ESWARA KRISHNA AIYAR Vs. MARIYA SUSAI REDDIAR

JUDGEMENT

(1.) This is an appeal from the judgment of the learned District Judge of South Arcot in a suit to enforce a mortgage dated 29 November, 1919, executed by defendants 1 to 3 in favour of the fifth defendant. This deed of mortgage Ex. A was assigned by a deed of assignment Ex. C dated 9 January, 1932, in favour of the third plaintiff who was a benamidar for plaintiffs 1 and 2. The fourth, defendant is the son of the first defendant the sixth defendant is the fifth defendant's wife; the seventh defendant is the undivided son of the fifth defendant; and the eighth defendant is a purchaser in Court auction of the suit properties in execution of a money decree against defendants 1 and 2 subsequent to the date of the mortgage. The ninth defendant, is the Official Receiver who was added as a party since the date of the suit as the representative of the first defendant who was adjudged an insolvent. The sum sought to be recovered in the suit was Rs. 20,000 which is the amount secured under the said mortgage. The main defence of the eighth defendant who became the purchaser of the right, title and interest of the first defendant in the suit properties in execution of a money decree was that the plaintiffs were not entitled to recover a sum of Rs. 20,000 but, only Rs. 11,111-1-9. The defence of defendants 5 to 7 was that they were not liable for the suit claim. To understand the plea of the eighth defendant a few facts are necessary. The mortgage Ex. A comprises two sets of properties: (1) the properties situate in the village of Orathur which belonged to defendants 1 and 2, and (2) the, properties in Perumbakkam village which belonged to the third defendant. The mortgage is usufructuary and provided that the mortgagee should enjoy the properties in lieu of interest and there is a clause which provides for redemption to this effect: We shall pay the said sum in any month of Chitrai when you may choose to ask for the amount, or when we desire to pay the amount and redeem the properties. In default, we agree that the amount may be received by process of Court.

(2.) On the 25 November, 1922, by a registered lease the said properties were leased to the mortgagors for a period of five years stipulating an annual rent of Rs. 2,109. In default of payment or rent it was provided in the deed that the lessor was entitled to recover the balance of the amount due and payable with interest at one per cent, per mensem from the lessees personally and also from and out of the properties leased, but by a later clause the personal liability of the second defendant and the fourth defendant was excluded and it was stipulated that only the properties woul4 be liable. There can be no doubt that this document creates a charge over the properties leased, that is the properties mortgaged under Ex. A, for the rent that may be due and payable thereunder. It is also stated that an intermediate charge was created over the property in favour of the fifth defendant's son-in-law benami for the fifth defendant but it does not appear from the record what the nature of that charge was and when it was redeemed, and for the, purpose of this appeal we have to proceed upon the footing that on the same properties there was a mortgage and a subsequent charge created by the mortgagors in favour of the same plaintiff under the said lease. Any decision that we give here will be without prejudice to the rights and obligations that may be enforceable under any such intermediate charge if any subsisting. It appears that although the property was leased to all the mortgagors only the third defendant enjoyed the income from the mortgaged property. But he failed to pay the rent and on the 27 September, 1929, there was a sum of Rs. 19,700 due and payable, For a sum of Rs. 15,000, part of the said sum of Rs. 19,700, the third defendant sold all the lands in Perumbakkam village, by a sale deed Ex. I dated 27th September, 1929, mortgaged under Ex. A to the fifth defendant absolutely. The operative portion of the said deed runs thus: Deducting the balance due to you is Rs. 19,700. Out of this amount you have agreed to give credit to a portion, namely, Rs. 15,000. As I have received the said sum in that manner I have in lieu thereof hereby sold to you absolutely the undermentioned properties belonging to me and in my possession and have delivered possession. You shall hold and enjoy the undermentioned properties from this day forwards with rights of alienation such as gift and sale. To this effect have I executed this deed of absolute sale with consent.

(3.) On a perusal of the deed there can be no doubt that the third defendant conveyed the said property to the fifth defendant free from encumbrances to be enjoyed by the fifth defendant will full powers of alienation. What the effect of this conveyance on the right's of the parties is we shall consider later. On the 9 January, 1932, the sixth defendant, the wife of the fifth defendant purchased from Maria Susai Reddiar and his son, the first and second plaintiffs herein, certain properties for a sum of Rs. 35,000. Part of the consideration, namely, a sum of Rs. 15,000 was paid by way of execution of a promissory note by the fifth defendant in favour of the vendors. In regard to the balance of Rs. 20,000 the consideration was said to have been paid thus: I have also received Rs. 20,000 in respect of the assignment of the usufructuary mortgage debt bond for Rs. 20,000 executed this day by your husband Eswara Krishna Aiyar in favour of my wife Rose Mary Ammal at my instance - the said usufructuary mortgage debt bond having been executed on 29 November, 1919, by Orathur Duraiswami Reddi and others in the name of your husband for Rs. 20,000.