GHULAM ASADULLAH KHAN Vs. MOHAMED ALI KHAN

JUDGEMENT

(1.) This is a quia timet action by eight plaintiffs against three defendants, all of whom are the heirs and legal representatives of a gentleman called Madhi Hussain Khan, who died on 26th July, 1932, leaving a will under which he appointed the first plaintiff as the sole executor. The first four plaintiffs are the sons and plaintiffs 5 to 8 are the daughters of Madhi Hussain Khan. Defendants 1 and 2 arc his sons and the 3 defendant is his widow. The first plaintiff obtained probate of his father's will. On 10 July, 1933, he mortgaged a part of the estate, namely, houses bearing Nos. 50, 51, 51-A, 52 and 53, Peters Road, Royapettah, with the Egmore Benefit Society for a sum of Rs. 30,000 and paid off some debts due by the cstate. This mortgage in favour of the Society contained a power of sale under Section 69 of the Transfer of Property Act. Subsequently all the heirs entered into an agreement about the distribution of the estate and the discharge of their liabilities. Under this agreement plaintiffs 2 to 8 were to take houses Nos. 50, 51, 51-A and 53, Peters Road, Royapettah and were liable to the Egmore Benefit Society in a sum of Rs. 23,070 as representing their share of the amount due under the mortgage deed executed by the executor, while defendants I to 3 were to take house No. 52, Peters Road, Royapettah and were liable to the Society in a sum of Rs. 9,780 in respect of the same mortgage as representing their share.

(2.) This agreement was followed on 30 August, 1938, by two deeds, one of which Ex. P-2 was executed by the executor in favour of several heirs making the allotment of properties and distributing the liabilities as per the agreement, and the other is Ex.P-3 which is a deed of release and indemnity as between the several heirs inter se undertaking to pay and discharge the several liabilities imposed upon each within three months from the date of the deed or to make within the same period the necessary arrangements to release the properties of the other branch or branches from the liabilities they are subject to. This deed further provides as follows: The heirs further jointly and severally covenant with the executor and each other that they, the heirs and each of them will at all times hereafter keep the executor and estates of the remaining heirs indemnified from and against all claims and demands whatsoever for or in respect of any liability allotted to each branch and hereby undertaken by them to pay and discharge. Each branch further undertakes not to alienate, incumber, or create a charge over the properties conveyed to it till all the liabilities imposed upon and undertaken by it are cleared, except for discharging the liabilities; imposed upon each or to pay their advocate's fee. The plaintiffs paid to the Egmore Benefit Society by selling House No. 50, Peters Road, Royapettah, a sum of Rs. 14,700 in April, 1939, and their assertion that they have paid every pie of interest due to the Society on their share of the liability up to this date has not only not been challenged but is proved beyond any doubt by the pass book Ex. P-26. The Society refused at first to recognise the arrangement come to among the heirs concerning the division of the mortgage liability and insisted on their right to bring all the properties to sale for the amount of principal and interest due after giving credit to the payment of Rs. 14,700 and to the sums paid by way of interest by the plaintiffs. This will be seen from Ex. P-9. The position then was this. Under the agreement the plaintiffs were due to pay to the Society only Rs. 8,500 for their share, while the defendants were liable to pay to the Society not only a sum of Rs. 9,780 but something more for interest which they had defaulted to pay. The Society advertised the properties for sale on 31st December, 1939, but the sale was stopped at the request of the plaintiffs for time. The plaintiffs wrote to the defendants Ex. P-12 on 28 November, 1939, pointing out that the sale was the direct consequence of their non-payment of interest on their share of the liability and that if their properties were also brought to sale the defendants would be liable for any loss the plaintiffs might sustain. It is stated that for this letter there was no reply. On 14 March, 1940, the Society wrote to the plaintiffs advocate that they had nothing whatever to do with the family arrangement between his clients and the other mortgagors; in other words, they wanted the whole amount remaining due to be paid to them. Thereupon the plaintiffs advocate sent to the defendants the letter, Ex. P-14, on 13 November, 1940, calling on them to pay to the Society the balance of their share of the liability and informing them that in default, legal steps would be taken against them. Once more the Society brought houses Nos. 51 and 51-A which were allotted to the plaintiffs for sale on 22nd December, 1940, and the plaintiffs wrote to the Society requesting them to bring house No. 52 to sale first as the liability was primarily that of the defendants, who had committed default in the payment of interest as a result of which penal interest was running. Accordingly house No. 52 was brought to sale by the Society and was purchased by the Society for Rs. 8,100 in June, 1940, but the sale did not materialise and was not treated as a good one on objection raised by the defendants to the purchase by the mortgagees themselves. On 6 December, 1940, the plaintiffs wrote another letter to the defendants asking them to separate the two liabilities and to execute a separate mortgage in favour of the Society for their share of Rs. 9,870 plus interest due up till 30 November, 1940. This again elicited no reply. The Society took up a reasonable attitude in March, 1941, as will be seen from Ex. P-20, where they say that if the amount due to them was secured, they would have no objection to effect being given to the terms of the partition deed by allowing the two sets of heirs to execute separate mortgages in respect of the properties allotted to their respective shares. This letter is important as it shows that for Rs. 8,500 which was due by the plaintiffs in respect of their share of the liability houses Nos. 51 and 51- A were considered sufficient security, whereas for the remainder that was due by the defendants there was adequate security only for Rs. 7,700, out of which Rs. 1,700 represented the value of the additional security that was offered by them, namely, Nos. 25 and 26, Mosque Street. The Society wanted the mortgagors to pay the difference amount of Rs. 3,755 and odd, which was of course the liability of the defendants under the terms of the agreement. The defendants made no arrangement for payment of this amount. The proposal made by the Society could not therefore come into effect and once again a sale was advertised for 27th. May, 1941, of houses Nos. 51, 51-A, 52 and 53, Peters Road, Royapettah.

(3.) It was in this posture of affairs that the present suit came to be filed on 12 May, 1941, calling upon the defendants to make good their liability and the contract of indemnity by bringing their share of the amount due under the mortgage and thus save the plaintiffs from the harm of their properties being brought to sale by the Society, even though those properties were considered by the Society as ample security for the plaintiffs own share of the liability of Rs. 8,500. The defendants say in their written statement that the plaintiffs, who are themselves defaulting parties, cannot maintain the present suit, and that if they had paid to them the sums which they had to pay under the agreement of allotment, it would have enabled them to pay over the sums to the Society in reduction of interest due and also a portion of the principal, and that the plaintiffs must be held responsible for the inability of the defendants to discharge their share of the liability which they undertook to discharge under the agreement. . The suit is the result of ill-feelings between the parties and as the Society had not taken any effective steps for bringing the properties to sale and as the plaintiffs have not suffered any damages, the action was premature and misconceived.