Veerappa Chettiar vs Veeraswami Pandaram and another

Kailasam, J.—This is an appeal by the decree holder auction purchaser in O.S. No. 298 of 1957 against the order of the First Additional Subordinate Judge, Cuddalore, allowing M.P. No. 637 of 1961 filed by the judgment debtors for setting aside the sale held on 16th August 1961, under O. 21, R. 90, C.P.C. The father of the respondents-defendants executed an usufructuary mortgage in favour of one Lakshmana on 5th October, 1913, Lakshmana had three brothers. A grandson of Lakshmana filed a partition suit O.S. No. 12 of 1943. The usufructuary mortgage debt was allotted to the share of Veerappa, the son of Rangaswami, one of the brothers of Lakshmana. In 1953, 40 years after the execution of the mortgage the respondents, who are the sons of the original mortgagor, took the properties on oral lease from Veerappa. Veerappa filed O.S. No. 298 of 1957 for arrears of rent due on the oral lease. A decree was passed on 6th September, 1951. The properties were attached; brought to sale and purchased by the decree-holder on 16th August, 1961. Thereupon, the judgment debtors filed M.P. No. 637 of 1961 in O.S. No. 298 of 1957 out of which this second appeal arises for setting aside the sale, mainly on the ground that the properties could not be sold except by way of a separate suit under O. 34, R. 14, C.P.C. The executing Court held that O. 34, R. 14 had no application to this case and dismissed the (sic). On appeal, the lower appellate (sic) held that the decree holder could not (sic) brought the properties to sale without (sic) a suit to enforce the mortgage as (sic) in O. 34, R. 14, C.P.C. It also held (sic) judgment debtors had not waived (sic) to protection under O. 34, (sic) these two findings are questioned in (sic) appeal by the decree holder. O. 34, R. 14 (sic):

Where a mortgagee has obtained a decree for the payment of money in satisfaction of a claim arising under the mortgage, shall not be entitled to bring the mortgaged property to sale otherwise than by institution a suit for sale in enforcement of the mortgage, and he may institute such suit notwithstanding anything contained in O. 2, R. 2.

The prohibition against bringing the mortgaged property to sale otherwise than by instituting a suit for sale is against the enforcement of the decree for payment of money in satisfaction of a claim arising under the mortgage. The question for consideration is whether the suit that was filed, O.S. No. 298 of 1957, was a claim arising under the mortgage.

As already stated, the usufructuary mortgage was executed by the father of the respondents on 5th October, 1913, in favour of Lakshmana, one of the brothers. The oral lease, the arrears for which the present suit was filed, was in 1953, 40 years after the execution of the usufructuary mortgage. It may be noted that the mortgagee''s right was allotted to one of the brothers'' son in a partition suit, and the lease was given by him to the sons of the mortgagor. Taking into consideration the lapse of 40 years, it cannot be stated that, at the time when the usufructuary mortgage was executed, any lease was in the contemplation. The two cannot form part of the same transaction. Further, the lease of the year 1953 could not have been for securing interest due on the mortgage. Taking all the circumstances, I have no hesitation in holding that the mortgage of the year 1913, and the lease of the year 1953, do not form part of the same transaction, and the suit for arrears of rent on the lease in 1953 is not a claim arising under the mortgage.

Reference was made to Kuttiyal v. Sanjiva Rao AIR 1952 Mad. 877 which was affirmed by a Bench of this Court in Narasimhulu Chettiar Vs. K. Ramanatha Mudaliar, . In Kuttiyal v. Sanjiva Rao AIR 1952 Mad. 877, it was observed that in order to treat both the documents as one transaction it was not necessary either that both the mortgage and the lease back should have been embodied in one document or that they should have been executed on one and the same date. The learned Judge observed:

I do not think that proposition can admit of any controversy. One essential condition is that at the time of the execution of the mortgage the lease back should have been in contemplation.

In that case, the lease was executed on the day following the execution of the mortgage, and admittedly the lease was in contemplation on the date of the execution of the mortgage. In this case, the lease could not have been in contemplation, as it was executed 40 years after the mortgage.

In Narasimhulu Chettiar Vs. K. Ramanatha Mudaliar, the decision in Kuttiyal v. Sanjiva Rao AIR 1952 Mad. 877 was approved and it was observed that it was well established that a decree for rent arising out of a lease back in favour of the mortgagor by the mortgagee in possession as part of the mortgage transaction was a claim arising under the mortgage. In the case before the Bench also the facts were similar to those in Kuttiyal v. Sanjiva Rao AIR 1952 Mad. 877, the lease being contemporaneous with the mortgage. In Karankattil Haji Thambilava Ismal Rowthen''s son Chinnappayan alias Muhammad Rowthen (dead) and Others Vs. Karumannasseri Gramam Parasurama Pattar''s son Narayana Pattar, Wadsworth, J. observed that the fact that the mortgage was on one day and the lease was on the next day could have very little bearing on the question whether the lease and the mortgage formed part of the same transaction. He further observed that the mortgage and the lease documents formed part of the same bargain and that the lease was intended to implement the undertakings of the mortgage. The learned Judge found that instead of providing for a simple mortgage, with payment of interest in cash, the common device was employed of drafting the mortgage as a usufructuary mortgage and making the mortgagor a tenant paying rent, and that the transaction was in its essence a mortgage in which the interest was collected in the shape of rest. The facts of the case just cited clearly make out that the two transactions were the same and arrears due by way of rent wag a claim arising under the mortgage.

Learned Counsel for the respondents was Unable to cite any decision in which the documents were held to form part of the same transaction when the lease was executed 40 years after the mortgage. On the facts, there can be no doubt that the lease did not form part of the mortgage transaction and the suit for arrears of rent was not a claim arising out of the mortgage. The judgment debtors are, therefore, not entitled to avail themselves of the protection given under O. 34, R. 14, C.P. Code. In the view taken, it is unnecessary to consider the question whether the judgment debtor has waived the right under O. 34, R. 14 in that they did not take objection, when the property was attached and ordered to be sold and the upset price reduced. In the result, the second appeal is allowed with costs and the application M.P. No. 637 of 1961 dismissed. No leave.