PUDUKAD PUBLIC BANK LTD Vs. ANNAMMA

JUDGEMENT

(1.) THIS appeal is by the decree-holder against an order passed in execution under the following circumstances. There are six items of properties in the decree schedule. The decree is based on a Kuri security bond executed by one Vareed to the decree-holder-Bank charged on these six items. That bond was on 4. 6. 1105. Subsequently Vareed executed a puisne mortgage in favour of one Kittunni Menon on 29. 7. 1105 charging items 1 to 4 and 6 mentioned in this decree and seven other items. On 20. 4. 1116, the heirs of Vareed executed Ext. III sale deed to one Thomman for the present decree schedule properties reserving the necessary amount for discharging the amount due under the Kuri bond. After this Kittunni Menon filed a suit O. S. 94 of 1118 on the puisne mortgage, and obtained Ext. I decree on 11. 1. 1119. He brought all the properties secured to him to sale and purchased them himself on 11. 6. 1120 as is evident from Ext. II sale certificate. THIS was done subject to the charge in favour of the decree-holder in this case. Before this court sale Thomman had sold plaint item 5 to Cheriya on 28. 5. 1120 under Ext. IV for Rs. 1,000/ -. In this Rs. 200/- had been reserved for payment to the Bank decree-holder in this case to get a release of its charge over this property. He paid Rs. 200/- and got a release. All or some of the properties purchased by Kittunni Menon had been sold to one Subramonia Iyer and in that a sum of Rs. 3,275/- had been reserved for payment to the decree holder in this case. Subramonia Iyer filed m. P. 920 of 1124 depositing Rs. 3,536-11-10 pies towards the decree debt. He claimed a release of the five items of properties from the charge under this decree. He also stated that if more amount was required Kittunni Menon's legal representative was to be directed to put the same in court. Kittunni Menon's legal representative had been already impleaded in the case as the 4th defendant. The execution court on 11. 7. 1124 ordered satisfaction of the decree to the extent of the sum deposited. Even before this order, the decree holder had filed execution petition No. 43 of 1124 for proclamation for sale of items 1 to 4 and 6, as the charge over item 5 had already been released. On notice, the 4th defendant entered appearance and stated that the release of item 5 from liability by the decree-holder was without bona fides and that he as the puisne mortgagee purchaser was entitled to get an abatement of the decree-debt to the extent to which the same could be proportionately charged on item 5. The extent of item 5 was 193 cents and of items 1 to 6 was 492 cents. The lower court held that the decree-debt had to be abated to the extent of 193/492 and the decree-holder was directed to file a statement showing the correct amount due in the light of the said order. The appeal is against this order.

(2.) THE only question for consideration is whether because of the release of item 5 by the decree-holder, the 4th defendant a puisne mortgagee can ask for proportionate abatement of the debt so far as the remaining properties are concerned. If the position taken by the 4th defendant is accepted, then the integrity of the mortgage has to be taken to be broken so that the mortgage debt is to be distributed on all the items in proportion to their value. That was the view that had been adopted by the Cochin High Court before the Transfer of Property Act was introduced into the State in 1112. Lonappan v. Cheriya, 23 Cochin Law Reports 691, decided in 1107 and Manikka menon v. Kunhu Devasi 25 Cochin L. R. 699, decided in 1109 had taken the view that where some of the properties comprised in a mortgage are released from the mortgage liability and a suit is brought for enforcement of the mortgage, third parties who had obtained rights in the remaining items were in equity entitled to say that there should be an abatement of the mortgage debt to the extent of the amount proportionately chargeable on the items already released and that only for the balance the remaining items could be proceeded against. But this position has been completely changed with the introduction of the Transfer of property Act in 1112 in the lines of the Indian Act as amended in 1929. S. 60 of the Act (Indian) had come up for consideration by the Judicial Committee of the Privy Council in Ram Chand v. Prabhu Dayal A. I. R. 1942 P. C. 50, and it had been laid down that under S. 60, the integrity of a mortgage is not broken except where the mortgagee has purchased or otherwise acquired as proprietor a certain portion of the property mortgaged, and that hence where the mortgagee has allowed the owner of one part of the mortgaged property to redeem his part, any separate owner of a portion of what remains cannot redeem his part on payment of its proportion of the debt. It had also been laid down in that case that the release of part of the mortgaged property by the mortgagee does not take away as regards that part of the liability to contribute which S. 82 imposes upon the different parts. Reference may also be made to two decisions of the Travancore High Court, relied on by the learned Advocates in the case. Thuppan Namburipad v. Chummaru, 27 T. L. J. 702, relied on by the appellant supports his position that the right of apportionment does not apply where it conflicts with the first mortgagee's rights to proceed against whichever items he chooses. THE other decision is Neelacantan v. Sankara Pillai, 32 T. L. J. 42, relied on by the respondent. THEre are certain observations in the body of the judgment, that while it is fairly well settled doctrine that as between the original parties viz. , the hypothecator and the hypothecatee the release of a part of the premises hypothecated does not affect the lien of the hypothecatee upon the residue which is bound for the whole debt, the hypothecatee with notice of lien of others upon the remainder of the hypothecated properties has no right to release any portion of the hypothecated properties to the injury of the onus of such liens. THEir Lordships however have confirmed the proposition that when a mortgagee voluntarily releases part of the security he can recover the whole debt from the remainder and that he is not bound to abate a proportionate part of the debt and is entitled to recover the whole of the mortgage amount from any portion of the security. In this case however there is no difficulty for the suits were filed after the introduction of the Transfer of Property Act, and the principle laid down in Ramchand v. Prabhu Dayal, fully supports the position taken by the appellant. THE respondent's remedy, if at all, can only be under S. 82 of the Transfer of Property Act and not here asking for proportionate abatement. THE order of the lower court is thus not sustainable. It is set aside and the 4th defendant's objections dismissed with costs in both the courts. Allowed.