S. Kannan and another vs G. Saraswathi Ammal and two others

E. Padmanabhan, J.—The defendants 1 and 2 in O.S.No.98 of 1983 on the file of the Sub-Court, Madurai, who have succeeded before

the trial court and lost before the first appellate court are the appellants in this second appeal. This second appeal is directed against the judgment

and decree dated 30.12.1996 made in A.S.No.54 of 1986 on the file of the District Court, Madurai.

At the time of admission the following substantial questions of law were framed by this Court:-

(a) Whether the order of attachment before judgment made in the money suit without notice to the third defendant-judgment debtor is valid and of

legal effect?

(b) Whether the purchase of the suit site by the decree holder in the name of his son the 4th defendant without the sanction of the Court was legal

and the Court auction sale is valid in law?

(c) Whether the first defendant would be subrogated to the rights of the mortgagee or his payment to mortgage decree-holder would be of a

volunteer?

Heard Mr. T.M. Hariharan, the learned counsel appearing for the appellants and Mr. R. Kannan, learned counsel for the respondents. For

convenience, the parties to this appeal will be referred as arrayed before the trial court.

The plaintiffs instituted the suit O.S.No.98 of 1983 on the file of the Sub-Court, Madurai for declaration of her title and for permanent injunction

or in the alternative for recovery of possession. The trial court after elaborate consideration dismissed the suit and upheld the defendants title, as

the defendants who are the auction purchasers have discharged the earlier subsisting mortgage debt. On appeal by the plaintiff the first appellate

court set aside the judgment and decree of the learned trial Judge, allowed the appeal and decreed the suit declaring the plaintiffs title. Being

aggrieved, the defendants 1 and 2 have preferred the present second appeal.

With respect to the factual matrix, there is not much of controversy and the chronology of events alone need be referred to. V.S. Ramalingam,

the third defendant in the suit under Ex.B.4 purchased the suit property on 17.8.1973 from one Deivanai Achi, who had in turn purchased the very

same property under Ex.B.3 dated 22.7.1964 from one Somasundaram Pillai. The title of the third defendant is admitted by either side.

The third defendant had borrowed a sum of Rs.2,000 from one Appasamy Pillai on 15.5.1975. The third defendant had borrowed a sum of

Rs.6,000 from one Thulasiram Visalakshi on 28.6.1975 to secure repayment of the principal amount of Rs.6,000 and interest and the third

defendant deposited the title deeds with the said Thulasiram Visalakshi on 30.6.1975. Thus the third defendant had deposited Exs.B.3 and B.4 the

documents of title with the said Thulasiram Visalakshi and created an equitable mortgage. The above facts are not in dispute.

Appasamy Pillai who had advanced a sum of Rs.2,000 on 15.5.1975 instituted the suit O.S.No.40 of 1978 against the third defendant for

recovery of the money due to him. Thulasiram Visalakshi, the mortgagee also instituted a suit O.S.No.222 of 1978 on the file of the Sub-Court,

Madurai at or about the same time for recovery of the amount due on the equitable mortgage. The suit O.S.No.222 of 1978 has been instituted on

30th of March 1978 while the suit O.S.No.400 of 1978 on the file of the District Munsif court, Madurai by Appasamy Pillai had been instituted on

20th March, 1978.

The said Appasamy Pillai applied for attachment of the suit property before judgment and by order dated 19.4.1978 made in J.A.No.355 of

1978, the District Munsif Court, Madurai Town ordered interim attachment before judgment at the instance of the said Appasamy Pillai. In

O.S.No.222 of 1978 on the file of the Sub-Court, instituted by the equitable mortgagee a preliminary decree was passed on 10.8.1978 as seen

from Ex.A.19. Thereafter on 31.1.1979 as seen from Ex.A.3, the interim attachment made in I.A. No.355 of 1978 in O.S.No.400 of 1978 on the

file of the District Munsif Court, Madurai Town was made absolute .

The said suit in O.S.No.400 of 1978 on the file of the District Munsif Court, Madurai Town was decreed on 2.2.1979 as seen from Ex.A.4.

The equitable mortgaged in whose favour a preliminary decree has been passed applied for passing of final decree. As seen from Ex.B.5 dated

30.7.1979 a final decree has been passed in favour of the said Thulasiram Visalakshi in I.A.No.118 of 1979 in O.S.No.222 of 1978 on the file of

the Sub-Court, Madurai.

Admittedly, the third defendant had not discharged the mortgaged debt and a final decree has been passed and even thereafter also the third

defendant has failed to discharge the mortgage decree. Without proper disclosure the third defendant constituted one Kumar as his power of

attorney under Ex.B.2 dated 2.8.1980 to sell the suit property The said power of attorney holder by a private sale Ex.B.l dated 7.9.1980 sold the

suit property to the first defendant Kannan for a consideration of Rs.12,500 while directing the said purchaser to discharge the mortgage decree

amount of Rs.10,095 as per the final decree passed in I.A. No.l18 of 1978 and the said sum had been reserved by the purchaser under Ex.B.1.

Under Ex.B.6 dated 8.9.1980 the purchaser namely the first defendant discharged the mortgage decree by remitting the sum of Rs.10,095 to the

decree holder Thulasiram Visalakshi and full satisfaction has been entered. Simultaneously, the money decree-holder who had attached the

property in I.S.No.355 of 1978 in O.S.No. 400 of 1978 on the file of the District Munsif Court, Madurai Town levied execution for sale of the

suit property.

In Ex.P.No.54 of 1980 in O.S.No.400 of 1978 on the file of the District Munsif Court, Madurai Town the 4th defendant, Swamiratinam had

purchased the very suit property on 27.10.1980 and a sale certificate was issued in favour of the 4th defendant on 5.1.1981 under Ex.A.2. Under

Ex.A.6, dated 12.4.1982 the 4th defendant had taken delivery of the suit property on 12.4.1982. The 4th defendant auction purchaser, in whose

favour sale certificate has been issued by the court after taking delivery had sold the suit property in favour of the plaintiff under Ex.A.1 dated

27.6.1982. Thereafter on 9.3.1983 the plaintiff who is the purchaser under Ex.A.1 from the 4th defendant had instituted the present suit for

declaration of title and for permanent injunction or alternatively for recovery of possession.

The trial court dismissed the suit in its entirety. The first appellate court allowed the appeal and decreed the suit declaring the plaintiffs title and

granting a decree for recovery of possession.

There is no dispute about the mortgage or the attachment or the preliminary decree or final decree and the court auction sale. It is not being

contended by either side that the proceedings are either collusive or not being bona fide or fraudulent transactions. Therefore it follows that the

equitable mortgage is true and after the creation of the equitable mortgage the third defendant had owned the equity of redemption alone on the

date when the suit property was attached i.e., on 19.4.1978, which attachment was eventually made absolute as seen from Ex.A.3 dated

31.7.1979.

The sale deed Ex.B.1 in favour of the first defendant on 7.9.1980 is the sale of equity of redemption alone as already pointed. Though the

equity of redemption alone has been attached and sold in a court auction in E.P.No.54 of 1980 in O.S.No.400 of 1978 on the file of the District

Munsif Court, Madurai Town and what was purchased by the 4th defendant is the equity of redemption. The sale in E.P.No.54 of 1980 is subject

to the earlier subsisting mortgage. It is not the case of the money decree-holder or the purchaser of the property that the subsisting mortgage had

been discharged by them. In other words the 4th defendant had purchased the equity of redemption alone validly, who had in turn sold it to the

plaintiff.

The first defendant had purchased the property under Ex.B.1 during the currency of the attachment of equity of redemption and had

discharged the earlier binding mortgage decree with reference to which a preliminary decree was passed on 10.8.1978 and a final decree has been

passed on 30.7.1979 as seen from Ex.A.19 and B.5. The first defendant in other words could not have purchased the equity of redemption which

has already been attached under Ex.B.1 as such the sale is void as it is not only pending litigation but also pending attachment. The first defendant

had without notice of the earlier proceedings had discharged the mortgage decree as seen from Ex.B.6 and had remitted a sum of Rs.10,095 to

Thulasiram Visalakshi, thus stepped into the shoes of the Thulasiram Visalakshi the mortgagee.

The third defendant had kept quiet and had not chosen to disclose the proceedings which went on simultaneously and the defendant as well as

the plaintiff as found by the two courts below were not aware of the proceedings. In fact the 4th defendant who is the auction purchaser under

Ex.A.2 sale certificate had taken delivery under Ex.A.6 and there was no obstructions to the said delivery. The plaintiff had thereafter purchased

the property from the 4th defendant as seen from Ex.A.1 on 27.6.1982 and the present suit has been filed on 9.3.1983 by the plaintiff for

declaration of title and for recovery of possession. The first defendant though claimed that he had taken delivery of the suit property, the

possession not being with the plaintiff, the present suit has been filed for declaration of title and for injunction alternatively for recovery of

possession.

It has to be pointed out that the private sale under Ex.B.l dated 7.9.1980 is void in terms of Section 64 of the Code of Civil Procedure. Even

otherwise what had been purchased under Ex.B.1 is the equity of redemption by the first defendant and the first defendant had stepped into the

shoes of the mortgage decree holder Thulasiram Visalakshi on and from 8.9.1980 on which date, he has discharged the mortgage decree as seen

from Ex.B.6.

As already pointed out the equity of redemption had been purchased validly and the purchase of equity of redemption under Ex.B.1 is void

and inoperative and will not confer any right on the first defendant as the equity of redemption has already been attached and sold in court auction.

The first defendant had not discharged the mortgage voluntarily and he could only claim subrogation and as a subrogee he could claim

reimbursement of the money paid by him to Thulasiram Visalakshi under Ex.P.6.

The first defendant would not have discharged the mortgage decree had he been aware of the attachment of the property. The first defendant

as found by the court below was not aware of the earlier proceedings. It cannot be said that the first defendant had made the payment under

Ex.B.6 and discharged the mortgage decree as a volunteer. It cannot also be said that the first defendant had purchased the suit property with the

knowledge. The plaintiff''s vendor had purchased the equity of redemption subject to the subsisting encumbrance namely the mortgage which has

resulted in a final decree Ex.B.5 dated 30.7.1979.

The learned counsel for the respondent heavily relied upon the decisions of this Court reported in Sengottian, P. V. B. Lakshmi, 1981 (94)

L.W. 353 and contended that there could be no subrogation nor the payment made under Ex.B.6 cold be claimed. This contention cannot be

appreciated as on the facts of the case it is evident that the parties to the two suit proceedings of sale were not aware of the parallel proceedings

which went on and the third defendant had chosen to conceal the simultaneous proceedings for obvious reasons.

The sale of equity of redemption under Ex.B.1 in favour of the first defendant is void as the said equity or redemption has already been

attached as seen from Ex.A.3 dated 31.1.1979 and the said attachment has been confirmed and the attached property namely the equity of

redemption in the property was brought in court auction in E.P.No.54 of 1980. That being so, in law it would be just that the plaintiff who had

purchased the equity of redemption is entitled to the property subject to his reimbursing the sum of Rs.10,095 to the first defendant with 9%

interest from 8.9.1980 the date on which he had remitted the said sum to the mortgagee-decree holder as seen from Ex.B.6.

Taking into consideration of the entire facts, the conduct of the parties, the parallel proceedings and the effect of attachment on the equity of

redemption, the sale of equity of redemption in E.P.No.54 of 1980 and the issuance of sale certificate under Ex.A.2 and the purchase by the 4th

defendant court auction purchaser and the subsequent sale by the 4th defendant to the plaintiff under Ex.A.1, this Court upholds the plaintiff''s title

to the suit property and further holds that the plaintiff will be entitled to recover the suit property subject to the plaintiff paying the sum of

Rs.10,095 with interest of 9% from 9.3.1983.

The learned counsel for the appellant namely the defendants 1 and 2 in fact pointed out that the defendants will be entitled to recover the

money which they have paid under Ex.B.l as their payment is not voluntary. Though the learned counsel for the appellant relied on various

decisions to show that the sale of equity of redemption already attached is void, the proposition of law is not being disputed, and hence there is no

necessity to refer to those decisions.

24 The first question of law framed has to be answered holding that the attachment before judgment and the money suit is valid and binding on the

judgment debtor, the third defendant and the sale of equity of redemption in violation of the said attachment is void. No argument has been

advanced on the second question of law.

As regards the third question of law, this Court has already held that the first defendant would be entitled to subrogation with the rights of the

mortgagee-decree holder and entitled to payment of the money paid by him to discharge the final decree.

In the foregoing circumstances, the second appeal is allowed in part. The judgment of the first appellate court is modified and the plaintiff''s title

to the suit property is declared and the plaintiff will be entitled to recover the suit property subject to his paying the sum of Rs.10,095 with 9%

interest from 9.3.1983 the date of the suit and this Court is not inclined to grant interest for the earlier period.

The plaintiff is granted three months time to deposit the said sum of Rs.10,095 with interest at 9% from 9.3.1983 onwards and recover

possession of the suit property from the first defendant thereafter. Both the parties shall bear their respective costs throughout.

The second appeal is allowed in part and the judgment and decree of the first appellate court is modified in part to the extent indicated above.