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MADRAS HIGH COURT
RAMASWAMI
V.Narasimhachariar
Versus
Egmore Benefit Society, 3rd Branch Ltd.
Appln. No.4814 of 1954 in C.S. No.322 of 1954
Decided On : 16 November, 1954
Transfer of Property Act, Section 69 - Constitutionality - Equal Protection and Right to Property - Madras Act 5 of 1954 - Applicability to Agriculturists - Mortgage Sale - Ad-interim Injunction.
Fact of the Case:
The plaintiff, a retired government official, mortgaged his properties to the defendant society to secure a loan. He defaulted on the loan, and the society issued statutory notices of sale under Section 69 of the Transfer of Property Act. The plaintiff obtained an ad-interim injunction to prevent the sale, claiming that Section 69 violated his right to equal protection under Article 14 and his right to property under Article 19(1)(f) of the Constitution. He also claimed that he was entitled to the benefits of Madras Act 5 of 1954, which provided relief to agriculturists from mortgage debts.
Finding of the Court:
The court held that Section 69 of the Transfer of Property Act did not violate the plaintiff's right to equal protection or his right to property. The court found that the provision applied equally to all mortgagors and did not discriminate against any particular class of persons. The court also held that the plaintiff was not entitled to the benefits of Madras Act 5 of 1954 because he was not an agriculturist.
Issues: 1. Whether Section 69 of the Transfer of Property Act violates the right to equal protection under Article 14 of the Constitution? 2. Whether Section 69 of the Transfer of Property Act violates the right to property under Article 19(1)(f) of the Constitution? 3. Whether the plaintiff is entitled to the benefits of Madras Act 5 of 1954?
Ratio Decidendi: 1. The court held that Section 69 of the Transfer of Property Act does not violate the right to equal protection because it applies equally to all mortgagors and does not discriminate against any particular class of persons. 2. The court held that Section 69 of the Transfer of Property Act does not violate the right to property because it is a reasonable restriction on the right to property that is necessary to protect the interests of mortgagees. 3. The court held that the plaintiff is not entitled to the benefits of Madras Act 5 of 1954 because he is not an agriculturist.
Final Decision: The court dismissed the plaintiff's application for an ad-interim injunction and allowed the defendant society to proceed with the sale of the mortgaged properties.
This is an application for ad-interim injunction filed in C.S. No.322 of 1954.
2. The facts are: The Plaintiff V. Narasimhachariar is a retired Assistant Secretary of the Government of Madras. The Defendant is a well-known credit institution of this City with many branches viz. the Egmore Benefit Society, 3rd Branch Limited. The Society is run on the principles of a Nidhi or Permanent Fund viz. takes deposits and lends out moneys on first mortgages, jwellery etc. In fact but for such credit institutions the industrial and commercial life of this city will not be able to progress.
The plaintiff executed a mortgage in respect of his houses No.33 Gengu Reddi Road and No.64 Eg-more High Road, in favour of the defendant Society for Rs.32,000/- payable with interest at 7½ per cent per annum. This amount was borrowed to pay off a prior mortgage of 1947 executed in favour of one Thaiyanayagi Ammal. This loan was a special loan under the bye-laws of this Society repayable within one year viz. on or before 6-12-1951. The mortgage deed expressly conferred upon the mortgagee the power of sale as specified in S.69, Transfer of Property Act. Inasmuch as the Plaintiff was paying regularly interest till June 1952 the Society did not attempt to recall the loan. The plaintiff defaulted from June 1952 and after he had done so for three months statutory notice of sale as per S.69, Transfer of Property Act was issued by the defendant Society to the plaintiff on 14-10-1952. When the period of three months of the said notice expired in January 1953, the plaintiff paid Rs.1000/- towards the accumulated arrears in February 1953 and promised to clear off the arrears of interest and the principal amount within a short time. This promise was not kept up and therefore the defendant Society issued a second statutory notice as per S.69, Transfer of Property Act on 21-9-1953.
On the expiry of the three months the defendant Society on 7-1-1954 intimated to the plaintiff that 17-3-1954 had been fixed for sale of the mortgaged properties and the date was so fixed so that even before the properties were actually sold the plaintiff could pay the mortgage money and save the properties. Then the plaintiff put up some propositions for the defendant Society to collect the rent and credit the same towards its loan. These propositions were accepted and the defendant Society states that the plaintiff has double-crossed it and it had not been able to collect any rent. On the date fixed for sale 17-3-1954 on the application of the plaintiff the Society adjourned the sale to 19-6-1954. This was to enable the plaintiff to pay up as he desired without prejudice to the statutory notice of sale dated 21-9-1953. But inasmuch as the plaintiff did not stick up to his undertaking and interest was accumulating, the properties were put up for sale on 19-6-1954. There were no bidders and the sale was adjourned to 24-7-1954. There was very wide advertisement of the sale by circulations of auction catalogues and publication in the well-known dailies "The Hindu" and "Indian Express". The plaintiff thereupon rushed to the City Civil Court and filed O. S.1198 of 1954 and obtained an interim injunction on the eve of the sale. This was contested by the defendant Society on notice being served upon them. Seeing that the sale could not be averted the plaintiff proposed certain terms and this was accepted by the defendant Society. The consent contained the following terms:
"The plaintiff will pay Rs.4500-0-0 towards the amount due on or before 5-10-1954 to the defendant Society at its office. In default of such payment, the defendant Society can bring the property to sale without any further notice to the mortgagor. The defendant will not exercise the power of sale on or before 5-10-1954."
The plaintiff again did not keep up his undertaking and is said to have tendered according to the defendant Society Rs.2000 and according to the plaintiff Rs.1500 on 5-10-1954 and this was refused by the
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