Kuttan Raghavan v. Ittyathi Maniyan

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S.A.No.832 of 1990 was dismissed by this Court on 09.06.1998. The original mortgagor was the first decree holder. After the death of Mani Paru, the right devolved on her children arrayed as decree holders 2, 3, 4 and 5, who are Narayanan, Leela, Chandran and Maniyan respectively. The fifth decree holder Maniyan filed E.P.No.81 of 2010 arraying the petitioner herein as the judgment debtor and the remaining decree holders as the respondents. While the execution proceedings were pending, other decree holders appeared and it was contended by the second decree holder Narayanan and fourth decree holder Chandran that they had assigned their rights over the mortgage property to the judgment debtor by document No.1951/10 dated 02.08.2010.

3. The judgment debtor took up the contention that the decree had become unenforceable in the light of the assignment of 2/4^thof the mortgage right of the decree holders in favour of the judgment debtor. It was contended that the fifth decree holder had no right to execute the decree since there was a merger of interest of a portion of the decree holders in that of the judgment debtor. Court below by the impugned order, relied on the decision reported in Pramod Kumar Jaiswal and Ors. v. Bibi Husn Bano and Ors. ((2005)5 SCC 492) which had held that, partial assignment of the

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mortgaged property will not result in the breaking of the mortgaged property and hence, judgment debtor was liable to be evicted. It was held that the only remedy available to the judgment debtor was to seek partition of the property. The contention of the judgment debtor was that in light of a merger of the interest of some of the decree holders with that of the interest of the judgment debtor, property could not be delivered and the option available to the decree holder was to seek partition of the property. Negativing the above contentions, court below ordered delivery of the property to the decree holder. This is challenged by the judgment debtor in this writ petition.

4. Heard the learned counsel for the petitioner, learned counsel for the respondents and examined the records.

5. On admitted facts and the arguments advanced by both sides, the crucial question that arise is whether on an assignment of a part of right of the mortgagors over the mortgaged property to the judgment debtor, whether the decree becomes unenforceable and the remedy available to the decree holder is to seek a partition of the property to recover his right over the property.

6. Before analyzing the various decisions which were referred to by both sides, it is essential to analyze the scope of section 60 of the Transfer of Property Act, 1881 which deals with disintegration of the

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mortgage. The last part of section 60 deals with redemption of a portion of the mortgaged property. It is essential to extract the above provision, which is as follows:

"Redemption of portion of mortgaged property:-

Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only, on payment of a proportionate part of the amount remaining due on the mortgage, except (only) where a mortgagee, or, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the share of a mortgagor."

7. A close perusal of the above provision indicates that it is essentially intended to protect the interest of a mortgagee who, by a composite mortgage had accepted the mortgaged property, which either consist of a single lot or separate items with mortgagors having distinct shares. It does not permit the person interested in a share of the mortgaged property to redeem his share only on payment of proportionate part of the amount remaining due on the mortgage. This assures the mortgagee of redemption of a mortgaged property by all the mortgagors together or in other words, it does not permit a breakage of the mortgaged property at the instance of one of the mortgagors. The above provision contemplates a situation when the mortgagee, or, if there are more mortgagees than one, all such

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mortgagees, has or have acquired, in whole or in part, the share of a mortgagor. From the scheme of the above provision, it is clear that when the mortgagor, by his conduct of permitting the merger of a portion of the mortgagor's right with that of the mortgagee rights, triggers a breaking up of the security, thereby enabling a co-mortgagor to claim redemption of his portion of the property. In other words, this is an exception to the proposition of integrity of mortgaged properties permitting a part redemption, only when there is breaking up of mortgage at the instance of mortgagor and mortgagee.

8. This legal proposition has to be kept in mind while analyzing the issues which were considered by various courts in various decisions. The court below has specifically referred to the decision reported in Pramod Kumar Jaiswal's case cited supra. It related to a merger of interest of a lessor in a lessee under section 111(d) of the Transfer of Properties Act. It is to be noted that there is no corresponding provision relating to merger as that of section 111 in the provisions relating to mortgage in the Transfer of Property Act. Learned counsel for the mortgagee contended that by virtue of acquisition of a portion of the mortgagor's right, there is a merger of two interests resulting in the breaking of the integrity of the mortgaged property and thereby the mortgage is terminated. It was contended that hence the mortgagor can only redeem to the extent

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of the remaining fractional interest vested in him. It was contended that, consequently, suit for redemption will not survive thereafter and the only remedy available to the mortgagor will be to sue for partition for his share of property.

9. To substantiate the above contention, learned counsel relied on several decisions. In Kunjan Govindan v. Bhagavathi Lekshmi (1958 KLT 328), a Single Bench of this Court held that when the integrity of a mortgage is broken by the mortgagee acquiring a share in the equity of redemption, the plaintiff who owns only a share is entitled to redeem only his share and no more. This was followed in Joseph v. Sukumara Panicker (1966 KLT

842) wherein, another Single Bench held that, when the integrity of a mortgage is broken by the mortgagee acquiring a share in the equity of redemption, plaintiff who owns only a share is entitled to redeem only his and no more. Both the above decisions are not applicable to the facts of this case, since those decisions were not dealing with the pendente lite transfer of mortgagor's right. Further, in those cases, the mortgagee defended the suit only to the extent of shares held by him. Again, the question that arises in the present case is not whether the mortgagor can claim more than the right held by him or his share, but the question is whether a post-

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decree transfer of property by some of the mortgagors in favour of mortgagee will defeat the right of redemption of the property granted in favour of the remaining mortgagor.

10. Another Single Bench of this Court in Peethambaran v. Dileepkumar Panicker and Ors. (2011(1) KLJ 126) held that when the mortgagee acquires a portion of the mortgaged property by purchase, there is merger of rights and the result is the extinguishment of mortgage. It was held that mortgagor's are entitled to a pro-rata reduction from the amount due under the mortgage in respect of the property sold.

11. The above decision appears to be contrary to the law laid down by the Division Bench of this Court earlier in Madhavan Nair and Another v. Ramankutty Menon and Others (AIR 1994 KERALA 75). In that case, dealing with applicability of section 5 of the Kerala Land Reforms Act, vis-a-vis, a mortgagee in possession, it was held that when a mortgagee in possession acquires a portion of equity of redemption, the mortgage is not extinguished completely. It was held that there can be only a pro tanto extinguishment of the mortgage right to the extent of the mortgagee acquiring the mortgagor's interest and so far as the other sharer of the equity of redemption is concerned, the mortgage will subsist. Hence the

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decision in Peethambaran's case cannot be considered as good law.

12. The last paragraph of Section 60 of the Transfer of Property Act which allows partial redemption is also indicative of the above fact. It further indicates that by the mortgagee acquiring a portion of equity of redemption, there is no extinguishment of the mortgagor's right in full, but there will be only a pro tanto extinguishment of the mortgage to the extent of mortgagee acquiring a share of mortgage. It was further held that if that be so, the mortgage subsists so far as the other sharers are concerned and it cannot be said that the mortgage has come to an end.

13. Learned counsel for the petitioner relied on a two Judges Bench decision of the Honourable Supreme Court in Jagdish Dutt and Another v. Dharam Pal and Others ((1999) 3 SCC 644) to contend that in a joint Hindu Family, where judgment debtor already in possession purchased undivided, undetermined interest of one of the coparceners, joint decree holders can seek execution in the whole and not in part of the property. Such judgment debtor cannot be dispossessed till the rights of the parties are appropriately ascertained by a decree in a partition suit. The scope of the above decision was that when there is a purchase of

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undivided, undetermined interest of one of the coparceners, joint decree holder can seek execution in the whole and not in the part of the property. The judgment debtor will continue to be in possession till the share is properly determined in a partition suit. Drawing the analogy from this decision, learned counsel for mortgagee contended that in the case at hand, the only relief available to the mortgagor was to seek for partition of the property on the basis of the shares held by him. However, it appears that this view in

Jagdish Dutt's case (supra) was not approved by the subsequent three Bench decision of Supreme Court in Pramod Kumar Jaiswal''s case.

14. Per contra, learned counsel for the respondent/decree holder relied on a catena of decisions to substantiate the contrary view. One of the earliest decisions referred to by the learned counsel was in Mora' Joshi v. Dinkar Joshi and Ors. (1891(15) ILR Bombay page 24), wherein the right to sue of one of several joint mortgagor's, entitled to redeem the whole mortgage before partition, though, mortgagee has acquired a share in the equity of redemption was considered. It was held that the owner of a share in the equity of redemption need not obtain partition before suing for redemption. He is entitled to redeem the mortgage and the fact

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that mortgagee has himself purchased a portion of the equity of redemption does not defeat that right. This view seems to have been explained and followed in various other subsequent decisions also.

15. In C.P.Kandaswami Mudaliar and Anr. v. Palaniammal and Ors. ((1973)2 MLJ 457), Madras High Court considered the question whether in a suit for redemption of an usufructuary mortgage, partition and separate possession of the plaintiffs' alleged half share in the suit properties, the contention of the defendant that the mortgage had been discharged by him and that, he had become the absolute owner of the suit properties by virtue of the purchase was sustainable. The High Court held that the defendant, by a mere assertion of his own or by a unilateral act on his own part cannot convert his possession of a moiety of the property as a mortgagee into that of an absolute owner, which he can do so, only if he had purchased the entire equity of the redemption of mortgage. If there has been a sale of the entire mortgaged property by the mortgagors to the mortgagee thus putting an end to the mortgage, the mortgagors possession subsequent to the date of the said sale would become adverse, for by the conscious act of parties, the mortgage would have been put an end to.

16. In Naurang Singh and Anr. v. Jangir Singh and Ors. (AIR 1985 P & H 268), the question that arose was the reverse of the

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earlier proposition. In that case, a suit for possession under section 60 of the Transfer of Property Act by the mortgagee was instituted. The plaintiff had filed a suit for redemption for having purchased equity of redemption of half of suit land. When the matter came up before the P & H High Court, it was held that, where only one among mortgagees has acquired by purchase, part of mortgaged property, it cannot be said that mortgage over that portion has merged in sale. Purchaser- mortgagee was not in a different position from outsider, so far as his rights conferred by his purchase are concerned. It was held that the plaintiff being one of the mortgagees who had purchased equity of redemption to the extent of one-half of the mortgaged property, was, thus, entitled to redeem whole of mortgaged land as integrity of mortgage could not be said to have been broken by purchasing a part of equity of redemption. The above decision upheld the concept of Madras High Court's decision in C.P.Kandaswami Mudaliar's case

that a part purchase of an item of property by the mortgagee cannot result in disintegration of the mortgaged property.

17. In Bhavani Santhakumar v. Sahadevan Raveendran (2005(3) KLJ 552), the question that arose was whether the submortgagee, by securing the equity of redemption from the original mortgagor can extinguish or destroy the sub-mortgagee. The Single Bench of this High court relying on Devadasan v. Parvathi Pillai

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(1958 KLJ 182) held that mortgage will subsist. An issue, almost similar in this case arose in Narayani Amma v. Govindan Nambi (1994(2) KLT 485). It was a case, wherein, some of the decree holders transferred their right to some of the judgment debtors. It was held that transferee-judgment debtor cannot be equated with a co- sharer entitled to be in possession along with the other joint decree holders. It was held that he can only be considered as one of the joint decree holders. He was entitled to actual delivery and not a symbolic delivery.

18. The Supreme Court in Pramod Kumar Jaiswal's case

(supra) had considered the question of merger of interest of lessor and lessee as provided under section 111(d) of the Transfer of Property Act. After an elaborate consideration of all earlier decisions, it doubted the legal propositions in Jagdish Dutt's case

(supra). Honourable Supreme Court, referring to the various authorities held that the plain and grammatical interpretation of Section 111(d) of the Transfer of Property Act leaves no room for doubt that unless the interest of the lessor and lessee in the whole of the property leased becomes vested at same time in one person in the same right, a determination of the lease cannot take place. On taking an assignment from some of the co-owner of the land, the interest of the lessor and lessee in the whole of the property cannot

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become vested at the same time in one person in the same right. It was held that there was no substance in the contention of the learned counsel for the appellant that the tenancy stood determined. It was held that the position as tenant continues and is bound to comply with request of Rent Control Act.

19. A Single Bench of this Court in P.T Mathai & Anr. v. South Indian Bank Ltd. & Ors. (2015(2) KLJ 821) held that the rule of indivisibility of a mortgage envisaged in section 60 of the Transfer of Property Act can be altered by an agreement, expressed or implied, entered into by all the mortgagor's and the mortgagee's. When there is such consent to alter the indivisible character of the mortgage, it cannot be later contended that the mortgage is indivisible. Though this was in a totally different context, the Court approved the principle that the mortgaged property becomes divisible only when there is a fusion of the interest of all the mortgagor's with that of the mortgagee's.

20. In an unreported decision, in C.R.P.Nos.404, 466, 468 and 478 of 2010 and W.P(C).No.28525 of 2010, a learned Single Judge of this Court had occasion to consider the above concept exhaustively. In an identical situation, contention of the judgment debtor was that the decree of redemption was for and on behalf of

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the tarvad and hence, all the members of the tarvad are co- mortgagors, entitled to execute the decree. The mortgagee's having acquired undivided right of one of the decree holder, they were not liable to be evicted from the decree schedule property in execution of the decree for redemption. Learned Judge had elaborately considered the issue on the strength of various decisions relied on by both sides. The mortgagee, who had claimed right on the basis of an acquisition of co-mortgagor's right, contended that since there is a fusion of interest in the mortgagee and mortgagor with the petitioner and hence, physical delivery of possession of property to respondent No.1 was not permissible. Reliance was placed on the decisions reported in Khelat Chandra v. Peary Lal (AIR (36) 1949 Calcutta 155), Kunjan Govindan v. Bhagavathi Lekshmi (1958 KLT 328), Joseph v. Sukumara Panicker (1966 KLT 842), Govindan v. Bhaskaran (1992(2) KLT 577), M.P.Ahmed

v. Kuthiravattam Estate Receiver (AIR 1997 SC 208), Jagdish Dutt v. Dharampal ((1999) 3 SCC 644) and Achalda Durgaji Oswal v. Ramvilas gangabisan Heda (AIR 2003 SC 1017).

21. On the other hand, respondents therein contended that the remedy available to the mortgagor was to execute the decree and get physical possession of the property and the right of the

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mortgagee was, if any, to sue for partition and separate possession of the share claimed by them after paying their share in the mortgaged money and other amounts due. They relied on the decisions reported in Naro Hari Bhave v. Vithal Bhat (1886 (10) ILR Bombay 648), Kannur Pillai v. Govindan (1954 KLT SN 15 (Case No.41) and Amruthappa v. Abdul Rasool . (AIR 1988 Andhra Pradesh 215). It was argued that the question of breaking of the mortgage would arise only when the entire right of the mortgagors is acquired by the mortgagee and not when a fractional interest of one of the co-mortgagors is acquired by the mortgagee or his legal representatives. This contention seems to be in consonance with the finding of this Court in P.T Mathai's case (supra). After an elaborate consideration of all legal principles, learned Single Judge found favour with the proposition advanced by the decree holders, especially in the light of the decision reported in

Mora' Joshi 's case (supra). It was held that one of several joint mortgagor's is entitled to redeem the whole mortgage before partition, though mortgagee has acquired a share in the equity of redemption. It was held that the owner of a share in the equity of redemption need not obtain partition before suing for redemption. He was entitled to redeem the mortgage and the fact that

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mortgagee himself has purchased a portion of the equity of redemption does not defeat that right. It was reasonable to think also in the light of the authorities referred to above. In such situation, the mortgagee who purchased and acquired the redemption from some of the co-mortgagors has first to yield to the redemption of mortgage in favour of the remaining decree holders and then sue for partition of property on payment of his share in the mortgaged money or other sum due. Otherwise, it will lead to a very incongruous situation, in which, after exhausting all other remedies after suffering a decree of redemption, the decree can still be defeated by a mortgagee or more than one among them, by purchasing a fractional interest from the mortgagor as happened in the case at hand.

22. A discussion of the above case laws unambiguously conclude that in the case at hand since, the transfer was pendente lite, that too, after the second appeal decree in favour of redemption was passed, the judgment debtor has to first yield to the decree of redemption and thereafter, sue for partition. As mentioned above, otherwise, it will lead to a situation wherein the mortgagor, who had obtained a decree of redemption will not be entitled to enjoy the fruits of the decree and will be forced to start the next round of

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litigation seeking partition. In the light of the above, I am satisfied that the judgment in C.R.P.No.404 of 2010 and connected cases referred to above lay down the correct law. In the light of the above, there is no merit in the writ petition and it is dismissed.

Sd/-

SUNIL THOMAS

Judge

Sbna/ True Copy / P A to Judge

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