Singaram Chettiar v. Kalyanasundaram Pillai

JUDGMENT

This is a suit to redeem an alleged mortgage by conditional sale treated in 1876 by Exhibits A and B and is brought by the plaintiff, timing as next reversioner to the original mortgagor, by reason of the surrender made by the mortgagor's surviving widow in favour of the then next reversioner, now deceased, and the plaintiff, his adopted son. The 1st and 2nd defendants are the son and grandson of one K. Ramalinga Chetti, who in 1891 obtained a deed of absolute sale, Ex. III, of the properties in question from the alleged mortgagee under Exhibit A. The defendants' case is that the transaction in Exhibits A and B was not one of conditional mortgage but of absolute sale, and that there is no right to redeem. They also contended that the suit was barred and that the plaintiff had no right to sue because he was not the adopted son of the next reversioner, and because one of the mortgagor's widows is still alive and had not divested herself of her estate so as to let in the reversioner. Finally, they contended that even if the plaintiff was entitled to sue, the suit was bad for non-joinder of certain parties interested under the will of the original mortgagor. The Subordinate Judge found all the issues in the plaintiff's favour and decreed his claim.

The first question to be decided in this appeal is whether the transaction of 1876 was a mortgage or a sale and on this point we entertain no doubt that the Subordinate Judge was right in his finding that Exhibits A and B were intended to create a mortgage by conditional sale. The test in such cases is admittedly the intention of the parties and everything in this case points to their intention having been to create a mortgage rather than a sale. The deeds were in renewal of a previous mortgage of the year 1860 for Rs. 7,000 executed in favour of the same mortgagee by the elder brother of Nallavinayagam Pillai, the executant of Ex. A. As recited in Ex. A, that elder brother had paid off Rs. 3,000 and got back half the property leaving the remaining half in the enjoyment of the creditor. The Rs. 4,000 remaining due and a further advance of Rs. 6,000 to Nallavinayagam constituted the consideration for Ex. A. On the same day that Ex. A was executed Saminatha Chetty, the mortgagee, executed a counter-agreement to reconvey on payment of this Rs. 10,000 on or before 30th June 1886. Ex. B, probably, follows the terms of the similar agreement executed by the mortgagee in 1860, which was one of the title deeds handed over to the plaintiff's grandfather with Ex. III but has not been produced by him. It provides that, if half of the Rs. 10,000 be paid between 1880 and 1884, half the land is to be given back at once and the other half on payment of another Rs. 5,000 in 1885, or payment may be made of the Rs. 10,000 before the 30th June 1886 and the properties reconveyed. If payment is not so made, the agreement is to be void, The provision entitling Nallavinayagam to get back half the property on paying half of the Rs. 10,000 mentioned in Exhibit A tends to show that the Rs. 10,000 paid under Exhibt A was a loan on mortgage and not the purchase price and the subsequence conduct of the other party to Exhibit A in making further advances to the widows of the mortgagor tends the same way. In transactions of this kind the presumption is in favour of a mortgage being intended rather than a sale and we agree with the conclusion of the Subordinated Judge on this point.

Before dealing with the other contentions raised in the appeal, it is necessary to refer to what happened after the death of the mortgagor and before the date of the conveyance of 1891, Exhibit III, under which the defendants claim. As already mentioned, the mortgagee under Exhibits A and B made further advances to the widows of the mortgagor, and when in 1886 the senior widow sued him to redeem the properties alleging that she had tendered the amount due before the time limited for payment in Exhibit B, he pleaded that no such tender had been made and that in consideration of further advances the widows had released their right of ‘redemption under Exhibit B. The junior widow in her written statement supported that contention. Issues were framed on those contentions and subsequently an additional issue was framed as to whether Exhibits A and B constituted a mortgage. This was tried as a preliminary issue and the Subordinate Judge found that it was not a mortgage. Before the other issues were tried the case was settled and the senior widow executed a deed of release, Ex. II, dated 27th February 1887, surrendering all her right of redemption in the suit lands in consideration of a further payment of Es. 1,100, the junior widow having already disclaimed all claim to redeem in her written statement. On this a petition was put in recording the settlement and the suit was ordered to be struck off the file on the 3rd March 1887. It has not been seriously contended before us that these proceedings could operate as res judicata against the reversioner, but the defendants rely on them in support of their contention that the suit is barred or at least premature. As regards the latter contention, assuming the transaction to have been originally one of mortgage, the effect of those proceedings was that the mortgagee acquired the equity of redemption from the widows of the mortgagor, an alienation binding on them and on their life-estates, though not necessarily binding on the next reversioner.

The junior widow is still alive, and the plaintiff's claim as reversioner is based on two relinquishment deeds, Exhibits C and D, executed by her.

In this state of things, the defendants contended that the effect of those proceedings in the suit above-mentioned was to vest the equity of redemption of the mortgaged properties in the mortgagee, at any rate for the life time of the widows or the survivor of them. This contention is reload in paragraph 6 of the defendants' written statement and is covered by the issues, but is not dealt with by the Subordinate Judge, whether from oversight or because it was not strongly pressed before him. It appears to afford a conclusive answer to the present suit, as it seems clear that a widow cannot, by relinquishing her widow's estate to the reversioner, affect the validity of alienations made by her before such relinquishment, which, though not binding on the reversioner, were binding on her for life. The result is, that, during the life time of the surviving widow, the equity of redemption remains vested in the defendants as assignees of the mortgagee, and that the present suit is premature.

In the view we take of the case, it is unnecessary and undesirable to express a final opinion as to the question of limitation which was elaborately argued before us. Mr. K. Srinivasa Iyengar has contended that this was not a case of a transfer from a mortgagee within Art, 134 of the Limitation Act at all, because admittedly, at the date of the transfer, the transferor, in addition to his mortgage interest, had acquired something more, viz., the equity of redemption in the suit properties, at any rate during the life time of the widows of the mortgagor so as to disentitle the mortgagor to sue for possession, and he has cited Munna Lal v. Munun Lal in support of this proposition. He has also contended that the article applicable is not art. 134 but art. 141, and seeing that on the facts found the transferor of the defendants acquired the equity of redemption in the suit properties from the widows of the mortgagor, there would seem to be strong grounds for holding that article 141 is applicable to this as to other alienations by the widow of the last male owner. Had, the widows purported to sell the suit properties outright to the defendant's transferor, this would undoubtedly have been the article applicable and it is difficult to see why it should be inapplicable because they have transferred something less, viz., the equity of redemption. Lastly he argued that, assuming article 134 to apply the recitals in Ex. III show that the transferee under that document did not take with that belief in the transferor's absolute title to transfer which a long catena of decisions beginning with Radanatk Doss v. Gisborne has held to be necessary to render the article applicable. In our opinion these decisions cannot now be questioned and we are therefore unable to follow the ruling of Mookerjee, J. in Ram Ranai Ghosh v. Raja Sri Sri Hari Narayana Singh Rao Bahadur, which appears to be at varia??? with them. Turning now to Ex. III it contains a curious recital of the transferee's belief in the transferor's absolute title to convey, which rather suggests an acquaintance with the decisions already referred to. The recitals and the documents handed over as title deeds both shown that the transferor did not rely for his absolute title solely on Ex. A. but also on the release and disclaimer he had obtained from the widows. In these cricumstances it seems open to question whether he really believed in his absolute title to transfer.

As regards the other contentions raised by the appellants, it is sufficient to say that we are not satisfied that Ex. C did not relinquish to the plaintiff the surviving widow's interest in the suit properties, as that is bad as a relinquishment because made in favour of the next reversioner for the time being and his son, the present plaintiff. Nor are we satisfied that the trustees under the will of the last male owner, Ex. K, took any interest in the suit properties which made it incumbent on the plaintiff to join them. So far as the present case is concerned it is sufficient to say that the plaintiff has not shown that he is entitled to redeem during the life time of the surviving widow of the last owner.

The appeal must be allowed and the decree of the Lower Court reversed with costs throughout.

Appeal allowed.