OONAMALAI AMMAL Vs. KVLNARASIMHA RAO NAIDU

JUDGEMENT

(1.) This appeal arises out of a suit for the recovery of a sum of money. The plaint also claimed that the amount should be recovered by sale of the suit property on the footing of a charge on the property. Defendant 1, who was admittedly the owner of the property at one time, is the mother of defendants 2 and 3. It is common ground that in 1924: this property had been given as security to one Kuppu Rao. In 1926 a suit was instituted by Kuppu Rao for the recovery of the amount due to him. He died pending that suit and the Administrator- General who took charge of his estate continued the suit and obtained a decree. In execution of that decree, the property was advertised for sale on 25 January 1928. The documentary evidence in the case, read in the light of the oral evidence, establishes that some days before the sale, attempts were made by defendants 1 and 2 to raise money to pay off the mortgage decree and prevent the sale of the pro-party. It is the plaintiff's case that his money was advanced for this purpose, through his cousin P.W. 6, and that the understanding, as evidenced by Ex. A, was that defendant 1 was to execute a hypothecation bond for the entire amount advanced by the plaintiff. As the defendants impeached the genuineness of Ex. A mid of some of the other documents produced on the plaintiff's side, it will be convenient to refer in the first instance to documents which have not been impeached. It is sufficient at this stage to state that no mortgage was in fact executed; but the plaintiff claims a charge on the principle of subrogation as his money had been utilized to pay off the mortgage decree in favour of Kuppu Row's estate. The contesting defendants deny even the fact that plaintiff's moneys went to pay off that decree and they contend that the plaintiff is not entitled to invoke the principle of subrogation.

(2.) P.W.6 was the proprietor of Dowden & Co., and there are in the record certain Jotters that passed between him and the Administrator-General, and as their genuineness has not been challenged their contents may be taken as fairly true ; their truth has also been sworn to by P.W. 6. These letters make it clear that the money which was paid to satisfy Kuppu Rao's decree was paid to the Administrator-General by Dowden & Co., on behalf of the present plaintiff who was the cousin of P.W. 6. It is also significant that in one of them there is express reference to the intention to take necessary documents from the defendants before paying the balance due under the mortgage decree. A short time was obtained to make payment of the balance and the decree amount was finally discharged by a further deposit by Dowden & Co. made in the name of the plaintiff. Though the execution records relating to that mortgage unit were not exhibited in the lower Court, we have, with the consent of the advocates on both sides, inspected them here. They only show that the decree was reported satisfied and that the sale warrant was accordingly returned unexecuted. Barring a passing reference in one petition to a payment having been made by one Narasimha Rao on behalf of the defendants, there is nothing further in the records of that case to show that the decree was discharged by the present plaintiff or that there was any arrangement between the present plaintiff and the defendants in that suit in respect of their executing a security bond in favour of the plaintiff to secure repayment of the sum advanced by him. The admitted documents, taken with the evidence of P.Ws. 6 and 7 suffice, in our opinion, to show that the present version of defendants 1 and 3 that it is they who found the money to pay off Kuppu Rao's mortgage decree and that they had no transaction whatever with the plaintiff in that connexion cannot be true. It has not been suggested what motive P.W. 6 had in 1928 to make a reference to the present plaintiff as the person whose money was being paid to the Administrator-General in satisfaction of the mortgage decree unless the statement represented the truth, Nor is it easy to understand why there should be any reference to documents being taken from the defendants in that suit, if it was the defendants" money which was being paid in discharge of that decree.

(3.) If, as seems to follow from the above facts, it was plaintiff's money which was in fact paid to discharge Kuppu Rao's decree and there was an intention to take formal documents from the defendants in due course to secure repayment thereof, there is little force in the objection raised on behalf of the defendants to the genuineness of the letters, Exs. A, Y and Z on which the claim in the present suit is founded. These letters show that the money was lent on the express understanding that its repayment should be secured by a hypothecation bond to be executed by defendants 1 and 2. But as the parties-hoped that they might sell the property privately and pay off the amount due to the plaintiff, there was considerable delay in the execution of the hypothecation bond. On a notice, Ex. J, being sent by an advocate on behalf of the plaintiff to the defendants, bringing these facts to their notice, Exs. Y and Z were executed by defendants 1 and 2, and in these documents they reiterated their promise to execute a formal mortgage deed within 15 days if by that time they were not able to pay up the money by the sale of the property. These documents are formally proved by persons who were present at their execution by defendants 1 and 2, and we see no reason to differ from the view of the learned trial Judge that they are genuine documents executed by defendants 1 and 2. If matters stood there, there can be little doubt that notwithstanding the non-execution of a formal mortgage deed, as originally contemplated by the parties, the plaintiff will be entitled to invoke the doctrine of subrogation. The case is clearly governed by the principle of the decision in Dinobundhu Shaw Chodhry V/s. Jogmayya Dasi (1902) 29 Cal 154 and the mere fact that at the time when the money was lent by the plaintiff to P.W. 6, no deed of mortgage had really been executed or that the parties intended to secure repayment by a formal deed of mortgage will not affect the applicability of the rule of subrogation to the case : cf. (1910) 2 Ch 277.2