MUTHIAH CHETTIAR Vs. NMRAYALU AYYAR, NAGASWAMI AYYAR AND CO, THROUGH ITS PARTNER, NMNAGASWAMI AYYAR (DIED)

JUDGEMENT

(1.) These two connected appeals have been brought from a preliminary decree for sale made by the Court of the Subordinate Judge of Madura for a sum of Rs. 1,82,450-6-7 with interest payable to the first respondent in these appeals, a firm of merchants and money-lenders at Madura. The third defendant is the appellant in Appeal No. 213 of 1940 and the first defendant and the legal representatives of the deceased second defendant are the appellants in Appeal No. 346 of 1940.

(2.) The firm (hereinafter referred to as the respondent) obtained a mortgage on 14th September, 1921, for a sum of Rs. 50,000 from one Vairavan Chetti who executed the deed for himself and as the guardian of his then minor son Shanmugham Chetti, purporting to charge five items of property consisting of two houses in Madura town and certain lands in Madura taluk. The properties are described in the deed as having been purchased out of the self-acquired funds of Vairavan Chetti and remaining in his undisputed enjoyment. In 1925 the respondent sued Vairavan Chetti and his son for the recovery of the amount due under the mortgage. In that suit (O.S. No. 114 of 1925 on the file of the lower Court) Vairavan Chetti pleaded that the mortgaged properties belonged to his joint family which included besides himself and his son, his father and his paternal uncle who are the first and second defendants respectively in the present suit, and that the mortgage was a colourable transaction unsupported by consideration brought about to defeat his uncle's rights in those properties. Shanmugham pleaded that Vairavan Chetti had no right to mortgage the properties and that the debt must have been incurred for illegal and immoral purposes.

(3.) Before the suit proceeded to trial the present defendants 1 and 2 applied by separate petitions to be impleaded as defendants in that suit impugning the validity of the mortgage, but claiming a right to redeem on the ground that the properties belonged to the joint family, if it was found to be valid and binding on the family. These petitions were opposed by the respondent on the ground, inter alia, that the petitioners were claiming a paramount title and that, therefore, they were neither necessary nor proper parties to that suit. The Court upheld the objection and dismissed the petitions. The decree was subsequently passed against Vairavan Chetti's interest alone in the hypotheca which was found to be joint family property, and the suit was dismissed as against Shanmugham on the ground that the debt was not binding on his share in the hypotheca. Appeals were preferred to this Court, which, concurring with the findings of the lower Court, affirmed the decree so far as Vairavan Chetti was concerned but set aside the dismissal of the suit as against Shanmugham and passed a money decree on the ground of his pious obligation as a Hindu son to pay his father's debt. Vairavan Chetti's interest in the mortgaged properties was accordingly brought to sale and purchased by the respondent for Rs. 42,513. As a large sum still remained due under the mortgage the present suit was brought in 1934 against the other members of the family who were not parties to the earlier suit and against certain alienees of the hypotheca or portions thereof, praying for a declaration that the defendants have no interest in the properties on the ground that the entire interest of the joint family in the hypotheca must be deemed to have passed to the respondent at the auction sale held in execution of the prior decree, as Vairavan Chetti was held out by the other members of the family as the ostensible owner of the properties and the respondent obtained the mortgage bona fide from him, or, in the alternative, for recovery of the balance still due under the mortgage by the sale of the remaining portion of the hypotheca on the basis that Vairavan Chetti executed the mortgage on behalf of and for purposes binding on the family. Before the suit was taken up for trial, the respondent, however, gave up the claim to the declaratory relief and the suit was tried as one brought merely to enforce the mortgage against the defendants for the balance of the mortgage money. It may be mentioned here that after the institution of the suit Shanmugham's share in the hypotheca was also brought to sale in execution of the money decree passed as aforesaid and was purchased for Rs. 24,300, and the respondent agreed that this sum should be deducted from the suit claim.