Ramiah Moopanar and others vs Chelliah Nadar

Natesan, J.—The second appeal has been preferred by the defendants and arises out of a suit for contribution between aliens from the

mortgagor after the satisfaction of the mortgage decree obtained by the mortgagee in O.S. No. 22 of 1958 on the file of the District Munsif,

Ambasamudram. Three items of properties belonged to one Rajamannar Ayyangar. He mortgaged them to one Ramalakshmiammal for a sum of

Rs. 5,000. He himself made some payments towards the mortgage and on 16th September, 1953 under Ex. A-1 he sold one half of item 1 in

favour of the first defendant in the suit, out of which this second appeal, arises, for a consideration of Rs. 1,000. He received Rs. 100 in cash and

the balance of Rs. 900 was reserved with the vendee to be paid to the mortgagee in part payment. Similarly, on 23rd October, 1953, under Ex.

A-2, he sold the other half of the first item to defendants 2 and 3 jointly for a similar consider ration and here also Rs. 900 was reserved with the

vendees to be paid to the mortgage in part payment. On 7th December, 1953 under Ex. A-3, he sold the third item of property to the plaintiff for a

consideration of Rs. 3,500. As on that date taking into account the payments to be made by defendants 1 to 3 of the amounts reserved with them,

a sum of Rs. 1270 was payable for full discharge of the mortgage the said amount of Rs. 1270 was reserved with the plaintiff for payment to the

mortgagee. The second item of the mortgaged property was retained by the mortgagor to be enjoyed by him free of encumbrance. As the

defendants herein did not join with the plaintiff in discharging the encumbrance, the Mortgagee filed the suit O.S. No. 22 of 1958, for the balance

due to her. When execution was taken out by the mortgagee-decree holder, the plaintiff and defendants 1 to 3 jointly, on 24th November, 1958

paid a sum of Rs. 500 towards the mortgage decree. Again, on 24th September, 1959, a further sum of Rs. 500, was paid by them. When making

these payments, the plaintiff and the defendants as among themselves, shared the amounts paid in the following proportion. For every sum of Rs.

500, the plaintiff contributed Rs. 200, the first defendant Rs. 150 and the defendants 2 and 3 jointly a sum of Rs. 150. Later defendants 1 to 3

entered into some arrangement with the mortgagee-decree holder and paid her Rs. 2000 and got their properties exonerated. For the balance due

under the mortgage, namely, Rs. 1788-50, the mortgagee proceeded against the property purchased by the plaintiff. Having paid the mortgagee

that amount, the plaintiff has come forward with the suit for contribution. The basis of his case was that as amongst themselves, the first defendant

had to pay the mortgagee Rs. 900 and defendants 2 and 3 jointly Rs. 900 and himself (plaintiff) had to pay Rs. 1270 in terms of the directions in

their respective sale deeds. Approximately, in the proportion of 3 : 3 : 4 that proportion would govern the liability for contribution. On this basis,

the plaintiff contended that giving credit for the payments made by the defendants, the first defendant would have to pay him a sum of Rs. 136-55

and defendants 2 and 3 on their part a sum of Rs. 136-55. But the trial Court held that the claim could be rested only under S. 82 of the Transfer

of Property Act, that there was no contract to the contrary as contemplated in that section and there was no privity of contract between the various

purchasers from the mortgagor, it found that if under the principle of S. 82 of the Transfer of Property Act, the market value of such item of

property was taken into consideration, the defendants cannot be made liable to pay any amount to the plaintiff as on that basis they had already

paid off the mount they would be liable to the mortgagee. In this view, the suit was dismissed. On appeal, the learned Subordinate Judge, in the

view that. S. 82 of the Transfer of Property Act, was not applicable and that justice and equity demanded that the defendants must contribute in

proportion to the liability undertaken by them as purchasers from the mortgagor, decreed the suit for contribution. In this appeal by the defendants

the principal contention is that there is no legal basis for the decree given by the lower appellate Court. It is pointed out that there is so contract

between the plaintiff and the defendants infer se obliging them to meet the liability to the mortgage in any particular proportion. It must be noticed

that the undertakings by each vendee was with the mortgagor severally. These individual undertakings cannot bind the mortgagee or the other

purchasers. The trial court finds that there is no privity of contract between the parties and it may be said that the lower appellate Court does not

find any contract between the plaintiff and the defendants. No doubt, in the plaint it is vaguely stated that the parties had agreed to bear the liability

for the mortgage in proportion to the amounts they had undertaken with the mortgagor to pay to the mortgagee. But there is nothing on record to

infer the existence of any such contract. No issue even was raised on that. The only question, therefore, for consideration is, whether in the

absence of a contract between the contributories themselves, it is open to the Court, on some equitable principle, to ratably distribute the obligation

for the mortgage debt amongst the parties, without reference to S. 82 of the Transfer of Property Act. What induced the lower appellate court in

this case to take this view is the fact that the defendants had been placed in possession of the properties purchased by them and had been in

enjoyment of the same, while they had parted only with one-tenth of the consideration amount in cash to the mortgagor. The rest they had retained

with themselves for discharge of the mortgage. If all the purchasers are joined together and paid off the mortgages on the day the plaintiff

purchased his item of property, the mortgage would have been then and there discharged. It is the default on the part of the defendants in not

joining with the plaintiff in discharging the mortgage, that led up to the mortgage suit and interest meanwhile swelling up. In view of this, the learned

Subordinate Judge thought that on equitable considerations, the defendants could be called upon to ratably contribute to the plaintiff, even though

the plaintiff may not secure any amount from them if S. 82 of the Transfer of Property Act was applied. Before the learned Subordinate Judge the

decision of this court in Kunchithapatham Pillai v. Palamalai Pillai 32 M.L.J. 347, was cited. But while the learned Subordinate Judge''s attention

was drawn to an observation in Bava Sahib v. Krishna Royan AIR 1936 Mad. 898, that it is no longer good law, regrettably a later Full Bench

decision of this court approving it does not appear to have been cited. It may be stated that the facts of the case, in Kunchithapatham Pillai v.

Palamalai Pillai 32 M.L.J. 347, though not identical, are so similar to the present case that the principles derivable therefrom would directly apply.

It is stated therein:

The liability to rateable distribution of properties mortgaged to in the first instance and sold subsequently in lots to different persons is imposed by

the Transfer of Property Act. The legislation may have been based on equitable grounds, but its limits are prescribed by the statute.

In that case, a mortgagor sold a portion of the mortgaged property to A and directed him to pay a part of the debt. Another portion of the

property was sold to B with a direction that he should also pay a part of the debt. The rest of the property was sold to C with a similar direction.

The last of the purchasers C had to pay a much larger amount to the mortgagee. The purchasers failed to pay as agreed upon. It resulted in the

mortgagee bringing a suit and obtaining a decree. A and B paid such portions of the debt as would, but for their undertakings, have been

proportionately chargeable on the properties purchased by them, but less than what they had undertaken to pay C, to avert the sale of his

properties, had to pay the mortgagee considerably more than what he had agreed with the mortgagor to pay. Having paid the amount, he sued the

other two persons for contribution, and, it was in these circumstances, it was held that the claim was not sustainable under S. 82 of the Transfer of

Property Act. It was pointed out in that decision that by the mere fact of subsequent purchase, the purchaser does not get an implied transfer of the

undertakings given to the vendor by the earlier purchasers. This decision finds affordance in the Full Bench decision of this court in Damodarasami

v. Govindarajulu ILR 1943 Mad. 531. The learned Judges observed therein that the correctness of the decision is not open to doubt from any

point of view. They observed at page 550:

The defendants had already paid what they were liable to pay under S. 82 and there was no contract between the respective purchasers making

them liable to pay more.

At page 554 it is observed:�

Obviously, there can be no objection to the mortgagors agreeing with their rights and liabilities with regard to contribution inter se shall be, but as

such a contract will not run with the land, it cannot affect a third party, unless he agrees to be bound by if.

It is pointed out that where the contract is between a mortgagee and his mortgagors, the position will be different, because such a contract will

run with the land. As I feel bound by the decision in Kunchithapatham Pillai v. Palamalai Pillai 32 M.L.J. 347, as directly applicable to this case, I

do not think that any further discussion is called for. I may, however, point out that that part of the decision in Kunchithapatham Pillai v. Palamalai

Pillai 32 M.L.J. 347 which relates to the consideration of the scope of the expression bound by law to pay in S. 69 of the Contract Act has been

subsequently dissented from in Thirumalasubbu Chettiar Vs. Smt. Rajammal, The observations in that regard run counter to the decision of the

Privy Council in Govindram v. Gondal State AIR 1950 P.C. 99 : (1950) 2 M.L.J. 1. But so far as the decision goes in relation to S. 82 of the

Transfer of Property Act and its applicability to contribution between owners of properties subject to a mortgage, the observations of the Full

Bench in Damodarasami v. Govindarajulu ILR 1943 Mad. 531 are there and are binding upon me.

Learned Counsel for the respondent drew my attention to the decision of this Court in O.R.M.M.S.P.S.V. Meyyappa Chettiar by his Power-

of-attorney Agent V. Edaganathan Pillai Vs. Murugappa and Sons and Others, but I do not find anything in that decision which in any way detracts

from the principles laid down in Kunchithapatham Pillai v. Palamalai Pillai 32 M.L.J. 347 with reference to S. 82 of the Transfer of Property Act.

In fact that was not a case of contribution between persons holding properties which had been covered by the same mortgage, and it was a case

where S. 82 of the Transfer of Property Act was held not applicable. In this connection I may refer to Kadarlal Seal v. Harilal Seal 1952 S.C.J.

37, 42, where it is observed:

In my opinion, the whole law of mortgage in India, including the law of contribution arising out of a transaction of mortgage, is now statutory and is

embodied in the Transfer of Property Act, read with the Civil Procedure Code. I am clear we cannot travel beyond these statutory provisions.

Here is the instant case under S. 82 of the Transfer of Property Act, the plaintiff is not entitled to any remedy. The defendants have paid more

than their proportion share of the liability. It follows that the decision of the lower appellate Court cannot be sustained. The suit for contribution

therefore fails and is dismissed. The second appeal is allowed and the degree of the trial Court dismissing the suit is restored. The parties will bear

their respective costs in this Court and in the lower appellate Court.