T.A. Sesha Iyer vs S.N. Srinivasa Ayyar and Others

The facts of this case are that plaintiffs, the second defendant and three other persons, brothers entered into a partition by means of Ex. A in

1913. The term of Ex. A with which we are concerned provided that "" the common family debts should be discharged by the respective sharers to

whom they fell, as per schedule of the document, and that, if any sharer failed to discharge accordingly, such sharer''s properties should be liable

for such debts and for the losses that might happen to the family."" One of the debts which was assigned to the second defendant in the schedule

was the debt due to one Venkatrama Iyer, and Venkatrama Iyer''s assignee has since obtained a decree against the second defendant and the

present plaintiffs in O.S. No. 542 of 1915 on the file of the court of the Principal District Munsif of Coimbatore. One term of the decree no doubt

was that it should be executed against the plaintiffs only in so far as the decree amount was not realised by proceeding against the first defendant in

that suit before the 9th September 1917. That period however had elapsed before the present suit was brought; and nothing is alleged to turn on

that provision. The decree may be taken to Be executable against the second defendant and the plaintiffs.

Subsequently in O.S. No. 142 of 1916 on the file of the court of the Subordinate Judge of Coimbatore, the first defendant obtained a decree on

an hypothecation given in respect of some of the pLalnt-mentioned properties by the second defendant after the said partition, and, in execution

thereof, he brought the pLalnt properties to sale. The plaintiffs contend that, when, as evidently will be necessary, they have discharged the amount

of the decree in O. S. No. 542 of 1915, which should have been discharged by the second defendant linder Ex. A, a charge in their favour will

attach to the properties, which the first defendant is bringing to sale for the amount, which they have paid on behalfof the second defendant; and

they have sued for a declaration that, under the terms of Ex. A, a mortgage right has been created in their favour to the extent of the decree amount

in O.S. No. 542 of 1915 and that that right is prior to the mortgage right of the first defendant, and also for a declaration that the properties shall

be sold subject to the mortgage right existing in favour of the plaintiffs.

The lower courts have given the plaintiffs the declaration asked for. The first ground on which we are asked to reverse their judgments is that the

plaintiffs had no cause of action to ask for a declaration at the time, when they brought their suit; and the second, which is similar to it, is that the

courts erred in the use of their discretion to give such declaration. The fact relied on is that the plaintiffs have not yet made any payment and, it is

said, may never have to do so and that, till they make some payment, the charge cannot attach. The answer to this seems to us to be that no

distinct and comprehensive rule as to the right to a declaration or the exercise of the Court''s discretion in granting a declaration can be Laid down

irrespectively of the circumstances of the particular case. Here the circumstances are that the liability of the plaintiffs was declared jointly with that

of the first defendant in the decree of O.S. No. 542 of 1915,that in vie''w of the failure to recover from the first defendant, the plaintiff''s liability is

not qualified and can at any moment be enforced against them. They may no doubt discharge it. But they will find it difficult to raise money to do so

by assigning their charge on the property, and if they want so to raise money they will be greatly assisted by the declaration of the court. It is further

material that in the course of the proceedings, by which the first defendant is bringing the property to sale, the plaintiff''s did apply to have a

reference to their charge included in the sale proclamation. We have not got the papers connected with that application, but it failed; and there is

nothing to show us that the failure was due to any fault of theirs or to anything except the attitude of the first defendant. We can only infer that his

attitude then as it is now, was to deny the plaintiff''s right and in these circumstances we think that a suit for declaration will lie and that the lower

courts used their discretion judicially and properly in granting it, subject of course to the conclusion, which we come to on the remaining objections

to thejr judgments.

The next point is that the plaintiffs have no charge at all now and will not have one, until they have actually made the payment on the second

defendant''s behalf. The authorities relied on by the first defendant viz., Putti Narayanamurthy Ayyar v. Marimuthu Pitlcti () ILR 26 Mad. 322 and

Abraham Servai v. Raphail Muthiriau () ILR 39 Mad. 288 have been rightly distinguished by the lower courts because they were cases in which

the suit was directly for contribution due on account of a payment, which the plaintiff had actually made. They have nothing to do with the case

here, which is for a mere declaration of the plaintiff''s right to a charge which will become operative and the amount of which will be ascertained,

only when they do make the payment.

Section 79 of the Transfer of Property, Act recognises as legitimate a mortgage made to secure the performance of an engagement in the future,

if it expresses the maximum to be secured thereby, and the section provides that a subsequent mortgage of the same property shall, if made with

notice of he prior mortgage, be postponed to the prior mortgage in respect of all advances not exceeding the maximum though made or allowed

with notice of the subsequent mortgage. This section seems to us to apply in tetms to the present case, because the language of the relevant portion

of Ex. A, as has already been said, must be construed in the light of the schedule of debts in Ex. A, which was available as a specification of the

maximum to be secured. Our attention has no doubt been called to the fact that the liability of each sharer''under Exhibit A is described as being for

such debts as he fails to discharge and also for ""the losses that may happen to the family."" Whatever may be the construction to be placed on the

last quoted words, in any case there is a sufficient specification, to meet the requirements of Section 79, of the maximum, even if only the debts be

taken into consideration. We however do not think that this reference to losses, meaning presumably interest and costs--and that is all the meaning

which we need for the, purposes of the present case--would impair the adequacy of the specification of the maximum. No question of notice of the

covenant in Exhibit A has been raised by the first defendant. We therefore see no reason for holding that this part of Exhibit A is not such a

mortgage or, charge as is contemplated by Section 79, and will not be, when it attaches, enforceable in accordance with its terms.

The next argument attempted is based on the wording of Ex. A, and is firstly that no charge at all is created, and secondly that, if any charge is

created, it is a charge enforceable only by the creditor. The suggestion on the first point is that this is simply a provision for discharge of the family

debts by the respective sharers, to whom they have fallen and that, if any sharer fails to discharge, such sharer''s property should be liable ; that the

words in fact simply emphasise the personal liability of the sharer and that no liability is attached directly to his property. We do not think that this is

the natural meaning of the provision, occurring as it does in a partition deed, the presumed intention being to secure that after the parties have

separated no one of them should make default in discharging his share of the enjoined obligations of the family. Clauses of this kind are not in our

experience uncommon and have been construed as for instance in Imbichi v. Thottaram-both Aunkoya Haji (1917) M.W. N. 533 in the manner

just stated.

The other contention, that the charge created by these words was intended to attach only in favour of the creditor is not supported by anything

and is not reconcilable with the intention of the document, as it has been expressed. In any case, even if such a charge were provided directly tor

the benefit of the creditor, the member of the family, who actually makes the payment to him, would presumably in accordance with the principle of

subrogation be entitled to the creditor''s remedy.

In order to prevent any possible ambiguity in the decree of the court of the first instance we think that it may be amended by the insertion after

the words "" to the extent of "" of the words "" any payment made by plaintiff towards "" and after the words ""this Court"" by the insertion of the words

enforceable when and after such payment has been made.

The appeal is allowed to this extent only and the first deft, will pay the plaintiff''s costs.