SAGGU SRINIVASA REDDI Vs. SAMINENI MOHAN NAIDU

JUDGEMENT

(1.) Plaintiff is the appellant. The father of the defendant executed a mortgage on 16/1/1946, in favour of the plaintiff for a sum of Rs.4,000..00 The property mortgaged consisted of salt-pans situated in Kalingapatnam Salt Factory granted to the mortgagor by the Assistant Collector of Salt Revenue under a lease for the period from 1/1/1943 to 31/12/1967. The mortgagor died on 4/3/1947 and the suit was instituted for recovery of the mortgage amount on 29/3/1947. The defendant contended that the mortgage was unenforceable as it was prohibited by the terms of the lease deed and was opposed to public policy. Both the Courts below accepted the contention of the defendant and held that the mortgage was unenforceable ; but, a money decree was, however, passed as against the assets of S. Audinarayana Naidu in the hands of the defendant. The plaintiff has preferred the second appeal in so far as the mortgage decree was not passed in his favour.

(2.) The simple question that arises for consideration is as to the effect of clause 12. of the lease-deed, Exhibit B-1, which runs in the following terms:-

(3.) There is no provision in the Madras Salt Act (Act IV of 1899) prohibiting the transfer of a lease. Sec. 11 only deals with the transfer of a licence granted under the terms of the Salt Act. It provides :