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1933 Supreme(Mad) 144

IN THE HIGH COURT OF MADRAS
Madhavan Nair, J.
Daso Polai
Versus
Narayana Patro and Ors.
Decided On : 29.03.1933

The sale deed had extinguished the mortgage, and the plaintiff cannot enforce it.

Headnote:

Mortgage - Disputed Sale Deed - Order 21, Rule 62, Civil Procedure Code - Order 21, Rule 66, Civil Procedure Code - Sale Proclamation - Equity of Redemption - Estoppel - Extinguishment of Mortgage - Transfer of Property Act, Section 101

Fact of the Case:

The plaintiff appealed for the recovery of Rs. 21,000 due on a registered mortgage bond. The property was sold in an execution proceeding, and the plaintiff claimed that the sale deed had discharged the mortgage. The defendants argued that the mortgage had been extinguished by the sale deed and the plaintiff cannot enforce it.

Finding of the Court:

The Court found that the property was sold subject to the mortgage, but the executing Court did not decide whether the mortgage subsisted. The plaintiff's claim based on the sale deed was dismissed, and he did not bring a suit within a year to set aside the order, thus losing his right under the sale deed. The Court held that the mortgage had been extinguished by the sale deed and the plaintiff cannot enforce it.

Issues: The issues revolved around the validity of the mortgage after the disputed sale deed, the effect of the claim petition dismissal, and the plaintiff's right to enforce the mortgage.

Ratio Decidendi: The Court held that the executing Court did not decide whether the mortgage subsisted, and the plaintiff's claim based on the sale deed was dismissed, leading to the loss of his right under the sale deed. The sale deed had extinguished the mortgage, and the plaintiff cannot enforce it.

Final Decision: The appeal was dismissed with costs.

JUDGMENT

Madhavan Nair, J.

1. The plaintiff is the appellant. The appeal arises out of a suit instituted by the plaintiff for Rs. 21,000 due on a registered mortgage bond, dated 1st August, 1913. The sum secured by the mortgage was Rs. 5,000 and the debt was repayable in 7 years. The mortgagors are defendants 1 to 4.

2. The circumstances relating to the suit are these. In O.S. No. 59 of 1919 on the file of the Court of the Subordinate Judge of Berhampore one Bennu Nahko, the late father of defendants 5 and 6 and the grandfather of defendants 7 and 8, obtained a money decree against the plaintiffs mortgagors, defendants 1 to 4, on 18th October, 1919. In E.P. No. 150 of 1919 the decree-holder asked for attachment and sale of the suit property. In Ex. A, the schedule attached to this Execution Petition, the decree-holder gave a list of five encumbrances said to be existing on the property. There is a note at the end of Ex. A which runs as follows:

These properties ought to be sold after issue of sale proclamation subject to the mortgage deed, dated 1st August, 1913 and executed in favour of Daso Pollayi (the present plaintiff) for Rs. 3,000 - this is admittedly a mistake for Rs. 5,000. Except as regards item No. 2 specified in the certificate of the Registrar, that is the mortgage deed for Rs. 3,000, the remaining items Nos. 3, 4, 5 and 6 were executed fraudulently and without any consideration whatever.

3. A similar note appears at the end of the bidders list also - see Ex. A-1. The sale of the property was fixed for 12th July, 1920, on which date the plaintiff put in a claim petition, E.A. No. 81 of 1920 (Ex. II), in which he stated that the suit mortgage bond of 1913 had been fully discharged by means of a registered sale deed, Ex. I, dated 10th September, 1919, for Rs. 8,000 under which he became the absolute owner of the property and that he has been in possession and enjoyment of the same ever since the sale - see paragraph 3 of Ex. II. This claim petition was dismissed on 12th July, 1920, because it was filed too late. On the same day, the property was purchased by Bennu Nahko, the decree-holder in O.S. No. 59 of 1919. Ex. III is the sale certificate issued to him. The plaintiff did not institute a suit to establish his right to the property within a year from the date of the order, and so the order made against him became conclusive under Order 21, Rule 63, Civil Procedure Code. In 1923 Bennu Nahko, the decree-holder-purchaser of the suit property, filed O.S. No. 131 of 1923 in the Berhampore District Munsifs Court for recovery of mesne profits of the lands purchased by him in Court auction. In this suit the plaintiff was the 10th defendant and he resisted it on the ground that some of the lands purchased by Bennu Nahko were his property by virtue of the sale deed Ex. I. The learned District Munsif held that inasmuch as the plaintiffs claim based on the sale was dismissed and he did not bring a suit within a year to set aside the order, he lost his right wider the sale deed and was debarred from claiming the property any longer - Ex. IV. This finding was upheld on appeal by the learned Subordinate Judge - Ex. V. Having lost his rights under the sale deed by his own default, the plaintiff instituted the present suit on 14th, October, 1926, to recover the money due under the mortgage bond, dated 1st August, 1913.

4. The plaintiffs argument is twofold. He argues first that the dismissal of his claim petition does not affect the suit mortgage and that, since the property was purchased by the decreeholder himself subject to the mortgage, what he purchased was only the equity of redemption and that therefore the contesting defendants are estopped from questioning the plaintiffs right as mortgagee under the suit mortgage. Next, he argues that, since as a result of the claim petition his sale deed became ineffectual and inoperative, the Court should hold that the original mortgage to which the property was subject revived as a matter o




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