SINGA PILLAY Vs. AYYANERI GOVINDA REDDY

JUDGEMENT

(1.) In the Calcutta and. Allahabad High Courts it appears to have been settled by judicial decisions that a benami mortgagee may maintain a suit upon a mortgage: vide Kirtibas Das v. Gopal; Jiu (1914) 19 C.L.J., 193, Sachita Nandu Mohapatro v. Baloram Gorain (1897) I.L.R., 24 C., 644, and Parmeshwar Dat v. Anardan Dat (1915) I.L.R., 37 All., 113. In this Court there is no reported case on the point so far as I am aware; but in Mandarayan v. Singaram Second Appeal No. 186 of 1903, the, same view was taken as in Calcutta and Allahabad and three more unreported cases were therein referred to as authorities that precluded arguments being raised to the contrary. In Kutha Perumal Rajali v. The Secretary of State for India (1907) I.L.R., 30 Mad., 245, the decision in Chidambara Mandarayan y. Singaram Second Appeal No. 186 of 1903, was quoted with approval and its principle was explained as being that a benamidar s suit is equivalent to a suit by an agent of an undisclosed principal. If a mortgagor can successfully resist a suit brought by the beneficial owner of the bond on the ground that he is not the person named in the bond as mortgagee, it is difficult to see on what grounds he could also be successful against the ostensible owner of the legal estate when the real owner holds back. In case of dispute the remedy would be to join the person alleged to be the real owner as a party, so that he might be bound by the decision. If the benamidar can sue upon the bond there is no reason why he should not assign his right of suit to another for proper consideration. In this case, however, there is a further difficulty. Both the lower Courts have found that the transfer to the plaintiff by Rangaswamy Mudali, the benamidar, was not a bona fide transaction.

(2.) The Subordinate Judge gives as one of his reasons for this finding that the transfer was made on the very date upon which the second defendant sued to recover the consideration of the pro-note from the real mortgagee. If he meant that the transaction was one in fraud of creditors, it must be set aside in a suit framed for that purpose. So far as the parties to this suit are concerned it is sufficient that Rangaswamy Mudali says he transferred his title to the plaintiff and received consideration for the transfer. His act must be taken as operating to pass whatsoever title he had to sue the mortgagor and I have held above on the point of law that he had a title to sue as mortgagee though he was a benamidar.

(3.) I agree therefore that the lower Court s decree must be reversed and a decree passed for the plaintiff. Seshagiri Ayyar, J.