SOORNEEDI SATHIRAJU Vs. BATCHU VENKATA RAO

JUDGEMENT

(1.) This Letters Patent appeal arises out of I.A. No. 1610 of 1951 on the of the Subordinate Judges Court, Kakinada and raises a short point involving the interpretation of Section 8(2) of the Madras Agriculturists Belief Act (IV of 1938). The question is whether the reduction to a proportionate extent of the liability of the mortgagors by reason of the purchase with the leave of the court of a part of the hypotheca by the mortgagee in court auction in execution of a simple money decree shall be deemed to be payment to the creditor by the debtor within the meaning of Section 8(2} to be taken into account for invoking the principle underlying the said sub-section. Justice Krishnaswamy Naidu, by the impugned order, has answered this question in the negative. Hence this appeal.

(2.) To appreciate the point, a brief statement of facts may be expedient. The appellants and their father mortgaged three items of property under a mortgage dated 18-4-1924 in favour of the mortgagee-respondent for a sum of Rs. 3000. A few years thereafter they borrowed some money on a promissory note dated 31-1-1933. They failed to redeem the debt. The respondent laid his action. O. S. 458 of 1938 on the foot of the promissory note on the file of the District Munsif, Kakinada, got a decree, brought one of the three items of the hypotheca to sale in execution of the said decree and purchased it with the leave of the Court for a sum of Rs. 1140.00 subject to the mortgage liability in his favour. What he purchased, of course, was the lenity of redemption that being the entire interest that the mortgagors had in the mortgaged property. As a rule, in the case of a mortgage, the rights in the property become split up, some remain with the mortgagor while the others become vested in the mortgagee. The right which invariably remains with the mortgagor is the equity of redemption. The appellant-mortgagors as a result of the sale ceased to have any interest in that portion of the hypo-theca. The properly from then on belonged to the decree-holder subject to the mortgage liability in his own favour. He had, thus, two distinct capacities and the merger of the two would be legally complete if he paid the rateable value to himself. If the entire hypotheca was the subject matter of sale in his favour, there would have been no difficulty. Then the fact that he was mere purchaser of the equity of redemption would have been of little moment. But in this cast: whereas the burden of the debt was on the entire hypotheca, the mortgagee was the auction purchaser of only of a part of it. He was therefore entitled to proceed against the mortgagors for recovery of the debt, and the mortgagors in turn had a right to demand rateable contribution towards the payment of the debt. One significant fact to be noted at this stage is that though the general rule is that a person interested in a share only of the mortgaged property shall not be entitled to redeem his own share on payment of a proportionate part of the amount remaining due on the mortgage, an exception has been engrafted on this rule in Section 60 of the Transfer of Properly Act in relation to cases where the mortgagee or mortgagees as a whole have acquired a right in the whole or part of the mortgaged property. Section 82 of the Transfer of Properly Act further lays down the rule of contribution to the mortgage debt. It provides that where property subject to a mortgage belongs to two or more persons having distinct and separate rights of ownership therein, the different shares in or parts of such property owned by such persons are, in the absence of a contract to the contrary, liable to contribute rateably to the debt secured by the mortgage, and, for the purpose of determining the rate at which each such share or part shall contribute, the value thereof shall be deemed to be its value at the date of the mortgage after deduction of the amount of any oilier mortgage or charge to which it may have been subject on the date. That being the rule, the mortgagors, even though they had lost all their rights in the auctioned part of the hypotheca, still remained interested therein so far as the determination of the rateable contribution, having regard to the total debt due, was concerned. Tim mortgagors notwithstanding the expiry of stipulated period of redemption did not care to pay off the mortgage debt still due from them. The mortgagee brought an action, O.S. No. 39 of 1911, and obtained a decree. He filed E.P. No. 195 of 1946 in the Subordinate Judges Court, Kakinada. The judgment-debtors pleaded complete discharge by reason of the purchase of the part of the hypotheca in the court auction. The learned Subordinate Judge did not accept the contention of complete discharge. He, however, determined the releable value and held that the decree-holder was bound to give credit to only a sum o Rs. 3367-0-0 being the proportionate. liability of item 1 of the mortgaged property. This order became final on account of the decision of the High Court in appeal. Then the judgment-debtors filed I.A. No. 1610 of 1961 under Sections 8 and 19 of the Madras Agriculturists Relief Act (IV of 1938) and pleaded that the debt was completely discharged. Admittedly they had paid a sum of Rs. 2984-15-0 in all. If the above sum of Rs. 3,367-3-0, be taken into account as it certainly goes towards partial discharge of the mortgage debt, the total payment would exceed Rs. 6000, which is double the amount of the principal sum. The Appellant Judgment-debtors on that basis invoking the aid of Clause (2) of Section 8 of the Madras Agriculturists Relief Act (IV of 1938) pleaded in vain total discharge of the debt. Controversy in this behalf alone is responsible for the present appeal. What we have to decide in this appeal is whether partial discharge by reason of purchase would be deemed to be a payment by the agriculturist debtor within the meaning of Section 8. Section 8, it may be noted, is a provision to scale down debts incurred prior to 1st of October 1932. The mortgage debt in question is of course of that category. How this sealing down should be effected is detailed in Sub-clauses (1) to (4). It admits of little doubt that provisions such as these which limit and interfere with the right of creditors accrued under valid contracts entered into with the debtors or under the general law, e.g. Section 60 of the Indian Contract Act in relation to appropriation or payments made, must be construed strictly. While it is essential that full effect should be given to the intention of the Legislature it is also not permissible to travel beyond the clear language and obvious intendment of the provisions or stretch their scope by analogy.

(3.) As already noticed, the case of the appellant-mortgagor is that by reason of the partial discharge of the mortgage debt consequent on me auction purchase or a part of the hypotheca, the whole debt in the circumstances, must be deemed to have been fully discharged. This they contend on the strength of Section 8(2) at the Madras Agriculturists Relief Act, 1938. Section 8(2) roads thus: