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Kaniyur Ganapathi Bhatta v. Beeru Bhandary
Structured Summary of the Opinion
Factual and Procedural Background
The plaintiff sued for redemption of a usufructuary mortgage executed on 2 February 1883 by two brothers, Kesava and Krishna, for Rs. 5,000. The plaintiff purchased the equity of redemption from Kesava. The defendants purchased from Krishna his share of the equity of redemption in the suit properties. At first instance, the District Judge decreed the plaintiff's right to redeem half the property (i.e., the share attributable to Kesava) and allowed the defendants to consolidate that usufructuary mortgage with a later simple mortgage executed by Kesava. The plaintiff filed the present second appeal challenging, inter alia, the District Judge's partial redemption decree and the allowance of consolidation. The appeal concludes with the appellate court modifying the lower court's decree by disallowing the consolidation claim and dismissing the appeal without costs; the memorandum of objections was also dismissed without costs.
Legal Issues Presented
- Whether the plaintiff, having purchased only Kesava's equity of redemption, was entitled to redeem the whole of the mortgaged property or only Kesava's share (i.e., whether partial redemption is permissible in the circumstances).
- Whether the defendants had acquired Krishna's interest in the equity of redemption in respect of all the mortgaged properties (and whether this acquisition brings the case within the exception to the last clause of Section 60 of the Transfer of Property Act).
- Whether the strict rules of Hindu joint family law (regarding alienation of specific family items by one co-parcener) should prevent the defendants from retaining a specific half-share of the mortgaged items or require partition proceedings instead.
- Whether the defendants were entitled to consolidate the usufructuary mortgage with a subsequent simple mortgage executed by Kesava (i.e., the applicability of the rule of consolidation under Section 61 of the Transfer of Property Act).
Arguments of the Parties
Appellant's (Plaintiff's) Arguments (as presented by Mr. Sitarama Rao)
- The District Judge should have allowed redemption of the whole of the mortgaged property; partial redemption is opposed to the provisions of the Transfer of Property Act.
- The finding that the defendants acquired Krishna's interest is challenged: defendants 1–3 allegedly acquired the equity of redemption in respect of one property and defendants 4–6 in respect of the other, and the mortgage related to two items only.
- The law (and Hindu law concerning alienation by a member of a joint family) is against partial redemption; therefore the plaintiff, as purchaser from Kesava, should be allowed to redeem the entire mortgage and compel the defendants to seek their share by a separate suit.
- Kesava, being the managing member of the family, ought to have been able to alienate the whole; hence the plaintiff should be in a better position than alienees from Krishna (argument ultimately rejected by the court as Kesava could not alienate what he did not possess).
- Relied strongly on Yadalli Beg v. Tukaram to support the contention that partial redemption should not have been decreed.
Respondents' (Defendants') Arguments (as presented by Mr. Adiga and by reliance on authorities)
- The defendants had acquired Krishna's interest in the equity of redemption and therefore the exception to the last clause of Section 60 applies, permitting partial redemption.
- Relied on Rathna Mudali v. Perumal Reddy to support the proposition that a court can decree partial redemption of a mortgage.
- Pointed to principles distinguishing an alienee's rights under Hindu joint family law from mortgage law when both co-parceners had mortgaged specific items, arguing that mortgage law should govern and allow the defendants to retain their acquired half-share of the items.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Yadalli Beg v. Tukaram (Privy Council) | Held that transferees of part of the security could, under the law as applied in that case, redeem the entire mortgage; the Privy Council expressed that partial redemption was not recognised in that factual setting. | The court distinguished this case: Yadalli Beg did not govern the present matter because, in that case, the persons resisting redemption had not themselves acquired the equity of redemption. The present defendants had acquired Krishna's rights and therefore the Privy Council decision would have been different if the resisting persons had acquired such rights. |
| Velayudan Chetty v. Alangaram Chetty | Affirms the principle that there cannot be a partial redemption except where the mortgagee(s) have acquired in whole or in part the share of the mortgagor (i.e., the exception to indivisibility applies in that circumstance). | The court relied on this decision to support its view that the present facts fall within that exception: since defendants acquired Krishna's interest, partial redemption was permissible. |
| Rathna Mudali v. Perumal Reddy | Support, in the view of the respondents, for the proposition that the Court could decree partial redemption of a mortgage. | The court observed that the learned Judges in that case had laid down the principle too broadly. The present court did not need to decide the correctness of Rathna Mudali in the abstract because of the particular facts here, and noted that Rathna Mudali was not followed by a Bench of this Court in Deynanthakath v. Patinharayil Avulla. |
| Deynanthakath v. Patinharayil Avulla | Referenced as a subsequent decision of a Bench of this Court that did not follow the Rathna Mudali reasoning. | Mentioned to indicate that Rathna Mudali had not been universally accepted and therefore could not be treated as an unqualified authority for partial redemption in all cases. |
| Manjaya v. Shamuga | Holds that when a co-parcener alienates his share in specific family properties, the alienee acquires only an equity to enforce his rights in a suit for partition and cannot sue for partition or allotment of that property alone. | Used to present the general Hindu law rule against an alienee obtaining possession of a specific item; the court distinguished the present case because both co-parceners had mortgaged specific items and mortgage law, rather than the strict rule of Hindu law, should govern here. |
| Balabhadra Patro v. Khetra Doss | States that an alienee from a member of a joint Hindu family is not entitled to possession of the alienor's share as a tenant-in-common; the alienee's right is to seek partition to obtain the share. | Referred to confirm the general Hindu law position; the court nonetheless applied mortgage principles to the present facts where both brothers had mortgaged specific items and one had sold his equity of redemption. |
| Subba Rao v. Sarvarayudu | Contains principles concerning the interplay of alienation by co-parceners and remedies; specific facts differ from the present case but its course of reasoning was considered instructive. | The court observed that although facts differ, the course adopted in Subba Rao commended itself and its principle could be applied to justify the District Judge's decree of partial redemption in the present circumstances. |
Court's Reasoning and Analysis
The court proceeded by analyzing two discrete issues: (1) whether the plaintiff could insist on redeeming the whole mortgage when he had acquired only Kesava's equity of redemption, and (2) whether the defendants could consolidate the usufructuary mortgage with a simple mortgage executed by Kesava.
On the first issue the court found as a factual matter that the defendants had acquired the interest of Krishna in the equity of redemption. The court then considered the exception contained in the last clause of Section 60 of the Transfer of Property Act, which provides that a person interested in only a share of mortgaged property is not entitled to redeem his share alone except where the mortgagee (or mortgagees) has or have acquired in whole or in part the share of the mortgagor. Because the defendants had acquired Krishna's interest, the court held the facts fell within that exception and the plaintiff, who acquired only Kesava's interest, was not entitled to redeem the whole of the mortgaged property.
The court addressed the appellant's appeal to Hindu joint family principles (that an alienee from one co-parcener cannot claim possession of specific items and must sue for partition) but distinguished those orthodox rules from the present case on the following grounds:
- Both brothers had separately mortgaged specific items; one of them (Krishna) subsequently sold his equity of redemption to third parties (the defendants), and the other brother (Kesava) sold his equity to the plaintiff with knowledge of the defendants' acquisitions.
- Kesava could not convey what he did not possess; therefore the plaintiff could not be in a better position than the alienees from Krishna.
- Applying the strict rule of Hindu Law would force multiplicity of suits and unnecessary litigation; equity and mortgage principles allowed the court to fashion a remedy that avoided such multiplicity and adjusted equities between parties.
The court examined authority to the contrary (Yadalli Beg v. Tukaram) and explained why it was distinguishable: in Yadalli Beg the resisting parties had not acquired the equity of redemption, whereas in the present case the defendants had done so; had the resisting parties in Yadalli Beg acquired such rights, the Privy Council outcome would have differed. The court also relied upon and quoted Velayudan Chetty v. Alangaram Chetty as affirming the exception to indivisibility where the mortgagee(s) have acquired the mortgagor's share.
On the consolidation point, the court applied the rule for consolidation (derived from Section 61 and its illustration in the Transfer of Property Act): consolidation is permissible only where the mortgagor and mortgagee of both mortgages are the same and the property mortgaged is the same. The court found that the second mortgage was a simple mortgage by Kesava to the first defendant and that defendants 4 to 6 had no interest in that simple mortgage. Because the full identity of parties and of mortgaged property necessary for consolidation was absent, the court determined consolidation could not be ordered. The court therefore modified the District Judge's decree by disallowing the consolidation claim.
Procedurally, the court noted other authorities relied upon by the parties (e.g., Rathna Mudali v. Perumal Reddy) and observed that those authorities were not determinative of the present dispute as framed by the facts; the court declined to resolve the broader correctness of those decisions because its ruling rested on the particular facts and established statutory exceptions.
Holding and Implications
Holding:
The appeal is dismissed with modification: the appellate court upheld the District Judge's decree for partial redemption (i.e., redemption of Kesava's half-share) because the defendants had acquired Krishna's interest and thus the exception to the last clause of Section 60 applied; but the appellate court modified the decree by disallowing the defendants' claim to consolidate the usufructuary mortgage with the simple mortgage executed by Kesava (consolidation under Section 61 was not permissible on the facts). The appeal was dismissed without costs; the memorandum of objections was dismissed without costs.
Implications:
- Direct practical effect on the parties: the plaintiff may redeem only the share he purchased (Kesava's share) and cannot compel redemption of the entire mortgaged estate; the defendants retain the rights they acquired from Krishna but are not entitled to consolidate the simple mortgage with the usufructuary mortgage.
- The court applied the exception in Section 60 of the Transfer of Property Act where a mortgagee has acquired the mortgagor's share; therefore partial redemption is permissible in that circumstance.
- The decision emphasizes that consolidation under Section 61 requires identity of mortgagor(s), mortgagee(s) and property; lacking such identity, consolidation will be refused.
- The opinion does not purport to lay down a broad, novel rule of law beyond applying established statutory exceptions and prior authorities to the particular facts; the court expressly limited its discussion of some authorities (e.g., Rathna Mudali) and did not adopt those decisions as universally determinative.
Decree modified.
The plaintiff's suit is for the redemption of a usufructuary mortgage executed by two brothers Kesava and Krishna on 2nd February 1883 for Rs. 5,000. The plaintiff has purchased the equity of redemption from Kesava. The defendants have purchased from Krishna his share of the equity of redemption, in the suit properties. The District Judge has given a decree to the plaintiff for the redemption of half the property and has allowed the defendant to consolidate the mortgage with a simple mortgage by Kesava. The plaintiff has preferred this second appeal.
The first point raised by Mr. Sitarama Rao for the appellant is that the District Judge should have allowed redemption of the whole of the property, as a partial redemption is opposed to the provisions of the Transfer of Property Act. The finding is, that the defendants have acquired the interest of Krishna in the equity of redemption. This finding is challenged by Mr. Sitarama Rao on the ground that defendants 1 to 3 have acquired the equity of redemption in respect of one of the properties and defendants 4 to 6 have acquired the equity of redemption in respect of the other item. The mortgage was with regard to two items of property only.
The question is whether the defendants have acquired the right of one of the mortgagors in all the properties mortgaged. It is immaterial whether the acquisition of the mortgagor's right was piecemeal or whether the acquisition was under one document.
If the mortgagee or mortgagees has or have acquired in whole or in part the share of the mortgagor the provisions of the exception to the last clause of Sect. 60 Transfer of Property Act will apply. The clause is in the following terms:
“Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only on payment of a proportionate part of the amount remaining due on the mortgage except where the mortgagee or if there are more mortgagees than one, all such mortgagees has or have acquired in whole or in part the share of the mortgagor.”
Defendants 1 to 6 have acquired the interest of the mortgagees. They have also acquired the interest of one of the mortgagors, viz., the interest of Krishna. The plaintiff is not therefore entitled to ask for the redemption of the whole of the mortgaged property seeing that he has acquired only the interest of Kesava. The facts of this case bring it within the exception already mentioned. But it is urged that the law is against a partial redemption and therefore the plaintiff should be allowed to redeem the whole of the property and the defendants should bring a suit for their half share of the property. This contention is based on the ground that Krishna could not under the Hindu Law alienate any specific portion of the joint family property and therefore those who have acquired the right to his share could only bring a suit for partition of the whole of the family property and in that partition their rights should be worked out. If it was a mere alienation of the family property by one of the members of a joint Hindu family no doubt the alienee would not be able to get possession of the specific items alienated to him. But here the question is complicated by the fact that both the members of the joint family made an alienation by way of mortgage of specific items and one of them sold his share of the equity of redemption. In these circumstances the question is whether the Court would not be justified in allowing the defendants to retain one half of the property and in decreeing the plaintiff only partial redemption of the half share of Kesava. The plaintiff acquired the right to the equity of redemption of Kesava knowing full well the facts of the case. There is evidence to show that Kesava knew that the defendants had acquired the rights of the mortgagee and also the share of Krishna to the equity of redemption. Could the plaintiff who has only acquired the interest of one of the members of the joint family have insisted upon being given possession of the specific items? It is difficult to see how the plaintiff stands in a better position than the alienee from the other brother. If the strict rule of Hindu Law is to be applied the plaintiff would have to sue for partition of the property and in the partition the equities between the parties will have to be adjusted. This argument is met by the contention that Kesava being the managing member of the family has alienated the whole of the property and therefore the plaintiff stands in a better position than the alienee from Krishna. This contention overlooks the fact that Kesava could not alienate what he did not possess. The right to the share of Krishna having already been alienated to third persons Kesava could not give a title to the plaintiff in respect of Krishna's share and therefore the plaintiff does not stand in a better position than the alienees from Krishna. In such a case as this where the circumstances are such that it would lead to unnecessary litigation by granting the relief asked for by the plaintiff the Court is not debarred from considering the equities in the case, and in order to avoid multiplicity of suits and unnecessary litigation from granting only such relief as the equities of the case would justify without in any way prejudicing the rights of the parties.
Mr. Sitarama Rao relies strongly on Yadalli Beg v. Tukaram in support of his contention that the District Judge was wrong in decreeing partial redemption. The facts in that case were, in 1893 A mortgaged 16 fields in Berar to B. In 1896 A conveyed one of the fields to G and others. In 1899, B brought a suit against A alone to enforce the mortgage and obtained a decree by consent. As A made default in payment within the time fixed, 9 of the fields were foreclosed and possession was handed over to B. C and others not having been made parties to the suit were not affected by it and they brought a suit for the redemption of the items. The Privy Council held that there could be no partial redemption and that C and others who had acquired the equity of redemption to one of the fields were entitled to redeem all the nine fields. Viscount Haldane in delivering the judgment of their Lordships observed:
“The only question that arises is whether they are entitled to redeem the whole of the nine fields, or only the field conveyed to them subject to the mortgage over the whole. According to English law the respondents would have been entitled to redeem the mortgage in its entirety subject only to the safeguarding of the equal title to redeem of any other person who had a right of redemption, a point which has not arisen so far in the present case. The respondents, being transferees of part of the security, by English law, if it applied, would on the one hand be entitled to redeem the entire mortgage on the properties generally, and correlatively could not compel the mortgagee to allow them to redeem their part by itself………The Judge in the original Court thought that the decisions of the Courts in India had established that one of several mortgagors cannot redeem more than his share unless the owners of the other shares consent or do not object. Subject to proper safeguarding of the rights to redeem, which these owners may possess, their Lordships are of opinion that this is not so in India any more than in England.”
This decision does not govern the present case as the defendants have acquired the right of the mortgagors to the mortgaged property. The decision of the Privy Council case would have been different if the persons who resisted the redemption had acquired in whole or in part the right to the equity of redemption from the mortgagor.
The decision in Velayudan Chetty v. Alangaram Chetty affirms the principle that there cannot be a partial redemption except in cases where the mortgagee or mortgagees where there are more than one has or have acquired in whole or in part the share of the mortgagor. As observed by the learned Judges in that case:
“The mortgage is one and indivisible and the exception only arises when the mortgagee or if there are more mortgagees than one if such mortgagees have acquired in whole or in part the share of the mortgagor.”
Mr. Adiga for the respondents relies upon Rathna Mudali v. Perumal Reddy, in support of his contention that the Court could decree partial redemption of a mortgage. The learned Judges who decided the case have laid down the principle too broadly. It is not open in ail cases for the Court to decree partial redemption. It is unnecessary to canvass the correctness of this decision in the view we have taken of the facts of this case. It was not followed by a Bench of this Court in Deynanthakath v. Patinharayil Avulla.
In support of the contention that the defendants can only bring a suit for partition in order to enforce their right to the properties and they are not entitled to be given half the share of the specific items mentioned in the plaint Manjaya v. Shamuga, is relied upon. In that case Sankaran Nair and Bakewell, JJ., held after an examination of various cases that:
“when a co-parcener alienates his share in certain specific family properties the alienee does not acquire any interest in that property but only an equity to enforce his rights in a suit for partition and to have the property alienated set apart for the alienor's share if possible. And the alinee cannot sue for partition and allotment to him of his share of the property alienated.”
In Balabhadra Patro v. Khetra Doss it was held that “an alienee from a member of a joint Hindu family is not entitled to possession of the alienor's share as a tenant-in-common. His only right is to obtain by a suit for partition the share to which the alienor is entitled.”
If a member of a joint Hindu family alienates any specific item belonging to the family, the alienee is not entitled to possession of that property nor can he sue for partition of that property alone. A suit for partition must comprise all the property of the family which is capable of division. But here both the brothers alienated by way of mortgage specific items. The mortgagees were entitled to be in possession of those items. One of the mortgagors afterwards sells his share in those items and the other co-parcener is aware of such alienation and then alienates his share in favour of the plaintiff. In such circumstances the alienee from one sharer cannot insist upon his getting possession of the specific items. The law applicable to mortgages should be applied in cases of this kind and not the strict rule of Hindu Law which is against the the alienee of a specific item of property from one co-sharer claiming to be in possession of that property. The principle of the decision in Subba Rao v. Sarvarayudu can be applied to this. Though the facts of that case are different from the facts of this, yet the course adopted by the learned Judges in that case commends itself to us. We hold that the learned District Judge was right in decreeing the plaintiff, partial redemption.
The next point urged is that the defendants are not entitled to consolidate the usufructuary mortgage with the simple mortgage executed by Kesava alone. The rule as to consolidation is applicable to Indian mortgages provided the mortgagee or mortgagor of both the mortgages sought to be consolidated are the same and the property mortgaged is also the same. There can be no consolidation of two mortgages if the properties mortgaged are different. This is clear from the illustration to Sect. 61 of the Transfer of Property Act. The mortgagor also should be the same. If A mortgages his share in one item of property, and B mortgages his share of the same item to the same mortgagee, though the mortgagee may be the same and the property mortgaged may be the same the mortgagee is not entitled to insist upon A paying the whole of the mortgage amount due on the two mortgages before he can redeem the property. And conversely if A mortgages the same property to B and then to C unless B acquires the rights of C in the 2nd mortgage he cannot insist upon A redeeming both together. The 2nd mortgage was a simple mortgage by Kesava to the 1st defendant. Defendants 4 to 6 are not interested in the mortgage. Therefore there can be no consolidation of the usufructuary mortgage with the simple mortgage. It is unnecessary to refer to any decision on this point as Sect. 61 of the Transfer of Property Act is quite clear. In the result the decree of the District Judge will be modified by disallowing the claim of the defendants to the consolidation of the mortgage under Ex, X with the usufructuary-mortgage sought to be redeemed. With this modification of the lower Court's decree, I dismiss the appeal without costs.
The memorandum of objections is dismissed without costs.
W. S. S.Decree modified.
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