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AMICUS AI
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  • Sect. 52 of the Transfer of Property Act; (1915) Madras
  • Sect. 88 of the Transfer of Property Act, 1882,
  • Sect. 104 of the Transfer of Property Act
  • Sect. 52 of the Transfer of Property Act
  • PROVINCIAL SMALL CAUSE COURTS ACT
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citation codes
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  • Sect. 52 of the Transfer of Property Act; (1915) Madras
  • Sect. 88 of the Transfer of Property Act, 1882,
  • Sect. 104 of the Transfer of Property Act
  • Sect. 52 of the Transfer of Property Act
  • PROVINCIAL SMALL CAUSE COURTS ACT
Smart Summary

Factual and Procedural Background

The plaintiff purchased certain mortgaged properties at a court-ordered auction on 2nd September 1908 and was put in possession on 15th January 1909. An attakshi (Exhibit D) recorded that some tuvari crops on a portion of the property had been removed at the date of delivery and that possession of the lands and remaining crops was given to the purchaser. In the plaint the plaintiff claimed for (a) harvested crops (cause of action alleged 3rd January 1909) and (b) crops cut and carried away after delivery (from February 1909).

A preliminary objection was raised by counsel for the respondents (Mr. K. S. Ganesa Aiyar) that the suit was for damages below Rs. 500 and therefore no second appeal lay. The High Court considered both the jurisdictional preliminary objection and the substantive question whether a lease granted by the judgment-debtor prior to sale bound the auction purchaser. The High Court remanded an issue to the Subordinate Judge to determine the amount recoverable by the plaintiff for rent between sale (2nd September 1908) and delivery of possession (15th January 1909). Following receipt of the Subordinate Judge's finding, the High Court delivered final judgment modifying the decree as described below.

Legal Issues Presented

  1. Whether the preliminary objection that the suit was for damages below Rs. 500 (and therefore not subject to second appeal) was sustainable.
  2. Whether lis pendens in a mortgage suit continues up to the actual sale of the property.
  3. If lis pendens continues to sale, whether a lease granted by the judgment-debtor after decree (but before sale/possession) binds or prejudices the auction purchaser.
  4. What amount (mesne profits or rent) is recoverable by the purchaser from the date of sale to date of delivery, and how to treat payments (revenue/assessments) made by the lessee under the lease.

Arguments of the Parties

Appellant's Arguments

  • Mr. T. R. Venkatarama Sastriar (for the appellant) argued that his client (the purchaser) was entitled to mesne profits from the date of the sale.
  • Counsel for the appellant also highlighted difficulties in procedure caused by absence of High Court rules under Section 104 of the Transfer of Property Act and relied on doctrinal analogies about when a mortgage suit ceases to be contentious.

Respondents' Arguments

  • Mr. K. S. Ganesa Aiyar (for the respondents) raised a preliminary objection that the suit was for damages below Rs. 500 and therefore a second appeal did not lie.
  • The respondents suggested that when an order for sale is made the lis (lis pendens) ceases — an argument that would, if accepted, permit the judgment-debtor to grant leases affecting the purchaser.
  • Mr. Ganesa Aiyar further contended that payments made to the judgment-debtor (for example under a lease) should be credited against the purchaser, on the ground that such leases and payments are part of ordinary management and any equities subsisting between lessor and lessee should bind the auction purchaser.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Savarimuthu v. Aithurusu Rowthar That a claim for an account (in the context described) is triable only by the regular courts (cited under Art. 31 of the Provincial Small Cause Courts Act). The Court relied on this authority to hold that the plaintiff's claim for harvested crops (a claim for an account) was beyond the jurisdiction of the Small Cause Court and triable only by regular courts.
Annamalai v. Subramanyan Authority regarding the nature of damages claims within jurisdictional limits (cited collectively). The Court agreed with this decision as supporting the proposition that the claim for subsequent cutting and carrying away of crops is within the cognizance of a Small Cause Court.
Raghava Reddy v. Krishna Reddy Same contextual support as Annamalai v. Subramanyan. Agreed with this decision for the proposition that the relevant damages claim is within Small Cause Court jurisdiction.
Ramaiyar v. Saminatha Ayyar Same contextual support as the two decisions above. The Court agreed with it in the same respect.
Venkoba Rao v. Muthu Aiyar A decision (Munro, J.) about the effect of order for sale on lis pendens. The Court expressly refused to follow Munro, J.'s decision, holding it not correct in the view of the present bench.
Kolluri Nagabhushanum v. Ammanna Assumed (without discussion) that lis pendens would continue up to the sale. The Court noted the assumption as an authority favouring continuation of lis pendens until sale.
Mallikarjunadu Setti v. Lingamurti Pantulu Contains obiter that the principle of Salt v. Cooper may apply; also contains a judgment (Moore, J.) considered in discussion about whether mortgage suit remains pending until final distribution. The Court discussed both Moore, J.'s view (which would support lis pending until sale/final adjustment) and the Full Bench majority (which treated a decree under Sect. 88 as final). The Court referred to this case in explaining differing views.
Surjiram Marwari v. Barhamdeo Persad Calcutta decisions enunciating that lis pendens affects mortgaged property up to sale. Listed among Calcutta authorities supporting the continuation of lis pendens until sale; relied on as part of a line of decisions the Court found persuasive.
Bhugwan Das Khettry v. Nelkanta Ganguli Calcutta decision cited for lis pendens continuing up to sale. Included as part of Calcutta jurisprudence endorsing continuation of lis pendens.
Kisory Lal Chowdhury v. Raja Sewbut Bogla Calcutta decision cited for the same principle. Relied on as part of the Calcutta line of decisions supporting lis pendens up to sale.
Madaneswar Singh v. Mahamaya Prasad Singh Calcutta decision in the line endorsing lis pendens up to sale. Noted by the Court among authorities supporting continuation of lis pendens.
Braja Nath Pal v. Joggeswar Bagchi Calcutta decision cited similarly. Listed in support of the view that lis pendens survives until sale.
Madan Mohan Singh v. Rajkishori Kumari Calcutta decision supporting continuation of lis pendens until sale. Used as supporting authority in the Court's review of precedents.
Thakur Prasad v. Gaya Sahu Allahabad decision adopting the view that lis pendens continues up to sale. Cited as part of the Allahabad line that supports continuation of lis pendens.
Chunni Lal v. Abdul Ali Khani Allahabad decision to the same effect. Included among authorities favouring lis pendens continuing until sale.
Shivjiram v. Warhan Bombay decision holding lis continues after decree but its effect depends on continued prosecution of execution applications. The Court considered this Bombay view but rejected its reasoning, declining to follow the approach that makes lis depend on active enforcement steps.
Samal v. Babaji Bombay authority with similar reasoning to Shivjiram v. Warhan. Noted as consistent with the Bombay approach which the Court declined to follow.
Bhoje Mahadev Parab v. Gangabai A review of Bombay authorities; discussed the dependence of lis on enforcement proceedings. The Court discussed this review and specifically the views of Batchelor and Shaw, but the present Court did not accept the Bombay characterization.
Kerakoose v. Brooks Authority cited for the proposition that proceedings continue the mortgage suit up to sale. Used to reinforce the view that a mortgage suit continues until sale is effected.
Fauntlery v. Beebe English Chancery authorities cited for the principle that an order for sale operates as conversion of realty to personalty and that property remains in custodia legis. Applied by analogy to show that a decree directing sale converts the rights and places the property in custody of the Court so that private dispositions cannot defeat the Court's order.
Dodson Cited with other Chancery authorities in support of the conversion principle. Referred to as part of English practice analogous to the Court's view of the effect of sale-decrees.
In re Yates v. Morton One more English Chancery authority cited for conversion and custodial effect of sale orders. Used as part of the Chancery analogy that the property remains in custodia legis and cannot be privately disposed of to defeat the court-ordered sale.
Bangess v. Booth English authority cited for analogous conversion principle. Invoked to illustrate how a court-ordered sale converts real property into sale proceeds and places the subject-matter under court control.
Radhika v. Radhamani Authority supporting that a lease of the kind in question is within the powers of an ordinary and prudent owner. Relied on to accept that such a lease might be a reasonable act of management by a mortgagor, though not necessarily binding on the purchaser.
Subbaraju v. Seetharama-raju Supports the position that the type of lease in question falls within ordinary owner powers. Used similarly to Radhika v. Radhamani to acknowledge that the lease might be a normal management act, without implying purchaser is bound by equities between lessor and lessee.

Court's Reasoning and Analysis

The Court proceeded in two main stages: first addressing the procedural objection and jurisdiction, and second the substantive question concerning lis pendens and the effect of a subsequent lease on the auction purchaser.

On procedure, the Court held that the plaintiff's claim for harvested crops (an account) was excluded from the jurisdiction of a Small Cause Court by the second part of Article 31 of the second schedule to the Provincial Small Cause Courts Act, relying on Savarimuthu v. Aithurusu Rowthar. By contrast, the claim for the subsequent cutting and carrying away of crops was a claim for damages within the cognizance of a Small Cause Court. Because part of the plaintiff's claim was properly triable only in the regular courts, the Court reasoned that the plaintiff was entitled to bring the consolidated suit in the regular courts; accordingly the preliminary objection that no second appeal lay was overruled and the suit was rightly brought in the District Munsif's Court.

On the substantive issue, the Court framed two precise questions: (1) whether lis pendens continues in a mortgage suit up to the sale of the property; and (2) if so, whether a purchaser at auction is prejudiced in his rights by an outstanding lease granted by the judgment-debtor.

The majority analysis emphasized that the doctrine of lis pendens is based on the fact that the property is the subject-matter of a suit and that where a decree directs sale, the property may be regarded as in custodia legis until actual sale. The Court rejected the Bombay line of decisions which made lis pendens depend on active prosecution of execution proceedings (i.e., dependent upon whether execution applications were being prosecuted). Instead, the Court preferred the view that lis pendens continues until the actual sale is effected: it relied on various Calcutta and Allahabad authorities, Kerakoose v. Brooks, and Chancery analogies to conclude that until sale the property remains affected by the suit.

On the second question, the Court held that because lis pendens continued up to the actual sale, a lease subsequently granted by the judgment-debtor did not bind the auction purchaser to his prejudice. Concerning mesne profits and rent, the Court stated that in estimating profits the amount of rent secured on the property by the judgment-debtor could be taken as the amount payable to the purchaser, but that equities between lessor and lessee (i.e., payments made to the judgment-debtor) do not ordinarily bind the purchaser under the language and scheme of Section 52 of the Transfer of Property Act. The Court accepted that such a lease might be an act within the powers of an ordinary and prudent owner (citing Radhika v. Radhamani and Subbaraju v. Seetharama-raju) but held that a lessee who obtains a lease while lis pendens subsists takes risks and cannot resist the purchaser's rights by relying on payments made to the lessor where the purchaser's title has accrued.

Judge Bakewell delivered a concurring analysis (with some doctrinal distinctions). He emphasized the statutory framework under Sections 88–90 of the Transfer of Property Act and the manner in which a decree under Section 88 contemplates alternative events. He noted the Full Bench decision in Mallikarjunadu Setti which held that a decree under Section 88 is a final decree and that subsequent proceedings are in execution. Relying on that precedent, Bakewell, J. concluded that the Court's sale and confirmation transferred to the purchaser the rights of the parties as they existed at the date of the decree and therefore the purchaser took free from the lease created by the mortgagor after the decree.

Procedurally the Court remitted an assessment task to the Subordinate Judge to determine the amount recoverable by the plaintiff for rent between sale and delivery; after the Subordinate Judge returned a finding (Rs. 83-5-4) the High Court accepted the finding (with adjustments by set-off against assessments paid by the lessee) and entered the decree described below.

Holding and Implications

Core Rulings:

  • The preliminary objection was overruled — the suit was rightly brought in the District Munsif's Court and a second appeal lay to the High Court in the circumstances described (because part of the cause of action was triable only by regular courts).
  • The Court held that lis pendens in a mortgage suit continues until the actual sale is effected.
  • A lease granted by the judgment-debtor after decree but prior to actual sale does not bind the auction purchaser to his prejudice; the purchaser acquires the rights as they existed at the date of the decree or subject to the effect of the court-ordered sale.
  • The purchaser is entitled to recover mesne profits (or rent proportionate to the rent secured under the lease) from the date of sale to the date of delivery of possession.
  • Decree entered: the Court accepted the Subordinate Judge's finding that the plaintiff was entitled to Rs. 83-5-4 and directed appropriate determinations and set-off treatment; the final decree ordered the parties to bear their own costs in this Court and modified costs as indicated.

Consequences and Implications:

Direct effect on the parties: the purchaser recovers Rs. 83-5-4 from the 2nd respondent (as found) for the period between sale and delivery, with the Court directing that each party bear their own costs in this Court (and leaving the lower courts' cost allocations otherwise undisturbed). The purchaser's title is not defeated by a lease granted by the judgment-debtor after decree but before sale.

Broader doctrinal implication: the judgment endorses the position that lis pendens survives until actual sale in the context of mortgage suits (and rejects the Bombay line that conditions lis pendens on active prosecution of execution proceedings). The Court relied on an array of Calcutta and Allahabad authorities and Chancery analogies while distinguishing or declining to follow certain other precedents. The opinion does not purport to lay down novel statutory interpretation beyond these holdings but clarifies how lis pendens and the effect of subsequent leases operate in the court's view under the facts and statute discussed.

Order as to Decree: The decree in favour of the plaintiff (purchaser) was modified in accordance with the Court's directions; a decree for Rs. 83-5-4 was entered against the 2nd respondent; each party to bear their own costs in the High Court; costs order in the Lower Courts as to the 1st respondent remains undisturbed.

    Ramasami Aiyangar v. Govinda Iyer

    JUDGMENT

    Seshagiri Aiyar, J. — Mr. Ganesa Aiyar takes the preliminery objection that the suit is for damages below Rs. 500 and that consequently there is no second appeal. In order to understand the nature of the suit, it ought to be stated that the plaintiff purchased the properties in suit, in auction in September 1908. He was put in possession on the 15th January 1909. Exhibit D, the attakshi, says that on the date of the delivery, Tuvari crops upon a portion of the property had been removed away and that the purchaser was put in possession of the lands and the crops on the remaining property. In the plaint, the plaintiff says that his cause of action for the harvested crops arose on the 3rd January 1909 and for the crops cut and carried away since delivery in February 1909. So far as the claim for the harvested crops is concerned, it is taken away from the cognisance of the Small Cause Court by the second part of Art 31 of the second schedule to the Provincial Small Cause Courts Act. It would be a claim for an account which under the ruling in Savarimuthu v. Aithurusu Rowthar is triable only by the regular Courts. As regards the claim for the subsequent cutting and carrying away of the crops, it is no doubt a claim for damages which are within the cognisance of a Small Cause Court. We agree with the decisions in Annamalai v. Subramanyan, Raghava Reddy v. Krishna Reddy(3) and Ramaiyar v. Saminatha Ayyar(4). We think the decision of Munro, J., in Venkoba Rao v. Muthu Aiyar(5) is not correct and we are not prepared to follow it. If a claim is partly within the jurisdiction of the regular Courts and partly within the jurisdiction of Small Cause Courts, there can be no question that the plaintiff is entitled to file a suit for the consolidated amount in the regular Courts. It is in this view we hold that the suit was rightly brought in the District Munsif's Court and that a second appeal lies. We overrule the preliminary objection. On the merits the question is whether the lease for three years granted by the judgment-debtor is binding on the auction-purchaser. There are two aspects of this question. (1) Does lis pendens continue in a mortgage suit up to the sale of the property? and (2) if it so continues, is the purchaser affected to his prejudice of the outstanding lease? The views held by the various High Courts have not been uniform. Therefore, it is desirable to Examine the principles on which the lis is made to depend in such cases. It is clear that until decree in a mortgage suit any dealing with the property mortgaged will be affected by lis pendens. If by virtue of the mortgage decree, the property is regarded as being under attachment till the sale takes place, on the analogy of Sect. 64 of the Code of Civil Procedure, private dealings can be avoided by persons claiming under the decree. It was suggested for the respondent] that when an order for sale is made the lis ceases. The effect of this contention will be to enable the judgment-debtor to deprive the purchaser of possession. He can grant a perpetual lease and thus render it impossible for the auction-purchaser to get possession of the property. I think the sounder view is to hold that the property continues to be subjected to lis pendens until the actual sale is effected.

    Now as to the authorities. In Kolluri Nagabhushanum v. Ammanna, it was assumed without discussion that the lis would continue up to sale. In Mallikarjunadu Setti…(Counter-Petitioner) v. Lingamurti Pantulu…(Petitioner) .*, etc. there is an obiter to the effect that the principle of Salt v. Cooper would apply to India. The rights of a mortgagee under the English Law are so different from those of a mortgagee in this country that it is not safe to apply the English analogy here. In Calcutta, there is a course of decisions enunciating the view that lis pendens affects the mortgaged property up to sale. See Surjiram Marwari v. Barhamdeo Persad, Bhugwan Das Khettry v. Nelkanta Ganguli, Kisory Lal Chowdhury v. Raja Sewbut Bogla(6). Madaneswar Singh v. Mahamaya Prasad Singh(7), Braja Nath Pal v. Joggeswar Bagchi(8), and Madan Mohan Singh v. Rajkishori Kumari(9). In Allahabad the same, view is taken: Thakur Prasad v. Gaya Sahu(10) and Chunni Lal v. Abdul Ali Khani(11). The view taken in Bombay does not commend itself to me. In Shivjiram v. Warhan(12) while holding that the lis continues after decree, the learned Judges say that its effect would depend upon the continuance of subsistence of execution applications. Samal v. Babaji(13) is to the same effect. All the authorities are reviewed in Bhoje Mahadev Parab v. Gangabai(14). Mr. Justice Batchelor says that if execution proceedings are not taken, there can be no contentious suit or proceeding. The decree in question was a maintenance decree which created a charge. The learned Judge seemed inclined to hold that the case of a mortgage decree may be different. Mr. Justice Shaw says that if there was a considerable interval between the passing of a decree and of an application to enforce it, the lis cannot subsist all the time. The effect of the Bombay rulings is to make the lis depend not upon the subsistence of the decree in the suit, but upon the active prosecution of applications for enforcing it. With all deference I am unable to follow this reasoning. The essence of the doctrine is that the property in dispute is the subject matter of a suit. There is no attachment in the case of mortgage decrees and all that is claimed in execution is to carry out the terms of the decree. Therefore it is the fact that the property is directed to be sold that is the basis of the doctrine of lis pendens and not the fact that applications are prosecuted to enforce the term's of the decree. The proceedings in question continue the mortgage suit up to sale (see Kerakoose v. Brooks. I am therefore of opinion that at the time of the sale to the plaintiff the property was subject to lis pendens.

    On this conclusion the point pressed by Mr. Venkatarama Sastriar arises that his client is entitled to mesne profits from the date of the sale. We think that in estimating the profits, the amount of rent secured on the property by the judgment-debtor may be taken as the amount payable to the plaintiff. Mr. Ganesa Aiyar contended that in estimating that amount, payments made to the judgment-debtor should be credited against the purchaser. His argument was that as leases of this kind are resorted to in the usual course of management, any equities subsisting between the lessor (judgment-debtor) and the lessee must bind the auction purchaser as well. I am willing to concede that a lease of this nature is within the powers of an ordinary and prudent owner of property. Radhika v. Radhamani and Subbaraju v. Seetharama-raju support this position. But the further Contention that the purchaser is affected by the equities against the judgment-debtor is not consistent with the language of Sect. 52 of the Transfer of Property Act; (1915) Madras Weekly Notes 174 is a peculiar case. In that case the purchaser claimed rent and not mesne profits, and he prayed for the whole amount against the tenant, with an alternative prayer, against the judgment-debtor for the amount recovered by the latter from the tenant. The actual decision in that case was perfectly right on the frame of the plaint. I do not think the learned Judges-intended to lay down either that the purchaser is bound to implead the judgment-debtor or that he can have his claim for the payment made to the judgment-debtor only against the latter. Prima facie, the purchaser is entitled to look to the person in possession from the date that title accrued to him, for mesne profits or damages. The payment in advance under the lease although it may be the usual course adopted as between lessor and lessee should not drive the purchaser to seek his remedy against a person to whom the money was paid. A person who obtains a lease when the lis subsists takes considerable risks, and if he pays money under it before he had enjoyment of the land, he cannot resist the right of the purchaser, whatever may be his rights to get back the money from his lessor.

    For these reasons, I hold that the purchaser is entitled to the proportionate share of rent secured under the lease of the property in dispute. We direct the Subordinate Judge to return a finding as to the amount recoverable by the plaintiff on the footing of our judgment. Finding should be submitted on the evidence on the record in 6 weeks and 7 days will be allowed for filing objections.

    Bakewell, J.—The plaintiff is the purchaser of certain land sold by the Court under a mortgage decree, dated 24th September 1902, which directed the defendants to pay the amount found to be due, and that in default of payment before the specified day the mortgaged property should be sold and the proceeds of sale be paid into Court and applied in payment of the amount of the decree, and that any balance should be paid to the defendants and any deficiency should be realizable from the 1st defendant and the other properties of the defendants. The decree thus followed the form prescribed by Sect. 88 of the Transfer of Property Act, 1882, and also contained a declaration of the liability of the defendants for any deficiency of the sale proceeds in respect of which a subsequent decree might be passed under Sect. 90.

    The 1st defendant appears to have remained in possession of the mortgage property and during some abortive proceedings for the sale thereof granted a lease,;; dated 4th April 1907, to the 2nd respondent in the present proceedings.

    On the 21st April 1908 an application was made for the sale of the property, and a sale was held on 2nd September 1908 and confirmed on 2nd December 1908, and possession was delivered to the purchaser, the appellant on 15th January 1909.

    In this appeal the question has been argued whether this lease is valid as against the purchaser.

    The difficulty of the question arises from the fact that the High Court made no rules of procedure under Sect. 104 of the Transfer of Property Act and the Courts have therefore been obliged to apply the rules relating to the execution of decrees contained in the Code of Civil Procedure, 1882. The provisions of the Code relate primarily to decrees for money and follow the principle of the English Common Law that a decree for money terminates the litigation, and that the decree-holder must initiate further proceedings to enforce it; but whereas under the Common Law the writ of execution is issued to an executive officer of the Crown, under the Code the Court itself executes the decree in a manner analogous to the procedure whereby the Court of Chancery sold property and distributed the sale proceeds among the persons entitled thereto during the course of a suit. Under the English Chancery practice an action for foreclosure or sale continues until an order absolute for foreclosure is made, or if an order for sale is made until the property is sold and the proceeds are paid to the parties; and the High Court of Calcutta has in effect followed this procedure which also obtains on the Original Side of this Court under its special rules of practice.

    The form of decree prescribed by Sect. 88 of the Act contemplates alternative events, the defendants may or may not pay the amount due into Court, and under Sect. 89 of the Act the Court ascertains which event has happened and in the first alternative it may award a further sum to the decree-holder as “costs of suit (Sect., 94) and deliver possession of the property to the mortgagor; in the second alternative the Court is directed on the application of the party to pass an order which has a result not stated to be effected by the decree under Sect. 88, namely that the mortgagor's right to redeem and the mortgagee's security are both extinguished. It is a fundamental principle of procedure that a Court shall not alter or add to its decree where-in the rights of the parties are merged, whereby it becomes functus officio, but the provisions of Sect. 89 contemplate that the Court retains a control over the suit where by it may add to the terms of the decree passed under Sect. 88. Neither of these sections deals with the personal liability of the mortgagor under his contract, but under Sect. 90 after a sale has been held and the net sale proceeds have been ascertained and found to be “insufficient to pay the amount due for ‘the time being on the mortgage,” which will include” such costs of suit as have been properly incurred by him (the mortgagee) since the decree for foreclosure, redemption or sale up to the time of actual payment” (Sect. 94), the Court may determine whether the balance is legally recoverable from the defendant otherwise than out of the proyerty sold and pass a “decree” for such sum; the Court may therefore adjudicate upon the rights of the parties under their original contract even after the first decree passed under Sect. 88, and pass a further decree. These are not powers ordinarily exercisable by a Court executing a final decree, nor such as may be reserved by a Court for disposal in proceedings in executions, and the power expressly given to the Court to pass a decree implies the continuance of its jurisdiction in the suit. For these reasons, if the case had been res Integra, I should have been prepared to hold, in accordance with the argument of Moore, J., in his judgment in Mallkarjunadu Setti v. Lingamurti Pantulu that mortgage suit remains pending until the rights of the parties are finally adjusted, that is until the sale moneys are distributed, or a final decree is passed under Sect. 90. It has however, been decided by the majority of the Full Bench of this Court in that case that a decree under Sect. 88 is the final decree in a mortgage suit and all subsequent proceedings are in execution thereof, and it follows, I think, that the contentious suit in which a right to this immoveable property was in question ceased to be actively prosecuted within the meaning of Sect. 52 of the Transfer of Property Act when the decree of 24th September 1902 was passed. It does not appear that there was any contentious proceeding thereafter. I am of opinion, therefore, that the lease in question does not fall within this section. The question remains, what is the effect of the decree under Sect. 88 upon the rights of the parties? It seems to me that it must be regarded as finally determining their rights in the property, and as providing that in a certain event, that is, default of payment by the mortgagor before a certain specified day, the parties shall have no right in the property, but only an interest in the proceeds of the sale thereby directed. In fact it operates as a conversion of the property in the same manner as an order for sale of the chancery division operates as a conversion of real property into personalty. (See Fauntlery v. Beebe, Dodson In re Yates v. Morton and Bangess v. Booth.; the property itself remains in custodia legis, no attachment is necessary, and no disposition by either party can affect the order of the Court that the subject-matter of the suit as it then stood shall be sold. It is obvious that, as pointed out by the learned Vakil for the appellant, any construction where-under either party retained a power of disposition over the mortgaged property would afford an opportunity of interminable litigation, against which the Court will certainly struggle.

    For these reasons, I am of opinion that the sale by the Court and its subsequent confirmation transferred to the purchaser the rights of the parties as they existed at the date of the decree and therefore free from the lease subsequently created by the mortgagor. I agree with the order proposed by my learned brother.

    In compliance with the order contained in the above judgment the Subordinate Judge of Trichinopoly submitted the following.

    FINDING

    I have been called upon by the High Court to submit a finding on the question as to what is the amount recoverable by plaintiff from 1st defendant on account of rent in respect of the plaint lands upon the evidence on record.

    2. The sale to plaintiff was on 2nd September 1908 and possession was given to plaintiff on 15th January 1909. I have to determine the rent payable between these two dates………… The balance to which plaintiff is entitled is Es. 83-5-4. I find that this is the rent to which plaintiff is entitled from the date of sale to the date of delivery.

    3. It is contended by 1st defendant that he paid revenue under Exhibits VI series and that he is entitled to deduct the amount paid, viz., Rs. 52-7-5. From the terms of the remand order, I do not think that I can make any deduction on account of revenue paid out of the rent found due. Even if I am at liberty to make the deduction I find from the evidence on record that there is nothing to show what is the revenue of the plaint lands…………Even if let defendant paid the revenue, I find that he is not entitled to get it from the plaintiff.

    [This Second appeal came on before their Lordships Abdur Rahim, O.C.J and Seshagiri Aiyar, J. for final hearing after the return of the finding of the Lower Appellate Court upon the issue referred for trial by their Lordships Seshagiri Aiyar and Bakewell, JJ. at the first hearing on 15th September 1916.]

    Messrs. T. R. Venkatarama Sastriar and V. S. Govindachariar for the appellant.

    Messrs. T. F. Muthukrishna Aiyar and K. S. Ganesa Aiyar for the Respondents.

    JUDGMENT

    We accept the finding of the Subordinate Judge though not for the reasons given by him. As regards disallowing one of the instalments of rent, the learned Vakils admitted that there is no reliable evidence as to whether any crops were raised before the sale to the Appellant. On the other hand, the assessment paid by the lessee ought to be deducted from the rent payable by him. This sum practically covers the third instalment of rent. Under the circumstances we think that the one may be set off against the other. We must therefore disallow the objections of both the appellant and the 2nd respondent. We accept the finding and there will be a decree for Rs. 83-5-4 against the 2nd Respondent. The decree of the Courts below will be modified by directing that each party should bear his own costs. The decree in favour of the 1st Respondent in the Lower Courts as to costs will not be disturbed. He will have no costs in this Court.

    C. K.Decree modified.

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    Comments

    Ramasami Aiyangar v. Govinda Iyer
    (Sep 15, 1916)