K M RAMAKRISHNA MUDALIAR Vs. VSVMANIKKA MUDALIAR (DECEASED)

JUDGEMENT

(1.) This appeal arises out of a mortgagee's suit for sale. The mortgage document (Ex. A) which was executed by the first defendant on 25 September, 1915, comprised properties which it appears from several statements on record stood in the first defendant's name, but as the title deeds themselves have not been produced it is not possible to make a mere positive statement on the point. At the time of the mortgage, the first defendant was undoubtedly a member of a joint family which consisted of a large number of male members and his father Varadaraja Mudaliar was also alive. The evidence establishes that the family was a trading family and was carrying on cloth trade; for convenience, they were having two shops which may be referred to as Shop No. 154 and Shop No. 172. In their dealings with outsiders, the family seem to have found it convenient, whether it be for bookkeeping purposes or for other purposes as well, to keep two sets of accounts, one for Shop No. 154 and another for Shop No. 172 though there was some amount of mixture even in respect of the transactions relating to one shop and the other. The plaintiff is clearly proved to have been supplying goods to and to have had dealings with both these shops for a long period. It is also stated that he was related to the family and presumably he was well acquainted with its position and affairs.

(2.) The main contesting defendants are persons who have purchased the interest of the second and third defendants in certain items of property in Court-sale and in the interests of the fourth defendant in a sale by the Official Receiver in the insolvency of the fourth defendant. These purchases took place in the years 1926, 1927 and 1929, and the insolvency proceedings began in 1923. It is clear that between 1915 and the date of the suit no member of the family ever questioned either the binding character of this debt or the binding character of the mortgage; on the other hand, we have the fact that in a partition suit instituted by the third defendant against the other members of the family in 1916 the properties comprised by the suit mortgage were not brought into the partition suit at all by any of the parties thereto nor was any suggestion made that this mortgage was not binding on the family. In the insolvency petition filed by the fourth defendant, he included the suit debt as one of the debts for which he was liable, and referred to the existence of the mortgage securing repayment of the same. Neither the Official Receiver nor any of the creditors of the fourth defendant took any steps to impeach the suit mortgage. On the other hand, the Official Receiver sold the property subject to the suit mortgage and when certain of the creditors attempted to have that sale set aside as having been held at an undervalue the Official Receiver as well as the present 13 and 14 defendants justified the sale on the ground-that as the properties were sold subject to mortgages including the suit mortgage the price fetched at the sale was a fair value. It is true that the mere fact of the sale having been held subject to the mortgage would not preclude purchasers from questioning the truth or the validity of the mortgage. Issat-un- nisa Begum V/s. Pertab Singh (1909) 19 M.L.J. 682 : L.R. 36 I.A. 203 : I.L.R. 31 All. 583 (P.C.). But the conduct of the parties can certainly be taken into account in dealing with the question of fact and drawing inference as to the truth and validity of the mortgage.

(3.) A suggestion was made in the written statements of the alienee-defendants in this case, that the suit mortgage was a sham transaction not supported by consideration but brought into existence in favour of a near relative of the family merely for the purpose of screening some property from the creditors of the family. In the argument before us, reliance was placed in this connection upon the admission of P.W. 1 that the title deed was not examined before the mortgage was taken nor did the plaintiff make any adequate enquiries. It was also pointed out that the suit had been instituted after considerable delay almost when the period of limitation was about to expire. These circumstances are explained, by the very relationship that the parties bore to each other. If the plaintiff was related to the family of the mortgagor defendants and had known their affairs there was nothing particular for him to enquire about. Similarly when nobody ever disputed his mortgage but on the other hand it was not called in question either in the partition suit or in the insolvency proceedings, it is nothing strange that in view of his relationship to the family the plaintiff did not think it necessary to sue unless and until it became inevitable. The real question therefore is whether there is sufficient proof on record as to the existence of the debt the payment of which was secured by this mortgage. The learned Subordinate Judge has discussed the evidence on this point very fully; a large mass of correspondence has been filed showing the dealings between the parties; the plaintiff also filed his accounts in Court showing how the amount of the suit bond was arrived at. No attempt has been made by the contesting defendants to show that the evidence thus prima facie furnished is open to suspicion.