RATHNA MUDALI Vs. PERUMAL REDDY

JUDGEMENT

(1.) The facts of this case so far as they are necessary for the decision of this second appeal are briefly as follow. One Vedachala executed an usufructuary mortgage deed to one Thangavelu on the 7th April 1900, Ex. II. This mortgage was subsequently transferred to the 2nd and 3rd defendants in the suit. The 1st defendant is the heir of Thangavelu. Vedachala had three sons. He and each of the sons were therefore entitled to a fourth share in the property. On the 2nd May 1900 two of the sons Singaravelu and Tiruvengada sold their half share of the property to the 4th defendant. The mortgagees, the 2nd and 3rd defendants received half of their debt from the 4th defendant and gave up possession of a portion of the properties to him.

(2.) The plaintiff obtained a transfer of the equity of redemption from Vedachela and his remaining son and he has instituted his suit for redemption of the mortgage. He claims to be entitled to be put in possession of the whole property mortgaged by Vedachala on payment of the whole amount and is not content with a decree for possession of half the property on payment of half the mortgage amount. The 4th defendant resists the plaintiffs attempt to recover the whole of the property and contends that as he has become the owner of half of the equity of redemption and the plaintiff entitled only to the remaining half, he should not be allowed to recover possession of more than half of the properties and he claims to be entitled to retain possession of the property in his possession as representing the share of his transferors. The District Munsif gave the plaintiff a decree for the whole property. On appeal the District Judge modified the Munsif s decree holding that the plaintiff was not entitled to recover the whole of the property and held that on payment by the plaintiff of half of the mortgage amount, the plaintiff and 4th defendant should be held to be jointly entitled to the possession of the mortgaged lands. The second appeal to this Court is preferred by the plaintiff and he contends that he is as a matter of right, entitled to recover the whole of the property mortgaged under Ex. II. The question for decision is whether the plaintiff is entitled as a matter of right to redeem the whole of the mortgage and to recover possession of the whole of the property in the circumstances of the case. It will be noticed that the mortgagees have split up the mortgage so far as they could by receiving a portion of the mortgage amount from the 4th defendant, the assignee of half of the equity of redemption and the 4th defendant has now become the owner of a share both in the equity of redemption and mortgage. Section 91 of the Transfer of Property Act lays down that any person having an interest in the right to redeem the property may redeem or institute a suit for redemption of the mortgaged property but I do not think that it lays down that a person who is entitled to a share only of the equity of redemption has under all circumstances, the right to insist on redeeming the whole of the mortgage and recovering possession of the whole of the mortgaged property. Section 60 enacts that a person entitled to a share only of the mortgaged property is not entitled to redeem his share only on payment of a proportionate part of the amount remaining due on the mortgage and lays down an exception where a mortgagee has acquired in whole or in part a share of the mortgagor. The mortgagee under this section has ordinarily a right to insist on treating the mortgage as indivisible and on the redemption of the whole mortgage. But he cannot do so where he has split up the equity of redemption by becoming the owner of a part of it himself. I do not think that there is any principle of justice which requires that a person who is entitled only to a part of the equity of redemption should necessarily he held to have a right to redeem the whole of the mortgage. If there are several persons in whom the equity of redemption is vested, there is no reason why one of them and the mortgagee acting together should not be held to be entitled to deal with his interest in the equity of redemption and the mortgagee s right as against him provided the rights of the other owners in the equity of redemption are not thereby injuriously affected. Of course nothing done either by a mortgagor or a mortgagee behind the back of the other can affect the right of that other so as to injure him in any way. Where the mortgagee has dealt with one of those entitled to the equity of redemption, it has been held that a person entitled to the remainder may claim to redeem his share only of the equity of redemption. See Marana Ammanna v. Pendyala Perubhotulu (1881) I.L.R. 3 M. 230 and Subramainam v. Mandayan (1886) I.L.R. 9 M. 453. It has also been held that a mortgagee may claim to recover the share of the debt due from a person entitled to a portion of the equity of rede nption when he has already entered into an arrangement with the owner of the remainder provided the right of the defendant is not prejudiced by the arrangement entered into between the mortgagee and the defendant s co-owners of the equity of the redemption. See Hari Kishen Bhagavat v. Valiat Husain (1903) I.L.R. 30 C. 755, Mahadaji Hari Lenaji v. Ganapat Shet Dhoud Shet (1890) I.L.R. 15 B. 257, Brijkishore v. Mcuiho Singh (1905) I.L.R. 28 A. 279 and Venkatachala Chetty v. Sreenivasavuradachariar (1904) I.L.R. 28 M. 552. In Lakshmangururaja Naik v. Madhu Kristo Shervai (1890) I.L.R. 15 B. 186 it was held that the mortgagee was entitled to have an account taken between him and the owner of a part of the equity of redemption when he had already settled his rights as against the owner of the remainder of the equity. The objection to a mortgagee splitting up a mortgage is entitled to weight only where the owner of a part of the equity of redemption is prejudicially affected by the splitting. In Huthasanan Nambudri v. Parameswarcr Nambudri (1904) I.L.R. 28 M. 209 it was no doubt held by this Court that a person entitled to a part only of the equity of redemption had a right to redeem the whole notwithstanding the mortgagee s objection that he should not be permitted to redeem more than his share of the equity. In that case the persons who were entitled to the remainder of the equity were parties to the suit and also seem to have resisted the plaintiff s attempt to redeem the whole. It does not appear whether they claimed to continue the mortgage in so far as their shares were concerned. The decision proceeded on the principle that a mortgage contract was indivisible and that it was the right equally of the mortgagor and mortgagee to keep it indivisible. The judgment was based on some decisions of the English Courts Pearse v. Morris (1869) 5 Ch. A. 227 and Hall v. Heward (1886) 32 Ch. D. 430 but in those English cases the plaintiff s co-owners in the equity of redemption were not parties and it does not appear that they objected to the redemption of the whole of the mortgage by the plaintiff. I cannot see any principle on which it should be held that even if some of the co-owners of the equity of redemption should desire to continue the mortgage of their shares one of the co- owners be held to be entitled to redeem the whole of the mortgage. I do not think that Huthasanan Nambudri v. Parameswara Nambudri (1898) I.L.R. 22 M. 209 intended to go the length of laying down such a general rule and certainly the English cases which were followed there did not propound any such rule. The question whether the court will allow redemption of the whole of the mortgage at the instance of a person entitled to a part only of the equity of redemption must depend on the circumstances of each case and the rights acquired by the mortgagee or by third persons subsequent to the mortgage. In this case there is no reason why the plaintiff should first be allowed to redeem the whole of the mortgage and the 4th defendant who has a right both of a mortgagee and mortgagor be left to bring a fresh suit for recovering his share of the equity of redemption from the plaintiff. In 2 cases Mar altar Akath Kondara Kayil Maniu v. Punjapatath Kuttu (1882) I.L.R. 6 M. 61 and Thachi Chettiar v. Ramanatha Aiyar (1896) I.L.R. 20 M. 295 it was held that when the plaintiff was entitled only to a part of the equity of redemption and the defendant entitled to another part the plaintiff could not sue to redeem at all without first getting a partition of the equity of redemption. With all respect it seems to me that those have gone too far in holding that the plaintiff s suit should be altogether dismissed. It may be noted that in those cases it was the mortgagee himself who had acquired a share of the equity of redemption and there was in my opinion, the less reason for holding that a partition should be first effected between the parties to the suit before a suit for redemption could be maintained. In Bombay on the other hand, it was held that notwithstanding that the mortgagee had become owner of a part of the equity of redemption, the mortgagor was entitled to insist on redeeming the whole mortgage. See Mora Joshi v. Ratnachandra Dinkar Joshi (1890) I.L.R. 15 B. 24 and Narayan v. Ganapat (1896) I.L.R. 21 B. 619. In my opinion, both the Madras cases and the Bombay cases mentioned above are contrary to the principle of the proviso to Section 60 of the Transfer of Property Act.

(3.) I can see no reason why on the facts found there should not be a decree for partition in this case so as to allow plaintiff to recover half the properties included in the mortgage? The 2nd and 3rd defendants did not claim to be entitled to any part of the properties now. The 4th defendant according to their admission is entitled to all that the plaintiff cannot claim. I ought to notice a contention that Vedachala was himself entitled to the whole of the property and that the 4th defendant acquired no right by the conveyance he obtained from the two of the sons of Vedachala. I am unable to see that this contention was put forward in either of the Courts below. It has not been raised even in the memorandum of second appeal. It was held in O.S. 261 of 1901 which was instituted by the original mortgagee Thangavelu against Vedachala and his sons and the 4th defendant that the latter was entitled to the shares of the two sons that were conveyed to him subject to the mortgage in Thangavelu s favour. The plaintiff in this suit did not as I have already observed, contend in the lower courts that Vedachala was solely entitled to the property. No doubt the plaintiff s object in insisting on recovering possession of the whole property is to make an attempt to set up a claim to the whole in case the 4th defendant be driven to another suit for recovering the shares of his transferors. I don t think that this course should be followed. The learned Vakil for the appellant consents to a decree for partition if we hold that he ought not to be allowed to redeem the whole mortgage. I have already held that the plaintiff was in no way prejudicially affected by the mortgagee s splitting up the mortgage and receiving half the amount due to him from the 4th defendant and I am therefore of opinion that the decree of the lower appellate Court should be modified by the plaintiff being allowed to redeem only half the properties on payment of half the mortgage amount is Rs. 187--5--0. The plaintiff will be put in possession of half the properties included in the mortgage deed after a fair partition between him and the 4th defendant. The 4th defendant must be put in possession of the remainder. It would be desirable to allot the lands in 4th defendant s possession to him in partition in so far as that can be done without injustice to the plaintiff. In the circumstances we think the parties should bear their own costs throughout. Sadasiva Aiyar, J.