Selvaraju Kounder vs Vadivel Pillai (Deceased) and Others

Aruna Jagadeesan, J.—The the Defendant in the suit is the Appellant herein. During the pendency of this second appeal, the Plaintiff/1st

Respondent died and hence, his legal representatives are brought on record as the Respondents 2 to 5 herein.

The case of the Plaintiff, as set out in the plaint, is as follows:

a. The original mortgagor one Kulandaivel Pillai, son of Arumugam Pillai after having executed the usufructuary mortgage in favour of the

Defendant died later leaving behind him his wife and three daughters viz. Mangalakshmi and Malliga, Mala and Geetha respectively. The Plaintiff

purchased the suit properties from Mangalakshmi on 13.3.1997 for a valid consideration of Rs. 400/- with a direction to discharge the mortgage of

Rs. 600/- in favour of the Defendant and Plaintiff has agreed to discharge the same.

b. The Plaintiff obtained the release deed from the daughters of the mortgagor on 29.7.1997 and thereby all the heirs of the mortgagor had parted

away the rights in the mortgaged property and as such, the Plaintiff is entitled to redeem the property mortgaged. The Plaintiff after the sale deed in

his favour called upon the Defendant to agree for the redemption after the receipt of the amount, to which he did not give a proper reply. Then the

Plaintiff issued a notice on 19.3.1997 expressing his readiness to redeem the property mortgaged and the Defendant has evaded the receipt of the

notice.

c. The Plaintiff deposited a sum of Rs. 600/- in the court being the amount due and as such, he is entitled to claim mesne profits, as the possession

of the Defendant is that of a trespasser since the date of deposit. Hence, the suit has been filed for redemption of the mortgaged property with

profits and costs.

The case of the Defendant, as set out in the Written Statement, is as follows:

a. The usufructuary mortgagor Kulandaivel Pillai soon after the suit usufructuary mortgage orally sold his equity of redemption to the Defendant by

receiving Rs. 1000/- from the Plaintiff in the presence of Verattikuppam Rangasamy Kounder Krishnapillai and many others including the Plaintiff.

The Defendant immediately levelled up the suit property and put up a pucca brick built house in the suit property spending about Rs. 15,000/-

which is known to the Plaintiff as well as the mortgagor. The Defendant also obtained electric service connection to the house and he has been

paying the house tax for the same. The mortgagor never objected to the same, as he had parted with the equity of redemption and the same

merged with the Defendant''s mortgagee right and the Defendant having thus become the absolute owner of the suit property.

b. To the knowledge of the said mortgagor as well as the Plaintiff, the Defendant has been in possession. Had not the mortgagor sold his equity of

redemption, he would have filed the suit for redemption claiming the benefits under the Tamil Nadu Act 38 of 1972 and 40 of 1979. The fact that

the Kulandaivel Pillai did not choose to redeem the suit usufructuary mortgage will clearly establish the fact that he had no subsisting right to

redeem. After the death of Kulandaivel Pillai, the Plaintiff has created the alleged sale deed in his favour by misrepresenting to the heirs of the said

Kulandaivel Pillai. The alleged vendor and the releasees had no subsisting right to convey, since the said Kulandaivel himself had no subsisting right

in the suit property on the date of his death.

c. With the full knowledge and information of the aforesaid oral sale by Kulandaivel taking advantage of the fact that the sale is oral in nature, the

Plaintiff has come forward with this suit and hence, the suit is false, frivolous and vexatious and the same is liable to be dismissed.

On the pleadings of both the parties, necessary issues were framed by the Trial Court. Before the Trial Court, the Plaintiff had marked Exs. A1

to A5 and examined himself as PW.1 and one Kannan and Malliga as PW.2 and PW.3. The Defendant had marked Exs. B1 to B6 and examined

himself as DW.1.

The Trial Court, after considering both the oral and documentary evidence, decreed the suit and the appeal filed by the Defendant as against the

Judgement and Decree of the Trial Court was dismissed by the lower Appellate Court. Hence, this second appeal has been filed by the Defendant.

This Court, while admitting this second appeal, had formulated the following substantial questions of law:

a. Whether the courts below are correct in deciding that in a suit of redemption of usufructuary mortgage, the mortgage is not entitled for

compensation for the superstructure made in the property, with the consent and knowledge of the mortgagor?

b.

c. Whether the courts below are right in not appreciating the oral sale made between the parties?

d.

e. Whether the courts below are correct in not granting adequate compensation for the pucca construction made by the mortgagee with the

consent of the mortgagor?

The Appellant is the usufructuary mortgagee of the suit property. It is the case of the Appellant that he put up a pucca brick built house with the

consent and knowledge of the Plaintiff/1st Respondent and he never raised any objection for the said construction put up by the Appellant. The

learned Counsel for the Appellant would submit that the courts below failed to appreciate the oral sale made between the parties.

This Court heard the submissions of the learned Counsel on either side and also perused the materials on record and the judgements of the court

below.

Both the courts below have rejected the contention of oral sale pleaded by the Appellant and categorically held that the Appellant has failed to

prove the said oral sale. There is no legal infirmity or perversity in the said finding.

Admittedly, in Ex. A3 the mortgage deed, there is no condition or stipulation between the parties with regard to any improvement made by the

mortgagee. When there is no such stipulation, the case is governed by Section 63A of the Transfer of Property Act (herein after referred to as the

Act). So, in the absence of any agreement, the question whether the Respondent has to pay for the improvements depends upon whether the claim

of the Appellant comes within the terms of Sub-section (2) of Section 63A of the Act.

In so far as the improvement is concerned, the mode and extent of proof required in such cases have been dealt with in a decision of the

Division Bench of this Court in the case of Sundram Ayyar v. Valia Mannadiar 59 LW 614 and it held as follows:

Mr. Govondarajachari attacks the finding of the learned Subordinate Judge on the factum of the execution of the improvements and the finding as

to their value. It may be mentioned that the third Defendant produced certain account books in proof of the expenses which he incurred for the

improvements, but the learned Subordinate Judge was not prepared to believe them. We have only got the oral evidence on behalf of the third

Defendant in support of his claim. We think that in a case where a mortgagee seeks to make the mortgagor liable for the amount as cost of

improvements, it is the duty of the mortgagee to establish by indubitable evidence the fact of the execution of such improvements and the actual

expenses incurred by him for effecting them. The third Defendant has failed to do that in this case. So far as the claim for reclamation is concerned

it is not clear exactly what lands were reclaimed after the execution of the mortgage and at what cost. If it were necessary to find, we have no

hesitation in finding that the third Defendant has not established what improvements were effected by him and the expenses which he incurred for

effecting them. We therefore hold that the third Defendant is not entitled to any amount on this account.

In my view the observation of the Division Bench cited supra squarely applies to the present case and as a matter fact, the courts below have

clearly held that there is no evidence let in by the Appellant/Defendant clinching the point relating to the construction put up by him and the

expenses incurred and also not filed any accounts to show any such expenditure incurred by him for putting up construction.

Sub-section (2) lays down the circumstances under which the cost of the improvements can be recovered from the mortgagor. In the present

case, at the outset, the Appellant has not shown anything in support of his contention that he has made construction with the permission of the

Respondent which consequently enables him to recover the amount spent by him before the mortgaged property could be redeemed. Even

assuming that the Respondent had not objected to the Appellant constructing a house on the vacant site, it cannot be considered as an

improvement necessary for the preservation of the land. There is no indication in the evidence adduced that he had made the construction as it was

necessary to preserve the property from destruction or deterioration. It is also not his case that the Respondent was put on notice that such

construction is necessary to preserve the property.

The mortgagee in possession cannot be permitted to lay money in increasing the value of the land except in circumstances which strictly fall

within the corners of the Section 63A of the Act. There is no ground in law in this case for granting compensation to the Appellant and Section

63A, as its restricted language clearly shows, is not attracted in this case. The mortgagee cannot be allowed to increase the value of the land in

order to cripple the mortgagor''s power of redemption. Therefore, the Appellant neither in law nor on any other principle could claim the benefit of

the improvements made by him and the argument advanced by the learned Counsel for the Appellant cannot be countenanced.

I am of the view that the Appellant has not shown to the satisfaction of the courts below and this Court in the second appeal that the

improvements said to have been effected partake the character of those specifically visualized under Sub-section (2) of Section 63A of the Act.

Therefore, in my view the claim of the Appellant/defendant has been rightly rejected by the court below and the conclusion and the said findings

does not call for any interference in this second appeal. Accordingly, the substantial questions of law are answered against the Appellant.

In the result, this Second Appeal is dismissed. No costs. Consequently, the connected MP is closed.