1953 Present : Rose C.J. and Pulle J.

M. S. PERERA (Assistant Government Agent, Kandy), Appellant,
and UNANTENNA et al., Respondents

S. C. 9-10-D. C. Kandy, X 1,397

Mortgage-Land Redemption Ordinance, No. 61 of 1942, as amended by Ordinance No. 62 of 1947-Section 3 (1) (b)-" Transfer "-Includes voluntary conveyance of mortgaged property subsequent to date of hypothecary decree- Hypothecary decree-Does mortgage become merged in decree ?

Where a land is mortgaged and the mortgage is put in suit and decree is entered against the mortgagor for the payment of the amount due on the mortgage bond, a subsequent voluntary conveyance by the mortgagor in favour of the mortgagee, the consideration for which is set off in full settlement of the amount due on the said decree, is a transfer as contemplated in section 3 (1) (b) of the Land Redemption Ordinance. In such a case it cannot be contended that, notwithstanding that the charge on the land created by the mortgage bond existed even after the decree, the debt due from the mortgagor personally to the mortgagee became merged in the decree and ceased to exist and that the land, therefore, was not a land which was " transferred by its owner . . . to any other person in satisfaction or part satisfaction of a debt which was due from that owner . . . to that other person and which was secured by a mortgage of that land subsisting immediately prior to the transfer " within the meaning of the section.

APPEALS from a judgment of the District Court, Kandy.

Walter Jayawardene, Crown Counsel, with V. Tennekoon, Crown Counsel, for the plaintiff appellant in Appeal No. 9, and respondent in Appeal No. 10.

N. E. Weerasooria, Q.C., with G. T. Samarawickreme, for the petitioner appellant in Appeal No. 10.

H. V. Perera, Q.C., with C. Thiagalingam, Q.C., and N. M. de Silva, for the 1st and 3rd defendants respondents in both appeals.

Cur. adv. vult.

May 22, 1953. ROSE C.J.-

There are two appeals in this case. The first appeal is by the plaintiff who is the Assistant Government Agent for Kandy. It turns upon the of section 3 (1) (b) of the Land Redemption Ordinance,

No. 61 of 1942, as amended by the Land Redemption (Amendment) Ordinance, No. 62 of 1947. The relevant part of the amended section reads as follows :-

" 3. (1) The Land Commissioner is hereby authorised to acquire on behalf of Government the whole or any part of any agricultural land, if the Land Commissioner is satisfied that the land was, at any time before or after the date appointed under section 1, but not earlier than the first day of January, 1929-

(b) transferred by its owner or his executors or administrators to any other person or the heirs, executors or administrators of any other person in satisfaction or part satisfaction of a debt which was due from that owner or his predecessor in title to that other person and which was secured by a mortgage of that land subsisting immediately prior to the transfer."

The facts are sufficiently set out in the judgment of the learned District Judge.

A point was taken by Mr. Thiagalingam on behalf of the 1st and 3rd defendants respondents that the authorization of the Assistant Government Agent by the Land Commissioner under section 2 (3) of the principal Ordinance was invalid. This matter, however, was not pressed in appeal and, therefore, it is unnecessary to advert to it further. Similarly claims for declaration of title, ejectment and damages made by the 1st and 3rd defendants were not pressed and it is unnecessary to make any observations in that regard.

The question to be decided in this case is whether it would be correct to hold that, where a land is mortgaged and the mortgage is put in suit and decree is entered against the mortgagor for the payment of the amount due on the mortgage bond, a subsequent voluntary conveyance by the mortgagor in favour of the mortgagee, the consideration for which is set off