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1921 Supreme(Mad) 24
IN THE HIGH COURT OF MARAS
S Aiyar
The Official Receiver
Versus
Lakshman Aiyar
Decided On : 24 January, 1921
The creation of the security on the immoveables is a material part of the mortgage transaction, and the mortgage debt should not be treated as validly transferred if the conditions imposed by the statute law have not been complied with.
Headnote:
Transfer of Property Act - Mortgage - Validity of transfer of security - Appellants treated as ordinary creditor, not secured creditor
Fact of the Case:
The court found that the mortgage debt had not been legally assigned, and the respondent could only be treated as an ordinary creditor, not a secured creditor.
Finding of the Court:
The court allowed the appeal, stating that the creation of the security on the immoveables should be treated as a material part of the mortgage transaction, and the mortgage debt should not be treated as validly transferred if the conditions imposed by the statute law have not been complied with.
Issues: Validity of transfer of security in a mortgage transaction
Ratio Decidendi: The creation of the security on the immoveables should be treated as a material part of the mortgage transaction, and the mortgage debt should not be treated as validly transferred if the conditions imposed by the statute law have not been complied with.
Final Decision: The appeal was allowed, and the respondent was treated only as an ordinary creditor and not a secured creditor. The respondent was ordered to pay the appellants' costs in both Courts.
Sadasiva Aiyar, J.
1. I am clear that by the amendment made in the definition of " actionable claim" on the Transfer of Property Act in 1900, the Legislature intended that when money is borrowed on mortgage of immoveable property, the creation of the security on the irnmoveables should be treated as material part of the mortgage transaction and that the mortgage debt should not be treated as validly transferred if the conditions imposed by the statute law as requisites for the valid transfer of the security have not been complied with. I think that the latest pronouncement of the learned Chief Justice in Perumal Ammal v. Perumal Naicker (1920) 40 M.L.J. 25 supports my above view.
2. The result is that the appeal has to be allowed and the respondent could be treated only as an ordinary creditor and not a secured creditor. The respondent will pay the appellants costs in both Courts.
Napier, J.
3. I agree.
4. The mortgage debt has not been legally assigned as correctly stated by the District Judge. Section 134 of the Transfer of Property Act has no application nor can any principle embodied therein be applied against the other provisions of the Transfer of Property Act.
5. Appeal allowed with costs here and in the court below.
