IN THE HIGH COURT OF MADRAS
Abdur Rahman, J.
R. Arunagiri Mudaliar
Versus
T.R. Radhakrishna Aiyar and Ors.
Decided On : 08.10.1940
Mortgage - Recovery of Debt - Transfer of Property Act - Section 82
Fact of the Case:
The plaintiff filed a suit for the recovery of the amount due under a mortgage deed. The lower court decreed the suit but held the plaintiff liable to contribute to the defendants 6 to 8 under Section 82 of the Transfer of Property Act.
Finding of the Court:
The court held that the plaintiff, as a mortgagee who purchased a part of the mortgaged property, was liable to contribute under Section 82 of the Transfer of Property Act. The court also discussed the calculation of the proportionate liability of the mortgaged properties and the application of Section 70 of the Transfer of Property Act.
Issues: The main issue was whether the plaintiff, as a mortgagee, was liable to contribute under Section 82 of the Transfer of Property Act and the calculation of the proportionate liability of the mortgaged properties.
Ratio Decidendi: The court applied the principle of Section 82 of the Transfer of Property Act, which holds that properties mortgaged to secure one debt are liable to contribute rateably to the debt secured by the mortgage. The court also discussed the application of Section 70 of the Transfer of Property Act in determining the plaintiff's security and liability.
Final Decision: The appeal was dismissed, and the respondents were awarded costs of the appeal.
Abdur Rahman, J.
1. This appeal arises out of a suit for the recovery of Rs. 5,100 being the principal and interest due under a mortgage deed Ex. A dated the 12th February, 1916, executed by the first defendant (who died during the pendency of the suit) in favour of the plaintiff. Twenty two items of property were covered by the mortgage out of which items 1 to 3 belonged to the first defendant originally and items 4 to 22 belonged to another person--one Ramachandra Aiyar. Out of these nineteen items of property, seven items (that is, items 4 to 10) were mortgaged with a Venkateswara Aiyar. Ramachandra Aiyar sold all the items that he owned (that is, items 4 to 22) to the first defendant in 1912 subject to Venkateswara Aiyars mortgage and the first defendant mortgaged all the properties which he owned (that is, items 1 to 22) for Rs. 5,000 with the plaintiff under Ex. A, A second mortgage for Rs. 2,500 in respect of the items 4 to 22 was created by the first defendant in favour of the plaintiff in 1918. This was not discharged and the plaintiff instituted a suit (O.S. 11 of 1922) in the Court of the Subordinate Judge of Vellore for the recovery of the amount due to him under the latter mortgage. It was decreed and the equity of redemption of items 11 to 22 was sold in execution and purchased by the third defendant for Rs. 104 on the 31st August, 1925, subject to the first mortgage Ex. A. It has been found by the Court below and the finding has not been challenged before us, that the third defendant was merely a benamidar and that the property was really purchased in auction by the plaintiff himself. At about this time items 4 to 10 which were mortgaged with Venkateswara Aiyar were brought to sale in execution of the decree obtained by him on his mortgage and were purchased before 1925 by him. Since he was a prior mortgagee, these items of property passed out of the story. The first defendant filed an insolvency application later (I. P. No. 32 of 1926) and was adjudicated on the 6th September, 1927. The Official Receiver of Vellore sold items 1 to 3 of the property in 1932 without disclosing the plaintiffs incumbrance. Out of these three items, two (that is, items 1 and 3) were purchased by the sixth defendant and the remaining second item by the seventh defendant in the name of the eighth defendant. The present suit was instituted by the plaintiff for the recovery of the amount due under his mortgage dated the 12th February, 1916 (Ex. A). This was decreed but to a very small extent. The learned District Judge of North Arcot who passed this decree, held that inasmuch as the plaintiff had purchased the items 11 to 22 of the property benami in the name of the third defendant, he was liable to contribute, under Section 82 of the Transfer of Property Act to the defendants 6 to 8. Since it was admitted by the parties before the trial Court that the value of the items 4 to 10 as compared to the items 11 to 22 be taken in the proportion of 2 : 11 and the value of these 19 items of property was at the time of the second mortgage in 1918 found to be Rs. 12,000 and that of the items 1 to 3 at the time of the first mortgage in 1916 to be Rs. 500 only, the claim was decreed for Rs. 203-15-2 for principal and for Rs. 44-5-0 in respect of interest against these defendants. The rest of the claim was dismissed. Not being satisfied with the decree the plaintiff has preferred the present appeal.
2. It appears that the sixth defendant made certain improvements on the property purchased by him and one of the grounds urged on behalf of the appellant before us is that the lower Court was wrong in ignoring the subsequent accession to the mortgaged property and depriving the plaintiff of the advantage which he would get under Section 70 of the Transfer of Property Act which entitled him to such accession for the purpose of his security. This is, however, a minor complaint, as it deals only with the value of security and not with the amount which
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