Kunjikavu Amma v. Janaki Amma .

JUDGMENT

1. This second appeal is by the plaintiff in a suit for enforcement of alleged prior charge or for redemption, which has been concurrently dismissed by the courts below. The plaint schedule property was originally owned by the plaintiff Kunhi Kavammal. She first executed Ext. A fidelity bond on 26-3-1100, securing the property for a sum of Rs. 500 towards guarantee of the faithful discharge, by her brother, of his duties as Muthalpadi etc., in the Cochin Kovilakam. Thereafter in 1105, she executed, in favour of the defendants, a simple mortgage and also a Purakadom for an aggregate sum of Rs. 350. This debt in due course led to the decree and execution proceedings in O.S No. 144 of 1109 on the file of the Irinjalakuda Munsiff's Court whereby the defendants themselves became the purchasers of the property but subject only to the prior charge, to the extent of Rs. 500 under Ext. A.

2. This Court sale was on 7-5-1112, Ext. I being the sale sannad. The defendants took delivery of the property subsequently on 6-5-1113 under Ext. V delivery Kychit. By Thulam 1118 the plaintiff's brother retired from his office in the Kovilakam and as no liabilities arose in connection with his services, Ext. A bond was returned to the plaintiff as discharged. The result, according to the plaintiff, was that she became the first charge-holder for the sum of Rs. 500 over the property in the hands of the defendants. The plaint averred that the defendants acknowledged such liability by payment of interest at 6 per cent on the debt for a period of two years but latterly they defaulted to pay either the interest or the principal.

3. This suit was, therefore, laid on 11-1-1950 for realisation of the amount of Rs. 500 by sale of the property or alternatively for redemption on payment of the hypothecation and Purakkadom amounts. The defendants contested the suit on the fooling that Ext. A did not constitute any prior charge over the property. But even so, it stood discharged on the retirement of the plaintiff's brother without fault, and the plaintiff could not derive any benefit in consequence. The mere mention in Ext. I sale sannad of Ext. A as a prior charge, did not impose any obligation on the defendants to pay the amount concerned to the plaintiff. The defendants also denied the allegation in the plaint as to acknowledgment of liability or payment of interest for 2 years or at all. Both the courts below have dismissed the suit and hence this second appeal by the plaintiff as above said.

4. Mr. A.S Krishna Iyer, learned counsel for the appellant, strenuously contended that the courts below had misled themselves in considering that the court sale in favour of the defendants was subject to and not free from encumbrance. According to learned counsel there should be a specific statement in the sale deed that the property was sold subject to encumbrance, if it was to be held to be so; otherwise the sale should be deemed to be free of encumbrances and he equated the rule of construction in case of sale inter vivos to that in invitum. It seems to me, however, that there is no justification for the proposition as stated by the learned counsel.

5. On the other hand no sale is free from encumbrances unless there is an express provision to that effect. And court sales as contrasted with private sales are always without warranty of title, i.e, the purchaser gets the property with all the risks and defects in the judgment-debtor's title. There can be no doubt, in any event, in this case, that the defendants have purchased the property subject to the encumbrance under Ext. A. For Ext. II sale sannad uses the expression *“ ” and “ ” and refers to the charge under Ext. A besides michavarom dues from 1107 onwards as constituting the “ ” or encumbrances.

6. Indeed the stand taken up by the plaintiff in her petition to set aside the sale in execution in favour of the defendants under Order 21, rule 90 of the CPC and even in the plaint herein was that the property was sold subject to the charge under Ext. A. And if that is so, the position is very well settled that if the encumbrances subject to which the property is sold, turn out to be invalid or in some way unenforceable, the benefit goes exclusively to the purchaser. In the leading case Izzat-Un-Nissa Begam v. Partab Singh, ILR 31 All 583 (PC) (A) certain properties were sold subject to encumbrances which were later found to be invalid and as such not binding on the property as the result of subsequent litigation.

7. The vendor then brought a suit against the vendee for the amount due on the encumbrances as unpaid purchase money in the hands of the vendee and their Lordships in negativing the contention observed that on the sale of property subject to encumbrances the vendor got the price of his interest, whatever it may be, together with an indemnity against the encumbrances affecting the land. If such encumbrances turn out to be invalid, the vendor had nothing to complain of. For, he had got what he bargained for and his indemnity was complete.

“He cannot pick up the burden of which the land is relieved and seize it as his own property. The notion that after the completion of the purchase the purchaser is in some way a trustee for the vendor of the amount by which the existence, or supposed existence, of encumbrances had led to diminution of the price, and liable, therefore, to account to the vendor for anything that remains of that amount after the encumbrances are satisfied or disposed of, is without foundation. After the purchase is completed the vendor has no claim to participate in any benefit which the purchaser may derive from his purchase.”

8. Reference may also be made to the Bench decision in Vmaitheertha v. Viswanatha, AIR 1954 Mad 508 (B), where also the sale was not free of any encumbrances and where the question arose as to the precise nature of the portion of the consideration which had been left in the hands of the vendee for payment of prior encumbrances. Govinda Menon J. (now in the Supreme Court) delivering the judgment on behalf of the Bench referred with approval to the following passage in Gangaram v. Raghubans, ILR 27 Pat. 898 (C) :

“It is plain therefore that in cases of sales of properties having encumbrances existing on them, if the amount of encumbrance is not paid to the seller and remains in the hands of the buyer to be paid to the person entitled thereto no part of the purchase money remains unpaid for which the charge under S. 55(4)(b) can possibly arise”, and continued:

‘In our opinion the existence of a statutory charge can arise only if there is a contract between the vendor and vendee that the latter would pay the consideration into the hands of the vendor and the vendee that the latter would pay the consideration into the hands of the vendor who would redeem the mortgage and deliver the property free of encumbrance to the vendee. In such a case it can be said that there is really a vendor's lien but such a statutory lien cannot be said to exist where the agreement is that the vendee should himself discharge the mortgage and recover possession of the property”.

9. The decisions in Marina Ammaji v. Bakhar Beg, AIR 1941 Mad 557 (D) and Satyanarayanamurthi v. Sathiraju AIR 1942 Mad 525 (E), relied on by the learned counsel for the appellant are only illustrations of sales free of encumbrances where part of the purchase money had been left with the vendee to pay off prior mortgages and the question was whether the reduction of the mortgage money under the Madras Agriculturists' Relief Act would redound to the benefit of the mortgagor and the court held it to be so. But they have nothing to do with the sale subject to encumbrance as we have here.

10. Difficult questions might have arisen if the liability under Ext. A had matured and the plaintiff, to save herself from her personal obligation thereunder, had paid off the liability. Could she not then claim subrogation as against the defendants seeing that they took the property subject to Ext. A and although as between the mortgagor and the mortgagee, the liability to pay the debt is still on the mortgagor, she (the mortgagor) is entitled to be subrogated if she is afterwards compelled to pay it. See Ghose page 373. Or would the absolute prohibition as to subrogation in favour of the mortgagor under S. 92 debar her claim altogether. Here, however, the liability which was a contingent one at the inception and at date of the sale in favour of the defendants, failed to fix itself either on the property or as against the plaintiff and this left the defendants altogether free. This second appeal fails in the result and is dismissed with costs.

V.R.B

11. Appeal dismissed.