Kamal Ch. Chunder v. Sushilabala Dassee

1. This suit is brought on an indenture of mortgage dated 17th September 1930. The transactions which have preceded the suit are somewhat involved, and must be set out in detail if the issues before the Court are to be understood. The plaintiff and the defendant, Nirmal Chunder Chunder, are the sons of Raj Chunder Chunder, who died intestate on 5th July 1915, and the defendant, Sushilabala, is Raj Chunder's widow. Raj Chunder was the son of Ganesh Chunder Chunder, who was for many years a highly respected attorney of this Court. Ganesh died on 4th July 1914, and his will was subsequently proved. Part of his estate consisted of Nos. 23 and 24, Wellington Street, the premises which are part of the subject-matter of the mortgage in suit. At the date of that mortgage a number of transactions had been effected, the result of which was that, subject to a charge for the worship of certain family deities, one undivided half of the premises was the property of the defendant, Nirmal, absolutely, and as regards the other half, the defendant Sushilabala had a life interest, the reversioners being the heirs of the defendant Nirmal.

2. Of the transactions to which I have referred, only one requires detailed examination. That transaction is embodied in a deed of release of 24th November 1928, the parties to which were the plaintiff, the defendant Nirmal, and the defendant Sushilabala. The deed inter alia recites that the defendant Sushilabala as a Hindu mother claims a one-third share of the estate of Raj Chunder upon partition thereof between the defendant Nirmal and the plaintiff, and that she has, in lieu of all her claims of every nature as a Hindu widow and Hindu mother, agreed to accept a sum of Rs. 300 per month to be paid by the defendant Nirmal, the right to occupy a certain house at Benares, and an undivided half-share in the mortgaged premises Nos. 23 and 24, Wellington Street, to be held by her for life and with reversion to the heirs of Nirmal. The deed also recites that the defendant Sushilabala has agreed to relieve the estate of Raj Chunder from all her claims including inter alia claims for residence and maintenance in arrears or to become due, and to pay the plaintiff a sum of Rs. 25,000.

3. The operative part of the deed conforms to the recitals, that is to say the plaintiff conveys his undivided share in the premises to the defendant Sushilabala for her life with reversion upon her death to the heirs of the defendant Nirmal. Later on the defendant Sushilabala covenants with the plaintiff to pay him Rs. 25,000 within one year, that sum being charged on the property conveyed until payment. At the end of the deed there is a clause whereby it is agreed that the defendant Sushilabala shall have full power and authority to raise a sum of Rs. 25,000 only on the mortgage of her undivided half-share in the premises. The next transaction to be considered is the mortgage of 17th September 1930. The parties to the deed are the defendants Nirmal and Sushilabala, called the mortgagors, the plaintiff and the defendant Bose, called the sureties, and the mortgagees, two ladies named Siddeseswari and Provabati. The mortgaged premises are Nos. 23 and 24, Wellington Street, and No. 157, Cotton Street, but the present dispute is concerned only with Wellington Street. There are recitals to the effect that the sum of Rs. 25,000 due to the plaintiff in terms of the deed of release has not been paid, and that the defendant Sushilabala has not effected any mortgage under the power reserved to her in that behalf, and also that the plaintiff has agreed to postpone the charge created in his favour by the deed of release. In the operative part, the mortgagors and sureties jointly and severally covenant to pay the sum advanced (Rs. 80,000) on 17th September 1930 with interest at 7 1/2 per cent. There is an important proviso whereby it is agreed that, although as between the mortgagors and the sureties, the sureties are only sureties for the mortgagors, yet as between the sureties and the mortgagees, the sureties shall be considered as principal debtors. By Clauses 1 to 9 it is provided that the mortgagees shall upon payment to them by the sureties or either of them, of the sum due whenever called on to do so, assign or transfer the mortgage security to the surety or sureties. The deed concludes with a covenant whereby the surety, the defendant Bose, covenants with the mortgagees that he will not, so long as the mortgage moneys thereby secured remain unsatisfied or are (not?) assigned to sureties, deal with or assign a decree for Rs. 84,513-11-10, of which he is the holder, and that he will apply and appropriate all moneys realized by him by virtue of the decree towards payment of the mortgagees' dues, and to the extent of the payment so made, he shall be subrogated to the position of the mortgagees.

4. The mortgage debt was not paid on the due date, and on 24th August 1936 one of the two mortgagees and the representatives of the other brought a suit (No. 1567 of 1936) on the covenant to repay contained in the mortgage against the mortgagors and the sureties, leave being given under Order 2, Rule 2, Civil P.C. to the plaintiff to reserve their remedies against the mortgaged premises. The suit was not contested, and on 5th January 1937, it was decreed jointly and severally against the mortgagors and sureties for Rupees 1,05,442-13-0 with interest and costs. On 29th April 1937, the plaintiff in this suit paid to the decree-holders in Suit No. 1567 of 1936 Rs. 1,07,161, the amount then due on the decree, and by a deed of that date the decree-holders granted, transferred, conveyed and assigned without recourse to the plaintiff the premises Nos. 23 and 24, Wellington Street, and No. 157, Cotton Street together with all sums secured thereon by virtue of the mortgage of 17th September 1930 and all the right, title and interest of the mortgagees secured thereby and the full benefit and advantages of the covenants therein.

5. The present suit was instituted on 28th May 1937. The plaintiff as against the defendants Nirmal and Sushilabala asks for a decree for Rs. 1,07,161, and for a decree in Forms 5 and 5-A of Appendix D in Schedule 1 of the Code in respect of the mortgaged premises. The plaintiff has also made his co-surety, Anath Nath Bose, a defendant, and asks for a decree against him for .Rs. 53,580-8-0 as contribution. There is an allegation in the plaint that the defendant Bose has realized Rupees 16,958-15-0 of the money due under the decree in his favour, and that, in breach of the covenant in the mortgage deed, he has neglected to apply the same in discharge of the mortgage debt. There is a claim for damages on this account which however has not been pressed. Finally, an injunction is asked for against the defendant Bose in terms of the covenant. The defendant Nirmal has not entered appearance, and the service of the writ and the facts constituting the causes of action against him have been formally proved. There will accordingly be a decree against him in terms of para. 1 of the prayer to the plaint, and also in terms of para. 2 in Form 5-A, the sum due being declared to be Rs. 1,07,161. I have dealt with the issues raised by the written statement of the defendant Sushilabala in a short judgment delivered during the hearing. On the pleadings I think that the only issues that arise are the power to Sushila to mortgage for more than Rs. 25,000 and the question whether the deities in whose favour the Wellington Street property is charged are necessary parties. However, I allowed Mr. Bose to raise the issue of his client's capacity in somewhat wider terms and the following issue was framed :

"Did Sushilabala obtain half of the mortgaged premises in lieu of maintenance and residence as a Hindu mother? If so, were the premises transferable in law, and is the mortgage by her valid?"

6. For the proposition that Sushilabala was incapable of mortgaging her interest, Mr. Bose relies on Section 6 (dd), T.P. Act:

A right to future maintenance, in whatsoever manner arising, secured or determined, cannot be transferred.

7. This clause was added to the Transfer of Property Act by the Amending Act of 1929. The preceding Clause (d) has always been part of the Act:

An interest in property restricted in its enjoyment to the owner personally cannot be transferred by him.

8. The short answer appears to be that what Sushilabala purported to mortgage was not a right to future maintenance but a life interest in immovable property. Her position is, in my judgment, far from logical, because she admits that the deed of release whereby she obtained the life interest in consideration of the release of her rights of residence and maintenance is valid, and at the same time argues that the life interest thus acquired is not transferable. I conceive that the statutory non-transferability enacted by Section 6 (d) and (dd) is based on the impossibility of transfer inherent in the nature of the right sought to be transferred, and not on notions of public policy. Apart from authority, I should have had no difficulty in holding that Section 6 (d) and (dd) have no application to the circumstances of this case. There is however direct authority to support this view. In Dhup Nath v. Ram Charitra it was held that where property had been given to a Hindu widow in lieu of maintenance, the transfer of the property during her life was not a transfer of the right to maintenance and was valid. It is true that the transfer in that case was prior to the amendment of 1929, but as the Court held that a right to maintenance was covered by Section 6 (d), the decision appears to be relevant. Alternatively it is suggested that if the incumbrance created by Sushilabala is valid at all, it is only valid up to Rs. 25,000.

9. The deed of release however does not purport to restrict her power of disposal, and I cannot construe the specific power to raise Rs. 25,000 on mortgage as by implication prohibiting her from raising a larger sum on the security of her life estate. I am inclined to agree with Mr. Chaudhuri that it was the intention of the parties that Sushilabala should be able to effect a mortgage for Rs. 25,000 binding on the reversioners. Whether the deed effectively carries out that intention is not a matter with which I am concerned. As regards the deities it is now admitted that as prior incumbrancers they are not necessary par-ties to this suit. These considerations; dispose of the various points raised by Sushilabala's defence and it follows that the decree as against her will be in the same terms as against the defendant Nirmal, costs as against both being as provided by the deed. Mr. Page for Anath Nath Bose, the plaintiff's co-surety, admits that his client is liable to contribute, but he argues that he has been improperly joined in this suit which should be dismissed as against him, and be allowed to proceed only against the other defendants. The issues were formally raised by Mr. Page in the following form :

"1. Is the suit as framed maintainable against the defendant Bose, or is it as against him bad for misjoinder of parties and for causes of action? 2. Does the plaint disclose any cause of action against this defendant?"

10. As regards the law, generally, the parties-concede that a security held by one cosurety must be brought into hotchpot, or in other words that all co-sureties are-entitled to the benefit of a security held by one of them: Atkins v. Arcedeckne (1883) 24 Ch D 709 and Steel v. Dixon (1881) 17 Ch D 825. I have no doubt-that this equitable principle is applicable to India, though it is not specifically recognized by Section 146, Contract Act, which deals with the liability of co-sureties to contribute. In England it is now well settled. that in a suit for contribution the principal debtor is a proper party. This proposition is formulated at p. 229 of Rowlatt on. Principal and Surety, Edn. 2, as follows:

Undoubtedly the proper course except in the simplest cases is for the surety or sureties who have paid in excess of their share, to sue principal' and co-sureties together in the Chancery Division, and have the rights of all worked out on one-enquiry.

11. Two questions appear to me to arise,, first : Is a suit of the character described maintainable in India having regard to the provisions of the Code?" Secondly, "Is the situation different where, as in this case, the plaintiff is endeavouring to realize his security in the same suit?"

12. As regards the first question I think this suit falls within Order 1, Rule 3 of the Code. The plaintiff's right to relief against the several defendants arises from the transaction embodied in the mortgage deed of assignment. If separate suits were brought, the plaintiff would have to allege and prove a number of common facts in both of them before he could obtain relief. He would certainly have to prove execution of the mortgage deed and the payment of the decree obtained on the personal covenant. It has not been contended that the provisions of Order 2, Rules 4 and 5 apply to the suit. I do not see how the plaintiff's right to institute the suit can be curtailed owing to the fact that his security is as yet unrealized. What gives him his right to call upon his co-surety to contribute is that he has paid the creditor the sum owing by the principal debtor, and the period of limitation runs from the date of such payment. All that the co-surety is entitled to claim is that he shall share proportionately in the proceeds of the security when it is realized. He is not in a position to insist that his liability is to be postponed until the security is realized and its extent ascertained.

13. In these circumstances I hold that the plaintiff must have a decree against the defendant Bose for Rs. 53,580-8-0 with costs. The decrees will however contain a provision that all sums realized in the suit from the other defendants or by sale of the mortgaged properties will be held by the Court subject to the equities in favour of the defendant Bose as the plaintiffs' cosurety, and will only be paid out to the plaintiff upon notice to the defendant Bose. Liberty to apply. The claim for damages against the defendant Bose is not pressed, but I think the plaintiff as assignee is entitled to the benefit of the covenant by Bose regarding the decree he holds and there will accordingly be an injunction in terms of para. 5 of the prayer to the plaint.