PERIA MANICKA MUDALIAR Vs. RAMATHAI VADIVELU MUDALIAR

JUDGEMENT

(1.) These are consolidated appeals from two decrees of the High Court of Judicature at Madras reversing two decrees of the Subordinate Judge of Chingleput, and giving judgment in both suits for the plaintiffs. The following statement of the facts is founded upon the findings of the High Court, which, for reasons which will hereafter appear, their Lordships accept as correct:

(2.) One Sundarammal was the owner of certain lands in the village of Kovur and elsewhere in the Chingleput district, subject to a first mortgage for Rs. 25,000 and interest and to a second mortgage for Rs. 9,500 and interest, and had incurred other debts. In the year 1902, the second mortgagees brought a suit to enforce their mortgage, obtained a decree for the sale of the mortgaged property, and themselves purchased it at the auction at a low price. Thereupon Sundarammal, in order to get this sale set aside under Section 310-A of the Civil Procedure Code and to provide for her other debts, entered into an agreement with four persons named Murugappa, Kandasami, Munisami and Ponnambala, for the sale of the whole property to them at the price of Rs. 65,000, being a sum sufficient to pay off the mortgage and other debts and to provide a small balance for the vendor. These persona were friends of Sundarammal, and it was understood that they should dispose of the lands piecemeal and, after paying out of the proceeds of sale the mortgage and other debts of Sundarammal and any money due to themselves, should pay over to her any balance which might remain. The property was accordingly conveyed to the four persons abovenamed (who will be referred to as the vendees ) on 10th August 1902; and on 15th August 1902, they paid into Court a sum of Rs. 15,598, being a sum sufficient to satisfy the second mortgagees, and got the sale to those mortgagees set aside. On 27th September 1902 the vendees divided amongst themselves about sixty acres of the land, which were taken to represent in value the amount which they had paid for redeeming the second mortgages; and some time afterwards, as no sale could be made of the remaining lands in Kovur, the vendees made a similar division of those lands among themselves, on the understanding that each of them should be responsible for his share of the debts. On this division a part of the land was reserved for Sundarammal, apparently in satisfaction of her interest in the ultimate balance to arise on realization. Murugappa died, and his interest in the lands became vested in his widow and certain alienees from her. Meanwhile, the first, mortgagees, who had not been parties to the arrangement above recited, became dissatisfied; and in the year 1904 they took proceedings to enforce their mortgage, and on 14th March 1904 obtained a decree for sale. The sale was fixed for 3rd May 1905; and it is obvious that the persons claiming under the deed of 1902 ran the risk, unless they made some arrangement, of losing the benefit of their purchase and of the monies which they had found to satisfy the second mortgagees. They accordingly determined to bid for the property, and for that purpose got together a sum of about Rs. 10,000, which they contributed in unequal shares. It was then ascertained that the appellant Vadivelu and two other persons named Vythilingam and Dharmakartha Kandasami were also proposing to bid, and it was in order to meet this difficulty that the agreement giving rise to these suits was entered into. The agreement was entered into orally between the three persons last named, that is to say, the appellant, Vythilingam and Dharmakartha Kandasami, and the four original vendees or their representatives, and was to the effect that the vendees should not bid for the property but should permit the above named three persons to buy, that if they bought the vendees should advance to them the above sum of about Rs. 10,000 to assist them in providing the deposit and completing the purchase, and that whichever of them became the purchaser of any property allotted on the first or second division to any of the original vendees (with an exception to be immediately mentioned) should convey such property to such vendee or his representative, on payment by him of such proportion of the auction price as might be found to be due from him on an adjustment of accounts. An exception was made in the case of Ponnambala, one of the four vendees, who was not anxious to get back the property allotted to him on the second division; and, so far as he was concerned, the arrangement applied only to the property passing under the first division, and it was understood that, as regards the properties allotted to him on the second division, the appellant should stand in his shoes.

(3.) The auction accordingly took place, and the appellant was declared the purchaser of lot 3, comprising about 115 acres of the Kovur lands, for Rs. 21,500, other lots being purchased by Vythilingam and Dharmakartha Kandasami. The vendees duly made the contribution of Rs. 10,000 which they had promised; the balance required was raised from other sources, and sale certificates were issued to the purchasers and possession given to them. The lots purchased by Vythilingam and Dharmakartha Kandasami have been dealt with in accordance with the agreement, and need not be further referred to.