ARJUNA REDDI Vs. VENKATACHALA ASARI

JUDGEMENT

(1.) This is a suit by the plaintiffs seeking to be allowed to redeem a mortgage executed by them (the first plaintiff and his deceased brother) in favour of the defendant on payment of the mortgage money. The defendant set up that there is no equity of redemption left in the plaintiffs by reason of the fact that he had in a suit brought by him against the mortgagors not arising out of the mortgage obtained a money decree against the mortgagors in execution of which he had himself purchased the equity of redemption. It is admitted that this sale of the equity of redemption was in contravention of Section 99 of the Transfer of Property Act, which provides that whatever may be the cause of action in a suit by the mortgagee against the mortgagor, the equity of redemption cannot be sold without a suit having been instituted under Section 67.

(2.) The only question is whether the equity of redemption having been sold in the previous suit in contravention of the section and the mortgagors not having objected to the confirmation of the sale, they can now exercise this remedy of redemption. It is to be noted that in seeking to redeem they have not offered to pay the amount for which the equity of redemption is sold.

(3.) It is argued by the appellants that the question is decided by the Privy Council in Khiarajmal v. Daim (1904) I.L.R. 32 C. 296 and reliance is placed on passages on pp. 312 and 315. We have examined that case very carefully and it has also been considered in a later case of this Court . The passage relied on by the appellants does not, we think, support them, Whereas it is clearly stated in the course of their judgment by the Board that where the mortgagor has not set aside the sale ha cannot exercise his right to redeem. Vide pages 312, 313 and 316. It is true that this decision is not on Section 99. It is based on the equitable principle, which their Lordships found applicable to India prior to the passing of the Transfer of Property Act, that a mortgagee cannot be permitted to sell the property of the mortgagor otherwise than in a mortgage suit in execution of a decree obtained for a sum covered by the mortgage which principle may be stated to be founded on the doctrine "once a mortgage always a mortgage". It is obvious that this case differs from the present in that here the suit was not brought in respect of a sum due on the mortgage and that therefore the equitable doctrine does not apply. But as the doctrine of equity has been relied on in subsequent cases in this Court it is worthy of notice that even in a case where the equitable doctrine does apply, their Lordships held that the right to redeem has been lost. In our opinion, the decision of the Privy Council is in favour of the view taken by the lower appellate court. Then the learned Vakil relied on a decision of the Full Banch in Ashutosh Sikdar v. Behari Lal Kirtania (1907) I.L.R. 35 Cal. 61. There seems to be some doubt as to whether the majority of the Judges came to any decision on this point at all. In a later case one of them took the view which the appellants ask us to take; but the High Court of Allahabad in considering his judgment have expressed their opinion that it is inconsistent with the view taken by him in the Full Bench case. Whether that be so or not, there is the very elaborate judgment of Mr. Justice Mookerjee in the Full Bench case where he sets out the different views which can possibly be taken on this point, and if the judgment of the Full Bench has decided this point in favour of the contention of the respondent, then Mr. Justice Mookerjee s judgment must be taken to support that view. The decision of the Allahabad Full Bench referred to is Lai Bahadur Singh v. Abharan Singh (1915) I.L.R. 37 All 165. Their Lordships considered all the cases including the decision of the Privy Council, the decision of the Full Bench of the Calcutta High Court and the decisions of this Court , and they take the view not only that the sale in contravention of Section 99 is not void, which view is acquiesced in by all the courts, but that being merely voidable, if it is not avoided by proceedings in execution prior to the confirmation" of the sale, the right of the mortgagor and those who represent him to redeem is absolutely extinguished, whether the purchaser at the sale be an outsider or the mortgagee bidding by leave of the court. There is no question that this decision is strongly in favour of the respondent. But our attention has been drawn to a number of decisions of this Court , some of which are not very easy to reconcile, and we are asked to follow the decision in Muthu v. Karuppan (1907) I.L.R. 30 M. 313, 315 : 17 M.L.J. 163, which the appellants rely on as supporting their contention. The first decision is that in Muthuraman Chetty v. Ettappasami (1998) I.L.R. 22 M. 372 at 375 : 17 M.L.J. 113. Speaking for myself, I do not think that it decides this question although the view has been taken in a later case that it does. The next case is Mayan Pathutti v. Pakuran (1898) I.L.R. 22 M. 347 : 9 M.L.J. 98, and this admittedly leaves the question open. The third case is Erusappa Mudaliar v. Commercial and Land Mortgage Bank, Ltd. (1899) I.L.R. 23 M. 377 : 10 M.L.J. 91 which was dissented from in Sesha Aiyar v. Krishna Aiyangar (1900) I.L.R. 24 M. 96 : 12 M.L.J. 383 and in Ikkotha v. Chakkiamma (1903) I.L.R. 27 M. 428. We have examined these cases very carefully and we cannot find that they decide anything which will assist us in the decision of this case. Doubts have arisen as to whether there is any difference between the cases where the mortgagee purchases the property at the execution sale and the case where it is purchased by a stranger. We do not think, that this question arises here, but we feel some little difficulty in appreciating the foundation of the difference in that the section which we have to construe and apply, says nothing about the purchaser at the court sale but provides that the actual sale is illegal, and the equitable distinctions applicable to those different cases seem to us not matters for consideration here. We then have two decisions Muthu v. Karuppan (1907) I.L.R. 30 M. 313, 315 : 17 M.L.J. 163 and Dharanikota Venkayya v. Budharazu Surayya Garu (1903) I.L.R. 30 M. 362. It is a little difficult to reconcile those two cases because it seems to us, on the examination of the facts in the cases, the judgment in both cases do not correctly represent the facts and that the ground of distinction taken in Dharnikota Venkayya v. Budharazu Surayya Garu (1903) I.L.R. 30 M. 362 does not really arise. But the case on page 362 lays down definitely that where there has been no objection to confirmation, there is no power to redeem, and what is more important is that the learned Judges follow and rely on the decision of the privy Council in Khirajmal v. Daim (1904) I.L.R. 32 C. 296. In this state of the authorities, it seems to us that we should follow the decision in Dharnikota Venkayya v. Budharazu Surayya Garu (1903) I.L.R. 30 M. 362 strengthened as it is by the decision of the Full Bench in Lal Bahadur Singh v. Abharam Singh (1915) I.L.R. 37 A. 165 in preference to dicta which are to be found in other cases of this Court.