RAMANUJULU NAIDU Vs. GAJARAJA AMMAL

JUDGEMENT

(1.) The plaintiff whose suit on a mortgage dated 17 February, 1935, has been dismissed by the Courts below is the appellant in this second appeal. The defence of the defendant (here respondent) was that the mortgage was a nominal transaction and that in any case there was a want or failure of consideration for the mortgage.

(2.) The facts are these : One Kangappa Chetty who died in 1915 was the owner of a house in Trichiaopoly and an extent of I acre 80 cents of cultivable land. he died leaving him surviving a widow Seshammal, his grand-daughter (daughter's daughter) Gajarajammal who is the defendant and Govindaswami, a grandson of his paternal uncle. The widow died on 21st December, 1932. By that time the Hindu Law of Inheritance (Amendment) Act (II of 1929) had come into force. In the year 1933 a Division Bench of this Court decided in Gavarammal S.A. No. 1939 of 1946. 3 August, 1949. V/s. Manikammal (1933) 66 M.L.J. 70 : I.L.R. 57 Mad. 718 that Act II of 1929 applied only in respect of succession to the property of Hindu males dying intestate after the Act came into force. This decision was overruled by a Full Bench in Lakshmiammal V/s. Anantharama Aiyangar where it was held that when a Hindu male died intestate before Act II of 1929 leaving a limited female heir who was alive after the Act came into force, succession to the deceased male member opened after the passing of the Act. Under the earlier decision of this Court, Govindaswami would have succeeded and under the later decision Gajarajammal, the defendant, would have succeeded as heir to the suit properties. Between the dates of these two decisions Govindaswami sold the suit properties to the defendant for a sum of Rs. 600, the price being paid by the execution of the suit mortgage by the vendee to the vendor for the full amount of the consideration. The sale and mortgage were executed on 17 February, 1935, each forming the consideration for the other. Exhibit P-I is a registration copy of the mortgage. By a series of assignments the mortgage right is now said to be vested in the plaintiff.

(3.) The District Munsif dismissed the suit holding that the sale and mortgage were nominal and unsupported by consideration and even if they were real, they were vitiated by the mistake of the parties. The learned Subordinate Judge on appeal dismissed the suit on the ground that there was a common mistake as regards the rights of the parties and therefore the mortgage was void and unenforceable. Mr. A.V. Narayanaswami Aiyar, the learned advocate for the appellant, challenges the correctness of this conclusion on two grounds. He states that on the date of Exhibit P-I, Govindaswami the original mortgagee was rightly considered to be the heir-at-law of the deceased Rangappa Chetty on the strength of Gavarammal V/s. Manikammal (1933) 66 M.L.J. 70 : I.L.R. 57 Mad. 718. He conveyed his interest, such as it was, to the defendant by a sale and took a mortgage on the same property for the price payable. It is argued that Govindaswami suffered a detriment and gave up a valuable right to the defendant who, having got what she wanted, cannot refuse to pay for the advantage gained by her. It is urged that there was no failure of consideration merely by reason of a later decision of this Court taking a different view of the law enacted by Act II of 1929. Mr. Narayanaswami Aiyar developed his argument in another way also. There was a doubt or dispute as to the respective rights of Govindaswami and the defendant, and the parties chose to settle this dispute by a sale of such rights as Govindaswami had in consideration of the vendee executing a mortgage for Rs. 600. This settlement of a disputed claim is, according to him, sufficient consideration for the mortgage. Secondly he contended that the mistake in the present case, assuming there was one, was a mistake of law regarding the interpretation of Act II of 1929 and was therefore not available under Section 21 of the Contract Act as a ground for avoiding the mortgage Exhibit P-I.