Singaram Chettiar and Another vs Kaliyana Sundaram Pillay

Abdur Rahim, J.—In my opinion, the order of the Subordinate Judge accepting the security tendered by the respondent is right. He has

accepted the Rs. 10,000, deposited by the respondent in Court under a decree passed in a suit for redemption, as security for Rs. 3,000 for any

mesne profits that might be recovered from him by the appellants. The money which is in deposit in Court under the decree is the amount which

would be payable to the defendants, who are the mortgagees, as money due under the mortgage. The defendants respondents, who have appealed

against the decree for redemption, will not be entitled to this money if they succeed in their appeal, and the decree for redemption is set aside, in

which case the money will be available as security. On the other hand, if the defendants'' appeal fails and the decree for redemption is confirmed,

the defendants will be entitled only to the Rs. 10,000 and there would be no claim for mesne profits at all. The decree directs that the money

should be deposited in Court. It does not say to the credit of the defendants; and I am not, therefore, prepared to hold that the property in the

money has passed to the defendants, though they may undoubtedly apply for an order that the money may be paid to them. They have made no

such application but have appealed against the decree by virtue of which alone they would be entitled to apply that the money may be paid to

them. The money remains to the credit of the suit and I see no reason why such money cannot be given as security. Even if defendants draw the

amount, they will be liable to refund the amount in case they succeed in their appeal.

In these circumstances, it is difficult to see why the money should not be a valid security. I would, therefore, dismiss this appeal.

Sundara Iyer, J.

I regret I am unable to agree in the conclusion arrived at by my learned brother. The plaintiff obtained a decree for redemption against the

defendants. The mortgage-money payable by him according to the decree was Rs. 10,000. The, defendants have filed an appeal against that

decree. In the meanwhile, the plaintiff wants to execute his decree for redemption and to take possession of the mortgage property. At the

defendant''s request, this Court passed an order that the plaintiff should not execute the decree and take possession of the property unless he gives

security to the satisfaction of the lower Court for Rs. 3,000 for the mesne profits that would be payable by the plaintiff to the defendants in case the

decree of the lower Court should be reversed on appeal The plaintiff now wants the Court to accept as security for Rs. 3,000 the sum of Rs.

10,000 which he has deposited in Court on account of the mortgage-money due under the decree. The lower Court has held that he is entitled to

have that amount accepted as security. The question for decision is, whether the sum of Rs. 10,000 in Court can legally be accepted as security for

the sum of Rs. 3,000 that might become payable by the plaintiff as mesne profits. In my opinion, it cannot be. According to the decree, the plaintiff

is entitled to recover possession only on paying a sum of Rs. 10,000 into Court. In addition to that liability, the order of this Court has also made

the plaintiff''s right to take possession conditional on his further giving security for Rs. 3,000. Now, can he give the Rs. 10,000 which he has

deposited as security for Rs. 3,000?

The sum of Rs. 10,000 is, as I have already stated, mortgage-money-, payable to the defendants, and the plaintiff''s right to recover possession

is conditional upon this mortgage-money being paid to the defendants. Ordinarily, a decree for redemption would direct that the plaintiff should pay

the money to the defendants, the mortgagees, or into Court. Evidently, the object of this alternative provision is to guard against the plaintiff''s right

to recover possession being affected by the failure on the part of the defendants to receive the money from the plaintiff. The section provides that

payment into Court is equivalent to the payment to the defendants so far as the plaintiff''s right to recover possession is concerned. I cannot doubt

that, when a mortgagor who obtains a decree for redemption pays the mortgage-money into Court, he pays it for the benefit of the defendants;

whatever his intention may be, that is why he was directed to pay the money into Court. It is impossible for me to suppose that the plaintiff could

be entitled to recover possession and at the same time to contend that the money paid into Court is his. If the money did continue to be his, even

after the deposit in Court, it is difficult to see how the defendants could be entitled to draw it; and I am, therefore, obliged to come to the

conclusion, first that the sum of Rs. 10,000 is no longer the money of the plaintiff, and secondly, that he has no disposing power over it. The latter

position, namely, that it is not any longer in his disposition, would by itself be sufficient to prevent him from tendering it as security for Rs. 3,000.

The result of allowing this Rs. 10,000 to be given as security would be, in my view, to regard what has already been paid to the credit of the

defendants as money which the plaintiff could dispose of so as to tender it as security for another liability. The respondent, no doubt, could put his

case in another way. Treating the money as the defendants'', the respondent might say that he is prepared to create a charge over the defendants''

liability for Rs. 10,000 which will come into existence in case the decree for redemption is reversed. And it is a strong fact in his favour that the

liability to pay the mesne profits would also arise only on the same contingency, namely, the reversal of the decree for redemption. Bo far as the

substantial justice of the case is concerned, the respondent has an unshakeable position and I should be willing to dismiss this appeal if I could; but

I am unable to see any way to do so. Now, when a Court directs security to be given, it may either be personal security or security of property.

The security tendered in this case is not the personal undertaking of any third person. It is a charge on the debt of Rs. 10,000 which would become

due from the appellants to the respondent in case of the reversal of the decree. But could the respondent create a charge on such a debt? What is

the nature of debt? There is at percent no indebtedness on the part of the defendants to the plaintiff, for we must proceed on the assumption that

the decree of the lower Court regulates the present rights of the parties. Under that decree, the plaintiff is entitled to the property and the

defendants are entitled to the Rs. 10,000; and, in my opinion, the defendants are as much the present owners of the Rs. 10,000, if they drew it, as

they are of any other money belonging to them; and the result of a reversal would be only to create a debt as from the date of the reversal of the

decree. Can a person then tender as security an expectation of a debt coining into existence? In my opinion he cannot. He can only tender

something over which he has a disposing power. A mere possibility of a debt cannot be transferred according to the principle embodied in Section

6 of the Transfer of Property Act. No doubt, the liability for mesne profits would only arise cm the expectation being realised but that does not

alter the position of the parties. The circumstance would, no doubt, be a justification for not ordering the respondent to give any security at all for

mesne profits becoming due, the defendants would have Rs. 10,000, of the plaintiff''s money into their own hands, and they could deduct Rs.

3,000 from the amount which they would have to pay back. But the Court has directed that for the contingent liability of Rs. 3,000, security should

be furnished. The fact that the liability would arise only in a certain case cannot alter the rule as to what can be given as security. It must be some

property over which the plaintiff has present disposing power; and as the plaintiff has no disposing power over the Rs. 10,000, I must hold that

amount cannot be given as security. Mr. G.S. Ramachandra Iyer has drawn our attention to the definition of security, namely, something which

makes certain. But how can a charge over a property, over which the plaintiff has no disposing power and, therefore, no right to create a charge,

make anything a bit more certain than it is already? I must hold that it cannot. I would, therefore, allow this appeal without costs.