Posted On by &filed under High Court, Madras High Court.

Madras High Court
Ponnammal vs Kalithitha Mudali on 16 February, 1910
Equivalent citations: (1911) ILR 34 Mad 115
Bench: Benson, K Ayyar


1. Ayilandammal, widow of Arunachala Asari, owned three houses which may be called Nos. 1, 2 and 3 and a well. She mortgaged Nos. 1 and 2 and the well with possession to the plaintiff. The mortgage was renewed by her adopted son Ratna Asari. Subsequently house No. 3 and a half of the well were given to the first defendant by Ayilandammal. The plaintiff instituted Original Suit No. 18 of 1898 for recovery of certain rooms which he alleged formed part of No. 2 against the first defendant and the tenant in occupation and for an injunction against the latter restraining him from using the well. He obtained a decree as prayed for. The first defendant appealed but the appeal was dismissed. Ratna Asari instituted a suit against the first defendant for recovery of the house No. 3 and the half of the well given to her by Ayilandammal. This suit was ultimately dismissed by the High Court on appeal. Ratna Asari then conveyed all his rights in houses Nos. 1 and 2 and the entire well to the plaintiff. The plaintiff now sues for a declaration of his right to the entire well and an injunction against the first defendant and another claiming under her. The first defendant’s claim is to one half of the well. The question has been raised whether the decree in either of the cases enures as res-judicata in favour of the plaintiff or the first defendant.

2. As regards Suit No. 18 of 1898, it appears from the plaint in that ease that no relief was asked for with reference to the well against the first defendant, nor was any question raised as to the title of the first defendant to any portion of the well. On the other hand, the fourth issue, which was the only one that related to the well, ran as follows: “Did the third defendant (the tenant) rent the same from the plaintiff as alleged in the plaint and did he enjoy the well with plaintiff’s permission?” Enjoyment with permission was found and the injunction therefore was granted against the tenant. It is true that the first defendant in her appeal raised a ground about the well, but this was entirely misconceived and no reference was made to it in the judgment of the High Court. We cannot therefore regard the decrees in Original Suit No. 18 of 1898, and, in appeal therefrom, as debarring the first defendant from setting up a right to the well in question. But, whether the plaintiff could treat the decision as binding between the parties or not as regards the well, he was at the time only a mortgagee and his rights could only have been, adjudicated upon in that capacity. The decision could not negative the first defendant’s rights whatever they were as owner of the equity of redemption, and all that passed to her under the-gift by Ayilandammal was the equity of redemption in one half of the well. The plaintiff as a mortgagee with possession was certainly entitled to restrain the first defendant from using the well, though that question was not raised for decision in that, suit.

3. The first defendant’s right to the equity of redemption in one half is certainly res judicata by the decision in Appeal Suit No. 35 of 1901 on appeal from Original Suit No. 3 of 1898. Ratna Asari, the adopted son, sued to recover half the well from the first defendant and his suit was finally dismissed. The plaintiff as purchaser from Ratna Asari, is not in a better position than Ratna Asari himself. Ratna Asari would be clearly debarred from disputing the first defendant’s title to the equity of redemption in half the well. The plaintiff is bound therefore to recognize the first defendant’s equity of redemption in a moiety. The plaintiff’s suit for a declaration of his right to the entire well must therefore fail. Does he, however, stand in a better position with reference to his prayer for injunction? If his mortgage was subsisting he would be entitled to the injunction as it was a mortgage with possession. But is the mortgage subsisting? The debt had been paid off by means of the sale (exhibit E). With the discharge of the debt the security falls to the ground. The plaintiff’s right to possession was an incident of the mortgage- If the mortgage is at an end he is not entitled to keep possession as mortgagee. Ratna Asari has conveyed to the plaintiff the two houses Nos. 1 and 2 and the entire well-As regards the houses the plaintiff has no doubt become the absolute owner, but when the mortgage was discharged Ratna Asari had the equity of redemption only in a moiety of the well. His conveyance could only pass that moiety of the plaintiff. The mortgage interest in the other moiety is extinguished by the discharge of the debt and not transferred to Ratna Asari (see Fischer on “Mortgages,” paragraph 681). The executant of the mortgage, i.e., the transferor of the interest in immoveable property, is “the mortgagor,” though he has parted with the equity of_ redemption. Section 91 of the Transfer of Property Act recognises his right to redeem. Section 60 entitles him on redemption to possession of the mortgaged property when the mortgage was one with possession. Section 15 of the English Conveyancing and Law of Property Act gives the mortgagor power to require the mortgagee to assign the mortgage debt to a third person as the mortgagor directs. But there is no such right in India. Section 74 of the Transfer of Property Act enables the subsequent encumbrancer, not the mortgagor, to acquire the rights of the prior mortgagee by obtaining a receipt for payment of the prior mortgage debt. No assignment of the mortgage has been taken as a matter of fact by Ratna Asari. On the other hand, the intention of the parties to exhibit E is to pay off and extinguish the mortgage debt. If Ratna Asari becomes entitled to possession of a moiety of the well under Section 60, he has no interest in the moiety to which the right to possession can attach itself as its incident. The equity of redemption having been parted with, Ratna Asari would only be a trustee for the first defendant, a mere conduit pipe to pass the possession to him (see Section 94 of the Indian Trusts Act). In Ex-parte Blsdee 1 M.D. & De Gex., 333 Sir J. Cross stated the effect of the payment by the mortgagor of the mortgage debt on the interest of the transferee of the equity of redemption. He says at page 338 “with regard to the property in the Pariah of Blagdo’n the bankrupt purchased the estates in fee simple subject to certain mortgages; and before the mortgages were paid off he deposited his title-deeds with the petitioner as a security for money advanced and afterwards he .paid off the mortgages. I am of opinion that the petitioner is entitled to the full benefit of the security upon the lands which are comprised in the deposited documents exonerated (as those lands now are) from the prior encumbrance.” The discharge of the mortgage merely enlarges the security of the subsequent encumbrancer or adds to the interest of the owner of the equity of redemption. It follows therefore that though the first defendant is merely the owner of the equity of redemption in a moiety under the gift, and though the right to possession was outstanding in the mortgagee at the date of the gift, the mortgage having been discharged, she is entitled to possession of the moiety and cannot be prevented from using the well as the owner of such moiety. We must reverse the decrees of both the Courts below and dismiss the suit with costs throughout.

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