P V S KRISHNAMURTHY PILLAI Vs. PVSSUNDARAMURTHY PILLAI

JUDGEMENT

(1.) The facts out of which these appeals arise are briefly these: One P. Venkatachalam was a well-known condiment and ice manufacturer of Madras. He acquired considerable property and died. One of his sons Subbaraya Pillai predeceased him leaving a son Sundaramurthi. Another son of P. Venkatachalam, namely, Subramania Pillai was appointed executor of his last will and testament. Another son Murugesam Pillai and some others including Sundaramurthi Pillai instituted C. S. No. 238 of 1905, in the High Court (original side), Madras, for partition and administration of the properties of Venkatachalam. Sundaramurthi claimed in that suit a fifth share in the properties of the deceased Venkatachalam. By the decree in that suit Sundaramurthi was declared entitled to a fifth share in all the properties and under that decree he got various properties besides a sum of about two lakhs. During the pendency of that suit a son was born, namely, Krishnamurthi. Sundaramurthi seems to have lived an extravagant life leading to wastage of the family property and heavy debts. The present suit was filed on 11 February 1927 by his minor son Krishnamurthi already mentioned and his daughther appearing through their mother as next friend for partition and for other reliefs appropriate to a son and daughter. Sundarmurthi was defendant 1 in the suit. Defendants 2, 4 and 5 are creditors claiming to hold mortgage rights over some of the family properties and the plaintiff questions the validity of these debts. Defendant 3 is a purchaser of house and ground No.182, Popham's Broadway, Madras, belonging to the family under a sale by public auction held at the instance of defendant 4 under power contained in a mortgage executed by defendant 1 in favour of defendant 4. The validity of the mortgage and sale is also impugned by the plaintiff s. Meanwhile on 3 March 1927, an application was filed to declare defendant 1 an insolvent.

(2.) The act of insolvency with which he was charged was that his property was attached on 29 January and it was allowed to remain under attachment for a period of throe weeks, that is up to 19 February. Defendant 1 was adjudicated insolvent on 14 March. As a result of this adjudication the Official Assignee of Madras was added as defendant 7 on 1 Saptember 1927. On the ground that one V. Rangayya claimed to be in possession of two houses, Nos.76 and 77, Poonamallee High Road, under a mortgage and claimed to recover rents thereof on the ground of an equitable assignment of rents executed by defendant 1 on 5th November 1926, the said Rangayya was made defendant 6. Kumaraswami Sastri, J., before whom the case came on for trial passed a decree for partition after declarring that the sale to defendant 3 was valid and that the mortgage in favour of defendant 4 was made for discharging the antecedent liability of defendant 1 and was therefore binding on the plaintiff. So far as defendant 2 was concerned defendant 1 had incurred debt under three documents Exs. 15, 16 and 17; but Exs. 15 and 17 were not registered and therefore were invalid as mortgages. As to Ex. 16 it was valid as a mortgage but it was not for an antecedent debt and did not bind the share of plaintiff 1. There were two debts Rs. 4,000, and Rs. 2,000, due to defendant 6. So far as the first debt of Rs. 4.000 was concerned, though the creditor defendant 6 had the right to collect the rents, he had no actual mortgage. As to the other debt of Rs. 2,000 it was incurred after insolvency and was not binding on the plaintiff. The learned Judge also directed an account to be taken and passed a preliminary decree accordingly. Appeal No. 3 of 1930 is an appeal against this decree by the plaintiffs. Defendant 6 and the Official Assignee have filed a memorandum of objections.

(3.) Taking up O. S. Appeal No. 3 first it is argued by the learned advocate that the mortgage in favour of defendant 4 was not incurred for an antecedent debt. The facts relating to this part of the case are these: There were two houses Nos. 182, Popham's Broadway, and 75 Poonamallee High Road. They originally fell to the share of Loganatham, another son of Venkatachalam in the partition suit. In that suit Messrs Parry & Co. were appointed receivers and they executed sale deeds in favour of Loganatham, Exs. 1 and 22. He mortgaged both these items to one Nagu Sah on 24 April 1922 by Ex. 23 for Rs. 35,000. This mortgage contained a power to sell and Nagu Sah brought No. 182, Popham's Broad way, to sale. At the auction held on 8 June 1923 it was purported to be purchased by Sundaramurthi, defendant 1, through his agent Kumaraswami who was a clerk of Mr. S. Duraiswami Ayyar, an advocate of this Court. Loganatham Pillai had borrowed a sum of money under a promissory note Ex. 5 dated 25 April 1922, from one Narayana Sah, and to discharge this debt he sold No. 75 Poonamallee High Road, for Rs. 12,800 to Sundaramurthi under Ex. 3, dated 20 July 1923. Sundaramurthi as a matter of fact had not with him the amount of Rs. 35,000 and Rs. 12,800 required for the above two transactions.