1924 Supreme(Mad) 133
IN THE HIGH COURT OF MARAS
K Sastri
Mollaya Padayachi
Versus
Krishnaswami Iyer
Decided On : 29 February, 1924
Headnote:
Mortgage - Property Ownership - Transfer of Property Act - Sections 41, 62, 69, 70, 90, 101 - The court discussed the ownership of the mortgaged properties, the benami nature of the purchase, and the rights of the mortgagee. It highlighted key legal provisions such as the principles of benami transactions, the rights and obligations of mortgagees and mortgagors, and the concept of equitable lien. The court's decision was influenced by its interpretation of the Transfer of Property Act and the principles of equity and justice.
Fact of the Case:
The plaintiff sued to recover a sum of money with costs and further interest due on a deed of mortgage executed by the 1st defendant in his favor. The 1st defendant's father, the 2nd defendant, denied the properties belonged to his wife and claimed to be the exclusive owner. The court analyzed the evidence and found that the properties were purchased by the 2nd defendant benami in the name of his wife, and that the mortgage was enforceable against the 2nd defendant on the principle of salvage lien.
Finding of the Court:
The court found that the properties were purchased benami in the name of the 2nd defendant's wife, and that the mortgage was enforceable against the 2nd defendant on the principle of salvage lien. The court also held that the plaintiff was entitled to a charge for the amount that went to set aside the Court sale, and modified the decree of the Subordinate Judge accordingly.
Issues: The main issues for determination were the ownership of the mortgaged properties, the benami nature of the purchase, and the enforceability of the mortgage against the 2nd defendant and subsequent purchasers.
Ratio Decidendi: The court's decision was based on the finding that the properties were purchased benami in the name of the 2nd defendant's wife, and that the mortgage was enforceable against the 2nd defendant on the principle of salvage lien. The court also held that the plaintiff was entitled to a charge for the amount that went to set aside the Court sale.
Final Decision: The court modified the decree of the Subordinate Judge to grant the plaintiff a mortgage decree for the amount that went to pay off the sale of the properties in favor of a third party, and held that the plaintiff was entitled to recover the amount by way of charge on the redeemed properties.
Kumaraswami Sastri, J.
1. The 4th and 5th defendants are the appellants.
2. The plaintiff sued to recover Rs. 6,669- I-O with costs and further interest due on a deed of mortgage dated the 27th of January, 1916 executed by the 1st defendant in his favour for Rs. 5,500 with interest at 9 per cent, per annum. It is alleged that the amount was repayable within the 27th of January, 1917, and that, in default of payment, interest at 12 per cent. was chargeable from the date of the bond and was to be added to the principal with annual rests.
3. The 1st defendant is the son of the 2nd defendant. The case for the plaintiff is that the mortgaged properties belong to Murugayee, the mother of the 1st defendant and the wife of the 2nd defendant, that Murugayee who died on the 7th January, 1916, executed a will, dated the 2nd of April, 1914, whereby she bequeathed the properties to the 1st defendant, that the 1st defendant became the exclusive owner of the properties, that in execution of the decree in O.S. No. 55 of 1914 on the file of the Tanjore Additional Sub-Court, which was passed against the 1st and 2nd defendants and the deceased Murugayee in favour of Dandapani Vaithiyan the properties were brought to sale and purchased by the decree-holder on the 20th of January, 1916, that with a view to set aside the sale, the 1st defendant who was the owner of the properties which were sold, executed the plaint mortgage deed, that the amount advanced by the plaintiff was deposited in Court by the 1st defendant towards the amount due under the decree and the Court sale was set aside on the 1st of February, 1916, and that the money advanced on the suit mortgage thus satisfied the decree of Court against the 2nd defendant also and went to set aside the Court sale. The plaintiff states that the 2nd defendant has no interest in the mortgaged properties, that in case the 2nd defendant claims the mortgaged properties as joint properties, the mortgage is binding on him as the 1st defendant was acting as the manager of the family and borrowed the money for preserving the estate and for satisfying the decree against the 2nd defendant, that in any event the 2nd defendant was bound in law to reimburse the plaintiff to the extent to which he, the 2nd defendant was benefited by the amount advanced for the mortgage and that he is liable to pay the plaintiff half the amount deposited in O.S. No. 55 of 1914, as the decree was personally against the 2nd defendant, and his wife Murugayee and against the family properties of the 1st defendant.
4. The 3rd defendant was made a party as he is a subsequent purchaser from the 1st defendant. Defendants 4 to 8 were made parties as mortgagees and purchasers from the 2nd defendant. Defendants 9 and 10 were made parties as they are the sisters of the 1st defendant and live in the first item of the mortgaged properties with the plaintiffs permission.
5. The 1st defendant filed a written statement admitting the plaintiffs claim and the allegations in the plaint.
6. The 2nd defendant filed a written statement denying that the properties belonged to his wife, Murugayee, and denying her right to dispose of the properties by will. He states that she had no funds to purchase the properties, that he went to the Transvaal, stayed there for several years, earned money and remitted money by post and brought money with him whenever he came to India, that the properties were purchased with his own funds benami in the name of his wife and were his exclusive properties and that the plaintiff was well aware that the properties stood in Murugayees name only benami and that he was the real owner. He admits that a decree was passed in O.S. No. 55 of 1914 on the file of the Additional Sub-Court, Tanjore, against himself, his wife Murugayee and his son, the 1st defendant, and the suit properties were brought to sale and that a sum of Rs. 4,203-1-4 was paid for setting aside the sale. He states that in any event there was no consideration for