S.R.M. Ramanujam Pillai vs Ramaswami Pillai and Others

Yahya Ali, J.—The question involved in this petition is whether certain reliefs in the plaint should be valued for Court-fee purposes u/s 7(iv)

A as for cancellation of an instrument. The matter was considered by the lower Court on an objection raised by the Court-fee examiner and it was

found that the valuation had to be made under the aforementioned provision and an additional Court-fee should be paid ad valorem on the amount

of the mortgages and the value of the properties comprised in the sale deeds, in favour of defendants 5 and 6, mentioned in the plaint.

The suit is on a mortgage bond executed by the first defendant in plaintiff''s favour on the 17th January, 1931, for Rs. 2,000. The first defendant

at the time of the execution of the mortgage was the manager of a joint Hindu family consisting of himself and his brothers, defendants 2, 3 and 4.

They are the sons of one Muthu Karuppa Pillai, who died shortlybefore the execution of the suit mortgage. During the lifetime of Muthu Karuppa

Pillai he had executed on the 9th May, 1928, a mortgage in favour of the fifth defendant of item 4 in the plaint schedule. The fifth defendant is the

son-in-law of Muthu Karuppa Pillai. He had also executed in favour of the sixth defendant on the 16th August, 1928, a mortgage of items 1 to 5.

On the 29th March, 1938, item 4 was sold by defendants 1 and 2 after the, death of their father to the sixth defendant. The fifth defendant filed

O.S. No. 54 of 1938 on the basis of the mortgage in his favour dated the 9th May, 1928, concerning item 4 and impleaded the sixth defendant

therein. He impeached the validity of the mortgage and sale in favour of the sixth defendant and that suit was decreed in favour of the fifth

defendant holding that those transactions were of a nominal character.

In paragraphs 7 and 11 of the plaint in this suit these facts have been recited and it is averred that the respective transactions referred to above,

being nominal and never intended to be given effect to, were not binding on the plaintiff. It was also alleged that no consideration passed under the

said documents and the recitals of consideration contained therein are false and fraudulent. It was urged that the fifth and sixth defendants were not

entitled to any rights in respect of the respective items under these instruments. The decree obtained by the fifth defendant in O.S. No. 54 of 1938

was also attacked as not being valid or binding on the plaintiff. As an alternative remedy it was urged that if the hypothecation was deemed to be

valid and binding on the plaintiff, the plaintiff was willing and ready to redeem item 4 by paying a proportionate share of the sum due on the

hypothecation bond in favour of the fifth defendant. In paragraph 15 it was stated that as the decree should be binding on all the defendants therein,

they were all impleaded as parties to the suit. Lastly in paragraph 18, the relief that was asked for was a preliminary decree directing the

defendants to pay the amount due under the mortgage bond and "" in default to sell the properties free from the claims of defendants 5 and 6, or if

the Court finds that the claims of defendants 5 and 6 are in any way binding on the plaintiff to give appropri ate directions to redeem items 1 to 5 of

the undermentioned properties on payment of the proportionate amount due on them"" With reference to the alternative relief concerning the

redemption of items 1 to 5 on payment of the proportionate sum due to defendants 5 and 6, it appears that the order of the lower Court that it was

admitted by the plaintiff that in addition to the court-fee paid for the suit mortgage debt, he was liable to pay court-fee in respect of the relief for

redemption of the mortgage in favour of defendants 5 and 6. So the only question that remains is whether in view of the relief asked for--the sale of

the suit properties free from the claims of defendants 5 and 6 in the event of default in payment of the mortgage money the court-fee paid is correct

or whether, as contended by the court-fee examiner, the plaintiff is bound to pay court-fee u/s 7(iv) A on the basis of relief for the cancellation of

the respective documents.

It is contended by the learned Counsel for the petitioner that the principle has been well settled that where the plaintiff is not a party to an

instrument, he need not ask for its cancellation; and, where he contends that the same is not valid or binding on him he is entitled to ignore it or

merely state that it is not valid and binding on him. The respondent was not represented before me and since the question was of some importance,

notice was ordered to the learned Government Pleader who has appeared and argued in support of the position taken up by the court-fee

examiner.

The contention put forward by the learned Government Pleader are two-fold. He says that a Relief of, the nature asked for, namely, the sale of

the hypotheca, in default of payment by the judgment-debtor of the decree amount, free from all claims, was wholly unnecessary in the suit; and as

that relief was over and above the relief necessary in this case, additional court-fee should be paid in respect thereof. The second contention is that

the mortgagee-plaintiff f''s for all practical purposes a representative in interest of the mortgagor and all the transactions binding upon him or to

which he was a party are binding upon the mortgagee, and hence the mortgagee should be deemed to be a party to all these transactions; and in

that view he must avoid these various documents by getting them cancelled before he can get any relief free from these encumbrances.

With reference to the first contention of the learned Government Pleader, it is stated by the learned advocate for the petitioner that where the

relief is merely incidental or ancillary to the claim for the recovery of mortgage money, no additional court-fee need be paid, and much less where

the relief is, as conceded by the Government Pleader, wholly unnecessary. But apart from this answer, I am not impressed by the argument that

this relief is wholly unnecessary. The plaintiff has set out the various transactions and the circumstances in which, according to him, they were

brought about and he wanted to clear up certain clouds that may arise when at a later stage he seeks to execute the decree which he hopes to

obtain in the present suit. Such a relief cannot be said to be entirely otiose or irrelevant in the suit.

The more serious contention is the second one, namely, that the mortgagee is virtually a party to those transactions. I am not impressed by this

argument either. The essential relationship between a mortgagee and mortgagor in a simple mortgage is that of a creditor and debtor. While in

certain matters the mortgagee may be bound by certain equities binding on the mortgagor, it cannot be said in general that he is for all purposes a

successor or representative in interest of the mortgagor.

Turning to the main point in the case as to whether in the circumstances it was necessary for the plaintiff to ask for the cancellation of the various

mortgages and sales referred to in the plaint and whether, even in the absence of any such express relief asked for, the plaint should be construed

as one asking in substance for such relief, the matter is covered by a series of decisions of various Courts. As early as in Unni v. Kunchi Ammal

I.L.R.(1890)Mad. 26, it was held that if a person not having authority to execute a deed, or having such authority under certain circumstances

which did not exist, executes a deed, it is not necessary for persons who are not bound by it to sue to set it aside; they may treat it as non-existent

and sue for their right as if it did not exist. The same principle was distinctly laid down by the Privy Council in Bijoy Gopal Mukerji v. Krishna

Mahishi Debi (1907) 17 M.L.J. 154 : L.R. 34 IndAp 87 : ILR 34 Cal. 329 . That was an action brought by a reversionary heir to set aside certain

alienations made by a limited owner. The facts of that case no doubt were entirely different, but the jural basis of the principle contended for on

behalf of the petitioner has been laid down in that case. Their Lordships said :;

It is true that the appellants prayed by their plaint a declaration that the ijara was inoperative as against them, as leading up to their prayer for

delivery to them of khas possession. But it was not necessary for them to do so, and they might have merely claimed possession, leaving it to the

defendants to plead and (if they could) prove the circumstances, which they relied on, for shewing that the ijara or any derivative dealings with the

property were not in fact voidable, but were binding on the reversionary heirs.

These two cases were referred to by a Full Bench of this Court in C.R. Ramaswami Aiyangar, represented by his mother and next friend

Lakshmi Ammal Vs. C.S. Rangachariar and Others, , where, after adverting to the observations of the Judicial Committee referred to above, the

learned Chief Justice said:

In such cases even if the plaint contains a prayer for a declaration or cancellation, there is good reason for holding it to be one for a purely

incidental but unnecessary, relief. As I have indicated, (here is no such prayer in the plaint and in the light of the principles explained there is no

justification for implying them and then demanding a fee for it.

I may point out here that in the present plaint there is no prayer for a declaration or cancellation and on the basis of the observations of the

learned Chief Justice, it has to be said that there is no justification for implying those prayers in the plaint and then demanding a fee for them.

Two more decisions of this Court may be referred to in this connection. In S.A. Ramanathan Chettiar Vs. P.P. Palaniappa Chettiar and

Others, , Wadsworth, J., had to consider the case of a creditor who brought a suit u/s 53 of the Transfer of Property Act for a declaration that an

alienation made by a debtor was void against the creditors. It was held that-that was not a suit for the cancellation of a document securing money

or property falling u/s 7(iv) A of the, Court-Fees Act but that it was a suit for a declaration where no consequential relief was prayed. In that

decision the learned Judge drew a clear distinction between a suit for the cancellation of an instrument and a suit for a declaration that an instrument

was not binding on the plaintiff and made the following observation:

When the plaintiff seeks to establish a title in himself and cannot establish that title without removing an insuperable obstruction such as a decree to

which he has been a party or a deed to which he has been a party, then quite clearly he must get that decree or deed cancelled or declared void in

to to and his suit is in substance a suit for the cancellation of the decree or deed even though it be framed as a suit for a declaration. But when he is

seeking to establish a title and finds himself threatened by a decree or a transaction between third parties, he is not in a position to get that degree

or that deed cancelled in toto. That is a thing which can only be done by parties to the decree or deed or their representatives. His proper remedy,

therefore, in order to clear the way with a view to establish his title, is to get a declaration, that the decree or deed is invalid so far as he himself is

concerned and he must therefore sue for such a declaration and not for the cancellation of the decree or deed.

The next is the decision of Horwill, J., in Adinarayana v. Rattamma (1944) 1 M.L.J. 497. That was a case of a gift which was attacked as a

sham and inoperative transaction and it was held that where such a deed had no legal effect, Section 7(iv) A of the Court-Fees Act which deals

with a suit for cancellation of a document securing money or other property cannot have any application. In the course of the judgment the learned

judge referred to some of the decisions referred to above including Unni v. Kuncki Ammal I.L.R.(1890) Mad. 26, the Privy Council decision in

Bijoy Gopal Mukerji v. Krishna Mahishi Debi (1907) 17 M.L.J. 154 : L.R. 34 IndAp 87 : I.I.P. 34 Cal. 329 , the decision of the Full Bench in

C.R. Ramaswami Aiyangar, represented by his mother and next friend Lakshmi Ammal Vs. C.S. Rangachariar and Others, and the decision of

Wadsworth, J., in C.R. Ramaswami Aiyangar, represented by his mother and next friend Lakshmi Ammal Vs. C.S. Rangachariar and Others, .

Referring to a certain part of the judgment of Wadsworth, J., it was pointed out by Horwill, J., that in all cases of decrees or voidable deeds it may

be proper to hold that those are sought to be avoided and the suit is in substance a suit for cancellation of the decree or deeds, even though it may

be framed as a suit for a declaration; but there is an exception to the general rule with regard to deeds which were intended to be inoperative and

were not intended to be anything more than scraps of paper and as such had no legal effect.

The trend of decisions is therefore clearly to the effect that unless the plaintiff is a party to a particular document and he cannot get the relief he

seeks without avoiding that document, it being an insuperable obstacle in his way, it is unnecessary for him to seek the cancellation of the

document; and any relief he may otherwise ask for on the basis that the document was not intended to be acted upon and was inoperative cannot

in substance and in effect be treated as a relief for cancellation within the meaning of Section 7(iv) A of the Court-Fees Act. Having regard to this

position the finding of the learned District Munsiff cannot be upheld. The petition is allowed.

The costs of this petition will abide the result of the suit.