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Ramasamy, Minor, By His Next Friend, Mookkayi Alias Karuppayi And Ors. v. Muniyandi Servai

Madras High Court

Jan 5, 1910

Judgment

Subsequent
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Factual and Procedural Background

The suit sought a declaration that (a) the sale of a "pangu" of a melvaram right by the second defendant to the first defendant, and (b) the redemption of another pangu which had been mortgaged to the predecessors-in-interest of the plaintiffs and defendants Nos. 2 to 7 by a payment made to the 2nd defendant, were not binding on the plaintiffs.

The District Judge found that the pangus had been under attachment by the Head Assistant Magistrate and were in the possession of a receiver appointed by him under proceedings under Chapter XII of the Code of Criminal Procedure. The District Judge dismissed the suit on two grounds: (1) that the suit was barred by limitation, being instituted more than three years after the dates of sale and redemption; and (2) that because consequential relief in the nature of possession was not prayed for, Section 42 of the Specific Relief Act operated as a bar.

The matter reached the appellate court (this opinion). The appellate court considered the limitation plea, the applicability of the Specific Relief Act provision on possession, the question whether the plaintiffs were obliged to seek partition or possession as additional relief, and whether payment to one tenant-in-common or co-mortgagee could discharge the entire mortgage debt.

Legal Issues Presented

Whether the suit was barred by limitation, and if Article 120 of Act XV of 1877 applied so as to render the suit in time.
Whether Section 42 of the Specific Relief Act barred the suit because consequential possession was not prayed for where the defendants were not in possession.
Whether, given the plaintiffs' entitlement only to a share in the pangus, they were bound to seek partition (a physical division) as further relief in addition to a declaration of title.
Whether payment of the mortgage money to one of several co-mortgagees or tenants-in-common (the 2nd defendant) could operate as a valid discharge of the whole mortgage as against the other co-mortgagees (the plaintiffs).

Arguments of the Parties

Plaintiffs' Contentions

The plaintiffs sought a declaration that the sale and the redemption were not binding on them.
They averred that they and defendants Nos. 2 to 7 were divided in interest though originally members of an undivided family, and alleged that the melvaram share was enjoyed according to that division.
In their case the 2nd defendant was alleged to be only one of several tenants-in-common interested in the suit properties.

Respondent / Defendants' Contentions (as represented by Mr. Sundara Aiyar)

The respondent (defendants) relied on a plea of limitation (though the respondent's vakil did not support the limitation plea in argument before the appellate court).
It was argued for the first time in the second appeal that the plaintiffs, being entitled only to a share, were bound to ask for partition (physical division) of their share as further relief in addition to a declaration.
Later, a contention was raised that the 2nd defendant, as a tenant-in-common entitled to the mortgage along with the plaintiffs, was legally competent to receive payment of the mortgage money and give a valid discharge to the first defendant as regards one pangu under the mortgage (i.e., payment to one co-mortgagee discharged the mortgage as to that pangu).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Barber Maran v. Ramana Goundan (1897) I.L.R. 20 M. 461	Held that where the mortgagor paid one of two co-mortgagees the whole mortgage money, the payment was a valid discharge of the mortgage and the unpaid mortgagee was not entitled to sue for his share.	The court discussed this authority at length, expressed dissent from its general application, and declined to follow it on the facts of the present case (finding it distinguishable and contrary to equitable principles applied in India).
Ahinsa Bibi v. Abdul Kader Saheb (1901) I.L.R. 25 M. 26	Contains a judgment (Mr. Justice Bhashyam Aiyangar) that doubted the correctness of Barber Maran and rested decision on the ground that payment was to one of the representatives of the mortgagee and did not fall within the rule in Barber Maran.	The court regarded the present matter as more akin to Ahinsa Bibi and relied on its principle that payment to one of divided members of the promisee's family cannot discharge the entire mortgage where other members have several interests.
Sitaram v. Shridhar (1903) I.L.R. 27 B. 293	Followed the opinion expressed in Ahinsa Bibi (doubting Barber Maran).	Noted as one of the authorities that follow the position in Ahinsa Bibi; used to show the existence of judicial authority contrary to Barber Maran.
Jagat Tarini Dasi v. Naba Gopal Chaki (1907) I.L.R. 34 C. 305	Apparently quoted with approval the opinion doubting Barber Maran.	Noted as an instance where the doubt expressed in Ahinsa Bibi was cited with approval.
Wallace v. Kelsall (1840) 55 R.R. 707	English common-law authority supporting the proposition that payment to one of joint creditors can be a discharge where the right to the debt is joint (based on jointness and survivorship).	Considered by earlier judges; the court observed the distinction between joint rights at law and equitable presumption of tenancy-in-common, and limited Wallace v. Kelsall's applicability where the right is truly joint.
Steeds v. Steeds (1889) 22 Q.B.D. 537	English authority previously doubted by Mr Justice Shephard; deals with the effect of payment/tender to one of joint obligees.	The court noted that doubts about Steeds have lost validity and that later cases (and texts) treat the English line as authoritative; but stressed equity's presumption of tenancy-in-common in many cases.
Powell v. Broadhurs (1901) 2 Ch. 160	Followed and explained Steeds v. Steeds.	Referred to as a later case which supports Steeds; the court observed that such decisions have not shaken earlier views but have been considered by commentators.
Douglas v. Patrick (1790) 3 Term Rep. p. 683 S.C I.R.R 793	Source for the rule as to the effect of a tender to one of two or more joint promisees.	Identified as the origin of the rule on tender to one of joint promisees; the court discussed the basis of that rule being jointness and survivorship.
Broadbent v. Ledward (1839) 11 A & E. 209; May v. Harvey (1811) 13 East 197; Atwood v. Ernest (1853) 22 L.J. C.P. 225; Brandon v. Scott (1857) 26 L.J. Q.B. 163	English cases illustrating distinctions in the law relating to delivery by a bailee to one of several joint bailors and related contract principles.	Referred to in discussion of Section 165 of the Indian Contract Act and the varying English authorities on delivery by a bailee to one of joint bailors; cited to show complexity and non-uniformity of rules.

Court's Reasoning and Analysis

The court proceeded through a sequence of legal analyses strictly tied to the facts and authorities presented in the record:

Limitation: The court held the limitation plea to be "obviously untenable." It found Article 120 of Act XV of 1877 applicable and concluded that the suit was in time. The respondent's counsel did not press the limitation point before the appellate court.
Possession and Section 42 Specific Relief Act: The District Judge's holding that the plaintiffs were bound to sue for possession was incorrect on the facts — the defendants were not in possession at the date of suit. The court reiterated the well-settled rule that where defendants are not in possession plaintiffs are not entitled to further relief in the nature of possession and therefore are not bound to seek it.
Partition / Physical Division Argument: Mr. Sundara Aiyar's contention (raised for the first time in the second appeal) that the plaintiffs were bound to ask for partition because they were entitled only to shares was not raised in the courts below. The appellate court declined to permit that contention to be raised for the first time in the second appeal. Moreover, the plaintiffs and the 8th defendant admitted division in interest, and the court applied the legal presumption in favour of a complete division of the melwaram right among sharers; the court refused to hold that divided enjoyment necessarily required a further physical metes-and-bounds division in all cases.
Findings of the District Judge as to binding effect of sale and redemption: The District Judge had found on issues 8 and 9 that the redemption and sale were binding on the plaintiffs, but the appellate court found those findings unclear and unsupported by evidence. The District Judge had not consistently found to whom the pangus belonged at the dates of sale and redemption and had made inconsistent statements (e.g., about the status of the 5th plaintiff and guardianship). On this basis and because issues 3 and 4 were found to be clearly erroneous, the appellate court reversed the decision below on these factual findings.
Legal question about payment to one co-mortgagee: The court permitted argument on the pure question of law whether a tenant-in-common co-mortgagee could accept payment and give a discharge binding on other tenants-in-common. The court treated the point as not free from difficulty and undertook a detailed examination of authorities and statutory provisions.
Principles from English law and Equity: The court traced the common-law rule that a payment or tender to one of joint obligees may discharge the obligation where the right is joint (citing Wallace v. Kelsall and Douglas v. Patrick), but contrasted this with equitable presumptions (tenancy-in-common) that prevail where there is no stipulation to the contrary. The court noted that in England the Judicature Act and Conveyancing Act provisions modified the common-law position, and that textbooks generally present the English authorities as authoritative.
Relevance of Indian statutory law: The court examined the interplay with the Indian Contract Act — specifically referencing the last clause of Section 38 and more importantly Section 45 — emphasizing that Section 45 states that the right to claim performance rests with the joint promisees during joint lives and with representatives jointly thereafter unless a contrary intention appears. The court concluded that an "offer of performance" (tender) is not a discharge of the obligation, and that the jointness indicated by Section 38 does not justify overriding Section 45. The court further referred to Section 165 (delivery by bailee to one of several joint bailors) and noted that it does not establish a general principle applicable to all contract contexts.
Conclusion on discharge by payment to one co-mortgagee: The court said that equity's presumption of tenancy-in-common (i.e., that co-creditors/mortgagees are tenants-in-common unless a contrary intention appears) means payment to one of the co-creditors ordinarily discharges only that co-creditor's share and not the shares of others. Given that Indian courts administer law and equity together, the court found it "impossible to apply" the common-law rule in Wallace v. Kelsall generally to India insofar as it would discharge the whole debt against co-owners when the equitable presumption of separate shares applies.
Specific factual application: On the facts before it, the court regarded the case as more akin to Ahinsa Bibi, where the mortgage was taken for an undivided family which later divided, and where the promisee had died and the payment had been made to one of divided members. The court held that such a payment cannot discharge the entire mortgage in which other members have separate interests.

Holding and Implications

Holding: The appellate court reversed the decree of the Court below and remanded the case for disposal according to law. The court explicitly held that the plea of limitation failed, that plaintiffs were not bound to seek possession, that the respondent could not be allowed to raise the partition/physical-division contention for the first time in the second appeal, and that payment to one of several persons with several interests in the mortgage cannot, on the facts of this case, discharge the whole mortgage as against the other persons with several interests.

Implications:

The direct effect is that the decree of the lower court is set aside and the matter is to be remanded for further proceedings consistent with this opinion.
The court expressed a doctrinal position: it dissented from a general application of Barber Maran v. Ramana Goundan and emphasized the equitable presumption that co-creditors or co-mortgagees are tenants-in-common unless a contrary intention appears; accordingly payment to one will ordinarily discharge only that person's share, not the entire obligation, where several interests exist.
The court did not permit the respondent to raise the partition/physical-division argument for the first time on second appeal; procedural fairness and preservation of issues for lower courts were enforced.
Costs were directed to "abide and follow the result" (i.e., costs to be dealt with according to the outcome on remand).

This summary is confined to matters explicitly stated in the provided opinion. No information beyond that text has been added.

Show all summary ...

1. The suit is for a declaration that the sale of a pangu of melvaram right by the second to the first defendant and the redemption of another pangu mortgaged to the predecessors in interest of the plaintiffs and defendants Nos. 2 to 7 by a payment to the 2nd defendant are not binding on the plaintiffs. The pangus in question are found by the District Judge to have been under attachment by the Head Assistant Magistrate and in the possession of a receiver appointed by him in proceedings under Chapter XII of the Code of Criminal Procedure. The suit is dismissed by the District Judge on the grounds that it was barred by limitation, having been instituted more than three years since the dates of sale and redemption, and that consequential relief in the nature of possession not having been prayed for, Section 42 of the Specific Relief Act operated as a bar. The plea of limitation is obviously untenable. And the respondent's vakil did not attempt to support it. The article applicable is 120 of act xv of 1877 and the suit, is in time. It is also conceded that the District Judge was wrong in holding that the plaintiffs were bound to sue for possession. The defendants were not in possession at the date of suit, and it is well settled that where the defendants are not in possession the plaintiffs are not entitled to further relief in the nature of possession and are therefore not bound to ask for it against them. But Mr. Sundara Aiyar argues that on the plaintiffs' own case they were entitled only to a share in the pangus in question and that they were therefore bound to ask for a partition of their share as further relief to which they were entitled in addition to the bare declaration of title. This contention was not raised in either of the Courts below. And even if there is any force in it we are not inclined to allow the respondent to raise it for the first time in second appeal. The plaintiffs averred that they and defendants Nos. 2 to 7 were divided in interest, though originally members of an undivided family. The 8th defendant admitted this allegation in paragraph No. 8 of his written statement. The parties in occupation of the property are the kudiva-ramdars. The melwaram is enjoyed in marakkal kuttu and the share of the melwaram due to the plaintiffs and defendants Nos. 2 to 7 is alleged to be enjoyed according to the partition in accordance with the respective interests of the divided members. Division being admitted in the family we cannot accede to Mr. Sundara Aiyar's contention raised for the first time in second appeal that so far as the suit property is concerned it has been kept undivided, the presumption of law being in favour of a complete division. Holding then that the melwaram right has been divided amongst the sharers we are not prepared to allow that in every case of divided enjoyment by division of the produce there must necessarily be a further physical division of the property by metes and bounds. We, must therefore, decline to entertain Mr. Sundara Aiyar's contention that further relief was claimable in this case by the plaintiffs.

2. The District Judge also finds upon the 8th and 9th issues that the redemption and sale are binding upon the plaintiffs: It is not clear on what grounds he has arrived at this conclusion. The 2nd defendant according to the plaintiffs' case is only one of several tenants-in-common interested in the suit properties. The District Judge has not found to whom the two pangus belonged on the dates of sale and redemption. In one part of his judgment he speaks of the fifth plaintiff as possibly a major in June 1898. In another place he says the 2nd defendant executed the document as guardian of the 5th plaintiff. These statements are not reconcilable. The decision of the Court below on the issues Nos. 3 and 4 being clearly erroneous and there being, in our opinion, no evidence to support the findings on the 8th and 9th issues, we must reverse the decision of the Court below. But Mr. Sundara Aiyar raises 'another question on behalf of the respondent, that the 2nd defendant as a tenant-in-common entitled to the mortgage along with the plaintiffs was legally competent to receive payment of the mortgage money and give a valid discharge to the first defendant as regards one pangu under mortgage. Although the validity of the redemption is made the subject of the 8th issue it is perfectly plain that the contention was merely that the 5th defendant was solely interested in the mortgage and that the 2nd defendant was competent to accept payment on his behalf. This, no doubt, is entirely different from Mr. Sundara Aiyar's present contention. But being purely one of law arising out of the plaintiff's own case we have allowed it to be argued.

3. The point is not one free from difficulty. It was held in Barber Maran v. Ramana Goundan (1897) I.L.R. 20 M. 461, by Collins C.J. and Shephard J., that where the mortgagor paid one of two co-mortgagees the whole mortgage money, the payment was a valid discharge of the mortgage and the unpaid mortgagee was not entitled to sue for his share. This decision has been recently followed in S.A. No. 419 of 1906 by Benson and Sankaran Nair JJ. In Ahinsa Bibi v. Abdul Kader Saheb (1901) I.L.R. 25 M. 26, however, Mr Justice Bhashyam Aiyangar doubted the correctness of the decision in Barber Maran v. Ramana Goundan (1897) I.L.R. 20 M. 461, though the case before him was distinguishable from the earlier one, and he rested his decision on the ground that the payment pleaded was to one of the representatives of the mortgagee and did not come within the rule enunciated in Barber Maran v. Ramana Goundan (1897) I.L.R. 20 M. 461, as to the validity of payments to one of the co-mortgagees. The opinion expressed by Mr. Justice Bhashyam Aiyangar in this case has been followed in Sitaram v. Shridhar (1903) I.L.R. 27 B. 293, and apparently quoted with approval in Jagat Tarini Dasi v. Naba Gopal Chaki (1907) I.L.R. 34 C. 305. Mr. Justice Shepherd who took part in the decision in Barber Maran v. Ramana Goundan (1897) I.L.R. 20 M. 461, has further considered the question in his Notes to Section 84 of the Transfer of Property Act: see pages 381 to 384, and re-affirmed his view with some additional arguments in its support. In the decision in Barber Maran v. Ramana Goundan (1897) I.L.R. 20 M. 461, he followed the decision in Wallace v. Kelsall (1840) 55 R.R. 707, and apparently doubted the correctness of Steeds v. Steeds (1889) 22 Q.B.D. 537. The latter case has been followed and explained in Powell v. Broadhurs (1901) 2 Ch. 160. The decision in this last case, has not shaken Mr. Justice Shephard in the conclusion arrived at by him in Barber Maran v. Ramana Goundan (1889) 22 Q.B.D. 537 though it has led hkn to consider the matter in his Commentaries on the Transfer of Property Act. It must be observed, however, that the doubts thrown on the decision in Steeds v. Steeds (1889) 22 Q.B.D. 537 must now be regarded as of no validity. All these English cases, moreover, have been quoted in recognized text books without a word of adverse comment and as fully authoritative: see Leake on Contracts, pp. 298 and 626 ; Chitty on Contracts, p. 744 ; Coote on Mortgages, pp. 556 and 733. Mr. Justice Shephard himself does not appear to adhere to his doubts as to the correctness of Steeds v. Steeds (1889) 22 Q.B.D. at p. 541. But he seems to rely "on Wallace v. Relsall (1840) 55 R.R. 707 as still good law, notwithstanding the later cases, and raises a doubt as to the applicability of the English law to this country. The principal ground of the decision in Barber Maran v. Ramana Goundan (1897) I.L.R. 20 M. 461, is the provision in the last clause of Section 38 of the Indian Contract Act " that an offer to one of several joint promisees has the same legal consequences as an offer to all of them." But an offer of performance is not a discharge of the obligation. The consequence of a tender is merely that the promisor is not responsible for non-performance ; nor does he thereby lose his rights under the contract. Interest will cease to run on the debt from the date of tender. The offer then not amounting to a discharge, it is difficult to see why the fact of tender to one of two joint promisees being good for certain purposes such as the preventing of further interest running should override the provisions of Section 45 of the Indian Contract Act which in express terms says " that the right to claim performance rests as between the promisor and the joint promisees with them during their joint lives and after the death of any of them with the representatives of such deceased person jointly with the survivor or survivors and after the death of the last survivor with the representatives of all jointly." There is, of course, the qualification that the above rule only holds good unless a contrary intention appears from the contract.

4. The rule as to the effect of a tender to one of two or more joint promisees is taken from Douglas v. Patrick (1790) 3 Term Rep. p. 683 S.C I.R.R 793, see Halsbury's Laws of England, Vol. VII, Section 863. But that as well as the rule in Wallace v. Kelsall (1840) 55 R.R. 707 is merely the result of the jointness of the obligation with its incident of survivorship. As stated by Wills J. in Steeds v. Steeds (1889) 22 Q.B.D. at p. 541 the reason why the defence is a good one at law is that the two creditors are treated as having a joint interest in the debt with its incident of survivorship and the satisfaction to one of the parties of a joint demand due to himself and others puts an end to the joint demand and he cannot afterwards by joining the other parties with him as plaintiffs recover the debt. Nor can a right of action be supposed to exist, which, if it existed, might survive to the very person who had already received full value. In Equity, however, it would appear as if the general rule with regard to money lent by two persons to a third was that they will prima facie be regarded as tenants-in-common and not as joint tenants both of the debt and of any security held for it." It is obvious from the foregoing passage that as it was a presumption in Equity that the mortgagees were tenants-in-common in the absence of a stipulation to the contrary, payment to one of two joint mortgagees was not a good discharge of the whole, i.e., even of the share of the other mortgagee. This rule of Equity prevails over the rule of the Common Law after the enactment of Sub-Sec, in to Section 25 of the Judicature Act of 1873. Sections 60 and 61 of the Conveyancing Act of 1881 have now laid down special rules in the case of obligations for sums of money expressed to be advanced on joint account as regards the effect of payment to the survivor or the represe natives of the last survivor etc.see Hood and Challis on Conveyancing, pp. 156 and 157. With the exception, therefore, of the special cases provided for by that enactment, the rule in Equity of a presumption of a tenancy-in-common now prevails in England with its consequence of a payment to one of two joint creditors operating only as a discharge of the share due to him. Wallace v. Kelsall (1840) 55 R.R. 707 is still authority only to the extent that if the right to the debt is joint so as to rebut the presumption of the equitable rule payment to one of the joint creditors is a discharge of the joint debt. To quote the words of Farwell J."There was no possible conflict of any equitable rule with this (before the Judicature Act of 1873) because no bill would lie in Chancery to recover a mere money demand." Under the law in India, however, there being no distinction between the jurisdiction at Law and in Equity, and the Courts in India being Courts administering the rules of justice, equity and good conscience, there could be no difficulty in the application of the equitable rule. But the whole foundation of the rule at law being the jointness of the right and that being expressly varied by the Indian Contract Act into a tenancy in-common, it seems to us impossible to apply the rule in Wallace v. Kelsall (1840) 60 R.R 797 as to the discharge of joint rights by performance to one of the joint obligees.

5. Our attention was drawn to the special rule contained in Section 165 of the Indian Contract Act relating to the validity of delivery by the bailee to one of several joint bailors. As regards this it is not irrelevant to point out that Dr. Whitley Stokes regards it as a departure from the Civil law, the English law and the Hindu and Mahomedan laws. The English cases have made various distinctions with regard to the nature of this contract and its consequences. See Broadbent v. Ledward (1839) 11 A and E. 209 ; May v. Harvey (1811) 13 East 197 S.C. 12 R.R. 322 ; Atwood v. Ernest (1853) 22 L.J. C.P. 225 ; Brandon v. Scott (1857) 26 L.J. Q.B. 163. It is unnecessary to pursue the history of the provision contained in Section 165. Any special rule thereby enacted has not the force of a general principle of the law of contracts. No similar rule is laid down in the Transfer of Property Act.

6. It remains to notice one further remark in Shephard's Commentaries, to Section 84 of the Transfer of Property Act, that the adducing of evidence at variance with a joint right under the contract, to show that the interest was several, would violate the provisions of the Indian Evidence Act. It is not easy to appreciate this criticism, for it is not by oral evidence that joint obligees under a contract are shown to be entitled to their respective interests but by the force of Section 45 of the Indian Contract Act. The recital of the advance being joint is not part of the contract to pay the joint obligees and may therefore be varied by evidence of several interests in the amount advanced. We are therefore constrained to express our dissent from the decision in Barber Maran v. Ramana Goundan (1897) I.L.R. 20 M. 461. We should have felt bound to refer this case to the Full Bench but for the circumstance that on the facts it is more akin to the case in Ahinsa Bibi v. Abdul Kader Sakeb (1901) I.L.R. 25 M. 26, than to the case in Barber Maran v. Ramana Goundan (1897) I.L.R. 20 M. 461. The promise was only one person. He took the mortgage on behalf of an undivided Hindu family. That family has become divided. The promisee himself is dead and the payment is said to have been made to one of the divided members of the family of the promisee. Such a payment, it appears to us, cannot discharge the entire mortgage in which other members of the family have their several interests. We must, therefore, overrule Mr. Sundara Aiyar's contention that the redemption of the mortgage can bind the plaintiffs if they had a several interest in the mortgage at the date of the redemption. The decree of the Court below is reversed and the case remanded for disposal according to law. Costs will abide and follow the result.