POTHIREDDIGARI VENKATA REDDY Vs. PEDDAMUNTHALA SESHA REDDI

JUDGEMENT

(1.) Both these appeals are by defendants 1 and 2 A.S. No 95 of 1965 against the preliminary mortgage decree dated 9th October, 1964, and A.S. No .149 of 1066 against the final decree passed in pursuance of the said preliminary decree on 22nd March, 1966. The facts leading, to these appeals may be stated as follows

(2.) Plaintiffs 2 and 3 are divided brothers and agnates of the 1st plaintiff P.W.4 is ths wife of one Pothula Kanga Reddy They are residens of Tartur village in Kumool Dist..possessed of extensive properties and also having money lending business. Defandants 1 and 2 are brothers, owning considerable extent of defectivable land and a jinning factory They are also residents of the same village. The plaintiff's family had been lending moneys to defendants 1 and 2 from a long time past on promissory notes etc. By 1953, the principal .and interest due there under amounted to Rs. 32,000/- and the defendants also had to pay about Rs. 28000/- by way of arrears of income tax, for realisation of which their properties were attached. In that situation for the discharge of the said sums, defendants I and 2 executed the suit mortgage bond, Ex. A.1 on 14-11-63 in favour of plaintiffs 1 to 3 and the husband or the 4th plaintiffs, hypothecating their houses described in plaint 'A' Schedule item 1 to 19 of 'B' Schedule, consising of cultivable lands situate, in Tartar village of an extent of Ac. 163,29, and item 20 in Veepanagandla Village of an extent of Ac. 5-47 and also the building, site and the jinning factory in Palliala village with the machinery and furniture, described in plaint 'C' schedule. The mortgage-deed provided for the repayment with interest at 12 annas percenti or 9 percent, per annum in two years. The arreas due to the Income-tax Department were admittedly paid by the mortgagees and they also bore the registration and other expenses, which the mortgagees undertook under the mortgage-deed. On 18-1-1954. defendants 1 and 2 executed a registered lease deed, Ex. A.2 for a period of two years in favour of plaintiffs 1 and 2 and the husband of the 4th plaintiff, in respect of only the 'B' Schedule properties for annual rent of Rs. 4000 stipulating that out ot the lease amount the lessees should pay the taxes on behalf of the lessors and the balance towards interest due on the suit mortgage bond, Ex. A.1 and then towards the principal, and the balance due after such adjustment would be paid in two years, but the lessees were given the option to continue the lease even after the expiry of two years, As defendants 1 and 2 represented that they were hard pressed for money, instead of so adjusting the rent for the first year the lessees paid Rs. 4000/- In cash to defendants 1 and 2, and obtained the receipt, Ex. A. 3 dated 25-9-1955,

(3.) While so, on 10-5-1956, the lessees were dispossessed of items 17 to 19 of 'B' Schedule by defendants 3 and 4 in execution of the decree in O. S. No. 33 of 1952 on the file of the Subordinate Judge's Court, Kurnool, dated 18-2-1955, which held that those properties did not belong to de'eniants 1 and 2. The said decision of the Sub Court was later affirmed by this conrt in A. S. No. 98 of 1955 and it became final. Hence defendants 3 and 4 wereimpleaded in the suit, As suggested by the mediators brought by the defendants the morgagees orally agreed in Appril, 58 to purchase items 1, 2, 3, 10, 13, 15, 16 and 20 of the 'B' schedule in lull discharge of the mortgage debt, and the defendants undertook to execute a sale deed therefor, and pursuant to that agreement, the lessees surrend red the other lands covered bv the lease-deed in April, 1958, to defendants 1 and 2, and thus the parties remained in possession of the respective items of the 'B' Schedule. The defendants, however, committed default in executing the sale-deed, and even threatered to dispossess the lessees from the 'R' Schedule items which remain in their (Plaintiff's) possession. Thereupon, the lessees filed O. S. No. 307 of 1961 on the file of the District Musif's Court, Kurnool, for a declaration of their title to those itmes of 'B' Schelule agreed to be sold and for injunction Defendants 1 and 2 not only denied the existence of the oral agreement, but instead pleaded another agreement by which they plesdtd that the mortgaged debt became discharged. An interlocu tory application lor the appointment of a receiver filed by the lessees (Plaintiff) was dismissed by the District Munsif, as he did not believe the oral agreement to sell. Taking advantage of that order, defendants 1 and 2 forcibly dispossessed the lessees of the items of the 'B' schedule which remained in their possession under the agreement to sell, between November and December, 1961. In these circumstances, the mortgagees had fallen back upon the mortgage dead Ex A.1 and filed the present suit for recovery of Rs. 89, 553.88 due Under the Mortgage on 9-10-1962. Though defendants 1 and 1 were income-tax assessces and also paid house-tax, and were not entitled to the benefits of Madras Agriculturists Relief Act IV of 1938. the plaintiffs have claimed interest as under the Act at 5% percent, per annum, though the mortgage-deed provided for interest at 9 percent, per annum. The plaintiff had given credit to the amount of rent due from the lessees from 1956 to 1961 in respect of the land which remained in their possession prior to the agreement to sell in 1958 and a proportionate sum after the agreement to sell till dispossession in 61. For the balance due, they prayed for a preliminary decree for sale of the mortgaged properties described in Schedules A, B & C, attached to the plaint.