DEVALLA GURUSWAMIAH Vs. E RAMAKRISHNA NAICKER

JUDGEMENT

(1.) IN the second appeal the question is whether it is necessary, for valid exercise of the power of sale under S. 69 of the Transfer of Property Act, that the first mortgagee, who invokes the power, should give notice of it to the second mortgagee and in the other appeal, C. M. A. No. 80 of 1962, the question is one of limitation. The property in question originally belonged to one Devalla Ramaiah. On his death, his estate vested in the Administrator General for administering the same on behalf of Ramiah's minor sons. On 18-2-1939, the Administrator General sold the property to the father of the respondent in the second appeal. But the purchaser on the same date executed the mortgage to secure a part of the price not paid at the time. The respondent' father was adjudged as insolvent in I. P. No. 46 of 1942 on the file of this court and in the insolvency, the Official Assignee, madras sold the property to the insolvent's son, the respondent, on 23-5-1955. It appears that the respondent's father and mother had executed a second mortgage over this very property. I do not think it necessary to refer to the litigation on the second mortgage and its result. The last of the minors became a major on 28-31945 on the completion on his 21st year. On the terms of the mortgage, in favour of the Administrator General, the amount due under it became payable on the date when the last of the minors became a major. The appellants, the quondam minors, invoked their power of sale under S. 69 of the Transfer of Property Act and took steps to bring the property to auction through auctioneers on 27-4-1957. But before the sale took place, the respondent brought the suit out of which this second appeal arises, for an injunction restraining the appellants from exercising their power of sale. There were a number of issues on which both the courts below were agreed except in regard to one question, namely, whether the power of sale could not be exercised by the appellants for their failure to serve notice on the second mortgagee. On that question, the lower appellate court, differing from the trial court, considered that such a notice was required under the terms of S. 69 read with Sec. 59a of the Transfer of Property Act. It was on that view the lower appellant court reversed the trial court's decree and decreed the suit. The second appeal is directed against this appellate decree.

(2.) THE civil miscellaneous appeal arises out of an order dismissing the appellant's application for leave to sue in forma pauperis on th view that the cause of action was prima facie barred by limitation. This view was formed by the trial judge on the ground that the suit should have been failed within 12 years of 24-3-1947, that is to say on 24-3-1959, the former date being the date when the last of the minors became a major and the amount due under the mortgage in favour of the administration General became payable. He did not agree with the appellant's that the documents relied on by them amounted to an acknowledgment of the debt to save time.

(3.) ON the question of notice, I think the lower appellate court as clearly wrong. In my opinion, S. 69 of the Transfer of Property Act does not require a notice to be served on the second mortgagee in order that the first mortgagee second mortgagee in order that the first mortgagee may validly exercise his power of sale. That section no doubt says that no such power shall be exercised unless and until notice in writing requiring payment of principal money has been served on the mortgagor or one of several mortgagors and default has been made in payment of the principal money or part of it for the specified time after service. But the term "mortgagor" in the section does not, in my opinion cover a second mortgagee. It is true that S. 59-A, which governs also S. 69, lays down a rule of interpretation that unless otherwise expressly provided, references in the chapter to mortgagors and mortgagees should be deemed to include references to persons delivering title from them respectively. In a sense a second tittle from a mortgagee may be regarded as a person deriving title from a mortgagor. It is not in that sense, as I think, should the section be understood. The section makes a difference between mortgagors and mortgagees and the persons deriving title from them respectively. It seems to me, therefore, that unless a person deriving title does so, not as a second mortgagee or the like, but for instance, as an assignee of the interest of the mortgagor qua mortgagor he will not be a mortgagor for purposes of S. 59-A. That is the view a Bench of the Allahabad High Court in Piary Lal v. Dina Nath, ILR (1939) ALL 185 at p 190: (AIR 1939 ALL 190 at p. 192) was inclined to take with which I am in respectful agreement. The learned Judges opined: another argument was that a mortgagee would also derive title from mortgagor and therefore S. 59-A would also apply to mortgagees. We do not think that that is a correct interpretation of s. 59-A because that section state in regard to mortgagors and mortgagees that reference to them shall include 'references to persons deriving tittle form them respectively. A distinctions therefore drawn by S. 59-A between the two categories of mortgagors and mortgagees and doubtless the intention is that the persons who derive title from them are to be persons who deliver title s a mortgagor or as a mortgagee. That is, under the head 'mortgagor' would be included persons succeeding by inheritance or by will or by sale or by auction sale to the right of the equity of redemption held by a mortgagor and those words would not include persons who subsequently take mortgage from the mortgagor". It follows, therefore the view taken by the lower appellate court to the contrary cannot be sustained. The result is the second appeal is allowed.