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Judgment
Sathiadev, J.—Defendant in O.S. No. 142 of 1977 on the file of Sub Court, Tirunelveli is the appellant. Plaintiff is the respondent. The suit
was filed for recovery of a sum of Rs. 13,600 based on usufructuary mortgage and for arrears of rent.
In the plaint, it is stated in para 3 that ""defendant had borrowed a sum of Rs. 10,000 and executed an usufructuary mortgage in favour of the
plaintiff."" Against column relating to rate of interest, it is stated ""mortgagee to be in possession in lieu of interest."" In para 4, it is stated that
defendant took the schedule lands on lease from the plaintiff agreeing to pay a monthly rent of Rs. 600 per half year. Thereafter, it is stated in the
plaint as follows: Taking advantage of the absence of the plaintiff from India, defendant did not pay any rent, and on return when plaintiff made the
demand, defendant sent a notice on 4.5.1977 stating that he had made certain payments to the plaintiff, and those payments should be adjusted
towards the principal amount due, but no such payment was made. Plaintiff sent a reply on 20.5.1977 denying the untrue claims of the defendant.
As defendant is bound to pay the entire principal amount and the rent from the date of mortgage, plaintiff restricts the claim to rent for three years
prior to the suit. The period of redemption had already expired. As defendant is not entitled to the benefits of Debt Relief Acts, he had sought for a
decree to be passed directing defendant to pay a sum of Rs. 13,600 with future interest, and failing payment within the time fixed by the Court, to
order sale of the schedule property through Court, and to pay the decree amount from out of the sale proceeds.
Defendant claimed that he had othied the property in favour of plaintiff by a registered deed dated 3.1.1969 for a consideration of Rs. 10,000.
An agreement termed as Kuthagai Vadast was entered into on 3.1.1969 itself on defendant agreeing to pay Rs. 600 per half year at the time of
harvest by way of rent. Defendant had been regularly paying interest at every harvest. On 30.3.1969, he had paid Rs. 300 towards interest for the
period of three months. In March, 1976, when he paid Rs. 600 towards interest after the harvest was over, plaintiff refused to make an
endorsement. After referring to the claim regarding payment of rents, he had claimed relief under Tamil Nadu Acts 4 of 1938, 38 of 1973 and 15
to 17 of 1976 as amended by Act 1 of 1977. He had further claimed that, as early as May, 1977, he had called upon the plaintiff to receive the
mortgage money of Rs. 3,974.92, which is the balance money payable, but plaintiff replied by making false claims. Hence, the suit is liable to be
dismissed. An additional-written statement had also been filed claiming relief under Ordinance 5 of 1978.
Trial Court decreed the suit, and on the appeal filed in A.S.No. 875 of 1979 before this Court, having been dismissed; this letters patent appeal
has been preferred by defendant.
R.S. Venkatachari, learned Counsel for defendant/ appellant (ranking of parties as in suit), would submit that the suit as filed for the sale of the
property is not maintainable, when the mortgage transaction is an usufructuary mortgage. He would submit that, only a money decree could be
passed; and when a decree for a sale of the mortgaged property having been passed illegally, the appeal had to be filed. He would, further submit
that the terms stipulated in Exhibit A.1, the usufructuary mortgage deed have not been properly interpreted, and hence, the concurrent finding
arrived at, is erroneous. According to him, it is the cardinal duty of a Court to find out the real intention of the parties behind a transaction and not
to misguide itself by looking into the irrelevant expressions which could have no relevance or applicability in understanding the true nature of the
document. If Exhibit A.1 is construed as an usufructuary mortgage, only a money decree could be passed, and necessarily, the benefits under the
Debt Relief Acts passed by Tamil Nadu Government are available, and therefore, the matter requires to be remanded for working out the rights of
parties in relation to the relevant Act.
S. Ramalingam, learned Counsel for the plaintiff, would state that, in the light of the Full Bench decision of this Court, the construction put upon
Exhibit A.1 by the learned Judge being in order, and when the mortgage transaction is anamolous in nature, the relief of sale of property as
ordered, is just and proper.
The Primordial aspect to be considered is, whether the mortgage executed by defendant was an usufructuary mortgage or an anamolous
mortgage? The relevant portion in Exhibit A-1 reads as follows:
In exhibit. A.1 at the top, it is captioned as Again at the end of the first paragraph, it is stated as follows:
As to what is the meaning of in Tamil Lexicon published under the authority of University of Madras in 1982, (Vol.1) at page 362, it is found as
follows:
Usufructuary mortgage
At page 3212 in Vol.V, the meaning of word (sic) is found as follows.
To redeem as mortgaged property,
Mr. R:S. Venkatachari, learned Counsel for the defendant, relying on the meaning of the word as found in Lexicon, submits that parties residing
in Tirunelveli area, use and understand the word only as usufructuary mortgage and haying so acted upon by the parties, any reliance placed upon
any decision, wherein the word had come for consideration leading to a different intention cannot be thrust on the parties, contrary to what has
been clearly understood by them. He relies upon the decision in Damodara v. Chandapur Pujary A.I.R 1933 Mad 673 in which it was held that an
understanding by the mortgagor to pay the money in an usufructuary mortgage would not make it a personal covenant if added to it there is an
indication about the time and the mode of redemption and in such a case, the sale of mortgaged property cannot be ordered undoubtedly, it is the
intention of the parties which will have to prevail, and it would be the cardinal duty of a Court to find out their intention by reference to the words in
document. In more than one place in the document, when the word had been used, it is just and proper to hold that the parties have understood
the document as an usufructuary mortgage. To give strength to this conclusion, and to find out as to how the plaintiff had understood it, para 3 of
the plaint becomes relevant. He had stated in the said paragraph as follows:
The defendant borrowed a sum of Rs. 10,000 and executed usufructuary mortgage in favour of the plaintiff....
It is also stated thereafter that the mortgagee has to be in possession in lieu of interest. Hence, in the light of Section 58(d) of Transfer of Property
Act, there being a condition imposed in Exhibit A.1 that until the year 1147, plaintiff would have the right to enter upon the lands and cultivate the
same, there could be no two opinions regarding the nature of the mortgage.
Yet, Mr. Section Ramalingam, learned Counsel for the plaintiff, would state that, even-though the word is used, in the later portion of Exhibit
A.1, when defendant had agreed to pay the mortgage amount of Rs. 10,000 whenever demanded by the plaintiff after the period of the mortgage
and concluded by stating that it had resulted in, a personal covenant, and therefore, it is an anamolous mortgage. In support of this plea, he relies
upon Muhammadhu Mamoona Labbai and Others Vs. C. Ramanatha Pillai and Others, where in the learned Judge in construing the words held
that these words denote a personal covenant to pay the amount and enables the mortgagee to bring a suit f or sale. After referring to the decision in
Kangayya Gurukkal v. Kalimuthu Annavi ILR 27 Mad. 526, the decision in P.R.M.P.L.R.M. Palaniappa Chettiar Vs. K. Periaswami Konar and
Another, was distinguished by pointing out that the language used in the document has to be properly construed, and if there is an option to pay in
any year after the expiry of the period and if there is an opportunity to redeem the mortgaged property after the stipulated period, then it cannot be
construed as a personal covenant. Therefore, the existence of the word by itself could never be construed as resulting in a personal covenant unless
the. necessary incidence to bring about a personal covenant apart from the obligations under the Transfer of Property Act are undertaken to be
performed by the mortgagor.
Having laid considerable stress on the word. He proceeds to rely upon Subbaraya Sarma v. Subramanyam (1952)2 M.L.J. 65, because
according to him, this expression is determinative of the real character of the transaction, whatever be the earlier expressions which have been used
regarding the creation of the mortgage. What he contends is that, if the words had not been used, then there would have been no personal
covenant, and in which event, no doubt it would be an usufructuary mortgage, as claimed in the plaint. Once an usufructuary mortgagor
incorporates as part of the mortgage deed personal covenant to pay mortgage amount on demand made by the mortgagee, then it becomes an
anamolous mortgage, and therefore, the relief for sale of property could be asked for, when the mortgagor fails to abide by the terms of the
mortgage deed. The learned Judge in the said decision has taken the view that, ""Where, however, the mortgage is a composite one with a clause
as soon as the amount is available, I shall pay the amount of principal and interest accrued due under the mortgage deed, get the mortgage
cancelled and take back the document"". There is a clear personal covenant to pay and therefore a suit for sale would lie u/s 67 of the Transfer of
Property Act"". This decision could have no relevance to the term contained in Exhibit A.1, because the meaning which could be attributed to the
word could be no different from the words found in the Tamil Lexicon, as extracted above. The defendant had simply stated that after the
mortgage period is over, whenever the mortgagee makes a demand, he would return the amount due and redeem the mortgage. The word cannot
but be understood, as meaning redemption of the mortgage. After all a mortgagor would say that that after the period of mortgage is over, he
would redeem his property by returning the mortgage money. In law what he has to do when the period of mortgage expires, by being expressed
in the document, it cannot be understood as resulting in any personal covenant, apart from the obligation put on him under the Transfer of Property
Act. It would be highly improper to understand the word as a personal covenant. In this context it is only referable to redemption of a mortgage.
Redeeming a mortgage is not always a personal covenant, but an obligation cast on the mortgagor under the Transfer of Property Act.
Still, Section Ramalingam learned Counsel for the plaintiff, would trace back to the earlier authorities beginning from Sivakami Ammal v.
Gopala Savundram Ayyan 4 M.L.J. 50 . In the said decision, in construing the term ""Mortgage"" as found therein, in and by which the mortgagor
has stated that, if he fails to pay the amount by Chitrai Kalavathi year 1883, he would pay the amount and give possession and take back the
document; it was held by the Full Bench that ""we are clearly of, opinion that the mortgage contains a covenant to pay and therefore the suit for sale
lies.
A Division Bench of this Court in Vdayanapillai v. Senthivelu Pillai ILR 19 Mad. 411 held that when an usufructuary mortgage contains a
personal undertaking to pay the amount secured thereby, then Article 147, Limitation Act XV of 1877 would apply. But it took note of the fact
that after the expiry of the stipulated period under the mortgage, if the mortgagor states that he would redeem the mortgage, it could not be a
personal covenant. It was held by a Division Bench of the Court in P.R.M.P.L.R.M. Palaniappa Chettiar Vs. K. Periaswami Konar and Another,
that, under such circumstances, there was no enforceable covenant to pay, and that a suit for enforcing the mortgage by sale of the mortgaged
property, was unsustainable.
In construing the words in S.S. Ahobala Sastriar Vs. S.P. Kalimuthu Pillai, , the learned Judge while relying upon the aforesaid decisions, took
the view that it would undoubtedly mean a personal covenant to pay. But in these decisions, in laying emphasis on the words the real meaning had
not been properly considered. There is no personal undertaking given by the mortgagor herein, which is anything different from what he is obliged
to do under the mortgage deed. He had not given any assurance more than what he is in law bound to do in respect of an usufructuary mortgage,
as defined in Section 58(d) of Transfer of Property Act.
Therefore, the word used in the document brings out the clear intention of the parties relating to the nature of the transaction, and the
concluding portion of the sentence extracted above pertains to what the mortgagor is bound to do after the expiry of the mortgage period; it being
his duty to redeem the property by paying back the mortgage amount whenever demanded by the mortgagee after the expiry of the period fixed
under the mortgage. There is absolutely no undertaking in the nature of a personal covenant, which could be spelt out in the terms and conditions
as found in Exhibit A.1 plaintiff also understood it only in that manner in para 4 of plaint. Therefore, the strenuous contention put forth by the
learned Counsel for the plaintiff that it is an anamolous mortgage, has to be necessarily rejected.
Once it is found that the real nature of Exhibit A.1 is an usufructuary mortgage, then no relief for sale of property could be granted. This aspect
having lost sight of both by the trial court as well as by the learned Judge; it results in the concurrent finding rendered being set aside.
Once it is held that only a money decree could be passed, necessarily, the defendant could seek for relief under the relevant Debt Relief Act.
He has chosen to mention each and every Debt Relief Act passed by the State of Tamil Nadu. In the light of the finding arrived at that only a
money decree could be passed, it is now for the trial court to consider as to which of the Debt Relief Acts could be applicable to the facts and
circumstances of the case, and to what extent, he would be entitled to claim relief.
Hence, the appeal is allowed with costs. The preliminary decree passed by the trial Court and as confirmed by the learned Judge are hereby
set aside and the matter is remanded to the trial court only for the purpose of finding out as to what extent the defendant would be entitled to the
benefits of any one of the Debt Relief Acts passed by the State of Tamil Nadu. It is made clear that Exhibit A.1 is an usufructuary mortgage, and
that only a money decree could be passed. It is stated that asum of Rs. 10,000 had been deposited by the defendant. Depending upon the finding
rendered regarding scaling down of decree debt, the balance amount could be drawn out by the defendant. Since the appeal is allowed and the
matter is remanded to the trial Court, the Court-fee paid on the appeal memorandum is directed to be refunded to the defendant.