Notice of sale under S. 69 of the Transfer of Property Act may be given to the mortgagor or one of several mortgagors, and an assignee from a mortgagor is not entitled to notice.

Headnote:
TRANSFER OF PROPERTY ACT - S. 69 - NOTICE OF SALE - SERVICE ON ONE OF SEVERAL MORTGAGORS - SUFFICIENT - ASSIGN FROM MORTGAGOR NOT ENTITLED TO NOTICE - S. 51 - NOT APPLICABLE TO IMPROVEMENTS MADE BY PURCHASER WITH KNOWLEDGE OF MORTGAGE.
Fact of the Case:

The appellant purchased a portion of the mortgaged property from the mortgagors with a covenant to get the property released from the mortgage within a year. The mortgagee, after serving notice on one of the mortgagors, sold the property to the respondent bank. The appellant filed a suit for possession of the property, claiming that the sale was invalid for want of notice to him.
Finding of the Court:

The court held that the sale was valid. It held that under S. 69(2) of the Transfer of Property Act, notice of sale may be given to the mortgagor or one of several mortgagors, and that the appellant, as an assignee from a mortgagor, was not entitled to notice. The court also held that S. 51 of the Transfer of Property Act, which allows a transferee of immovable property to claim the value of improvements made by him, did not apply to the appellant, as he knew that he was purchasing a portion of the mortgaged property.
Issues: 1. Whether the sale of the mortgaged property was invalid for want of notice to the appellant? 2. Whether the appellant was entitled to the value of the improvements made by him on the property?
Ratio Decidendi: 1. Section 69(2) of the Transfer of Property Act provides that notice of sale may be given to the mortgagor or one of several mortgagors, and that the appellant, as an assignee from a mortgagor, was not entitled to notice. 2. Section 51 of the Transfer of Property Act, which allows a transferee of immovable property to claim the value of improvements made by him, did not apply to the appellant, as he knew that he was purchasing a portion of the mortgaged property.
Final Decision: The appeal was dismissed with costs.

Judgement

MITTER, J. : This is an appeal from a judgment and decree of the High Court of Judicature at Madras on a special leave granted by this Court.

2. The owners of the property situate in the City of Madras created a mortgage over it in 1944 in favour of one Jagmohan Prasad Bhatta with power to him to sell the mortgaged property without the intervention of the Court. On April 22, 1950 the appellant before us purchased a small portion of the property from the mortagagors the vendors covenanting to get the property mentioned in the schedule to the document released from the mortgages mentioned within a period of one year, in default whereof the vendee was to be at liberty to enforce his rights to compel the vendors to do so in appropriate proceedings and the vendors agreed to indemnify the purchaser for all such expenses and damages. The original mortgagee died on March 14, 1950 leaving a will and bequeathing the entire property in equal shares to several persons. The executor to the will of the deceased executed a deed of transfer in favour of the said legatees on May 14, 1951. The legatees executed a general power of attorney in favour of one Gangadhar Bhatta, the 8th defendant conferring on him all powers including the power to realise the amounts due under the mortgage, dated September 21, 1944 and to take other necessary steps. On May 28, 1952 a notice was issued in terms of the mortgage-deed under S. 69 of the Transfer of Property Act. There is no dispute that it was not served on the appellant. The sale was widely advertised and was adjourned from time to time till April 26, 1953 when the property was purchased by the 1st respondent, the Indian Bank Ltd., for a sum of Rs. 1,12,500. The sale-deed in favour of the bank was executed on July 4, 1953. The bank filed a suit on April 26, 1954 praying for vacant possession of portions of the property, decree for mesne profits against some of the defendants and other reliefs. Before the learned single Judge of the Madras High Court who heard the suit it was contended on behalf of the present appellant that the sale was invalid in the absence of notice thereof to him. The learned Judge turned down the contention that the sale was fraudulent as alleged by the appellant. He also rejected the contention put forward on behalf of the appellant that he was a bona fide purchaser within the meaning of S. 51 of the Transfer of Property Act and as such entitled to the improvements effected by him, namely, the cost of erecting the structures he had put up thereon. The appellant filed an appeal before the High Court of Madras alleging identical grounds in appeal. After losing in the High Court, the appellant applied for special leave to this Court which was granted raising six grounds his petition. By his statement of case filed in this Court, the appellant sought to contend that the provisions of S. 69 of the Transfer of Property Act allowing the exercise of the power of sale after notice to any one of the mortgagors offended Arts. 19 and 14 of the Constitution and as such were liable to be struck down. In Para. 2 of his written statement he had raised the plea that the power of sale in terms of S. 69 of the. Transfer of Property Act was ultra vires the Constitution of India as being discriminatory and opposed to the fundamental rights of citizens. Apparently the plea was abandoned at the hearing because no issue was raised thereon at the trial of the suit or in appeal to Division Bench. We indicated that we could not allow the appellant to urge this plea at this stage.

3. The point that the sale under the provisions of the mortgage-deed was invalid because of want of notice to the 16th defendant is not one of substance. Section 69, sub-s (1) gives a mortgagee or any person acting on his behalf the power to sell or concur in selling the mortgaged property or any part thereof in default of payment of the mortgage money, without the intervention of the Court in the cases specified in sub-cls

Click Here to Read the rest of this document