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1995 Supreme(Mad) 344

High Court of Judicature at Madras
THE HONOURABLE CHIEF JUSTICE MR. K.A. SWAMI & THE HONOURABLE MR. JUSTICE RAJU
Jamal Mohammad
Versus
Mohamad Unus & Others
LPA No. 112 of 1993
Decided On :Decided on : 23-03-1995

Advocates Appeared:
For the Appellant:Venkataseshan & N.S. Nandakumar, Advocates.
For the Respondent:K. Venkataramana Rao, A. Ramamurthi, S.M. Hameed and Mohideen, Advocates.

A mortgagee who purchases the mortgaged property by using the mortgage debt and also by paying an additional sum must be deemed to hold the property so purchased for the benefit of all the mortgagees, subject to repayment of their due share of the expenses properly incurred.

Headnote:

PARTITION - MORTGAGE - PURCHASE OF MORTGAGED PROPERTY BY ONE OF THE CO-MORTGAGEES - WHETHER SUCH PURCHASE SHOULD BE HELD TO BE FOR AND ON BEHALF OF THE MORTGAGEES OR SHOULD BE HELD TO BE HIS OWN SELF-ACQUIRED PROPERTY - SECTION 90 OF THE INDIAN TRUSTS ACT, 1882.

Fact of the Case:

A suit for partition and separate possession was filed by one Sikkandar, who died during the pendency of the suit. The trial Court decreed the suit in favor of the plaintiff for 4/7th share in the suit properties. The first defendant, who had purchased one of the suit properties (Item No. 4) by using the mortgage debt and also by paying an additional sum, appealed against the decree. The plaintiff filed cross-objections to the extent he was denied a share in Item No. 4.

Finding of the Court:

The High Court held that the first defendant, by using his position as a co-mortgagee, gained an advantage in derogation of the rights of the other co-mortgagees. Therefore, he must be deemed to hold the property so purchased for the benefit of all the mortgagees, subject to repayment of their due share of the expenses properly incurred.

Issues: Whether the purchase of the mortgaged property by one of the co-mortgagees by using the mortgage debt and also by paying an additional sum should be held to be for and on behalf of the mortgagees or should be held to be his own self-acquired property.

Ratio Decidendi: The High Court relied on Section 90 of the Indian Trusts Act, 1882, which provides that where a mortgagee, by availing himself of his position as such, gains an advantage in derogation of the rights of the other persons interested in the property, he must hold, for the benefit of all persons so interested, the advantage so gained. The Court held that the first defendant, by using his position as a co-mortgagee to purchase the mortgaged property, had gained an advantage over the other co-mortgagees. Therefore, he must be deemed to hold the property so purchased for the benefit of all the mortgagees.

Final Decision: The High Court dismissed the appeal and upheld the decree of the trial Court, which had awarded the plaintiff a 4/28th share in Item No. 4.

Judgment :-

K.A. SWAMI, C.J.

1. This appeal by the first defendant is preferred against the Judgment and decree dated 21.9.1992 passed in A.S. No. 442 of 1982 and Cross Objection by the learned single Judge.

2. The appeal arises out of a suit for partition and separate possession filed by one Sikkandar, who died during the pendency of the suit and his legal representatives have been brought on record. The trial Court decreed the suit in the following terms:

“In the result, there will be a preliminary decree for partition and separate possession of the plaintiffs 4/7th share in suit items 1 to 3 and 5 to 7. The plaintiffs are also entitled to 4/7th share in the redemption of other amount of Ex. A.14, i.e., in Rs. 700/- due to the joint family from the first defendant. It will be adjusted at the time of passing of final decree for partition by way of equity. The suit in other respects is dismissed. In the circumstances of the case, both parties are directed to bear their respective costs.”

3. Aggrieved by the judgment and decree of the trial Court, the first defendant preferred A.S. No. 442 of 1982 and the plaintiff in the suit preferred Cross-Objections to the extent he was denied of share in item No. 4 of the suit properties. Learned single Judge has held that as the mortgage money was used for the purpose of purchasing item No. 4 which was the mortgaged property, the plaintiff would be entitled to a share in item No. 4 to the extent he would have been entitled to, for the mortgage money. Accordingly, learned single Judge has held that the plaintiff would be entitled to 4/28 share in item No. 4. Therefore, first defendant has come up in appeal.

4. Learned counsel for the appellant has confined the arguments in so far as the judgment and decree under appeal, relate to item No. 4. It is contended that, no doubt, item No. 4 was mortgaged to the original plaintiff, but, as the first defendant came to purchase the same by paying a sum of Rs. 2,000/-, including a sum of Rs. 700/- which was the mortgage money, it became the self-acquired property of the first defendant. Therefore, the plaintiff would not be entitled to any share in it, except a share in the amount of Rs. 700/-. The trial Court has accepted this stand of the first defendant, whereas, learned single Judge has negatived it. Therefore, the following point arises for consideration in this appeal:

When there are more than one mortgagee, standing in the position of co-owners and one of them purchases the mortgaged property by using the mortgage debt and also by paying additional sum, whether such purchase should be held to be for and on behalf of the mortgagees or should be held to be his own self-acquired property?

5. Learned counsel appearing for the appellant has placed reliance on Section 90 of the Indian Trusts Act, 1882 and has also relied upon the decisions in Vellai Mira Ravuttan v. Mira Moidian Ravuttan (1864 (II) MHCR 414), Alavala Balayya v. Alavala Guruvayya (1914 (1) L.W. 874), Sheikh Mohammad Ali v. Sheikh Mumtaz Ali (1929 (IV) I.L.R. (Lucknow) 261) = (A.I.R. 1929 Oudh. 521) and Peer Mohideen v. Asia Bivi (A.I.R. 1934 Madras 686) and Vermas “Islamic Law” VI Edition, para 121, at page 388. We may point out that all these decisions relate to money transactions. The do not relate to purchasing of the mortgaged property by one of the co-mortgagees by suing the mortgage money. Therefore, the said decisions are of no assistance to the appellant. Section 90 of the Indian Trusts Act specifically provides, “Where a tenant for life, co-owner, mortgagee or other qualified owner of any property, by availing himself of his position as such, gains an advantage in derogation of the rights of the other persons interested in the property, or where any such owner, as representing all persons interested in such property, gains any advantage, he must hold, for the benefit of all persons so interested, the advantage so gained, but subject to repayment by such persons of their due shar






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