ABDUR RAHIM JIWANI Vs. VITHALDAS RAMDAS

JUDGEMENT

(1.) This is a suit filed by the plaintiff for redemption of two properties, one at Chira Bazar and the other at Sleater Road, which are more particularly described in Exts. A and B to the plaint. The property at Chira Bazar consists of ground and two floors and it is fully tenanted. There are four residential premises and six shops in this property. The property at Sleater Road consists of ground and four floors. There arc six residential premises in this property.

(2.) On or about 17th Nov. 1954, the plaintiff executed a mortgage in respect of his property at Chira Buzar in favour of Fatmabai Hasanbhai for a sum of Rupee 25,000/- repayable with interest. On the same date, he created a mortgage of his property at Sleater Road in favour of Pratapchand Kasturchand and others for a sum of Rupees 22,000/- repayable with interest. In or about 1956, Pratapchand Kasturchand and others filed a suit for the sale of the mortgaged property. In order to prevent such a sale, it stems that the plaintiff tried to get the mortgages transferred. The plaintiff approached a broker Khemchand for this purpose. Thereafter, by an indenture of transfer of mortgage dated 14th Dec. 1956, defendants Nos 1 and 2 obtained a transfer of the mortgage in respect of the Chira Bazar property for a sum of Rs. 35.000/-- By another indenture of transfer of mortgage, also dated 14th of December 1956, defendants Nos. 1 and 2 obtained a transfer of the mortgage in respect of the Sleater Road property for a sum of Rs. 30.000/-. On the same date, a second mortgage was created in respect of both these properties in favour of defendant No. 3 for a sum of Rs. 10,000/-. From out of these amounts of Rs. 35,000/-, Rs. 30,000/-and Rs. 10,000/- advanced by defendant Nos. 1, 2 and 3 as aforesaid, the claims of the previous mortgagees were fully satisfied, and disbursements of various amounts were made, particulars of which are given in a letter addressed by the Attorneys of defendants Nos. 1, 2 and 3 to the Advocates of the plaintiff. This fetter is dated 29th Dec., 1956, part of Ex. J collectively. It seems that municipal taxes in respect of these properties were in arrears at the date when the indentures of transfer were executed. From out of the moneys advanced by defendants Nos. 1, 2 and 3, all arrears of municipal taxes up to date were paid. Insurance premium in respect of these properties was also paid from out of the amounts so advanced. The Advocates of the plaintiff by their letter dated 10th Jan., 1957 confirmed these disbursements. This letter also forms part of Ex. S collectively. Defendant No. 3, who was the second mortgagee, was put in possession of the mortgaged properties and he was in charge of the management of the suit-properties from I4th Dec. 1956. He was thus required to collect the rents in respect of these properties, to pay municipal taxes and other outgoings, to carry out repairs if required, to pay interest to the prior mortgagees-defendants Nos. 1 and 2 as also to himself and to keep an account of all re coveries and expenditure. There is a dispute as to whether there was any tripartite agreement between the plaintiff, defendant Not. 1 and 2, and defendant No. 3 under which defendants Nos. 1 and 2 agreed that they would look to defendant No. 3 for the payment of interest under the transfers of mortgages to them. In any event, there is evidence to show that there was an agreement at least between the plaintiff and defendant No. 3 that, from out of the rents and profits of the two properties which were put in possession of defendant No. 3, defendant No. 3 would pay on behalf of the plaintiff interest due and payable to defendants Nos. 1 and 2 under the indentures of transfers of mortgages. In fact, up to 14th May 1957, defendants Nos. 1 and 2 received interest amounts from defendant No. 3. Defendants Nos. 1 and 2 did not receive any interest under the two mortgages after 14lh May 1957. These defendants, therefore, sent 'a notice of demand dated 10th Sept. 1957 to the plaintiff. They sent another notice of demand dated 26th Oct. 1957 to the plaintiff. Since the plaintiff failed and neglected to pay any interest to these defendants pursuant to the notices of demand, they advertised both the properties for auction sale in exercise of their powers under the two transfers of mortgages dated 14th Dec., 1956. They were entitled to sell the suit-properties without the intervention of the Court in the event of there being defaults in the payment of three installments of interest as provided in the indentures of transfers of mortgages. Accordingly, defendants Nos. 1 and 2 advertised the properties for auction sale. The auctioneers of defendants Nos. 1 and 2 were Messrs Gandhi and Co. The auction sale of the Chira Bazar property was originally fixed for 27th Nov. 1957, while that of the Skater Road property was originally fixed for 29th of November 1957. In the meanwhile, the plaintiff filed a suit in the High Court, being Suit No. 372 of 1957, in order to stop the auction sales. In a Notice of Motion taken out in this suit by the plaintiff, a consent order was taken requiring the plaintiff to deposit in Court Rs. 1,500/-. The plaintiff, however, failed and neglected to deposit this amount in Court. Thereafter, defendants Nos: 1 and 2 proceeded with the auction tales. The property at Chira Bazar was sold by public auction on 27th Dec. 1957 for a sum of Rs. 41,000/- in favour of defendant No. 7 who was declared the highest bidder. Defendant No, 7 is the son-in-law of defendant No. 3. Immediately thereafter, defendant No. 7 sold the Chira Bazar property to defendant No. 3 for a sum of Rs. 42.000/-. A conveyance of the Chira Bazai property was executed directly in favour of defendant No. 3 Jamnadas on 15th Jan, 1958.

(3.) On 19th Jan. 1958, the plaintiff filed a suit in the City Civil Court at Bombay, being Suit No. 458 of 1958, to set aside the auction sale of the property at Chira Bazar. The suit was ultimately withdrawn by the plaintiff on 29th Apr. 1960 with liberty to file a fresh suit.