Veeraraghava Aiyar and Others vs K. Lakshmana Aiyar and Others

Miller, J.—While certain Immovable property was under attachment after a money decree and before it was sold by the Court, the plaintiff

obtained a mortgage of the property and undertook, as part of the consideration thereof to discharge the amount of the decree. He failed to do so

and the property was sold. The judgment-debtor then had recourse to the appellants and giving him a mortgage on the same properly obtained

from him the payment required by Section 310A of the former CPC and got the sale set aside. The appellants now claim that their mortgage

should be given priority to that of the plaintiff. Mr. Ramachandra Iyer put his claim on four grounds. He claimed that u/s 69 of the Indian Contract

Act, his client was entitled to a prior charge, that he was also entitled u/s 70 of that Act and, failing either of those two sections, claimed priority on

the principle of Section 101 of the Transfer of Property Act and lastly be claimed a salvage lien on the ground that he had saved the property for

the plaintiff by his payment. Now as regards Section 69 of the Indian Contract Act, the answer to his claim seems to me to be that he was not

interested in the payment of the money. His only interest is that created by his mortgage. As I understand Section 69, the interest must be an

existing interest, an interest which the payment is intended to protect; and not an interest which may be said to be created by the payment or as

part of the transaction in which the payment was made or which is merely security for the payment. The appellants had no such existing interest

when they undertook to lend some money to the judgment-debtor and took the mortgage as security therefor. There is no interest which this

payment protected. They were in no way interested in the satisfaction of the decree. Consequently, the payment does not come within Section 69,

and I do not think it is within Section 70 for the reason that the payers did not make the payment in any way for the plaintiff. It is suggested (but I

do not propose to investigate the suggestion) that the plaintiff has been benefited by the payment, but, as I understand the decision in Yogambal

Boyee Ammani Ammal v. Naina Pillai Marakayer 36 M.L.T. 162 Section 70 will not apply to cases where the person, who makes the payment,

makes it for himself and not for the other person against whom his claim for reimbursement is made. Here there is nothing to suggest that this

mortgage money was advanced by the appellants in the interest of the plaintiff and, consequently, he is not entitled to claim on that account priority

over the plaintiff though indirectly he may have benefited the plaintiff. Then as to the third ground, there is no earlier security which the appellants

would be entitled to retain as a shield. They are seeking rather to create a security where none was before. The further claim is as salvagor and the

answer to that is again that the appellants have no interest in the property which they say they have saved. So far as I know, where charges of this

kind have been allowed, the cases are those in which the person who has paid money had an interest to preserve and here, as I have said in

discussing the question of Section 69 of the Contract Act, I think that the appellants had no interest which could support their claim to save the

property at the plaintiff''s expense on grounds such as those on which the decision of the Full Bench in Raja of Vizianagaram v. Raja Setrucherla

Somasekharaz 26 M.k 686 was based. It seems to me that all these four grounds fail and that the appellant must be content to take, what he

certainly in terms took, the mortgage as security for his payment, subsequent to that of the plaintiff. I would, therefore, dismiss the appeal with

costs.

Abdur Rahim, J.

I agree.