memorandum of cross-objections has necessarily to be construed as one preferred in that appeal. We shall dispose Of A.S. No. 572A and the memorandum of cross-objections by a separate Judgment.

In A.S. No. 572 Mr. M. Madhavan Nair appearing for the Appellant first contended that the lower Court''s finding that on the date of Ex. I the Poonallur Illom had no title over item 1, was wrong. His argument was that O.S. No. 406 was a suit against a junior member of the Illom and that the execution sale held in that case pursuant to the decree passed against the Junior member was null and void so far as the Illom was concerned and that therefore, notwithstanding the execution sale the Illom continued to be the owner of that item.

It is common ground that item 1 was sold in execution of the decree in O.S. No. 406 of 1094 on 1-4-1097, that the sale was confirmed on 3-5-1097 and that symbolical delivery was effected on 5-8-1100 - See Ex. IV, copy of the execution progress diary In the case. In support of his argument Mr. Madhavan Nair invited our attention to the Full Bench decision of this Court in - ''Kamakshi Amma v. Gangadharan Pillai'' AIR 1954 Trav-C 60 (A). It, is now necessary to state that In 1195 the then Karnavan of the Poonallur Illom instituted a suit in O.S. No. 280 to set aside the execution sale in O.S. No. 406 and that that suit was dismissed. Exhibit V is a copy of the judgment, in O.S. 280.

The following extract from the judgment would show that the suit failed because it was time-barred and that on the date of Ex. I, notwithstanding the fact that the sale was pursuant to a decree against a junior member of the Illom, the Illom had under Article 8(a), Limitation Act. then in force in Travancore (II of 1062), frretrierably lost its title to item 1:

Inasmuch as the suit properties which admittedly belong to Plaintiff''s Illom were attached and sold for the above decree debt the Plaintiff win is the khrnavan of the Illom is compete to question, the validity of the sale. The Court sale in this case admittedly took place on 1-4-1097 and it was confirmed on 3-5-1107. It was contended for the Defendants that the suit is barred by limitation under Article 8(a) of the old Limitation Regulation II of 1062 as it has been brought more than one year after the date of confirmation of the sale.

It has been held in - ''Pethiru Pathrose v. Iyappan Ittan'' 26 Trav LR 133 (B), that the nature of the amendment made in Article 8(a) by the amending Regulation v. of 1068 makes it clear that the term to sot aside an execution sale as applied to sales held in connection of decrees against the members of the family of the parties who seek to set them aside should be interpreted as applying to all suits where the validity of such sales come into question.

In - ''Cheeru Ichira v. Narayanan Kunchu'' 12 Trav LR 122 (C), it has been held that Article 8(a) of Limitation. Regulation II of 1062 governs also suits to set aside sales of Tarwad property made in execution of a decree passed against a junior member and that no member of the debtor''s tarwad, whether the debtor be the Karnavan or only a junior member, can seek to set aside a Court sale of tarwad property on any ground what of confirmation of the sale. It is clear, therefore, that the present suit which has been brought more than one year after the date of confirmation of the sale is barred by limitation.

The decision in 26 Trav LR 13 (B) referred to in the above extract was round about 1910 or 1911. Even so late as 1949 a Pull Bench of the Travancore High Court had reaffirmed the decisions in 12 Trav LR 122 (C) and the cases that followed it- see 1949 Trav LR 14 (D); the relevant portion of the head note in the latter case may usefully be quoted here:

A suit by the mother of the Plaintiffs to set aside a mortgage of the plaint tarwad property was dismissed with costs. For costs the equity of redemption was attached and sold. The present suit is for setting aside the attachment and sale and for redeeming the property filed admittedly one year after sale on vague allegations or fraud and collusion not specified in pleadings.

Held, the article was originally intended to protect bona fide purchasers at judicial sales, by providing a short limit for bringing suits to set them aside. But the protection thus afforded was found insufficient and the amendment was therefore introduced to enlarge the scope of the article. The resultant position is that no member of the judgment-debtor''s tarwad or family is entitled to seek to set aside the sale of tarwad property after the lapse of one year, except on the ground that the judgment-debtor had no interest in the properties sold. It can be seen from the wording of the article that it is wider in scope than the corresponding article of the Indian Limitation Act (Article 12).

The words by whomsoever brought on any ground other than that the judgment-debtor or his family or tarwad had no right, title and interest in the property sold'' found in Article 9 were added to it with a view to give finality to Court sale both against the parties and strangers in order to secure public confidence in them.

The expression ''any ground'' is wide enough to include even the ground of the invalidity of the decree itself. 12 Trav LR 122 (C), - Sasthayi Chonnaru v. Itty Mani'' 10 Trav LJ 299 (E); - ''Parvathi v. Parameswaran'' 24 Trav LJ 734 (F), followed.

The mother of the Plaintiffs who had brought the suit to set aside the mortgage was a junior member of the tarwad and the sale of the tarwad property was in execution of the decree passed in the suit for costs. The question we have to consider is whether on the date of Ex, I the Poonallur Illom had any title over item 1, Exhibit I was in Karkadagom 1104. The Court sale in O.S. No. 460 was confirmed in Dhanu 1097 and even the symbolical delivery of the equity of redemption was over in Meenam 1100, more than 4 years before the date of Ex, I.

According to the view entertained by the Travancore High Court as seen from the decision already referrd to, the Illom had lost its title for good and It is idle to contend now on the strength of the decision in AIR 1954 Trav-C 60 (A) that the sale was void and therefore it was still open to Defendant 1 to redeem the property from the mortgagees in possession. In Ex. I the illom made no mention of the Court sale in O.S. No, 460 and the argument that it is open to Defendant 1 to redeem the property, 30 long yearn after it was delivered over to the purchaser comes with very little grace.

The decision in O.S. No. 280 of 1105 (Ex. V) binds the Plaintiff as much as it binds the Illom. That suit was brought by the then Karnavan. The lower Court''s finding that on the date of Ex. I, the Illom had no title to item 1 is correct and, we affirm it.

Admittedly O.S. No. 329 of 1103 was pending when Ex. I was executed. No mention was, however, made about it in the sale deed. As Ex, 1 was executed during the pendency of the suit, the vendee, Defendant 1, is bound by the decision. It is admitted that pursuant to the ultimate decree in the suit the property (equity redemption) has been sold and that it has also been delivered over so long ago as 12-12-1117.

The only argument Mr. Madhavan Nair made about this item was that Defendant 1 as an assignee ''pendente lite'' had the right to intervene in the execution proceedings and claim marshalling. Several other items were also included m the hypothecation bond put in suit in O.S. No. 329 and the decree passed therein. Exhibit VII (copy of the decree) would show that the litigation had seen several vicissitudes and that the Illom was strenuously contesting it. Yet at no time the Illom chose to inform the Court about Ex. J. (sic) or to give intimation to Defendant 1 about the pendency of the suit.

On the records of the case there is nothing show that Defendant 1 was ever aware of the litigation. Marshalling is not something which can be claimed as a right. The contention that the Defendant, could have claimed such a right in the execution proceeding. in O.S. No. 329 was never raised by the Plaintiff before the Court below and we do not know what defences would have been open to Defendant 1 had such a point been raised there.

As the property has been last to the vendor in execution of a hypothecation decree passed in a suit which was pending on the date of the (sic) deed, the lower Court correctly held that there war failure of consideration so far as this item was also concerned.

It was next argued that the principle of ''caveat emptor'' should apply to the case and that the Defendant cannot therefore plead failure of consideration in a suit on the hypothecation bond. I In the first place the sale deed expressly provides, for indemnity in case the vendee''s title is affected on account of any undisclosed encumbrances. A charge is also created over the rights under the plaint hypothecation bond for the said indemnity provision.

In the circumstances we cannot pay any heed to the argument based on the doctrine of ''caveat emptor''. In so doing we have not overlooked that elsewhere in Ex. I the sale of the equity redemption is stated to be ''subject to all risks''. In view of the express provision relating to indemnification and the charge, it is clear to us the parties did not intend that clause to affect the rights of the vendee.

The extract from the judgment of the tower Court quoted in the opening paragraph of this judgment would show that the amount of the consideration that failed on account of loss of items 1 and 2 exceeds by far the hypothecation money. The suit to enforce payment of the money due under the bond was therefore rightly dismissed. The appeal fails and it will stand dismissed with costs.