VR RM RM RAMANATHAN CHETTIAR Vs. ABDUL HAMEED

JUDGEMENT

(1.) THE plaintiff is the appellant. The second defendant respondent herein had mortgaged a superstructure. The plaintiff obtained a decree in O. S. No. 345 of 1951. In land acquisition proceedings the site and the superstructure were acquired, compensation being granted to the owner of the site and to the 2nd defendant as the owner of the superstructure. The plaintiff as mortgagee did not put forward his claims in the acquisition proceedings with the result that the compensation amount was paid to the 2nd defendant. This was subsequent to the decree which the plaintiff had obtained. Thereupon, the plaintiff laid the suit against the State of Madras and the 2nd defendant for recovery of the amount of his mortgage claim. The learned District Munsif, Tiruvarur, dismissed the suit as against the State of Madras but passed a decree against the 2nd defendant. The 2nd defendant appealed and his contention was that the plaintiff's remedy was not personally against him but only against the superstructure. He claimed that the mortgage had been effected by one Chinnasami Naicker. The 2nd defendant had purchased the property in a court auction in execution of a decree and the property had been so purchased by him subject to the charge in favour of the plaintiff's father who was the mortgagee. It was also contended that the suit was barred and that the 2nd defendant was not liable to pay the amount received by him as compensation for the acquisition of the superstructure.

(2.) THE learned Subordinate Judge accepted the position that the compensation amount was in the nature of a substituted security and that the plaintiff derived a right to make a claim before the Land Acquisition Officer and was also entitled to be paid out of the sum awarded as compensation by virtue of the provisions of section 73 of the Transfer of Property Act. But the appellate court thought that since the plaintiff had obtained both a preliminary and final decree in his mortgage suit 0. Section No. 345 of 1951, it was not competent for him to lay a second suit for enforcing the security and that his remedy was only to proceed by way of execution of the decree which he had obtained. Accordingly, the suit was dismissed. Hence this second appeal.

(3.) IT is undoubtedly true that the plaintiff's action by way of a suit was misconceived in the circumstances of the case. When once it is conceded that upon his mortgage claim he had obtained a preliminary decree and final decree for the sale of the property mortgaged, his remedy must naturally be only by way of proceedings in execution of his final decree. Neither Section 73 of the Transfer of property Act, nor Section 31 of the Land Acquisition Act gives the plaintiff a new cause of action. Under Section 73 (2) of the Transfer of Property Act, it is provided that where a mortgaged property or any part thereof is acquired under the Land Acquisition Act, the mortgagee shall be entitled to claim payment of the mortgage money in whole or in part out of the amount due to the mortgagor as compensation. This provision merely enacts the principle of substituted security, that is to say, that the mortgagee is for the purpose of his security, entitled not only to proceed against the mortgaged property but against anything that is substituted for it. The mortgagee would not lose his rights only for the reason that he had tailea to exercise his right to claim compensation before the Land Acquisition Officer. That this is so is made clear by the third proviso to Section 31 (2) of the Land Acquisition act which states that "nothing herein contained shall affect the liability of" any person who may receive the whole or any part of any compensation awarded under this Act to pay the same to the person lawfully entitled thereto. " the right of a mortgagee is therefore maintained by the two provisions referred to. The short question, however, is the manner in which that right can be enforced in the circumstances of the present case.