Kandiah Et Al., V. Sivakanupillai Et Al.,

1943 Present:  Hearne and Wijeyewardene JJ.

KANDIAH et al, Appellants, and SIVAKANUPILLAI et al.,
Respondents.

224-D. C. Jaffna, 16,179.

Mortgage-Sale of property subject to payment of mortgage debt-Discharge of mortgage by vendee-Seizure in execution of property-Claim by vendee-Right to payment of mortgage debt.

On January 1, 194O, third defendant conveyed the property in question to the plaintiff, subject to a mortgage which the plaintiff undertook to discharge and to pay the third defendant a certain sum of money in addition. On July 29, 1940, first and second defendants issued writ against the property and seized it. On August 5, 1940, the plaintiff discharged the mortgage debt. On seizure of the property plaintiff claimed it, but his claim was disallowed and the present 247 action followed.

Held, that the property was liable to be sold under the writ issued by the first and second defendants subject to a right of mortgage in favour of the plaintiff to the extent of the mortgage debt.

APPEAL from a judgment of the District Judge of Jaffna.

N. Nadarajah, K.C. (with him H. W. Thambiah), for first and second defendants, appellants.

S. J. V. Chelvanayagam (with him P. Navaratnarajah), for plaintiff, respondent.

N. Kumarasingham for third defendant, respondent.

Cur. adv. vult.

August 4, 1943. HEARNE J.-

The facts relevant to this appeal are these. On August 22, 1937, the third defendant, a woman, mortgaged on P 2 two properties, Iniyavudai and another called for short S, to one Kanthappillai. On January 1, 1940, she conveyed both the properties by P 1 to the plaintiff " subject to mortgage No. 5,321" (P 2). The plaintiff undertook to discharge the mortgage debt of Rs. 1,260 and to pay the third defendant Rs. 240. On July 29, 1940, the first and second defendants issued writ against Iniyavudai which was seized. On August 5, 1940, the plaintiff, according to his evidence, discharged mortgage bond No. 5,321.

On the seizure of Iniyavudai by the first and second defendants the plaintiff claimed it by virtue of P 1 but his claim was disallowed and the present 247 action which was filed in November, 1940, was the result.

The trial Judge held that P 2 was a genuine transaction and that the plaintiff had paid the mortgage debt on bond 5,321. But he also held that P 1 was collusive and fraudulent and, in the result, made the order that the land described in the plaint, viz., Iniyavudai, was liable to be seized and sold under the writ issued by first and second defendants against the third defendant subject, however, to " a right of mortgage in favour of the plaintiff to the extent of Rs. 1,260 over the properties Iniyavudai and S Described in P 1 ". The first and second defendants have appealed.

Counsel for the plaintiff, the respondent to this appeal, did not argue that the order of the learned Judge which reserved to his client " a right of mortgage over Iniyavudai and S " was justified by the provisions of section 11 of the Mortgage Ordinance under which he purported to act. He argued that as the Judge had found there was consideration for P 1, which he did, he could not have found that it was fraudulent and collusive. This argument was disposed of by Garvin J. in Meera Saibo v. Ayan Sinnavan1[(1927) 29 N. L. R. 84]. P 1 was clearly fraudulent and collusive. It was designed to save the third defendant's properties from creditors and the transfer rendered her insolvent.

What remains to be considered is this. If the order of reservation in favour of the plaintiff cannot be justified by section 11 of the Mortgage Ordinance which applies to sales in hypothecary actions and not to private sales can it be justified at all ?

In Haniffa v. Silva2[(1912) 15 N. L. R. 362.] A's property was purchased by the plaintiff at a Fiscal's sale held under a writ issued against A. Subsequently A was adjudicated bankrupt and thereafter sold th

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