Krishnaswami Pillai vs Janakalaxmi Ammal and Another

Pakenham Walsh, J.—1st defendant is the appellant in this Second Appeal. The suit was one for contribution against Defendants 1 and 2.

Three properties which we may call A, B and C were owned by one Sundara Reddi who, on 28th November, 1918, mortgaged them to one

Visvanatha Reddi. Sundara Reddi sold property B on 1st December, 1919 and Plaintiff ultimately purchased it.

Sundara Reddi was adjudged insolvent and 1st defendant purchased property A from the Official Receiver. Subsequent to the purchase of

property A by 1st defendant a suit was filed on 4th December, 1923, by the legal representatives of the mortgagee. In that suit Plaintiff was 5th

defendant and the present appellant was 2nd defendant.

A preliminary decree was obtained which fell to the share of one of the mortgagee''s legal representatives. He got a final decree and brought all

the mortgaged properties to sale. The properties were sold and Plaintiff paid off the entire mortgage amount and got the sale set aside. This suit

was brought by him for contribution to the extent to which the other sharers are liable. The trial Court gave him a decree which was confirmed by

the lower appellate Court. 1st defendant prefers this second appeal. Two grounds are taken on appeal.

That after the passing of the order for sale the mortgage debt is extinguished and becomes a decree debt. Consequently Section 82 of the

Transfer of Property Act is not applicable.

In any case interest and the 5 per cent, compensation to the disappointed buyer are inadmissible.

The trial Court has dealt elaborately with the first point and the lower appellate Court agrees with it. It is, however, unnecessary to discuss the

matter here because it has been settled in a judgment of the Privy Council since delivered and reported in (1930) L.R. 57 I.A. 189 (Privy Council)

This case is on all fours with the present and shows that an owner of property getting a mortgage sale set aside under such circumstances can sue

for contribution for the amount which he has paid to satisfy the mortgage debt. It is also authority for the proposition that the debt is the amount in

the sale proclamation so that the interest included in this amount is also payable. There remains only the question of the 5 per cent, compensation.

The lower appellate Court has dealt with this briefly in para. 3 of its judgment where it says:

No authority has been cited in support of the proposition that when the mortgage debt has ripened into a decree and has proceeded to sale the

subsequent accretions are beyond the pale of contribution. The subsequent accretions whether by way of interest or by way of costs partake of the

character of the original debt.

As regards interest the Privy Council case confirms the view, but I cannot see how the 5 per cent, paid to the disappointed buyer can possibly

come u/s 82 of the Transfer of Property Act. It is not a charge on the property and can never become one, because if it is not paid down the sale

is not cancelled. Section 82 deals entirely with a charge on property and not with person. In any case the money does not go to the decree-holder

as such. There is also authority for the view that the 5 per cent, cannot be an item on which contribution can be claimed : Bhagwan Singh v.

Mashar Ali Khan ILR (1914) All. 272. The poundage is allowable as a claim for contribution. Vide Ramabhadrachar v. Srinivasa Ayyangar ILR

(1900) Mad. 85. The appeal is allowed so far as contribution under the item 5 per cent. (Rs. 202-4-0) is concerned and is otherwise dismissed.

Appellant will pay and receive proportionate costs in this appeal and will recover proportionate costs in the Courts below.