R.M.S. Benjamin vs Devadoss and Others

Krishnaswami Nayudu, J.—This appeal arises out of a suit for redemption. There was a usufructuary mort-gage under a registered

document dated 24-8-1892 for a sura of Rs. 31-8-0 in favour of Jacob and Mariammal. The mortgagees who were in possession usufructuarily

sub-mortgaged their rights in favour of one Marivel Servai for the same sum of Rs. 31-8-0 by a deed dated 21-8-1910 duly executed and

registered. As sub-mortgagee Marivel Servai was in possession. In execution of a money decree obtained against Marivel Servai by the second

defendant, the mortgage rights of Marivel Servai which he obtained under the deed dated 21-8-1910 were brought to sale and the first defendant

purchased the property in court auction and took delivery of possession. The first defendant therefore became entitled to the mortgagee''s rights in

the usufructuary mort-gage dated 24-8-1892.

The plaintiffs as representatives of the original mortgagors, instituted O. S. No. 504 oi 1946 for redemption. The prayer for redemption waa

granted on plaintiff''s paying Rs. 31-8-0, the principal amount and other sums including expenses stated to have been incurred by the first

defendant in O. S. No. 219 of 1942, a suit instituted by him to recover possession of the property, as his possession was disturbed by the

plaintiffs. There were also certain criminal complaints and counter-complaints of trespass between the parties and it is the first defendant''s case

that he incurred further expenditure in those proceedings. The first defendant appealed against the decree in respect of the expenses incurred by

him in the criminal proceedings which were disallowed by the trial court and for costs. During the pendency of the appeal, the plaintiffs filed an

application I. A. No. 205 of 1949 for scaling down the mortgage debt u/s 9-A, Clause (3), Madras Agriculturists'' Relief Act, 1938, as amended

by Act 23 of 1948.

The learned District Judge held that the amended provision of the Act applied to the case and the principal amount must be deemed to have been

wiped out by reason of the application of the Act, rejected the claim of the first defendant for expenses incurred in the criminal proceedings, and as

a result modified the decree of the trial court by granting him only the costs of the suit and deleting the principal sum of Rs. 31-8-0 from the decree.

The first defendant has preferred this second appeal.

As regards the expenses incurred by him in the criminal proceedings, the first defendant is not entitled to get the same from the mortgagor, as,

u/s 72, Transfer of Property Act, a mortgagee is entitled to spend only such money as is necessary among others under Clause (d) for making his

own title thereto good against the mortgagor. However much the expenses incurred by him in O. S. No. 219 of 1942 might be held to be justified,

in so far. as the expenses incurred for the proceedings in the criminal courts are concerned it could not be said that those expenses were incurred

for the purpose of making his own title good against the mortgagor. There is no substance in this contention and I agree with the learned District

Judge that the first defendant is not entitled to the expenses incurred by him in regard to the criminal proceedings.

It is contended that the plaintiffs are not entitled to any reliefs by way of scaling down under Madras Act 23 of 1948 for several reasons. I. A.

No. 205 of 1949, it is urged, should have. been before the District Munsif who passed the decree and the appellate court had no jurisdiction to

entertain an application for scaling down as it was the trial court alone that had jurisdic-tion u/s 19 of the Act to scale down the debt and amend

the decree. In support of this contention the learned counsel relied on a decision of a Bench of this Court reported in --''Gangaraju v. Ramayya'',

AIR 1939 Mad 483 (A), where it was held that Sections 19 and 20, Madras Agriculturists'' Relief Act should be read together and that the

explanation of the expression ""court which passed the decree"" in Section 20 equally applies to Section 19. The ""court which passed the decree"" is

defined in the explanation to Section 20 of the Act, where it is stated that the expression or words to that effect shall, in relation to the execution of

decrees, unless there is anything repugnant in the subject or context, be deemed to include (a) where the decree to be executed has been passed in

the exercise of appellate jurisdiction, the court of first instance.

In that case a decree was passed by the lower court and an appeal was filed which was dis missed by the appellate court. As proceedings in

execution were taken, the judgment-debtors applied u/s 20 for stay of execution and then presented an application u/s 19 of the Act to the trial

court which passed the decree for scaling down. The trial court refused to take cognizance of this application, as in its opinion, the decree having

been appealed against, its jurisdiction to amend the decree ceased. On these facts the High Court held that the appli cation to scale down the

decree debt and amend the decree was properly made to the court of first instance and that court had Jurisdiction to deal with it. In the course of

his judgment Madhavan Nair J. observed at page 484 of the report thus

In the present case the reference to the ''court which passed the decree'' in Section 20 of the Madras Agriculturists'' Relief Act is by its

explanation, to the court of first instance, that is, the court to which the petitioner made his application. A perusal of the two Sections 19 and 20

shows clearly that they have to be read together,

The learned Judge further observes that the petitioner''s application to scale down the decree debt and amend the decree was in their opinion

properly made to the court of first instance and that court had jurisdiction to deal with that application. In circumstances of that case, an application

made to the trial court for scaling down the decree debt, after an application for stay was made and stay obtained u/s 20 of the Act, was held to be

properly made and that the trial court had Jurisdiction notwithstanding the fact that there was an appeal against the decree and the same was

dismissed by the appellate court. That decision is no authority for the position that no application for scaling down can be made to the appellate

court.

Mr. Ramakrishna Aiyar for the respondent referred me to. a Pull Bench decision in -- Velagala Sriramareddi and Others Vs. Karri

Sriramareddi, being minor by certificated guardian, Mr. G. Bhima Rao, , which, though not directly in point, however, shows that an application for

scaling down the decree is not outside the jurisdiction of the appellate court and that the only condition that has to be observed is that such an

application should be made during the pendency of the appeal and not after its termination. In that case it was held that where a debt is the subject

matter of an appeal, if an application for scaling it down is not made in the appellate court before the Judgment is delivered, the decree must be

drawn up in accordance with the terms of the Judgment and no subordinate court has power to pass an order which will affect the decree. Where

however an application is made before the judgment is delivered, the proper course will be to reserve the final order until the application for scaling

down has been decided. The learned Judges observe:

It has been the practice of some learned Judges of this Court, where an application for scaling down has been made before judgment has been

delivered, to direct that an inquiry into the application should be conducted by the trial court and the amount awarded in the Judgment should be

deemed to be subject to the finding on the application, it is not necessary to decide whether this practice is lawful or not, but to avoid any question

arising in future, we consider that the proper course will be to reserve the final order until the application for scaling down has been decided. All

questions arising in the appeal other than the question of scaling down can be decided and the decree left open until a report has been received

from the trial court, the application for scaling down being remitted to that court for inquiry and report.

These observations clearly indicate that it is within the province of the appellate court to consider any application for scaling down and find the

amount that is exactly due either by itself or by referring the matter to the lower court and getting its report and incorporating the same in the

decree to be passed. Though it may be convenient for ah appellate court to refer applications for scaling down to the lower court and call for

reports, it does not necessarily mean that the appellate court cannot, by Itself, go into the questions and find out whether there could be a scaling

down of the decree, and if so to what extent. It is only for the sake of con venience that such matters are referred to the lower court for enquiry

and report, but not on the ground or want of any jurisdiction in the appellate court. What we are here concerned is whether the appellate court has

no jurisdiction to go into the question and in this case the lower appellate court was perfectly in order in going into the merits of the application and

giving its decision.

The next contention of Mr. Srinivasa Ayyar is that the decree had become final and that it was not open to the judgment-debtors to apply for a

scaling down. This argument Ignores the effect of Section 16 of the Amending Act of 1948 when the Act is sought to apply under Clause (iii) of

that section to all suits and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of

this Act. This clause came up for consideration before a Full Bench of this Court in -- Chintapalli Venkataratnam Vs. Merla Seshamma, , where it

is held that a reading of Section 16 (i) and (iii) would suggest that Clause (iii) would apply exclusively to executable decrees or orders which,

though they have become final before the commencement, of the Act, are still in the stage of unfinished execution and at the stage at which

satisfaction Was not fully received. Here the decree has not been executed and it has not been suggested that there has been any satisfaction of the

decree apart otherwise from its being executed. It was competent for the plaintiffs to have applied under the Amending Act and they are entitled to

have the debt scaled down.

Another argument adduced on behalf of the appellant is that the debt being an usufructuary mortgage debt and the first defendant having

acquired it in court auction, the sale, certificate having been issued to him on 12-8-1938, the transaction is exempted from the operation of Section

9-A by virtue of Sub-section (10)(ii)(b) which says that nothing contained in Section 9-A except Sub-section (i) of Section 9-A shall apply to any

usufructuary mortgage where during the period after 30-9-1937 and before 30-1-1948, the usufructuary mortgagee or any of his successor in

interest has transferred, either wholly or in part, the mortgagee''s rights in the property bona fide and for valuable consideration, then to the whole

or such part, as the case may be. What is urged by Mr. Srinivasa Ayyar is that though it is a purchase at a court auction it is a transfer by the

usufructuary mortgagee''s successors in interest and that the purchaser at the court auction had acquired it bona fide and for valuable consideration.

The learned District Judge did not accept this contention and held that a court auction purchaser is taken out of the scope of Clause (b) of Section

9-A, Sub-section (10)(ii). A plain reading of the language of the section supports the view taken by the lower court as what is contemplated is a

transfer by the usufructuary mortgagee or any of his successors in interest, bona fide and for valuable consideration. Ordinarily questions of good

faith and valuable consideration do not arise in court auction sales. It is only a transfer ''inter vivos'' that must have been intended under Clause (b)

though the words ''inter vivos'' which have been used in Clause (a) have been omitted in Clause (b). It is argued that by reason of this omission the

transfers that are contemplated under Clause (b) should not be restricted to transfers ''inter vivos'' but must include purchases in court auction.

There is no definition of ""transfer"" in the Madras Agriculturists Relief Act, but transfer of property as denned in Section 5, Transfer of Property Act

means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself and one or more

other living persons; and ""to transfer property"" is to perform such act.

Provisions analogous to Clause (b) in other enactments where transferees for consideration and in good faith and bona fide are protected from the

operation of certain provisions of these enactments may be looked at to ascertain the intention of the framers of Clause (b), whether it was

intended to restrict it only to transfer by act of parties or to include court auction purchasers. Section 100, Transfer Property Act which defines

charges makes an exception that a charge shall not be enforced against any property in the hands of a person to whom such property has been

trans ferred for consideration and without notice of the charge. In construing that exception our High Court held in -- Arumilli Surayya Vs. Pinisetti

Venkataramanamma and Others, , that the saving clause does not apply to an auction purchaser who is not a transferee within the meaning of

Section 5. Even taking the ordinary meaning of the word ""transfer"" It implies that it is a result of act of parties. Unless it is a transfer by act of

parties, it cannot come within the exceptions covered by Section 9-A Sub-section (10) (ii) (b), Madras Agriculturists Relief Act and hence a court

auction purchase is outside the scope of the sub- clause.

The direction of the lower appellate court that the appellant should pay the costs of the appeal is attacked as not being consistent with the finding

arrived at. Though the appellant succeeded in the lower appellate court in getting the costs of the suit included, he opposed the application for

scaling down and the time of the court having been occupied mainly in hearing the appeal on the question of the Amended Act 23 of 1948, and the

respondent having succeeded I consider that the lower appellate court was right in having dismissed the appeal with costs.

In the result this appeal is dismissed with costs. No leave.