Sree Rajah Vatsavaya Venkata Simhadri Jagapatiraju Bahadur Garu v. Rajah Thyada Pusapati Rudra

JUDGMENT

Srinivasa Aiyangar, J. — Two points are raised in this appeal, first as to the liability of the 6th defendant, second as to the amount recoverable from the 1st defendant, the registered holder.

So far as the 6th defendant is concerned it is clear that the plaintiff cannot recover anything personally from him as he was under no personal obligation to pay the proportionate revenue to the Government. It is now settled that the only person who is personally bound to pay the revenue to Government is the registered holder, who is called the defaulter in the Revenue Recovery Act, and that co-owners or co-sharers, who are not also registered holders, are not under any such obligation, though the Government revenue may be a charge on the lands in their holding. Subramania v. Mahalingasami Sivan Chetty. Payment of the revenue by the plaintiff could not give him a larger or higher night than what the Government had. See Ghose on Mortgages, p. 371; Freeman on Co-Tenancy, pp. 254 and 349. On this principle this Court has held in Paruykyi v. Pakram Haji, and Narain Pai v. Appu that a person who pays the whole revenue to the Government under circumstances similar to the present case is not entitled to a personal decree against the co-owners or co-sharers who were not under a personal obligation to pay to the Government. The observations of Bhashyam Aiyangar, J., in Rajah of Vizianagram v. Rajah Setrucherla Somasekhararaz, were based on the assumption that all the co-owners or co-sharers were liable personally to pay to the Government. Nor do we think that Sect. 70 of the Contract Act has any application to the present case. The case of Gajapathi Kistna Chendra Deo v. Srinivasa Charlu, on which Mr. Sarma relied, had not been followed in Raja of Pittapuram v. Secretary of State, in which all the previous cases were reviewed by Spencer, J., and this case was followed in Narain Pai v. Appu by Sadasiva Aiyar, J., who was himself a party to the decision in Gajapathi Kistna Chendra Deo v. Srinivasa Charlu. The case of Yogambal Boyee Ammani Ammal v. Naina Pillai Markayar is also to the same effect. If the 6th defendant had been personally liable to pay, the Sub-Court of Viazagapatam would have jurisdiction to pass a money decree, though the 6th defendant was residing in the Agency Tracts, as the cause of action arose at least in part within the jurisdiction of the Vizagapatam Sub-Court; but that Court has no jurisdiction to enforce a charge over the portion of the estate purchased by the 6th defendant as it is situated in the Agency Tracts, and the plaintiff must be left to enforce his charge in the Agency Courts. We, therefore, confirm the decree of the Lower Court as regards the 6th defendant.

The next question, which alone admits of any doubt, is the amount, which the plaintiff is entitled to recover from the first defendant, the registered holder. The plaintiff, the first defendant and the 6th defendant are each in possession of portions of the estate. The Government revenue paid by the plaintiff accrued due after the purchase by the plaintiff and the 6th defendant of portions of the property in execution of a mortgage decree. If it was a case of a private sale under Sect. 55 of the Transfer of Property Act, the plaintiff and the 6th defendant would each be bound to pay the porportionate share of the Government revenue due on the lands in their possession; the fact that the purchase was made in a Court sale does not make any difference. The position, therefore, is this: there was a charge on the whole estate in favour of the Government, and the registered holder, the 1st defendant, was also personally liable to pay the amount of the charge to the Government. (We are assuming that the statutory liability of the registered holder is a personal liability). The case is analogous to that of a mortgagor who had covenanted to pay the mortgage-money and who afterwards sells portions of the mortgaged property to several persons subject to the mortgage. As between the mortgagor and his vendees, the mortgagor would be liable in proportion to the value of the property in his hands, while his vendees would be liable in proportion to the value of the property in their hands. This, of course, would not affect the right of the mortgagee to enforce the personal covenant against the mortgagor, or the charge against any portion of the mortgaged property. If in such a case the whole amount is collected from the mortgagor on his personal liability or by the sale of the property in the hands of any one of the owners, the person who so paid the money or out of whose property the mortgage amount was realised would be entitled to contribution from the property of the other owners under Sect. 82 of the Transfer of Property Adt. The mortgaged property is considered the primary fund for payment of the mortgage-debt. [Jones on Mortgages, Sect. 736 and Sect. 740; also see Palmer v. Hendrie]. If, therefore, the present plaintiff had asked for contribution out of the properties, he could not have recovered more than the amount payable by the 1st defendant in proportion to the value of the property in his hands. For example, if the plaintiff was the purchaser of a one-third share, 6th defendant another one-third, the 1st defendant remaining in possession of the other third, whoever paid the whole of the charge, whether plaintiff or the 6th defendant or the 1st defendant, would be entitled to recover one-third from each of the remaining two as a charge on the property. Does the fact that the plaintiff sues under Sect. 69 of the Contract Act to recover the money personally from the registered holder make any difference as regards the amount claimable from him. Reading the terms of Sect. 69 literally, in the case supposed, the plaintiff, it may be contended, would be entitled to recover the whole amount and not merely two-thirds or one-third personally from the registered holder, for the 1st defendant was the person who in law was bound to pay the revenue; the plaintiff, of course, was interested in the payment, i.e, he was not a volunteer. That, I think, would be manifestly absurd, for the property in the hands of the plaintiff is itself liable to pay one-third of the Government revenue, and it is this liability on his part that gives him a right to make the payment at all to the Government, so as to enable him to recover back from the co-owners the share of the revenue which they personally were bound to pay or for which the property in their hands was liable. A simple illustration will make this matter clear. A mortgages certain lands to B and sells (he property subject to the mortgage to C. Supposing B sues C on the mortgage, and C to save the property pays the mortgagee; could C recover the money from A, he being the person who under law was bound to pay within the meaning of Sect. 69? Clearly not; for, as between A and C, C is the person who is bound to discharge the debt, though so far as B, the mortgagee, is concerned there is no novation of the liability of A; the position of A in such cases is said to be analogous to that of a surety, C being the principal debtor. It is the ultimate liability that determines the right to recover the amount paid to discharge the original liability. It is possible to contend in the case above said that C is entitled to recover from A personally the amount of the mortgage-debt, but that A, in his turn, would be entitled to a charge upon the mortgaged property for the sum which he paid to C and recover as much as he can from the mortgaged property, which amount may conceivably be less than the amount which he paid; this would be untenable, because, the purchaser of the property subject to the mortgage would then be entitled indirectly to recover back the amount paid by him for the sale of the equity of redemption. To put the converse case, if A had been sued by the mortgagee personally and had been obliged to pay B, he certainly would be entitled to call on C to pay back the money which he paid. In an English conveyance, on sale of the equity of redemption, a covenant would be implied on the part of the vendee to indemnify the vendor from all the consequences of non-payment of the mortgage amount by the vendee. Under the Transfer of Properly Act, Sect. 55, though there is no implied covenant of indemnity, the same result would follow, as the statute makes it obligatory on the part of the vendee to discharge the mortgage as between him and his vendor, though the liability of the vendor-mortgagor to his mortgagee is not affected. It is clear, therefore that the person who is interested in the payment mentioned in Sect. 69 must be a person who, as between himself and the defendant, who was not bound to pay though the defendant may be under an obligation to pay to a third party. [See Mangalathammal v. Narayanaswami Aiyar, and Manindra Chandra Nandy v. Jamahir Kumari]. Whether the basis of Sect. 69 is the Common Law action of “money paid at the defendant's request” or the equitable doctrine of subrogation, does not much matter as the plaintiff can in either case recover only from the person ultimately liable [See Moule v. Garrett, per Cockburn, C.J, citing Leake; Sheldon on Subrogation, page 15, Sect. 11]. In this case, if the plaintiff and the 1st defendant were the only two persons who had an interest in the property, and if the plaintiff had paid (he whole of the Government revenue, he could not have recovered more than the share payable on account of the property in the hands of the defendant. Is the plaintiff also entitled to recover from the 1st defendant the proportionate share of the revenue payable on account of the properties in the hands of 6th defendant, because the plaintiff is not the person liable to pay that sum? If the plaintiff is allowed to recover from the 1st defendant the amount payable both on account of the properties in his hands and in the hands of the 6th defendant, unless the first defendant is in his turn subrogated to the rights of the plaintiff (which is more than doubtful), the first defendant would have been compelled to pay the amount really payable by the 6th defendant; that, I think, would be unfair. The present suit is a suit for contribution and it was of course necessary to make all persons who are liable to contribute, whether personally or out of their properties, parties, in order to fix the proportionate amount which each person was ultimately bound to pay. If Sect. 69 applies to a suit for contribution it may be that no effective relief could be given against all the parties so as to dispose off, of all matters in controversy and avoid multiplicity of suits. In Futteh Ali v. Gunganath Roy, it was doubted whether a suit for contribution comes within the scope of Sect. 69.

“The person interested in the payment of money” must, we think, be a person who is not himself bound to pay the whole or any portion of the amount. It is to be noted that there are express provisions in the Contract Act for contribution in the cases of joint promisors and co-sureties. (Sect. 43, cl. 2 and Sects. 146 and 147). We are, therefore, inclined to hold that Sect. 69 does not apply to a suit for contribution at all. The result is the appeal is dismissed with costs.

The Chief Justice.—I agree.

Appeal dismissed.