MUTHIALPET BENEFIT FUND LTD Vs. V DEVARAJULU CHETTY

JUDGEMENT

(1.) This is an application for appointing public auctioneers as commissioners to sell the mortgaged property after due advertisement and wide publicity with a note in bold lines in sale notices that the property would be sold free from all claims of all parties to the suit and free from all encumbrances and that vacant possession would be given on payment of the full purchase price and that the sale will be subject to confirmation by the High Court.

(2.) The facts are: The applicant is the Honorary Secretary of the Muthialpet Benefit Fund Ltd., which is a reliable and well known Nidhi in the city of Madras doing useful work. Defendant 1 V.K. Govindarajulu Chetty for himself and on behalf of his three minor sons who are now the plaintiffs in the pauper suit C. S. 7 of 1953 as manager of a joint Hindu trading family executed in favour of defendant 2, the Muthialpet Benefit Fund Ltd., two simple mortgages" dated 1-4-1948 and 7-51949 for Rs. 15,000/- and Rs. 4000/- respectively mortgaging as security for the repayment of the said sums with interest at Re. 0-9-5 per cent ' per mensem and Re. 0-12-6 per cent per mensem respectively the house Nos. 11 & 11-A, Venkatachala Mudali Street, Choolai, Madras. The sum of Rs. 15000 was lent by the Fund after proper and bona fide enquiries for the purpose of discharging an antecedent mortgage debt over the said property due to the Triplicane Fund Ltd., which is another respectable well known Nidhi in Madras and for investing as additional capital in the family ancestral business in gunnies which was the mainstay of the family. The further sum of Rs. 4000 was lent after diligent and honest enquiries to discharge the debts incurred for constructing an additional wing in the backyard of the mortgaged property which was necessary for the more beneficial enjoyment of the house. Under the said mortgage deeds a power of sale under Section 69, T. P. Act has been conferred on the mortgagee, the Muthialpet Benefit Fund Ltd., who can exercise the said power in the event of default committed in the repayment of the mortgage dues as per terms and conditions provided in the deeds. - Defendant 1 mortgagor committed default in payment and thereafter the Fund began to press for repayment from June 1951 and waited till June 1952, on defendants 1's promise and assurances of repayment. As no payments were forthcoming the Fund fixed the sale of the mortgaged property on 27-7-1952 after notice. Thereupon defendant 1, as is usual in these cases, set up his wife to institute a pauper suit, C. S. 7 of 1953, on behalf of his minor sons impleading himself and other creditors along with himself euphemistically demanding partition and in reality to defeat and delay, if possible, the mortgages executed in favour of the Fund. In the suit an application No. 1900 of 1952 was filed for an injunction to restrain the sale of the property by the Fund, On 5-9-1952 Panchapakesa Ayyar J. made an order that an injunction restraining the sale by the Fund would issue on condition that the plaintiffs paid to the fund directly Rs. 120/- to cover interest every month commencing from 5-10"-1952 and that in default of payment in any one month, the sale would take place. The plaintiffs after paying three monthly instalments of Rs. 120/-, defaulted in paying the monthly instalments of interest thereafter. The plaintiffs' later application No. 465 of 1953 for reducing the monthly instalments to Rs. 80/-Was dismissed. The Fund brought the property to sale on 8-2-1953 after due publication. But there were no bidders as defendant 1 and his wife, the next friend of the plaintiffs, scared away the intending bidders by notifying them orally that the above suit was pending and that they would be buying at their peril. It is in the circumstances that the present application has been filed.

(3.) The case for the Fund is that the principal and interest had accumulated to Rs. 24,558-13-1, that the property is not properly looked after with regard to its' maintenance and repairs because the mortgagors have neither the interest nor the means for doing so, that unless extensive repairs are carried out at once the value of the property would be seriously affected, that defendant 1 has been collecting the rent without the least thought of paying even the interest due on the mortgages, that the value of the immovable properties in Madras has been steadily going down owing to increasing economic depression and separation of Andhra Province resulting in mass exodus of well-to-do middle class people from Madras. It is imperative therefore that in order to secure the most advantageous price the property should be sold through public auctioneers after wide publicity free of all encumbrances.