Ponaka Malla Reddy And Ors. And … vs Katam Reddy Seshadri Reddy on 26 September, 1894

Madras High Court
Ponaka Malla Reddy And Ors. And … vs Katam Reddy Seshadri Reddy on 26 September, 1894
Equivalent citations: (1895) 5 MLJ 53


1. By the plaint the plaintiff sought to avoid certain alienations of his property made by his mother and guardian during his infancy and claimed to recover such property from the purchasers. It was averred that the first alienation, namely a mortgage of the property, was a sham transaction, the debt supposed to be secured by it having no existence, and that the subsequent sales were unjustifiable. The plaint also contained statements indicating that the plaintiff had other complaints against the defendant No. 2 with reference to certain monies alleged to have come into his hands. Although on the face of the plaint it was patent that these complaints contained in the 18th paragraph of the plaint constituted a cause of action wholly distinct from that arising with regard to the alienations, no objection was taken on behalf of defendants and the District Judge allowed the matter to pass unnoticed. If ever there was a case in which the wholesome rule laid down in Section 44 of the Civil Procedure Code should have been obeyed, this case was one, for the consequence of the neglect of the rule has been that a number of persons claiming under the alienations impeached by the plaintiff have been brought into Court to hear charges against a co-defendant in which they have no kind of interest. The irregularities in the conduct of the case do not cease here. Issues were adjusted, specific issues relating to the mortgage and sales and a general issue which was said to relate to the matters charged in the 18th paragraph of the plaint. At the trial, for some reason which is not explained, the defendants were made to begin, notwithstanding that the burden of proof clearly lay on the plaintiff. Evidence was advanced in proof of the mortgage and the issue touching it was found in the defendants’ favor. As regards the subsequent sales, the Judge found that the plaintiff’s guardian was under no necessity to alienate the property and that therefore the sales were invalid against him. If the plaint had been restricted to an impeachment of the alienations made by the guardian, the result of these findings would have been a dismissal of the suit against the mortgagee and a decree for the plaintiff against the purchasers.

2. Objections have been taken to the decree by the plaintiff and the mortgagee, and several of the purchasers, defendants, have appealed.

3. As regards the mortgage there is no doubt that the finding is correct. There is ample evidence to support it and we see no reason for differing from the Judge’s conclusion. It is admitted that creditors pressed for payment of debts and that several suits were instituted and the provisions made for payment out of income was a beneficial one. It was suggested that the mortgage was not binding on the plaintiff, because the father’s debts were barred by limitation even at the date of the acknowledgment made by him.

4. This is a point which was not taken in the Court below, and unless it was apparent on the evidence that the mortgage was given for a barred debt, we should not be inclined to give any weight to the objection. The accounts to which our attention was called appear to show that there were mutual dealings between the plaintiffs father and his creditors. We are not satisfied that the debts were barred and therefore need not consider the question which was raised on the supposition that they were barred.

5. As regards the finding on the 3rd issue relating to the sales, we are unable to agree with it. The position of things in October 1868 when the sales B, C, D, E. took place was this. The mortgagee who had been in the possession of the whole property comprised in the mortgage was unwilling to retain possession any longer and he was not bound to do so under the instrument of mortgage. He was desirous of giving up possession on payment of part of the mortgage money. To effect this payment the sales took place. It is not said that fair prices were not obtained, nor is it proved that the plaintiff’s guardian had at the time other funds out of which she could have made the payment. There is no reason whatever to suppose that the transaction was not a fair and reasonable one entered into the interests of the minor. Allowance being made for the rents and profits received by the mortgagee before the sales took place, it is clear that a large balance still remained due on the mortgage. The judge observes that it was the original understanding that the mortgagee “should hold possession and have the debt discharged by the usufruct of the lands and also by the collection of the outstanding debts due to the father’s estate.”

6. There is no indication of such understanding in the mortgage instrument, nor does there appear to be any evidence in proof of it. The instrument of mortgage reserves a right to the mortgagee to insist on payment of the debt at his option. The judge reflects unfavourably on the explanation given by the defendant No. 2 of his unwillingness to retain possession of the mortgage lands. The explanation appears to us perfectly reasonable and it is supported by evidence. There is also evidence with regard to all the sates in which the appellants are interested that the proceeds were credited to the mortgage debt.

7. The conclusion at which we arrive is that the judge’s finding as regards the sales B. G. D. E. and J is against the weight of evidence. The consequence of the finding on the 3rd issue is that the decree so far as it relates to the appellants and concerns the sales under which they claim and the mesne profits of the lands sold must be reversed To that extent clearly the suit must be dismissed. This being so, and the decree so far as it concerns the mortgage being confirmed, there remain the claims mentioned in the 18th paragraph of the plaint and the 7th issue to be considered.

8. The decree deals with these claimsand also with the accounts of the parties on the footing of the mortgage. Regardless of the fact that the relation in which the parties stood to each other as mortgagor and mortgagee was a distinct relation from that occasioned by the conduct of defendant No. 2 with reference to the estate of the plaintiff’s father, the judge has dealt with the parties as if there was only one account to be adjusted and has credited to the mortgage account sums alleged to be owing by the defendant No. 2 in his capacity of administrator or manager of the father’s estate.

9. It is not alleged that there was any agreement justifying the confusion of the two accounts. It is urged in the plaintiff’s behalf that, although the procedure adopted was irregular, objection was not taken by the defendants at the proper time and that the plaintiff may find himself barred by limitation, if he is remitted to another suit.

10. As regards the mortgage, we observe that the plaintiff never asked that an account should be taken–he asked for the cancellation of the mortgage-deed. In the suit as framed, it was impossible that he should ask even in the alternative for an account to be taken. When once it was found that the mortgage was a genuine and operative security the plaintiff was entitled to no relief in this suit in respect of the mortgage. Such part of the decree as touches the mortgage must therefore be reversed. We have considered the possibility of remanding the suit for a proper account to be taken of moneys that have come into the defendant’s hands otherwise than as mortgagee. The claim for such an account is one which, as already observed ought never to have been allowed in conjunction with a claim for the cancelment of alienations and the recovery of immoveable property…It is said on the appellants’ behalf that the plaint contains no sufficient allegation with regard to these matters and that the firat issue did not give him adequate notice of the point intended to be raised. These objections are not without weight. We see nothing in the circumstances of the case to entitle the plaintiff to any indulgence or to justify a departure from the clear rule laid down by Section 44. The principal object of the suit was clearly to obtain the cancelment of the alienations. Now that the plaintiff has failed in that object we cannot allow him in this suit to prosecute his other claims against the defendant No. 2.

12. The result is that the decree as against the appellants will be reversed and the suit will as against them stand dismissed.

13. The appellants are entitled to their costs througout.

14. Both appeals are allowed with costs.

15. The memorandum of objections is dismissed with costs.

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