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Attorney(S)
  • For the Appellant: L. Mohanan, Advocate.
  • For the Respondent: G.S. Reghunath, Mohan Jacob George, Advocates.
Judges
  • V. Ramkumar, J.
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • For the Appellant: L. Mohanan, Advocate.
  • For the Respondent: G.S. Reghunath, Mohan Jacob George, Advocates.
Judges
  • V. Ramkumar, J.
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Smart Summary

Structured Summary of the Opinion — Second Appeal (Defendants 4 and 6 v. Plaintiff)

Factual and Procedural Background

This appeal arises from O.S. No. 1034/1984 filed in the Addl. Munsiff's Court, Neyyattinkara. The suit sought redemption of Exts. A2 and A3 mortgages with respect to the plaint C and D schedule properties and for fixing a western boundary of the plaint D schedule property.

Concisely, the plaintiff is a son of Sahadevan and Gouri Sarasamma. By a partition (1123 M.E / 1948), Sarasamma was allotted the plaint C property (10½ cents) and Sukumaran (her brother) was allotted the plaint D property (10½ cents). Sukumaran mortgaged the D property to Sarasamma and Sahadevan by Ext. A1 (7-6-1951). Sarasamma and Sahadevan subsequently executed Ext. A2 (11-4-1955) mortgaging both C and D to Lakshmi Bhavani for Rs. 50; and later executed Ext. A3 (20-2-1956) sub-mortgage of C and D in favour of Sivanandan for Rs. 140. Lakshmi Bhavani and Sivanandan died and their rights devolved on defendants 1–6 (defendant 6 is husband of defendant 4). The plaintiff and other heirs (except 7th defendant) hold transfers in favour of the plaintiff by Ext. A4 (18-10-1984). Defendants 4 and 6 claim possession through Ext. B2 (gift deed dated 15-4-1968) and Lakshmi Bhavani had acquired Sukumaran's rights by Ext. B1 (sale deed dated 14-11-1961).

At trial, four issues were framed, documents Exts. A1–A4 and B1–B2 were marked, and advocate-commissioner reports (Exts. C1, C2) and a mahazar (Ext. C3) were placed on record. No oral evidence was adduced. The learned Munsiff entered a preliminary decree on 19-2-1987 in favour of the plaintiff. On appeal (A.S. 29/94) the Subordinate Judge, Neyyattinkara, by judgment dated 5-4-1995 confirmed the decree. Defendants 4 and 6 appealed to this court in a second appeal, which was admitted on 1-2-1996 on several substantial questions of law.

Legal Issues Presented

  1. When a mortgage effects a mortgage of the mortgagee's mortgage interest, does it create a transfer of the mortgagee's right?
  2. Is a sub-mortgagee, at least to a limited extent, an assignee of the mortgage right?
  3. Can a sub-mortgagee remedy his right based on derivative title by getting a document executed in his favour?
  4. When the integrity of a mortgage is split up because the mortgagee acquires a share in the equity of redemption, is a plaintiff who owned only a share entitled to redeem more than his share?
  5. When the assignee of the mortgagee obtains the equity of redemption, does merger occur?

Arguments of the Parties

Appellants' (Defendants 4 & 6) Arguments

  • Challenge restricted to the plaint D schedule property (10½ cents) and the survival of Exts. A2 and A3 as subsisting mortgages was disputed.
  • It was argued that Ext. B1 (sale deed dated 14-11-1961) shows Lakshmi Bhavani acquired the equity of redemption in respect of the plaint D property, splitting the integrity of the mortgage such that the plaintiff could only redeem the C property.
  • Ext. A2 was characterised as a sub-mortgage that amounts, to a limited extent, to an assignment of the mortgagee’s right; a sub-mortgagee can realize the mortgaged interest and thereby extinguish the mortgage.
  • Reliance was placed on authorities (cited by counsel) asserting that where the mortgage's integrity is split by acquisition of equity of redemption, the mortgagor's right becomes fractional and the sub-mortgagee may not survive to redeem (counsel cited Chinna Goundan v. Subramania Chettiar and Joseph v. Sukumara Panickar).
  • Accordingly, the suit as to the D schedule property should have been dismissed.

Respondent / Plaintiff (and Court's presentation of plaintiff's position)

  • The plaintiff's pleading: the plaint C and D properties were mortgaged and sub-mortgaged by Exts. A1–A3; Lakshmi Bhavani and Sivanandan became sub-mortgagees and their rights devolved on defendants; the plaintiff, as heir and assignee of other co-heirs, is entitled to redeem Exts. A2 and A3 and to recovery of possession where defendants refuse to surrender after repayment.
  • The tender in the plaint represents the full liability under Exts. A2 and A3 (Rs. 140/-) and thus supports redemption of those sub-mortgages.
  • The plaintiff contends (as accepted by the courts below) that the assignment in Ext. B1 of Sukumaran's rights to Lakshmi Bhavani did not extinguish Exts. A2 and A3; the sub-mortgagees' acquisition of the original mortgagor's rights did not destroy the sub-mortgage, and the proper remedy of the appellants was to bring a separate suit (or counterclaim) to redeem Ext. A1 if they wished to challenge that mortgage.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Chinna Goundan v. Subramania Chettiar, AIR 1959 Mad. 246 (FB) Cited by appellants' counsel to support the proposition that a sub-mortgagee may not survive to redeem and that acquisition of equity of redemption by the mortgagee splits the integrity of the mortgage, limiting the mortgagor's redemption right. The court noted this authority as relied upon by counsel but did not accept the appellants' reliance on it; the judgment did not apply this precedent to uphold appellants' case.
Joseph v. Sukumara Panickar, 1966 KLT 842 Cited by appellants to suggest that when the integrity of the mortgage is split, the mortgagor is entitled only to a fractional right to redeem. The court recorded the citation but rejected the submission that such splitting extinguished the sub-mortgages in the present facts; the court did not treat this precedent as dispositive in favour of appellants.
Devadasan v. Parvathi Pillai, 1958 KLJ 182 Cited by the court to emphasize that the mere submortgaging of a mortgage for a higher amount is not a reason to hold the original mortgage extinguished. The court relied on this authority to support its conclusion that submortgaging, or an assignment of certain rights to a sub-mortgagee, does not ipso facto extinguish the existing sub-mortgages (Exts. A2 and A3) in the present case.
Madhavan Nair v. Ramankutty Menon, AIR 1994 Ker. 75 Cited by the court for the principle that if an original mortgagee acquires a portion of the equity of redemption, the mortgage is not wholly extinguished — at most there is pro tanto extinguishment to the extent of that acquisition. The court applied this principle to observe that even where partial acquisition of equity occurs, mortgage rights survive as to the remaining shares; the court found this principle supportive of holding that Exts. A2 and A3 survive.

Court's Reasoning and Analysis

The court's analysis proceeded from the documentary facts and the legal effect of the chain of mortgages, sub-mortgages and assignments as they stood on the record:

  1. The court reconstructed the title matrix from the documents: Ext. A1 (mortgage by Sukumaran to Sarasamma & Sahadevan), Ext. A2 (sub-mortgage by Sarasamma & Sahadevan to Lakshmi Bhavani), and Ext. A3 (further sub-mortgage by Sarasamma & Sahadevan to Sivanandan). Ext. B1 was an assignment by Sukumaran to Lakshmi Bhavani and Ext. B2 was a gift by Lakshmi Bhavani and Sivanandan to defendants 4 and 6.
  2. The court noted that under Ext. A3 Sivanandan became a sub-mortgagee without possession with an authorised right to redeem Ext. A2 (from his wife) on payment of Rs. 50; however, Sivanandan had not redeemed Ext. A2. The total liability under Exts. A2 and A3 was Rs. 140, and that sum was tendered in the plaint for redemption.
  3. Confronting the appellants' contention that Ext. B1 (acquisition of Sukumaran's rights by Lakshmi Bhavani) split the integrity of the mortgage and thereby extinguished the sub-mortgages as to the D schedule, the court distinguished two scenarios:
    • Where the original mortgagee acquires, from the mortgagor, a portion of the equity of redemption thereby causing partial extinguishment of the mortgage — in such a case there may be pro tanto extinguishment (principle drawn from Madhavan Nair).
    • But where the sub-mortgagee has obtained the mortgagor's rights (as B1) this does not automatically extinguish existing sub-mortgages; the correct remedy for the party asserting extinguishment would be to institute a separate suit to redeem the original mortgage (Ext. A1) or to raise a counterclaim in the present suit — neither of which the appellants did.
  4. The court relied on Devadasan v. Parvathi Pillai to the effect that mere submortgaging for a higher amount does not extinguish the prior mortgage; and on Madhavan Nair for the limited proposition that only pro tanto extinguishment can follow when an original mortgagee acquires part of the equity. The court therefore concluded that Exts. A2 and A3 subsisted and the plaintiff's suit for redemption of those sub-mortgages was properly decreed by the courts below.
  5. The court observed that alternatives available to the appellants (a suit to redeem Ext. A1 or a counterclaim in the present suit) were not pursued, which undermined their present challenge to the survival of Exts. A2 and A3.
  6. On ancillary matters, the court found no fault with the relief fixing the western boundary of the plaint D property as per line CH in Ext. C2 plan and noted that the trial court’s dismissal of the appellants’ commission application (assessing value of improvements) had not been specifically challenged earlier; accordingly the court was not inclined to entertain belated contentions on that front.

Holding and Implications

Holding: This second appeal is DISMISSED. The concurrent findings and decrees of the courts below, which entered a preliminary decree for redemption of Exts. A2 and A3 and fixed the western boundary as prayed, are affirmed. No costs were awarded.

Implications:

  • The direct effect is that the plaintiff's decree for redemption of Exts. A2 and A3 stands and the plaintiff may proceed to obtain possession subject to the decree.
  • The court recorded that after obtaining possession the plaintiff runs the risk of being sued in a separate proceeding for redemption of Ext. A1 (the original mortgage) — a consequence identified in the opinion but not decided here.
  • The court held that the substantial questions of law framed in the memorandum of appeal "do not really arise" on the facts of this case; accordingly, the decision affirms existing application of principles (as set out in the cited authorities) rather than laying down a novel precedent. In short, no new rule of law was created by this judgment beyond application of the cited principles to the particular facts.

This summary has been prepared exclusively from the provided opinion and does not add or infer facts beyond the text of the opinion.

Show full summary ...

    Bhavani Santhakumari v. Sahadevan Raveendran

    1. Defendants 4 and 6 in O.S No. 1034/1984 on the file of the Addl. Munsiff's Court, Neyyattinkara, are the appellants in this second appeal. The said suit was one for redemption of Exts.A2 and A3 mortgages in respect of the plaint C and D schedule properties and for putting up a boundary on the western side of the plaint D schedule property.

    2. The case of the plaintiff can be summarised as follows:—

    The plaintiff is the son of Sahadevan and Gouri Sarasamma. The plaint C schedule property admeasuring 10 ½ cents was allotted to Gouri Sarasamma, the mother of the plaintiff, as per a partition deed for the year 1123 M.E corresponding to 1948. The plaint D schedule property, also admeasuring 10 ½ cents, was allotted to Govindan Sukumaran as per the said partition deed. The said Govindan Sukumaran mortgaged the plaint D schedule property to Gouri Sarasamma and her husband Sahadevan as per Ext.A1 mortgage deed dt. 7-6-1951. Thus, the plaintiffs parents were in possession and enjoyment of the plaint C and D schedule properties. As per Ext.A2 mortgage deed dt. 11-4-1955, Gouri Saramma and her husband Sahadevan mortgaged the plaint C and D schedule properties to one Lakshmi Bhavani, the mother of defendants 1 to 5, after borrowing a sum of Rs. 50/-. Gouri Saramma and her husband Sahadevan thereafter executed a further sub-mortgage of the plaint C and D schedule properties to One Sivanandan, the father of defendants 1 to 5, as per Ext.A3 mortgage dt. 20-2-1956 for a sum of Rs. 140/-. The original mortgages viz. Sivanandan and Lakshmi Bhavani died and their rights have devolved on defendants 1 to 6. The 6th defendant is the husband of the 4th defendant. The parents of the plaintiff are dead. Their right devolved on their children including the plaintiff and the 7th defendant. The other legal heirs, excluding the 7th defendant, assigned their right over the properties in favour of the plaintiff. Defendants Nos. 4 to 6 are in possession of the property lying adjacent to the plaint schedule property. There is no boundary separating the two properties. The defendants have not effected any improvements in the property in their possession. They are committing waste in the plaint schedule properties. The plaintiff is entitled to redeem the mortgages in respect of the plaint C and D schedule properties. The defendants refused to surrender possession of the properties on receipt of the mortgage money. Hence the suit.

    3. Defendants 1 to 3 and 7 remained ex parte. The suit was resisted by defendants 4 to 6 who filed a joint written statement contending inter alia as follows:—

    The parents of defendants 1 to 5 were in possession and enjoyment of the plaint C schedule property as per Exts.A2 and A3 mortgages. In the partition deed of the year 1123 M.E the plaint D schedule property was allotted to Govindan Sukumaran. He transferred his property in favour of Lakshmi Bhavani, the mother of defendants 1 to 5 as per Ext.B1 sale deed dt. 14-11-1961. The plaintiff is not entitled to redeem the plaint D schedule property. The plaintiff has no right over the plaint C and D schedule properties. Defendants 4 and 6 are in possession of 21 cents of the plaint A schedule property which includes the plaint C and D schedule properties as per Ext.B2 gift deed dt. 15-4-1968. The 4th defendant and her brothers and sisters are in possession of the plaint C and D schedule properties. Defendants 1 to 6 are in possession and enjoyment of 31 ½ cents of land informing part of the plaint A schedule property. The plaintiff is not entitled to redeem the plaint C and D schedule properties, nor is he entitled to put up a boundary as prayed for. The plaintiff has no cause of action. The plaintiff is not entitled to recover possession of the property on the strength of Exts.A2 and A3 mortgages which have become time-barred. Defendants 1 to 5 have got jenm right over the property. They have also effected improvements in the plaint B schedule property to the tune of Rs. 10,000/- They have got fixity of tenure also over the plaint B schedule property. The suit, as framed, is not maintainable. The mortgage amount mentioned in the plaint is not correct. The suit is therefore liable to be dismissed with costs.

    4. Four issues were framed by the trial court. On the side of the plaintiff 4 documents were marked as Exts.A1 to A4 and on the side of the defendants 2 documents were marked as Exts.B1 and B2. No oral evidence were adduced on either side. Exts.C1 and C2 are the report and plan submitted by the advocate-commissioner and Ext.C3 is the mahazar report prepared by the earlier advocate-commissioner.

    5. The learned Munsiff, after trial, as per judgment dt. 19-2-1987 passed a preliminary decree as prayed for. On appeal by defendants 4 and 6 as A.S 29/94 before the Sub Court, Neyyattinkara, the learned Subordinate Judge as per judgment dt. 5-4-1995 confirmed the preliminary decree passed by the trial court and dismissed the appeal. Hence this second appeal.

    6. On 1-2-1996 this court admitted the second appeal on the following substantial questions of law formulated in the memorandum of appeal:—

    “i. When the mortgage effects a mortgage of his mortgage interest, is he not creating a transfer of his right as mortgagee?

    ii. Is not a sub-mortgagee, atleast to a limited extent, an assignee of the mortgage right?

    iii. Is it not possible for a sub-mortgagee to remedy his right basing on derivative title by getting a document executed in his favour?

    iv. When the integrity of the mortgage is split up, by the mortgagee acquiring the share in the equity of redemption, is the plaintiff who owned only a share entitled to redeem more than his share?

    v. When the assignee of the mortgagee obtains equity of redemption, is not there merger?

    7. I heard Advocate L. Mohanan, the learned Counsel appearing for the appellants and Advocate Sri. G.S Reghunath, the learned counsel appearing for the contesting respondents.

    8. Assailing the judgment and decrees under appeal Adv. Sri. L. Mohanan made the following submissions before me:—

    The challenge in this appeal is only with regard to the plaint ‘D’ schedule property admeasuring 10 ½ cents which along with the plaint C schedule property having an equal extent was the subject matter of Exts.A2 and A3 mortgages dated 11-4-1995 and 20-2-1956. The finding of the Court below that the aforesaid mortgages are subsisting, is wrong and unsustainable. As per Ext.D1 sale deed dated 14-11-1961, Lakshmi Bhavani, the mother of defendants 1 to 5 had obtained the equity of redemption in respect of plaint D schedule property. With the said assignment the integrity of the mortgage is split up since the mortgagee had acquired fractional right over the plaint D schedule property. Thereafter the only right which subsists is the right of the plaintiff to redeem the plaint C Schedule property. Ext. A2 which is a sub-mortgage amounts to a limited extent an assignment of the mortgagees right. In the capacity of the sub-mortgagee, he has a right to bring to sale the interest of the original mortgager. When that is done the mortgage itself is extinguished. As per Ext. B1 sale deed the rights of the mortgager and the sub-mortgagee are settled and the mortgagee does not survive only sub-mortgager to redeem the mortgage (vide Chinna Goundan v. Subramania Chettiar, AIR 1959 Mad. 246 (FB). The suit as against the plaint D Schedule property should have been dismissed. When the integrity of the mortgage is split up, the mortgager is entitled only to a fractional right (vide Joseph v. Sukumara Panickar 1966 KLT 842).

    9. I am afraid that I cannot agree with the above submissions. The plaint consists of 4 schedules viz. plaint A, B, C and D schedules. A true replica of Ext. C2 plan which forms part of the decree is given below:—

    10. Plot ABCDEFGHIJ having an extent of 63 cents is the plaint A schedule property. Plot BCDGHI having an extent of 31 ½ cents is the plaint B schedule property. The plaint D schedule property which has been identified as plot CDGH having an extent of 10 ½ cents forms the eastern portion of the plaint B schedule property. The plaint C schedule property identified as plot DEFG having an extent of 10 ½ cents lies on the eastern boundary of the plaint D schedule property.

    11. The plaintiff and the 7th defendant, along with three others who are not parties to the suit, are the children of one Sahadevan and Sarasamma. Sarasamma has a brother by name Sukumaran. In a partition of the year 1123 ME corresponding to 1948, Sarasamma was allotted the plaint C schedule property. The plaint D schedule property was set apart to Sukumaran, the brother of Sarasamma, in the very same partition. The said Sukumaran created a possessory mortgage of the plaint D schedule property in favour of Sarasamma and Sahadevan as per Ext.A1 mortgage dt. 7-6-1951 after borrowing a sum of Rs. 75/-. Thus Sarasamma and her husband Sahadevan came into joint possession as mortgages in respect of the plaint D schedule property and Sarasamma continued to be the absolute owner in possession of the plaint C schedule property which she had obtained in the partition of the year 1123 ME. While so, Sahadevan and Sarasamma, the mortgagees under ExtA1, executed Ext.A2 sub-mortgage dated 11-4-1955 of both the plaint C and D schedule properties to one Lakshmi Bhavani, the mother of defendants 1 to 5, after taking a loan of Rs. 50/-. With the execution of Ext.A2 mortgage Lakshmi Bhavani, referred to above, became the mortgages in respect of the plaint C schedule property and sub-mortgage in respect of the plaint D schedule property. On 20-2-1956 both Sahadevan and Sarasamma created a further sub-mortgage (claimed as a superior mortgage by the learned counsel for the respondents) as per Ext.A3 of both the plaint C and D schedule properties in favour of Sivanandan, the husband of Lakshmi Bhavani and father of defendants 1 to 5. The amount borrowed under Ext.A3 sub-mortgage was Rs. 140/-. The document recites that the properties are in the possession of Lakshmi Bhavani under Ext.A2 mortgage and what is actually received in cash is only Rs. 90/- and Rs. 50/- due under Ext.A2 mortgage is adjusted and authorises Sivanandan to redeem the property from his wife Lakshmi Bhavani. In the meanwhile, Lakshmi Bhavani obtained an assignment of the rights of Sukumaran, the mortgagor under ExtA1 mortgage as per Ext.B1 sale deed dt. 14-11-1961 on a consideration of Rs. 235/-. The plaintiff obtained an assignment of the rights of the other children of Sahadevan and Sarasamma excluding the 7th defendant as per Ext.A4 sale deed dt. 18-10-1984. Sivanandan and Lakshmi Bhavani had transferred their rights over the properties to the 4th defendant and her husband who is the 6th defendant as per Ext.B2 gift deed dt. 15-4-1968. The position after Ext.A3 mortgage by Sahadevan and Sarasamma in favour of Sivanandan is that Sivanandan became a sub-mortgage without possession in respect of the G and D schedule properties with a right to redeem Ext.A2 mortgage by paying his own wife Rs. 50/-. Admittedly Sivanandan had not redeemed Ext.A2 mortgage. The total liability of Lakshmi Bhavani and Sivanandan towards the mortgage money under Exts.A2 and A3 mortgages is Rs. 140/-. It is the said amount which is tendered in the present plaint for redemption of Exts.A2 and A3 mortgages. The appellants who have obtained the rights of Sivanandan and Lakshmi Bhavani cannot successfully resist the present suit on the basis of Ext.B1 assignment deed by Sukumaran. This is not a case where the original mortgagee, by obtaining the equity of redemption from the original mortgagor, has broken the integrity of the original mortgage. This is a case in which the original mortgagee has instituted a suit against the sub-mortgagee for redemption of the two sub-mortgages. The sub-mortgagee, by securing the equity of redemption from the original mortgagor, cannot extinguish or destroy the submortgage. The remedy of the appellants by virtue of Ext.B1 assignment was to file a separate suit for redemption of Ext.A1 mortgage (the original mortgage). That has not been done. Alternatively, they could have filed a counter claim for redemption of Ext.A1 mortgage in the present suit. That also was not done. In Devadasan v. Parvathi Pillai, 1958 KLJ 182 it was held that the mere fact that a mortgage right is submortgaged for a higher amount is no reason for holding that the original mortgage has been extinguished. Even in a case where the original mortgagee acquires a portion of the equity of redemption, the mortgage is not extinguished completely. There can only be a protanto extinguishment of the mortgage right to the extent of the mortgagee acquiring the mortgagor's interest and so far as the other shares of the equity of redemption is concerned, the mortgage will subsist (vide Madhavan Nair v. Ramankutty Menon AIR 1994 Ker. 75). But the above proposition is not attracted in the present case where one of the sub-mortgagees has purchased the equity of redemption from the original mortgagor. Since in the case on hand Exts.A2 and A3 mortgages still survive, the present suit for redemption of those mortgages was rightly decreed by the courts below. It goes without saying that after the plaintiff gets possession of the properties, he stands the risk of being sued for redemption of Ext.A1 mortgage.

    12. The relief of fixation of the western boundary of the plaint D schedule property along with the line CH in Ext.C2 plan also cannot be faulted. Likewise, the dismissal by the trial court of the commission application filed by the appellants for assessing the value of improvements, was not specifically challenged or any arguments addressed before the lower appellate court. Hence I am not inclined to entertain the submission feebly made in that regard by the learned counsel for the appellants.

    13. I do not find any good ground to interfere with the concurrent findings recorded by the courts below. The questions of law formulated in the memorandum of appeal do not really arise for consideration. This second appeal is accordingly dismissed. No costs.

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    Comments

    Bhavani Santhakumari v. Sahadevan Raveendran
    (Aug 3, 2005)